Futu Q2 2024 Earnings Call Transcript

Quartr
Provided by Quartr
August 20, 2024

There are 8 speakers on the call.

Operator

Hello, ladies and gentlemen. Welcome to FUTU Holdings Second Quarter 2024 Earnings Conference Call. At this time, all participants are in a listen only mode. After management's prepared remarks, there will be a Q and A session. Today's conference call is being recorded.

Operator

If you have any objections, you may disconnect at this time. I would now like to turn the conference over to your host for today's conference call, Daniel Yuan, Chief of Staff to CEO and Head of IR at FUTU. Please go ahead, sir.

Speaker 1

Thanks, operator, and thank you for joining us today to discuss our Q2 2024 earnings results. Joining me on the call today are Mr. Lee Fei, Chairman and Chief Executive Officer Arthur Chen, Chief Financial Officer and Robin Xu, Senior Vice President. As a reminder, today's call may include forward looking statements, which represent the company's belief regarding future events, which by their nature are not certain and are outside of the company's control. Forward looking statements involving hereinments and uncertainties.

Speaker 1

We caution you that a number of important factors could cause actual results to differ materially from those contained in any forward looking statements. For more information about the potential risks and uncertainties, please refer to the company's filings with the SEC, including its annual report. With that, I will now turn the call over to Leaf. Leaf will make his comments in Chinese, and I will translate. Thank you all for joining our earnings call today.

Speaker 1

In the Q2, we acquired 155,000 paying clients, representing 168 percent year over year growth. By the end of the quarter, we crossed the 2,000,000 paying clients milestone, translating into a 29% growth year over year and 8% growth quarter over quarter. 6 months into 2024, we have achieved over 80% of our full year new paying client guidance. Given the strong year to date momentum, we would like to raise our guidance again to 550,000 new paying clients in 2024. New paying clients in Hong Kong and Singapore both recorded double digit sequential growth amid market rebound, collectively contributing to over onethree of paying client growth in the 2nd quarter.

Speaker 1

In Japan, new paying clients grew by double digit quarter over quarter as we continue to strengthen product offerings, iterate our marketing initiatives and increase our brand awareness. Meanwhile, Malaysia maintained strong momentum and contributed the highest number of new paying clients among all markets 2 quarters in a row despite sequential deceleration. One major product update is our recent launch of cryptocurrency trading in Hong Kong and Singapore. Compared to some other markets we operate in, we believe that the penetration of crypto in Hong Kong and Singapore has much room for growth given their supportive regulatory environment, rising awareness of virtual assets and the emergence of more user friendly virtual asset trading platforms. The adoption curve will not be linear and obviously highly subjective to market sentiments.

Speaker 1

But when we develop our product roadmap, we think less about short term monetization than offering a broader portfolio of asset classes with low correlation to help our clients navigate market cycles and thus drive higher client wallet share. In terms of our product roadmap for other international markets, in Japan, we are on track to launch NISA savings account, mutual funds and U. S. Margin trading in the coming months. In Malaysia, we recently rolled out Ringgit and USD denominated money market funds.

Speaker 1

To help our clients capitalize on the vibrant local IPO market in Malaysia, we also launched the Malaysian stock IPO subscription services. In Canada, we just introduced cash plus product that enables clients to earn incentives on their idle cash. Total client assets jumped 24% year over year and 12% quarter over quarter to a record HKD579 billion. The growth was fueled by the robust net asset outflow across markets and the market appreciation of our client stock holdings. With net asset inflow reporting rapid sequential growth, we have succeeded our full year 2023 number only 6 months into the year.

Speaker 1

In the Q2, our clients continue to take on more leverage positions amid uplift market sentiment. As a result, margin financing and securities lending balance climbed to an all time high of HKD44 1,000,000,000. Driven by robust net asset inflow into equities and money market funds, total client assets in Singapore grew by 19% quarter over quarter, marking the 8th consecutive quarter of double digit growth. Average client assets in Malaysia recorded 45% sequential growth, while total client assets more than doubled. In Australia, average client assets realized sequential growth for 3 consecutive quarters.

Speaker 1

Growing optimism continued into the 2nd quarter for Hong Kong stock and major U. S. Indices notched an all time high. Total trading volume grew to HKD1.62 trillion dollars up 69% year over year and 21% quarter over quarter. For Hong Kong stock trading, client interest persisted through technology and high dividend names.

