FUTU Stock: Explanation For Over 11% Increase This Week

By Amit Chowdhry ● Sep 2, 2021
  • The stock price of Futu Holdings Ltd (NASDAQ: FUTU) increased by over 11% this week. This is why it happened.

The stock price of Futu Holdings Ltd (NASDAQ: FUTU) increased by over 11% this week. Investors are responding positively to the company’s second-quarter ending June 30, 2021.

For the second quarter, Futu reached several major milestones. The number of Futu’s paying clients increased to one million, including 100,000 paying clients that came from Singapore. And another major milestone was that the company’s stock was added to the MSCI Hong Kong Index. For the same quarter, the company obtained an investment grade long-term issuer credit rating “BBB-” from S&P Global Ratings, becoming the first online broker in the Asia-Pacific region to have obtained this international rating.

The company’s corporate services experienced strong growth this quarter. And Futu I&E’s IPO and IR clients climbed to 186 with its ESOP solution clients reaching 263 as of June 30, 2021. For the first half of 2021, Futu participated in the underwriting or distribution of all Chinese ADR’s secondary listings in Hong Kong, as well as numerous HK$100-billion Hong Kong IPOs, namely Kuaishou Technology, Baidu, Bilibili, and JD Logistics. And this quarter, Futu’s wealth management business Money Plus partnered with 50 world-renowned asset managers, establishing seven new partnerships in Q2. Total client asset balance under Money Plus was approximately HK$13.8 billion ($1.77 billion USD), up 59.2% YoY as of June 30, 2021.

In the second quarter, Futu’s momentum in revenue growth remained strong with a 129.3% year-over-year increase to $203.1 million, reflecting triple-digit growth for six consecutive quarters. And non-GAAP adjusted net income also saw 126.7% YoY growth, reaching $70.9 million.

The brokerage commission and handling charge income increased by 94.8% YoY to $102.7 million; interest income reached $78.6 million, representing an increase of 193.6%; and other income (including wealth management, enterprise services, etc.) increased by 140.5% YoY to $21.7 million.

Futu reached 15.5 million global users as of the second quarter, representing a 66.8% increase YoY; the number of registered clients increased by 142.5% YoY to 2.32 million; and the number of paying clients increased by 230.2% YoY, reaching one million. Futu’s client retention rate remained strong at 98% during the first half of 2021.

Net paying clients tripled YoY to approximately 211,000 (Q2 2020: 65,000). And with international expansion continuing to accelerate this past quarter, about 80% percent of newly acquired paying clients resulted from the exponential growth Futu has realized in Hong Kong, Singapore, and other overseas markets. As of quarter-end, the total client assets hit a new high of $64.8 billion (approximately HK$503.2 billion), representing a 253.5% increase YoY. Average client asset balance climbed to about $64,700 (approximately HK$500,000).

Plus the brokerage business maintained steady growth with total trading volume increasing 104.3% to $169.4 billion. And daily average revenue trades (DARTs) increased by 105.4% YoY to 540,988.

KEY QUOTE:

“As an international, tech-driven online brokerage, Futu puts the user experience and needs of its clients first. We are dedicated to driving innovation and providing more user-friendly and state-of-the-art FinTech services to investors. We feel immensely proud of the strong growth we’ve achieved in Singapore and are thankful for all the support we have received from their investing community. Singapore is a key focus of our international expansion strategy, and we are humbled to see that moomoo has attracted such a large customer base in such a short period of time. We are proud of the market traction we’ve gained globally, thanks to our industry-leading products and services.” 

“Looking ahead, we are devoted to catering to the evolving needs of the Singapore market and look forward to deepening our relationship with local industry partners, while promoting financial literacy and driving innovation within the FinTech industry.”

“Futu is committed to deepening its presence in the Hong Kong market and has demonstrated its strengths in IPO distribution and IR services. Our mission is to better serve promising Chinese enterprises seeking an IPO or secondary listing in Hong Kong, made possible through our unparalleled solutions and services, which range from IPO subscription, setting up their Futu Page accounts, running virtual roadshows and facilitating briefing sessions. Futu is well-positioned to connect listed companies with high-quality retail investors and facilitate meaningful exchanges about corporate values and business prospects. As more companies look to gain a foothold in the Hong Kong market, working with us will allow those enterprises to step into the spotlight, which will further amplify the value and advantages of the Hong Kong stock market.”

— Leaf Hua Li, Futu’s Founder, Chairman, CEO & Chairman of the Technology Committee.

Disclaimer: This content is intended for informational purposes. Before making any investment, you should do your own analysis.