Ge Long Hui·2026-01-13 06:30Core Viewpoint - Dongfang Securities, the second-largest brokerage under Shanghai State-owned Assets, is poised to benefit from both internal growth drivers and external integration opportunities, with expectations of market performance release due to governance improvements and strategic execution acceleration [1] Group 1: Governance and Strategic Execution - The board of directors is taking a leading role in strengthening governance, which opens up possibilities for external integration [1] - After management adjustments, the company is accelerating strategic execution, indicating clear signals of capital operations or merger and acquisition activities [1] Group 2: Business Performance and Financial Metrics - Asset management is showing marginal improvement, with stable fixed-income investment returns and an increase in equity proprietary scale and directional exposure [1] - Credit impairment continues to narrow, and risks associated with overseas business are being further cleared [1] Group 3: Market Expectations and Valuation - The brokerage sector has seen phase-based leading performances from firms with merger and acquisition expectations, with Dongfang Securities potentially following suit if external expansion expectations materialize [1] - The target price is set at 15.06 yuan based on a valuation of 1.50x PB for 2026, indicating a potential upside of 38% [1]