The Hong Kong Stock Exchange has unveiled plans to acquire a controlling stake in one of China’s leading fintech concerns.
On 20 February Hong Kong Exchanges & Clearing announced that it planned to acquire a 51% equity stake in Shenzhen fintech company Ronghui Tongjin Keji Co., Ltd. (融汇通金科技有限公司), and had already executed an letter of intention.
Ronghui has around 200 employees and bills itself as a provider of technical services, specialising in technology and data applications in the areas of market exchanges and financial regulation.
The company is currently a subsidiary of Shanghai-listed Shenzhen Jinzheng Technology Company Limited (深圳市金证科技股份有限公司), which has over 6,000 employees and provides consulting and technical services to a broad range of securities firms, asset managers, financial companies and regulatory agencies in China.
Charles Li, chief executive of HKEX, said that global capital markets are seeing rapid growth driven by technology, and that the acquisition would further strengthen the exchange’s technological capabilities.
The move is expected by domestic observers to reduce HKEX’s dependence upon third party service providers, as well as administrative development costs and project execution risks.
The acquisition will be completed via an increase in Ronghui’s registered capital, and see a reduction in Shenzhen Jinzheng’s current equity share from 60% to 29.4%, and the equity share of Ronghui employees from 40% to 19.6%.