1、 See the last page for disclaimer Page 1 of 17 Equity Research Equity Research Report Company Report 股股票票研研究究 公公司司报报告告 证证券券研研究究报报告告 非银金融行业非银金融行业 Non-Bank Finance Sector 富途控股富途控股 Futu Holdings Ltd.(FUTU US)Company Report:Futu Holdings Ltd.(FUTU US)Franco Li 李炜(852)2509 7204 公司报告：富途控股(FUTU US).hk 16 D

2、ecember 2022 Demand for Diversification Will Drive Overseas Investment;Futu Expected to Record Strong Earnings;Initiate With Buy 多元化需求带动海外投资增长，富途有望实现盈利超预期；首予“买入”Increasing demand for diversification will drive demand for overseas investment to increase beyond market expectation.Global wealth grew ra

3、pidly at 7.7%CAGR between 2016 and 2021.As people become wealthier,on the one hand,their demand for wealth management products and services will be more diverse;on the other hand,they will pay more attention to the preservation of their wealth and become more risk averse.This will lead to investors

4、increasing their allocation of overseas assets to diversify their investments and risks.We expect overseas investment to increase beyond market expectation,driven by growing global wealth and increasing demand for geographical diversification.Futu is well positioned to benefit from strong demand for

5、 overseas investment diversification and to achieve robust client asset growth,driving earnings to exceed market expectation.This is supported by Futus 1)51 licenses,which enable Futu to provide broad global access to overseas markets;2)large global client base;and 3)technology-driven trading platfo

6、rms.Initiate with Buy rating with a TP of US$82.20.We expect demand for overseas investment products to remain strong in the long term and Futu will record earnings beyond market expectation,driven by the Companys access to a broad range of overseas markets and advanced technology-driven trading pla

7、tforms.We assign a 2023E PER of 25.0 x,higher than the peers weighted average PER,and initiate investment rating of“Buy”.多元化需求的增长将推动海外投资需求的超预期增长多元化需求的增长将推动海外投资需求的超预期增长。2016 年至 2021 年，全球财富以7.7%的复合年增长率快速增长。随着人们变得更加富裕，一方面他们对财富管理和服务的需求变得更加多元化；另一方面，他们会更加注重财富的保值并且变得更加风险厌恶。这将导致投资者增加海外资产的配置，以分散投资和风险。受到全球财富增

8、长以及地域分散化需求的推动，我们预计海外投资增长将超预期。富途有望受益于富途有望受益于强劲的海外分散化投资需求，并实现强劲的客户资产增长，推动盈利超预强劲的海外分散化投资需求，并实现强劲的客户资产增长，推动盈利超预期，期，得益于：1）51 张牌照使富途能提供广泛的全球市场准入；2）庞大的全球客户群；3）技术驱动的交易平台。首次给予“买入”评级，目标价首次给予“买入”评级，目标价 82.20 美元。美元。我们预计对海外投资产品的需求将长期保持强劲，而富途能提供多市场选择以及先进的科技化交易平台，有望实现盈利的超预期。我们给予公司 25.0 倍 2023 年市盈率，高于同业加权平均市盈率，并首予“

9、买入”的投资评级。Rating:Buy Initial 评级：买入买入(首次覆盖)6-18m TP 目标价:US$82.20 Revised from 原目标价:Share price 股价:US$67.090 Stock performance 股价表现 Change in Share Price 股价变动 1 M 1 个月 3 M 3 个月 1 Y 1 年 Abs.%绝对变动%33.2 63.6 79.7 Rel.%to NASDAQ Index 相对纳指变动%26.4 59.6 96.6 Avg.Share price(US$)平均股价（美元）60.6 45.4 41.7 Source:

10、Bloomberg,Guotai Junan International.Table_Year End Turnover Net Profit EPS EPS PER BPS PBR DPS Yield ROE 年结 收入 股东净利 每股净利 每股净利变动 市盈率 每股净资产 市净率 每股股息 股息率 净资产收益率 12/31(HK$m)(HK$m)(HK$)(%)(x)(HK$)(x)(HK$)(%)(%)2020A 3,311 1,326 10.227 643.8 50.9 64.098 8.1 0.000 0.0 24.4 2021A 7,115 2,810 18.721 83.1 27

11、.9 139.797 3.7 0.000 0.0 19.2 2022F 7,360 2,761 19.635 4.9 26.8 149.524 3.5 0.000 0.0 13.1 2023F 9,043 3,627 25.797 31.4 20.4 177.907 3.0 0.000 0.0 15.8 2024F 12,125 4,898 34.837 35.0 15.1 215.397 2.4 0.000 0.0 17.7 Shares in issue(m)总股数(m)150.1 Major shareholder 大股东 Leaf Hua Li 34.3%Market cap.(US$

12、m)市值(US$m)10,070.2 Free float(%)自由流通比率(%)65.7%3 month average vol.3 个月平均成交股数(000)2,350.3 FY23 Target P/B(x)FY23 目标市净率(x)3.6 52 Weeks high/low(US$)52 周高/低(US$)72.200/21.230 FY23 Target P/E(x)FY23 目标市盈率(x)25.0 Source:the Company,Guotai Junan International.(60.0)(40.0)(20.0)0.020.040.060.080.0100.0Dec-

13、21Mar-22Jun-22Sep-22Dec-22%of returnNASDAQ COMPOSITE IndexFUTU Company Report See the last page for disclaimer Page 2 of 17 16 December 2022 Futu Holdings Ltd.富途控股(FUTU US)Table_PageHeader Futu Holdings Ltd.(FUTU US)Table of Contents Company Overview.3 Futu aims at making investing easier through te

14、chnology.4 Futu recorded surging net profits and high ROE in recent years.5 Demand for diversification will drive overseas investments to increase beyond expectation.7 Internationalization strategy ensured Futu a better position to capture increasing demand for overseas investment.9 Technology-drive

15、n trading platforms provided by Futu meets trading demand.10 Forecasts and Valuation.13 Catalysts.14 Risks.14 Financial Statements and Ratios.16 XXcZoXtZ9YrVmPaQaObRpNrRsQnPjMnMsQiNpOuMbRrQoNxNpOsOwMqNrO Company Report See the last page for disclaimer Page 3 of 17 16 December 2022 Futu Holdings Ltd.

