036800.KQ - Nice Information & Technology

[kms8717]

Thanks Packer. A link to NICE Holdings' IR presentation(http://eng.nice.co.kr/nb0810.nice).

As you mentioned, it's of decent quality, and NICE(previously very timid on IR) changed its stance since the chairman passing last year(now doing HK/Singapore IR conference, etc.)

 

When OK POS was originally acquired, it was viewed more as a hardware biz. NICE TCM(simply ATM biz then) needed a new growth driver, and it made sense that TCM's nationwide A/S network provides service for OK POS(just as they're doing Kiosk too). But I&T spends its $ to agencies to install these POS machines and as S/W angle becomes more and more important for POS/VAN biz, NICE I&T is ramping up its effort to directly contract with merchants to concede data to I&T. With this S/W aspect as I&T's main focus going forward, this should reduce I&T's discount.

 

Nonetheless I agree with your view that TCM is interesting with ATM as a cash cow(cash usage decline to plateau now that the demand for payment method that protects privacy is there) while growing with parking/kiosk(left-wing gov aggressively raising minimum wage as a tailwind)

 

NICE Info Svc(CB) is interesting too with prospect of evolving into a financial data platform for individuals. Gov is aggressively removing regulatory hurdles to promote more fintech bizs on the CB front(called "Mydata" biz). Some of the major legal hurdles to be overcome this Feb. My expectation is that In Svc(with its dominant position in CB biz) will extend its leadership to this new Mydata biz(gathering all the financial acct info, Credit info of individual's into one platform and incur ad revenue for various financial products)

 

Because of these interesting subs, I find NICE holdings to be interesting too. All the subs have strengthened their respective market positions over the years, but stock did not reflect it because some of its manufacturing investments(mainly ITM and BBS) overshadowed the growths in the subs. Subtracting almost ~$20mm out of the group's ~$70mm net income over many years. Given that both manufacturing companies are turning around from the J-curve this year, '19 fw P/E is only high single digit, for what I believe to be a stably growing financial infra group with data biz and international(SEA) expansion providing upside potential.

 

 

 

 

[Packer16]

Do you think the founder/Co-CEO passing last year is having an effect on operations or the stock price?  It appears he was quite the firm builder here & what do you think the impact will be if he is gone?  The family has not sold any shares at this point but do you think the overhang could be depressing the price?  The current CEO has the same last name as the former Chairmen's wife.  Are they related?  Thanks.

 

Packer

[Poor Charlie]

I'm expecting van fee to be cut by a similar magnitude (as it's been the case past) - how will they make up for this 10-12% cut in P? NICE VAN M/S growing from 18% to 20%(hypothetically) would be 10% growth in Q, offline payment market naturally grows at ~2.5%

 

Unit growth

You mention that you expect the VAN market to grow by 2.5%.  Given the maturity of Korea’s payments industry, that would be my expectation as well.  On the other hand, the VAN market has been growing at a low-teens rate for years (see my spreadsheet).  It appears growth has slowed in 2018 (NICE’s VAN transactions grew by 9% in 1H), but I still think the VAN market can grow above 2.5% for a few years.

 

Pricing

Considering the pricing pressure these last few years, it’s hard for me to expect anything different going forward.  But the recent IR slides (see attachment) mention pricing stabilization.  This is the first time they’ve talked about this, and it makes me (cautiously) optimistic that pricing won’t be as big an issue these next few years.   

 

Unit growth + Pricing

2.5% transaction growth and 10% price cuts get you a revenue decline rate in the high single-digits.  It will take a lot of growth from market share gains for NICE to offset this.  Consider the last five years: the VAN market has grown by 13.7% and NICE’s market share has gone from 15.5% to 18.2%, but NICE’s VAN revenue grew by only 7%.  This leads me to believe that you’re expecting revenue declines for the VAN business.  Is that indeed what you expect?

 

It is interesting in looking at how the different NICE firms have developed & work together to provide revenue to each other.  An example is the OKPOS which is owned by NICE TCM but will provide traffic for NICE I&T.  Also how the NICE Info Services data can drive traffic on NICE I&T network.  It looks like NICE I&T is the net beneficiary of other subs work but trades for the lowest multiple of them all.  NICE TCM appears to have a nice set of projects parking payment & POS (including software) which will also drive NICE I&T network volume. 

