China

CITIC Securities Posts 75% Increase in Net Profit for 2015

Summary:

  • CITIC Securities (600030.SS/6030.HK) has recorded a 74.6% increase in net profit for 2015 to RMB 19.8 billion, as reported by Sina.
  • The company also posted a 92% increase in revenue to approximately RMB 56 billion.
  • The firm plans to pay a cash dividend of RMB 0.5 per share.

Why It Matters:

  • Although CITIC Securities recorded a very high net profit in 2015, most of the net profit is not available to equity investors. After the collapse of the stock market bubble, securities firms in China, regarded as the major driver of the bubble and also the biggest beneficiaries, “voluntarily” invested huge amounts of funds to assist the Chinese government in supporting the stock market.
  • CITIC Securities has revealed that it invested funds of RMB 21.1 billion in purchasing stock. Although the firm recorded a loss of only 1.1% from these activities, the company expects to hold these positions for a very long time in order to avoid market panic.
  • CITIC Securities is also being investigated by the Chinese government for insider trading. Most members of the firm’s executive committee are under investigationĀ and have returned to work.