16、富途控股(FUTU US)Table_PageHeader Futu Holdings Ltd.(FUTU US)Company Overview Futu(FUTU.US,the Company)operates online brokerage and wealth management platforms internationally.Futu was founded in December 2007 and started online brokerage business in 2012.Futu mainly focuses on Hong Kong and US stock o

17、nline trading services for retail investors.It initially targeted mainland China-based investors and later expanded its footprint to clients in Hong Kong,the US,Singapore,and Australia.Futu was listed on NASDAQ stock exchange(NASDAQ:FUTU)in March 2019.Figure-1:Futu is currently at the internationali

18、zation stage Source:the Company,Guotai Junan International.As the 18th founding employee of Tencent,Founder Leaf Hua Li is fully aware of the importance of user experience.Before founding Futu,Leaf Hua Li had served in several senior management roles at Tencent,including the head of Tencents multime

19、dia business and its innovation center.Mr.Li joined Tencent in 2000 and was the 18th founding employee of Tencent.Having served Tencent for 7 years,Mr.Li is fully aware that user experience is the key to Tencents success and he has consistently focused on providing premier investing experience to us

20、ers at Futu.Besides,the senior management team of Futu has substantial experience in the financial and internet industries and has deep understanding of internet products and technologies.Table-1:Senior management team of Futu has substantial experience in the financial and internet industries Name

21、Age Position/Title Previous/Other Experience Leaf Hua Li 45 Founder,Chairman of the Board of Directors and Chief Executive Officer Head of Tencents multi-media business and its innovation center before 2007 Arthur Yu Chen 46 Chief Financial Officer Vice president at China International Capital Corpo

22、ration from 2005 to 2009;Director at Citigroup Global Markets Asia Limited from 2009 to 2016.Nineway Jie Zhang 47 Director Manager of its online transaction business at Essence Securities from 2000 to 2002;Head of the online trading center of the headquarters of Shenzhen of China Galaxy Securities C

23、o.,Ltd.from 2002 to 2013.Shan Lu 47 Director Research and development engineer for Shenzhen Liming Network Systems from 1998 to 2000;Senior executive vice president of Tencent and the president of Technology and Engineering Group from 2000 to 2014;Also serves on the board of China United Network Com

24、munications Group Co.,Ltd.(SHA:600050).Vic Haixiang Li 49 Independent Director Senior executive vice president of Tencent before 2012 and in charge of Tencents online search business from 2010 to 2012;Founder and managing partner of VI Ventures and chairman of VI Asset Management;Also serves as inde

25、pendent non-executive director at AVO Insurance Company Limited.Brenda Pui Man Tam 51 Independent Director Partner at PricewaterhouseCoopers China and Hong Kong from 2007 to 2016;Served in multiple audit positions at PricewaterhouseCoopers Hong Kong from 1995 to 2007 and at Ernst&Young Hong Kong fro

26、m 1992 to 1995.Robin Li Xu 39 Senior Vice President Over ten years of experience in the internet industry including seven years at Tencent where he was a senior product manager responsible for online payment product development and operations for Tenpay.Source:the Company,Guotai Junan International.

27、Early Stage 2007 Commenced operations 2012 Started online brokerage business in Hong Kong 2014 Began offering stock trading services on major U.S.exchangesInternationalization 2018 became a FINRA member in the US 2019 listed on NASDAQ 2021 launched trading services in Singapore 2022 launched trading

28、 services in Australia Company Report See the last page for disclaimer Page 4 of 17 16 December 2022 Futu Holdings Ltd.富途控股(FUTU US)Table_PageHeader Futu Holdings Ltd.(FUTU US)Leaf Hua Li has 67.4%of the aggregate voting power of Futu and thus is able to consistently implement the strategy of pursui

29、ng premier user experience through technology.The second largest shareholder is Tencent,controlling around 21%of the ordinary shares and 27.6%of the aggregate voting power.In December 2018,Futu entered into a strategic cooperation framework agreement with a subsidiary of Tencent,to collaborate acros

30、s a number of areas,such as traffic,content and cloud computing through Tencents online platform.As Tencent is known for technological excellence and focus on user experience,the collaboration with Tencent empowers Futu to provide good user experience supported by strong technological capacity.Figur

31、e-2:Leaf Hua Li has 67.4%of the aggregate voting power of Futu Note:As of Feb 28,2022;Source:the Company,Guotai Junan International.Table-2:Principal Subsidiaries Subsidiary Date of Incorporation Place of Incorporation%of economic interest Principal Activities Futu Securities International(Hong Kong

32、)Limited Apr.2012 Hong Kong 100%Financial services Futu Inc.Dec.2015 USA 100%Financial services Futu Clearing Inc.Aug.2018 USA 100%Financial services Futu Singapore Pte.Ltd Dec.2019 Singapore 100%Financial services Futu Securities(Australia)Ltd.Feb.2001 AUS 100%Financial services Futu Securities(Hon

33、g Kong)Limited May.2014 Hong Kong 100%Investment holding Futu Network Technology Limited May.2015 Hong Kong 100%Research and development and technology services Futu Network Technology(Shenzhen)Co.,Ltd.Oct.2015 Shenzhen,PRC 100%Research and development and technology services Shen Si Network Technol

34、ogy(Beijing)Co.,Ltd.Sep.2014 Beijing,PRC 100%No substantial business Variable Interest Entity Shenzhen Futu Network Technology Co.,Dec.2007 Shenzhen,PRC 100%Research and development and technology services Note:As of December 31,2021;Source:the Company,Guotai Junan International.Futu aims at making