I can see how NICE I&T benefits from its association with the other NICE subsidiaries.  But I can see the opposite, too.  If you look at NICE holdings’ IR materials over the last ten years, it appears that they favor NICE Information Services.  It’s possible that NICE Holdings funnels these new data-related business opportunities to NICE Information Services instead of NICE I&T.  This might even make sense, given NICE Information Services’ background in consumer and corporate credit databases. 

 

NICE Info Services is also interesting as this is where the "big data" analysis will be done.

Of all the NICE companies, I initially spent the most time with NICE Information Services.  It looked like the best business: 70% market share, 20% revenue growth, untapped pricing power, possible margin expansion, lots of growth opportunities in adjacent markets, etc.  Since then the price has re-rated higher, but the business hasn’t performed as I expected (growth has slowed to low single-digits). 

 

Other than NICE I&T and NICE Information Services, the only other NICE subsidiary that interests me is their ratings agency—NICE Investors’ Services.  But NICE Investors’ Services isn't publicly traded, and it’s too small to move the needle inside NICE Holdings.  If you're looking for other information/analytics companies, I’d suggest e-Credible and Korea Ratings, which we own as well.

 

Korea reminds me of the US in the 1970s—there are so many bargains, and everything seems to get cheaper by the day.  Out of all these opportunities, however, I keep coming back to NICE I&T.  Unless I’m completely missing something, it’s one of the cheapest companies I’ve seen.

[Packer16]

The one overarching question in my mind is how key was the founder who died last year?  especially in the growth areas?  The family has inherited his shares so there is a possibility of a sale of those interests but IMO I would want to wait a few years to let the growth play out.  It is cheap & has some growth characteristics so that is why I have liked it all along.

 

Packer

[kms8717]

Former chairman Kim had an engineering background but somehow had a great knack for business, and built this group by mainly purchasing various financial infra bizs. He definitely was the leader of the firm, but he knew about his health situation well for years and prepared for a leadership transition under the new CEO Choi - they've been Co-CEOs for yrs.  Choi and Kim's wife are NOT related. I am not worried about overhang but rather expecting better shareholder alignment through increased dvd from the holdco as the family needs to pay inheritance tax over the next 5yrs. It is a big amount (~$100mm) but the family doesn't want/need to sell down shares to keep the controlling stake. I believe the son is on a VERY long-term process to be tested for taking on the leadership role.

 

That said, I do expect the decision making power will somewhat shift from the holdco to each subsidiary going forward. My take is that Kim was somewhat conservative in terms of sub's biz expansion, while he was aggressive in making investments from the holdco(mainly into manufacturing).

 

Kim's main legacy are manufacturing investments made 2012~2015 into ITM(2nd battery protection-for phones and EVs), BBS(high-performance wheels also targeted for EVs), and LMS(EV and Battery casing). These investments all went through J-curve, but now they're starting to contribute meaningful earnings - which sellside is just starting to show interests. Each firm IPOing starting from May 2019 will shed some light on these firms.

 

In terms of VAN, the unit growth and pricing expectation I shared was my most conservative estimate. But they're ready to expedite the consolidation by choosing inorganic growth path and also they have room to cut costs on the agency side.

 

While data biz naturally fits Info Service, NICE holdings don't favor one sub to another, and they put emphasis on balance among them. As political stance got tougher on the VANs, they've put many holdco key staffs into NICE VAN this yr, and NICE VAN is internally very focused on monetizing the transaction data.

 

Info svs's growth rate has been slowed down, but the new Mydata biz is expected to add some fuels.

 

Of them all, I do believe I&T and Holdings to be the most misunderstood ones with a favorable risk/reward skew.

 

 

 

 

[Poor Charlie]

KMS8717

 

I ran a google translate on the articles you linked to.  The translation was crude, but I think I got most of it.

 

http://news.mk.co.kr/newsRead.php?year=2019&no=51547

• Beginning early 2019, VANs will reduce the commissions they pay to ISOs by 30%
  
• ISOs are trying to offset the commission reductions by charging merchants separately for services rather than bundling them into transaction fees
  
• It’s expected that this will cause a lot of pain among the ISOs, forcing them to cut their workforce by 30%.  It doesn't, however, mention any changes to the VAN industry. 
  

http://www.etnews.com/20190124000317

• Lotte, Shinhan, BC, Samsung, Hyundai and KB agreed to consolidate their QR operations into a single ‘super app’
  
• The six card brands used different payment processors, which led to integration issues
  
• To reduce these issues, the card companies have agreed to use a single processing firm: NICE I&T
  
• NICE I&T does not have the business yet, but the contract is supposed to be signed in February.
  

