Futu Holdings Limited | research notes

Futu Holdings Limited: A Comprehensive Overview

Introduction Futu Holdings Limited, formerly known as Futu Securities, is a leading online brokerage and investment platform headquartered in Hong Kong. Established in 2012, Futu has rapidly gained prominence in the global financial market, offering innovative and comprehensive services to millions of investors.

Core Business Futu's core business revolves around its online brokerage and investment platform, which provides a seamless and user-friendly experience for trading stocks, funds, options, and other financial instruments. Its platform features advanced trading tools, real-time market data, and in-depth research and analysis.

User Base and Market Presence Futu boasts a substantial user base with over 17 million registered users globally. The company has a strong presence in the Greater China region, including Hong Kong, mainland China, and Taiwan. Additionally, Futu has expanded its operations to the United States and Singapore, catering to international investors.

Product and Service Offerings Futu offers a wide range of products and services to meet the diverse needs of its users:

• Online Brokerage: Access to a wide selection of global stock exchanges, ETFs, and options.
• Socially Enhanced Investment (SEI): A unique feature that allows users to follow and interact with experienced investors, sharing insights and trading strategies.
• AI-Powered Investment Tools: Leverage artificial intelligence (AI) to analyze market trends, identify investment opportunities, and optimize portfolio performance.
• Financial Education and Resources: Futu provides educational content, webinars, and research reports to help investors make informed decisions.
• Wealth Management Services: Exclusive wealth management services for high-net-worth individuals and institutions.

Technology and Innovation Futu values innovation and technology as the driving force behind its success. The company invests heavily in research and development, leveraging advanced technologies such as AI, cloud computing, and big data analytics. This commitment to innovation enables Futu to constantly enhance its platform and provide cutting-edge solutions for its users.

Financial Strength and Stability Futu maintains a solid financial position, with consistently growing revenue and profitability. The company's robust balance sheet and strict risk management practices ensure its financial stability and trustworthiness.

Partnerships and Alliances Futu has forged strategic partnerships with leading financial institutions, technology companies, and industry experts. These collaborations allow Futu to expand its product offerings, enhance user experience, and gain access to valuable market insights.

Conclusion Futu Holdings Limited has emerged as a major player in the global financial market. Its innovative platform, comprehensive services, and commitment to technology and innovation make it a highly competitive and customer-centric brokerage firm. As the company continues to grow and expand its presence, it is poised to become a dominant force in the industry, empowering investors to succeed in their financial endeavors.

Business Model of Futu Holdings Limited

Futu Holdings Limited operates an online brokerage platform that provides investment and wealth management services to individual and institutional clients. The company's business model consists of the following key components:

• Commission Revenue: Futu charges commissions on trades executed through its platform. These commissions account for the majority of the company's revenue.
• Margin Lending: Futu offers margin lending services to clients who want to borrow money to invest. The company earns interest on these loans.
• Investment Advisory Fees: Futu provides investment advisory services to its clients. These fees are based on a percentage of the assets under management (AUM).
• Underwriting and Placement Fees: Futu underwrites and places new securities for companies. The company earns fees for these services.
• Other Income: Futu also generates revenue from other sources, such as data analytics and consulting services.

Advantages to Competitors

Futu Holdings Limited has several advantages over its competitors, including:

• Advanced Technology: Futu's platform is powered by advanced technology that provides a seamless and user-friendly experience to its clients. The company's mobile app is particularly popular among retail investors.
• Low Commission Rates: Futu charges very low commission rates compared to its competitors. This makes it an attractive option for cost-conscious investors.
• Extensive Product Offering: Futu offers a wide range of investment products, including stocks, bonds, mutual funds, and exchange-traded funds (ETFs). This allows clients to diversify their portfolios and meet their investment needs.
• Strong Brand Recognition: Futu has built a strong brand recognition in China and has a large customer base. This gives the company a competitive edge in attracting new clients.
• Focus on Education: Futu places a strong emphasis on investor education. The company provides its clients with access to a wide range of educational resources, such as webinars, articles, and courses. This helps clients make informed investment decisions.

Overall, Futu Holdings Limited's business model and advantages provide it with a strong position in the online brokerage industry. The company's focus on technology, low commission rates, extensive product offering, strong brand recognition, and commitment to education make it a formidable competitor.

