I have concluded that I have been too cautious about Futu Holdings. It has all the credentials of an exciting growth stock. I am adding it to my Top 20 Group, which now has 21 constituents.
Futu Holdings is a stock broker similar to Robinhood (HOOD) but mostly for Asian markets. They provide trading, but also wealth management and enterprise services. According to Futu’s website, they claim their mission is to “make investing easier and not alone.” Thus, they created a platform that allows users to work together and discuss investing, what I believe is similar to what users would do on Reddit. Futu’s business is built on a couple of different businesses that together create a unique ecosystem. These are:
Futubull
Futubull is Futu’s most important platform that serves investors from Hong Kong and Mainland China. It provides users access to stocks in Hong Kong, international markets, and A-shares available through the Stock Connect program. I believe the biggest problem with this part of their business is that they can’t grow their user base in mainland China due to CCP regulations in 2022. They can still grow their Hong Kong user base.
Moomoo
Moomoo is Futu’s international platform that is currently being used by users from the United States, Singapore, Australia, Japan, Canada, and Malaysia. It has the same core technology as Futubull.
Futu offers on both platforms the possibility to trade stocks, ETFs, options, futures, and, in certain jurisdictions, cryptocurrencies. They are also offering margin trading, which gives them a large part of their revenues, as I will discuss later.
Money Plus
This is a part of the business that offers users access to products like mutual funds and bonds. This is a minor part of their business, yet I believe due to it being integrated into users’ brokerage accounts, it helps create an ecosystem providing users with everything they might want in one place.
Enterprise Services
This part of the business refers to B2B services. This includes employee stock ownership plan solutions, initial public offering distribution, and investor relations services.
NiuNiu and Moo Community
I believe that a core differentiator for Futu is its integrated social community, which is similar to Reddit’s Wallstreetbets, which transforms investing from a solo activity into something that can be discussed with other users. I like that Futu embedded a social network directly into both of its trading platforms. Here, trading ideas can be shared and debated. Users can post market analysis, discuss their opinion on stock price movements, etc. I believe this gives Futu a competitive advantage and brand loyalty, and is one reason behind their incredible user base growth.
Seeking Alpha, 15 July 2025, Emanuel Nemec
The business is growing rapidly.
Futu’s revenues show strong growth. In the company’s most recent financial results for Q1 2025, Futu reported total revenues of HK$4.7 billion ($603.4 million), a remarkable 81.1% increase year-over-year.
The revenue is primarily generated from two main sources: first, the brokerage commission. This is the largest component, contributing HK$2.31 billion, which is up 113% YoY. The company states the increase is driven by a 140% increase in total trading volume. I believe these are very strong revenues, and with the bullishness we are seeing in the stock market, total trading volume should continue to increase.
The second is interest income. This segment accounted for HK$2.07 billion, up 53% YoY. This income comes from margin financing, securities lending, and interest on cash balances.
According to investing.com, margin buying is more prevalent in the bull market. Due to the upcoming lowering of interest rates and the market estimating the tariff impact lower than expected, I believe stocks will continue with the bullish momentum.
Seeking Alpha, 15 July 2025, Emanuel Nemec
My simple rule for a successful investment is that the business should be on course to become substantially larger in a relatively short time. Futu fits the bill.
Futu has an active and rapidly expanding user and client base. As of December 31, 2024, the average age of its clients with funded accounts was 38. Futu’s client base is loyal: the Company retained over 98% of the funded accounts on a quarterly basis in 2024. The Company grows the client base mainly through online and offline marketing and promotional activities, including those through external marketing channels that it cooperates with and directly pays for as well as promotions and marketing campaigns conducted on the Company’s platform and word-of-mouth referrals.
Futu achieved significant growth in its user and client base. Futu’s users increased from 20.0 million as of March 31, 2023 to 22.5 million as of March 31, 2024 and to 26.3 million as of March 31, 2025. Futu’s funded accounts increased from 1,528,103 as of March 31, 2023 to 1,887,270 as of March 31, 2024 and to 2,673,119 as of March 31, 2025.
Futu Holdings investor relations website company profile
Share Recommendations
Futu Holdings FUTU
Futu is being added to my Top 20 list.
Strategy – Buy Shares In Companies That Are Becoming Bigger Sustainably And Rapidly
Many companies, especially in the United States, tend to grow larger over time. What we want are companies that are doing this rapidly. Spotting these companies is a knack. Many companies appear to be growing fast, but this impression can be distorted by temporary factors like a cyclical recovery or a rebound from depressed levels.
We want fast-growing companies which are the real deal. Companies like those in my Top 20 list, which now has 21 constituents. I will refer to it as my Top 20 list regardless of the number of constituents it has. The principle is what matters:- companies which form an elite and have some special magic.
A subscriber asked me the other day how I do what I do, how I know what the market is going to do, and how I pick shares which perform so strongly. I am a long way short of infallible, but in so far as I do deliver the results he is talking about I think it is a result of 60 years of close involvement with share markets, a preoccupation with shares in fast-growing companies and an ability to read the signs and distinguish shares in companies which are the real deal from those which flatter to deceive.
I have been reading a Dick Francis story about a bloodstock agent. He has an uncanny ability to pick race horses, whether for flat or jump racing, which will win races. I suspect it is a similar skill. He has a great deal of knowledge of form books, the physical presentation of the horse, and the breeding, but he also has the knack.
A good, potentially great horse triggers a reaction in him, a feeling of excitement. Shares have the same effect on me. Now and then I find a share which I believe is going to be a worldbeater. I react to these shares. It is almost the same thing as meeting a pretty girl and finding you have a connection. There is some electricity between you, some feeling of excitement and rapport.
I know what you are thinking. I have all these feelings, but she doesn’t. Dream on, guys.
I sum all this up as magic, some mysterious thing going on which cannot be fully explained. I try to find the magic, and 60 years of practice has given me some ability to do this. I can see from their portfolios and the decisions they take that some of my subscribers, perhaps many, are acquiring similar skills. I could not be more delighted.
