On November 19, 2024, Jefferies released a research report, maintaining a "BUY" rating and increasing the price target from $88.40 to $109.20. In the research report, Jefferies pointed out:
1)Total revenue grew 29.6% YoY to HK$3,436.1m, 3.3% and 15.7% above consensus and Jefferies' estimate, respectively. Non-GAAP net profit was 1.2% below consensus mainly due to unrealized FX losses from modest appreciation of RMB in 3Q.
2) In 3Q24, Futu added about 154K new paying clients (155K in 2Q24), with total paying clients reaching about 2.2 million. Total client assets increased by 48.1% YoY to HK$693.4bn. Client acquisition accelerated in Hong Kong and Singapore, which collectively contributed to over 1/3 of new paying clients in 3Q24. Malaysia remained the top contributor of new paying clients among its seven markets for three consecutive quarters.
3) In celebration of the fifth anniversary of its Nasdaq listing, Futu announced that its board of directors approved a special cash dividend of US$2 per ADS. The aggregate amount of the special cash dividend to be paid will be approximately US$280m, which will be funded by surplus cash on Futu’s balance sheet.
Jefferies maintains Buy and raises Price Target to US$109.2, based on 2025E EPS of HK$45.8 and 1.0x PEG, factoring in the latest business updates.
Key risks include:
(1) macro-headwinds impacting securities market trading volume in the US, HK and SG;
(2) loss of market share due to competition;
(3) lower-than-expected commission fee rate and interest rate.