Eliza Wong
– Victory Securities transformed losses into HKD 40.7M net profit as virtual asset revenue jumped 2000% YoY
– Stock price tripled (+200%) amid Hong Kong’s progressive virtual asset regulatory framework
– Virtual assets now contribute ~19% of total revenue, projected to become dominant income stream
– Sector boosted by RWA tokenization potential and stablecoin adoption across financial institutions
The Virtual Asset Breakthrough Transforming Brokerage Economics
The tectonic shift in Hong Kong’s financial landscape became undeniable when Victory Securities (胜利证券), a 53-year-old brokerage institution, announced staggering 2025 interim results. Defying broader market trends, the firm projected HKD 40.72 million in net profits—a radical reversal from HKD 5.82 million losses just a year prior. This dramatic turnaround stems directly from their strategic pivot into virtual asset services, where revenue skyrocketed approximately 2000% year-over-year. Investor enthusiasm manifested in a 200% stock price surge since January 2024, elevating Victory Securities’ market valuation to HKD 1.89 billion.
Hong Kong’s calculated embrace of virtual assets created fertile ground for such transformations. As Guotai Junan International (国泰君安国际) anticipates 2025 net profits between HKD 515-595 million (up 161-202% YoY), analysts attribute this momentum to Hong Kong’s framework enabling new virtual asset revenue streams. Trading volumes signal explosive demand: Victory Securities alone facilitated over HKD 100 billion in virtual asset transactions during its most recent fiscal year.
Deconstructing Victory Securities’ Virtual Asset Triumph
Victory Securities’ virtual asset pivot represents more than opportunistic timing—it’s a case study in strategic repositioning. Analysts examining their ascent identify three core drivers behind this virtual asset success story.
Regulatory Enablers: Hong Kong’s Progressive Stance
Hong Kong established itself as a virtual asset trailblazer with its 2022 Policy Declaration on virtual asset development. By methodically authorizing brokers to upgrade existing licenses, regulators enabled firms like Victory Securities to integrate virtual assets into traditional financial services. In April 2024, Victory Securities cleared a crucial milestone: securing Securities and Futures Commission authorization for retail-focused:
– Virtual asset discretionary account management
– Structured virtual asset products for professional investors
These approvals position Victory Securities among only 40 brokerages with upgraded “Type 1 licenses” permitting virtual asset trading, alongside firms including Haitong International Securities and Futu Securities. This regulatory scaffolding empowers brokers to monetize surging institutional and retail interest.
Revenue Architecture: Beyond Trading Commissions
Victory Securities’ virtual asset income streams reveal sophisticated monetization beyond basic transaction fees:
– Proprietary trading via virtual asset volatility
– Structured product issuance/distribution fees
– Discretionary management services (retail/professional)
– Custody and staking solutions
Such diversification explains their projected HKD 64.68 million virtual asset income for H1 2025—eclipsing traditional segments according to Huatai Securities research. Revenue composition shifted fundamentally: virtual assets comprised just 1.9% of total income in 2023, soaring to 19.1% by end-2024.
Market Catalysts Fueling Virtual Asset Adoption
Beyond brokerage-specific dynamics, structural shifts are accelerating virtual asset integration across financial services.
The Tokenization Opportunity
Real-world asset (RWA) tokenization represents virtual assets’ most potent frontier. As BCG and ADDX project a $16 trillion tokenized illiquid asset market, brokers position themselves as critical intermediaries. Firms like Guotai Junan International and GF Securities (Hong Kong) are actively pursuing capabilities around:
– Tokenized bond/debt offerings
– Fractional real estate investments
– Commodity-backed digital instruments
This RWA evolution transforms virtual assets from speculative instruments to institutional-grade portfolio components.
Stablecoins: Bridging Traditional and Digital Finance
Hong Kong’s 2024 stablecoin regulations created essential payment rails for virtual asset ecosystems. Brokers now leverage stablecoins for:
– Instant settlement efficiency
– Reduced FX friction in cross-border transactions
– Institutional-grade liquidity management
Crypto-friendly payment platforms facilitate fiat conversions, enhancing accessibility. Market maturation compounds growth—research suggests virtual asset brokerage fees could rise 30-40% above traditional equity commissions.
Competitive Landscape: Brokers Rush to Capture Value
As Victory Securities’ early results validate the model, broker competition intensifies across virtual asset verticals.
License Evolution: The New Battleground
Securing virtual asset permissions now constitutes strategic priority:
– Over 20 mainland-backed brokers (including CITIC Securities 中信证券 and China Merchants Securities 招商证券) actively pursuing license upgrades
– Major players projecting virtual asset services to comprise 15-25% of 2026 revenue
– Platform investments targeting institutional trading interfaces
Industry sources indicate virtual asset upgrades could increase broker valuations by 2-4x based on revenue multiples—a pattern mirrored in Victory Securities’ share appreciation.
Operational Differentiation Strategies
Leading brokers pursue distinct virtual asset positioning:
– Victory Securities: Hybrid trading platform with proprietary algorithmic tools
– Guotai Junan: Focus on tokenized debt instruments
– Shenwan Hongyuan: Virtual asset wealth management
Specialization mitigates margin compression as competition grows. Firms simultaneously develop custody solutions addressing institutional security prerequisites.
Future Trajectories: Beyond the Initial Surge
Virtual asset adoption currently delivers exceptional growth—but sustainable success requires navigating interpretive guidance on securities rules. Firms expanding rapidly now orient strategies toward three horizons:
Regulatory Development Pathways
Authorities continue refining virtual asset governance, with consultative papers suggest:
– Cross-border trading protocols under discussion
– Enhanced disclosure requirements
– Capital reserve standards
Brokers with compliance specialization stand to gain disproportionate market share.
Product Innovation Pipeline Analysis
Next-generation virtual asset offerings prioritize institutional utility:
– Regulatory compliant yield products
– Insurance-wrapped custody solutions
– ESG-aligned tokenization frameworks
Such innovations expand addressable markets beyond speculative trading into core treasury and portfolio functions.
Macro Positioning Considerations
Brokers leverage virtual assets to reclaim relevancy in evolving capital markets. Goldman Sachs notes virtual assets potentially capture 35% of traditional brokerage revenues by 2030. Firms ignoring this shift risk permanent displacement.
Victory Securities’ metamorphosis proves virtual assets extend beyond niche offerings—they’re revolutionizing brokerage fundamentals. Early movers reap asymmetric rewards: while Victory achieved 2000% virtual asset revenue growth, follower firms report 300-700% expansion trajectories. With global tokenization forecasts reaching USD $16 trillion and Hong Kong positioning as Asia’s regulated gateway, brokers converting license privileges into monetizable services stand primed for valuation reratings. Assess brokerage investment opportunities prioritizing:
1) Virtual asset license completeness
2) Institutional-grade custody/trading infrastructure
3) Regulatory compliance expertise
Monitor Hong Kong exchange statistics for virtual asset volume acceleration—approach brokers with sub-15% virtual asset revenue share cautiously.
