GTHT released a research report stating that the wealth effect brought by medium- and long-term capital entering the market will continue to drive retail capital inflows. Coupled with drivers such as retail business, brokerage performance is expected to be gradually released, and the firm remains optimistic about the brokerage sector driven by the dual engines of allocation forces (including retail capital entering the market) and performance improvement. The sector benefits from the resonance of allocation forces and performance elasticity, with a greater preference for high-quality leading firms and those with distinctive wealth management characteristics. It is recommended to increase holdings in high-quality leading brokerages that benefit from incremental capital inflows, specifically recommending Huatai Securities Co., Ltd. (601688.SH) and China International Capital Corporation Limited (03908). The firm expects that, driven by trading activity combined with base effects, the performance of listed brokerages will improve significantly, with net profit attributable to shareholders increasing by 46.4% year-on-year. GTHT forecasts that the adjusted operating revenue (operating revenue minus other business costs) for 42 listed brokerages in 2025 will increase by 34.1% year-on-year to 5,657 billion yuan, and net profit attributable to shareholders will increase by 46.4% year-on-year to 2,164 billion yuan. Specifically, the profit for the fourth quarter alone is projected to be 47.3 billion yuan, up 8% year-on-year but down 27% quarter-on-quarter. The report stated that active trading has driven high growth in market turnover and margin financing balances, fueling high growth in retail business. This, combined with a recovery in proprietary business, serves as the main support for brokerage performance growth. In terms of the contribution of various business revenues to the revenue increment of listed brokerages in 2025, the firm estimates that brokerage and credit businesses together contribute 50.4%, while investment business contributes 45.5%. 1) Regarding retail business, the annual average daily stock and fund trading volume reached 20,576 billion yuan, a 70% year-on-year increase, and the average daily margin financing balance reached 20,793 trillion yuan, a 33% year-on-year increase. The firm expects net brokerage revenue and net interest income to increase by 49% and 57% year-on-year, respectively. 2) For proprietary business, benefiting from the boost in the equity market and relative stability in the bond market, the proprietary investment return rate is expected to continue its previous recovery trend, driving full-year proprietary income growth. 3) The firm expects investment banking business revenue to increase by 12% year-on-year, with a marginal recovery in equity financing boosting investment banking profits. 4) Assets under management are expected to see a slight year-on-year increase, driving asset management revenue up by 4% year-on-year.
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