UBS Group believes that brokerage stocks, as the market beta, will benefit from both macroeconomic and capital market support in mainland China. On the macroeconomic front, there is a reduction in deposit reserve ratio and policy interest rates, as well as guiding a decrease in the loan market quote rate (LPR), reducing existing mortgage rates and lowering the down payment requirement for second homes to be aligned with first homes. On the capital market front, guidelines on market cap management for listed companies have been established, requiring listed companies to set up a regular repurchase mechanism, and establishing new monetary policy tools to support stable stock market development and guide long-term capital market participation.

The H-share brokerage stocks covered by the bank currently have a market value-to-account ratio of only 0.4 times, at a historically low level. The industry is experiencing multiple positive catalysts: coordinated policy support unprecedentedly announced cross-level capital market support measures and accelerated industry consolidation to improve the industry environment. The bank believes that industry concentration will continue to improve, with major brokerages in advantageous positions in assets and wealth management, as well as institutional business, benefiting the most. The bank prefers CITIC Securities (06030.HK) and Huatai Securities (06886.HK).

The following is the bank's investment ratings and latest target prices for H-share brokerage stocks:

Stock │ Investment rating │ Target price

CITIC Securities (06030.HK) | Buy | 23.3 yuan

Huatai Securities (06886.HK) | Buy | 13.1 yuan

China Galaxy (03908.HK) | Buy | 15.6 yuan

China Securities Co.,Ltd. (06066.HK) | Buy | 9.5 yuan

Haitong Securities (06837.HK) | Neutral | HKD 3.7

Everbright Securities (06176.HK) | Neutral | HKD 5.57

China Galaxy (06881.HK) | Sell | HKD 2.84