Listed brokerages have entered a period of intensive disclosure for their 2026 interim performance forecasts, with the first batch of 10 firms all reporting anticipated growth. Leading brokers such as CITIC Securities, Guotai Junan Securities, and China Merchants Securities all achieved record highs for the same period. CITIC Securities expects to achieve a net profit attributable to shareholders of 23.343 billion yuan in the first half, a year-on-year increase of 69.59%. Guotai Junan Securities forecasts a net profit between 20.003 billion and 20.511 billion yuan, representing growth of 27% to 30%. China Merchants Securities anticipates a net profit ranging from 10 billion to 11 billion yuan, up by 93% to 112%. Mid-sized and small brokerages have demonstrated significant performance flexibility, with Tianfeng Securities forecasting the highest growth of nearly 700%.

An analysis of the drivers behind the strong performance points to three main factors: technology innovation investment, international business, and wealth management. Notably, the recovery in STAR Market IPOs combined with positive market sentiment has brought investment banking, direct investment, and alternative investment into a period of realization. The impressive results have strengthened the earnings certainty for the brokerage sector. However, the sector's price-to-book (PB) ratio remains in a historically low range. As the gap between performance and valuation widens further, the momentum for a valuation recovery in brokerages may be accumulating.

China Securities Co., Ltd. noted that brokerage mergers and acquisitions are transitioning from a stage of "speculation on expectations" to one of "profit delivery." The combined capability to cover large projects and the amplified leverage effect post-merger are expected to systematically elevate the return on equity (ROE) for the sector. Additionally, the sustainability of the industry's positive cycle may exceed expectations, with simultaneous and mutually reinforcing growth in brokerage, investment banking, and proprietary trading, indicating an upward shift in the operating performance of leading firms.

Sector Performance Trends

Since mid-June, the brokerage sector, following a period of sustained weakness, has shown frequent unusual activity. Coupled with a noticeable return of capital, this may indicate early positioning for a subsequent recovery. Taking the leading brokerage ETF, Huabao (512000), as an example, it recently saw a single-day net inflow exceeding 100 million yuan, with cumulative inflows over the past 10 days surpassing 2.2 billion yuan.

High Growth and Low Valuation: Focus on Brokerage Recovery

The brokerage ETF (512000) and its feeder funds passively track the CSI All Share Securities Companies Index, providing exposure to 49 listed brokerage stocks in a single transaction. It is an efficient investment tool for concentrating on leading brokers while also including mid-sized and small firms. The latest fund size of brokerage ETF (512000) exceeds 39 billion yuan, with an average daily turnover this year of over 1.2 billion yuan, ranking it among the largest and most liquid brokerage sector ETFs in the A-share market.

Important Considerations for Investors

Recent market volatility may be significant, and short-term price movements do not predict future performance. Investors must make rational investment decisions based on their own financial situation and risk tolerance, paying close attention to position sizing and risk management.

Data Source: Shanghai and Shenzhen Stock Exchanges.

ETF Fee Information

Subscription and redemption agents may charge a commission of up to 0.5% when investors subscribe for or redeem fund units. On-exchange trading fees are subject to the actual charges by securities firms, with no sales service fee levied.

Feeder Fund Fee Information

For the Huabao CSI All Share Securities Companies ETF Feeder Fund (Class A), the subscription fee (front-end load) is 1,000 yuan per transaction for subscription amounts of 2 million yuan or more, 0.6% for amounts between 1 million and 2 million yuan, and 1% for amounts below 1 million yuan. The redemption fee is 1.5% for holding periods under 7 days, 0.5% for 7 to 180 days, 0.25% for 180 days to 1 year, and 0% for 1 year or more. No sales service fee is charged. For the Huabao CSI All Share Securities Companies ETF Feeder Fund (Class C), no subscription fee is charged. The redemption fee is 1.5% for holding periods under 7 days and 0% for 7 days or more. The sales service fee is 0.4%.

Risk Disclosure

Brokerage ETF Huabao (512000) and its feeder funds passively track the CSI All Share Securities Companies Index, with a base date of June 29, 2007, and a release date of July 15, 2013. The index's annual performance from 2021 to 2025 was -4.95%, -27.37%, 3.04%, 27.26%, and 2.54%, respectively. Index constituent changes are made per its compilation rules, and its historical back-tested performance does not indicate future results. This product is issued and managed by Huabao Fund. Distributors do not bear investment, payment, or risk management responsibilities. Investors should carefully read the Fund Contract, Prospectus, Fund Product Key Facts Statement, and other legal documents to understand the fund's risk-return profile and choose a product suitable for their own risk tolerance. The fund manager's risk rating for the brokerage ETF is R3-Medium Risk, suitable for investors with a suitability rating of C3 or above. The performance of other funds managed by the fund manager does not guarantee this fund's performance. Past fund performance does not predict future results. Funds carry risks; investment requires caution. Distributors (including the fund manager's direct sales channels and other distributors) assess this fund's risk according to relevant laws and regulations. Investors should promptly pay attention to the suitability opinions issued by the fund manager. Suitability opinions from different distributors may not be consistent, and a distributor's fund product risk rating result cannot be lower than the risk rating result issued by the fund manager. The description of the fund's risk-return characteristics in the fund contract and its risk rating may differ due to different consideration factors. Investors should understand the fund's risk-return situation and choose fund products cautiously based on their own investment objectives, horizon, experience, and risk tolerance, bearing the risks themselves. The China Securities Regulatory Commission's registration of this fund does not indicate a substantive judgment or guarantee of its investment value, market prospects, or returns. Funds carry risks; investment requires caution.

MACD golden cross signals have formed, with some stocks showing good gains.