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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16 UNDER

THE SECURITIES EXCHANGE ACT OF 1934

For the month of December 2022

Commission File Number: 001-38820

Futu Holdings Limited

11/F, Bangkok Bank Building

No. 18 Bonham Strand W, Sheung Wan

Hong Kong S.A.R., People’s Republic of China

+852 2523-3588

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F Form 40-F

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): 

EXHIBIT INDEX

Exhibit No.

    

Description

99.1

Unaudited interim condensed consolidated financial statements of Futu Holdings Limited as of and for the six months ended June 30, 2022

99.2

Unaudited interim condensed consolidated financial statements of Futu Holdings Limited as of and for the nine months ended September 30, 2022

- 1 -

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

FUTU HOLDINGS LIMITED

By

:

/s/ Leaf Hua Li

Name

:

Leaf Hua Li

Title

:

Chairman of the Board of Directors and Chief Executive Officer

Date: December 22, 2022

- 2 -

2022-09-300001754581--12-31false00000737944914739142450494552051494552051494552051P4Y0.0134680000044300000http://fasb.org/us-gaap/2022#ReceivablesFromClearingOrganizationshttp://fasb.org/us-gaap/2022#CommissionsPayableToBrokerDealersAndClearingOrganizationshttp://fasb.org/us-gaap/2022#ReceivablesFromClearingOrganizationshttp://fasb.org/us-gaap/2022#CommissionsPayableToBrokerDealersAndClearingOrganizationsP4Y67768000

Exhibit 99.1

FUTU HOLDINGS LIMITED

INDEX TO UNAUDITED INTERIM CONDENSED

CONSOLIDATED FINANCIAL STATEMENTS

    

Page

UNAUDITED INTERIM CONDENSED CONSOLIDATED BALANCE SHEET

F-2

UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

F-4

UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY

F-5

UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

F-6

NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

F-8

F-1

FUTU HOLDINGS LIMITED

UNAUDITED INTERIM CONDENSED CONSOLIDATED BALANCE SHEET

(In thousands, except for share and per share data)

As of December 31, 

As of June 30, 

    

Note

    

2021

    

2022

HK$

HK$

ASSETS

Cash and cash equivalents

 

 

4,555,096

 

6,300,400

Cash held on behalf of clients

 

 

54,734,351

 

63,262,436

Term deposit

5,750

Restricted cash

2,065

1,971

Short-term investments

 

4

 

1,169,741

 

17,501

Securities purchased under agreements to resell

106,203

Loans and advances (net of allowance of HK$12,258 thousand and HK$20,142 thousand as of December 31, 2021 and June 30, 2022, respectively)

 

6

 

29,587,306

 

28,829,926

Receivables:

 

  

 

 

Clients

 

 

469,577

 

1,438,510

Brokers

 

 

7,893,927

 

6,125,217

Clearing organizations

 

 

1,961,121

 

1,915,872

Fund management companies and fund distributors

72,340

120,537

Interest

 

 

50,829

 

89,458

Prepaid assets

 

 

18,306

 

19,711

Other current assets

 

7

 

81,594

 

108,740

Total current assets

 

 

100,702,456

 

108,236,029

Operating lease right-of-use assets

5

243,859

212,529

Long-term investments

8

23,394

249,588

Other non-current assets

7

568,805

1,060,134

Total non-current assets

836,058

1,522,251

Total assets

101,538,514

109,758,280

LIABILITIES

 

  

 

 

  

Amounts due to related parties

 

27(b)

 

87,459

 

64,439

Payables:

 

  

 

 

Clients

 

 

59,127,439

 

67,951,394

Brokers

 

 

7,599,233

 

14,365,158

Clearing organizations

 

 

393,782

 

1,359,746

Fund management companies and fund distributors

56,690

49,545

Interest

 

 

15,359

 

10,334

Borrowings

9

6,357,405

4,353,919

Securities sold under agreements to repurchase

4,467,861

Operating lease liabilities - current

5

96,860

104,121

Accrued expenses and other current liabilities

 

10

 

2,176,213

 

1,807,086

Total current liabilities

 

 

80,378,301

 

90,065,742

Operating lease liabilities - non-current

5

163,719

123,624

Other non-current liabilities

10

10,935

16,094

Total non-current liabilities

174,654

139,718

Total liabilities

80,552,955

90,205,460

Commitments and Contingencies (Note 26)

