Group 1 - The core viewpoint of the articles highlights a strong performance in the A-share market, with major indices reaching new highs and significant increases in trading volumes, indicating a bullish sentiment among investors [1][2] - The CSI Securities Leader Index (399437) rose by 1.07% as of August 20, 2025, with notable gains from constituent stocks such as Guosen Securities (up 4.64%) and Guojin Securities (up 3.41%) [1] - The total trading volume in the Shanghai and Shenzhen markets reached 2.41 trillion yuan, marking the sixth consecutive trading day with volumes exceeding 2 trillion yuan, with over 3,600 stocks rising [1] Group 2 - Southwest Securities reported a 26.23% year-on-year increase in revenue for the first half of 2025, totaling 1.504 billion yuan, with a net profit of 423 million yuan, up 24.36% [1] - Dongfang Wealth achieved a revenue of 6.856 billion yuan, reflecting a 38.65% increase year-on-year, with a net profit of 5.567 billion yuan, up 37.27% [1] - A total of 24 A-share listed brokerages have disclosed their half-year performance forecasts, with 27 brokerages reporting net profit growth or turning profitable compared to the previous year, driven by increased trading activity [2]

Investment Rating - The report maintains a "Positive" investment rating for the brokerage sector [10] Core Viewpoints - The report emphasizes three main reasons for the positive outlook on brokerages: 1) The financial sector is currently lagging, with a high safety margin in valuations; 2) Upcoming mid-year reports are expected to show continued high growth in performance; 3) The absolute value of AH premium remains high, with ongoing valuation recovery in H-shares [2][5] Summary by Relevant Sections Reason 1: Financial Sector Lagging with High Valuation Safety Margin - Since the beginning of 2025, brokerages have underperformed the market, with a cumulative increase of only 0.1% compared to a 3.0 percentage point underperformance against the CSI 300 index. Within the financial sector, brokerages lag behind insurance, diversified finance, and banks by 10.1, 11.3, and 20.0 percentage points respectively. However, since June, the sector has shown positive excess returns against the CSI 300 [6][17] - As of July 18, 2025, the price-to-book (PB) ratio for the industry is approximately 1.50, which is around the 40th percentile of the relative valuation range since 2016, indicating a high safety margin [22][23] Reason 2: Upcoming Mid-Year Reports Expected to Show Continued High Growth - The market has maintained high trading activity, with an average daily trading volume of 1,390.2 billion yuan from January to June 2025, representing a year-on-year increase of 61.1%. The A-share IPO, refinancing, and bond underwriting scales for the same period are 37.4 billion yuan, 697.7 billion yuan, and 45 trillion yuan, showing year-on-year increases of 15.0%, 613.5%, and 16.6% respectively [7][30] - Among 31 brokerages that have disclosed performance forecasts, all expect a net profit growth rate of over 40%, with two companies projecting over 1000% growth [38] Reason 3: High Absolute Value of AH Premium and H-share Valuation Recovery - As of July 18, 2025, the AH premium for the brokerage sector stands at 68.1%, with the average AH premium for the entire industry at 62.0%. Notably, Citic Securities, Guolian Minsheng, and CICC maintain AH premiums above 100% [8][45] - The report highlights that the current AH premium levels for brokerages are historically high, with specific companies like Citic Securities at 133.8%, Guolian Minsheng at 118.0%, and CICC at 104.5% [48]