Shenwan Hongyuan Group Co., Ltd. has released a research report emphasizing the importance of the "large asset management" business within brokerage service portfolios. Regarding asset management subsidiaries, the firm anticipates an inflection point in scale has been reached following the industry-wide reduction in channel businesses. Leading institutions are expected to establish a positive cycle of growth. Across different market environments, this is projected to play a significant role in smoothing short-term earnings volatility for brokers and boosting their overall profit levels. The report recommends focusing on two primary investment themes: 1) Currently undervalued leading institutions with strong foundations in the "large asset management" business, which benefit from an optimized competitive landscape and possess comprehensive strength; and 2) Specialized brokerages with distinct "large asset management" business characteristics, attractive valuations, and a clear logic for Return on Equity (ROE) improvement. Shenwan Hongyuan's key views are as follows: At present, the firm believes focus should be placed on the "large asset management" business within brokerage portfolios, primarily consisting of asset management subsidiaries and minority/majority stakes in public fund companies. Since September 24th of last year, domestic equity markets have performed strongly, with major stock indices showing significant gains, leading to scale expansion and profit surges for brokerage "large asset management" divisions. Against a backdrop of low interest rates and an increasing allocation to equity-linked assets by households, the "large asset management" business is expected to continue expanding, becoming a substantial and stable anchor for brokerage earnings. The main supports for this are: 1) The business model attributes of the "large asset management" sector; 2) The cross-asset class and cross-market product layouts of leading asset managers; 3) The growth potential of the business; and 4) Its role as a product-facing business that naturally connects the asset side (e.g., investment banking) and client side (e.g., retail wealth management) of brokerages, serving as a crucial synergy hub. Concurrently, the brokerage sector, trading at low valuations, is attracting attention from absolute return funds, with dividend yield becoming a key factor in assessing allocation value. However, due to the sector's inherent cyclicality, market concerns persist regarding the sustainability of strong earnings. Given its operational characteristics, the "large asset management" business is poised to be key in mitigating the cyclical volatility of brokerage earnings and driving a steady rise in profit levels. Among leading industry players, Shenwan Hongyuan selected six companies for comparative analysis based on their relatively prominent and distinctive "large asset management" operations, focusing on the business's contribution to earnings. These are: CITIC Securities (CITIC Securities Asset Management + China Asset Management), Guotai Junan/ Haitong Securities (Guotai Haitong Asset Management + Huaan Fund + HFT Investment Management + Fullgoal Fund), Huatai Securities (Huatai Securities Asset Management + Huatai-PineBridge Fund + Southern Fund), GF Securities (GF Securities Asset Management + GF Fund Management + E Fund Management), China Merchants Securities (China Merchants Securities Asset Management + Bosera Asset Management + China Merchants Fund), and Orient Securities (Orient Securities Asset Management + HT Capital + Great Wall Fund). From a static perspective: Huatai Securities, GF Securities, China Merchants Securities, and Orient Securities exhibit distinct "large asset management" characteristics, with the business contributing approximately 15% to profits. Based on a static observation of 2025 profit contributions, Huatai Securities (15.13%), GF Securities (12.36%; with minority/majority-owned public funds contributing significantly at 17.25%), China Merchants Securities (13.87%), and Orient Securities (17.39%; with the asset management subsidiary contributing notably at 7.60%) show prominent and significant contributions from their "large asset management" businesses. From a dynamic perspective: Asset management subsidiaries are poised for recovery, while minority/majority-owned public fund companies continue to grow. For asset management subsidiaries, the firm expects the scale inflection point under the impact of channel business reduction has appeared. Institutions are seeking to drive a recovery in average fee rates through product structure optimization, such as shifting towards active management, and exploring diverse businesses like ABS/REITs investment banking services. The overall profitability of asset management subsidiaries is improving marginally, with ROE still having room for increase. For minority/majority-owned public fund companies, the profit level is rising, and ROE performance is strong. Leading institutions, leveraging their cross-asset and cross-market product layouts, are expected to form a positive growth cycle characterized by "profit level stepping up in high-growth years - stabilizing and advancing in volatile markets - stepping up again in high-growth years." This pattern will be crucial for smoothing short-term brokerage earnings fluctuations and boosting the overall profit level across different market environments. Risk warnings include potential underperformance in asset management scale growth due to changes in market conditions, and fee rates declining more than expected due to regulatory policies or industry competition.