After market close on April 9, a leading securities firm disclosed preliminary first-quarter results, reporting a net profit of 10.216 billion yuan for Q1 2026. A single-quarter net profit exceeding 10 billion yuan is relatively rare in the brokerage industry's history; for the full year 2025, only seven brokerages announced profits surpassing the 10-billion-yuan mark. Regarding the sector's Q1 2026 performance, analysts from multiple securities firms have expressed optimistic forecasts, bringing brokerages back into the investment spotlight.
Strong growth is anticipated for the brokerage sector in the first quarter. Behind the better-than-expected performance lies a substantial year-on-year increase in the one-way trading volume of stocks and funds on the Shanghai and Shenzhen stock exchanges. Statistics indicate a significant rise in market turnover during the quarter, with cumulative stock and fund trading volume reaching 176.24 trillion yuan, up 74.2% year-on-year. The average daily trading volume was 3.15 trillion yuan, representing a 77.3% increase. Margin lending and securities borrowing balances stood at 2.61 trillion yuan by the end of the quarter, growing 36% compared to the same period last year.
Against this backdrop, several securities analysts have voiced positive expectations for the sector's Q1 2026 results. The non-bank financial team at Guojin Securities believes the trading volume scale year-to-date is likely to support continued profit growth for brokerages in Q1 2026. Kaiyuan Securities noted that wealth management continues to benefit from the migration of household assets, while investment banking and investment services are creating new growth drivers. Overseas expansion is expected to open up additional growth and profitability avenues. These three business lines are driving steady improvement in brokerages' fundamentals, with sustained net profit growth anticipated for 2026. They project a combined 26% year-on-year increase in listed brokers' adjusted net profit for the first quarter.
Investment opportunities are seen in the divergence between ongoing fundamental improvements and current share price performance. Industry optimism toward the brokerage sector currently stems from two main factors. First, fundamental improvements are evident: the sector achieved high profit growth and an elevated return on equity (ROE) in 2025, while market turnover and margin trading balances maintained strong growth momentum in Q1 2026, indicating continued fundamental recovery. Second, valuations remain low: as of April 9, 2026, the price-to-earnings ratio (TTM) of the CSI All Share Securities Companies Index stood at just 14.66 times, near a decade-low percentile of 2.94%.
Given these conditions, some institutions recommend focusing on investment opportunities arising from the disconnect between the sector's persistent fundamental improvements and its recent price gains. Overall, with first-quarter results potentially exceeding expectations, the brokerage sector's low valuation advantage becomes prominent, warranting investor attention. Investors may consider brokerage-related instruments such as the Brokerage ETF (159842) and its feeder funds (Class A: 025193, Class C: 025194).
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