According to a research note released by China Securities Co., Ltd. (ASX: 601066), since the second half of 2026, a number of listed brokerages have密集 launched or advanced share repurchases, with major shareholders increasing their holdings in tandem. This wave of buybacks is dominated by small and medium-sized brokerages, the proportion of cancellation-style repurchases has risen significantly, and the initiating entities have become more diverse.

The direct motivation is the mismatch between the strong performance growth in the first half of the year and the low valuation of the sector, prompting industrial capital to enter with its own funds to actively correct this discrepancy; on the policy side, the new "Nine National Articles" encourage repurchase and cancellation, and the market value management guidelines continue to provide guidance, pushing cancellation-style repurchases toward normalization. Cancellation-style repurchases permanently reduce total share capital, enhance earnings per share and return on net assets, and carry no subsequent selling pressure from treasury shares, driving brokerage market value management from short-term stabilization to long-term shareholder returns, which is beneficial in the long run to the optimization of the sector's shareholder return system.

The main views of China Securities Co., Ltd. are as follows: This round of brokerage repurchases and stake increases presents the following characteristics. First, the participating entities are mainly small and medium-sized brokerages. Medium-sized institutions such as Guolian Minsheng, Changjiang Securities, Huaan Securities, Sinolink Securities, Hongta Securities, and Zhongtai Securities have acted密集, while the actions of top-tier brokerages are relatively limited. The logic is that repurchases directly consume net capital, and net capital is the regulatory bottom line for core businesses such as margin trading and proprietary trading. Small and medium-sized brokerages currently have limited willingness to expand business and relatively abundant net capital, giving them the conditions to implement repurchases.

Second, the proportion of cancellation-style repurchases has risen significantly. In the past, repurchases were mostly for market value maintenance and equity incentives. In this round, many companies have explicitly stated that the shares will be used for cancellation and reduction of registered capital, and some companies have also stipulated that repurchased shares unused within three years will be cancelled according to procedures. Third, the initiating entities have become more diverse. Proposals from controlling shareholders, initiation by chairmen, and simultaneous increases in holdings by major shareholders have followed one another, with large shareholders and management forming a common recognition of the company's valuation, and repurchases and stake increases forming a joint force.

Why have brokerages recently密集 repurchased or increased their holdings? The superficial direct motivation is the mismatch between strong performance growth and depressed valuations. First-half performance was generally forecast to increase, yet the sector's valuation remains at a historical low. Industrial capital entering with its own funds is an active correction of this mismatch; policy continues to provide guidance, and tools such as relending for repurchases and stake increases also provide low-cost funding support.

The root lies in the dual resonance of institutions and interests. At the policy level, the new "Nine National Articles" for the first time wrote repurchase and cancellation into the top-level design, explicitly encouraging listed companies to repurchase shares and cancel them according to law; since 2024, policies such as the CSRC's market value management guidelines have further encouraged cancellation-style repurchases, and repurchase rules have lowered thresholds and cancelled window periods, paving the way for them to move from sporadic actions to normalization. At the shareholder return level, repurchasing and cancelling at low valuations with own funds is equivalent to recovering equity at a low price, which is more friendly to shareholders. In this round of brokerage repurchases, many companies have explicitly used shares for cancellation and reduction of registered capital. Their impact is mainly in the following three aspects:

First, it permanently reduces total share capital. On the premise of unchanged profits, it enhances earnings per share and net assets per share, passively raising return on net assets, and is a genuine return of real money that benefits all shareholders. Second, cancelled shares permanently exit circulation, and there is no selling pressure from treasury shares sold later, which helps continuously support the valuation foundation. Third, it pushes the brokerage industry's market value management approach from short-term stabilization and support to long-term shareholder returns, in line with the investor-oriented direction.

However, it should also be viewed rationally. The improvement in indicators from cancellation-style repurchases is built on the basis of stable profits. If fundamentals lack support, a limited scale of share reduction alone will be difficult to form a sustained valuation floor. Risk analysis: uncertainty of market price fluctuations; uncertainty of corporate profit forecasts; technological updates and iterations.