Huatai Securities: Focus on top securities firms with strong asset-liability management capabilities and steady performance growth.

Huatai Securities pointed out that in the first quarter of 2025, the net profit attributable to the mother of large securities firms increased significantly by 92% year-on-year, and non-recurring net profit increased by 51% year-on-year. They are paying attention to three major trends: 1) the trend of expanding balance sheets continues, driving further expansion of total assets by financial investment scale, but leverage levels are different; 2) investment contribution growth, with investment income of large securities firms generally increasing, showing strong elasticity; 3) restoration of light capital business, with the average daily stock and fund trading volume in the entire market in the first quarter increasing by 71% year-on-year, net brokerage income improving year-on-year, and investment banking net income generally improving, with relatively stable asset management net income. Looking ahead to the future development of the industry, the political bureau meeting has set the tone for continuing to stabilize and activate the capital market, with central Huijin fund further playing a role similar to a "stabilization fund", and supportive policies for the capital market are expected to continue to be implemented. They focus on top securities firms with strong balance sheet application capabilities and steady performance growth, and seize structural opportunities in the mergers and acquisitions theme.