FUTU

Hello, ladies and gentlemen. Welcome to Futu Holdings' first quarter 2026 earnings conference call. At this time, all participants are in a listen-only mode. After management's prepared remarks, there will be a question-and-answer session. 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, Alan Tsui, Investor Relations Manager at Futu. Please go ahead, sir.

Thanks, operator. Thank you for joining us today to discuss our first quarter 2026 earnings results. Joining on the call today are Mr. Leaf Li, Chairman and Chief Executive Officer, Arthur Chen, Chief Financial Officer, and Robin Xu, Senior Vice President. 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 would 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 annual report. With that, I will now turn the call over to Leaf. Leaf will make his comments in Chinese, and I will translate.

[Non-English content]

Thank you all for joining our earnings call today. In the first quarter, we added 225,000 net new funding accounts, bringing our total funding accounts to 3.59 million, up 34% year-over-year and 7% quarter-over-quarter. Although subdued Hong Kong equity markets weighed on client acquisition, Hong Kong still contributed the second-largest new account addition among all regions. We remain confident about sustained client growth in Hong Kong. Looking ahead, we will focus more on the growth of client assets and lifetime value, leveraging our strength in product innovation, brand trust, and one-stop platform to further unlock the commercial potential of the Hong Kong market. Singapore delivered double-digit sequential growth in net new funding accounts. Over the past three years, average client assets in Singapore grew at a CAGR of more than 50%.

Given the wealth profile of local residents, we continue to see significant room for further asset growth in Singapore. Malaysia led all markets in client additions for another quarter, thanks to our effective marketing initiatives around U.S. equities, as well as Moomoo's strong IPO product capability, which allowed us to capitalize on the active Malaysian IPO window for accelerated client growth. Meanwhile, profitability in Malaysia continued to improve, and we expect the market to achieve breakeven within the next six to 12 months. In Japan, our superior U.S. equity trading capability continued to drive client acquisition. In the first quarter, U.S. stock trading volume in Japan recorded double-digit sequential growth while U.S. options contract volume doubled. This year, we will continue to enhance our Japanese equity trading experience to better meet domestic investment needs and further unlock client acquisition potential.

In the US, we officially received NFA approval to operate a prediction market brokerage business, and we will soon begin offering event contracts, including sports-related products, to local investors, further strengthening Moomoo's value proposition to active traders.

客户市场参与热情高涨，净入金达到历史第二高的单季度水平。然而股票持仓市值的下跌对客户资产造成明显拖累。季末客户资产环比基本持平，同比增长47%。日本、澳大利亚及加拿大市场的客户资产均实现双位数环比增长，三地户均资产更创下历史新高。客户质量稳步提升。随着投资者的风险偏好上升，季末融资融券余额按季增长8%至729亿港元。

Client engagements strengthened on the back of precious metal market volatility and geopolitical tension, leading to the second highest quarterly net asset inflow on record. Market losses in client equity holdings exerted a substantial negative impact. The client asset remained flat quarter-over-quarter, yet up 47% year-over-year. Client asset registered double-digit sequential growth in Japan, Australia, and Canada. The average client asset across these three regions also reached all-time high and is growing, improving client quality. Rising risk appetite drove margin financing and security lending balance up 8% sequentially to HKD 72.9 billion at quarter end.

总交易量再创平台纪录，达4.15万亿港元，同比增长29%，环比增长4%。美股交易量整体保持稳定，为3万亿港元。AI仍为最主要的美股投资主题，但客户投资兴趣逐步沿AI产业链下移，从芯片厂延伸至基础设施标的。港股方面，市场波动性加剧，客户入市抄底，推动港股交易量环比增长22%至1万亿港元。中国科技股及新上市的AI相关股票交易活跃，抵消了消费板块相对疲弱的交易表现。

Total trading volume reached a record HKD 4.15 trillion, up 29% year-over-year and 4% quarter-over-quarter. U.S. stock trading volume remained broadly stable at HKD 3 trillion. AI continued to be the dominant investment theme, with client interest gradually shifting down the value chain from semiconductor names towards AI infrastructure beneficiaries. Hong Kong stock trading volume rose 22% sequentially to HKD 1 trillion, as heightened market volatility drove stronger bottom fishing activities. Active trading in China technology and newly listed AI-related companies more than compensated for softer momentum in the consumer sector.

3月，猎豹交易所正式通过香港证监会VATP牌照第二阶段审批，并全面展业。目前富途证券部分虚拟资产交易量及AUM已迁移至猎豹交易所。未来我们计划在香港推出证券融资交易虚拟资产服务，进一步提升客户跨资产资金使用效率。同时，我们也将持续推进OTC交易、更多币种支持及质押等核心能力，并积极探索机构服务相关新业务场景，逐步将猎豹交易所打造成香港Web3生态的重要基础设施。

In March, PantherTrade officially obtained second phase approval for the Hong Kong SFC VATP license and commenced full operations. Since launch, a portion of Futu Securities' crypto trading volume and AUM has migrated to PantherTrade. Looking ahead, we plan to introduce security-backed margin financing for virtual assets in Hong Kong to further enhance capital efficiency across asset classes. At the same time, we will continue to expand the capability of our crypto exchange, including OTC trading, broader token support, and staking services. We are also actively exploring new institutional service use cases with the goal of making PantherTrade a key infrastructure within the Hong Kong Web3 ecosystem.

截至一季度末，财富管理客户资产规模达1,784亿港元，同比增长28%，环比基本持平。一季度客户风险偏好提升，部分资产配置由货币基金流向股票基金。为满足客户不断演进的投资需求，我们进一步丰富了基金产品选择。在香港，我们成为首批推出太空经济主题公募基金的券商之一。在新加坡，我们上线了新加坡金管局证券市场发展计划下的本地股票基金。此外，我们还推出了挂钩黄金和石油的结构性票据，并进一步拓展发行人合作。季度内零售结构化产品认购客户数环比翻倍。

Period end wealth management client assets were HKD 178.4 billion, up 28% year-over-year, and broadly stable quarter-over-quarter. In the first quarter, client asset allocation partly rotated from money market funds into equity funds amidst improving risk appetite. In response to evolving client demands, we further expanded our fund selection. In Hong Kong, we became one of the first brokers to offer space economic themed mutual funds, while in Singapore, we rolled out local equity funds under the MAS Equity Market Development Programme. We also launched gold and oil-linked structured notes and onboarded new issuers. Total retail subscribers for structured products doubled sequentially. As of quarter end, we served 625 IPO distribution and IR clients, up 26% year-over-year.

In the first quarter, 12 IPOs each saw over HKD 100 billion in subscription demands on our platform, while six issuers appointed us as overall coordinators for their Hong Kong listings, underscoring our strong distribution and underwriting capabilities. During the quarter, we also act as joint bookrunners for several prominent Hong Kong IPOs, including those of Zhipu AI, MiniMax, and Biren Technology. Next, I'd like to invite our CFO, Arthur, to discuss our financial performance.

Thank you, Liv and Alan. Please allow me to walk you through our financial performance in the first quarter. All the numbers are in HKD unless otherwise noted. Total revenue was HKD 5.9 billion, up 25% from HKD 4.7 billion in the first quarter of 2025. Brokerage commission and handling charge income was HKD 2.6 billion, up 14% year-over-year, and down 5% quarter-over-quarter. Total trading volume grew on both year-over-year and a quarter-over-quarter basis, while blended commission rate declined due to stronger trading activities in higher priced U.S. stocks and options during the quarter. Interest income was HKD 2.7 billion, up 28% year-over-year, and down 13% quarter-over-quarter.