Speaker 1

Trading velocity also rebounded sequentially amid a possible shift in market sentiment. As a result, Hong Kong stock trading volume increased by 28% sequentially to HKD358 1,000,000,000. Boosted by the continued AI mania and resurgence of mean stocks, U. S. Stock trading volume grew by 19% quarter over quarter to HKD1.24 trillion dollars In the U.

Speaker 1

S. Market, advanced options trading tools combined with user friendly interface and extensive educational resources boosted our appeal among options traders. In the Q2, the number of options traders in the U. S. Increased by around 60% year over year, while the number of options contracts traded more than doubled compared to the year ago quarter.

Speaker 1

Wealth Management recorded another quarter of exceptional growth. As our clients saw diversification and continue to park more funds in safer assets like money market funds and U. S. Treasury bills, total client assets grew by 84% year over year and 25% quarter over quarter to around HKD 80 1,000,000,000 As of quarter end, wealth management assets accounted for 14% of our total client assets and over 25% of paying clients held wealth management positions. We have 451 IPO distribution in our clients, up 21% year over year.

Speaker 1

We underwrote 7 of the 10 largest Hong Kong IPOs in the first half of twenty twenty four. Next, I'd like to invite our CFO, Arthur, to discuss our financial performance.

Speaker 2

Thank you, Li and Daniel. Please allow me to walk you through our financial performance in the Q2. All the numbers are in Hong Kong dollars unless otherwise noted. Total revenue was RMB 3,100,000,000, up 26 percent from RMB 2,500,000,000 in the Q2 of 2023. Brokerage commission and handling charge income was RMB 1,400,000,000, up 45% year over year and 27% Q over Q.

Speaker 2

The increase was mainly driven by a 69% year over year and 21% Q over Q growth in total trading volume. Given our per share pricing model for U. S. Stock trading, the blended commission rate increased from 8.1 basis points to 8.5 basis points. As a result, brokerage income grew at a faster rate than trading volume Q over Q.

Speaker 2

Interest income was RMB1.6 billion, up 13% year over year and 18% Q over Q. The year over year and Q over Q increase was mainly driven by higher margin financing income due to an increase in daily average margin balance and the higher interest income from security borrowing and the lending business. Other income was RMB 161,000,000, up 27% year over year and 3% Q over Q. The year over year and Q over Q increase was both primary attributable to higher funded distribution income, while the Q over Q increase was partially offset by the decline in underwriting fee income. Our total costs were RMB574 1,000,000, an increase of 53 percent from RMB375 1,000,000 in the Q2 of 2023.

Speaker 2

Brokerage commission and handling charge expenses were RMB 87 1,000,000, up 58% year over year and up forty 5% Q over Q. The expenses grew by our wider margins and income sequentially, mainly due to the capital fee scheme for U. S. Stock trading. Under the per share pricing model, we charge a maximum of 50 basis points of trading volume per order for U.

Speaker 2

S. Stock trading. So when clients trade more low priced Mi stock as was the case in the Q2, there will be a mismatch between the growth rate of revenue and expenses. Interest expenses was RMB378 1,000,000, up 71 percent year over year and 21% Q over Q. The year over year and the Q over Q increase was mainly driven by high interest expenses associated with our security borrowing and the lending business.

Speaker 2

Processing and servicing costs was RMB109 million, up 11% year over year and 13% Q over Q. The year over year increase was largely due to higher cloud service fee and the Q over Q increase was mainly driven by higher market information and data fees. As a result, our total gross profit was RMB2.6 billion, an increase of 21% from RMB2.1 billion in the Q2 of 2023. Gross margin was 81.6 percent as compared to 84.9% in the year ago quarter. Operating expenses were up 26% year over year and 16% q over q to RMB1.1 billion.

Speaker 2

R and D expenses were RMB374 1,000,000, up 3% year over year and 12% Q over Q. The year over year and the Q over Q increase was mainly driven by an increase in R and D headcount to support our new markets. Selling and marketing expenses was RMB 338 1,000,000, up 93% year over year and 16% Q over Q. The year over year increase was driven by the triple digit year over year growth in new paying clients, partially offset by lower client acquisition cost. The Q over Q increase was mainly due to the sequential increase in client acquisition costs.

Speaker 2

G and A expenses were RMB362 1,000,000, up 16% year over year and 20% Q over Q. The year over year and the Q over Q increase was primarily due to increase in headcount for G and A personnel. As a result, income from operations increased by 18% year over year and 24% Q over Q to 1 point 5,000,000,000. Operating margin declined to 47.3 percent from 50.6% in the Q2 of 2023, mostly due to higher marketing expenses. Our net income increased by 8% year over year and 17% Q over Q to RMB1.2 billion.

