Everbright unit targets April A-share listing

PUBLISHED : Monday, 28 January, 2008, 12:00am
UPDATED : Monday, 28 January, 2008, 12:00am

Everbright Securities, a unit of locally listed financial conglomerate China Everbright Group, will strive to complete its A-share listing by April after it posted a four-fold jump in net profit for last year.

The mainland's 11th-largest brokerage by trading volume in 2006 will speed up preparations for a domestic listing, expand its retail outlets, and set up custodian, qualified domestic institutional investors products, commodities and stock index futures businesses, the Economic Observer quoted chairman Tang Shuangning as saying at Everbright's annual work meeting in Shanghai.

The firm did not say how much it is seeking to raise from the listing.

Benefiting from the bull market for the most part of last year, net profit rocketed 405.24 per cent to 4.53 billion yuan from 896.6 million yuan in 2006 and 61.99 million yuan in 2005.

The brokerage first unveiled a listing plan in mid-2006, when it was toying with the idea of a back-door listing by injecting its assets into an existing listed firm in exchange for a controlling stake.

This would allow Everbright Securities to circumvent the listing requirement of three consecutive years of net profit; it posted a net loss of 80.8 million yuan in 2004.

After failing to take over Guangfa Securities for the back-door listing, it applied with the China Securities Regulatory Commission last September for approval to issue up to 540 million shares in an initial public offering.

'Everbright Securities must speed up its IPO progress and strive to complete it by March or April,' Mr Tang was quoted as saying. 'This is not only for the sake of its business development but also to fulfil the need to be regulated by the market.'

Before its listing application, Everbright raised 1.25 billion yuan through a private share placement to 11 strategic investors in May.

Mainland brokerages are raising funds to shore up their competitiveness before a further relaxation of restrictions on foreign investment in the sector. Brokerages preparing for listings include China Merchants Securities and Guotai Junan Securities. The listed ones include Citic Securities, Haitong Securities and Hong Yuan Securities.

Everbright Securities had a 2.56 per cent share of the securities broking market in 2006, according to the Securities Association of China. It was on ninth position in securities underwriting with a 1.34 per cent market share and seventh on asset management with 3.6 per cent.

China Everbright has a 39.31 per cent stake in Everbright Securities, the second-biggest after China Everbright Group's 40.92 per cent.

Second try

The brokerage plans to issue as many as 540m A shares

Last year's bull market boosted Everbright Securities' net earnings to, in yuan: 4.53b yuan