Core Viewpoint - Bank of America Securities upgraded Huatai Securities (06886) from "Neutral" to "Buy" due to the resolution of uncertainties in fundraising with the issuance of convertible bonds, maintaining a target price of HKD 22.1, indicating attractive current valuation and stable fundamentals [1] Group 1: Fundraising and Convertible Bonds - Huatai Securities plans to issue HKD 10 billion zero-coupon convertible bonds maturing next year, with a conversion price of HKD 19.7 per share, equivalent to a price-to-book ratio of 1x for 2024 after excluding dividends [1] - The potential dilution from the full conversion of these bonds is approximately 5.6% [1] - The proceeds from the bond issuance will support the company's overseas business expansion, aligning with the board's previous plan to inject RMB 9 billion into overseas operations [1] Group 2: Financial Outlook and Capital Structure - Bank of America Securities believes that after the bond issuance, the company still has room for equity financing under general authorization, with a potential issuance scale of up to 20% of total share capital [1] - The earnings forecast for Huatai Securities remains unchanged, indicating confidence in the company's financial stability and growth prospects [1]

Core Viewpoint - Bank of America Securities reports that Huatai Securities plans to issue HKD 10 billion zero-coupon convertible bonds maturing next year, with a conversion price of HKD 19.7 per share, aligning with the board's previous plan to inject RMB 9 billion into overseas operations [1] Group 1: Bond Issuance Details - The conversion price of HKD 19.7 per share corresponds to a price-to-book ratio of 1x for 2024, excluding dividends [1] - If fully converted, the potential dilution effect is approximately 5.6% [1] - The proceeds from the bond issuance will support the expansion of overseas business [1] Group 2: Financial Implications - Following the bond issuance, the company retains capital financing capacity under general authorization, with a potential issuance scale of up to 20% of total share capital [1] - The completion of this issuance is expected to eliminate uncertainties regarding the company's fundraising efforts [1] Group 3: Investment Rating and Valuation - Bank of America Securities upgrades the investment rating for Huatai Securities from "Neutral" to "Buy" [1] - The current valuation is considered attractive, with a target price set at HKD 22.1 [1] - The company's fundamentals remain robust, and the overseas capital injection may provide upward potential [1]

Group 1 - The core viewpoint of the articles highlights the strong performance expectations for listed securities firms in 2025, driven by a vibrant capital market and robust growth in brokerage and proprietary trading businesses [1][2] - As of January 30, 2025, 21 listed securities firms have disclosed their performance forecasts, with leading firms like CITIC Securities and Guotai Junan expected to maintain their market dominance, projecting CITIC Securities' net profit to exceed 30 billion yuan and Guotai Haitong's net profit growth rate to exceed 100% year-on-year [1] - Smaller securities firms are anticipated to show even greater profit elasticity, with Guolian Minsheng forecasting a year-on-year net profit growth rate exceeding 400% [1] Group 2 - The growth drivers for the 2025 performance of these listed securities firms include brokerage and proprietary trading businesses, supported by a favorable A-share market environment and government policies aimed at stabilizing growth and boosting the capital market [2] - Factors such as a moderately loose liquidity environment, continuous optimization of the capital market, and the restoration of investor confidence are expected to collectively enhance the performance of the securities sector [2] - The current valuation of the securities sector is at a historical low, presenting a defensive rebound opportunity, with recommendations to focus on strong leading firms and those with competitive advantages in wealth management, proprietary trading, and cross-border business [2]

Core Viewpoint - Huatai Securities experienced a decline of 4.05% in stock price on February 3, with a trading volume of 4.739 billion yuan, indicating market volatility and investor sentiment shifts [1]. Financing and Margin Trading - On February 3, Huatai Securities had a financing buy-in of 656 million yuan and a repayment of 432 million yuan, resulting in a net financing buy of 225 million yuan. The total margin trading balance reached 6.742 billion yuan [1]. - The financing balance of 6.731 billion yuan accounts for 4.23% of the circulating market value, which is above the 50th percentile level over the past year, indicating a relatively high level of financing activity [1]. - In terms of securities lending, 73,000 shares were repaid while 48,600 shares were sold, with a selling amount of approximately 1.058 million yuan. The remaining securities lending balance was 1.153 million yuan, exceeding the 80th percentile level over the past year, also indicating a high level of activity [1]. Business Performance - As of September 30, Huatai Securities reported a total of 195,500 shareholders, a decrease of 6.96% from the previous period. The average number of circulating shares per person increased by 7.62% to 38,566 shares [2]. - For the period from January to September 2025, Huatai Securities achieved an operating income of 27.129 billion yuan, a year-on-year decrease of 13.67%. However, the net profit attributable to shareholders increased by 1.69% to 12.733 billion yuan [2]. Dividend Distribution and Shareholding Structure - Since its A-share listing, Huatai Securities has distributed a total of 42.893 billion yuan in dividends, with 13.994 billion yuan distributed over the past three years [3]. - As of September 30, 2025, the top ten circulating shareholders included Hong Kong Central Clearing Limited, holding 442 million shares (a decrease of 108 million shares), and China Securities Finance Corporation, holding 153 million shares (unchanged). The Guotai CSI All-Share Securities Company ETF (512880) entered as a new shareholder with 131 million shares [3].

