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164% GROWTH ALERT An online brokerage and trading platform in Hong Kong
& Mainland China 
Taking advantage of the massive influx of Asian IPOsAND from the rise in investable assets in ASIA
Here is an EASY thread
$FUTU was founded in 2011 and provides online brokerage services in Hong Kong & Mainland China
Through its investing platform “Futubull”
it provides market data, trading services and news feed of HK, Mainland China and US stock markets
& Mainland China Through its investing platform “Futubull”
it provides market data, trading services and news feed of HK, Mainland China and US stock markets
It is backed by Tencent Holdings, Matrix Holdings and Sequoia Capital and it went public on the Nasdaq in March 2019
By the time of its IPO, it counted 5.3m users
and had HKS 54B in client assets 
Today, its counts 9.3m users and has HKS 142B in client assets
By the time of its IPO, it counted 5.3m users
and had HKS 54B in client assets Today, its counts 9.3m users and has HKS 142B in client assets
Needless to say, the business is growing FAST 
In Q2 ’20, its sales increased 164% YoY to $ 89m
Gross profit increased by 172% YoY to $ 69m and Net Income boomed by 327% to $ 30.5m
In Q2 ’20, its sales increased 164% YoY to $ 89mGross profit increased by 172% YoY to $ 69m and Net Income boomed by 327% to $ 30.5m
Ok, so its a business growing at a rapid pace and profitable 
Here are some questions
What does it do?
What is its market opportunity
How can it win?
Here are some questions
What does it do? What is its market opportunity How can it win?
What does it do?$FUTU offers a fully digitised brokerage platform
and it makes money mainly from trade executions and margins financing Their users consists in the emerging affluent Chinese population, taking advantage of generational shift in wealth management
Besides providing access to trades, it also enable users to get all the latest news on their stocks 
It also provides an immersive social platform for investors through the Futubull platform
From their S1 filling
It also provides an immersive social platform for investors through the Futubull platform
From their S1 filling
“We have embedded social media tools to create a network centered around our users and provide connectivity to users”
As of Dec. 2019, the daily active users for the social community
reached 208k users and these users spent on average 24.5 minutes each day on the platform
As of Dec. 2019, the daily active users for the social community
reached 208k users and these users spent on average 24.5 minutes each day on the platform
What is its market opportunity?According to BCG, China’s household wealth
is set to increase by about $ 14T by 2023 and reach $ 35TThe number of High Net Worth Individuals (investable assets of $ 850k) will surge by 44%
and currently stands at 1,7m individuals
Sill according to BCG, the Assets Under Management (AUM) in China is set to grow by 11% to 15% per year over the 2018 - 2025 period
Watch out: on this graph values are indexed to 2016
Watch out: on this graph values are indexed to 2016
This is further supported by data from the UBS and the Financial Times
China’s asset management industry is set to reach around RMB 47T by 2025 Up from RMB 11T in 2017
China’s asset management industry is set to reach around RMB 47T by 2025
Up from RMB 11T in 2017
How can it win?They are doing it right! Growing at a rapid pace, taking advantage of social features and active in a market that is set to boom in coming years
But what about their competition? How are they doing?
A look at the Android marketplace for mobile trading apps reveals that 
Futubull has 4.5 stars 
and 4,700 ratings Huasheng Securities has 3.8 stars and 199 ratings
StockViva has 4.3 stars and 1,655 ratingsOf course, there are other very large players such as AntGroup ($BABA)
$FUTU is showing that it can deliver on its vision 
and take advantage of the growing investment landscape in China
At this point in time the market growth can absorb more than one player and $FUTU is ideally placed
and take advantage of the growing investment landscape in China At this point in time the market growth
can absorb more than one player and $FUTU is ideally placed
The key element that one should still monitor is the regulatory environment for investments in China 
Overall, the regulatory environment in China is becoming more open as access to markets is being provided to foreign institutions and investors
Overall, the regulatory environment in China is becoming more open as access to markets is being provided to foreign institutions and investors
“If you’re any financial institution, a fund manager big or small, CHina is now an open market to you […] It is really a high point of openness and capital market development for China” - Fraser Howie, taken from Financial Times https://www.ft.com/content/a5392f07-9deb-4573-beb1-88a946f00df5
Of course, one should not forget that under certain events, the governing bodies might take restrictive actions
As this has been the case with the AntGroup IPO
https://www.wsj.com/articles/ant-group-ipo-postponed-by-shanghai-stock-exchange-11604409597
As this has been the case with the AntGroup IPO
https://www.wsj.com/articles/ant-group-ipo-postponed-by-shanghai-stock-exchange-11604409597
THE BOTTOM LINE $FUTU is growing at a fast clip as it provides the trading tools a new generation of investors require It is taking advantage of the “community” building effect of investing, increasing the time spent on app and the number of trades per day
The trading market is set to boom in China as wealth is being built up and the amount if investable assets increases dramatically Regulation is an element to watch for sure and competition from top players such as $BABA should be monitored
Disclaimer - This is not investment advice in any form and investors are responsible for conducting their own research before investing.
Sources
✑ Investor presentation
✑ Company website
✑ Google Play Store
✑ Financial Times
✑ Wall Street Journal
Sources
✑ Investor presentation
✑ Company website
✑ Google Play Store
✑ Financial Times
✑ Wall Street Journal
✑ Boston Consulting Group
✑ Bain & Company
✑ UBS
✑ Global Times
✑ Bain & Company
✑ UBS
✑ Global Times
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