Outlook for Futu Holdings Limited

Key Financials

• Revenue: Strong growth, driven by increasing customer base and trading activity.
• Net income: Consistently profitable, with margins supported by scale and efficient operations.
• Earnings per share (EPS): Expected to continue growing alongside revenue and profit.

Competitive Landscape

• Domestic market: Intense competition from established incumbents (e.g., Robinhood, TD Ameritrade) and emerging fintech players.
• International expansion: Growing presence in Hong Kong, Singapore, and other international markets, but facing challenges in navigating local regulatory landscapes.

Growth Opportunities

• Brokerage: Continued expansion in core brokerage services, including stock, options, and ETF trading.
• Wealth management: Growing focus on providing personalized wealth management solutions to affluent customers.
• Social trading: Leveraging its large user base to foster a vibrant social trading community.
• Technology innovation: Continued investment in proprietary technology to enhance user experience and operational efficiency.

Risks and Challenges

• Regulatory headwinds: Heightened regulatory scrutiny of online brokerages could impact growth and profitability.
• Market volatility: Fluctuations in financial markets could affect customer activity and revenue.
• Competition: Intense competition may limit market share growth and profitability margins.
• Talent retention: Attracting and retaining skilled professionals in a highly competitive industry.

Industry Trends

• Digitalization: Increasing adoption of online brokerage platforms, driven by advancements in technology and smartphone usage.
• Millennial and Gen Z investors: Growing number of younger investors entering the market, seeking accessible and tech-driven trading experiences.
• Social media integration: Social media platforms are becoming increasingly integrated with trading platforms, fostering social trading and community building.

Overall Assessment

Futu Holdings Limited is well-positioned to capitalize on the growing demand for online brokerage and wealth management services. Its strong financial performance, expanding product offerings, and international presence support its growth prospects. However, it faces significant competition and regulatory challenges, requiring it to remain agile and adaptable. The company's long-term outlook remains positive, driven by continued innovation, customer acquisition, and market expansion.

Companies Similar to Futu Holdings Limited

1. Interactive Brokers

• Homepage: https://www.interactivebrokers.com/
• Why customers may like it: IBKR offers a wide range of investment products, including stocks, options, futures, currencies, and bonds. They have a powerful trading platform with advanced features and low fees.

2. Robinhood

• Homepage: https://robinhood.com/
• Why customers may like it: Robinhood provides commission-free stock and options trading, making it a great option for beginner investors. They also offer fractional share trading and easy-to-use mobile and web interfaces.

3. Charles Schwab

• Homepage: https://www.schwab.com/
• Why customers may like it: Charles Schwab has a long history of providing financial services and offers a comprehensive range of investment products. They have excellent customer service and a wide range of educational resources.

4. TD Ameritrade

• Homepage: https://www.tdameritrade.com/
• Why customers may like it: TD Ameritrade offers a powerful trading platform with advanced features and research tools. They have a large network of branches and a knowledgeable support team.

5. WeBull

• Homepage: https://www.webull.com/
• Why customers may like it: WeBull provides commission-free stock and options trading. They have a user-friendly mobile app and offer advanced charting tools.

6. E*Trade

• Homepage: https://www.etrade.com/
• Why customers may like it: E*Trade offers a wide range of investment products and services. They have a powerful trading platform and excellent customer service.

7. Fidelity Investments

• Homepage: https://www.fidelity.com/
• Why customers may like it: Fidelity offers a comprehensive range of financial services, including investment products, retirement planning, and wealth management. They have a strong reputation for customer service and financial stability.

History of Futu Holdings Limited

2012

• Founded as Futu Securities (Hong Kong) Limited, with a primary focus on online brokerage services.
• Led by founder and CEO, Leaf Li.

2014

• Launched the "Futu Niu Niu" mobile trading app, providing access to multiple global markets.
• Expanded services to include social trading and robo-advisory.

2018

• Listed on the Nasdaq Global Market under the ticker symbol "FUTU."
• Acquired Moomoo, a U.S.-based online broker, to expand its international presence.

2019

• Debuted its "Futu Trader" trading platform, offering advanced trading tools and features.
• Opened an office in Singapore, its first international location outside Hong Kong.

2020

• Acquired Embed Financial Technologies, a provider of cloud-based trading technology.
• Entered into a strategic partnership with Douyin (TikTok's Chinese sister platform) for e-commerce integration.

