GF Securities Issuer Summary

Report date: 2026-05-21
Issuer: GF Securities Co., Ltd.
Coverage ticker / market identifier: GFFHBV
Sector: China securities / investment banking
Primary credit focus: Consolidated issuer credit of GF Securities Co., Ltd.; market and liquidity risk as a major Chinese securities firm with a relatively non-government-controlled profile; offshore issuance structures involving GF Holdings (Hong Kong) and related entities

Note: GFFHBV is the market identifier used for this coverage and is not a legal issuer identifier for any specific bond. For individual bonds, the issuer, guarantor, guarantee scope, governing law, cross default, change of control and subordination should be reviewed separately.

1. Business Snapshot and Recent Developments

GF Securities Co., Ltd. (“GF Securities”) is a large Chinese integrated securities company established in 1991 and listed on both the Shenzhen Stock Exchange and the Hong Kong Stock Exchange as an A+H-listed securities group. Its businesses are centred on investment banking, wealth management, trading and institutional services, and investment management. Through domestic securities operations, asset management, public mutual funds and overseas securities subsidiaries, the group conducts capital markets businesses across mainland China and Hong Kong. The starting point for credit analysis is to view the company not as a deposit-taking bank, but as a market-based financial issuer. Its earnings, capital, liquidity and refinancing capacity are driven by equity, bond and derivatives markets, client trading flows, proprietary positions, repo, valuation of financial assets, assets under management and investment banking deal flow.

In one sentence, the company can be described as “a major non-government-controlled securities company in China”. In its official company introduction, GF Securities describes itself as one of China’s largest non-government-controlled securities companies and as having long ranked among the industry leaders in total assets, net assets, net capital, operating income and net profit. This description has two credit implications. First, GF Securities is a leading securities company with scale, a client base, branch network, product breadth and asset management platform, rather than a small or mid-sized regional securities firm. Second, unlike CICC, which is linked to Central Huijin ownership, or CITIC Securities, which is linked to CITIC Group ownership, GF Securities is not an issuer whose core credit case rests on ownership and support channels from an identifiable central government shareholder. Its non-government-controlled status does not, by itself, require us to rule out support expectations. However, in assessing GF Securities, potential support from the government, local governments or major shareholders should be separated from legal guarantees or parent guarantees.

The main analytical subject of this report is the consolidated credit of GF Securities Co., Ltd. GFFHBV is treated as a coverage market identifier and is not considered to indicate the issuing entity for any specific bond. In practice, GF Securities itself, GF Holdings (Hong Kong) Corporation Limited, GF Securities (Hong Kong), GF Financial Markets (UK), GF Global Capital and other SPVs or overseas subsidiaries may be involved in issuance, guarantees or funding transfers. Therefore, even if consolidated issuer credit is strong, the recourse, guarantee scope, remittance restrictions, structural subordination and covenants of individual bonds need to be reviewed separately.

The 2025 results showed both earnings recovery and balance sheet expansion at GF Securities. According to the 2025 annual report, total revenue and other income were RMB44.513bn, profit before tax was RMB17.973bn, profit attributable to shareholders of the parent was RMB13.702bn, and weighted average ROE was 10.16%. This was a clear improvement from profit attributable to shareholders of the parent of RMB9.637bn and ROE of 7.44% in 2024, and earnings were also materially higher than in 2023, when the company reported RMB6.978bn of profit attributable to shareholders of the parent and ROE of 5.66%. At the same time, total assets expanded from RMB758.745bn at end-2024 to RMB975.484bn at end-2025. The earnings improvement supports credit quality, but asset expansion at a securities company is accompanied by increases in financial assets, repo, client deposits, short-term funding, bond issuance and collateral needs. It should therefore not be assessed simply as scale expansion.

The first quarter of 2026 was also strong on an unaudited CAS basis. According to the first quarterly report published on HKEX on 27 April 2026, operating revenue for January–March 2026 was RMB11.682bn, profit before tax was RMB6.239bn, profit attributable to shareholders of the parent was RMB4.707bn, and weighted average ROE was 3.32%. At end-March 2026, total assets were RMB1.122tn and equity attributable to shareholders of the parent was RMB171.485bn, both expanding further from end-2025. It would not be appropriate to simply annualise first-quarter profit, but the results confirm that the 2025 earnings recovery had not stalled at the start of 2026, while the balance sheet had grown further.

