富途控股 (FUTU) 2022 Q4 法說會逐字稿

Hello, ladies and gentlemen. Welcome to Futu Holdings Fourth Quarter and Full Year 2022 Earnings Conference Call. (Operator Instructions) Today's conference call is being recorded. If you have any objections, you may disconnect at this time. I'd now like to turn the conference over to your host for today's conference call, Daniel Yuan, Chief of Staff to CEO and Head of IR at Futu. Please go ahead, sir.

女士們，先生們，您好。歡迎來到富途控股 2022 年第四季度和全年收益電話會議。 （操作員說明）正在錄製今天的電話會議。如果您有異議，此時您可以斷開連接。我現在想把會議轉交給今天電話會議的主持人 Daniel Yuan，他是 Futu 的參謀長兼首席執行官兼 IR 負責人。請繼續，先生。

Thanks, operator, and thank you for joining us today to discuss our fourth quarter and full year 2022 earnings results. Joining me on the call today are Mr. Leaf Li, Chairman and Chief Executive Officer; Arthur Chen, Chief Financial Officer; and Robin Xu, Senior Vice President.

謝謝運營商，感謝您今天加入我們討論我們的第四季度和 2022 年全年收益結果。今天和我一起參加電話會議的有董事長兼首席執行官 Leaf Li 先生；陳亞瑟，首席財務官；高級副總裁 Robin Xu。

As a reminder, today's call may include forward-looking statements, which represent the company's belief regarding future events, which by their nature are not certain and are outside of the company's control. Forward-looking statements involve inherent risks and uncertainties. We caution you that a number of important factors could cause the actual results to differ materially from those containing any forward-looking statements.

提醒一下，今天的電話會議可能包含前瞻性陳述，這些陳述代表了公司對未來事件的看法，這些事件本質上是不確定的，並且不在公司的控制範圍內。前瞻性陳述涉及固有的風險和不確定性。我們提醒您，許多重要因素可能導致實際結果與包含任何前瞻性陳述的結果大不相同。

For more information about the potential risks and uncertainties, please refer to the company's filings with the SEC, including its registration statement. So with that, I will now turn the call over to Leaf. Leaf will make his comments in Chinese, and I will translate.

有關潛在風險和不確定性的更多信息，請參閱公司向美國證券交易委員會提交的文件，包括其註冊聲明。因此，我現在將把電話轉給 Leaf。 Leaf 將用中文發表評論，我將進行翻譯。

(foreign language)

（外語）

[Interpreted] Thank you all for joining our earnings call today. In the fourth quarter, we added over 42,000 paying clients, down 27% sequentially. Stock market plummet in the first half of the quarter and uncertainties around the sustainability of market rebound in the second half affected user sentiment, which led to the deceleration of client acquisition.

[解釋]感謝大家今天參加我們的財報電話會議。第四季度，我們增加了超過 42,000 名付費客戶，環比下降 27%。上半季度股市暴跌，下半年市場反彈能否持續的不確定性影響用戶情緒，導致獲客放緩。

Our total paying clients reached around 1.5 million, representing 20% growth year-over-year. In 2022, we managed to add over 240,000 paying claims exceeding our full year guidance by 20%. Despite a challenging market backdrop, our average quarterly client retention rate in 2022 remained above 98%, which speaks to the stickiness of our product.

我們的付費客戶總數達到約 150 萬，同比增長 20%。到 2022 年，我們設法增加了超過 240,000 件已支付索賠，超出了我們全年指導的 20%。儘管市場環境充滿挑戰，但我們在 2022 年的平均季度客戶保留率仍保持在 98% 以上，這說明了我們產品的粘性。

(foreign language)

（外語）

[Interpreted] In Hong Kong, we continue to promote our product to mold the population age over 35 through offline workshops and campaigns as well as targeted online apps. In the past quarter, people over 35 contributed over 50% of our new paying clients in Hong Kong. We'll further roll out offline events and refine product offerings to reach and serve this population.

[解讀] 在香港，我們繼續通過線下研討會和活動以及有針對性的在線應用程序推廣我們的產品，以塑造 35 歲以上的人口。在過去一個季度，35 歲以上的人貢獻了我們在香港的新付費客戶的 50% 以上。我們將進一步推出線下活動並改進產品供應，以接觸和服務這一人群。

In the U.S. market, we saw an improvement in client quality at the first month average net asset inflow of new paying clients increased by approximately 40% sequentially. Client acquisition in Singapore remained resilient in the fourth quarter, mainly attributable to continued client interest in money market and fixed income fund products.

