Futu Announces First Quarter 2024 Unaudited Financial Results

Core Viewpoint - Futu Holdings Limited reported its first quarter 2024 financial results, highlighting significant growth in client numbers and trading volumes, despite a decline in net income and gross profit compared to the previous year. Operational Highlights - The total number of paying clients increased by 23.5% year-over-year to 1,887,270 as of March 31, 2024 [2] - Registered clients rose by 15.4% year-over-year to 3,812,326 [2] - Total users grew by 12.3% year-over-year to 22.5 million [2] - Total client assets increased by 11.2% year-over-year to HK$517.9 billion [2] - Daily average client assets were HK$480.0 billion, up 6.0% from the same period in 2023 [2] - Total trading volume in Q1 2024 increased by 9.5% year-over-year to HK$1.3 trillion [2] - Daily average revenue trades (DARTs) rose by 7.0% year-over-year to 549,854 [2] - Margin financing and securities lending balance increased by 8.9% year-over-year to HK$37.6 billion [2] Financial Highlights - Total revenues increased by 3.7% year-over-year to HK$2,592.5 million (US$331.3 million) [3] - Total gross profit decreased by 3.9% year-over-year to HK$2,122.2 million (US$271.2 million) [3] - Net income decreased by 13.1% year-over-year to HK$1,035.1 million (US$132.3 million) [3] - Non-GAAP adjusted net income decreased by 11.6% year-over-year to HK$1,121.1 million (US$143.3 million) [3] Management Commentary - The company experienced a 330.8% year-over-year increase in new paying clients, totaling 177,000, marking the third highest quarterly growth in history [4] - New paying clients from Hong Kong and Singapore showed strong double-digit growth, while other markets saw triple-digit growth [4] - The launch in Malaysia attracted over 100,000 registered clients within six weeks, becoming the most downloaded financial app in the country [4] - Total trading volume increased by 40.0% quarter-over-quarter to HK$1.3 trillion, driven by heightened client interest in technology and high-dividend stocks [4] - Margin financing and securities lending balance reached an all-time high of HK$37.6 billion, up 13.7% sequentially [4] Wealth Management - Total client assets in wealth management were HK$64.0 billion, up 72.8% year-over-year and 11.1% quarter-over-quarter [5] - Bond holdings increased by 21.3% sequentially, driven by strong demand for U.S. treasury bills [5] - Wealth management asset balance in Singapore grew by 37.1% quarter-over-quarter [5] Cost and Expense Analysis - Total costs increased by 61.7% year-over-year to HK$470.2 million (US$60.1 million) [7] - Brokerage commission and handling charge expenses decreased by 16.5% year-over-year to HK$60.3 million (US$7.7 million) [7] - Interest expenses surged by 139.1% year-over-year to HK$312.8 million (US$40.0 million) [7] - Total operating expenses rose by 15.6% year-over-year to HK$929.5 million (US$118.8 million) [9] Income Metrics - Income from operations decreased by 15.1% to HK$1,192.7 million (US$152.4 million) [11] - Net income margin declined to 39.9% from 47.7% in the previous year [12] - Basic net income per ADS was HK$7.53 (US$0.96), down from HK$8.54 in the first quarter of 2023 [13]