Zhongtai: Who stole the elasticity of this round of securities firms?

Zhongtai releases a research report stating that since 2025, the market trading activity has been continuously increasing, but the securities sector has clearly underperformed the overall trend, with the current PB ratio only at 1.3 times, forming a sharp contrast with the positive fundamental expectations. In comparison, as of the end of April 2026, the securities sector index is equivalent to the recent Shanghai Composite Index level of around 3400 points, with a difference of about 20%. The securities sector often plays a leading role in the market, but now that the market has entered the "midsummer", the valuation of the securities sector is still at a "low point," and this deviation may be difficult to sustain. Investment recommendation: "One flower does not make spring, but the blossoming of many flowers brings full spring." First tier (priority allocation): undervalued leading comprehensive securities firms (CITIC, CICC, Huatai), benefiting from strong comprehensive strength, industry concentration, mergers and acquisitions, and policy dividends, with ample room for valuation recovery. Second tier (flexible allocation): characteristic securities firms with high cost-effectiveness and clear improvement in ROE (GF, Industrial Bank, Orient), with a high proportion of light asset businesses in wealth management, asset management, and investment banking. Zhongtai's main points are as follows: According to the "funds' behavior characterization based on order splitting" constructed by Zhongtai's strategy team, the analysis of institutional and retail investors' pricing power in the sector. Since the market on September 24, 2024, the pricing behavior of funds influencing the securities sector has significantly differentiated: 1) The sharp rise in the sector in September 2024 was mainly contributed by institutional net buying, with retail investors following suit in buying between October and December 2024; 2) From the market low point in April 2025 to August 2025, the sector witnessed simultaneous market growth where institutions were buying while retail investors were selling; 3) Since 2026, the continuous selling pressure in the securities sector mainly comes from retail investors, with signs of gradual acceleration in institutional net inflows since 1Q26. Shareholder perspective: Changes in shareholder numbers can observe the marginal contribution of incremental funds. Looking back, the number of shareholders of A-share listed securities firms often increases rapidly with rising stock prices. There may be two logical layers behind this: 1) The profit model of securities firms is directly linked to the performance of the capital market, making it attractive to retail investors due to its simple and clear logic; 2) Although the increase in the number of shareholders implies diversification from a chip perspective, it is often seen as a sign of increasing market popularity and attention. Comparing the relationship between the year-end number of shareholders of A-share listed securities firms from 4Q25 to the end of 1Q26 and the changes in stock prices during the period (2025.01.01 to 2026.03.31), the average change in stock prices and the overall change in the number of shareholders during the period are -14.6% and -13.4%, respectively. Except for a few securities firms, the stock price changes of the vast majority of A-share securities firms match well with the changes in the number of shareholders during the period. From the perspective of per capita market value and total market value, there is a significant differentiation in pricing power among different companies, with A-share securities firms overall exhibiting a pattern of "top institutionalization, balanced middle, and retailization at the tail end." Performance perspective: Anticipating a "slow bull market" guides large redemptions of wide-based ETFs, dragging down the enthusiasm for investments in weighty stocks in the securities sector. The market consensus on the logic of the "slow bull market" has gradually formed in this round of index gains, shifting the allocation logic from "playing the high elasticity" to "chasing certainty," which to some extent suppresses the valuation elasticity of the securities sector. On a deeper level, the implied low volatility and low turnover characteristics of the "slow bull market" are structurally mismatched with the traditional profit model of securities firms that rely on market activity, causing investors to fall into a double uncertainty of "fearing the trap of chasing highs, and worrying about flat performance." The market's fuzzy pricing recognition of the securities sector in the new ecosystem is a key reason for the weakening of its beta attribute. Trading perspective: Differences in the aesthetic preferences of incremental funds. The current market trading activity has significantly increased, with sector differentiation continuing, and incremental funds have not deviated from existing main tracks, still oscillating between "semiconductors," "optics," and "electronics." Insurance funds as the incremental funds in this round of the market prefer large-cap stocks with stable profits and dividends, while the dividend yield of the securities sector is not outstanding, and the high ROE of the securities industry has declined since 2015, remaining at a relatively low level. Risk warning: This article analyzes chip structures based on changes in shareholder numbers and has a certain subjectivity, with risks of outdated research report information and sample statistical differences, exacerbated equity market volatility, delayed data updates, and risks of model calculation deviations.