Futu Announces Fourth Quarter and Full Year 2019 Unaudited Financial Results
Fourth Quarter and Full Year 2019 Operational Highlights
- Total number of registered clients1 increased 42.9% year-over-year to 717,842 as of
December 31, 2019 . - Total number of paying clients2 increased 49.4% year-over-year to 198,382 as of
December 31, 2019 . - Total number of users3 increased 34.7% year-over-year to 7.5 million as of
December 31, 2019 . - Total client assets increased 71.1% year-over-year to
HK$87.1 billion as ofDecember 31, 2019 . - Daily average client assets were
HK$80.0 billion in the fourth quarter of 2019, an increase of 57.6% from the same period in 2018. - Total trading volume in the fourth quarter of 2019 decreased 1.8% year-over-year to
HK$224.8 billion . Total trading volume in 2019 decreased 3.8% year-over-year toHK$872.7 billion . - Daily average revenue trades (DARTs)4in the fourth quarter of 2019 increased 4.5% year-over-year to 105,093. DARTs in 2019 increased 8.7% year-over-year to 105,511.
- Margin financing and securities lending balance increased 52.2% year-over-year to
HK$4.8 billion as ofDecember 31, 2019 .
Fourth Quarter 2019 Financial Highlights
- Total revenues increased 36.8% year-over-year to
HK$310.9 million (US$39.9 million ). - Total gross profit increased 37.6% year-over-year to
HK$224.1 million (US$28.8 million ). - Net income increased 14.9% year-over-year to
HK$43.9 million (US$5.6 million ). - Non-GAAP adjusted net income5 increased 19.1% year-over-year to
HK$49.3 million (US$6.3 million ).
Full year 2019 Financial Highlights
- Total revenues increased 30.9% year-over-year to
HK$1,061.6 million (US$136.3 million ). - Total gross profit increased 38.8% year-over-year to
HK$779.9 million (US$100.1 million ). - Net income increased 19.6% year-over-year to
HK$165.7 million (US$21.3 million ). - Non-GAAP adjusted net income5 increased 21.9% year-over-year to
HK$181.6 million (US$23.3 million ).
_____________________
1 The number of registered clients refers to the number of users who open one or more trading accounts on Futu’s platform.
2 The number of paying clients refers to the number of the clients with assets in their trading accounts on Futu’s platform.
3 The number of users refers to the number of user accounts registered with our Futu NiuNiu applications or websites.
4 The number of Daily Average Revenue Trades (DARTs) refers to the number of average trades per day that generate commissions or fees.
5 Non-GAAP adjusted net income is defined as net income excluding share-based compensation expenses.
“We are pleased to report another strong quarter, driven by robust growth in the number of paying clients and total client assets,” said Mr.
“We attribute the strong paying client growth to a combination of optimized marketing efforts, upbeat market sentiment and high-profile Hong Kong IPOs. In the fourth quarter, we selectively worked with a number of targeted third-party channels whose client profiles are similar to our own. The active IPO market was also in our favor: our clients’ total subscription for the IPOs of Alibaba and Poly Property Development both exceeded
“Our total client assets jumped 71% year-over-year to
“Given that our business is 100% online, our operating metrics haven’t demonstrated much negative impact from the outbreak of COVID-19 so far. The launch of new products may be delayed in the first quarter, but we do not believe such delay will weigh on the long-term growth prospects of our business.”
Mr. Arthur Yu Chen, Futu’s Chief Financial Officer, added, “In the fourth quarter, we recorded total revenue of
Fourth Quarter 2019 Financial Results
Revenues
Total revenues were
Brokerage commission and handling charge income was
Interest income was
Other income was
Costs
Total costs were
Brokerage commission and handling charge expenses were
Interest expenses were
Processing and servicing costs were
Gross Profit
Total gross profit was
Gross margin was 72.1%, compared with 71.7% in the fourth quarter of 2018.
Operating Expenses
Total operating expenses were
Research and development expenses were
Selling and marketing expenses were
General and administrative expenses were
Net Income
Net income increased by 14.9% to
Non-GAAP adjusted net income increased by 19.1% to
Net Income per ADS
Basic net income per American Depositary Share (“ADS”) was
Full Year 2019 Financial Results
Revenues
Total revenues were
Brokerage commission and handling charge income was
Interest income was
Other income was
Costs
Total costs were
Brokerage commission and handling charge expenses were
Interest expenses were
Processing and servicing costs were
Gross Profit
Total gross profit was
Gross margin was 73.5%, compared with 69.2% in 2018. The rise was primarily due to greater operating leverage as a result of the Company’s larger scale and improved operating efficiency, as well as higher net interest margin in 2019.
