Futu Holdings Ltd. transforms the investment experience on its fully digitized “one-stop-shop” trading platform, primarily serving users in Hong Kong, China, and the United States.
Now a licensed securities brokerage firm serving more than 717,800 registered clients, Futu was founded by Leaf Hua Li in 2007 as an internet technology and software development services provider. Li was an early employee at Chinese technology conglomerate Tencent Holdings Ltd. (HKEX: 0700), 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. Its digital platform, Futu NiuNiu, facilitates trading for Hong Kong, U.S., and China Connect stocks, and is accessible on any mobile device, tablet, or desktop. NiuNiu features market data and news, research and analytical tools, investment classes, and – significantly – social networking for improved user engagement. For U.S. investors, Futu is developing a similar trading platform called moomoo. Eventually, the app will have all the features of its Chinese counterpart.
In 2019, Futu also launched Money Plus, a one-stop asset allocation platform for clients who want to manage their discretionary stock trading and wealth management all in one place.
In addition, Futu offers corporate services to institutional clients, which includes establishing and administering the platforms of their employee stock option plans (ESOP) and providing IPO subscription services in Hong Kong and New York. In addition, Futu offers corporate services to institutional clients, which includes establishing and administering the platforms of their employee stock option plans (ESOP) and providing IPO subscription services in Hong Kong and New York.
Futu holds a hefty stack of operating licenses. In Hong Kong, Futu has its own clients, assets and clearing abilities, so the company is not dependent upon third parties to execute its trades. In the United States, Futu obtained a clearing license in June 2019. The company has also applied for a virtual banking license in Hong Kong.
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. Futu has a long-term partnership with Tencent to cooperate in traffic, content, and cloud infrastructure.
As of Dec. 31, 2019, the company had a user base of 7.5 million with more than 717,800 registered clients and 198,400 clients with assets in Futu trading accounts. For 2019, the company recorded HK$872.7 billion in total trading volume for clients. It held HK$87.1 billion in client assets at the year-end, up 71% from 2018.
Futu Holdings Limited
Selina Cheng, CFA
Head of Equity Research
Registered broker by SFC(CE No. AZT137)
SFC types 1, 2, 4, 5,7 and 9 licenses holder
U.S. FINRA Securities brokerage licenses holder