Summary of Conference Call Notes Industry Overview - The A-share brokerage sector has experienced a lagging performance, with a year-to-date increase of only 3% until last week, followed by a recovery of approximately 8%, resulting in a cumulative increase of about 11%, which still trails behind the overall market index's strong performance [1][3] - In contrast, Hong Kong's Chinese brokerage firms have shown robust performance this year, with an increase exceeding 60%, significantly outpacing A-shares. This is attributed to the clear valuation advantage of Hong Kong brokers, which were valued at 0.5-0.6 times before recovery and have now improved to 0.9-1 times, attracting more capital allocation [1][3] - There is a notable structural difference in the brokerage sector this year, with large Chinese brokerages outperforming smaller thematic firms, indicating a shift in investment logic from expectations to actual performance and valuation support [1][3][4] Market Trends and Predictions - The overall market trend remains upward, with sector rotation occurring. The brokerage industry has entered a dual phase of performance and valuation recovery, supported by stable trading and margin financing data, policy support, economic stabilization, and improved expectations driving capital participation [1][5] - A small slow bull market is expected in 2025, with equity asset returns projected between 5%-15%, which will attract external capital into the market. Resident savings are gradually entering the market, albeit in a gradual manner [6][7] Trading and Financing Data - Despite trading and margin financing data reaching historical highs, the number of listed companies has significantly increased from over 2,000 in 2015 to more than 5,000 now, with total market capitalization growing from approximately 46 trillion to nearly 100 trillion. This indicates a stable upward market trend [8] - Brokerages have reduced performance volatility through bond investments and derivatives, with the recovery in the equity market boosting related business activities [8] Hong Kong Market Impact - The Hong Kong market is performing strongly in 2025, with bullish trends in trading volume, IPOs, refinancing, and derivatives markets. The market share of Chinese brokerages in Hong Kong is continuously increasing, significantly benefiting leading firms [9] Future Performance Expectations - The performance recovery of the brokerage sector is expected to be sustainable, with high certainty for 2025 and growth potential for 2026 as long as the overall market continues to rise. Current average valuation levels are at 1.66 times, which is relatively high compared to historical levels, but the current valuation percentile is low, suggesting a focus on high-quality brokerages valued around 1-1.1 times [10][12] Wealth Management and Local State-Owned Brokerages - Local state-owned brokerages are actively expanding their business, with relatively low current market response, but their valuation around one time is worth considering. All business lines benefit from the development of the capital market, including fund products and private equity, positively impacting wealth management [11] Investment Opportunities - High-quality securities firms, especially during adjustment periods, present excellent investment opportunities. It is recommended to focus on these firms during market developments, as they possess fundamental and valuation support, which will make them stronger in future market trends [12]