35、investing easier through technology Futu focuses on asset-light businesses,and mainly serves retail investors with stock trading-related services through online platforms.Its main business is trade execution,with brokerage commission and handling charge income contributing more than 50%of total reve

36、nue in recent years.In 2021,the top 3 revenue sources were brokerage commission and handling charge income,margin financing,and securities lending,accounting for 55%,24%,6%of total revenue,respectively.The Company serves its Chinese retail investors,mainly based in Hong Kong and mainland China,throu

37、gh the Futubull platform,while its international investors in the US,Singapore,and Australia are served through the Moomoo branded platform,the international version of Futubull.OtherShareholdersFutu HoldingsLimitedLeaf HuaLiEntities affiliated with Leaf Hua Li100%Entities affiliated with TencentTen

38、cent100%or controlled34.3%of ordinary shares;67.4%of voting power21.0 of ordinary shares;27.6%of voting power44.7%of ordinary shares;5.0%of voting power Company Report See the last page for disclaimer Page 5 of 17 16 December 2022 Futu Holdings Ltd.富途控股(FUTU US)Table_PageHeader Futu Holdings Ltd.(FU

39、TU US)Figure-3:Futu focuses on asset-light businesses Figure-4:Revenue breakdown in 2021 Source:the Company,Guotai Junan International.Source:the Company,Guotai Junan International.Futus services mainly serve retail investors wealth management demand.Futus one-stop proprietary digital platform enabl

40、es investors to trade stocks and other listed instruments,to obtain financing and short sell stocks,and to invest in other wealth management products,such as mutual fund products.Futu provides timely market data and information to facilitate investing decisions and embeds a social community into the

41、 platform for investors to exchange investing ideas.Figure-5:Futu mainly serves retail investors,but also provides services to corporate clients Source:the Company,Guotai Junan International.Futu aims at making investing easier through technology and it regards premier investing experience and stron

42、g technology infrastructure as its main competitive strengths.It creates strong user experience with flexible access,fully digitalized and seamless process,real-time and comprehensive market data and information,and an embedded social community to connect users,investors,and companies.Futu made sign

43、ificant investments into technological infrastructure which drives every function of its business.Its strong technology-driven platforms are designed with flexibility,stability,scalability and security in mind and ensure investors a premier investing experience.Futu recorded surging net profits and

44、high ROE in recent years Futus paying clients grew rapidly in recent years.Futus user base expanded rapidly in recent years.As at 3Q22,Futus number of users,registered clients,and paying clients reached 19.2 mn,3.13 mn,and 1.44 mn,respectively,up around 4 times,10 times,and 17 times,respectively,com

45、pared to 2017.The conversion rates of paying clients have also risen steadily in recent years,both in terms of paying clients as a percentage of registered clients and of total users.Brokerage commission and handling charge income 55.0%Margin financing24.2%Securities lending5.6%IPO financing 2.8%Ban

46、k deposits 2.8%Currency exchange service 2.8%IPO subscription service 2.4%Enterprise public relations service1.4%Funds distribution service 1.0%66%56%56%71%65%65%0%20%40%60%80%100%2002020211H22asset-light business incomeasset-heavy business incomeTo Retail ClientsOnlineInvesting ServicesM

47、argin Financingand Securities LendingWealth ManagementOther Services(IPO/yieldenhancement,etc)Value-added Services(many of which are free)Market data and InformationTo Corporate ClientsIPO DistributionInvestors RelationsEmployee Stock Ownership Plan(ESOP)User Community and SocialInteractionTrade Exe

48、cutiontrading volume commissionrateMFSLBalanceinterest rateAUMmanagement fee(shared)Company Report See the last page for disclaimer Page 6 of 17 16 December 2022 Futu Holdings Ltd.富途控股(FUTU US)Table_PageHeader Futu Holdings Ltd.(FUTU US)Figure-6:Futus user base expanded rapidly in recent years Figur

49、e-7:The conversion rates of paying clients rose steadily in recent years Source:the Company,Guotai Junan International.Source:the Company,Guotai Junan International.Expanding client base drove up total balance of client assets and trading volumes.As at 3Q22,Futu recorded above HK$369.6 mn in total c

50、lient assets,around 8 times the amount of client assets at the end of 2017.Total trading volume also surged around 10 times to above HK$6 trn in 2021,compared with around HK$500 bn in 2017.Figure-8:Total client assets grew in recent years Figure-9:Total trading volume grew in recent years Source:the

51、 Company,Guotai Junan International.Source:the Company,Guotai Junan International.Futus net profits surged in recent years and ROE remained high.Futus net profits witnessed dramatic increase in recent years,up around 20 times in 3 years,from HK$143 mn in 2019 to HK$2,810 mn in 2021,driven by both su

52、rges in revenue and improvement in net profit margins.Supported by increasing balance of client assets and trading volumes,the Companys revenues recorded a 6-fold increase from HK$1,062 mn in 2019 to HK$7,115 mn in 2021.Thanks to strong scale effect,the Companys net profit margins widened by 26.0 pp

53、ts from 13%in 2019 to 39%in 2021.As Futu better meets trading demand of investors by providing technology-driven trading platforms,the Company achieved higher net profit margin and asset turnover than the average of its listed Chinese broker peers,and thus higher ROE.05,000,00010,000,00015,000,00020

54、,000,00025,000,0002002020213Q22Total number of usersRegistered clientsPaying clients27.9%26.4%27.6%36.4%45.2%46.1%2.1%2.4%2.6%4.3%7.2%7.5%0.0%5.0%10.0%15.0%20.0%25.0%30.0%35.0%40.0%45.0%50.0%2002020213Q22Paying clients%registered clientsPaying clients%total users-50%0%50%100%15

