(Yicai) April 28 -- Ant Group is expanding into the brokerage business, with the financial technology platform having agreed to buy a controlling stake in Hong Kong-based Bright Smart Securities and Commodities Group for HKD2.8 billion (USD360 million).

The two firms announced late on April 25 that Ant will acquire the 50.55 percent stake from Bright Smart Chairman Ye Maolin at a price of HKD3.28 (USD0.42) per share.

Industry insiders said the deal will lead to more intense competition among Hong Kong securities firms and wealth management businesses.

Bright Smart [HKG: 1428] closed up xx percent at xx today. During the US trading session on April 25, Futu Holdings [NASDAQ: FUTU], a Hong Kong-based brokerage controlled by Tencent Holdings, fell by 6.43 percent, closing at USD87.85.

After the completion of the acquisition, Ye will no longer hold shares in Bright Smart, but Ant said it will maintain the firm’s listed status. The deal also mark’s Ant’s first acquisition of a securities brokerage license.

According to the announcement, Ant expressed confidence in the long-term economic development of the Chinese mainland and Hong Kong, and it believes the integration of technology and wealth management can create significant market opportunities. Bright Smart said that Ant’s product and technological innovation capabilities will help it to reach a broader age demographic of clients and enhance the experience for existing customers, driving further business growth and accelerating its digital transformation.

Bright Smart reported revenue of HKD1.236 billion and net profit of HKD559 million (USD72.06 million) for the 2024 fiscal year. From April 1 to Dec. 31, 2024, it recorded an unaudited post-tax net profit of HKD476 million, up about 8 percent year-on-year. The firm also said its total number of customer accounts is now nearly 580,000.

A Hong Kong analyst told Yicai that the deal will bring further investment in Bright Smart, which could allow it to reduce service fees and thereby expand its market share. In the future, after Ant completes its acquisition, the valuations of Bright Smart and Futu may gradually converge, with the latter's valuation possibly being pulled down, the analyst said.

Bright Smart stated that there are over 500 securities brokers in Hong Kong, and the industry is struggling with declining revenues and worsening profit margins.

Historically, the company has focused on returning value to shareholders through dividend payouts, but in the future, more capital will be reinvested into the business to enhance its technological infrastructure and improve risk control efficiency. This will help to create a safer, better, and faster platform for clients, it said.

Editor: Tom Litting