Once again, leading securities firms are expanding internationally, injecting 6.1 billion yuan to increase capital in their Hong Kong subsidiaries.

China Securities Firms Accelerate International Expansion

On March 12, China Securities Firm GF Securities announced a major capital increase plan, intending to inject no more than HKD 6.101 billion into its wholly-owned subsidiary GF Hong Kong. A year earlier, in January 2025, GF Securities had already increased its capital in GF Hong Kong by HKD 2.137 billion.

In recent years, international subsidiaries, especially those in Hong Kong, have become increasingly important as core gateways for overseas expansion. Cross-border business has become a key focus for securities firms.

GF Securities Announces Capital Increase

This capital increase is within expectations. In January, when GF Securities’ H-share refinancing was completed, it was mentioned that over HKD 6 billion raised would support overseas business development and capital injections into foreign subsidiaries. The latest announcement states that the funds for this increase mainly come from the company’s general authorization to issue additional H-shares and convertible bonds, with the total amount roughly matching the planned increase. The remaining funds will come from the company’s own resources.

However, the HKD 6.101 billion increase may not be the final amount. Past examples show that initial plans often get scaled back. For instance, in early 2025, GF Securities completed a HKD 2.137 billion increase, which was originally planned to be HKD 5.237 billion, but the final amount was nearly halved. Additionally, the capital increase for GF Hong Kong may be phased rather than a one-time event. The earliest plan dates back to 2018, and it has taken seven years from proposal to implementation.

Several securities firms are ramping up their overseas expansion. Besides GF Securities, Huatai Securities completed a HKD 10 billion convertible bond issuance in February, with plans to increase its wholly-owned foreign subsidiary Huatai International by no more than HKD 9 billion to support overseas growth. Over the past year, Shanxi Securities, Dongxing Securities, Dongwu Securities, and Hua’an Securities have also increased their international subsidiaries, accelerating their entry into cross-border financial markets.

The pace of securities firms’ internationalization is expected to accelerate further in 2026. Regulatory authorities continue to encourage firms to enhance cross-border services, providing policy support for Chinese securities firms to go global. Market conditions are favorable, with a rebound in Hong Kong IPOs, a trend of Chinese concept stocks returning to Hong Kong, and the cross-border financial demands driven by the Belt and Road Initiative, creating a broad market space for cross-border business development.

Strengthening GF Hong Kong’s Capital Base

GF Hong Kong, established in 2006 as GF Securities’ core offshore platform, currently has a paid-in capital of HKD 10.337 billion. Its main businesses include investment holding, investment banking, sales and trading, and asset management through its subsidiaries. The recent capital increase aims to further solidify the platform’s capital strength. The company states that this will directly enhance GF Hong Kong’s capital base, improve its risk resistance, and further support its international business development and cross-border service capabilities.

GF Hong Kong’s performance provides fundamental support for the capital increase. As of Q3 2025, according to Hong Kong accounting standards, GF Hong Kong’s total assets reached HKD 107.546 billion, up 63.86% year-over-year; net assets attributable to the parent company were HKD 11.744 billion, up 44.26%. Operating income was HKD 3.52 billion, up 57.49%, and net profit attributable to the parent was HKD 1.046 billion, a significant increase of 189.05%. All key operational indicators have shown substantial growth.

Regarding the details of GF Hong Kong’s capital increase, especially the investment areas, the January refinancing announcement mentioned plans to enhance cross-border transaction services, institutional business, cross-border investment banking, and other comprehensive cross-border services through product innovation and connectivity channels.

Policy-Driven Acceleration of Securities Firms’ Internationalization

GF Securities’ capital increase exemplifies the recent trend of Chinese securities firms accelerating their international expansion. Reports and tracking by China Securities Journal show that Hong Kong remains the primary choice for overseas expansion among these firms, with leading firms making large capital injections and smaller firms actively entering the market. The funds are mainly allocated to investment banking, asset management, wealth management, and other cross-border sectors.

Leading firms leverage their capital advantages to continue large-scale investments in Hong Kong subsidiaries, with single-round increases often between HKD 5 billion and HKD 9 billion. For example, in December 2025, China Merchants Securities announced approval to increase its subsidiary, China Merchants International, by up to HKD 9 billion in multiple tranches, with the first tranche not exceeding HKD 4 billion. CITIC Construction Investment also disclosed in August 2025 plans to inject HKD 1.5 billion into CITIC Construction Investment International to expand overseas coverage.

Smaller or specialized firms tend to establish new Hong Kong subsidiaries or make smaller capital injections, typically between HKD 300 million and HKD 2 billion, to quickly penetrate cross-border markets. For instance, Dongwu Securities finalized a plan in April 2025 to increase its Hong Kong subsidiary Dongwu Hong Kong by no more than HKD 2 billion, which received approval from the China Securities Regulatory Commission (CSRC) in February 2026. Hua’an Securities also planned a HKD 500 million increase, which was approved in February 2026, raising its Hong Kong subsidiary Hua’an Financial Holdings’ registered capital from HKD 480 million to nearly HKD 1 billion.

Shanxi Securities and Dongxing Securities have also completed capital increases, with Shanxi Securities planning to inject HKD 1 billion into Shanxi International to strengthen capital and reduce financing costs, and Dongxing Securities adding HKD 300 million to Dongxing Hong Kong for operational funds. Northeast Securities is a new entrant, having approved the establishment of a Hong Kong subsidiary, Dongzheng International, with a HKD 500 million capital injection in early 2025, becoming its first overseas platform.

Besides these, several other small and medium-sized firms, such as Western Securities and First Venture, are planning to expand into Hong Kong. The focus of their capital increases is on core cross-border businesses like investment banking sponsorships, cross-border transactions, asset management, and wealth management, as well as on capital supplementation, obtaining relevant financial licenses, and risk management capabilities to build a solid foundation for overseas growth.

It is noteworthy that Hong Kong has become the central hub for Chinese securities firms’ cross-border operations, but competition is intensifying. These firms face not only domestic rivals but also international investment banks and local Hong Kong securities firms, increasing the competitive pressure in their overseas expansion efforts.