Which are China’s top five brokerages?

STATE-BACKED Guotai Junan Securities’ purchase of its rival Haitong Securities to create a sector leader is part of Beijing’s drive to consolidate the US$1.7-trillion industry amid challenging markets, a trend analysts say will continue.

China’s roughly 145 securities firms had combined total assets of 11.83 trillion yuan (S$2.2 trillion) at the end of 2023, according to official data.

Here are China’s five biggest brokerages by total assets in 2023:

Citic Securities

Set up in 1995, Citic Securities is the full-service investment banking arm of state-owned conglomerate Citic Group. It has developed from a small financial entity into China’s No 1 brokerage by assets, market value and revenue.

Dubbed China’s Goldman Sachs, Citic Securities is also one of the country’s most international brokerages having actively expanded beyond mainland China. It acquired pan-Asian broker CLSA from French bank Credit Agricole in 2013.

The Beijing-based broker, listed in both Shanghai and Hong Kong with a market value of nearly US$40 billion, had total assets of 1.45 trillion yuan as of end-2023.

In August, it reported a 6.51 per cent fall in first-half profit of 10.57 billion yuan, dragged down by shrinking revenue from asset management and securities underwriting.

Guotai Junan Securities

Shanghai-based Guotai Junan was established in 1999. The broker counts several state entities among its top ten shareholders, including its biggest investor Shanghai State-owned Assets Management with a 21 per cent stake.

Guotai Junan had 925 billion yuan in assets as of end-2023, making it China’s No 2 broker by that measure. In the first half of 2024, it recorded net profit of five billion yuan, down 13 per cent, due to the challenging domestic market environment.

The company went public in Shanghai in 2015, with an IPO of 30 billion yuan, then China’s second-largest domestic flotation behind Agricultural Bank of China’s dual US$22 billion A-share and H-share listing in 2010.

Huatai Securities

Huatai Securities, China’s No.3 brokerage, was established in 1991. It went public in Shanghai in 2010 and five years later in Hong Kong. The broker counts state-owned Jiangsu Guoxin Investment Group as its biggest shareholder with a stake of 15 per cent.

It had total assets of 906 billion yuan as of end-2023. The brokerage reported a drop of 19 per cent in its first-half profit.

In 2019, the brokerage became the first Chinese firm to use the London-Shanghai stock connect mechanism, raising US$1.7 billion.

Haitong Securities

Dual listed in Shanghai and Hong Kong, Haitong Securities was founded in 1988 and was one of China’s first securities firms.

It has developed businesses spanning from brokerage and investment banking to asset management and futures. It has also a presence in several financial centres offshore, including Hong Kong, Singapore, London and New York.

Like cross-town peer Guotai Junan, Haitong also has several local government-backed entities among its top ten shareholders, such as Shanghai Guosheng Group, an investment arm of the Shanghai government.

Haitong, with total assets of 755 billion yuan as of end-2023, has seen its profits plunge in recent quarters, with first-half net profit down 75 per cent to 953 million yuan.

China Merchants Securities

China Merchants Securities, established in 1993 and headquartered in Shenzhen, is the flagship brokerage arm of state-owned conglomerate China Merchants Group (CMG).

The broker, 23.55 per cent owned by CMG in addition to a few shareholders that are central government-backed companies, had 696 billion yuan in assets as of end-2023. Its first half revenue shrank 11 per cent from a year ago. REUTERS