GF Securities, the mainland's fourth-largest securities firm by revenue last year, aims to use a backdoor listing in Shenzhen to become the country's third publicly traded brokerage. Yan Bian Road Construction, which has 184 million shares, would issue new shares to convert into two billion GF Securities shares, a statement to the Shenzhen Stock Exchange said yesterday. Yan Bian would buy back and cancel 85 million non-tradable shares from two state-owned shareholders, the company said. Each Yan Bian share may convert into 0.83 GF Securities share, pending shareholder approval, which means the road builder will have to issue almost 2.4 billion shares worth 12.9 billion yuan in order to exchange stocks with the securities firm. The average price for Yan Bian's shares, which have been suspended from trading since June 3, over the past 20 trading days is 5.40 yuan. On completion, GF Securities will become the first securities firm to be listed through buying a shell company. The country's other listed brokerages are Citic Securities and Hong Yuan Securities. Mainland securities firms that lost money as domestic markets slumped before last year were barred from a direct listing under rules requiring three consecutive years of profit before the sale of shares through initial public offerings, Guotai Junan Securities analyst Liang Jiang said. Using a listed shell company offers an alternative route to putting shares on the market. GF Securities, which made net profits of 158 million yuan last year on revenue of 990 million yuan, might have had to wait until next year for a listing as it had a loss in 2003, the statement said. Yan Bian's two biggest shareholders, Jilin Aodong Medicine Industry Group and Shenzhen International Trust & Investment, will sell their 46 per cent stake in the company back to Yan Bian before the road firm cancels the non-tradable stock to comply with China Securities Regulatory Commission rules. Yan Bian will give its entire assets to Jilin Aodong, becoming an empty shell for GF Securities to occupy. GF Securities would also refund Jilin Aodong 40 million yuan, the statement said. Shares in Yan Bian, which will change its name to GF Securities, will resume trading today. The stock has more than tripled this year to close at 8.06 yuan on June 2. As the mainland stock markets rebound this year, trading volume has soared, boosting profits at brokerage firms. The Shanghai and Shenzhen composite indices have surged more than 40 per cent in the past 12 months.