Everbright Sec 1H net income 1.68B yuan

Everbright Sec 1H net income 1.68B yuan

Everbright Securities has reported a strong first half (1H) net income of RMB 1.68 billion, underscoring the company's strategic capital optimization efforts. The financial results reflect the company's ability to secure favorable financing terms and allocate resources to high-margin services, particularly in institutional brokerage and asset management.

In December 2024, Everbright Securities secured approval from the National Association of Financial Market Institutional Investors (NAFMII) to issue RMB 8 billion in debt instruments, including perpetual notes at record-low 2.07% rates [1]. This financing has been crucial for the company's capital structure optimization, enabling debt restructuring, liquidity management, and expansion in high-margin services. The proceeds from this financing are being used to fund research and development for digital platforms and ESG-focused products.

The company's ability to secure low-cost funding has positioned it to compete effectively in China's fragmented securities market. By leveraging its strong credit profile and market confidence, Everbright Securities has been able to issue debt instruments at competitive rates, reducing refinancing risks and freeing up capital for strategic reinvestment.

The strategic allocation of funds to high-margin services has driven earnings growth. For instance, Everbright Securities' asset management arm has seen a 20% year-on-year increase in assets under management (AUM) as of Q2 2025, driven by demand for structured products and ESG-focused funds. The company's role as a lead underwriter in the 2025 Third Tranche MTNs, alongside banks like Bank of China and China Merchants Bank, further solidifies its reputation as a trusted capital market intermediary.

The regulatory approval for issuing short-term financing bonds has provided Everbright Securities with a competitive edge. The company's ability to issue perpetual notes at ultra-low rates has enabled it to reinvest savings into R&D for digital brokerage platforms and AI-driven portfolio management tools. These innovations are critical for retaining clients in an increasingly tech-savvy market.

Investors should note that the current valuation of Everbright Securities appears undervalued relative to its capital optimization trajectory. The stock has underperformed the CSI 300 Financials Index by 15% in 2025, despite the company's robust balance sheet and strategic initiatives. This divergence presents an opportunity to capitalize on the market's delayed recognition of the company's momentum.

Key catalysts for near-term outperformance include debt restructuring success, brokerage margin expansion, and regulatory tailwinds. The redemption of high-cost perpetual debt via the 2025 Third Tranche MTNs is expected to reduce interest expenses by RMB 150 million annually. Additionally, with 40% of the RMB 8 billion allocated to institutional brokerage, Everbright Securities is well-positioned to capture a larger share of the 15% annual growth in institutional trading volumes. The NAFMII's endorsement of green and asset-backed securities aligns with national policy goals, ensuring continued regulatory support for the company's innovative financing tools.

In conclusion, Everbright Securities' regulatory approval to issue short-term financing bonds is more than a liquidity play—it's a masterstroke in capital optimization. By securing low-cost, flexible funding, the company is accelerating its shift toward high-margin services while fortifying its competitive edge. For investors, the current undervaluation offers a rare opportunity to align with a firm that is not only navigating market fragmentation but actively reshaping it. As the market begins to recognize the scale of Everbright Securities' strategic execution, the stock is poised for a re-rating. The time to act is now, before the momentum builds.

References:
[1] https://www.ainvest.com/news/everbright-securities-strategic-capital-optimization-catalyst-brokerage-asset-management-growth-2508/