Document and Entity Information
Document and Entity Information | 12 Months Ended |
Dec. 31, 2021shares | |
Document Information [Line Items] | |
Document Type | 20-F |
Document Registration Statement | false |
Document Annual Report | true |
Document Transition Report | false |
Document Shell Company Report | false |
Entity Registrant Name | Futu Holdings Ltd |
Entity File Number | 001-38820 |
Entity Incorporation, State or Country Code | E9 |
Entity Address, Address Line One | 11/F, Bangkok Bank Building |
Entity Address, Address Line Two | No. 18 Bonham Strand W |
Entity Address, Address Line Three | Sheung Wan |
Entity Address, City or Town | Hong Kong S.A.R |
Entity Address, Country | CN |
Entity Central Index Key | 0001754581 |
Current Fiscal Year End Date | --12-31 |
Document Fiscal Year Focus | 2021 |
Document Fiscal Period Focus | FY |
Amendment Flag | false |
Document Period End Date | Dec. 31, 2021 |
Entity Filer Category | Large Accelerated Filer |
Entity Voluntary Filers | No |
Entity Well Known Seasoned Issuer | Yes |
Entity Interactive Data Current | Yes |
Entity Current Reporting Status | Yes |
Entity Shell Company | false |
Entity Emerging Growth Company | false |
ICFR Auditor Attestation Flag | true |
Document Accounting Standard | U.S. GAAP |
Auditor Name | PricewaterhouseCoopers Zhong Tian LLP |
Auditor Firm ID | 1424 |
Auditor Location | Shenzhen, the People’s Republic of China |
Class A ordinary shares | |
Document Information [Line Items] | |
Security Exchange Name | NASDAQ |
Trading Symbol | FUTU |
Title of 12(b) Security | Class A ordinary shares, par value US$0.00001 per share* |
Entity Common Stock, Shares Outstanding | 708,482,154 |
Class B ordinary shares | |
Document Information [Line Items] | |
Entity Common Stock, Shares Outstanding | 494,552,051 |
ADR | |
Document Information [Line Items] | |
Security Exchange Name | NASDAQ |
Trading Symbol | FUTU |
Title of 12(b) Security | American depositary shares (one American depositary share representing eight Class A ordinary shares, par value US$0.00001 per share) |
Business Contact | |
Document Information [Line Items] | |
Entity Address, Address Line One | 11/F, Bangkok Bank Building |
Entity Address, Address Line Two | No. 18 Bonham Strand W |
Entity Address, Address Line Three | Sheung Wan |
Entity Address, City or Town | Hong Kong S.A.R |
Entity Address, Country | CN |
Contact Personnel Name | Arthur Yu Chen |
Contact Personnel Email Address | ir@futuholdings.com |
City Area Code | 852 |
Local Phone Number | 2523-3588 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS $ in Thousands, $ in Thousands | Dec. 31, 2021HKD ($) | Dec. 31, 2021USD ($) | Dec. 31, 2020HKD ($) |
ASSETS | |||
Cash and cash equivalents | $ 4,555,096 | $ 584,016 | $ 1,034,668 |
Cash held on behalf of clients | 54,734,351 | 7,017,584 | 42,487,090 |
Restricted cash | 2,065 | 265 | |
Term deposits | 300,000 | ||
Short-term investments | 1,169,741 | 149,974 | |
Securities purchased under agreements to resell | 106,203 | 13,616 | |
Loans and advances (net of allowance of HK$9,075 thousand and HK$12,258 thousand as of December 31, 2020 and 2021, respectively) | 29,587,306 | 3,793,439 | 18,825,366 |
Receivables: | |||
Clients | 469,577 | 60,205 | 735,145 |
Brokers | 7,893,927 | 1,012,094 | 5,780,461 |
Clearing organizations | 1,961,121 | 251,439 | 1,243,928 |
Fund management companies and fund distributors | 72,340 | 9,275 | 297,622 |
Interest | 50,829 | 6,517 | 19,876 |
Prepaid assets | 18,306 | 2,347 | 11,422 |
Other current assets | 81,594 | 10,461 | 106,887 |
Total current assets | 100,702,456 | 12,911,232 | 70,842,465 |
Operating lease right-of-use assets | 243,859 | 31,266 | 208,863 |
Long-term investments | 23,394 | 2,999 | |
Other non-current assets | 568,805 | 72,928 | 286,439 |
Total non-current assets | 836,058 | 107,193 | 495,302 |
Total assets | 101,538,514 | 13,018,425 | 71,337,767 |
LIABILITIES | |||
Amounts due to related parties | 87,459 | 11,213 | 87,169 |
Payables: | |||
Clients | 59,127,439 | 7,580,830 | 46,062,842 |
Brokers | 7,599,233 | 974,311 | 4,533,581 |
Clearing organizations | 393,782 | 50,487 | 324,266 |
Fund management companies and fund distributors | 56,690 | 7,268 | 127,442 |
Interest | 15,359 | 1,969 | 5,493 |
Borrowings | 6,357,405 | 815,094 | 5,482,818 |
Securities sold under agreements to repurchase | 4,467,861 | 572,832 | 5,453,037 |
Lease liabilities - current | 96,860 | 12,419 | 66,333 |
Accrued expenses and other liabilities | 2,176,213 | 279,015 | 717,183 |
Total current liabilities | 80,378,301 | 10,305,438 | 62,860,164 |
Lease liabilities - non-current | 163,719 | 20,990 | 155,898 |
Other non-current liabilities | 10,935 | 1,404 | 14,015 |
Total non-current liabilities | 174,654 | 22,394 | 169,913 |
Total liabilities | 80,552,955 | 10,327,832 | 63,030,077 |
Commitments and Contingencies (Note 29) | |||
SHAREHOLDERS' EQUITY | |||
Additional paid-in capital | 17,935,752 | 2,299,573 | 6,960,369 |
Treasury stock (nil and 29,462,760 shares as of December 31, 2020 and 2021, respectively) | (1,178,755) | (151,130) | |
Accumulated other comprehensive (loss)/income | 75,994 | 9,742 | 4,974 |
Retained earnings | 4,152,472 | 532,396 | 1,342,262 |
Total shareholders' equity | 20,985,559 | 2,690,593 | 8,307,690 |
Total liabilities and shareholders' equity | 101,538,514 | 13,018,425 | 71,337,767 |
Class A ordinary shares | |||
SHAREHOLDERS' EQUITY | |||
Ordinary shares | 58 | 7 | 47 |
Class B ordinary shares | |||
SHAREHOLDERS' EQUITY | |||
Ordinary shares | $ 38 | $ 5 | $ 38 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) $ in Thousands | Dec. 31, 2021HKD ($)shares | Dec. 31, 2020HKD ($)shares |
Allowances for loans and advances | $ | $ 12,258 | $ 9,075 |
Treasury stock shares | 29,462,760 | 0 |
Class A ordinary shares | ||
Ordinary shares, shares authorized | 48,700,000,000 | 48,700,000,000 |
Ordinary shares, shares issued | 737,944,914 | 590,139,760 |
Ordinary shares, shares outstanding | 737,944,914 | 590,139,760 |
Class B ordinary shares | ||
Ordinary shares, shares authorized | 800,000,000 | 800,000,000 |
Ordinary shares, shares issued | 494,552,051 | 494,552,051 |
Ordinary shares, shares outstanding | 494,552,051 | 494,552,051 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME $ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2021HKD ($)$ / sharesshares | Dec. 31, 2021USD ($)$ / sharesshares | Dec. 31, 2020HKD ($)$ / sharesshares | Dec. 31, 2019HKD ($)$ / sharesshares | |
Revenues | ||||
Brokerage commission and handling charge income | $ 3,913,027 | $ 501,696 | $ 1,990,138 | $ 511,365 |
Interest income | 2,518,198 | 322,862 | 965,627 | 464,903 |
Other income | 684,095 | 87,709 | 355,057 | 85,287 |
Total revenues | 7,115,320 | 912,267 | 3,310,822 | 1,061,555 |
Costs | ||||
Brokerage commission and handling charge expenses | (572,159) | (73,357) | (361,486) | (100,550) |
Interest expenses | (376,902) | (48,323) | (185,090) | (89,238) |
Processing and servicing costs | (257,003) | (32,951) | (149,378) | (91,916) |
Total costs | (1,206,064) | (154,631) | (695,954) | (281,704) |
Total gross profit | 5,909,256 | 757,636 | 2,614,868 | 779,851 |
Operating expenses | ||||
Research and development expenses | (805,325) | (103,252) | (513,283) | (262,345) |
Selling and marketing expenses | (1,392,070) | (178,480) | (385,320) | (164,701) |
General and administrative expenses | (529,048) | (67,830) | (248,404) | (164,850) |
Total operating expenses | (2,726,443) | (349,562) | (1,147,007) | (591,896) |
Others, net | 2,478 | 318 | (17,238) | (9,462) |
Income before income tax expenses | 3,185,291 | 408,392 | 1,450,623 | 178,493 |
Income tax expenses | (375,081) | (48,090) | (124,793) | (12,286) |
Share of loss from equity method investments | (307) | (543) | ||
Net income | 2,810,210 | 360,302 | 1,325,523 | 165,664 |
Preferred shares redemption value accretion | (12,309) | |||
Income allocation to participating preferred shareholders | (10,196) | |||
Net income attributable to ordinary shareholders of the Company | 2,810,210 | 360,302 | 1,325,523 | 143,159 |
Net income | 2,810,210 | 360,302 | 1,325,523 | 165,664 |
Other comprehensive (loss)/income, net of tax | ||||
Foreign currency translation adjustment | 71,020 | 9,104 | 9,420 | (3,147) |
Total comprehensive income | $ 2,881,230 | $ 369,406 | $ 1,334,943 | $ 162,517 |
Net income per share attributable to ordinary shareholders of the Company | ||||
Basic | (per share) | $ 2.34 | $ 0.30 | $ 1.28 | $ 0.17 |
Diluted | (per share) | 2.30 | 0.30 | 1.26 | 0.16 |
Net income per ADS | ||||
Basic | (per share) | 18.72 | 2.40 | 10.23 | 1.38 |
Diluted | (per share) | $ 18.43 | $ 2.36 | $ 10.10 | $ 1.25 |
Weighted average number of ordinary shares used in computing net income per share | ||||
Basic | shares | 1,200,912,670 | 1,200,912,670 | 1,036,865,727 | 832,790,329 |
Diluted | shares | 1,219,672,508 | 1,219,672,508 | 1,050,143,014 | 917,897,426 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY $ in Thousands | Ordinary sharesClass A ordinary sharesIPOHKD ($)shares | Ordinary sharesClass A ordinary sharesFollow-on public offeringHKD ($)shares | Ordinary sharesClass A ordinary sharesHKD ($)shares | Ordinary sharesClass A ordinary sharesUSD ($)shares | Ordinary sharesClass B ordinary sharesHKD ($)shares | Ordinary sharesClass B ordinary sharesUSD ($)shares | Ordinary sharesHKD ($)shares | Ordinary sharesUSD ($)shares | Treasury stock purchasesHKD ($)shares | Treasury stock purchasesUSD ($)shares | Additional Paid-in CapitalIPOHKD ($) | Additional Paid-in CapitalFollow-on public offeringHKD ($) | Additional Paid-in CapitalHKD ($) | Accumulated other comprehensive (loss)/incomeHKD ($) | (Accumulated deficit)/Retained EarningsHKD ($) | Class A ordinary sharesshares | IPOHKD ($) | Follow-on public offeringHKD ($) | HKD ($)shares | USD ($)shares |
Beginning balance at Dec. 31, 2018 | $ 31 | $ (1,299) | $ (148,925) | $ (150,193) | ||||||||||||||||
Beginning balance (in shares) at Dec. 31, 2018 | shares | 403,750,000 | 403,750,000 | ||||||||||||||||||
Profit for the year | 165,664 | 165,664 | ||||||||||||||||||
Share-based compensation | $ 15,967 | 15,967 | ||||||||||||||||||
Preferred shares redemption value accretion | (12,309) | (12,309) | ||||||||||||||||||
Conversion and redesignation of preferred shares into ordinary shares | $ 19 | $ 11 | 1,262,751 | 1,262,781 | ||||||||||||||||
Conversion and redesignation of preferred shares into ordinary shares (In shares) | shares | 237,129,043 | 237,129,043 | 140,802,051 | 140,802,051 | ||||||||||||||||
Issuance of ordinary shares | $ 9 | $ 1,259,308 | $ 1,259,317 | |||||||||||||||||
Issuance of ordinary shares (in shares) | shares | 115,666,666 | |||||||||||||||||||
Redesignation of ordinary shares into Class B ordinary shares | $ 31 | $ (31) | ||||||||||||||||||
Redesignation of ordinary shares into Class B ordinary shares (in shares) | shares | 403,750,000 | 403,750,000 | (403,750,000) | (403,750,000) | ||||||||||||||||
Shares issued upon exercise of employee share options | $ 8 | 10,465 | 10,473 | |||||||||||||||||
Shares issued upon exercise of employee share options (in shares) | shares | 106,295,232 | 106,295,232 | ||||||||||||||||||
Foreign currency translation adjustment, net of tax | (3,147) | (3,147) | ||||||||||||||||||
Ending balance at Dec. 31, 2019 | $ 36 | $ 42 | 2,536,182 | (4,446) | 16,739 | 2,548,553 | ||||||||||||||
Ending balance (in shares) at Dec. 31, 2019 | shares | 459,090,941 | 459,090,941 | 544,552,051 | 544,552,051 | ||||||||||||||||
Profit for the year | 1,325,523 | 1,325,523 | ||||||||||||||||||
Share-based compensation | 32,573 | 32,573 | ||||||||||||||||||
Issuance of ordinary shares | $ 7 | $ 2,339,711 | $ 2,339,718 | |||||||||||||||||
Issuance of ordinary shares (in shares) | shares | 76,000,000 | |||||||||||||||||||
Shares issued upon exercise of employee share options | 16,799 | 16,799 | ||||||||||||||||||
