Futu Announces Third Quarter 2022 Unaudited Financial Results
Third Quarter 2022 Operational Highlights
- Total number of paying clients1 increased 23.8% year-over-year to 1,444,955 as of
September 30, 2022 . - Total number of registered clients2 increased 21.4% year-over-year to 3,132,800 as of
September 30, 2022 . - Total number of users3 increased 15.6 % year-over-year to 19.2 million as of
September 30, 2022 . - Total client assets declined 12.8% year-over-year to
HK$369.6 billion as ofSeptember 30, 2022 . - Daily average client assets were
HK$416.5 billion in the third quarter of 2022, a decrease of 6.2% from the same period in 2021. - Total trading volume in the third quarter of 2022 declined 19.7% year-over-year to
HK$1.1 trillion , in which trading volume forU.S. stocks wasHK$752.0 billion , trading volume forHong Kong stocks wasHK$303.6 billion , and trading volume for stocks under the Stock Connect wasHK$26.2 billion . - Daily average revenue trades (DARTs)4 in the third quarter of 2022 declined 22.3% year-over-year to 448,309.
- Margin financing and securities lending balance declined 6.5% year-over-year to
HK$29.6 billion as ofSeptember 30, 2022 .
Third Quarter 2022 Financial Highlights
- Total revenues increased 12.4% year-over-year to
HK$1,945.6 million (US$247.9 million ). - Total gross profit increased 18.0% year-over-year to
HK$1,727.5 million (US$220.1 million ). - Net income increased 22.7% year-over-year to
HK$754.6 million (US$96.1 million ). - Non-GAAP adjusted net income5 increased 24.8% year-over-year to
HK$806.1 million (US$102.7 million ).
Mr.
“Total client assets declined 12.8% year-over-year and 14.7% quarter-over-quarter to
“Equity market plunge led to a 19.5% quarter-over-quarter decline of total trading volume to
“Total client assets in wealth management reached
“Our enterprise business had 301 IPO and IR clients as well as 572 ESOP clients as of quarter end, up 40.0% and 76.0% year-over-year. More than 50 companies adopted our ESOP services during the quarter, including Ganfeng Lithium and
Third Quarter 2022 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
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 22.7% to
Non-GAAP adjusted net income increased by 24.8% 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
Please note that all participants will need to pre-register for the conference call, using the link
https://register.vevent.com/register/BIca2bc9c5992e46bb83d642235c97c935.
It will automatically lead to the registration page of "Futu Holdings Ltd Third Quarter 2022 Earnings Conference Call", where details for RSVP are needed.
Upon registering, all participants will be provided in confirmation emails with participant dial-in numbers and personal PINs to access the conference call. Please dial in 10 minutes prior to the call start time using the conference access information.
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 quotations from the management team of the Company, contain forward-looking statements. Futu may also make written or oral forward-looking statements in its periodic reports to the
For investor inquiries, please contact:
Investor Relations
ir@futuholdings.com
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except for share and per share data)
As of |
As of |
||||
2021 | 2022 | 2022 | |||
HK$ | HK$ | US$ | |||
ASSETS | |||||
Cash and cash equivalents | 4,555,096 | 6,865,549 | 874,615 | ||
Cash held on behalf of clients | 54,734,351 | 52,662,417 | 6,708,759 | ||
Restricted cash | 2,065 | 1,870 | 238 | ||
Term deposit | - | 5,450 | 694 | ||
Short-term investments | 1,169,741 | 13,373 | 1,704 | ||