Did I get that (mostly) right? 

 

Also, a few questions regarding the first article:

[*]Was there some kind of big change that happened in the payments industry recently (or is expected to happen)?  I’m asking because the changes in the ISO market that are described in the article seem to indicate something other-than-normal.  The ISO industry has been under pressure for years, but 30% commission reductions in a single month seem extreme.  Perhaps I read the article incorrectly?

[*]The article mentioned something about Lotte and the other card companies going directly to merchants (and something about the VANs suing Lotte for doing this).  If you have any background information on this, would you mind elaborating.

 

Thanks again for taking the time to post your remarks! 

 

[kms8717]

Charlie

 

You got the translation right.

 

In Korea, it is culturally and legally very hard to lay off employees. So even though the card/processing fee pressure has been mostly passed onto ISOs for almost a decade now, ISOs have been bearing all the pain by just cutting wages. With the minimum wage increase hitting them at the same time, they simply can't sustain the current structure anymore. VAN(ISO) industry has hit the tipping point so to speak.

 

This is a reason why the industry didn't expect another violent card fee cut and NICE cautiously expected the P trend to reverse from next year. This seems unlikely. Therefore my conservative estimates. However, a chance for consolidation also went up at the same time, and I&T is positioned well for this.

 

On your second question - VANs revenue comes from both card authorization and transaction acquiring(roughly split 80%/20%). Acquiring revenue goes mainly to ISOs as cost. Card companies are approaching some large merchants who they can link their systems and internalize the acquiring process. As the card industry pressure continues, card companies are trying to increase that percentage, while VANs(for their ISOs) challenging that. Yet, whether or not this happens, net effect on VAN itself is practically zero.

 

Thanks

 

 

[Poor Charlie]

Thanks KMS and Packer for the discussion.  Here are a few more things I have questions about:

 

Discount to local comps (which are discounted to international comps)

NICE I&T trades at a discount to other VANs and PGs.  For instance, compare NICE I&T with Korea I&C, which is of similar size. 

 

NICE I&T

• Revenues = 366 billion
  
• Net income = 37 billion
  
• Net cash = 132 billion
  
• Market cap = 180 billion
  

Korea I&C

• Revenues = 377 billion
  
• Net income 25 billion
  
• Net cash = 127 billion
  
• Market cap = 355 billion
  

NICE earns 1.5x more than Korea I&C, but it trades at half the price.  Furthermore, the discount has persisted for years.  It’s tough to attribute this to NICE’s competitive position—they're the market leader, they're gaining share in both VAN and PG and they seem to have new products that are well-received.  It’s also tough to attribute it to obscurity—NICE publishes English IR materials and their website has Korean sell-side reports.  Perhaps it’s the controlling family? 

 

2018 Dividend

Most of the NICE companies (including NICE I&T) have announced/reaffirmed buyback programs recently.  But I noticed that none of them made their yearly dividend declarations, which they normally do every December.  Given the death of the founder, I would have expected increased distributions to help cover the estate taxes that you mentioned.

 

 

Any thoughts?

[kms8717]

KICC has been the traditional #1 until NICE went past them - and I think the discount has to do with some sort of inertia, which I don't deem sustainable.

 

- There was some view that NICE benefited more from the "smaller, more frequent" pay trend, due to its heavy mom and pop store percentage in its client portfolio. Therefore market feared the reversal of this trend(change in VAN fee structure from fixed to variable) would hurt them more. We've observed in the past three years that this was not the case - during this time, NICE shifted its customer mix to reflect the new fee structure. Mom and pop stores account for only ~20-25%.

 

- KICC has participated in the internet bank(which gained quite a bit of traction in '15) by owning a tiny equity ownership.  Also it has some investments in PE/VC, but this is very small part of their assets.

 

- NICE VAN's van business is bigger and more profitable, and so is their PG business(#4 after KG Inicis, LG Uplus, and NHN KCP). KICC does not have strong, fast growing international presence as NICE does.

 

- Despite small, NICE VAN pays dividends. It will increase its dividends to better align with shareholders.

 

- As far as I know, NICE subs don't announce dvds in December, but do in ~Feb just like all the other SK-listed companies.  Expecting dvds to increase across the board.

