57 China Brokers Suffered 27% Decrease in H1 Net

57 securities brokers in China’s Mainland saw their first-half net profits reduce 27% year on year, according to the latest information disclosure.

Available data showed that these 57 Chinese securities companies achieved operating revenues of CNY 45.92 billion in the six months from January to June 2010, down 9% compared to the corresponding period of the previous year. Meantime, they reaped net profits of CNY 17.1 billion, down 27% year over year. Among them, Zhongshan Securities Co., Rising Securities Co., Yingda Securities Co. and Beijing Gao Hua Securities suffered losses during the first half of this year.

Also, seven small and medium-sized firms saw a growth in their first-half net profits while some large brokers witnessed sharp declines in their net profits during the same period. For example, Jinan-based Qilu Securities Co. gained net profits of CNY 502 million in the first six months, down 53% from the same period of a year ago; Orient Securities Co., based in Shanghai, made first-half net profits of CNY 535 million, decreasing 42% year on year; Guotai Junan Securities in the period earned net profits of CNY 1.4 billion, an decrease of 40% from the same period of 2009.

As a result of the gloomy stock market over the first six months of the year, these brokers suffered declines in their commission incomes from the broking business. Still, China Galaxy Securities, Guotai Junan Securities, and Guosen Securities, with net incomes of CNY 2.53 billion, CNY 2.32 billion and CNY 2.13 billion from the agency securities trade took the first three places among these more than 50 securities firms.

Compared to the poor performance in the securities broking business, these companies in the first half year performed strongly in their investment banking business. 57 companies earned total net incomes of CNY 5.48 billion from the first half’s underwriting business.

Based in the southern boomtown Shenzhen, Ping An Securities as the securities unit of the nation’s second biggest insurance group achieved net incomes of CNY 1.21 billion from the first-half underwriting business, versus the figure of CNY 137 million in the same period of the previous year.

Two other firms Shenzhen-based First Capital Securities and Shanghai-based BOC International meantime realized such incomes of CNY 200 million and CNY 399 million respectively, accounting for 45% and 38% of their total operating turnover during the period. Market analysts predict that the country’s securities companies are likely to realize a robust growth in their incomes from the investment banking business this year.