On August 20, 2024, Morgan Stanley released a research report, maintaining an "Equal-weight" rating and a price target of $70 for Futu Holdings. In the research report, Morgan Stanley pointed out:

1）24% yoy, 12% QoQ growth in client assets and 38% higher full year paying client guidance was evidenced of the firm is on the right track with its strategy.

2) The double digit QoQ growth of new paying clients in HK, Singapore and Japan is worth highlighting as they see more potential in per client assets in these regions over time.

3) Despite >70% of client trading volume are currently from the US market, they note that YTD, Futu's stock performance trend has tracked more closely with HSTECH and KWEB than S&P500. The recent rebound in HSTECH and KWEB since early August indicates improving sentiment, and Futu should also benefit on the back of a solid set of operating numbers delivered in 2Q24.

4) FUTU has some room to trade up near term with improving sentiment on China internet names, but the bigger potential will depend on a sharper profit rebound.

• Risks to Upside

1) Better-than-expected market conditions in HK/US

1) Less attrition of onshore client base

2) Solid traction in Japanese user and client acquisition and more color on a clearer monetization path

• Risks to Downside

1) Major correction in US/HK markets

2) More regulation of onshore client base

3) Slower-than-expected paying client conversion and monetization in Japanese market