Equity Research Analyst - Long-Short

Raj S, CA, CFA

Equity Bottom-Up

<ul>
<li>FUTU’s platform is already scaled and profitable, with strong client growth, sticky assets, and expanding yields from cash and margin balances.</li>
<li>Crypto optionality is real but not fully in consensus. The full license could transform revenue mix in 2026-27 significantly, with margin upside.</li>
<li>At 20x FY2 P/E, even though its peak of its range, we think the valuation doesn’t reflect the potential impact on revenues from crypto. We believe consensus is 10-15% short.</li>
</ul>


FUTU’s platform is already scaled and profitable, with strong client growth, sticky assets, and expanding yields from cash and margin balances.
Crypto optionality is real but not fully in consensus. The full license could transform revenue mix in 2026-27 significantly, with margin upside.
At 20x FY2 P/E, even though its peak of its range, we think the valuation doesn’t reflect the potential impact on revenues from crypto. We believe consensus is 10-15% short.


FUTU: Strong Traction Expected from Crypto Regulatory Push in HK and ASEAN

<ul>
<li>FUTU's risk-reward is asymmetric:  Structurally low valuation, active consensus upgrades and a near-term catalyst (HK crypto VATP license), which can boost further upgrades (2026e) sets up a compelling long entry.</li>
<li>HK-VATP enables FUTU to expand its crypto related revenues, product offerings and margins, and remove third-party dependency. With crypto &lt;2% assets, this new earnings leg is entirely absent from consensus.</li>
<li>FUTU’s pullback to ~15.6x FY2 P/E puts it at the bottom of a ~15x-25x - reasonable valuation band. With upgrades and catalysts ahead, it stands as a strong rerating candidate.</li>
</ul>


FUTU's risk-reward is asymmetric:  Structurally low valuation, active consensus upgrades and a near-term catalyst (HK crypto VATP license), which can boost further upgrades (2026e) sets up a compelling long entry.
HK-VATP enables FUTU to expand its crypto related revenues, product offerings and margins, and remove third-party dependency. With crypto &lt;2% assets, this new earnings leg is entirely absent from consensus.
FUTU’s pullback to ~15.6x FY2 P/E puts it at the bottom of a ~15x-25x - reasonable valuation band. With upgrades and catalysts ahead, it stands as a strong rerating candidate.


2026 High Conviction Idea - FUTU US - 3Q25 Beat and Bottom-Of-Range Valuation Creates Strong Upside

HK/China Equity Long-Short

Osbert Tang, CFA

GigaDevice Semiconductor  / Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/gigadevice-semiconductor" target="_blank" data-smartkarma-citation="entities:46238:1" rel="noopener">GigaDevice Semiconductor (3986 HK)</a>'s grey market price of HK$224.8 is 38.8% higher than the IPO price. This means a PER of 53.5x for FY26, simply too stretched for us. </li>
<li>The grey market price represents a 68-77% FY26 PER premium to the most-expensive peers, namely <a href="https://www.smartkarma.com/entities/microchip-technology-inc" target="_blank" data-smartkarma-citation="entities:8788:1" rel="noopener">Microchip Technology (MCHP US)</a> and <a href="https://www.smartkarma.com/entities/texas-instruments-inc" target="_blank" data-smartkarma-citation="entities:18804:1" rel="noopener">Texas Instruments (TXN US)</a>. </li>
<li>Our fair value range is HK$204-238, based on the HA discount for 2025 IPOs and the current overall HA discount, implying limited upside potential.</li>
</ul>



GigaDevice Semiconductor (3986 HK)'s grey market price of HK$224.8 is 38.8% higher than the IPO price. This means a PER of 53.5x for FY26, simply too stretched for us. 
The grey market price represents a 68-77% FY26 PER premium to the most-expensive peers, namely Microchip Technology (MCHP US) and Texas Instruments (TXN US). 
Our fair value range is HK$204-238, based on the HA discount for 2025 IPOs and the current overall HA discount, implying limited upside potential.


GigaDevice (3986 HK): Its Just Too Demanding

Bright Smart Securities / Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/bright-smart-securities-commodities-group" target="_blank" data-smartkarma-citation="entities:20511:1" rel="noopener">Bright Smart Securities (1428 HK)</a> rallied by 132% since our last Insight, fueled by the euphoria in the brokerage and securities sector on the HK government's stablecoin initiative.</li>
<li>At HK$16.44, it is at 100% PER premium to the sector average, ex-<a href="https://www.smartkarma.com/entities/guotai-junan-international" target="_blank" data-smartkarma-citation="entities:13438:1" rel="noopener">Guotai Junan International (1788 HK)</a>. The risk-reward payoff now looks less attractive.</li>
<li>It also implies net profit to grow by 150% by FY31F and priced at 18x PER. This appears stretched in the near term, though long-term prospects stay decent. </li>
</ul>



Bright Smart Securities (1428 HK) rallied by 132% since our last Insight, fueled by the euphoria in the brokerage and securities sector on the HK government's stablecoin initiative.
At HK$16.44, it is at 100% PER premium to the sector average, ex-Guotai Junan International (1788 HK). The risk-reward payoff now looks less attractive.
It also implies net profit to grow by 150% by FY31F and priced at 18x PER. This appears stretched in the near term, though long-term prospects stay decent. 