55、0%200%250%050,000100,000150,000200,000250,000300,000350,000400,000450,0002002020213Q22(HKD mn)Total client assetsYoY(RHS)-50%0%50%100%150%200%250%300%350%01,000,0002,000,0003,000,0004,000,0005,000,0006,000,0007,000,000200202021(HKD mn)Total trading volumeYoY(RHS)Company Report

56、See the last page for disclaimer Page 7 of 17 16 December 2022 Futu Holdings Ltd.富途控股(FUTU US)Table_PageHeader Futu Holdings Ltd.(FUTU US)Figure-10:The surge in net profit was driven both revenue and net profit margin Figure-11:Futus ROE was higher than the average of its listed Chinese broker peers

57、 ROE Source:the Company,Guotai Junan International.Source:the Company,Wind,Up fintech,IBKR,Guotai Junan International.Table-3:Futus ROE was higher than the average of its listed Chinese broker peers ROE 2021 ROE Net Profit Margin Asset Turnover Equity Multiplier Futu 19.2%39.5%8.2%4.8 Listed Chinese

58、 Brokers Average 8.8%29.9%6.0%4.9 Source:the Company,Wind,Guotai Junan International.Demand for diversification will drive overseas investments to increase beyond expectation Global wealth grew rapidly at 7.7%CAGR between 2016 and 2021.According to the Global Wealth Report 2022 by Boston Consulting

59、Group(BCG),global wealth grew rapidly from US$326.0 trn in 2016 to US$472.7 trn in 2021,implying a CAGR of 7.7%.In particular,total wealth in Asia,excluding Japan,grew at a CAGR of 9.0%from US$82.7 trn in 2016 to US$127 trn in 2021.Figure-12:Wealth grew rapidly in recent years,especially in Asia(ex-

60、Japan)Source:Wind,World Bank,Guotai Junan International.As people become wealthier,demand for regional diversification increases.As people become wealthier,on the one hand,demand for wealth management products and services will be more diverse;on the other hand,they will pay more attention to the pr

61、eservation of their wealth and become more risk averse.Thus,investors will tend to invest in different asset classes or in assets in different regions to diversify investment and investment risk.Increasing demand for geographical diversification has driven an increase in the allocation to overseas a

62、ssets.We believe that as people become wealthier,demand for geographical diversification will increase and more money will flow to overseas assets.We use foreign residents holdings of US corporate stocks to measure overseas investments of investors,as the US stock market is the largest equity market

63、 in the world,and people in countries and regions with higher GDP per capita have higher proportion of overseas investments in their portfolio.Especially for those in regions with GDP per capita above US$35,000,such correlation is more obvious.-2.5%4.6%13.5%40.0%39.5%35.8%-10.0%0.0%10.0%20.0%30.0%40

64、.0%50.0%-1,00001,0002,0003,0004,0005,0006,0007,0008,0002002020211H22(HKD mn)Total revenueShareholders net profitShareholders net profit margin(RHS)-1.5%3.6%7.8%24.4%19.2%12.0%-5.0%0.0%5.0%10.0%15.0%20.0%25.0%30.0%2002020211H22FutuListed Chinese brokers average7.0%7.5%8.0%8.5%9.

65、0%9.5%00500GlobalAisa ex-Japan(USD tn)201620215-year CAGR(RHS)Company Report See the last page for disclaimer Page 8 of 17 16 December 2022 Futu Holdings Ltd.富途控股(FUTU US)Table_PageHeader Futu Holdings Ltd.(FUTU US)Figure-13:People in regions with higher GDP per capita allocate more money

66、 to overseas assets,such as US equities Source:World Bank,Board of governors of the Federal Reserve System,Credit Suisse,Guotai Junan International.In recent years,overseas investment has been gaining popularity.The value of US stock holdings for investors in Hong Kong,Singapore,and Australia,grew a

67、t a faster CAGR than US stock market capitalization did between 2018 and 2021,indicating additional fund inflows into the US stock market from those regions in recent years.The proportion of investors who invested in overseas stock markets increased dramatically to 31%in both Hong Kong and Australia

68、 in 2021,representing an increase in overseas investment demand.We expect overseas investment demand to increase beyond market expectation,driven by 1)growing global wealth,and 2)increasing investment allocation to overseas assets supported by demand for geographical diversification.Figure-14:In rec

69、ent years,overseas investment has been gaining popularity Source:World Bank,Board of governors of the Federal Reserve System,Boston Consulting Group,Guotai Junan International.Figure-15:More stock investors in Hong Kong invested in overseas stock markets Figure-16:More investors in Australia investe

70、d in overseas stock markets Source:The Investor and Financial Education Council,Guotai Junan International.Source:Australian Securities Exchange,The Australian Securities and Investments Commission,Guotai Junan International.SwitzerlandNorwaySingaporeDenmarkSwedenAustraliaCanadaHong KongJapanKoreaCh

71、ina0%5%10%15%20%25%30%35%40%020,00040,00060,00080,000100,000Holdings of US Corporate Stocks as%of Wealth(2021)GDP per capita(USD)(2021)0%5%10%15%20%25%30%35%Overseas stock market investors as%of stock investors(HK)20%5%10%15%20%25%30%35%Overseas stock market investors as%of investors(AU)2

72、0021 Company Report See the last page for disclaimer Page 9 of 17 16 December 2022 Futu Holdings Ltd.富途控股(FUTU US)Table_PageHeader Futu Holdings Ltd.(FUTU US)Internationalization strategy ensured Futu a better position to capture increasing demand for overseas investment As at 1H22,Futu h

73、eld 51 licenses in different markets,allowing it to provide clients with broad global access to overseas markets,meeting client demand for regional diversification.Rooted in Hong Kong for more than 10 years,Futu has gradually expanded its footprint to other markets and obtained licenses in different

74、 regions.Compared with most of its competitors,Futu is able to provide users with access to more markets.Table-4:Futu holds licenses in several regions Market Details Hong Kong SFC Type 1 License for dealing in securities SFC Type 2 License for dealing in futures contracts SFC Type 3 License for lev