在美國市場，我們看到第一個月新付費客戶平均淨資產流入的客戶質量有所改善，環比增長了約 40%。新加坡的客戶獲取在第四季度保持彈性，這主要歸因於客戶對貨幣市場和固定收益基金產品的持續興趣。

(foreign language)

（外語）

[Interpreted] Total client assets increased by 2% year-over-year and 13% quarter-over-quarter to HKD 417 billion. The sequential increase was largely due to market appreciation of our clients' Hong Kong stock holding, and robust net asset inflow across all regions. As of quarter end, margin financing and securities lending balance declined by 10% sequentially.

[解讀] 客戶總資產同比增長 2%，環比增長 13% 至 4,170 億港元。環比增長主要是由於我們客戶持有的香港股票的市場升值，以及所有地區的強勁淨資產流入。截至季度末，融資融券餘額環比下降10%。

While we saw an uptick in securities lending balance amid market volatility, margin financing balance declined as clients unwound some of their positions during Hong Kong market rebound.

雖然我們看到證券借貸餘額在市場波動中有所上升，但由於客戶在香港市場反彈期間平倉部分頭寸，保證金融資餘額有所下降。

(foreign language)

（外語）

[Interpreted] Solar trading volume was flattish quarter-over-quarter at HKD 1.1 trillion, of which Hong Kong stock trading constituted 36%. In the fourth quarter, Hong Kong stock trading volume increased by 31% sequentially to HKD 397 billion. The increase can be attributed to higher trading volume of China new economy companies and leveraged and inverse APF, which clients use the tactical tool to make short-term bets on market trends.

【解讀】太陽能成交量環比持平，為1.1萬億港元，其中港股成交量佔36%。第四季度，港股成交量環比增長 31% 至 3,970 億港元。增長可歸因於中國新經濟公司和槓桿反向 APF 的交易量增加，客戶使用戰術工具對市場趨勢進行短期押注。

Our market shares in Hong Kong futures and options trading further climbed to historic highs of 8% and 15%, respectively. U.S. stock trading volume was HKD 675 billion, down 10% sequentially and mid-market sell assets in any U.S. technology name.

我們在香港期貨及期權交易的市場份額分別進一步攀升至 8% 及 15% 的歷史高位。美國股票交易量為 6,750 億港元，環比下降 10%，中端市場拋售任何美國科技名稱的資產。

(foreign language)

（外語）

[Interpreted] Total client assets in wealth management grew 68% year-over-year and 22% quarter-over-quarter to HKD 32 billion, mainly driven by sustained interest in money market funds and the interest rate hikes. We onboarded commodity funds and alternative funds in Singapore. In Hong Kong, we expanded equity and invest link structured product offering for high net worth clients to meet their different risk/return objectives during market turmoil. In the fourth quarter, we also became the first retail platform in Hong Kong to distribute the BGF China Innovation Fund at BlackRock, thereby enhancing the brand awareness of Futu Money Plus.

[解讀]財富管理客戶總資產同比增長68%，環比增長22%至320億港元，主要受貨幣市場基金持續興趣和加息推動。我們在新加坡加入了商品基金和另類基金。在香港，我們擴大了為高淨值客戶提供的股票和投資鏈接結構性產品，以滿足他們在市場動盪期間的不同風險/回報目標。第四季度，我們還成為香港首家在貝萊德代銷BGF中國創新基金的零售平台，從而提升了富途理財的品牌知名度。

(foreign language)

（外語）

[Interpreted] Our Enterprise business had 333 IPO distribution in IR clients as well as 638 ESOP clients of 41% and 60% year-over-year, respectively. We acted as joint book runners for several high-profile Hong Kong IPOs, including those of 360 Digitec and Weilong Delicious. We underwrote 41 Hong Kong IPOs in 2022 and ranked first among all brokers according to Mint. Of all 28 companies listed in 2022 with market cap over HKD 10 billion by the end of the year, 23 companies have used one or more of our enterprise product offerings. In the fourth quarter, we also launched MooMoo ESOP in Singapore to provide corporate clients with ESOP solution services.

[解讀]我們的企業業務在 IR 客戶中有 333 個 IPO 分佈，以及 638 個 ESOP 客戶，分別同比增長 41% 和 60%。我們擔任多起備受矚目的香港首次公開招股的聯席賬簿管理人，其中包括 360 Digitec 和威龍美味。我們在 2022 年承銷了 41 筆香港 IPO，在 Mint 的所有券商中排名第一。在 2022 年年底市值超過 100 億港元的所有 28 家上市公司中，有 23 家公司使用了我們的一種或多種企業產品。第四季度，我們還在新加坡推出了 MooMoo ESOP，為企業客戶提供 ESOP 解決方案服務。

(foreign language)

（外語）

Next, I'd like to invite our CFO, Arthur, to discuss our financial performance.

