富途证券招股书（英文）-20190308-293页_3mb

7,500,000 American Depositary Shares (ADSs) Offering Summary

Core Content

Futu Holdings Limited is conducting an initial public offering (IPO) of 7.5 million American Depositary Shares (ADSs). Each ADS represents 8 Class A ordinary shares, with a par value of US$0.00001 per share. The ADSs are listed on the Nasdaq Global Market under the symbol "FHL".

The price per ADS is US$12.00, resulting in a total offering value of US$90,000,000. The underwriting discounts and commissions amount to US$0.996 per ADS, totaling US$7,470,000, and the proceeds to Futu Holdings are US$11.004 per ADS, or US$82,530,000 in total.

The underwriters have the option to purchase up to 1.125 million additional ADSs within 30 days of the offering, at the initial public offering price less the underwriting discounts and commissions.

Key Information

• Offering Details:

  • Number of ADSs: 7,500,000
  • Price per ADS: US$12.00
  • Total Proceeds: US$82,530,000
  • Underwriters: Goldman Sachs (Asia) L.L.C., HSBC, UBS Investment Bank, Credit Suisse, BOCI
  • Listing: Nasdaq Global Market under symbol "FHL"
  • Date of Prospectus: March 7, 2019
  • Delivery Date: March 12, 2019

• Share Structure:

  • Class A ordinary shares: 1 vote per share, not convertible to Class B.
  • Class B ordinary shares: 20 votes per share, convertible into Class A at any time.
  • Voting Power: Mr. Leaf Hua Li beneficially owns 74.1% of Class B shares and can exercise 71.9% of total voting power.

• Company Status:

  • Emerging Growth Company: Eligible for reduced public company reporting requirements.
  • Foreign Private Issuer: Exempt from certain provisions of the Exchange Act.

Main Viewpoints

• Market Position:

  • Ranked #4 in Hong Kong Online Retail Securities Market and #2 in China's Overseas Online Retail Securities Market in 2018.
  • Total client trading volume in 2018: HK$907 billion (US$115.8 billion)
  • Total client assets: HK$50.9 billion (US$6.5 billion)
  • Net profit in 2018: HK$138.5 million (US$17.7 million)
  • Revenue CAGR (2012–2018): 205%

• User and Client Base:

  • Users: 5.6 million as of December 31, 2018
  • Registered Clients: 502,000
  • Paying Clients: 132,821
  • Client Retention: Over 97% quarterly retention since 2017
  • Average Daily Active Users (DAUs): Over 151,000 in December 2018
  • Average Daily Usage: 24.1 minutes per trading day

• Business Model:

  • Offers a fully digitized brokerage platform called Futu NiuNiu.
  • Provides trade execution, margin financing, market data, news, research, and analytical tools.
  • Operates a social network platform called NiuNiu Community, which enhances user engagement and information exchange.

• Strategic Partnerships:

  • Tencent Mobility Limited, an affiliate of Tencent Holdings Limited, has subscribed for 666,667 ADSs.
  • Collaborates with Tencent in traffic, content, cloud services, and fintech-related products.

• Corporate Structure:

  • Futu International Hong Kong is the core operating entity in Hong Kong, holding Type 1, 2, 4, 5, and 9 licenses from the HK SFC.
  • Futu Holdings Limited is the holding company incorporated in the Cayman Islands.
  • Futu Network and Shenzhen Futu (a VIE) are key entities for R&D and operations in China.
  • Futu Inc., Futu Clearing Inc., and Moomoo Inc. are U.S.-based subsidiaries for expanding overseas services.

• Financial Performance (2016–2018):

  • Revenues:
    • 2016: HK$87.0 million
    • 2017: HK$311.7 million
    • 2018: HK$811.3 million (US$103.6 million)
  • Net Profit:
    • 2016: Net loss of HK$98.5 million
    • 2017: Net loss of HK$8.1 million
    • 2018: Net profit of HK$138.5 million (US$17.7 million)
  • Adjusted Net Income:
    • 2016: Net loss of HK$89.3 million
    • 2017: Adjusted net income of HK$1.7 million
    • 2018: Adjusted net income of HK$149.0 million (US$19.0 million)

Key Challenges and Risks

• Regulatory Environment: Navigating a complex and evolving regulatory landscape.
• Growth Management: Managing future growth while maintaining profitability.
• Operational Barriers: High regulatory and capital requirements.
• User Engagement: Increasing utilization of services by both existing and new users.
• Competition: Intensifying competition and evolving revenue models.
• Legal and Regulatory Actions: Risk of intellectual property or privacy claims.
• Profitability Maintenance: Retaining profitability after transitioning from losses to profit in 2018.

Summary of Financial Highlights

• Total Revenue (2018): HK$811.3 million (US$103.6 million)
• Net Profit (2018): HK$138.5 million (US$17.7 million)
• Client Assets (2018): HK$50.9 billion (US$6.5 billion)
• Trading Volume (2018): HK$907 billion (US$115.8 billion)
• User Growth: 5.6 million users as of December 31, 2018
• Paying Clients Growth: Increased from 35,456 (2016) to 132,821 (2018)
• Client Retention: Over 97% of paying clients retained quarterly since 2017

Summary of Key Strengths

• Premier Investing Experience: Focus on user experience and technology.
• Proprietary Technology Infrastructure: Closed-loop, secure, and scalable platform.
• Attractive User Base: Rapidly growing and loyal user and client base.
• Significant Operating Leverage: Efficient operations enable low commission rates.

Summary of Strategies

• Grow and Monetize Client Base: Expand user base and enhance monetization.
• Broaden Core Services: Diversify into asset management, financial services, and fintech products.
• Improve Platform: Invest in technology infrastructure to support growth and security.
• Expand Internationally: Strengthen presence in Hong Kong and U.S. markets.

Summary of Corporate Structure

• Futu International Hong Kong: Core HK SFC-regulated entity.
• Futu Holdings Limited: Holding company incorporated in Cayman Islands.
• Futu Network and Shenzhen Futu (VIE): Key entities for R&D and operations in China.
• Futu Inc., Futu Clearing Inc., and Moomoo Inc.: U.S.-based subsidiaries for international expansion.

Summary of Legal and Regulatory Information

• Exemptions: As an emerging growth company, exempt from Section 404 auditor attestation.
• Foreign Private Issuer: Exempt from certain provisions of the Exchange Act.
• Regulatory Compliance: All operations are conducted under applicable licensing and regulatory requirements.