Operating Expenses
Total operating expenses were
Research and development expenses were
Selling and marketing expenses were
General and administrative expenses were
Net Income
Net income increased by 19.6% to
Non-GAAP adjusted net income increased by 21.9% to
Net Income per ADS
Basic net income per American Depositary Share (“ADS”) was
Conference Call and Webcast
Futu's management will hold an earnings conference call on
International: | +65-6713-5090 |
800-819-0121 | |
US: | +1-845-675-0437 |
+852-3018-6771 | |
Passcode: | Futu |
A telephone replay will be available after the conclusion of the conference call through
International: | +61-2-8199-0299 |
US: | +1-646-254-3697 |
Passcode: | 9155905 |
Additionally, a live and archived webcast of this conference call will be available at https://ir.futuholdings.com/.
About
Use of Non-GAAP Financial Measures
In evaluating the business, the Company considers and uses non-GAAP adjusted net income, a non-GAAP measure, as a supplemental measure to review and assess its operating performance. The presentation of the non-GAAP financial measure is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with
Non-GAAP adjusted net income is not defined under
The Company compensates for these limitations by reconciling the non-GAAP financial measure to the nearest
For more information on this non-GAAP financial measure, please see the table captioned "Unaudited Reconciliations of Non-GAAP and GAAP Results" set forth at the end of this press release.
Exchange Rate Information
This announcement contains translations of certain HK dollars (“HK$”) amounts into
Safe Harbor Statement
This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of the United States Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates" and similar statements. Among other things, the expectation of its collection efficiency and delinquency, contain forward-looking statements. Futu may also make written or oral forward-looking statements in its periodic reports to the
For investor and media inquiries, please contact:
IR inquiries:
Tel: +86 (755) 8663-6688 ext. 8925
E-mail: ir@futuholdings.com
Media inquiries:
Tel: +86 (755) 8663-6688 ext. 8147
E-mail: futupr@futunn.com
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS |
||||||||
(In thousands, except for share and per share data) |
||||||||
As of |
As of |
|||||||
2018 | 2019 | 2019 | ||||||
HK$ | HK$ | US$ | ||||||
ASSETS | ||||||||
Cash and cash equivalents | 215,617 | 362,574 | 46,547 | |||||
Cash held on behalf of clients | 11,771,487 | 14,540,863 | 1,866,750 | |||||
Available-for-sale financial securities | 59,348 | 93,773 | 12,039 | |||||
Equity method investment | - | 6,166 | 792 | |||||
Loans and advances | 3,086,904 | 4,188,689 | 537,742 | |||||
Receivables: | ||||||||
Clients | 120,256 | 247,017 | 31,712 | |||||
Brokers | 425,849 | 1,226,348 | 157,438 | |||||
Clearing organization | 175,955 | 304,080 | 39,038 | |||||
Interest | 49,427 | 16,892 | 2,169 | |||||
Prepaid assets | 8,810 | 12,470 | 1,601 | |||||
Operating lease right-of-use assets | - | 161,617 | 20,748 | |||||
Other assets | 149,279 | 239,435 | 30,739 | |||||
Total assets | 16,062,932 | 21,399,924 | 2,747,315 | |||||
LIABILITIES | ||||||||
Amounts due to related parties | 8,591 | 33,628 | 4,317 | |||||
Payables: | ||||||||
Clients | 12,304,717 | 15,438,879 | 1,982,037 | |||||
Brokers | 920,871 | 1,484,243 | 190,547 | |||||
Interest | 2,405 | 519 | 67 | |||||
Borrowings | 1,576,251 | 1,467,586 | 188,408 | |||||
Securities sold under agreements to repurchase | - | 1,590 | 204 | |||||
Operating lease liabilities | - | 172,466 | 22,141 | |||||