The current credit interpretation is as follows.

When analysing GF Securities’ credit, it is important not to treat 2025 and first-quarter 2026 earnings as low-volatility bank-like income, not to equate non-government-controlled status with zero support, and not to automatically transfer the consolidated issuer credit to individual bonds involving GFHK or overseas SPVs. The GFFHBV coverage identifier does not indicate legal recourse.

2. Industry Position and Franchise Strength

GF Securities’ business franchise ranks among the stronger platforms in China’s securities industry. The company’s official website describes it as one of the earliest integrated securities companies established in China and as an A+H-listed securities company that has maintained leading industry positions in total assets, net assets, net capital, operating income and net profit. This report has not recalculated a full industry ranking table, but total assets of RMB975.484bn at end-2025, total assets of RMB1.122tn at end-March 2026 and parent net capital of RMB113.072bn are sufficient to treat the company as a leading issuer in China’s securities sector.

The first pillar supporting the franchise is its broad client base and wealth management network. In 2025, the wealth management segment generated total revenue and other income of RMB17.272bn and profit before tax of RMB8.610bn. Wealth management at a securities company does not provide low-cost and stable liabilities in the same way as bank deposits. However, through client trading, financial product distribution, asset allocation, margin financing, investment advisory services and branch channels, it provides a base for revenue generation. When risk appetite among retail, high-net-worth and corporate clients in mainland China improves, wealth management supports fees, interest income, product distribution and flow revenue. Conversely, if markets fall sharply, trading turnover declines and investors move away from risk assets, revenue can fall even with the same client base.

The second pillar is the scale of the trading and institutional business. In 2025, this segment generated total revenue and other income of RMB17.975bn and profit before tax of RMB9.316bn, making it the largest segment by profit contribution. Market-making, bond, equity and derivatives trading, institutional client services, proprietary positions and client flows as a major securities company enhance earnings power. However, because market prices, interest rates, credit spreads, collateral, repo and counterparty credit can move simultaneously, periods of strong earnings require particular attention to risk volume and liquidity needs.

The third pillar is the asset management platform. GF Fund’s public mutual fund AUM was RMB1.016tn at end-2025, and its non-money-market public mutual fund scale was reportedly third in the industry. E Fund’s public mutual fund AUM was RMB2.571tn, and its non-money-market public mutual fund scale was reportedly first in the industry. E Fund should be assessed as an equity-accounted investment / associate rather than a consolidated subsidiary, but it is an important asset for GF Securities in supporting the asset management ecosystem, product supply, fee income and investor touchpoints. The depth of the asset management platform can partly mitigate volatility in investment banking and proprietary income. However, AUM is affected by market prices and investor redemptions, and reputational risk remains for credit and liquidity products. Asset management therefore supports credit quality, but should not be viewed as fully stable income.

The fourth pillar is A+H listing status and access to both domestic and overseas markets. The Hong Kong listing supports disclosure, capital access and recognition among international investors. At the same time, where Hong Kong subsidiaries or overseas platforms are involved, foreign-currency liquidity, jurisdiction-specific regulation, subsidiary funding transfers and guarantee structures become more complex. Bondholders need to assess not only the credit quality of a major domestic securities company, but also the recourse and funding channels of overseas issuers.

In peer comparison, GF Securities should be analysed alongside CICC and CITIC Securities as a major Chinese securities company, but its ownership structure and support assessment differ. CICC has a stronger policy and government-related profile through Central Huijin, while CITIC Securities has a stronger financial group profile through CITIC Group / CITIC Financial Holdings. As a leading securities company with a relatively non-government-controlled profile, GF Securities’ credit strength needs to be explained more by “market access, regulatory capital, revenue base and self-contained liquidity management”. This difference does not mean that GF Securities has weaker credit quality in a simple sense. Rather, because its franchise is strong, the company can be viewed at investment-grade levels, but support expectations and legal recourse on offshore bonds cannot be assumed on the same basis as for government-related issuers.

Overall, GF Securities has the client base, trading capabilities, asset management platform and domestic and overseas market access of a leading issuer in China’s securities industry. However, these strengths are expressed within capital markets and do not represent stability independent of adverse market conditions. The credit question is whether the company can maintain net capital, liquidity, collateral capacity, repo access, client confidence and compliance under weaker market conditions.

