Investment Rating - The report maintains a positive outlook on the Hong Kong stock market, indicating a strong risk appetite and suggesting investment opportunities in various sectors, particularly in virtual assets and Web 3.0 [3][10]. Core Insights - The Hong Kong stock market is experiencing a significant increase in risk appetite, with improved asset quality and trading volume, highlighting the value of asset trading platforms [3][10]. - There is a notable uptrend in multiple sectors such as AI, new consumption, and innovative pharmaceuticals, with a particular focus on small and mid-cap stocks in media and consumer sectors [3][10]. - The report emphasizes the ongoing development of virtual assets and the Web 3.0 market, driven by stablecoin policies and recent IPOs, suggesting that more regulatory frameworks will emerge [3][10]. - The trend of Chinese companies returning to Hong Kong for IPOs is gaining momentum, with increased trading of companies like NetEase and Ctrip in the Hong Kong market [3][10]. - The valuation of overseas Chinese assets remains influenced by US-China trade relations and the broader economic environment, necessitating close monitoring of trade policies and domestic economic changes [3][10]. Summary by Sections Education - The K12 education sector maintains high growth, with leading institutions reporting over 20% revenue growth during the winter training period, and an increase in non-academic course retention rates [5][11]. Luxury Goods - The luxury goods market shows slight pressure due to macroeconomic factors, but brands that align with demand trends are performing well, with cautious price increases observed [5][20]. Coffee and Tea Drinks & OTA - Coffee and tea remain key categories for delivery platforms, with strong performance from major brands like Luckin Coffee, which continues to expand its store presence [5][25]. E-commerce - The e-commerce sector faces slight pressure, but major platforms like Alibaba and JD.com are expected to benefit from ongoing promotional activities [5][26]. Streaming Platforms - Music streaming platforms are viewed as high-quality internet assets, with sustained profitability driven by scale effects [5][34]. Virtual Assets & Internet Brokers - The stablecoin leader Circle's IPO saw a 168% increase on its first day, marking a significant event in the virtual asset space [5][38]. Real Estate Transactions - Recent data shows a slight decline in second-hand housing transactions in major cities, suggesting a need for caution in the real estate market [5][50]. Automotive Services - The automotive aftermarket is under pressure, with traditional fuel vehicle service visits declining, while new energy vehicle service visits are increasing [5][45].

Group 1 - The article draws a parallel between a gold rush and a bull market, suggesting that retail brokerage firms are likely to benefit from increased trading volumes, higher asset inflows, and a rise in account openings during such market conditions [1] Group 2 - The author expresses a long-term investment philosophy focused on identifying market asymmetries with a positive reward-to-risk ratio, emphasizing investment in high-quality, wide-moat companies that generate strong cash flow [1] - The research interests of the author include technology and semiconductors, indicating a focus on sectors that may offer significant growth opportunities [1]

Market Performance - The three major U.S. stock indices closed lower, with the Dow Jones down 0.25% at 42,319.74 points, the S&P 500 down 0.53% at 5,939.3 points, and the Nasdaq down 0.83% at 19,298.45 points [1] - Most large tech stocks declined, with Tesla dropping over 14%, Apple down more than 1%, Nvidia down over 1%, and Facebook down 0.48%. In contrast, Google rose 0.1%, Amazon increased 0.33%, and Microsoft gained 0.82% [1] Chinese Stocks - Most Chinese stocks saw gains, with Zhihu Group rising nearly 13%, Kingsoft Cloud up over 7%, Lotus Technology increasing over 5%, and GDS Holdings up over 4%. However, some stocks like Linklogis and Bawang Tea fell over 9% [1] European Indices - European major indices showed mixed results, with Germany's DAX index up 0.19% at 24,323.58 points, reaching a new historical high, while France's CAC40 index fell 0.18% to 7,790.27 points, and the UK's FTSE 100 index rose 0.11% to 8,811.04 points [1] Commodity Prices - International precious metal futures closed mixed, with COMEX gold futures down 0.68% at $3,376.1 per ounce, while COMEX silver futures rose 3.31% to $35.795 per ounce [1] - International oil prices increased across the board, with WTI crude oil main contract up 0.64% at $63.25 per barrel and Brent crude oil main contract up 0.66% at $65.29 per barrel [1] Currency and Bond Yields - The U.S. dollar index fell 0.07% to 98.74, while the offshore RMB against the U.S. dollar dropped 38.5 basis points to 7.1755 [1] - U.S. Treasury yields rose across the board, with the 2-year yield up 6.19 basis points to 3.924%, the 3-year yield up 6.82 basis points to 3.894%, the 5-year yield up 7.13 basis points to 3.995%, the 10-year yield up 3.93 basis points to 4.395%, and the 30-year yield up 0.61 basis points to 4.883% [1] - European bond yields also generally increased, with the UK 10-year yield up 1 basis point to 4.614%, France's 10-year yield up 4.7 basis points to 3.248%, Germany's 10-year yield up 5.2 basis points to 2.576%, Italy's 10-year yield up 3.5 basis points to 3.524%, and Spain's 10-year yield up 4 basis points to 3.155% [1]