The year-over-year increase was mainly driven by high interest income from margin financing and bank deposits, while the quarter-over-quarter decrease was primarily attributable to lower interest income from securities borrowing and the lending business, as well as bank deposits. Other income was HKD 564 million, up 80% year-over-year and down 10% quarter-over-quarter. The year-over-year increase was primarily driven by higher currency exchange service income and IPO subscription service charge income. The quarter-over-quarter decrease was mainly due to lower enterprises public relationship service charge income and IPO subscription service charge income. Our total cost was HKD 749 million, flat compared to the first quarter of 2025. Brokerage commission and the handling charge expenses were HKD 164 million, up 16% year-over-year and 16% quarter-over-quarter.

The year-over-year increase was broadly in line with the growth of our brokerage commission and handling charge income. The quarter-over-quarter increase was mainly due to transaction fees rebate in the prior quarters. Interest expenses were HKD 415 million, down 12% year-over-year and 5% quarter-over-quarter. Both the year-over-year and the quarter-over-quarter decrease was mainly driven by lower interest expenses associated with our security borrowing and lending business. Processing and service costs were HKD 117 million, up 25% year-over-year and 13% quarter-over-quarter. Both year-over-year and the quarter-over-quarter increase was primarily driven by higher product service fees. As a result, total gross profit was HKD 5.1 billion, an increase of 29% from HKD 3.9 billion in the first quarter of 2025. Gross margin was 87.2% as compared to 84% in the first quarter of 2025.

Operating expenses were HKD 1.6 billion, up 25% year-over-year and flat quarter-over-quarter. R&D expenses were HKD 479 million, up 24% year-over-year and down 5% quarter-over-quarter. The year-over-year increase was primarily driven by higher R&D headcount to support strategic initiatives in the new markets. Selling and the marketing expenses were HKD 557 million, up 21% year-over-year and 10% quarter-over-quarter. Both the year-over-year and the quarter-over-quarter increase was mainly driven by higher customer acquisition costs. G&A expenses was HKD 541 million, up 30% year-over-year and flat quarter-over-quarter. The year-over-year increase was primarily due to increase in G&A personnel. As a result, income from operation was HKD 3.5 billion, up 31% year-over-year and down 15% quarter-over-quarter.

Operating margin increased to 30.3% from 57.2% in the first quarter of 2025, mostly due to strong top-line growth and operating leverage. On May 22nd, 2026, the company received an administrative penalty reprieve notification letter from the China Securities Regulatory Commission, Shenzhen Bureau, in an aggregate amount of approximately RMB 1.85 billion, which has been fully reflected in our first quarter financial statements as an adjusted subsequent event under U.S. GAAP. This amount does not impact our business fundamentals or financial stability. We remain focused on long-term growth across international markets. As a result, our net income decreased by 61% year-over-year and 75% quarter-over-quarter to HKD 831 million, with net income margin at 14.2%. Prior to giving effect to this adjustment. Our net income would have increased by 36% year-over-year and down 13% quarter-over-quarter to HKD 2.9 billion, with net income margin at 49.9%.

As of the close of the U.S. market on May 27th, 2026, we have cumulatively repurchased approximately $418 million worth of ADSs, reflecting management's strong confidence in the company's future growth prospects and the commitment to deliver shareholder value. Subject to market conditions, we may continue to execute repurchases from time to time and the $800 million share repurchase program announced in November 2025. That concludes our prepared remarks. We'd now like to open the call to questions. Operator, please go ahead.

Thank you. Our first question is going to come from the line of You Fan with CICC. Your line is open. Please go ahead.

好的，感谢管理层给我这个提问的机会。我是中金公司的分析师樊悠悠。我这边有两个问题想要请教一下管理层。首先第一个的话还是关于监管，想请公司为我们再解读一下上周五关于跨境证券期货基金经营活动的一个最新监管指引。公司是如何理解这一次最新的监管要求？从公司层面来看的话，对咱们富途有什么影响？第二个问题的话，我想请教一下关于地区的分布。可否请管理层再帮忙拆解一下咱们一季度的净新增的有资产客户数，包括存量一季度的有资产客户数，它在各个市场的一个地区分布。然后包括如果截至到一季度末来看的话，咱们的客户AUM在各个市场的一个分布大概是如何。我这边的话来快速翻译一下。Thanks management for taking my call. This is You Fan from CICC. I have two questions here. The first one is about the regulation. Would you please share more on your understanding of the latest regulatory requirements published by CSRC and SFC last Friday?

What's the impact on Futu? The second question is about our regional breakdown. Would you please share more data on the regional breakdown of the net new added paying clients, the existing paying clients in Q1, and also the AUM breakdown by regions as of Q1? These are my two questions. Thank you.

好的，谢谢悠悠。那第一个问题我请Steve来回答，我来回答第二个问题。

你好，悠悠。我来回答第一个问题。CSRC与SFC上周五发布了关于内地投资者跨境证券期货及基金业务的行业性指引更新，我们第一时间关注并积极响应。此次规则的调整是属于面向全行业的统一要求，公司将积极拥抱监管，并严格按照指引稳步推进后续合规工作。作为持牌金融机构，富途始终将合规经营放在首位。此前我们已经全面停止为内地身份客户开户，并持续加强开户审核与反欺诈机制，对造假行为保持零容忍。过去两年，我们已经累计驳回了数以万计的不合规开户申请。截至一季度末，内地有资产客户占比约13%，客户资产占比约17%，对应收入贡献约20%。并且内地客户两年集中整顿期并不是要求清退账户，而是限制在境内的入金与买入行为。富途业务在过去几年也都更加多元化。当前，面向香港本地客户，我们在激烈竞争的市场环境中仍然保持了超过50%的市场占有率。同时，公司的国际化也都进入了全面加速期。一季度海外独立品牌moomoo在海外所有市场均录得收入，年对年高比例增长，其中五个国家的收入增速是超过了100%。海外有资产客户超过200万人，客户质量逐年提升，人均AUM约1.8万美元，显著高于当地其他在线投资平台。未来公司预计还将进入更多国际市场。目前监管牌照申请进展顺利，我们也正在同步推进前期准备工作。我们相信全球化布局将进一步提升集团业务结构的韧性与未来增长空间。总体而言，目前公司在香港及海外市场的业务运营一切正常，各项新业务也在有序推进中。我们预计此次监管更新不会对全年80万户户口指引产生实质影响。富途将继续坚持合规经营与国际化战略，不断提升产品与服务能力，推动公司长期稳健增长。谢谢。

CSRC and SFC released updated industry-wide regulatory update last Friday.

Regarding cross-border securities, futures and fund-related activities involving Mainland Chinese investors. We paid close attention to the updates immediately and responded proactively. This regulatory adjustment applies uniformly across the industry, and the company will continue to actively embrace regulatory requirements and steadily advance subsequent compliance measures in strict accordance with the guidance. As a licensed financial institute, Futu has always placed compliance operation as its top priority. Previously, we had already fully ceased account opening for Mainland Chinese identity holders. While continuously strengthening our account review and anti-fraud mechanism, we maintain zero tolerance towards fraudulent activity. Over the past two years, we have cumulatively rejected tens of thousands of non-compliant account opening applications.

As of the end of the first quarter, Mainland China funded accounts represent approximately 13% of our Q2 funding accounts, while related client assets accounted for around 17% of total client assets, contributing approximately 20% of total revenue. In addition, the two-year recertification period of Mainland Chinese clients does not require forced account closures, but rather restrictions on deposit and security buying activities while clients are physically located within Mainland China. Over the past several years, Futu's business has also become increasingly diversified. In Hong Kong, despite the intense competitive market environment, we have maintained a market share of over 50% among local residents. Meanwhile, the company's international expansion has entered a phase of full acceleration. In the first quarter, Moomoo, our overseas independent brand, delivered strong year-over-year revenue growth across all overseas markets, with revenue in five countries more than doubling.

