According to the Zhitong Finance APP, WELL LINK SEC (08350) announced that on May 7, 2025, the company, as the buyer, signed a sales agreement with the sellers (Xu Chujia and Zhang Meijuan), in which the company conditionally agreed to acquire and the sellers conditionally agreed to sell the shares for sale, representing all issued equity of the target company (Haishan Co., Ltd.), for a total consideration of HKD 35 million, which will be paid to the sellers through the issuance of consideration bonds.

Upon completion, the group will hold all issued equity of the target company, and the target company will become a direct wholly-owned subsidiary of the company, with the financial information of the target group consolidated into the company's financial statements.

Since its establishment in 2005, the target group has a long operating history, currently accumulating approximately 20,000 customers, which can be integrated into the group upon the completion of the potential acquisition. Compared to organic growth, this will accelerate the development into a leading online brokerage in Hong Kong. With a stronger customer base, the group can better leverage its market position and further expand its capabilities.

In the past two fiscal years, the group has demonstrated its strength in attracting high-net-worth clients through investment consulting, private placements, bond trading, and providing guaranteed financing through an introduction brokerage model. The customer base of the target group has a large proportion of retail clients, but some of these retail clients may become high-net-worth clients in the future. The group believes that with its existing capabilities, they can achieve better segmentation and service. On the other hand, the group's existing retail clients will also benefit from the target group's focus on a mass-market technology platform, which enables simple trading of investment products.

The group operates in a highly competitive environment in Hong Kong. On one hand, cost management is crucial for streamlining business operations to cope with turbulent markets; on the other hand, the group also needs to continue investing to make progress in the market.

The board believes that the potential acquisition will allow the group to gain complementary talents and manage costs more effectively. Furthermore, with a larger customer base, the group will be able to achieve better returns on investment in technology and system development. Therefore, the group can unify its securities and futures brokerage and advisory services under the "WELL LINK" brand and operate more efficiently to achieve economies of scale by integrating their respective capabilities and experiences.

By operating two similarly natured companies under the group, the company can better integrate financial resources and expand its business scale. Internally, the functions of the funding department can be better operated to support the various subsidiaries under the group. Externally, the group will have a stronger capital base to negotiate more favorable terms with financial institutions.

Although the target company incurred a loss for the year ending December 31, 2024, approximately HKD 23.6 million was due to expected credit loss impairment of margin financing receivables. After confirming the impairment provision, the balance of the related margin receivables has been reduced to HKD 7.2 million, with an average collateral rate of 33%, indicating that subsequent margin exposure will decrease. Excluding the impairment, the target company's net loss will turn into a net profit of HKD 11.4 million