富途控股 (FUTU) 2023 Q1 法說會逐字稿

Hello, ladies and gentlemen. Welcome to Futu Holdings First Quarter 2023 Earnings Conference Call. (Operator Instructions) Today's conference call is being recorded. If you have any objections, you may disconnect at this time.

女士們，先生們，您好。歡迎來到富途控股 2023 年第一季度收益電話會議。 （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。

I would 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.

現在，我想將會議轉交給今天的電話會議主持人 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 first quarter 2023 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 2023 年第一季度的收益結果。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，代表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 annual report on Form 20-F.

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 20-F 表格年度報告。

With that, I'll now turn the call over to Leaf. Leaf will make his comments in Chinese, and I will translate.

有了這個，我現在將電話轉給 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 today. As of quarter end, our paying clients surpassed 1.5 million, representing 15% growth year-over-year. Based on paying client growth in the first 5 months of the year, we expect to add 150,000 paying clients in 2023.

[已翻譯] 感謝大家今天的加入。截至本季度末，我們的付費客戶超過 150 萬，同比增長 15%。根據今年前 5 個月的付費客戶增長，我們預計 2023 年將增加 150,000 名付費客戶。

In the first quarter, Hong Kong market contributed over 1/3 of paying client growth as client acquisition accelerated on the back of the rally of China technology in January. We also witnessed resilient paying client growth in Singapore as we continue to strengthen our brand awareness through off-line events and promoted demand for lower-risk fund products through investor education.

在第一季度，香港市場貢獻了超過 1/3 的付費客戶增長，這是因為在 1 月份中國科技股上漲的推動下，客戶獲取速度加快。隨著我們繼續通過線下活動加強我們的品牌知名度，並通過投資者教育促進對低風險基金產品的需求，我們還見證了新加坡付費客戶的強勁增長。

(foreign language)

（外語）

[Interpreted] We continue to broaden our trading product offerings and upgrade trading features in various markets. We became the only broker in Hong Kong that allows clients to trade certain U.S. stocks and ETFs 24 hours a day, 5 days a week thereby enhancing the flexibility and accessibility of the U.S. stock trading.

[解讀]我們繼續擴大我們的交易產品範圍併升級各個市場的交易功能。我們成為香港唯一允許客戶每週 5 天、每天 24 小時交易特定美國股票和 ETF 的經紀商，從而提高了美國股票交易的靈活性和可及性。

We also launched leveraged foreign exchange trading in Singapore, where clients can trade 36 major currency pairs on margin to take advantage of volatility in the foreign exchange market.

我們還在新加坡推出了槓桿式外匯交易，客戶可以利用保證金交易 36 種主要貨幣對，以利用外匯市場的波動性。

In the U.S., we've rolled out multi-leg options strategy orders for U.S. stocks. This advanced trading functions, streamlines clients' trading experience and will attract more sophisticated options traders to our platform.

在美國，我們推出了美股多邊期權策略訂單。這種先進的交易功能簡化了客戶的交易體驗，並將吸引更多經驗豐富的期權交易者使用我們的平台。

Despite market weakness and headline regulatory news, our expanding product suite and premier user experience led to another quarter of over 98% paying client retention rate.

儘管市場疲軟和頭條監管新聞，但我們不斷擴大的產品套件和一流的用戶體驗導致另外四分之一的付費客戶保留率超過 98%。

(foreign language)

（外語）

[Interpreted] Total client assets increased by 21% year-over-year and 12% quarter-over-quarter to HKD 466 billion due to higher mark-to-market value of client stock holdings and net asset inflow.

[解讀] 客戶總資產同比增長 21%，環比增長 12% 至 4,660 億港元，原因是客戶持股按市值計價和淨資產流入增加。

In Singapore, total client assets and average client assets increased by 28% and 22% sequentially, attributable to solid net asset inflow across client cohorts and favorable U.S. equity market performance.

在新加坡，客戶總資產和平均客戶資產環比增長 28% 和 22%，這歸因於客戶群體的穩健淨資產流入和有利的美國股市表現。

In the first quarter, we attracted high-quality clients in Singapore that continue to deposit funds into their trading accounts. For clients we acquired in January, for example, their average asset balance almost tripled by March.

第一季度，我們在新加坡吸引了優質客戶，他們繼續將資金存入他們的交易賬戶。例如，對於我們在 1 月份收購的客戶，他們的平均資產餘額到 3 月份幾乎翻了三倍。

(foreign language)

（外語）

[Interpreted] Margin financing and securities lending balance was up by 30% sequentially to reach HKD 35 billion driven by elevated activities around technology stock. Total trading volume was HKD 1.2 trillion, up 12% quarter-over-quarter. U.S. stock trading volume grew by 23% sequentially to HKD 828 billion mainly due to higher trading turnover of U.S. technology names, many of which handsomely outperformed the market during the quarter.

[解讀] 由於圍繞科技股的活動增加，保證金融資和證券借貸餘額環比增長 30%，達到 350 億港元。總成交額為 1.2 萬億港元，環比上升 12%。美國股票交易量環比增長 23% 至 8,280 億港元，這主要是由於美國科技公司的交易額增加，其中許多公司在本季度的表現都好於市場。

Hong Kong stock trading volume was HKD 372 billion, down 6% sequentially as investor sentiments were dragged by the equity market correction in February and March.

