3. Futu Holdings Limited (NASDAQ:FUTU)
Stock Price as of May 31: $36.71
Hedge Fund Holders: 11
Futu Holdings Limited (NASDAQ:FUTU) is a Hong Kong-based digitalized brokerage and wealth management platform that operates in China, Hong Kong, and the US. Futu is the market leader in providing online brokerage services in China. It offers enormous growth opportunities but has a high regulatory risk associated with it as well.
On May 19, Cindy Wang at China Renaissance assumed coverage on Futu Holdings Limited (NASDAQ:FUTU) stock with a Buy rating. The analyst gave Futu Holdings Limited (NASDAQ:FUTU) stock a price target of $51.80 and appreciated the new paying customer acquisition related to overseas expansion. Wang thinks that this will drive the total value of client assets. The analyst anticipates the firm to capture 20% of the investing population in Singapore through rapid expansion. The stock is a cheaper alternative to a commission-free online trading platform like the Menlo Park, California-based Robinhood Markets, Inc. (NASDAQ:HOOD).
Tao Value shared its insights on Futu Holdings Limited (NASDAQ:FUTU) in its Q1 2021 investor letter. Here’s what the firm said:
“Futu is a new “Opportunistic” position. It is an HK based online brokerage & wealth management platform with deep root in technology. Futu sits in the confluence of 3 strong favorable forces of Meteorology, Topography & Commander, yet was underpriced at the time of our entry. In terms of Meteorology, there is a huge addressable market of Chinese domestic middle to upper classes’ wealth being deployed to overseas assets allocation in the next decade. Additionally, the incumbents being disrupted are extremely weak in their digital transformation. On Topography, Futu’s user-centric product design built an intuitive front end and great user experience, while the digital native development framework built solid & reliable back end (including a self-developed order routing & execution system for HK market). This is a rare combination compared to both offline incumbents (who lack flashy front end & UX) & other new online disrupters (who lack solid infrastructure). On Commander factor, founder CEO Li Hua was a Tencent engineer in its early days with deep knowledge in product design and development. Li is said to be a fanatic product manager, to this day still at the front-line, alpha testing any new features. Based on analyses of these factors, I think Futu could compound its revenue at a very high rate with very high certainty and with strong operating leverage, putting our entry price very attractive compared to earning power in 3-5 years. Yet just as we finished building a small position, the price started to take off and more than tripled in a month. When such price action happens, it is obvious that Mr. Market has turned very euphoric to this name. I decided to trim but kept a reasonable position given its growth certainty.”
Futu Holdings Limited (NASDAQ:FUTU) was held by 11 hedge funds at the end of Q1 2022.
