Futu Holdings- The fintech broker from China
For the development (company figures), better view and more check out the free blog: https://topicswithhead.beehiiv.com/p/futu-holdings-der-fintech-broker-aus-china
Futu Holdings Limited is an innovative fintech company specializing in digital financial services. Founded in 2009 by Leaf Hua Li, a former Tencent employee, Futu has become a major player in online trading. Since its IPO on Nasdaq on March 8, 2019, the company offers a wide range of services, including trading and clearing services, asset management as well as market data and social interactions via its Futubull and moomoo platforms.
Core business and key products/services
Futu provides a comprehensive offering to its customers:
Trading services: enables trading of shares in various markets, including Hong Kong, the US and China.
Wealth management: Futu Money Plus gives customers access to over 100 investment funds.
Market data and analytics: Provides real-time market data and advanced analytical tools.
Social features: Users can interact in a community and share information and investment strategies.
Mission and vision
Futu's mission is to create a user-centric platform that revolutionizes investing through innovative technologies. The mission is to facilitate access to financial services and continuously optimize the user experience.
Historical development
Since its foundation in 2009, Futu has undergone impressive growth. The IPO in 2019 marked an important milestone and gave the company access to further resources for its expansion into international markets.
Important milestones:
2009: Foundation of Futu Holdings.
2019: IPO on the Nasdaq.
2020-2023: Expansion into markets such as the USA and Singapore and steady growth of the user base.
Strategic acquisitions and developments
Futu has established strategic partnerships with global asset managers to offer its clients a broader range of investment products, further strengthening the company's market position.
Business model & core competencies
Futu's business model is based on a powerful technological infrastructure that enables cost-effective and comprehensive services. The company's key strengths are
Technological innovation: Proprietary platforms for trading.
Ease of use: Intuitive operation and comprehensive support.
Customer centricity: High customer loyalty through personalized offers.
Competitive advantages
Lower trading fees compared to traditional brokers.
Strong technological platform that enables real-time data and analysis.
High customer loyalty, as over 80% of users are regularly active.
Future prospects & strategic initiatives
Futu plans to continue expanding into new markets and investing in innovative technologies to improve the quality of its services.
Growth initiatives:
Expansion of the offering in the areas of wealth management and social interactions.
International expansion, particularly in North America.
Futu is also investing more heavily in artificial intelligence and data analytics to develop personalized services and further improve the user experience.
Market position & competition
Futu is now one of the leading digital brokers in Asia and is actively expanding into North America.
Its main competitors in the USA include:
Robinhood
Charles Schwab
Total Addressable Market (TAM)
The global online retail market is estimated at around USD 9.5 billion, with an annual growth rate of 5.3% until 2030. Futu has the potential to gain a significant share of this market, particularly due to the growing demand for digital financial services.
Share performance
Since the IPO, the share has a TR of 533% in the last 3 years it was 67%, mainly due to the increase from last year with 57%
Share distribution
Investor
Date
% Owned
Market Value
Hua Li
2023-12-31
36.59986%
$2.6B
Tencent Holdings Limited
2023-12-31
22.42365%
$1.59B
Aspex Master Fund
2024-08-06
3.41907%
$242.81M
Aspex Management (HK) Limited
2024-08-06
3.41907%
$242.81M
Morgan Stanley, Investment Banking
2024-06-30
2.46291%
$174.91M
For the development (company figures), better view and more check out the free blog: https://topicswithhead.beehiiv.com/p/futu-holdings-der-fintech-broker-aus-china
Conclusion
Futu Holdings is well positioned to benefit from technological innovation and expansion into new markets. Especially in regions where the population is open to new brokers, Futu is positioning itself favorably to benefit from these developments. In Asia, there is a lot of potential as the markets are often still underdeveloped, especially in terms of shareholder culture. With the huge market in China, the company has access to an enormous population. It is also looking to position itself in Singapore and the USA, although Futu will probably only play a minor role in the USA. Futu can therefore be seen as an investment in Asia and the emerging markets.
The company is very innovative and is managed by the founders, who also hold a significant stake in the company. With the support of Tencent, one can positively emphasize that they are involved in interesting markets. On the other hand, there is the challenge that the voting rights of over 50% are held by 2 owners. Futu has a lot of cash, good metrics and is still not overpriced, but unfortunately the growth figures are currently falling sharply, but as long as they can be maintained or slightly increased, this should be sufficient for a reasonable valuation.
So what is the problem: the risk discount due to China, especially Hong Kong, is noticeable and I have to be honest and say that I would put this discount even higher in order to invest.
Actually, I don't have any individual stocks from China as I trust the dictatorship less than our own state. Therefore, Futu would have to get back to a point where the valuation is close to cash or well below book value. This was the case until the last increase, but I had not yet looked at the share in detail at that time. Therefore, the rule for me is: for an exceptional stock, I want at least a 15-20% additional China risk discount (normally 25%, which would mean the valuation at around 10 billion( before the rise), corresponding to 60 to 70 euros for the ADR share.
Then I would take another look at the figures and invest if the trend holds.
