China’s top brokerage CITIC posts 46% third-quarter profit jump

CITIC Securities Co Ltd (600030.SS), reported a 45.8% rise in third-quarter net profit, as China’s biggest brokerage posted strong 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.

China in 2018 adopted a U.S-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.