Daiwa sees testing times for CITIC Securities

CITIC Securities Co, China's biggest brokerage, may be acquired by a rival in a regulator-driven transaction if its woes deepen beyond existing management "turmoil" and regulatory and legal probes, according to Daiwa Securities Group Inc.

That's the worst-case scenario, Daiwa analysts led by Leon Qi said in a Nov 30 note that laid out four alternatives for what happens next for the firm.

In the aftermath of China's summer stock bust, CITIC and some of its executives have faced a series of investigations by the authorities. The company will face tighter control from its parent, CITIC Group Corp, people familiar with the matter said last month.