Futu Holdings Posts Upbeat Q3 Results


Online brokerage and wealth management platform Futu Holdings Limited (FUTU) has posted strong results for the third quarter of 2021. Shares of the company gained 4.1% in Wednesday’s early trading session.

The company reported adjusted earnings of HK$3.94 ($0.50) per ADS, up 29.6% from HK$3.04 per ADS reported in the prior-year period. (See Futu Holdings stock charts on TipRanks)

Furthermore, revenues surged 83% year-over-year to HK$1.73 billion ($222.4 million). The increase in revenues reflected a surge in brokerage commission and handling charge income, which increased 65.8% to HK$933.4 million ($119.9 million), as well as 128.5% growth in interest income to HK$631.7 million ($81.1 million).

While research and development expenses increased 49.5% year-over-year to HK$223.9 million ($28.8 million), general and administrative expenses rose 121.7% year-over-year to HK$136.8 million ($17.6 million).

During the third quarter, Futu’s paying clients grew 179.2% year-over-year. In addition, the total number of Futu users increased 58.6% year-over-year to 16.6 million.

Total client assets grew 111% year-over-year to HK$423.9 billion, while the client retention rate slipped slightly to 97% due to weak market performance.

The Chairman and CEO of Futu, Leaf Hua Li, said, “In Hong Kong, we remained the top-of-mind retail broker, with the number of our Hong Kong users already constituted approximately one-third of the Hong Kong adult population. Our growth strategy in Hong Kong is to further penetrate into the young and tech-savvy population, and tap into the demographics that are currently not well represented in our client base through a series of targeted marketing initiatives.”

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Price Target

Overall, the stock has a Hold consensus rating based on 2 Buys, 2 Holds and 1 Sell. The average Futu price target of $87.22 implies 60.6% upside potential from current levels.

Negative Investors Sentiment

TipRanks’ Stock Investors tool shows that investors currently have a Very Negative stance on Futu with 9.2% of investors on TipRanks decreasing their exposure to FUTU stock over the past 30 days.

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