Group 1 - The core viewpoint of the articles highlights the strong performance expectations for listed securities firms in 2025, with major firms like CITIC Securities and Guotai Junan maintaining their market leadership [1][2] - As of January 30, 2025, 21 listed securities firms have disclosed their performance forecasts, with CITIC Securities expected to achieve a net profit exceeding 30 billion yuan and Guotai Haitong projecting a year-on-year net profit growth rate exceeding 100% [1] - Smaller securities firms are anticipated to show even greater profit elasticity, with Guolian Minsheng forecasting a year-on-year net profit growth rate exceeding 400% for 2025 [1] Group 2 - Brokerage and proprietary trading businesses are identified as the core drivers of performance growth for these listed securities firms in 2025 [2] - The A-share market is expected to remain active in 2025, with a high level of performance in the securities industry, suggesting investment opportunities in the sector [2] - Factors such as a stable growth policy, a conducive capital market environment, and the restoration of investor confidence are expected to drive the upward trend in the securities sector [2] Group 3 - The current valuation of the securities sector is at a historical low, presenting a defensive rebound opportunity [2] - It is recommended to focus on leading securities firms with strong overall capabilities and those with differentiated competitive advantages in wealth management, proprietary trading, and cross-border business [2] - Related concepts in the Hong Kong stock market include Huatai Securities, GF Securities, China Galaxy, Guotai Haitong, CICC, CITIC Securities, and others [3]

Core Viewpoint - The company plans to issue H-share convertible bonds amounting to 10,000 million HKD based on a general authorization, which does not involve the issuance of A-shares [2][3]. Group 1: Bond Issuance Details - The bond issuance is based on a general authorization granted by the shareholders at the 2026 first extraordinary general meeting, allowing the board to issue shares, including convertible securities, up to 20% of the total issued share capital as of that meeting [2][3]. - The initial conversion price for the bonds is set at 19.70 HKD per H-share, representing a premium of approximately 6.78% over the last trading price of 18.45 HKD and a premium of about 5.09% over the average price of the last five trading days [12][13]. - If all bonds are converted at the initial conversion price, approximately 507,614,213 shares will be issued, which would represent about 29.53% of the existing H-shares and about 5.62% of the total issued shares [13]. Group 2: Use of Proceeds - The net proceeds from the bond issuance, estimated at approximately 9,924.7 million HKD after deducting commissions and expected expenses, will be used to support the company's overseas business development and to supplement other operational funds [18][22]. Group 3: Conditions and Compliance - The obligations of the underwriter to subscribe and pay for the bonds are contingent upon several conditions, including satisfactory due diligence and compliance with regulatory approvals [6][9]. - The company must comply with the China Securities Regulatory Commission's requirements and complete the necessary filings related to the bond issuance [16]. Group 4: Impact on Shareholding Structure - The issuance of the bonds is expected to maintain sufficient public float after the conversion, ensuring compliance with regulatory requirements [20]. - The potential impact on the company's shareholding structure has been outlined, indicating that the issuance will not adversely affect the existing shareholder base [19]. Group 5: Board Meeting and Resolutions - The company's board of directors held a meeting on February 2, 2026, where the proposal for the bond issuance was unanimously approved [25][27].

| 表格序號 | 大股東/董事/最高行政人員名 作出披露的 買入 / 費出或涉及的 每股的平均價 | | | | | 持有權益的股份數目 佔已發行的 有關事件的日期 相 | | | --- | --- | --- | --- | --- | --- | --- | --- | | | | 류因 | 股份數目 | | | ( 請參閱上述 * 註 | 有投票權股 (日 / 月 / 年) * | | | | | | | | | 份自分比 | | | | | | | | | (%) | | CS20260202E00449 | 易方达基金管理有限公司 | 1201(L) | | 1,703,600(L) | HKD 18.8121 | 153,412,400(L) | 8.92(L)28/01/2026 | | 股份代號: | 06886 | | --- | --- | | 上市法國名稱: | 華泰證券股份有限公司 - H股 | | 日期 (日 / 月 / 年): | 03/01/2026 - 03/02/2026 | 格隆汇2月3日丨根据联交所最新权益披露资料显示，2026年1月28日，华泰证券(06886.HK) ...

