On May 13, UBS released a research report, optimistic about FUTU's overseas expansion, and raised the target price from $70.00 to $84.00.

UBS pointed out the following highlights on FUTU:

• Q124 preview: UBS expects FUTU to release Q124 results in late-May. UBS estimates Q124 NPAT to reach HK$981 mn (+12%/ down 18% QoQ/YoY), ~4% lower than Visible Alpha (VA) Consensus. The YoY decline is mainly due to (1) increased cost from securities lending business and (2) higher selling & marketing expense amid rapid overseas expansion. Q124 revenue is estimated to be HK$2.6 bn (+9%/3% QoQ/YoY), broadly in line with VA cons.

• Discussion of key metrics: (1) ~160k paying client acquisition in Q124, thanks to strong QoQ growth in each overseas market. (2) Moderate QoQ growth in client AUM. (3) Solid QoQ improvement in trading commission, mainly supported by rebound in velocity. (4) Betterthan-expected Opex control.

• Valuation: Factoring in the faster-than-expected overseas expansion, muted US rate cut expectation and effective Opex control, UBS lifts FY24/25/26E EPS by 12%/19%/14% to US$5.0/5.6/6.4. UBS's new PT is US$84.00 (from US$70.00), implying 16x 12-mth-fwd P/E. Maintain Buy. FUTU is trading at 13x 12-mth-fwd P/E.

Key risks to FUTU include:

(1) lower-than-expected international expansion (especially in Japan and Malaysia market);

(2) worse-than-expected market conditions;