富途控股 (FUTU) 2020 Q3 法說會逐字稿

Hello, ladies and gentlemen. Welcome to Futu Holdings Third Quarter 2020 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，大家好。歡迎參加富途控股2020年第三季電話會議。（操作員指示）今天的電話會議正在錄音。如果您有任何異議，您可以此時斷開連接。

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.

現在我想將會議交給今天電話會議的主持人，富途辦公廳主任兼 IR 主管 Daniel Yuan 先生。請繼續，先生。

Thanks, operator, and thank you for joining us today to discuss our third quarter 2020 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.

感謝營運商，感謝您今天加入我們討論我們 2020 年第三季的獲利結果。今天與我一起參加電話會議的還有董事長兼執行長李葉先生；陳亞瑟，財務長；徐彥，資深副總裁。

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 actual results to differ materially from those contained in any forward-looking statements. 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括前瞻性陳述，這些陳述代表了公司對未來事件的信念，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陳述中包含的結果有重大差異。有關潛在風險和不確定性的更多信息，請參閱該公司向 SEC 提交的文件，包括其註冊聲明。

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

這樣，我現在就把電話轉給 Leaf。Leaf會用中文發表評論，我會翻譯。

(foreign language)

（外語）

[Interpreted] Hello, everyone. Thank you for joining the earnings call today. I’m excited to share that we continue to deliver outstanding operating and financial results in the third quarter of 2020.

【解讀】大家好。感謝您參加今天的財報電話會議。我很高興與大家分享，我們在 2020 年第三季繼續取得出色的營運和財務表現。

(foreign language)

（外語）

[Interpreted] Our net paying client addition was approximately 115,000, bringing the total number of paying clients to over 418,000, up 137% year-on-year. This marks our highest quarterly paying client addition. Our China mainland and Hong Kong paying clients both experienced triple-digit growth in the quarter driven by a number of industry tailwinds, including continued market volatility and the surge of high-profile Hong Kong IPOs. Organic growth continued to contribute over half of our new paying clients. During our second quarter earnings call, we guided for 280,000 net new paying clients in 2020. We are well on track to deliver this guidance.

【解讀】付費客戶淨增加約11.5萬戶，付費客戶總數超過41.8萬戶，較去年成長137%。這標誌著我們季度付費客戶增加量最高。在市場持續波動和備受矚目的香港首次公開募股激增等多項行業推動因素的推動下，我們的中國大陸和香港付費客戶在本季度均實現了三位數增長。有機成長持續為我們的新付費客戶貢獻了一半以上。在第二季財報電話會議上，我們預計 2020 年淨新增付費客戶將達到 28 萬名。我們正在順利交付這項指導意見。

(foreign language)

（外語）

[Interpreted] Besides total paying clients, we also witnessed robust growth in total client assets. At of quarter end, total client assets reached HKD 201 billion, representing 178% growth on a year-on-year basis and 41% growth on a quarter-on-quarter basis. Average asset balance per paying client was HKD 481,000, up 17% year-on-year. Our quarterly paying client retention rate surpassed 98% for the seventh consecutive quarter.

【解讀】除了付費客戶總數之外，我們也見證了客戶總資產的強勁成長。截至季末，客戶總資產達2,010億港元，年增178%，季增41%。每位付費客戶的平均資產結餘為港幣481,000元，年增17%。我們的季度付費客戶保留率連續第七個季度超過 98%。

(foreign language)

（外語）

[Interpreted] Total trading volume in the quarter surpassed HKD 1 trillion landmark, an exponential 381% year-on-year growth. U.S. stock trading contributed about 56% of the total trading volume. In the third quarter, we launched Hong Kong securities lending and several derivatives trading offerings, including Hong Kong stock futures and MSCI index futures. The market share of our derivatives trading products climbed meaningfully over the quarter. Going forward, we will seek to further diversify our derivatives trading offering.

【解讀】季度總交易量突破1兆港元大關，較去年成長381%。美股交易約佔總交易量的56%。第三季度，我們推出了香港融券和多項衍生性商品交易產品，包括香港股票期貨和MSCI指數期貨。我們的衍生性商品交易產品的市佔率在本季大幅攀升。展望未來，我們將尋求進一步多元化我們的衍生性商品交易產品。

(foreign language)

（外語）

[Interpreted] The strong IPO market continued to play in our favor. In the third quarter, 6 IPOs recorded over HKD 10 billion subscription, respectively, on our platform, including the U.S. IPOs of XPeng Motors and Beike and the Hong Kong IPOs of Nongfu Spring and Ming Yuan Cloud. To note, the Hong Kong IPO Nongfu Spring attracted over 110,000 retail investors to subscribe over HKD 35 billion on our platform.

【解讀】強勁的IPO市場繼續對我們有利。第三季度，平台認購金額超過100億港元的IPO分別有6起，其中包括小鵬汽車、北科汽車的美國IPO，以及農夫山泉、明源雲的香港IPO。值得注意的是，農夫山泉香港IPO吸引了超過11萬名散戶投資者在我們的平台上認購了超過350億港元。

(foreign language)

（外語）

[Interpreted] As for our wealth management business, Money Plus, we established partnerships with 9 reputable asset managers, including Morgan Stanley, Invesco and BNP Paribas. We have over 30 wealth management partners as of quarter end. In the third quarter, wealth management daily average asset balance reached HKD 8.15 billion, a record high since we launched the service. Over 29,000 clients held mutual fund positions as of quarter end.