Shares issued upon exercise of employee share options (in shares) | shares | 5,048,824 | 5,048,824 | 5,048,824 | |||||||||||||||||
Surrendered and cancellation of Class A ordinary shares (in shares) | shares | (5) | (5) | ||||||||||||||||||
Share conversion from Class B to Class A | $ 4 | $ (4) | ||||||||||||||||||
Share conversion from Class B to Class A (in shares) | shares | 50,000,000 | 50,000,000 | (50,000,000) | (50,000,000) | ||||||||||||||||
Issuance of Pre-Funded warrants | 2,035,104 | 2,035,104 | ||||||||||||||||||
Foreign currency translation adjustment, net of tax | 9,420 | 9,420 | ||||||||||||||||||
Ending balance at Dec. 31, 2020 | $ 47 | $ 38 | $ 0 | $ 0 | $ 0 | 6,960,369 | 4,974 | 1,342,262 | 8,307,690 | |||||||||||
Ending balance (in shares) at Dec. 31, 2020 | shares | 590,139,760 | 590,139,760 | 494,552,051 | 494,552,051 | 0 | 0 | ||||||||||||||
Profit for the year | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | 0 | 0 | 2,810,210 | 2,810,210 | $ 360,302,000 | |||||||
Share-based compensation | 98,913 | 98,913 | ||||||||||||||||||
Issuance of ordinary shares | $ 7 | 10,856,517 | 10,856,524 | |||||||||||||||||
Issuance of ordinary shares (in shares) | shares | 87,400,000 | 87,400,000 | ||||||||||||||||||
Shares issued upon exercise of employee share options | 19,957 | $ 19,957 | ||||||||||||||||||
Shares issued upon exercise of employee share options (in shares) | shares | 6,805,264 | 6,805,264 | 5,875,592 | |||||||||||||||||
Treasury stock purchases | shares | (1,178,755,000) | (1,178,755,000) | (1,178,755,000) | (1,178,755,000) | ||||||||||||||||
Treasury stock purchases (in Shares) | $ (29,462,760) | $ 1,178,800 | $ 151,200,000 | |||||||||||||||||
Exercise of Pre-Funded warrants | $ 4 | (4) | ||||||||||||||||||
Exercise of Pre-Funded warrants (in shares) | shares | 53,599,890 | 53,599,890 | ||||||||||||||||||
Foreign currency translation adjustment, net of tax | 71,020 | 71,020 | 9,104,000 | |||||||||||||||||
Ending balance at Dec. 31, 2021 | $ 58 | $ 38 | $ (1,178,755) | $ (29,462,760) | $ 17,935,752 | $ 75,994 | $ 4,152,472 | $ 20,985,559 | $ 2,690,593,000 | |||||||||||
Ending balance (in shares) at Dec. 31, 2021 | shares | 737,944,914 | 737,944,914 | 494,552,051 | 494,552,051 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS $ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2021HKD ($) | Dec. 31, 2021USD ($) | Dec. 31, 2020HKD ($) | Dec. 31, 2019HKD ($) | |
Cash flows from operating activities | ||||
Net income | $ 2,810,210 | $ 360,302 | $ 1,325,523 | $ 165,664 |
Adjustments for: | ||||
Depreciation and amortization | 36,436 | 4,672 | 27,231 | 16,547 |
Expected credit loss expenses | 3,200 | 410 | 9,075 | |
Share of loss from equity method investments | 307 | 543 | ||
Impairment from equity method investments | 5,888 | |||
Foreign exchange losses/(gains) | (138,234) | (17,723) | 11,493 | 7,539 |
Share-based compensation | 98,913 | 12,682 | 32,573 | 15,967 |
Realized gain from short-term investments | (665) | (707) | ||
Fair value gain from short-term investments | (26) | (3) | ||
Deferred income tax benefit | (21,431) | (2,748) | (13,146) | (1,576) |
Amortization of right-of-use assets | 83,695 | 10,731 | 52,548 | 49,553 |
Changes in operating assets: | ||||
Net increase in securities purchased under agreements to resell | (106,203) | (13,616) | ||
Net increase in loans and advances | (10,765,123) | (1,380,215) | (14,645,752) | (1,101,785) |
Net increase in accounts receivable from clients and brokers | (1,847,898) | (236,922) | (5,042,241) | (927,260) |
Net increase in accounts receivable from clearing organizations | (717,193) | (91,953) | (939,848) | (128,125) |
Net (increase)/decrease in accounts receivable from fund management companies and fund distributors | 225,282 | 28,884 | (297,622) | |
Net decrease/(increase) in interest receivable | (30,953) | (3,969) | (2,984) | 32,535 |
Net (increase)/decrease in prepaid assets | (6,653) | (853) | 1,048 | (3,660) |
Net decrease/(increase) in other assets | (105,145) | (13,484) | (156,222) | 20,860 |
Changes in operating liabilities: | ||||
Net increase/(decrease) in amounts due to related parties | (37,983) | (4,870) | 83,429 | 25,037 |
Net increase in accounts payable to clients and brokers | 16,130,249 | 2,068,087 | 33,673,301 | 3,697,534 |
Net increase in accounts payable to clearing organizations | 69,516 | 8,913 | 324,266 | |
Net increase/(decrease) in accounts payable to fund management companies and fund distributors | (70,752) | (9,071) | 101,061 | 26,381 |
Net increase in payroll and welfare payable | 213,981 | 27,435 | 217,200 | 33,990 |
Net (decrease)/increase in interest payable | 9,866 | 1,265 | 4,974 | (1,886) |
Net decrease in operating lease liabilities | (79,544) | (10,199) | (38,077) | (38,704) |
Net increase/(decrease) in securities sold under agreements to repurchase | (985,176) | (126,311) | 5,451,447 | 1,590 |
Net increase in other liabilities | 1,242,937 | 159,359 | 271,910 | 79,397 |
Net cash generated from operating activities | 6,011,971 | 770,803 | 20,456,717 | 1,969,434 |
Cash flows from investing activities | ||||
Proceeds from disposal of property and equipment and intangible assets | 9 | |||
Purchase of property and equipment and intangible assets | (70,456) | (9,033) | (44,649) | (118,341) |
Purchase of short-term investments | (1,169,715) | (149,971) | (206,793) | (285,784) |
Proceeds from disposal of short-term investments | 306,602 | 250,061 | ||
Realized gain received from short-term investments | 665 | 707 | ||
Acquisition of long-term investments | (23,394) | (2,999) | 0 | (6,709) |
Placement of term deposits | (300,000) | |||
Maturity of term deposits | 300,000 | 38,464 | ||
Net cash used in investing activities | (963,565) | (123,539) | (244,175) | (160,057) |
Cash flows from financing activities | ||||
Proceeds from public offering, net of issuance costs | 10,856,524 | 1,391,933 | 2,339,718 | 1,259,317 |
Proceeds from exercise of employee share options | 23,492 | 3,012 | 16,842 | 969 |
Proceeds from issuance of Pre-Funded warrants | 2,035,104 | |||
Purchase of treasury stock | (1,178,755) | (151,130) | ||
IPO loan borrowings (net) | (300,199) | (38,489) | 300,199 | |
Proceeds from other borrowings | 53,483,435 | 6,857,202 | 23,808,006 | 6,764,524 |
Repayment of other borrowings | (52,313,417) | (6,707,192) | (20,092,973) | (6,873,188) |
Payment of other financing expenses | (16,862) | (2,162) | ||
Net cash generated from financing activities | 10,554,218 | 1,353,174 | 8,406,896 | 1,151,622 |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | 167,130 | 21,428 | (1,117) | (44,666) |
Net increase in cash, cash equivalents and restricted cash | 15,769,754 | 2,021,866 | 28,618,321 | 2,916,333 |
Cash, cash equivalents and restricted cash at beginning of the year | 43,521,758 | 5,579,999 | 14,903,437 | 11,987,104 |
Cash, cash equivalents and restricted cash at end of the year | 59,291,512 | 7,601,865 | 43,521,758 | 14,903,437 |
Cash, cash equivalents and restricted cash | ||||
Cash and cash equivalents | 4,555,096 | 1,034,668 | 362,574 | |
Cash held on behalf of clients | 54,734,351 | 42,487,090 | 14,540,863 | |
Restricted cash | 2,065 | |||
Cash, cash equivalents and restricted cash at end of the year | 59,291,512 | 43,521,758 | 14,903,437 | |
Non-cash financing activities | ||||
Accretion to preferred shares redemption value | 12,309 | |||
Supplemental disclosure | ||||
Interest paid | (367,036) | (47,058) | (181,706) | (89,238) |
Income tax paid | (102,890) | (13,192) | (16,250) | (15,117) |
Cash paid for amounts include in operating lease liabilities | $ (89,427) | $ (11,466) | $ (58,686) | $ (50,629) |
GENERAL INFORMATION, ORGANIZATI
GENERAL INFORMATION, ORGANIZATION AND PRINCIPAL ACTIVITIES | 12 Months Ended |
Dec. 31, 2021 | |
GENERAL INFORMATION, ORGANIZATION AND PRINCIPAL ACTIVITIES | |
GENERAL INFORMATION, ORGANIZATION AND PRINCIPAL ACTIVITIES | 1. Futu Holdings Limited (the “Company”) is an investment holding company incorporated in the Cayman Islands with limited liability and conducts its business mainly through its subsidiaries, variable interest entities (“VIEs”) and subsidiaries of the VIEs (collectively referred to as the “Group”). The Group principally engages in online financial services including securities and derivative trades brokerage, margin financing and fund distribution services based on internally developed software and digital platform “Futubull” and “Moomoo”. The Group also provides financial information and online community services, etc. The Company completed its IPO on March 8, 2019 on the Nasdaq Global Market. Each American Depositary Shares (“ADSs”) of the Company represents eight Class A ordinary shares. As of December 31, 2021, the Company’s principal subsidiaries and consolidated VIE are as follows: Place of Percentage of Date of Incorporation/ Incorporation/ Direct or Indirect Subsidiaries Establishment/ Establishment Economic Interest Principal Activities Futu Securities International (Hong Kong) Limited (“Futu Securities”) April 17, 2012 Hong Kong 100 % Financial services Futu Inc. December 17, 2015 Delaware, USA 100 % Financial services Futu Clearing Inc. August 13, 2018 Delaware, USA 100 % Financial services Futu Singapore Pte. Ltd December 17, 2019 Singapore 100 % Financial services Futu Securities (Australia) Ltd. February 15, 2001 New South Wales, AUS 100 % Financial services Futu Securities (Hong Kong) Limited May 2, 2014 Hong Kong 100 % Investment holding Futu Network Technology Limited May 17, 2015 Hong Kong 100 % Research and development and technology services Futu Network Technology (Shenzhen) Co., Ltd. October 14, 2015 Shenzhen, PRC 100 % Research and development and technology services Shen Si Network Technology (Beijing) Co., Ltd. (“Shen Si”) September 15, 2014 Beijing, PRC 100 % No substantial business VIE Shenzhen Futu Network Technology Co., Ltd. (1) December 18, 2007 Shenzhen, PRC 100 % Research and development and technology services Note: (1) Mr. Leaf Hua Li and Ms. Lei Li are beneficiary owners of the Company and held 85% and 15% equity interest in Shenzhen Futu, respectively. Mr. Leaf Hua Li is the founder, chairman and chief executive officer of the Company, and Ms. Lei Li is Mr. Leaf Hua Li’s spouse. |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2021 | |
SIGNIFICANT ACCOUNTING POLICIES | |
