Futu’s Net Profit Rises 23%, Despite Drop in Trading Vol

Futu, an online brokerage that provides Chinese investors with access to the Hong Kong and US stock markets, has released its unaudited third-quarter financial results. The company reports a 12.4% increase in revenue, reaching $247.9 million.

The company’s gross profit rose 18% year-over-year (YoY) to $220.1 million, while the net income increased by 22.7% in the same period to $96.1 million.

Futu’s total registered clients increased to 3,132,800 in the third quarter of this year- a jump of 21.4% compared with the same quarter last year.

According to Leaf Hua Li, the total paying clients increased by 58k to 1.44 million, representing a 2.8% YoY growth. In Singapore, new paying clients increased by approximately one-third sequentially as they launched offline and online marketing campaigns. The campaigns promoted low-risk mutual fund products and expanded acquisition channels for clients.

Trading volumes down

However, both total client assets and trading volumes decreased. Total client assets dropped US$47.1 billion, a 12.8% YoY decline. Q3 2022 total trading volume stood at $1.1 trillion, a 19.7% decrease.

Li added that the equity market plunge led to a 19.5% quarter-over-quarter decline in total trading volume, with Hong Kong stock trading volume alone 28.3% down at HK$303.6 billion amid deteriorating market sentiments across all sectors.

The US stock trading was down 16.2% quarter-over-quarter at HK$752 billion, he continued, due mainly to lower technology name turnover. However, they partially offset it by leveraging strong and inverse ETF interest.

The company’s statement reports that daily average revenue trades (DARTs) decreased by 22.3% year-over-year, totalling 448,309. Although FUTU shares reached a five-month low in October, they have since escalated 80% to over $50 per share—the highest price since June.