【解讀】財富管理業務Money Plus與摩根士丹利、景順、法國巴黎銀行等9家知名資產管理公司建立了合作關係。截至季末，我們擁有超過 30 家財富管理夥伴。第三季度，理財日均資產餘額達81.5億港元，創下服務以來的新高。截至季末，超過 29,000 名客戶持有共同基金部位。

In September, we launched bond trading for professional investors. We now offer a diverse array of USD-denominated bonds covering multiple industries, including technology, real estate, logistics and finance. Money Plus is strategically positioned to offer more diversified products, catering to different risk appetites of our users and retaining more user assets within Futu's ecosystem.

9月，我們向專業投資者推出債券交易。我們現在提供多種美元計價債券，涵蓋科技、房地產、物流和金融等多個行業。Money Plus的策略定位是提供更多元的產品，滿足用戶不同的風險偏好，並在Futu生態系統中保留更多的用戶資產。

(foreign language)

（外語）

[Interpreted] Our enterprise service, Futu I&E also made solid progress in the quarter. We obtained ISO 27701 certification for our ESOP SaaS system, the world's highest level of privacy information system certification. We are the first ESOP SaaS provider in China to receive such recognition. As of quarter end, we had 126 ESOP plans and 81 IPO and IR clients. Futu I&E continues to be the go-to ESOP partner for industry-leading TMT, biotech and consumer retail companies, including MINISO, Ocumension and GEO Module Group.

【解讀】我們的企業服務富途進出口在本季也取得了紮實的進展。我們的 ESOP SaaS 系統獲得了 ISO 27701 認證，這是全球最高級別的隱私資訊系統認證。我們是中國第一家獲得此類認可的 ESOP SaaS 提供者。截至季末，我們擁有 126 個 ESOP 計劃和 81 個 IPO 和 IR 客戶。富途進出口持續成為業界領先的TMT、生技和消費零售公司（包括名創優品、Ocumension和GEO Module Group）的首選員工持股計畫合作夥伴。

(foreign language)

（外語）

[Interpreted] We have been reaching new milestones with internationalization. Futu Singapore Private Limited was officially granted the capital markets services license from the Monetary Authority of Singapore. We aim to launch the Singapore business in the first half of 2021, and we are excited about our growth prospects in the country. Besides, I am pleased to share that on November 13, Futu Futures Inc.'s application for National Futures Association member was approved. Futu Futures, Inc. is now a commodity futures trading commission registered futures commission merchant.

[解讀]我們的國際化已達到新的里程碑。富途新加坡私人有限公司正式取得新加坡金融管理局核發的資​​本市場服務牌照。我們的目標是在 2021 年上半年推出新加坡業務，我們對在該國的成長前景感到興奮。此外，我很高興告訴大家，11月13日，富途期貨公司的全國期貨協會會員申請獲得批准。富途期貨公司現為商品期貨交易委員會註冊期貨商。

(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財務長Arthur來討論一下我們的財務表現。

Thanks, Leaf and Daniel. We continue to deliver outstanding financial results. Let me walk you through some key of our financial details for the 3 quarter. All currencies are in Hong Kong dollar terms.

謝謝，葉和丹尼爾。我們持續取得出色的財務表現。讓我向您介紹我們第三季的一些關鍵財務細節。所有貨幣均以港幣計算。

We recorded total revenues of HKD 946 million, up 2.7x year-on-year and 38% Q-on-Q. To break it down, brokerage commission and handling charge income was HKD 563 million, up 3.6x year-on-year and 38% Q-on-Q. This was primarily due to the 3.8x growth of our total trading volume. Our blended commission rate this quarter was 5.8 basis point, down from 6.6 basis point in the last quarter. This sequential decrease was primarily due to the increase in trading volume for stocks for clients that use the flat rate pricing package option we offered.

總收入達 9.46 億港元，年增 2.7 倍，季增 38%。具體來看，經紀佣金及手續費收入為5.63億港元，年增3.6倍，季增38%。這主要是由於我們的總交易量增加了 3.8 倍。本季我們的混合佣金率為 5.8 個基點，低於上季的 6.6 個基點。這一環比下降主要是由於使用我們提供的統一費率定價方案的客戶的股票交易量增加。

Brokerage income accounts for 60% of our total revenue in the quarter. Interest income was HKD 276 million, an increase of 140% year-on-year and 33% Q-on-Q. Both margin financing interest income and IPO financing interest income achieved strong growth. Margin financing interest income increased primarily on the back of a significant 142% year-on-year increase in daily average margin financing balance. IPO financing interest income increased significantly due to the hit Hong Kong IPO market and our clients' increasing appetite to subscribe high-quality IPOs on margin.

經紀收入占我們本季總收入的60%。利息收入為2.76億港元，較去年成長140%，較上季成長33%。融資融券利息收入及IPO融資利息收入均實現強勁成長。融資融券利息收入成長主要是由於融資融券日均餘額年增142%。由於香港IPO市場受到衝擊，以及客戶以保證金認購優質IPO的意願不斷增加，IPO融資利息收入大幅增加。

Interest income contribute about 29% of our total revenue. Other income was HKD 107 million, up HKD 5.6 million year-on-year and 52% Q-on-Q. The growth was primarily due to increase in our IPO subscription service charge income, currency exchange service income and underwriting fee income. Other income contributed about 11% of our total revenue.

