Backed by large enterprises, Hong Kong stock brokers start "Three Kingdoms Kill"

The key moment for the recovery of Hong Kong stocks, Ant Group is launching a new round of attacks on brokerage licenses.

Recently, Ant Wealth made a tender offer to acquire Hong Kong's "established" brokerage Bright Smart, stating that it is "confident in the long-term development of the Hong Kong economy and optimistic about the huge opportunities in the combination of technology and wealth management."

This acquisition involves a 50.55% stake in Bright Smart, with a total price reaching HKD 2.814 billion; the acquisition price is HKD 3.28 per share, representing a premium of 17.6% compared to the share price before suspension.

Since attempting to acquire a stake in Debon Securities in 2015, Ant has been pursuing brokerage licenses for 10 years.

Currently, Ant holds licenses for third-party payment, banking, insurance, and fund sales, but has never had the opportunity to control a brokerage due to regulatory prudence.

If this acquisition is successful, not only will Ant achieve its long-held ambition, but the Hong Kong market will also welcome another internet brokerage.

Futu is backed by Tencent, Tiger Brokers has Xiaomi behind it, and now Bright Smart will also have Ant.

Whether it is Eastmoney, which started as a financial portal in mainland China, or Futu Securities, which is invested by Tencent, the value of "internet platform + brokerage" has been repeatedly validated; once Ant joins, the market may face a brand new transformation.

The Quality of Bright Smart

Bright Smart, which has been "added to the shopping cart" by Ant, has a history of 30 years.

During the critical period in 2003 when Hong Kong abolished the minimum commission system, founder Ye Maolin keenly lowered the commission to 0.05%, making Bright Smart a well-known name in the industry and earning the title of "the pioneer of low commission."

In 2010, Bright Smart was listed on the Hong Kong Stock Exchange and successively obtained licenses No. 1, 2, 4, 5, 6, and 9 from the Hong Kong Securities and Futures Commission, covering multiple fields including securities trading, futures contract consulting, and asset management.

Although it is an established institution, Bright Smart has shown a certain degree of market sensitivity.

During the industry downturns in 2013 and 2023, it took proactive innovative measures, implementing seven-day operations, extending service hours, and launching promotional activities such as stock giveaways for new accounts to stimulate user growth.

Compared to its peers, Bright Smart has demonstrated relatively stable performance.

In the favorable market years of 2017-2018, it even saw profit growth of over 50%;

Even after the Hang Seng Index continued to decline in 2021-2022, it still maintained profits of over HKD 500 million each year;

In recent years, it has consistently maintained a high ROE level, with ROE reaching 35.16% in 2023-2024.

From April to December 2024, BRIGHT SMART's after-tax net profit reached 476 million yuan, a year-on-year increase of approximately 8%; the total number of clients approached 580,000, with client assets nearing 60.5 billion yuan.

However, BRIGHT SMART, which is based on Hong Kong's "retail investors," may need to catch up on digital construction.

In 2019, BRIGHT SMART launched the APPs BRIGHT SMART (Baby) and BRIGHT SMART Futures (Doudou) trading apps, but user ratings and reviews were poor;

Not only were there frequent issues such as "network not available," "often unable to log in," and "password recovery not working," but some users even commented in the app review section, "With such an outdated client, it's no wonder BRIGHT SMART has low rates and no one uses it."

Despite good revenue performance and stable existing clients, it has become difficult to demonstrate offensive advantages against the backdrop of industry reshuffling and technological transformation;

By the end of 2024, the number of new accounts was only 13% of Futu Securities, revealing a significant gap.

Since 2021, major shareholder Ye Maolin of BRIGHT SMART has repeatedly reduced his holdings in the public market at high levels, indicating a certain intention to withdraw.

Now, the introduction of ANT GROUP is indeed a good choice.

BRIGHT SMART stated, "This cooperation will promote BRIGHT SMART's digitalization and transformation, becoming a leading trading platform backed by cutting-edge technology."

ANT WEALTH expressed, "We are optimistic about the long-term development of the Chinese economy and the economy of Hong Kong, and we see great market opportunities brought by the combination of technology and wealth management."

Currently, the financial products offered by ANT WEALTH include Yu'ebao (money market fund), bond funds, equity funds, index funds, gold ETFs, and more.

Dongxing Securities Co., Ltd. analyst Sun Ting pointed out that ANT can complete international expansion by holding a local Hong Kong brokerage, leveraging BRIGHT SMART's licenses and client resources to strengthen the "technology + wealth management" strategy.

Sun Ting also emphasized that "the aforementioned acquisition needs to be approved by the Hong Kong Securities and Futures Commission, involving cross-border capital flow and data compliance risks."

ANT's "Brokerage Dream"

Brokerages have always been a missing piece in ANT's financial empire.

With years of layout in institutions such as Tianhong Fund, MYbank, and ZhongAn Insurance, ANT's territory has expanded to all aspects of the financial industry, including banking, insurance, funds, and micro-lending.

The pursuit of brokerage licenses can be traced back to 10 years ago.

In 2015, ANT Financial, which had not yet fully separated from Alibaba, planned to invest in "Fosun Group" subsidiary Debon Securities, but the plan was ultimately aborted due to delays in obtaining approval.

In the same year, Yunfeng Fund, in which Jack Ma held a 40% stake, acquired 56% of the shares of Hong Kong-listed brokerage Ruido Group through its holding subsidiary Jade Passion for HKD 2.68 billion, achieving a backdoor listing.

However, subsequently, Yunfeng Financial's performance in the brokerage sector was not impressive.

On one hand, the pursuit of mainland licenses faced frequent setbacks.

