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  Title	Q4 2024 Futu Holdings Ltd Earnings Call
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  Published Date	March 14, 2025, 1:26 a.m.
  Summary	Unlock stock picks and a broker-level newsfeed that powers Wall Street. Upgrade Now Q4 2024 Futu Holdings Ltd Earnings Call Thomson Reuters StreetEvents Fri, Mar 14, 2025, 2:26 AM 31 min read Particip
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  Content	Unlock stock picks and a broker-level newsfeed that powers Wall Street. Upgrade Now Q4 2024 Futu Holdings Ltd Earnings Call Thomson Reuters StreetEvents Fri, Mar 14, 2025, 2:26 AM 31 min read Participants Daniel Yuan; Chief of Staff to CEO, Head of Strategy and Investor Relations; Futu Holdings Ltd Hua Li Leaf; Chairman of the Board, Chief Executive Officer, Founder; Futu Holdings Ltd Yu Chen Arthur; Chief Financial Officer; Futu Holdings Ltd Li Xu Robin; Senior Vice President; Futu Holdings Ltd Emma Xu; Analyst; Bank of America Cindy Wang; Analyst; China Renaissance Chiyao Huang; Analyst; Morgan Stanley Charles Zhou; Analyst; UBS Yang Fan; Analyst; CICC Peter Zhang; Analyst; JPMorgan Zoey Zong; Analyst; Jefferies Hanyang Wang; Analyst; 86Research Cihan Wang; Analyst; Goldman Sachs Presentation Operator Hello, ladies and gentlemen. Welcome to Futu Holdings fourth quarter and full-year 2024 earnings conference call. (Operator Instructions) Today's conference call is being recorded. 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, Head of Strategy and IR at Futu. Daniel Yuan Thanks, operator, and thank you for joining us today to discuss our fourth quarter and full year 2024 earnings results. Joining me on the call today are Mr. Leaf Li, 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 here and uncertainties. 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. Hua Li Leaf (spoken in foreign language) Daniel Yuan (interpreted) Thank you all for joining our earnings call today. Client acquisition accelerated across all markets, mid and eventful quarter. We exceeded our full year guidance by a wide margin, adding 215,000 paying clients in the fourth quarter alone. As of year-end, total paying clients was over 2.4 million, up 41% year over year. Year-to-date, we've observed robust paying client growth across markets and are guiding for 800,000 paying clients in 2025. Hua Li Leaf (spoken in foreign language) Story Continues Daniel Yuan (interpreted) In the fourth quarter, Hong Kong market was the top growth driver for new paying clients as we implemented targeted marketing initiatives to capitalize on the momentum of different asset classes. In Singapore, we maintained quality growth with more paying clients added, they are also with higher average assets. We further solidified our position as a leading one-stop investment platform in Malaysia and recorded another quarter of strong paying client growth with our increasingly localized product experience and strengthening brand equity. In Japan, new pain clients grew double digits quarter over quarter as our superior US stock trading experience gained traction amid a bullish US market backdrop. Hua Li Leaf (spoken in foreign language) Daniel Yuan (interpreted) In 2024, we delivered 209 iterations of our mobile app and desktop clients and added 7,762 new features, up 37% and 32% year over year, respectively. Product velocity remained high in the fourth quarter. In Japan, we launched US margin trading with an increasing adoption rate and improving throughout the quarter. In the US, we unveiled option strategy builder on our desktop version to better help traders to navigate various options trading strategy. As we continue to refine our options trading products, in the fourth quarter, the number of options traders in the US more than doubled year over year, while the number of options contracts traded more than tripled compared to the year ago quarter. In Hong Kong and Singapore, we established a bond trading desk to help our clients execute large and complex bond orders. For our clients in Australia and Canada, we launched recurrent investment plans for local stock. Hua Li Leaf (spoken in foreign language) Daniel Yuan (interpreted) Although the pullback of China equity in the second half of the quarter weighed on the valuation of our clients' assets. It was more than offset by stellar net asset inflow across markets. Total client assets were HKD743 billion, up 43% year over year and 7% quarter over quarter. Overseas markets recorded the highest quarterly net asset inflow, almost equivalent to the full year 2023 inflow. [Hot line] assets in Singapore grew by 19% quarter over quarter, marking the tenth consecutive quarter of sequential growth, thanks to robust net asset inflow into US equities and money market funds. US, Canada and Australian markets also witnessed sequential growth in average client assets for four consecutive quarters. As our clients took on more leverage positions, margin financing and securities lending balance increased by 25% sequentially to a record HKD51 billion. Hua Li Leaf (spoken in foreign language) Daniel