3. Segment Assessment

GF Securities’ segments differ in both earnings scale and risk profile. In 2025, wealth management, trading and institutional services, and investment management supported earnings, while investment banking made only a small profit contribution. The Others segment recorded a large loss, indicating the burden of group costs, other businesses, consolidation adjustments or holding and management functions. In assessing the segments, it is not sufficient to view the segments with larger profits as better businesses. The key is how repeatable the earnings are and how much capital and liquidity they consume.

The segment data based on the 2025 annual report segment reporting are as follows. Amounts are rounded to RMB billion.

Investment banking indicates GF Securities’ franchise and client relationships, but its direct profit contribution in 2025 was small. Revenue and other income were RMB0.923bn and profit before tax was RMB0.098bn in 2025, both down from 2024. Investment banking is an important segment for the issuer’s industry position because it is involved in IPOs, refinancing, bond underwriting, M&A, advisory work and policy-driven capital market development. However, it should not be overestimated as a stable floor for debt repayment capacity, because it depends on deal approvals, market sentiment, the opening and closing of issuance markets and regulatory policy.

Wealth management was a major driver of the earnings improvement in 2025. Revenue and other income were RMB17.272bn and profit before tax was RMB8.610bn, contributing close to half of total profit before tax. For a securities company, wealth management can become a relatively diversified revenue source through client trading, financial product distribution, margin financing, investment advisory services, branch networks and online channels. GF Securities’ large client base supports the company’s credit profile. However, wealth management depends on client market participation. If equity markets are weak, trading turnover falls and financial product distribution slows, revenue will decline. Client deposits are also large, but they are deposits associated with securities transactions and are not stable funding in the same way as core deposits at commercial banks.

Trading and institution is the centre of both the company’s earnings power and credit risk. In 2025, revenue and other income were RMB17.975bn and profit before tax was RMB9.316bn, making it the largest profit source. Institutional client services, trading, market-making, proprietary positions, derivatives, and bond and equity products generate strong earnings capacity. However, in credit analysis, the size of this segment should be treated both as an earnings strength and as a stress channel. Mark-to-market valuation of financial assets, sensitivity to interest rates, spreads and equity prices, derivatives counterparties, collateral posting, repo haircuts and liquidity needs are less visible in normal conditions but can deteriorate simultaneously under market stress.

Investment management brings GF Securities’ earnings closer to an AUM-based and fee-based profile. In 2025, revenue and other income were RMB8.170bn and profit before tax was RMB4.031bn, both increasing from 2024. GF Fund, E Fund, asset management subsidiaries, and private, public and institutional products support client touchpoints and fee income. In particular, the reported top industry ranking of E Fund’s non-money-market public mutual fund scale is an important indicator of GF Securities’ asset management ecosystem. However, E Fund’s contribution involves equity-accounted investment / associate characteristics, so its impact on consolidated cash flow and regulatory capital needs to be separated carefully. AUM is affected by market prices and redemptions, while product problems can become reputational risk.

The loss in the Others segment is an item for follow-up in initial coverage. Profit before tax in this segment was negative RMB4.089bn in 2025, slightly wider than the negative RMB3.968bn in 2024. Under the annual report’s segment classification, this may include other businesses, group management, consolidation adjustments, and subsidiary- or investment-related expenses. The strength of the three main segments resulted in a large improvement in group profit, but recurring losses in Others are a reason to review the consolidated cost structure, intra-group funding and non-core business profitability.

The central issue across the segments is that the revenue base is broad but not independent of markets. Diversification can absorb weakness in individual segments, but in a stress where equities, bonds, credit and liquidity deteriorate simultaneously, multiple segments may react in the same direction. Therefore, the 2025 earnings recovery supports credit quality, but should be assessed together with normalised earnings, trading risk volume, the quality of liquid assets and the stability of secured funding.

4. Financial Profile and Analysis

GF Securities’ financial profile improved from 2023 to 2025, with stronger earnings, and 2026 began with high first-quarter profit. At the same time, total assets, liabilities, repo, short-term financing debt and bonds outstanding also expanded. Debt repayment capacity should therefore be analysed by looking at both the earnings recovery and the increase in risk volume. For a securities company, growth in total assets does not necessarily imply credit deterioration. However, when proprietary positions, financial assets, client-related balances, repo, derivatives and collateral increase, liquidity consumption under stress and sensitivity to market prices also increase.