Securities purchased under agreements to resell | 106,203 | 22,349 | 2,847 | ||
Loans and advances - current (net of allowance of |
29,587,306 | 29,720,594 | 3,786,159 | ||
Receivables: | |||||
Clients | 469,577 | 271,855 | 34,632 | ||
Brokers | 7,893,927 | 5,068,471 | 645,682 | ||
Clearing organizations | 1,961,121 | 1,601,026 | 203,958 | ||
Fund management companies and fund distributors | 72,340 | 80,584 | 10,266 | ||
Interest | 50,829 | 146,338 | 18,642 | ||
Prepaid assets | 18,306 | 25,711 | 3,275 | ||
Other current assets | 81,594 | 110,153 | 14,033 | ||
Total current assets | 100,702,456 | 96,595,740 | 12,305,504 | ||
Operating lease right-of-use assets | 243,859 | 200,030 | 25,482 | ||
Long-term investments | 23,394 | 245,724 | 31,303 | ||
Loans and advances - non-current | - | 37,013 | 4,715 | ||
Other non-current assets | 568,805 | 943,140 | 120,147 | ||
Total non-current assets | 836,058 | 1,425,907 | 181,647 | ||
Total assets | 101,538,514 | 98,021,647 | 12,487,151 |
LIABILITIES | ||||||||
Amounts due to related parties | 87,459 | 53,602 | 6,828 | |||||
Payables: | ||||||||
Clients | 59,127,439 | 54,948,151 | 6,999,943 | |||||
Brokers | 7,599,233 | 12,231,738 | 1,558,223 | |||||
Clearing organizations | 393,782 | 2,050,313 | 261,193 | |||||
Fund management companies and fund distributors | 56,690 | 71,143 | 9,063 | |||||
Interest | 15,359 | 15,340 | 1,954 | |||||
Borrowings | 6,357,405 | 6,547,293 | 834,071 | |||||
Securities sold under agreements to repurchase | 4,467,861 | - | - | |||||
Lease liabilities - current | 96,860 | 105,536 | 13,444 | |||||
Accrued expenses and other current liabilities | 2,176,213 | 1,683,822 | 214,505 | |||||
Total current liabilities | 80,378,301 | 77,706,938 | 9,899,224 | |||||
Lease liabilities - non-current | 163,719 | 107,740 | 13,725 | |||||
Other non-current liabilities | 10,935 | 20,726 | 2,641 | |||||
Total non-current liabilities | 174,654 | 128,466 | 16,366 | |||||
Total liabilities | 80,552,955 | 77,835,404 | 9,915,590 | |||||
SHAREHOLDERS’ EQUITY | ||||||||
Class A ordinary shares | 58 | 63 | 8 | |||||
Class B ordinary shares | 38 | 33 | 4 | |||||
Additional paid-in capital | 17,935,752 | 18,091,374 | 2,304,692 | |||||
Treasury Stock | (1,178,755 | ) | (3,975,219 | ) | (506,410 | ) | ||
Accumulated other comprehensive income/(loss) | 75,994 | (50,648 | ) | (6,452 | ) | |||
Retained earnings | 4,152,472 | 6,120,640 | 779,719 | |||||
Total shareholders' equity | 20,985,559 | 20,186,243 | 2,571,561 | |||||
Total liabilities and shareholders' equity | 101,538,514 | 98,021,647 | 12,487,151 |
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands, except for share and per share data)
For the Three Months Ended | For the Nine Months Ended | ||||||||||||||||
2021 |
2022 |
2022 |
2021 |
2022 |
2022 |
||||||||||||
HK$ | HK$ | US$ | HK$ | HK$ | US$ | ||||||||||||
Revenues | |||||||||||||||||
Brokerage commission and handling charge income | 933,412 | 957,804 | 122,016 | 3,056,091 | 2,959,050 | 376,959 | |||||||||||
Interest income | 631,668 | 880,823 | 112,210 | 1,900,608 | 2,076,484 | 264,527 | |||||||||||
Other income | 165,970 | 106,953 | 13,625 | 555,812 | 297,774 | 37,934 | |||||||||||
Total revenues | 1,731,050 | 1,945,580 | 247,851 | 5,512,511 | 5,333,308 | 679,420 | |||||||||||
Costs | |||||||||||||||||
Brokerage commission and handling charge expenses | (125,460 | ) | (82,574 | ) | (10,519 | ) | (484,462 | ) | (265,795 | ) | (33,860 | ) | |||||
Interest expenses | (74,319 | ) | (44,698 | ) | (5,694 | ) | (321,286 | ) | (110,525 | ) | (14,080 | ) | |||||
