HK/China Equity Long-Short

Osbert Tang, CFA

Equity Bottom-Up

Bright Smart Securities & Commodities / Equity Bottom-Up

Bright Smart Securities & Commodities (1428 HK)

<ul>
<li>
<a href="https://www.smartkarma.com/entities/bright-smart-securities-commodities-group" target="_blank" data-smartkarma-citation="entities:20511:1" rel="noopener">Bright Smart Securities (1428 HK)</a> rallied by 132% since our last Insight, fueled by the euphoria in the brokerage and securities sector on the HK government's stablecoin initiative.</li>
<li>At HK$16.44, it is at 100% PER premium to the sector average, ex-<a href="https://www.smartkarma.com/entities/guotai-junan-international" target="_blank" data-smartkarma-citation="entities:13438:1" rel="noopener">Guotai Junan International (1788 HK)</a>. The risk-reward payoff now looks less attractive.</li>
<li>It also implies net profit to grow by 150% by FY31F and priced at 18x PER. This appears stretched in the near term, though long-term prospects stay decent. </li>
</ul>



Bright Smart Securities (1428 HK) rallied by 132% since our last Insight, fueled by the euphoria in the brokerage and securities sector on the HK government's stablecoin initiative.
At HK$16.44, it is at 100% PER premium to the sector average, ex-Guotai Junan International (1788 HK). The risk-reward payoff now looks less attractive.
It also implies net profit to grow by 150% by FY31F and priced at 18x PER. This appears stretched in the near term, though long-term prospects stay decent. 


<ul>
<li>
<a href="https://www.smartkarma.com/entities/bright-smart-securities-and" target="_blank" data-smartkarma-citation="entities:20511:1" rel="noopener">Bright Smart Securities (1428 HK)</a>'s earnings rebounded solidly by 20.4% YoY in 2H FY25, fueled by higher client accounts and assets, and better HK market turnover.</li>
<li>BSS has been an underperformer against peers since May, as other brokerage companies rallied on the back of potential entry into the virtual asset dealing business. </li>
<li>Ant Financial will be able to transform BSS into a sizeable cross-asset house. The share price's current implied earnings growth and PER valuations are conservative.</li>
</ul>



Bright Smart Securities (1428 HK)'s earnings rebounded solidly by 20.4% YoY in 2H FY25, fueled by higher client accounts and assets, and better HK market turnover.
BSS has been an underperformer against peers since May, as other brokerage companies rallied on the back of potential entry into the virtual asset dealing business. 
Ant Financial will be able to transform BSS into a sizeable cross-asset house. The share price's current implied earnings growth and PER valuations are conservative.


Bright Smart (1428 HK): Bright and Smart FY25

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Event-Driven

<ul>
<li>Mr Hung’s offer for <a href="https://www.smartkarma.com/entities/get-nice-holdings-limited" target="_blank" data-smartkarma-citation="entities:16415:1" rel="noopener">Get Nice (64 HK)</a> is HK$2.00 in cash plus a HK$2.00 special dividend. The gross spread is now 3.6%, and the vote is on 26 October.</li>
<li>Mr Hung holds 51.67%. Blocking the scheme requires 4.83% of outstanding shares (10% of disinterested holders), and no disinterested shareholder appears to be close to that.</li>
<li>The IFA says the offer is fair and reasonable. It justifies the 62.5% NAV discount by past trading discounts and the cost of selling assets. This is a done deal.</li>
</ul>


Mr Hung’s offer for Get Nice (64 HK) is HK$2.00 in cash plus a HK$2.00 special dividend. The gross spread is now 3.6%, and the vote is on 26 October.
Mr Hung holds 51.67%. Blocking the scheme requires 4.83% of outstanding shares (10% of disinterested holders), and no disinterested shareholder appears to be close to that.
The IFA says the offer is fair and reasonable. It justifies the 62.5% NAV discount by past trading discounts and the cost of selling assets. This is a done deal.


Get Nice Holdings (64 HK): Low-Risk Scheme Vote on 26 October

<ul>
<li>
<a href="https://www.smartkarma.com/entities/futu-holdings-ltd" target="_blank" data-smartkarma-citation="entities:27858:1" rel="noopener">Futu Holdings Ltd (FUTU US)</a>'s 2Q26 non-GAAP net profit growth of 40.1% is impressive, suggesting that the negative impact of regulatory issues is fading. </li>
<li>Operational metrics accelerated sequentially, partly due to the solid HK IPO pipeline, which is likely to sustain. 3Q26 momentum moderated slightly but is manageable.</li>
<li>Its 12.1x FY26 PER is inflated given the room for earnings upgrades. It is also cheaper than the average of 17.2x since 2021 and 13.7x since 2025.</li>
</ul>



Futu Holdings Ltd (FUTU US)'s 2Q26 non-GAAP net profit growth of 40.1% is impressive, suggesting that the negative impact of regulatory issues is fading. 
Operational metrics accelerated sequentially, partly due to the solid HK IPO pipeline, which is likely to sustain. 3Q26 momentum moderated slightly but is manageable.
Its 12.1x FY26 PER is inflated given the room for earnings upgrades. It is also cheaper than the average of 17.2x since 2021 and 13.7x since 2025.