Accrued expenses and other liabilities | 149,818 | 252,460 | 32,411 | |||||
Total liabilities | 14,962,653 | 18,851,371 | 2,420,132 | |||||
MEZZANINE EQUITY | ||||||||
Series A convertible redeemable preferred shares | 68,072 | - | - | |||||
Series A-1 convertible redeemable preferred shares | 14,587 | - | - | |||||
Series B convertible redeemable preferred shares | 282,627 | - | - | |||||
Series C convertible redeemable preferred shares | 777,835 | - | - | |||||
Series C-1 convertible redeemable preferred shares | 107,351 | - | - | |||||
Total mezzanine equity | 1,250,472 | - | - | |||||
SHAREHOLDERS’(DEFICIT)/EQUITY | ||||||||
Pre-IPO ordinary shares | 31 | - | - | |||||
Class A ordinary shares | - | 36 | 5 | |||||
Class B ordinary shares | - | 42 | 5 | |||||
Additional paid-in capital | - | 2,536,182 | 325,594 | |||||
Accumulated other comprehensive loss | (1,299 | ) | (4,446 | ) | (570 | ) | ||
(Accumulated deficit)/Retained earnings | (148,925 | ) | 16,739 | 2,149 | ||||
Total shareholders' (deficit)/equity | (150,193 | ) | 2,548,553 | 327,183 | ||||
Total liabilities, mezzanine equity and shareholder's (deficit)/equity | 16,062,932 | 21,399,924 | 2,747,315 | |||||
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | |||||||||||||||||
(In thousands, except for share and per share data) | |||||||||||||||||
For the Three Months Ended | For the Twelve Months Ended | ||||||||||||||||
2018 | 2019 | 2019 | 2018 | 2019 | 2019 | ||||||||||||
HK$ | HK$ | US$ | HK$ | HK$ | US$ | ||||||||||||
Revenues | |||||||||||||||||
Brokerage commission and handling charge income | 113,328 | 151,590 | 19,461 | 407,990 | 511,365 | 65,649 | |||||||||||
Interest income | 102,848 | 127,958 | 16,427 | 360,585 | 464,903 | 59,684 | |||||||||||
Other income | 11,000 | 31,362 | 4,026 | 42,768 | 85,287 | 10,949 | |||||||||||
Total revenues | 227,176 | 310,910 | 39,914 | 811,343 | 1,061,555 | 136,282 | |||||||||||
Costs | |||||||||||||||||
Brokerage commission and handling charge expenses | (20,513 | ) | (30,762 | ) | (3,949 | ) | (80,127 | ) | (100,550 | ) | (12,909 | ) | |||||
Interest expenses | (22,448 | ) | (31,174 | ) | (4,002 | ) | (95,624 | ) | (89,238 | ) | (11,456 | ) | |||||
Processing and servicing costs | (21,294 | ) | (24,884 | ) | (3,195 | ) | (73,843 | ) | (91,916 | ) | (11,800 | ) | |||||
Total costs | (64,255 | ) | (86,820 | ) | (11,146 | ) | (249,594 | ) | (281,704 | ) | (36,165 | ) | |||||
Total gross profit | 162,921 | 224,090 | 28,768 | 561,749 | 779,851 | 100,117 | |||||||||||
Operating expenses | |||||||||||||||||
Research and development expenses | (45,440 | ) | (74,322 | ) | (9,541 | ) | (151,097 | ) | (262,345 | ) | (33,680 | ) | |||||
Selling and marketing expenses | (24,391 | ) | (51,337 | ) | (6,591 | ) | (98,062 | ) | (164,701 | ) | (21,144 | ) | |||||
General and administrative expenses | (30,563 | ) | (55,706 | ) | (7,151 | ) | (103,831 | ) | (164,850 | ) | (21,164 | ) | |||||
Total operating expenses | (100,394 | ) | (181,365 | ) | (23,283 | ) | (352,990 | ) | (591,896 | ) | (75,988 | ) | |||||
Others, net | (1,947 | ) | (1,767 | ) | (227 | ) | (7,959 | ) | (9,462 | ) | (1,215 | ) | |||||
Income before income tax expense | 60,580 | 40,958 | 5,258 | 200,800 | 178,493 | 22,914 | |||||||||||
Loss from equity method investments | - | (334 | ) | (43 | ) | - | (543 | ) | (70 | ) | |||||||
Income tax (expenses)/benefit | (22,406 | ) | 3,318 | 426 | (62,288 | ) | (12,286 | ) | (1,577 | ) | |||||||
Net income | 38,174 | 43,942 | 5,641 | 138,512 | 165,664 | 21,267 | |||||||||||
Preferred shares redemption value accretion | (16,740 | ) | - | - | (66,998 | ) | (12,309 | ) | (1,580 | ) | |||||||
