Citi remained positive on China online brokers

花旗仍看好中国在线经纪商

2021/03/01 20:59  富途资讯

On February 26, Citi analyst Judy Zhang raised price targets on $富途控股(FUTU.US)$ from $119.7 to $246.5 and $向上融科(TIGR.US)$ to $38.6 .

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Source: Citi Research

Citi reported that "While we transfer primary coverage of Futu, Up Fintech and East Money to Judy Zhang from Daphne Poon, we turn more positive on the China online brokers. We raise our target price for Futu (revised to Buy/High Risk from Buy) by 106% to US$246.50 and for UP Fintech (Buy/High Risk) by 365% to US$38.60. Our estimates are up 4%, 24% and 50% on average for 2020E, 2021E and 2022E."

Citi turned more positive on Chinese online brokers given:

  • Beneficiary of household asset reallocation

Development of the wealth-management (WM) and asset-management businesses should help online brokers sustain long-term growth by: 1) capturing the rising demand for professional WM services from Chinese investors; 2) reducing earnings volatility through market cycles; 3) offsetting the margin pressures from ongoing pricing competition; and 4) enhancing client retention and catering to their lifetime financial-service needs. The recent regulatory scrutiny of Big Tech should also leave more room for online brokers to gain market share in WM/fund-distribution businesses.

  • One-stop financial-service provider

China online brokers provide not only a trading platform but also a comprehensive financial information portal. Some features unique to Chinese online brokers include: (i) forums and communities, which allow investors to share trading experience/expertise; and (ii) investor education.

These services have become popular among Chinese investors, helping to enhance online brokers’ user traffic, stickiness and trading activities. We see a structural trend of online brokers taking market share from traditional players owing to competitive pricing, tech knowhow, and comprehensive product/service offerings.

With a closed-loop platform of trading + social networking + financial media, online brokers are well positioned to capture the investing demand of the young generation.

  • Relaxation of capital controls to boost the addressable overseas market

The recent plan by SAFE to relax the restrictions on individual capital accounts largely removes the regulatory risk for Futu and Tiger (UP Fintech), and should potentially boost their TAM by allowing onshore Chinese investors to directly transfer money from onshore China bank accounts into Futu’s/Tiger’s brokerage accounts for overseas investments.

We estimate the TAM for Chinese online brokers in the overseas markets at c.US$2tn in terms of total client assets. This compares with Futu’s and Tiger’s client assets of US$26bn and US$11bn as of 3Q20, presenting significant room for growth.

Editor | Debby, Eli

2月26日,花旗分析师朱迪·张(Judy Zhang)将富途控股的目标价从119.7美元上调至246.5美元,将向上融科(TIGR.US)的目标价上调至38.6美元。

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资料来源:花旗研究

花旗报告称:“虽然我们将富途、涨金融科技和东方货币的主要业务从潘达芬转移到朱迪·张手中,但我们对中国在线经纪商的态度变得更加积极。我们将富途(修订为买入/高风险从买入)的目标价上调106%,至246.50美元,将金融科技(买入/高风险)的目标价上调365%,至38.6美元。我们对2020E、2021年和2022年的预期分别上涨了4%、24%和50%。”

花旗对中国在线经纪商的态度变得更加积极,原因是:

  • 家庭资产再分配受益者

财富管理(WM)和资产管理业务的发展应有助于在线经纪商保持长期增长:1)抓住中国投资者对专业WM服务日益增长的需求;2)通过市场周期降低收益波动性;3)抵消持续的定价竞争带来的利润率压力;4)增强客户保留力,满足他们终身金融服务的需求。最近对大型科技公司的监管审查也应该会为在线经纪商在理财/基金分销业务中获得市场份额留下更大的空间。

  • 一站式金融服务提供商

中国在线经纪商不仅提供了一个交易平台,还提供了一个全面的金融信息门户。中国在线经纪商的一些独特功能包括:(I)允许投资者分享交易经验/专业知识的论坛和社区;以及(Ii)投资者教育。

这些服务在中国投资者中变得流行起来,有助于提高在线经纪商的用户流量、粘性和交易活动。我们看到,由于具有竞争力的定价、技术诀窍和全面的产品/服务提供,在线经纪人从传统参与者手中夺取市场份额的结构性趋势。

在线经纪商拥有交易+社交+财经媒体的闭环平台,能够很好地抓住年轻一代的投资需求。

  • 放宽资本管制以提振潜在的海外市场

外管局最近放松个人资本账户限制的计划,在很大程度上消除了富途和老虎(金融科技)的监管风险,并可能通过允许在岸中国投资者直接将资金从在岸中国银行账户转移到富途/老虎的经纪账户进行海外投资,来提振它们的TAM。

我们估计,按客户总资产计算,中国在线经纪商在海外市场的TAM约为2万亿美元。相比之下,截至2020年第三季度,富途和老虎的客户资产分别为260亿美元和110亿美元,呈现出巨大的增长空间。

编辑|伊莱·黛比

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