Jingwu Finance | China-Affiliated Brokerage stocks surged sharply in the short term. As of the time of this report, Guolian Securities (01456) rose by 5.58%, CC SECURITIES (01375) rose by 3.78%, China Merchants (06099) rose by 3.31%, CISI FIN (06058) rose by 2.65%, and China Galaxy (06881) rose by 2.15%.

On the news front, JPMorgan released a Research Report indicating that the recent strong tone of support for the macro economy and stock market released by the Central Political Bureau is expected to have a positive response for Chinese financial stocks. It is believed that the short-term performance of Brokerage stocks will outperform China Mainland Banking stocks, with a more bullish outlook for China Galaxy. The bank anticipates that due to the impact of trade tensions, stock market volatility will occur in the first quarter of next year, but further policy support from China is expected to limit the downside risks of Chinese financial stocks.

Sinolink published a Research Report stating that looking ahead to 2025, liquidity is expected to further ease, enhancing market stability and building a solid market bottom. The improvement of the economic fundamentals has been confirmed, and the stock market is expected to rise further, which is bullish for the valuation and performance of the Brokerage sector. Reviewing the previous expansions of Brokerage valuations under liquidity easing, which expanded to above 1.9X, the current valuation of Brokerages is only 1.6X. Overall, there is potential for an increase. It is recommended to focus on strong beta business lines (equity investment elasticity + trading elasticity) where Brokerages will benefit more from a recovery in the equity market and the mergers and acquisitions main line.