China Securities 3Q26 preview: Weak Market Backdrop, but CICC and CMS Poised to Outperform

Eight brokers under our coverage are scheduled to report 3Q26 results over the coming weeks. We believe market expectations are already subdued, reflecting a challenging operating backdrop in 3Q26. Quarterly ADT declined 21% QoQ, while weaker equity market performance is likely to pressure investment income, with the CSI 300 and STAR 50 indices down 12% and 31% QoQ, respectively. We forecast aggregate net profit for brokers under our coverage to decline 24% QoQ but increase 23% YoY in 3Q26. Company-level performance should remain highly divergent: we expect CICC and CMS to deliver sector-leading results, with profit growth of 128% YoY and 89% YoY respectively, supported by robust IPO activity and CXMT-related investment gains. In contrast, Galaxy, Huatai and GTHT may disappoint due to a high earnings base in 3Q25 and weaker investment performance amid softer equity markets. A- and H-share brokers trade at 0.94x and 0.63x forward P/B;