H1 profits expand for listed brokers

The 19 listed brokerages trading on China's A-share markets saw their combined profits increase 11 percent year-on-year during the first half to hit 13.2 billion yuan ($2.15 billion), the Securities Times reported Tuesday, citing data from Wind.

Specifically, eight of the brokerages recorded profit growth of more than 20 percent during the period, while seven saw their profits slip, the Times wrote.

Among the winners, Soochow Securities Co, Western Securities Co and Northeast Securities Co each saw their net profits swell by more than 40 percent. Haitong Securities claimed the largest share of the accumulated profits after raking in 2.67 billion yuan during the first six months, up 31.59 percent year-on-year.

Meanwhile, CITIC Securities Co, Everbright Securities Co and GF Securities Co fell among the brokerages which saw weaker results.

Analysts attributed the stronger overall performance to heavier turnover as market conditions deteriorated.

By the end of June, the Shanghai Composite Index and the Shenzhen Component Index were down 12.78 percent and 15.6 percent respectively from the start of the year, while average daily trading jumped nearly 26 percent year-on-year over the period, according to data from the China Securities Regulatory Commission (CSRC).

Public securities firms on the mainland scored 20.71 billion yuan from trading commissions over the first half, representing a rise of 14.16 percent, figures from Wind show.

Several firms were able to shore up their earnings by expanding beyond traditional brokering to offer services related to refinancing, bond issuance and the new third board, Li Bo, an analyst from GF Securities, told the Global Times.

Li went on to say that the ongoing regulatory freeze on new IPOs has severely curtailed earnings from underwriting and sponsoring services. "Larger brokerages have felt the most impact in this regard, since they're the ones who traditionally dominated the underwriting market."

As for the brokerage industry at large, China's 114 securities firms posted 78.53 billion yuan in revenue and 24.47 billion yuan in net profits through the first half, the Securities Association of China (SAC) revealed in July. Of these firms, 99 notched expanding profits during the period, according to the association.

China's brokers also encountered headwinds earlier in the year after several firms received down-gradings or warnings from regulators.

Ping An Securities had its rating cut in July by the CSRC for reportedly endorsing false financial disclosures when sponsoring the IPO of Wanfu Biotechnology (Hunan) Agricultural Development Co.

"These developments will affect performances over the short-term, but as a whole the securities industry is expected to become stronger through the second half," said Li.