Damo: High turnover in the A-share market is expected to benefit CICC (03908) and others

The Zhitong Finance App learned that Morgan Stanley released a research report saying that the average daily turnover (ADT) of the A-share market continues to be high. Currently, they are more confident in the full-year ADT forecast. They are raising the 2025 ADT forecast by 53% to 1.53 trillion yuan, and predicts that ADT will maintain a year-on-year increase of 5% to 6% in 2026 and 2027. Accordingly, the profit forecasts of the covered Chinese brokerage firms from 2025 to 2027 will increase by an average of 25%, 23%, and 20%. It is believed that the increase in trading will drive brokerage commissions, margin interest rate, and leverage management increases, market liquidity Ample will support more financing activities and is expected to benefit brokerage firms with strong underwriting, trading and asset management businesses such as CICC (03908), CITIC Securities (06030), and GF Securities (01776).

The bank expects the average return on equity (ROE) of the brokerage sector to rebound to 9% in 2026. Among them, CITIC Securities and CICC's ROE are expected to reach 10.7% and 9.4% respectively. Currently, it predicts that the investment income of CICC, GF and CITIC Securities will increase by 20%, 21% and 11% respectively this year, while Oriental Wealth (300059.SZ) and China Merchants Securities (06099) may record a decline in investment revenue this year.