Futu Holdings Limited (“Futu” or the “Company”) (Nasdaq: FUTU), a leading, tech-driven online brokerage and wealth management platform focusing on global investors, has announced its unaudited financial results for the third quarter ended September 30, 2021.

In the third quarter, Futu recorded solid growth in total revenues with an 83.0% year-over-year increase to US$222.4 million. Non-GAAP adjusted net income increased 58.5% year-over-year to US$83.0 million.

Three businesses sustained strong growth momentum in the third quarter. Brokerage commission and handling charge income increased by 65.8% to US$119.9 million; interest income increased by 128.5% to US$81.1 million and other income increased by 55.6% to US$21.3 million.

As of quarte end, the number of Futu users worldwide reached 16.6 million, an increase of 58.6% year-over-year; the number of Futu registered clients reached 2.58 million, an increase of 119.9% year-over-year; the number of Futu’s paying clients reached 1.17 million, an increase of 179.2% year-over-year. Client stickiness remained strong and the quarterly client retention rate was as high as 97%.

It is worth noting that Futu’s quarterly net paying client increase was 166,000, a year-over-year increase of 44.7%. In the first three quarters, more than 70% of the net increase in paying clients are from Hong Kong SAR, Singapore, and other international markets. As of quarter end, client assets totaled US$54.45 billion, a year-over-year increase of 111.0%.

In addition, Futu’s quarterly total trading volume reached US$173.5 billion, a year-over-year increase of 33.1%. Client daily average revenue trades (DARTs) reached 576,810, a year-over-year increase of 52.2%.

Hong Kong industry leader status reinforced with Futu users accounting for about one third of Hong Kong adult population

In the third quarter, Futu continued its solid growth across high-growth markets. Rooted in Hong Kong, Futu utilizes technologies to promote the development of Hong Kong’s financial services. Futu further reinforced its status as a leader in the Hong Kong brokerage industry, highlighted by a 162% increase in Hong Kong paying clients – the sixth consecutive quarter to realize triple-digit percentage growth year-over-year.

Futu’s market penetration rate in Hong Kong has been rising steadily. According to the latest population statistics from the Census and Statistics Department, Futu’s number of users now account for about one third of Hong Kong’s adult population and continues to reinforce its status as an industry leader. Per the open data, Futu’s monthly market share in Hong Kong stock trading has exceeded the lower limit of the market share range of Category A SEHK Participants since July 2020. Therefore, it can be reasonably deducted that Futu has entered the ranks of Category A SEHK Participants, becoming the first retail brokerage firm to have achieved the standing.

Advertisement

As measured by the number of Hong Kong active users and the UGC content generated, the Futubull Community has become the second largest online forum in Hong Kong, leading the trend of “social investing” in Hong Kong. Based on quarterly trading day data, an average Hong Kong user spent as long as 33 minutes on the Futubull App. On an average trading day in the quarter, over 350,000 Hong Kong users were active in the online Community and generated nearly 100,000 pieces of UGC content.

Internationalization accelerates with Singapore market AUM up over 50% QoQ

Futu’s global expansion further expedited in the third quarter. In Singapore, Futu officially launched fund products in the quarter and continued to expand the categories of trading products to meet the diversified investment needs of Singapore clients. Meanwhile, Futu is dedicated to investor education in Singapore and has invested substantial resources. During the quarter, 249 new videos and infographics were produced, covering 40 courses and topics; in collaboration with the Singapore Exchange (SGX) and other major financial institutions, Futu jointly held seminars and featured events such as the Paper Trading Competition to further promote its industry standing.

In-depth investing education services and the ultimate online product experience have attracted numerous quality Singapore clients for Futu. In the quarter, the scale of Singapore client assets increased by 52.4% compared with the last quarter. moomoo has become one of the fastest growing one-stop investment platforms in Singapore, continuously ranking among the top three financial apps as measured by download volume.

In the United States, Futu insisted on fully localized operations and realized a high quarter-on-quarter growth in the number of US users. During the quarter, moomoo and Benzinga, a well-known US financial website, jointly organized moomoo’s first Paper Trading Competition in the U.S.. In addition, moomoo was invited to attend the FinTwit Conference, an established FinTech event in the US, to share moomoo’s product features and stories with investors, which further enhanced moomoo’s reputation and influence.

Futu corporate services now trusted by over 450 well-known companies

Futu has long provided companies with corporate services—such as IPO underwriting, IR and PR management, ESOP solutions, and trust services—establishing the company as the preferred service provider for large-cap companies.

