Chinese Brokerage Firms’ Overseas Operations Provided Substantial Revenue Last Year

Chinese Brokerage Firms’ Overseas Operations Provided Substantial Revenue Last Year

Dou Shicong

Date: Thu, 04/19/2018 - 21:46 / source:Yicai
Chinese Brokerage Firms’ Overseas Operations Provided Substantial Revenue Last Year
Chinese Brokerage Firms’ Overseas Operations Provided Substantial Revenue Last Year

(Yicai Global) April 19 -- China’s brokerage firms listed on the A-shares market posted substantial overseas business revenues for last year, indicating such operations have become a new source for income growth.

As of today, some 17 brokerage firms listed on the Chinese mainland markets released their overseas business income data for last year. Among them, 13 companies reported growth, and five brokers each posted CNY1 billion (USD159.4 million) in overseas revenues, China Securities Journal reported.

The state-backed large brokerage firm CITIC Securities Co. reported the highest revenue from overseas operations, with CNY5.62 billion. Two large securities firms headquartered in Shanghai, Haitong Securities Co. and Guotai Junan Securities Co., ranked second and third, with CNY4.87 billion and CNY2.04 billion respectively.

The proportion of overseas business income in total revenue of Chinese brokerages has also increased significantly. Some 15 A-share listed brokerage firms saw increase and three companies achieved more than 10 percent of their revenue from overseas operations. Among them, Haitong Securities ranked first, with a 17.2 percent share, followed by CITIC Securities at 12.9 percent.

Overseas business has become a new revenue growth point for brokerage firms, said Wang Xiaojun, an analyst at Cinda Securities Co. Large securities firms that made early moves in internationalization have made rapid progress and achieved big returns, while small- and medium-sized brokers carried out some international business backed by shareholders or local government sources, Wang added, saying it is difficult for such companies’ overseas revenue flow to be sustainable.

With promotion of the Belt and Road Initiative, a grand plan for a vast infrastructure and trade route boasting a major network of railroads, highways, ports and pipelines embracing the continents of Asia, Europe and Africa, Chinese companies have increased their overseas investment and development, which has brought more opportunities for brokerage firms to provide financial consulting, investment, and financing services.

In addition, continued promotion of internationalization of the yuan and Guangdong–Hong Kong– Macau Greater Bay Area initiative have also brought international development opportunities for brokerage firms, Wang added.

Editor: Mevlut Katik

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Keywords: Securities Brokers, CITIC Securities, HaiTong Securities, Guotai Junan Securities