Buying brokerages = buying technology? Changxin, Yushu and others are lining up to go public, and brokerages are ushering in a "big year for investment banking."

Buying brokerages = buying technology? Changxin, Yushu and others are lining up to go public, and brokerages are ushering in a "big year for investment banking."

The wave of IPOs for hard technology companies is reshaping the investment logic of securities firms. With star projects such as Changxin Technology, Unitree Robotics, Yangtze Memory, and others advancing their listing processes, the market's pricing narrative for securities firms is undergoing a fundamental shift—from being mere "bull market flag bearers," they are upgrading to "discounted baskets of tech stocks" holding substantial hard tech equity.

On Wednesday, the A-share securities sector surged again, with multiple stocks like Tianfeng Securities, Guosheng Securities, and Huaan Securities hitting their upper price limits, and financial stocks overall strengthening. This trend is not an isolated event. According to previous reports by Shanghai Securities News, the key change in this round of trading is that "buying securities firms equals buying a basket of discounted tech stocks," a logic that is rapidly fermenting in the market.

The core driver behind this narrative evolution is the mandatory co-investment mechanism of the STAR Market and the in-depth layout of hard tech equity by leading securities firms. In its latest industry report, Kaiyuan Securities pointed out, the main line of this big investment bank cycle is not simply an IPO cycle rebound, but a revaluation of the securities firms' business model brought about by speeding up the securitization of tech assets. Guosheng Securities calculated that since 2026, the STAR and ChiNext boards combined saw 20 new stocks, with a total actual fundraising of 30.3 billion yuan and total underwriting and sponsorship fees of 1.7 billion yuan; CITIC Securities, Guotai Junan, and CICC ranked top three by income.

Currently, valuations for securities firms are still at historical lows. According to Guosheng Securities data, as of closing on June 26, the price-to-book (PB) ratio of the securities sector was only 1.20, at historical low levels, while the average daily trading value of A-share stocks and funds has reached 3.19 trillion yuan, with margin balances consistently above 2.5 trillion yuan. The divergence between fundamentals and valuation is attracting persistent capital inflows.

The co-investment system unlocks "new tech attributes," fully upgrading investment bank logic

The institutional foundation supporting the logic of "buy securities firms, buy tech stocks" is the mandatory co-investment rule of the STAR Market. According to current regulations, all IPO projects on STAR Market require the sponsoring securities firm’s alternative subsidiary to co-invest; ChiNext imposes differentiated constraints on four types of companies including loss-making ones, requiring sponsors to participate in co-investment. Co-investment ratios are tiered by issuance scale between 2% and 5%, with a 24-month lock-up period.

This mechanism’s market effects have already been proven. Choice data shows that since 2025, 30 listed companies have landed on the STAR Market; based on June 26 closing prices, over 70% of the co-investments now have floating gains exceeding underwriting and sponsorship fees. According to Guotai Junan Securities calculations, the average increase for new STAR Market IPOs in 2025 is 200%–260%; if the total IPO scale in 2026 is 60 billion yuan, with an average co-investment ratio of 3%, total industry co-investment will be about 1.8 billion yuan, and based on historical increases, expected floating gains for securities firms can reach 4.5 billion yuan, with leading firms' single-quarter floating gains possibly surpassing 7 billion yuan.

Shanghai Securities News cited Sun Ting, chief analyst for non-bank at Dongwu Securities, who stated that under the STAR and ChiNext co-investment mechanisms, investment banking logic has shifted from traditional sponsorship and underwriting fee models to a full lifecycle service model of "industry insight—project acquisition—capital empowerment—value realization." Guo Jianzhong, Deputy General Manager of Caitong Capital, also stated that securities firms use their investment segment to deeply bind themselves to high-quality hard tech companies at the B round and even earlier stages, then land sponsorship and investment banking businesses; the core "investment + investment bank" linkage has become industry practice.

The investment banking cycle remains at the bottom, head-concentrated trend accelerates

Despite warming market sentiment, investment banking remains in a low-recovery stage, with significant room to rise. Kaiyuan Securities data shows that total IPO scale in 2025 was 131.8 billion yuan, only 22% of the 2022 peak of 586.9 billion yuan; it’s estimated A-share IPOs in 2026 will total about 200 billion yuan, 37% of 2021's figure, still at a relative low following the previous high cycle.

Meanwhile, the trend toward IPO business concentrating in leading institutions is strengthening. The market share for IPO businesses at "Three Zhong, One Hua" plus Guotai Junan has increased from 52%–55% in 2020–2022, to 73% in 2025, and 58% in the first half of 2026. In terms of profitability, leading securities firms' investment banking profit margin recovered from 19% in 2024 to 37% in 2025, though there’s space for further recovery compared to 50% in the high cycle of 2020–2021.

