Citic Securities will sell a 51 per cent stake in China Asset Management (CAM) to meet regulatory requirements, in a deal that could bring the mainland's biggest brokerage a one-time gain of 6.5 billion yuan (HK$7.7 billion). The Beijing-based company said the asking price of the stake would be at least 7.56 billion yuan, or 14.8 times the fund house's earnings last year, when it posted a net profit of 1 billion yuan. Citic Securities owns 100 per cent of CAM, the mainland's largest mutual fund manager. The total investment into the asset manager, the mainland's largest, was valued at 2 billion yuan in 2007 - when it bought CAM - or 1 billion yuan for the stake it now seeks to sell. Despite the one-off gain, Citic's per-share earnings will be negatively affected due to the sale of the profitable asset. The China Securities Regulatory Commission stipulates that a firm can own up to 49 per cent stake of a domestic fund management firm and more than half in a Sino-foreign joint-venture fund management firm. 'The fact that Citic Securities has voluntarily chosen to reduce its own holding to 49 per cent suggests that it was unable to find a willing foreign buyer,' fund consultancy Z-Ben Advisors said. Z-Ben predicts the 51 per cent stake will be sold to a clutch of investors, each taking a small part of CAM. CAM had a market share of 9.38 per cent at the end of March, up from 9 per cent at the end of last year. On the mainland, its star fund manager Wang Yawei is believed to have Warren Buffett-style wizardry and is closely watched by retail investors. Citic said in March that it would launch an initial public offering in Hong Kong, seeking to raise US$2.7 billion by offering 15 per cent of its enlarged capital, in a move to improve its international profile. It is likely to become the first mainland brokerage to list on an overseas market. Citic reported a net profit of 12.1 billion yuan last year, up 20.3 per cent from the previous year. Last month, Shanghai-based Haitong Securities also announced plans to list in Hong Kong, hoping to use the proceeds for overseas expansion. The company said it would float 1.2 billion shares, or 15 per cent of its enlarged capital, which is likely to raise up to HK$14 billion.