富途控股 (FUTU) 2021 Q1 法說會逐字稿

Hello, ladies and gentlemen. Welcome to Futu Holdings' First Quarter 2021 Conference Call. (Operator Instructions) Today's conference call is being recorded. If you have any objections, you may disconnect at this time. I would now like to turn the conference over to your host for today's conference call, Mr. Daniel Yuan, Chief of Staff and Head of IR at Futu. Please go ahead, sir.

女士們、先生們，大家好。歡迎參加富途控股2021年第一季電話會議。（操作員指示）今天的電話會議正在錄音。如果您有任何異議，此時您可以斷開連接。現在，我想將今天的電話會議主持人、富途證券首席參謀長兼投資者關係主管 Daniel Yuan 先生交給您。先生，請繼續。

Thanks, operator, and thank you for joining us today to discuss our first quarter 2021 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，接線員，感謝您今天加入我們討論我們的 2021 年第一季收益結果。今天與我一起參加電話會議的還有董事長兼執行長李立先生； Arthur Chen，財務長；以及資深副總裁 Robin Xu。

As a reminder, today's call may include forward-looking statements, which represent the company's beliefs 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 actual results to differ materially from those contained in any forward-looking statement. For more information about the potential risks and uncertainties, please refer to the company's filings with the SEC, including its registration statement.

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，這些事件本質上並不確定且不在公司的控制範圍內。前瞻性陳述涉及固有風險和不確定性。我們提醒您，許多重要因素可能導致實際結果與任何前瞻性聲明中的結果有重大差異。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。

So with that, I will now turn the call over to Leaf. Leaf will make his comments in Chinese and I will translate.

因此，我現在將電話轉給 Leaf。Leaf 將以中文發表評論，我負責翻譯。

(foreign language)

（外語）

[Interpreted] Hello, everyone. Thank you for joining the earnings call today. We are excited to announce that we started off the year with robust growth across our operating and financial matrices.

[翻譯]大家好。感謝您參加今天的財報電話會議。我們很高興地宣布，我們在新的一年在營運和財務方面都實現了強勁增長。

(foreign language)

（外語）

[Interpreted] Our net paying client addition was approximately 273,000, bringing the total number of paying clients to over 790,000, representing 231% year-over-year growth. 3 months into the year, we already achieved 39% of our full year growth target. For the first quarter, over 70% of net additions came from Hong Kong, Singapore and other overseas markets. Organic growth continued to contribute over 50% of our net new paying clients. Despite rapid client base expansion, our quarterly playing (sic) [paying] client churn rate remains below 2%.

[解讀] 我們的淨付費客戶新增約 273,000 名，使付費客戶總數超過 79 萬名，年增 231％。今年以來，我們已實現全年成長目標的39%。第一季度，超過70%的淨增量來自香港、新加坡等海外市場。有機成長持續為我們新增淨付費客戶貢獻50%以上。儘管客戶群迅速擴大，但我們的季度付費客戶流失率仍低於 2%。

(foreign language)

（外語）

[Interpreted] Since our official debut in Singapore on March 8, we have experienced significant growth in client acquisition. Our superior product experience and laser focus on client servicing, coupled with our online and off-line advertising and strong word-of-mouth referral has helped us quickly capture the mindshare of Singaporeans, characterized by its large and affluent Chinese population, deep and mature capital markets, high penetration of financial services and rising rate of digitalization.

[翻譯]自 3 月 8 日在新加坡正式亮相以來，我們的客戶獲取量顯著增長。我們卓越的產品體驗和對客戶服務的高度關注，加上我們的線上和線下廣告以及強大的口碑推薦，幫助我們迅速贏得了新加坡人的青睞。新加坡擁有龐大而富裕的華人人口、深厚而成熟的資本市場、金融服務的高滲透率和不斷上升的數位化率。

Singapore presents a huge market opportunity, let alone its strategic importance as an entry point into the broader Asian market. With the strong growth momentum trending into the second quarter, we are confident to unveil rapid growth in Singapore.

新加坡擁有巨大的市場機遇，更不用說其作為進入更廣闊的亞洲市場的切入點的戰略重要性。隨著第二季強勁的成長勢頭，我們有信心新加坡將實現快速成長。

(foreign language)

（外語）

[Interpreted] In terms of client assets, our average asset balance per paying client climbed to HKD 585,000, the record high since 2016. As of quarter end, total client assets reached HKD 462.2 billion, representing 368% growth on a year-over-year basis and 62% growth on a quarter-over-quarter basis.

[解讀]客戶資產方面，本行每位付費客戶平均資產餘額達58.5萬港元，創2016年以來新高。截至季末，客戶總資產達4,622億港元，年增368%，季增62%。

(foreign language)

（外語）

[Interpreted] Total trading volume in the quarter was HKD 2.2 trillion, up 278% year-over-year. U.S. stock trading contributed about 63% of the total trading volume. In the past quarter, we launched OSE futures from the Japan Exchange Group and Singapore stock trading as part of our continued efforts to diversify trading offerings.

【解讀】本季總成交額為2.2兆港元，年增278%。美國股票交易貢獻了總交易量的約63%。在過去的一個季度，我們推出了日本交易所集團的 OSE 期貨和新加坡股票交易，這是我們持續努力實現交易產品多樣化的一部分。

(foreign language)

（外語）

[Interpreted] Our wealth management business Money Plus established new partnerships with 4 reputable asset managers in the quarter, including Wells Fargo, Income Partners, Aberdeen Standard and BNY Mellon. As of quarter end, over 59,000 clients held total assets of HKD 13.1 billion in wealth management, up 189% and 108% year-over-year, respectively. As Money Plus's distribution capabilities get increasingly recognized by asset managers, Fargo entered into an exclusive agreement with us to distribute the Hong Kong dollar-denominated retail share class with its China small mid-cap growth line, one of its flagship products in the region.

