Bank of America has raised its earnings forecast for Futu for 2025-26 by 9-11% and increased the target price from $129.5 to $143.60. The bank reaffirms its "Buy" rating for Futu, citing the company's diversified market risk, strong growth in customer base and assets under management, as well as encouraging developments in overseas markets and new products. BofA expects FUTU to report solid sequential growth and highlights the following points:

1. Futu acquired 215k new paying clients in 4Q24, up 39% QoQ/262% YoY. Futu guided 800k new paying clients in 2025, excluding new markets (if any). It saw robust growth outlook for new markets like Malaysia/Japan and see further upside from relatively mature markets like HK/Singapore.

2. Both HK and US markets remained very active in 1Q25. Futu guided that retail investors remained highly engaged despite sharp correction of the US market in the near term, and doesn't expect significant decline in trading activities unless in a protracted market decline.

3. Futu hasn't utilized any of the quota so far under the outstanding USD 500mn share buyback program, which will expire by the end of 2025. It believes new markets and new business lines are still in a fast growth stage, and there will be ample room for it to deploy capital into these areas, which will enhance its competitive edge and profitability. Meanwhile, it also noticed some shareholders care much about cash dividends, so it will re-evaluate its dividend payout policies when FY25 completes.

Price Objective Risk:

• Upside risks: better-than-expected capital market condition, lower-than-expected competition, and faster-than-expected client growth.

• Downside risks: stricter-than-expected regulations, large US/HK market correction and intensified competition.