Speaker 2

Net income margin declined to 38.6% in the 2nd quarter as compared to 41.1% in the same quarter last year. Our effective tax rate for the quarter was 15.2%. That concludes our prepared remarks. We now like to open the call to questions. Operator, please go ahead.

Operator

Thank you. And the first question comes from the line of Cindy Wang from China Renaissance. Please go ahead. Your line is now open.

Speaker 3

Thanks for taking my call. I have two questions. One question is related to crypto services. So recently you have launched the crypto services in Hong Kong and Singapore. Could you provide some color on client feedback on crypto trading?

Speaker 3

And what's your client acquisition strategy? 2nd is basically now is around 2 months for the Q3. So can you give us some lately trend for the Q3, including like trading volume, trading velocity, AUM and the margin financing and securities lending balance? Thank you.

Speaker 2

Thank you, Cindy. For the Q2 today, we what we witnessed is still very robust client asset inflows despite there will be some negative impacts implications from the market to market loss due to the challenges what we face in Hong Kong markets. And then in terms of clients' trading turnover velocity and also the trading volume, etcetera, we both seen that these indicators remain very strong and have a sequential Q1Q increase. In terms of the commission rate, given that we got some benefit in the second quarter in line that a lot more clients are trading these low value me stock, which give us some positive uptick in terms of the take rate. So such benefit will be become normalized in the Q3 so far.

Speaker 2

Thank you very much.

Operator

Thank you.

Speaker 1

So we launched cryptocurrency trading in Hong Kong and Singapore on August 1 August 12, respectively. And we now offer a limited number of mainstream trading pairs. So far, we have a number of clients that have activated their cryptocurrency trading accounts, but because we offered the product not long ago and because recently the cryptocurrency market experienced very significant pullback and fluctuation. Our clients trading volume of cryptocurrency and client assets are both pretty small in comparison to the scale of the whole business. Right now, our focus is to continue to enhance our product capabilities and continue to provide investor education and operations to further enhance our value proposition as a one stop asset allocation platform.

Speaker 1

Thank you.

Operator

Thank you. We will now take our next question. And the next question comes from the line of Thiao Huang from MS. Please go ahead. Your line is now open.

Speaker 4

So I got two questions. One is on the could management provide more color on the Q on Q increase in client assets? How much is inflow and how much is mark to market driven? And in particular, where the inflows are coming from in terms of the geographic mix in 2Q? And second question is on the Japanese client acquisition.

Speaker 4

Do we see any acceleration trend in the Q2 compared to the Q1? And how is the trend in 3Q going so far right now? And also, what's the currently the per client asset in Japan and where the clients are putting their money at in Japan? Thank you.

Speaker 2

Thank you, Chiyang. I will take your first question and I will leave the second question to my colleague Daniel. Now in terms of the benefit from our total client assets increase in the Q2, our total client assets increased by 12% Q over Q. And to break it down, majority of the contribution actually comes from the client asset inflows in terms of the top of their accounts on cash or stock transfer, which accounts for roughly to high single digit contribution. And the remaining 2% to 3% belongs to the market to market positive benefit.

Speaker 2

And Hong Kong and Singapore both these are 2 key markets in terms of the contribution of new asset inflows, which roughly accounts for 80% of our total net asset inflow. Thank you very much.

Speaker 1

So overall, in the second quarter, we saw very robust net new paying clients in Japan, actually recorded very decent quarter over quarter growth. And in terms of the absolute number of paying clients contributed, so Japan and Malaysia are in the 1st tier. So we were very happy with what we saw in Japan in the Q2. And at the quarter end, we had close to 800,000 users, which we think is also very healthy growth. And previously, we gave the guidance of having 1,000,000 to 1,500,000 users in Japan by year end, and we're still very confident about that guidance.

Speaker 1

So in terms of driver for new paying client growth, 2 things. First of all, it's just to continue to rollout of new products. So in comparison to some of the mainstream players in Japan, we still lack a couple of very key financial products. And as Leaf mentioned in his opening remarks, we have a plan to offer those products in the next couple of months. And secondly, brand building is also important.

Speaker 1

As we've realized and a lot of investors are aware right now, Japan users usually take a bit more time to trust the brand, especially a brand from overseas. So that's why we'll continue to invest in our brand and that's also why we did a power lounge and had a brand ambassador in the Q2. These all contributed to a higher brand equity and we'll continue to invest in brand building. And in terms of average client assets, right now it's a couple of $1,000 and mostly clients still allocated into U. S.