利息收入約占我們總收入的29%。其他收入為1.07億港元，較去年增加560萬港元，較上季增加52%。此成長主要是由於我們的IPO認購服務費收入、貨幣兌換服務收入和承銷費收入的增加。其他收入約占我們總收入的11%。

On the cost side, total costs was HKD 182 million, up 161% year-on-year and 18% Q-on-Q. To break it down, brokerage commission and handling charge expenses was HKD 101 million, an increase of 3.1x year-on-year and 31% Q-on-Q. The growth was roughly in line with our total trading volume growth.

成本方面，總成本為1.82億港元，年增161%，季增18%。其中，經紀佣金及手續費支出為1.01億港元，年增3.1倍，季增31%。這一增長與我們的總交易量增長大致一致。

Interest income -- interest expenses were HKD 47 million, an increase of 151% year-on-year and 18% Q-o-Q primarily due to higher IPO financing interest expenses. Processing and servicing costs were HKD 34 million, an increase of 27% year-on-year primarily due to increase in cloud service fee to support the growing number of trades. As a result, total gross profit increased to HKD 764 million, up 3.1x year-on-year and 43% Q-on-Q.

利息收入--利息支出為4,700萬港元，年增151%，季增18%，主要由於IPO融資利息支出增加。處理及服務成本為3,400萬港元，年增27%，主要是由於雲端服務費增加以支援不斷增長的交易數量。總毛利增至7.64億港元，年增3.1倍，季增43%。

Gross margin was expanded to 81% versus 73% in the same period last year. Total operating expenses were HKD 323 million, an increase of 111% year-on-year and 22% Q-on-Q. To break it down, R&D expenses were HKD 150 million, an increase of 111% year-on-year and 28% Q-on-Q. The increase was primarily due to increase in R&D headcount to support our business expansion.

毛利率由去年同期的 73% 擴大至 81%。總營運開支為3.23億港元，年增111%，季增22%。其中，研發費用為1.5億港元，較去年成長111%，較上季成長28%。這一增長主要是由於研發人員數量增加以支持我們的業務擴張。

Selling and marketing expenses was HKD 111 million, an increase of 184% year-on-year and 15% Q-on-Q. The increase was primarily due to higher branding and marketing spending. Although we're more aggressive on our marketing strategy to take advantage of the favorable market condition, our client acquisition costs per each unit continued to trend down in this quarter.

銷售及行銷費用為1.11億港元，較去年成長184%，較上季成長15%。這一增長主要是由於品牌和行銷支出增加。儘管我們在行銷策略上更加積極，以利用有利的市場條件，但我們每個單位的客戶獲取成本在本季度繼續呈下降趨勢。

G&A expenses was HKD 62 million, an increase of 45% year-on-year and 22% Q-on-Q. The increase was primarily due to increase in headcount for G&A personnel. As a result, our net income increased to HKD 402 million. Non-GAAP adjusted net income increased to HKD 408 million, up over 16x year-on-year and 68% Q-on-Q. The significant bottom line growth was primarily due to robust revenue growth and strong operating leverage. Also, in this quarter, we completed our USD 314 million equity loan financing. This placement has doubled our equity base and significantly strengthened our balance sheet to support our future growth. That concludes our prepared remarks. We'd now like to open the call to questions.

一般及行政費用為 6,200 萬港元，年增 45%，季增 22%。這一增長主要是由於 G&A 人員人數的增加。結果，我們的淨利潤增加至4.02億港元。非美國通用會計準則調整後淨利增至 4.08 億港元，年增超過 16 倍，季增 68%。淨利潤的顯著成長主要歸功於強勁的營收成長和強大的營運槓桿。此外，本季我們完成了 3.14 億美元的股權貸款融資。此次配售使我們的股本基礎增加了一倍，並顯著增強了我們的資產負債表，以支持我們未來的成長。我們準備好的演講到此結束。我們現在要開始提問。

Operator, please go ahead.

接線員，請繼續。

(Operator Instructions) We have the first question coming from the line of Ivy Lv from HSBC.

（操作員說明） 第一個問題來自匯豐銀行的 Ivy Lv。

It's Livy Lv from HSBC. And I have 2 questions today, mainly on the financial numbers. So first one, in the balance sheet, loans in advance. And also, we've seen a very big difference between this number and our margin balance. So could management explain the reason of this discrepancy?

我是匯豐銀行的 Livy Lv。我今天有兩個問題，主要是關於財務數據。第一，在資產負債表中，預支貸款。而且，我們發現這個數字與我們的保證金餘額之間有很大差異。那麼管理階層能否解釋一下造成這種差異的原因呢？

And the second number is on the short-term borrowings because we see a sharp increase on this number. So could management give us guidance on the source of that funding and also the funding cost trend going forward?

第二個數字是短期借款，因為我們看到這個數字急劇增加。那麼管理階層能否為我們提供有關資金來源以及未來融資成本趨勢的指導？

Okay. Thank you, Livy. I will answer your second question first. For the short-term borrowing actually, since the beginning of this year, we start to further optimize our funding source. Besides the equity following and also the bank borrowing, we also start to use the repo -- equity repo to further lower down our financial cost and further to support our balance sheet growth. So the items you can see from the short borrowing is more due to this equity repo instrument.

好的。謝謝你，李維。我先回答你的第二個問題。實際上短期借款方面，從今年年初開始，我們開始進一步優化資金來源。除了追隨股權和銀行借款之外，我們也開始使用回購——股權回購來進一步降低我們的財務成本，進一步支持我們的資產負債表成長。所以你從短期借款看到的項目比較是因為這種股權回購工具。

And for the first question, I think, basically, these 2 things, the loan balance and also the margin balance is still quite in line. Actually, I see the number is not too far away. So just wonder, could you further clarify your questions?

