On August 21, 2024, Jefferies released a research report, maintaining a "BUY" rating with a price target of $88.4 for Futu Holdings. In the research report, Jefferies pointed out:

1) Futu reported 2Q results with revenue and non-GAAP earnings ahead of consensus and Jefferies' estimates, primarily driven by high growth in commission and fee income as well as interest income.

2) In 2Q, 155K new paying clients were added, totaling 332K for 1H, exceeding 80% of the previous full-year target of 400K. The full-year guidance is now raised to 550K new paying clients.

3) Cryptocurrency trading was launched in HK and SG in Aug., new product launches in Japan are progressing well, and the company is investing in Airstar Bank for synergies.

4) The number of new paying clients in Japan and Malaysia grew rapidly.

5) Jefferies believes strong demand from global high net-worth individuals for geographically diverse investment portfolios will drive Futu's financial and wealth management growth. Futu leads peers in technology, operating efficiency, and financial licenses.

Catalysts

• Improvement of commission fee rates and interest rates;

• Stronger-than-expected investor demand;

• Stronger-than-expected user growth and traffic conversion.

Risks to Downside

• Compliance risk and regulatory risk;

• Macro-headwinds impacting securities market trading volume in the US, HK and SG;

• Loss of market share due to competition;

• Lower-than-expected commission fee rate and interest rate.