Alibaba is building its presence in the financial sector with a $500 million investment in market leader Huatai Securities Co through a private share issuance.
With the purchase, the e-commerce giant become Huatai’s fifth-largest shareholder with a 3.25% stake, according to Caixin. Huatai has yet to announce what role Alibaba will have as a shareholder, but one source told Caixin that they may cooperate on online broking and artificial intelligence.
Alibaba, which already operates online payment system Alipay through its affiliate company Ant Financial, has yet to make large inroads into the domestic securities market. Investment deals and joint ventures in recent years have been repeatedly resisted by government regulators.
Huatai is China’s third-largest securities broker by revenue, according to the Securities Association of China, taking Rmb 5.5 billion ($801 million) last year.