Yuan (interpreted) Total trading volume jumped by 202% year over year and 52% quarter-over-quarter to HKD2.89 trillion. In the fourth quarter, our clients diversify their investing to include more crypto and AI names. As a result, US stock trading volume grew by 36% sequentially to a historic high of HKD2.08 trillion. Notably, several AI-focused companies previously less familiar to our clients emerged as top trading US stocks in 2024, driven by the remarkable outperformance and the rising narrative around AI's transformative potential. Hong Kong stock trading volume grew exponentially by 117% sequentially to HKD755 billion. The renewed enthusiasm in Hong Kong Equity starting from September led to a substantial rebound in trading velocity. Clients showed a meaningful pickup of interest in many technology names as well as leverage in inverse ETFs among other things. Hua Li Leaf (spoken in foreign language) Daniel Yuan (interpreted) Total (inaudible) And Wealth Management increased 93% year over year and 14% quarter-over-quarter to HKD111 billion. Money market funds continue to hold strong appeal for our clients even with moderately lower yields in the fourth quarter and drove the bulk of the sequential growth in Wealth Management AUM. In Hong Kong and Singapore, we expanded our structured product offerings to better address the investment needs of our high net worth clients. Total client assets and wealth management accounted for 15% of total client assets, up from 12% in the same quarter last year. Hua Li Leaf (spoken in foreign language) Daniel Yuan (interpreted) We had 482 IPO distribution in IR clients, up 16% year-over-year. In 2024, we underwrote 40 Hong Kong IPOs, ranking 1st among all brokers for the third consecutive year according to wind. The new digital IPO Zelle platform, feeding introduced by the Hong Kong Stock Exchange eliminates multi-account subscriptions, shortens the selling period, reduces the amount of lock up capital needed and lower funding costs through the new prefunding model. We believe that this new system improves the retail IPO subscription experience, cross more retail participation and favors market consolidation. We swiftly adapted our subscription process based on the new framework and achieved notable gains in market share. Hua Li Leaf (spoken in foreign language) Daniel Yuan (interpreted) Next, I'd like to invite our CFO Officer, to discuss our financial performance. Yu Chen Arthur Thanks, Leaf and Daniel. Please allow me to walk you through our financial performance in the fourth quarter. All the numbers are in Hong Kong dollar unless otherwise noted. Total revenue was HKD4.4 billion, up 87% from HKD2.4 billion in the fourth quarter of 2023. We concluded a strong year with full year revenue growing to HKD13.6 billion, up 36% year over year. Brokerage commission and handling charge income was HKD2.1 billion, an increase of 128% year over year and 35% QoQ. The year-over-year QoQ increase was both driven by higher trading volumes, partially offset by the decline in blended commission rate. We adopt per contract and per share pricing model for US options and the US stock trading, respectively. As a result, brokerage income will grow at a slow rate than trading volume where our clients trade high-priced stocks and options. Interest income was HKD2 billion, up 52% year over year and 19% QoQ, both were driven by higher interest income from our security borrowing and lending business and high interest from banking deposits. Other income was HKD353 million, up 157% year-over-year and a 69% QoQ. The year over year QoQ increase was both primarily attributed to higher funded distribution income and the currency exchange income. Our total cost was HKD776 million, an increase of 79% from HKD434 million in the fourth quarter of 2023. Brokerage commission and handling charge expenses was HKD112 million, up 19% year over year and 38% QoQ. The Q-on-Q increase was roughly in line with the movement of our brokerage commission and handling charge income. Interest expenses were HKD513 million, up [9%] year over year and 24% QoQ. The year-over-year increase was driven by higher interest expenses associated with our securities borrowing and the lending business. The Q over Q increase was mainly due to higher margin financing interest expenses as a result of higher funding costs for Hong Kong dollars. Processing and servicing costs were HKD151 million, up 45% year-over-year and 16% Q over Q. The increase was largely due to higher market information and the data fee for new products as wealth higher system usage fees. As a result, total gross profit was HKD3.7 billion, an increase of 89% from HKD1.9 billion in the fourth quarter of 2023. Gross margin was 82.5% as compared to 81.7% in the fourth quarter of 2023. Operating expenses were was 57% year over year and 33% QoQ to HKD1.4 billion. R&D expenses were HKD399 million, up 10% year over year and 4% QoQ. This increase was partially due to costs related to organizational restructuring in the fourth quarter of 2024. Selling and marketing expenses were HKD464 million, up 154% year-over-year