According to a research report released by China Securities Co., Ltd. (601066), the securities sector possesses medium- to long-term allocation value, and three main themes are recommended for attention.

The full-lifecycle regulation of property insurance companies' products has been further strengthened, which helps optimize the industry's competitive environment and is expected to further highlight the Matthew effect in the industry.

Hong Kong-listed non-bank financials are showing improving interim results while trading at low valuations, and under a tight-balance market structure, the resonance between fundamental improvement and valuation repair may present structural opportunities.

In the diversified financial sector, policy dividends and technology dividends are converging, and it is recommended to closely follow the themes of "low valuation + high dividend + high growth."

The main views of China Securities Co., Ltd. (601066) are as follows:

Securities: The securities sector possesses medium- to long-term allocation value, and three main themes are recommended for attention

Post-holiday trading volume has rebounded sequentially, mainly due to the calendar effect of capital returning to the market. However, it remains in a declining trend year-on-year, and the capital return is more a reflection of existing position reallocation. The overall market is still in a phase of contraction and consolidation.

Margin financing balances are at historical highs, but the leverage level is basically matched with market capitalization expansion. Systemic leverage risk is controllable, and market risk appetite is still in a repair channel.

Equity financing pace is steady, with resources continuously tilting toward new quality productive forces. The current sector valuation is at a relatively low historical level, providing a certain margin of safety.

It is recommended to focus on securities firms with differentiated competitiveness in technology investment banking, leading securities firms in wealth management business and fintech targets, and top-tier securities firms driving ROE upward through accelerated internationalization.

Insurance: Full-lifecycle regulation of property insurance company products is further strengthened, which helps optimize the industry's competitive environment, and the Matthew effect in the industry is expected to be further highlighted

On October 9, the National Financial Regulatory Administration issued the "Regulations on the Development and Management of Insurance Products for Property Insurance Companies" (hereinafter referred to as the "Regulations").

In recent years, with the rapid development of China's property insurance market, insurance product coverage has continuously expanded and protection content has been enriched. However, problems have also emerged, such as a high proportion of rider products lacking detailed rules, management and application of industry model clauses and pure risk loss ratios needing strengthening, and standards for product evaluation, revision, and deregistration needing further refinement.

On one hand, the "Regulations" sets up a dedicated chapter to regulate the development and management of rider products, listing specific circumstances where development is prohibited. The purpose is to guide the industry back to the original intent of rider product development, ensuring clear product structure and well-defined responsibilities, and preventing clause conflicts, claims disputes, or operational compliance risks.

In addition, the "Regulations" clarifies that for products with industry model clauses or benchmark pure risk loss ratios, companies should in principle use them; for companies that do not use them, reasons and differences must be explained in feasibility reports or actuarial reports. This respects companies' differentiated operating paths while strengthening the effectiveness of model clauses and pure risk loss ratios through detailed requirements, promoting product quality improvement across the entire industry.

Risk warnings: Uncertainty in market price fluctuations, uncertainty in corporate earnings forecasts, and technology updates and iterations.