中国券商 - 我们对 A 股市场支持措施及对中国券商影响的看法-China Brokers Our take on supportive measures to A-share market implications on China brokers

Summary of Conference Call Notes Industry and Company Involved - Industry: Chinese Brokerage Industry - Key Companies Mentioned: - China International Capital Corporation (CICC) - CITIC Securities - China Galaxy Securities - GF Securities - Huatai Securities - Orient Securities Core Points and Arguments 1. Supportive Measures for A-share Market: - CSRC Chairman Wu Qing's speech on December 6 indicated a policy direction to build a first-class investment bank through mergers and acquisitions and sector consolidation, alongside relaxing capital requirements for selective brokers [1][5] 2. Performance Assessment Guidelines: - New guidelines announced by the Asset Management Association of China aim to align mutual fund managers' incentives with long-term fund performance, requiring significant reinvestment of performance-based compensation [2][5] - Fund managers face salary cuts if they underperform benchmarks significantly, promoting a focus on long-term performance [2][5] 3. Earnings Growth Expectations: - China brokers are expected to deliver robust earnings growth of 43% in 2025 and 14% in 2026, with projected ROE of 9.2% and 9.7% respectively, driven by strong A-share market performance [5] - Brokers with high leverage ratios, such as CICC, CITICS, and Orient, are anticipated to benefit more from potential capital ratio relaxations [5] 4. Market Valuation: - Covered H-share China brokers have seen a correction of -11% since the end of October, currently trading at 0.77x 2026 P/B, which is viewed as attractive [5] - The expectation of stabilizing fee rates post-sector consolidation could further enhance brokers' ROE, potentially leading to a re-rating of their valuations [5] 5. Top Picks: - Orient Securities is highlighted as a top pick due to its favorable positioning in the current market environment [1][5] Other Important but Possibly Overlooked Content - Long-term Performance Focus: - The new guidelines emphasize long-term indicators in key performance indicators (KPIs) for fund managers, with a significant portion of their performance metrics tied to long-term returns [2][5] - Impact of Regulatory Changes: - The ongoing NFAR policies are designed to encourage insurers to invest more long-term funds into the A-share market, which could further support the brokerage sector [1][5] - Leverage Ratios: - The leverage ratios for covered China brokers are expected to increase, which could enhance their profitability and market competitiveness [5][7]