[解讀] 我們的財富管理業務 Money Plus 在本季與 4 家知名資產管理公司建立了新的合作關係，包括富國銀行、Income Partners、安本標準和紐約梅隆銀行。截至季末，逾5.9萬名客戶財富管理總資產達131億港元，較去年同期分別成長189%及108%。隨著 Money Plus 的分銷能力越來越受到資產管理公司的認可，Fargo 與我們達成了獨家協議，以港元計價的零售股票類別及其中國小型中型成長股系列進行分銷，這是其在該地區的旗艦產品之一。

In the first quarter, we started to offer a flagship TMT hedge fund managed by a globally renowned asset manager to our qualified investors.

第一季度，我們開始向合格投資者推出由全球知名資產管理公司管理的旗艦TMT對沖基金。

(foreign language)

（外語）

[Interpreted] At the quarter end, our enterprise business Futu I&E had 152 IPO and IR clients as well as 200 ESOP solution clients. In the first quarter, we participated in all Chinese ADR secondary listings in Hong Kong, and we were the only online broker in the selling groups of the Hong Kong IPOs of Kuaishou, Baidu, and Bilibili.

[解讀] 截至本季末，企業業務富途投顧擁有 152 家 IPO 和 IR 客戶以及 200 家 ESOP 解決方案客戶。一季度，我們參與了香港所有中概股ADR的二次上市，是快手、百度、嗶哩嗶哩等香港IPO銷售組中唯一的網路券商。

(foreign language)

（外語）

[Interpreted] The enterprise account function in our social community gets increasingly adopted by listed companies to engage with over 14 million retail investors interested in Hong Kong and U.S. stock trading. By the end of the first quarter, over 500 listed companies have set up enterprise accounts with us to promote their products and services, provide business updates and livestream earnings calls. As of today, 9 enterprise accounts have amassed over 1 million followers. Listed companies are an indispensable stakeholder in our ecosystem, and their engagement has greatly diversified our content offerings, thereby increasing user stickiness and retention.

[解讀]我們社群社群中的企業帳號功能正被越來越多的上市公司採用，以接觸超過1,400萬對香港和美國股票交易感興趣的散戶投資者。截至第一季末，已有超過 500 家上市公司在我們這裡建立了企業帳號，以推廣其產品和服務、提供業務更新和直播財報電話會議。截至目前，已有9位企業帳號粉絲突破100萬人。上市公司是我們生態系統中不可或缺的利害關係人，他們的參與極大地豐富了我們的內容產品，從而提高了用戶黏性和保留率。

(foreign language)

（外語）

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

[口譯]接下來，我想請我們的財務長亞瑟來討論我們的財務表現。

Thanks, Leaf and Daniel. Please allow me to walk you through our financial performance in the first quarter. All the numbers are in Hong Kong dollars, unless otherwise noted. Our total revenue was HKD 2.2 billion, an increase of 349% year-over-year and 86% Q-on-Q.

謝謝，Leaf 和 Daniel。請容許我向您介紹我們第一季的財務表現。除非另有說明，所有數字均為港元。我們的總收入為22億港元，年增349％，環比增長86％。

Brokerage commission and handling charge income was HKD 1.3 billion, an increase of 343% year-over-year and 84% Q-on-Q. The growth was mainly driven by 278% year-over-year of our total trading volume increase. Our blended commission rate and our clients' trading velocity remained resilient compared with last quarter. Interest income was HKD 659 million, an increase of 356% year-over-year and 96% Q-on-Q.

經紀佣金及手續費收入為13億港元，年增343%，季增84%。成長主要得益於我們的總交易量年增278%。與上一季相比，我們的綜合佣金率和客戶交易速度依然保持強勁。利息收入為6.59億港元，年增356%，較上季成長96%。

The increase in margin financing interest income was mainly driven by a strong growth in daily average margin financing balance, higher IPO financing interest income due to a very active Hong Kong IPO market in the first quarter, and increase in our securities borrowing and lending business.

保證金融資利息收入增加，主要由於每日平均保證金融資餘額強勁成長、第一季香港IPO市場非常活躍導致IPO融資利息收入增加，以及證券借貸業務增加。

Other income was HKD 221 million, an increase of 370% year-over-year and 69% Q-on-Q. The strong growth was primarily driven by an increase in our IPO subscription service charge income and the currency exchange service income.

其他收入為2.21億港元，年增370%，季增69%。強勁的成長主要得益於我們的IPO認購服務費收入和貨幣兌換服務收入的增加。

In terms of cost, our total cost was HKD 443 million, an increase of 276% year-over-year and 83% Q-on-Q.

成本方面，我們的總成本為4.43億港元，年增276%，較上季成長83%。

Brokerage Commission and handling charge expenses were HKD 214 million, an increase of 327% from HKD 50 million in the first quarter of 2020. The increase was largely in line with the growth of our brokerage commission and handling charge income.

經紀佣金及手續費支出為2.14億港元，較2020年第一季的0.5億港元成長327%。這一增長與我們的經紀佣金及手續費收入的增長基本一致。

Interest expenses was HKD 168 million, an increase of 406% from HKD 33 million in the first quarter of 2020. The growth was primarily due to higher-margin financing interest expenses and increase in our security borrowing and the lending business.

