Bocom Intl released a report, expecting both support and certain disturbances in the stock market next year, recommending a balanced allocation. In terms of earnings expectations, it is anticipated that next year the securities industry will surpass the banking and insurance industries. In terms of valuation levels, the bank believes that the securities sector is approaching a reasonable level, the insurance sector still significantly below historical average levels, with room for improvement supported by higher ROE; the banking sector still has undervaluation and high dividend attributes. The bank recommends adopting a balanced allocation strategy to balance flexibility and defensiveness.

Regarding the insurance sector, the bank points out that in the first three quarters of this year, the life insurance industry performed strongly in terms of assets and liabilities, expecting higher base numbers for both assets and liabilities next year. However, at the current valuation level, they still possess defensiveness and flexibility, recommending Ping An Insurance (02318.HK) and China Pacific Insurance (02601.HK).

In terms of the banking sector, the bank suggests focusing on high dividend themes and moderately increasing flexibility. It is expected that the profit growth rate of listed banks next year remains stable, with the ability to release provisions continuing to be a key factor affecting profit growth. They recommend continuing to focus on targets where provisions still have room for release, focusing on state-owned banks and China Merchants Bank (03968.HK).

Regarding the securities industry, the bank anticipates a recovery trend in various brokerage business next year, but valuation levels are already close to a reasonable level. They recommend leading brokerages with a more balanced business structure, maintaining a buy rating for Citic Securities (06030.HK) and HTSC (06886.HK).