Haitong Securities had a strong April on easing credit and higher daily trading volume.  Photo: Company

Translated by Andrew Vanburen from a Chinese-language piece in Shanghai Securities Journal

 CHINA’S LISTED BROKERAGES are having a year to remember, with all of them reporting profits of late.

So who are they and why are they behaving so counter to recent market trends?

Let’s take last month for example, and this is no April Fool’s gag.

Over the 30-day period, the bottom lines of the country’s listed brokerages all were in the black, totaling around 1.52 billion yuan for the month.

Among them, a half dozen had a better April than March, while the other seven saw slight month-on-month declines.

Leading the charge were Mainland China’s top two houses by total assets – Citic Securities Co  (SHA: 600030) and Haitong Securities (SHA: 600837).

Guangdong Development Bank Securities and 10 other brokerages rounded out the reporting list.

Those having standout Aprils also included Southwest Securities (SHA: 600369), Pacific Securities (SHA: 601099), Industrial Securities (SHA: 601377), Soochow Securities (SHA: 601555) and Founder Securities (SHA: 601901).

Among them, Southwest Securities had one of the most attention-grabbing months, with an operating revenue of 220 million yuan and a net profit of 110 million.

This compares to a loss of 22.5 million yuan in March.

China's benchmark Shanghai Composite Index is down nearly 15% from a year earlier. The same can't be said for the country's listed brokerages.

Shanghai-listed Founder Securities also had a notable April, with its bottom line rising some 35 fold to around 110 million yuan.

But they don’t call Citic Securities top dog in the industry for nothing.

Its operating revenue last month was 810 million yuan, resulting in a 38% sequential rise in the brokerage’s bottom line to 380 million.

This is in rather stark contrast to the valuations of individual listcos in China outside of the brokerage sector.

China’s benchmark Shanghai Composite Index is down nearly 15% from year-earlier levels.

With the likelihood of greater liquidity thanks to lower interest rates going forward, more money is being freed up to feed into the capital markets.

Furthermore, brokerage commissions do a brisk business in volatile times, when daily turnover spikes can occur on a relatively frequent basis.

Therefore, it must be remembered that not all counters are dragged down by a slumping benchmark index.

See also:

HSBC: ‘Bullish’ On China Shares In 2012; Prefers ICBC, CCB, CITIC

NEW KID ON BLOCK: 21 A-Shares In Red; 4 In Hot Water

KINGS OF THE HILL: 12 Banks Produce Over Half Of All Listcos’ Profit

What’s Really Behind China Share Rally?


You may also be interested in:

You have no rights to post comments

Counter NameLastChange
AEM Holdings2.760-0.050
Avi-Tech Electronics0.265-
Best World1.8000.010
Broadway Ind0.086-0.001
China Sunsine0.390-
Delfi Limited1.0500.010
Food Empire1.4200.020
Fortress Minerals0.2700.020
Geo Energy Res0.390-0.005
GSS Energy0.027-0.002
Hong Leong Finance2.560-
Hongkong Land (USD)3.270-0.060
ISDN Holdings0.340-0.005
IX Biopharma0.041-0.005
Jiutian Chemical0.025-
KSH Holdings0.2500.005
Leader Env0.050-0.003
Medtecs Intl0.135-0.004
Nordic Group0.345-0.005
Oxley Holdings0.093-
REX International0.121-0.003
Sinostar PEC0.137-0.002
Southern Alliance Mining0.605-
Straco Corp.0.515-0.010
Sunpower Group0.215-
The Trendlines0.085-
Totm Technologies0.024-0.002
Uni-Asia Group0.840-0.010
Wilmar Intl3.390-0.020
Yangzijiang Shipbldg1.660-0.030

We have 1040 guests and no members online

rss_2 NextInsight - Latest News