利息支出為1.68億港元，較2020年第一季的3,300萬港元成長406%。成長主要歸因於利潤率較高的融資利息支出以及證券借貸業務的增加。

Processing and servicing costs were HKD 62 million, an increase of 78% from HKD 35 million in the first quarter of 2020. We continue to increase cloud service expenses and add another 300 throttling controllers connected to the trading system of the Hong Kong Stock Exchange to execute a large number of concurrent Hong Kong stock trade. As a result, our total gross profit was HKD 1.8 billion, an increase of 373% year-over-year and 87% Q-on-Q.

加工及服務成本為 6,200 萬港元，較 2020 年第一季的 3,500 萬港元增加 78%。我們持續增加雲端服務費用，增加300台節流控制器連接港交所交易系統，用於執行大量並發的港股交易。結果，我們的總毛利為18億港元，年增373％，環比增長87％。

Gross profit margin increased from 76% in the first quarter of 2020 to near to 80% in the first quarter of this year, thanks to higher operating leverage as a result of our larger business scale. Our total operating expenses was HKD 490 million, an increase of 149% from HKD 197 million in the first quarter of 2020.

毛利率由2020年第一季的76%上升至今年第一季的近80%，這得益於業務規模擴大帶來更高的經營槓桿。我們的總營業費用為4.9億港元，較2020年第一季的1.97億港元成長149%。

To break it down, R&D expenses was HKD 137 million, an increase of 63% from HKD 84 million in the first quarter of 2020. We further invest in the R&D to support our new product offerings.

其中，研發費用為1.37億港元，較2020年第一季的8,400萬港元成長63%。我們進一步投資研發以支持我們的新產品。

Selling and marketing expenses were HKD 275 million, an increase of 321% year-over-year and 144% Q-on-Q. The increase was primarily due to higher branding and marketing spending, especially in the international markets to cultivate brand image and acquire new clients. If we compare client acquisition costs in the Hong Kong and the China areas alone, our CAC number this quarter is largely in line with that number in the last quarter.

銷售及行銷費用為2.75億港元，較去年成長321%，較上季成長144%。成長主要歸因於品牌和行銷支出的增加，尤其是在國際市場上培養品牌形象和獲取新客戶的支出。如果我們僅比較香港和中國地區的客戶獲取成本，本季的 CAC 數字與上一季的數字大致一致。

G&A expenses were HKD 78 million, an increase of 65% year-over-year. The increase was primarily due to the increase in the headcount for G&A personnel. As a result, our net income increased by 6.5x to HKD 1.2 billion from HKD 155 million in the first quarter of 2020. In April, we also completed our follow-on offering with net proceeds of approximately USD 1.4 billion. The proceeds will be used to support a larger margin financing balance, our international market expansion, new licensing applications, potential investment and acquisition opportunities and other general corporate purpose. That concludes our prepared remarks.

一般行政開支為7,800萬港元，較去年同期增加65%。成長的主要原因是一般及行政人員數量的增加。因此，我們的淨收入從 2020 年第一季的 1.55 億港元成長 6.5 倍至 12 億港元。今年4月，我們也完成了後續發行，淨收益約14億美元。所得將用於支持更大的保證金融資餘額、我們的國際市場擴張、新的許可申請、潛在的投資和收購機會以及其他一般公司用途。我們的準備好的演講到此結束。

We'd now like to open the call to questions. Operator, please go ahead.

我們現在想開始提問。接線員，請繼續。

(Operator Instructions) We have our first question coming from the line of Katherine Liu from Morgan Stanley.

(操作員指示) 我們的第一個問題來自摩根士丹利的 Katherine Liu。

(foreign language) Thank you very much for giving me this opportunity to ask questions. This is Katherine from Morgan Stanley. So I have 2 questions to raise. First is can management please give some introduction or some briefing in terms of the second quarter this year trend in terms of trading velocity, client acquisition growth rate, et cetera? And also in light of the first quarter strong growth, will management release guidance in terms of the full year, for example, growth rate in paying clients, et cetera?

（外語）非常感謝您給我這個提問的機會。我是摩根士丹利的凱瑟琳。所以我有兩個問題要提出。首先，管理階層能否就今年第二季的交易速度、顧客獲取成長率等趨勢進行一些介紹或簡報？而且鑑於第一季的強勁成長，管理層是否會發布全年指引，例如付費客戶成長率等？

And second question is could management please give some guidance or introduction in terms of the breakdown of clients by geography? And then we note that Singapore could potentially see very strong growth. And could management please give us some guidance in terms of the growth trend in the Singapore market?

第二個問題是，管理階層能否就客戶按地區分佈的情況給予一些指導或介紹？然後我們注意到新加坡可能會實現非常強勁的成長。管理層能否就新加坡市場的成長趨勢給我們一些指引？

Sure, Katherine. Let me answer your second question first, I will show you our client breakdown in the first quarter. I will leave the second trend -- the second quarter trend and also the -- your questions about the guidance to Robin and Leaf. Robin will also give you some color in terms of our client acquisitions and also the client profile in Singapore, this particular market.

當然，凱瑟琳。讓我先回答你的第二個問題，我將向你展示我們第一季的客戶細分情況。我將把第二個趨勢——第二季的趨勢以及關於 Robin 和 Leaf 的指導的問題留給大家。Robin 也會向您介紹我們的客戶獲取情況以及新加坡這一特定市場的客戶概況。

In the first quarter, on a flat rate basis, Singapore and the U.S. account for 25% of our new paying clients acquired in the first quarter. The remaining 75% was almost evenly split within Mainland China and also Hong Kong, I think slightly higher in Hong Kong part. I will leave Robin and Leaf to give you comments about your first question.

