Core Viewpoint - The performance of the brokerage industry has significantly improved in the first half of 2025, driven by increased investor confidence and market activity, with all 29 listed brokerages reporting profit growth [1][2]. Group 1: Brokerage Performance - As of July 15, 2025, the median net profit growth for the 29 listed brokerages is approximately 100%, with an average growth rate of 203%, and the smallest growth reported is 55% [2][3]. - Notably, Huaxi Securities and Guolian Minsheng are expected to see net profit growth exceeding 1000% [2]. - The brokerage sector has experienced a maximum index increase of 22% from April 7 to July 15, with 28 stocks rising over 20% and some exceeding 55% [1][2]. Group 2: Market Drivers - The growth in brokerage profits is attributed to active capital markets and favorable policies, particularly in self-operated and brokerage businesses [2][3]. - A-shares' average daily trading volume reached 1.6 trillion yuan, a 66% year-on-year increase, while Hong Kong's market saw a 118% increase in daily trading volume [3][4]. - The IPO financing scale in the A-share market for the first half of 2025 was 37.4 billion yuan, a 15% increase year-on-year, with the second quarter seeing a 27% quarter-on-quarter growth [3][4]. Group 3: Mergers and Acquisitions - Active mergers and acquisitions have contributed to the earnings elasticity of brokerages, with Guotai Junan expected to report a net profit of 15.283 to 15.957 billion yuan, a 205% to 218% increase year-on-year [4][5]. - Guolian Minsheng anticipates a net profit of approximately 1.129 billion yuan, reflecting a growth of around 1183% [5]. Group 4: Market Outlook and Differentiation - The brokerage sector is expected to continue its upward trend, supported by high market activity and low valuations, with a potential for valuation recovery [6][7]. - There is a notable differentiation within the brokerage sector, influenced by factors such as company size, business structure, and involvement in mergers and acquisitions [7]. - The average net profit for the 29 brokerages is around 2.1 billion yuan, but the median is only about 700 million yuan, indicating significant performance disparities [7].