A：One of the main sources of income of listed companies in the securities sector is economic business, that is, through the trading of stocks, ETFs and other trading targets in securities companies, securities companies will charge a certain percentage of commission. In addition, product sales are also an important part, including the purchase and sale of various financial products. Investors will also pay handling fees when buying and selling products by securities companies. These handling fees and management fees that may be incurred during the period when customers hold products are part of the income of securities companies.

A：Investment banking is another major source of income for securities firms, mainly through participation in the issuance of stocks, bonds and other financial targets, such as IPOs. In assisting listed companies to complete the shareholding system reform, financial combing, information disclosure rectification and submission of relevant materials, securities companies will charge a certain commission. Although the slowdown in the pace of new stock issuance during the bear market has a negative impact on the investment banking business, the current pace of credit issuance is relatively stable, which is conducive to the development of the investment banking business of securities companies.

A：Margin trading is the third part of the income structure of securities companies. The client is required to pay the cost of the liability (e. g., the financing rate) when the securities firm raises funds through its own funds, stock offerings, share placements or other forms of financing. Due to the low cost of financing for securities firms, the financing rates offered to clients may be higher, resulting in spread income, which is one of the important sources of income for securities firms. Proprietary business is the investment of securities companies with their own capital in stocks, bonds and other financial targets, and may also participate in ETF, derivatives and other investments. Securities companies conduct proprietary business by buying bottom positions and taking hedging measures, charging commissions in the course of their business and generating more revenue in a bull market. Although equity investments are usually less volatile due to volatility, bond investments and fixed income investments are still the main components of the proprietary business of securities companies.

A：The asset management business is the fourth source of revenue for securities companies, and with an asset management license, securities companies can carry out asset management services such as public funds and asset management for specific clients (such as private equity business). By raising funds and collecting management fees, you can also charge performance commissions for private equity businesses, which allows securities companies to use asset management licenses to expand their asset management business and increase revenue in addition to traditional economic businesses.

A：Larger securities firms, whose main business is relatively balanced, may account for a higher proportion of investment banking, as investment banking has a significant head effect. In addition, due to the high capital requirements of credit business, large securities companies with sufficient capital can better carry out such business. Among small securities companies, proprietary business accounts for a larger proportion of their revenue, relying mainly on the investment income of the proprietary team to achieve revenue growth.

A：All revenues of securities firms are directly or indirectly closely related to the secondary market. Among them, economic business (e. g., stock trading commissions) is positively correlated with market volume, and credit business (e. g., margin trading) is positively correlated with market conditions, with increased business volume and revenue when the market is good. Although the asset management business has certain counter-cyclical characteristics, but in a better market when the customer's willingness to buy increased, while the increase in the net value of products led to the increase in management scale, thereby increasing management fees and related income. The proprietary business, on the other hand, has exposure to equity assets, which increases or decreases with stock market fluctuations. In contrast, although the investment banking business is affected by the policy counter-cyclical adjustment, it is also positively related to the stock market in practice.

A：The nine policies of the country are at a high level, expressing the determination of the policy level to promote the high-quality development of the capital market. Starting from the investment side and the financing side, the policy reformed the potential problems of the securities market at that time, which injected a strong impetus into the long-term stable development of the securities market, especially played a positive role in alleviating the liquidity shortage caused by excessive IPO.

A：The relationship between IPU issuance volume and stock market performance is not directly related. The share price is mainly determined by the profitability (EPS) and valuation level (PE) of listed companies, while the large amount of IPO funds may affect liquidity and thus the price-earnings ratio. But the size of the IPO does not directly affect the profitability or quality of the company.

A：Most shareholders are more worried about the uneven quality of listed companies than the large number or size of IPOs. If the quality of listed companies is good, even if the amount raised is large, it will be welcomed by investors because of its high profitability.

A：At the financing end of the New District, Guojiutao has adopted measures to improve the listing standards of listed companies, strictly control access, select companies that meet the hard technology and future industrial development directions to provide diversified listing requirements, and strengthen information disclosure and delisting systems to improve and make real high-quality The listing of enterprises, while strict supervision to ensure the timeliness and accuracy of information disclosure.

A：On the investment side, the policy will help reduce the overall volatility of the market, improve the risk-return characteristics of A- shares and achieve market stability by reforming public funds to meet long-term investment needs, improving the quality and investment value of listed companies, and guiding long-term funds such as social security, insurance and banking into the market.