由於 2 月和 3 月股市調整拖累投資者情緒，港股成交量為 3,720 億港元，環比下跌 6%。

(foreign language)

（外語）

[Interpreted] Wealth Management business recorded another quarter of strong growth, with total client assets climbing to HKD 37 billion, up 77% year-over-year and 17% quarter-over-quarter.

[解讀] 財富管理業務再創季度強勁增長，客戶總資產攀升至370億港元，同比增長77%，環比增長17%。

In Singapore, elevated interest around money market funds led to a 69% sequential increase in total client assets. We also expanded our product offerings by introducing bond trading. As of quarter end, 15% of our paying clients in Singapore held wealth management products, up from 1% in the year ago quarter.

在新加坡，對貨幣市場基金的興趣增加導致客戶資產總額環比增長 69%。我們還通過引入債券交易擴大了我們的產品範圍。截至本季度末，我們在新加坡的付費客戶中有 15% 持有理財產品，高於去年同期的 1%。

In Hong Kong, we bolstered our structured product offering by launching fixed coupon notes and digital notes. These products gained traction among our high-net worth clients and structured product asset balance as a result grew by fivefold quarter-over-quarter.

在香港，我們通過推出固定息票和數字票據來加強我們的結構性產品供應。這些產品在我們的高淨值客戶和結構性產品資產餘額中獲得了吸引力，因此環比增長了五倍。

(foreign language)

（外語）

[Interpreted] We have 353 IPO distribution and IR clients as well as 662 ESOP clients as of quarter end, up 37% and 44% year-over-year, respectively. We acted as joint lead managers for several high-profile Hong Kong IPOs, including those of Beauty Farm Medical and Health Industry and YH Entertainment Group.

[解讀]截至本季度末，我們擁有 353 家 IPO 分銷和 IR 客戶以及 662 家 ESOP 客戶，同比分別增長 37% 和 44%。我們曾擔任多個備受矚目的香港首次公開招股的聯席牽頭經辦人，其中包括美麗農場醫療健康產業和永輝娛樂集團。

In the first quarter, we underwrote 9 Hong Kong IPOs and ranked first among all brokers according to Mint.

第一季度，我們承銷了 9 筆香港 IPO，根據 Mint 的數據，在所有券商中排名第一。

(foreign language)

（外語）

[Interpreted] I am pleased to announce that our wholly-owned Malaysia subsidiary has received the approval-in-principle for the Capital Markets Services License from the Securities Commission Malaysia. We look forward to tapping into the immense market opportunity in Malaysia and further strengthening our presence in the Southeast Asian market.

[解讀] 我很高興地宣布，我們的全資馬來西亞子公司已獲得馬來西亞證券委員會的資本市場服務許可證原則性批准。我們期待把握馬來西亞巨大的市場機遇，進一步加強我們在東南亞市場的影響力。

(foreign language)

（外語）

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

[解讀] 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。

Thanks, Leaf and Daniel. Now please allow me to walk you through our financial performance in the first quarter. All numbers are in Hong Kong dollar unless otherwise noted.

謝謝，利夫和丹尼爾。現在請允許我向您介紹我們第一季度的財務業績。除非另有說明，否則所有數字均以港元為單位。

Total revenue were HKD 2.5 billion, up 52% from HKD 1.6 billion in the first quarter of 2022.

總收入為25億港元，較2022年第一季度的16億港元增長52%。

Brokerage commission and handling charge income was HKD 1.1 billion, an increase of 12% year-over-year and 3% Q-over-Q. The year-over-year increase was mainly driven by a higher blended commission rate of 8.8 basis points. The Q-over-Q increase was primarily attributable to higher U.S. stock trading volume.

經紀佣金及手續費收入為11億港元，同比增長12%，環比增長3%。同比增長的主要原因是混合佣金率提高了 8.8 個基點。環比增長主要歸因於美國股票交易量增加。

Interest income was HKD 1.3 billion, an increase of 125% year-over-year and 14% Q-over-Q. The increase was driven by higher interest income on cash deposits and higher security lending income.

利息收入為港幣 13 億元，按年增加 125%，按季增加 14%。增加的原因是現金存款利息收入增加和證券貸款收入增加。

Other income was HKD 126 million, up 29% year-over-year and 34% Q-over-Q. The year-over-year and Q-over-Q increase was both driven by higher fund distribution income.

其他收入為 1.26 億港元，同比增長 29%，環比增長 34%。同比和環比增長均由更高的基金分配收入推動。

Our total cost was HKD 291 million, an increase of 28% from HKD 228 million in the first quarter of 2022.

我們的總成本為 2.91 億港元，比 2022 年第一季度的 2.28 億港元增長 28%。

Brokerage commission and handling charge expenses were HKD 72 million, down 25% year-over-year and up 13% Q-over-Q. The expenses didn't move in tandem with our brokerage commission and handling charge income mainly due to cost savings from our U.S. self-clearing business.

經紀佣金及手續費支出為0.72億港元，同比下降25%，環比上升13%。這些費用沒有與我們的經紀佣金和手續費收入同步移動，這主要是由於我們的美國自助清算業務節省了成本。

Interest expenses was HKD 131 million, up 234% year-over-year and down 28% Q-over-Q. The year-over-year increase and the Q-over-Q decrease were both driven by interest expenses associated with our securities lending business.

