Shenwan Hongyuan Securities·2025-07-12 09:16Investment Rating - The report maintains a positive outlook on the securities industry, indicating a "Look Favorably" rating for the sector, suggesting it will outperform the overall market [2][7]. Core Insights - The report highlights the implementation of 28 measures by the China Securities Association aimed at enhancing self-regulation and promoting high-quality development in the securities industry, focusing on underwriting, wealth management, internationalization, and compensation reform [2]. - The transition from a scale-oriented to a function-oriented service model in investment banking is emphasized, which is expected to improve the quality of services and reduce financing costs for listed companies [2]. - The wealth management sector is anticipated to expand as securities firms are encouraged to apply for fund advisory qualifications and include bank wealth management and insurance products in their offerings [2]. - The internationalization of Chinese securities firms is entering a new phase, driven by cross-border IPOs, overseas bond issuance, and the demand for wealth management services [2]. - The report recommends three investment themes: benefiting from an optimized competitive landscape, firms with significant earnings elasticity, and those with strong international business capabilities [2]. Summary by Sections Underwriting and Sponsorship Business - Strict regulations against tiered pricing and the inclusion of pricing report quality in the evaluation of investment banking practices are highlighted [2]. - The new regulations are expected to enhance the quality of enterprises entering the capital market, which is crucial during the current adjustments in the A-share IPO market [2]. Wealth Management - The report discusses the potential for securities firms to broaden their wealth management offerings by including various financial products, addressing the one-stop asset allocation needs of clients [2]. - The current scale of the asset management market is noted, with bank wealth management products at 29.14 trillion yuan, insurance products at 27.67 trillion yuan, and public funds at 31.94 trillion yuan, compared to only 6.08 trillion yuan for private securities management [2]. Internationalization - The report emphasizes the growing international business opportunities for Chinese securities firms, driven by improved connectivity between mainland China and Hong Kong, and the increasing demand for cross-border financial services [2]. Compensation Reform and Public Relations - The importance of a stable compensation system for the high-quality development of the securities industry is discussed, along with the need for effective public relations to boost market confidence [2]. Investment Recommendations - The report recommends specific securities firms based on their competitive advantages and market positioning, including Guotai Junan, GF Securities, and CITIC Securities among others [2][3].