Core Viewpoint - The securities industry is expected to see significant performance growth and a return to high value in 2026, driven by low current valuations and potential expansion in ROE for leading brokerages [1][2][4]. 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 increasing by 5,242.45 billion yuan in the first three quarters of the year [1]. - The total trading volume of A-shares reached 301.56 trillion yuan, with an average daily trading volume of 16.5 trillion yuan, marking a historical high for the same period [1]. - Listed brokerages reported a net profit of 169.4 billion yuan in the first three quarters of 2025, a year-on-year increase of 63%, with a record quarterly net profit of 72.5 billion yuan in Q3 [1]. Business Growth - Key business segments such as brokerage, investment banking, asset management, interest income, and investment returns all experienced positive growth, with increases of 74%, 23%, 2%, 56%, and 43% respectively [1]. - Analysts highlight that retail and international businesses are contributing new growth to the industry [1]. Future Outlook - The industry ROE is projected to rise to around 7.2% by 2026, surpassing the 70th percentile since 2016, while the current industry valuation remains at the 40th percentile, indicating room for recovery [2]. - The trend of large wealth management and strong growth in new A-share and margin trading accounts is expected to continue, with daily trading volumes of 2 trillion yuan becoming the norm [2]. - The international business of Chinese brokerages is anticipated to expand, particularly in Hong Kong, with increased contributions from overseas branches [2]. Valuation Recovery - As of November 12, the PB ratio for the brokerage sector was 1.52, indicating a relatively low historical valuation [3]. - Analysts suggest that core businesses such as public funds, overseas operations, and derivatives are likely to drive profitability improvements, with a focus on strategic allocation opportunities [3]. - The current valuation of brokerages is seen as reasonable but on the lower side, with expectations for further increases as market conditions improve [3][4]. Investment Recommendations - Analysts recommend focusing on brokerages with advantages in overseas and institutional businesses, wealth management, and retail operations, particularly those benefiting from cross-border asset management trials in Hainan [3]. - The overall sentiment is positive regarding the securities industry's growth potential and value recovery opportunities leading into 2026 [4].