Kaiyuan Securities: Brokerages' Q3 reports are expected to exceed expectations; continue to be bullish on the allocation value of leading brokerages.

Kaiyuan Securities: Brokerages' Q3 reports are expected to exceed expectations; continue to be bullish on the allocation value of leading brokerages. Kaiyuan Securities released a research report stating that since September, market trading activity has declined month-on-month. Federal Reserve rate hikes and rising US Treasury yields have brought certain pressure on risk assets, and the non-bank financial sector declined in September, giving back some of the gains since June. At present, we continue to be bullish on the allocation value of leading brokerages. With improved profit structure, leading brokerages' Q3 results may decline slightly on a quarter-on-quarter basis but are overall expected to exceed expectations, demonstrating profit resilience amid increased market volatility. Valuation and capital flow conditions remain favorable. With a rising ROE center and improved earnings sustainability, leading brokerages have significant room for revaluation. The main views of Kaiyuan Securities are as follows: Weekly View: Brokerages' Q3 reports are expected to exceed expectations; August life insurance premium growth under pressure Since September, market trading activity has declined month-on-month. Federal Reserve rate hikes and rising US Treasury yields have brought certain pressure on risk assets, and the non-bank financial sector declined in September, giving back some of the gains since June. At present, we continue to be bullish on the allocation value of leading brokerages. With improved profit structure, leading brokerages' Q3 results may decline slightly on a quarter-on-quarter basis but are overall expected to exceed expectations, demonstrating profit resilience amid increased market volatility. Valuation and capital flow conditions remain favorable. With a rising ROE center and improved earnings sustainability, leading brokerages have significant room for revaluation. Listed insurers' full-year profits and dividends are expected to grow steadily, and we are bullish on investment opportunities in high-dividend-yield targets under the dividend style, favoring Jiangsu Financial Leasing, which offers a high dividend yield and sustained steady profit growth. Brokerages: Five brokerages join the domestic offshore RMB FX trading platform; Q3 reports expected to exceed expectations (1) As of September 25, the average daily A-share stock and fund turnover in September was 2.34 trillion yuan, down 14.0% month-on-month; the average daily stock and fund turnover in Q3 was 2.81 trillion yuan, down 16.8% quarter-on-quarter; the cumulative average daily stock and fund turnover for the year was 3.10 trillion yuan, up 60.74% year-on-year. (2) On September 24, Caixin reported that the China Foreign Exchange Trade System's offshore RMB FX trading platform has onboarded its first batch of overseas brokerage-type institutions, including Huatai Financial Holdings (Hong Kong), CITIC SEC International Capital, Jiantou Overseas, GUOTAI JUNAN I Securities (Hong Kong), and CICC Financial Products Co., Ltd. All five institutions have completed multiple offshore RMB FX transactions, covering FX spot and swap products. The bank believes this progress is conducive to leading brokerages expanding cross-border FICC client-driven business. (3) IPO business in A-share and Hong Kong stock markets grew quarter-on-quarter in Q3. New project listings help improve direct investment and co-investment business profitability. Wealth management and overseas businesses are expected to maintain steady momentum. In a market environment of declining stock prices and quarter-on-quarter shrinking trading volume in Q3, the bank believes leading brokerages' Q3 reports are still expected to exceed expectations, with profit resilience likely to stand out. The ROE center and earnings sustainability improvement remain significantly mismatched with extremely low valuation levels, and we are bullish on leading brokerages' valuation reshaping and excess return opportunities. Insurance: August life insurance premiums declined year-on-year; property insurance maintained slight growth (1) According to the official website of the National Financial Regulatory Administration, from January to August 2026, original life insurance premium income was 3.57 trillion yuan, down 0.22% year-on-year, a marked slowdown from the +1.78% growth in January-July. In August alone, it fell 13.6% year-on-year. The bank expects that the high base and product switching brought about by the bancassurance "report-and-act as one" policy are the main reasons for the significant pressure on new policy growth; from January to August, original property insurance premium income was 1.25 trillion yuan, up 2.2% year-on-year, close to the 2.3% growth in January-July, maintaining overall low-speed growth. (2) The insurance sector's valuation and institutional holdings remain at low levels. The logic of spread stabilization continues, driven by long-end interest rates fluctuating at the bottom and liability costs continuing to decline. Meanwhile, premium growth is expected to continue amid deposit migration. The industry's long-term logic supports sector valuation. In Q3, investment performance, liability-side data, and COR may weaken on a year-on-year and quarter-on-quarter basis, with style becoming the main driver. We recommend high-dividend-yield China Pacific Insurance, Ping An Insurance, and PICC P&C. Recommended and Beneficiary Stock Portfolio Recommended portfolio: Jiangsu Financial Leasing (600901.SH), Huatai (601688.SH), Ping An Insurance (601318.SH), PICC P&C (02328); CITIC SEC (600030.SH), CICC (03908), China Pacific Insurance (601601.SH), Hithink RoyalFlush Information Network (300033.SZ), Guotai Haitong (601211.SH), HKEX (00388), Caitong (601108.SH). Risk warning: Capital market volatility brings uncertainty to investment returns; insurance liability side may fall short of expectations.