China/Asia TMT

Shawn Yang

China growth and global non-US Internet equities

Blue Lotus Research Institute

Blue Lotus Research is a Hong Kong Type 4 Licensed investment advisory firm focusing on Chinese growth equities and global non-US Internet equities

Equity Bottom-Up

<ul>
<li>FUTU reported 2Q23 revenue 5.9%/13.5% vs. our estimate/consensus, non-GAAP NI beat our estimate/consensus by 9.9%/19.4%, mainly contributed by higher revenue from interest income due to continuous interest rate hike.</li>
<li>Overseas expansion turns to be the primary focus. However, we think exploit new market is a bumpy and slow path, which cannot solve the near-term headwind on weak trading sentiment.</li>
<li>We maintain the stock as BUY rating and maintain TP at US$55/ADS, which implies 12.6x PE in 2023, the stock currently trading at 11.3x PE in 2023, leaving 12% upside.</li>
</ul>


FUTU reported 2Q23 revenue 5.9%/13.5% vs. our estimate/consensus, non-GAAP NI beat our estimate/consensus by 9.9%/19.4%, mainly contributed by higher revenue from interest income due to continuous interest rate hike.
Overseas expansion turns to be the primary focus. However, we think exploit new market is a bumpy and slow path, which cannot solve the near-term headwind on weak trading sentiment.
We maintain the stock as BUY rating and maintain TP at US$55/ADS, which implies 12.6x PE in 2023, the stock currently trading at 11.3x PE in 2023, leaving 12% upside.


[Futu Holdings (FUTU US, BUY, TP US$55) Earnings Review]: Short Term Peaking but Momentum Remains

<ul>
<li>We think Futu has proved its ability to retain its mainland China users. The DAU remained stable, and the growth rate of clients’ HK assets outpaced the market in July.</li>
<li>Futu’s overseas expansion is quickly ramping up in Japan, Malaysia, and is progress steadily in Singapore and Australia. We expect the monetization in Malaysia begin in 2024.</li>
<li>We expect Futu 2Q23 revenue 4.5% higher than consensus, our non-GAAP NI 8.7% higher than consensus. We maintain BUY rating on FUTU and raise TP by US$4 to US$55.</li>
</ul>


We think Futu has proved its ability to retain its mainland China users. The DAU remained stable, and the growth rate of clients’ HK assets outpaced the market in July.
Futu’s overseas expansion is quickly ramping up in Japan, Malaysia, and is progress steadily in Singapore and Australia. We expect the monetization in Malaysia begin in 2024.
We expect Futu 2Q23 revenue 4.5% higher than consensus, our non-GAAP NI 8.7% higher than consensus. We maintain BUY rating on FUTU and raise TP by US$4 to US$55.


[Futu Holdings (FUTU US, BUY, TP US$55) TP Change]: Better Outlook in Both Domestic and Overseas

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Equity Capital Markets

<ul>
<li>National Securities Depository Limited (NSDL) is looking to raise around US$400m in its India IPO. </li>
<li>It is the largest depository in India in terms of number of issuers, number of active instruments, market share in demat value of settlement volume and value of assets.</li>
<li>In this note, we talk about the not-so-positive aspects of the deal.</li>
</ul>


National Securities Depository Limited (NSDL) is looking to raise around US$400m in its India IPO. 
It is the largest depository in India in terms of number of issuers, number of active instruments, market share in demat value of settlement volume and value of assets.
In this note, we talk about the not-so-positive aspects of the deal.


NSDL Pre-IPO - The Negatives - Margins Could Drag

<ul>
<li>National Securities Depository Limited (NSDL) is looking to raise around US$400m in its India IPO. </li>
<li>It is the largest depository in India in terms of number of issuers, number of active instruments, market share in demat value of settlement volume and value of assets.</li>
<li>In this note, we talk about the positive aspects of the deal.</li>
</ul>


National Securities Depository Limited (NSDL) is looking to raise around US$400m in its India IPO. 
It is the largest depository in India in terms of number of issuers, number of active instruments, market share in demat value of settlement volume and value of assets.
In this note, we talk about the positive aspects of the deal.


NSDL Pre-IPO - The Positives - Dominant Position, Strong Revenue Growth

Rakuten Securities / Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/rakuten-securities-inc" target="_blank" data-smartkarma-citation="entities:39933:1" rel="noopener">Rakuten Securities</a>, the online securities arm of Rakuten, aims to raise around US$500m (estimated) in its Japan listing.</li>
<li>It is the largest online securities firm in Japan with a 33.7% market share. In FY22, it had over 8.64m accounts, with around JPY18.2tn (US$131bn) of assets under custody.</li>
<li>In this note, we talk about the not-so-positive aspects of the deal.</li>
</ul>



Rakuten Securities, the online securities arm of Rakuten, aims to raise around US$500m (estimated) in its Japan listing.
It is the largest online securities firm in Japan with a 33.7% market share. In FY22, it had over 8.64m accounts, with around JPY18.2tn (US$131bn) of assets under custody.
In this note, we talk about the not-so-positive aspects of the deal.


Rakuten Securities IPO Early Look - The Negatives - Growth Has Slowed Down

United States

Futu Holdings Limited operates as a holding company. The Company, through its subsidiaries, offers an online brokerage platform that enables individual investors to trade in listed stocks. Futu Holdings serves customers in the United States, China, and Hong Kong.

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Futu Holdings Ltd (FUTU US)

[Futu Holdings (FUTU US, BUY, TP US$55) Earnings Review]: Short Term Peaking but Momentum Remains

We maintain the stock as BUY rating and maintain TP at US$55/ADS, which implies 12.6x PE in 2023, the stock currently trading at 11.3x PE in 2023,...

Blue Lotus Research Institute

[Futu Holdings (FUTU US, BUY, TP US$55) TP Change]: Better Outlook in Both Domestic and Overseas

We expect Futu 2Q23 revenue 4.5% higher than consensus, our non-GAAP NI 8.7% higher than consensus. We maintain BUY rating on FUTU and raise TP by...

Blue Lotus Research Institute

NSDL Pre-IPO - The Negatives - Margins Could Drag

National Securities Depository Limited (NSDL) is looking to raise around US$400m in its India IPO. In this note we talk about the not-so-positives...

Sumeet Singh

NSDL Pre-IPO - The Positives - Dominant Position, Strong Revenue Growth

National Securities Depository Limited (NSDL) is looking to raise around US$400m in its India IPO. In this note, we talk about the positive aspects...

Sumeet Singh

Rakuten Securities IPO Early Look - The Negatives - Growth Has Slowed Down

Rakuten Securities, the online securities arm of Rakuten, aims to raise around US$500m (estimated) in its Japan listing. In this note, we talk...

Sumeet Singh

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