CITIC Securities: Undervalued value exists in the securities sector configuration.

CITIC Securities stated that the investment opportunities for excess returns in the securities sector compared to broad market indexes are far more than absolute return opportunities, and the sector's configuration value is undervalued. Policy/meeting signals are the core drivers of excess returns in the securities sector, which can be categorized into three types: 1) favorable capital market policy signals for the securities industry, 2) favorable macro signals for trading activity, and 3) favorable targeted signals for specific brokerages/businesses. Under the three driving conditions, the average excess returns of the securities sector relative to the market are 1)>3)>2). It is very important to pay early attention to meeting points related to finance work/capital markets. In the three driving market scenarios, there are significant differences in individual stock performance within the securities sector: in scenario 1, most brokerages within the sector can outperform the securities index, with smaller brokerage firms or newly listed brokerages leading in relative gains due to their relatively smaller capital requirements; in scenario 2, the market returns to brokerage/two-way trading performance, with brokerages with a higher proportion of this type of business leading in relative gains; in scenario 3, brokerages benefiting from specific policies or with clear mapping logic leading in stock gains. Overall, the number of brokerages within the sector that can outperform the securities index is 1)>2)>3).