Hong Kong Stock Concept Tracking | Listed brokers' profits surged in the first quarter, and institutions expect the valuation of the brokerage sector to recover (with concept stocks)

In Q1 2025, the stock base turnover of the Shanghai and Shenzhen markets reached 99.55 trillion yuan, a year-on-year increase of 68%, and an average daily turnover of 1687.258 billion yuan, an increase of 74% year-on-year, driving 42 listed brokerage firms to achieve operating income of 125.930 billion yuan and net profit to mother of 52.183 billion yuan, an increase of 25%/83% year-on-year respectively.

On January 24, the Securities Regulatory Commission issued the “Implementation Plan on Promoting the Entry of Medium- and Long-Term Capital into the Market”, which focuses on overcoming the blockages and difficulties of medium- and long-term capital entry, providing incremental momentum for the steady and far-reaching growth of the capital market. The overall business trend of the industry is improving.

According to CITIC Construction Investment research, the securities sector market diverged from the trend of a sharp increase in performance in the first quarter. The profits of listed brokerage firms surged 83%, but the sector closed down cumulatively, outperforming the broad-based index. The core reason is that under overseas macroeconomic turbulence,

1) The market has doubts about whether future trading activity can be maintained;

2) At the same time, there are doubts about whether brokers' own operations can withstand high base pressure. However, based on the performance base faced in the second and third quarters of this year, the growth environment for brokerage business, finance business, and public equity business was significantly better than in the same period last year, and the only one facing a high base of proprietary investment or a change in equity and bond style can maintain relative stability (as can be seen from Q1 self-operating performance). Therefore, it is determined that the securities sector will at least have a period of valuation repair.

Tianfeng Securities released a research report saying that the brokerage industry has maintained a trend of concentration of leaders, achieving a situation where the strong are becoming stronger, and that the sharp increase in the growth rate of proprietary business is the main driving force for high performance growth. As policy dividends continue to be released, brokerage firms are expected to take advantage of the trend.

The Zhitong Finance App learned that the huge AH difference between Hong Kong stock companies related to Chinese brokerage firms may also be one of the reasons for the more outstanding performance of Hong Kong stocks.

CITIC Construction Investment published a summary of the brokers' 2025 quarterly report, stating that in the first quarter of 2025, brokers' performance maintained the recovery trend since the third quarter of last year. However, from last year's self-operated business as the core driver, to superposition investment banking, asset management and other businesses to maintain resilience, the revenue and profit of listed brokerage firms surged 25% and 83% year-on-year respectively. In particular, net income from brokerage, self-employment, and interest increased 49%, 51%, and 27% year-on-year respectively. Looking at the whole year, the growth prospects for brokerage, asset management, and investment banking businesses are expected to be better than expected, and valuations are expected to recover.

Companies related to the Chinese brokerage sector of Hong Kong stocks:

CICC (03908), CITIC Securities (06030), Everbright Securities (06178), CITIC Construction Investment Securities (06066), Hongye Futures (03678), GF Securities (01776), etc.