It is first necessary to distinguish accounting standards and reporting scope. The annual figures for 2023–2025 are consolidated IFRS figures based on annual reports. By contrast, the first quarter of 2026 is based on an unaudited CAS quarterly report and may not be fully comparable with annual IFRS figures at the same level of granularity. Parent net capital, risk coverage ratio, capital leverage ratio, LCR and NSFR are parent-level metrics under Chinese securities company regulation, not consolidated IFRS capital ratios. Therefore, the financial table should be read with the understanding that it combines consolidated earnings and assets with parent regulatory metrics.

Key financial and regulatory metrics are as follows. Amounts are rounded to RMB billion.

Profitability has clearly improved. Profit attributable to shareholders of the parent in 2025 increased by about 42% from 2024 and almost doubled from 2023. ROE also rose from 5.66% in 2023 and 7.44% in 2024 to 10.16% in 2025. For a securities company, the return to double-digit ROE indicates that the company has recovered a certain level of earnings power relative to equity. Profit attributable to shareholders of the parent of RMB4.707bn in the first quarter of 2026 was also high, and quarterly ROE of 3.32% indicates that the earnings environment was favourable at least at the start of 2026.

However, this earnings improvement cannot be treated as permanent normalised profit. The 2025 earnings were substantially supported by improvements in wealth management and trading and institutional services. These segments are strong when markets are buoyant, but revenue may fall sharply in market downturns, issuance-market slowdowns, interest-rate and spread volatility, or deterioration in investor risk appetite. From a credit perspective, 2025 profit should be assessed as a source of stress resilience, while also testing whether the company can maintain net capital and liquidity in a weaker year.

The balance sheet has expanded rapidly. Total assets increased from RMB682.182bn at end-2023 to RMB758.745bn at end-2024, RMB975.484bn at end-2025 and RMB1.122tn at end-March 2026. In the three months from end-2025 to end-March 2026 alone, total assets increased by about 15%. Equity attributable to shareholders of the parent also increased to RMB171.485bn at end-March 2026, but the pace of growth in total assets and liabilities was also significant. This may reflect increases in business opportunities, client deposits, repo, financial assets, bond issuance and short-term financing debt.

For a securities company, parent regulatory metrics are important in assessing capital. At end-2025, parent net capital was RMB98.531bn, the risk coverage ratio was 231.61%, LCR was 185.72% and NSFR was 145.32%. At end-March 2026, net capital rose to RMB113.072bn, the risk coverage ratio to 244.32%, LCR to 202.34% and NSFR to 152.70%. These indicate near-term regulatory capital and liquidity headroom. In particular, the improvement in net capital and liquidity metrics while total assets were expanding is supportive for credit quality.

At the same time, the capital leverage ratio declined from 14.58% at end-2025 to 11.50% at end-March 2026. Because the ratio declined despite the increase in net capital, the size of on- and off-balance-sheet assets, leverage, transaction volume or the risk-adjusted denominator may have expanded. It is not necessary to conclude from a single quarterly change that credit quality has deteriorated, but if total assets continue to expand rapidly, the direction of capital leverage and risk coverage should be monitored in addition to the absolute amount of net capital.

Asset quality should not be assessed using a single metric such as a bank NPL ratio. Risks are dispersed across margin financing, collateral-related exposures, bond investments, asset management products, derivatives counterparties, repo collateral, and Level 2 / Level 3 financial assets. This report has not sufficiently extracted detailed breakdowns and sensitivities. Therefore, while earnings and regulatory metrics are strong, the quality of financial assets and proprietary risk remain open items.

The preliminary financial assessment is that the financial profile supports credit quality, but is also increasing the list of monitoring items. Earnings recovery, capital growth and strong parent regulatory metrics support an investment-grade credit profile. At the same time, increases in total assets and liabilities, the scale of trading profits, expansion of repo, short-term funding and client deposits, and the decline in the capital leverage ratio indicate that risk volume is rising behind the strong results.