Overseas funded accounts surpassed 2 million, while client quality continued to improve steadily, with average AUM per client reaching approximately $18,000, significantly higher than that of other local online investment platforms. Looking ahead, the company expects to expand into more international markets. Regulatory license applications are progressing smoothly. While we are also advancing related preparations in parallel, we believe our global expansion strategy will further enhance the resilience of the group's business structure and broaden its long-term growth potential. Overall, the company's operations in both Hong Kong and overseas markets remain fully normal, and various new business initiatives are progressing in an orderly manner. We do not expect this regulatory update to have any material impact on our full-year guidance of 800,000 net new funded accounts.

Futu will continue to adhere to its compliance first and international expansion strategies, while continuously enhancing its product and service capabilities to drive long-term sustainable growth.

好的，谢谢Leaf。那有关这个第二个问题，新增有资产客户的一个拆解，我来回答一下。在一季度，马来西亚和香港两个地区合计贡献了超过一半的我们的新增有资产客户。其余的市场里面，新加坡的贡献是最大的。那么截止到一季度末，整个集团的这个有资产客户当中，海外品牌Moomoo的贡献超过55%，其中以新加坡、美国和马来西亚为主。截止一季度末，整个集团的客户资产当中，富途证券香港的主体占比是最大的。海外品牌Moomoo的客户资产当中，以新加坡和美国为主。Malaysia and Hong Kong together contributed more than half of the net new funded accounts in the first quarter, while among the remaining markets, Singapore contributed the largest ratios.

At the end of the first quarter, over 55% of the group funded accounts were under our overseas brand Moomoo, primarily from Singapore, U.S., and also Malaysia. At the end of the first quarter, Futu Securities Hong Kong entity contributed the largest share of the group's total assets. Within Moomoo, total clients assets was primarily contributed by Singapore and the U.S. Thank you.

Thank you.

非常清楚，感谢管理层。Thank you very much.

Thank you. One moment for our next question. Our next question comes from the line of Leon Qi with CLSA. Your line is open. Please go ahead.

好的，非常感谢给我这个提问的机会。我是中信里昂的Leon Qi。今天有两个问题想请教管理层。第一是想请教管理层，在最新的金管局更新之后，我们公司也披露了相关的行政处罚事项，是否可以给我们更新一下我们公司与银行等资金提供方的最新合作关系？比如说在银行授信额度、融资成本以及信用评级方面，是否仍然是大致维持平稳的？那我第二个问题是关于我们境外成熟市场的发展。我们富途在香港和新加坡市场其实已经建立了比较领先的市场地位。再接着往前看的话，管理层如何看待这两个市场持续的增长空间？

Thanks management for taking my questions.

This is Li Yongqi from CLSA. I will recap my questions in English. I have two questions. My first question is on the regulatory aspect. With the recent regulatory updates as well as the administrative penalty disclosed, we would like to understand your latest cooperations with banks and other funding partners. For example, in our credit lines with the banks, funding costs or credit ratings, are they generally remain stable? Some color around that will be very helpful to us. My second question is on the growth potential in our international markets, especially the mature markets. We do understand that Futu already has a very strong presence in Hong Kong and Singapore. How do you think about the runway ahead for continued growth in these markets? Thanks a lot.

好的，谢谢Leo。我来回答一下这两个问题。第一个有关授信，还有信贷评级这边。确实，我这周和我的同事，跟我们的信贷评级机构，包括我们全球的商业银行的合作伙伴，有非常紧密的沟通。那也非常高兴可以跟你分享，目前我们整个的银行授信的余额度保持稳定，没有任何的一些变化。此外，在未来几周，我们也有可能会公布我们每年一度的信贷评级。我对获得一个好的结果也是充满信心的。For the first question regarding the credit facility and also the credit rating, actually this week, I and my teams had very constructive discussions with our credit rating agency and commercial bank partners around the globe. I'm very happy to share that our credit facilities remain intact. And in the next couple of weeks, we are very likely to get our annual credit rating issued by S&P Global Ratings and I'm very confident there will be a good result. 第二个问题是有关香港跟新加坡两个成熟市场的。确实我觉得富途在香港和新加坡两地，从用户覆盖人数上来看，已经是处于一个很高的水平。但从客户的资产的渗透和挖掘上，我们还有非常大的一个空间。比如最近波士顿咨询公司刚刚发布了一个报告，香港已经正式超越瑞士，成为全球最大的跨境财富管理中心。在这个报告里面，新加坡也是排在第三位的。那么根据香港证监会的公开统计，截止2024年年底，香港金融理财资产是超过35万亿港元。那根据新加坡金管局2024年底的统计，新加坡金融理财类的资产也是超过34万亿港元。相比之下，富途集团目前总的客户资产才1万亿港元出头一点。那在香港跟新加坡两个国际金融中心，伴随品牌影响力的持续提升，我们对两地数十万亿港元的居民财富的深度服务布局现在才刚刚起步，天花板还非常高，赛道的一个空间也是非常广阔的。我们经过11年持续的打磨，已经建立起非常丰富的产品矩阵，优异的客户服务能力，以及不断扩展的金融服务生态。向前看，我们保持一个非常强劲的一个信心，我们将不断进取，持续深耕，去开拓这两个成熟的市场。While Futu has achieved a very extensive user coverage in Hong Kong and Singapore, there remain enormous potentials for further penetrate and grow client assets.

A recent report issued by BCG states that Hong Kong has overtaken Switzerland to become the world's largest support for the wealth management hub, with Singapore ranking the third. According to the public data by SFC, Hong Kong's wealth management assets exceed HKD 35 trillion by the end of 2024. Data from the MAS also shows the city state's wealth management assets also topped HKD 34 trillion over the same period. By contrast, Futu's group's total assets stand now just over HKD 1 trillion. As two major international financial hub, Hong Kong and Singapore boost the trillions of HKD in resident wealth. With our brand influence continue to grow, our in-depth wealth service in these two markets are still in the early stage. The market upside remains substantial with vast room for development.

After more than a decade of refinement, we have built a comprehensive product portfolio, outstanding customer service capabilities and expanding global financial service ecosystems. We are fully confident in the future and we will keep optimizing our offering and further deepen our presence in these two mature markets. Thank you.

好的，非常感谢管理层的解答。

Thanks a lot, very helpful.

Thank you. One moment as we move on to our next question. Our next question comes from the line of Chiyao Huang with MS. Your line is open.

谢谢。管理层，我是摩根士丹利的智瑶，想请教两个关于新的业务的问题。第一个是想请教在美国的预测市场，咱们看到了什么样的机会？现在有什么样的布局？而且美国的预测市场可能与美国现有的业务会产生什么协同？那么管理层如何看待这个业务的盈利性和潜在的市场规模？这是第一个问题。第二个问题想请教在香港的VATP的最新的进展情况，目前咱们在这个产品和策略上在取得牌照之后有哪些更新？未来在crypto业务上与新加坡包括美国的crypto业务可能会产生什么样的联动？同时也想请教管理层，就是认为这个crypto的资产，如果它需要占到这个总资产的大概什么样的水平之后可以考虑可能可以带来一个比较meaningful的变现的一个机会，那大概需要多长的时间？目前这个时间可能更多的是需要花在这个自身的系统和产品的搭建上呢，还是客户的接受度其实会更花一些时间？谢谢。

Basically two questions from me. One is on the U.S. prediction market, what is the main opportunity that the company is focusing on and what's the planning here? Is there any synergy with the current our business in the U.S. and how the management see the margin and the term of this business in the U.S.? Second question on the crypto business in Hong Kong, especially regarding the VATP, is there any update on the product and strategies? Also potentially what kind of synergy could we have between Hong Kong crypto business with that in the Singapore and the U.S.? Also wondering how does management think about at what level of a client assets should be in crypto in order for us to see a meaningful monetization opportunities and roughly what time it's going to take?

The time we're spending is more on the building our own infrastructure and product offerings or just for the acceptance of the client to grow? Thank you.