<ul>
<li>
<a href="https://www.smartkarma.com/entities/bright-smart-securities-and" target="_blank" data-smartkarma-citation="entities:20511:1" rel="noopener">Bright Smart Securities (1428 HK)</a>'s earnings rebounded solidly by 20.4% YoY in 2H FY25, fueled by higher client accounts and assets, and better HK market turnover.</li>
<li>BSS has been an underperformer against peers since May, as other brokerage companies rallied on the back of potential entry into the virtual asset dealing business. </li>
<li>Ant Financial will be able to transform BSS into a sizeable cross-asset house. The share price's current implied earnings growth and PER valuations are conservative.</li>
</ul>



Bright Smart Securities (1428 HK)'s earnings rebounded solidly by 20.4% YoY in 2H FY25, fueled by higher client accounts and assets, and better HK market turnover.
BSS has been an underperformer against peers since May, as other brokerage companies rallied on the back of potential entry into the virtual asset dealing business. 
Ant Financial will be able to transform BSS into a sizeable cross-asset house. The share price's current implied earnings growth and PER valuations are conservative.


Bright Smart (1428 HK): Bright and Smart FY25

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: Strong Traction Expected from Crypto Regulatory Push in HK and ASEAN

We re-iterated our bullish position on FUTU in a new note. FUTU's risk-reward is asymmetric: The combination of a structurally low valuation,...

Raj S, CA, CFA

2026 High Conviction Idea - FUTU US - 3Q25 Beat and Bottom-Of-Range Valuation Creates Strong Upside

2026 High Conviction: FUTU US risk-reward is asymmetric: Structurally low valuation, consensus upgrades post 3Q25 and a near-term catalyst (crypto...

Raj S, CA, CFA

GigaDevice (3986 HK): Its Just Too Demanding

GigaDevice's grey market price is 38.8% higher than IPO, leading to a FY26 PER of 53.5x, with limited upside potential compared to peers, even...

Osbert Tang, CFA

Bright Smart (1428 HK): Valuation Update

Bright Smart announced that it is still working on satisfying condition c.), which is reporting with the NDRC. Given that the Long Stop Date is 25...

Osbert Tang, CFA

Bright Smart (1428 HK): Bright and Smart FY25

BSS saw a 20.4% YoY earnings rebound in 2H FY25, driven by increased client accounts and assets, and better market turnover. Ant Financial's...

Osbert Tang, CFA

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52-week Range

Market Cap (USDm)

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FUTU: Strong Traction Expected from Crypto Regulatory Push in HK and ASEAN

We re-iterated our bullish position on FUTU in a new note. FUTU's risk-reward is asymmetric: The combination of a structurally low valuation,...

Raj S, CA, CFA

2026 High Conviction Idea - FUTU US - 3Q25 Beat and Bottom-Of-Range Valuation Creates Strong Upside

2026 High Conviction: FUTU US risk-reward is asymmetric: Structurally low valuation, consensus upgrades post 3Q25 and a near-term catalyst (crypto...

Raj S, CA, CFA

GigaDevice (3986 HK): Its Just Too Demanding

​GigaDevice's grey market price is 38.8% higher than IPO, leading to a FY26 PER of 53.5x, with limited upside potential compared to peers, even...

Osbert Tang, CFA

Bright Smart (1428 HK): Valuation Update

Bright Smart announced that it is still working on satisfying condition c.), which is reporting with the NDRC. Given that the Long Stop Date is 25...

Osbert Tang, CFA

Bright Smart (1428 HK): Bright and Smart FY25

​BSS saw a 20.4% YoY earnings rebound in 2H FY25, driven by increased client accounts and assets, and better market turnover. Ant Financial's...

Osbert Tang, CFA

GigaDevice's grey market price is 38.8% higher than IPO, leading to a FY26 PER of 53.5x, with limited upside potential compared to peers, even...

BSS saw a 20.4% YoY earnings rebound in 2H FY25, driven by increased client accounts and assets, and better market turnover. Ant Financial's...