Blue Lotus China New Economy Research, Blue Lotus Research Institute

Eric Wen

Blue Lotus China New Economy Research

China growth and global non-US Internet equities

Blue Lotus Research Institute

Blue Lotus Research is a Hong Kong Type 4 Licensed investment advisory firm focusing on Chinese growth equities and global non-US Internet equities

Equity Bottom-Up

<ul>
<li>We think FUTU is stepping into a stagnant phase in 2024. Japan is not a game changer. </li>
<li>Client asset inflow from overseas is not meaningful, and growth from mainland is frozen by regulation.</li>
<li>We downgrade the stock into SELL rating and cut TP to US$46/ADS, mainly due to slow progress in overseas expansion and difficulty in monetization. </li>
</ul>


We think FUTU is stepping into a stagnant phase in 2024. Japan is not a game changer. 
Client asset inflow from overseas is not meaningful, and growth from mainland is frozen by regulation.
We downgrade the stock into SELL rating and cut TP to US$46/ADS, mainly due to slow progress in overseas expansion and difficulty in monetization. 


[Futu Holdings(FUTU US, SELL, TP US$46)Rating Change]: Run Out of Growth Momentum, Downgrade to SELL

China/Asia TMT

Shawn Yang

<ul>
<li>FUTU reported 2Q23 revenue 5.9%/13.5% vs. our estimate/consensus, non-GAAP NI beat our estimate/consensus by 9.9%/19.4%, mainly contributed by higher revenue from interest income due to continuous interest rate hike.</li>
<li>Overseas expansion turns to be the primary focus. However, we think exploit new market is a bumpy and slow path, which cannot solve the near-term headwind on weak trading sentiment.</li>
<li>We maintain the stock as BUY rating and maintain TP at US$55/ADS, which implies 12.6x PE in 2023, the stock currently trading at 11.3x PE in 2023, leaving 12% upside.</li>
</ul>


FUTU reported 2Q23 revenue 5.9%/13.5% vs. our estimate/consensus, non-GAAP NI beat our estimate/consensus by 9.9%/19.4%, mainly contributed by higher revenue from interest income due to continuous interest rate hike.
Overseas expansion turns to be the primary focus. However, we think exploit new market is a bumpy and slow path, which cannot solve the near-term headwind on weak trading sentiment.
We maintain the stock as BUY rating and maintain TP at US$55/ADS, which implies 12.6x PE in 2023, the stock currently trading at 11.3x PE in 2023, leaving 12% upside.


[Futu Holdings (FUTU US, BUY, TP US$55) Earnings Review]: Short Term Peaking but Momentum Remains

<ul>
<li>We think Futu has proved its ability to retain its mainland China users. The DAU remained stable, and the growth rate of clients’ HK assets outpaced the market in July.</li>
<li>Futu’s overseas expansion is quickly ramping up in Japan, Malaysia, and is progress steadily in Singapore and Australia. We expect the monetization in Malaysia begin in 2024.</li>
<li>We expect Futu 2Q23 revenue 4.5% higher than consensus, our non-GAAP NI 8.7% higher than consensus. We maintain BUY rating on FUTU and raise TP by US$4 to US$55.</li>
</ul>


We think Futu has proved its ability to retain its mainland China users. The DAU remained stable, and the growth rate of clients’ HK assets outpaced the market in July.
Futu’s overseas expansion is quickly ramping up in Japan, Malaysia, and is progress steadily in Singapore and Australia. We expect the monetization in Malaysia begin in 2024.
We expect Futu 2Q23 revenue 4.5% higher than consensus, our non-GAAP NI 8.7% higher than consensus. We maintain BUY rating on FUTU and raise TP by US$4 to US$55.


[Futu Holdings (FUTU US, BUY, TP US$55) TP Change]: Better Outlook in Both Domestic and Overseas

Asia Pac IPO & Placement Research, China biotech, Aequitas Research

Ke Yan, CFA, FRM

Asia Pac IPO & Placement Research, China biotech

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

East Money Information / Equity Bottom-Up

<p>East Money is the most actively traded A-share stock in 2020. It just reported its 1H2021 results. Unlike the traditional broker, it has a strong leverage on its online information platform which is well reflected in its latest financial results. As an unconventional broker and a member stock of the MSCI China A50 index, we think investors should follow the company closely.</p>

East Money is the most actively traded A-share stock in 2020. It just reported its 1H2021 results. Unlike the traditional broker, it has a strong leverage on its online information platform which is well reflected in its latest financial results. As an unconventional broker and a member stock of the MSCI China A50 index, we think investors should follow the company closely.

