The Investment Case for $FUTU, the Robinhood of HK and Singapore
>Winning market share in core markets of HK and Singapore including high wealth individuals - 2.7M funded accounts total, 700K of 2M HK's total which is the highest share amongst HK's 500 brokers.
>High level of trading of clients - 3.6% of total volume in in HK, significant share of retail trading in HK.
>Crypto is a huge potential business for them. Possible 18% 2027 revenue uplift from crypto, additional 9% from stablecoins and derivatives, per Morgan Stanley estimates.
>Strong product with well-regarded user experience. >Tokenization is not as interesting to them, but the stablecoins and RWAs are interesting. In particular, HK intends to tokenize government issued bonds.
>Futu is very competitive in price for crypto trading at 8bps compared to 20-30 for IBKR in HK. Crypto trading is exciting because its turnover is 700% on AUM compared to equities at around 100-200% at a take rate of 3-4x compared to equities.
>Not an expensive stock at ~15x PE
$FUTU is held in VanEck Onchain Economy ETF, ticker $NODE.
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