 

Thanks

[Poor Charlie]

KMS

 

Any news on NICE’s QR-code app?  The article you linked to mentioned it was supposed to be agreed to sometime in February.

 

(Also, NICE has been in the market buying back their stock lately.)

[kms8717]

No news articles yet, but the conversation seems to be going well.

 

http://www.nicenpay.com/

 

Above site is newly updated - there you can have a glimpse at their payment app which supports most of the major card companies. The payment app can be used in offline, pc online, and mobile.

 

I&T is starting to be more talked about among the locals in the investment community websites.

[Poor Charlie]

NICE published their results last night.

 

FY2018 vs FY2017

• Revenues: +13%
  
• Gross margins: 28% vs 32%
  
• Operating margins: 9% vs 12%
  

 

Q4 2018 vs Q4 2017

• Revenues: +10%
  
• Gross margins: 25% vs 28%
  
• Operating margins: 9% (excluding impairment of intangibles) vs 11%
  

 

A few comments:

• Revenue growth decelerated from 17% in 1H2018 to 10% in 2H2018
  
• Marketwide VAN transactions increased by 7.6% and NICE's VAN transactions increased by 5.4%.  This was the first time they lost share in several years.  It appears this was due to share gain by KICC, which grew revenues by 15% in Q3 and 25% in Q4.
  
• All NICE's 2018 operating income came from the VAN business (35.7 billion won VAN EBIT compared to 35.2 billion won consolidated EBIT).
  
• There was a 2.9 billion won impairment in Q4.  I'm not sure what this was for. 
  
• NICE generated 88 billion won in cash flow in 2018 compared to 50 billion won in 2017.  Excluding working capital changes, cash flow was around 55 billion won in both years.
  
• NICE raised their dividend from 350 won per share to 420 won per share.  They also bought back around 2% of their stock over the last few months.
  

 

NICE trades at 6.5x trailing earnings and 4.5 trailing free cash flow (before working capital changes).  They now have more net cash than market value—204 billion won net cash and 195 billion won market cap.

[kms8717]

4Q revenue was weak YoY because the competitor KICC had a temporary processing trouble in 3-4Q17 which NICE processed, so the base was high.  4Q18 SG&A was high because of the continued pressure in ISOs, NICE incurred some impairment on the prepaid expenses that they've made to the ISOs. I believe the margin squeeze to be temporary.

 

What's more important IMO are two things:

 

1) NICE granted its C-levels 3yr stock options for the first time in its history to align with the shareholder interests. Despite the earnings decline in '18, they also increased dividend this year.

 

2) NICE added new lines of businesses including a) Tax-refund b) Merchant app.  As many of NICE's merchants are making growing number of transactions for the Chinese travelers, there's an increasing need and growing market for tax refund biz, which NICE can do very easily utilizing the existing merchant network and payment infrastructure.  Secondly, the merchant app is a step toward transforming the current, simple processing business into a data business, generating subscription revenue and further diversifying the revenue stream - derisking itself from the gov pressure on the processing fee.

 

I strongly believe now is a very attractive time to be overweight in I&T.

[Poor Charlie]

Thanks for your comments KMS.  I missed the merchant app disclosure when I was going through the filings.  If you know anything else about this, would you mind elaborating?  How would you compare the merchant app (and the overall non-processing revenue initiative) to what the newer payment companies in the west—Square, PayPal, Adyen, Stoneco, etc.—are doing?

[kms8717]

Hi-

 

I haven't seen the app, but based on the disclosure and my discussion with the IR, it sounds like they're following Square's path. it probably includes a dashboard with sales summary, stats, analysis of the near-by similar merchant sales, and third party software. 

 

Although this subscription revenue is a small part for Square, this is a fast growing segment, and it makes Square - merchant relationship stickier as well as win new businesses - a source of its double digit multiple(vs. NICE's 6.5x?). Stoneco's case seems a little unique in that half of its revenue comes from "financial income revenue", which is extending credits to the merchants.  I am of the view that processing revenue + app subscription revenue is more sustainable.

 

2019 will be a year when I&T's business really evolves into a healthier one.

 

 

[Poor Charlie]

KMS

 

I’d like to get your opinion on NICE’s excess cash balance.  Like other payment companies, changes in settlement receivables and payables cause large swings in working capital.  Also, I understand that settlement in Korea is 3 to 4 days, so NICE should have some baseline float as well.  How much of their cash and investments do you consider ‘excess’ funds that aren’t needed to run the business or handle settlement.  In other words, how much cash could they distribute without affecting the business?