East Money 1H21: The Most Active A-Share that Beat the Market

Independent Sell Side Equity Research Analyst, ChartSmarter

Douglas Busch

Independent Sell Side Equity Research Analyst

ChartSmarter

ChartSmarter is a service dedicated to the art of technical analysis.

On a daily basis we write up actionable ideas on a specific, major S&P sector on both the long and short side, in an easy yet thorough way. In the notes we give precise entries and exits, while looking to capture the "meat" of a trend.

Technical Analysis.

Technical Analysis

KraneShares CSI China Internet ETF / Technical Analysis

<ul>
<li>China momentum continues with KWEB breaking out above WEEKLY double-bottom base</li>
<li>Stocks REPORTING this week that look technically sound include PDD BZ and EH</li>
<li>In-Depth look at individual leaders in Tencent Holdings, Futu Holdings, and Sony Group</li>
</ul>


China momentum continues with KWEB breaking out above WEEKLY double-bottom base
Stocks REPORTING this week that look technically sound include PDD BZ and EH
In-Depth look at individual leaders in Tencent Holdings, Futu Holdings, and Sony Group


United States

Futu Holdings Limited operates as a holding company. The Company, through its subsidiaries, offers an online brokerage platform that enables individual investors to trade in listed stocks. Futu Holdings serves customers in the United States, China, and Hong Kong.

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Futu Holdings Ltd (FUTU US)

[Futu Holdings(FUTU US, SELL, TP US$46)Rating Change]: Run Out of Growth Momentum, Downgrade to SELL

FUTU faces stagnation in 2024 as Japan offers limited growth potential and regulatory constraints hinder expansion. Stock downgraded to SELL /ADS...

Blue Lotus Research Institute

[Futu Holdings (FUTU US, BUY, TP US$55) Earnings Review]: Short Term Peaking but Momentum Remains

We maintain the stock as BUY rating and maintain TP at US$55/ADS, which implies 12.6x PE in 2023, the stock currently trading at 11.3x PE in 2023,...

Blue Lotus Research Institute

[Futu Holdings (FUTU US, BUY, TP US$55) TP Change]: Better Outlook in Both Domestic and Overseas

We expect Futu 2Q23 revenue 4.5% higher than consensus, our non-GAAP NI 8.7% higher than consensus. We maintain BUY rating on FUTU and raise TP by...

Blue Lotus Research Institute

Red Dragon Awakening

Focusing on Chinese names that have already been leading, and these are the ones most likely to continue to do so going forward. Very specific...

Douglas Busch

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

[Futu Holdings(FUTU US, SELL, TP US$46)Rating Change]: Run Out of Growth Momentum, Downgrade to SELL

​FUTU faces stagnation in 2024 as Japan offers limited growth potential and regulatory constraints hinder expansion. Stock downgraded to SELL /ADS...

Blue Lotus Research Institute

[Futu Holdings (FUTU US, BUY, TP US$55) Earnings Review]: Short Term Peaking but Momentum Remains

We maintain the stock as BUY rating and maintain TP at US$55/ADS, which implies 12.6x PE in 2023, the stock currently trading at 11.3x PE in 2023,...

Blue Lotus Research Institute

[Futu Holdings (FUTU US, BUY, TP US$55) TP Change]: Better Outlook in Both Domestic and Overseas

We expect Futu 2Q23 revenue 4.5% higher than consensus, our non-GAAP NI 8.7% higher than consensus. We maintain BUY rating on FUTU and raise TP by...

Blue Lotus Research Institute

East Money 1H21: The Most Active A-Share that Beat the Market

We highlight the strong set of results for East Money. As an unconventional broker and a member stock of the MSCI China A50 index, we think...

Ke Yan, CFA, FRM

Red Dragon Awakening

Focusing on Chinese names that have already been leading, and these are the ones most likely to continue to do so going forward. Very specific...

Douglas Busch

FUTU faces stagnation in 2024 as Japan offers limited growth potential and regulatory constraints hinder expansion. Stock downgraded to SELL /ADS...