好的，我来回答第一个问题。那第二个有关碳中和的这个业务的问题，我请我的这个同事Alan来回答。就像Leo刚才在opening remarks里面提到的，我们美国的Moomoo Financial跟Futu Clearing已经在今年的5月份正式获得了FCM牌照，获准开展预测市场经纪跟相关的清算业务。在推进牌照申请的同时，我们也完成了产品跟系统能力的一些搭建，所以预计很快就可以向我们的美国零售投资者开放预测市场相关的交易服务。相比传统的期货等衍生品，预测市场产品形态是更加直观的，理解的门槛也更低，且用户参与的方式也会更加灵活。这不仅有助于零售投资者的金融市场的参与程度，推进普惠金融，也有望成为平台获客、提升交易活跃度以及推动客户转换的一个重要的抓手。所以在过去一段时间，我们也看到美国非常多的预测市场的一些玩家，比如Polymarket，比如Kalshi、还有Robinhood，他们都有一个非常好的业务在这一块的业务的增长。同时我们也看到，对于挂钩金融事件的预测市场产品，做市商在围绕底层资产进行风险对冲的时候，也能进行进一步提升现货和衍生产品的流动性，增加整体证券市场的价格发现的能力。那Moomoo现在在美国进行相关业务的布局，一方面是希望能够掌握当地预测市场快速发展的行业机会。那另一方面更重要的，我们是希望能够借此去累积我们的在产品设计、运营管理以及风险控制等核心的knowhow，为未来在更多的一些地区开展预测市场业务去做好经验的沉淀。那目前呢，我们也正与其他地区的一些监管非常积极地在沟通，以及一起探讨预测市场的这个事件的范围和落地的可能性。那我简单翻译一下。Thanks for the questions regarding the prediction markets.

Moomoo Financial and Futu Clearing officially obtained FCM license in May, allowing us to conduct prediction market brokerage and the clearing business. Alongside the license application process, we have also completed the development of product and system capabilities and expect to launch prediction market trading service to our U.S. retail clients in the near future. Compare with traditional derivatives such as futures, prediction markets products are generally more intuitive, easy for clients to understand and offer more flexible participation mechanisms. This not only helps improve retail participation in financial markets and promote broader financial inclusion, but also has the potential to become the important driver for client acquisition, trading activation, and client conversion on the platforms.

We also witness in the past couple of months, a lot of major U.S. players such as Kalshi, Polymarket and Robinhood make a huge progress in terms of new client acquisition through this new product offerings. Also for prediction market product linked to the financial events, market makers hedging activities around underlying assets could further enhance liquidity in both spot and the derivative markets, while also strengthening the overall price discovery efficiency across security markets. Our expansion into the prediction market business in the U.S. is not only intend to capture the rapid growth opportunity in the local market, but I think more importantly, is to accumulate

core know-how in areas such as product design, operational management, and risk control. We believe this experience will help lay the foundations for expanding prediction market business into additional markets in the future. At present, we are also very actively engaging and discussing with regulators in other jurisdictions regarding the scope and the feasibilities of prediction market products. Thank you.

你好，我是Allen。正如Leaf Li在opening remarks当中提到的，我们在3月份的时候，猎豹交易所正式通过了香港SFC的VATP牌照的一个第二阶段的审批，现在已经全面营业了。未来我们计划将围绕三个大的方面去推进我们业务的发展。首先是我们想要继续强化我们内部协同以及流量承接的能力。目前富途证券部分crypto的交易量以及AUM已经迁移到了我们的猎豹交易所。未来随着我们在更多的地区虚拟资产的合规牌照逐步落地，我们会在合规的框架下积极探索各地的加密货币业务，与我们的猎豹交易所做深度协同的这个可能性。第二，我们要继续持续去丰富我们的虚拟资产产品能力。在监管框架允许下，我们计划将逐步推进OTC交易、更多的币种支持以及质押等等的一些核心功能，为我们的高净值客户以及机构客户提供更加完整的虚拟资产的服务能力。与此同时，拥有交易所的牌照也能够让我们更直接地去参与行业基础设施的建设，探索包括永续合约在内的这种创新型的产品的机会。第三，我们想要构建一个更长期的生态能力。未来我们希望进一步探索，例如这个代币化证券的二级市场交易，又例如对接第三方经纪商它的流量，以及为我们的虚拟资产ETF发行方提供涵盖从OTC交易、托管到质押在内的这种一站式的解决方案。随着我们传统的金融与虚拟资产市场逐步地融合，我们相信猎豹交易所是有机会成长为香港Web3生态重要基础设施的一个平台的。对于香港和新加坡，我们相信两地的虚拟资产的行业仍然处于一个早期的发展阶段。富途这边我们将持续做好投资者教育，以及持续的产品创新。作为一个拥有brokerage和crypto exchange牌照的这样一个一体式的平台，我们对集团的crypto整体业务的发展充满信心。

Let me quickly translate. In March, as Leaf Hua Li mentioned in opening remarks, PantherTrade successfully passed the second phase approval of the Hong Kong SFC's VATP license and officially commenced full operation. Going forward, we will focus on advancing the business across three dimensions. Firstly, we will be strengthening the internal synergy and traffic conversion capability. Currently a portion of Futu Securities virtual asset trading volume and AUM has already migrated to PantherTrade. Looking ahead as the Group gradually secures compliant virtual asset licenses in additional regions, we will actively explore deeper collaboration opportunities between our regional cryptocurrency brokerage businesses and PantherTrade with applicable regulatory framework. Second, we will continue to enhance our virtual asset product ability subject to regulatory approval. We plan to progressively introduce core functionalities such as OTC trading, additional token listings and staking services.

Basically, enabling us to provide more comprehensive virtual asset solutions for high net worth and institutional clients. Meanwhile, holding an exchange license also allows the Group to participate more directly in industry infrastructure development and actively explore innovative product opportunities, including perpetual futures. Certainly, we aim to build a long-term ecosystem capability. In the future, we plan to explore secondary market trading for tokenized securities, integration with third-party brokers and one-stop solutions for virtual asset ETF issuers covering OTC, trading, custody and staking services. As traditional finance and virtual asset markets continue to converge, PantherTrade has the potential to evolve into a key infrastructure platform within the Hong Kong Web3 ecosystem. We think Hong Kong and Singapore markets, especially for the crypto part, they are still in the early stage of development. For Futu, we will continue to do investor education and product innovation.

As a platform that has both brokerage and crypto exchange capability, we are very confident in the future growth potential of the overall crypto business. Thank you.

谢谢。

Thank you. One moment for our next question. Our next question is going to come from the line of Emma Xu with BofA Securities. Your line is open. Please go ahead.

谢谢给我这个提问的机会。我有两个关于业务方面的问题，我们看到一季度的时候，利息收入环比还是下降比较多的，降了12.8个百分点。请管理层帮我们拆解一下，一季度利息收入按类型来拆分，然后各个项环比变化的原因是什么？利息收入目前二季度以来的趋势是怎么样？第二个问题是想整体问一下二季度的经营情况的，包括这些净增有资产客户、净入金，然后这个公允价值的变动以及交易量的趋势是怎么样的。我来翻译一下我的问题。So the first question is about the interest income.

We thought that interest income declined 12.8% sequentially. Could you please provide the breakdown of your interest income by category, drivers of the quarter-over-quarter changes for each item, as well as the quarter-to-date trends? The second question is about the operating trends in second quarter so far. Could you update us the latest new founded accounts, AUM, including the net asset inflows and mark-to-market changes as well as the trading volume. Thank you.

