HUB24: Discovering new market segments

About the author:

Author name:

By Scott Murdoch

Job title:

Senior Analyst

Date posted:

19 October 2023, 7:30 AM

Sectors Covered:

Diversified Financials, Professional Services

• HUB24 (ASX:HUB) reported 1Q23 Platform FUA of A$65.1bn (+3.8% qoq; and +21% pcp), with a -A$0.4bn negative market move and net inflows of A$2.8bn.
• 1Q23 flows stepped up meaningfully from the previous quarter, with the run rate supporting expectations of A$10-11bn of ‘core’ FY24 inflows (EQT transition of ~A$4bn commencing 3Q24).
• HUB announced the launch of a new cost-effective product (Discover) to address lower balance clients and compete effectively versus lower cost incumbents.
• HUB’s product offering continues to lead the market (along with NWL); the runway to secure additional adviser market share remains material; scale benefits should drive margin expansion from here; and HUB is delivering ‘cleaner’ financials. We continue to see long-term upside in the stock, however retain a Hold on valuation.

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