75、eraged foreign exchange trading SFC Type 4 License for advising on securities SFC Type 5 License for advising on futures contracts SFC Type 7 License for providing automated trading services SFC Type 9 License for asset management MPF Intermediary,SEHK Participant,HKSCC Direct Clearing Participant,S

76、EHK China Connect Exchange Participant,HKSCC China Connect Clearing Participant,SEHK Options Trading Exchange Participant,SEOCH Direct Clearing Participant,HKFE Futures Commission Merchant,and HKCC Clearing Participant.Member of London Stock Exchange and Turquoise The United States Regulated by the

77、United States Securities and Exchange Commission(SEC)Member of the Financial Industry Regulatory Authority,Inc.(FINRA)Member of the Securities Investor Protection Corporation(SIPC)Member of the Depository Trust Company(DTC)Member of the National Securities Clearing Corporation(NSCC)Member of the Opt

78、ions Clearing Corporation(OCC)Singapore Capital Markets Services(CMS)License with exempt Financial Adviser(EFA)status SGXs full memberships Clearing Member of The Central Depository(Pte)Ltd(CDP)Trading Member of Singapore Exchange Securities Trading Limited(“SGX-ST”)Trading and Clearing Member of Si

79、ngapore Exchange Derivatives Trading Limited(“SGX-DT”)Depository Agent of CDP Australia Australian Financial Services(AFS)License Source:the Company,Guotai Junan International.Table-5:Futu provides multi-market access to its users Main Client base Broker Name Stock Market Option Market HK US SG AU C

80、hina Stock connect HK US SG Greater China/International Futu&Moomoo Greater China/International Tiger Greater China/US Webull Greater China Huatai International Interactive brokers US Robinhood SG DBS AU CommSec AU CMC Markets Source:Company websites,Guotai Junan International.A large global user ba

81、se enables Futu to benefit from growing global wealth.Futu has accumulated a large global user base,with 18.6 mn total users,3 mn registered clients,and around 1.4 mn paying clients as at 1H22.Thanks to the large paying Company Report See the last page for disclaimer Page 10 of 17 16 December 2022 F

82、utu Holdings Ltd.富途控股(FUTU US)Table_PageHeader Futu Holdings Ltd.(FUTU US)client base,Futu is likely to benefit from the growth of client wealth.Paying clients to total user ratio was only at 7.5%as at 1H22,indicating great conversion potential.Figure-17:As at 1H22,Futu has accumulated a large and d

83、iverse paying client base Figure-18:The paying client to total user ratio was only 7.5%as at 1H22 Source:the Company,Guotai Junan International.Source:the Company,Guotai Junan International.Futus target clients are in wealthy and fast-growing regions and thus Futu is likely to benefit from the incre

84、asing demand for overseas assets.Futus target clients are in regions with higher GDP per capita and higher GDP per capita growth rates than the world average.For example,GDP per capita in Hong Kong,Singapore,Australia,and the US ranged from around US$50,000 to US$73,000 in 2021,much higher than the

85、world average,representing lucrative markets with high proportion of wealth being allocated to overseas assets.Besides,GDP per capita in all target regions,except Hong Kong,grew faster than the global average.Thus,we expect Futu to benefit from the increasing demand for overseas assets.Figure-19:Fut

86、us target clients are in regions with high GDP per capita and high GDP per capita growth rates Source:Wind,World Bank,Guotai Junan International.Technology-driven trading platforms provided by Futu meets trading demand Services provided by traditional brokers do not fully meet demand.According to a

87、survey conducted by Trade Ideas in 2021,more than 50%of investors are not satisfied with the insights and research that their brokers provide.Another retail investing survey conducted by BNY Mellon and the World Economic Forum in 2022 showed that three-quarters of current retail investors would inve

88、st more if they had more opportunities to learn about investing.Besides,for those not currently investing,70%said education in investing would make them more likely to invest.Thus,we believe that investors demand information and services that make investing easier and help them to make better invest

89、ment decisions;traditional brokers do not meet such demand.2.1%2.4%2.6%4.3%7.2%7.5%0.0%1.0%2.0%3.0%4.0%5.0%6.0%7.0%8.0%2002020211H22Paying clients%total usersHong Kong38%0.5mnOnshore China37%0.5mmSG15%0.2mnUS&others10%0.15mn5.6%2.6%5.1%3.7%3.7%0.0%1.0%2.0%3.0%4.0%5.0%6.0%010,00020,00030,0

90、0040,00050,00060,00070,00080,000Mainland ChinaHong Kong SARSingaporeAustraliaUnited States(USD)2001920202021World GDP per capita(2021)5-year CAGR(RHS)5-year CAGR(World 2021)(RHS)Company Report See the last page for disclaimer Page 11 of 17 16 December 2022 Futu Holdings Ltd.富途控股(FUTU US)T

91、able_PageHeader Futu Holdings Ltd.(FUTU US)Figure-20:Investor demand for wealth management services has not been satisfied by traditional brokers Source:Trade Ideas.We believe that the technology-driven trading platforms provided by Futu better meet investor trading demand.For over 10 years,Futu has

92、 developed a proprietary and highly automated technology infrastructure encompassing every aspect of its business operations,from account opening,fund transfers,trading and investment,to risk management.Futu lowers investment barriers for retail investors by providing a fully digitalized and seamles

93、s investment process,while traditional brokerage services may have tedious account opening processes and hard-to-use apps.Futu also helps investors to make good investment decisions by offering comprehensive market information,visual fundamental analysis,and offers a social community,while most trad

94、itional brokers just provide trade execution tools and many lack the technological capabilities to provide comprehensive digitalized services.Convenient:Futu offers its platforms through IOS,Android,Mac and PC applications as well as through internet browsers with an intuitive user interface.It offe

95、rs completely online-based account opening services,which takes less than three minutes,and timely fund transfer services,which normally takes less than five minutes.Besides,trade execution service is easy to use and clients can access to various products across different markets on its platforms.In

