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The Impact of ESG Factors on Valuation in China’s Securities Brokerage Industry: A Case Study of CITIC Securities

In: Proceedings of the 2025 International Conference on Hybrid Commerce, Human Capital, and Economic Dynamics (ICHCH 2025)

Author

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  • Fuyu Li

    (The University of Manchester, Alliance Manchester Business School)

Abstract

The incorporation of Environmental, Social, and Governance factors into corporate valuation has evolved from a niche consideration into a mainstream analytical lens, particularly within China’s dynamic securities brokerage industry. Using CITIC Securities as a case study, this paper explores how ESG factors influence valuation models such as Price-to-Earnings, Discounted Cash Flow, and Price-to-Book. Through an existing literature review, this study examines how ESG data reshape the key valuation assumptions, including growth expectations, cost of capital, and market-based multiples. The findings indicate that CITIC Group's active ESG strategies, which are reflected in governance reforms, transparent reporting, and leadership in green finance, have strengthened investor confidence and supported a valuation premium compared to peers. Nevertheless, industry-wide challenges including inconsistent ESG disclosure, methodological uncertainty, and limited regulatory enforcement still prevent ESG from being fully integrated into valuation frameworks. This paper argues that ESG should no longer be a peripheral consideration, but rather a strategic driver of both value and risk. As ESG frameworks mature and investor demand increases, Chinese brokerages will need to move beyond passive compliance and adopt proactive ESG strategies to maintain a competitive position and attract long-term capital.

Suggested Citation

  • Fuyu Li, 2026. "The Impact of ESG Factors on Valuation in China’s Securities Brokerage Industry: A Case Study of CITIC Securities," Advances in Economics, Business and Management Research, in: Ata Jahangir Moshayedi (ed.), Proceedings of the 2025 International Conference on Hybrid Commerce, Human Capital, and Economic Dynamics (ICHCH 2025), pages 131-141, Springer.
    • Handle: RePEc:spr:advbcp:978-2-38476-585-0_16
    DOI: 10.2991/978-2-38476-585-0_16
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