Surging Nearly 200%, Who’s Behind the Surge?

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The financial world took notice on June 25 as Chinese brokerage stocks experienced a dramatic rally. In Hong Kong, the China-affiliated securities index surged 11.75%, led by Guotai Junan International, which skyrocketed nearly 200%. The momentum spilled into mainland markets, where the Wind Securities Index climbed 5.52%. Stocks like TF Securities and Guosheng JinKong hit their daily trading limits, while Guotai Haotong rose 9.09%.

What caused this explosive movement? The answer lies at the intersection of traditional finance and the rapidly evolving digital asset ecosystem.

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The Catalyst: Virtual Asset Licensing Breakthrough

The primary driver behind Guotai Junan International’s historic surge was a regulatory milestone. On June 24, the company received approval from the Hong Kong Securities and Futures Commission (SFC) to upgrade its existing securities license to include virtual asset trading services. This upgrade allows it to offer comprehensive digital asset solutions — including crypto and stablecoin trading, investment advice, and the issuance and distribution of virtual asset-related products such as OTC derivatives.

This makes Guotai Junan International the first mainland-affiliated broker in Hong Kong authorized to provide full-spectrum virtual asset services.

In industry terms, this is known as a “Type 1 license upgrade.” According to Xu Kang, Chief Financial Analyst at Huachuang Securities, Guotai Junan International had already secured qualifications for distributing virtual asset products earlier in 2024 — including involvement in the launch of spot Bitcoin ETFs by institutions like Harvest Fund (International) and CSOP Asset Management (Hong Kong).

“This early mover advantage and faster-than-expected approval signal a broader trend,” Xu noted in a recent research report. “We expect more brokers with international arms to follow suit, enriching Hong Kong’s digital asset ecosystem.”

Why Stablecoins Are Driving Market Excitement

The timing of this development aligns perfectly with growing global interest in stablecoins — digital currencies pegged to real-world assets like the U.S. dollar. With recent legislative moves in the U.S. advancing stablecoin regulation, market participants anticipate a transformation in cross-border payments and financial infrastructure.

“Stablecoins could redefine global payment systems,” said a non-bank financial analyst from a Shanghai-based brokerage. “Guotai Junan International’s new license positions it at the forefront of this shift — no wonder investors reacted so strongly.”

Indeed, the stock surged 198.39% on June 25 alone, with trading volume exceeding HK$16 billion — a clear sign of institutional and retail investor enthusiasm.

Hong Kong's Strategic Push Into Virtual Assets

Hong Kong has been actively positioning itself as a global hub for virtual asset innovation. Backed by robust financial infrastructure and an internationally aligned regulatory framework, the city is fast-tracking its ambitions in Web3 and digital finance.

As highlighted in a report by CITIC Securities, Hong Kong’s strategic commitment to virtual assets is clear. The region leverages its unique position within the Greater Bay Area to foster innovation while maintaining regulatory rigor. This dual advantage is attracting both traditional financial institutions and fintech pioneers.

“Hong Kong is accelerating its journey to become a core node in the global virtual asset network,” CITIC analysts stated. They recommend investors focus on high-quality brokerage firms that are proactively integrating into the crypto-financial ecosystem.

Xu Kang echoed this sentiment: “With continued policy support, maturing regulations, and expanding institutional participation, Hong Kong’s Web3 strategic positioning will only strengthen.”

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Broader Market Drivers: IPO Boom and Rising Trading Volumes

Beyond digital assets, fundamental improvements are also boosting sentiment toward Hong Kong-listed brokers.

Record-Breaking IPO Activity

In the first five months of 2025, Hong Kong’s IPO market raised HK$77.7 billion — a staggering 709.4% year-on-year increase, according to Western Securities. Key listings included industry giants:

These landmark deals have significantly boosted underwriting revenues for Chinese brokers operating in Hong Kong.

Stronger Brokerage Revenue from Higher Trading Volumes

Increased market activity is also fueling commission-based income. From January to May 2025, the average daily trading value on the Hong Kong Stock Exchange reached HK$224.3 billion, up 125% year-over-year.

This sustained liquidity benefits brokers across research, sales, trading, and wealth management divisions.

What This Means for A-Share Brokers

While the immediate catalyst was in Hong Kong, A-share brokerages also benefited from positive spillover effects. Analyst Tao Shengyu from Donghai Securities explained that investor sentiment in mainland China is closely tied to policy developments and market vitality.

“Policy incentives and sustained trading activity are key,” Tao said. “Reforms that support capital markets — especially those boosting tech innovation and SME financing — directly enhance broker profitability.”

He added that long-term performance hinges on how quickly reforms translate into real economic impact and sustained investor engagement.

FAQ: Understanding the Brokerage Surge

Q: What triggered Guotai Junan International’s near-200% stock surge?
A: The surge followed SFC approval to upgrade its license, allowing full virtual asset trading services — a first among mainland-affiliated brokers in Hong Kong.

Q: What is a 'Type 1 license upgrade' in Hong Kong?
A: It refers to expanding a traditional securities license to include dealing in virtual assets, enabling brokers to offer crypto trading, advisory, and product distribution.

Q: How are stablecoins influencing financial markets?
A: Stablecoins are seen as potential disruptors in global payments. Regulatory clarity, especially in the U.S., has boosted confidence in their adoption within mainstream finance.

Q: Are other Chinese brokers likely to follow this path?
A: Yes. Analysts expect more brokers with international arms — particularly those with strong client bases — to pursue similar upgrades amid Hong Kong’s supportive regulatory environment.

Q: Is this rally sustainable beyond speculation?
A: While short-term momentum was driven by sentiment, stronger IPO pipelines, rising trading volumes, and structural integration of digital assets suggest underlying fundamentals are improving.

Q: How does this affect average investors?
A: It opens new avenues for exposure to digital assets through regulated brokers. Over time, this could lead to broader product offerings in wealth management platforms.

👉 See how leading financial platforms are integrating blockchain-powered services for tomorrow’s investors.

Conclusion: A New Era for Brokerages

The recent surge in brokerage stocks isn’t just a flash in the pan — it reflects deeper structural shifts. From virtual asset licensing and stablecoin innovation to booming IPO activity and regulatory evolution, multiple forces are converging to reshape the financial landscape.

Guotai Junan International’s breakthrough marks a pivotal moment: traditional brokers are no longer just observers but active participants in the digital asset revolution. As Hong Kong solidifies its role as a global Web3 hub, firms that adapt quickly stand to gain significant competitive advantages.

For investors, analysts, and financial institutions alike, one message is clear — the future of brokerage lies at the intersection of regulation, technology, and global market access.

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