Investment Rating - The industry investment rating is "Outperform the Market" [10] Core Viewpoints - The report highlights the acceleration of supply-side reforms in the securities industry, particularly through the proposed merger of CICC with Dongxing Securities and Xinda Securities, which is expected to enhance the competitive landscape and promote high-quality development in the sector [4][6][9] - The report emphasizes the importance of regulatory support for large financial institutions and the encouragement of mergers and acquisitions to optimize industry structure and improve service quality [6][9] Summary by Sections Industry Overview - The report discusses the increasing regulatory scrutiny and the push for high-quality development within the securities industry, with a focus on creating "aircraft carrier-level" securities firms through market-driven mergers and acquisitions [6][9] Merger Details - CICC plans to absorb Dongxing and Xinda Securities through a share exchange, with trading suspension expected to last no more than 25 trading days [6][9] - The merger is anticipated to create a more robust entity with enhanced asset management capabilities and a stronger market position [6][9] Financial Performance - As of Q3 2025, CICC's total assets were CNY 764.94 billion, with a net profit of CNY 6.57 billion, while Dongxing and Xinda reported total assets of CNY 116.39 billion and CNY 128.25 billion, respectively [9] - Post-merger projections indicate that CICC's total assets could reach CNY 1,009.58 billion, with a net profit of CNY 9.52 billion, reflecting significant growth potential [9] Competitive Advantages - CICC is noted for its balanced business development and strong cross-border capabilities, while Dongxing is enhancing its wealth management services, and Xinda is leveraging its asset management resources for competitive differentiation [7][8] - The merger is expected to create synergies that will enhance the firms' abilities to serve the real economy and improve overall service quality [6][9]