FINANCE

Soochow Securities Moves to Take Control of Rival in Industry Shakeout

Published: Mar. 3, 2026 4:18 a.m. GMT+8

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Soochow Securities plans to acquire a 26.68% stake in Donghai Securities via share swap. Photo: VCG

Soochow Securities Co. Ltd. said Monday that it plans to acquire a controlling stake in smaller rival Donghai Securities Co. Ltd. through a share swap, the latest step in a state-backed drive to consolidate China’s fragmented brokerage industry.

The Shanghai-listed firm signed a preliminary agreement with Changzhou Investment Group Co. Ltd. to buy the state-owned company’s 26.68% stake in Donghai by issuing new A-shares. Trading in Soochow Securities was suspended Monday and may remain halted for up to 10 trading days pending finalization of the deal’s terms.

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Soochow Securities plans to acquire a 26.68% stake in Donghai Securities via share swap, aiming to boost total assets to 270 billion yuan ($39 billion) and enter China’s top 15 brokerages.
The deal reflects state-backed efforts to consolidate China’s fragmented securities sector for global competitiveness.
Donghai faced governance scandals and fluctuating profits, while Soochow reported steady growth with 2.93 billion yuan profit in early 2025.

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Who’s Who

Soochow Securities Co. Ltd.: Soochow Securities Co. Ltd. is a Shanghai-listed national brokerage firm. It plans to acquire a 26.68% stake in Donghai Securities Co. Ltd. to consolidate China's brokerage industry. If the acquisition is completed, Soochow's total assets could reach 270 billion yuan, placing it among the industry's top 15 by assets.

Donghai Securities Co. Ltd.: Donghai Securities Co. Ltd. is a smaller, regional brokerage firm founded in 1993 in Jiangsu province, listed on the National Equities Exchange and Quotations. It has faced governance issues, including a corruption scandal involving its former chairman. Soochow Securities Co. Ltd. plans to acquire a controlling stake in Donghai Securities. Donghai reported a loss in 2023 but returned to profit in 2024 and the first half of 2025.

Changzhou Investment Group Co. Ltd.: Changzhou Investment Group Co. Ltd. is a state-owned company that holds a 26.68% stake in Donghai Securities Co. Ltd. Soochow Securities Co. Ltd. plans to acquire this stake through a share swap as part of a state-backed consolidation of China's brokerage industry. The group acquired stakes in Donghai after a scandal involving Fuxing Group to stabilize operations.

Fuxing Group: Fuxing Group (also referred to as Fuxing) is a troubled conglomerate that was involved in a corruption scandal with Donghai Securities. Its dealings led to the imprisonment of Donghai Securities' former chairman, Zhu Kemin, in 2022. Following this, state-owned enterprises acquired stakes previously held by Fuxing affiliates to stabilize Donghai's operations.

Huatai Securities Co. Ltd.: Huatai Securities Co. Ltd. is mentioned as an industry heavyweight and one of the five brokerages located in Jiangsu province. The article implies it is a significant player in China's fragmented brokerage market, which regulators are aiming to consolidate.

Goldman Sachs Group Inc.: The article mentions Goldman Sachs Group Inc. in the context of the Chinese brokerage industry. It states that over 100 Chinese brokerages combined have assets comparable to those of a single Wall Street giant like Goldman Sachs. This highlights the fragmented nature of China's market compared to the larger, consolidated players in the US.

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What Happened When

2022：: Donghai's former chairman Zhu Kemin is sentenced to 10 years in prison for corruption.

2023：: Donghai posts a loss of 492 million yuan.

Since late 2023：: Central authorities explicitly encourage mergers and acquisitions to cultivate high-quality leading institutions.

2024：: Donghai returns to profit with 23.5 million yuan.

First half of 2025：: Donghai reports net income of 106 million yuan.

First three quarters of 2025：: Soochow Securities reports net profit of 2.93 billion yuan and net assets of 42.8 billion yuan.

Mid-2025：: Soochow's total assets projected to reach about 270 billion yuan if acquisition is completed.

March 2, 2026：: Soochow Securities announces plan to acquire a controlling stake in Donghai Securities via share swap and signs preliminary agreement with Changzhou Investment Group to buy 26.68% of Donghai.