SIGNIFICANT ACCOUNTING POLICIES | 2. SIGNIFICANT ACCOUNTING POLICIES Basis of presentation The consolidated financial statements of the Group have been prepared in accordance with the accounting principles generally accepted in the United States of America (“U.S. GAAP”). Significant accounting policies followed by the Group in the preparation of the accompanying consolidated financial statements are summarized below. The Group continuously evaluates the reliability and relevance of the disclosure of financial information, and to keep comparable to the presentation of balance sheets of other companies in the same industry, certain reclassifications were made to the prior years to conform to the current-year presentation, which included reclassification of “Other assets” into “Other current assets” and “Other non-current assets”, reclassification of “Accured expenses and other liabilities” into “Accrued expenses and other current liabilities” and “Other non-current liabilities”, and reclassification of “Operating lease liabilities” into “Operating lease liabilities - current” and “Operating lease liabilities - non-current”. Basis of Consolidation The consolidated financial statements include the financial statements of the Company, its subsidiaries, the VIEs and subsidiary of the VIEs for which the Company or its subsidiary is the primary beneficiary. A subsidiary is an entity in which the Company, directly or indirectly, controls more than one half of the voting power; or has the power to appoint or remove the majority of the members of the Board of Directors; or to cast a majority of votes at the meeting of directors; or has the power to govern the financial and operating policies of the investee under a statute or agreement among the shareholders or equity holders. A consolidated VIE is an entity in which the Company, or its subsidiary, through contractual arrangements, has the power to direct the activities that most significantly impact the entity’s economic performance, bears the risks of and enjoys the rewards normally associated with ownership of the entity, and therefore the Company or its subsidiary is the primary beneficiary of the entity. All transactions and balances among the Company, its subsidiaries, the VIEs and subsidiaries of the VIEs have been eliminated upon consolidation. VIE Companies 1) Contractual Agreements with VIEs The following is a summary of the contractual agreements (collectively, “Contractual Agreements”) between the Company’s PRC subsidiary, Shen Si, and the VIEs. Through the Contractual Agreements, the VIEs are effectively controlled by the Company. Shareholders’ Voting Rights Proxy Agreements. Business Operation Agreements . 2. SIGNIFICANT ACCOUNTING POLICIES (Continued) VIE Companies (Continued) 1) Contractual Agreements with VIEs (Continued) Equity Interest Pledge Agreements. Exclusive Technology Consulting and Services Agreements. Exclusive Option Agreements. 2. SIGNIFICANT ACCOUNTING POLICIES (Continued) VIE Companies (Continued) 2) Risks in relation to the VIE structure The following table sets forth the assets, liabilities, results of operations and changes in cash and cash equivalents of the VIEs and their subsidiary taken as a whole, which were included in the Group’s consolidated financial statements with intercompany balances and transactions eliminated between the VIEs and their subsidiary: As of December 31, 2020 2021 (HK$ in thousands) Total assets 162,897 254,602 Total liabilities 145,693 176,204 Year ended December 31, 2019 2020 2021 (HK$ in thousands) Total operating revenue 65,681 103,433 210,161 Net income 8,807 20,727 52,741 Year ended December 31, 2019 2020 2021 (HK$ in thousands) Net cash (used in)/generated from operating activities (2,502) (14,847) 2,340 Net cash generated from/(used in) investing activities 2,233 17,104 (3,327) Net (decrease)/increase in cash, cash equivalents and restricted cash (269) 2,257 (987) Cash, cash equivalents and restricted cash at beginning of the year 1,750 1,481 3,738 Cash, cash equivalents and restricted cash at end of the year 1,481 3,738 2,751 Transactions between the VIE and other entities in the consolidated group Total assets for 2020 and 2021 include amounts due from internal companies in the consolidated group in the amount of HK $117,085 thousand and HK$190,424 thousand, respectively. Total liabilities include amounts due to the internal companies in the amount of HK$72,506 thousand and HK$80,435 thousand, respectively. During 2019, 2020 and 2021, the VIE earned inter-company revenues in the amounts of HK$ 63,742 thousand, HK$ 94,500 thousand and HK$ 187,774 thousand, respectively. In addition, the repayment of advances to Group companies by the VIE in 2019, 2020 and 2021 are in the amount of HK$32,740 thousand, nil , and nil , respectively. All of these balances and transactions have been eliminated in consolidation. Under the Contractual Agreements with the VIEs, the Company has the power to direct activities of the VIEs and VIEs’ subsidiaries, and can have assets transferred out of the VIEs and VIEs’ subsidiaries. Therefore, the Company considers itself the ultimate primary beneficiary of the VIEs and there is no asset of the VIEs that can only be used to settle obligations of the VIEs and VIEs’ subsidiaries, except for registered capital of the VIEs and their subsidiary amounting to RMB10 million as of December 31, 2019, 2020 and 2021, respectively. Since the VIEs are incorporated as limited liability companies under the PRC Company Law, creditors of the VIEs do not have recourse to the general credit of the Company. There is currently no contractual arrangement that would require the Company to provide additional financial support to the VIEs. However, as the Company is conducting certain businesses through its VIEs and VIEs’ subsidiary, the Company may provide such support on a discretionary basis in the future, which could expose the Company to a loss. 2. SIGNIFICANT ACCOUNTING POLICIES (Continued) VIE Companies (Continued) 2) Risks in relation to the VIE structure (Continued) In the opinion of the Company’s management, the contractual arrangements among its subsidiary, the VIEs and their respective Nominee Shareholders are in compliance with current PRC laws and are legally binding and enforceable. However, uncertainties in the interpretation and enforcement of the PRC laws, regulations and policies could limit the Company’s ability to enforce these contractual arrangements. As a result, the Company may be unable to consolidate the VIEs and VIEs’ subsidiaries in the consolidated financial statements. On March 15, 2019, the Foreign Investment Law was formally passed by the thirteenth National People’s Congress and it was taken effect on January 1, 2020. The Foreign Investment Law replaces the Law on Sino-Foreign Equity Joint Ventures, the Law on Sino-Foreign Cooperative Joint Ventures and the Law on Foreign-Capital Enterprises to become the legal foundation for foreign investment in the PRC. The Foreign Investment Law stipulates certain forms of foreign investment. However, the Foreign Investment Law does not explicitly stipulate contractual arrangements such as those we rely on as a form of foreign investment. Notwithstanding the above, the Foreign Investment Law stipulates that foreign investment includes “foreign investors investing through any other methods under laws, administrative regulations or provisions prescribed by the State Council.” Future laws, administrative regulations or provisions prescribed by the State Council may possibly regard Contractual Arrangements as a form of foreign investment. In the event that the State Council in the future promulgates laws and regulations that deem investments made by foreign investors through contractual arrangements as “foreign investment”, the Group’s ability to use the contractual arrangements with its VIEs and the Group’s ability to conduct business through the VIEs could be severely limited. The Company’s ability to control the VIEs also depends on the power of attorney Shen Si has to vote on all matters requiring shareholders’ approvals in the VIEs. As noted above, the Company believes these power of attorney are legally binding and enforceable but may not be as effective as direct equity ownership. In addition, if the Group’s corporate structure or the contractual arrangements with the VIEs were found to be in violation of any existing PRC laws and regulations, the PRC regulatory authorities could, within their respective jurisdictions: ● revoke the Group’s business and operating licenses; ● require the Group to discontinue or restrict its operations; ● restrict the Group’s right to collect revenues; ● block the Group’s websites; ● require the Group to restructure its operations, re-apply for the necessary licenses or relocate the Group’s businesses, staff and assets; ● impose additional conditions or requirements with which the Group may not be able to comply; or ● take other regulatory or enforcement actions against the Group that could be harmful to the Group’s business. 2. SIGNIFICANT ACCOUNTING POLICIES (Continued) The imposition of any of these restrictions or actions may result in a material adverse effect on the Group’s ability to conduct its business. In addition, if the imposition of any of these restrictions causes the Group to lose the right to direct the activities of the VIEs or the right to receive their economic benefits, the Group would no longer be able to consolidate the financial statements of the VIEs. In the opinion of management, the likelihood of losing the benefits in respect of the Group’s current ownership structure or the contractual arrangements with its VIEs is remote. Use of Estimates The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, related disclosures of contingent assets and liabilities at the balance sheet date, and the reported revenues, costs and expenses during the reported period in the consolidated financial statements and accompanying notes. These accounting estimates reflected in the Group’s consolidated financial statements mainly include, but are not limited to, the estimation of the expected usage and the estimated relative standalone selling price of the incentive points and coupons, the valuation and recognition of share-based compensation arrangements, depreciable lives of property and equipment, useful life of intangible assets, expected credit losses on financial instruments, assessment for impairment of long-term investments, present value for expected future leasing payment, contingency reserve, provision of income tax and valuation allowance for deferred tax asset, and valuation of financial instruments measured at fair value. Actual results could differ from those estimates. Comprehensive Income and Foreign Currency Translation The Group’s operating results are reported in the consolidated statements of comprehensive income pursuant to FASB ASC Topic 220, “Comprehensive Income”. Comprehensive income consists of two components: net income and other comprehensive income (“OCI”). The Group’s OCI is comprised of gains and losses resulting from translating foreign currency financial statements of entities, of which functional currency is other than Hong Kong dollar which is the presentational currency of the Group, net of related income taxes, where applicable. Such subsidiaries’ assets and liabilities are translated into Hong Kong dollars at period-end exchange rates, and revenues and expenses are translated at average exchange rates prevailing during the period. Adjustments that result from translating amounts from a subsidiary’s functional currency to the Hong Kong dollar (as described above) are reported net of tax, where applicable, in accumulated OCI in the consolidated balance sheets. Convenience Translation Translations of balances in the consolidated balance sheets, consolidated statements of comprehensive income and consolidated statements of cash flows from HK$ into US$ as of and for the year ended December 31, 2021 are solely for the convenience of the readers and were calculated at the rate of US$1.00=HK$7.7996, representing the noon buying rate set forth in the H.10 statistical release of the U.S. Federal Reserve Board on December 30, 2021. No representation is made that the HK$ amounts could have been, or could be, converted, realized or settled into US$ at that rate on December 30, 2021, or at any other rate. Current Expected Credit Losses Prior to January 1, 2020, the Group applied incurred loss methodology for recognizing credit losses that delays recognition until it is probable a loss has been incurred. The identified impairment loss was immaterial prior to January 1, 2020. On January 1, 2020, the Group adopted FASB ASC Topic 326 – “Financial Instruments – Credit Losses” (“ASC Topic 326”) which replaces the incurred loss methodology with the current expected credit loss (“CECL”) methodology. The new guidance applies to financial assets measured at amortized cost, held-to-maturity debt securities and off-balance sheet credit exposures. For on-balance sheet assets, an allowance must be recognized at the origination or purchase of in-scope assets and represents the expected credit losses over the contractual life of those assets. 