對於第一個問題，我認為基本上這兩件事，貸款餘額和保證金餘額仍然相當一致。事實上，我看到這個數字並不遙遠。所以想知道，你能進一步澄清你的問題嗎？

Livy, maybe I will chime in a little bit on your first question regarding the discrepancy. So I just want to clarify, so for our margin financing and securities lending balance, that number does not include our IPO financing balance. Therefore, the line item, loans and advances, that includes our IPO financing balances. So actually, in the third quarter, there were 2 IPOs that extended from September to October.

Livy，也許我會補充你關於差異的第一個問題。所以我想澄清一下，所以對於我們的融資融券餘額來說，這個數字不包括我們的IPO融資餘額。因此，貸款和墊款這一行項目包括我們的 IPO 融資餘額。所以實際上，在第三季度，有 2 起 IPO 從 9 月延續到 10 月。

If I remember correctly, (inaudible) were the 2 Hong Kong IPOs that started the IPO subscription process in September, but they eventually got listed in October. So that 2, about HKD 25 billion of IPO financing was included in our loans and advances balance on the balance sheet, whereas it's not included in the margin financing and securities lending balance. So I think that kind of explains the discrepancy here.

如果我沒記錯的話，（聽不清楚）是 9 月開始進行 IPO 認購程序的 2 家香港 IPO，但最終在 10 月上市。因此2，約250億港元的IPO融資已計入我們資產負債表上的貸款和墊款餘額，但不計入保證金融資和融券餘額。所以我認為這可以解釋這裡的差異。

We have the next question. This is coming from the line of Daphne Poon from Citigroup.

我們有下一個問題。這是來自花旗集團的 Daphne Poon 的。

So my first question is regarding the IPO subscription business. Just wondering if you can help break down the contribution in this quarter like the interest income, other revenue and commission. And related to that is that recently we saw the news from Hong Kong EX saying that they're planning to revise this IPO subscription route to basically shorten the subscription period from T+5 to T+1. So just wondering if the management has done any specifically or acclimate like in terms of the revenue or earnings impact from this.

我的第一個問題是關於IPO認購業務。只是想知道您是否可以幫助細分本季度的貢獻，例如利息收入、其他收入和佣金。與此相關的是，最近我們看到香港交易所的消息稱，他們計劃修改IPO認購路線，將認購期限從T+5基本上縮短為T+1。因此，我想知道管理層是否採取了任何具體措施或適應措施，以應對由此產生的收入或收益影響。

And second, just want to quickly check on the new customer -- new paying customer mix this quarter between the Hong Kong and China clients? And lastly, is regarding your sales and marketing costs. So as you mentioned earlier, the unit like customer acquisition costs per new paying client is meaningfully. I think now it's less than HKD 1,000. So just wondering if that will be the sustainable level going forward? Basically, what's the outlook here?

其次，只想快速檢查新客戶—本季香港和中國大陸客戶之間的新付費客戶組合？最後，是關於您的銷售和行銷成本。正如您之前提到的，每個新付費客戶的客戶獲取成本等單位是有意義的。我想現在不到1000港元。所以只是想知道這是否是未來可持續的水平？基本上，這裡的前景如何？

Okay. Thank you, Daphne. I will answer your first question about IPO margin. And I will partially answer your second questions in terms of breakdown of new paying clients. I will leave the acquisition cost outlook to my colleague, Robin.

好的。謝謝你，達芙妮。我將回答你關於IPO保證金的第一個問題。我將部分回答你關於新付費客戶細分的第二個問題。我將把購置成本展望留給我的同事羅賓。

We noticed this consultation paper issued by Hong Kong Stock Exchange earlier this week. You’re right. The IPO processing time line may be cut from the current T+5 days to T+1 day under this new arrangement. On such perspective, our IPO margin revenue will be negatively impact similar to all our retail broker peers. And I expect we may loss middle to single -- middle single digit revenues if we implement this new policy in the first 3 quarter of this year.

我們注意到香港聯交所本週稍早發布的這份諮詢文件。你說得對。根據這項新安排，IPO 處理時間可能會從目前的 T+5 天縮短至 T+1 天。從這個角度來看，我們的 IPO 保證金收入將受到與我們所有零售經紀商同行類似的負面影響。我預計，如果我們在今年前第三季實施這項新政策，我們可能會損失中個位數的收入。

On a forward-looking perspective, I think this loss may be significantly offset by the demand increase and also the industry consolidation within the retail brokerage business in Hong Kong. Despite our near-term financial loss, which I think is fully manageable, we strongly support this initiative advocated by Hong Kong Stock Exchange as we think this reform will improve the overall market efficiency and eliminate unnecessary transition costs for all market participants. This will make the overall market more accessible to the main Street. So we think every participant, including Futu, will be better eventually.

從前瞻性角度來看，我認為這一損失可能會被需求成長以及香港零售經紀業務的行業整合所抵消。儘管我們近期出現財務損失，我認為這是完全可以控制的，但我們強烈支持香港聯交所倡導的這一舉措，因為我們認為這項改革將提高整體市場效率，並為所有市場參與者消除不必要的過渡成本。這將使整個市場更容易到達主要街道。所以我們認為每個參與者，包括富途，最後都會變得更好。

And for your second question, in terms of the new paying clients we achieved in this quarter, 53% came from the Hong Kong local market and the remaining 47% came from the mainland. I will leave the client acquisition cost questions to Robin. Thank you.

