Core Viewpoint - The securities industry is expected to see significant performance growth and a return to high value due to low valuations and potential expansion in ROE by 2026 [1][2][6] Group 1: Market Performance - The A-share market has been on an upward trend, with the margin balance reaching 23,941.58 billion yuan and financing balance increasing by 5,242.45 billion yuan in the first three quarters [2] - Listed securities firms reported a net profit of 1,694 billion yuan in the first three quarters of 2025, a 63% year-on-year increase, with a record quarterly net profit of 725 billion yuan in Q3 [2] - All major business segments, including brokerage, investment banking, asset management, interest income, and investment returns, showed positive growth [2] Group 2: Business Trends - The wealth management sector is on the rise, with strong growth in new A-share and margin account openings, and daily trading volumes potentially stabilizing around 2 trillion yuan [3] - The investment banking market is recovering significantly, and international business is expected to contribute more to profits as Chinese brokers expand overseas [3] - The application of AI in the industry is progressing, with leading firms exploring innovative AI applications as a new growth point [3] Group 3: Valuation Recovery - The securities sector is anticipated to experience valuation recovery, with the PB ratio at 1.52, indicating it is relatively low historically [4] - Core businesses such as public funds, overseas operations, and derivatives are expected to drive profit improvements, with a notable expansion in ROE for leading firms [4] - Analysts recommend focusing on brokers with advantages in overseas and institutional business, wealth management, and retail operations benefiting from cross-border asset management trials [4] Group 4: Future Outlook - Analysts predict that the ROE for the securities industry could reach 7.7% by 2026, with the sector still undervalued [6] - The ongoing capital market reforms and supportive policies are expected to enhance the valuation of securities firms, particularly larger ones [5][6] - The industry is viewed as having a strong long-term growth trajectory, with significant investment opportunities anticipated in 2026 [6]