Sinolink Securities Co has won regulatory approval to trade shares on the stock market via a back-door listing, a statement filed to the Shanghai Stock Exchange said today.

 

The Chengdu-based securities firm joins a group of domestic brokers, including Haitong Securities Co, Guoyuan Securities Co, Northeast Securities Co and Changjiang Securities, to tap public funds for growth.

 

Shanghai-listed Chengdu Urban Construction Investment & Development Co Ltd is allowed to issue 216.13 million new shares worth 1.8 billion yuan (US$246.5 million) to other shareholders of Sinolink Securities in exchange for the 48.24 percent stake they hold in the brokerage firm.

 

Chengdu Urban Construction currently holds 51.76 percent of Sinolink Securities.

 

The listed firm will be renamed Sinolink Securities once the share swap is completed, the statement said.

 

“This year we will see a batch of brokerage firms get listed one after another. But more will choose an initial public offering,'' said Liang Jing, an analyst with Guotai Jun'an Securities Co. “It is due to demand and fiercer competition as the door opens for foreign participation.”

 

Some brokers have chosen back-door listings to sidestep rules that require three consecutive years of profit for an IPO applicant.

 

Other brokers such as Huatai Securities, Orient Securities, Western Securities and Merchants Securities are busy preparing initial public offerings as China encourages brokerage firms to trade public shares.

 

Sinolink Securities runs 15 branches and seven securities service outlets on the mainland.

 

It earned 374 million yuan in the first half of last year with 7.2-billion yuan in assets.

 

The brokerage firm earned an estimated 554 million yuan last year and aims to make 757-million-yuan in 2008.

 

(Shanghai Daily January 23, 2008)