Key Takeaways:
Citic Securities' net profit jumped 52% year-on-year in the third quarter as its revenue grew at a similar pace
A Chinese stock rally fueled the company's big increase in fee income from brokerage services, while a resurgence of IPOs drove up its investment banking revenues
Everything seems to be clicking for Citic Securities Co. Ltd. (6030.HK; 600030.SH) these days as Chinese stocks become hot commodities again after years as global laggards.
Fueled by that resurgence, China's largest brokerage's net profit jumped 52% year-on-year in the third quarter to 9.4 billion yuan ($1.3 billion), as its revenue grew 56% to 22.8 billion yuan, according to its latest financial results released last Friday. The lion's share of the big revenue increase came from a near tripling of investment income that accounted for nearly 60% of the company's total, up sharply from less than 30% a year earlier. But Citic Securities' core operations improved significantly as well, with its net fee and commission income up 36% year-on-year.
Citic Securities' revenue increased by a third year-on-year in the nine months to September, with its net profit rising 38%, which puts the company on course for two consecutive years of earnings growth after a similar period of declines.
The results show how Citic Securities, the brokerage arm of one of the country's top financial conglomerates, is benefitting from a rally in Chinese stocks fueled by growing optimism around the technology sector, even as the country's broader economy remains wobbly. The bull equity market translates directly to more brokerage fees from investors trading stocks, as well as valuation gains on assets that the company owns.
At the same time, a renaissance ...