第一季度，以固定費率計算，新加坡和美國占我們第一季新付費客戶的 25%。剩下的 75% 幾乎平均分佈在中國大陸和香港，我認為香港部分的比例略高一些。我會讓 Robin 和 Leaf 就您的第一個問題發表評論。

(foreign language)

（外語）

[Interpreted] Although we have achieved 39% of our full year paying client growth target in the first quarter, for the time being we'll not adjust our full year target. Well, we definitely believe that our product has a very differentiated value proposition to overseas markets. And in fact, since we entered the Singapore market officially in March, we have some very strong client growth and that momentum has continued into the second quarter. So we also reckon that the brokerage business is positively correlated with the market performance, with market sentiments with the number of IPOs and we understand that right now, the market has disagreements over how the market performance will evolve for the rest of the year. So we'll not adjust our full year kind of paying client growth target for now, and we may give a updated guidance during our 2Q earnings call, if needed.

[解讀]雖然我們第一季已經達成了全年付費客戶成長目標的39%，但暫時不會調整全年目標。嗯，我們確實相信我們的產品對海外市場有非常差異化的價值主張。事實上，自從我們三月正式進入新加坡市場以來，我們的客戶數量就成長得非常強勁，而且這種勢頭一直延續到第二季​​。因此，我們也認為，經紀業務與市場表現、市場情緒與 IPO 數量呈正相關，我們理解，目前市場對於今年剩餘時間市場表現如何演變存在分歧。因此，我們暫時不會調整全年付費客戶成長目標，如果需要，我們可能會在第二季財報電話會議上給予更新的指引。

(foreign language)

（外語）

[Interpreted] Well, we have seen the market experience some level of pullback since mid-February, and we believe that our users' trading sentiment has been affected more or less, and we think that's perfectly normal. We feel like the market still gets a lot of attention right now and kind of center the rotation from growth to value stocks, there are still a number of stocks that are performing really, really well.

[解讀] 嗯，我們看到自 2 月中旬以來市場經歷了一定程度的回調，我們相信用戶的交易情緒或多或少受到了影響，我們認為這是完全正常的。我們感覺市場現在仍然受到很多關注，並且有點從成長股轉向價值股的中心，仍然有許多股票的表現非常非常好。

And from the standpoint of our client assets, we have seen that from March 1 to last Friday, which is May 16, almost on every single trading day, we see a positive net asset inflow, except for a couple of trading days. So it's a very positive sign that our clients are continuously putting assets into our platform.

從我們客戶資產的角度來看，我們看到，從3月1日至上週五，也就是5月16日，除了幾個交易日外，幾乎每個交易日，我們都看到正的淨資產流入。因此，我們的客戶不斷將資產投入我們的平台是一個非常積極的信號。

And for us, paying client number, paying client retention and client assets are 3 KPIs, and we attach much more importance to these 3 matrices than some short-term volatilities in the clients' trading volume.

對我們來說，付費客戶數量、付費客戶保留率和客戶資產是3個KPI，我們更重視這3個矩陣，而不是客戶交易量的短期波動。

And let me just add a little bit to your question about our Singapore clients profile. So, so far, based on what we have seen, again, this is only based on about 2 and 2.5 months of data that we have seen so far. So our Singapore clients average and median ages is almost identical to that of Mainland China and Hong Kong clients.

請容許我稍微補充一下您關於我們新加坡客戶概況的問題。因此，到目前為止，根據我們所看到的情況，這只是基於我們迄今為止看到的大約 2 到 2.5 個月的數據。因此，我們的新加坡客戶的平均年齡和中位數年齡幾乎與中國大陸和香港客戶相同。

And in terms of their client assets, it still lags. And actually, there's a pretty big discrepancy between our -- between the average client assets of our Singapore clients and our mainland China clients. But we think that's normal. And based on our experience, when we enter a new market, it will take some time for our clients' assets and clients' trading volume to catch up. And we'll probably give more details around our client profile in the next couple of quarters.

而從客戶資產方面來看，仍落後。實際上，我們的新加坡客戶和中國大陸客戶的平均客戶資產之間存在很大差異。但我們認為這是正常的。而且根據我們的經驗，當我們進入一個新市場時，我們的客戶的資產和客戶的交易量需要一些時間來趕上。我們可能會在接下來的幾季提供有關客戶資料的更多詳細資訊。

We have our next question. This is coming from the line of Jacky from China Renaissance.

我們有下一個問題。這是來自華興資本 Jacky 的系列。

(foreign language) So congrats on the great results. I have 2 questions. Number one is about our competition. We actually saw some competitors, for example, in Hong Kong market increasing their marketing efforts. And we also hear some Asia brokers may enter the U.S. and the Hong Kong stock trading business. So regarding the potential increasing competition for our markets and customers from Mainland and Hong Kong, do we concern about our customer acquisition costs and the trading commission pricing pressure?

（外語）恭喜您所取得的優異成績。我有兩個問題。第一是關於我們競爭。我們實際上看到一些競爭對手，例如香港市場的競爭對手，正在加強行銷。我們也聽說一些亞洲經紀商可能會進入美國和香港的股票交易業務。那麼，考慮到我們來自內地和香港的市場和客戶可能面臨的日益激烈的競爭，我們是否擔心客戶獲取成本和交易佣金定價壓力？

And number two is about a housekeeping question. Could you provide us a rough breakdown of our interest income and also other revenue?

