JF SmartInvest harnesses AI in drive into lucrative financial intelligence services

The company unveiled an AI-powered terminal at its new showroom in Hong Kong’s financial district as it chases high-net-worth individuals seeking investment advice

Key Takeaways:

• JF SmartInvest opened a physical store in Hong Kong where visitors can try out its new AI-powered terminal for investment portfolio analysis
• The company is pivoting from its traditional focus on investor education to the higher-margin business of providing financial information and advice

By Warren Yang

If you’ve ever sought a chatbot’s advice on whether to buy Apple, short Tesla, or jump into an obscure biotech stock, you’re not alone. Across the globe, millions of retail investors are outsourcing their financial due diligence to AI-powered large language models. So, it comes as little surprise that the financial services industry is racing to capitalize on growing human interest in using AI to earn some fast money in the stock market.

The latest strategic move from JF SmartInvest Holdings Ltd. (9636.HK), an investor education and financial information provider, underscores just how influential AI has become in a very short time. In a filing to the Hong Kong stock exchange last Friday, the company announced its opening of a four-story flagship store in the city’s financial district. That’s where it will showcase its proprietary AI investment terminal for individual traders, also announced in the filing. Finally, the company will also offer virtual asset trading and advisory services in the city, pending regulatory approval from Hong Kong’s Securities and Futures Commission (SFC).

The opening of the new physical site by subsidiary Forthright Securities doesn’t make much sense at first glance in an era when financial services are migrating to the cloud and few people visit brick-and-mortar brokerage offices anymore. But JF SmartInvest calls the site Hong Kong’s “largest offline investment experience hub,” spanning a massive 19,337 square feet in Hong Kong’s financial district. The company didn’t disclose how much money it was dishing out for the project. But rent for that much real estate in the city, known for its high property costs, must be enormous.

If the goal is to introduce wealthy investors to AI applications and convert them into lasting customers, then the flashy move may prove worth the money as a savvy marketing tool. The store showcases the Forthright AI Investment Terminal, a computer with a high-performance display and advanced internal processors that offers global market quotes, institutional-grade research, portfolio diagnostic tools, and multi-asset trading across equities, options, futures, funds and virtual assets.

The terminals are part of an investment ecosystem that JF SmartInvest is looking to build, spanning AI-powered analytical tools, in-house research and human advisory services. And at the new Hong Kong shop, which appears to target high-net-worth individuals, the company’s customers can experience this concept in real life. They can run an automated portfolio diagnostic on the AI terminal, and then step into a private meeting room with a licensed adviser to refine investment strategy before executing trades. For retail investors, the allure is obvious: institutional-grade analysis without the need for institutional expertise, including reading and digesting long financial reports.

Demand for financial intelligence in Hong Kong is set to grow amid a massive influx of investor capital into the city. Assets under management in Hong Kong swelled 20% last year alone to a record HK$42.2 trillion ($5.4 trillion), fueled by a resurgence of the financial hub’s stock market, among other things.

JF SmartInvest’s business is booming as well. Its revenue rose 49% to 3.43 billion yuan ($480 million) last year, while its net profit soared 238.5% to 921.8 million yuan, which translates to a net profit margin of 27%, up sharply from 11.8% for 2024. Much of that came as strong gains in China’s equity markets stoked interest in stock trading by retail investors who are one of JF SmartInvest’s biggest customer groups.

Behind the headline numbers is a structural shift in how the company makes its money. Historically dependent on human-intensive investor education services, JF SmartInvest is increasingly relying on subscription-based financial software platforms like Qinlong and Jiuyao Stocks, AI-driven analysis and decision-support tools for individual investors, as its primary growth engines.

Sticky customers

The Forthright AI Investment Terminal shows that JF SmartInvest continues to try to cultivate new high-margin income sources. By offering hardware powered by its own AI software, the company can build a base of loyal customers who are serious about trading. A physical machine sitting on an investor’s desk creates a much higher commitment, and thus greater customer loyalty, than a simple smartphone app.

This isn’t the first time the company has rolled out its own hardware. Back in 2024 the company introduced its Easy-Stock Pad, a tablet computer equipped with the company’s software to give users easy access to all of its offerings, from online classes to investment and research tools using AI and big data analysis.

Though it sounded like a gimmick at that time, sales of the device — priced starting at 2,000 yuan — have exceeded 100,000 units. It may not be a massive number, but it does suggest that people are willing to pay for physical devices dedicated to JF SmartInvest’s services.

The Forthright AI Investment Terminal probably costs much more than the Easy-Stock Pad, though no price was disclosed in Forthright’s announcement. But given that its target customer seems to be affluent individuals, a relatively high price tag isn’t likely a big hurdle.

As powerful as AI is, large language models like the one that runs the Forthright AI Investment Terminal do make mistakes and can misguide investors. JF SmartInvest seems to be well aware of such risks, which may explain why it gives terminal users access to human advisors who can do sanity checks on AI-generated investment themes.

JF SmartInvest’s shares rose about 3% on Monday, the first trading day after the announcement, while the broader Hang Seng Index barely moved that day. This seems like an investor vote of confidence in the company’s latest move. The stock trades at a price-to-earnings (P/E) ratio of about 13, slightly higher than 11 for online stock broker Futu Holdings (FUTU.US). But both figures are still relatively low compared with global peers, reflecting investor caution about companies with exposure to China’s unpredictable markets.

Maintaining the Hong Kong showroom and manufacturing terminals carry high costs, even if that manufacturing is outsourced. But the rewards can be big if terminals help to retain customers in the highly competitive field, especially high-margin customers who are most likely to pay for such a premium product.

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