96、formative and educative:Futu provides real-time market data,news alerts,and advanced filtering tools to help investors monitor markets.It delivers visual analysis of fundamental conditions that enables users to make better investment decisions.Besides,it offers a community through its platforms to e

97、nable users to exchange trading ideas and investment education courses to equip users with investment knowledge to make informed investment decisions.Thanks to premier user experience,its client retention rate remained above 98%in 3Q22 despite poor market conditions.Figure-21:Thanks to premier user

98、experience,client retention rates remained high at above 97%Source:the Company,Guotai Junan International.Heavy investment in R&D ensured strong technological capacity.Futu consistently spent more money on research and development(R&D)than its competitors to enhance its digital infrastructure.Futu r

99、ecorded 70%CAGR between 2017 and 2021 in R&D expense,which reached around HK$800 mn in 2021,more than twice the average R&D expense spent by Chinese brokers in 2021.90.0%91.0%92.0%93.0%94.0%95.0%96.0%97.0%98.0%99.0%1Q192Q193Q194Q191Q202Q203Q204Q201Q212Q213Q214Q211Q222Q223Q22 Company Report See the l

100、ast page for disclaimer Page 12 of 17 16 December 2022 Futu Holdings Ltd.富途控股(FUTU US)Table_PageHeader Futu Holdings Ltd.(FUTU US)Figure-22:Futu consistently spent more money in research and development than its competitors Source:the Company,Securities Association of China,Up Fintech holding,Guotai

101、 Junan International.Empowered by technology,Futu is able to evolve and adapt to change quickly to provide services that meet investor demand,ensuring premier user experience.Its strong technology-driven platforms are designed with flexibility and stability at its core.With configurable templates,Fu

102、tu is able to evolve and adapt to industry change quickly to consistently provide services that meet investor demand.For example,in 1H22,Futu was able to evolve quickly,releasing 99 versions of its mobile app and desktop clients and adding 3,989 new features.Futus technology ensures secure and stabl

103、e trading services amid volatile market environments,ensuring premier user experience.Futu is likely to attract fund inflows and record earnings beyond market expectation.In the context of increasing demand for overseas investments,as Futu provides multi-market access and satisfies investor trading

104、demand by its technological trading platforms,we expect it to attract fund inflows beyond expectation and thus to record revenues beyond market expectation.Besides,we expect the Company to maintain high net profit margin in the future due to its competitive services,and thus record earnings exceedin

105、g market expectation.00500600700800900200202021(HKD mn)Chinese Brokers Average R&DFutu R&DTiger R&D Company Report See the last page for disclaimer Page 13 of 17 16 December 2022 Futu Holdings Ltd.富途控股(FUTU US)Table_PageHeader Futu Holdings Ltd.(FUTU US)Forecasts and Valuation

106、Table-6:Futus operational and financial information forecasts 2019 2020 2021 1H22 2022E 2023E 2024E Financial Information(HKD mn)Total revenues 1,062 3,311 7,115 3,388 7,360 9,043 12,125 Brokerage income 511 1,990 3,913 2,001 4,023 4,598 7,341 Interest income 465 966 2,518 1,196 2,937 3,884 3,887 Ot

107、her income 85 355 684 191 400 561 897 Gross profit margin%73.5%79.0%83.0%87.1%87.6%87.1%85.6%Shareholders net profit margin%13.5%40.0%39.5%35.8%37.5%40.1%40.4%Shareholders net profit 143 1,326 2,810 1,214 2,761 3,627 4,898 Key Metrics Paying clients 198,382 516,721 1,244,222 1,387,146 1,494,955 1,73

108、4,955 2,034,955 Sequential addition 65,561 318,339 727,501 142,924 250,733 240,000 300,000 Assets per capita(HKD mn)0.44 0.55 0.33 0.31 0.30 0.33 0.39 Total client assets(HKD mn)87,100 285,200 407,800 433,600 448,487 572,535 793,632 Trading velocity of Users 12.7 21.7 14.2 13.9 11.9 11.7 14.0 Total

109、trading volume(HKD mn)872,600 3,463,700 6,136,456 2,667,700 5,078,891 5,969,984 9,531,673 Gross commission rate(bps)5.9 5.7 6.4 7.5 7.9 7.7 7.7 ROE Profit margin 13.5%40.0%39.5%35.8%37.5%40.1%40.4%Asset turnover 5.7%7.1%8.2%6.4%6.9%7.3%7.8%Equity Multiplier 8.4 8.6 4.8 5.6 5.4 5.5 5.8 ROE 7.8%24.4%1

110、9.2%12.0%13.1%15.8%17.7%Source:the Company,Guotai Junan International.We forecast total balance of client assets to change yoy by 10.0%/27.7%/38.6%in 2022-2024,respectively,driven by growing client base and assets per capita We expect client additions to slow down in 2023 due to potential risk of gl

111、obal recession but to recover in 2024.Thus,we forecast addition of paying clients to be 250,733/240,000/300,000 in 2022-2024,respectively.We expect Futu to continue to attract capital inflows thanks to growing wealth and increasing allocation to overseas assets.Therefore,we forecast assets per capit

112、a to be HK$0.30 mn/HK$0.33 mn/HK$0.39 mn as at the end of 2022-2024,respectively.We forecast total revenues to rise yoy by 3.4%/22.9%/34.1%and shareholders net profit to change yoy by-1.8%/31.4%/35.0%in 2022-2024,respectively.We forecast brokerage income to change yoy by 2.8%/14.3%/59.7%in 2022-2024

113、,respectively.We expect commission rates to remain high as Futus technological trading platforms better meets investor trading demand.We expect trading activities to remain poor amid sluggish equity market,but to recover in 2024.Therefore,we forecast trading volume to change yoy by-17.2%/17.5%/59.7%