In 2015, Yunfeng Financial applied to the China Securities Regulatory Commission to establish a joint venture brokerage, Yunfeng Securities, under the CEPA agreement, but two years later, Yunfeng Securities was still absent from the second batch of publicized lists under CEPA, and the plan to go north was shattered On the other hand, Yunfeng Financial's brokerage business in Hong Kong has also been difficult to describe as smooth.

Since its establishment, Yunfeng Financial has performed poorly and has been in constant losses, only gradually achieving stable profitability after completing the acquisition of 60% of the shares of American Winton Insurance Asia in 2018.

This has resulted in multiple segments such as insurance, wealth management, and securities brokerage, but profitability has long relied solely on insurance.

In 2024, the net operating profit from the insurance business reached HKD 1.167 billion, while the other businesses collectively lost HKD 33 million.

The valuation is also not favored by the market, with the stock price frequently falling below HKD 1 in 2025, becoming a penny stock.

In addition, Alibaba also acquired a 3.25% stake in Huatai Securities during its private placement in 2018, but by 2024, the shareholding ratio had been reduced to 1.11%.

Whether it is Ant Group or its related party Alibaba, it seems that they are always "a breath away" in the brokerage business.

Now that the Hong Kong stock market is warming up again, the Hang Seng Tech Index is leading the gains among major economies' stock markets, and the Hong Kong brokerage license is becoming an opportunity that Ant Group may not want to miss.

The long-established reputation and credibility of BRIGHT SMART can help it overcome the challenges of adapting to the local market and penetrate the Hong Kong market.

Some investors have pointed out that compared to applying for or acquiring, it can shorten the compliance approval cycle by 2-3 years, greatly reducing time costs.

However, the offer price for Ant Group's acquisition still has nearly a 20% premium compared to BRIGHT SMART's stock price before suspension;

If the acquisition fails to achieve the "1+1>2" synergy effect, the total price of HKD 2.814 billion may still burden it and affect future liquidity.

Internet Securities Further Investment

In fact, there are very few true internet brokerages in the market.

For a long time, in the A-share market, only Eastmoney has formed a closed-loop chain with "Eastmoney.com + TianTian Fund + Eastmoney Securities";

In the mid-2021 fund bull market, Eastmoney's market capitalization once surpassed that of leading brokerages due to the scarcity of its targets and its leading position in the fund sales market.

What the market expects from this acquisition is the transformation brought about by internet giants entering the brokerage track.

In the Hong Kong market, Ant Group is directly competing with its old rival Tencent's investment in Futu.

The success of Futu Securities in the Hong Kong stock market is already well recognized.

In 2019, Futu Securities' parent company, Futu Holdings, went public on NASDAQ; the founder is Li Hua, Tencent's 18th employee and an early participant in the development of QQ.

Before the IPO in the U.S., Tencent was the largest institutional shareholder of Futu Holdings, holding a 38.2% stake; as of the end of March 2025, it still holds 20.4% of the shares and 30.8% of the voting rights Futu Securities has three types of businesses: brokerage services, wealth management, and corporate services.

With the support of financial technology and the endowment of the internet, Futu Holdings' overseas business has soared, expanding into six international markets including the United States, Singapore, and Australia beyond its Hong Kong base.

In 2024, Futu Holdings' revenue grew by 35.8% year-on-year to HKD 13.59 billion, and its Non-GAAP net profit increased by 26.2% to HKD 5.768 billion.

Among them, the profit in the fourth quarter has already doubled compared to the same period last year.

Li Hua stated that the company's market share among users in Hong Kong has surpassed 50% in the fourth quarter; this means that one in two adults in Hong Kong is using Futu.

With the recovery of Hong Kong stock IPOs and a significant increase in financing limits, Futu Securities continues to stand out in the new share subscription.

For example, in the IPO of Mixue Group, it offered multiple incentives, significantly reducing costs and attracting retail investors;

Including providing all customers with 108 times interest-free bank financing leverage, and opening 200 times financing leverage for V2, V3 members, and private clients (assets ≥ HKD 1 million).

According to relevant media estimates, Futu Securities has already earned about HKD 6.3 million in subscription fees from the IPO of Mixue Group.

Tiger Brokers, as the second-largest shareholder, also successfully went public in the U.S. in 2019.

At its inception, Tiger Brokers primarily served as a full-disclosure agent for Interactive Brokers (IB) in the U.S., until it began acquiring licenses in 2018 and entered the Hong Kong market four years later.

Now, Tiger Brokers' revenue in 2024 has increased by 43.7% to USD 392 million, and its net profit has grown by 65% to USD 71 million.

The speed of Futu and Tiger further confirms the infinite possibilities in the securities industry with the support of internet channels.

According to data from Jieli Financial Cloud, in March 2025, the monthly transaction volume rankings of Futu, BRIGHT SMART, and Tiger Brokers among over 500 brokerages are 4th, 17th, and 40th, with market shares of 3.85%, 0.82%, and 0.22%, respectively.

Comparing the current Hong Kong financial licenses held by the four companies mentioned earlier, it is found that BRIGHT SMART already holds multiple core licenses, showing little difference from Futu Securities and Tiger Brokers;

It only lacks License 3, which represents leveraged foreign exchange trading, and License 7, which represents automated trading services.

This also means that once the acquisition is completed, internet-based Hong Kong brokerages may spark a new round of "competition."

After the review on April 28, BRIGHT SMART closed at HKD 5.5 per share, with an increase of 81.97%;

Whether it can help ANT GROUP achieve more breakthroughs in brokerage and even in the financial sector remains to be seen over time.

Risk Warning and Disclaimer

The market has risks, and investment requires caution. This article does not constitute personal investment advice and does not take into account the specific investment objectives, financial situation, or needs of individual users. Users should consider whether any opinions, views, or conclusions in this article are suitable for their specific circumstances. Investment based on this is at one's own risk