好的，谢谢Emma。我来回答第一个有关利息收入的问题，第二个问题我请我的同事Allen来回答。那整个第一季度，整个我们集团的利息收入的结构里面，现金利息收入跟融资的利息收入大约各自占40%，其余的部分是来自于我们的借券业务。利息收入环比下降主要有几方面的原因。一方面是现金利息收入这一块的回落，另外一块是借券利息收入这一块的下降。两融的融资的这块利息收入实际上环比是有上升的。具体来看，现金利息收入环比下降，一方面是因为美联储在去年12月中旬的时候减息，这个减息的影响在本季度是得到一个充分的体现。另外一方面，本季度因为市场波动比较加剧，整体我们客户入市抄底相对是比较活跃，带动了我们整个日均现金余额环比是有一个下降，这个对我们的现金利息收入这一块会有一定的拖累。相反，因为大家抄底的动作比较活跃，反而是增加了我们在融资这一块的利息收入，这块利息收入在本季度是有一个环比的上升的。借券的利息收入环比下降，其实主要是因为市场的因素，特别是这个季度，在美股这边整体的市场波动性减弱，客户整体的做空的需求是有所下降的。同时，借券的收益率也有一个比较显著的回落。那二季度到目前为止，我们整个的利息收入目前来看是一个环比保持稳定的状态。Now let me very quickly translate. In the first quarter, approximately 40% of group interest income was from idle cash.

Another roughly 40% contributed by margin financing. The remaining mainly came from the stock borrowing and the lending business. The Q-over-Q decline in interest income was mainly attributed to lower stock borrowing and idle cash interest income, while margin financing interest income achieved a sequential growth. Idle cash interest income decline due to two reasons. Number one is Fed rate cut in May, December last year was fully reflected in the first quarter. Secondly, heightened market volatility during the quarter drove more active buying dip behaviors among clients, leading to sequential decline in average daily cash balance, which also weigh on idle cash interest income. By contrast, supported by active margin trading activity in both the U.S. and Hong Kong, our margin financing balance increased meaningfully on Q-on-Q basis, therefore contributed more margin financing interest income.

At the same time, security borrowing interest income declined sequentially, mainly due to market factors as the implied volatility in the U.S. equity market was going down in the first quarter. Overall, short selling demand moderated, leading to a meaningful decline in security lending yield at the same time. Based on the current run rate in the second quarter, we expect the overall interest income to remain broadly stable QoQ. Thank you.

Hello，Emma，你好，我是Allen。那我来回复一下你的第二个问题。那按照2Q的这个run rate来看，我们这个竞争有看客户数字预计将环比维持一个稳定。净入金这边我们看到二季度保持了一个一季度的比较好的增长的态势。上周五这个事情对短期的净入金有干扰，但整体的影响是可控的。然后mark to market这边我们觉得受益于quarter to date的市场的表现，所以这个数字是一个正数，以及底下还有我们客户的一个持续活跃的交易行为。那我们预计这个AUM与交易量是有机会录得一个双位数的环比提升的。Okay, let me quickly translate。So based on the current second quarter run rate, the net new funding accounts are expected to remain stable sequentially.

Net asset inflows has maintained the strong growth momentum seen in the first quarter. While last Friday's regulatory developments created some short-term disruption to net inflows, the overall impact remains manageable. Benefiting from positive quarter-to-date mark-to-market performance as well as continued active client trading behavior, both AUM and trading volume have the potential to achieve double-digit sequential growth. Thank you.

Thank you. One moment for our next question. Our next question comes from the line of Charles Zhou with UBS. Your line is open. Please go ahead.

各位管理层晚上好，我是UBS的Charles Zhou。我这边有两个问题。第一，我们看到近期蚂蚁收购耀才证券也落地了，同时微牛也密集地在香港打广告，蚂蚁银行和众安银行也陆续上线了港美股的交易，所以想问一下公司是如何看待整个香港市场的一个竞争格局，看起来竞争是在加剧的。

第二个问题就是今年以来，韩国的科技股还是表现得非常火热。想问一下公司是否近期有上线韩股的计划？能不能具体谈一下，比如像时间线，包括计划在哪些市场推出等等。

Good evening, this is Charles Zhou from UBS. I have two questions. The first, we have seen recent developments such as an acquisition of Bright Smart Securities, intensive marketing by Webull, the launch of the Hong Kong U.S. stocks trading function by Ant Bank and ZA Bank. How does the company view the intensifying competition in the Hong Kong markets? My second question is related to South Korean markets. We also know that Korean tech stocks have been performing very strong year to date. Does the company have any plans to expand into the Korean equity markets? Would appreciate if you can share some details such as your timeline or maybe the target markets. Thank you.

好的，谢谢Charles。那我来回答你第一个问题，那第二个问题，请我的同事Robin来回答。那首先我们觉得香港依然是一个具备长期增量空间的一个市场。因为根据香港最近的，比如说行政长官2025年的一个施政报告，这个报告里面也提到，从港府推出一系列新的输入人才政策以来，至今已经有超过23万的人才到香港来工作和发展。那全球的一个宏观经济不确定性的一个上升的一个背景下面，我们也相信越来越多的一些高净值的人士以及国际资本也会涌向香港，市场整体的资产规模和财富水平还会不断上升。那对于我们而言，我们对自身的一个竞争力是保持有非常强的一个信心的。过去即使有非常多家知名的友商进入香港，那我们依然是可以稳步去扩大我们的客户规模、客户资产以及市场份额。这背后的核心是源于我们建立起来的有时间壁垒的，多维度的这样的一个竞争力的模型。那在产品服务方面，我们已经在香港打造了一站式的金融服务平台，并持续去升级我们比如说AI等这些创新的能力的应用，在有竞争力的收费的情况下面，为客户提供业界一流的产品体验。那就像你刚才问到的第二个问题，我们实际也有计划去上线韩国的这样的一个交易，去提升我们的产品的一个供给。那在品牌方面，我们在过去十几年在香港的一个持续深耕，已经建立了非常强大的品牌认知跟用户信任，也有越来越多的客户愿意将核心资产长期放在富途的平台。我们的高净值的客户的一个占比，也是在过去几个季度持续提升。这方面的品牌积累，我认为并不是一个短期营销就能很快能够复制出来的。那最后我觉得其实竞争也不是一个坏事，那香港本来就是全球竞争最充分的一个金融市场，那长期来看，竞争也会去推动整个行业的一个创新。那对于具备产品能力、品牌能力以及生态优势的头部平台，反而有机会能够进一步去提升相应的市场份额。那更何况就是在香港这样的一个国际金融中心，随着我们的一个品牌成熟的一个提升，就像我前面讲到的，相比香港地区几十万亿的个人投资者财富的一个深度，我们目前的一个金融服务的一个渗透度才刚刚开始，所以我们对于这个市场还是充满了一个信心的。 First, we think Hong Kong remains a market with significant long-term potentials.

According to the Hong Kong Chief Executive's 2025 Policy Address, since the launch of various talents admission initiatives, more than 230,000 professionals have relocated to Hong Kong for work and development opportunities. Against a backdrop of rising global macro uncertainties, increased number of high net worth individuals and international capitals are also flowing to Hong Kong, driving continued expansion in market wealth and asset pools. For Futu, we remain very confident in our own competitiveness. Even several well-known peers have entered into Hong Kong market recent years, we have continued to see steady expansions in our customer base, client assets and market share. At the core of this achievement is multi-dimension competitive moat we have built over time, supported by time barriers to entry.

On the product and service front, we have already established a comprehensive one-stop financial service platform in Hong Kong, while continuously enhancing innovative capabilities such as AI applications. Combined with competitive pricing, this enables us to deliver industry-leading user experience to our clients. More recently, we have also planned to launch Korean stock trading, as you just asked before. From a branding perspective, we have spent more than a decade deeply cultivating Hong Kong market and have established very strong brand recognition and client trust. An increasing number of clients are willing to place their core assets with Futu's platform over the long term, while the proportion of high-net-worth clients continues to rise in the past couple of quarters.

This type of brand equity cannot be replicated through short-term marketing spending alone. Finally, we do not view competition as a purely negative thing, because Hong Kong has always been one of the world's most competitive financial markets. Over the long run, competition drives industry innovations. For leading platforms with strong product capabilities, brand trust and ecosystem advantage, competition may in fact create opportunities to further consolidate market shares. More importantly, in Hong Kong as a global financial center, we believe our penetration into the tens of trillions of HKD of personal investable assets is still at a very early stage while our brand continues to mature. Supported by our long-term accumulated strength, we remain highly confident in our abilities to continue growth both in client and the client's assets in the Hong Kong market. Thank you.