 

Before making any adjustments, I get the following cash and investment balance:

 

154 in cash + 38 in ST financial assets + 13 in LT investments and receivables = 205 billion won

 

I ask because with all their excess cash, I would’ve expected a larger dividend and/or bigger buyback program. 

 

 

 

 

(Note: In my post on NICE's 2018 results, I adjusted Q4 2018 operating margin for a 2.9 billion won impairment.  Upon closer inspection, I believe this impairment was actually a below-the-line expense included in ‘Other losses,’ which increased by 3.3 billion in Q4.  As a result, the operating margin should have been the reported 6%.  Apologies for the mistake.)

[kms8717]

PG business temporarily books the cash that ultimately needs to be paid back to the merchants, so NICE's cash balance is a bit overstated - accounting for this ST liability, I estimate the net cash or the excess cash to be around 140B Won, about 70% of market cap. Current FCF yield is about 25-30%, so in a normal operation circumstance, much of this cash should be distributed back to the shareholders.

 

But as I may have explained before and you may as well know, the current gov is creating a huge uncertainty in the local payment market that it wants to shift from the current credit card based payment system to a mobile pay system like China), and NICE wants to be adequately loaded to adapt to this new potential change - either to sustain the lead or completely dominate the industry once the direction is set. 

 

Government aggregated all the mobile pay players in one consortium under the "ZEROPAY effort," and wants to negotiate with the VANs to support this mobile pay in the existing VAN machines, but the compensation is just too low for the VANs to move forward - and meanwhile the gov is blaming the card industry and pushing down the processing fee, so many VANs are struggling.

 

It is the Gov that's running out of time. Polls are falling, and despite all the noise that ZEROpay created, it's being bashed and derided. No one uses it. Without VAN's support, it cannot move any further.

 

Long story short, NICE may have to acquire another VAN that loses out in this environment(KSNET recently took out all the operating cashflow as dividends. Maybe they're trying to sell its business?), or install new signpads that reads NFC, Blooths or whatever to accept mobile payments. This will require capital.    While the future is still a bit unclear, NICE feels confident that they will continue to be relevant in any environment, and despite the earnings decline, they increased dividends. Yes it could have been bigger given the cashflow, but given what's going on, I think it was adequate.  And it''s moving forward to be more of a data company.

 

I may be repeating, but I think this has a Square-like potential selling for less than 6x '19 P/E, 30% '19 FCF Yield. My favorite reward/risk skew in Korean market currently.

[Poor Charlie]

A few comments:

 

Zeropay

• The Korean government has tried things like this before.  They tried, for example, to develop a free tutoring service to compete with the for-profits (Daeko, Chungdahm, Megastudy, etc.) and it didn’t work.  I think it will be even harder to develop a government-sponsored payment system.  In addition to the network effect, there’s also the issue of trust.  When I use a credit card, I know I can always dispute the transaction and get my money back.  You can’t really offer this clearinghouse-like service to consumers with Zeropay.  The incentives just aren’t there.
  
• Korea is mostly a credit card (as opposed to debit card) system.  As I mentioned in a previous post, credit offers a lot of benefits to the consumer—float, points, cash back, etc.  Even if the government offers tax incentives (I believe they’re already doing this), it’s going to be hard for consumers to give up these benefits. 
  

 

Fee pressure from the government

• I wonder what the government’s goals are here.  Do they want to get interchange down to par with the EU?  If that’s the case, there’s still a lot of room to go (I understand Korean card-present credit is in the low-1% range).  I don’t mind the government pushing back on fees, but I think they could be more rational about it.  Why, for example, do small merchants pay a lower interchange than large merchants?  Policies like this won’t result in a healthy payment ecosystem.   
  

 

Square-like service

• NICE’s current Square-like product, APPPOS (https://apppos.nicevan.co.kr/), looks well-designed.  I wonder if it’s caught on with smaller merchants yet?
  
• NICE I&T should work with the other NICE subsidiaries to develop Square-like services.  NICE I&T and NICE TCM could, for instance, work together to build ERP-related software into the merchant’s hardware (maybe they’re already doing this or will be doing it with the merchant app mentioned in their proxy?).  Also, I believe a large amount of Square’s non-transaction revenue comes from third-party loan servicing fees (Square Capital).  Perhaps NICE I&T could work with NICE Information Services on a third-party lending platform? 
  