Speaker 1

Stocks. Although the percentage of assets in Japan stocks and the percentage of trading volume from Japan stocks have been increasing. And we believe that as we continue to enhance our Japan stock product offering, these percentage contribution will continue to go up closer to the market level. Thank you.

Speaker 4

Thank you.

Operator

Thank you. We will now take our next question. Please stand by. And the next

Speaker 3

I've got 2 questions, Hal. The first question was our plans for new product offerings, any product pipeline, especially in new markets like Japan and Malaysia? And the second question, what's our progress of the share repurchase program?

Speaker 1

So in terms of product pipeline for Japan, as we've mentioned earlier, a couple of very important financial products for us and also what we intend to roll out in the next couple of months include number 1, the savings account number 2, mutual funds and thirdly, U. S. Margin financing. And for Malaysia, I think we've kept a very nice pace of new product rollout. And in the Q3 quarter to date, we've actually rolled out Malaysian stock IPO subscription services and also the CashPlus product, which is the money market product.

Speaker 1

And from our experience, when the IPO market is very hot, usually IPO subscription service can be a good contributor of new client growth. And during the hybrid environment, money market products can help increase client assets. And in terms of future product pipeline in Malaysia, we plan to roll out this quarter the stock transfer for Malaysian stock, so that we can attract existing clients and other brokers in Malaysia. Thank you.

Speaker 2

Our existing share repurchase program actually will cover 2024 and also 2025. So far, we have not exercised this program yet. We will keep you and also other analysts and investors share our shareholders on post if we exercise any of them. Thank you.

Operator

Thank you. We will now take our next question. Please stand by. And the next question comes from the line of Zoey Jiang from Jefferies. Please go ahead.

Operator

Your line is now open.

Speaker 3

Thanks so much for taking my question. I have two questions. First, what's the business model of your crypto series? And second, we have seen that interest expenses increased by 21% sequentially in Q2. Wondering what's the reason behind and how should we think about the trend going forward?

Speaker 3

Thank you.

Speaker 2

In terms of the interest expenses increase in the Q2, which I think is mainly associated with our clients' margin financing and the stock borrowing, in particular in terms of stock borrowing, the pricing the implied interest rate is more rely on the market driven demand and the supply situation, which is very hard to give a precise estimation and very difficult to project. And if just assume the status as a status as coal, if our penetration rate of our retail clients to continue income in the store borrowing universe, I think the expenses associated with such activities revenue on the top line will both further increase. Thank you.

Speaker 1

So for cryptocurrency trading, since we now only offer the trading services, the business model is pretty straightforward as we charge a commission. And when we design our pricing scheme, we want to balance our market competitiveness and monetization potential. So right now in Hong Kong and Singapore, we both work with an upstream provider to offer cryptocurrency trading. And under our current pricing model, take into consideration the upstream costs, we still enjoy pretty good gross profit margin. So the net take rate of cryptocurrency trading is higher than the net take rate for Hong Kong and U.

Speaker 1

S. Stock trading. Thank you.

Speaker 3

Thank you.

Operator

Thank you. We will now take our next question. Please stand by. And the next question comes from the line of Emma Yu from Bank of America Securities. Please go ahead.

Operator

Your line is now open.

Speaker 5

So I have two questions. The first question is about the client acquisition. You just raised your 4 year new paying client target to 550,000, which means you need to acquire around 108,000 new paying clients per quarter. And usually, your client acquisition is seasonally low in Q4. That implies your Q1 client acquisition is still quite strong.

Speaker 5

So could you tell us which markets are driving your client growth in Q3? And the second question is about is that given the rising expectations of REDCARD and then the recent wild volatilities in the AI stocks, so do you see the changes in client asset allocation, say between the stocks, the bonds and the options, etcetera? And in terms of the allocation within the stock, say from the AI growth stock to value stock and how will these changing behaviors impact your take rate? And correspondingly, given the rising expectation of RevPAR, how will it impact your interest income? I know it could probably have limited impact on your interest income this year, But what would be, say, that 25 bps impact on your interest income next year?

Speaker 5

Thank you.

Speaker 2

In terms of the guidance for new client acquisition, as Lee mentioned in the opening remarks, we have already revised our target to 550 ks new paying clients for the whole year. And in the Q2, major contributions for the new clients acquired is number 1 is the Hong Kong and the Singapore, which contribute over 1 third of our new paying clients acquired in the Q2. And combined Japan and Malaysia, which accounts for roughly 40% for the whole pie. And based on the quarter to date situations, we are still very confident we can achieve the guidance we mentioned before despite there can be some uncertainties coming arising in the U. S.