2. SIGNIFICANT ACCOUNTING POLICIES (Continued) Current Expected Credit Losses (Continued) The Group adopted ASC Topic 326 using the modified retrospective approach for all in-scope assets. The adoption of ASC Topic 326 has no material impact on the Group’s retained earnings as of January 1, 2020. Results for reporting periods beginning after January 1, 2020 are presented under ASC Topic 326 while prior periods continue to be reported in accordance with previously applicable U.S. GAAP. The Group’s in-scope assets are primarily loans and advances that are collateralized by client securities and the collateral is required to be maintained at specified minimum levels at all times. The Group monitors margin levels and requires clients to provide additional collateral, or reduce margin positions, to meet minimum collateral requirements if the fair value of the collateral changes. The Group applies the practical expedient based on collateral maintenance provisions in estimating an allowance for credit losses for the loans and advances. In accordance with the practical expedient, when the Group reasonably expects that borrowers (or counterparties, as applicable) will replenish the collateral as required, there is no expectation of credit losses when the collateral’s fair value is greater than the amortized cost of the financial assets. If the amortized cost exceeds the fair value of collateral, then credit losses are estimated only on the unsecured portion. For the year ended December 31, 2020 and 2021, expected credit loss expenses of HK$9,075 thousand and HK$3,200 thousand resulting from the assessment of credit losses for the loans and advances under ASC Topic 326 at period-end were recognized in “Others, net” in the consolidated statements of comprehensive income respectively. An allowance for credit losses on other financial assets, including receivables from clients, brokers, clearing organizations and fund management companies and fund distributors, is estimated based on the aging of these financial receivables. Since most of the financial receivables are short-term in nature, the allowance for credit losses for other financial assets were immaterial for all periods presented. Cash and Cash Equivalents Cash and cash equivalents represent cash on hand, demand deposits and time deposits placed with banks or other financial institutions, which are unrestricted to withdrawal or use, and which have original maturities of three months or less. Cash Held on Behalf of Clients The Group has classified the clients’ monies as cash held on behalf of clients under the assets section in the consolidated balance sheets and recognized the corresponding accounts payables to the respective clients under the liabilities section. Term Deposit Term deposit consists of bank deposits with an original maturity of greater than three months. Restricted Cash The Group is required to maintain restricted cash deposits for certain property leases. These funds are restricted and have been classified as such on our consolidated balance sheets due to the nature of restriction. 2. SIGNIFICANT ACCOUNTING POLICIES (Continued) Short-term Investments The Group classifies certain financial assets with highly liquidity and original maturities less than twelve months as short-term investments. The Group’s short-term investments consist of investments in money market funds. The Group values its money market funds using quoted prices in active markets for these investments, and accordingly, the Group classifies the valuation techniques that use these inputs as Level 1. Securities Purchased Under Agreements to Resell and Securities Sold Under Agreements to Repurchase Transactions involving purchases of securities under agreements to resell (resell agreements) and transactions involving sales of securities under agreements to repurchase (repurchase agreements) are treated as collateralized financing transactions. Under resell agreements, the Group pays cash to counterparties and receives securities as collateral. These agreements are carried at amounts at which the securities will subsequently be resold, and the interest income received by the Group is recorded as interest income in the consolidated statements of comprehensive income. Under repurchase agreements, the Group receives cash from counterparties and provides securities as collateral. These agreements are carried at amounts at which the securities will subsequently be repurchased, and the interest expense incurred by the Group is recorded as interest expenses in the consolidated statements of comprehensive income. Loans and advances Loans and advances include margin loans, IPO loans extended to clients and other advances, collateralized by securities and are carried at the amortized cost, net of an allowance for credit losses. Revenues earned from the loans and advances are included in interest income. Margin loans are extended to clients on a demand basis and are not committed facilities. Securities owned by the customers, which are not recorded in the consolidated balance sheets, are held as collateral for amounts due on the margin loans. IPO loans for subscription of new shares are normally settled within one week from the drawdown date. Once IPO stocks are allotted, the Group requires clients to repay the IPO loans. Force liquidation action would be taken if the clients fail to settle their shortfall after the IPO allotment result is announced. Other advances consist of bridge loans to enterprises which pledged unlisted or listed shares they hold as collateral. Loans and advances are initially recorded net of directly attributable transaction costs and are measured at subsequent reporting dates at amortized cost. Finance charges, premiums payable on settlement or redemption and direct costs are accounted for on an accrual basis to the surplus or deficit using the effective interest method and are added to the carrying amount of the instrument to the extent that they are not settled in the period in which they arise. The balances will be written off to the extent that there is no realistic prospect of recovery. This is generally the case when the Group determines that the debtor does not have assets or sources of income that could generate sufficient cash flows to repay the amounts subject to the write-off. 2. SIGNIFICANT ACCOUNTING POLICIES (Continued) Trading Receivables from and Payables to Clients Trading receivables from and payables to clients include amounts due on brokerage transactions on a trade-date basis. Receivables from and Payables to Brokers, Clearing Organizations and Fund Management Companies and Fund Distributors Receivables from and payables to brokers, clearing organizations and fund management companies and fund distributors include receivables and payables from unsettled trades on a trade-date basis, including amounts receivable for securities, derivatives or funds trades not delivered by the Group to the purchaser by the settlement date and cash deposits, and amounts payable for securities, derivatives or funds trades not received by the Group from a seller by the settlement date. Clearing settlement fund deposited in the clearing organizations for the clearing purpose is recognized in receivables from clearing organizations. The Group borrowed margin loans from executing brokers, with the benchmark interest rate plus premium differentiated depending on the amount borrowed, and immediately lent to margin financing clients. Margin loans borrowed is recognized in the payables to brokers. The Group’s policy is to net the receivables from and payables to clearing organizations according to ASC Topic 210-20, when all of the following conditions are met: a) Each of two parties owes the other determinable amounts. b) The reporting party has the right to set off the amount owed with the amount owed by the other party. c) The reporting party intends to set off. d) The right of setoff is enforceable at law. Interest Receivable and Payable Interest receivable is calculated based on the contractual interest rate of bank deposit, loans and advances, securities loaned and receivables on an accrual basis, and is recorded as interest income as earned. Interest payable is calculated based on the contractual interest rates of payables, borrowings, securities borrowed and securities sold under agreements to repurchase on an accrual basis. Securities Borrowed and Securities Loaned Securities borrowed and securities loaned are recorded at the amount of the cash collateral advanced or received. Securities borrowed transactions require the Group to provide counterparties with collateral, which may be in the form of cash, or other securities. With respect to securities loaned, the Group receives collateral, which may be in the form of cash or other securities in an amount generally in excess of the fair value of the securities loaned. The Group monitors the market value of securities borrowed and loaned on a daily basis, with additional collateral obtained or refunded as permitted contractually. Receivables and payables related to securities borrowed and securities loaned are included at receivables from and payables to brokers or clients in the consolidated balance sheets. Securities lending fees received and securities borrowing fees paid by the Group are included in interest income and interest expense, respectively, in the consolidated statements of comprehensive income. 2. SIGNIFICANT ACCOUNTING POLICIES (Continued) Leases The Group accounts for leases in accordance with ASC 842, Leases (“ASC 842”), which requires lessees to recognize leases on the balance sheet and disclose key information about leasing arrangements. The Group determines if a contract contains a lease based on whether the contract conveys to the Group the right to control the use of an underlying asset for a period of time in exchange for consideration. If the Group determines that a contract contains a lease, it recognizes, in the consolidated balance sheets, a lease liability and a corresponding right-of-use asset on the commencement date of the lease. The lease liability is initially measured at the present value of the future lease payments over the lease term using the rate implicit in the lease or, if not readily determinable, the Group’s secured incremental borrowing rate. An operating lease right-of-use asset is initially measured at the value of the lease liability minus any lease incentives and initial direct costs incurred plus any prepaid rent. The group recognizes operating lease right-of-use assets and corresponding operating lease liabilities in the financial statement on the date when the lessor makes the underlying asset available for use. Each lease liability is measured using the Group’s secured incremental borrowing rate, which is based on an internally developed yield curve using interest rates of debt issued with a similar risk profile as the Group and a duration similar to the lease term. The Group’s leases have remaining terms of one The Group’s operating leases contain both lease components and non-lease components. Non-lease components are distinct elements of a contract that are not related to securing the use of the underlying assets, such as common area maintenance and other management costs. The Company elected to measure the lease liability by combining the lease and non-lease components as a single lease component. As such, the Company includes the fixed payments and any payments that depend on a rate or index that relate to the lease and non-lease components in the measurement of the lease liability. Some of the non-lease components are variable in nature and not based on an index or rate, and as a result, are not included in the measurement of the operating lease right-of-use assets or operating lease liability. Operating lease expense is recognized on a straight-line basis over the lease term and is included in rental and other related expenses in the Group’s consolidated statements of comprehensive income. All of the Group’s leases are classified as operating leases and primarily consist of real estate leases for corporate offices, data centers, and other facilities. As of December 31, 2020 and 2021, the weighted-average remaining lease term on these leases is approximately four years and three years , For the year ended December 31, 2020 and 2021, right-of-use assets obtained under operating leases was HK$85,827 thousand and HK$108,949 thousand, respectively. The Group’s lease agreements do not contain any residual value guarantees, restrictions or covenants. Refundable Deposit Refundable deposit is included in other assets in the consolidated balance sheets. As a clearing member firm of securities and derivatives clearing organizations in Hong Kong and the U.S., the Group is also exposed to clearing member credit risk. These clearing organizations require member firms to deposit cash to a clearing fund. If a clearing member defaults in its obligations to the clearing organizations in an amount larger than its own margin and clearing fund deposits, the shortfall is absorbed pro rata from the deposits of the other clearing members. Many clearing organizations of which the Group is member have the authority to assess their members for additional funds if the clearing fund is depleted. A large clearing member default could result in a substantial cost if the Group is required to pay such additional funds. 