Group 1 - Chinese brokerage stocks collectively declined, with Zhongzhou Securities down 4.81% to HKD 2.57, China Merchants Securities down 4.47% to HKD 15.82, Everbright Securities down 3.91% to HKD 10.33, and CITIC Securities down 3.75% to HKD 12.85 [1] - According to Zhongtai Securities, the market has fully priced in the Federal Reserve's interest rate cut expectations, leading to a decline in investor sentiment and a temporary cooling of risk appetite [1] - Guotai Junan Securities noted that the non-bank sector has underperformed the index in the past month, but this is mainly due to trading factors, with the non-bank fundamentals continuing to improve [1] Group 2 - Morgan Stanley reported that the average daily trading volume (ADT) in the A-share market remains high, increasing confidence in the annual ADT forecast, raising the 2025 ADT prediction by 53% to RMB 1.53 trillion [1] - The forecast for ADT growth for 2026 and 2027 is expected to maintain an annual increase of 5% to 6% [1] - As a result, the average earnings forecast for covered Chinese brokerages for 2025, 2026, and 2027 has been raised by 25%, 23%, and 20% respectively [1]

Core Viewpoint - Morgan Stanley has increased its confidence in the A-share market's average daily trading volume (ADT), raising its 2025 ADT forecast by 53% to 1.53 trillion yuan, with expectations of 5% to 6% annual growth for 2026 and 2027 [1] Group 1: Market Predictions - The average daily trading volume (ADT) for 2025 is now projected at 1.53 trillion yuan, reflecting a 53% increase from previous estimates [1] - The ADT is expected to maintain an annual growth rate of 5% to 6% for both 2026 and 2027 [1] Group 2: Impact on Brokerage Firms - The upward revision in ADT forecasts has led to an average increase in profit predictions for covered Chinese brokerage firms by 25%, 23%, and 20% for the years 2025, 2026, and 2027, respectively [1] - Increased trading activity is anticipated to boost brokerage commissions, margin interest, and operational leverage, benefiting firms like CICC, CITIC Securities, and GF Securities, which have strong underwriting, trading, and asset management capabilities [1] Group 3: Return on Equity (ROE) Expectations - The average return on equity (ROE) for the brokerage sector is expected to rebound to 9% by 2026, with CITIC Securities and CICC projected to achieve ROEs of 10.7% and 9.4%, respectively [1] - Investment income forecasts for this year indicate growth of 20%, 21%, and 11% for CICC, GF Securities, and CITIC Securities, while East Money and China Merchants Securities may experience declines in investment income [1]