Southwest Securities Relinquishes Control of its Hong Kong Unit

00:00

00:00/00:00

Listen to this article 1x

Southwest Securities joined a flurry of Chinese brokerages to launch investment banking business in Hong Kong in the 2010s

Southwest Securities Co. Ltd. (600369.SH) has handed over the controlling stake in its Hong Kong brokerage unit after years of loss-making business.

Southwest Securities International Securities Limited, a Hong Kong-traded arm of Chongqing-based Southwest Securities, said in a Monday filing that individual investor Wong Man Hin Max has paid HK$89.8 million ($11.5 million) to acquire 74.01% of its stake. The deal priced Southwest Securities International’s shares at HK$0.03 each.

You've accessed an article available only to subscribers

Subscribe today for just $.99.

VIEW OPTIONS

Unlock exclusive discounts with a Caixin group subscription — ideal for teams and organizations.

Subscribe to both Caixin Global and The Wall Street Journal — for the price of one.

Share this article

Open WeChat and scan the QR code

DIGEST HUB

Digest Hub

Back

Explore the story in 30 seconds

Southwest Securities sold a 74.01% stake in its loss-making Hong Kong unit to investor Wong Man Hin Max for HK$89.8 million ($11.5 million).
Wong will also take on a HK$580 million perpetual bond for a symbolic HK$1 and finance HK$70 million to repay a loan of $16.9 million.
The Hong Kong unit struggled with losses and had assets and liabilities of HK$710 million and HK$747 million respectively by 2023.

AI generated, for reference only

Who’s Who

Southwest Securities Co. Ltd.: Southwest Securities Co. Ltd. (600369.SH) is a Chongqing-based company that has divested its controlling stake in its loss-making Hong Kong brokerage unit, Southwest Securities International Securities Limited. The 74.01% stake was sold to investor Wong Man Hin Max for HK$89.8 million ($11.5 million). The unit, launched in 2014, struggled with losses and had assets of HK$710 million and liabilities of HK$747 million by the end of 2023.

Southwest Securities International Securities Limited: Southwest Securities International Securities Limited, a Hong Kong unit of Southwest Securities, was launched in 2014 to tap the global market. Despite its ambitions, it faced expanding losses and had total assets of HK$710 million with liabilities of HK$747 million by the end of 2023. The firm was sold to investor Wong Man Hin Max for HK$89.8 million due to its continuous poor performance and limited presence in Hong Kong.

Haitong Securities Co. Ltd.: Haitong Securities Co. Ltd. is a Chinese brokerage firm involved in investment banking. Its unit, Haitong International Securities Group Ltd., was delisted from the Hong Kong market after facing years of heavy losses. Haitong Securities was among the Chinese brokerages that expanded globally in the 2010s but faced setbacks, particularly after the bond market rout in 2022.

Zhihai Investment Co. Ltd.: The article does not provide specific information about Zhihai Investment Co. Ltd., other than mentioning that Wong Man Hin Max, who acquired the controlling stake in Southwest Securities International, is a board member of the company.

Decca Co.: Decca Co. is an interior design firm. Wong Man Hin Max, who paid HK$89.8 million to acquire a controlling stake in Southwest Securities International, is the chief executive officer of Decca Co. He holds 70% of Decca Investment Limited, which filed for an initial public offering on the Nasdaq in April 2022, though the application expired in February 2024.

Decca Investment Limited: Decca Investment Limited is an interior design firm led by CEO Wong Man Hin Max, who owns 70% of the company. The firm filed for an initial public offering on the Nasdaq in April 2022, but the application is set to expire in February 2024.

AI generated, for reference only

What Happened When

2014：: Launched in Hong Kong, Southwest Securities International was part of Southwest Securities' ambition to tap the global market via the financial hub.

April 2022：: Decca Investment Limited, in which Wong holds 70%, filed for an initial public offering on the Nasdaq.

2022：: A bond market rout forced many Chinese brokerages, including Haitong International Securities Group Ltd., to retreat from the Hong Kong market.

By the end of 2023：: Southwest Securities International had total assets of HK$710 million with liabilities of HK$747 million.

February 2024：: The application for Decca Investment Limited's initial public offering on the Nasdaq expired.

June 2024：: Southwest Securities announced the deal to transfer the controlling stake in Southwest Securities International to Wong Man Hin Max, which includes transferring Southwest Securities International’s HK$580 million perpetual bond to Wong for a symbolic HK$1.

AI generated, for reference only