CITIC Securities: The high level of market activity and relaxation of regulation in the investment banking derivatives sector are the core themes of the improvement in the securities industry's performance this year.

CITIC Securities pointed out that the high trading activity in the market and the relaxation of regulations in the investment banking derivatives field are the core themes of performance improvement in the securities industry this year. It is recommended to focus on the layout around high certainty of performance growth and improvement in long-term industry competition landscape. In the current year, the high trading activity in the market, the relaxation of equity financing, and the recovery of derivatives business are expected to become the core themes of performance improvement, helping the industry's ROE level to reach around the 90th percentile in nearly a decade. While the current industry PE and PB valuations are only below the 20th percentile in the past decade, the valuation price ratio is prominent. Looking ahead in the long term, relying on the synergies brought by mergers and acquisitions and the efficiency of capital utilization increased through leverage expansion, large institutions in the industry are expected to continue to improve shareholder returns and increase market share. Under the above two themes, it is recommended to focus on leading securities companies and medium-sized brokerage firms.