On October 28, Jefferies released a research report. It has a BUY rating for $Futu Holdings Limited(FUTU.US)$ with a price target of $165.
Jefferies pointed out in the research report:
More guidelines are needed. Except for Futu, in fact many onshore securities firms have already set their offshore subsidiaries to provide HK/US securities trading services to domestic individuals, such as Haitong International, Hafoo Securities. Foreign brokers including Interactive Brokers also accept mainland China individuals to open trading accounts. Hence, more guidelines from the regulators are needed to address these concerns.
Futu has a good tracking record and sufficient capital and there is no risk of bankruptcy.
Jefferies has a BUY rating for Futu and PT at US$165, based on price-to-earnings valuation. It expects further monetization of Futu backed by the fast-accumulated user base.
Risk factors:
1) macro-headwinds impacting securities market trading volume in the US, HK and SG;
2) loss of market share due to competition;
3) lower-than-expected commission fee rate and interest rate.