關於你的第二個問題，就我們本季新增的付費客戶而言，53%來自香港本地市場，剩下的47%來自內地。我將把客戶獲取成本問題留給羅賓。謝謝。

Thank you. (foreign language)

謝謝。（外語）

(foreign language)

（外語）

[Interpreted] Right. So this year, the percentage of our new paying clients from organic growth continue to climb meaningfully quarter-after-quarter. And you can see that our per paying client acquisition cost has, therefore, come down quite a bit this year. Therefore -- in terms of our overall market spending, I think, we attach more importance to the ROI, our client acquisition as opposed to the total marketing expenses.

【解釋】對。因此，今年，我們來自有機成長的新付費客戶的比例繼續逐季大幅攀升。因此，您可以看到，今年我們的每位付費客戶獲取成本大幅下降。因此，就我們的整體市場支出而言，我認為我們更重視投資報酬率，即我們的客戶獲取，而不是總行銷費用。

We have the next question coming from the line of Yiran Zhong from Crédit Suisse.

下一個問題來自瑞士信貸銀行的鐘怡然。

Congratulations on a strong quarter. I have 3 questions. One is, in 3Q, you have further gained trading volume market shares, both in Hong Kong and U.S. How is the trend looking for 4Q thus far? And also, more specifically on U.S. volume, we noticed that the China ADRs trading volume has significantly pick up in November. And could you share any color on kind of the stock distribution of your U.S. volume? What are the top traded U.S. stocks on your platform? And how concentrated on the China ADRs traded through Futu?

恭喜季度表現強勁。我有 3 個問題。一是，第三季度，你們在香港和美國的交易量市佔率進一步增加，那麼第四季的趨勢如何？此外，更具體地說，就美國交易量而言，我們注意到中國 ADR 交易量在 11 月顯著回升。能否分享一下您在美國的庫存分佈？你們平台上交易量最大的美國股票有哪些？透過富途交易的中國ADR的集中度如何？

Secondly is, we calculated that the overall commission and handling fee rate was 5.5 bps in 3Q, lower than the 4 -- 6.4 bps in the last quarter. Could you share kind of the underlying drivers for the Q-on-Q change? Any color on how it's trending going forward?

其次是，我們計算出第三季整體佣金和手續費率為5.5個基點，低於上季的4-6.4個基點。您能否分享一下逐季度變化的潛在驅動因素？有什麼顏色可以說明未來的趨勢嗎？

And thirdly, on customer acquisition, can you -- are you able to break out the contribution from, say, IPO-related promotional events? Just trying to understand how should we think about the customer acquisition growth related to IPOs? And also, how is that -- how should we think about the trend going for -- beyond 4Q, beyond this year into next year and beyond?

第三，在顧客獲取方面，您能否－例如，與 IPO 相關的促銷活動所做出的貢獻？只是想了解我們應該如何看待與 IPO 相關的客戶獲取成長？而且，我們該如何思考第四季之後、今年之後到明年、之後的趨勢？

Okay. Thank you. I will answer the first 2 questions, and I will also leave the third question to Robin for your inquiries about client acquisitions. Number one, as we mentioned in our last earnings call, we see significant spike in terms of our market share gains in Hong Kong since July.

好的。謝謝。我會回答前兩個問題，第三個問題我也會留給Robin，供您詢問有關客戶獲取的問題。第一，正如我們在上次財報電話會議中提到的，自 7 月以來，我們在香港的市佔率大幅成長。

And the situation in Q3, you can see the overall -- our Hong Kong trading volumes increased a lot. In terms of the market share, we continue ways to keep our market shares over 2%. And I think the situation in October is still well on track. So I do expect there can be some structural positive things going forward.

第三季的情況，你可以看到整體——我們香港的交易量增加了很多。從市佔率來看，我們持續努力將市佔率維持在2%以上。我認為十月份的情況仍然進展順利。所以我確實預期未來會出現一些結構性正面的事情。

And in terms of the U.S. trading volume, actually, I think we -- the breakdown for our U.S. trading is not very concentrate on these Chinese ADR names. If my memory is right, our Chinese ADR trading volume accounts for roughly 10% to 15% of our total U.S. trading volumes overall. So despite -- we will benefit from these Chinese ADR training volumes recently in the U.S., I think the overall impact is not very meaningful.

就美國交易量而言，實際上，我認為我們美國交易的細分並不是非常集中在這些中國 ADR 名稱上。如果我沒記錯的話，我們中國的 ADR 交易量大約占我們美國總交易量的 10% 到 15%。因此，儘管我們最近在美國將受益於中國的 ADR 培訓量，但我認為整體影響並不是很有意義。

And secondly, about your question on the commission rate. Actually, I addressed this in the opening remarks. On a like-for-like basis, actually, our commission rate keep -- very stable. You can see our blended commission rate dropped down this quarter compared with last quarter. This is mainly due to the increase in trading volume product for stocks for clients who use the flat rate pricing package options we offered. I will leave the third question to Robin.

其次，關於你關於佣金率的問題。事實上，我在開場白中就談到了這一點。實際上，在同類基礎上，我們的佣金率保持非常穩定。您可以看到本季我們的混合佣金率與上季相比有所下降。這主要是由於使用我們提供的統一費率定價套餐選項的客戶的股票交易量產品增加。我將第三個問題留給羅賓。

Okay. I'll take the third question on our paying client breakdown. It's very difficult for us to break out what clients specifically come for the IPOs because it's really hard to trace other activities like they may invest in stocks first and then subscribe to IPO. So it's very hard to do that breakdown. But overall, we have seen that when these jumbo IPOs get listed in Hong Kong, we'll see a pickup in our client acquisition for 1 to 2 weeks beforehand.