Investment Rating - The investment rating for Huatai Securities is "Buy" (maintained) [1] Core Views - The issuance of zero-coupon convertible bonds is expected to dilute H-share capital by 29.53% and total capital by 5.6%, with proceeds aimed at developing overseas business and supplementing working capital. This is anticipated to have short-term pressure on stock prices, particularly in the Hong Kong market, but will benefit long-term international business growth and enhance overall ROE [4][5][6] - The company maintains its profit forecast, expecting net profit attributable to shareholders to reach 168 billion, 217 billion, and 251 billion yuan for 2025, 2026, and 2027 respectively, representing year-on-year growth of 9%, 29%, and 16% [4][6] Financial Summary - Revenue projections are as follows: - 2023: 36,578 million yuan - 2024: 41,466 million yuan - 2025: 37,078 million yuan (down 10.6% YoY) - 2026: 43,144 million yuan (up 16.4% YoY) - 2027: 48,837 million yuan (up 13.2% YoY) [7][10] - Net profit projections are as follows: - 2023: 12,751 million yuan - 2024: 15,351 million yuan - 2025: 16,750 million yuan (up 9.1% YoY) - 2026: 21,680 million yuan (up 29.4% YoY) - 2027: 25,067 million yuan (up 15.6% YoY) [7][10] - The company’s ROE is projected to improve from 7.4% in 2023 to 10.9% in 2027 [7][10] Valuation Metrics - The projected P/E ratios are: - 2025: 12.2 - 2026: 9.4 - 2027: 8.2 [4][7] - The current P/B ratio is 1.20 [4]

Investment Rating - The report rates the securities industry as "Overweight," indicating that the industry is expected to outperform the overall market [7]. Core Insights - The report highlights opportunities for brokerages driven by wealth expansion and international business growth, particularly focusing on firms like Huatai Securities and GF Securities, which are actively increasing their international presence [1]. - The report notes that while short-term refinancing may pressure stock prices, the medium-term outlook for return on equity (ROE) is expected to recover or improve, suggesting a potential rebound in price-to-book (PB) ratios [1]. - The report emphasizes the increasing focus on international business by major brokerages, which is anticipated to contribute positively to their performance and ROE in the medium term [1]. Summary by Sections Huatai Securities - On February 3, 2026, Huatai Securities announced a plan to issue HKD 10 billion zero-coupon convertible bonds due in 2027, with a net fundraising target of HKD 9.925 billion. The initial conversion price is set at HKD 19.70, representing a premium of 6.78% over the closing price [1]. - The dilution effect on book value per share (BPS) is projected to decrease from CNY 19.07 to CNY 18.99, a dilution ratio of 0.41%, while ROE is expected to decrease from 6.41% to 6.27% [1]. GF Securities - On January 7, 2026, GF Securities announced plans to issue over HKD 60 billion in new H shares and convertible bonds, with a share placement of HKD 39.75 billion and a convertible bond issuance of HKD 21.5 billion [1]. - The initial conversion price for the bonds is set at HKD 19.82, with a dilution effect of approximately 19.2% on H shares and 4.3% on total equity [1]. Market Dynamics - The report indicates that the refinancing activities of brokerages may exert short-term pressure on stock prices, but the impact is expected to dissipate quickly, with Huatai Securities' A shares likely to perform better than H shares in the short term [1]. - The report also notes that major brokerages are enhancing their international business capabilities, which is expected to significantly contribute to their performance and ROE [1]. Investment Recommendations - The report suggests focusing on three investment themes: 1. Strong comprehensive capabilities of leading institutions such as Guotai Junan and CITIC Securities 2. Brokerages with significant earnings elasticity like Huatai Securities and招商证券 3. Companies with strong international business competitiveness, recommending China Galaxy [1]. Valuation Overview - The report provides a valuation overview of major listed brokerages, indicating their current prices, PB ratios, and projected net profit growth for 2025 and 2026, highlighting the relative performance of each brokerage [2].

Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Views - The issuance of H-share zero-coupon convertible bonds is expected to dilute H-share capital by 29.53% and total capital by 5.6%, with proceeds aimed at overseas business development and working capital supplementation. This is anticipated to have short-term pressure on the stock price, particularly in the Hong Kong market, but is expected to benefit long-term international business growth and enhance overall ROE [4][5][6] - The company maintains its profit forecast, projecting net profit attributable to shareholders of 168 billion, 217 billion, and 251 billion yuan for 2025-2027, representing year-on-year growth of 9%, 29%, and 16% respectively. The corresponding PE ratios are 12.2, 9.4, and 8.2 times, with a current PB of 1.20 times [4][6] Financial Summary - Revenue is projected to reach 37,078 million yuan in 2025, with a year-on-year decrease of 10.6%, followed by a recovery to 43,144 million yuan in 2026 and 48,837 million yuan in 2027, with growth rates of 16.4% and 13.2% respectively [7][10] - Net profit attributable to shareholders is expected to be 16,750 million yuan in 2025, 21,680 million yuan in 2026, and 25,067 million yuan in 2027, with year-on-year growth rates of 9.1%, 29.4%, and 15.6% respectively [7][10] - The company's gross margin is projected to improve from 51.2% in 2025 to 58.5% in 2027, while the net margin is expected to rise from 45.2% to 51.3% over the same period [7][10] Valuation Metrics - The projected PE ratios for the company are 12.2 for 2025, 9.4 for 2026, and 8.2 for 2027, indicating a favorable valuation trend [7][10] - The projected PB ratios are 1.2 for 2025, 1.1 for 2026, and 1.0 for 2027, suggesting a decreasing trend in the price-to-book ratio [7][10]