CICC: Investing in high-quality Chinese securities firms is the right time, focusing on three main themes.

Zhongjin released a research report stating that the growth of the Chinese securities industry benefits from the development of the Chinese economy and the reform of the capital market. Major Chinese securities firms are expected to accelerate towards becoming international first-class investment banks during the "15th Five-Year Plan" period, better serve China's modernization while enhancing their own business scale, professional capabilities, and profitability quality. The long-term investment value is expected to further highlight. It is recommended to focus on three investment themes: 1) Secondary market activity leading to the primary market, leading performers in investment banking and direct investment/private equity business have promising performance elasticity; 2) Performance returns generated by institutional investors are recognized again, specialty securities firms with strengths in institutional sales/trading services, product sales/distribution capabilities, or dominant public mutual fund/asset management business are expected to benefit; 3) Globalization-related business growth is more significant, comprehensive investment banks/internet securities firms/exchanges have positioning advantages. Key viewpoints of Zhongjin are as follows: How to view future industry trends? Seize the opportunity and move towards top-notch. As the demands of enterprises/institutions/residents become increasingly diverse and complex, opportunities and higher requirements are presented for the development of Chinese securities firms: 1) Serving the needs of the real economy transformation and upgrading, creating industrial investment banking through the "trinity investment" model, connecting asset/capital ends to create asset investment banking, leveraging internal collaboration to enhance comprehensive service capabilities, expand more revenue streams, and focus on strengthening cross-border and overseas business layouts to enhance international competitiveness; 2) Serving the deepening capital market reforms, based on asset-liability management and research capabilities, further enhancing globalization sales/multi-asset trading/comprehensive service levels, capturing various institutional incremental funds, and creating a trading investment bank; 3) Serving resident asset allocation needs, wealth/asset management synergy, playing a combination of products + investment advice + allocation, exploring new growth curves, and creating a wealth investment bank. How to understand the sector investment value? Value enhancement, leading players returning. Historically, investors have underweighting the securities sector mainly due to homogenized competition, large performance fluctuations, and low ROE levels. Looking forward, we believe that optimization of the pattern, internal stabilization, and profit cen...