Chinese securities brokerages expected to see strong profit growth this year, favors HTSC, GF Securities – Citigroup
MARKET STOCKS VIEWS & ANALYSIS
Chinese securities brokerages expected to see strong profit growth this year, favors HTSC, GF Securities – Citigroup
MARKET STOCKS VIEWS & ANALYSIS

Chinese securities brokerages expected to see strong profit growth this year, favors HTSC, GF Securities – Citigroup

 

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The seven Chinese securities firms covered by Citigroup posted a 25.1% year-on-year growth in Q1 revenue and a 40.1% jump in net profit after tax, a significant improvement from 20.3% and 25.1% falls a year ago, according to a note by Citigroup. 

Return on equity (ROE) improved by 2.24 percentage points to 7.81% in the first quarter from a year ago, and core leverage ratio rose 4.43 times, compared to 4.27 times in the fourth quarter of last year, it said.

The strong performance was mainly driven by proprietary trading, while most other businesses still weak, therefore, Citigroup adjusted its profit forecast for the next two years, expecting a growth rate of 11% to 21% from fiscal year 2023 to 2025. 

After the high base in 2021, Chinese securities firms will achieve strong profit growth this year with the introduction of the registration-based IPO system and policy support for A-shares, and ROE will improve, it said. The bank’s top picks are HTSC and GF Securities.