券商板块点评：从自由现金流角度看券商ROE改善机会

Investment Rating - The report maintains an "Outperform the Market" rating for the brokerage sector [1][5]. Core Viewpoints - The performance drivers of the securities industry are continuously improving, supported by increased market trading volume and the expansion of margin financing, alongside cost reduction measures that enhance cash flow and long-term investor returns [2][3]. - The current market environment is favorable, with major indices reaching new highs, leading to a significant upward trend in brokerage stock prices [3]. - The report highlights that the return on equity (ROE) for securities firms is on an upward trajectory due to improvements in revenue, cost management, and profit margins [8][12]. Summary by Sections Industry Performance - The securities industry has seen a median net profit growth rate of 44.9% among three firms that released mid-year performance reports for 2025, with forecasts indicating a lower bound of 80.1% and an upper bound of 98.0% for 29 firms [13][14]. - The brokerage sector's price-to-book (PB) ratio as of July 28 is 1.58, slightly above the five-year average, indicating room for valuation improvement [3][24]. Cost Management and Profitability - Securities firms have implemented cost-cutting measures, leading to a decline in management expense ratios, which directly benefits free cash flow [8][12]. - The leverage ratio of securities firms has increased, contributing to the improvement in ROE [8]. Market Trends and Recommendations - The report suggests that the ongoing market activity and the expansion of margin financing will drive both valuation and profitability for brokerages [24]. - Key recommendations include focusing on undervalued leading brokerages like Huatai Securities and CITIC Securities, as well as high elasticity stocks such as Industrial Securities and Oriental Fortune [24].