接下來，我想邀請我們的首席財務官亞瑟討論我們的財務業績。

Thank you, Leaf and Daniel. Before going through our financial performance, I'd like to give you an update on our latest share repurchase program announced on March 11, 2022. At the end of last year, we have repurchased an aggregate of 8 million ADS with approximately USD 250 million total repurchase amount in the open market transaction.

謝謝你，利夫和丹尼爾。在介紹我們的財務業績之前，我想向您介紹一下我們於 2022 年 3 月 11 日宣布的最新股票回購計劃。截至去年年底，我們回購了總計 800 萬股美國存託憑證，總金額約為 2.5 億美元公開市場交易回購總額。

This constitutes about 50% of the maximum purchase amount of USD 500 million approved under our share repurchase program. Now please allow me to walk you through our financial performance in the fourth quarter. All numbers are in Hong Kong dollars unless otherwise noted.

這約占我們股票回購計劃批准的最高購買金額 5 億美元的 50%。現在請允許我向您介紹我們第四季度的財務業績。除非另有說明，所有數字均以港元為單位。

Total revenue was HKD 2.3 billion, up 42% from HKD 1.6 billion in the fourth quarter of 2021. Despite market volatility, we ended 2022 with full year revenue growing 7% to HKD 7.6 billion. Brokerage commission and handling charge income was HKD 1 billion, an increase of 22% year-over-year and 10% Q-over-Q. The increase was mainly driven by a higher-blended commission rate of 9.6 basis points.

總收入為 23 億港元，較 2021 年第四季度的 16 億港元增長 42%。儘管市場波動，但我們在 2022 年底全年收入增長 7% 至 76 億港元。經紀佣金及手續費收入為10億港元，同比增長22%，環比增長10%。增加的主要原因是更高的混合佣金率 9.6 個基點。

The commission per share pricing model for U.S. stock trading led to a further hike in blended commission rate as stock price drop and the number of the shares trade increased. Interest income was HKD 1.1 billion, an increase of 84% year-over-year and 29% Q-over-Q. The increase was mainly driven by higher interest income from higher cash deposits due to higher benchmark interest rates, which more than offset by the lower margin finance income due to lower daily average margin financing balance.

美股交易的每股佣金定價模式導致混合佣金率隨著股價下跌和股票交易數量的增加而進一步上調。利息收入為 11 億港元，同比增長 84%，環比增長 29%。增加的主要原因是較高的基準利率導致較高的現金存款帶來更高的利息收入，這被較低的每日平均保證金融資餘額導致的較低保證金融資收入所抵消。

Other income was HKD 94 million, down (technical difficulty), an increase of 58% from HKD 217 billion in the fourth quarter of 2021. Brokerage commission and handling charge expenses was HKD 64 million, down 27% year-over-year and 23% Q-over-Q. Expenses didn't move in line with our brokerage commission and handling charge income mainly due to cost savings from our U.S. sales clearing business. Interest income was HKD 182 million, up 227% year-over-year and 307% Q-o-Q.

其他收入為0.94億港元，下降（技術難度），較2021年第四季的2170億港元增加58%。經紀佣金及手續費開支為0.64億港元，同比下降27%，23 % Q-over-Q。費用與我們的經紀佣金和手續費收入不一致，這主要是由於我們的美國銷售清算業務節省了成本。利息收入為 1.82 億港元，同比增長 227%，環比增長 307%。

The year-over-year and Q-o-Q increase was mainly driven by higher interest expenses associated with our security lending business. Processing and servicing costs were $96 million, up 31% year-over-year and 6% Q-o-Q. The year-over-year increase was due to higher data transmission fee and system upgrade fees. As a result, our total gross profit was HKD 1.9 billion, an increase of 40% from HKD 1.4 billion in the fourth quarter of 2021.

同比和環比增長的主要原因是與我們的證券借貸業務相關的利息支出增加。加工和服務成本為 9600 萬美元，同比增長 31%，環比增長 6%。同比增長是由於較高的數據傳輸費和系統升級費。因此，我們的毛利總額為 19 億港元，較 2021 年第四季度的 14 億港元增長 40%。

Gross margin was 85% as compared to 86% in the quarter of 2021. Operating expenses were down 1% year-over-year and up 7% Q-over-Q to HKD 818 million. To break it down, R&D expenses were HKD 334 million up 24% year-over-year and 7% Q-over-Q. The increase -- the year-over-year increase was mainly due to increase in R&D headcount as we continue to support new product offerings investing in the U.S. sales clearing capabilities and the customized products for international markets.