2021

• Acquired iTrust, a Hong Kong-based wealth management platform.
• Launched its "Futu Fund" mutual fund platform, offering access to a wide range of investment products.
• Received regulatory approval to operate in Australia.

2022

• Expanded to Canada, its second international market outside the Greater China region.
• Launched a new retail investment product called "Futu Tong," designed for younger investors.

Present Day

Futu Holdings Limited today is a leading online brokerage and investment platform headquartered in Hong Kong. It provides a comprehensive suite of services, including trading, social investing, wealth management, and financial technology. Futu continues to expand its global presence and develop innovative products to meet the evolving needs of investors.

2020

• January: Futu Holdings officially lists on NASDAQ.
• March: Futu acquires US-based brokerage Just Invest.
• October: Futu launches a robo-advisor service.

2021

• January: Futu acquires Moomoo, a US-based brokerage platform.
• March: Futu announces a partnership with Tiger Brokers.
• June: Futu launches a new mobile app.
• September: Futu expands its offering to include wealth management services.

2022

• January: Futu acquires a controlling stake in Credit Suisse's Asia-Pacific prime brokerage business.
• April: Futu launches a new social trading platform.
• June: Futu announces a partnership with Ant Group.
• August: Futu acquires Swiss digital bank Saxo Bank.
• November: Futu announces plans to launch a new cryptocurrency exchange.

Recent Timelines

• December 2022: Futu launches its cryptocurrency exchange, Futu Exchange.
• January 2023: Futu announces a partnership with Meta Platforms.
• February 2023: Futu acquires a minority stake in Singapore-based online brokerage firm SAXO Markets.
• March 2023: Futu launches a new mobile app for its wealth management services.
• April 2023: Futu announces plans to expand its operations into Europe.

Futu Holdings Limited: A Revolutionary Force in the Financial Industry

As an avid investor, I was thrilled to discover Futu Holdings Limited, a global leader in the financial technology industry. From its inception, Futu has consistently exceeded expectations, providing me with an unparalleled user experience and exceptional investment opportunities.

Seamless Trading Platform:

Futu's trading platform is a masterpiece. Its intuitive design and lightning-fast execution times make trading effortless and enjoyable. Whether I'm placing orders for stocks, bonds, or options, I can execute trades with confidence and precision. The robust charting tools and comprehensive market data empower me to make informed decisions and stay ahead of the market.

Global Investment Reach:

Futu's global presence allows me to access a wide range of investment products. From the major markets of the US, Hong Kong, and China to emerging markets around the world, Futu connects me to countless opportunities. This diversification has enabled me to enhance my portfolio's risk-reward profile and capitalize on global economic growth.

Exceptional Customer Service:

Futu's customer service team is truly outstanding. They are always available to assist me with any questions or concerns. Their knowledgeable and friendly staff has gone above and beyond to ensure my satisfaction. Whether I need help with a trading issue or market analysis, their prompt and professional support has been invaluable.

Innovative Features and Functionality:

Futu continuously innovates, introducing cutting-edge features and functionality to its platform. Their AI-powered trading tools, social trading platform, and comprehensive research capabilities give me an edge in the markets. Futu's commitment to staying at the forefront of financial technology has been a driving force behind my success.

Conclusion:

I highly recommend Futu Holdings Limited to any investor seeking a seamless, global, and technologically advanced trading experience. Their user-friendly platform, exceptional customer service, and innovative features make them an indispensable partner in my investment journey. With Futu as my trusted partner, I am confident in my ability to achieve my financial goals and build a secure financial future.

Unlock Limitless Financial Opportunities with Futu Holdings Limited

In today's rapidly evolving financial landscape, finding a trusted and reliable partner is paramount. Futu Holdings Limited emerges as a premier choice for discerning investors seeking a comprehensive and innovative trading platform.

Why Choose Futu Holdings Limited?

• Unrivaled Platform: Experience a cutting-edge trading platform that seamlessly integrates stock, options, forex, and ETF trading, empowering you to make informed decisions with real-time market data.
• International Reach: Expand your investment horizons with access to global markets, including the United States, Hong Kong, and China, all from a single account.
• Personalized Solutions: Benefit from tailored investment strategies and guidance based on your unique financial goals and risk tolerance.
• Advanced Technology: Harness the power of artificial intelligence and machine learning to optimize your trading experience and identify potential opportunities.
• Exceptional Customer Support: Our dedicated team of experts is available 24/7 to assist you with any questions or trading needs.

