China Securities Co., Ltd.: Listed securities firms show stable and improving performance, with continuous optimization of business structure.

China Securities Co., Ltd. issued a research report stating that the operating performance of listed securities firms in 2025 is showing a stable and positive trend, with continuous optimization of business structure and further consolidation of the leading comprehensive advantages. The value of insurance allocation is evident, and it is recommended to focus on investment opportunities in stocks with high dividends, low valuations, and low sensitivity to performance. In the Hong Kong stock market, the non-bank sector's long-term value is highlighted under the resonance of low valuation characteristics and expectations of profit improvement. In terms of diversified financials, with stable regulatory logic, clear consumer-driven orientation, and improved efficiency of AI technology, the consumer finance industry is in a period of dual driving force of policy dividends and technological dividends. China Securities Co., Ltd.'s main points are as follows: Securities: The operating performance of listed securities firms in 2025 is showing a stable and positive trend, with continuous optimization of business structure and further consolidation of leading comprehensive advantages. The brokerage business benefits from the increase in market trading activity and wealth migration by residents, achieving double-digit revenue improvement; the investment banking business steadily grows under the activation of mergers and acquisitions policies and the recovery of IPO pace; despite the deepening fee rate reform of the asset management business, the transformation to active management is starting to show results; the investment business, driven by stocks and bonds and yield improvement, continues to release performance potential. Leading securities firms, with the synergy of the full business chain and balance sheet advantages, continue to lead in industry differentiation, further solidifying the foundation for high-quality development. Insurance: The value of allocation is evident, and it is recommended to focus on investment opportunities in stocks with high dividends, low valuations, and low sensitivity to performance. The current allocation value of the insurance sector is evident, with Ping An A shares as an example, the PEV is 0.63x (as of April 3, same below), in the 15th percentile in the past year. Recently, affected by the retreat of broad monetary expectations and input inflation expectations, the term spread widened, with the 10-year government bond yield this week at 1.8199%, an increase of 0.27BP from the end of last week, helping to solidify long-term spread performance. Insurance funds have continued to increase allocation to equity assets in recent years, with increased elasticity in performance with equity market performance, but by measuring OCI, impacts on profits from equity market fluctuations can be reduced. Insurers with a high proportion of OCI stock allocation are expected to have relatively stable profits, and subsequent disturbances in stock prices through annual report disclosures can be monitored for allocation opportunities. Hong Kong market and HKEx views In Hong Kong, the non-bank sector's long-term value is highlighted under the resonance of low valuation characteristics and expectations of profit improvement. This week (until April 3), the Hong Kong stock market has shown some recovery, with the Hang Seng Index +1.32%. Southbound funds transactions accounting for 22.72% of trading volumes maintained at a central level, providing solid support for the liquidity of Hong Kong stocks. The current sector's valuation is still relatively low compared to major global markets. Although the shift in expectations for Fed rate cuts weakens temporary dollar liquidity support, the continued increase in pricing power of Southbound funds continues to hedge foreign capital fluctuations, providing strong support at the bottom of the sector, and the long-term value of allocation is worth paying attention to. Risk warning: Uncertainty in market price volatility, uncertainty in corporate earnings forecasts, and technological updates and iterations.