5. Structural Considerations for Bondholders

For bondholders, the first structural issue is to distinguish GF Securities’ consolidated credit from the legal recourse of individual bonds. This report focuses primarily on the consolidated issuer credit of GF Securities Co., Ltd., but the GFFHBV market identifier does not automatically mean a bond issued directly by GF Securities or guaranteed by GF Securities. For offshore bonds, Hong Kong subsidiaries, UK subsidiaries, SPVs, guarantee agreements, keepwells, parent support letters, governing law, cross default, change of control and regulatory remittance restrictions may affect recovery.

The preliminary structural mapping based on the group and overseas network described in the 2025 annual report is as follows. This table does not reflect a review of offering circulars for individual bonds; it is intended to identify the corporate layers bondholders should review next.

The credit strength of GF Securities itself is an important starting point for offshore bond investment. If the parent is a major Chinese securities company with an important position in domestic capital markets and strong parent regulatory metrics, that supports funding access and investor recognition for overseas subsidiaries. However, bondholders’ ultimate recovery depends on the terms of individual bond contracts. For SPV bonds without explicit parent guarantees, keepwell-type support, standalone subsidiary bonds or structurally subordinated bonds, the distance between consolidated credit and bond recourse widens.

There are also regulatory, remittance, foreign-exchange and capital-movement issues between the mainland Chinese issuer and overseas subsidiaries. In normal conditions, intra-group capital and liquidity support may be expected, but under stress, domestic and overseas regulation, foreign-currency liquidity, subsidiary regulatory capital, regulatory approvals and the parent’s own liquidity needs can become constraints. For offshore bonds, investors need to review not only whether there is a parent guarantee, but also the currency, jurisdiction, remittance, tax, early redemption and cross-default scope at the time of a guarantee claim.

Structurally, GF Securities should not be presumed to be simply weaker than CICC or CITIC Securities. The company has market access and regulatory capital as a major securities company, and its parent credit is correspondingly strong. At the same time, it is harder to place central government or large state-owned financial group ownership at the centre of the credit support narrative, as one might for CICC or CITIC Securities. Therefore, for GF Securities bonds, consolidated credit, parent regulatory metrics, offshore structure and individual contract terms become more important.

Important structural items that remain unverified at this stage include the issuer, guarantor, guarantee scope, ranking, subordination, existence of collateral, negative pledge, cross default, change of control, parent support agreements, tax, governing law and jurisdiction for each individual ISIN. Until these items are confirmed, GFFHBV-related bonds should not all be treated as equivalent to senior unsecured bonds issued directly by GF Securities.

6. Capital Structure, Liquidity and Funding

GF Securities’ funding and liquidity should be analysed by looking at securities-company-specific items such as repo, client deposits, short-term financing debt, bond issuance, financial assets and regulatory LCR / NSFR, rather than a bank-style deposit and loan structure. From end-2025 to end-March 2026, the company’s liabilities and market-based funding increased significantly. This indicates business expansion and higher client activity, while also making stress-period refinancing, collateral and liquidity management more important.

Key liability and liquidity-related items are as follows. Amounts are rounded to RMB billion.

Repo is a normal funding tool for a securities company, but it can also become a vulnerability during market stress. At end-March 2026, financial assets sold under repurchase agreements were RMB231.282bn, up by about RMB37.7bn from end-2025. Without reviewing collateral assets, currency, maturities, counterparties and refinancing capacity, the increase in repo balances should not be treated only as efficient funding.

Client deposits and similar balances indicate franchise scale, but are not core deposits like those of a deposit-taking bank. At end-March 2026, client deposits and similar balances were RMB285.350bn, up from end-2025. Client funds are affected by market sentiment, trading volume and client behaviour, and should not be overestimated as stable funding under stress.

Short-term financing debt and bonds outstanding have also increased. At end-March 2026, short-term financing debt was RMB93.839bn and bonds outstanding were RMB155.175bn. Bond issuance capacity as a domestic securities company and investment-grade ratings support refinancing capacity, but when short-term debt is large, market closures, deterioration in the rating outlook, regulatory sanctions or liquidity shocks can directly affect refinancing costs.

Regulatory liquidity metrics are currently supportive. At end-March 2026, parent LCR was 202.34% and NSFR was 152.70%, both improved from end-2025. This indicates that the parent has some headroom for both short-term stress and stable funding. However, regulatory metrics do not fully substitute for issuer-wide liquidity risk. Consolidated subsidiaries, overseas subsidiaries, SPVs, foreign-currency bonds, individual bond maturities, collateral posting, unused committed lines, and the currency and jurisdiction of liquid assets need to be reviewed separately.

