What Happened
Futu Holdings (FUTU -1.61%) saw shares bounce 25.9% in June, according to S&P Global Market Intelligence. It beat the Nasdaq, which was up 5.5% last month.
Futu, based in Hong Kong, is a fintech offering a digital brokerage and wealth management platform. It has been referred to as the Robinhood of China. The company went public in March of 2019 at about $15 per share, and has been on a rocket ship since. It is up about 250% year to date and is trading at around $159.
Image source: Getty Images.
.
So what
The nearly 26% spike in the stock price in June reflects the meteoric growth of the trading platform. The number of paying clients, or those with assets in their Futu accounts, increased 231% year over year to 789,652 in the first quarter. The total number of account holders jumped 70% year over year to 14.2 million. The daily average client assets were 385 billion Hong Kong dollars ($49 billion), up 303%, and total trading volume increased 277% to $283 billion in U.S. dollars. About 63% of that was in U.S. stocks.
This resulted in a 349% increase in revenue to $284 million and a 373% rise in gross profit to $226 million. Net income increased more than sixfold year over year to $149 million.
Now what
Futu is one of the hottest growth stocks on the market and is showing no signs of slowing down. It has the tailwind of the global trend toward digital trading, which has opened the door to new and younger investors. It has a large addressable market, given the growth of the Chinese market through the growing middle and upper classes. In March, it expanded into Singapore and is looking to grow further in Southeast Asia.
Futu has a great business model with high margins and the potential to be a good growth story for a long time.
