On Nov 24, Bank of America Global Research reiterated a Buy rating on FUTU(FUTU.US) and maintained their price target of $62.80, based on 14x 2024E P/E multiple, lower than global mature online brokers' given the regulation risk, but higher than traditional China brokers'.

BofA pointed out the following highlights on FUTU:

1. 3Q results broadly in line, buy on trough sentiments

Futu's 3Q GAAP net profit rose 45% YoY to HKD1,091mn, and its revenue rose 36% YoY to HKD2,650mn. New paying clients rose 4% QoQ to 65k, with >40%/~25% from HK/SG. We tweaked 23-25E EPS by ±5%, rolled over P/E base to 2024E Buy on trough sentiments & valuation and good development in HK & overseas markets.

2. Steady Japan launch, more to be anticipated from 2Q24

Futu launched brokerage businesses in Japan and Canada during Q3 and it has 400k users in Japan now with DAU to user ratio at about 20%, the highest among all of the markets it has entered. It aims to refine its processes and offerings in Japan and plans to launch NISA account and Japan stock trading in 1Q24. Futu also plans to launch Malaysia in 1Q24 and is applying for Crypto Trading Platform License in HK.

Downside Risk:

Stricter-than-expected regulations

Large US/HK market correction

Intensified competition