Sector: Financial Services
Sub-Industry: Online Brokerage
Futu Holdings Ltd. is an advanced FinTech company transforming the investing experience by offering a fully digitized brokerage platform, primarily serving the emerging affluent Chinese population through its licensed securities brokerage firm at its headquarters in Hong Kong.
Founded in 2007 as an internet technology and software development services provider, Futu was started by Mr. Leaf Hua Li, the company's chairman and chief executive officer. Li was an early employee at Tencent, where he participated in the creation of Tencent QQ and founded Tencent Video.
Futu's primary fee-generating services include trade execution and margin financing, which provide clients the ability to trade securities, such as stocks, warrants, options and ETFs, across different markets. The company provides investing services through its digital platform, Futu NiuNiu, which is accessible through mobile device, tablet, or desktop. Futu also provides market data and news, research, and analytical tools, as well as social network services through its NiuNiu Community.
With commission rates typically one-fifth of rates offered by leading brokers in Hong Kong, according to research firm Oliver Wyman, Futu attracts mostly younger, tech-savvy investors. The company's clients are, on average, 34 years old with high income. Nearly half of its clients work in internet, information technology, or the financial services industries.
Major institutional investors in Futu include Tencent, Matrix Partners, and Sequoia Capital. In addition, Futu recently signed an agreement with a unit of Tencent to cooperate in traffic, content and cloud areas through Tencent's online platform.
As of Dec. 31, 2018, the company had a user base of 5.6 million with more than 502,000 registered clients and more than 132,000 clients with assets in trading accounts. For the year ended Dec. 31, the company recorded HK$907 billion ($115.8 billion) in total trading volume for clients. It held HK$50.9 billion (US$6.5 billion) in client assets at the end of the period.
For the year through December, the company generated revenue of HK$811.3 million (US$103.6 million), representing a 159 percent increase from the year before. Net income for the year was $17.7 million, or 1 cent per share, in contrast to a net loss of $1 million in 2017.