利息支出為 1.31 億港元，同比增長 234%，環比下降 28%。同比增長和環比下降均由與我們的證券借貸業務相關的利息支出推動。

Processing and the servicing cost was HKD 88 million, down 5% year-over-year and 9% Q-over-Q. The year-over-year decrease was mainly due to lower cloud service fee as a result of system optimization. The Q-over-Q decrease was mainly due to lower market information fee and the data transmission fee.

加工及服務成本為 8800 萬港元，同比下降 5%，環比下降 9%。同比下降主要是由於系統優化帶來的雲服務費用降低。環比下降主要是由於市場信息費和數據傳輸費較低。

As a result, total gross profit was HKD 2.2 billion, an increase of 55% -- 56% from HKD 1.4 billion in the first quarter of 2022. Gross margin was 88% as compared to 86% in the first quarter of 2022.

因此，毛利總額為 22 億港元，較 2022 年第一季度的 14 億港元增長 55% 至 56%。毛利率為 88%，而 2022 年第一季度為 86%。

Operating expenses were up 7% year-over-year and down 2% Q-over-Q to HKD 804 million.

經營費用同比增長 7%，環比下降 2% 至 8.04 億港元。

R&D expenses were HKD 355 million, up 26% year-over-year and 6% Q-over-Q. The increase was mainly due to increase in R&D headcount as we continue to support new product offering and invest in product localization in new international markets.

研發費用為3.55億港元，同比增長26%，環比增長6%。這一增長主要是由於研發人員增加，因為我們繼續支持新產品供應並投資於新國際市場的產品本地化。

Selling and marketing expenses was HKD 141 million, down 51% year-over-year and 8% Q-over-Q. Expenses declined due to decelerating client acquisitions amid weak market sentiments.

營銷費用為 1.41 億港元，同比下降 51%，環比下降 8%。由於市場情緒疲軟，客戶收購速度放緩，導致費用下降。

G&A expenses was HKD 308 million, up 73% year-over-year and down 7% Q-over-Q. The rise was primarily due to the increase in headcount for general and administrative personnel to support our international business. The expenses declined Q-over-Q as we recorded one-off professional service fee for our proposed Hong Kong listing last quarter.

G&A 費用為 3.08 億港元，同比增長 73%，環比下降 7%。這一增長主要是由於為支持我們的國際業務而增加的一般和行政人員人數。由於我們在上個季度為擬議的香港上市記錄了一次性專業服務費，因此費用環比下降。

As a result, our net income increased by 108% year-over-year and 24% Q-over-Q to HKD 1.2 billion. Net income margin expanded to 48% from 35% in the same quarter last year, mainly due to strong revenue growth and the lower marketing spending.

因此，我們的淨收入同比增長 108%，環比增長 24%，達到 12 億港元。淨利潤率從去年同期的 35% 擴大到 48%，這主要是由於收入增長強勁和營銷支出減少。

That concludes our prepared remarks. We now like to open the call for questions. Operator, please go ahead.

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) Thank You. We'll now take our first question. (Operator Instructions) We now have the first question ready, and this is from the line of Chiyao Huang from Morgan Stanley.

（操作員說明）謝謝。我們現在開始第一個問題。 （操作員說明）我們現在準備好了第一個問題，這是來自摩根士丹利的 Chiyao Huang。

(foreign language) So my first question is around the overseas expansion. We have been seeing very encouraging progress in Singapore in the first quarter. So wonder if management could give more color on the U.S. and Australia market development? And also regarding the new entrance in Malaysia market, any plans and also localization in that market, that will be greatly appreciated.

（外語）所以我的第一個問題是關於海外擴張。我們在第一季度看到新加坡取得了非常令人鼓舞的進展。那麼想知道管理層是否可以對美國和澳大利亞市場的發展給予更多的色彩？還有關於馬來西亞市場的新入口，任何計劃以及在該市場的本地化，我們將不勝感激。

And second question is around your latest regulatory change with the removal of the Futu app from the onshore app stores. And just wondering how would that impact the existing onshore users, their experience? And how is the company's plan to continue to provide high-quality service to those existing clients? And maybe longer term, how do management think about the existing TAM? Do TAM of existing onshore clients would change going forward? And also, how would the competition change going forward?

第二個問題是關於您最近從境內應用商店中刪除 Futu 應用程序的監管變化。只是想知道這將如何影響現有的陸上用戶及其體驗？公司計劃如何繼續為這些現有客戶提供高質量的服務？也許從長遠來看，管理層如何看待現有的 TAM？現有在岸客戶的 TAM 未來會發生變化嗎？而且，未來的競爭將如何變化？

Thank you, Chiyao. I think the first question Daniel and Robin can give you some colors about our first quarter achievements in Australia and in the U.S., also our ambition plans for entering to Malaysia potentially in the second half of this year.

謝謝你，千瑤。我認為第一個問題 Daniel 和 Robin 可以為您介紹我們第一季度在澳大利亞和美國取得的成就，以及我們可能在今年下半年進入馬來西亞的雄心計劃。

For your second question about CSRC, the Mainland regulation implications, I think Leaf will give you some more colors in terms of the implications for our existing users. I can just supplement some initial data in the past week, which we observed. Hopefully, it will be helpful to you.

