FUTU(US:FUTU)2025-11-03 02:36Summary of Futu Holdings 3Q25 Preview Company Overview - Company: Futu Holdings - Industry: Banks & Financial Services Key Financial Highlights - 3Q25 Expectations: - Client AUM growth of 13% q/q to HK$1.1 trillion [7][18] - Profit growth of 116% y/y and 11% q/q [7][16] - New paying clients expected to increase from 204k in 2Q to 227k in 3Q [7][17] - Brokerage revenues projected to rise by 10% q/q and 85% y/y [7][18] - Interest income anticipated to grow by 12% q/q and 51% y/y [7][18] Market Conditions - Equity Market Performance: - Strong performance in HK and US equities, with the Hang Seng Index and Nasdaq Index up 12% and 11% q/q, respectively [7][21] - Robust trading volumes in HK and US markets, with HK trading volume up 149% y/y [22][23] Earnings Estimates - Revised Earnings Estimates: - Adjusted EPS for 2025 increased by 12%, for 2026 by 10%, and for 2027 by 6% [7][39] - New price target set at US$280, implying a 54% potential upside from the current price of US$182.04 [3][11] Strategic Focus - Key Areas of Interest: - Management's guidance on 4Q25 operating trends, including client growth and trading velocity [7][17] - Updates on Futu's virtual asset trading platform (VATP) and crypto trading business [7][17] - Clarification on the treatment of new and existing mainland clients following the suspension of new account openings [7][17] Valuation Insights - Valuation Metrics: - Current share price at 17x 2026 P/E, compared to an average forward P/E of 15x since 4Q21 [7][11] - Anticipated multiple expansion due to a more stable regulatory environment and growth in the crypto and digital assets business [11][44] Risks and Considerations - Potential Risks: - Operating expenses expected to rise by 15% q/q and 38% y/y, primarily driven by selling and marketing expenses [7][18] - Ongoing regulatory changes and market volatility could impact future performance [11][44] Conclusion - Investment Thesis: Futu is positioned for strong growth driven by client acquisition, market expansion, and a robust crypto business. The company maintains an Overweight rating with a target price of US$280 [10][43].