For everyone wondering what happened to FUTU
Highlights from the Quarterly Results:
FUTU beat revenue and profit expectations. Quarter 4 net income almost doubled from the year before. At price of $44, FUTU is now trading below PE Ratio of 17, which in my opinion, is low, considering FUTU’s high growth potential and the expected renewed uptrend in China stocks that we are starting to see from mid-March.
Investor Conference Call Highlights:
1) New market expansion: FUTU is planning to expand into at least 2 new countries in Asia this year, one of which seems to be Japan as mentioned by several analysts during the call. These markets could potentially be the next powerful engines of growth, similar to what Singapore market did to FUTU.
FUTU beat revenue and profit expectations. Quarter 4 net income almost doubled from the year before. At price of $44, FUTU is now trading below PE Ratio of 17, which in my opinion, is low, considering FUTU’s high growth potential and the expected renewed uptrend in China stocks that we are starting to see from mid-March.
Investor Conference Call Highlights:
1) New market expansion: FUTU is planning to expand into at least 2 new countries in Asia this year, one of which seems to be Japan as mentioned by several analysts during the call. These markets could potentially be the next powerful engines of growth, similar to what Singapore market did to FUTU.
Apart from the 2 new markets, FUTU is already continuing to expand in Singapore, Hong Kong, Australia and the US.
2) Interest income: Interest income (and hence profits from it) is expected to grow year-on-year due to the highest interest rate environment as shared by the management. For reference, interest income contributes about 50% of the net income for Quarter 4.
3) China crackdown announcement: FUTU witnessed about 1-2% outflow of client assets in the first half of January, which is manageable to the company. Notably, the trend of client asset outflow reversed in February and now they are witnessing net inflow everyday. In the middle of February, the CSRC has also issued greater clarity on the regulations that will apply to the industry and FUTU views it as positive for its development.
4) Continued share buyback: FUTU bought back $250M worth of shares (about 8,000,000 ADRs) in the whole of 2022 and still has $250M worth of firepower left for 2023. The average share buyback price is close to PE ratio of 15, which at the current price of $44 (PE ratio of 17), the downside risk is limited.
So why the drop? Futu hit technical resistance at $52. Big players used the chance to do some market manipulation to force small players to sell cheap. Short sellers joined in to attack the short. It has nothing to do with the company's fundamentals.
What to expect in the next few days:
1) Looking at past trends, FUTU always drop or hardly changes on the day of the results, but has a big rise in the next 3 days. We can possibly expect the same.
1) Looking at past trends, FUTU always drop or hardly changes on the day of the results, but has a big rise in the next 3 days. We can possibly expect the same.
2) Alibaba’s big announcement has generated a lot of positive sentiment amongst China stocks and Hong Kong’s stock market is expected to have a big rise tomorrow, which will further boost FUTU’s stock price.
3) Given the good results and positive market sentiment, analysts should be reiterating their BUY Calls and raising their BUY Target Price over the next 2 days, similar to what we saw in November where there is not much movement on results day, but 2 days later, JP Morgan reiterated their BUY and raised the target price, and FUTU stock rose.
What to expect in the next few months:
1) FUTU is currently awaiting new license approvals from market regulators. Once it receives new market license, it can officially expand into the new markets that it has planned. These announcements will be positive for the stock price.
1) FUTU is currently awaiting new license approvals from market regulators. Once it receives new market license, it can officially expand into the new markets that it has planned. These announcements will be positive for the stock price.
2) China and Hong Kong shares’ recent correct seemed to have bottomed out and is currently on the first phase of a new uptrend. If the uptrend sustains, we should see FUTU break out of its current consolidation pattern and make new highs as well.
Hope the above is useful for everyone, especially those who did not attend the Investor Conference Call earlier and/or do not understand the recent results.
Hope the above is useful for everyone, especially those who did not attend the Investor Conference Call earlier and/or do not understand the recent results.
Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only.
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ethancheng98 : Good analysis, worth a read. Agree with the point on technical resistance and big players manipulating to stop out the retail investors - look at L sized outflow on the app.
Believe that strong fundamentals will spur long-term growth, just hold on.
骨神 : Excellent. This is all correct. Let’s wait and see for the next 3 days.
sTone83 : Don't get involved when the price performance is not in line with the fundamentals
Kenny Tey :
Great thanks to your helpful and useful and valuable information. 
.
I am holding 86.19% of $Futu Holdings Ltd (FUTU.US)$ out of my total stock..
102590478 : just need one bad news to crash this stock down to single digit
prolohzOP : Congratulations to everyone who boarded the ship with me yesterday!
Tony讲股 sTone83: It's not OK to just look at the fundamentals