Thank you. One moment, please.

Okay.

In April, Futubull and Moomoo officially supported real-time market data for South Korean stocks. Our team is currently actively preparing for the rollout of South Korean stock trading, which is expected to first launch in Hong Kong and Singapore in June, with more regions to follow progressively thereafter. Currently, many clients primarily gain exposure to South Korean equities indirectly through leveraged ETFs and similar products. As of May 26th, Futu Securities clients accounted for approximately 30% and 18% of the holdings in the CSOP 2 times leveraged ETF on Samsung Electronics and CSOP 2 times leveraged ETF on SK Hynix, respectively, reflecting strong client demand for South Korean equities, particularly names within the AI supply chain. As a leading one-stop investment and trading platform, Futu remains committed to providing clients with diversified global asset allocation opportunities and best-in-class trading experience.

We will continue to monitor the potential of other international stock markets and dynamically evaluate additional market access opportunities based on the client demand and commercial value.

Thank you. This will conclude today's question and answer session. I would now like to hand the conference back over to Alan Tsui for closing remarks.

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 representatives. Thank you and goodbye.

This concludes today's conference call. Thank you for participating. You may now disconnect. Everyone, have a great day.

Hello, ladies and gentlemen. Welcome to Futu Holdings Fourth Quarter and Full Year 2025 Earnings 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, Daniel Yuan, Chief Staff to CEO, Head of Strategy and IR at Futu. Please go ahead, sir.

Thanks, operator, and thank you for joining us today to discuss our fourth quarter and full year 2025 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. 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 annual report. With that, I will now turn the call over to Li. Li will make his comments in Chinese, and I will translate.

[Foreign Language]

[Interpreted] Thank you all for joining our earnings call today. In 2025, we delivered another year of strong client acquisition, adding more than 950,000 menu funded accounts and surpassing our full year guidance by 19%. Total funded accounts reached around $3.4 million, up 40% year-over-year. We remain confident in our ability to acquire 800,000 net new funded accounts in 2026, supported by strong bottom-up growth opportunities across both our established markets and newer ones.

[Foreign Language]

[Interpreted] And the robust growth in funded accounts in 2025 was broad-based, driven primarily by solid client additions from Hong Kong and Malaysia. In 2025, net new funded accounts in Hong Kong recorded high double-digit year-over-year increase as we continue to extend our market leadership on top of a high market share. Significant share gain was also observed in Malaysia, and we expect this momentum to continue given our competitive product offering and growing brand trust. In Japan, cumulative app downloads as of November last year crossed 2 million, further solidifying our position as the #1 foreign securities firm. Momo was also the most downloaded trading app in Australia in 2025.

[Foreign Language]

[Interpreted] In the fourth quarter, we added roughly 230,000 net new funded accounts, down 8% quarter-over-quarter, but up 9% year-over-year. While client growth in Hong Kong moderated sequentially following a sharp downturn in the local stock market, net new funded accounts in Japan and Malaysia recorded double-digit sequential growth, underpinned by strong client interest in U.S. stock trading and our superior U.S. stock offerings. In the U.S., we rolled out another round of off-line marketing campaign highlighting key features for active traders. During the quarter, the number of auction contracts traded at, stock and crypto training volume in the U.S. market all posted double-digit sequential growth.

[Foreign Language]

[Interpreted] In the fourth quarter, net asset inflow remained strong. The mark-to-market losses on clients' Hong Kong stock holdings weighed on overall client assets. Total client assets were HKD 1.23 trillion at quarter end, up 66% year-over-year and flat quarter-over-quarter, with Hong Kong and Singapore saw rising net outside flow contribution from high net worth clients. While in the U.S., average client assets recorded the fastest sequential increase among all regions. Underpinned by heightened U.S. stock margin trading activity, margin financing and securities lending balance expanded 7% sequentially to HKD 67.7 billion as of quarter end. A number of popular Hong Kong IPOs during the quarter further contributed to the increased use of leverage driving a double-digit sequential rise in daily average margin balance.

[Foreign Language]

[Interpreted] Total trading volume climbed to a record HKD 3.98 trillion, up 38% year-over-year and 2% quarter-over-quarter. The U.S. equity markets featuring numerous investment themes in 2025 and and we've observed our clients diversify and beyond large technology names into a broader range of sectors and across the AI value chain. As a result, U.S. stock trading turnover was up 17% sequentially to HKD 3 trillion in the fourth quarter. Hong Kong stock trading volume contracted 31% quarter-over-quarter to HKD 821 billion, as investor appetite to China technology stocks weighed the market correction in the second half. This decline was partially offset by elevated trading interest in gold and other precious metals related names. Crypto trading volume remained resilient at approximately HKD 20 billion despite market headwinds, with crystal penetration among trading clients rising across Hong Kong, Singapore and the U.S. During the quarter, we expanded our crypto offerings by adding more than 10 points in both Singapore and the U.S. and further enrich to our market data and information around crypto.

[Foreign Language]

[Interpreted] Both management client assets reached HKD 179.6 billion, up 62% year-on-year and 2% sequentially. In response to growing client demand for portfolio diversification, we broadened our portfolio suite across key markets. In Hong Kong, we enhanced our lineup of high dividend funds and further lower the minimum investment threshold for structure product, making them more accessible to retail investors. In Singapore, we introduced more Singapore equity funds as well as for duration volume funds. In Malaysia, we launched sari-compliant bold tracker funds, which were met with strong demand from local investors.

[Foreign Language]

[Interpreted] During the quarter, we streamlined Airstar Bank's account opening processes and launched mutual funds and insurance products in the banking app. A desktop version was also introduced to clients with a seamless cross-platform experience. On the internal fund, we strengthened Airstar Bank's compliance and risk management capabilities by developing an anti-money laundering system and AI-powered fraud detection infrastructure. Looking ahead, we'll continue to enhance the technology infrastructure and user experience while exploring synergies between Airstar Bank and the group as we advance toward a comprehensive one-stop financial services platform in Hong Kong.

[Foreign Language]

[Interpreted] At quarter end, we have 600 IPO distribution in our clients, a 24% year-over-year increase. In 2025, we reinforced our standing as the leading online broker for Hong Kong IPO distribution and subscription. In 2025, we provided investment banking services to over half of the newly listed Hong Kong Board Company, with full year subscription amount on our platform, representing 49% of the total public offering subscription amount. The number of Hong Kong IPO subscribers on our platform grew nearly 5x year-over-year. In the fourth quarter, we assumed the role of overall coordinators for a number of high-profile Hong Kong IPOs, including those of Technology and.

