Brokerage stocks have always been regarded as the vane of the A** market, and their trends have attracted the attention of the majority of investors and institutions. Recently, the stock prices of brokerage stocks have risen abnormally, and many ** such as Dongfang**, Xingye**, and GF** have risen by more than 3%, making brokerage stocks the focus of discussion again. Does this signal the start of a bull market? How do I take advantage of the opportunity?
From the perspective of performance, brokerage stocks have a solid foundation. According to statistics, as of January 20, the overall performance of the 18 brokerages that have disclosed unaudited financial data for 2020 is very good. Among them, the net profit of five brokerages, including Oriental Wealth, Huaxin**, CICC Wealth, Yingda** and Donghai**, will more than double the year-on-year net profit in 2020. The substantial growth in the performance of brokerages is mainly due to the average daily trading volume of the market in 2020**, the upward trend, and the business innovation and transformation of brokerages themselves.
From the perspective of valuation, there is still a large space for brokerage stocks. As of January 21, the average price-to-book ratio of the brokerage sector was 18 times, 2 times higher than the all-time high2 times down nearly 20%. In the context of the rapid advancement of the comprehensive deepening of the capital market reform and the comprehensive registration system to lay the foundation for the new cycle of the industry, the valuation repair of the brokerage sector is expected to accelerate. Some institutions believe that the time window for re-layout of the brokerage sector is gradually approaching.
From a policy point of view, brokerage stocks are expected to benefit from the dividends of capital market reform. In 2020, major breakthroughs were made in capital market reform, including the successful operation of the Science and Technology Innovation Board, the launch of the ChiNext reform, the relaxation of mergers and acquisitions, and the improvement of the delisting system. In 2021, the reform of the capital market will continue to deepen, including the full implementation of the registration system, the construction of a multi-level market system, the improvement of the basic market system, and the strengthening of market supervision. These reform measures will help enhance market activity, optimize market structure, and enhance market functions, thereby providing more opportunities and space for brokerage business.
I believe that brokerage stocks, as the core participants and beneficiaries of the capital market, have strong growth and flexibility, and deserve long-term attention and allocation. At the same time, brokerage stocks also have high cyclicality and volatility, and need to be reasonably adjusted and exchanged according to market sentiment and sector rotation. I suggest that you can choose some brokerage stocks with strong comprehensive strength, stable performance and reasonable valuation as core holdings, and at the same time pay attention to some brokerage stocks with outstanding business characteristics, high growth and relatively undervalued valuation as supplementary allocation, in order to obtain better returns.
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