CICC Says First-Quarter Earnings Doubled

   By Yvonne Lee 
 

HONG KONG--China International Capital Corp., the investment bank partly owned by KKR & Co that is preparing for a Hong Kong initial public offering, said first-quarter net earnings doubled during the recent China stock market surge, according to a primarily listing prospectus.

Despite the strong results, the country's top investment bank warned that its underwriting and sponsoring fees from domestic listings could be hurt in the future due to recent regulatory measures from the Chinese government, including decision to suspend new stock sale.

The Beijing-based investment bank, which made its name advising state-owned firms that have gone public in Hong Kong over the past decade, said its net profit for the three months ended March jumped to 356.8 million yuan (US$57 million) from 178.4 million yuan a year earlier, aided by the increased trading of stocks and funds by its brokerage clients.

The strong results came after Chinese markets boomed and then fell sharply. The Chinese government then took measures to stabilize the markets. The Shanghai Composite Index is up 1.3% on Thursday.

The Beijing-based CICC on Tuesday applied to Hong Kong's stock exchange for a US$1 billion initial public offering. It could list as early as September, people familiar with the deal said.

Proceeds from the offering will be used to expand its trading platform and fund the development of its investment banking business, the document said, adding that CICC and ABC International Holdings Ltd., the investment banking unit of Agricultural Bank of China Ltd. (1288.HK), are the sponsors of the deal.

Central Huijin Investment Ltd., the domestic investment arm of China's sovereign-wealth fund, is the largest shareholder in CICC with a 43.17% stake. Singapore's sovereign-wealth fund GIC Private Ltd. holds 16.35%, while TPG Capital owns 10.3% and KKR holds 10%, according to the document.

Write to Yvonne Lee at [e-mail]

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