114、in 2022-2024,respectively.We expect interest rates earned by Futu to remain high in 2022 and 2023 due to interest rate hikes,but to drop in 2024.We expect margin financing and securities lending balance to grow with client assets.Thus,we forecast interest income to change yoy by 16.6%/32.3%/0.1%in 2

115、022-2024,respectively.Company Report See the last page for disclaimer Page 14 of 17 16 December 2022 Futu Holdings Ltd.富途控股(FUTU US)Table_PageHeader Futu Holdings Ltd.(FUTU US)We expect net profit margin to remain high in 2022-2024 thanks to Futus competitive services.Thus,we forecast net profit mar

116、gin to be 37.5%/40.1%/40.4%in 2022-2024,respectively.Initiate with Buy rating with a TP of US$82.20.In the context of increasing demand for overseas investment,we expect Futu to record earnings beyond market expectation as it provides multi-market accesses and technology-driven trading platforms tha

117、t meet investor trading demand.Hence,we assign 2023E PER of 25.0 x,higher than the peers weighted average PER,and initiate with investment rating of Buy.Catalysts 1)Higher-than-expected client asset growth.2)Faster-than-expected dovish US Federal Reserve pivot on interest rate hikes.Risks 1)Market r

118、isks:Weakness in stock markets may lead to decrease in client assets and lackluster trading activity,which will adversely affect Futus operations.2)Competition risks:Intense competition in the online brokerage industry may lead to lower commission fees or loss in market share.3)Regulatory risks:Futu

119、 does not hold any licenses for providing securities brokerage business in mainland China.If its activities in mainland China were deemed by relevant regulators as provision of securities business,its mainland Chinese client base and operations may be adversely affected.Company Report See the last p

120、age for disclaimer Page 15 of 17 16 December 2022 Futu Holdings Ltd.富途控股(FUTU US)Table_PageHeader Futu Holdings Ltd.(FUTU US)Table-7:Peers Comparison Company Stock Code Currency Last price PE(fiscal year)PB(fiscal year)ROE(%)D/Y(%)Mkt Cap (HK$)21A 22F 23F 24F 21A 22F 23F 24F 22F 22F HK$m Futu Holdin

121、gs Ltd-Adr FUTU US USD 67.090 27.9 26.6 20.3 16.2 3.8 3.8 3.2 2.9 12.9 n.a.76,702 Up Fintech Holding Ltd-Adr TIGR US USD 5.040 756.5 73.0 28.0 15.3 1.6 1.7 1.6 1.4 1.2 n.a.5,991 Interactive Brokers Gro-Cl A IBKR US USD 69.790 21.3 17.9 13.5 13.0 2.9 n.a.n.a.n.a.31.7 0.6 229,475 Schwab(Charles)Corp S

122、CHW US USD 77.060 27.1 19.6 16.1 13.8 3.0 3.6 3.5 3.2 20.1 1.1 1,118,844 East Money Information Co-A 300059 CH CNY 19.690 28.5 28.3 23.1 18.8 5.6 4.1 3.5 3.0 16.8 0.4 290,442 Simple Average 172.3 33.1 20.2 15.4 3.4 3.3 2.9 2.6 16.5 0.7 Weighted Average 29.2 21.4 17.1 14.7 3.5 3.7 3.5 3.1 20.7 0.9 So

123、urce:Bloomberg,Guotai Junan International.Company Report See the last page for disclaimer Page 16 of 17 16 December 2022 Futu Holdings Ltd.富途控股(FUTU US)Table_PageHeader Futu Holdings Ltd.(FUTU US)Financial Statements and Ratios Table_IncomeStatement Income Statement Year end 31 Dec(HKD m)2020A 2021A

124、 2022F 2023F 2024F Total revenues 3,311 7,115 7,360 9,043 12,125 Total costs(696)(1,206)(913)(1,164)(1,744)Gross profit 2,615 5,909 6,446 7,879 10,381 Research and development expenses(513)(805)(1,214)(1,514)(1,908)Selling and marketing expenses(385)(1,392)(988)(1,094)(1,467)General and admin expens

125、es(248)(529)(844)(992)(1,330)Others,net(18)2(282)(150)(100)Profit before tax 1,450 3,185 3,118 4,129 5,576 Income tax(125)(375)(357)(502)(678)Profit after tax 1,326 2,810 2,761 3,627 4,898 Non-controlling interest 0 0 0 0 0 Shareholders profit/loss 1,326 2,810 2,761 3,627 4,898 Basic EPS 10.227 18.7

126、21 19.635 25.797 34.837 Diluted EPS 10.098 18.433 18.109 23.792 32.130 Cash Flow Statement Year end 31 Dec(HKD m)2020A 2021A 2022F 2023F 2024F Operating activities Net income 1,326 2,810 2,761 3,627 4,898 Net increase in loans and advances(14,646)(10,765)(6,477)(7,685)(13,720)Net increase in account

127、s payable to clients and brokers 33,673 16,130 13,634 17,103 28,599 Others 104(2,163)(48)(634)(1,463)Cash from Operating Activities 20,457 6,012 9,871 12,411 18,315 Investing activities Purchase of short-term investments(207)(1,170)(300)(300)(300)Others(37)206 0 0 0 Cash from Investing Activities(24

128、4)(964)(300)(300)(300)Financing activities Purchase of treasury stock 0(1,179)(2,796)0 0 Borrowing,net 3,715 1,170 648 2,259 2,988 Others 4,692 10,563(81)0 2 Cash from Financing Activities 8,407 10,554(2,229)2,259 2,990 Net Changes in Cash 28,619 15,603 7,341 14,371 21,005 Effect of FX rate change(1

129、)167 0 0 0 Cash at Beg of Year 14,903 43,522 59,292 66,633 81,004 Cash at End of Year 43,522 59,292 66,633 81,004 102,008 Source:the Company,Guotai Junan International.Balance Sheet Year end 31 Dec(HKD m)2020A 2021A 2022F 2023F 2024F Cash&cash equivalents 43,522 59,292 66,633 81,004 102,008 Loans an