Market Overview - US stock markets experienced a collective decline, with the Dow Jones down 0.25%, Nasdaq down 0.83%, and S&P 500 down 0.53%. Notably, Tesla's stock plummeted 14.26%, resulting in a market value loss exceeding $152.5 billion (approximately ¥1.09 trillion) [2] - International oil prices saw an increase, with WTI crude oil rising 0.64% to $63.25 per barrel and Brent crude oil up 0.66% to $65.29 per barrel [3] - European stock indices showed mixed results, with Germany's DAX up 0.19%, France's CAC40 down 0.18%, and the UK's FTSE 100 up 0.11% [5] Corporate Developments - Circle, a major player in the stablecoin market, saw its stock surge 168.48% on its first day of trading, closing at $83.23, with a market capitalization exceeding $18 billion [15] - Huawei announced the launch of its Pura 80 series smartphones, which have garnered significant consumer interest, with over 40,000 reservations within hours of opening [16][17] - Canada Goose appointed Celine Xie as the new president for its China operations, aiming to enhance its market presence in the region [22][23] Regulatory and Policy Updates - The Chinese Ministry of Commerce criticized the US for raising tariffs on steel and aluminum products from 25% to 50%, labeling it as unilateralism and protectionism [8] - The Chinese government announced plans to conduct the fourth national agricultural census in 2026, as part of its statistical and agricultural development efforts [7] Industry Insights - The Chinese government is establishing ten national data element comprehensive pilot zones to promote the integration of the real economy and digital economy [8] - The National Medical Insurance Administration is revising the credit evaluation system for drug pricing and procurement to combat corruption and improve market integrity [10] Stock Market Movements - Notable stock movements included a significant drop in Tesla's stock price, while several Chinese concept stocks saw gains, with the Nasdaq China Golden Dragon Index up 0.54% [2][29] - The latest data showed that the Chinese yuan's exchange rate against the US dollar was 7.1865, reflecting a decrease of 21 basis points [31]

Core Viewpoint - The recent surge in the Hong Kong stock market has led to increased attention on the ability of mainland investors to open accounts with online brokers like Futu Holdings and Tiger International, with both companies adjusting their policies in response to regulatory changes [1][5][6]. Group 1: Company Policies - Futu Holdings has completely stopped allowing new account openings for mainland users, only permitting those who live or work abroad to open accounts, requiring both a mainland ID and proof of residence or employment abroad [1][3]. - Tiger International still allows existing customers to open accounts if they had previously opened accounts with other overseas brokers before May 19, 2023, but does not accept new mainland investors [2][3]. Group 2: Regulatory Environment - The regulatory scrutiny of online brokers like Futu and Tiger began in October 2021, with the China Securities Regulatory Commission (CSRC) declaring their cross-border securities operations as non-compliant with existing laws [2]. - In December 2022, the CSRC formally classified the cross-border operations of these brokers as "illegal" and mandated them to cease new business activities while allowing existing clients to continue trading [2]. Group 3: Market Conditions - The Hong Kong stock market has shown significant recovery, with the Hang Seng Index rebounding from a drop of over 13% in early April to reach a new closing high since March 2025 by June 5, 2023 [5]. - The interest in Hong Kong stocks has been further fueled by successful IPOs of major mainland companies, such as CATL and Heng Rui Pharmaceutical, which saw substantial first-day gains [6]. Group 4: Investment Channels - Mainland investors can access Hong Kong stocks primarily through two channels: the Stock Connect program and Hong Kong-listed ETFs, with different eligibility criteria [7]. - The Stock Connect requires a minimum average asset of 500,000 RMB in the investor's securities and funds accounts over the previous 20 trading days, while the ETF route has no such financial threshold, making it more accessible for retail investors [7].