The factors behind the increase in capital in the first quarter of 2026 require additional review. It is confirmed that equity attributable to shareholders of the parent and net capital increased at end-March 2026, but this report has not sufficiently reviewed related capital-raising announcements, use of proceeds, dilution, regulatory capital recognition or implications for future leverage capacity.

The preliminary liquidity and funding assessment is that the position is currently good, but can change quickly as a market-based financial issuer. Parent LCR, NSFR and net capital are strong. As a major domestic securities company, GF Securities also has access to bond markets. At the same time, repo, short-term financing debt, bonds and client deposits are large components of liabilities and expanded further in the first quarter of 2026. GF Securities’ liquidity may be sufficient in normal conditions, but can change quickly under stress where market prices, collateral, counterparties, foreign currency and ratings move together.

7. Rating Agency View

External ratings are a supporting reference for viewing GF Securities as an investment-grade, large Chinese securities company. The 2025 annual report confirms that the company is rated AAA / stable by CCXI, that its domestic bonds are rated AAA, and that it is rated BBB / stable by S&P and Baa2 / stable by Moody’s. S&P’s official website confirms that in 2023 GF Securities and related issuers were assigned BBB/A-2 issuer credit ratings, and ratings were also confirmed for notes related to GF Holdings (Hong Kong). However, this report has not reviewed the guarantee agreements or offering circular terms for those notes. For Fitch, public information confirms a headline indicating BBB / Stable affirmation for GF Securities and GF Holdings (Hong Kong), but the detailed text had not been reviewed at the time of this report.

The important point in reading the ratings is that the existence of investment-grade ratings and the review of the rating rationale are separate matters. The BBB / Baa2 level likely reflects, to some extent, GF Securities’ scale, regulatory capital, domestic market position, revenue base and liquidity management. However, this report has not sufficiently reviewed the latest detailed rating agency reports, support notching, standalone assessment, upgrade and downgrade triggers, or treatment of offshore subsidiary and SPV bonds.

The domestic AAA rating supports domestic bond market access. For a major Chinese securities company, access to domestic bonds, short-term financing bills, corporate bonds, subordinated bonds and asset-backed products is central to refinancing and capital management. The domestic AAA rating supports this access, but domestic rating scales, support assumptions and market practices differ from international ratings. Foreign-currency bond investors need to review not only the domestic AAA rating, but also international ratings, foreign-currency liquidity, guarantee structure and the positioning of overseas subsidiaries.

International ratings provide a benchmark for comparing GF Securities with investment-grade securities company peers. Support expectations related to ownership structure may differ from those for CITIC Securities or CICC. At the same time, GF Securities has the revenue base and regulatory capital of a major securities company, and investment-grade ratings from S&P and Moody’s have been confirmed. From a credit perspective, it is appropriate to respect the external ratings while incorporating the company-specific market risk, repo and short-term funding, offshore bond structure and relatively non-government-controlled profile.

8. Credit Positioning

GF Securities’ credit positioning can be summarised as “a market-based credit with investment-grade parent credit strength as a major Chinese securities company, but with limited reliance on support expectations from the central government or a large state-owned financial group”. Revenue scale, parent net capital, liquidity metrics, asset management platform and access to domestic and overseas markets are strong. However, the subject of the credit case is not an explicit government guarantee or parent guarantee, but rather the business franchise, capital, liquidity and market access.

In peer comparison, GF Securities has a weaker policy-shareholder profile than CICC and is less able than CITIC Securities to place large financial group support at the front of the credit case. At the same time, it is less regionally diversified than a Nomura-type international securities group and is strongly affected by China’s markets and China’s securities regulation. It also differs from Chinese mega banks, because its credit analysis centres not on a deposit base, but on repo, client deposits, marketable assets and trading income.

As an investment-grade issuer, GF Securities is less a stable public-bond-like credit and more a major securities company credit with embedded market-based financial risk. Because live prices have not been reviewed, this report does not make buy, sell or relative-value judgements.