關於你的第二個關於中國證監會的問題，大陸監管的影響，我想 Leaf 會在對我們現有用戶的影響方面給你更多的顏色。我可以補充一些我們觀察到的過去一周的初步數據。希望對您有所幫助。

(foreign language)

（外語）

(foreign language)

（外語）

[Interpreted] So for Malaysia, we just received the approval-in-principle for the Capital Markets License from the Securities Commission Malaysia. And next, we'll start building local team and work on product and research and development. So far, we haven't decided date for the official launch in Malaysia, and we'll update the market when we have more information.

[解釋] 因此，對於馬來西亞，我們剛剛收到了馬來西亞證券委員會對資本市場許可證的原則性批准。接下來，我們將開始建立本地團隊並致力於產品和研發。到目前為止，我們還沒有確定在馬來西亞正式推出的日期，我們會在有更多信息時更新市場。

And in terms of the U.S. market, our growth in U.S. slowed down during the first quarter, primarily because we were mapping out and optimizing our localization strategy with a focus on improving client quality. And we started to offer the U.S. multi-leg options trading function in the first quarter, and we plan to launch advanced function and products such as bracket orders this year while continuing to strengthen the core product capabilities around U.S. stocks and derivatives trading. In the future, we'll also offer tailored investor education content and activities to enhance brand awareness, attract clients through superior product offerings and improve client quality.

在美國市場方面，第一季度我們在美國的增長放緩，主要是因為我們正在製定和優化我們的本地化戰略，重點是提高客戶質量。並且我們在第一季度開始提供美股多邊期權交易功能，我們計劃在今年推出括號定單等高級功能和產品，同時繼續加強圍繞美股和衍生品交易的核心產品能力。未來，我們還將提供量身定制的投資者教育內容和活動，以提升品牌知名度，通過優質產品吸引客戶，提高客戶質量。

And for the Australian market, in the first quarter, our client acquisition of Australia has increased and after more than a year of brand building, our branding awareness in Australia continued to improve. And based on our market research and -- owning on our target client profile and have adopted different methods to cultivate brand awareness and acquire clients of different backgrounds. We plan to continue to launch product functions and develop deeper customer insights in Australia.

而對於澳大利亞市場，第一季度，我們在澳大利亞的客戶獲取有所增加，經過一年多的品牌建設，我們在澳大利亞的品牌知名度不斷提高。並根據我們的市場研究和 - 擁有我們的目標客戶資料，並採用不同的方法來培養品牌知名度並獲得不同背景的客戶。我們計劃繼續推出產品功能，並在澳大利亞開發更深入的客戶洞察。

(foreign language)

（外語）

[Interpreted] So based on CSRC's announcement on December 13 and the statements made on February 15 in response to questions from reporters, the existing clients' trading will not be affected and the existing clients can continue to trade through their existing offline financial institutions. And for these existing clients to deposit more funds, it is allowed as long as they satisfy the requirements from SAFE. And currently, for our existing clients, all of their trading activities and some deposit activities are as usual.

【解讀】因此，根據中國證監會12月13日的公告和2月15日就記者提問作出的回應，存量客戶的交易不會受到影響，存量客戶可以繼續通過現有的線下金融機構進行交易。而這些存量客戶存入更多的資金，只要滿足外管局的要求是可以的。目前，對於我們現有的客戶，他們的所有交易活動和一些存款活動都照常進行。

And besides, the regulators further clarified that existing clients are defined as clients that already have trading accounts with offshore brokers. So for Mainland Chinese clients that have opened trading accounts with other Hong Kong brokers, we're allowed to open accounts for them. And the fund deposits and stock transfer from other brokers to us are also allowed by the regulators.

此外，監管機構進一步明確，現有客戶是指已經在離岸經紀商開立交易賬戶的客戶。因此，對於在其他香港經紀商處開立交易賬戶的中國大陸客戶，我們可以為他們開立賬戶。其他券商向我們存入資金和轉入我們的股票也是監管機構允許的。

And in terms of our app upgrades, we have issued guidances on our website and our app to guide clients on how to timely upgrade the app to the latest version. And we think our current services to the existing clients are not jeopardized. And if they have questions during the upgrade, they can call our customer service line and ask questions through the app at any time and we resolve client requests very timely.

在我們的應用升級方面，我們在我們的網站和我們的應用上發布了指南，指導客戶如何及時將應用升級到最新版本。我們認為我們目前為現有客戶提供的服務不會受到損害。並且如果他們在升級過程中有任何問題，可以隨時撥打我們的客服專線，通過APP提出問題，我們會非常及時地解決客戶的問題。

Yes. And also I want to supplement, if I may, some initial observations since we published an announcement to remove our app from the metric Apple stores last Tuesday. We're very delighted that it seems that our existing China client population are very prompt about this headline news. We do not see any meaningful abnormal churn rates and also the client net asset outflows in the past week.

是的。如果可以的話，我還想補充一些自上週二我們發佈公告將我們的應用程序從指標 Apple 商店中刪除以來的初步觀察。我們感到非常高興的是，我們現有的中國客戶群體似乎對這一頭條新聞非常及時。在過去一周，我們沒有看到任何有意義的異常流失率和客戶淨資產流出。

Thank you. We'll now take our next question. This is from the line of Cindy Wang from China Renaissance.