2. SIGNIFICANT ACCOUNTING POLICIES (Continued) Property and Equipment, net Property and equipment, which are included in other assets in the consolidated balance sheets are stated at historical cost less accumulated depreciation and impairment, if any. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. Residual rate is determined based on the economic value of the property and equipment at the end of the estimated useful lives as a percentage of the original cost. Category Estimated useful lives Residual rate Computers equipment 3 5 % Furniture and fixtures 3 5 % Office equipment 3 5 % Vehicle 5 years 5 % Office building 30 years 5 % Expenditures for maintenance and repairs are expensed as incurred. Intangible Assets Intangible assets which are included in other assets in the consolidated balance sheets mainly consist of computer software and other intangible assets. Identifiable intangible assets are carried at acquisition cost less accumulated amortization and impairment loss, if any. Finite-lived intangible assets are tested for impairment if impairment indicators arise. Amortization of finite-lived intangible assets is computed using the straight-line method over their estimated useful lives, mainly including: Category Estimated useful lives Computer software 5 years Infinite-lived intangible assets mainly consist of the trading right and licenses. The Group had held a futures trading right as a clearing member firm of HKEx in order to trade futures through the trading facilities of the Stock Exchange, and has recognized it as intangible assets. The licences recognised as intangible assets consist of an insurance broker license and a financial services license. The Group obtained an insurance broker license through acquiring a member of the Hong Kong Professional Insurance Brokers Association. The Group acquired an Australian subsidiary that holds an Australian Financial Services License (AFSL) granted and regulated by the Australian Securities and Investments Commission (ASIC). The future trading right and licenses have an indefinite useful life and are carried at cost less accumulated impairment losses. The Group will not amortize the future trading right and licenses until its useful life is determined to be finite. Long-term investments The Group’s long-term investments primarily consist of equity method investments and equity investments without readily determinable fair values. In accordance with ASC 323 Investment—Equity Method and Joint Ventures, the Group accounts for equity method investments over which the Group has significant influence but does not own a majority of the equity interest or otherwise controls and the investments are either common stock or in substance common stock using the equity method. The Group’s share of the investee’s profit and loss is recognized in the consolidated statements of comprehensive income of the period. 2. SIGNIFICANT ACCOUNTING POLICIES (Continued) Long-term investments (Continued) The carrying amount of equity method investments is tested for impairment whenever there is an indication that the carrying amount may be impaired in accordance with the policy described in “Impairment of long-lived assets”. In January 2019, the Group invested in a private company. The Group acquired 20% ordinary equity interest with a total consideration of HK$6,709 thousand. The Group exercises significant influence in the investee and therefore accounts for this as an equity method investment. Based on the Group’s assessment on the recoverable amounts of the equity method investment, as of December 31, 2020 and 2021, the impairment provision on the equity method investment was HK$5,888 thousand. In December 2021, the Group invested in a private equity fund. The Group acquired approximately 10% ordinary equity interest with a total consideration of HK$7,798 thousand. The Group exercises significant influence in the equity fund and therefore accounts for this as an equity method investment. Based on the Group’s assessment on the recoverable amounts of the equity method investment, impairment provision of nil on the equity method investment was recognized as of December 31, 2021. In accordance with ASC 321 Investment—Equity Securities, for those equity investments without readily determinable fair values, the Group elects to record these investments at cost, less impairment, and plus or minus subsequent adjustments for observable price changes. Under this measurement alternative, changes in the carrying value of the equity investment are required to be made whenever there are observable price changes in orderly transactions for the identical or similar investment of the same issuer. Pursuant to ASC 321, for those equity investments that the Group elects to use the measurement alternative, the Group makes a qualitative assessment of whether the investment is impaired at each reporting date. If a qualitative assessment indicates that the investment is impaired, the Group estimates the investment’s fair value in accordance with the principles of ASC 820. If the fair value is less than the investment’s carrying value, the Group recognizes an impairment loss equal to the difference between the carrying value and fair value. In December 2021, the Group invested in a private equity fund. The Group acquired approximately 2.75% ordinary equity interest with a total consideration of HK$15,596 thousand. Based on the Group’s impairment assessment of the investment, no impairment provision was made as of December 31, 2021. Impairment of Long-lived Assets Long-lived assets are evaluated for impairment whenever events or changes in circumstanc |
FINANCIAL ASSETS AND FINANCIAL
FINANCIAL ASSETS AND FINANCIAL LIABILITIES | 12 Months Ended |
Dec. 31, 2021 | |
FINANCIAL ASSETS AND FINANCIAL LIABILITIES | |
FINANCIAL ASSETS AND FINANCIAL LIABILITIES | 3. FINANCIAL ASSETS AND FINANCIAL LIABILITIES Financial Assets and Liabilities Measured at Fair Value The following tables set forth, by level within the fair value hierarchy (see Note 2), financial assets measured at fair value as of December 31, 2020 and 2021. As required by ASC Topic 820, financial assets and financial liabilities are classified in their entirety based on the lowest level of input that is significant to the respective fair value measurement. Financial Assets At Fair Value as of December 31, 2021 Level 1 Level 2 Level 3 Total (HK$ in thousands) Financial assets, measured at fair value Short-term investments 1,169,741 — — 1,169,741 Other financial assets (1) — 598 — 598 Total financial assets, measured at fair value 1,169,741 598 — 1,170,339 (3) The Group enters into currency futures contracts to manage currency exposure associated with anticipated receipts and disbursements occurring in a currency other than the functional currency of the entity. The currency futures contracts are valued using broadly distributed bank and broker prices, and are classified as Level 2 of the fair value hierarchy since inputs to their valuation can be generally corroborated by market data. The Group did not hold any financial assets measured at fair value as of December 31, 2020. Transfers Between Level 1 and Level 2 Transfers of financial assets and financial liabilities at fair value to or from Levels 1 and 2 arise where the market for a specific financial instrument has become active or inactive during the period. The fair values transferred are ascribed as if the financial assets or financial liabilities had been transferred as of the end of the period. During the years ended December 31, 2021 and 2020, there were no transfers between levels for financial assets and liabilities, at fair value. 3. FINANCIAL ASSETS AND FINANCIAL LIABILITIES (Continued) Financial Assets and Liabilities Not Measured at Fair Value The following financial instruments are not measured at fair value in the Group’s consolidated balance sheets at December 31, 2020 and 2021, but require disclosure of their fair values. The estimated fair value of such instruments at December 31, 2020 and 2021 approximates their carrying value due to their generally short maturities. If measured at fair value in the financial statements, these financial instruments would be classified based on the lowest level of any input that is significant to the fair value measurement. As of December 31, 2021 Carrying Fair Value Value (HK$ in thousands) Financial assets, not measured at fair value Cash and cash equivalents 4,555,096 4,555,096 Cash held on behalf of clients 54,734,351 54,734,351 Restricted Cash 2,065 2,065 Securities purchased under resale agreements 106,203 106,203 Loans and advances 29,587,306 29,587,306 Receivables: Clients 469,577 469,577 Brokers 7,893,927 7,893,927 Clearing organizations 1,961,121 1,961,121 Fund management companies and fund distributors 72,340 72,340 Interest 50,829 50,829 Other financial assets 387,072 387,072 Total financial assets, not measured at fair value 99,819,887 99,819,887 As of December 31, 2021 Carrying Fair Value Value (HK$ in thousands) Financial liabilities, not measured at fair value Amounts due to related parties 87,459 87,459 Payables: Clients 59,127,439 59,127,439 Brokers 7,599,233 7,599,233 Clearing organizations 393,782 393,782 Fund management companies and fund distributors 56,690 56,690 Interest 15,359 15,359 Borrowings 6,357,405 6,357,405 Securities sold under agreements to repurchase 4,467,861 4,467,861 Operating lease liabilities 260,579 260,579 Other financial liabilities 937,970 937,970 Total financial liabilities, not measured at fair value 79,303,777 79,303,777 3. FINANCIAL ASSETS AND FINANCIAL LIABILITIES (Continued) Financial Assets and Liabilities Not Measured at Fair Value (Continued) As of December 31, 2020 Carrying Fair Value Value (HK$ in thousands) Financial assets, not measured at fair value Cash and cash equivalents 1,034,668 1,034,668 Cash held on behalf of clients 42,487,090 42,487,090 Term deposit 300,000 300,000 Loans and advances 18,825,366 18,825,366 Receivables: Clients 735,145 735,145 Brokers 5,780,461 5,780,461 Clearing organizations 1,243,928 1,243,928 Fund management companies and fund distributors 297,622 297,622 Interest 19,876 19,876 Other financial assets 251,672 251,672 Total financial assets, not measured at fair value 70,975,828 70,975,828 As of December 31, 2020 Carrying Fair Value Value (HK$ in thousands) Financial liabilities, not measured at fair value Amounts due to related parties 87,169 87,169 Payables: Clients 46,062,842 46,062,842 Brokers 4,533,581 4,533,581 Clearing organizations 324,266 324,266 Fund management companies and fund distributors 127,442 127,442 Interest 5,493 5,493 Borrowings 5,482,818 5,482,818 Securities sold under agreements to repurchase 5,453,037 5,453,037 Operating lease liabilities 222,231 222,231 Other financial liabilities 96,800 96,800 Total financial liabilities, not measured at fair value 62,395,679 62,395,679 3. FINANCIAL ASSETS AND FINANCIAL LIABILITIES (Continued) Financial Assets and Liabilities Not Measured at Fair Value (Continued) Netting of Financial Assets and Financial Liabilities The Group’s policy is to net the receivables from and payables to clearing organizations that meet the offsetting requirements prescribed in ASC Topic 210-20. The following tables represents the amounts of financial instruments that are offset in the consolidated balance sheets as of December 31, 2021 and 2020. Effects of offsetting on the balance sheet Related amounts not offset Gross Amounts amounts Net amounts subject to set off in the Presented in master Financial Gross balance the balance netting instrument Net As of December 31, 2021 amount sheet sheet arrangements collateral amount HK$in thousands Financial Assets Amounts due from clearing organizations 7,596,090 (5,634,969) 1,961,121 — — 1,961,121 Financial liabilities Amounts due to clearing organizations 6,028,751 (5,634,969) 393,782 — — 393,782 Effects of offsetting on the balance sheet Related amounts not offset Gross Amounts amounts Net amounts subject to set off in the presented in master Financial Gross balance the balance netting instrument Net As of December 31, 2020 amount sheet sheet arrangements collateral amount HK$ in thousands Financial Assets Amounts due from clearing organizations 12,614,684 (11,370,756) 1,243,928 — — 1,243,928 Financial liabilities Amounts due to clearing organizations 11,695,022 (11,370,756) 324,266 — — 324,266 |
