HK Stock Market Move | Chinese securities firms' stocks fell again as geopolitical tensions intensified in February. Market risk appetite continued to decline.

Chinese brokerage stocks fell again. As of the time of publication, China Securities Co., Ltd. (06066) fell by 4.3% to HK$10.46; Shenwan Hongyuan Group (06806) fell by 4.24% to HK$2.71; GF SEC (01776) fell by 3.78% to HK$14.78. On the news front, the Shanghai Composite Index hit a ten-year high in 2025, with A-share trading volume increasing and investor confidence rebounding. Recently, A-share 2025 annual report disclosures continued to progress, and the brokerage sector saw positive earnings catalysts. Among the listed brokerage firms that have disclosed earnings forecasts, over half are expected to have a year-on-year increase in net profit attributable to shareholders of over 50%, signaling an industry-wide profit recovery. Sinolink pointed out that market risk appetite continued to decline due to ongoing international influences. Although geopolitical impacts have weakened the investment environment and slowed down trading volume growth since February, the trading volume volume can still support Q1 2026 brokerage performance growth. The average daily stock fund trading volume of the entire market in January and February 2026 was 3.3 trillion yuan, a significant increase of 89% year-on-year. It is expected that brokerage profits will continue to grow rapidly. In terms of valuation, as of March 20, the PB valuation of the brokerage sector was 1.23 times, only at the 19th percentile for the past ten years. This indicates that there is sufficient room for valuation correction, as it is currently significantly misaligned with performance.