Investment Rating - The report assigns a "Buy" rating for Futu Holdings (FUTU US) with a target price raised to $135.00, indicating a potential upside of 25.6% from the current closing price of $107.52 [1][5][12]. Core Insights - Futu's Q4 earnings exceeded expectations, with Non-GAAP net profit reaching HKD 19.52 billion, a significant year-on-year and quarter-on-quarter growth of 105% and 40% respectively, marking a record high for a single quarter [5]. - The company reported strong guidance for customer growth in 2025, with a forecast of 800,000 new paying users, representing a growth rate of 33% based on the existing market [5]. - Futu's trading volume in Q4 reached HKD 2.89 trillion, a year-on-year increase of 202%, with 72% of the volume coming from U.S. stocks [5]. - The wealth management business is steadily improving, with assets under management growing to HKD 110.9 billion, accounting for 15% of client assets, an increase of 3 percentage points from 2023 [5]. - The report highlights the positive impact of the recent surge in investor interest in Chinese AI-related stocks, benefiting Futu's business structure and customer growth [5]. Financial Overview - Revenue projections for Futu are as follows: HKD 10,008 million in 2023, HKD 13,590 million in 2024, and HKD 16,812 million in 2025E, reflecting a year-on-year growth of 31%, 36%, and 24% respectively [4][14]. - Net profit is expected to grow from HKD 4,279 million in 2023 to HKD 6,556 million in 2025E, with corresponding growth rates of 46%, 27%, and 21% [4][14]. - The report indicates an increase in the price-to-earnings ratio from 27.3 in 2023 to 17.8 in 2025E, suggesting a more attractive valuation as earnings grow [4][15].

Financial Data and Key Metrics Changes - Total revenue for Q4 2024 was HK$4.4 billion, an increase of 87% from HK$2.4 billion in Q4 2023. Full-year revenue grew to HK$13.6 billion, up 36% year-over-year [21][30] - Brokerage commission and handling charge income reached HK$2.1 billion, a 128% year-over-year increase and a 35% quarter-over-quarter increase [21][22] - Net income increased by 113% year-over-year and 42% quarter-over-quarter to HK$1.9 billion, with a net income margin expanding to 42.2% [30] Business Line Data and Key Metrics Changes - In Q4, the number of new paying clients reached 215,000, bringing total paying clients to over 2.4 million, a 41% year-over-year increase [7][8] - Total trading volume jumped by 202% year-over-year and 52% quarter-over-quarter to HK$2.89 trillion, with U.S. stock trading volume growing by 36% sequentially [15][16] - Total client assets in wealth management increased by 93% year-over-year and 14% quarter-over-quarter to HK$111 billion [17] Market Data and Key Metrics Changes - The Hong Kong market was the top growth driver for new paying clients, with a significant rebound in trading velocity starting from September [8][16] - Singapore recorded a 19% quarter-over-quarter growth in total client assets, marking the 10th consecutive quarter of growth [14] - In Japan, new paying clients grew double-digit quarter-over-quarter, driven by a bullish U.S. market backdrop [10] Company Strategy and Development Direction - The company aims to add 800,000 new paying clients in 2025, focusing on existing markets without entering new ones [7][37] - A strong emphasis on enhancing product offerings, including the launch of crypto trading in the U.S. and expanding wealth management services [46][72] - The company is leveraging AI to improve operational efficiency and client-facing capabilities, enhancing user experience [53][56] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about client acquisition growth in existing markets, particularly in Hong Kong and Singapore, due to favorable market conditions [37][108] - The company anticipates continued robust net asset inflow in 2025, despite potential market volatility [107][108] - Management highlighted the importance of maintaining a balance between user experience and compliance in AI applications [56] Other Important Information - The company underwrote 40 Hong Kong IPOs in 2024, ranking first among all brokers for the third consecutive year [19] - The introduction of the new digital IPO settlement platform, FINI, is expected to enhance retail participation in the market [20] Q&A Session Summary Question: Guidance for new paying clients in 2025 - Management clarified that the guidance of 800,000 new paying clients does not include new markets, focusing on existing markets with strong growth potential [37] Question: Client acquisition cost (CAC) increase - Management targeted a CAC of HK$2,500 to HK$3,000 for 2025, attributing the increase to brand equity investments [38] Question: Current trading volume and market performance - Management noted robust trading opportunities in both Hong Kong and U.S. markets, forecasting higher net asset inflows and trading volumes [44] Question: Product pipeline for equity derivatives and crypto - Management confirmed a rich product pipeline for overseas markets, including crypto trading planned for the U.S. [46] Question: Impact of U.S. stock market correction on trading volume - Despite setbacks in the U.S. stock market, management observed increased trading activity due to market volatility [61] Question: Breakdown of interest income - Approximately 40% to 45% of interest income was derived from idle cash deposits, with the remainder from margin financing and security lending [99] Question: Share buyback program and capital return plans - Management has not utilized the share repurchase program yet, focusing on growth opportunities in new markets [92] Question: Derivatives trading percentage in total volume - Derivatives accounted for roughly one-third of total trading commissions in Q4, with no significant changes expected in Q1 [97]

