China's CITIC Securities Q1 profit falls 40 pct

SHANGHAI, April 30 - CITIC Securities Co <600030.SS>, China's biggest listed brokerage, posted a 40.34 percent drop in first-quarter profit despite a recent rebound in the local stock market.

Chinese brokerages are suffering from thinner margins, a lack of initial public offerings and lower investment returns from propriety trading as the benchmark Shanghai Composite Index <.SSEC> tumbled 65 percent last year, although it rebounded 30 percent in the first quarter.

January-March net profit fell to 1.50 billion yuan ($219.8 million) from 2.52 billion yuan a year earlier, the Beijing-based broker said in a statement to the Shanghai Stock Exchange.

Revenue fell 40.2 percent to 3.46 billion yuan, in part reflecting an 80 percent slide in securities underwriting income to 117.8 million yuan, as well as an 86 percent drop in investment income to 285.5 million yuan.

CITIC Securities, the broking arm of China's largest financial conglomerate, said its 2008 profit tumbled 41.03 percent to 7.31 billion yuan, largely in line with preliminary full-year figures released on Jan. 21.

CITIC Securities shares rose 2.7 percent on Wednesday and are up around 40 percent this year, beating the benchmark index's gain of about 36 percent.

CITIC Securities said last month that China Life Insurance Co <601628.SS> and its parent had cut their combined stake in the brokerage to 12.32 percent from 17.32 percent. In February, shirt-maker Youngor Group Co <600177.SS> said it sold 175 million shares in CITIC Securities. ($1=6.823 Yuan)