Investment Rating - The report maintains a rating of "Accumulate" for the company with a target price of 11.91 CNY per share [6][12]. Core Insights - The company's performance in 2025 aligns with the pre-announcement, driven by investment and brokerage businesses, leading to rapid profit growth. As a large brokerage firm with a strong wealth management label, the company is expected to benefit from the trend of residents moving their deposits [2][12]. - The company achieved a net profit of 5.634 billion CNY in 2025, representing a year-on-year increase of 68%. Adjusted revenue (operating income minus other business costs) was 15.358 billion CNY, up 26% year-on-year [12]. - The company is projected to achieve net profits of 6.583 billion CNY, 7.371 billion CNY, and 8.091 billion CNY for 2026, 2027, and 2028 respectively, with year-on-year growth rates of 17%, 12%, and 10% [12]. Financial Summary - **Revenue and Profit Forecasts**: - Operating revenue for 2024 is projected at 19.19 billion CNY, with a decrease to 15.358 billion CNY in 2025, followed by a recovery to 17.261 billion CNY in 2026 [4][13]. - Net profit attributable to shareholders is expected to rise from 3.35 billion CNY in 2024 to 5.634 billion CNY in 2025, and further to 6.583 billion CNY in 2026 [4][13]. - **Earnings Per Share (EPS)**: - EPS is forecasted to increase from 0.39 CNY in 2024 to 0.66 CNY in 2025, and reach 0.77 CNY in 2026 [4][13]. - **Return on Equity (ROE)**: - The ROE is expected to improve from 4.1% in 2024 to 6.8% in 2025, and further to 7.5% in 2026 [4][13]. Business Segments - **Revenue Breakdown**: - In 2025, the company generated revenue from investment (6.99 billion CNY), brokerage (2.92 billion CNY), investment banking (1.5 billion CNY), and asset management (1.36 billion CNY), with year-on-year growth rates of 40%, 16%, 29%, and 1% respectively [12]. - **Asset Management**: - The asset management segment contributed 9.3 billion CNY in profit in 2025, with a profit share of 16.5%. The company’s public fund subsidiary is expected to see improved profitability as the public fund industry undergoes reforms [12].

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 for leading brokerages by 2026 [1][2][6] Group 1: Market Performance - The A-share market has been on an upward trend, with the margin trading balance reaching 23,941.58 billion yuan and financing balance at 23,783.90 billion yuan by the end of Q3 [2] - In the first three quarters of 2025, listed brokerages achieved a net profit attributable to shareholders of 169.4 billion yuan, a year-on-year increase of 63% [2] - The average daily trading volume reached a historical high of 16.5 billion yuan, with total trading volume for the first three quarters amounting to 301.56 trillion yuan [2] Group 2: Business Growth Areas - Retail and international businesses are contributing new growth to the industry, with significant increases in new accounts and financing balances [3] - The investment banking market is recovering, and the derivatives business is expected to see regulatory improvements, enhancing overall performance [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 and Investment Opportunities - The securities sector is currently undervalued, with a PB ratio of 1.52, indicating potential for valuation recovery [4] - Analysts suggest that core businesses such as public funds, overseas operations, and investment banking will drive profitability improvements [4][5] - The industry is expected to benefit from liquidity improvements and favorable policies, with ROE projected to rise to 7.7% by 2026 [6]

Group 1: Business Strategy and Development - Northeast Securities focuses on differentiated development by leveraging its strengths in three main business lines: Wealth Management, Investment Banking, and Investment [2][3] - The company aims to enhance its wealth management capabilities through innovative teams targeting different client segments, including wealth management clients, entrepreneurs, and institutional clients [3] - In investment banking, the focus is on transaction-oriented services for small and medium-sized innovative enterprises, aiming for a comprehensive service model throughout the business lifecycle [3] Group 2: Capital Investment Focus - The company prioritizes capital investment in client-facing businesses, including credit services, to enhance customer experience and asset growth [4][5] - Self-operated investments are balanced between equity and fixed income, with a focus on stable profitability and risk control [4][5] Group 3: Regional Business Layout - Northeast Securities has established a "Three Locations, Three Centers" business layout, with Beijing focusing on fixed income, Shanghai on equity and innovation, and Changchun as the governance center [5] - The company has a comprehensive financial service system with subsidiaries in private equity, alternative investments, and asset management, covering 132 branches across 66 major cities in China [5] Group 4: M&A and Market Positioning - The company is attentive to regulatory changes and market dynamics, seeking high-quality partnerships to enhance its competitive position amid industry consolidation [6] - It aims to support small and medium-sized innovative enterprises in accessing capital markets through a structured approach to IPOs [6][7] Group 5: Performance Metrics - The company's margin trading business has provided stable returns due to increased market activity, while equity self-operated investments have shown resilience despite market fluctuations [7] - Fixed income self-operated investments are characterized by low volatility and consistent contributions, serving as a stabilizing force for the company's overall investment strategy [7]