The brokerage sector has demonstrated notable earnings recovery in the first three quarters of 2025, driven by steady economic growth and a rebound in capital markets. East Money Securities highlights that continued accommodative monetary policies under pro-growth measures are expected to sustain market liquidity.
The "15th Five-Year Plan" positions capital markets as a "wealth reservoir" and "consumption amplifier," fostering policy-backed structural upgrades in the securities industry. A dual-track development model is emerging—where leading firms consolidate strength while niche players carve out specialized roles—to better serve high-quality market growth.
**Key Takeaways from East Money Securities:** 1. **Broad-Based Earnings Recovery** With China’s economy stabilizing and equity/fund trading volumes rising YoY, listed brokerages posted robust results: - Revenue/net profit up 43%/62% YoY. - Core segments rebounded—proprietary trading (+44%), brokerage (+75%), margin financing (+55%), asset management (+0.2%), and investment banking (+23%).
2. **Market Outlook: High-Quality Growth to Fuel Economic Cycle** The "15th Five-Year Plan" aims to elevate household consumption, with capital markets playing a pivotal role. Theoretical and global precedents suggest markets can boost consumption via wealth effects, creating a virtuous cycle of "market expansion → wealth growth → consumption upgrade → industrial transformation."
3. **Leading Brokers: Scaling Up for "Aircraft Carrier" Status** Regulatory support for M&As and innovation is accelerating top firms’ strategic growth: - **Scale Expansion**: Top 10 brokers’ total assets grew 28% YoY (vs. industry’s 25%). - **Operational Resilience**: Shifting capital-heavy businesses to client-driven models and building integrated smart ecosystems. - **Boundary-Pushing**: Expanding into global markets and innovative assets (e.g., virtual assets).
4. **Niche Players: Specialization as a Competitive Edge** Smaller brokers are adopting differentiated strategies: - **Regional Focus**: Leveraging local resources and government ties. - **Boutique Services**: Targeting SMEs/niche sectors in investment banking or wealth management. - **Digital Transformation**: Partnering externally to fuse technology with business.
**Stock Picks**: - **Leading Brokers**: CITIC Securities (600030.SH), China Galaxy (601881.SH), GF Securities (000776.SZ), Huatai Securities (601688.SH). - **Niche Players**: Western Securities (002673.SZ), Huaxi Securities (002926.SZ), and fintech-focused firms.
**Risks**: Slower economic recovery, delayed reforms, intensifying competition, and market volatility.
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