格隆汇APP·2026-03-11 15:17Core Viewpoint - The article discusses the paradox of the securities sector achieving record profits while remaining undervalued, highlighting the disconnect between performance and valuation in the context of a bull market [4][5]. Historical Review - An analysis of eight significant market cycles over the past 20 years reveals that a combination of valuation bottom, policy bottom, and macroeconomic bottom is essential for initiating a bull market in the securities sector [7][8]. - Historical data shows that when the price-to-book (PB) ratio of securities firms falls below the 3% percentile, it often marks the beginning of a market rally [9][10]. - The correlation between the rise in return on equity (ROE) and market performance is evident, with significant gains observed during periods of policy and macroeconomic easing [13][14]. The Mystery of Divergence - Despite the securities sector achieving an annualized ROE of 8.7% in the first three quarters of 2025, the PB ratio remains around 1.4, indicating a significant valuation gap [16][17]. - Investor concerns stem from issues such as severe business homogenization and reliance on brokerage services, raising doubts about the sustainability of the current market rally [19][20]. Current Conditions - The characteristics of the three bottoms are becoming increasingly clear, with the PB ratio at a historical low and liquidity conditions improving significantly [22][23]. - Policy measures are being implemented to expand the operational scope of securities firms, including support for new listings and virtual asset trading [24][26]. ROE Enhancement Path - The report emphasizes a shift from reliance on brokerage services to a more diversified revenue structure, which is expected to support ROE growth [28][29]. - Key strategies for enhancing ROE include reducing volatility in proprietary trading, expanding international operations, and exploring innovative business avenues [30][31][32]. Investment Strategy - The current state of the securities sector presents opportunities for both value recovery and growth realization, with a focus on identifying leading firms capable of significant expansion [36][38]. - Specific companies such as CITIC Securities, Galaxy Securities, Huatai Securities, Haitong Securities, and Orient Securities are highlighted as potential leaders in the sector [38]. Conclusion - The article concludes that with low valuations and strong earnings, the securities sector is poised for a comeback, supported by historical patterns and ongoing structural improvements in profitability [41].