Speaker 2

Election in the 4th quarters. And we do expect contribution breakdown from these markets should be similar to what we have witnessed in the first half of this year. And of course, for the second question, of course, we got some negative implications from the rate cut. We have some preliminary sensitivity estimation. Every 25 basis point rate cut, our pretax profit operating profit will be impacted by HKD5 1,000,000 to HKD8 1,000,000.

Speaker 2

If we did not account any positive potential positive implications from the market trading volume increase because of the rate hike and also the benefit from the new client acquisitions for these implications. And so far, we have not witnessed a very significant client asset allocation changes arising from the your observations. But in the Wealth Management universe, we do witness there will be more asset allocations by our clients on the fixed income quarters, including the treasuries and also fixed short duration fixed income quarter, etcetera. Thank you.

Speaker 5

Thank you. Very helpful.

Operator

Thank you. We will now take our next question. Please stand by. And the next question comes from the line of Charles Zhou from UBS. Please go ahead.

Operator

Your line is now open.

Speaker 6

So first of all, congratulations to the management team. I think it's a very strong set of results and also above the consensus. So my question is regarded to the client acquisition costs, because I think this is very well managed. So do we have any updates for the 2024 for the full year guidance? And if you don't have any new guidance or any updates, we believe there's also a decent huge upside from here as well.

Speaker 6

So could you please also share your marketing and also client acquisition strategy in several of the key markets in the second half? My second question is related to the interest income. Our understanding there are 3 major components: idle cash interest income, margin financing and stock lending interest income as well as the IPO financing income. So could you please just help us to split the interest income from these three components for the Q2? Thank you.

Speaker 2

For your two questions, number 1 is about the CAC guidance. Any update? In the Q2, our CAC is around HKD2200, which have 30% Q over Q increase versus Q1, which has a very relatively very low base because of the significant contribution of new clients acquired in Malaysia. We think the situation will just be normalized in the Q2. And for the Q3 for today, I think in terms of CAC, we still maintain it's in a relatively low levels, which is below our guidance range HKD2500 to HKD3000 for the whole year.

Speaker 2

Relative speaking, I will become more constructive in terms of this cat guidance. Based on the current run rate, I think it will be very likely located in the low end of our range or even lower than this range for the whole year. Then the breakdown of the interest income, because of the market challenges in Hong Kong and in the U. S, the interest income deriving from the IPO financing, both in Hong Kong and in the U. S.

Speaker 2

Is not material. And clients' idle cash and also the margin financing almost contribute equally in terms of the interest income breakdown despite my feeling is the interest income from idle cash was slightly higher than the second part. Thank you very much.

Speaker 6

Okay. That's very helpful. Thank you.

Operator

Thank you. We will now take our next question. Please stand by. And the next question comes from the line of Peter Zhang from JPMorgan. Please go ahead.

Operator

Your line is now open.

Speaker 7

Let me do the translation. Many thanks for management giving me the opportunity to ask a question. This is Peter from JPMorgan. I have two questions. My first question is on Malaysia business.

Speaker 7

I wish management could give us more details on the progress of the Malaysia business. For example, the client net asset inflow, average client assets, client profile and client trading turnover and what's the outlook of the Malaysia business? And my second question is about the Aerstar Bank. I understand that Futu invest 40% shares into the Airstar Bank in June. We wish to understand what rationale behind this investment and going forward what Futu's strategy to cooperating with this virtual bank in Hong Kong?

Speaker 7

Thank you.

Speaker 2

Now, I think the key we think the key motivations or the reason for we to consider to do this investment, number 1 is we continue to put a lot of requests or suggestion from our users and the clients in the past several years in Hong Kong, given more and more Hong Kong clients met a lot of pain points in terms of the fund transfer to the brokerage accounts. And secondly, of course, we do think in terms of our future strategy directions, there will be a lot of synergy and also same scenarios between the brokerage business, wealth management business in Futu and also the retail banking business and also high net worth wealth management business normally provide by the bank. So far, the deal was just complete in the Q2. We work strive very hard and work very closely with the local management of Aerstar Bank alongside with Xiaomi and other shareholders of Aerostar to align our long term strategy. Having said that, I think the near term focus will be more on the product itself, especially how to contribute our R and D capabilities and the technology capabilities to further Austin and enhance the infrastructure of the commercial of Airstyles Bank's products.