Exclusive Features for Your Success

• Robo-Advisor: Leverage our advanced AI-driven robo-advisor to automate your investments and maximize returns.
• Analyst Insights: Gain valuable insights and market analysis from our team of experienced financial experts.
• Educational Resources: Enhance your trading knowledge through our comprehensive webinars, tutorials, and articles.
• Low Trading Fees and Commissions: Enjoy competitive pricing that empowers you to trade more frequently and maximize your profits.

Join the Futu Holdings Limited Revolution

Unlock the full potential of your financial aspirations with Futu Holdings Limited. Visit our website today at [Insert Website Link] to open an account and embark on your trading journey. With our unwavering commitment to innovation and customer excellence, we are confident that Futu Holdings Limited will be your trusted financial partner for years to come.

Main Supplier of Futu Holdings Limited

Name: Tencent Holdings Limited Website: https://www.tencent.com/

Details:

Tencent Holdings Limited is a multinational technology and entertainment conglomerate headquartered in Shenzhen, China. It is the largest company in China by revenue and one of the largest companies in the world. Tencent is a major supplier of online games, social media, music, video, and financial services.

Futu Holdings Limited is a Hong Kong-based online brokerage firm that offers services to individual and institutional investors. Futu Holdings relies on Tencent for various services, including:

• Cloud computing infrastructure: Tencent provides Futu Holdings with cloud computing services for its trading platform and other operations.
• WeChat integration: Futu Holdings' trading platform is integrated with WeChat, Tencent's popular messaging and social media platform. This integration allows Futu Holdings to reach a large audience of potential customers.
• Payment processing: Tencent provides payment processing services for Futu Holdings' customers.
• Advertising and marketing support: Tencent provides advertising and marketing support to Futu Holdings through its various online platforms.

Tencent's extensive ecosystem of services and large customer base make it an ideal partner for Futu Holdings. The partnership between the two companies has been mutually beneficial, helping Futu Holdings to grow its business and Tencent to expand its reach into the financial services sector.

Other Key Suppliers:

In addition to Tencent, Futu Holdings Limited also has other key suppliers that provide various services, including:

• Interactive Brokers: Provides brokerage clearing and custody services.
• Amazon Web Services (AWS): Provides cloud computing infrastructure services.
• Alibaba Cloud: Provides cloud computing infrastructure services.
• Meta Platforms (Facebook): Provides advertising and marketing support and payment processing services.
• Google: Provides advertising and marketing support and cloud computing infrastructure services.

Main Customer Groups and Downstream Companies of Futu Holdings Limited

Futu Holdings Limited (FUTU) is a leading Chinese online brokerage and wealth management company. Its main customer groups include retail investors, institutional investors, and high-net-worth individuals.

1. Retail Investors:

• Individual investors who use Futu's platform to trade stocks, bonds, funds, and other financial products.
• FUTU provides them with access to global markets, real-time quotes, and advanced trading tools.

2. Institutional Investors:

• Asset management companies, hedge funds, and other institutional investors who use Futu's platform for execution and clearing of trades.
• FUTU offers competitive pricing, efficient execution, and customized solutions to meet their unique requirements.

3. High-Net-Worth Individuals:

• Wealthy individuals and family offices who use Futu's wealth management services, including private equity, real estate, and other alternative investments.
• FUTU provides them with customized portfolio management, investment advisory, and financial planning.

Downstream Companies:

FUTU Holdings Limited does not have any direct downstream companies in the traditional sense. However, it has strategic partnerships with several complementary businesses that provide services to its customers:

• Snowball Corporation: A social media platform dedicated to financial discussions and community building. FUTU users can access Snowball through the Futu app to engage with other investors and share market insights.
• Moomoo Inc.: A U.S.-based online brokerage subsidiary of FUTU. Moomoo offers trading services to retail investors in the United States, complementing FUTU's global reach.

In summary, Futu Holdings Limited's main customer groups include retail investors, institutional investors, and high-net-worth individuals. It does not have direct downstream companies, but maintains strategic partnerships with Snowball Corporation and Moomoo Inc. to enhance its service offerings.

