Core Viewpoint - The A-share market is experiencing an upward trend, with significant performance from brokerage stocks, indicating a bullish sentiment in the market [1][3]. Market Performance - As of July 28, the Shanghai Composite Index rose by 0.12% to close at 3597.94 points, while the Shenzhen Component and ChiNext Index increased by 0.44% and 0.96%, closing at 11217.58 points and 2362.6 points respectively [1]. - The CSI All Share Securities Index closed at 874.91 points, up 0.67% on the same day, with a cumulative increase of 8.86% in July [2]. Individual Stock Performance - Among the 49 constituent stocks, 33 saw an increase, with Zhongyin Securities leading at a rise of 7.93%, reaching its daily limit [2]. - Other notable performers included Huatai Securities and Guotai Junan, which rose by 2.97% and 2.87% respectively [2]. ETF Performance - Multiple brokerage ETFs also showed strong performance, with increases exceeding 1%, including Huian Securities ETF (up 1.3%) and Jiashi Securities ETF (up 1.27%) [3]. - Several public funds' securities ETFs also rose by over 0.9% on the same day [3]. Earnings Forecast - As of July 28, 32 listed brokerages have released mid-year earnings forecasts, with many reporting significant profit increases, including Guolian Minsheng and Huaxi Securities, which are expected to see net profit growth rates of 1183% and 1025.19% to 1353.9% respectively [3]. - A total of 12 brokerage stocks or related stocks have projected net profit growth rates exceeding 100% [3]. Year-to-Date Performance - The CSI All Share Securities Index has increased by 5.22% year-to-date, with Xiangcai Co. leading the gains at 57.78% [4]. - Other top performers include Zhongyin Securities and Dongwu Securities, with increases of 46.33% and 35.43% respectively [4]. Market Sentiment and Future Outlook - Analysts view brokerage stocks as indicators of market sentiment, with improving performance and expectations of mergers and reforms supporting their valuations [4]. - The brokerage sector is anticipated to maintain a steady recovery and upward trend, with potential for outperforming market benchmarks if the capital market remains stable and active [5].

Group 1 - The core viewpoint of the article highlights that the securities sector is experiencing a bullish trend, with multiple brokerage stocks, including Jinlong Co., hitting the daily limit up, and others like Guosen Securities, Bank of China Securities, and Dongfang Securities also seeing gains [1] - The securities sector has seen a continuous rise for six consecutive days, indicating a strong upward momentum [1] - Industry insiders believe that the securities sector is in a phase of multiple favorable factors, including sustained policy support, active trading sentiment in the A-share market, increasing interest in the Hong Kong stock market, and the recovery of brokerage firms' performance, which collectively enhance the sector's outlook [1]

Group 1 - The current stock market is perceived as unappealing, leading investors to feel stuck between holding cash and entering the market [1][3] - The sluggish performance of brokerage stocks is identified as a key factor contributing to the current market situation, as these stocks typically serve as a market indicator and engine [3][5] - Major brokerage firms like CITIC Securities and East Money have seen their stock prices stagnate, reflecting a lack of momentum in the market [3][5] Group 2 - Investors had hoped that major financial blue-chip firms would lead the market, but instead, they have remained silent and stagnant, resulting in reduced trading volumes [5] - The brokerage sector is described as being in a state of "having the will but lacking the power," waiting for a catalyst to revive market activity [5] - Experienced investors understand that 95% of market time is spent in boredom, with significant gains often occurring in brief bursts, emphasizing the importance of patience [7]

Core Viewpoint - The core driver for the rise in brokerage stocks is the high trading activity in the market combined with the fundamental recovery brought about by stable market upward trends [1][2] Group 1: Market Dynamics - The brokerage sector's performance is closely tied to macroeconomic conditions and is sensitive to economic cycle turning points [1][2] - Brokerage stocks typically perform well during interest rate cuts, as loose monetary policy leads to increased liquidity and positive market sentiment [1][2] - Macro and industry-related policies play a decisive role in initiating brokerage stock rallies, with historical examples including the stock reform in 2005-2007 and the "Four Trillion Plan" in 2008-2009 [2] Group 2: Profitability and Valuation - The profitability of brokerages is highly correlated with capital market performance, leading to significant earnings growth during bullish phases [2] - The transition from light to heavy capitalization has resulted in a downward shift in the ROE (Return on Equity) and valuation levels of brokerages [2] - Future development of innovative businesses, such as off-exchange derivatives, may provide opportunities for systematic improvement in industry ROE [2] Group 3: Characteristics of Leading Stocks - Leading stocks in the brokerage sector during past rallies exhibit beta characteristics, with those aligned with prevailing trading themes often yielding excess returns [3] - Newly listed stocks tend to have smaller free float market capitalizations, resulting in significant price elasticity during brokerage rallies [3] - Brokerage firms with performance elasticity, driven by revenue and cost dynamics, are typically more resilient during market fluctuations [3]