Online titan Alibaba and retail giant Suning have emerged as key strategic investors in Huatai Securities, as China’s brokerages increasingly turn to fintech to enhance their market competitiveness.
Huatai Securities announced last week that it had completed a private placement of 1.089 billion shares with an issuance price of 13.05 yuan per share, to raise approximately 14.208 billion yuan in capital.
The private placement has lifted Huatai’s net capital to 64.865 billion yuan, putting it in fourth place in China’s brokerage sector.
Following the private placement Alibaba and Suning Commerce Group have also emerged as the sixth and seventh biggest shareholders respectively in Huatai Securities.
Huatai hopes that Alibaba and Suning will help to improve the company’s fintech capabilities and expand its retail client base in their role as strategic investors.
A Huatai executive said to China Securities Journal that Alibaba will help the company to accelerate its efforts in the fintech sphere, actively create an open financial services ecosystem, and maintain as well as expand its leading advantages amongst brokerages.
As China’s leading “smart retailer,” Suning will help Huatai Securities with its sales and services to retail customers, as well as sales of financial products, asset management operations and asset securitisation operations.
Since 2013 Huatai has used its online platform and cost advantages to become China’s leading retail brokerage.
Huatai’s new strategic investor arrangement brings together an vast potential customer base, given that Alibaba’s Ant Financial – the world’s largest fintech firm, has 622 million customers, while Suning has 345 million registered customers as well as around 3,800 outlets in China.
Analysts say that Alibaba will help Huatai to consolidate its fintech advantages and improve its wealth management operations, foreseeing cooperation in the two key areas of technology and products and services.
With regard to technology, Alibaba’s big data, cloud computing and artificial intelligence capabilities will help to strengthen Huatai’s advantages within the brokerage sector.
Huatai is also expected to engage in greater cooperation with Ant Financial in the sphere of wealth management.
Fintech has emerged as a core area of competitiveness for China’s financial institutions, driving a rise in co-operation with the country’s leading internet firms.
In September last year Tencent subscribed to 207.5 billion H shares in China International Capital Corporation, obtaining a 12.01% of all H shares and 4.95% of total share capital.