Comparative Analysis Report on Valuation Levels of the Securities Industry

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This report selects major securities firms in the A-share and U.S. stock markets for a comparative analysis of valuation levels, covering core dimensions such as market capitalization, valuation indicators (P/E, P/B), and profitability (ROE, profit margin), to provide cross-market valuation references for investors [0].

• Significant Differentiation in P/E Ratios of the A-share Securities Industry
  : Haitong Securities has a P/E ratio as high as 134.44x due to performance pressure, which is an outlier. After excluding this outlier, the average P/E ratio of A-shares is approximately 15.27x
• Relatively Unified Valuations of the U.S. Securities Industry
  : The P/E ratios of the three major firms range from 17x to 22x, with an average of 19.17x
• Comparison Conclusion
  : After excluding outliers, the P/E ratio of the A-share securities sector is about 20% lower than that of U.S. stocks, indicating a certain discount for A-share securities stocks relative to U.S. stocks

• Generally Low P/B Ratios for A-shares
  : The P/B ratios of major securities firms range from 0.83x to 1.48x, with an average of approximately 1.21x
• Significantly Higher P/B Ratios for U.S. Stocks
  : The P/B ratios of the three major firms range from 2.38x to 3.73x, with an average of approximately 2.91x
• Comparison Conclusion
  : The P/B ratio of the A-share securities sector is only about 41% of that of U.S. stocks, reflecting the market’s valuation differences in asset quality and profitability

• Relatively Low ROE for A-shares
  : After excluding Haitong Securities, the average ROE is approximately 8.50%
• Higher ROE for U.S. Stocks
  : The average ROE reaches 15.21%, which is about 1.8 times that of A-shares
• DuPont Analysis
  : The high valuations of U.S. securities firms mainly stem from the support of their higher return on equity

• U.S. Securities Firms
  : Focus on wealth management and asset management as core businesses, with diversified revenue structures and higher profit stability
• A-share Securities Firms
  : Traditional channel businesses (brokerage, investment banking) account for a relatively high proportion, with obvious cyclical characteristics

• Maturity Differences
  : The U.S. capital market has a longer development history, with a more institutionalized investor structure
• Liquidity Premium
  : The U.S. stock market usually has higher average daily trading volume and turnover rate
• Regulatory Environment
  : There are differences in securities regulatory systems and capital adequacy requirements between China and the United States

• U.S. Securities Firms
  : Have a well-established global layout, with relatively high certainty in performance growth
• A-share Securities Firms
  : Benefit from capital market reforms and the advancement of the registration-based IPO system, but the transformation process is still ongoing

According to the latest institutional analyses [1][2]:

• The valuations of the securities sector and institutional holdings are both in historically low ranges
• The non-bank financial sector rose 12% cumulatively in 2025, underperforming the CSI 300 Index’s 18% increase
• The sector’s shareholding structure has improved, turnover rate has decreased, and the capital-side restraining factors have basically been cleared

Institutions generally believe [1][2]:

• Conditions for Upward Breakthrough Are Met
  : The securities sector has favorable conditions for upward breakthrough, with limited room for valuation decline
• Structural Opportunities as the Main Focus
  : More optimistic about structural opportunities driven by leading firm integration and intrinsic value
• Catalytic Factors
  :
  • Catalysis of the spring market rally
  • Public fund reform policies
  • Growth in investment banking business
  • Expectations of mergers and acquisitions (advancement of the Guotai Haitong case)

The valuation levels of the securities industry exhibit the following characteristics:

1. Obvious Cross-Market Valuation Differences
   : The P/E and P/B ratios of the A-share securities sector are significantly lower than those of U.S. stocks, reflecting the market’s different expectations for profitability and growth

2. Profitability is the Core of Valuation
   : U.S. securities firms support higher valuation levels with higher ROE, while A-share securities firms need to enhance profitability through business transformation

3. Sufficient Margin of Safety in Valuation
   : Currently, the valuations of the A-share securities sector are in a historically low range, with a good margin of safety and room for upward elasticity

4. Differentiated Pattern Will Continue
   : The performance of the securities sector in 2026 is more likely to stabilize, and investment should focus on structural opportunities driven by leading firm integration and intrinsic value

[0] Jinling AI Financial Database - Valuation Data of Securities Firms
[1] Securities Times - “Spring Market Rally Plus Low Valuations: Institutions Are Bullish on Investment Opportunities in the Securities Sector” (https://www.stcn.com/article/detail/3575162.html)
[2] Eastmoney - “Securities Sector Posts Three Consecutive Years of Gains: 2026 Will Be a Decisive Year for the ‘Differentiation Logic’ of the Securities Sector” (https://caifuhao.eastmoney.com/news/20260115215046781958520)
[3] Sina Finance - “Spring Market Rally Plus Low Valuations: Institutions Are Bullish on Investment Opportunities in the Securities Sector” (https://finance.sina.com.cn/jjxw/2026-01-07/doc-inhfmtvv6415271.shtml)