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]