好的。我將回答關於我們的付費客戶細分的第三個問題。我們很難弄清楚哪些客戶專門來參加 IPO，因為很難追蹤其他活動，例如他們可能先投資股票，然後再認購 IPO。所以要進行這種分解是非常困難的。但總體而言，我們發現，當這些大型 IPO 在香港上市時，我們會提前 1 至 2 週看到客戶獲取量的增加。

For Ant Group's IPO, for example, 2 weeks before the Ant Group's IPO, we have seen a meaningful pickup in our paying client numbers. And as we mentioned, these jumbo deals in Hong Kong will definitely be a positive contributor to our paying client growth. But again, it's very hard to break down the specific percentage. But we think the Hong Kong IPO, in general, just attract a lot more attention to the market. Well, it may bring some clients that are interesting IPO at first, but then they will be converted to other trading clients. So overall, we have not seen a meaningful change in our clients' asset balance or their trading behaviors.

以螞蟻集團 IPO 為例，在螞蟻集團 IPO 前兩週，我們看到付費客戶數量大幅增加。正如我們所提到的，香港的這些巨額交易肯定會對我們的付費客戶成長做出積極貢獻。但同樣，很難細分具體的百分比。但我們認為，整體而言，香港IPO只會吸引更多市場關注。嗯，它可能會帶來一些一開始對IPO感興趣的客戶，但隨後他們會轉換為其他交易客戶。因此總體而言，我們沒有看到客戶的資產餘額或交易行為發生有意義的變化。

(Operator Instructions) We have the next question from the line of Kelvin Chu from UBS.

（操作員說明）我們有來自 UBS 的 Kelvin Chu 的下一個問題。

It's Kelvin Chu from UBS. Two questions from me. First, you have delivered very strong brokerage business this year with decent market share gain. So at this point, what is your long-term strategic vision for your business model? How do you prioritize your traditional business versus wealth management fund product distribution over the long term?

我是瑞銀集團的 Kelvin Chu。我有兩個問題。首先，你們今年的經紀業務非常強勁，市場佔有率也獲得了可觀的成長。那麼目前，您對業務模式的長期策略願景是什麼？從長遠來看，您如何優先考慮傳統業務與理財基金產品分銷？

And secondly, can we have an update on the U.S. settlement system? Any disruption due to COVID-19? Just in terms of timing, when should we expect the migration of the trading account to take place? And when will the financial impact to come through in terms of potentially higher interest income from settlement cash?

其次，我們能否了解美國結算系統的最新情況？新冠肺炎 (COVID-19) 造成任何干擾嗎？就時間而言，我們預期交易帳戶的遷移會在什麼時候發生？結算現金利息收入可能增加，財務影響何時會顯現？

Okay. Thank you, Kelvin. Let me answer your second question first. I will leave the first question to my colleagues Leaf and Robin. You are right. Our progress in the U.S. self-clearing was negatively impacted by this COVID-19 pandemic. Now we currently expect we will start the trial migration to our self-clearing house in the first half next year. It is still too early to expect the financial impact. I think overall speaking, next year's financial impact will still not too significant. But just to give you a rough idea, based on our current U.S. stock positions as we complete this full process of the self-clearings, I think, we will at least generate additional USD 50 million operating profit.

好的。謝謝你，凱爾文。我先回答你的第二個問題。我將第一個問題留給我的同事Leaf和Robin。你是對的。我們在美國自我清理方面的進展受到了這次 COVID-19 大流行的負面影響。目前，我們預計明年上半年開始試遷移到我們的自助清算所。現在預測財務影響還為時過早。我認為整體來說，明年的財務影響仍然不會太大。但只是給大家一個大概的了解，根據我們目前的美股部位，當我們完成整個自我清算過程時，我認為我們至少會額外產生5000萬美元的營業利潤。

(foreign language)

（外語）

[Interpreted] Our strategy is composed of 5 different elements to our businesses. And number one is our retail brokerage business; number two, our wealth management business that provides a lot more earnings visibility nature. And thirdly is our enterprise service, Futu I&E with our ESOP system and IPO distribution services. And number four is our international expansion, we want to expand our client size, and we think that overseas market will contribute to a meaningful share of our overall paying client base in the mid to long run.

[解讀] 我們的策略由 5 個不同的業務要素組成。第一是我們的零售經紀業務；第二，我們的財富管理業務提供了更多的收益可見度。第三是我們的企業服務，富途進出口擁有我們的ESOP制度和IPO發行服務。第四是我們的國際擴張，我們希望擴大我們的客戶規模，我們認為從中長期來看，海外市場將在我們的整體付費客戶群中佔據有意義的份額。

And number five is that we want to create Futu into ecosystem that is centered around users and provides connectivity to different stakeholders like the investors, KOLs, media, et cetera, and we want to construct a self-reinforcing ecosystem. And with regards to the relationship between our brokerage and wealth management business, I think our strategy is to become one stop financial services platform for our clients and catering to the various different asset allocation needs for our clients. And I think wealth management is a very important step towards the strategy.