F-2

FUTU HOLDINGS LIMITED

UNAUDITED INTERIM CONDENSED CONSOLIDATED BALANCE SHEET (Continued)

(In thousands, except for share and per share data)

As of December 31, 

As of June 30, 

Note

2021

2022

    

    

HK$

    

HK$

SHAREHOLDERS’ EQUITY

 

  

 

  

 

  

Class A ordinary shares(US$0.00001 par value; 48,700,000,000 and 48,700,000,000 shares authorized as of December 31, 2021 and June 30, 2022, respectively; 737,944,914 and 739,142,450 shares issued and outstanding as of December 31, 2021 and June 30, 2022, respectively)

 

11

 

58

 

58

Class B ordinary shares (US$0.00001 par value; 800,000,000 and 800,000,000 shares authorized as of December 31 2021 and June 30, 2022, respectively; 494,552,051, and 494,552,051 shares issued and outstanding as of December 31, 2021 and June 30, 2022, respectively)

 

11

 

38

 

38

Additional paid-in capital

 

 

17,935,752

 

18,039,055

Treasury stock (29,462,760 and 109,041,760 shares as of December 31, 2021 and June 30, 2022, respectively)

11

(1,178,755)

(3,909,782)

Accumulated other comprehensive income

 

 

75,994

 

57,454

Retained earnings

 

 

4,152,472

 

5,365,997

Total shareholders’ equity

 

 

20,985,559

 

19,552,820

Total liabilities and shareholders’ equity

 

 

101,538,514

 

109,758,280

The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.

F-3

FUTU HOLDINGS LIMITED

UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

(In thousands, except for share and per share data)

    

Six months ended June 30, 

Note

2021

2022

    

    

HK$

    

HK$

Revenues

 

  

 

  

  

Brokerage commission and handling charge income

 

16

 

2,122,679

2,001,246

Interest income

 

17

 

1,268,940

1,195,661

Other income

 

18

 

389,842

190,821

Total revenues

 

 

3,781,461

3,387,728

Costs

 

 

Brokerage commission and handling charge expenses

 

19,22

 

(359,002)

(183,221)

Interest expenses

 

20

 

(246,967)

(65,827)

Processing and servicing costs

 

21,22

 

(116,024)

(186,799)

Total costs

 

(721,993)

(435,847)

Total gross profit

 

3,059,468

2,951,881

Operating expenses

 

 

Research and development expenses

 

22

 

(310,787)

(574,174)

Selling and marketing expenses

 

22

 

(652,036)

(507,235)

General and administrative expenses

 

22

 

(174,365)

(388,532)

Total operating expenses

 

 

(1,137,188)

(1,469,941)

Others, net

 

 

(19,593)

(115,819)

Income before income tax expenses and share of loss from equity method investment

 

 

1,902,687

1,366,121

Income tax expenses

 

23

 

(206,497)

(143,198)

Share of loss from equity method investment

(9,398)

Net income

 

 

1,696,190

1,213,525

Net income attributable to ordinary shareholders of the Company

 

 

1,696,190

1,213,525

Net income

 

 

1,696,190

1,213,525

Other comprehensive income/(loss), net of tax

 

 

Foreign currency translation adjustment

 

 

2,954

(18,540)

Total comprehensive income

 

 

1,699,144

1,194,985

Net income per share attributable to ordinary shareholders of the Company

 

14

 

Basic

 

 

1.45

1.05

Diluted

 

 

1.42

1.04

Net income per ADS

Basic

11.56

8.38

Diluted

11.36

8.30

Weighted average number of ordinary shares used in computing net income per share

 

14

 

Basic

 

 

1,173,661,489

1,158,972,163

Diluted

 

 

1,194,580,873

1,169,572,515

The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.

F-4

FUTU HOLDINGS LIMITED

UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY

(In thousands, except for share and per share data)

    

    

    

    

    

    

Accumulated 

    

    

Class A ordinary shares

    

Class B ordinary shares

    

Treasury stock purchases

    

Additional 

    

other 

    

Number of

Number of

Number of

paid in 

comprehensive 

Retained 

    

    

Note

    

Shares

    

Amount

Shares

    

Amount

Shares

    

Amount

capital

(loss)/income

earnings

Total equity

 

HK$

 

HK$

    

    

HK$

    

HK$

 

HK$

 

HK$

 

HK$

As of January 1, 2022

 

737,944,914

 

58

 

494,552,051

 

38

 

(29,462,760)

 

(1,178,755)

 

17,935,752

 

75,994

 