謝謝。我們現在開始下一個問題。這是來自 China Renaissance 的 Cindy Wang 的產品線。

(foreign language) So I have question -- two questions. First question is related to commission rate. So the commission rate has slightly down sequentially. So may I know what the reason behind it? Is that because of the U.S. stock refund impacted or the lower derivative trading in the first quarter?

（外語）所以我有兩個問題。第一個問題與佣金率有關。因此佣金率環比略有下降。那麼我可以知道背後的原因是什麼嗎？是因為美股退款受影響還是一季度衍生品交易量減少？

The second question is since we've seen the news about that Futu is going to open the first shop in Hong Kong, could management let us know what kind of services the shop will provide? And could investors open trading accounts through the shop in the future?

第二個問題，既然看到了富途即將在香港開第一家店的消息，請問管理層可否告知，這家店會提供什麼樣的服務？未來投資者是否可以通過商城開立交易賬戶？

Thank you, Cindy. I will take the first question. And for the second question, Leaf will answer. In terms of commission rate, you are right. I think the fluctuation is due to the 2 reasons you both mentioned. Number one is primarily due to the U.S. stock trading pattern as we elaborate to the market several times. It is more due to the U.S. market rebound, especially for these tech names -- big tech names in the first quarter. I think going forward, they are -- we do not feel any strong competition in terms of pricing in Hong Kong and in other markets. Of course, there will be some natural fluctuations from a quarter-to-quarter perspective due to the U.S. stock trading pattern.

謝謝你，辛迪。我先回答第一個問題。而對於第二個問題，Leaf 會回答。就佣金率而言，你是對的。我認為波動是由於你們都提到的兩個原因造成的。第一個主要是由於我們多次向市場闡述的美國股票交易模式。這更多是由於美國市場的反彈，尤其是對於這些科技公司——第一季度的大型科技公司。我認為展望未來，他們是——我們認為在香港和其他市場的定價方面沒有任何激烈的競爭。當然，由於美股交易格局的原因，從季度來看會有一些自然波動。

And also in the second quarter, so far, given the market is trading in a very narrow range bond, so what we see, the clients' activities on the derivative side, especially on the option and the future, start to be decreased on a Q-on-Q level. So this will have some implications in the second quarter blended commissions.

而且在第二季度，到目前為止，鑑於市場在非常窄的範圍內交易債券，所以我們看到，客戶在衍生品方面的活動，特別是在期權和期貨方面的活動，開始減少Q-on-Q 水平。因此，這將對第二季度的混合佣金產生一些影響。

I hand over to Leaf for your second question.

我將您的第二個問題交給 Leaf。

(foreign language)

（外語）

[Interpreted] We actually have plans to open off-line stores for a while, and we have been preparing for it. I think recently, we're going through renovations of the off-line stores. So probably logo attracted media attention. And the reason we opened this off-line store was actually drawing inspirations from Apple's off-line store. I think the store will help our potential clients better experience our products and services. And also, we can answer a lot of your questions face-to-face. As we continue to increase our client penetration in Hong Kong, I think the store will help us reach the clients that we're not able to reach through online channels and further expand our client acquisition channel. Thank you.

【解讀】我們其實有一段時間開線下店的打算，一直在做準備。我想最近，我們正在對線下商店進行裝修。所以可能標誌引起了媒體的關注。而我們之所以開這家線下店，其實就是從蘋果的線下店中汲取靈感。我認為商店將幫助我們的潛在客戶更好地體驗我們的產品和服務。而且，我們可以面對面地回答您的許多問題。隨著我們繼續增加我們在香港的客戶滲透率，我認為這家商店將幫助我們接觸到我們無法通過在線渠道接觸到的客戶，並進一步擴大我們的客戶獲取渠道。謝謝。

Thank you. And we'll now take our next question. This is from the line of Zoey Zong from Jefferies.

謝謝。我們現在開始下一個問題。這是來自 Jefferies 的 Zoey Zong 系列。

(foreign language) Congratulations on the solid results, and I have 2 questions. So first, could you please provide some color about our user acquisition strategy this year? We have noted that in Q1 our sales and marketing expenses and customer acquisition costs both declined sequentially. Recently, we have seen company's promotion in Hong Kong. So just wondering what's our user acquisition target and the cost in Q2 full year and the longer term?

（外語）恭喜你取得了紮實的成績，我有2個問題。那麼首先，您能否介紹一下我們今年的用戶獲取策略？我們注意到，在第一季度，我們的銷售和營銷費用以及客戶獲取成本都環比下降。最近，我們看到了公司在香港的宣傳。所以只是想知道我們的用戶獲取目標以及第二季度全年和長期的成本是多少？

And my second question is about our strategy for wealth management business. Will we launch our own fund products? Or do we just perform a distributor?

我的第二個問題是關於我們的財富管理業務戰略。我們會推出自己的基金產品嗎？還是我們只做分銷商？

Thank you, Zoey. I will take both of your questions. I think number one, in terms of the client acquisition, you can see in the first quarter implied CAC is roughly in line with what we achieved in the fourth quarter of last year. I think going forward, despite -- of course, second quarter, it should be even more challenging given the market conditions, especially in Hong Kong. The index is trading in a very narrow range, and we have no any meaningful IPO project to the market. So it will have some negative implication to our client acquisition.

