Equity Research Analyst - Long-Short

Raj S, CA, CFA

I am Raj - CA and CFA. A Buy-side analyst.

I cover BFSI, Autos, Tech, AI and several other sectors across geographies.
   
I am a CA and CFA, with 10+ years experience in fundamental equity research across buy-side and sell-side and across geographies.

My research process is fundamental driven, focused on the catalysts which would have a direct impact on a stocks performance and market valuation. These days, I look for names which have a clear mis-pricing evident in its valuation vs. fundamental business moats/ growth/ NAV. Fortunately, there are always such stories around. More importantly, the timeline of when the mis-pricing is resolved and what triggers this resolution is what interests me.

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

Guotai Junan Intl (1788 HK): A Good Enough Privatisation Price

CICC (3908 HK): It's Getting More Interesting

Equity Bottom-Up

<ul>
<li>Mainland exposure was always the "red flag" for Futu and that's now removed; the current valuations and downgrades price in the worst case scenario, providing a clear asymmetric upside opportunity.</li>
<li>2Q is evidence that the underlying business remains strong: revenue increased 36% y/y, profits +40% y/y, strong client adds ex-mainland, and trading volume reached new records</li>
<li>Futu trades at 9.9x FY2 P/E, around the bottom of its three-year range; a return to 16x FY2 P/E implies approximately 60% upside, not to mention the long-term compounding business.</li>
</ul>


Mainland exposure was always the "red flag" for Futu and that's now removed; the current valuations and downgrades price in the worst case scenario, providing a clear asymmetric upside opportunity.
2Q is evidence that the underlying business remains strong: revenue increased 36% y/y, profits +40% y/y, strong client adds ex-mainland, and trading volume reached new records
Futu trades at 9.9x FY2 P/E, around the bottom of its three-year range; a return to 16x FY2 P/E implies approximately 60% upside, not to mention the long-term compounding business.


Futu Holdings (FUTU US) : Regulatory Risk Reset, Asymmetric Upside

Futu Holdings Ltd

Futu Holdings (FUTU US) : Regulatory Risk Reset, Asymmetric Upside