On March 14th, JPMorgan released a research report, reaffirming its shareholding rating on Futu with a target price of $64.
JPM points out the following key points:
Futu expects to increase its new paying customers by 59% in 2024. Futu has released new guidelines, expecting to reach 0.35 million new paying clients in 2024, an increase of 59% from 0.22 million in 2023.
Overseas expansion is yielding results. In February 2024, Futu launched brokerage services in Malaysia. In addition, management revealed that customer acquisition in Japan accelerated in the first quarter due to strong market performance.
Share repurchase program: Futu has announced a $0.5 billion share buyback plan, accounting for 5.5% of the market cap at the close on March 13th. Futu will repurchase up to $0.5 billion worth of shares in 2024 and 2025. This will reduce the number of shares and increase the ROI.
Downside risks:
Profitability.
Cost control: The CIR for Q4 2023 was 56.9%, compared to 50.9% in Q4 2022.
External environment: Trading volume is weaker than expected.