Speaker 2

Thank you.

Speaker 1

So in terms of our client profiles, given our value proposition as a one stop trading platform for Malaysian and U. S. Stocks, so far the clients we have attracted have some level of investment experience and most of them are young Asian males and have a higher income level than the country average number. And also we've seen that the trading turnover of our Malaysian clients are meaningfully higher than the group average. So given the ARPU and CAC numbers we have seen in the Q2, we think the payback period of Malaysia is better than when we first launched in Singapore.

Speaker 1

As of the end of the second quarter, across our different cohorts in Malaysia, net asset inflow, average client assets, all we're trending up month over month and average client assets was actually up 45% Q on Q. And as our average client assets in Malaysia continue to increase, we believe the unit economics will continue to improve. So in terms of the 2nd quarter client acquisition and the 3rd quarter quarter to date trend, so the 2nd quarter net new paying clients was down a bit sequentially mostly because of a high base in the Q1. That's when we were able to convert a large number of our existing users into paying clients. But apart from that, the 2nd quarter growth was very steady Q on Q.

Speaker 1

And we believe the strong momentum is partially due to the spillover of our brand equity accumulated in Singapore and also because there are leading product capabilities as a one stop platform for Malaysian U. S. Stocks. And also the strong market sentiment in the 2nd quarter also helped with client acquisition. In the Q2, we launched Malaysian stock IPO subscription and also automatic investment schemes for U.

Speaker 1

S. Stocks and fractional shares through U. S. Stocks. And for the Q3 quarter to date, we launched money market funds and also stock transfer from Malaysian stocks.

Speaker 1

And for Q3, we expect a steady quarter over quarter new paying clients growth in Malaysia. Thank you.

Operator

Thank you. We will now take our next question. Please stand by. And the next question comes from the line of Hu Chen from CLSA. Please go ahead.

Operator

Your line is now open.

Speaker 3

What is the share of trading and media in trading total U. S. Trading volume? How did this single factor influence the commission rate in the Q2? How big was the influence from mid cap stock trading?

Speaker 3

What is a good indicator to track the change in U. S. Stock trading commission rate change? And what is the fee rate in the distribution of funds, funds and the money market funds? And what could be a good timing towards considering issuing dividends?

Speaker 3

Thanks.

Speaker 2

In terms of your first question, Navida roughly accounts for our 20% to 30% of our clients' U. S. Stock trading volumes in the 2nd quarters. And for your second question, so far, we do not have any concrete dividend policy. The key reason is we think still there are huge growth potential areas, which we can further deploy our capitals.

Speaker 2

And we are very confident these investments will generate more high return, which is higher than our cost of the capital. And in terms of the economics of these fund distribution, our treasury trading, etcetera, which I think to some extent related to some confidentiality commercial arrangement. But the only thing I can share is arrangement is very typical similar to the industry distribution model. Thank you.

Operator

Thank you. Due to time constraints, I would now hand back to Daniel Hwan for any closing remarks. Please go ahead.

Speaker 1

That concludes our call today. On behalf of

Speaker 2

the Futu management team, I

Speaker 1

would like to thank you for joining us today. If you have any further questions, please do not hesitate to contact me or any of our Investor Relations representatives. Thank you, and goodbye.

Operator

Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.

Powered by Quartr

Key Takeaways

  • FUTU added 155,000 new paying clients in Q2, a 168% year-on-year increase, surpassing 2 million total and raising its full-year target to 550,000 new clients.
  • The company launched cryptocurrency trading in Hong Kong and Singapore and plans to introduce NISA savings, mutual funds, and US margin trading in Japan, as well as money market funds and IPO subscription services in Malaysia.
  • Total client assets rose 24% YoY and 12% QoQ to a record HKD 579 billion, fueled by strong net inflows and market gains, while margin financing and securities lending reached an all-time high of HKD 441 billion.
  • Total trading volume climbed to HKD 1.62 trillion (+69% YoY, +21% QoQ), with Hong Kong stock volume up 28% QoQ to HKD 358 billion and US stock volume up 19% QoQ to HKD 1.24 trillion; US options traders grew 60% YoY as contracts traded more than doubled.
  • Q2 revenue reached RMB 3.1 billion (+26% YoY) and net income RMB 1.2 billion (+8% YoY), as operating margin dipped to 47.3% amid higher marketing, R&D, and G&A expenses to support international expansion.
AI Generated. May Contain Errors.
Earnings Conference Call
Futu Q2 2024
00:00 / 00:00