On July 29th, the brokerage sector strengthened during the trading session, with a second surge in the afternoon. As of the time of writing, HuaLin Securities hit the daily limit up, BOC International China rose over 6%, Guosheng Financial Holding gained over 4%, and more than ten stocks including Pacific Securities, Sinolink Securities, and Huachuang Yunxin climbed over 2%. The top-tier brokerage ETF, HuaBao Brokerage ETF (512000), with assets nearing 40 billion yuan, saw its intraday price rise by 1.93%.
Capital has been heavily increasing positions recently. The HuaBao Brokerage ETF (512000) attracted 524 million yuan in net inflows over three consecutive days, and over the past ten days, cumulative fund inflows surpassed 795 million yuan. With high earnings growth, low valuations, and accelerated consolidation, the brokerage sector is experiencing a convergence of three catalysts.
Regarding performance, based on the semi-annual performance forecasts disclosed by 21 listed brokerages (including parent companies), all except Jinlong Shares—which saw a decline due to a one-time factor from a high base—achieved positive year-on-year net profit growth. Eight brokerages expect their net profit upper limit to double.
Additionally, on the evening of July 27th, Orient Securities released its merger and restructuring report (draft), proposing to acquire 100% equity of Shanghai Securities for 25.12 billion yuan, further accelerating sector merger and integration. After the transaction is completed, Orient Securities' total assets are expected to exceed 600 billion yuan, placing it among the top ten in the industry.
Meanwhile, the valuation of the brokerage sector remains near a decade low. As of July 28th, the price-to-book ratio (PB, LF) of the CSI All Share Securities Index stood at 1.29 times, positioned at a historically low level in the 18.2% percentile over the past ten years. Combined with the continuous improvement in the industry's fundamentals, there is ample room for valuation recovery, highlighting medium-to-long-term allocation value.
Huaxi Securities believes that market concerns over capital suppression and refinancing in the brokerage sector have been fully reflected in valuations, which remain at historical lows. Meanwhile, return on equity (ROE) continues to improve, making the divergence between fundamentals and valuations unsustainable over the long term. Overseas investment banking, asset expansion, and wealth management have become core advantages driving profit leadership for top-tier brokerages, with sustainable net profit growth expected. Catalysts for the sector include better-than-expected earnings, favorable policy news, or style rotation in capital flows.
With high growth and low valuations, pay attention to the brokerage sector's recovery! The Brokerage ETF (512000) and its linked funds (Class A: 006098, Class C: 007531) passively track the CSI All Share Securities Index, providing a one-click investment in 49 listed brokerage stocks. This is an efficient tool for concentrated investment in leading brokerages while also covering small and mid-cap firms. The Brokerage ETF (512000) has a fund size of nearly 40 billion yuan and an average daily trading volume exceeding 1.2 billion yuan this year, making it a top-tier brokerage ETF in terms of A-share scale and liquidity.
Reminder: Recent market fluctuations may be significant, and short-term gains or losses do not predict future performance. Investors must invest rationally based on their own capital position and risk tolerance, paying close attention to position and risk management. Data sources: Shanghai and Shenzhen stock exchanges, etc. Description of ETF fund fees: When investors subscribe for or redeem fund shares, subscription and redemption agents may charge a commission of up to 0.5%. On-exchange trading fees are subject to actual charges by securities companies, with no sales service fee. Description of linked fund fees: For the HuaBao CSI All Share Securities ETF Linked Fund (Class A), the subscription fee (front-end charge) is 1,000 yuan per order for subscription amounts of 2 million yuan or more, 0.6% for amounts between 1 million yuan and 2 million yuan, and 1% for amounts below 1 million yuan. The redemption fee is 1.5% for holding periods of less than 7 days, 0.5% for holding periods between 7 days and 180 days, 0.25% for holding periods between 180 days and 1 year, and 0% for holding periods of 1 year or more; no sales service fee is charged. For the HuaBao CSI All Share Securities ETF Linked Fund (Class C), no subscription fee is charged, the redemption fee is 1.5% for holding periods of less than 7 days and 0% for holding periods of 7 days or more, and the sales service fee is 0.4%.
Risk warning: The Brokerage ETF (512000) and its linked funds passively track the CSI All Share Securities Index, with a base date of June 29, 2007, and published on July 15, 2013. The annual returns of the CSI All Share Securities Index from 2021 to 2025 were -4.95%, -27.37%, 3.04%, 27.26%, and 2.54%, respectively. The constituent stocks of the index are adjusted according to its compilation rules from time to time, and historical back-tested performance does not indicate future performance of the index. This product is issued and managed by HuaBao Fund, and the distribution agency does not assume responsibility for product investment, redemption, or risk management. Investors should carefully read fund legal documents such as the Fund Contract, Prospectus, and Fund Product Information Summary to understand the fund's risk-return characteristics and choose a product that matches their risk tolerance. The fund manager assesses the risk rating of the Brokerage ETF as R3-Medium Risk, suitable for investors with a suitability rating of C3 or above. The performance of other funds managed by the fund manager does not guarantee the performance of this fund. Past performance of the fund does not predict its future results. Funds carry risks; invest with caution! Sales institutions (including the fund manager's direct sales institutions and other sales institutions) conduct risk assessments on this fund in accordance with relevant laws and regulations. Investors should promptly pay attention to the suitability opinions issued by the fund manager. The suitability opinions of various sales institutions may not be consistent, and the risk rating results of fund products issued by fund sales institutions must not be lower than those made by the fund manager. The fund's risk-return characteristics and risk rating in the fund contract may differ due to different considerations. Investors should understand the risk-return profile of the fund, select fund products carefully based on their investment objectives, time horizon, investment experience, and risk tolerance, and bear the risks themselves. The registration of this fund by the China Securities Regulatory Commission does not imply a substantive judgment or guarantee of the fund's investment value, market prospects, or returns. Funds carry risks; invest with caution.
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