As of quarter end, Futu has provided IPO underwriting and IR services to 215 companies. Futu achieved another remarkable quarter in IPO business in the Hong Kong market. Of companies listed in Hong Kong in the first three quarters, all companies with a market value of over HK$100 billion and 80% of those worth over HK$5 billion chose Futu’s corporate services. In the quarter, a number of companies partnered with Futu on their IPO journeys in Hong Kong, such as Li Auto, XPeng Motors, Zylox-Tonbridge Medical, and Brii Biosciences. Futu’s “Ten Billion IPO Club” now has 30 member companies (that is, companies whose IPO subscription amount by Futu clients exceeded HK$10 billion).

In the quarter, Futu officially launched an integrated, digitalized Investor Relations/Public Relations platform customized for listed companies. Ushering in a new era of corporate communications and investor relations management, the one-stop platform enhances the efficiency and paradigm of market tracking, investor profiling, and quantified communications. As of quarter end, over 700 companies had established a presence in Futubull Community and over 100 Hong Kong listed companies worth over HK$10 billion have opened a Futu Page. Abundant well-known listed companies joined in the quarter, such as POP MART, BYD Co. Ltd., JD Health, and Anta Sports.

In addition, Futu has registered a licensed trust or company service provider (license number: TC006475) under the Hong Kong Anti-Money Laundering and Counter-Terrorist Financing Ordinance (Cap. 615) and registered a trust company under the Hong Kong Trustee Ordinance (Cap. 29). The Futu trust team brings together senior experts across bank trust departments, multinational trust service providers, family offices, and possesses extensive experience in ESOP equity incentive trust and family trust services.

Advertisement

As of quarter end, Futu has secured over 300 ESOP clients, a year-over-year increase of over three digits. Clients include leading companies in consumer goods, healthcare, cutting-edge technology, and TMT industries such as HEYTEA, Akesobio, BOE Varitronix, Ximalaya, and Tencent Music. By providing enterprises with full-process services from plan design, trust taxation services, data management, and option vesting, Futu ESOP has become a preferred one-stop ESOP equity incentive service provider for leading companies across industries.

Futu Money Plus achieved record AUM with a 132% YoY increase

As of quarter end, the company’s wealth management business Futu Money Plus’ AUM reached HK$17.7 billion, a year-over-year increase of 132.4% and a quarter-on-quarter increase of 28.5%. This also broke a record in terms of the net AUM increase during a single quarter. The penetration rates of fund investors among Futu’s paying clients attained new highs. By the end of their third quarter, the number of fund investors exceeded 115,000, a year-over-year increase of 287%. Futu added a net 40,000 new fund investors in the quarter.

Distribution of private investment funds also achieved notable growth and their AUM rose 135.0% compared with the previous quarter and grew 7 times from a year ago; PI (professional investor) investors increased by 109% compared with the previous quarter and 30 times on a year-over-year basis.

As of the third quarter, Futu Money Plus had partnered with 56 world-renowned financial institutions, among which 6 were introduced last quarter, including Schroders Investment Management, the Carlyle Group and Fenghe Fund Management. In the quarter, Futu initiated another in-depth collaboration with the leading asset manager Fullgoal Hong Kong to launch and distribute the Fullgoal China Equity Fund.

To further enhance the investment experience for its partners and users, Futu transformed the infrastructure of alternative products in the quarter by adding features such as streamlined capital calls, which have laid a solid foundation for more innovations in the future. Meanwhile, Futu optimized the trading system for trading and execution of bonds, increasing the fill rate for bond trading.

Since its launch, Futu Money Plus has always insisted on strict selection criteria to provide clients with a series of quality products. Meanwhile, Futu has also integrated the big data algorithm with the industry-leading operational capabilities to continuously improve our online investment services. By fully assessing client needs and risk preferences, Futu offers them personalized premium services so that they can invest their wealth with ease and convenience. Through these efforts, Futu manages to gain increasing trust and confidence from high-net-worth clients. The number of fund investors and AUM of our wealth management business are both rising steadily.

Futu has also been proactively expanding its wealth management business in Hong Kong SAR and international markets. In the third quarter, Futu officially launched its mutual fund business in Singapore, providing clients with 40 mutual fund products, and counting, from reputable institutions such as BlackRock, Allianz, and Goldman Sachs. With more products made available and better localized operations, Futu Money Plus will make more progress in many more international markets.