Looking at income structure, in 2025, investment banking income accounted for 22% and 18% for CICC and CITIC Construction Investment, respectively, and about 15% for other leading firms. As for profits, CICC investment banking contributed about 19% of profits, up 3 percentage points year-on-year; CITIC Construction Investment, Guotai Junan, CITIC Securities, and Huatai Securities contributed about 15%, each achieving substantial growth compared to 2024, mainly benefiting from turning losses to gains in direct and co-investment profits.

Guosheng Securities pointed out that since 2026, 20 new stocks have debuted on STAR and ChiNext, accounting for 43.12% of all A-share IPO fundraising for the year, mostly concentrated in fields like electronic equipment, components, and integrated circuits in high-end manufacturing. Among them, CITIC Securities handled 7 projects, earning 664 million yuan in sponsorship and underwriting fees; Guotai Junan sponsored 6 companies, earning 436 million yuan; CICC sponsored and listed 4 companies, earning 234 million yuan.

Changxin Technology: Dissecting a "big investment bank chain" sample

The Changxin Technology IPO is the best case to observe how tech asset securitization enhances the big investment banking business of securities firms. This leading domestic DRAM memory chip R&D, design, and manufacturing integrated enterprise—by capacity, shipment, and sales—has become China’s No.1 and the world’s No.4 DRAM producer, aiming to raise 29.5 billion yuan, marking the second-largest STAR Market fundraising, only second to SMIC. On May 17, 2026, the company updated its prospectus, reporting net profit attributable to parent company of 24.76 billion yuan in Q1 2026, up 1688% year-on-year, with interim guidance for net profit over 50 billion yuan.

Kaiyuan Securities conducted detailed calculations on the benefit chain for securities firms in the Changxin Technology IPO, across underwriting, co-investment, and direct investment:

On the underwriting side, based on a 1.5% fee, total underwriting and sponsorship fee for Changxin Technology is about 440 million yuan, with joint sponsors CICC and CITIC Construction Investment each earning about 220 million yuan. Underwriting income is relatively certain, but compared to direct and co-investment, its contribution to current profit elasticity is steadier, with core value in providing quality asset entry and client stickiness in industry.

On the co-investment side, assuming issue price of 3.5 yuan per share and a 2% co-investment ratio, each co-investment amount is 744 million yuan. Under an assumed market cap of 2 trillion yuan, each co-investment floating gain is about 5.3 billion yuan; under 3 trillion yuan, the gain may reach 8.3 billion yuan. Note that co-investment returns are locked for 24 months, so the pace of final profit contribution is uncertain.

Direct investment offers the greatest elasticity. Penetrating the shareholding structure, CMS and Huaan Securities directly hold the most shares of Changxin Technology among securities firms. Under 2 trillion yuan market cap assumption, combining direct and co-investment profits, CMS theoretical gain is about 13.2 billion yuan, CITIC Construction Investment about 7.6 billion yuan, Huaan Securities about 6.9 billion yuan, CICC about 5.4 billion yuan, GF Securities about 1.6 billion yuan, Guotai Junan about 1.5 billion yuan, Founder Securities about 1.1 billion yuan.

Kaiyuan Securities pointed out that the above direct and co-investment gains are not fully reflected in current income statements due to stock lock-up periods and are somewhat discounted, for reference only.

Hard Technology IPO reserves are sufficient, prosperity expected to continue

Besides Changxin Technology, the hard technology IPO pipeline is also worth attention. Unitree Robotics plans to raise 4.2 billion yuan, already submitted to the CSRC, sponsored by CITIC Securities; Yangtze Memory completed guidance registration acceptance on May 19, 2026, jointly sponsored by CITIC Securities and CITIC Construction Investment; Hyperfusion Digital Technology plans to raise 8 billion yuan, now in the inquiry stage; Enflame Technology plans to raise 6 billion yuan, already submitted to CSRC.

In terms of project reserves, leading securities firms hold significant advantages. Kaiyuan Securities data shows that from 2025 to May 2026, CITIC Securities and Guotai Junan each had 23 non-BEIPO projects, ranking first two in the industry; for STAR Market fundraising, CITIC Securities led with 23.4 billion yuan, followed by Guotai Junan, CICC, CITIC Construction Investment, and Huatai Securities.

Regarding floating gains from co-investment, from June 2024 to June 2026, CITIC Securities accumulated floating gains of 3.17 billion yuan, Guotai Junan 1.88 billion yuan, CITIC Construction Investment 1.33 billion yuan, CICC 1.22 billion yuan, Huatai Securities 790 million yuan. Kaiyuan Securities pointed out that in the stage of tech stock rally and concentrated hard tech IPOs, such floating gain contributions to securities firm profit elasticity become more pronounced.

Kaiyuan Securities believes this round of big investment bank cycle has a threefold logic: short-term performance elasticity, mid-term project reserves, and long-term upward ROE baseline.

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