[Foreign Language]

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

[Foreign Language] Thank you, Hua and Daniel. Please allow me to walk you through our financial performance in the fourth quarter. All the numbers are in Hong Kong dollars, unless otherwise noted. Total revenues were HKD 6.4 billion, up 45% from HKD 4.4 billion in the fourth quarter of 2024. We concluded another strong year with full year revenue growing HKD 22.8 billion, up 68% year-over-year. Brokerage commission and handling charge income was HKD 2.8 billion, up 35% year-over-year and down 5% Q-o-Q. Total trading volume grew both year-over-year and a Q-o-Q basis, while blended commission rates moderate as clients trade more higher-priced U.S. stocks and options during the quarter. Interest income was HKD 3 billion, up 50% year-over-year and the flat Q-Q. The year-over-year increase was driven by higher interest income from security borrowing and lending business, banking deposits and margin financing. On a sequential basis, interest income remained stable as higher interest income from banking deposits and margin financing was offset by lower interest income from security borrowing and the lending business. Other income was HKD 630 million, up 79% year-over-year and 42% Q-o-Q. The year-over-year increase was primarily attributable to higher fund distribution service income and IPO subscription service charge income. The Q-over-Q increase was mainly driven by higher enterprise public relationship service charge income and IPO subscription service charge income. Our total cost was HKD 729 million, a decrease of 6% from HKD 776 million in the fourth quarter of 2024. Brokerage commission and handling charge expenses was HKD 141 million, up 26% year-over-year and down 12% Q-over-Q. Both the year-over-year and Q-over-Q movement were roughly in line with the change of brokerage commission and handling charge income. The interest income were HKD 437 million, down 15% year-over-year and 8% Q-o-Q. Both the year-over-year and Q-o-Q decrease was mainly due to lower interest expenses associated with our security borrowing and letting business. Processing and servicing costs was HKD 150 million, flat year-over-year and down 6% Q-o-Q. The Q-o-Q decrease was mostly driven by the sequential decrease in cloud service fees. As a result, total gross profit was HKD 5.7 billion, an increase of 56% from HKD 3.7 billion in the fourth quarter of 2024. Gross margin was 88.7% as compared to 82.5% in the fourth quarter of 2024. Operating expenses were up 9% year-over-year and down 8% Q-o-Q to HKD 1.6 billion. R&D expenses was HKD 507 million, up 27% year-over-year and down 12% Q-o-Q. The year-over-year increase was mainly due to an increase in R&D headcount to support crypto and AI-related initiatives. The cumulative decrease was largely attributable to bonus accrual made in previous quarters. Selling and marketing expenses was HKD 507 million, up 9% year-over-year and down 13% Q-o-Q. The year-over-year increase was in line with the growth of our new -- net new fund accounts and the Q-o-Q decrease was largely attributable to sequential lower new client additions and to a less extent, the decrease in client acquisition costs. G&A expenses were HKD 549 million, down 5% year-over-year and flat Q-o-Q. The year-over-year decrease was primarily due to the lower professional service expenses compared to the year ago quarter. As a result, income from operations increased 87% year-over-year and 6% Q-o-Q to HKD 4.1 billion. Operating margin increased to 64.4% from 50% in the fourth quarter of 2024, mostly due to strong top line growth and operating leverage. Our net income increased by 80% year-over-year and 5% Q-o-Q to HKD 3.4 billion. Net income margin expanded to 52.3% in the fourth quarter as compared to 42.2% in the same quarter last year. Our effective tax rate for the quarter was 16.3%. That concludes our prepared remarks. We now like to open the call to questions. Operator, please go ahead.

[Operator Instructions] We will now take the first question from the line of Peter Zhang from JPMorgan.

[Foreign Language] This is Peter Zhang from JPMorgan, and many thanks for giving me the opportunity to ask questions and congratulations on the results. I have 2 questions. My first question is on the -- among the first quarter business trend. I'm wondering whether management can give us some color on the fee income growth, net asset inflow and trading velocity in the first quarter year-to-date? And also, how about the commission fee rate trend in 2026? My second question is regarding the trading volume breakdown particularly for the U.S. trading volume. This maybe because in the past few years, some investors may view Futu as stock to China. And some investors think that our clients trade a lot Chinese AR stocks. But I guess given that we have very successful overseas expansion, the trading volume mix may change over time. So I'm wondering whether management can give us some color on the breakdown of your U.S. stock trading volume into Chinese ADI and other stock.

[Foreign Language] Let me just do the translation for your second question, I will do the answers regarding the Chinese ADR contribution for our U.S. stock trading volumes in the latest quarter, this portion is less than 10%. And even we compare with the third quarter last year, the number was still roughly around 10%. So I think structure-wise, the contribution from Chinese ADRs to our overall U.S. stock has been gradually decreased. I will now hand over to my colleague, Daniel, who will answer your first question.

[Foreign Language] So based on the trends we have seen year-to-date, we expect net new funded accounts and trading volume to be flattish quarter-over-quarter. And we've seen very strong bottom activities from our clients. So we expect a double-digit sequential increase in net asset inflows, and we expect the quarterly net asset inflow in the first quarter to be the highest quarterly number. And mark-to-market impact had -- was pretty strong, and it was pretty negative quarter-to-date. So we expect, all in all, total client assets to increase modestly by the end of the first quarter. Thank you. And in terms of commissions -- blended commission rate, so far, I think we are seeing flattish Q-on-Q blended commission rate. Thanks.

We will now take the next question from the line of Emma Xu from Bank of America Securities.

[Foreign Language] The first one is about the crypto business. So what are the latest developments in the crypto-related business after the relaxation of Hong Kong's regulatory policies in February this year? What new products have been launched? And what is the current implementation status and performance? The second question is about the AI. What specific empowerment that AI currently bring to your business? Will AI bring challenges to some business or put pressure on given the SLI model of your business?

[Foreign Language] In terms of the crypto development, I think in the first -- in Hong Kong, we are still waiting for the Hong Kong regulators for our VAT license approvals. We are very confident in the near future, we can get this license. And after the launch of the VAT piece, hopefully, we can, in the near future, Futu can start to provide our traditional clients for crypto trading on the back of the margin using their stock for the margins. And also, we will provide taking service for them as well. In the future, we also wish to provide a crypto service to our high net worth clients alongside with the service to our institution clients for the one-stop solutions. And then in the past one quarter, we further enriched our product offering trading different tokens in Singapore and in the U.S. And at the same time, as we've mentioned in the opening remarks, in Hong Kong, Singapore and the U.S., the number of clients trading for the cryptos all include a double-digit increase, and the penetration rate for these [indiscernible] trading crypto also increased a lot to the latest high single-digit and low teen levels. We think this penetration rate can continue to grow in the foreseeable future. Thank you.

[Foreign Language]

[Interpreted] So AI is the company level of strategic priority at Futu. We've actually started AI assessments in 2022 and over the past few quarters, we have ramp up AI investment by deeply integrating AI capabilities into our product experience and internal operations. We now leverage AI to enhance the efficiency with which our clients discover investment opportunities and gather information. Our AI-generated daily and weekly reports automatically filter and key insights, cover over 20 types of market data, including technical indicators, patterns and loads and these offer better timeliness and broader content coverage compared to our peers. Furthermore, AI power's summaries of earnings reports and news has also significantly improved client efficiency and gathering information. In the fourth quarter, we launched AI which allows users to generate quantitative trading strategies using simple natural language. This feature has been very well received by the advanced traders on our platform, lowering the barrier to creating professional investment strategy. We have also expanded the asset classes coverage of our AI chatbot and AI analysis. So for the open it's quite popular recently. We now offer access through our open API. We've actually started developing open API in 2014 has been optimizing that experience ever since. And we've also supported skills that are accessible to open as well. So thanks to the years of development and accumulation and market data information in the trading infrastructure as well as our execution and clearing capabilities as well as our determination to embrace AI and our capabilities and leveraging AI to empower our business. We believe Futu will stay as a leading player in the AI era. Thank you.

We will now take the next question from the line of Chiyao Huang from Morgan Stanley.

[Foreign Language] So the first question is regarding the HKD 800,000 guidance on new founded accounts, which is a very strong number. And considering the rising market volatility year-to-date, I'm just wondering what will be the main drivers and the main areas that the management sees has larger potential to help achieve this target, especially including any new markets that we are targeting? Second question is regarding the Airstar Bank. Just wondering what's the long-term planning -- strategic planning for the bank's positioning in the market? What kind of differentiation will be there compared to other virtual bank and the traditional banks? And do we have a time line of the product pipelines? Over time, what would be the expected revenue structure for Airstar Bank will be more balance sheet business or more fee income business in wealth management?