毛利率為 85%，而 2021 年季度為 86%。營業費用同比下降 1%，環比增長 7% 至 8.18 億港元。細分來看，研發費用為 3.34 億港元，同比增長 24%，環比增長 7%。這一增長——同比增長主要是由於研發人員的增加，因為我們繼續支持投資於美國銷售清算能力和國際市場定制產品的新產品。

Looking into 2023, we intend to further grow our headcount by middle to high teens on top of our 2,800 employees at the end of last year to support expansion into new international markets. Selling and marketing expenses was HKD 153 million, down 55% year-over-year and 35% Q-o-Q. Expenses declined due to slower client acquisition amid weak market sentiment and the lower client acquisition costs.

展望 2023 年，我們打算在去年年底的 2,800 名員工的基礎上進一步增加中高青少年的員工人數，以支持向新的國際市場的擴張。營銷費用為港幣 1.53 億元，同比下降 55%，環比下降 35%。由於市場情緒疲軟和客戶獲取成本降低，客戶獲取速度放緩，導致費用下降。

G&A expenses were HKD 330 million, up 52% year-over-year and 56% Q-over-Q. The rise was primarily due to increase in headcount for general and administrative personnel and to a lesser extent, an increase in professional fees relating to our proposed Hong Kong IPO listing. As a result, our net income increased by 92% year-over-year and 27% Q-over-Q to HKD 959 million.

G&A 費用為 3.3 億港元，同比增長 52%，環比增長 56%。增加的主要原因是一般和行政人員的人數增加，其次是與我們擬議的香港 IPO 上市相關的專業費用增加。因此，我們的淨收入同比增長 92%，環比增長 27%，達到 9.59 億港元。

Net income margin expanded to 42% in the fourth quarter as compared to 31% in the same quarter last year, mainly due to lower marketing spending. Our effective tax rate for the quarter was 14.7% due to higher tax rate from our U.S. operations. That concludes our prepared remarks. We now like to open the call to questions. Operator, please go ahead.

第四季度的淨利潤率從去年同期的 31% 擴大到 42%，這主要是由於營銷支出減少。由於我們美國業務的稅率較高，我們本季度的有效稅率為 14.7%。我們準備好的發言到此結束。我們現在想公開提問。接線員，請繼續。

(Operator Instructions) Our first question comes from the line of Han Pu from CICC.

（操作員說明）我們的第一個問題來自中金韓普的線。

(foreign language) This is Han from CICC. And congrats on another strong quarter. I have two questions. Firstly, how about the latest progress in the new market, such as Australia and Japan, for example, the user profile and the products and service offering. Secondly, we see the continuous rapid growth in the wealth management business. Could you please share more color on the driver behind the product structure and our forward plan. Besides how about the revenue contribution in the fourth quarter of the growth management business and also the user penetration to our brokerage business.

（外語）我是中金公司的韓。祝賀又一個強勁的季度。我有兩個問題。首先，新市場的最新進展如何，例如澳大利亞和日本，例如用戶概況以及產品和服務提供情況。其次，我們看到財富管理業務持續高速增長。您能否分享更多有關產品結構背後的驅動因素和我們的前瞻性計劃的信息。除了增長管理業務第四季度的收入貢獻以及我們經紀業務的用戶滲透率如何。

(foreign language)

（外語）

[Interpreted] In Q4, we (inaudible) from various client acquisition channels in the Australian market, reduced the budget for inefficient client acquisition channels, and constantly optimized the account opening funnel. And by deepening connection with clients via online and offline exchanges, we also improved clients' product experience. So as a result, the client acquisition cost in Q4 in Australia fell substantially on a Q-o-Q basis. And in the future, we'll continue to improve our product capability and the ability to efficiently acquire clients as well as upgrade our marketing strategy.

[解讀]第四季度，我們（聽不清）從澳洲市場的各種獲客渠道，減少低效獲客渠道的預算，不斷優化開戶渠道。並通過線上線下交流加深與客戶的聯繫，提升客戶的產品體驗。因此，澳大利亞第四季度的客戶獲取成本環比大幅下降。未來，我們將繼續提升產品能力和高效獲客能力，升級營銷策略。

(foreign language)

（外語）

[Interpreted] Wealth Management business maintained strong growth momentum in the fourth quarter, mainly because low-risk fund products remain attractive to our clients during the rate hike cycle. And meanwhile, we have been broadening fund offerings to meet the investment and financial needs of customers with different risk appetites. And in Q4, wealth management business helped attract a lot of clients and assets, specifically the growth in wealth management AUM in Q4 is almost entirely driven by new asset inflows and the percentage of our new paying clients brought by fund products has also been growing. That's especially true in the Singapore market.

