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Futu Holdings Ltd (FUTU)
NASDAQ:FUTU
Top Page
Futu Holdings
(NASDAQ:FUTU)
74Outperform
Positive Factors
Client Growth
Futu acquired 215k new paying clients in 4Q24, up 39% QoQ/262% YoY, indicating strong client acquisition momentum.
Financial Performance
Total revenue and gross profit are expected to grow markedly, showcasing a strong financial performance outlook.
Market Expansion
The company saw a robust growth outlook for new markets like Malaysia and Japan, with further upside expected from relatively mature markets like Hong Kong and Singapore.
Negative Factors
Commission Rates
There is a decline in commission rates due to volume shifts and overseas business expansion.
Foreign Exchange Losses
The HKD131mn of other losses in 3Q were mainly due to the unrealized FX losses arising from RMB/SGD appreciation versus USD.
Futu Holdings (FUTU) vs. S&P 500 (SPY)
Market Cap
$4.57B
Dividend YieldN/A
Average Volume (3M)3.27M
Price to Earnings (P/E)20.6
Beta (1Y)1.48
Revenue Growth36.30%
EPS Growth27.77%
CountryUS
Employees3,343
SectorFinancial
Sector Strength83
IndustryFinancial - Capital Markets
Share Statistics
EPS (TTM)1.80
Shares Outstanding94,783,490
10 Day Avg. Volume2,513,479
30 Day Avg. Volume3,270,570
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.00
Price to Cash Flow (P/CF)0.00
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$139.08Price Target Upside36.78% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering6
Futu Holdings Business Overview & Revenue Model
Company DescriptionFutu Holdings Limited (FUTU) is a leading digital brokerage and wealth management platform primarily operating in Hong Kong. The company offers a comprehensive suite of financial services, including securities trading, margin financing, wealth management, and market data services. Futu leverages its innovative digital platform to provide a seamless and user-friendly experience for its clients, which includes retail investors and institutional clients across various global markets.
How the Company Makes MoneyFutu Holdings generates revenue through multiple streams, primarily derived from its brokerage and wealth management services. The company charges commission fees on securities trading executed through its platform, which represents a significant portion of its income. Additionally, Futu earns interest income from margin financing services provided to its clients who borrow funds to trade securities. The company also offers subscription-based market data services and earns asset management fees from its wealth management services. Partnerships with financial institutions and technology companies further enhance Futu's offerings, allowing it to expand its client base and increase revenue opportunities by providing advanced trading tools and financial products.
Futu Holdings Financial Statement Overview
Summary
Futu Holdings has a strong income statement with significant revenue and profit growth, supported by a healthy balance sheet with no debt. The company shows strong equity and profit margins. However, cash flow inconsistencies present a challenge, indicating a need for improved cash management.Income Statement
Futu Holdings has demonstrated strong revenue growth, with Total Revenue increasing significantly over the years. The Gross Profit Margin remains high at 100% for 2024, indicating effective cost management. Net Profit Margin has also improved, reaching 45.5% in 2024 from 47.05% in 2023. The EBIT Margin is robust at 55.3% for 2024. However, the absence of EBITDA data in 2024 slightly limits the full profitability assessment.―
Balance Sheet
The company maintains a strong equity position with Stockholders' Equity steadily rising. The Debt-to-Equity Ratio is favorable at 0, indicating no debt burden. The Return on Equity (ROE) is impressive, rising to 19.4% in 2024, suggesting efficient use of equity. Equity Ratio stands at 17.5% for 2024, reflecting a balanced asset structure. The lack of debt enhances financial stability but also limits leverage for potential growth.78
Cash Flow
Cash flow performance is mixed. The Free Cash Flow has fluctuated, showing significant declines in recent years. The Operating Cash Flow to Net Income Ratio is unavailable for 2024, limiting insight into cash conversion efficiency. The Free Cash Flow to Net Income Ratio is also not calculable due to missing data, indicating potential challenges in cash management.―
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 11.97B | 9.10B | 7.32B | 6.74B | 3.13B | Gross Profit |
| 11.97B | 7.56B | 6.33B | 5.53B | 2.43B | EBIT |
| 6.62B | 5.01B | 3.48B | 3.19B | 1.45B | EBITDA |
| 6.80B | 5.18B | 3.63B | 3.31B | 1.53B | Net Income Common Stockholders |
| 5.44B | 4.28B | 2.93B | 2.81B | 1.33B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 11.69B | 4.94B | 5.03B | 5.72B | 1.33B | Total Assets |
| 159.70B | 97.14B | 94.50B | 101.54B | 71.34B | Total Debt |
| 8.55B | 5.89B | 2.69B | 11.09B | 11.16B | Net Debt |
| -11.69B | 952.04M | -2.34B | 6.53B | 9.82B | Total Liabilities |
| 131.70B | 72.56B | 73.64B | 80.55B | 63.03B | Stockholders Equity |
| 28.01B | 24.57B | 20.86B | 20.99B | 8.31B |
| Cash Flow | Free Cash Flow | |||
| 0.00 | -6.42B | 3.38B | 5.94B | 20.41B | Operating Cash Flow |
| 0.00 | -6.34B | 3.47B | 6.01B | 20.46B | Investing Cash Flow |
| 0.00 | -2.44B | 93.86M | -963.57M | -244.18M | Financing Cash Flow |
| 0.00 | 2.31B | -7.01B | 10.55B | 8.41B |
Futu Holdings Technical Analysis
Positive
101.68
Price Trends
99.33
Positive
96.37
Positive
87.07
Positive
Market Momentum
1.22
Negative
59.51
Neutral
93.46
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FUTU, the sentiment is Positive. The current price of 101.68 is above the 20-day moving average (MA) of 88.60, above the 50-day MA of 99.33, and above the 200-day MA of 87.07, indicating a bullish trend. The MACD of 1.22 indicates Negative momentum. The RSI at 59.51 is Neutral, neither overbought nor oversold. The STOCH value of 93.46 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for FUTU.
