Futu Holdings (FUTU), a Chinese online brokerage and wealth management firm, reported skyrocketing earnings growth that topped expectations. FUTU stock gave up gains.
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Futu earnings exploded 880% to 49 cents a share, beating expectations by 8 cents. Revenue swelled 283% to $153 million, also beating.
The brokerage added 98,632 paying clients on a net basis in Q4, representing a 161% growth rate, for a year-end total of 516,721. Futu CEO Leaf Hua Li said “more than half of new clients were from Hong Kong and overseas.”
Total client assets surged 227% year over year to $36.7 million in the fourth quarter.
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FUTU Stock
Shares turned lower to close down 4.1% at 142.22 on the stock market today after jumping as much as 10.6% intraday. FUTU stock is extended from a buy point of 51.20 and from its 10-week moving average, according to MarketSmith chart analysis. The stock, which rebounded from its 21-day line Tuesday, could be building the right side of a consolidation after a huge run in January to early February.
Futu stock hit an all-time high of 204.25 on Feb. 10. It has a leading 99 RS Rating and its relative strength line is trending upward. With an EPS Rating of 84 and a Composite Rating of 99, Futu is ranked No. 1 in the IBD Finance-Investments Bank-Brokers group.
It has a three-year EPS growth rate of 111% and a three-year sales growth rate of 96%.
Tied with Futu for the No. 1 ranking is Cowen (COWN), which provides research, brokerage and investment banking to foreign and domestic corporations. COWN stock fell 4.1%.
China-based brokerage Up Fintech (TIGR) dropped 5.9%.
Huge Year For Futu Holdings
For 2020, Futu’s revenue ballooned 212% year-over-year to $427 million. Total gross profit rocketed 235% to $337.3 million. Total costs were $89.8 million, an increase of 147% from 2019.
The company says it “primarily serves the emerging affluent Chinese population.”
Futu provides investing services through its proprietary digital platform, Futubull, an application that is accessible through any mobile device, tablet or desktop. The company’s primary fee-generating services include trade execution and margin financing, which allow its clients to trade securities, such as stocks, warrants, options, futures and exchange-traded funds, across different markets. It also has a wealth management service called Money Plus.
Please follow Adelia Cellini Linecker on Twitter @IBD_Adelia.
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