第二個問題是關於內部管理的問題。您能否提供我們一下我們的利息收入和其他收入的粗略明細？

Sure, Jacky. Let me answer your second question in terms of housekeeping financial numbers, first. I will leave the first question to my colleague, our CEO, Leaf. in terms of the interest income breakdown, roughly interest income arising from the margin financing account for 60% to 65% of total interest income. The remaining interest income actually derive from our clients' idle cash deposit. And also for -- in terms of other income, actually, these 2 major parts. One is the IPO subscription service charge, i.e., normally, we charge HKD 50 to HKD 100 per person when each participate in the Hong Kong IPOs. The other significant part is the foreign exchange service charge. Many of our clients trade in both in Hong Kong and the U.S. markets, so they do have the demand for the foreign exchange. These 2 parts, I think, roughly will contribute 70% to 75% of our total other income. The remaining part will belong to such as the distribution income from our wealth management products and other service offerings.

當然，傑基。首先，讓我回答您關於內部財務數據的第二個問題。我將第一個問題留給我的同事，我們的執行長 Leaf。從利息收入組成來看，來自融資融券的利息收入大概占到總利息收入的60%至65%。剩餘的利息收入其實來自於我們客戶的閒置現金存款。就其他收入而言，實際上有這兩個主要部分。一是新股認購服務費，一般我們每次參與香港新股認購收費是50至100港幣/人。另一個重要的部分是外匯服務費。我們的許多客戶都在香港和美國市場進行交易，因此他們確實有外匯需求。我認為這兩部分大約占我們其他總收入的 70% 到 75%。剩餘部分將屬於我們的理財產品和其他服務產品的分配收入。

(foreign language)

（外語）

[Interpreted] So from our inception, we operated in a very crowded market. And we don't think the market is going to get less competitive going forward. And we indeed have seen some players offering 0 commissions. But we don't think the change in the competitive landscape will have a downward pressure on our commission rate. Because in Hong Kong, there's the stamp duty, which is 10 bps. And for us, we offer 3 bps on Hong Kong trading, and the marginal benefit for our clients for lowering our commission rate beyond that 3 bps is really low.

[翻譯] 所以從一開始，我們就在一個非常擁擠的市場中運作。我們也不認為未來市場競爭力會減弱。而且我們也確實看到一些玩家提供0佣金。但我們不認為競爭格局的變動會對我們的佣金率產生下行壓力。因為香港有印花稅，稅率是10個基點。對我們來說，我們在香港交易中提供 3 個基點的佣金率，而將我們的佣金率降低到超過 3 個基點之後，我們的客戶獲得的邊際效益真的很低。

(foreign language)

（外語）

[Interpreted] And for some of the A share brokers, they already have Hong Kong licensed entities. And besides, we've also seen some other online brokers that want to enter the Hong Kong local market.

[解讀]而對一些A股券商來說，他們已經擁有香港持牌實體。除此之外，我們也看到一些其他網路券商也想進入香港本地市場。

(foreign language)

（外語）

[Interpreted] So maybe I'll talk a little bit more about the online brokers due to the similarities in the business model.

[翻譯] 因此，由於商業模式的相似性，我可能會多談論一些線上經紀人。

(foreign language)

（外語）

[Interpreted] First of all, we definitely welcome online brokers to enter the Hong Kong market. With more of these players entering the Hong Kong market, we can educate the market together and help the online brokerage industry as a whole gain more industry recognition.

[解讀]首先我們絕對歡迎網路券商進入香港市場。隨著更多這樣的參與者進入香港市場，我們可以共同教育市場，並幫助整個線上經紀行業獲得更多的行業認可。

(foreign language)

（外語）

[Interpreted] Now there are 2 major types of online brokers that provide Hong Kong stock trading services. And the first type are the Hong Kong brokers that are licensed by SFC and hold SFC licenses and are regulated by the SFC, and Futu is an example of this first type. And the second type are the online brokers that hold licenses of a third domicile and it's not regulated by the Hong Kong SFC; for example, a license from New Zealand. And this is the second type, using the third-party domicile license to provide trading in Hong Kong.

[解讀]目前提供港股交易服務的網路券商主要有2種。第一類是獲得香港證監會發牌並持有證監會牌照並受證監會監管的香港券商，富途證券就是第一類的一個例子。第二類是持有第三地牌照的網路券商，不受香港證監會監管；例如來自紐西蘭的許可證。這是第二種，利用第三方住所牌照在香港提供交易。

(foreign language)

（外語）

[Interpreted] And as we all know, the SFC has more stringent regulatory requirements than some other markets and are more prudent when giving out licenses. So for the second type of online brokers that we just mentioned, if they are to get a license in Hong Kong, they must solve the issue of regulatory incongruity in advance.

[譯]眾所周知，香港證監會的監管要求比其他一些市場更為嚴格，在發放牌照時也更為謹慎。所以對於我們剛才提到的第二類網路券商來說，他們如果要在香港拿牌照，就必須先解決監管不協調的問題。

And from the regulatory standpoint, SFC will not allow the online brokers to operate under a more relaxed regulatory framework. This means that once the online brokers hold licenses, they'll need to migrate their existing clients and their existing businesses into the new entity that is regulated by the SFC.

而從監管角度而言，證監會不會允許網路經紀商在較為寬鬆的監管架構下經營。這意味著，一旦網路經紀商獲得牌照，他們就需要將現有客戶和現有業務遷移到受證監會監管的新實體。

And if this issue cannot be solved very well, it is highly unlikely that they will get a license in Hong Kong. And I think that's probably why another online brokerage peer of ours have been talking about getting the license in Hong Kong soon for the past 3 years, but still have not managed to get one. Because based on our understanding, under normal circumstances, there is no way that it would take so long to apply for a new Hong Kong brokerage license.

