Brokerages' Q3 Results Show Resilience as Institutions Bet on Sector Valuation Recovery

Several listed brokerages have recently released their third-quarter reports, with revenue and net profit generally rising in the first three quarters, showing overall strong resilience. Institutions are also paying attention to the dividend characteristics of the brokerage sector. CITIC Securities noted that dividend yields at leading A-share brokerages have approached or surpassed those of traditional dividend-paying industries. Gao Chao, chief non-bank analyst at Kaiyuan Securities, believes that in the third quarter, trading volumes and stock market performance weakened quarter-on-quarter, putting pressure on brokerage and margin financing income. However, the recovery of the IPO (initial public offering) market, along with incremental direct investment and follow-on investment gains from listings such as CXMT (ChangXin Memory Technologies), as well as the operational resilience of wealth management and overseas businesses, are expected to support industry profitability. He added that the ROE (return on equity) center and sustainability of profits at leading brokerages have risen, a clear mismatch with their low valuations, increasing the likelihood of a valuation recovery. (Securities Times)