Income allocation to participating preferred shareholders | (10,363 | ) | - | - | (34,576 | ) | (10,196 | ) | (1,309 | ) | |||||||
Net income attributable to ordinary shareholders of the Company | 11,071 | 43,942 | 5,641 | 36,938 | 143,159 | 18,378 | |||||||||||
Net income per share attributable to ordinary shareholders of the Company | |||||||||||||||||
Basic | 0.02 | 0.04 | 0.01 | 0.09 | 0.17 | 0.02 | |||||||||||
Diluted | 0.02 | 0.04 | 0.01 | 0.07 | 0.16 | 0.02 | |||||||||||
Net income per ADS | |||||||||||||||||
Basic | 0.35 | 0.05 | 1.38 | 0.18 | |||||||||||||
Diluted | 0.35 | 0.05 | 1.25 | 0.16 | |||||||||||||
Weighted average number of ordinary shares used in computing net income per share | |||||||||||||||||
Basic | 403,750,000 | 995,325,912 | 995,325,912 | 403,750,000 | 832,790,329 | 832,790,329 | |||||||||||
Diluted | 511,536,122 | 1,007,588,968 | 1,007,588,968 | 511,536,122 | 917,897,426 | 917,897,426 | |||||||||||
Net income | 38,174 | 43,942 | 5,641 | 138,512 | 165,664 | 21,267 | |||||||||||
Other comprehensive income, net of | |||||||||||||||||
tax | |||||||||||||||||
Foreign currency translation adjustment | 5,653 | (5,205 | ) | (668 | ) | 754 | (3,147 | ) | (404 | ) | |||||||
Total comprehensive income | 43,827 | 38,737 | 4,973 | 139,266 | 162,517 | 20,863 | |||||||||||
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
|||||||||||||||||
(In thousands) |
|||||||||||||||||
For the Three Months Ended | For the Twelve Months Ended | ||||||||||||||||
2018 |
2019 |
2019 |
2018 |
2019 |
2019 |
||||||||||||
HK$ | HK$ | US$ | HK$ | HK$ | US$ | ||||||||||||
Net cash generated from operating activities | 1,074,362 | 3,161,694 | 405,897 | 4,470,167 | 1,969,434 | 252,834 | |||||||||||
Net cash used in investing activities | (47,336 | ) | (80,958 | ) | (10,393 | ) | (78,052 | ) | (160,057 | ) | (20,548 | ) | |||||
Net cash (used in)/generated from financing activities | (325,251 | ) | 147,850 | 18,981 | 35,690 | 1,151,622 | 147,845 | ||||||||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash | 8,807 | (44,647 | ) | (5,732 | ) | 7,457 | (44,666 | ) | (5,734 | ) | |||||||
Net increase in cash, cash equivalents and restricted cash | 710,582 | 3,183,939 | 408,753 | 4,435,262 | 2,916,333 | 374,397 | |||||||||||
Cash, cash equivalents and restricted cash at beginning of the period | 11,276,522 | 11,719,498 | 1,504,544 | 7,551,842 | 11,987,104 | 1,538,900 | |||||||||||
Cash, cash equivalents and restricted cash at end of the period | 11,987,104 | 14,903,437 | 1,913,297 | 11,987,104 | 14,903,437 | 1,913,297 | |||||||||||
Cash, cash equivalents and restricted cash | |||||||||||||||||
Cash and cash equivalents | 215,617 | 362,574 | 46,547 | 215,617 | 362,574 | 46,547 | |||||||||||
Cash held on behalf of clients | 11,771,487 | 14,540,863 | 1,866,750 | 11,771,487 | 14,540,863 | 1,866,750 | |||||||||||
Cash, cash equivalents and restricted cash at end of the period | 11,987,104 | 14,903,437 | 1,913,297 | 11,987,104 | 14,903,437 | 1,913,297 | |||||||||||
Non-cash financing activities | |||||||||||||||||
Accretion to preferred shares redemption value | 16,740 | - | - | 66,998 | 12,309 | 1,580 | |||||||||||
UNAUDITED RECONCILIATIONS OF NON-GAAP AND GAAP RESULTS | |||||||||||
(In thousands) | |||||||||||
For the Three Months Ended | For the Twelve Months Ended | ||||||||||
2018 |
2019 |
2019 |
2018 |
2019 |
2019 |
||||||
HK$ | HK$ | US$ | HK$ | HK$ | US$ | ||||||
Net income | 38,174 | 43,942 | 5,641 | 138,512 | 165,664 | 21,267 | |||||
Add: share-based compensation expenses | 3,197 | 5,382 | 691 | 10,440 | 15,967 | 2,050 | |||||
Adjusted net income | 41,371 | 49,324 | 6,332 | 148,952 | 181,631 | 23,317 |
Source: Futu Holdings Limited