Guotai Junan: Holiday factors lead to decline in stock and bond financing, merger demand remains high.

Guotai Junan released a research report stating that in January, the domestic stock and bond financing scale showed a decline due to holiday factors. However, the overall tightening trend in equity financing is still ongoing. The bank believes that the income from financial advisory services for mergers and acquisitions is expected to become an incremental source of income for securities investment banking business. Top-tier securities firms with superior corporate client resources and professional service capabilities are expected to continue to maintain a leading position in the evolution of investment banking business ecosystem. Key points from Guotai Junan are as follows: - The number of trading days in January decreased due to the Chinese New Year, leading to a year-on-year decline in the scale of domestic stock and bond financing, while the number of mergers and acquisitions remained high. - The Chinese New Year factor led to a decrease in the number of trading days in January to 18 days, a decrease of 18% compared to the same period last year which had 22 days, resulting in a year-on-year decline in the underwriting scale of stocks and bonds. - Market liquidity improvement continues to support the active participation in Hong Kong stock equity financing. - Policies related to securities investment banking business continue to be improved in order to support new productive forces and encourage mergers and acquisitions. Risks warnings include significant fluctuations in the capital market and a continuation of the tightening IPO pace.