4,152,472

 

20,985,559

Profit for the period

 

 

 

 

 

 

 

 

 

1,213,525

 

1,213,525

Share-based compensation

 

13

 

 

 

 

 

 

 

97,251

 

 

 

97,251

Shares issued upon exercise of employee share options

 

13

 

1,197,536

 

 

 

 

 

 

6,052

 

 

 

6,052

Treasury share purchases

 

11

 

 

 

 

 

(79,579,000)

 

(2,731,027)

 

 

 

 

(2,731,027)

Foreign currency translation adjustment, net of tax

 

 

 

 

 

 

 

 

(18,540)

 

 

(18,540)

Balance at June 30, 2022

 

739,142,450

 

58

 

494,552,051

 

38

 

(109,041,760)

 

(3,909,782)

 

18,039,055

 

57,454

 

5,365,997

 

19,552,820

    

    

    

    

    

    

Accumulated 

    

    

 

Class A ordinary shares

    

Class B ordinary shares

    

Treasury stock purchases

    

Additional 

    

other 

    

 

Number of

Number of

Number of

paid in 

comprehensive 

Retained 

    

 

    

Note

    

Shares

    

Amount

Shares

    

Amount

Shares

    

Amount

capital

income

earnings

Total equity

HK$

HK$

    

    

HK$

    

HK$

HK$

HK$

HK$

As of January 1, 2021

 

590,139,760

 

47

494,552,051

 

38

 

 

6,960,369

4,974

1,342,262

 

8,307,690

Profit for the period

 

 

 

 

 

1,696,190

 

1,696,190

Share-based compensation

 

13

 

 

 

 

 

33,416

 

33,416

Issuance of ordinary shares upon follow-on public offering

 

87,400,000

 

7

 

 

 

10,856,518

 

10,856,525

Exercise of Pre-funded warrants

 

53,599,890

 

4

 

 

 

(4)

 

Shares issued upon exercise of employee share options

 

13

 

2,395,392

 

 

 

 

8,122

 

8,122

Foreign currency translation adjustment, net of tax

 

 

 

 

 

2,954

 

2,954

Balance at June 30, 2021

 

733,535,042

 

58

494,552,051

 

38

 

 

17,858,421

7,928

3,038,452

 

20,904,897

The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.

F-5

FUTU HOLDINGS LIMITED

UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

(In thousands)

    

    

Six months ended June 30,

Note

2021

    

2022

    

    

HK$

HK$

Cash flows from operating activities

 

  

  

Net income

 

1,696,190

1,213,525

Adjustments for:

 

Depreciation and amortization

 

22

15,368

27,537

Expected credit loss expenses

8,819

7,849

Share of loss from equity method investment

9,398

Impairment from equity method investment and other non-current assets

32,326

Foreign exchange (gains)

 

(27,008)

(92,231)

Share-based compensation

 

13

33,416

97,251

Realized gain from short-term investments

 

(12,491)

Fair value losses

6,867

Deferred income tax benefit

23

(8,791)

(534)

Amortisation of right-of-use assets

36,571

47,948

Changes in operating assets:

 

 

Net decrease in securities purchased under agreements to resell

 

 

106,203

Net (increase)/decrease in loans and advances

 

 

(34,368,174)

749,496

Net (increase)/decrease in accounts receivable from clients and brokers

 

 

(4,327,609)

799,777

Net decrease in accounts receivable from clearing organizations

 

 

607,850

49,169

Net decrease/(increase) in accounts receivable from fund management companies and fund distributors

153,270

(48,197)

Net increase in interest receivable

 

 

(16,563)

(38,629)

Net (increase)/decrease in prepaid assets

 

 

(20,698)

156

Net increase in other assets

 

 

(3,318)

(485,889)

Changes in operating liabilities:

 

 

Net (decrease)/increase in amounts due to related parties

 

 

(59,635)

12,708

Net increase in accounts payable to clients and brokers

 

 

20,794,806

15,589,859

Net increase in accounts payable to clearing organizations

 

 

512,718

965,964

Net decrease in accounts payable to fund management companies and fund distributors

(31,236)

(7,145)

Net (decrease)/increase in payroll and welfare payable

 

 

(23,472)

66,425

Net increase/(decrease) in interest payable

 

 

8,649

(5,025)

Net decrease in operating lease liabilities

(31,120)

(32,540)

Net increase/(decrease) in securities sold under agreements to repurchase

182,982

(4,467,861)

Net increase/(decrease) in other liabilities

 

