Founder Securities released a research report stating that the capital market continues to maintain high prosperity, and the acceleration of supply-side reforms in the industry has led to a persistent divergence between the improving fundamentals of brokerages and their valuation performance. The report highlights opportunities for sector valuation recovery driven by event catalysts.
Amid the high market activity, Founder Securities remains optimistic about the brokerage sector's ability to sustain rapid year-on-year profit growth in 2025. The sector's valuation remains mismatched with its improving earnings trend, leaving ample room for upward revisions. From a PB valuation perspective, the sector's 2025 dynamic PB stands at 1.30x, at the 33rd percentile over the past decade and still below historical highs. The report notes recent catalysts for the brokerage sector, including the completion of CITIC Securities' merger case and the expansion of the comprehensive account pilot program, suggesting potential valuation recovery opportunities.
The brokerage sector's 2025E net profit is projected to grow 51% year-on-year, with ROE rebounding to 8.8%. Founder Securities' key views are as follows:
**1. Third Batch of Brokerage Comprehensive Account Pilots Approved, Signaling Normalization of Upgraded Services** In April 2021, the Securities Association of China issued a notice on optimizing brokerage account management functions. By August 2021, the CSRC approved pilot programs for 10 brokerages, including CITIC Securities. In November 2022, GF Securities and Industrial Securities obtained pilot qualifications, expanding the program's scope. In February 2025, the CSRC mentioned in its "Implementation Opinions on Capital Markets' Five Major Financial Tasks" the "steady advancement of the brokerage account management optimization pilot toward normalization." With the latest expansion, the number of pilot brokerages has increased to 20, indicating a move toward regularizing upgraded account services.
**2. Comprehensive Account Pilot Aims to Improve Capital Efficiency and Client Experience** Under the third-party custodianship framework for client trading settlement funds, traditional brokerage account management rules segregated ordinary, margin, and options accounts under different regulatory requirements, with independent fund and information controls. As brokerage services diversified and account systems grew more complex, the comprehensive account pilot introduced optimizations such as same-name transfers and categorized account management. This enables seamless connectivity between a client's fund, securities, margin, and options accounts, allowing direct fund transfers between same-name accounts and breaking the closed management of funds across different accounts. These changes significantly enhance user experience for multi-account clients and improve capital turnover efficiency.
**3. Pilot Experience Suggests Wealth Management Expansion Opportunities, Accelerating Industry Transformation** Amid the industry's shift toward "buy-side advisory" models, improving client service capabilities has become a key challenge. The comprehensive account pilot facilitates centralized fund and information management, laying the foundation for a client-centric service model while enabling better coordination across brokerage, asset management, and advisory business lines. This enhances brokers' ability to provide diversified wealth management services.
The 12 pilot brokerages have already explored innovative functions. For example, China Securities Co., Ltd. introduced a "wealth sub-account" feature supporting fund transfers and performance analysis across trading accounts, public funds, and high-end wealth management products. Huatai Securities upgraded its sub-account management capabilities to accommodate scenarios like public fund advisory services, meeting diverse client needs.
**Risk Warnings:** M&A progress falling short of expectations; policy implementation delays; slower-than-expected shifts in household asset allocation.
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