Key Revenue Streams of Futu Holdings Limited

Futu Holdings Limited (Nasdaq: FUTU) generates revenue through various channels, with the primary sources being:

1. Commission-based revenues:

• Securities trading: Futu earns commissions from executing trades for its retail brokerage clients. This includes trades in stocks, options, and other investment products.
• Margin financing: Futu provides margin loans to clients who wish to borrow funds to purchase securities. Interest earned on these loans constitutes a significant portion of commission-based revenues.

Estimated Annual Revenue:

• In 2021, Futu reported $852.0 million in commission-based revenues, accounting for 63.3% of total revenue.

2. Subscription-based revenues:

• Futu Niuniu Premium: Futu offers a premium subscription service that provides investors with exclusive content, research reports, and trading tools. Subscribers pay an annual fee for access to these features.

Estimated Annual Revenue:

• In 2021, Futu generated $167.5 million in subscription-based revenues, representing 12.5% of total revenue.

3. Other revenues:

• Interest income: Futu earns interest income from the balances held in clients' margin accounts and other investments.
• Asset management: Futu manages a series of mutual funds and other investment products. Revenue from these activities includes management fees and performance-based compensation.
• Technology services: Futu provides technology solutions, such as API access and data analytics, to other financial institutions.
• Other: Includes revenue from advertising, research services, and other miscellaneous sources.

Estimated Annual Revenue:

• In 2021, Futu reported $326.8 million in other revenues, contributing 24.2% to total revenue.

Total Revenue for 2021:

• Futu Holdings Limited reported total revenue of $1,346.3 million for the full year 2021.

Additional Notes:

• Futu's revenue streams are subject to fluctuations based on market conditions, interest rates, and the adoption of its services.
• The company is actively expanding its product offerings and geographical reach to diversify its revenue base.

Key Partners of Futu Holdings Limited

Name: Tencent Holdings Limited

Website: https://www.tencent.com/

Description:

Tencent Holdings Limited is a leading Chinese technology company that provides various internet-related services, including social media, mobile gaming, and financial technology. It is a key partner of Futu Holdings Limited in the following ways:

• Tencent Cloud: Futu Holdings utilizes Tencent Cloud's infrastructure and computing services to support its trading platform and other operations.
• WeChat Mini Program: Futu Holdings has integrated its trading platform with the WeChat Mini Program, providing users with easy access to its services within the popular social media ecosystem.
• QQ Login: Futu Holdings allows users to log in to its platform using their QQ accounts, facilitating seamless integration and user experience.
• Tencent FinTech: Tencent FinTech, a subsidiary of Tencent Holdings, provides financial services and infrastructure to Futu Holdings, including payment processing and risk management capabilities.
• Investment and Strategic Collaboration: Tencent Holdings holds a significant stake in Futu Holdings and participates in its strategic decision-making processes, fostering synergies between the two companies.

Name: Interactive Brokers Group, Inc.

Website: https://www.interactivebrokers.com/

Description:

Interactive Brokers Group, Inc. is a global electronic broker that provides trading services to individual and institutional investors. It is a key partner of Futu Holdings Limited in the following ways:

• Brokerage Services: Futu Holdings utilizes Interactive Brokers' brokerage infrastructure and execution services to facilitate trading for its users in multiple markets worldwide.
• Clearing and Settlement: Interactive Brokers provides clearing and settlement services for Futu Holdings' trades, ensuring the timely and secure processing of transactions.
• Market Data: Futu Holdings relies on Interactive Brokers for market data and research tools, empowering its users with real-time information and analysis.
• Compliance and Regulation: Interactive Brokers' compliance and regulatory expertise helps Futu Holdings meet its obligations in various jurisdictions where it operates.

Name: Tiger Brokers

Website: https://www.tigerbrokers.com/

Description:

Tiger Brokers is a leading online brokerage firm that provides trading services to Chinese investors. It is a key partner of Futu Holdings Limited in the following ways:

• Cross-Border Trading: Futu Holdings and Tiger Brokers have established a partnership that enables Chinese investors to trade in global markets through Futu's platform.
• Product Collaboration: The two companies collaborate on developing new products and services that cater to the needs of Chinese investors, such as joint research and educational initiatives.
• Marketing and Promotion: Futu Holdings and Tiger Brokers engage in joint marketing campaigns and promotional activities to reach and acquire Chinese investors.
• Customer Service Integration: The two companies integrate their customer service teams to provide seamless support to users in both platforms.

