Eight small and medium-sized securities companies have posted
543 percent growth in combined yearly net profit to 5.21 billion
yuan in 2007, thanks to the booming stock market.
The larger brokerages, many of which are listed on the stock
exchange, will post their earnings in the spring reporting
Traditional brokerage services are the major contributor to
securities companies' earnings. And new accounting rules have
helped brokerage performances look even better.
Beijing-based Guodu Securities posted net profit of 1.2 billion
yuan, while Guangxi Sealand Securities jumped 416 percent to 614
million yuan. Shanxi Securities posted an annual net profit of 820
million yuan, and Beijing Gaohua Securities 247 million yuan.
"The small and medium-sized securities companies' strong
performance reflects the magnitude of the bullish stock market for
the whole of 2007," said Liang Jing, an analyst at Guotai Jun'an
Securities. Total turnover on both the Shanghai and Shenzhen stock
exchanges amounted to 46.06 trillion yuan, up 409 percent from
New accounting rules allow brokerages to book the unrealized
gains of their shareholding as income.
Securities companies' investment income also jumped in 2007. The
average investment income of the eight securities firms amounted to
470 million yuan. That includes Guodu Securities at 1.07 billion
yuan and Tebon Securities at 630 million yuan.
Income from underwriting also climbed, as the number of IPOs
increased. A total of 779.456 billion yuan was raised through
mainland IPOs in 2007.
Underwriting income from Guodu Securities amounted to 69.45
million yuan, up 1680 percent from the year before, while Tebon
Securities made 52.35 million yuan.
Analysts said the larger, listed securities companies are
expected to post even higher earnings as they hold greater market
The top 10 securities firms for brokerage services accounted for
over 50 percent market share, and the top 10 in underwriting took
90 percent of the market, Guotai Jun'an Securities said.
China's largest stockbroker CITIC Securities said it expects net
profit growth of over 400 percent for 2007. Shanghai-based Haitong
Securities posted a net profit increase of over 700 percent to more
than 5.3 billion yuan.
(China Daily January 18, 2008)