Online brokerage and wealth management platform Futu Holdings Limited (FUTU) has posted strong results for the third quarter of 2021. Shares of the company gained 4.1% in Wednesday’s early trading session.
The company reported adjusted earnings of HK$3.94 ($0.50) per ADS, up 29.6% from HK$3.04 per ADS reported in the prior-year period. (See Futu Holdings stock charts on TipRanks)
Furthermore, revenues surged 83% year-over-year to HK$1.73 billion ($222.4 million). The increase in revenues reflected a surge in brokerage commission and handling charge income, which increased 65.8% to HK$933.4 million ($119.9 million), as well as 128.5% growth in interest income to HK$631.7 million ($81.1 million).
While research and development expenses increased 49.5% year-over-year to HK$223.9 million ($28.8 million), general and administrative expenses rose 121.7% year-over-year to HK$136.8 million ($17.6 million).
During the third quarter, Futu’s paying clients grew 179.2% year-over-year. In addition, the total number of Futu users increased 58.6% year-over-year to 16.6 million.
Total client assets grew 111% year-over-year to HK$423.9 billion, while the client retention rate slipped slightly to 97% due to weak market performance.
The Chairman and CEO of Futu, Leaf Hua Li, said, “In Hong Kong, we remained the top-of-mind retail broker, with the number of our Hong Kong users already constituted approximately one-third of the Hong Kong adult population. Our growth strategy in Hong Kong is to further penetrate into the young and tech-savvy population, and tap into the demographics that are currently not well represented in our client base through a series of targeted marketing initiatives.”
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Price Target
Overall, the stock has a Hold consensus rating based on 2 Buys, 2 Holds and 1 Sell. The average Futu price target of $87.22 implies 60.6% upside potential from current levels.
Negative Investors Sentiment
TipRanks’ Stock Investors tool shows that investors currently have a Very Negative stance on Futu with 9.2% of investors on TipRanks decreasing their exposure to FUTU stock over the past 30 days.
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