Goldman Sachs: raising the annual average daily trading volume growth forecast for A shares, raising the target prices of CICC (03908), CITIC SEC (06030), and GF SEC (01776).

Goldman Sachs releases a research report stating that based on new predictions, the average target prices for brokerage A shares and H shares have been raised by 11% and 13% respectively. The target prices are as follows: CICC (03908 / Buy) target price HK$16.47, CITIC SEC (06030 / Neutral) target price HK$20.68, GF SEC (01776 / Neutral) target price HK$11.18. The average return on A shares and H shares for CICC, CITIC SEC, and GF SEC from the beginning of the year until now are only -3% and +6% respectively. It is believed that there is still good upside potential, with the average upside potential for the A shares and H shares of the three covered brokerages expected to be 18% and 5% respectively. Goldman Sachs pointed out that after the policy stimulus at the end of September last year, the daily average turnover of A-shares (ADTV) surged to RMB 1.9 trillion in the following five months, showing a strong upward trend in trading volume, mainly driven by capital inflows and increased trading volume related to the artificial intelligence theme; ETF continued to surge, boosting market trading volume. Therefore, the bank raised its year-over-year growth forecast for ADTV from 15% to 22% for the whole year, with brokerage's multiple business lines expected to benefit from it. In addition, Goldman Sachs also adjusted its profit forecasts for the covered brokerages (CICC, CITIC SEC, GF SEC) and financial technology companies (East Money Information (300059.SZ) and Hundsun Technologies Inc. (600570.SH)). The bank predicts that the aforementioned covered brokerages and financial technology companies will see a year-over-year increase in average revenue and profit in the fourth quarter of last year of 22% and 30% respectively and forecasts a growth of 14% and 18% for this year.