[Foreign Language] For the first question, for our 800 fund accounts, this number we have already in that one new markets, we will have potential to enter into in 2026. Despite the year-to-date, there is some market volatility arising from geopolitical tensions and a lot of macro headwinds, our client acquisitions run rate still remain very robust, and we are very confident to achieve these targets towards the end of this year. Then for the Airstar Banks, we will continue to focus how to generate meaningful synergies between Airstar banks and the Futu existing business. As Leaf mentioned in the opening remarks in the fourth quarter and also in the next couple of quarters, our most work in Airstar Bank will center around in 2 aspects, externally is to upgrade the user experience and internally, we will further to enrich the infrastructure. On the -- in the external side, we have already launched some new wealth management products in Airstar Bank app. Like mutual funds and insurance products, there will be more wealth management-related products to be launched in the app in the next couple of quarters. Then internally, we further to enhance the compliance and the risk controls, a lot of proprietary developed products to enhance the business efficiency and the lower operating cost for the banks. In the long run, we think the revenue stream will be more schooled to these fee income arising from the wealth management and associated activities supplement by some balance sheet expansion business. But having said that, this is a very long-term targets for revenue generation. So in the near term, we will still continue to focus the 2 aspects I mentioned before. Thank you very much.

We will now take the next question from the line of You Fan from CICC.

[Foreign Language] This is You Fan from CICC, and I have 2 questions. The first one is about the user regional breakdown. We still see strong customer growth we've captured despite the market downturn. So what's the regional breakdown of our existing and also the new paying clients? And the second question is about AUM. How much is from client net asset inflow and how much from market-to-market depreciation? And what is the regional breakdown of the client asset?

[Foreign Language] For the contribution of the fourth quarter net add, Malaysia and Hong Kong collectively contribute over 50% of new client adds in the fourth quarter. Then other remaining markets like U.S., Singapore and Japan, their contribution rate is in the percentage of 10% to 20%. And as the year ends, the fund accounts in the universe of our overseas brand moomoo has already increased to 55% of total group fund accounts. Among them the contribution from Singapore and the U.S. was most. And for the second question regarding the new net asset flow inflows in the fourth quarter. The Q-on-Q basis, the net asset inflows have some moderations in the fourth quarter. But on the absolute levels, it remains in a very high levels, the momentum keeps very strong, but you can imagine in the fourth quarter, Hong Kong market got a lot of retreat. For instance, Hansa Index down 5% Q-o-Q and Hansa Tech Index, down 15% Q-o-Q. Therefore, we got some negative impact from the market-to-market loans, which almost fully offset the net asset inflows in the fourth quarter. And at year-end, Hong Kong remains the largest in terms of clients' assets AUM breakdown, followed by Singapore and some new markets like Japan and the U.S. the contribution, we see a very good momentum to increase. Thank you very much.

We will now take the next question from the line of Leon Qi from CLSA.

[Foreign Language] I will briefly translate my questions into English. This is Leon Qi from CLSA and congrats again on very strong fourth quarter results. I have 2 questions today. First one is actually a follow-up on our new markets this year. Is it possible for management to give us some clues in terms of our rationale of entering these new markets? Is it going to replicate one of our existing markets? Is the significance mostly on new paying clients or any new strategy in terms of products, et cetera. So if it is possible for management to share with us some clues of entering market this year? The second question is actually a bit operational. We just want to understand the reasons behind the very resilient quarterly net asset inflow. In particular, in Hong Kong, we do understand that high net worth clients a few years ago. How do we evaluate the performance of our relationship managers for these high net worth clients, is net client inflow, a major metric that we actually look at or we actually look at other metrics such as total assets, new funded accounts or even metrics such as the performance of client assets or the number of different products that our clients hold. So this kind of operational metrics will be very helpful for us.

[Foreign Language] Regarding the first question for this new market, it is still too early to share the exactly the market name, given that we are still in the process of the license applications, but we think this market will be in the universe of Asia. Then for the second question for the certain performance measurements for our internal colleagues regarding the high net worth clients. As you said, the new asset inflow is definitely one factor of the -- of our overall metrics which is very comprehensive and also outline is to care about the clients like and values. Therefore, the net asset inflows and also including the clients' total asset retention rate all these factors into this metrics. Thank you.

We will now take the next question from the line of Cindy Wang from China Renaissance.

[Foreign Language] Congrats for the great fourth quarter results. So I have 2 questions here. First, for your new funding accounts target HKD 800,000 in 2026, could you break down the expected contributions from Hong Kong and overseas market? And what is the expected average customer acquisition cost for the whole year? Second is quarter-to-date, we saw a strong market really starting in January, but followed by recent stock market volatility due to geopolitical risk. So based on investors' trading activity on your platform, could you provide some guidance on trading volume, trading velocity and margin financing and security spending demand trend in first quarter?

[Foreign Language] In terms of the breakdown of the new fund account targets for 2026, we think largely it will be the same stock contributions from different markets in 2025. And Hong Kong will continue to be a very strong contributor in terms of the geographic locations. Then for the cap, our initial objective for this year's cap will be around 25,000 to 30,000 -- sorry, 250,000 to -- sorry, HKD 2,500 to HKD 3,000 considering the uncertainty of this year's market volatility. And also, there will be some fund loaded cost in this new market expansion, as I mentioned before. Therefore, there we want to leave some flexibility in the CAC objective. But year-to-date, we think the CAC acquisition situations remain very robust and CAC for the first 2 months, I think will be in the low end or even lower than the range I mentioned before.

[Foreign Language] So in the first quarter, quarter-to-date, the market has been quite volatile, and we've seen our clients engaging very actively with the market. We expect the first quarter's total trading volume to be flattish during the quarter. So it's going to stay at the historic high that we've seen in the fourth quarter last year. And when the market experienced a pullback, we've seen lots of activities from our clients. We're expected a sequential increase in our margin financing and securities lending balance. And as we shared earlier, net asset inflow is also very strong, and we expect a historic high quarterly net asset inflow in the first quarter. Thank you.

We will now take the next question from the line of Zoey Zong from Jefferies.

[Foreign Language] This Zoey from Jefferies. I have 2 questions. First, could you please elaborate on the competitive landscape in Hong Kong? And how do we see the market share momentum in Q4 and recently in Q1? And second, in November last year, we announced a share repurchase program of up to [ USD 800 million ] till December '27, could you please give us an update on the progress? And how should we expect the pace in the next 2 years?

[Foreign Language] Regarding share buyback programs, so far, in the fourth quarter, actually, we have not conducted any share buyback within this [ 800 million ] share buyback programs, which will cover toward the end of 2027. So we will continue to closely work the market conditions and looking for potential market opportunities to come up with share buyback program, which is more preemptive. Thank you.

[Foreign Language] So we haven't seen any incremental changes in terms of the competitive landscape in Hong Kong. We think our performance in Hong Kong is still influenced by the overall market sentiment. And in the fourth quarter due to the sharp pullback of the Hong Kong stocks, the Hong Kong retail investors had -- was overall quite bearish about the market. So our client acquisition decelerated sequentially of the very active Hong Kong IPO market to some extent listed investor sentiment. And just looking back at 2025, Hong Kong contributed the highest number of net funded accounts within the Food Group and the net funding accounts achieved high double-digit year-over-year increase. So we're able to extend our leadership and further solidified our leadership on top of a very high market share. And we not only saw very strong client growth in 2025, we also saw very strong net asset inflow. And we've seen a higher percentage of contribution in terms of net asset inflow from our high net worth claims, which was largely due to a growing portfolio of wealth management products and our more professional -- in our image of a professional finance platform, thanks to the series of brand initiatives that we carried out and lots of investment forms and lectures that we did throughout the year. And we think that very strong performance in Hong Kong 2025 really speaks to our assessment of the market potential earlier. We believe that Hong Kong has huge headroom to growth for us in terms of both client numbers and client assets. And looking to [ 2026 ], we'll continue to enhance our product capabilities. We'll continue to invest in brand building, and we are very optimistic about the long-term growth opportunity in Hong Kong. Thank you.

We will now take -- sorry, I would like to hand back over to the speakers for closing remarks.

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.

This concludes today's conference call. Thank you for participating. You may now disconnect. [Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.