and 48% QoQ. The year-over-year increase was due to a triple-digit year-over-year increase in net new paying clients, partially offset by lower client acquisition costs. The QoQ increase was in line with the growth of our new paying clients. General and administrative expenses was [HKD576 million], up 55% year-over-year and 51% QoQ. The year-over-year increase was primarily due to an increase in the general and administrative headcount and the Q-over-Q increase was mainly due to higher bonus accrued for general and administrative personnel and to a less extent, cost related to organizational restructuring. As a result, income from operations increased 117% year over year and 28% QoQ to HKD2.2 billion. Operating margin increased to 50% from 43.1% in the fourth quarter of 2023, mostly due to strong top line growth and operating leverage. Our net income increased by 113% year over year and 42% QoQ to HKD1.9 billion. Net income margin expands to 42.2% in the fourth quarter as compared to 36.9% in the same quarter last year. Our effective tax rate for the quarter was 16.1%. That concludes our prepared remarks. We'd now like to open the call to questions. Operator, please go ahead. Question and Answer Session Operator (Operator Instructions) Emma Xu, Bank of America Securities. Emma Xu (spoken in foreign language) I have two questions. The first question is about the new paying clients. You guided 800,000 new paying clients for this year, around 100,000 more than year last. But last year, you have two new markets, Malaysia and Japan -- in Japan, this year, previously, you guided that you don't have new market plans. So just wondering why you are able to guide such a strong new paying client target. And the second question is about the CAC client acquisition cost. It increased moderately in the fourth quarter last year despite the very -- the active market -- in active market in general, CAC should be lower, thanks to the natural flows. So just wondering, is it due to the change of the market, the mix of the new paying client market or due to the change of the channels that lead to the increase of the CAC? And what's your target of CAC for this year? Yu Chen Arthur Thanks, Emma. I will take these two questions. (spoken in foreign language) Now in terms of your first question regarding our new guidance for 2025, these 800,000 new paying clients does not include any new markets, we were entering or not in 2025. So this is all for the existing seven markets. The reason for this very strong guidance is, number one is we think these two new markets such as Malaysia and Japan, which we end into last year still provide a very meaningful robust growth outlook in 2025. Not to mention the relatively mature markets such as Singapore and Hong Kong, we still see a very good upside in client acquisitions, thanks to partially due to the Chinese asset rating what we witness from early days of this year. And in terms of the second question regarding the client acquisition costs, we roughly target [HKD2,500 to HKD3,000] CAC for this year from the end of last year. And going forward, we will spend more money in some brand equities in order to enhance our long-term user loyalty in our platform. Thank you. Operator Cindy Wang, China Renaissance. Cindy Wang (spoken in foreign language) And I have two questions here. First question, Recently, we noticed that the US and the Hong Kong market overall market trading volume has a very strong quarter over quarter performance in first quarter, quarter-to-date. So can management give us a little bit color based on current run rate, what's the trading volume, trading velocity, net asset inflow and the margin financing securities lending guidance? The second question is related to the new product pipeline. So we know like Futu has a lot of like product pipeline every year. So can you give us a roughly pipeline on the equity derivatives and crypto products. Yu Chen Arthur (spoken in foreign language) So first of all, I give some color on the quarter-to-date operating matrices. We've seen this year, there was a lot of trading opportunities for both the Hong Kong and US stock market. Our retail investors continue to be very highly engaged. And year-to-date, based on the current run rate, we forecast higher net new paying clients as compared to the fourth quarter last year. We've also seen higher net asset inflows, which coupled with the appreciation of China equities have led to a very meaningful sequential increase in total client assets. And based on this current run rate, we also forecast our total trading volume to further increase on top of the high base last quarter. We've seen that the clients remain highly engaged and very high risk tolerance year-to-date. And regarding our product plan, so this year for all of our overseas markets, we have a very rich product pipeline in where we're to satisfy the client demand for different risk rewards. In Japan, for example, we'll continue to catch up with our product trade capabilities around Japanese equities and at the same time, continue to optimize and extend our leadership in US trading. In