SHORT-TERM INVESTMENTS
SHORT-TERM INVESTMENTS | 12 Months Ended |
Dec. 31, 2021 | |
SHORT-TERM INVESTMENTS | |
SHORT-TERM INVESTMENTS | 4. SHORT-TERM INVESTMENTS The following is a summary of short-term investments: As of December 31, 2020 2021 (HK$ in thousands) Money market funds — 1,169,741 Total — 1,169,741 For the years ended December 31, 2019, 2020 and 2021, the Group recorded realized gain of HK$707 thousand, HK$665 thousand and nil related to short-term investments in the consolidated statements of comprehensive income, respectively. |
LEASE
LEASE | 12 Months Ended |
Dec. 31, 2021 | |
LEASE | |
LEASE | 5. LEASE The following table presents balances reported in the consolidated balance sheets related to the Group’s leases: As of December 31, 2020 2021 (HK$ in thousands) Operating lease right-of-use assets 208,863 243,859 Operating lease liabilities 222,231 260,579 The following table presents operating lease cost reported in the consolidated statements of comprehensive income related to the Group’s leases: Year ended December 31, 2019 2020 2021 (HK$ in thousands) Operating lease cost 64,756 64,594 106,459 The following table reconciles the undiscounted cash flows of the Group’s leases as of December 31, 2021 to the present value of its operating lease payments: December 31, 2021 (HK$ in thousands) 2022 102,767 2023 96,326 2024 38,306 2025 30,688 2026 and thereafter 7,455 Total undiscounted operating lease payments 275,542 Less: imputed interest (14,963) Present value of operating lease liabilities 260,579 |
LOANS AND ADVANCES
LOANS AND ADVANCES | 12 Months Ended |
Dec. 31, 2021 | |
LOANS AND ADVANCES | |
LOANS AND ADVANCES | 6. LOANS AND ADVANCES As of December 31, 2020 2021 (HK$ in thousands) Margin loans 18,424,972 29,084,958 IPO loans 400,394 34,348 Other advances — 468,000 Total 18,825,366 29,587,306 |
PROPERTY AND EQUIPMENT, NET
PROPERTY AND EQUIPMENT, NET | 12 Months Ended |
Dec. 31, 2021 | |
PROPERTY AND EQUIPMENT, NET | |
PROPERTY AND EQUIPMENT, NET | 7. PROPERTY AND EQUIPMENT, NET As of December 31, 2020 2021 (HK$ in thousands) Gross carrying amount Computers and equipment 60,039 109,989 Furniture and fixtures 34,704 64,507 Office equipment 42,276 64,822 Office building 27,983 28,239 Vehicle 632 635 Total of gross carrying amount 165,634 268,192 Less: accumulated depreciation Computers and equipment (17,295) (29,852) Furniture and fixtures (13,738) (23,828) Office equipment (24,282) (35,860) Office building (1,403) (2,291) Vehicle (600) (604) Total of accumulated depreciation (57,318) (92,435) Property and equipment, net 108,316 175,757 Depreciation expenses on property and equipment which are included in research and development expenses, selling and marketing expenses and general and administrative expenses in the consolidated statements of comprehensive income for the years ended December 31, 2019, 2020 and 2021 were HK$15,647 thousand, HK$25,792 thousand and HK$34,118 thousand, respectively. |
INTANGIBLE ASSETS, NET
INTANGIBLE ASSETS, NET | 12 Months Ended |
Dec. 31, 2021 | |
INTANGIBLE ASSETS, NET | |
INTANGIBLE ASSETS, NET | 8. INTANGIBLE ASSETS, NET As of December 31, 2020 2021 (HK$ in thousands) Gross carrying amount Computer software 8,525 15,596 License 2,000 4,261 Others 3,563 3,638 Total of gross carrying amount 14,088 23,495 Less: accumulated amortization Computer software (3,041) (5,172) Others (831) (1,105) Total of accumulated amortization (3,872) (6,277) Intangible assets, net 10,216 17,218 Amortization expenses on intangible assets which are included in research and development expenses, selling and marketing expenses and general and administrative expenses in the consolidated statements of comprehensive income for the years ended December 31, 2019, 2020 and 2021 were HK$900 thousand, HK$1,439 thousand and HK$2,317 thousand, respectively. |
LONG-TERM INVESTMENTS
LONG-TERM INVESTMENTS | 12 Months Ended |
Dec. 31, 2021 | |
Long-term Investments | |
Long term Investments | 9. LONG-TERM INVESTMENTS The Group’s long-term investments primarily consist of equity method investments and equity investments without readily determinable fair values. As of December 31, 2020 2021 (HK$ in thousands) Equity method investments (1) — 7,798 Equity investments without readily determinable fair values (2) — 15,596 Total — 23,394 (1) Equity method investments As of December 31, 2020 and 2021, the Group’s investments accounted for under the equity method totaled nil and HK$7,798 thousand, respectively. The Group applies the equity method of accounting to account for its equity method investments over which it has significant influence but does not own a majority equity interest or otherwise control. In January 2019, the Group invested in a private company by acquiring 20% ordinary equity interest with a total consideration of HK$6,709 thousand. Based on the Group’s assessment on the recoverable amounts of the equity method investment, as of December 31, 2020 and 2021, the impairment provision on the equity method investment was HK$5,888 thousand. In December 2021, the Group invested in a private equity fund by acquiring approximately 10% ordinary equity interest with a total consideration of HK$7,798 thousand. Based on the Group’s assessment on the recoverable amounts of this equity method investment, as of December 31, 2021, no impairment provision on the equity method investment was recognized. (2) Equity investments without readily determinable fair values As of December 31, 2020 and 2021, the Group’s equity investments without readily determinable fair values totaled nil and HK$15,596 thousand, respectively. In December 2021, the Group invested in a private equity fund by acquiring 2.75% ordinary equity interest with a total consideration of HK$15,596 thousand. Equity securities without determinable fair values of the Group represent investments in privately held companies with no readily determinable fair value. The Group elected measurement alternative and recorded these investments at cost, less impairment, adjusted for subsequent observable price changes. No impairment provision of |
OTHER ASSETS
OTHER ASSETS | 12 Months Ended |
Dec. 31, 2021 | |
OTHER ASSETS | |
OTHER ASSETS | 10. OTHER ASSETS As of December 31, 2020 2021 (HK$ in thousands) Current: Staff advances 36,468 26,527 Others 70,419 55,067 Total 106,887 81,594 Non-current: Refundable deposit 150,733 337,513 Property and equipment, net (Note 7) 108,316 175,757 Deferred tax assets (Note 26) 17,174 38,317 Intangible assets, net (Note 8) 10,216 17,218 Total 286,439 568,805 |
BORROWINGS
BORROWINGS | 12 Months Ended |
Dec. 31, 2021 | |
BORROWINGS | |
BORROWINGS | 11. BORROWINGS As of December 31, 2020 2021 (HK$ in thousands) Borrowings from: Banks (1) 5,182,620 6,357,405 Other financial institutions 300,198 — Total 5,482,818 6,357,405 The Group obtained borrowings mainly to support its margin financing business. Those borrowings bear weighted average interest rates of 1.82% and 1.15% as of December 31, 2020 and 2021, respectively. (1) The Group has unused borrowing facilities of HK$3,285,909 thousand and HK$14,695,095 thousand from banks as of December 31, 2020 and 2021, respectively, which are uncommitted. These bank borrowings were pledged by margin clients’ shares as the primary source of credit risk mitigation of the lenders, and bear floating interest rates based on various benchmarks including Hong Kong Prime Rate, Hong Kong Interbank Offered Rate (“HIBOR”), CNH HIBOR, etc. |
ACCRUED EXPENSES AND OTHER LIAB
ACCRUED EXPENSES AND OTHER LIABILITIES | 12 Months Ended |
Dec. 31, 2021 | |
ACCRUED EXPENSES AND OTHER LIABILITIES | |
ACCRUED EXPENSES AND OTHER LIABILITIES | 12. ACCRUED EXPENSES AND OTHER LIABILITIES As of December 31, 2020 2021 (HK$ in thousands) Current: Payables to corporate clients in relation to ESOP management services 17,801 870,283 Accrued payroll and welfare expenses 317,428 531,409 Tax payables 173,911 494,744 Accrued advertising and promotion fee 37,652 152,305 Temporary payables in relation to fund distribution services 70,793 48,240 Accrued professional fee 6,952 22,066 Stamp duty, trading levy and trading fee payables 26,007 19,447 Accrued market information and data fee 13,143 12,832 Contract liabilities - current 2,958 3,058 Refund from depositary bank - current 2,756 2,773 Others 47,782 19,056 Total 717,183 2,176,213 Non-current: Contract liabilities - non-current 5,291 5,910 Refund from depositary bank - non-current 7,120 4,389 Deferred tax liabilities (Note 26) 1,604 636 Total 14,015 10,935 |
ORDINARY SHARES AND TREASURY ST
ORDINARY SHARES AND TREASURY STOCK | 12 Months Ended |
Dec. 31, 2021 | |
ORDINARY SHARES AND TREASURY STOCK | |
