Futu Holdings (FUTU) Q4 Earnings Report in Focus

Futu Holdings Ltd (NASDAQ:FUTU) is a digital broker and wealth management platform based in Hong Kong. The company primarily makes money in the form of commissions from its online brokerage. It helps customers trade stocks, bonds, and other financial instruments in China and Hong Kong. Futu went public in March 2019 by pricing its 7.5 million shares at $12 apiece for total proceeds of $90 million.

The company on Tuesday announced its financial results for the fourth quarter. Futu reported adjusted earnings of HK$552.9 million for the three months ended December 31, significantly higher than HK$49.3 million in the comparable quarter of 2019.

Revenue for the quarter skyrocketed 281.6 percent on a year-over-year basis to HK$1,186.4 million. Total paying clients in the quarter jumped 160.5 percent to 516,721, while registered clients in the quarter rose 97.8 to 1,419,734.

CEO Leaf Hua Li said in a statement, “Futu I&E continues to be the go-to enterprise service partner. We had 105 IPO and IR clients as of year-end. In the fourth quarter, 10 IPOs recorded over HK$10 billion in subscription, respectively, on our Futubull platform, including the US IPOs of Miniso and Lufax, and the HK IPOs of Pop Mart and JD Health. We also added 33 ESOP clients in the quarter, bringing our total ESOP client number to 159.”

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Futu shares fell more than 4 percent on Tuesday despite solid Q4 results. The stock continued its downward trajectory Wednesday, slipping nearly 2 percent in the mid-day trading. Nevertheless, the stock has gained significant value in recent months. FUTU stock’s value has increased nearly 200 percent so far in 2021.

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