【解讀】第四季度財富管理業務保持強勁增長勢頭，主要是因為低風險基金產品在加息週期中對客戶仍有吸引力。同時，我們一直在擴大基金產品範圍，以滿足不同風險偏好客戶的投資和理財需求。而在四季度，理財業務幫助吸引了很多客戶和資產，特別是四季度理財AUM的增長幾乎完全是由新資產流入推動的，基金產品帶來的新付費客戶比例也在增長。在新加坡市場尤其如此。

And looking ahead, we see a lot of room for growth in wealth management business, and we plan to continuously diversify structured products in Hong Kong with an aim to provide 5 types of notes, including fixed dividend structured products and fund linked notes in the first half of this year to better meet the allocation needs, professional investors and high net worth clients. And in Singapore, we have comprehensive mutual fund product offerings and we'll focused on introducing more low-risk fund portfolios and dividend-paying fund portfolios, while gradually expanding other product categories, including bonds, private equity funds, structured notes, et cetera. Thank you.

展望未來，我們看到財富管理業務有很大的增長空間，我們計劃在香港繼續多元化結構性產品，目標是在首批提供5種票據，包括固定股息結構性產品和基金掛鉤票據今年下半年更好地滿足專業投資者和高淨值客戶的配置需求。而在新加坡，我們擁有全面的互惠基金產品系列，我們將重點推出更多低風險基金組合和派息基金組合，同時逐步擴大其他產品類別，包括債券、私募股權基金、結構性票據等。 .謝謝。

Our next question comes from the line of Chiyao Huang from Morgan Stanley.

我們的下一個問題來自摩根士丹利的 Chiyao Huang。

(foreign language) My first question is on the driver for higher brokerage commission rate in the fourth quarter and roughly what's the contribution from the derivative products? And how is the management's outlook on the brokerage commission rating to 2023? And my second question is on the interest income, which we are seeing a rapid growth in the fourth quarter. And so basically, wondering how is our plan to utilize the client idle cash and what do we invest? And what's the percentage and the scale of client or cash that we plan to utilize in 2023?

(外文) 我的第一個問題是關於四季度經紀佣金率上升的驅動因素，衍生產品的貢獻大致是多少？管理層對 2023 年經紀佣金評級的展望如何？我的第二個問題是關於利息收入，我們在第四季度看到了快速增長。所以基本上，想知道我們計劃如何利用客戶閒置現金以及我們投資什麼？我們計劃在 2023 年使用的客戶或現金的百分比和規模是多少？

I will take these two questions. Number one, in terms of the commission rate, I think the hike was mainly driven by our typical reasons because the market was quite volatile in fourth quarter. The U.S. stock markets make meaningful corrections, which implies our pricing model -- effective pricing model become much higher. The other reason is, as you mentioned, these derivative tradings continue to increase in the fourth quarter given the market volatility, which also has a positive benefit on our blend commission rate.

我會回答這兩個問題。第一，就佣金率而言，我認為加息主要是由我們的典型原因推動的，因為第四季度市場波動很大。美國股市做出有意義的修正，這意味著我們的定價模型——有效定價模型變得更高。另一個原因是，正如你提到的，鑑於市場波動，這些衍生品交易在第四季度繼續增加，這對我們的混合佣金率也有積極的好處。

And in terms of the contribution in the fourth quarter derivatives, commissions roughly account for 1/3 of our total commission, maintaining a relatively high level in our history. But as I mentioned in last earnings call, we do not set any top -- specific targets for our derivative products. Instead, what we focus will be more on the investment education side, and also further enhance our product itself. For instance, this year, we will gradually roll out our U.S. option portfolio or the functions to attract more of these professional derivative traders. And we are not inclined to push or hard sell these derivative products to these clients with low risk appetite.

而從第四季度衍生品的貢獻來看，佣金約占我們總佣金的1/3，保持了歷史上較高的水平。但正如我在上次財報電話會議中提到的那樣，我們沒有為我們的衍生產品設定任何最高的具體目標。相反，我們的重點將更多地放在投資教育方面，並進一步提升我們的產品本身。比如今年，我們會逐步推出美股期權組合或者功能，吸引更多的專業衍生品交易員。而且我們不傾向於向這些風險偏好較低的客戶推銷或硬推銷這些衍生產品。

The second question regarding the interest income, it is very difficult to quantify how much idle cash we can utilize, but it depends on the market volatility, but I can give you some general range, say, in our history, the idle cash percentage-wise accounts for roughly 20% to 10% of our total client assets, different markets -- depend different market conditions. For instance, in the fourth quarter, or even in the whole last year because the market was very -- not very good. Actually, our clients' idle cash position, percentage-wise, it was relatively higher. I think looking forward this year, the interest income will continue to grow on a year-on-year basis, mainly benefiting from the high interest rate environment. And for the deployment usage, actually, we do not have a lot of choice. The reason is, according to the SFC regulations, we can only put clients' idle cash into the bank deposits to the commercial banks with the duration of less than 6 months.

