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

APAC IPOs & Placements, Aequitas Research

Nicholas Tan

APAC IPOs & Placements

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.

Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/hashkey-holdings-limited" target="_blank" data-smartkarma-citation="entities:40847:1" rel="noopener">HashKey (3887 HK)</a> is looking to raise up to US$215m in its upcoming Hong Kong IPO.</li>
<li>It operates the largest licensed crypto exchange in Hong Kong.</li>
<li>In this note, we examine the IPO dynamics, and look at the firm’s valuation.</li>
</ul>



HashKey (3887 HK) is looking to raise up to US$215m in its upcoming Hong Kong IPO.
It operates the largest licensed crypto exchange in Hong Kong.
In this note, we examine the IPO dynamics, and look at the firm’s valuation.


HashKey Holdings Pre-IPO: Ok-Ish Cornerstones but Too Expensive

Equity Research Analyst - Long-Short

Raj S, CA, CFA

<ul>
<li>FUTU's risk-reward is asymmetric:  Structurally low valuation, active consensus upgrades and a near-term catalyst (HK crypto VATP license), which can boost further upgrades (2026e) sets up a compelling long entry.</li>
<li>HK-VATP enables FUTU to expand its crypto related revenues, product offerings and margins, and remove third-party dependency. With crypto &lt;2% assets, this new earnings leg is entirely absent from consensus.</li>
<li>FUTU’s pullback to ~15.6x FY2 P/E puts it at the bottom of a ~15x-25x - reasonable valuation band. With upgrades and catalysts ahead, it stands as a strong rerating candidate.</li>
</ul>


FUTU's risk-reward is asymmetric:  Structurally low valuation, active consensus upgrades and a near-term catalyst (HK crypto VATP license), which can boost further upgrades (2026e) sets up a compelling long entry.
HK-VATP enables FUTU to expand its crypto related revenues, product offerings and margins, and remove third-party dependency. With crypto &lt;2% assets, this new earnings leg is entirely absent from consensus.
FUTU’s pullback to ~15.6x FY2 P/E puts it at the bottom of a ~15x-25x - reasonable valuation band. With upgrades and catalysts ahead, it stands as a strong rerating candidate.


2026 High Conviction Idea - FUTU US - 3Q25 Beat and Bottom-Of-Range Valuation Creates Strong Upside

<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> will benefit from Ant Financial's technology innovation capabilities, customer group, digitalisation, and cross-selling to over 640m of Alipay users.</li>
<li>With <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> having an average PER of 19x for 2020-2025, we use 15x for BSS after a conservative estimate of 50% earnings growth in 5 years. </li>
<li>We value BSS at HK$8.13, but this is a conservative estimate. Its earnings growth is likely to be faster than our forecast, given its better leverage on the new parent.  </li>
</ul>



Bright Smart Securities (1428 HK) will benefit from Ant Financial's technology innovation capabilities, customer group, digitalisation, and cross-selling to over 640m of Alipay users.
With Futu Holdings Ltd (FUTU US) having an average PER of 19x for 2020-2025, we use 15x for BSS after a conservative estimate of 50% earnings growth in 5 years. 
We value BSS at HK$8.13, but this is a conservative estimate. Its earnings growth is likely to be faster than our forecast, given its better leverage on the new parent.  


Bright Smart (1428 HK): An Attempt to Derive a Value

United States

UP Fintech Holding Limited operates as a holding company. The Company, through its subsidiaries, provides online securities brokerage services. Up Fintech Holding serves customers in China.

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UP Fintech (TIGR US)

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

HashKey Holdings Pre-IPO: Ok-Ish Cornerstones but Too Expensive

HashKey Holdings (3887 HK) plans to raise up to US$215m in its Hong Kong IPO, boasting the largest licensed crypto exchange in the region. This...

Nicholas Tan

2026 High Conviction Idea - FUTU US - 3Q25 Beat and Bottom-Of-Range Valuation Creates Strong Upside

2026 High Conviction: FUTU US risk-reward is asymmetric: Structurally low valuation, consensus upgrades post 3Q25 and a near-term catalyst (crypto...

Raj S, CA, CFA

Bright Smart (1428 HK): An Attempt to Derive a Value

Bright Smart benefits from Ant Financial's technology and customer base, with potentially faster-than-forecast growth. At a 50% 5-year growth and...

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

HashKey Holdings Pre-IPO: Ok-Ish Cornerstones but Too Expensive

​HashKey Holdings (3887 HK) plans to raise up to US$215m in its Hong Kong IPO, boasting the largest licensed crypto exchange in the region. This...

Nicholas Tan

2026 High Conviction Idea - FUTU US - 3Q25 Beat and Bottom-Of-Range Valuation Creates Strong Upside

2026 High Conviction: FUTU US risk-reward is asymmetric: Structurally low valuation, consensus upgrades post 3Q25 and a near-term catalyst (crypto...

Raj S, CA, CFA

Bright Smart (1428 HK): An Attempt to Derive a Value

​Bright Smart benefits from Ant Financial's technology and customer base, with potentially faster-than-forecast growth. At a 50% 5-year growth and...

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...

HashKey Holdings (3887 HK) plans to raise up to US$215m in its Hong Kong IPO, boasting the largest licensed crypto exchange in the region. This...

Bright Smart benefits from Ant Financial's technology and customer base, with potentially faster-than-forecast growth. At a 50% 5-year growth and...