Core Insights - Futu Holdings Ltd. reported significant growth in Q4 2024, with revenues of US$570.6 million, an increase of 86.8% year-over-year, and non-GAAP adjusted net income of US$251.3 million, up 105.4% YoY [1] - For the full year 2024, the company achieved revenues of US$1.75 billion and non-GAAP adjusted net income of US$742.6 million, reflecting YoY increases of 35.8% and 26.2% respectively [2] User and Client Growth - The company reported over 25 million global users by year-end, including 2.41 million paying clients, representing increases of 16% and 41% YoY respectively [3] - Total client assets reached US$95.7 billion, marking a 53% YoY increase [3] - In 2024, the company acquired over 701 thousand new paying clients, exceeding its full-year guidance by 127% [3] Market Performance - Q4 marked the strongest growth in users and paying clients in Singapore over the past 10 quarters, with double-digit increases in Japan, Canada, Malaysia, and Australia [4] - In Hong Kong, the user base expanded to over half of the local adult population, with significant growth in paying clients and record-high average client assets [5] Trading Activities - The company's trading volume reached an all-time high of US$371.5 billion in Q4, with US stocks trading volume surging by 195% YoY to over US$267 billion [6] - Hong Kong stocks trading volume exceeded US$97 billion, representing a three-year high [6] - Crypto trading services launched in Singapore and Hong Kong saw increased traction, with significant growth in the number of traders and trading volume [6] Wealth Management Expansion - The wealth management business experienced rapid growth, with assets under management surpassing US$14 billion, nearly doubling from the end of 2023 [7] Product Development and User Engagement - The company optimized user experience through product launches and upgrades, including a redesigned desktop version and new trading options in Japan and Australia [8] - User engagement improved significantly, with daily active usage increasing across all markets [10] - The number of online course learners doubled compared to the previous quarter, reflecting increased user activity [11] Market Position and Recognition - The moomoo app secured top positions in Singapore and Malaysia for accumulated downloads and daily active users, and ranked first in annual downloads in Australia [12] - The app maintained high user ratings in Singapore, Japan, and Malaysia on both Google Play and App Store [12] - Moomoo was recognized as the 2024 Best Stock Broker by traders on the TradingView platform [9]

Economic Outlook - The Chinese government has set a GDP growth target of 5% for 2025, which aligns with its medium- and long-term goals [2] - A budget deficit target of 4% of GDP has been announced, which is 1% higher than the previous year, marking the largest deficit since 2010 [2] Stimulus Measures - The government plans to inject nearly $179 billion in long-term treasury bonds, approximately $69 billion in bonds to support large commercial banks, and $610 billion in special-purpose bonds to assist local governments facing financial difficulties [3] - The intention to expand cooperation in the science and technology sector and deepen reforms in investment and financing within the capital market has been highlighted [4] Market Response - Chinese stocks, including Futu Holdings, GDS Holdings, and New Oriental Education & Technology, experienced significant gains, with Futu up 12%, GDS up 10%, and New Oriental up roughly 6% [1] - The tech sector is showing positive momentum, driven by government stimulus and advancements in artificial intelligence [6] Company Insights - Futu Holdings operates as a digital wealth management and online brokerage platform, facilitating investments for both Chinese citizens and foreigners [7] - GDS Holdings, which runs data centers, has benefited from the AI sector's growth [7] - New Oriental Education & Technology is an online tutoring and education platform that has also seen stock price increases [7] Trade War Context - The ongoing trade war with the U.S. is contributing to market volatility, but there are signs of recovery in Chinese stocks [8] - The Chinese government is responding to U.S. tariffs with retaliatory measures, indicating a commitment to defend its economic interests [5]

