HK/China Equity Long-Short

Osbert Tang, CFA

Equity Bottom-Up

Bright Smart Securities / Equity Bottom-Up

<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

Thematic (Sector/Industry)

<ul>
<li>Following Trump's threats on tariffs and pull-out of meeting with Xi, the 5% collapse in the HSI futures implies a heavy sell-off in HK when the market reopens.</li>
<li>The stocks with the best YTD performance and significant strengths in the last month are the prime candidates most vulnerable to the initial collapse. </li>
<li>
<a href="https://www.smartkarma.com/entities/semiconductor-manufacturing-international-corp-smic" target="_blank" data-smartkarma-citation="entities:14231:1" rel="noopener">Semiconductor Manufacturing International Corp (SMIC) (981 HK)</a>, <a href="https://www.smartkarma.com/entities/kuaishou-technology" target="_blank" data-smartkarma-citation="entities:29725:1" rel="noopener">Kuaishou Technology (1024 HK)</a>, <a href="https://www.smartkarma.com/entities/alibaba-group-holding-ltd-d7b798e2-202d-4e01-9a1e-799e2ae8f0c7" target="_blank" data-smartkarma-citation="entities:28434:1" rel="noopener">Alibaba (9988 HK)</a>, and <a href="https://www.smartkarma.com/entities/hua-hong-semiconductor-ltd" target="_blank" data-smartkarma-citation="entities:7201:1" rel="noopener">Hua Hong Semiconductor (1347 HK)</a> are badly exposed.</li>
</ul>


Following Trump's threats on tariffs and pull-out of meeting with Xi, the 5% collapse in the HSI futures implies a heavy sell-off in HK when the market reopens.
The stocks with the best YTD performance and significant strengths in the last month are the prime candidates most vulnerable to the initial collapse. 

Semiconductor Manufacturing International Corp (SMIC) (981 HK), Kuaishou Technology (1024 HK), Alibaba (9988 HK), and Hua Hong Semiconductor (1347 HK) are badly exposed.


Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

Guangzhou Automobile Group / Event-Driven

<ul>
<li>Gross SOUTHBOUND volumes just over US$16+bn a day this past 5-day week. A comedown from the previous week. Net buying OK at just over +US$550mm/day. One-third of the previous week.</li>
<li>Last week's reco was <a href="https://www.smartkarma.com/entities/great-wall-motor-co-ltd-cb302af9-398c-4d2d-ba39-023e43287eef" target="_blank" data-smartkarma-citation="entities:128:1" rel="noopener">Great Wall Motor (2333 HK)</a> up 9.8% on the week, and H/A spread contracted 6.2%.</li>
<li>The data tables below update on a daily basis in the <a href="https://www.smartkarma.com/tools" target="_blank" rel="noopener">Tools</a> section of Smartkarma. The <a href="https://www.smartkarma.com/tools/quiddity/south-flow-monitor" target="_blank" rel="noopener">SOUTHBOUND Flow Monitor</a> and <a href="https://www.smartkarma.com/tools/quiddity/ah-shares-monitor" target="_blank" rel="noopener">AH Monitor</a> are both there free for SK readers.</li>
</ul>


Gross SOUTHBOUND volumes just over US$16+bn a day this past 5-day week. A comedown from the previous week. Net buying OK at just over +US$550mm/day. One-third of the previous week.
Last week's reco was Great Wall Motor (2333 HK) up 9.8% on the week, and H/A spread contracted 6.2%.
The data tables below update on a daily basis in the Tools section of Smartkarma. The SOUTHBOUND Flow Monitor and AH Monitor are both there free for SK readers.


HK Connect SOUTHBOUND Flows (To 8 Aug 2025); Big Swing Out of ETFs into TECH

Asia Pac IPO & Placement Research, China biotech, Aequitas Research

Ke Yan, CFA, FRM

Asia Pac IPO & Placement Research, China biotech

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Quantitative Analysis

<ul>
<li>We analyze the weekly Hong Kong Connect flows with our data engine for holding position as of August 8th.</li>
<li>The top stocks by inflows and outflows were tabulated for all market, HSCEI, mid cap and s/mid cap groups.</li>
<li>We highlight flows for Tencent, Kuaishou, Alibaba, Meituan, Li Auto, China Mobile.</li>
</ul>


We analyze the weekly Hong Kong Connect flows with our data engine for holding position as of August 8th.
The top stocks by inflows and outflows were tabulated for all market, HSCEI, mid cap and s/mid cap groups.
We highlight flows for Tencent, Kuaishou, Alibaba, Meituan, Li Auto, China Mobile.


HK Connect Flows Weekly (Aug 8th): Tencent, Kuaishou, Alibaba, Meituan, Li Auto, China Mobile

Hong Kong

Guotai Junan International Holdings Ltd. is a securities brokerage house. The Company's services include securities and futures dealing and broking services for various financial markets, corporate finance and ECM services, asset and fund management services and financing services such as margin financing and other types of financing.

Price Gauge
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Guotai Junan International (1788 HK)

Bright Smart (1428 HK): Valuation Update

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Bright Smart (1428 HK): Bright and Smart FY25

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Travis Lundy

HK Connect Flows Weekly (Aug 8th): Tencent, Kuaishou, Alibaba, Meituan, Li Auto, China Mobile

We analyzed southbound Hong Kong connect flows in the past week and highlighted flows for Tencent, Kuaishou, Alibaba, Meituan, Li Auto, China Mobile.

Ke Yan, CFA, FRM

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

HK Strategy: Who Will Suffer the Most?

​Trump's tariff threats and market uncertainty lead to a potential heavy sell-off in HK, with top-performing stocks like SMIC, Kuaishou, Alibaba,...

Osbert Tang, CFA

HK Connect SOUTHBOUND Flows (To 8 Aug 2025); Big Swing Out of ETFs into TECH

SOUTHBOUND net flows continue positive. Gross flows down ~20%wow, NET flows -65%wow. ETFs sold bigly, rotation into Tech (whether INFO TECH or...

Travis Lundy

HK Connect Flows Weekly (Aug 8th): Tencent, Kuaishou, Alibaba, Meituan, Li Auto, China Mobile

We analyzed southbound Hong Kong connect flows in the past week and highlighted flows for Tencent, Kuaishou, Alibaba, Meituan, Li Auto, China Mobile.

Ke Yan, CFA, FRM

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...

Trump's tariff threats and market uncertainty lead to a potential heavy sell-off in HK, with top-performing stocks like SMIC, Kuaishou, Alibaba,...