Futu Holdings Risk Analysis
Futu Holdings disclosed 98 risk factors in its most recent earnings report. Futu Holdings reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Futu Holdings Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $8.51B | 31.16 | 16.25% | 1.30% | 7.44% | -15.53% | |
76 Outperform | $8.70B | 10.47 | 23.13% | <0.01% | 6.71% | 6.81% | |
74 Outperform | $4.57B | 20.63 | 20.67% | ― | 36.30% | 27.77% | |
73 Outperform | $75.36B | 24.78 | 19.26% | 0.56% | 15.28% | 23.59% | |
71 Outperform | $189.84B | 14.03 | 13.88% | 3.13% | 6.53% | 55.54% | |
70 Outperform | $1.56B | 25.17 | 10.61% | ― | 43.68% | 77.18% | |
64 Neutral | $12.51B | 9.81 | 7.92% | 16985.69% | 12.67% | -5.98% |
* Financial Sector Average
Performance Comparison
FUTU
Futu Holdings
101.68
33.36
48.83%
IBKR
Interactive Brokers
179.79
61.43
51.90%
MKTX
Marketaxess Holdings
228.14
26.03
12.88%
MS
Morgan Stanley
119.10
24.03
25.28%
TIGR
Up Fintech Holding
9.17
5.32
138.18%
XP
XP
15.84
-4.66
-22.73%
Futu Holdings Earnings Call Summary
Earnings Call Date:Mar 13, 2025
(Q4-2024)
| % Change Since: -8.99%|
Next Earnings Date:May 15, 2025
Earnings Call Sentiment Positive
The earnings call highlighted strong growth in paying clients, revenue, and trading volume, along with significant achievements in product development and market leadership in IPO underwriting. However, challenges such as increased operating expenses and a decline in the commission rate were noted. Overall, the positive aspects significantly outweigh the negatives.Q4-2024 Updates
Positive Updates
Record Growth in Paying Clients
Added 215,000 paying clients in Q4, resulting in a total of over 2.4 million paying clients, a 41% year-over-year increase.
Strong Revenue and Profit Growth
Total revenue reached HK$4.4 billion, up 87% year-over-year. Net income increased by 113% year-over-year to HK$1.9 billion.
High Product Development Velocity
Delivered 209 app iterations and added 7,762 new features in 2024, with a 37% and 32% year-over-year increase respectively.
Expansion in Trading Volume
Total trading volume jumped by 202% year-over-year to HK$2.89 trillion, with U.S. stock trading volume growing by 36% sequentially.
Increase in Wealth Management Assets
Total client assets in wealth management increased 93% year-over-year to HK$111 billion, accounting for 15% of total client assets.
IPO Underwriting Leadership
Underwrote 40 Hong Kong IPOs, ranking first among all brokers for the third consecutive year.
Negative Updates
Challenges in China
A pullback in China equity in the second half of Q4 weighed on the valuation of client assets.
Increased Operating Expenses
Operating expenses increased by 57% year-over-year to HK$1.4 billion due to costs related to organizational restructuring and increased headcount.
Blended Commission Rate Decline
Blended trading commission rate declined both year-over-year and sequentially in Q4, partially due to a shift in the product mix.
Company Guidance
During the Futu Holdings Fourth Quarter and Full Year 2024 Earnings Conference Call, the company reported exceeding its full year guidance by adding 215,000 paying clients in Q4, bringing the total to over 2.4 million, a 41% increase year-over-year. They are guiding for 800,000 new paying clients in 2025. Total client assets reached HK$743 billion, up 43% year-over-year and 7% quarter-over-quarter, with overseas markets recording the highest quarterly net asset inflow. Margin financing and security lending balances rose 25% sequentially to a record HK$51 billion. Total trading volume surged 202% year-over-year and 52% quarter-over-quarter to HK$2.89 trillion, with U.S. stock trading volume hitting a historic high. Revenue in Q4 was HK$4.4 billion, up 87% year-over-year, and full-year revenue grew 36% to HK$13.6 billion. Brokerage commission income increased by 128% year-over-year, while interest income rose 52% year-over-year. Operating margin improved to 50%, and net income increased by 113% year-over-year to HK$1.9 billion, with a net income margin of 42.2%. The company also highlighted the robust growth of its Wealth Management business, with total client assets increasing 93% year-over-year to HK$111 billion, and its involvement in 482 IPO distributions.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.