 

515,257

(473,827)

Net cash (used in)/generated from operating activities

 

 

(14,351,728)

14,118,089

F-6

FUTU HOLDINGS LIMITED

UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Continued)

(In thousands)

    

    

Six months ended June 30,

Note

2021

    

2022

    

    

HK$

HK$

Cash flows from investing activities

 

 

Purchase of property and equipment and intangible assets

 

 

(28,622)

(62,660)

Purchase of short-term investments

 

 

(3,361,817)

Proceeds from disposal of short-term investments

 

 

4,548,040

Acquisition of long-term investments

 

 

(235,434)

Maturity of term deposits

300,000

Cash paid for acquisition, net of cash acquired

(102,008)

Net cash generated from investing activities

 

 

271,378

786,121

Cash flows from financing activities

Proceeds from public offering, net of issuance costs

10,856,525

Proceeds from exercise of employee share options

18,548

12,937

Purchase of treasury stock

(2,731,027)

Proceeds from other borrowings

50,788,801

37,827,127

Repayment of other borrowings

(26,942,607)

(39,827,600)

Payment of other financing expenses

(1,570)

Net cash generated from/(used in) financing activities

34,721,267

(4,720,133)

Effect of exchange rate changes on cash, cash equivalents and restricted cash

30,620

89,218

Net increase in cash, cash equivalents and restricted cash

20,671,537

10,273,295

Cash, cash equivalents and restricted cash at beginning of the period

43,521,758

59,291,512

Cash, cash equivalents and restricted cash at end of the period

64,193,295

69,564,807

Cash, cash equivalents and restricted cash

Cash and cash equivalents

1,773,938

6,300,400

Cash held on behalf of clients

62,419,357

63,262,436

Restricted Cash

1,971

Cash, cash equivalents and restricted cash at end of the period

64,193,295

69,564,807

Supplemental disclosure

Interest paid

(238,318)

(70,852)

Income tax paid

(79,825)

(216,122)

Cash paid for amounts included in operating lease liabilities

(39,704)

(52,028)

The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.

F-7

FUTU HOLDINGS LIMITED

NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1.    GENERAL INFORMATION, ORGANIZATION AND PRINCIPAL ACTIVITIES

Futu Holdings Limited (the “Company”) is an investment holding company incorporated in the Cayman Islands with limited liability and conducts its business mainly through its subsidiaries, variable interest entities (“VIEs”) and subsidiaries of the VIEs (collectively referred to as the “Group”). The Group principally engages in online financial services including securities and derivative trades brokerage, margin financing and fund distribution services based on internally developed software and digital platform “Futubull” and “Moomoo”. The Group also provides financial information and online community services, etc. The Company completed its IPO on March 8, 2019 on the Nasdaq Global Market. Each American Depositary Shares (“ADSs”) of the Company represents eight Class A ordinary shares.

As of June 30, 2022, the Company’s principal subsidiaries, consolidated VIE are as follows:

Country/place and

Attributable equity

 

Company name

date of Incorporation/

interest of

 

Subsidiaries

    

 Establishment

    

the Group

    

Principal activities

    

Statutory auditors

Futu Securities International (Hong Kong) Limited (“Futu Securities”)

Hong Kong,
April 17, 2012

100

%

Financial services

PricewaterhouseCoopers Certified Public Accountants

Futu Securities (Hong Kong) Limited

Hong Kong,
May 2, 2014

100

%

Investment holding

Gary K. K. Leung & Co.

Futu Network Technology Limited

Hong Kong,
August 17, 2015

100

%

Research and development and technology services

Gary K. K. Leung & Co.

Futu Network Technology (Shenzhen) Co., Ltd.

Shenzhen, PRC,
October 14, 2015

100

%

Research and development and technology services

Shenzhen Yuanfeng Certified Public Accountants

Shen Si Network Technology (Beijing) Co., Ltd. ("Shen Si")

Beijing, PRC,
September 15,2014

100

%

No substantial business

N/A

Moomoo Financial Inc(1) (previous name: Futu Inc.)

Delaware, USA,
December 17, 2015

 

100

%

Financial services

Baker Tilly US, LLP

Futu Clearing Inc.

Delaware, USA,
August 13, 2018

 

100

%

Financial services

Baker Tilly US, LLP

Moomoo Financial Singapore Pte. Ltd(1) (previous name: Futu Singapore Pte. Ltd)

Singapore
December 17, 2019

 

100

%

Financial services

BDO LLP, Singapore

Futu Securities (Australia) Ltd.

