China Galaxy Faces Multiple Regulatory Warnings in 2026 Over Compliance Lapses
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China Galaxy Securities Co., Ltd. (601881.SH) has been subjected to multiple regulatory measures this year, even as its total assets surpassed one trillion yuan for the first time in the first half of 2025. On September 14, 2025, the Zhejiang Securities Regulatory Bureau issued a warning letter to the company's Zhejiang branch and ordered corrective actions for its Taizhou sales office and its head, Wu Tao, due to compliance failures including missing records in investment advisory promotion and employees not cooperating with inspections. Earlier in April, a Hunan branch was also warned for improper incentives and management issues. Additionally, subsidiaries like Galaxy Futures have faced regulatory actions for improper conduct. Despite the compliance issues, China Galaxy reported total assets of 1.06 trillion yuan as of mid-2025, with revenue up 22.58% year-on-year and net profit up 20.18%, though both growth rates slightly lagged the industry average. The company stated it is strengthening its compliance management system. The article is based on a report by Investment Times and Biaodian Research.
Source report
By Tian Wenhui, Investment Time Network & Benchmark Finance
China Galaxy Securities Co., Ltd. (hereinafter "China Galaxy," 601881.SH) saw its total assets surpass the trillion-yuan mark for the first time in the first half of this year. However, the company has faced multiple regulatory actions in recent months, with the latest being a warning letter issued this week.
Recent Regulatory Actions
On September 14, the Zhejiang Securities Regulatory Bureau decided to issue a warning letter to China Galaxy's Zhejiang Branch. The decision was formally published on the China Securities Regulatory Commission (CSRC) website on September 18.
The regulatory action stems from issues identified at the China Galaxy Taizhou Yinzuo North Street Securities Business Department, including:
- Missing records in the promotion process of securities investment advisory services
- Weak compliance awareness among certain staff members, including failure to cooperate with on-site inspections
The Zhejiang branch was cited for inadequate compliance management and insufficient compliance awareness over its subordinate business outlets.
Additionally, the bureau ordered corrective measures for the aforementioned business department and its head, Wu Tao.
Previous Compliance Issues in 2024
This is not the first regulatory action against China Galaxy this year. In April, the Hunan Securities Regulatory Bureau issued a warning letter to China Galaxy's Changsha Shaoshan Road Securities Business Department for:
- Certain client managers conducting business outside their registered location without attendance records
- Excessive incentives for the sale of initial public offering (IPO) fund products
These issues reflected inadequate internal management and compliance operations at the business department.
Subsidiary Regulatory Issues
China Galaxy's wholly-owned subsidiary, Galaxy Futures Co., Ltd., has also faced regulatory actions this year:
- On July 23, the Ningbo Securities Regulatory Bureau issued a warning letter to Wang Rong, a staff member of Galaxy Futures' Ningbo Business Department, for providing futures trading advice to clients without meeting the required qualifications for futures trading consulting.
- On April 15, 2026, Galaxy Futures' Guangzhou Business Department received a warning letter from the Guangdong Securities Regulatory Bureau for:
- Unfair competition through commission rebates and improper benefit transfers to clients
- Inadequate process control over brokerage and intermediary introduction businesses
- Deficiencies in compliance management and internal controls
Company's Compliance Stance
In its semi-annual report, China Galaxy stated that it continues to strengthen its compliance management system through:
- Compliance audits, training, inspections, consultations, and corrective actions
- Building a "full coverage, penetrating, and whole-chain" compliance management framework
- Enhancing process control and reinforcing compliance requirements across all subsidiaries
The company also noted efforts to implement penetrating compliance management over subsidiaries, establishing a unified compliance management system covering both the parent company and all subsidiaries.
Investment Time Network and Benchmark Finance sent an inquiry outline to China Galaxy regarding these regulatory measures but had not received a response by the time of publication.
Financial Performance
As of the end of the first half of 2024, China Galaxy's total assets crossed the trillion-yuan threshold, reaching 1,060.474 billion yuan, an increase of 23.92% from the end of the previous year.
First Half 2024 Performance
| Metric | China Galaxy | Industry Average | |--------|-------------|-----------------| | Revenue Growth (YoY) | 22.58% | 31.38% | | Net Profit Growth (YoY) | 20.18% | 23.5% |
China Galaxy's growth rates slightly lagged behind the industry average.
Historical Performance Comparison (2023–2025)
| Year | China Galaxy Revenue Growth | Industry Revenue Growth | China Galaxy Net Profit Growth | Industry Net Profit Growth | |------|---------------------------|----------------------|-----------------------------|--------------------------| | 2023 | 0.01% | 2.77% | 1.43% | -3.14% | | 2024 | 5.43% | 11.15% | 27.31% | 21.35% | | 2025 | 24.34% | 19.95% | 24.81% | 31.2% |
In 2023 and 2024, China Galaxy's revenue growth was below the industry average, but its net profit growth exceeded the industry. In 2025, revenue growth outpaced the industry, while net profit growth fell behind.
Key Revenue and Expense Items
- Asset management fee income declined sharply by 35.45% year-on-year in the first half.
- Credit impairment losses amounted to 335 million yuan, compared to a reversal of 241 million yuan in the same period last year, due to increased expected credit impairment risks in credit-related businesses.
- Other asset impairment losses reached 160 million yuan, a 446.09% increase year-on-year, primarily due to higher impairment provisions for other current assets related to commodity sales.
Data source: China Galaxy financial reports and China Securities Industry Association official website
Keywords: China Galaxy (601881.SH)
Source
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China Galaxy Securities Zhejiang Branch Penalized for Compliance Failures at Taizhou Office