第二個問題，關於利息收入，我們可以動用多少閒置現金是很難量化的，這取決於市場波動，但我可以給你一個大概的範圍，比如說，在我們的歷史上，閒置現金百分比- wise 大約占我們客戶總資產的 20% 到 10%，不同的市場——取決於不同的市場條件。例如，在第四季度，甚至去年全年，因為市場非常——不是很好。實際上，我們客戶的閒置現金頭寸百分比相對較高。我認為展望今年，利息收入將繼續同比增長，主要受益於高利率環境。而對於部署用途，實際上，我們沒有太多選擇。原因是，根據證監會的規定，我們只能將客戶的閒置現金存入商業銀行的銀行存款中，期限不超過6個月。

Our next question comes from the line of Cindy Wang from China Renaissance.

我們的下一個問題來自華興資本的Cindy Wang。

(foreign language) So I have two questions. First question is related to the U.S. market. So in fourth quarter, the average net asset inflow of new paying clients for their first month of onboarding to increase by 40% quarter-over-quarter. So what's the U.S. client acquisition strategy in fourth quarter to help the new asset inflow increase? And do you have any expectation in terms of net asset inflow and the number of new paying clients contribution in U.S. in 2023. So the second question is related to customer acquisition costs. So in fourth quarter, the CAC was (inaudible) down 11% quarter-over-quarter. Can you kind of give us the recent declines? And if this trend will be sustained in the first quarter of 2023? And how do we see the full year?

（外語）所以我有兩個問題。第一個問題與美國市場有關。因此，在第四季度，新付費客戶入職第一個月的平均淨資產流入環比增長 40%。那麼第四季度美國客戶獲取策略如何幫助新資產流入增加？您對2023年美國的淨資產流入和新付費客戶貢獻數量有何預期。所以第二個問題與客戶獲取成本有關。因此，在第四季度，CAC（聽不清）環比下降 11%。你能告訴我們最近的跌幅嗎？而這種趨勢是否會在 2023 年第一季度持續？我們如何看待全年？

I will take your second question first. I'll leave the first question to Leaf to answer. For the CAC in the fourth quarter, actually, we further optimized our channel distributions in Hong Kong and also in overseas markets. We adjust certain incentives to our clients on a dynamic basis not only just focus on the speed of our clients, but also, more importantly, on the quality of our clients. Going forward, I think it is still very difficult to predict 2023 situations. I think our base case will be the CAC largely will be the same as 2022.

我先回答你的第二個問題。第一個問題我會留給葉子來回答。對於第四季度的CAC，實際上我們進一步優化了我們在香港和海外市場的渠道佈局。我們動態地調整對客戶的某些激勵措施，不僅關注客戶的速度，更重要的是客戶的質量。展望未來，我認為預測 2023 年的情況仍然非常困難。我認為我們的基本情況是 CAC 在很大程度上與 2022 年相同。

(foreign language)

（外語）

[Interpreted] In acquisition in the U.S. in Q4 slowed down on a sequential basis. On one hand, market sentiment remained weak, which affected clients' willingness to enter the market. And on the other hand, we deliberately slowed down client acquisition to focus on improving client quality. And as mentioned, the first month average net asset inflows from our new paying clients in the U.S. increased by around 40%, mainly because we focused on attracting client assets and adjusted the reward threshold. And in the first quarter this year, we already launched multi-leg options for U.S. docs and we plan to add and improve advanced derivative products and functions, such as index options this year. And going forward, we'll continue to enhance our product capabilities and gradually improve our product portfolio centered on U.S. docs and U.S. derivatives to enhance our competitiveness in the local market, while also controlling client acquisition cost and focusing on improving client quality.

[解讀] 第四季度在美國的收購環比放緩。一方面，市場情緒依然疲軟，影響了客戶的入市意願。另一方面，我們故意放慢了客戶獲取的速度，以專注於提高客戶質量。如前所述，我們在美國的新付費客戶第一個月的平均淨資產流入量增長了 40% 左右，主要是因為我們專注於吸引客戶資產並調整了獎勵門檻。而在今年一季度，我們已經推出了美單多邊期權，併計劃在今年增加和完善先進的衍生產品和功能，比如指數期權。未來，我們將繼續提升產品能力，逐步完善以美國單據和美國衍生品為核心的產品組合，提昇在當地市場的競爭力，同時控制獲客成本，著力提升客戶質量。

And regarding the guidance, we now have no guidance for the U.S. clients or asset inflow growth in 2023.

