On May 7, the brokerage sector opened higher but then declined, with most stocks falling. Only Orient Securities and First Capital rose by over 1%. The top-tier brokerage ETF Huabao (512000), with assets exceeding 36 billion yuan, saw its on-market price drop by 0.76%, displaying a wide premium in negative territory. The real-time premium rate reached 0.2%, indicating active buying interest at low levels. Data from the Shanghai Stock Exchange showed that 512000 recorded a net inflow of 166 million yuan over the past five days.

Valuations in the brokerage sector are at historic lows. Data indicates that the CSI All Share Securities Companies Index currently has a price-to-book ratio (PB) of just 1.29 times, positioning it at the 16.86th percentile of its historical range over the past decade, a significant low.

In terms of news, Orient Securities has released the draft plan for its merger and reorganization with Shanghai Securities, and its stock resumed trading today. The merger with Shanghai Securities is expected to directly enhance Orient Securities' asset scale and reshape its valuation framework. For the brokerage sector, this case provides a new model for supply-side reform, reinforcing market expectations that leading brokerages will grow stronger through mergers and acquisitions, thereby catalyzing a sector-wide revaluation.

AVIC Securities pointed out that regulators are currently explicitly encouraging industry consolidation. Amid policies promoting high-quality development in the securities sector, mergers and acquisitions are an effective means for brokerages to achieve external growth. Such consolidation can enhance the overall competitiveness of the industry, optimize resource allocation, and promote healthy market development. Additionally, industry integration helps increase concentration and create economies of scale.

Soochow Securities stated that against the backdrop of high-quality development in China's capital markets and the ongoing improvement in brokerages' capital-intensive business capabilities and efficiency, there is still room for growth in the return on equity (ROE) and valuations of domestic brokerages. Furthermore, expectations for capital market reforms continue to strengthen, and policies encourage high-quality brokerages to improve and strengthen through mergers. Large brokerages still hold significant advantages, and industry concentration is expected to rise steadily, warranting valuation premiums for major players.

High growth prospects coupled with low valuations highlight the potential for a recovery in the brokerage sector. Brokerage ETF (512000) and its feeder funds (Class A 006098, Class C 007531) passively track the CSI All Share Securities Companies Index, providing exposure to 49 listed brokerage stocks in a single transaction. This makes it an efficient tool for concentrating investments in leading brokerages while also covering small and mid-sized firms. Brokerage ETF (512000) currently has a fund size of 36 billion yuan, with an average daily turnover exceeding 1.1 billion yuan year-to-date, ranking it among the top brokerage ETFs in terms of scale and liquidity in the A-share market.

Note: Recent market volatility may be significant. Short-term gains or losses do not indicate future performance. Investors should make rational decisions based on their financial situation and risk tolerance, paying close attention to position management and risk control.

Data source: Shanghai and Shenzhen Stock Exchanges, among others.

ETF fee-related information: When subscribing for or redeeming fund units, subscription and redemption agents may charge a commission of up to 0.5%. On-market trading fees are subject to the rates set by securities firms, with no sales service fee charged. Feeder fund fee-related 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 amounts of 2 million yuan (inclusive) or more, 0.6% for amounts between 1 million yuan (inclusive) 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 days (inclusive) to 180 days, 0.25% for 180 days (inclusive) to 1 year, and 0% for holding periods of 1 year (inclusive) or longer; no sales service fee is charged. The Huabao CSI All Share Securities Companies ETF Feeder Fund (Class C) charges no subscription fee. The redemption fee is 1.5% for holding periods under 7 days and 0% for 7 days (inclusive) or longer; the sales service fee is 0.4%.

Risk disclosure: Brokerage ETF (512000) passively tracks the CSI All Share Securities Companies Index, which has a base date of June 29, 2007, and was launched on 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. The index's constituent stocks are adjusted according to its compilation rules, and its historical backtested performance does not indicate future results.

This product is issued and managed by Huabao Fund. Distributors are not responsible for the product's investment, repayment, or risk management. Investors should carefully read the Fund Contract, Prospectus, and Key Fund Information Document to understand the fund's risk-return characteristics and select products that match their risk tolerance. Huabao Fund assesses the risk rating of Brokerage ETF as R3-Medium Risk, suitable for investors with a suitability rating of C3 or higher. The performance of other funds managed by the fund manager does not guarantee this fund's performance. Past performance does not indicate future results. Funds carry risks, and investment requires caution. Sales institutions (including the fund manager's direct sales channels and other distributors) evaluate this fund's risk based on relevant laws and regulations. Investors should promptly review the suitability opinions provided by the fund manager. Suitability assessments may vary among sales institutions, and the risk rating assigned by sales institutions cannot be lower than that determined by the fund manager. The fund's risk-return characteristics as described in the fund contract may differ from its risk rating due to different assessment factors. Investors should understand the fund's risk-return profile and make careful selections based on their investment objectives, time 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; invest with caution.

MACD golden cross signals have formed, and these stocks are performing well.