Malaysia, we also will have a number of product innovations and iterations based on local clients' needs. In the US, we plan to roll out crypto training in the next couple of months. And in terms of wealth management, we plan to continue to expand our wealth management offerings, including offering more structured notes for our retail and high net worth clients. Thank you. Operator Chiyao Huang, Morgan Stanley. Chiyao Huang (spoken in foreign language) So, basically two questions. One is the what -- basically, what areas of the business that management think have the most potential to integrate AI models like Deep Seek and what kind of efficiency gains? And how should that strengthen the product offerings and services? And the second question is on crypto offerings. And just wondering, is there any update on the licensing process or what can be done to accelerate the client penetration or investor education and the marketing side on the crypto business in Hong Kong and Singapore. So -- and then what will be most differentiated offering from Futu to script office compared to peers? Yu Chen Arthur Thank you, Chiyao. Leaf will answer your first question, and my colleagues, Robin will answer your second question regarding Crypto. Hua Li Leaf (spoken in foreign language) Daniel Yuan (interpreted) So in the past couple of years, we've made a number of explorations in AI, based on different usage scenarios. And we think corporate AI capabilities both for internal operations and for client-facing capabilities, and we are also doing local deployment of Deep Seek. So internally, we've found that AI help us to meaningfully lift our efficiency in terms of the market use and data generation, filtering of content in our social community and the designing and the graphics, et cetera. And in terms of client-facing user experiences. So in Hong Kong, we've launched a new synthesis function for individual stocks, twice a day in the morning and at night. We also have an automatic interpretation of the corporate announcement and analysis of the financial results. These are all based on the AI model, which we believe help our clients to quickly understand market dynamics and reduce the time needed for them to make investment decisions. And we are also doing a lot of study and research in terms of how better to incorporate AI to empower more applications for retail investors. And we believe that if we use AI to help with decision-making that puts a much higher requirement in terms of the timeliness and the accuracy of the information generated. So the unpredictable quality of the responses will actually increase the investment thresholds for the retail investors and prolong the time needed for them to make effective investment decisions, thereby lowering their investment experiences. And we hope to make a lot of thorough preparations and to make sure that the information we generate through AI in different usage scenarios are highly accurate. And at the same time, we need to do very prudent assessment and very comprehensive testing to make sure that we strike the right balance between user experience, compliance and technological innovation, so as to maximize our investors' benefits and also to protect their needs. Thank you. Operator Charles Zhou, UBS. Charles Zhou (spoken in foreign language) So I have two questions. The first one, we understand the company plans to develop Wealth Management business in both Hong Kong and also Singapore. So what is your expectation for the total addressable market size? And also how does the Futu differentiate from its competitors in other -- I mean, say, for example, private banks or insurance companies? And can you maybe talk about your competitive advantage from product distribution, et cetera? And do you think the business will be scalable? My second question is following the strong trading volume in Q4 last year. US stock corrected sharply over the past month. How did it impact your trading volume in Q1 and if the sales momentum continue in the US to persist, the client AUM will decline. Will this also affect overall our trading volume in the rest of this year in 2025? Yu Chen Arthur (spoken in foreign language) In terms of the trading volumes, despite we saw some setback in the US stock market in the first quarter so far. But actually, the market setbacks create more volatilities, which inspire more clients trading to bottom fish, the markets in the US stock market. And then in the meantime, the trading volumes in Hong Kong made a huge spike due to China assets rating and a lot of DeepSeek related scene. So on a collective basis, we -- as Daniel mentioned before, in the first quarter, so far, we see the overall trading volumes remain very robust. Now I hand over to Robin. Li Xu Robin (spoken in foreign language) Daniel Yuan (interpreted) So I'll first translate about the crypto updates, and then Robin also touched on Wealth Management. So in the fourth quarter, the crypto market had a huge boost, which lifted our clients trading interest and sentiments. We've seen that in November and December, the crypto trading volume on