9. Key Credit Strengths and Constraints

GF Securities’ main credit strengths are its leading franchise in China’s securities industry, earnings recovery from 2025 through the first quarter of 2026, parent regulatory headroom and asset management platform. Net capital of RMB113.072bn, a risk coverage ratio of 244.32%, LCR of 202.34% and NSFR of 152.70% at end-March 2026 indicate near-term capital and liquidity headroom. AUM linked to GF Fund and to E Fund exposure as an equity-accounted investment / associate also supports client touchpoints and product supply, but E Fund’s contribution should not be treated as the same consolidated platform as GF Fund.

The main constraints are earnings volatility as a market-based financial issuer, balance sheet and liability expansion, the interpretation of support expectations, unverified offshore bond structures, and conduct and internal control risk. At end-March 2026, total assets were RMB1.122tn and total liabilities were RMB943.994bn, while repo, client deposits, short-term financing debt and bonds outstanding had also increased. GF Securities is likely to have supervisory and market importance, but a central government or large state-owned financial group ownership structure cannot be placed at the centre of the credit assessment. For individual bonds, legal protections should not be concluded until the guarantee scope, governing law, remittance, structural subordination, cross default and change of control have been reviewed.

10. Downside Scenarios and Monitoring Triggers

The main downside scenario for GF Securities is one in which a market decline and liquidity stress occur simultaneously. If equity markets fall, bond spreads widen, derivatives valuations deteriorate and client trading declines at the same time, earnings across multiple segments, collateral capacity, repo terms, counterparty credit and client funds may all deteriorate simultaneously.

The second scenario is one in which balance sheet expansion consumes capital headroom. In the first quarter of 2026, net capital and the risk coverage ratio improved, but the capital leverage ratio declined. If total assets, repo, short-term financing debt and bonds outstanding continue to increase, while earnings normalise or decline, regulatory capital headroom may thin. Even if capital growth is confirmed, credit quality will not improve if risk volume expands by more.

The third scenario is stress arising from offshore subsidiaries or individual bond structures. If parent guarantees are limited, foreign-currency liquidity is insufficient, remittance restrictions arise, subsidiary-level regulatory capital comes under pressure, or the scope of cross default differs from assumptions, individual bond risk may be higher than suggested by consolidated parent credit.

The fourth scenario is the accumulation of conduct and regulatory risk. If sanctions relating to investment banking, research, product distribution, asset management, derivatives or client suitability are repeated in the same areas, they should be viewed as internal control issues.

The indicators to monitor are as follows.

On the upside, if the earnings recovery continues for multiple years, net capital increases while the capital leverage ratio is maintained, and LCR / NSFR remain high, the credit view would become more stable. Conversely, if total assets and market-based funding expand faster despite strong earnings and regulatory metrics decline, the increase in risk volume should be given significant weight.

11. Credit View and Monitoring Focus

GF Securities’ current credit quality can be assessed as investment-grade for a major Chinese securities company. The direction is stable, and the earnings recovery and regulatory metrics from 2025 through the first quarter of 2026 are good. However, given the expansion in total assets, repo, short-term funding and trading and institutional business, it is appropriate to reserve judgement on whether credit quality has improved. In normal conditions, the probability of a sharp change in credit quality is not high, but because the company is a market-based financial issuer, the speed of change can accelerate when market declines, collateral and repo conditions, ratings and regulatory sanctions move together.

The core supports for the parent credit are the franchise as a leading securities company, earnings recovery since 2025, asset management platform, and headroom in parent net capital and liquidity metrics. GF Securities is not an issuer dependent on a single investment banking deal or small-scale brokerage business. It is connected to multiple revenue pools through wealth management, trading and institutional services, and investment management. Net capital of RMB113.072bn, a risk coverage ratio of 244.32%, LCR of 202.34% and NSFR of 152.70% at end-March 2026 are important grounds supporting current credit quality.

At the same time, this credit view does not rely on an explicit government guarantee or parent guarantee. GF Securities is a major securities company with a relatively non-government-controlled profile, and the same support expectations as for CICC or CITIC Securities should not be applied automatically. Supervisory and market importance, domestic market access, and relationships with local and major shareholders may be support factors, but they are different from legal guarantees. Therefore, the company’s credit is explained more by its own capital, liquidity, revenue base, market access and risk management capabilities than by support expectations.

