--- title: "KaiYuan Securities: Guiding medium- to long-term excess assessments, the non-bank sector is expected to receive increased allocation" type: "News" locale: "en" url: "https://longbridge.com/en/news/240724916.md" description: "KaiYuan Securities released a research report indicating that some undervalued high-quality targets in the non-bank sector are expected to receive increased allocation. The PB (LF) of the brokerage sector is 1.3 times, which is at the 22nd percentile since 2013. The insurance and brokerage sectors rose by 3.58% and 2.18% respectively this week. The new regulations from the China Securities Regulatory Commission will enhance the vitality of mergers and acquisitions for listed companies. Since 2025, approximately 90 major asset restructurings have been disclosed, which is 3.3 times that of the same period in 2024. Recommended undervalued brokerages with retail advantages, such as JFL" datetime: "2025-05-18T23:41:02.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/240724916.md) - [en](https://longbridge.com/en/news/240724916.md) - [zh-HK](https://longbridge.com/zh-HK/news/240724916.md) --- # KaiYuan Securities: Guiding medium- to long-term excess assessments, the non-bank sector is expected to receive increased allocation According to the Zhitong Finance APP, Kaiyuan Securities released a research report stating that this week, the insurance and brokerage sectors rose by 3.58% and 2.18% respectively. The non-bank sector outperformed the CSI 300 this week, possibly influenced by the "Action Plan" guiding the medium- and long-term assessment of public funds. Based on the data of actively managed equity funds' heavy holdings at the end of Q1 2025, the non-bank financial sector is underweight by 5.47% (based on industry free float market capitalization), the highest underweight ratio among 31 primary industries. Currently, the brokerage sector's PB (LF) is 1.3 times, positioned at the 22nd percentile since 2013. In the medium to long term, some undervalued quality targets in the non-bank sector are expected to receive increased allocation. Attention should be paid to the details of subsequent fee reductions in public fund channels, and continue to recommend undervalued brokerages with prominent retail advantages, recommending the stable profit and high dividend yield of Jiangsu Jinzu (600901.SH). ## Key points from Kaiyuan Securities are as follows: **Brokerage: New regulations on major asset restructuring of listed companies released, further enhancing the vitality of mergers and acquisitions** (1) This week, the average daily trading volume of stock funds was 15.2 trillion, a decrease of 4.4% week-on-week. The scale of newly established stock and mixed funds this week was 4.75 billion, a decrease of 22% week-on-week. (2) On May 16, the China Securities Regulatory Commission officially announced the implementation of the revised "Administrative Measures for Major Asset Restructuring of Listed Companies," optimizing aspects such as simplifying review procedures, establishing a phased payment mechanism, and enhancing regulatory inclusiveness, further boosting the activity of mergers and acquisitions by listed companies. The main modifications include: A. Establishing a phased payment mechanism for restructuring share consideration. B. Increasing inclusiveness regarding changes in financial conditions, industry competition, and related party transactions. C. Introducing a simplified review procedure for restructuring, where restructuring transactions eligible for the simplified procedure do not require review by the exchange's merger and acquisition committee, and the CSRC will make a decision on registration within five working days. D. Optimizing lock-up period requirements, implementing "reverse linkage" between the investment period of private equity funds and the lock-up period for shares obtained through restructuring, encouraging private equity funds to participate in mergers and acquisitions of listed companies. The CSRC disclosed that since 2025, listed companies have been more proactive in planning asset restructuring, with approximately 90 major asset restructurings disclosed, 3.3 times that of the same period in 2024, and the total amount of completed major asset restructuring transactions exceeding 200 billion, 11.6 times that of the same period in 2024. (3) The valuation of the brokerage sector and institutional holdings are at low levels, with macro-level measures to stabilize the economy and stock market continuing, coupled with sustained year-on-year growth in annual reports and Q1 reports, the brokerage sector opportunities remain optimistic. Three main stock selection lines: brokerages with significant performance elasticity and retail advantages, financial technology, and mergers and acquisitions. The Hong Kong Stock Exchange, benefiting from increased activity in the Hong Kong stock market, is also favored. **Insurance: In Q1, the insurance industry increased allocation to equity assets, with the proportion of stocks and funds rising to 12.8%** (1) The China Banking and Insurance Regulatory Commission disclosed that in Q1 2025, the original insurance premium income of insurance companies was 2.2 trillion, a year-on-year increase of 0.8%; by the end of Q1 2025, the total assets of financial institutions in the insurance industry (excluding specialized insurance intermediaries) were 37.8 trillion, an increase of 5.4% from the beginning of the year. The balance of insurance funds invested in stocks and funds at the end of the period was 4.47 trillion, with a quarter-on-quarter increase of +0.44 percentage points to 12.79%, and the balance increased by 8.8% quarter-on-quarter, continuing to increase allocation to equity assets (2) From the perspective of the full-year outlook, the new single base in the second half of the year is relatively high, and the annual NBV growth rate is expected to decline compared to 2024. The operational quality is expected to continue to improve, and the integration of individual insurance reporting and the increase in the proportion of participating insurance will help reduce liability costs; domestic measures to stabilize growth and the stock market will continue, focusing on beta catalysts in the equity market, and optimistic about undervalued life insurance and property insurance targets. **Recommended and Beneficial Target Portfolio** Recommended target portfolio: JFL, China Pacific Insurance, Hong Kong Stock Exchange; Zhina Compass, Dongfang Securities, Dongfang Caifu, Caitong Securities; China Life, China Taiping. 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