New South Wales,
Australia,
February 15, 2001

 

100

%

Financial services

Hall Chadwick

  

 

  

 

VIE

Shenzhen Futu Network Technology Co., Ltd.(2) ("Shenzhen Futu")

Shenzhen, PRC,
December 18, 2007

100

%

Research and development and technology services

Shenzhen Yuanfeng Certified Public Accountants

Notes:

(1)

These subsidiaries changed company names in June 2022.

(2)

Mr. Leaf Hua Li and Ms. Lei Li are beneficiary owners of the Company and held 85% and 15% equity interest in Shenzhen Futu, respectively. Mr. Leaf Hua Li is the founder, chairman and chief executive officer of the Company, and Ms. Lei Li is Mr. Leaf Hua Li’s spouse.

F-8

FUTU HOLDINGS LIMITED

NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2.    SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation

The unaudited interim condensed consolidated financial statements of the Group have been prepared in accordance with the accounting principles generally accepted in the United States of America (“U.S. GAAP”).

The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements. In the opinion of the Company, the accompanying unaudited interim condensed consolidated financial statements contain all adjustments, consisting of only normal recurring adjustments, necessary for a fair statement of its financial position as of June 30, 2022, its results of operations and cash flows for the six months ended June 30, 2021 and 2022. The unaudited interim condensed consolidated balance sheet as of December 31, 2021, was derived from audited financial statements as of that date, but does not contain all of the footnote disclosures required by U.S. GAAP for a complete set of financial statements. Accordingly, these financial statements should be read in conjunction with the audited consolidated financial statements and related footnotes for the year ended December 31, 2021. Significant accounting policies followed by the Group in the preparation of the accompanying consolidated financial statements are summarized below.

Basis of Consolidation

The consolidated financial statements include the financial statements of the Company, its subsidiaries, the VIEs and subsidiary of the VIEs for which the Company or its subsidiary is the primary beneficiary.

A subsidiary is an entity in which the Company, directly or indirectly, controls more than one half of the voting power; or has the power to appoint or remove the majority of the members of the Board of Directors; or to cast a majority of votes at the meeting of directors; or has the power to govern the financial and operating policies of the investee under a statute or agreement among the shareholders or equity holders.

A consolidated VIE is an entity in which the Company, or its subsidiary, through contractual arrangements, has the power to direct the activities that most significantly impact the entity’s economic performance, bears the risks of and enjoys the rewards normally associated with ownership of the entity, and therefore the Company or its subsidiary is the primary beneficiary of the entity.

All transactions and balances among the Company, its subsidiaries, the VIEs and subsidiaries of the VIEs have been eliminated upon consolidation.

VIE Companies

1)    Contractual Agreements with VIEs

The following is a summary of the contractual agreements (collectively, “Contractual Agreements”) between the Company’s PRC subsidiary, Shen Si, and the VIEs. Through the Contractual Agreements, the VIEs are effectively controlled by the Company.

Shareholders’ Voting Rights Proxy Agreements. Pursuant to the Shareholders’ Voting Rights Proxy Agreements, each shareholder of VIEs irrevocably authorized Shen Si or any person(s) designated by Shen Si to exercise such shareholder’s rights in VIEs, including without limitation, the power to participate in and vote at shareholder’s meetings, the power to nominate and appoint the directors, senior management, and other shareholders’ voting right permitted by the articles of association of VIEs. The shareholders’ voting rights proxy agreements remain irrevocable and continuously valid from the date of execution until the expiration of the business term of Shen Si and can be renewed upon request by Shen Si.

Business Operation Agreements. Pursuant to the Business Operation Agreements, VIEs and their shareholders undertake that without Shen Si’s prior written consent, VIEs shall not enter into any transactions that may have a material effect on VIEs’ assets, business, personnel, obligations, rights or business operations. VIEs and their shareholders shall elect directors nominated by Shen Si and such directors shall nominate officers designated by Shen Si. The business operation agreements will remain effective until the end of Shen Si’s business term, which will be extended if Shen Si’s business term is extended or as required by Shen Si.

