Stock Price Divergence from Fundamentals, Sell-Side Analysts: Brokerage Stocks Poised for Valuation Correction Window

21st Century Business Herald Reporter Sun Yongle

Recently, there have been continuous fluctuations in the securities firm sector. On the 16th, Dongwu Securities disclosed an integration plan with Donghai Securities, causing its stock price to drop 7%. On the 20th, Eastmoney disclosed the first annual report of a listed securities firm this year, with the stock price falling over 5%, and nearly 2 billion yuan of net main capital outflows, ranking first among A-shares.

Since the beginning of this year, the securities index has fallen nearly 8%, making it one of the worst performers in the industry and showing a clear divergence from the fundamentals, which has caused many investors to doubt the sector’s recovery prospects.

The reporter’s review found that leading securities firms will release their performance reports intensively from late March to the end of April. The overall industry shows a high-growth trend, and the sector is expected to benefit from multiple positive catalysts.

On one hand, among listed securities firms that have announced performance forecasts, more than half have seen net profit year-on-year growth of over 50%, indicating a recovery in industry profitability. On the other hand, since the release of the “New National Nine Articles,” dozens of securities firms have launched stock buyback plans, continuously boosting investor confidence.

In response, sell-side research analysts generally hold an optimistic attitude, believing that the current valuation and institutional positions of the securities sector are relatively low compared to similar market environments in history, and emphasizing the strategic allocation opportunities in securities stocks.

Huatai Securities’ research report pointed out that looking ahead, the sector’s performance stability and sustainability are relatively good, and factors such as easing capital restrictions, market style balancing amid geopolitical fluctuations, and increased policy support for the capital market are expected to create a window for valuation recovery, especially given strong earnings and low valuations.