Glonghui, August 12 | J.P. Morgan Chase published a research report stating that since the beginning of the year, mainland brokerage stocks have outperformed the Shanghai and Shenzhen 300 and Hang Seng State-owned Enterprises Index by 9% and 20% respectively since the beginning of the year because their main businesses all faced intense operating disadvantages. According to the bank, although the valuation is at its bottom, it is still cautious about the industry and favors CITIC Securities. According to Motong, the industry's profit in 2024 fell by an average of 8%, and it will continue to outperform the market in the next 6 to 12 months. The bank downgraded the ratings of Cathay Pacific Junan and China Galaxy to “neutral”. The target prices of the two shares were drastically cut to HK$8.1 and HK$4.1 respectively, downgraded Haitong Securities's rating to “reduced holdings”, the target price was cut from HK$3.9 to HK$2.1; the rating of CICC was raised from “neutral” to “increased holdings”, and the target price was lowered from HK$11.3 to HK$10.6. The bank believes that the pressure on expense revenue will continue and even intensify in the second half of the year, while the investment banks' base effect will still be unfavorable to the industry in the third quarter, and the possibility of normalization of the IPO market over the next 6 to 12 months is still limited. Furthermore, according to the bank, investment income is still facing more adverse factors. It is believed that although the investment and transaction income of more brokers improved quarterly in the next quarter, it will still regress on an annual basis in the first half of the year.