4Q25 Preview: Resilient key metrics with modest sequential growth amid market turbulence

4Q25Preview:Resilientkey metrics with modestsequential growthamid market turbulence Futu is scheduled torelease4Q25 results on March 12 (Thu), pre-market. Despiteturbulent HK/US stock marketsoverthe last quarter, we think Futu’s stock price hasfactoredin thebeta headwindsandisawaitingcatalyststo confirma bottomingrebound. Futu’s share price fell 13% YTD, tracking KWEB while underperformingNASDAQ by 9ppts, translating into a trading multiple of 12x FY26E P/E, a steepdiscount to its global peers (Table). We expect resilient net asset inflows and clientacquisitionsalbeitwithsofter sequential growth in 4Q25. We forecastthenew fundedaccounts to decline 13% QoQ but rise 3% YoY to 220k in 4Q, leading toa full-yearaddition of 940k, up by 34% YoY,wellahead of mgmt.’sFY25target of 800k. Totalclient assetsremainedstable QoQ, with robust netclientasset inflows largely offsetbytheMTM fair value losses (i.e. HSTECH/KWEB down 14.7%/14.0% in 4Q25). Weanticipate4Q25topline to reach HK$6.3bn, down 2% QoQ, with theQoQchangeinbrokerage commission and interest income slightly trending down by 2%/1%;andGAAP/non-GAAP bottom-line atHK$3.2/3.3bn, up 73%/70% YoYbutflat/flat QoQ.Maintain BUY withourTP at US$228 (unchanged),which implies19x FY26E P/E. Target PriceUS$228.00Up/Downside58.9%Current PriceUS$143.46 China Financials Nika MA(852) 3900 0805nikama@cmbi.com.hk Stock Data Our key forecasts for4Q25:1)220k new fundedaccountsin 4Q25, decelerating from 254k in 3Q25due to easing trading sentiment in HK. New paying client acquisition amounted to 940k(CMBIest) in FY25,bringingthetotal number of paying clients to 3.35mn as ofyear-end. HK and Malaysia could still bethe two largest contributors,in our view.2)Client AUMremainedlargely stable QoQatHK$1.23tn,asrobust net clientasset inflowscould belargely offset by elevated mark-to-marketfair valuelossesamidintensifiedmarket volatilities(i.e. 4Q25 HSTECH/NASDAQ:-14.7%/+2.6%).3)Brokerage commission income totalled HK$2.85bnin4Q25,up39% YoYbut down 2% QoQ. Tradingvolumewas flatat HK$3.9tn,as US stocks and optionstrading likely compensatedfor the subdued trading activityin HK.Trading velocitycould trenddown to 14.8x in 4Q25 (CMBI est)vs. 16.6x in 3Q25;and blendedcommission yield could edge lower by 0.2bp QoQ to 7.3bps,due to an increasedmix of higher-value US stocks and options tradedontheplatforminthe quarter.4)Interest incomeslidby 1% QoQ to HK$3.0bn, as theFed’s tworate cuts inSep/Oct 2025 could boost MFSL balance while lowering yield for bank deposits.5)Total revenue reached HK$6.3mn in 4Q25,down 2% QoQ but up 42% YoY.Net revenue(excl. commission expense, interest expense and processing cost)was HK$5.5bn in 4Q25, down 2% QoQ/up 50% YoY,showcasing cost efficiency.6) Operating expensesfell7% QoQ to HK$1.6bn(CMBI est), driven by lowerselling and marketing expenses(-9% QoQ) as a result of slower client acquisitionand lower CAC. R&D and G&A expensescould sequentially moderate by 5%(CMBI est), given the front-loadedexpenditure amida high base in 3Q25.6) GAAP/non-GAAP net profit reached HK$3.2bn/3.3bn,up0.7%/0.5% QoQ.Net margin rose to 51.7%, up 1.3pct QoQ,thanks to efficient OpEx improvement. Source: FactSet Related reports: 1.Futu Holdings(FUTU US)-3Qearnings a strong beat, driven by resilientnet asset inflows and NII recovery, Nov20, 2025 2. Futu Holdings (FUTU US)-Marketingfeedback: short-term views mixed; 3QEPSupside to reinforce long-termconvictions, Oct 28, 20253. Futu Holdings (FUTU US)-Pioneeredone-stop financial services platform torideon crypto advancements;InitiateBUY, Oct 14, 2025 What towatchin 4Q/FY25earnings call: 1) New market entry plan in 2026E.Futu hasachievedleading penetration vs.  peers in its key operating markets regardingtotalfunded accounts,i.e. ~40% inHK and 30% in SG. The market expansion plan for 2026E could underpin thebroker’s mid-term growth prospectson client AUM and new client acquisition.2) Mgmt. guidance onnew client acquisition.In FY25,the company’smgmt. guided to increase new paying clients by 800k, which had been reached 90% asof 3Q25. We believe the clarityon growth target will be essential toboostingmarket confidence andprovidinga key reference toaquarterly performancetrack.3) Latest progress and synergies with Airstar Bank.In 3Q25, Futu increased its stakein AirstarBank to 68% from 44%, indicating the company’sstressonbanking services and a strategic move to HK stablecoin business potentially infuture. Any updateonsynergies with Airstar Bank shouldimply diversification.4) Progress in the evaluation phase II for Futu’s VATP license.The HK SFC released a new VATP license to VictoryFintech Company (VDX) in earlyFeb 2026, raising the total number ofVATP-licensed entities totwelve. The industrycompetitive landscape and Futu’s current progressona fullVATPlicense couldhelp open uptheheadroom foritscryptorevenuesbeyond spot tradingbusiness. Valuation:Thestockis now trading at 12x FY26E P/E,representing a steepdiscount (-50%)to keypeers as s