如果這個問題不能得到很好的解決，他們在香港拿牌照的可能性就很小。我想這可能也是為什麼我們的另一家網路券商同行在過去三年裡一直在談論盡快獲得香港牌照，但卻遲遲沒有拿到的原因。因為據我們了解，在正常情況下，申請新的香港經紀牌照不可能花這麼長時間。

(foreign language)

（外語）

[Interpreted] And secondly, we don't think that the potential entry of other online brokerage companies will have a negative impact on Futu's market share in Hong Kong. Well, the first reason is that financial services, it really takes a big position for our clients to choose a financial services platform.

[解讀]其次，我們認為其他網路券商的潛在進入不會對富途在香港的市佔率產生負面影響。嗯，第一個原因是金融服務，對我們的客戶來說，選擇金融服務平台確實很重要。

And there is the psychological barrier for clients to actually entrust their assets with their financial services platform. And for Futu, we have very outstanding shareholder base. We have shareholders like Tencent that really instill trust into our brand. And on top of that, we have spent the past 8 years cultivating our brand image in Hong Kong, gaining user recognition and capturing the mindshare of the Hong Kong local users. And for a financial services company that is new to Hong Kong, it will take a lot of time for them to get the same level of trust that we've been able to garner in the past 8 years.

而客戶實際上將資產委託給金融服務平台有心理障礙。對於富途而言，我們擁有非常優秀的股東基礎。我們擁有騰訊這樣的股東，他們真正增強了我們品牌的信任。除此之外，我們花了8年時間在香港培養我們的品牌形象，贏得用戶認可，並佔領香港本地用戶的心智份額。對於新進入香港的金融服務公司來說，他們還需要很長時間才能獲得我們過去八年所贏得的同等程度的信任。

(foreign language)

（外語）

[Interpreted] And secondly, so they're newcomers, and they can only be competitive if they can offer very differentiated value proposition. Otherwise, it will be very difficult for them to replace the existing platforms. And Futu has built a very comprehensive business that has huge entry barriers. And we've invested significantly into our account opening, into our trading infrastructure, market information and services and social community, et cetera, and many of our product offerings really set industry standards. And the other online brokerage peers need to spend a lot of time to catch up to where we are today, let alone offering differentiated products and services. And on top of that, we have never stopped innovating.

[解釋] 其次，他們是新手，只有能提供非常差異化的價值主張，才能具有競爭力。否則，他們將很難取代現有的平台。富途已經建立了非常全面的業務，並且進入障礙很高。我們對開戶、交易基礎設施、市場資訊和服務以及社交社區等方面投入了大量資金，我們的許多產品都真正樹立了行業標準。而其他網路券商同行需要花費大量時間才能趕上我們的水平，更不用說提供差異化的產品和服務了。除此之外，我們從未停止創新。

(foreign language)

（外語）

[Interpreted] And the third point is the regulatory congruity issue that we just mentioned. And as we discussed earlier, and some of the online peers have already started acquiring Hong Kong local clients without a Hong Kong license. And after they acquire the license, they probably will spend a lot of time migrating their existing Hong Kong clients to these new entity that is heavily regulated by the SFC and has really strengthened KYC and AML procedures. And this will be a very cumbersome process, definitely with some sort of attrition. And for the other party that has not operated in Hong Kong so far, after they get the license, they still need to kickstart the very stringent account opening, KYC procedure under the supervision of the SFC. And this will take time for them to adjust to, and take time for them to get familiarized with.

[口譯]第三點是我們剛才提到的監理一致性問題。正如我們之前所討論的，一些線上同行已經開始在沒有香港牌照的情況下招募香港本地客戶。在獲得執照後，他們可能會花費大量時間將現有的香港客戶遷移到這些受到香港證監會嚴格監管、並真正加強了 KYC 和 AML 程序的新實體。這將是一個非常繁瑣的過程，肯定會產生一定程度的人員減員。而對另一方來說，目前還未在香港運營，拿到牌照之後還需要在香港證監會的監管下，進行非常嚴格的開戶、KYC等流程。他們需要時間來適應和熟悉這一點。

(foreign language)

（外語）

[Interpreted] And fourthly, the margin financing business is highly contingent on the capital -- on the company's capital base. And the margin financing capital needs to be gradually accumulated through the long-term collaboration with the commercial banks in Hong Kong. In Hong Kong, based on the SFC's regulation, the margin financing balance that a broker can support is limited to 5x of its capital base.

[解讀] 第四，保證金融資業務高度依賴公司的資本基礎。而保證金融資的資金則需要透過與香港商業銀行的長期合作逐漸累積。在香港，根據證監會的規定，經紀商可支持的保證金融資餘額不得超過其資本基礎的5倍。

So first of all, they need to inject a lot of capital into their licensed entity in Hong Kong to bolster their net assets. And on top of that, they need to secure additional financing from the commercial banks in Hong Kong. And from our experience, the Hong Kong commercial banks are generally very conservative. And they're only willing to offer additional credit lines after a long-term communication and long-term collaboration. So it's impractical for these newcomers to garner a lot of capital in a short period of time. And this will definitely put constraints on the margin financing business, especially the IPO margin financing business. And we realize that some of the other peers are trying to migrate their clients from the interactive broker accounts to their own account system. And if their own account system is under the supervision of SFC, the margin financing capital issue that we just mentioned will be further enhanced.