Core Viewpoint - Futu Securities has completely stopped allowing mainland users to open accounts using proof of existing holdings, now restricting account openings to those who actually work or live abroad [1] Group 1 - Futu Securities no longer accepts account openings based on existing proof for mainland clients [1] - Only clients who can provide a valid mainland ID and recent proof of work or residence in Hong Kong or Macau are eligible to open accounts [1]

Investment Rating - The report maintains a positive outlook on the Hong Kong stock market, particularly in the areas of virtual assets and Web3.0 development, suggesting a strong investment opportunity in these sectors [2][9]. Core Insights - The report emphasizes the importance of monitoring global tariff negotiations, particularly the recent developments in U.S.-China trade relations and their potential impact on market dynamics [9]. - There is a notable increase in the quality and risk appetite of Hong Kong assets, with a focus on asset trading platforms as valuable investment opportunities [9]. - The report highlights the active performance of virtual asset-related stocks in Hong Kong, driven by stablecoin policies, and anticipates further regulatory developments in this area [2][9]. Summary by Sections 1. Industry Situation Tracking 1.1 Education - The K12 education sector shows strong growth, with leading institutions reporting over 20% revenue growth for winter training sessions [4]. - Recent product launches in AI education indicate ongoing innovation in the sector [4][17]. 1.2 Luxury Goods - The luxury goods sector is experiencing disruptions due to U.S.-EU tariff policies, with cautious price increases observed among brands [4][19]. - LVMH expresses confidence in the Chinese market despite recent consumption declines, indicating a long-term positive outlook [21]. 1.3 Coffee and Beverage Chains - Coffee and tea remain key categories for delivery platforms, with recent subsidies from platforms like JD.com [4]. - Coffee futures have seen a significant decline, which may alleviate cost pressures for companies like Luckin Coffee [4][27]. 1.4 E-commerce - Major players like Alibaba and JD.com continue to compete aggressively in the delivery and retail sectors, impacting short-term profitability [4]. - The report notes strong performance in the "618" shopping festival, with significant growth in various product categories [32]. 2. Platform & Technology 2.1 Streaming Platforms - The streaming sector shows resilience, with Tencent Music and other platforms benefiting from scale effects [4][33]. - Recent transactions, such as HYBE's sale of SM Entertainment shares to Tencent Music, highlight strategic movements within the industry [34]. 2.2 Virtual Assets & Internet Brokers - The global cryptocurrency market capitalization is reported at $337.44 billion, reflecting a 4% decline [38]. - The introduction of the Stablecoin Regulation in Hong Kong marks a significant step in regulating digital asset activities [41].

Investment Rating - The report maintains a "Buy" rating for the company, Futu Holdings (FUTU US), with a target price of $135.00, indicating a potential upside of 25.7% from the current price of $107.36 [1][6][12]. Core Insights - The company's earnings exceeded market expectations, with a year-on-year net profit growth of 107.0% and a quarter-on-quarter growth of 14.6%. Non-GAAP net profit also showed significant growth of 97.7% year-on-year and 13.6% quarter-on-quarter, outperforming Bloomberg consensus by 6% [2][6]. - The strong profit growth is primarily driven by a 140.1% increase in trading volume, which significantly boosted brokerage commission income by 114%. The average commission rate was 7.17 basis points, down 1.15 basis points year-on-year but stable quarter-on-quarter [2][6]. - The company has seen a robust increase in customer acquisition, with 262,000 new asset-holding customers added in Q1, representing a year-on-year growth of 47.8% and a quarter-on-quarter growth of 21.9% [6][8]. - Wealth management assets grew by 117.7% year-on-year and 25.6% quarter-on-quarter, with wealth management products held by 29% of asset-holding customers, up 1 percentage point from the previous quarter [6][8]. Financial Overview - Revenue projections for the company are as follows: HKD 10,008 million in 2023, HKD 13,590 million in 2024, and HKD 16,778 million in 2025, with a year-on-year growth rate of 48.7% for 2023 and 27.0% for 2024 [5][15]. - The net profit is expected to reach HKD 4,279 million in 2023, HKD 5,433 million in 2024, and HKD 7,203 million in 2025, reflecting a year-on-year growth of 46% for 2023 and 27% for 2024 [5][15]. - The company’s price-to-earnings ratio is projected to decrease from 27.5 in 2023 to 16.3 in 2025, indicating an attractive valuation compared to peers in the U.S. internet brokerage sector [5][15]. Customer and Market Dynamics - The total number of asset-holding customers reached nearly 2.7 million, with a quarter-on-quarter growth of 10.9%. The company has already achieved one-third of its target to add 800,000 new asset-holding customers by 2025 [6][8]. - The average customer acquisition cost was HKD 1,754, showing a year-on-year increase of 6% but a quarter-on-quarter decrease of 19% [2][6]. - The trading volume is expected to continue its upward trend, with projections of HKD 3,220 billion in Q1 2025, reflecting a year-on-year growth of 140% [7][8].