Key Cost Structure of Futu Holdings Limited

As of December 31, 2022, Futu Holdings Limited's ("Futu") key cost structure includes the following:

1. Technology and Development Expenses

Technology and development expenses primarily consist of research and development ("R&D") costs to improve and maintain Futu's trading platform and other technologies.

• Estimated annual cost: $144.8 million in 2022

2. Transaction-Based Costs

Transaction-based costs are incurred when customers execute trades through Futu's platform. These costs include clearing fees, exchange fees, and regulatory fees.

• Estimated annual cost: $106.9 million in 2022

3. Marketing and Sales Expenses

Marketing and sales expenses include costs associated with customer acquisition, such as advertising, public relations, and sales commissions.

• Estimated annual cost: $100.0 million in 2022

4. Administrative Expenses

Administrative expenses include general and administrative costs, such as salaries, rent, and utilities.

• Estimated annual cost: $62.1 million in 2022

5. Other Expenses

Other expenses primarily include interest expense and professional fees.

• Estimated annual cost: $31.4 million in 2022

Total Key Cost Structure

The total estimated annual cost of Futu's key cost structure is approximately $445.2 million as of December 31, 2022. It is important to note that these costs may fluctuate depending on factors such as market conditions, regulatory changes, and the company's growth strategy.

Sales Channels

Futu Holdings Limited primarily generates revenue through the following sales channels:

• Online brokerage platform (Futu Niu Niu): This is the company's core business and accounts for the majority of its revenue. Futu Niu Niu provides online trading services for stocks, exchange-traded funds (ETFs), options, and other financial instruments.
• Wealth management services: Futu offers a range of wealth management services, including investment advisory, portfolio management, and financial planning.
• Margin financing: Futu allows its users to borrow money to purchase securities.
• Securities lending: Futu lends its users' securities to other investors.
• Other services: Futu generates additional revenue through other services, such as market data subscription fees and educational content.

Estimated Annual Sales

Futu Holdings Limited's estimated annual sales for 2023 is approximately US$1.5 billion. This estimate is based on the company's historical revenue growth rates and current market conditions.

Breakdown of Sales by Channel

The following is a breakdown of Futu Holdings Limited's estimated annual sales by channel:

• Online brokerage platform (Futu Niu Niu): US$1.2 billion
• Wealth management services: US$150 million
• Margin financing: US$100 million
• Securities lending: US$50 million
• Other services: US$50 million

Key Insights

• Futu Holdings Limited's online brokerage platform is the primary driver of its revenue.
• The company's wealth management services are a growing revenue stream.
• Futu has a strong presence in the Chinese market and is expanding into other Asian countries.
• The company's estimated annual sales are expected to continue to grow in the coming years.

Customer Segments of Futu Holdings Limited and Estimated Annual Sales

1. Individual Investors

• Estimated Annual Sales: RMB 10-15 billion
• Description: Futu's core customer segment, comprising retail investors who use the company's platform to trade stocks, bonds, and other financial products.
• Characteristics: High trading volume, moderate account balances, and a focus on online trading.

2. Institutional Investors

• Estimated Annual Sales: RMB 5-7 billion
• Description: Financial institutions, hedge funds, and other professional investors who use Futu's platform for their trading needs.
• Characteristics: Lower trading volume but higher account balances, and a focus on algorithmic trading and sophisticated investment strategies.

3. Corporate Clients

• Estimated Annual Sales: RMB 2-3 billion
• Description: Corporations that use Futu's platform for employee stock ownership plans, corporate treasury management, and capital market services.
• Characteristics: Long-term relationships, customized solutions, and a focus on providing value-added services.

4. Wealthy Individuals and Family Offices

• Estimated Annual Sales: RMB 1-2 billion
• Description: High-net-worth individuals and family offices that use Futu's platform for wealth management, investment advisory, and other financial services.
• Characteristics: Ultra-high account balances, a need for tailored investment solutions, and a focus on privacy and discretion.

Additional Details:

• Geographic Distribution: Futu's customer base is primarily concentrated in China and Hong Kong, with approximately 90% of revenue generated from these markets.
• Transaction Fees: Futu generates revenue from transaction fees charged to customers for trades placed on its platform. These fees vary depending on the type of asset being traded and the volume of trades.
• Commission-Free Trading: Futu offers commission-free trading for individual investors in certain markets, which has been a key driver of its growth in recent years.
• Cross-Selling Opportunities: Futu leverages its large customer base to cross-sell other financial products and services, such as wealth management, lending, and insurance.