所以首先，他們需要向香港的持牌實體注入大量資本，以增強其淨值。除此之外，他們還需要從香港的商業銀行獲得額外融資。而且根據我們的經驗，香港商業銀行普遍非常保守。而且只有在長期溝通和長期合作之後，他們才願意提供額外的信用額度。因此，這些新進入者想要在短時間內累積大量資本是不切實際的。這必將對融資融券業務，特別是IPO融資融券業務造成限制。我們意識到其他一些同行正嘗試將他們的客戶從互動式經紀商帳戶遷移到他們自己的帳戶系統。而如果他們自己的帳戶體係受到證監會的監管，那我們剛才提到的融資融券的資本問題將會得到進一步的提升。

(foreign language)

（外語）

[Interpreted] The fifth point is that the Hong Kong execution and clearing system need a lot of capital and time to invest, and the R&D takes -- is a very lengthy process. And Futu spent 8 years to construct a highly stable and scalable execution and clearing system with a 99.96% service availability rate. And this very advanced trading system has high entry barriers. And when the other brokers enter the Hong Kong market, for the -- in the short period of time, they probably need to rely on a third-party vendor to provide this execution system, which means that the stability of the system will be outside of their control for a considerable amount of time. So this may lead to trade congestion issues when there is extreme market volatility or when hot IPOs take place. So in the short term, it will be very difficult for them to match the client servicing quality that Futu can provide.

[解讀]第五點是香港執行清算系統需要大量的資金和時間投入，研發需要一個非常漫長的過程。而富途以8年時間建構了高穩定、可擴展的執行清算系統，服務可用率高達99.96%。而且這種非常先進的交易系統，進入門檻很高。而當其他經紀商進入香港市場時，在短時間內，他們可能需要依賴第三方供應商來提供這個執行系統，這意味著系統的穩定性在相當長的一段時間內將不受他們的控制。因此，當市場波動劇烈或出現熱門 IPO 時，可能會導致交易擁塞問題。因此，短期內他們很難達到富途所提供的客戶服務品質。

(foreign language)

（外語）

[Interpreted] And the last point is, I want to make aside, we have never stopped innovating and progressing, and we still keep that nascent mentality when we entered into the Hong Kong market.

[翻譯] 最後一點，我想說的是，我們從來沒有停止過創新和進步，我們仍然保持著當初進入香港市場時的那種初生心態。

And we believe that additional competition in the Hong Kong market will push us to do better.

我們相信，香港市場的進一步競爭將推動我們做得更好。

We have our next question coming from the line of Zeyu Yao from CICC.

我們的下一個問題來自中金公司的姚澤宇。

(foreign language) This is Zeyu Yao from CICC. First of all, congrats to our exciting results. I see our existing business are well on track. And I was wondering if there is any possibility that we will apply for new brokerage licenses to serve more customers in other areas, or launch more trading products like Bitcoin or other digital currency?

(外語) 我是中國義大利商會的姚澤宇。首先，恭喜我們取得的令人興奮的成績。我看到我們現有的業務進展順利。另外我想知道我們是否有可能申請新的經紀牌照，以便在其他地區服務更多的客戶，或推出更多像比特幣或其他數位貨幣的交易產品？

Okay. Thank you, Zeyu. Let me answer your first question. I will leave the second question to my colleagues, our Senior Vice President, Robin Xu, for more service and products in our pipelines.

好的。謝謝你，澤宇。讓我回答你的第一個問題。第二個問題我將留給我的同事，我們的高級副總裁 Robin Xu，以了解有關我們即將推出的更多服務和產品。

For the new license, actually, I think you are right, we are doing some preliminary studies in other international markets, in particular in the Asian countries. Therefore, as Leaf mentioned in the opening remarks, we do think Singapore is a very important gateway for which entering into the Asian market as a whole. But now it's still in a very preliminary stage. Also, we are doing some feasibility studies in other English language-speaking country as well.

對於新的許可證，實際上，我認為你是對的，我們正在其他國際市場，特別是在亞洲國家進行一些初步研究。因此，正如 Leaf 在開幕致詞中所提到的，我們確實認為新加坡是進入整個亞洲市場的一個非常重要的門戶。但現在它仍處於非常初步的階段。此外，我們也在其他英語國家進行一些可行性研究。

(foreign language)

（外語）

[Interpreted] So we're planning to launch crypto trading to our international clients in the second half of this year. And also, we'll plan to roll out more futures under the CME futures.

[翻譯] 因此，我們計劃在今年下半年向我們的國際客戶推出加密貨幣交易。此外，我們也計劃在芝加哥商品交易所 (CME) 期貨市場推出更多期貨。

We have the next question. This is coming from the line of Zoey Zong from Jefferies.

我們還有下一個問題。這是來自 Jefferies 的 Zoey Zong 的說法。

(foreign language) This is Zoey from Jefferies. Congratulations on the strong first quarter results, and I have a follow-up question on the digital currency. So regarding digital currency at this point, we have noted that the [SFC and different associations] of China have announced that to banks and financial institutions and payment companies some licenses related to cryptocurrency transactions. I'm wondering what about Futu's plan on digital currency this year and will China issue a license who currently have following customer if we launch it in the country [in that].

（外語）我是 Jefferies 的 Zoey。恭喜您第一季的強勁業績，我有一個關於數位貨幣的後續問題。因此，關於數位貨幣，我們注意到中國（證監會和不同協會）已經宣布向銀行和金融機構以及支付公司發放一些與加密貨幣交易相關的許可證。我想知道富途今年的數位貨幣計畫如何，如果我們在中國推出數位貨幣，中國是否會向目前擁有以下客戶的客戶提供許可證。

(foreign language)

（外語）

[Interpreted] We are very much aware of the different regulatory frameworks under different jurisdictions. And actually, we're in the process of applying for digital currency-related licenses in U.S., Singapore and Hong Kong, but what we know for sure is that we will not offer digital currency trading services to mainland China users.

[翻譯] 我們非常清楚不同司法管轄區下不同的監管架構。事實上，我們正​​在美國、新加坡和香港申請數位貨幣相關的執照，但我們可以肯定的是，我們不會向中國大陸用戶提供數位貨幣交易服務。

The next one comes from the line of Emma Xu with BofA Securities.