Guotai Junan International / Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/guotai-haitong-securities-co-ltd-class-h" target="_blank" data-smartkarma-citation="entities:23752:1" rel="noopener">Guotai Haitong Securities (2611 HK)</a> proposed to privatise <a href="https://www.smartkarma.com/entities/guotai-junan-international-holdings-limited" target="_blank" data-smartkarma-citation="entities:13438:1" rel="noopener">Guotai Junan International (1788 HK)</a> at HK$3.0, a 44.2% premium to the pre-suspension price, which looks good enough. </li>
<li>The proposed price equals 11.9x PER for FY26F, higher than the average of 10.1x since 2024. This is better than the sector's average PER of 10.3x.</li>
<li>It also equates to 1.6x 12-month forward P/B, or 1.3SD above the 5-year average, well reflecting a projected ROE recovery in the next two years.</li>
</ul>



Guotai Haitong Securities (2611 HK) proposed to privatise Guotai Junan International (1788 HK) at HK$3.0, a 44.2% premium to the pre-suspension price, which looks good enough. 
The proposed price equals 11.9x PER for FY26F, higher than the average of 10.1x since 2024. This is better than the sector's average PER of 10.3x.
It also equates to 1.6x 12-month forward P/B, or 1.3SD above the 5-year average, well reflecting a projected ROE recovery in the next two years.


Guotai Junan Intl (1788 HK): A Good Enough Privatisation Price

Hong Kong

China Industrial Securities International Financial Group provides a comprehensive suite of financial services, including brokerage, corporate finance, asset management, and financial products and investments. It offers services such as securities, futures, options, and insurance brokerage, as well as margin financing and investment advisory. The company is headquartered in Sheung Wan, Hong Kong, and was incorporated in 2015.

China Industrial Securities International Financial (6058 HK)

China Industrial Securities International Financial

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China Industrial Securities International Financial (6058 HK)

Bright Smart (1428 HK): Valuation Update

Bright Smart announced that it is still working on satisfying condition c.), which is reporting with the NDRC. Given that the Long Stop Date is 25...

Osbert Tang, CFA

Bright Smart (1428 HK): Bright and Smart FY25

BSS saw a 20.4% YoY earnings rebound in 2H FY25, driven by increased client accounts and assets, and better market turnover. Ant Financial's...

Osbert Tang, CFA

Get Nice Holdings (64 HK): Low-Risk Scheme Vote on 26 October

Mr Hung's HK$4.00 offer for GNH trades at a current spread of 3.6%. He holds 51.67%; no one comes close to holding a blocking stake, and the IFA...

Arun George

Futu Holdings (FUTU US): A Splendid Show

Futu Holdings' 2Q26 results are impressive, and operating metrics have accelerated sequentially. The impact of regulatory issues is fading, and it...

Osbert Tang, CFA

Guotai Junan Intl (1788 HK): A Good Enough Privatisation Price

Guotai Haitong proposes to privatise Guotai Junan International at HK$3.0, a 44.2% premium over the closing price, offering a higher-than-average...

Osbert Tang, CFA

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Bright Smart (1428 HK): Valuation Update

Bright Smart announced that it is still working on satisfying condition c.), which is reporting with the NDRC. Given that the Long Stop Date is 25...

Osbert Tang, CFA

Bright Smart (1428 HK): Bright and Smart FY25

​BSS saw a 20.4% YoY earnings rebound in 2H FY25, driven by increased client accounts and assets, and better market turnover. Ant Financial's...

Osbert Tang, CFA

Get Nice Holdings (64 HK): Low-Risk Scheme Vote on 26 October

Mr Hung's HK$4.00 offer for GNH trades at a current spread of 3.6%. He holds 51.67%; no one comes close to holding a blocking stake, and the IFA...

Arun George

Futu Holdings (FUTU US): A Splendid Show

Futu Holdings' 2Q26 results are impressive, and operating metrics have accelerated sequentially. The impact of regulatory issues is fading, and it...

Osbert Tang, CFA

Guotai Junan Intl (1788 HK): A Good Enough Privatisation Price

​Guotai Haitong proposes to privatise Guotai Junan International at HK$3.0, a 44.2% premium over the closing price, offering a higher-than-average...

Osbert Tang, CFA

BSS saw a 20.4% YoY earnings rebound in 2H FY25, driven by increased client accounts and assets, and better market turnover. Ant Financial's...

Guotai Haitong proposes to privatise Guotai Junan International at HK$3.0, a 44.2% premium over the closing price, offering a higher-than-average...