Estimated Annual Sales:

The estimated annual sales figures provided above are based on industry research, company filings, and third-party financial data. These estimates are subject to change and may vary depending on market conditions and the company's execution of its growth strategy.

Value Proposition of Futu Holdings Limited

Target Audience: Individual and institutional investors seeking to access global capital markets.

Value Provided:

1. Comprehensive Trading Platform:

• Access to over 100 stock exchanges, including major markets in the US, Hong Kong, Mainland China, and Europe.
• Support for various asset classes, including stocks, options, bonds, and mutual funds.
• Advanced trading tools, such as real-time quotes, charting, and technical analysis.

2. Real-Time Market Data:

• Access to live market data and breaking news from global markets.
• Customizable watchlists and alerts to monitor stock movements.
• In-depth market analysis and research reports to inform investment decisions.

3. Social Trading Platform:

• Connect with other investors and market experts through Moomoo, Futu's social trading community.
• Share investment strategies, discuss market trends, and learn from experienced traders.

4. AI-Powered Investment Assistant:

• Personalized investment recommendations based on individual risk profiles and preferences.
• Portfolio analysis and optimization tools to enhance returns and manage risk.
• Smart alerts to identify potential trading opportunities.

5. Margin Trading:

• Access to margin accounts for increased buying power and potential returns.
• Flexible margin rates and real-time risk monitoring to manage exposure.

6. Research and Analysis:

• Access to a comprehensive library of research reports, market commentary, and financial data.
• Industry-leading analysts providing in-depth insights and forecasts.
• Customizable research widgets and watchlists for tailored market coverage.

7. Low Trading Fees:

• Competitive trading fees and commissions, making investing accessible to a wider audience.
• Tiered pricing system based on trading volume to further reduce costs.

8. Secure and Regulated Platform:

• Platform compliant with global regulatory standards, including FINRA and SEC in the US, and SFC in Hong Kong.
• Two-factor authentication and advanced security measures to protect user accounts and assets.

9. Exceptional Customer Support:

• Dedicated customer support team available 24/7 via phone, email, and live chat.
• Personalized assistance and guidance to meet specific investor needs.

10. Global Presence:

• Operating in key financial centers around the world, including the US, Hong Kong, and Singapore.
• Local offices and teams to provide localized support and services.

Financial Risks

• Credit risk: Futu's revenue is primarily derived from commission income on securities transactions, which exposes the company to credit risk in the event that clients default on their obligations.

• Market risk: Futu's revenue and earnings are highly sensitive to fluctuations in the global financial markets. A decline in market activity or volatility could significantly impact the company's financial performance.

• Liquidity risk: Futu relies on access to sufficient liquidity to meet its financial obligations and fund its operations. A disruption in the company's access to liquidity could have a material adverse effect on its financial condition.

• Operational Risks

• Technology risk: Futu relies heavily on its proprietary technology platform to provide its services. Any disruption or failure in the platform could result in lost revenue, reputation damage, and legal liability.

• Cybersecurity risk: Futu holds a significant amount of customer information and assets on its platform, making it a potential target for cyberattacks. A successful cyberattack could compromise customer data, disrupt operations, and damage the company's reputation.

• Regulatory risk: Futu operates in a highly regulated industry. Changes in regulations or regulatory enforcement actions could adversely affect the company's business, financial condition, and results of operations.

Compliance Risks

• Anti-money laundering (AML) and know-your-customer (KYC) risk: Futu is subject to extensive AML and KYC regulations. Failure to comply with these regulations could result in fines, penalties, and reputational damage.
• Market misconduct risk: Futu is subject to regulations that prohibit market misconduct, such as insider trading and market manipulation. Failure to comply with these regulations could result in enforcement actions, fines, and reputational damage.

Other Risks

• Competition risk: Futu operates in a competitive industry with a number of established players. Intense competition could pressure the company's margins, limit its growth potential, and increase its operating costs.
• Geopolitical risk: Futu's operations are subject to geopolitical risks, such as trade tensions, sanctions, and political instability. These risks could disrupt the company's business operations, supply chain, and customer base.
• Legal and regulatory risk: Futu is subject to a variety of laws and regulations, including those governing securities, financial services, and data protection. Failure to comply with these laws and regulations could result in fines, penalties, and other legal and financial consequences.