In recent years, the epidemic has set off an investment boom and accelerated the development of Internet securities companies, including securities companies listed in the United States. How strong are these securities companies?
The following is a comparison of the four leading brokerage firms in Hong Kong: Futu Securities (NASDAQ: FUTU), Interactive Brokers (NASDAQ: IBKR), Robinhood Markets Inc (NASDAQ: HOOD), and SoFi (NASDAQ: SOFI). The latest quarterly results of key data performance compare the strength of each company.
1. Quarterly profit growth
Comparing the profit growth of the four brokerages in the first quarter of 2022, Futu, which just announced its results, performed the best. According to the non-GAAP measurement in the United States (Non-GAAP, the same below), Futu’s net profit increased by 16.6% quarter-to-quarter to approximately 7,940 The quarterly net profit of the remaining three brokerages declined, of which Robinhood's quarterly net profit declined by 64.4%.
2. Customer data: user growth, average daily revenue of customers
Recruiting investment customers is one of the forces driving the growth of brokerages’ performance. The number of Futu’s clients with assets in the first quarter of this year reached 1.326 million, an increase of 82,000 quarter-on-quarter, a growth rate of 6.6%, and a year-on-year increase of 67.9%, the same as SoFi. is high growth.
And Futu's customer retention rate is as high as 98.2%, showing that customer loyalty is extremely high.
As for the transaction volume of customers that can bring benefits to brokers, Futu’s average daily customer revenue transactions (DARTs) reached 596,000 in the last quarter, an increase of 9.6% quarter-on-quarter, the best performance among the four brokers, and Interactive Brokers DARTs during the same period. It grew 4% quarter-on-quarter, while Robinhood recorded a quarter-on-quarter contraction (SoFi did not release relevant data).
Different from the other three securities companies, Futu's investment app "Futu Niuniu" not only provides services such as securities trading and wealth management, but also has a social platform function, attracting many people who are interested in investing.
As of the end of March this year, the number of registered users of Futu Niuniu and moomoo App reached 18.1 million, an increase of 27% year-on-year, further expanding the scale of the platform and building a lively exchange platform for the investment circle.
Futu Securities firmly occupies the leading position among technology securities companies in Hong Kong. In terms of the number of active users and Hong Kong User Generated Content (UGC), Niuniuquan continues to be the largest online investment community in Hong Kong.
In addition, according to market data, the number of Futu users in Hong Kong exceeds 2 million, that is, an average of every 3 adult Hong Kong people use it.
3. Exploiting the market becomes the business growth point of the company
Among the four securities firms, Futu, which has been based in Hong Kong for ten years, has been actively exploring multiple securities markets in recent years in order to find more business explosion points.
As of the first quarter of 2022, Futu has held 50 licenses and qualifications in Hong Kong, the United States, Singapore, Australia and Europe.
In the first quarter of this year, Futu officially entered the Australian market, providing one-stop online investment services for local investors and promoting the development of local financial transactions.
In the Singapore market, in 2022, Futu has been granted the Financial Adviser License Exemption (EFA) by the Monetary Authority of Singapore, becoming the first local technology brokerage to obtain full membership of the SGX.
In the first quarter, the scale of client assets under management in Singapore increased by 15.1% quarter-on-quarter, and the penetration rate in the Singapore market has further increased, which is expected to become the company's business growth point.
To sum up, the investment atmosphere was extremely hot at the beginning of last year, and the performance of securities companies in general grew rapidly. However, in 2022, the investment market will become more volatile, and the high base effect will lead to the slowdown in the performance growth of most securities companies in the first quarter of this year.
Judging from the performance of its peers, Futu's competitive advantages and performance data are relatively strong, coupled with its solid foundation in Hong Kong, it has a certain strength and foundation.
Recently, a number of small securities firms have announced their closure, and Futu may be able to further benefit from a new round of industry consolidation.