Futu Q3 2024 $FUTU (+0%)

Financial performance

Futu Holdings Limited recorded solid growth in the quarter, with the following highlights:

Total revenue: an increase of 29.6% year-on-year to HK$3,436.1 million (US$442.3 million).

Net profit: An increase of 20.9% year-on-year to HK$1,319.2 million (US$169.8 million).

Adjusted non-GAAP net profit: An increase of 20.8% to HK$1,398.4 million (US$180.0 million).

Balance sheet summary

As of September 30, 2024, Futu Holdings reported:

Total assets: HK$143,462.0 million.

Total liabilities: HK$115,043.8 million.

Shareholders' equity: HK$28,418.2 million.

Details of the profit and loss account

Revenue from brokerage commissions and handling fees: HK$1,528.9 million, an increase of 51.5% compared to the third quarter of 2023

Interest income: HK$1,698.8 million, a year-on-year growth of 12.9%.

Total costs: HK$624.9 million, an increase of 42.9% compared to the third quarter of 2023

Key figures and profitability metrics

Gross margin: 81.8%, compared to 83.5% in the third quarter of 2023.

Operating margin: Increased to 50.4% from 49.8% in the previous year.

Net profit margin: Down to 38.4% from 41.2% in the same quarter of the previous year.

Segment information

Total trading volume: HK$1.90 trillion, an increase of 74.7% year-on-year.

Asset management (asset balance): HK$97.3 billion, an increase of 87.5% year-on-year.

Competitive position

Futu expanded its client base by 33.1% year-on-year.

Strong growth in established markets such as Hong Kong and Singapore; Malaysia is one of the main drivers for new paying customers.

Management forecasts and comments

Management expects growth in paying customers for the full year to exceed the forecast of 550,000, supported by momentum in established markets and momentum in new regions.

Risks and opportunities

Opportunities: Further expansion into international markets and introduction of new products such as US options and money market funds.

Risks: Unrealized foreign currency losses due to the appreciation of the renminbi.

Summary of results

Positive aspects:

1. significant increase in total revenue and net profit compared to the previous year.

2. strong growth in trading volume and assets under management.

3. expansion of the client base, particularly in international markets.

4. improvement in the operating margin.

5. announcement of a special dividend, signaling a strong liquidity position.

Negative aspects:

1. decline in net profit margin due to foreign currency losses.

2. increase in total costs, which negatively impacts the gross margin.

3. higher interest expenses due to securities lending and borrowing.

4. decline in the average commission rate.

rate.

5. weak performance of Japanese equities, which impairs customer acquisition.