FUTU(US:FUTU) Minsheng Securities·2024-04-21 01:31Investment Rating - The report suggests actively monitoring the company due to its strong market position and growth potential in both existing and new markets [2]. Core Viewpoints - The company is a technology-driven one-stop wealth management platform with a robust performance, achieving a revenue CAGR of 75% and a net profit CAGR of 125% from 2019 to 2023 [2]. - The company maintains a leading position in the Hong Kong and Singapore markets, with a strong user base and high retention rates [2]. - The company is expanding into overseas markets, including the United States, Australia, Canada, Japan, and Malaysia, which is expected to open new growth avenues [2]. Summary by Sections Company Overview - The company launched its Hong Kong online brokerage business in 2012 and has since expanded its licenses in Hong Kong and overseas [2]. - The founder, Mr. Li Hua, is the largest shareholder with high voting rights, while Tencent is the second-largest shareholder [2]. Financial Analysis - Revenue increased from 1.062 billion HKD in 2019 to 10.008 billion HKD in 2023, with a CAGR of 75% [19]. - The main revenue sources are brokerage commissions and interest income, accounting for over 90% of total revenue [19]. - Net profit rose from 166 million HKD in 2019 to 4.279 billion HKD in 2023, with a CAGR of 125% [22]. Market Position - The company is the largest retail internet broker in Hong Kong, with user numbers exceeding 40% of the local adult population [2]. - In Singapore, the company has achieved profitability for the first time in Q4 2023, with user numbers representing nearly 30% of the adult population [2]. Overseas Expansion - The company has launched operations in multiple international markets, including the U.S., Australia, Canada, Japan, and Malaysia, with Malaysia showing rapid growth in user acquisition [2]. - The company has submitted an application for a virtual asset trading platform license in Hong Kong, expected to be granted in June 2024 [2]. User and Asset Growth - The total number of users reached 21.6 million by the end of 2023, with a year-on-year growth of 10% [29]. - Total client assets increased to 485.6 billion HKD, reflecting a year-on-year growth of 16% [31]. Business Model - The company's revenue model includes transaction commissions, interest income, and other income sources such as foreign exchange services and financial product distribution [12]. - The company has a high-quality growth strategy focused on increasing assets under management (AUM) [29]. Regulatory Environment - The regulatory landscape has stabilized, allowing existing mainland clients to continue trading without disruption [42]. - The company is expected to benefit from the beta resonance of Hong Kong and U.S. stocks, enhancing its commission income [44]. Conclusion - The company is well-positioned for future growth, with a solid foundation in existing markets and promising expansion into new territories [2].