CITIC Securities Co Ltd, China's biggest listed brokerage house, said it returned to profitability in the third quarter of the year as revenue from arranging new share sales almost doubled in the period.

The brokerage unit of government-backed China International Trust and Investment Corp posted a net income of 1.31 million yuan (US$158,212) in the third quarter, compared with a net loss of 55.19 million a year ago.

Revenue rose to 155.05 million yuan from 119.60 million yuan in the period.

"CITIC Securities revised its corporate strategy to attach more importance to the investment banking business at a time of a falling market," said Lu Liang, an analyst at China Securities Co Ltd. "That is why it could make money while most other brokers are struggling to make ends meet."

Arranging the initial public offering of shares in Henan Rebecca Hair Products Co Ltd and Henan Zhongyuan Expressway Co Ltd helped to boost the income for CITIC Securities, which was hired as the lead underwriter.

Rebecca Hair products raised around 240 million yuan while Zhongyuan Expressway netted roughly 1.73 billion yuan respectively from their IPOs.

CITIC Securities' revenue in the investment banking sector also jumped to 60.07 million yuan from 31.14 million yuan in the year-ago period.

CITIC Securities did not give the number of new shares and bonds it arranged for sale in the com-pany's quarterly earnings report.

However, the stock broking business continued to drop as Shanghai's stock market fell more than 8 percent and Shenzhen's stock market slumped nearly 10 percent in the period, diminishing investors' appetite for trading stocks.

CITIC Securities' stockbroking revenue decreased to 48.91 million yuan from 57.73 million yuan for the same period last year.

CITIC Securities lost 7.39 million yuan trading securities on its own account, but the loss narrowed as compared with 33.45 million yuan in the year-earlier period.

For the first nine months, the brokerage firm earned 156.89 million yuan, up from 105.33 mil-lion in the same period a year ago.

Analysts anticipate full-year earnings of CITIC Securities to grow steadily as it is expected to earn 100 million yuan from arranging the 10 billion yuan initial share sale of China Yangtze Power Corp, the country' biggest IPO sale this year so far.

Meanwhile, CITIC Securities is selling 2 billion yuan bonds to qualified institutional investors so as to boost its cash flow.

(Shanghai Daily October 30, 2003)