ORDINARY SHARES AND TREASURY STOCK | 13. ORDINARY SHARES AND TREASURY STOCK Ordinary shares The Company’s original Memorandum and articles of association authorized the Company to issue 807,500 ordinary shares with a par value of US$0.0050 per share. After a share split effective on September 22, 2016, the Company’s amended Memorandum and articles of association authorized the Company to issue 403,750,000 ordinary shares with a par value of US$0.00001 per share. Each ordinary share is entitled to one vote. Immediately prior to the completion of the initial public offering on March 8, 2019, the Company was approved by the board of directors of the Company to adopt a dual class share structure, consisting of 48,700,000,000 Class A ordinary shares with a par value of US$0.00001 each, 800,000,000 Class B ordinary shares with a par value of US$0.00001 each and 500,000,000 shares undesignated with a par value of US$0.00001 each. In respect of all matters subject to shareholders’ vote, each holder of Class A ordinary share is entitled to one and each holder of Class B ordinary share is entitled to twenty votes. On August 22, 2020, the Company completed a public offering, issued Class A ordinary shares for a total consideration of US$ 301.8 million ( HK$ 2,339.7 million ) after deducting the underwriting discounts and commissions and offering expenses. Each Class B ordinary share is convertible into one Class A ordinary share at any time by the holder thereof, while Class A ordinary shares are not convertible into Class B ordinary shares under any circumstances. On December 3, 2020, 50,000,000 shares of Class B ordinary shares were converted to the same number of Class A ordinary shares. In December, 2020, the Company entered into a securities purchase agreement with a leading global investment firm for a private placement of Pre-Funded warrants (the “Offering” or the “Pre-Funded Warrants”). The net proceeds to the Company from the Offering were approximately US $262.5 million (HK $2,035 million). In the Offering, the Company issued Pre-Funded warrants to purchase 53,600,000 shares of Class A ordinary shares that were immediately exercisable and had a termination date in June 2022, at a price of US $4.89751 less a norminal exercise price of US $0.00001 per Pre-Funded warrant. The Pre-Funded Warrants were equity classified because they were immediately exercisable, did not embody an obligation for the Company to repurchase its shares, and permitted the holders to receive a fixed number of common shares upon exercise. In addition, such warrants did not provide any guarantee of value or return. On June 11, 2021, the investment firm exercised these Pre-Funded warrants which increased 53,599,890 shares of Class A ordinary shares, and 110 shares were retrieved as the consideration of share purchase. On April 24, 2021, the Company completed a public offering, issued 87,400,000 Class A ordinary shares for a total consideration of US$1,398 million (HK$10,857 million) after deducting the underwriting discounts and commissions and offering expenses. During the year ended December 31, 2020 and 2021, 5,048,824 and 5,875,592 shares of Class A Ordinary Shares were issued upon exercise of outstanding stock options. During the year ended December 31, 2020 and 2021, nil and 929,672 shares of Class A Ordinary Shares were issued upon vest of outstanding restricted shares units under the Group’s share-based incentive plans (Note 16). Treasury stock On November 3, 2021, the Group’s Board of Directors approved a share repurchase program to repurchase up to US$300.0 million worth of its own American depositary shares (“ADSs”), representing its Class A ordinary shares, until December 31, 2022. As of December 31, 2021, the Group had repurchased an aggregate of 29,462,760 ordinary shares under the Share Repurchase Program in the open market, at an average price of US$41.04 per ADS, or US$5.13 per share for a total consideration of US$151.2 million (HK$1,178.8 million). As of December 31, 2021, 29,462,760 Class A ordinary shares were repurchased and recorded at historical purchase cost of US$151.2 million (HK$1,178.8 million). |
RESTRICTED NET ASSETS
RESTRICTED NET ASSETS | 12 Months Ended |
Dec. 31, 2021 | |
RESTRICTED NET ASSETS | |
RESTRICTED NET ASSETS | 14. RESTRICTED NET ASSETS In accordance with the PRC laws and regulations, the Group’s PRC subsidiaries and VIEs are required to make appropriation to certain reserve funds, namely general reserve fund, enterprise expansion fund, and staff bonus and welfare fund, all of which are appropriated from the subsidiaries’ annual after-tax profits as reported under PRC GAAP. The appropriation must be at least 10% of the annual after-tax profits to the general reserve fund until such reserve fund has reached 50% of the subsidiaries’ registered capital. The domestic companies are also required to provide discretionary surplus fund, at the discretion of the Board of Directors, from its annual after-tax profits as reported under PRC accounting standards. The aforementioned reserve funds can only be used for specific purposes and are not distributable as cash dividends. As a result of the PRC laws and regulations and the requirement that distributions by the PRC entity can only be paid out of distributable profits computed in accordance with PRC accounting standards, the PRC entity is restricted from transferring a portion of its net assets to the Group. Amounts restricted include paid-in capital and statutory reserves of the Group’s PRC subsidiaries and VIEs. Furthermore, cash transfers from the Group’s PRC subsidiaries to their parent companies outside of China are subject to PRC government control of currency conversion. Shortages in the availability of foreign currency at the time of requesting such conversion may temporarily delay the ability of the PRC subsidiaries and consolidated affiliated entities to remit sufficient foreign currency to pay dividends or other payments to the Group, or otherwise satisfy their foreign currency denominated obligations. As of December 31, 2020 and 2021, the restricted net assets of the Group’s relevant PRC entities amounted to HK$229,035 thousand and HK$304,377 thousand, respectively. For the year ended December 31, 2021, the Group performed a test on the restricted net assets of subsidiaries and VIEs in accordance with Securities and Exchange Commission Regulation S-X Rule 4-08 (e) (3), “General Notes to Financial Statements” and concluded that the restricted net assets do not exceed 25% of the consolidated net assets of the Group as of December 31, 2021 and the condensed financial information of the Group are not required to be presented. |
REDEEMABLE CONVERTIBLE PREFERRE
REDEEMABLE CONVERTIBLE PREFERRED SHARES | 12 Months Ended |
Dec. 31, 2021 | |
REDEEMABLE CONVERTIBLE PREFERRED SHARES | |
REDEEMABLE CONVERTIBLE PREFERRED SHARES | 15. REDEEMABLE CONVERTIBLE PREFERRED SHARES From 2014 to 2017, the Group issued several rounds of Preferred Shares to certain investors. All series of Preferred Shares had the same par value of US$0.00001 per share. Upon the completion of the Company’s IPO in March 2019, all of the issued and outstanding Preferred Shares were automatically converted and redesignated into Class A or Class B Ordinary Shares on a one-for-one basis. Accounting of the Preferred Shares The Company classified the Preferred Shares as mezzanine equity in the consolidated balance sheets because they were redeemable at the holders’ option any time after a certain date and were contingently redeemable upon the occurrence of certain liquidation events outside of the Company’s control. The Preferred Shares are recorded initially at fair value, net of issuance costs. The Group determined that the embedded conversion features and the redemption features do not require bifurcation as they either are clearly and closely related to the Preferred Shares or do not meet the definition of a derivative. The Group has determined that there was no embedded beneficial conversion feature attributable to the Preferred Shares. In making this determination, the Group compared the initial effective conversion prices of the Preferred Shares and the fair values of the Group’s ordinary shares determined by the Group at the issuance dates. The initial effective conversion prices were greater than the fair values of the ordinary shares to which the Preferred Shares are convertible into at the issuance dates. In March 2019, 237,129,043 issued and outstanding preferred shares were converted into Class A ordinary shares and 140,802,051 issued and outstanding preferred shares were converted into Class B ordinary shares upon the completion of the IPO. |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 12 Months Ended |
Dec. 31, 2021 | |
SHARE-BASED COMPENSATION | |
SHARE-BASED COMPENSATION | 16. SHARE-BASED COMPENSATION Share-based compensation was recognized in operating expenses for the years ended December 31, 2019, 2020 and 2021 as follows: Year ended December 31, 2019 2020 2021 (HK$ in thousands) Research and development expenses 12,055 20,579 75,755 General and administrative expenses 3,374 10,354 14,020 Selling and marketing expenses 538 1,640 9,138 Total share-based compensation expenses 15,967 32,573 98,913 Share Options In October 2014, the Board of Directors of the Company approved the establishment of 2014 Share Incentive Plan, the purpose of which is to provide an incentive for employees contributing to the Group. The 2014 Share Incentive Plan shall be valid and effective until October 30, 2024. The maximum number of shares that may be issued pursuant to all awards (including incentive share options) under 2014 Share Incentive Plan shall be 135,032,132 shares. Option awards are granted with an exercise price determined by the Board of Directors. Those option awards generally vest over a period of four In December 2018, the Board of Directors of the Company approved the 2019 Share Incentive Plan, pursuant to which the maximum number of shares of the Company available for issuance shall be a number of up to 2% of the total number of shares issued and outstanding on September 29, 2019 as determined by the Board, plus an annual increase on each September 30 during the term of this 2019 Share Incentive Plan commencing on September 30, 2020, by an amount determined by the Board; provided, however, that (i) the number of shares increased in each year shall not be more than 2% of the total number of shares issued and outstanding on September 29 of the same year and (ii) the aggregate number of shares initially reserved and subsequently increased during the term of this 2019 Share Incentive Plan shall not be more than 8% of the total number of shares issued and outstanding on September 29, 2019 immediately preceding the most recent increase. On December 31, 2019, the Company modified the exercise price of 8,113,145 stock options granted under 2014 Share Incentive Plan to US$0.60. The incremental compensation expenses of HK$3,008 thousand (US$386 thousand) was equal to the excess of the fair value of the modified award immediately after the modification over the fair value of the original award immediately before the modification. For the years ended December 31, 2019, 2020 and 2021, the Group granted 9,791,200, 2,489,832 and 1,080,000 stock options to employees pursuant to the 2014 Share Incentive Plan and 2019 Share Incentive Plan. 16. SHARE-BASED COMPENSATION (Continued) Share Options (Continued) A summary of the stock option activity under the 2014 and 2019 Share Incentive Plan for the years ended December 31, 2019, 2020 and 2021 is included in the table below. Options granted Weighted average share number exercise price per option (US$) Outstanding at December 31, 2019 23,718,626 0.5161 Exercised (5,048,824) 0.4293 Granted 2,489,832 0.6810 Forfeited (2,117,298) 0.5588 Outstanding at December 31, 2020 19,042,336 0.5628 Exercised (5,875,592) 0.4365 Granted 1,080,000 0.0444 Forfeited (905,278) 0.6539 Outstanding at December 31, 2021 13,341,466 0.5703 The following table summarizes information regarding the share options outstanding as of December 31, 2021 and exercise prices and aggregate intrinsic value have been adjusted according to the modification of exercise price in December 2019: As of December 31, 2021 Weighted- average Weighted- remaining average exercise Options exercise price contractual life Aggregate number per option (years) intrinsic value US$ US$ in thousand Options Outstanding 13,341,466 0.5703 3.42 165,157 Exercisable 2,825,014 0.5729 2.85 34,964 Expected to vest 10,516,452 0.5696 3.57 130,193 The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the fair value of the underlying stock at December 31, 2021. The weighted average grant date fair value of options granted for the years ended December 31, 2019, 2020 and 2021 were US$0.7345, US$1.5239 and US$18.9219 per option, respectively. Options exercised for the years ended December 31, 2019, 2020 and 2021 were 106,295,232, 5,048,824 and 5,875,592, respectively. The total intrinsic value of options exercised during year ended December 31, 2021 was approximately HK$614,738 thousand (US$79,093 thousand). 