For bond investors, the analysis needs to proceed in two stages: parent credit and individual bond structure. The consolidated credit of GF Securities Co., Ltd. is reasonably strong, but whether a specific GFFHBV-related bond is a parent bond, a GFHK bond, an SPV bond, whether it has a parent guarantee, and whether the guarantee is explicit, unconditional and irrevocable are prerequisites for investment analysis. This report has not reviewed offering circulars, so the guarantee scope and covenants of individual bonds remain unverified.

Future monitoring should prioritise four points. First, whether the 2026 interim results and results from the second quarter onward can sustain the strength seen in 2025 and the first quarter of 2026. Second, whether net capital, the capital leverage ratio, LCR and NSFR are maintained as total assets, repo, short-term financing debt and bonds outstanding expand. Third, the legal recourse, guarantees, maturities and currency-specific liquidity of GFHK / overseas subsidiary / SPV bonds. Fourth, whether regulatory sanctions relating to investment banking, research, asset management or product distribution recur.

Overall, GF Securities is an investment-grade issuer supported by its franchise and financial metrics as a major Chinese securities company. However, the returns required by investors should reflect not only a major-securities-company premium, but also the relatively non-government-controlled profile, securities-company market risk, repo and short-term funding, volatility in trading earnings, and unverified offshore bond structures. The conclusion of this report is that the issuer’s parent credit can currently be viewed as stable, but investment decisions on individual bonds require documentation review and live market price checks.

12. Short Summary & Conclusion

GF Securities is an investment-grade issuer supported by its client base as a major Chinese securities company, asset management platform, earnings recovery since 2025, and parent net capital and liquidity metrics. At the same time, the company is a market-based financial issuer with a relatively non-government-controlled profile, and the same support expectations as for CICC or CITIC Securities should not be assumed automatically. For GFFHBV-related bonds, investors need to separate the consolidated credit of GF Securities itself from the issuer, guarantee scope, remittance arrangements and covenants of individual bonds involving GFHK, overseas subsidiaries or SPVs.

13. Sources

Primary Sources

• GF Securities Co., Ltd., 2025 Annual Report, HKEX, published 2026-04-16. https://www1.hkexnews.hk/listedco/listconews/sehk/2026/0416/2026041600468.pdf
• GF Securities Co., Ltd., 2026 First Quarterly Report, HKEX, published 2026-04-27. https://www1.hkexnews.hk/listedco/listconews/sehk/2026/0427/2026042703000.pdf
• GF Securities official Financial Reports page, accessed 2026-05-21. https://ir.gf.com.cn/en/report/performance-report-hk
• GF Securities official Company Introduction and related investor pages, accessed 2026-05-21. https://en.gf.com.cn/about/intro
• HKEXnews title search for GF Securities announcements, accessed 2026-05-21. https://www1.hkexnews.hk/search/titlesearch.xhtml?category=0&lang=EN&market=SEHK&stockId=121060

Rating Sources and Pointers

• S&P Global Ratings, official 2023 assignment page for GF Securities Co., Ltd. and GF Holdings (Hong Kong) related ratings, accessed 2026-05-21. https://www.spglobal.com/ratings/en/regulatory/article/-/view/type/HTML/id/2963048
• GF Securities 2025 Annual Report, financing capacity / rating-related disclosures, used for CCXI, S&P, Moody's and domestic bond rating levels.
• Public rating headlines for later S&P / Fitch affirmations were used only as pointers. Detailed latest S&P / Fitch / Moody's rating reports, support notching and rating triggers were not reviewed.

Internal Working Files

• issuer_summary/issuers/gf_securities/working/gf_securities_20260521_writing_plan.md
• issuer_summary/issuers/gf_securities/data/gf_securities_20260521_credit_metrics.json

Unverified Or Pending Items

• Live bond prices, spreads, OAS and CDS were not checked.
• Offering circulars and individual ISIN terms for GFFHBV / GFHK / GF Financial Markets (UK) / GF Global Capital related notes were not reviewed.
• Guarantee scope, cross default, change of control, governing law, subordination and tax clauses remain unverified for individual bonds.
• Currency-by-currency maturity ladder, committed liquidity facilities, collateral composition, Level 2 / Level 3 financial assets and derivatives sensitivity require follow-up.
• Latest detailed S&P / Fitch / Moody's rating reports and upgrade / downgrade triggers were not obtained.