Core Viewpoint - The securities industry is closely linked to market performance and shows strong left-side characteristics, with valuation levels highly correlated to the overall industry ROE. The macroeconomic development is entering a new cycle, and the 20th National Congress has outlined comprehensive reform measures, indicating that the capital market will play a significant role in supporting high-quality economic development in the new development cycle [1]. Group 1: New Requirements and Directions - The 20th National Congress emphasizes the need for a more inclusive and adaptable capital market system, focusing on three main areas: supporting technological innovation, meeting diverse investor wealth management needs, and facilitating high-level institutional openness [2]. - The "1+N" policy framework will be implemented by 2025, aiming to enhance the capital market's investment and financing coordination [2]. Group 2: New Opportunities for Securities Companies - There is a growing demand for wealth management as residents shift their wealth towards equity investments, with public fund issuance reaching a three-year high and equity funds accounting for over 50% of new issuances [3]. - The scale of mergers and acquisitions is expected to grow significantly due to policy drivers, with leading securities firms leveraging their full industry chain capabilities to manage complex transactions [3]. - The acceleration of internationalization presents new opportunities for securities firms, as they obtain investment banking licenses in various markets to serve both domestic and international clients [3]. Group 3: Upgrading Business Models - Different securities firms are evolving from homogeneous business models to more differentiated strategies, focusing on operational quality rather than just asset scale [4]. - The competitive landscape shows that while leading firms continue to strengthen, smaller firms exhibit greater elasticity, with revenue concentration increasing but profit concentration decreasing among the top firms [4]. - Securities companies are transitioning to integrated client service models, enhancing their offerings across various financial services and focusing on lifecycle services [4]. Group 4: Investment Strategy - The market is entering a phase where policies aimed at enhancing capital market services for technology companies are being implemented, which will support the development of light asset businesses for securities firms [5]. - The restructuring of supply sides through mergers and acquisitions is expected to continue, leading to increased concentration and the emergence of internationally competitive investment banks [5]. - Some leading firms are anticipated to expand their business and ROE growth through both organic and external growth strategies, with a focus on high-quality development in the capital market [6].