130、d advances 18,825 29,587 36,064 43,749 57,469 Account Receivables 8,077 10,448 8,237 9,993 12,753 Other assets 914 2,212 1,700 1,903 2,152 Total assets 71,338 101,539 112,634 136,649 174,382 Account Payables 51,054 67,193 82,498 99,601 128,200 Borrowings 5,483 6,357 7,006 9,265 12,253 Securities sol

131、d under agreements to repurchase 5,453 4,468 0 0 0 Other liabitlites 1,041 2,535 2,106 2,767 3,643 Total liabilities 63,030 80,553 91,609 111,633 144,095 Total Shareholders equity 8,308 20,986 21,025 25,016 30,287 Minority interest 0 0 0 0 0 Total equity 8,308 20,986 21,025 25,016 30,287 Financial R

132、atios 2020A 2021A 2022F 2023F 2024F Operation(%)Brokerage income growth 289.2 96.6 2.8 14.3 59.7 Interest income growth 107.7 160.8 16.6 32.3 0.1 Other income growth 316.3 92.7(41.5)40.0 60.0 Revenue growth 211.9 114.9 3.4 22.9 34.1 Shareholders profit growth 825.9 112.0(1.8)31.4 35.0 Profitability(

133、%)Gross profit margin 79.0 83.0 87.6 87.1 85.6 Shareholders net profit margin 40.0 39.5 37.5 40.1 40.4 Asset turnover 7.1 8.2 6.9 7.3 7.8 Equity Multiplier(x)8.6 4.8 5.4 5.5 5.8 ROAA 2.9 3.3 2.6 2.9 3.1 ROAE 24.4 19.2 13.1 15.8 17.7 Valuation metrics(x)BPS(HKD)64.1 139.8 149.5 177.9 215.4 Current P/

134、E 50.9 27.9 26.8 20.4 15.1 Current P/B 8.1 3.7 3.5 3.0 2.4 TP P/E 62.3 34.2 32.8 25.0 18.5 TP P/B 9.9 4.6 4.3 3.6 3.0 Company Report See the last page for disclaimer Page 17 of 17 16 December 2022 Futu Holdings Ltd.富途控股(FUTU US)Table_PageHeader Futu Holdings Ltd.(FUTU US)Company Rating Definition Th

135、e Benchmark:NASDAQ Composite Index Time Horizon:6 to 18 months Rating Definition Buy 买入 Relative Performance15%;or the fundamental outlook of the company or sector is favorable.Accumulate 收集 Relative Performance is 5%to 15%;or the fundamental outlook of the company or sector is favorable.Neutral 中性

136、Relative Performance is-5%to 5%;or the fundamental outlook of the company or sector is neutral.Reduce 减持 Relative Performance is-5%to-15%;or the fundamental outlook of the company or sector is unfavorable.Sell 卖出 Relative Performance 5%;or the fundamental outlook of the sector is favorable.Neutral 中

137、性 Relative Performance is-5%to 5%;or the fundamental outlook of the sector is neutral.Underperform 跑输大市 Relative Performance-5%;Or the fundamental outlook of the sector is unfavorable.DISCLOSURE OF INTERESTS(1)The Analysts and their associates do not serve as an officer of the issuer mentioned in th

138、is Research Report.(2)The Analysts and their associates do not have any financial interests in relation to the issuer mentioned in this Research Report.(3)Except for CHINA GRAND PHARMACEUTICAL AND HEALTHCARE(00512 HK),LUZHOU BANK(01983 HK),SF REIT(02191 HK),JINSHANG BANK(02558 HK),BANKOFZHENGZHOU(06

139、196 HK),Guotai Junan and its group companies do not hold equal to or more than 1%of the market capitalization of the issuer mentioned in this Research Report.(4)Guotai Junan and its group companies have had investment banking relationships with the issuer mentioned in this Research Report within the

140、 preceding 12 months.(5)Guotai Junan and its group companies are not making a market in the securities in respect of the issuer mentioned in this Research Report.(6)Guotai Junan and its group companies have not employed an individual serving as an officer of the issuer mentioned in this Research Rep

141、ort.There is no officer of the issuer mentioned in this Research Report associated with Guotai Junan and its group companies.DISCLAIMER This Research Report does not constitute an invitation or offer to acquire,purchase or subscribe for securities by Guotai Junan Securities(Hong Kong)Limited(Guotai

142、Junan).Guotai Junan and its group companies may do business that relates to companies covered in research reports,including investment banking,investment services,etc.(for example,the placing agent,lead manager,sponsor,underwriter or invest proprietarily).Any opinions expressed in this report may di

143、ffer or be contrary to opinions or investment strategies expressed orally or in written form by sales persons,dealers and other professional executives of Guotai Junan group of companies.Any opinions expressed in this report may differ or be contrary to opinions or investment decisions made by the a

144、sset management and investment banking groups of Guotai Junan.Though best effort has been made to ensure the accuracy of the information and data contained in this Research Report,Guotai Junan does not guarantee the accuracy and completeness of the information and data herein.This Research Report ma

145、y contain some forward-looking estimates and forecasts derived from the assumptions of the future political and economic conditions with inherently unpredictable and mutable situation,so uncertainty may contain.Investors should understand and comprehend the investment objectives and its related risk

146、s,and where necessary consult their own financial advisers prior to any investment decision.This Research Report is not directed at,or intended for distribution to or use by,any person or entity who is a citizen or resident of or located in any jurisdiction where such distribution,publication,availa

147、bility or use would be contrary to applicable law or regulation or which would subject Guotai Junan and its group companies to any registration or licensing requirement within such jurisdiction.2022 Guotai Junan Securities(Hong Kong)Limited.All Rights Reserved.27/F.,Low Block,Grand Millennium Plaza,181 Queens Road Central,Hong Kong.Tel.:(852)2509-9118 Fax:(852)2509-7793 Website:.hk