謝謝你，佐伊。我會回答你的兩個問題。我認為第一，就客戶獲取而言，你可以看到第一季度隱含的 CAC 與我們去年第四季度取得的成就大致一致。我認為展望未來，儘管 - 當然，第二季度，考慮到市場狀況，尤其是在香港，它應該更具挑戰性。該指數在非常狹窄的範圍內交易，我們沒有任何對市場有意義的 IPO 項目。因此，這會對我們的客戶獲取產生一些負面影響。

But having said that, I think overall, our CAC target this year should be similar to compared with last year. Particularly, in Hong Kong, we will continue to double down our efforts in terms of the market share gains, not only just to the millennial generations, which we used to take into, but with -- as Leaf and Robin mentioned before, we were also focusing on these some new population such as the female population and also the client over the age of 40s.

但話雖如此，我認為總體而言，我們今年的 CAC 目標應該與去年相近。特別是在香港，我們將繼續加倍努力擴大市場份額，不僅是我們過去考慮的千禧一代，而且——正如 Leaf 和 Robin 之前提到的，我們是還關注這些新的人群，例如女性人群以及 40 多歲以上的客戶。

Number two, in terms of wealth management, I think you are right, in the foreseeable future, our role will still be the facilitator or distributor to our clients. We do not have any confirmed time schedule or plan to package our products by using our own money. Thank you.

第二，在財富管理方面，我覺得你是對的，在可預見的未來，我們的角色仍然是客戶的促進者或分銷者。我們沒有任何確定的時間表或計劃使用我們自己的錢來包裝我們的產品。謝謝。

Thank you. We'll now take the next question, this is from the line of Frank Zheng from Credit Suisse.

謝謝。我們現在來回答下一個問題，這是來自瑞士信貸的 Frank Zheng 的話。

(foreign language) This is Frank from Credit Suisse. I have 2 questions. The first one is on the breakdown of interest income in terms of return on deposit and return on the margin financing security lending business. And similarly, what are the sizes of each component of interest expenses?

（外語）我是瑞士信貸的弗蘭克。我有兩個問題。第一個是按存款回報率和保證金融資證券借貸業務回報率劃分的利息收入明細。同樣，利息支出的每個組成部分的大小是多少？

And secondly, how should we think about the growth rate of operating expenses going forward? Will the company take some measures to optimize the expenses?

其次，我們應該如何看待未來運營費用的增長率？公司會採取一些措施來優化費用嗎？

Thank you, Frank. I will take both of your questions. In terms of the breakdown of the interest income, as you can imagine, we're key beneficiaries of the U.S. rate up cycle. So in the past several quarters, you can see our interest income continued to increase sequentially, largely due to the fed rate hike and also the liquidity situations in Hong Kong. So you can imagine the majority of our interest income come from the clients idle cash deposits nowadays.

謝謝你，弗蘭克。我會回答你的兩個問題。就利息收入的細分而言，正如您所想像的，我們是美國加息週期的主要受益者。所以在過去的幾個季度，你可以看到我們的利息收入連續增加，主要是由於美聯儲加息以及香港的流動性狀況。所以你可以想像，我們現在大部分的利息收入來自於客戶閒置的現金存款。

Having said that, you can see our margin balance also increased Q-over-Q in the first quarter. So the absolute contribution from margin business also is very healthy.

話雖如此，您可以看到我們的保證金餘額在第一季度也有所增加。因此，保證金業務的絕對貢獻也非常健康。

In terms of your second question regarding the operating expenses, I think we have given some guidance to the market in last earning call -- in the last earning -- earning call. We're looking for roughly 15% to 20% headcount increase year-over-year primarily to support our international market expansion. Most of this headcount increase will be on the R&D side. Of course, there will be new overseas office opening, so there will be associated rental expenses and also the security activity colleagues be placed in these local markets.

關於你關於運營費用的第二個問題，我認為我們在上次財報電話會議中——在上次財報電話會議上——為市場提供了一些指導。我們希望員工人數同比增長約 15% 至 20%，主要是為了支持我們的國際市場擴張。增加的員工人數大部分將用於研發方面。當然，還會開設新的海外辦事處，因此會產生相關的租金費用，並且還會有安全活動的同事被安置在這些本地市場。

I think going forward, definitely, there will be more -- some rigorous expenses control, especially on the G&A expenses, which we can see there is still some room to further enhance. But I think in terms of R&D, which we think it is not expensive, to some extent, we think it is our investment. So we will continue to make a huge effort on the R&D which will be our core advantage compared with our peers. Thank you.

我認為未來肯定會有更多——一些嚴格的費用控制，特別是在 G&A 費用方面，我們可以看到仍有進一步加強的空間。但我認為在研發方面，我們認為它並不昂貴，在某種程度上，我們認為這是我們的投資。因此，我們將繼續在研發方面做出巨大努力，這將是我們與同行相比的核心優勢。謝謝。

Thank you. We'll now take the next question. This is from Leon Qi from Daiwa.

