UPDATE: China Renaissance Assumes Futu Holdings Limited (FUTU) at Buy, 'Fast expansion in Singapore, with estimated 20% share of investing population'

China Renaissance analyst Cindy Wang assumes coverage on Futu Holdings Limited (NASDAQ: FUTU) with a Buy rating and a price target of $51.80.

The analyst comments "Futu targets to reach 90% self-clearing in the US by 3Q22, which we estimate could contribute around HK$160mn in incremental operating income in 2022E from lowering funding costs and third-party commission charges. We expect Futu’s earnings to decline -50% YoY in 1Q22E due to a high base, but gradually recover in the following quarters. We forecast its earnings to grow at a 24.3% CAGR in 2022E-24E driven by expansion in overseas markets, which should bring new paying customers to drive up total client assets, trading volume and MFSL balance, as well as achieve operating efficiency gains from economies of scale. We use 24x 2022E P/E to derive our TP of US$51.80, benchmarking its average 12-month forward P/E since listing. Our TP implies a 1x 2022E PEG ratio."

For an analyst ratings summary and ratings history on Futu Holdings Limited click here. For more ratings news on Futu Holdings Limited click here.

Shares of Futu Holdings Limited closed at $31.71 yesterday.

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