GF Securities plans back door listing

GF Securities, the sixth-largest Chinese brokerage by assets, said Tuesday it would take over a highway operator and transform it into the second-largest publicly traded Chinese stockbroker by value, Bloomberg reported. The brokerage will swap shares with existing shareholders in Yanbian Highway Construction and rename the highway builder GF Securities. The so-called backdoor listing by GF Securities, the first of its kind among Chinese brokers, will help it skirt listing criteria in China, which require three successive years of profits. GF Securities reported profits in 2005 and 2004, following a loss in 2003. The transaction will value GF Securities at US$2.3 billion, making it China's second-largest brokerage by value after Citic Securities, valued at US$5.25 billion, and ahead of Hong Yuan Securities, which is valued at US$1.43 billion.