第五，我們希望把Futu打造成一個以使用者為中心，連結投資者、KOL、媒體等不同利害關係人的生態系統，建構一個自我強化的生態系統。至於我們的經紀業務和財富管理業務之間的關係，我認為我們的策略是成為客戶的一站式金融服務平台，滿足客戶各種不同的資產配置需求。我認為財富管理是邁向該策略的非常重要的一步。

We have our next question which is coming from the line of Hanyang Wang from 86Research.

我們的下一個問題來自 86Research 的 Hanyang Wang。

So my first question is about our margin financing business. So our successful secondary offering last quarter helped us serve more margin financing demand and significantly improved the margin financing balance. So we have impressive growth, be sustainable, given we have the leverage restriction on the business in Hong Kong. How shall we project the future growth of our margin financing balance? And do we need to keep raising money from the capital markets to meet the leverage requirement?

我的第一個問題是關於我們的保證金融資業務。因此，我們上季度成功的二次發行幫助我們滿足了更多的保證金融資需求，並顯著改善了保證金融資餘額。鑑於我們對香港業務的槓桿限制，我們的成長令人印象深刻，而且是可持續的。我們如何預測未來融資餘額的成長？我們是否需要不斷從資本市場籌集資金來滿足槓桿要求？

And my second question is on our user acquisition strategy. So in the third quarter, I think a number of Hong Kong paying users have surpassed the mainland users. So what will be our strategy in the future to acquire the mainland China users, which seems to be -- have a larger user base that we could explore into?

我的第二個問題是關於我們的用戶獲取策略。所以在第三季度，我認為香港的付費用戶數已經超過內地用戶了。那麼，我們未來獲取中國大陸用戶的策略是什麼，這似乎是我們可以探索的更大的用戶基礎？

My final question is about the Ant's IPO suspension. So will there be any impact on our IPO financing business in the fourth quarter?

我的最後一個問題是關於螞蟻金服IPO暫停的問題。那麼對我們第四季的IPO融資業務是否會產生影響呢？

Okay. Thank you. I think I have already answered your third question before through another analyst. I will answer your first question about margin financing, and I will leave the user acquisition strategies to my colleagues, Robin and Daniel.

好的。謝謝。我想我之前已經透過另一位分析師回答了你的第三個問題。我將回答您關於保證金融資的第一個問題，並將用戶獲取策略留給我的同事 Robin 和 Daniel。

For the margin financing, you are right, after the equity placement we did in third quarter, our equity base has already almost doubled. This will be very supportive for our balance sheet business going forward. I think based on our current business expansions, we will have sufficient monies to support our margin financing in the next 12 to 18 months.

對於保證金融資，你是對的，在我們第三季度進行股權配售之後，我們的股本基數已經幾乎翻了一番。這將非常有利於我們資產負債表業務的未來發展。我認為根據我們目前的業務擴張，我們將有足夠的資金來支持未來12到18個月的保證金融資。

And also, if you look at our third quarter number, our total equity base now already exceeds HKD 5 billion. Based on the regulations made by Hong Kong SFC, each retail broker's leverage ratio in Hong Kong cannot exceed 5x. So you can have just -- here, just to give you some rough ideas about how further upside for our margin businesses.

而且，如果你看看我們第三季的數據，我們的總股本現在已經超過 50 億港元。根據香港證監會的規定，香港各零售經紀商的槓桿率不能超過5倍。因此，您可以在這裡為您提供一些關於我們的保證金業務如何進一步上漲的粗略想法。

I think it is very difficult to estimate the margin balance outlook going forward as that -- there was a lot of market conditions, market volatilities will impact the client's risk appetite. But I think long term speaking, as we have more and more clients, this balance will continue to grow down the road. Now I will leave the second question to Robin. Thank you.

我認為很難估計未來的保證金餘額前景，因為市場條件很多，市場波動會影響客戶的風險偏好。但我認為從長遠來看，隨著我們擁有越來越多的客戶，這種平衡將繼續增長。現在我將第二個問題留給Robin。謝謝。

(foreign language)

（外語）

[Interpreted] We have been quite aggressive with our Hong Kong marketing strategy and that turned out to be quite effective because Hong Kong itself is a small place. And the existing client base, they are very prone to trading Hong Kong and U.S. securities already. So our marketing efforts have been quite effective so far.

[解讀]我們在香港的行銷策略非常積極，結果證明非常有效，因為香港本身就是一個小地方。而現有的客戶群，他們已經很容易交易香港和美國的證券。所以到目前為止我們的行銷工作是相當有效的。

And with regards to our mainland client acquisition, I think we use different client acquisition strategies because of the number of constraints. For example, like ESOP continues to contribute a very steady stream high-quality clients and word-of-mouth referral is more meaningful in mainland than in Hong Kong in terms of our absolute paying client contribution. So we have different client acquisition strategies for mainland, and we think the growth prospects in mainland are very strong. Thank you.

至於我們大陸的客戶獲取，我認為由於數量的限制，我們使用了不同的客戶獲取策略。例如，像ESOP持續貢獻非常穩定的優質客戶，就我們的絕對付費客戶貢獻而言，口碑推薦在大陸比在香港更有意義。所以我們對大陸有不同的客戶獲取策略，我們認為大陸的成長前景非常強勁。謝謝。

We have our next question. This is coming from the line of Cecilia Qiu from DTC Investment.

我們有下一個問題。這是來自 DTC Investment 的 Cecilia Qiu 的專線。

Congrats on the strong quarter. I'm really excited about Futu launching Hong Kong option products and other derivative instruments to expand your product portfolio. But my concerns are on the risk control side. I don't know if you have anything to share at this moment about risk management regarding your burgeoning derivatives business segment.

