Shenwan Hongyuan Securities·2026-01-05 02:05Investment Rating - The report maintains a "Positive" outlook on the non-bank financial sector for 2026, indicating strong upward momentum for the industry [3][4]. Core Insights - The brokerage sector is expected to experience a significant upward breakthrough in 2026, driven by improved chip structure, reduced turnover rates, and a favorable valuation environment. The sector is currently undervalued compared to its earnings potential [4]. - The insurance sector shows signs of stabilization post the interest rate switch, with premium growth expected to improve in 2026, particularly in the life insurance segment [4]. - Regulatory changes, including the completion of public fund fee reforms, are anticipated to benefit the non-bank financial sector by reducing costs for investors and enhancing market participation [4][22]. Summary by Sections Market Review - The Shanghai Composite Index closed at 4,629.94 with a decline of 0.59% over the week. The non-bank index fell by 1.84%, with brokerages and insurance indices declining by 1.37% and 3.33%, respectively [8][10]. Non-Bank Financial Insights - The brokerage sector's index underperformed the Shanghai Composite Index by 0.78 percentage points in 2025, with a total decline of 2.05% for the year. In contrast, major A-share indices saw significant gains [4]. - The insurance sector's original premium income reached 5.76 trillion yuan from January to November 2025, reflecting a year-on-year growth of 7.6%. The life insurance segment grew by 9.2% during the same period [4][31]. Investment Analysis - For brokerages, the report recommends focusing on leading firms with strong competitive advantages, such as Guotai Junan and CITIC Securities, as well as those with high earnings elasticity like Huatai Securities [4]. - In the insurance sector, companies like China Life and Ping An are highlighted for their potential in the upcoming market revaluation, with a focus on the growth of new business premiums [4]. Regulatory Developments - The China Securities Regulatory Commission (CSRC) has implemented new rules for public real estate investment trusts (REITs), expanding financing options for commercial properties [21]. - The completion of the public fund fee reform is expected to lower overall fund costs by approximately 20%, saving investors around 51 billion yuan annually [22].