our platform grew exponentially, which is almost 5x of what we saw in October. And our daily trading volume surpassed USD 35 million. And we've also seen a similar growth rate in terms of our number of crypto traders on our platform. So in the first quarter, we've seen that the crypto prices experienced some pullback. And at the same time, there's a lot of trading opportunities in the Hong Kong and US stock market. So we've seen a supplying interest in crypto trading on our platform, but the trading volume and the crypto traders are still at a relatively high level. Right now in Hong Kong, we offer four trading pairs to our retail investors, and we offer six training pairs in Singapore. And in the future, we plan to allow more kind of mainstream trading pairs. And at the same time, I think will enhance our management of the capital efficiency and also the liquidity and the security and also kind of lower the cost of our clients moving funds in and out, which we believe will help with client conversion and with further penetration of crypto trading. We believe in Hong Kong and Singapore, most of their retail investors are still in the very early stage of building up awareness of those asset class. And we think there's a lot of further room for penetration. And we hope to leverage more investor education materials, a seamless fund deposit experience to each client concerns towards this relatively new asset class. And as the regulatory framework is more clear in these two markets. Futu has one of the earliest retail play players and the space will enjoy the early mover advantage in building up our user mind share, especially in terms of compliant operations, which will help us in advantage as the crypto asset class becomes more mainstream in these two markets. And as we mentioned earlier, we are also planning to roll out crypto training in US this year, and we are expecting a higher penetration of crypto among our US client base compared to what we have seen in Hong Kong and Singapore so far. And as regards to our VAPP license, so we got a conditional approval from SSC. And we are working on our product development. We don't have a very specific timeline for our official launch yet, and we look forward to giving more color down the road. And then about the Wealth Management. So this year, we've entered into a rate cut cycle. But we still believe money market funds yield will continue to be attractive to our clients in the foreseeable future. And at the same time, we have provided very seamless automatic subscription and redemption functions for our money market funds, which really maximizes our clients' capital efficiency. So that's to help them to seize the trading opportunities in the market and at the same time, earn yields on their (inaudible). And we -- typically, we expect an outperformance of fixed income-related assets during a rate cycle, and we have built a comprehensive set of products in the space, in Hong Kong and Singapore, which we believe will help our clients navigate these different investment cycles to achieve long-term capital appreciation. And at the same time, as mentioned earlier, we intend to further enrich our Wealth Management product offerings, including more structured notes for both our retail and high net worth clients, and we are optimistic about the AUM growth for our Wealth Management. And to have some additional color to what Robin just said about Wealth Management, I think there are some of our key competitive advantages in this space is, number one, we really offer our clients -- is seamless experience to navigate across different outlet classes on our platform, whether it's Equities or Wealth Management or crypto, et cetera. So I think that is one of our key competitive advantage. We don't just lead our competitors in just one specific asset class, but it is a very seamless once-off experience for clients to very easily switch between asset classes and to cross navigate different cycles. And number two, I think we adopt a platform model, which is a key advantage for our high net worth clients, Wealth Management business, through example like in terms of structured products, we onboard structured offerings from a number of different private banks and our clients can compare these returns and the performances and pick the best asset class on our platform as opposed to maybe some other institutions will prefer to sell to their clients, their own proprietary products. So this platform model really gives our clients access to a variety of different assets and us as, an intermediary is very neutral and just make sure that we will be able to provide our clients with the most attractive investment opportunity. Thank you. Operator Yang Fan, CICC. Yang Fan (spoken in foreign language) This is Yang Fan from CICC and the two questions. The first one is regarding the AUM breakdown in 4Q. So how much is from the client net asset inflow and how much from market-to-market impact? And what's the original breakdown of the client assets? And the second question, we see the active Hong Kong IPO subscription recently. So what's the