Guosen's listing, China's largest since 2011, came as fellow brokerages and banks pushed the Shenzhen and Shanghai indexes nearly 30 percent higher since a central bank interest rate cut on Nov. 21.
Brokerages have booked strong earnings this year reflecting optimism in the wider equities market, an area the government is pushing as a funding source for cash-strapped local firms.
"If you look at trading volumes now, it's huge - and that gives an immediate boost to brokerages' revenues," said analyst Zhang Yuehui at Kaiyuan Securities.
Financial shares often rise after rate cuts because cheaper loans spur lending and spending, boosting bank and brokerage earnings. The longer the rally, the more revenue brokerages earn from facilitating trading transactions.
CITIC Securities Co Ltd, Haitong Securities Co Ltd and China Merchants Securities Co Ltd have all roughly doubled in value since the rate cut. In this climate, CITIC on Monday announced the sale of 1.5 billion shares.
Brokerage shares have been further buoyed by increased custom thanks to Hong Kong and Shanghai stocks now being traded on each other's bourse. The resumption of mainland IPOs after a year-long hiatus also provided a boost.
Shares of Guosen opened at 7 yuan on Monday, a maximum of 20 percent over the 5.83 yuan IPO price. The shares then reached 33 percent above IPO triggering an half-hour trading halt, after which they hit the daily limit of 8.4 yuan.
Investment bank BOC International puts Guosen shares' fair market value at 14 yuan to 21 yuan.
FLYING TOO HIGH?
Analysts said brokerages were likely to fare well in 2015, but that valuations were getting steep. The market rally has seen financial firms' price-to-earnings ratio - a gauge of a company's valuation - average as much as 75.87.
Guosen's ratio was 22.97 when its IPO price was set nearer the start of the rally, which analysts said was low compared with peers but not uncommon for a new listing in China.
"It's hard to say if there's already a bubble given an expected surge in profit, but if prices continue to soar the stocks will be over-valued," said Kaiyuan Securities' Zhang.
Most analysts nevertheless recommend buying shares of China's largest brokerage firms.
The 7 billion yuan (723 million pounds) listing of mid-sized Guosen, one of China's leading underwriters of IPOs for smaller firms, was the mainland's largest since Power Construction Corp of China Ltd raised over 13 billion yuan in 2011.
Established in 1994, Guosen has registered capital of 7 billion yuan, according to its website.
(Additional reporting by Shanghai newsroom; Editing by Christopher Cushing)
By Adam Jourdan and Samuel Shen
