Futu Holdings Limited Completes HKD440 Million Investment in Airstar Bank, Becoming Second Largest Shareholder
In a recent press release, Futu Holdings Limited (Futu), a leading tech-driven online brokerage and wealth management platform, announced its completion of a HKD440 million investment in Gravitation Fintech HK Limited, the parent company of Airstar Bank, a licensed virtual bank in Hong Kong. This investment now makes Futu the second-largest beneficial owner, indirectly holding 44.11% of Airstar Bank.
The investment comes at a time when Futu Holdings Ltd’s corporate customers have seen a significant increase in their cost of revenue. In the fourth quarter of 2023, the cost of revenue for these customers rose by 1.25% year on year, with a sequential increase of 220.11%. However, during the same period, Futu Holdings Ltd recorded a revenue increase of 31.29% year on year.
The increase in revenue was also observed among Futu Holdings Ltd’s corporate clients, with a rise of 1.52% year on year and a sequential growth of 90.43%. However, industry insiders have expressed concern over the elevated inventories among Futu’s business partners, which could potentially lead to a decline in sales until inventory levels are adjusted to meet current orders.
The impact of reduced spending plans by these companies could further disadvantage Futu Holdings Ltd. The growth in revenue among Futu’s business partners was primarily driven by corporate customers in the insurance brokerage industry and healthcare facilities. Notable performers among these clients were Marsh And Mclennan Companies Inc (MMC) and Davita Inc (DVA), which saw increases in revenue by 11.8% and 2.3% respectively. On the other hand, the regional banks faced declining business.
Taking a closer look at the behavior of Futu’s business clients, companies like Marsh And Mclennan Companies Inc (MMC), Davita Inc (DVA), and Univest Financial (UVSP) demonstrated extraordinary strength. However, other companies, such as Univest Financial, faced challenges.
It is worth noting that Futu Holdings Ltd’s performance is affected by a decline in investments and spending, averaging at -12.06% by their business partners. This pattern can be further observed by looking at closely related industries, such as the Computer Networks Industry, which experienced a decline in revenue by -10.82% during the same timeframe.
These trends are reflected in Futu Holdings Ltd’s market capitalization, with investors sharing concerns. The stock performance of the company’s corporate clients in the CSIMarkets stock index has only achieved a 7.43% increase year to date, while Futu’s stocks have seen a significant increase of 38.01% during the same period.
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