謝謝。我們現在開始下一個問題。這是來自 Daiwa 的 Leon Qi。

(foreign language) Congratulations on the very strong results. I have 2 questions. The first one is still on the regulations from the Mainland China side. We noticed that from CSRC's public announcements, one of the principles from the regulator is to effectively dissolve the existing users. Just wondering if management could share with us any color on what's the latest stance from the regulatory at the moment on the existing client base.

（外語）祝賀你取得了非常好的成績。我有兩個問題。第一個還是大陸方面的規定。我們注意到，從證監會的公告中，監管的原則之一是有效解散存量用戶。只是想知道管理層是否可以與我們分享監管機構目前對現有客戶群的最新立場。

And the second question is on the wealth management business. We did appreciate the very strong AUM growth on the wealth management business. From a longer term, just wondering how management sees the AUM of your wealth management business which is the buy-side business? How does your buy-side AUM would compare with your sell-side traditional brokerage AUM? Just appreciate if management give us any long-term color on that.

第二個問題是關於財富管理業務。我們確實對財富管理業務的 AUM 強勁增長表示讚賞。從長遠來看，只是想知道管理層如何看待您作為買方業務的財富管理業務的資產管理規模？您的買方 AUM 與您的賣方傳統經紀 AUM 相比如何？如果管理層給我們任何長期的顏色，請感激不已。

Thank you, Leon. Maybe I'll take your second question first and leave the first question to Leaf to give you some more sharing about the regulations for the existing clients. You can understand we're actually a very dedicated apprentice of Charles Schwab in the United States. So I think a lot of lessons we learned from Schwab is that eventually we want to be asset aggregators for our users and provide life -- provide lifetime service -- financial service down the road.

謝謝你，萊昂。也許我會先回答你的第二個問題，第一個問題留給Leaf給你更多關於現有客戶的法規分享。你可以理解我們其實是嘉信理財在美國非常敬業的徒弟。所以我認為我們從嘉信理財中吸取的很多教訓是，最終我們希望成為我們用戶的資產聚合器，並提供生活——提供終身服務——未來的金融服務。

So, so far, we do not set any specific targets in terms of portions between the wealth management AUM versus our clients' trading AUM. I think now the wealth management AUM roughly accounts to close to 10% of our total clients assets. Hopefully, I hope such proportion will continue to increase up to 20% to 30% in the next 3 to 5 years.

因此，到目前為止，我們沒有就財富管理 AUM 與客戶交易 AUM 之間的部分設定任何具體目標。我認為現在財富管理的AUM大約占我們客戶總資產的近10%。希望這個比例在未來3到5年內能繼續增加到20%到30%。

Definitely, there will be a very long journey to go. As you can imagine, wealth management is a business which time is your friend. But I think we're fully dedicated and fully commitment on these directions to rolling the snowball step by step.

當然，還有很長的路要走。正如您所想，財富管理是一項時間是您朋友的業務。但我認為我們在這些方向上完全投入並完全致力於逐步滾雪球。

Now I'll hand it over to Leaf for your first question about the Mainland regulations.

你的第一個問題，關於大陸的規定，現在就交給Leaf吧。

(foreign language)

（外語）

[Interpreted] Based on the spirit of CSRC's announcement on December 30 and statements made on February 15, resolving listing business is to let clients churn naturally while providing them with proper services, not turning them away. So clients who stopped trading due to investment losses or when they need their funds for other purposes, which will lead to a natural churn for clients. And with our new clients, the number of existing clients will reduce as time goes by. Thus serving the existing clients themselves is the prerequisite for orderly resolving existing clients. Thank you.

【解讀】根據中國證監會12月30日的公告和2月15日的聲明精神，解決上市業務是讓客戶自然流失，同時為客戶提供適當的服務，而不是拒之門外。因此，由於投資損失或需要將資金用於其他目的而停止交易的客戶，這將導致客戶自然流失。對於我們的新客戶，現有客戶的數量會隨著時間的推移而減少。因此，服務存量客戶本身是有序解決存量客戶的前提。謝謝。

We'll now take our next question, and this is from Han Pu from CICC.

我們現在開始下一個問題，這是來自中金公司的韓普。

(foreign language) Firstly, I want -- could you please share us more about why we choose Malaysia as our new market? And do we have more information to share about the market room, the competitive landscape, the local investor behavior and the product supply in this market?

（外語）首先，我想 - 你能分享更多關於我們為什麼選擇馬來西亞作為我們的新市場的原因嗎？關於這個市場的市場空間、競爭格局、當地投資者行為和產品供應，我們是否有更多信息可以分享？

And secondly, regarding the Singapore market, we see both the paying client number and the average asset -- client assets keep growing quarter-over-quarter in the Singapore market. If we see the cohort of the first launch in the first quarter of 2021, like 2 years before, how was the average client assets and the year follow net asset inflow? Have we reached the breakeven point and that we start to make the profit?

其次，關於新加坡市場，我們看到付費客戶數量和平均資產——新加坡市場的客戶資產都在逐季增長。如果我們看到 2021 年第一季度首次推出的隊列，就像 2 年前一樣，平均客戶資產和淨資產流入後的年份如何？我們是否達到盈虧平衡點並開始盈利？

Okay. Thank you. Maybe my colleagues, Robin can answer the first question about the competitive landscape and also our competitive advantage in Malaysia. And I'll take your second question. Robin, please.