恭喜季度表現強勁。我對富途推出香港選擇權產品和其他衍生性商品來擴展您的產品組合感到非常興奮。但我擔心的是風險控制方面。我不知道您目前是否有關於新興衍生性商品業務部門的風險管理方面的資訊可以分享。

Okay. Thank you. I will let my colleagues, Daniel, to answer this question.

好的。謝謝。我會讓我的同事丹尼爾來回答這個問題。

With regards to our risk management procedures, we have always been quite prudent with our risk management approach. And actually, if you compare our LTV ratio -- I mean for individual stock margin financing, if you compare our LTV ratio to those offered by traditional banks, we are more conservative around that. And that also goes with our derivatives trading risk management as well.

就我們的風險管理程序而言，我們的風險管理方法一直相當審慎。實際上，如果你比較我們的 LTV 比率——我的意思是對於個股保證金融資，如果你將我們的 LTV 比率與傳統銀行提供的 LTV 比率進行比較，我們對此會更加保守。這也與我們的衍生性商品交易風險管理有關。

I think to prepare for the launch of this business, we have actually recruited a number of finance personnel from the traditional institutions that have very rich experience in risk management for derivatives products. So like overall, we have been prudent in our approach and we gradually rollout our derivatives trading products.

我覺得為了準備推出這個業務，我們實際上從傳統機構招募了一些財務人員，他們對衍生性商品產品的風險管理有非常豐富的經驗。因此，整體而言，我們的做法一直保持謹慎，並逐步推出衍生性商品交易產品。

Like we mentioned, like in the third quarter, we started offering the Hong Kong securities lending business. But so far, we've only opened up that service to 10% of our total paying client base, and we decided to open it to 100% of our client base by the end of this year. So like when we start the new derivatives product, like we are prudent, and we take a gradual approach towards our business development.

正如我們所提到的，就像在第三季度，我們開始提供香港證券借貸業務。但到目前為止，我們只向我們總付費客戶群的 10% 開放了這項服務，我們決定在今年年底之前向 100% 的客戶群開放該服務。就像我們開始推出新的衍生性商品時一樣，我們是謹慎的，我們採取漸進的方式來發展我們的業務。

So overall, I think, so far, we have not -- since we launched the margin financing business in 2017 and like we have added a lot of new derivatives products. But so far, we have not experienced any material loss on any of our margin financing or derivatives trading offering. Thank you.

總的來說，我認為，自從我們在 2017 年推出保證金融資業務以來，到目前為止，我們還沒有增加很多新的衍生性商品。但到目前為止，我們的任何保證金融資或衍生性商品交易產品都沒有遭受任何重大損失。謝謝。

Understood. And may I add one more question on your brokerage fee and commission expense ratio, is there a meaningful difference between the brokerage expense ratio of your U.S. trading volume and that of Hong Kong volume? And how should we expect the expense ratio to be in, say, 3 to 5 years when your proprietary U.S. stock clearing system is fully developed?

明白了。我可以再補充一個關於你們的經紀費用和佣金費用比率的問題嗎？你們美國交易量和香港交易量的經紀費用比率之間是否存在有意義的差異？當您專有的美國股票清算系統完全開發出來時，我們應該如何預期 3 到 5 年後的費用比率？

I think in terms of the commission -- blended commission rate in Hong Kong and in the U.S., U.S. rate is slightly higher than Hong Kong, but the difference is too -- not too significant. And secondly, for the U.S. self-clearing capabilities, Kelvin from UBS also raised this question before, I think it will take a very long time for us to gradually migrate our clients' U.S. stock positions to our self-clearing house.

我認為就佣金而言——香港和美國的混合佣金率，美國的佣金率略高於香港，但差異也不是太大。其次，對於美國的自我清算能力，瑞銀的Kelvin之前也提出過這個問題，我認為我們需要很長時間才能逐步將客戶的美國股票部位遷移到我們的自我清算所。

It has a lot of human technology know-hows, and we need to make sure all these corporate actions can be conduct in a right manner. So it definitely will take time. I'll just give you a rough idea. If we migrate all these existing positions to our self-clearing house today, the cost savings in terms of the execution fee and also the idle cash potentially we can monetize alongside with the stock positions, we can potentially monetize through stock borrowing and lending activities. We can generate additional USD 15 million operating profit without considering any direct people cost nowadays.

它擁有大量的人類技術知識，我們需要確保所有這些企業行為都能以正確的方式進行。所以這肯定需要時間。我只是給你一個粗略的想法。如果我們今天將所有這些現有頭寸遷移到我們的自助清算所，那麼執行費用方面的成本節省以及我們可以與股票頭寸一起貨幣化的閒置現金，我們可以透過股票借貸活動貨幣化。如今，在不考慮任何直接人員成本的情況下，我們可以額外產生 1,500 萬美元的營業利潤。

(Operator Instructions) We do not have any questions at this moment. I would like to hand the conference back to our host, Mr. Daniel, please take over for any closing remarks.

（操作員說明） 目前我們沒有任何問題。我想把會議交還給我們的主人丹尼爾先生，請他做閉幕致詞。

Thank you. 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 representative. Thank you, and goodbye.

謝謝。我們今天的電話會議到此結束。我謹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, sir. Ladies and gentlemen, that concludes our conference for today. Thank you all for your participation. You may disconnect your lines now. Thank you to all.

謝謝你，先生。女士們、先生們，今天的會議到此結束。感謝大家的參與。現在您可以斷開線路。謝謝你們。