• Without being in the market (or speaking the language), it’s hard for me to assess NICE’s chances here.  It appears like they stay on top of payment industry trends (and have good technology), but I’m just too far removed to know for sure. 
  

 

------

I think NICE’s biggest opportunity is in mobile payments.  Korea doesn’t have a centralized payment network (like MA/V in the US or Alipay/Wechat in China).  If NICE could partner with the major card brands on a mobile payments platform (like the article you linked to suggested), perhaps they could be the company that does this in Korea? 

[dabuff]

Which brokers have you all been using to trade Korean equities? Thanks.

[Genyi]

Which brokers have you all been using to trade Korean equities? Thanks.

 

www.boom.com

[nik_explores]

This is the HK based broker. How is your experience with Boom securities?

 

I am using Phillip Securities HK. they dont have real time quote and the app is quite outdated

 

 

[nik_explores]

Considering the parent company of 034310.KQ NICE HOLDINGS is trading at quite a holding discount.  I think that could be a better play as well.

 

Another note is that Pabrai funds is the 8.7% holder of NICE Holdings recently. The company looks solid as well. It has a recent VIC writeup

https://www.valueinvestorsclub.com/idea/Nice_Holdings/9451338100#description

 

Does any one know how to check the disclosures of institutional buyers ?

 

For e.g. Japan has this link. Do we have similar for Korea?

 

https://disclosure.edinet-fsa.go.jp/E01EW/BLMainController.jsp?uji.verb=W0EZA240CXP001007BLogicE&uji.bean=ee.bean.parent.EECommonSearchBean&TID=W1E63012&PID=currentPage&SESSIONKEY=1616744046310&downloadFileName=&lgKbn=1&dflg=0&iflg=0

 

[RetroRanger]

Yes anyone got long-term experience with Boom as a broker? There seems to be no alternative. ATM i dont feel perfectly fine with having a broker in HK ( but boom has also a company in japan )

Still it would be good to know if some experienced users have a long term review for Boom :)

 

[Poor Charlie]

Considering the parent company of 034310.KQ NICE HOLDINGS is trading at quite a holding discount.  I think that could be a better play as well.

 

I agree on NICE Holdings.  I’ve owned several of the NICE subsidiaries (NICE Information Services, NICE D&B, NICE I&T) for a long time but never paid much attention to the holding company.  It was just too tough to analyze their (or any other Korean holding company’s) filings when I don’t speak the language.  That being said, I’ve been buying NICE Holdings recently.  I still don’t fully understand a few things (private equity put agreements, manufacturing strategy, etc.), but I made an exception because of the quality of the assets. 

 

I would be happy to talk about NICE with anyone interested.

 

 

Another note is that Pabrai funds is the 8.7% holder of NICE Holdings recently. The company looks solid as well. It has a recent VIC writeup

https://www.valueinvestorsclub.com/idea/Nice_Holdings/9451338100#description

 

PIF owns both NICE Holdings and NICE I&T.

 

Does any one know how to check the disclosures of institutional buyers ?

 

+5% interests are disclosed on DART.

 

[Genyi]

This is the HK based broker. How is your experience with Boom securities?

 

I am using Phillip Securities HK. they dont have real time quote and the app is quite outdated

 

I have used Boom for about 12 years. I am satisfied with their services. I invest long term and only make a few trades per year. I login to their website for those and never tried their app. I also don't rely on their real-time quotes, but those are available for an extra fee. For all their fees, click the Customer Service button on the homepage. Some of their commissions could be considered high. That's why I use Boom mostly to access markets not available with other brokers.

 

They do not invest your surplus cash balance automatically in a money market fund, like Phillip does. So you may want to transfer it if you have a large cash balance or invest in a money market etf yourself. Just to feel safe. But on the other hand, Boom is part of a larger Japanese financial services company called Monex. I don't believe it will just fail suddenly.

 

I've been on the phone with customer service only once in all that time. As you probably know, Hong Kong residents use Cantonese and Mandarin on a daily basis. The representative was hard to understand in English. I prefer to raise issues by email, but the language barrier may become a concern if you prefer to call them.

 

Their reporting is basic but clear and sufficient for my purposes. Everything can be downloaded online; they don't mail anything on paper anymore.

 

In summary, I'm happy but also note that I am not a 'heavy' user of the platform.