June 27 (Bloomberg) -- Everbright Securities Co., the brokerage unit of China's largest state-owned investment group, plans to sell as many as 520 million shares in an initial public offering, the first securities firm IPO in more than five years.

The China Securities Regulatory Commission will review the IPO application on June 30, according to a sales document posted on the regulator's Web site.

Everbright Securities is the first brokerage to raise cash through an IPO since Citic Securities Co.'s 2003 initial share sale. Everbright Securities had three straight years of profits, a requirement for companies in China to sell shares to the public, after a stock market rally last year helped the nation's securities companies recover from an industrywide loss of 7.8 billion yuan ($1.14 billion) in 2005.

Everbright Securities will use the proceeds from the Shanghai share sale to boost capital and make acquisitions to increase its number of outlets to over 100. The firm also plans to set up a private equity unit and expand overseas, according today's statement.

China Everbright Group controls 40.9 percent of Everbright Securities, while affiliate China Everbright Ltd. owns 39.3 percent. The two shareholders promised a 36 month lockup period after the stocks start trading, while the rest of the shareholders promised a minimum of 12 month lockup.

The statement didn't say how much the company aims to raise. Its net asset per share is 3.45 yuan and its earnings per share is 1.7 yuan as of the end of last year, according to the statement. The price-to-earnings ratio for China's benchmark CSI 300 index is 21.8.

Everbright Securities increased profit sixfold last year to 4.7 billion yuan ($685 million) as the nation's stock market almost tripled, boosting income from trading fees and investments.

Oriental Securities Co. is arranging the sale.

To contact the reporters on this story: Luo Jun in Shanghai at at jluo6@bloomberg.netZhao Yidi in Beijing at at yzhao7@bloomberg.net

Last Updated: June 26, 2008 21:15 EDT