impact on our income statement and what's the contribution to our new payment plans and the net asset inflow? Yu Chen Arthur (spoken in foreign language) In terms of the net asset inflow, breakdowns in the fourth quarter. As we mentioned before, the market to market implications in the fourth quarter actually was a negative number. So the client asset inflow, the number is much larger than the movement of the balance between two quarters. And among the 24% of the asset inflow actually come from Great China areas. This number one year ago was 21%, we see it is a very good indicator for our overseas markets, continuous engagement for clients. Then the second question, the direct revenues from Hong Kong IPO is just contributed low single digits of our total revenue, given that we are further diversifying our revenue stream in the past four to five years. And also due to the new mechanisms in Hong Kong, such as Fine, the settlement duration, the leverage financing duration will both shortened. So, on one side, it is a negative to all the brokers' direct commission and the interest income. But on the other hand, it further engaged clients to the markets to enhance the market liquidity and there's more interest in terms of the retail clients participate in this market. So on a net-net basis, it is still very positive to our business. Operator Peter Zhang, JPMorgan. Peter Zhang (spoken in foreign language) This is Peter Zhang from JPMorgan. And I have two questions. First is about the operating expense, and we noticed that from a sequential perspective, the G&A expense increased by over 50% Q-on-Q in fourth quarter, while R&D expense only moderately pick up by 4%. So we wish to understand what's the drivers behind this divergent trend for the two different operating expense in fourth quarter? And what will be your outlook for 2025 in terms of your headcount growth and your R&D and expense growth into 2025? And my second question is about other income. We noticed that the other income grew by 69% Q on Q to a record quarterly high in fourth quarter. We wish to understand what's the drivers behind this increase? And what's the outlook into 2025? Yu Chen Arthur (spoken in foreign language) For two questions. Number one is regarding the G&A Q-on-Q expenses increase mainly due to three reasons. Number one is our year-end bonus equipment, especially for the overseas market management. Secondly is due to some one-off professional expenses relating to some new license applications and new market feasibility studies. The third is due to some one-off organizational restructuring. Looking forward to 2025, we expect the number of our headcount will continue to increase in mid -- low to middle single digit versus the situation in 2024. Then for second question regarding the breakdown of the key drivers of the other income mainly comes from two facts. Number one is revenues derived from the Wealth Management, including the funds distribution and also more fees from the structured products like structured nodes and the T-bills, et cetera. The other is relating to foreign -- FX exchange fees. This is partially due to very divergent market performance between the US market and the Hong Kong market in fourth quarter. We saw more clients trying to switch their assets between these two markets. Thank you. Operator Zoey Zong, Jefferies. Zoey Zong (spoken in foreign language) I have two questions. First, we have seen the blended trading commission rate declined both year-over-year and sequentially in Q4. However, the trading volume contribution from a stock actually increased. So excluding the structural impact, what's the reason for the commission rate decline? And then my second question is about (inaudible) We ever had [USD500 million] share buyback program, which is effective period of December this year. May I ask how much is the remaining quarter? And what's your capital ratio and this year? Also, do we have any consideration of regular dividends? Yu Chen Arthur (spoken in foreign language) In terms of the blended commission rate, the Q-over-Q decrease was mainly due to the product mix change. In the fourth quarter, more clients trading these high-value nominal values US stocks and also high non-middle value US options, which and -- which made the blended take rates have some Q-on-Q decrease. And in the first quarter, so far, we saw our take rate remains very stable. Then the second question regarding the shareholder returns. So far, we have not utilized our share repurchase program, which would be expired at the end of 2025. We still think these new market, new business lines were still in a fast growth stage. There will be a huge room for us to deploy the capital for this new business and the new markets, which we think in the long run will enhance our competitive edge in the markets and also our profitability. Having said that, we -- as we mentioned in our third quarter, we do concur part of our shareholders is very focusing or care about cash dividends. And we will revisit and evaluate our dividend payout policies when 2025 year full year complete and we'll consider the