证券行业2025年度投资策略：周期新启，把握拐点

Industry Investment Rating - The report maintains a "Positive" investment rating for the securities industry, suggesting a favorable outlook for 2025 [10] Core Views - The report highlights that the incremental policies introduced at the end of 2024 are not short-term stimuli but mark the beginning of a new upward cycle in the capital markets [3] - The securities industry is expected to benefit from improved operating conditions and policy continuity in 2025, with a focus on leading brokers, M&A themes, and high-elasticity stocks [3][9] - The industry's profit growth is projected to reach nearly 30% in 2025, with ROE recovering to around 8%, close to the levels seen between 2019 and 2021 [8] 2024 Recap - The securities sector outperformed the broader market in 2024, with a cumulative increase of 35.8% as of November, surpassing the CSI 300 by 21.7 percentage points [6] - The sector saw a strong rebound starting in September, with a 48.8% increase from September 24 to November, outperforming the CSI 300 by 26.4 percentage points [6] - The industry's net profit attributable to shareholders improved significantly in Q3, with a year-on-year increase of 41.7% and a quarter-on-quarter increase of 14.9%, driven by a 161.2% year-on-year growth in investment income [6] 2025 Outlook - The report identifies three key marginal changes: 1) top-level policy support for capital markets, 2) a more favorable regulatory environment, and 3) accelerated M&A activity in the industry [7] - The industry is expected to enter a new upward cycle, with policy continuity and improved fundamentals driving growth [7][8] - The PB valuation of the securities sector is expected to rise to 1.7-2.0x, with a potential upside of 7%-26% from the current level of 1.59x as of November [8] Investment Recommendations - The report recommends focusing on three investment themes: 1) leading brokers with low valuations and high ROE, such as CITIC, Huatai, and China Galaxy, 2) M&A-themed stocks, and 3) high-elasticity stocks benefiting from market recovery, such as Orient Securities and GF Securities [9] Market Performance and Valuation - The securities sector's PB valuation rose to 1.59x by November, still within a safe margin, with the relative valuation percentile at 31% since 2012 [44] - The sector's ROE for the first three quarters of 2024 was 3.5%, down 0.55 percentage points year-on-year, with leading brokers like Huatai and CITIC maintaining higher ROEs [51] Business Performance - Brokerage income declined by 13.6% year-on-year in the first three quarters of 2024, while investment income grew by 24.4%, becoming the main driver of performance [46] - The top five brokers accounted for 40.6% of total revenue, and the top ten accounted for 60.1%, indicating increased market concentration [59] Policy and Regulatory Environment - The report notes a shift in regulatory tone, with policies aimed at boosting the capital markets and easing restrictions on IPOs and M&A activities [7][99] - The government has introduced measures to support the capital markets, including the establishment of a 500 billion yuan swap facility and a 300 billion yuan stock buyback loan [97]