下一位提問者是美國銀行證券公司的 Emma Xu。

(foreign language) So congratulations on the very strong results. I have 2 questions. The first question is about the margin financing business. After capital -- after the follow-on offerings in fourth quarter, Futu further -- in April, Futu further strengthen its capital base. So will you try to increase the ratio of margin financing and security loan balance as a percentage of total client assets?

（外語）祝賀您取得如此優異的成績。我有兩個問題。第一個問題是關於融資融券業務的。在第四季進行增發後，富途在四月進一步增強了資本基礎。那麼你們會嘗試提高保證金融資和擔保貸款餘額佔客戶總資產的比例嗎？

And the second question is about client acquisition. You mentioned that 50% of the new client is for organic growth. Then how about the other half, what's the acquisition channel for the other half of client specifically? And pay more attention about ESOP clients, how much that they contribute to the new clients? And how do you recorded those ESOP clients? Will you recorded them as a new paying client when the stock is listed, or you will wait until their stock are vested?

第二個問題是關於客戶獲取。您提到 50% 的新客戶是為了有機成長。那麼另一半客戶呢，具體另一半客戶的獲取管道是怎麼樣的呢？並且更關注ESOP客戶，他們對新客戶的貢獻有多大？那你是如何記錄這些 ESOP 客戶的呢？當股票上市時，您會將他們記錄為新的付費客戶嗎，還是會等到他們的股票歸屬？

Thank you very much. I will answer the first question. I will leave the second question to my colleagues, Robin and Daniel. Number one, I think we value our paying clients from a DCF value perspective, i.e., we more care about their lifetime value rather than the near-term P&L they can contribute in terms of our top lines or bottom lines. Therefore, I think we will not very aggressively encourage our clients to use the margin, because the margin financing involve very high risks. Therefore, I think in our mentality, investment education, how to let our investors know the risk is far more important our near-term monetization. If you look at our margin balance -- financing balance versus our total client assets ratio, this risk ratio historically is in the range of 5% to 7%. And I think definitely after we finish our follow-on placement, we do have more sufficient capitals to support our margin financing business. And in particular, our IPO subscription service in Hong Kong. But we will not intentionally to push up our clients' margin usage unless they know the risks.

非常感謝。我來回答第一個問題。我將第二個問題留給我的同事 Robin 和 Daniel。首先，我認為我們是從直流現金流價值的角度來評估我們的付費客戶，也就是說，我們更關心他們的終身價值，而不是他們能為我們的收入或利潤做出的短期損益貢獻。因此，我認為我們不會非常積極地鼓勵我們的客戶使用保證金，因為保證金融資涉及的風險非常高。因此，我認為在我們的心態、投資教育上，如何讓我們的投資者認識到風險遠比我們的短期貨幣化更重要。如果你看看我們的保證金餘額——融資餘額與我們的總客戶資產比率，這個風險比率歷史性地在 5% 到 7% 之間。而且我認為，在我們完成後續配售後，我們確實擁有更充足的資本來支持我們的保證金融資業務。特別是我們在香港的IPO認購服務。但我們不會故意提高客戶的保證金使用量，除非他們了解風險。

Emma, this is Daniel. I'll take your second question on client acquisition. So about 50% of our new paying clients are from organic growth, then about 15% are from ESOP and group account opening. And the rest, 35% is roughly evenly split between online and off-line advertising as well as the third-party channel partners. So definitely, we think about the high-profile IPOs are conducive to our client acquisition, but it's very difficult for us to attribute certain client base to maybe 1 or 2 single IPOs. But we generally kind of observe an increase and uptick in our client acquisition before these IPOs take place. But it's very difficult to ascertain which clients come specifically from the IPOs.

艾瑪，這是丹尼爾。我來回答你關於客戶獲取的第二個問題。因此，我們約有 50% 的新付費客戶來自有機成長，約 15% 來自 ESOP 和團體開戶。剩下的 35% 則大致平均分配給線上、線下廣告以及第三方通路夥伴。因此，我們確實認為高調的 IPO 有利於我們獲得客戶，但我們很難將特定的客戶群歸因於 1 或 2 次單一 IPO。但在這些 IPO 進行之前，我們通常會觀察到客戶獲取量的增加和上升。但很難確定哪些客戶具體來自 IPO。

And for Kuaishou's case, like you mentioned. So for Kuaishou's employees that have stock options, right now, they're not counted as our paying clients.

就您提到的快手的情況來說。所以對於快手有股票選擇權的員工來說，目前他們還不算是我們的付費客戶。

As we do not have any further questions, I would like to hand the conference back to our host, Mr. Daniel Yuan. Please take over.

由於我們沒有其他問題，我想將會議交還給主持人丹尼爾袁先生。請接管。

Thank you, operator, and thank you all for joining the earnings call today. On behalf of the Futu management team, I'd like to thank you for joining our earnings call. And if you have any additional questions, please do not hesitate to ask me or any of our Investor Relations representatives. Thank you, and good night.

謝謝接線員，也謝謝大家參加今天的財報電話會議。我謹代表富途管理團隊感謝您參加我們的財報電話會議。如果您有任何其他問題，請隨時詢問我或我們的任何投資者關係代表。謝謝您，晚安。

Ladies and gentlemen, that concludes our conference for today. Thank you all for your participation. You may disconnect now.

女士們、先生們，今天的會議到此結束。感謝大家的參與。您現在可以斷開連線。

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

[本記錄中標記為[已翻譯]的部分由現場翻譯人員朗讀。 ]