Ge Long Hui A P P·2025-11-20 04:15Core Viewpoint - Major securities firms, including CICC, Dongxing Securities, and Xinda Securities, are planning a merger, which has led to a rise in the securities sector, with various ETFs showing significant gains [1][5]. Group 1: Merger Announcement - CICC is planning a stock swap merger with Dongxing Securities and Xinda Securities, with A-shares and H-shares of the three companies set to be suspended from trading on November 20, expected to last no more than 25 trading days [5]. - The merger is a significant move by the Central Huijin Investment, which aims to accelerate the establishment of a top-tier investment bank [5]. - This merger marks the first instance of such consolidation in the securities industry, with Central Huijin holding stakes in multiple securities firms [5]. Group 2: Financial Metrics Post-Merger - Following the merger, CICC's total assets are projected to rank fourth in the industry, while net profit is expected to rank sixth [5]. - For the first three quarters of 2025, the net profits of CICC, Dongxing, and Xinda are forecasted to be 6.6 billion, 1.6 billion, and 1.4 billion respectively, reflecting year-on-year growth rates of 130%, 70%, and 53% [5]. - The combined net profit of the merged entity is anticipated to reach 9.5 billion, with total assets amounting to 1 trillion [5]. Group 3: Industry Trends and Performance - The securities industry is undergoing significant consolidation, with several firms having completed mergers this year, indicating a trend towards resource integration to enhance scale and competitiveness [6]. - Despite a strong performance in major A-share indices, the overall securities sector has lagged, with the CSI All Share Securities Companies Index only increasing by 3.26% [6]. - The net profit of listed securities firms increased by 62.4% year-on-year for the first three quarters of 2025, highlighting a disparity between earnings growth and stock performance [6]. Group 4: Future Outlook - The securities industry is expected to maintain high levels of wealth management activity due to continued inflows of incremental capital [8]. - The importance of proprietary trading in securities firms is anticipated to rise, with a focus on equity investments expected to increase [8]. - The deepening of interconnectivity between mainland and Hong Kong markets is likely to drive recovery in investment banking and rapid growth in international business for leading securities firms [9]. - Ongoing supply-side reforms in the industry are expected to continue, with an increase in industry concentration anticipated [9].