Chinese brokerage stocks moved higher during the afternoon trading session. At the time of writing, Huatai Securities (06886) rose by 5.38% to HK$17.84; China International Capital Corporation (CICC) (03908) increased by 4.58% to HK$21.92; GTHT (02611) climbed 4.71% to HK$17.79; China Galaxy (06881) advanced 2.71% to HK$10.62; and China Merchants Securities (06099) gained 2.32% to HK$14.54. The market movement is supported by recent intensive releases of preliminary earnings reports and forecasts from brokerages. According to Wind statistics, by the end of January, five listed brokerages, including CITIC Securities, had disclosed their 2025 preliminary results, while another 17 had issued earnings forecasts for the period, collectively accounting for approximately half of all listed brokerages. Overall, the performance reports from these 22 brokerages were collectively positive, with eight firms expected to report a year-on-year increase in net profit attributable to shareholders exceeding 70% for the previous year. Shenwan Hongyuan believes that the brokerage sector's business climate is continuously improving, with both internal and external operational environments remaining favorable, and suggests focusing on the sector's beta attributes. At the current juncture, the brokerage sector is in a phase of mismatch between fundamentals and valuation, and considering that funding pressures have marginally eased, attention should be paid to the sector's inherent beta characteristics. GTHT Securities pointed out that, benefiting from reforms on the investment side, brokerage performance is showing sustained improvement. Since the beginning of the year, sustained market activity suggests the brokerage sector is poised to benefit from a dual boost in both earnings and valuation.
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