A：Active capital markets directly benefit the economic business of securities companies, especially the increase in turnover led to the growth of fee income. At the same time, the rapid development of high gross margin businesses such as investment advisory business and asset management business has helped to improve the gross margin of securities companies. Reforms such as the comprehensive registration system and mergers and acquisitions are also conducive to improving the investment banking revenue and gross profit margin of securities companies, and promoting the transformation of securities companies to high-end.

A：After the merger of securities companies, back-office support personnel such as IT, operations, legal compliance and wind control can be reused in large quantities. The IT systems and related teams originally owned by the two companies can be simplified into one IT system after the merger, thereby streamlining personnel and increasing per capita output value. In addition, the regulator hopes to improve the management level, reduce management costs, and promote the complementary business advantages of different securities companies through industry mergers and acquisitions.

A：In the long run, the integration of industry resources is the development direction of the securities industry, through mergers and acquisitions can achieve the reduction of management costs and complementary business advantages. For example, large securities firms have economies of scale in areas such as investment banking, while small securities firms may have an advantage in proprietary business. After the merger and reorganization, it can significantly reduce the management cost of listed companies, and form a unique business combination, such as good at high-end business and good at retail business brokerage cooperation.

A：Due to the high capital requirements of the securities business, mergers and acquisitions will help to increase the scale of capital to meet the needs of credit business, derivatives business and other capital consumption. Mergers and acquisitions can effectively reflect the scale effect of securities companies, thereby enhancing the business structure and efficiency of the entire industry, and benefiting business results.

A：The fundamentals of the securities company are good, and the operation of the main business is good. Take an index as an example, its operating income in the first quarter increased by 30% year-on-year, and its net profit growth rate was close to 20%. At the same time, the average daily stock-based trading volume exceeded 3 trillion, an increase of 77% year-on-year, and the financing balance also increased by more than 40%, which is conducive to the growth of economic business and credit business income. In addition, head securities companies are actively going out to sea to improve gross margins by increasing the proportion of overseas business, benefiting from factors such as higher gross margins in the Hong Kong subsidiary business and growing demand from overseas customers.

A：In recent years, with the concept of "housing, not speculation" deeply rooted in the hearts of the people, the investment and financial attributes of real estate have gradually declined, and the new assets of residents no longer flow into the real estate market in large quantities. In the past, residents often preferred to buy investment properties when they made money, especially non-rigid purchases, and to increase investment through mortgages and leverage. But now, the real estate market tends to be rational, and investors have shifted from investment purchases to real rigid demand purchases. Therefore, there is a need for the same volume of investment targets to meet the growing investment needs of the population, and the stock market is given the opportunity to develop at this time.

A：On the one hand, the return to residential properties of the real estate market has led to no allocation of new assets for residents; on the other hand, the value of medium-and long-term investments in the stock market has increased significantly, attracting residents to deposit in the form of fixed income plus, fixed income, and even directly purchase public or private securities investment funds and stocks to participate in the stock market. In addition, the sharp decline in risk-free interest rates (e. g., bank deposit rates from more than 3 per cent to near 1 per cent) has prompted residents to increase their risk appetite and put some of their money into equity assets.

A：The data show that the ratio of residential deposits to the total market capitalization of A- shares has declined since April 2020, which means that there is still plenty of room for residential deposits to enter the market. At the same time, the allocation of financial institutions to the securities sector is obviously insufficient. With the adjustment and allocation of investment products such as public funds to the undervalued securities sector, as well as the outflow of funds from the real estate market, the securities sector is expected to usher in more investment opportunities.

A：The PB (price-to-book ratio) of securities firms is currently at historically low levels, equivalent to only the 9% decile of the last 10 years. Although the overall valuation of the sector is low, considering the solid growth rate of the securities company's own income and profit, and the long-term investment logic is stable, especially in the context of the large cycle of the transfer of residential assets from the real estate market to the stock market, the potential growth of securities companies is very large. At the same time, due to the improvement of the quality of listed companies and the reduction of A- share volatility, the medium-and long-term allocation value of securities companies has been greatly improved, and the growth rate of short-term profits is fast. Therefore, the current securities company sector is actually the preferred target of value investment.