(Yicai Global) Dec. 14 -- Shares of Chinalin Securities plunged after the mid-size Chinese brokerage denied media reports that said it plans an acquisition.

Chinalin Securities [SHE: 002945] finished almost 10 percent lower today at CNY13.82 (USD2.17). Yesterday, the stock ended 7 percent higher after touching the 10 percent upper trading limit.

The Shenzhen-based brokerage this morning rejected reports of an “acquisition targeting the securities business of a certain Internet giant,” saying it had no such plans.

The speculation may stem from a series of previous moves by Chinalin Securities. On June 15, Chairman Lin Li for the first time issued an open letter to staff, declaring the firm’s determination for an Internet-oriented transformation. Then on Nov. 20, Chinalin Securities announced that to meet the needs of the company’s internet-oriented strategic transformation, it had recently decided to shut 11 branches.

A week later, the firm said it had hired Zhao Weixing as chief executive and chairman of its executive committee.

At that time, China Business Journal cited Chinalin Securities as saying that it would embrace the new trend of internet-based brokerages in the future, accelerate its pace of technological and financial reforms as well as transform into a customer-centric, tech-driven fintech company under Zhao’s leadership.

Zhao previously served as the operating director of Ant Group’s micro-loan business department, vice president of Zhejiang MY Bank, head of Sichuan XW Bank and vice president of Xiaomi Finance.

Chinalin Securities issued a statement on the evening of Dec. 12 about abnormal fluctuations in the trading of its shares. It said that the company had initiated a comprehensive technological and financial transformation at the start of this year, with investment in tech-related research and development increasing continuously.

Based on the need to develop its online securities business, Chinalin Securities will further strengthen investment in internet-based marketing, the statement added. And the company has been recruiting tech and finance talent this year, which has increased labor costs.

Chinalin Securities went public in January 2019 and has opened more than 160 branches across China. In January last year, due to a number of irregularities, the China Securities Regulatory Commission took administrative supervision measures against the company, restricting the scale of its new business for three months.

Editor: Peter Thomas