Processing and servicing costs | (67,439 | ) | (90,843 | ) | (11,573 | ) | (183,463 | ) | (277,642 | ) | (35,369 | ) | |||||
Total costs | (267,218 | ) | (218,115 | ) | (27,786 | ) | (989,211 | ) | (653,962 | ) | (83,309 | ) | |||||
Total gross profit | 1,463,832 | 1,727,465 | 220,065 | 4,523,300 | 4,679,346 | 596,111 | |||||||||||
Operating expenses | |||||||||||||||||
Research and development expenses | (223,905 | ) | (313,439 | ) | (39,930 | ) | (534,692 | ) | (887,613 | ) | (113,075 | ) | |||||
Selling and marketing expenses | (403,065 | ) | (235,457 | ) | (29,995 | ) | (1,055,101 | ) | (742,692 | ) | (94,613 | ) | |||||
General and administrative expenses | (136,782 | ) | (212,270 | ) | (27,041 | ) | (311,147 | ) | (600,802 | ) | (76,537 | ) | |||||
Total operating expenses | (763,752 | ) | (761,166 | ) | (96,966 | ) | (1,900,940 | ) | (2,231,107 | ) | (284,225 | ) | |||||
Others, net | 9,902 | (103,356 | ) | (13,167 | ) | (9,691 | ) | (219,175 | ) | (27,921 | ) | ||||||
Income before income tax expense and share of loss from equity method investment | 709,982 | 862,943 | 109,932 | 2,612,669 | 2,229,064 | 283,965 | |||||||||||
Income tax expense | (94,771 | ) | (104,374 | ) | (13,296 | ) | (301,268 | ) | (247,572 | ) | (31,539 | ) | |||||
Share of loss from equity method investment | - | (3,926 | ) | (500 | ) | - | (13,324 | ) | (1,697 | ) | |||||||
Net income | 615,211 | 754,643 | 96,136 | 2,311,401 | 1,968,168 | 250,729 | |||||||||||
Net income attributable to ordinary shareholders of the Company | 615,211 | 754,643 | 96,136 | 2,311,401 | 1,968,168 | 250,729 |
Net income per share attributable to ordinary shareholders of the Company | |||||||||||||||
Basic | 0.50 | 0.67 | 0.09 | 1.94 | 1.72 | 0.22 | |||||||||
Diluted | 0.49 | 0.66 | 0.08 | 1.91 | 1.70 | 0.22 | |||||||||
Net income per ADS | |||||||||||||||
Basic | 4.00 | 5.37 | 0.68 | 15.50 | 13.72 | 1.75 | |||||||||
Diluted | 3.94 | 5.30 | 0.68 | 15.26 | 13.59 | 1.73 | |||||||||
Weighted average number of ordinary shares used in computing net income per share | |||||||||||||||
Basic | 1,229,645,101 | 1,124,883,590 | 1,124,883,590 | 1,192,527,761 | 1,147,484,439 | 1,147,484,439 | |||||||||
Diluted | 1,247,110,187 | 1,138,110,884 | 1,138,110,884 | 1,212,191,974 | 1,158,401,576 | 1,158,401,576 | |||||||||
Net income | 615,211 | 754,643 | 96,136 | 2,311,401 | 1,968,168 | 250,729 | |||||||||
Other comprehensive income/(loss), net of tax | |||||||||||||||
Foreign currency translation adjustment | 21,130 | (108,102 | ) | (13,771 | ) | 24,084 | (126,642 | ) | (16,133 | ) | |||||
Total comprehensive income | 636,341 | 646,541 | 82,365 | 2,335,485 | 1,841,526 | 234,596 |
UNAUDITED RECONCILIATIONS OF NON-GAAP AND GAAP RESULTS
(In thousands)
For the Three Months Ended | For the Nine Months Ended | ||||||||||
2021 |
2022 |
2022 |
2021 |
2022 |
2022 |
||||||
HK$ | HK$ | US$ | HK$ | HK$ | US$ | ||||||
Net income | 615,211 | 754,643 | 96,136 | 2,311,401 | 1,968,168 | 250,729 | |||||
Add: Share-based compensation expenses | 30,879 | 51,454 | 6,555 | 64,295 | 148,705 | 18,944 | |||||
Adjusted net income | 646,090 | 806,097 | 102,691 | 2,375,696 | 2,116,873 | 269,673 |
Non-GAAP to GAAP reconciling items have no income tax effect.
_________________
1 The number of paying clients refers to the number of clients with assets in their trading accounts with Futu.
2 The number of registered clients refers to the number of users who open one or more trading accounts with Futu.
3 The number of users refers to the number of user accounts registered with Futu.
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.
Futu Holdings Limited