關於指導，我們現在沒有針對 2023 年美國客戶或資產流入增長的指導。

Our next question comes from Frank Zheng from Credit Suisse.

我們的下一個問題來自瑞士信貸的 Frank Zheng。

(foreign language) This is Frank Zheng from Credit Suisse. I have two questions. The first one is on new market entries. What is the latest progress in the timetable? Is the services in Japan already online? The second question is related to interest rates. Fourth quarter interest expense surged quarter-on-quarter. We would like to understand, in general, when interest rate is in an up cycle, with the interest rate spread of margin finance and secure lending business be affected, considering that the fee rate income is relatively fixed, but the fee rate expenses could elevate.

（外語）我是瑞士信貸的Frank Zheng。我有兩個問題。第一個是關於新的市場進入。時間表的最新進展是什麼？日本的服務已經上線了嗎？第二個問題與利率有關。第四季度利息支出環比激增。我們想了解，一般而言，當利率處於上行週期時，考慮到手續費收入相對固定，但手續費支出可能會增加，融資融券和擔保貸款業務的利差會受到影響.

Frank, I will take both of your questions. Number one, in terms of the new market expansion, I think you're right, we do have some new markets in our pipelines. In the base case, we are looking for to expand two new markets, both are in Asia this year. I think, though, in terms of total addressable market for these two potential markets, will be very meaningful. But in terms of the exact timeline, it is still very difficult to predict nowadays given we're still waiting for the regulators' confirmations for our license approval. Hopefully, we will give you some update more and more color in the coming quarters.

弗蘭克，我會回答你的兩個問題。第一，就新市場擴張而言，我認為你是對的，我們確實有一些新市場正在籌備中。在基本情況下，我們正在尋求擴展兩個新市場，今年都在亞洲。不過，我認為，就這兩個潛在市場的總潛在市場而言，將非常有意義。但就確切的時間表而言，鑑於我們仍在等待監管機構對我們的許可批准的確認，現在仍然很難預測。希望我們能在接下來的幾個季度為您提供越來越多的顏色更新。

Second, regarding the interest expenses, I think in theoretically speaking, the spread will be narrowed a little bit given that our pricing strategy on the margin financing is fixed rate. But on the funding cost side, it will be impacted from the high interest rate environment, but thanks to our U.S. sales clearing capabilities and also a very strong balance sheet. If you look at our total equity base, you can see actually, a lot of margin financing, the funding source came from our own money. So therefore, I think the pressures from the funding cost is still manageable in 2023.

第二，關於利息支出，我認為理論上講，考慮到我們在融資融券上的定價策略是固定利率，利差會收窄一點。但在融資成本方面，它會受到高利率環境的影響，但這要歸功於我們在美國的銷售清算能力以及非常強大的資產負債表。如果你看看我們的總股本基礎，你會發現實際上有很多保證金融資，資金來源來自我們自己的錢。因此，我認為資金成本的壓力在 2023 年仍然是可控的。

Our next question comes from Leon Qi from Daiwa.

我們的下一個問題來自 Daiwa 的 Leon Qi。

(foreign language) This is Leon Qi from Daiwa. Two questions today. Firstly is regarding Hong Kong business. We noticed that recently, Futu has been carrying out more and more offline services. I appreciate if management can give us any color on how should we think about our offline business strategy in Hong Kong? Does that help us in terms of increasing the customer wallet share in AUM? And second question is regarding your latest plans for Hong Kong listing.

（外語）我是 Daiwa 的 Leon Qi。今天有兩個問題。首先是關於香港業務。我們注意到，最近富途的線下服務越來越多。如果管理層能告訴我們應該如何考慮我們在香港的線下業務戰略，我將不勝感激？這是否有助於我們增加 AUM 中的客戶錢包份額？第二個問題是關於香港上市的最新計劃。

I will take your second question first, and I will leave the first question to Leaf to answer. There is no any confirmed timelines for our Hong Kong IPO listing nowadays. I think the top priority for the management this year is to fully cooperate and collaborate with the Mainland regulators to complete our inspection as soon as possible. So this is our top priority, and we will further assess the fee abilities of our Hong Kong IPO listing later, depending on the market conditions and also depending our use of proceeds.

我先回答你的第二個問題，第一個問題留給Leaf來回答。目前我們的香港 IPO 上市沒有任何確定的時間表。我認為管理層今年的首要任務是與內地監管機構充分配合和配合，盡快完成我們的檢查。所以這是我們的首要任務，我們稍後會根據市場情況以及我們對所得款項的用途，進一步評估我們在香港 IPO 上市的費用能力。

(foreign language)

（外語）

[Interpreted] So in Hong Kong, Futu has higher penetration rate among the younger generations than the middle age groups. And we hope to better serve the middle age groups of clients. And compared with the younger generations on our platform, we see that the middle age groups are generally less tech savvy and have longer conversion cycles. As such, we carried out offline account opening services in Hong Kong as face-to-face communication can shorten the conversion cycle of these clients. And we also plan to reach potential clients through multiple touch points, including offline campaigns, cooperation with KOLs, et cetera, so as to improve the quantity and the quality of the clients acquired.

