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Fees Boost Sees China Brokerage CITIC Q3 Profits Leap 46%

CITIC dominates underwriting business for IPO projects in the STAR Market and ChiNext, according to Zheshang Securities research note


CITIC Beijing branch
The logo of CITIC Securities is seen at its branch in Beijing, China. Photo: Reuters

 

China’s biggest brokerage, CITIC Securities, posted a 46% third-quarter profit jump on Thursday thanks to solid growth in commission fees, after rapidly expanding its asset management and investment banking businesses.

Net profit for the July-September quarter rose to 5.45 billion yuan ($851.8 million) from 3.74 billion yuan a year earlier, CITIC said in a stock exchange filing on Thursday. 

It marked the company’s best quarterly profit growth since the second quarter in 2020, when net profit jumped 121.7%.

Revenue of the commission fees from investment banking and asset management businesses rose 25.6% and 59%, respectively, in the first nine months of this year, the filing showed.

 

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China in 2018 adopted a US-style, registration-based IPO system on Shanghai’s Nasdaq-style STAR Market, and later in Shenzhen’s start-up board ChiNext, in a bold reform designed to give the market a bigger role in evaluating IPO candidates.

The reforms are encouraging more companies to plan mainland listings, benefiting leading brokerages’ investment banking and securities underwriting businesses.

CITIC had dominated the underwriting business for the IPO projects in the STAR Market and ChiNext, according to a research note of Zheshang Securities.

The brokerage’s investment in the property sector declined 7.3% to 983 million yuan at the end of September, compared to the end of 2020, while the total investment increased 15% to 1.2 billion yuan, the filing showed.

 

  • Reuters with additional reporting by Sean O’Meara

 

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Sean OMeara

Sean O'Meara is an Editor at Asia Financial. He has been a newspaper man for more than 30 years, working at local, regional and national titles in the UK as a writer, sub-editor, page designer and print editor. A football, cricket and rugby fan, he has a particular interest in sports finance.

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