Securities advisory firms are making a fortune! This company’s net profit increased by 238% last year, with marketing "burning money" exceeding 1.4 billion yuan.

Last year, as the Shanghai Composite Index hit a ten-year high, A-share trading volume surged, and investor confidence rebounded, securities advisory firms also reaped substantial profits.

Recently, the only publicly listed securities advisory firm in Hong Kong, Jiufang Zhitu, disclosed its performance for 2025. The company achieved revenue of 3.403 billion yuan, a year-on-year increase of 48.7%, and a net profit attributable to the parent company of 922 million yuan, a significant year-on-year growth of 238.5%. This is the best performance report since the company went public in Hong Kong in 2023.

Marketing expenditure reached 1.413 billion yuan: Continuous expansion of traffic procurement

Jiufang Zhitu Holdings continues its core business model of “monetizing traffic.”

In 2025, the company’s sales and marketing expenses amounted to 1.413 billion yuan, an increase of 33.4% year-on-year, accounting for 41.2% of annual revenue. The financial report explains that this increase is mainly due to the expansion of user scale and the broadening of the integrated media traffic pool, leading to increased internet traffic procurement expenditures. This far exceeds Jiufang Zhitu’s R&D expenses of 356 million yuan and is also higher than the growth rate of R&D expenditure.

According to statistics, since 2020, the company’s expenditures on internet traffic procurement have continued to rise. This “burning money” model has been continuously ramped up since going public: marketing expenses were 956 million yuan in 2023, increased to 1.06 billion yuan in 2024, and further climbed to 1.413 billion yuan in 2025, with a total investment exceeding 3.4 billion yuan over three years.

Jiufang Zhitu stated that the company is actively exploring new business models in e-commerce, strengthening integrated media traffic operations, further broadening customer outreach channels, and expanding user coverage; meanwhile, continuously enhancing the product, content, and service system for existing customers, increasing the revenue contribution from old customers and improving retention.

During the reporting period, the company’s total order amount reached approximately 3.955 billion yuan, a 12.8% increase from about 3.506 billion yuan in 2024, and the number of paying users in 2025 reached 289,500, a significant increase of 59.5% from 181,500 in 2024. The end-of-period contract liabilities were 1.53 billion yuan, which will mainly be recognized as revenue in the 2026 fiscal year, providing some support for revenue in the 2026 fiscal year.

It is noteworthy that, in addition to growth in main business revenue, Jiufang Zhitu’s other income for 2025 totaled 489 million yuan, a year-on-year increase of 85.9%. Excluding investment income, the VAT rebate contributed approximately 202 million yuan. In 2024, the company’s total government subsidies amounted to 278 million yuan, exceeding the shareholder profit attributable to shareholders of 272 million yuan for that year.

Refund rates have risen for two consecutive years

In terms of refund rates, Jiufang Zhitu’s refund rate has risen for two consecutive years. In 2025, the company’s VIP product refund rate was 22.9%, an increase of 1.1 percentage points from 21.8% in 2024, while the refund rate in 2023 was 20%. The company stated that the refund rate level is “overall stable and improving.”

From historical data, refund rates show significant fluctuations: in the first half of 2024, the flagship series and Qilong series refund rates once reached as high as 30.3% and 31%, and then fell back in the second half of the year. Although the refund rate in 2025 decreased compared to mid-year, it remains higher than the overall level for 2024.

“The refund rate is a relatively key indicator in the securities advisory industry; if it exceeds 30%, the company may face a certain degree of losses,” said a securities advisory director to reporters from Securities China.

In February of this year, the Shanghai Securities Association published a report on the self-regulatory inspection situation of investment consulting institutions in Shanghai for 2025, noting that the complaint rate among some institutions remained high, with individual institutions having refund ratios as high as 40%; the product refund mechanism was imperfect, and the refund process was cumbersome; institutions generally “emphasized marketing over service,” with the staffing of advisory and compliance personnel severely mismatched with the number of customers, making it difficult to ensure service quality.

The Shanghai Securities Association admitted that the complaint rate for investment consulting institutions remains at a high level, exposing areas for improvement in business standardization, service transparency, and client suitability management. In the future, the industry should further enhance customer service quality, reduce client complaints, optimize product structure, and increase long-term customer loyalty to promote the sustained and healthy development of the securities investment consulting business.

Although Jiufang Zhitu’s financial report is impressive, its core subsidiary, Shanghai Jiufang Cloud Intelligent Technology Co., Ltd., also received an administrative regulatory decision from regulators in February, ordering corrections and suspending new customer acquisitions for three months.

Industry insiders analyze that the simultaneous surge in performance and heavy regulatory penalties in the securities advisory industry indicates that the competition core is shifting from merely vying for traffic to a comprehensive competition in research and investment capabilities as well as compliance and risk control.

“Institutions that adhere to compliance, actively transform, and possess professional capabilities will build a competitive moat under strict regulation, seize industry resources, and further open up long-term development space,” said a company leader from a securities advisory firm in Shanghai to reporters from Securities China, while institutions with weak compliance foundations, reliance on traditional marketing models, and lack of core competitiveness will face continuous operational impacts and development challenges, even being accelerated out of the market.

Proofreading: Yao Yuan