In today’s briefing:
- Is the Relief Rally Over?
- [Futu Holdings (FUTU US, BUY, TP US$55) Earnings Review]: Short Term Peaking but Momentum Remains
- Alight at the End of the Tunnel
Is the Relief Rally Over?
- Nvidia blew the doors off Street expectations last week, but the market reacted with semiconductor stocks turning red on the day. Is the relief rally over?
- We conclude from our review of technical conditions that while breadth indicators argue for a deeper correction, that day may not have arrived just yet.
- Sentiment is too bearish and should put a floor on stock prices in the short term. The relief rally probably has further room to run.
[Futu Holdings (FUTU US, BUY, TP US$55) Earnings Review]: Short Term Peaking but Momentum Remains
- 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.
Alight at the End of the Tunnel
- Two years ago, when SPACs were the talk of the town, Alight, a firm specializing in cloud-based HR and benefits services, took the plunge.
- With a $7.3 billion merger supported by Bill Foley, they went public right in the midst of the SPAC craze.
- Fast forward to today, the business climate is quite different.
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