relative measures to provide a reward to thanks our long-term shareholders. Thank you. Operator Hanyang Wang, 86Research. Hanyang Wang (spoken in foreign language) This is Hanyang from 86Research. I have one single question regarding on the derivatives trading. So what is the approximately the percentage of derivatives in the total trading volume in the fourth quarter? And considering the increase in market volatility recently, do you see an increase in the proportion of delivered trading on our platform in Q1? Yu Chen Arthur (spoken in foreign language) In terms of the derivative commissions, it's roughly accounts for a third of our total trading commissions in the fourth quarter, slightly down to our historical high in the past. And in the first quarter so far, we do not witness any material change for this ratio. Thank you. Operator Alan Chan, Citi. (spoken in foreign language) This is Alan from Citibank. Can you give us some breakdown of the interest income in terms of other tax interest income, best margin financing, liquidity and income. And management increase share, what's the prevailing interest rate on Futu clients idle cash, what was the adtech yield in 4Q '24? And since September last year, we have already seen the Fed cutting the Fabry of 100 basis points. I'm wondering how much of that 100 basis points at required has already been reflected into the decline the cash interest rate. Yu Chen Arthur (spoken in foreign language) Now in terms of the breakdown of the interest income, roughly 40% to 45% interest income was derived from the idle cash deposits and the remaining belongs to the margin financing and the security lending, et cetera. And the impact for the rate cut, if we use the fourth quarter end client assets numbers to make projections. Every [25] basis cut by the federate, our pretax profit monthly pretax profit will be negatively impacted by HKD8 billion to HKD10 million. Thank you. Operator Cihan Wang, Goldman Sachs. Cihan Wang (spoken in foreign language) My first question is, do we have a regional breakdown of the new paying client growth in 4Q? And for 2025, what proportion of 800,000 new paying client is expected to be from new markets and what proportion from mature markets? And my second question is, do we have a guidance for AUM client growth in 2025? Will it be diluted as paying client growth is very fast and majority of them may be from a new market? And in the long run, what levels do we expect the AUM per client to reach in each region? Yu Chen Arthur (spoken in foreign language) In terms of the breakdown of the new client acquisition, geographic locations for these mature markets like Hong Kong and Singapore, which on a collective basis, contributed roughly 40% to 45% of our total new paying clients acquired in the fourth quarter. And the remaining countries in Asia alongside Australia contribute roughly 40% as well. Then the remaining 20% belongs to the North America. Li Xu Robin (spoken in foreign language) Daniel Yuan Let me briefly translate. So first of all, I just want to comment on net asset inflow. And in 2024, we saw a very meaningful step-up in net asset inflow in comparison to 2023. And we foresee a similar very robust net asset inflow in 2025 as well. And as you understand like average client assets are, first of all, impacted by our new client mix between different markets and also impacted by mark-to-market trends. And both of these factors are less within our control and that asset inflows. It's very hard to predict how average plan assets was going to trend for 2025. And in terms of average client assets in different markets. Well, some markets will structurally have high average client assets. For example, Hong Kong and Singapore, like these clients will have higher investable income and therefore, we'll have more capital that they can deploy on Futu's platform. But at the same time, we found super encouraging is by in the fourth quarter, all of our markets experienced very meaningful Q-on-Q growth in average client assets. And we expect this trend to continue because as we onboard more products, and there's a lot of cross-selling opportunity, and we think there's ample opportunity for our existing clients to put more assets onto our platform. At the same time, as our product capabilities get enhanced and as our brand equity gets enhanced, we're able to attract more high-quality clients, including high net worth clients in many of these markets. Operator Thank you. I would now like to turn the conference back to Daniel Yuan for closing remarks. Daniel Yuan Well, that concludes our earnings call. On behalf of the Futu management team, I 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 This concludes today's conference call. Thank you for participating. You may now disconnect. Portions of this transcript that are marked (interpreted) were spoken by an interpreter present on the live call. The interpreter was provided by the company sponsoring this event. View Comments Terms and Privacy Policy Privacy Dashboard More Info Recommended Stories
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