好的。謝謝。也許我的同事，羅賓可以回答關於競爭格局以及我們在馬來西亞的競爭優勢的第一個問題。我會回答你的第二個問題。羅賓，請。

(foreign language)

（外語）

[Interpreted] So the population of Malaysia is around 33 million with the Chinese population accounting for about 20%. And as of 2022, there were about 2.1 million active retail trading accounts for Malaysian stocks, while the number of trading accounts for U.S. stocks, Hong Kong and Singaporean stocks are in the hundreds of thousands and are constantly rising. And we observed that the retail participants in Malaysia are gone and are highly accustomed to digitized products. And now the new personal accounts opened in 2022, 59% of them come from investors age 23 to 45.

[解讀] 所以馬來西亞的人口大約有3300萬，其中華人人口約佔20%。而截至2022年，馬股約有210萬個活躍散戶交易戶口，而美股、港股及新股的交易戶口數則在數十萬個，並不斷上升。我們觀察到馬來西亞的零售參與者已經消失，並且已經高度習慣於數字化產品。而現在2022年新開的個人賬戶，其中59%來自23-45歲的投資者。

Currently, in Malaysia, the traditional bank affiliated securities firms are dominant, while the online brokers started relatively late. However, due to the overall trend of younger retail investors and their high acceptance of Internet products, we think there is huge potential for online brokers to further penetrate.

目前，在馬來西亞，傳統的銀行附屬證券公司占主導地位，而在線經紀商起步較晚。但由於整體散戶年輕化趨勢和對互聯網產品的接受度較高，我們認為線上券商進一步滲透的潛力巨大。

In Mainland -- sorry, mainstream Internet brokers such as Rakuten, iSPEED and MPlus are relatively small in scale and their product capabilities are pretty basic with almost no social community operations. And on the other hand, our product capabilities have strong advantages, including a wider variety of products, advanced market data and order types and rich fundamental and technical analysis tools.

內地——抱歉，樂天、iSPEED、MPlus等主流互聯網券商規模相對較小，產品能力也很基礎，幾乎沒有社群運營。另一方面，我們的產品能力具有強大的優勢，包括更廣泛的產品種類、先進的市場數據和訂單類型以及豐富的基本面和技術分析工具。

And in addition, the trading fees for foreign stocks like U.S. stocks are pretty high in Malaysia, with each trade costing as much as USD 10 to USD 25 and Futu can greatly reduce the trading costs of these offshore stocks.

另外，像美股這樣的海外股票在馬來西亞的交易費用相當高，每筆交易成本高達10美元到25美元，而富途可以大大降低這些離岸股票的交易成本。

And finally, we have an active social community, which investor education materials and very strong Internet operational capabilities, all of which we think can provide Malaysian investors with a very differentiated experience. Thank you.

最後，我們有一個活躍的社交社區，其中有投資者教育材料和非常強大的互聯網運營能力，我們認為所有這些都可以為馬來西亞投資者提供非常差異化的體驗。謝謝。

Thank you, Daniel and Robin. For your second question, I -- we entered into Singapore markets roughly 2 years ago. So the first batch of our core client cohort assets increased by 2 to 3x in the past 2 years. We're very encouraged to see the clients cohort and also the clients retention. So now for the first batch, 2 years -- the clients which we acquired 2 years ago, they have already surpassed our client acquisition costs, which means contribute to operating profit nowadays.

謝謝你，丹尼爾和羅賓。關於你的第二個問題，我 - 我們大約在 2 年前進入新加坡市場。因此，我們的第一批核心客戶群組資產在過去兩年中增加了 2 到 3 倍。我們很高興看到客戶群體和客戶保留率。所以現在對於第一批，2 年——我們 2 年前獲得的客戶，他們已經超過了我們的客戶獲取成本，這意味著現在對營業利潤做出了貢獻。

I think we're extremely confident about our profitability and earning powers in the Singapore markets alone not only just because of the -- our cohort will continue to enhance our ARPU and the client assets, but more importantly there will be a lot of initiative efforts to cutting the costs down, not only the operating cost, but also the clearing costs such as our U.S. stock trading, which we still deal with our Singapore-based clients through our external partners.

我認為我們對我們在新加坡市場的盈利能力和盈利能力非常有信心，不僅僅是因為 - 我們的團隊將繼續提高我們的 ARPU 和客戶資產，但更重要的是會有很多主動努力降低成本，不僅是運營成本，還有清算成本，例如我們的美國股票交易，我們仍然通過外部合作夥伴與新加坡客戶打交道。

In the second half of this year, we do have a plan to gradually migrate our U.S. stock trading for Singapore clients from external partners to our internal U.S. clearinghouse. So this will also meaningfully decrease our costs relating to the U.S. stock trading which will further enhance our profitability in Singapore. Thank you very much.

今年下半年，我們確實有計劃逐步將我們為新加坡客戶進行的美國股票交易從外部合作夥伴轉移到我們內部的美國票據交換所。因此，這也將顯著降低我們與美國股票交易相關的成本，這將進一步提高我們在新加坡的盈利能力。非常感謝。

Thank you. And I will now hand the conference back to Yuan for some closing remarks.

謝謝。現在，我將把會議交還給 Yuan，讓他發表一些閉幕詞。

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

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 does conclude the conference for today. Thank you for participating, and you may now disconnect.

謝謝。今天的會議到此結束。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。]