The "banner bearer" of the market returned with a bang on August 26, propelling the Shanghai Composite Index back above the 3,900-point mark as the entire brokerage sector saw a surge in activity. Jinlong Co., Ltd. and Xiangcai Securities Co., Ltd. hit their daily limit locks with strong momentum, while major players like Changjiang Securities Co., Ltd., China Merchants Securities Co., Ltd., Guoyuan Securities Co., Ltd., and GF Securities Co., Ltd. also rallied in tandem. The Securities ETF HuaBao (512000) delivered a long-awaited surge, breaking through multiple moving averages including the 10-day, 20-day, and half-year lines in a single session.

Analysts suggest that as the second half of the year unfolds and the market shifts into a consolidation phase, the brokerage sector's compelling valuation and solid earnings support have brought it back into the spotlight. Interim results from listed brokers have shown collective strong growth. Among the 25 constituent stocks of the CSI All Share Securities Index, which the Securities ETF HuaBao (512000) tracks, that have disclosed their interim earnings, overall net profit has surged by a substantial 51.16% year-on-year.

Top-tier brokerages have comprehensively beaten expectations. CITIC Securities Co., Ltd. reported a net profit attributable to shareholders of 23.343 billion yuan for the first half of the year, a 69.60% year-on-year increase, marking its best-ever performance for the period. Meanwhile, Guotai Haitong Securities Co., Ltd. achieved a record high of 20.26 billion yuan in first-half profits.

Despite this earnings strength, brokerage valuations remain at historically low levels. As of August 25, the price-to-book ratio (PB LF) of the CSI All Share Securities Index stood at just 1.25 times, placing it in the 13.21st percentile of the past decade.

At the same time, listed brokers are sending clear signals that their shares are undervalued through substantial dividends, share buybacks, and stake increases. To date, 10 listed brokers have announced interim dividend plans, with combined proposed cash payouts nearing 17 billion yuan. Multiple firms, including Guolian Minsheng Securities Co., Ltd., Soochow Securities Co., Ltd., Industrial Securities Co., Ltd., and Huaan Securities Co., Ltd., have been actively implementing buybacks and stake increases, fully demonstrating their confidence in the long-term value of their companies.

Kaiyuan Securities believes that, on one hand, low valuations, low positioning, and improving capital market conditions form the fundamental logic for the brokerage sector to generate excess returns. On the other hand, the sector's continuously rising return on equity, optimizing business structure, and enhanced earnings growth potential are key drivers for a re-rating of brokerage valuations.

Huatai Securities noted that while market trading activity has cooled in the short term, risk appetite remains supported by ample liquidity. During the interim reporting window, the performance delivery of top-tier brokers remains the main storyline, with investment banking, co-investment, proprietary trading, and international operations providing incremental support, even as sector valuations have pulled back. The firm advises seizing the window to accumulate positions at these undervalued levels.

The Securities ETF HuaBao (512000) passively tracks the CSI All Share Securities Index, providing one-click exposure to 49 listed brokerage stocks. It serves as an efficient investment tool for concentrated allocation to leading brokers while also offering balanced coverage of mid-to-small-cap players. For off-exchange investors, the feeder funds are available (Class A: 006098, Class C: 007531).

Data sources: Shanghai and Shenzhen stock exchanges, Wind, etc. As of 2026.8.25, the weightings of Jinlong Co., Ltd., Xiangcai Securities Co., Ltd., Changjiang Securities Co., Ltd., China Merchants Securities Co., Ltd., and GF Securities Co., Ltd. in the CSI All Share Securities Index are 0.3%, 0.53%, 1.51%, 3.45%, and 3.34%, respectively.

Institutional views: Kaiyuan Securities 20260802, "Central Political Bureau Meeting's Positive Stance on Stock Market Stability, Bullish on Non-Bank Financials Alpha"; Huatai Securities 20260823, "Seizing Quality Financial Opportunities Amid Improving Earnings."

ETF fund fee disclosure: When subscribing or redeeming fund shares, the agency handling the subscription/redemption may charge a commission of up to 0.5%. On-exchange trading fees are subject to actual charges by the securities company; no sales service fee is charged.

Feeder fund fee disclosure: For the HuaBao CSI All Share Securities ETF Feeder Fund (Class A), the subscription rate (front-end) is 1,000 yuan per transaction for subscription amounts of 2 million yuan or more, 0.6% for amounts between 1 million and 2 million yuan, and 1% for amounts below 1 million yuan. The redemption fee is 1.5% for holding periods less than 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 or more. No sales service fee is charged. For the HuaBao CSI All Share Securities ETF Feeder Fund (Class C), no subscription fee is charged, the redemption fee is 1.5% for holding periods less than 7 days and 0% for 7 days (inclusive) or more, and the sales service fee is 0.4% per annum.

Risk disclosure: The Securities ETF HuaBao (512000) and its feeder fund passively track the CSI All Share Securities Index, with a base date of June 29, 2007, and a publication date of July 15, 2013. The annual returns of the CSI All Share Securities Index from 2021 to 2025 were -4.95%, -27.37%, 3.04%, 27.26%, and 2.54%, respectively. The annual volatility for 2021 to 2025 was 24.46%, 23.47%, 21.17%, 36.95%, and 20.53%, respectively. The index's constituent stocks are adjusted periodically according to its compilation rules, and backtested historical performance does not indicate future index returns. This product is issued and managed by HuaBao Fund, and distribution institutions do not bear responsibility for the product's investment, redemption, or risk management. Investors should carefully read fund legal documents such as the Fund Contract, Prospectus, and Fund Product Summary to understand the fund's risk-return characteristics and choose products that match their own risk tolerance. The risk rating assessed by the fund manager for the Securities ETF is R3-Medium Risk, suitable for investors with suitability rating C3 and above. Performance of other funds managed by the fund manager does not constitute a guarantee of this fund's performance. Past performance does not indicate future returns. Funds involve risks; invest with caution! Sales institutions (including the fund manager's direct sales channels and other sales institutions) conduct risk evaluations of this fund in accordance with relevant laws and regulations. Investors should promptly pay attention to the suitability opinions issued by the fund manager. The suitability opinions of various sales institutions may not be consistent, and the risk level rating of fund products issued by fund sales institutions shall not be lower than the risk level rating determined by the fund manager. The risk-return characteristics and risk level described in the fund contract may differ due to different consideration factors. Investors should understand the risk-return profile of the fund and carefully choose fund products based on their own investment objectives, horizon, experience, and risk tolerance, bearing the risks themselves. Registration of this fund with the China Securities Regulatory Commission does not imply any substantive judgment or guarantee of its investment value, market prospects, or returns. Funds involve risks; invest with caution.