Investment Rating - The report maintains a "Buy" rating for the company with a target price of $159.87 per ADS [8][9]. Core Insights - The company reported a significant increase in Q1 2025 performance, with revenue of HKD 4.7 billion, up 81% year-over-year, and net profit of HKD 2.1 billion, up 107% year-over-year, driven by accelerated overseas customer acquisition and increased trading volumes in the Hong Kong and US stock markets [1][5]. - The company has achieved one-third of its annual customer acquisition target in Q1 2025, adding 260,000 new funded accounts, a 48% increase year-over-year [2]. - The trading activity in the Hong Kong and US markets remains robust, with total trading volume reaching HKD 3.22 trillion, a 140% increase year-over-year [3]. - Continuous innovation in products and services, including AI-driven investment assistants and new trading options, is strengthening the company's brand and product capabilities [4]. Summary by Sections Financial Performance - For 2025-2027, the company expects net profits of HKD 7.5 billion, HKD 8.4 billion, and HKD 9.2 billion respectively, reflecting an upward revision of 20%-26% from previous estimates [5][7]. - The estimated EPS for 2025 is HKD 6.52, with a projected PE ratio of 24x [5][7]. Customer Acquisition - The company has seen a strong influx of new customers, particularly from Hong Kong, Japan, the US, and Malaysia, with significant participation in recent IPOs [2]. Trading Activity - The trading environment is favorable, with a notable increase in trading volumes and customer asset turnover rates, indicating high market engagement [3]. Innovation and Product Development - The company is actively enhancing its service offerings, including the introduction of new trading products and platforms, which are crucial for attracting overseas customers [4].

Investment Rating - The report maintains a "Buy" rating for the company with a target price of $159.87 per ADS [8][9]. Core Insights - The company reported a significant increase in Q1 2025 performance, with revenue of HKD 4.7 billion, up 81% year-over-year, and net profit of HKD 2.1 billion, up 107% year-over-year, driven by accelerated overseas customer acquisition and increased trading volumes in the Hong Kong and US stock markets [1][5]. - The company has achieved one-third of its annual customer acquisition target in Q1 2025, adding 260,000 new funded accounts, a 48% increase year-over-year [2]. - The trading activity in the Hong Kong and US markets remains robust, with total trading volume reaching HKD 3.22 trillion, a 140% increase year-over-year [3]. - Continuous innovation in products and services, including AI-driven investment assistants and new trading options, is strengthening the company's brand and product capabilities [4]. Summary by Sections Financial Performance - For 2025, the company expects to achieve net profits of HKD 7.45 billion, with an EPS of HKD 6.52, reflecting a 20% to 26% upward revision in profit forecasts for 2025-2027 [5][7]. - The projected revenue for 2025 is HKD 18.02 billion, with a year-over-year growth rate of 32.62% [7]. Customer Acquisition - The company has successfully expanded its customer base, with Hong Kong remaining the primary source of new customers, supported by a rebound in the stock market and IPO activities [2]. Trading Activity - The trading environment is favorable, with a significant increase in trading volumes and customer asset turnover rates, indicating strong market engagement [3]. Innovation and Product Development - The company is focused on enhancing its service offerings, including the introduction of new trading products in various markets, which is crucial for attracting overseas customers [4].