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Australian Investment Blog

ASX:HUB 24/01/2025

HUB24 (HUB), Netwealth (NWL) & Praemium (PPS) – Platform space levelling up

HUB24 (HUB) $72.43

A strong second-quarter results earlier in the week for HUB24 with total Funds Under Administration (FUA) reaching a record $120.90 billion.

Key highlights:

  • Total FUA A$120.90 billion, +33% y/y
  • Platform FUA A$98.87 billion, +36% y/y
  • Platform net inflows A$5.46 billion, +23% y/y
  • Number of advisers 4,886, +14% y/y

Platforms like HUB are benefitting from several favourable conditions at the moment. Rising markets increase asset prices leading to higher FUA and higher interest rates allow the business to charge higher fees on client cash balances.

We’re continuing to see an industry-wide shift away from incumbents (Macquarie, BT, AMP) to tech-focused platforms – it’s the perfect storm for HUB right now. We like the business and the platform space more broadly, but prefer to wait for the Feb result to see if the FUA figures feed through to bottom line before we consider buying the stock.

HUB
MM is cautiously bullish on HUB
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HUB24 (HUB)

Netwealth (NWL) $29.90

Traders took advantage of early strength following a good quarterly yesterday. Custodial net inflows i.e. assets held in safe custody (not HIN) of $4.4 billion in 2Q was ~20% ahead of consensus estimates underpinned by 4,272 new accounts established in the 3 months, taking total numbers of accounts to 151,437 (+14%) for the calendar year.

The outlook is good here, momentum strong, just the stock price is very high. Interestingly, they have also made changes to what they pay on cash across some products, moving from an up to 0.65% haircut to RBA Target Rate to a up to 0.8% reduction. In other words, cash that sits on the platform will get around 2.65%, about 2% pa less than what a savvy investor could get elsewhere!

NWL
MM remains neutral NWL, given current sky-high valuation
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Netwealth (NWL)

Praemium (PPS) 85c

A good session yesterday for the minor in the platform space today delivering a positive quarter for net inflows with: 1) SMA net inflows above our expectations, 2) Spectrum producing maiden quarterly net inflows of ~$70 million, and 3) Powerwrap returning to positive net inflows following five consecutive quarters of net outflows.

Further, momentum seems solid and they’re pushing through price increases which will support margins going forward.

  • As a user of Praemium, they’ve lifted their game in recent quarters and the platform is good for portfolios that appreciate greater flexibility of assets held – a message that seems to be resonating.
PPS
MM remains bullish PPS
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Praemium (PPS)
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