[解讀] 所以在香港，富途在年輕一代的滲透率要高於中年人群。我們希望更好地服務於中年客戶群體。與我們平台上的年輕一代相比，我們看到中年群體普遍對技術的了解程度較低，轉化週期較長。因此，我們在香港開展線下開戶服務，因為面對面的溝通可以縮短這些客戶的轉換週期。並且我們還計劃通過線下活動、與KOL的合作等多種接觸點觸達潛在客戶，以提高獲客的數量和質量。

(Operator Instructions) Our next question comes from the line of Katherine Lei from JPMorgan.

（操作員說明）我們的下一個問題來自摩根大通的 Katherine Lei。

Sorry, this is Peter asking question on behalf of Katherine. (foreign language) So let me do the translation. So we understood that there is a CSRC announcement on tightening of the offshore brokers. And we wish to understand what's the impact on Futu's business operation, in particular, does Futu see any current AUM outflow fall in the CSRC announcement last December?

抱歉，我是彼得代表凱瑟琳提問。 （外語）所以讓我來翻譯吧。所以我們了解到證監會發布了收緊離岸券商的公告。而我們想了解一下對富途的經營有什麼影響，尤其是富途在去年12月的證監會公告中是否看到當前的AUM流出量下降？

Let me answer your question. First of all, I'll give you some general color about our client's movement following the end of last year's news flow. We do witness some our Hong Kong clients because of the -- there are some sentiment concerns, there are some client outflows in -- particularly in the first half of January. But I think the overall amount is quite manageable. Roughly, I think the net outflow at the time accounts for roughly 1% to 2% of our total client assets, which, compared with the situation we faced and at the end of 2021, we think the situation was manageable.

讓我回答你的問題。首先，我會給你一些關於我們客戶在去年新聞流結束後的動向的一般色彩。我們確實見證了一些香港客戶，因為 - 存在一些情緒擔憂，有一些客戶外流 - 特別是在 1 月上半月。但我認為總體金額是可以控制的。粗略地說，我認為當時的淨流出量大約占我們客戶總資產的 1% 到 2%，與我們面臨的情況和 2021 年底相比，我們認為情況是可控的。

And the net outflow conditional situation gradually reversed starting from February. And nowadays, we record daily asset inflows.

而淨流出有條件的局面從2月份開始逐漸扭轉。而如今，我們記錄每日資產流入。

Secondly, regarding the CSRC's news at the end of last year, I think we -- number one, we fully accept the regulator's point of view, and we have a full cooperation with the regulators. On a net-to-net basis, we do think it will be healthy for the industry's long-term growth. And also, if you follow you, there are some clarities from the CSRC spokesperson in the middle of February, mentioning how to deal with the existing clients. They ask for orderly deal with the existing clients. It will be an industry-wide situation. So we will take a very constructive manners to cooperate with the regulators in this regard.

其次，關於證監會去年底的消息，我覺得我們——第一，我們完全接受監管的觀點，我們和監管有充分的合作。在淨值對淨值的基礎上，我們確實認為這對行業的長期增長是健康的。而且，如果你關注你，證監會發言人在 2 月中旬有一些澄清，提到如何與現有客戶打交道。他們要求與現有客戶進行有序的交易。這將是整個行業的情況。因此，我們將在這方面以非常有建設性的方式與監管機構合作。

(Operator Instructions) I'm showing no further questions. Thank you very much for all your questions. I'll now turn the conference back to Daniel for closing remarks.

（操作員說明）我沒有進一步提問。非常感謝您提出的所有問題。我現在將會議轉回 Daniel 作閉幕詞。

Thank you, operator. And that concludes our call today. On behalf of the Futu management team, I would like to thank you for joining us today. If you have any further questions, please do not hesitate to contact me or any of our Investor Relations representatives. Thank you, and goodbye.

謝謝你，運營商。我們今天的電話會議到此結束。我代表富途管理團隊，感謝您今天加入我們。如果您有任何其他問題，請隨時與我或我們的任何投資者關係代表聯繫。謝謝，再見。

Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.

謝謝。今天的電話會議到此結束。感謝您的參與。您現在可以斷開連接。

[Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]

[此記錄中標記為 [已翻譯] 的部分由現場通話中的口譯員說出。]