BOCIC(SH:601696) Bank of China Securities·2025-08-27 00:05Core Insights - The report highlights the implementation of the revised classification and evaluation regulations for securities companies, effective from August 22, 2025, which aims to enhance regulatory efficiency and reduce industry burdens while promoting differentiated development among firms [1][2]. - The new regulations emphasize the importance of functionality and compliance, shifting the competitive focus from capital scale to professional capabilities and functional realization, benefiting leading firms while requiring smaller firms to invest in differentiation [2][3]. Summary by Sections Regulatory Changes - The revised regulations focus on promoting the functionality of securities companies, optimizing business development indicators, and enhancing the evaluation framework to support high-quality development [2]. - The new framework introduces special indicators that increase the weight of net asset return, guiding the industry towards efficiency rather than mere scale expansion [2][3]. Market Impact - The overall market impact of the new regulations is viewed as neutral to positive, potentially stabilizing profitability and valuation elasticity within the brokerage sector [2][3]. - The report anticipates a valuation recovery for brokerage firms in the short term, driven by improved market sentiment, while in the long term, it expects a dual pattern of valuation uplift for leading firms and recovery for differentiated smaller firms [1][2].