F-9

FUTU HOLDINGS LIMITED

NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2.    SIGNIFICANT ACCOUNTING POLICIES (Continued)

VIE Companies (Continued)

1)    Contractual Agreements with VIEs (Continued)

Equity Interest Pledge Agreements. Pursuant to the Equity Interest Pledge Agreements, each shareholder of VIEs agrees that, during the term of the Equity Interest Pledge Agreements, he or she will not dispose of the pledged equity interests or create or allow any encumbrance on the pledged equity interests without the prior written consent of Shen Si. The Equity Interest Pledge Agreements remain effective until the latter of the full payment of all secured debt under the equity interest pledge agreements and VIEs and their shareholders discharge all their obligations under the contractual arrangements.

Exclusive Technology Consulting and Services Agreements. Under the Exclusive Technology Consulting and Services Agreements between Shen Si and the VIEs, Shen Si has the exclusive right to provide VIEs with technology consulting and services related to, among other things, technology research and development, technology application and implementation, maintenance of software and hardware. Without Shen Si’s written consent, VIEs shall not accept any technology consulting and services covered by these agreements from any third party. VIEs agree to pay a service fee at an amount equivalent to all of its net profit to Shen Si. Unless otherwise terminated in accordance with the terms of these agreements or otherwise agreed with Shen Si, these agreements will remain effective until the expiration of Shen Si’s business term, and will be renewed if Shen Si’s business term is extended.

Exclusive Option Agreements. Pursuant to the Exclusive Option Agreements, each shareholder of VIEs has irrevocably granted Shen Si an exclusive option, to the extent permitted by PRC laws, to purchase, or have its designated person or persons to purchase, at its discretion, all or part of the shareholder’s equity interests in VIEs. Unless PRC laws and/or regulations require valuation of the equity interests, the purchase price shall be RMB1.00 or the lowest price permitted by the applicable PRC laws, whoever is higher. Each shareholder of VIEs undertakes that, without the prior written consent of Shen Si, he or she will not, among other things, (i) create any pledge or encumbrance on his or her equity interests in VIEs, (ii) transfer or otherwise dispose of his or her equity interests in VIEs, (iii) change VIEs’ registered capital, (iv) amend VIEs’ articles of association, (v) liquidate or dissolve VIEs, or (vi) distribute dividends to the shareholders of VIEs. In addition, VIEs undertake that, without the prior written consent of Shen Si, they will not, among other things, dispose of VIEs’ material assets, provide any loans to any third parties, enter into any material contract with a value of more than RMB500,000, or create any pledge or encumbrance on any of their assets, or transfer or otherwise dispose of their material assets. Unless otherwise terminated by Shen Si, these agreements will remain effective until the expiration of Shen Si’s business term, and will be renewed if Shen Si’s business term is extended.

F-10

FUTU HOLDINGS LIMITED

NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2.    SIGNIFICANT ACCOUNTING POLICIES (Continued)

VIE Companies (Continued)

2)    Risks in relation to the VIE structure

The following table sets forth the assets, liabilities, results of operations and changes in cash and cash equivalents of the VIEs and their subsidiary taken as a whole, which were included in the Group’s consolidated financial statements with intercompany balances and transactions eliminated between the VIEs and their subsidiary:

As of December 31, 

As of June 30,

    

2021

    

2022

(HK$ in thousands)

Total assets

 

254,602

296,738

Total liabilities

 

176,204

179,039

    

Six months ended June 30, 

    

2021

    

2022

(HK$ in thousands)

Total operating revenue

 

86,930

144,398

Net income

 

22,456

37,236

Six months ended June 30,

    

2021

    

2022

(HK$ in thousands)

Net cash (used in)/generated from operating activities

(3,204)

26,055

Net cash generated from financing activities

7,388

Net (decrease)/increase in cash and cash equivalents

(3,204)

33,443

Cash and cash equivalents at beginning of the period

3,738

2,751

Cash and cash equivalents at end of the period

534

36,194

Transactions between the VIE and other entities in the consolidated group

As of December 31, 2021 and June 30, 2022, total assets include amounts due from internal companies in the consolidated group in the amount of HK $190,424 thousand and HK$211,692 thousand, respectively. Total liabilities include amounts due to the internal companies in the amount of HK$ 80,435 thousand and HK$ 91,479 thousand, respectively. For the six months ended June 30, 2021 and 2022, the VIE earned inter-company revenues in the amounts of HK$75,000 thousand and HK$131,834 thousand, respectively. In addition, for the six months ended June 30, 2021 and 2022, the repayment of advances to Group companies by the VIE are in the amount of nil and nil, and VIE proceeded from advances from Group companies in the amount of nil and HK$7,388 thousand, respectively. All of these balances and transactions have been eliminated in consolidation.