Illegal Cross-border Exhibition Rectification (Part III): Re-evaluating Online Securities Broker Valuation
For a platform, what is most damaging from regulatory crackdowns on illegal cross-border activities is not the stock price for one or two days, but the potential reassessment of its entire historical growth model. Fines are one account; whether the retained domestic customer base can continue to contribute transactions, financing, assets, and conversions is another, much longer-term concern.
The greatest strength of internet brokers like Futu and Tiger is their ability to make Hong Kong and US stock trading a low-friction product. The problem is that when this experience faces mainland users, it encounters barriers related to licensing, foreign exchange regulations, suitability assessment for investors, data handling, and the boundaries of cross-border financial services.
Therefore, the third section should focus only on the business model and institutional stratification. Although the product capability of cross-border securities firms remains strong, if regulatory boundaries re-enclose the largest and most readily available user base, its valuation can no longer be predicated on old growth stories.