CITIC Securities: The strong growth in brokerage performance resonates with the warmth of policies, the expectation of valuation adjustment is strengthened, and the value of sector allocation is highlighted.

CITIC Securities Research Report indicates that by 2025, the net profit of listed securities companies will generally achieve high growth, mainly benefiting from the year-on-year increase in average daily turnover and the maintenance of margin trading balances at a high level. The net profit growth of many securities companies exceeds 70%. At the same time, the implementation of reserve requirement ratio cuts and interest rate cuts, as well as the introduction of medium and long-term capital entry plans, is expected to optimize the classification evaluation and open up capital space for high-quality securities firms, with significant effects from mergers and restructurings. At the macroeconomic level, the economy has successfully achieved the 5% growth target, with market activity reaching a ten-year high, providing solid support for performance. The current PB valuation of the sector is only 1.36 times, at a historically medium level, and the improvement in performance and policy dividends are expected to drive an upward shift in valuation.