Group 1 - Futu Holdings Limited will report its financial results for Q4 and full year 2024 on March 13, 2025, before U.S. markets open [1] - An earnings conference call will be held on March 13, 2025, at 7:30 AM U.S. Eastern Time [1] - Participants must pre-register for the conference call using a provided link [2] Group 2 - Upon registration, participants will receive confirmation emails with dial-in numbers and personal PINs [3] - A live and archived webcast of the conference call will be available on the company's investor relations website [3] Group 3 - Futu Holdings Limited is a tech-driven online brokerage and wealth management platform [4] - The company offers a range of digital financial services through its platforms, including trade execution, margin financing, and wealth management [4] - Futu integrates social media tools to enhance user connectivity and engagement [4]

Core Insights - Futu Holdings Limited (FUTU) is currently more attractive to value investors compared to Ibotta (IBTA) based on various financial metrics and rankings [3][7] Valuation Metrics - FUTU has a forward P/E ratio of 18.02, while IBTA has a higher forward P/E of 27.43 [5] - The PEG ratio for FUTU is 0.76, indicating better value relative to its expected earnings growth compared to IBTA's PEG ratio of 0.87 [5] - FUTU's P/B ratio stands at 4.36, which is lower than IBTA's P/B ratio of 5.29, suggesting that FUTU is more undervalued in terms of market value versus book value [6] Earnings Outlook - FUTU has a Zacks Rank of 2 (Buy), indicating a stronger improvement in earnings outlook compared to IBTA, which has a Zacks Rank of 3 (Hold) [3][7] - The analysis indicates that FUTU has experienced stronger estimate revision activity, making it a more favorable option for value investors [7] Value Grades - FUTU has been assigned a Value grade of B, while IBTA has a Value grade of C, reflecting the relative attractiveness of their valuations [6]

Stock Comparison: Futu Holdings Limited Sponsored ADR (FUTU) vs Symbotic Inc (SYM) - Investors in the Technology Services sector may consider FUTU or SYM as potential investment opportunities [1] - The Zacks Rank system, which emphasizes earnings estimates and revisions, is used to identify value opportunities [2] Zacks Rank and Earnings Outlook - FUTU has a Zacks Rank of 2 (Buy), indicating positive earnings estimate revisions and an improving earnings outlook [3][7] - SYM has a Zacks Rank of 3 (Hold), suggesting less favorable earnings outlook compared to FUTU [3] Valuation Metrics - FUTU has a forward P/E ratio of 14.12, significantly lower than SYM's 206.26 [5] - FUTU's PEG ratio of 0.69 is much lower than SYM's 6.88, indicating better value considering earnings growth [5] - FUTU's P/B ratio of 3.30 is substantially lower than SYM's 44.70, suggesting FUTU is more reasonably valued relative to its book value [6] Value Grades - Based on valuation metrics, FUTU earns a Value grade of B, while SYM receives a Value grade of F [6] - The combination of Zacks Rank and Value grade suggests FUTU is the superior value option currently [7]

