Oppen Securities: Top brokerages' Q3 earnings may beat expectations; August life insurance premiums fell 13.6% YoY

Weekly Outlook

Market trading activity has declined month-on-month since September. The Federal Reserve’s interest rate hikes and rising U.S. Treasury yields have exerted pressure on risk assets, leading to a decline in the non-bank financial sector in September, partially reversing gains accumulated since June.

We continue to see strong value in leading brokerages. Despite a likely slight sequential decline in Q3 earnings, improvements in profit structure suggest overall results may exceed expectations. These firms demonstrate earnings resilience amid heightened market volatility, supported by favorable valuation and liquidity conditions. With a rising ROE中枢 (core ROE) and sustained profitability improvements, leading brokerages offer significant revaluation potential.

For listed insurers, full-year earnings and dividends are expected to grow steadily. We see investment opportunities in high-dividend-yield stocks under the current dividend-focused market style, and recommend Jiangsu Financial Leasing, which offers both high dividend yield and sustained earnings growth.

Brokerages: Five Firms Access Offshore RMB FX Trading Platform; Q3 Earnings Likely to Beat Expectations

• As of September 25, the average daily equity and fund trading volume in A-shares for September stood at RMB 2.34 trillion, down 14.0% month-on-month.
• For Q3, the average daily trading volume was RMB 2.81 trillion, down 16.8% quarter-on-quarter.
• Year-to-date, the average daily trading volume reached RMB 3.10 trillion, up 60.74% year-on-year.

On September 24, Caixin reported that the China Foreign Exchange Trade System’s offshore RMB FX trading platform has onboarded its first batch of overseas brokerage institutions, including:

• Huatai Financial Holdings (Hong Kong)
• CITIC Securities International Capital
• CSC Overseas
• Guotai Junan International Securities (Hong Kong)
• CICC Financial Products Co., Ltd.

These five institutions have already executed multiple offshore RMB FX transactions, covering products such as FX spot and swaps. We believe this development will help leading brokerages expand their cross-border FICC client-driven business.

In Q3, IPO activity in both A-shares and Hong Kong markets increased quarter-on-quarter. New listings are expected to boost direct investment and co-investment profitability. The wealth management and overseas business segments are likely to remain stable. Despite the market downturn and shrinking trading volumes in Q3, we expect leading brokerages to deliver Q3 results that exceed expectations, highlighting their earnings resilience. The current mismatch between rising ROE中枢, improved earnings sustainability, and extremely low valuations supports our positive view on the revaluation and outperformance of leading brokerages.

Insurance: August Life Insurance Premiums Decline Year-on-Year; Property Insurance Maintains Modest Growth

• According to data from the National Financial Regulatory Administration, life insurance original premium income for January–August 2026 totaled RMB 3.57 trillion, down 0.22% year-on-year. This marks a significant slowdown from the +1.78% growth recorded in January–July. In August alone, premiums fell 13.6% year-on-year. We attribute the sharp decline in new business growth primarily to a high base effect and product transitions resulting from the bancassurance "reporting and combining" policy.
• Property insurance original premium income for January–August reached RMB 1.25 trillion, up 2.2% year-on-year, close to the 2.3% growth rate for January–July, maintaining a low growth trajectory.

The insurance sector remains undervalued with low institutional holdings. The logic of stabilizing interest rate spreads—driven by bottoming long-term interest rates and declining liability costs—continues to hold. Meanwhile, deposit migration is expected to support premium growth. These long-term industry dynamics should underpin sector valuations. However, Q3 data on investment performance, liability-side trends, and combined ratios may weaken both quarter-on-quarter and year-on-year, making market style the primary driver. We recommend high-dividend-yield stocks China Pacific Insurance, Ping An Insurance, and PICC Property and Casualty.

Recommended and Beneficiary Stock Portfolio

Recommended stocks:

• Jiangsu Financial Leasing
• Huatai Securities
• Ping An Insurance
• PICC Property and Casualty
• CITIC Securities
• CICC (H-shares)
• China Pacific Insurance
• Hithink RoyalFlush
• Guotai Haitong
• Hong Kong Exchanges and Clearing
• Caitong Securities

Risk Factors

• Volatility in capital markets may introduce uncertainty to investment returns.
• Insurance liability-side performance may fall short of expectations.