Individual Investors Growth - 46 million new brokerage accounts were opened by individual investors in the U S during 2020-21, an 80% increase over a two-year period [1] - More than 75% of these new investors remain invested today, indicating a sustained interest in the market [1] The Investor Diaries Initiative - The Investor Diaries is a research initiative launched by The BlackRock Foundation and Commonwealth to understand new investors, particularly those earning low to moderate incomes (LMI) [9] - The initiative aims to provide insights into the financial circumstances, motivations, behaviors, and needs of LMI investors, and the role of capital market investing in their financial wellness [9] - The project will use voice diary entries, a national survey, and analysis of large transaction data sets to capture the experiences of LMI investors [9] Partnership with Investment Platforms - Commonwealth has partnered with Betterment and moomoo to capture participants' experiences with both robo-advised and self-directed platforms [10] - Betterment offers automated investment technology with diversified, expert-built portfolios, while moomoo provides an accessible platform for self-directed investors with advanced tools and features [11] About Commonwealth - Commonwealth is a national nonprofit that builds financial security and opportunity for LMI households through innovation and partnerships [6] - Over the past two decades, Commonwealth has enabled over 2 million people to save nearly $8 billion [6] About The BlackRock Foundation - The BlackRock Foundation focuses on making saving and investing more accessible and affordable for LMI households [7] - The foundation's Emergency Savings Initiative has provided access to more than 10 million people and led to $2 billion in new liquid savings between 2019 and 2022 [7] About Betterment - Betterment is the largest independent digital financial advisor, helping more than 900,000 customers manage over $50 billion with low-cost, expert-built investing portfolios [12] About moomoo - Moomoo is an investment and trading platform that provides global investors with pro-grade tools, data, and insights to make informed investment decisions [4] - The platform offers advanced charting tools, technical analytics, and in-depth data, along with educational resources and community features [4]

Investment Rating - The report maintains a **Buy** rating for Futu Holdings (FUTU US) with a target price of **$108.00**, representing a potential upside of **43.2%** from the current price of **$75.41** [1][5] Core Views - The report highlights that Futu Holdings' current valuation is attractive, with a 2024E P/E ratio of **16x**, significantly lower than its US internet brokerage peers [9] - The company's diversified overseas markets and product lines (stocks, equity derivatives, cryptocurrencies, wealth management products) are expected to enhance business stability [9] - The report expects Futu's ROE to remain around **18%** from 2024 to 2026, excluding special dividends [9] Financial Performance and Forecasts Revenue and Profit Growth - Revenue is expected to grow from **HKD 10,008 million** in 2023 to **HKD 12,848 million** in 2024E, representing a **28.4%** YoY increase [7][9] - Non-GAAP net profit is forecasted to grow from **HKD 4,572 million** in 2023 to **HKD 5,419 million** in 2024E, an **18.5%** YoY increase [7][9] - The report has revised its 2024E revenue forecast upward by **4.2%** and Non-GAAP net profit by **2.4%** [4] Key Financial Metrics - Gross margin is expected to remain stable at **81.9%** in 2024E, slightly up from **81.8%** in the previous forecast [4] - Net profit margin is projected to be **39.6%** in 2024E, down **0.6** percentage points from the previous forecast [4] - EPS is expected to grow from **HKD 30.78** in 2023 to **HKD 36.49** in 2024E, a **2.6%** upward revision from the previous forecast [6] Operational Metrics - The number of funded clients is expected to grow from **1.71 million** in 2023 to **2.31 million** in 2024E, a **34.9%** YoY increase [3][7] - Client assets are projected to grow from **HKD 485.6 billion** in 2023 to **HKD 645.9 billion** in 2024E [7] - Trading volume is expected to reach **HKD 7.1 trillion** in 2024, a **68%** YoY increase, driven by active trading in both Hong Kong and US markets [9] Market and Industry Context - The report notes that the Federal Reserve's slower pace of interest rate cuts is expected to stabilize Futu's net interest income, with a **3.7%** YoY growth forecasted for 2024 [9] - The company's overseas expansion and product diversification are seen as key drivers of future profitability, particularly in a high-interest-rate environment [9] Valuation and Peer Comparison - Futu's 2024E P/E ratio of **16x** is significantly lower than its US internet brokerage peers, making its valuation attractive [9] - The report suggests that supportive economic policies in China could further boost the company's valuation [9]

Company Analysis - Futu Holdings (NASDAQ: FUTU) stock experienced significant growth, increasing its value by four times in 2020 and then by 400% in January 2021 [1] - The company's stock has been highly volatile in recent years, but is now considered a clear buy [1] Industry Trends - The financial, consumer, and technology industries are key areas of focus for investment analysis [1] - Emerging technologies and their impact on younger generations are important considerations for long-term growth investments [1] Investment Philosophy - Deep research into business model trends is prioritized over short-term market trends or stock prices [1] - This approach aims to identify long-term growth opportunities while avoiding risky financial instruments [1]