16. SHARE-BASED COMPENSATION (Continued) Share Options (Continued) The fair value of each option granted during 2019, 2020 and 2021 was estimated on the date of each grant using the binomial option pricing model with the assumptions (or ranges thereof) in the following table: 2019 2020 2021 Risk-free interest rate 1.67 % 0.27%-0.36 % 0.09%-0.89 % Expected term (in years) 5.00 5.00 5.00 Expected dividend yield 0 % 0 % 0 % Expected volatility 45 % 40 % 40 % Expected forfeiture rate (post-vesting) 15 % 15 % 15 % Risk-free interest rate is estimated based on the yield curve of US Sovereign Bond as of the option valuation date. The expected volatility at the grant date and each option valuation date is estimated based on annualized standard deviation of daily stock price return of comparable companies with a time horizon close to the expected expiry of the term of the options. The Company has never declared or paid any cash dividends on its capital stock, and the Group does not anticipate any dividend payments in the foreseeable future. Expected term is the contract life of the options. As of December 31, 2021, there was HK$201,948 thousand (US$25,897 thousand) of unrecognized compensation expenses related to the options, adjusted for estimated forfeitures, which is expected to be recognized over a weighted-average period of 3.96 years, respectively, and may be adjusted for future changes in estimated forfeitures. Restricted Shares Units Plan In December 2018, the Board of Directors of the Company approved the 2019 Share Incentive Plan. The fair value of restricted share units granted with service conditions is estimated based on the fair market value of the underlying ordinary shares of the Company on the date of grant. The following table summarizes activities of the Company’s restricted share units granted to employees under the plan: Weighted average grant date Shares awarded number fair value per share(US$) Outstanding at December 31, 2020 6,067,400 4.6827 Vested (929,672) 4.6827 Granted 12,105,712 5.7371 Forfeited (281,576) 5.4426 Outstanding at December 31, 2021 16,961,864 5.6793 For the years ended December 31, 2019, 2020 and 2021, the Group granted nil, 6,067,400 and 12,105,712 restricted shares units to employees pursuant to the 2019 Share Incentive Plan, respectively. As of December 31, 2021, there was HK$694,749 thousand (US$89,092 thousand) of unrecognized compensation expenses related to the restricted shares units, adjusted for estimated forfeitures, which is expected to be recognized over a weighted-average period of 4.64 years and may be adjusted for future changes in estimated forfeitures. |
NET INCOME PER SHARE
NET INCOME PER SHARE | 12 Months Ended |
Dec. 31, 2021 | |
NET INCOME PER SHARE | |
NET INCOME PER SHARE | 17. NET INCOME PER SHARE For the years ended December 31, 2019, the Group has determined that its all classes of convertible redeemable preferred shares are participating securities as they participate in undistributed earnings on an as-if-converted basis. The holders of the Preferred Shares are entitled to receive dividends on a pro rata basis, as if their shares had been converted into ordinary shares. Accordingly, the Group uses the two-class method of computing net income per share, for ordinary shares and preferred shares according to the participation rights in undistributed earnings . For the years ended December 31, 2020, the Company issued Pre-Funded warrants to purchase 53,600,000 shares of Class A ordinary shares with an exercise price of US$ 0.00001 that are included in our computation of basic earnings per share. For the years ended December 31, 2021, the investment firm exercised these Pre-Funded warrants which increased 53,599,890 shares of Class A ordinary shares, and 110 shares were retrieved as the consideration of share purchase . Basic net income per share and diluted net income per share have been calculated in accordance with ASC 260 on computation of earnings per share for the years ended December 31, 2019 , Year ended December 31, 2019 2020 2021 (HK$ in thousands, except for share and per share data) Basic net income per share calculation: Numerator: Net income attributable to ordinary shareholders of the Company 143,159 1,325,523 2,810,210 Denominator: Weighted average number of ordinary shares outstanding - basic 832,790,329 1,036,865,727 1,200,912,670 Net income per share attributable to ordinary shareholders of the Company - basic 0.17 1.28 2.34 Diluted net income per share calculation: Numerator: Net income attributable to ordinary Shareholders of the Company 143,159 1,325,523 2,810,210 Denominator: Weighted average number of ordinary shares outstanding - basic 832,790,329 1,036,865,727 1,200,912,670 Dilutive effect of share options and restricted shares units 85,107,097 13,277,287 18,759,838 Weighted average number of ordinary shares outstanding - diluted 917,897,426 1,050,143,014 1,219,672,508 Net income per share attributable to ordinary shareholders of the Company - diluted 0.16 1.26 2.30 For the years ended December 31, 2019, 2020 and 2021, options to purchase ordinary shares and restricted share units that were anti-dilutive and excluded from the calculation of diluted net income per share were 3,747,975, 4,800,584 and 357,978 shares on a weighted average basis, respectively. |
COLLATERALIZED TRANSACTIONS
COLLATERALIZED TRANSACTIONS | 12 Months Ended |
Dec. 31, 2021 | |
COLLATERALIZED TRANSACTIONS | |
COLLATERALIZED TRANSACTIONS | 18. COLLATERALIZED TRANSACTIONS The Group engages in margin financing transactions with its clients. Margin loans generated from margin lending activity are collateralized by cash and/or client-owned securities held by the Group. The Group monitors the required margin and collateral level on a daily basis in compliance with regulatory and internal guidelines and controls its risk exposure through risk management system. Under applicable agreements, clients are required to deposit additional collateral or reduce holding positions, when necessary to avoid forced liquidation of their positions. Pursuant to the authorization obtained from margin clients, the Group further repledges the collaterals to commercial banks or other financial institutions to obtain the funding for the margin or other businesses. 18. COLLATERALIZED TRANSACTIONS (Continued) The following table summarizes the amounts of margin loans and clients’ collaterals received and repledged by the Group as of December 31, 2020 and 2021: As of December 31, 2020 2021 (HK$ in thousands) Margin loan extended to margin clients 18,424,972 29,084,958 Securities purchased under agreements to resell transactions — 106,203 Collateral received from margin clients 89,404,131 119,745,500 Collateral received from brokers — 144,156 Collateral repledged to commercial banks and other financial institutions 58,255,907 20,953,603 The Group also engaged in securities borrowing and lending transactions which require it to deposit cash collateral with the securities lenders and receive the cash collateral from the borrowers. The cash collateral is generally in excess of the market value of the securities borrowed and lent. The Group monitors the market value of securities borrowed and loaned on a daily basis, with additional collateral obtained or refunded as permitted contractually. The following table summarizes the amounts of market value of securities borrowed and lent and cash collateral received and deposited as of December 31, 2020 and 2021: As of December 31, 2020 2021 (HK$ in thousands) Securities borrowed and lent 4,307,346 8,436,638 Cash collateral received from borrowers 5,067,828 9,737,786 Cash collateral deposited with lenders 3,645,214 3,120,123 |
BROKERAGE COMMISSION AND HANDLI
BROKERAGE COMMISSION AND HANDLING CHARGE INCOME | 12 Months Ended |
Dec. 31, 2021 | |
BROKERAGE COMMISSION AND HANDLING CHARGE INCOME | |
BROKERAGE COMMISSION AND HANDLING CHARGE INCOME | 19. BROKERAGE COMMISSION AND HANDLING CHARGE INCOME Year ended December 31, 2019 2020 2021 (HK$ in thousands) Brokerage commission income 352,625 1,531,048 3,147,610 Handling charge income 158,740 459,090 765,417 Total 511,365 1,990,138 3,913,027 |
INTEREST INCOME
INTEREST INCOME | 12 Months Ended |
Dec. 31, 2021 | |
INTEREST INCOME | |
INTEREST INCOME | 20. INTEREST INCOME Year ended December 31, 2019 2020 2021 (HK$ in thousands) Interest income from: Margin financing 221,648 497,975 1,720,473 Securities lending 37,202 73,792 397,505 IPO financing 12,658 184,226 200,567 Bank deposits 187,223 208,556 197,390 Bridge loan 6,172 1,078 1,872 Other financing — — 391 Total 464,903 965,627 2,518,198 |
OTHER INCOME
OTHER INCOME | 12 Months Ended |
Dec. 31, 2021 | |
OTHER INCOME | |
OTHER INCOME | 21. OTHER INCOME Year ended December 31, 2019 2020 2021 (HK$ in thousands) Currency exchange service income 4,670 67,000 201,030 IPO subscription service charge income 26,537 159,682 169,336 Enterprise public relations service charge income 16,156 29,988 96,327 Underwriting fee income 19,579 30,797 86,880 Funds distribution service income 10,447 42,658 68,856 Market information and data income 2,692 18,463 43,921 Others 5,206 6,469 17,745 Total 85,287 355,057 684,095 |
BROKERAGE COMMISSION AND HAND_2
BROKERAGE COMMISSION AND HANDLING CHARGE EXPENSES | 12 Months Ended |
Dec. 31, 2021 | |
BROKERAGE COMMISSION AND HANDLING CHARGE EXPENSES | |
BROKERAGE COMMISSION AND HANDLING CHARGE EXPENSES | 22. BROKERAGE COMMISSION AND HANDLING CHARGE EXPENSES Year ended December 31, 2019 2020 2021 (HK$ in thousands) Commission, handling and settlement expenses 95,064 302,800 524,470 IPO subscription service charge expenses 5,486 58,686 47,689 Total 100,550 361,486 572,159 |
INTEREST EXPENSES
INTEREST EXPENSES | 12 Months Ended |
Dec. 31, 2021 | |
INTEREST EXPENSES | |
INTEREST EXPENSES | 23. INTEREST EXPENSES Year ended December 31, 2019 2020 2021 (HK$ in thousands) Interest expenses for margin financing Due to banks 36,206 45,545 125,002 Due to other licensed financial institutions 28,636 38,246 51,179 Due to other parties 3,930 — — Interest expenses for securities borrowed Due to clients 1,298 7,984 132,034 Due to brokers 9,077 13,853 18,624 Interest expenses for IPO financing Due to banks 10,091 79,337 50,063 Due to other parties — 125 — Total 89,238 185,090 376,902 |
PROCESSING AND SERVICING COSTS
PROCESSING AND SERVICING COSTS | 12 Months Ended |
Dec. 31, 2021 | |
PROCESSING AND SERVICING COSTS | |
PROCESSING AND SERVICING COSTS | 24. PROCESSING AND SERVICING COSTS Year ended December 31, 2019 2020 2021 (HK$ in thousands) Cloud service fee 16,729 48,940 122,269 Market information and data fee 54,282 68,274 70,387 Data transmission fee 13,890 23,072 46,289 System cost 4,334 4,476 12,160 SMS service fee 1,523 2,511 1,197 Others 1,158 2,105 4,701 Total 91,916 149,378 257,003 |
NON-INTEREST COST AND EXPENSES
NON-INTEREST COST AND EXPENSES BY NATURE | 12 Months Ended |
Dec. 31, 2021 | |
NON-INTEREST COST AND EXPENSES BY NATURE | |
NON-INTEREST COST AND EXPENSES BY NATURE | 25. NON-INTEREST COST AND EXPENSES BY NATURE Year ended December 31, 2019 2020 2021 (HK$ in thousands) Employee compensation and benefits 327,441 682,068 1,248,682 Marketing and branding 130,528 297,170 1,163,495 Brokerage commission and handling charge expenses (Note 22) 100,550 361,486 572,159 Processing and servicing costs (Note 24) 91,916 149,378 257,003 Rental and other related expenses 64,756 64,594 106,459 Depreciation and amortization 16,547 27,231 36,435 Professional services 28,757 32,988 59,697 Others 23,867 42,956 111,675 Total 784,362 1,657,871 3,555,605 |
TAXATION
TAXATION | 12 Months Ended |
Dec. 31, 2021 | |
TAXATION | |
TAXATION | 26. TAXATION Income Tax 1) Cayman Islands The Group was incorporated in the Cayman Islands. Under the current laws of the Cayman Islands, the Company is not subject to tax on either income or capital gain. Additionally, the Cayman Islands does not impose a withholding tax on payments of dividends to shareholders. 2) The United States (“US”) The Company’s subsidiaries, incorporated in the United States are subject to statutory income tax at a rate up to 35% for taxable income earned in the United States. On December 22, 2017, the Tax Cuts and Jobs Act (the “Tax Act”) was enacted, significantly revising the U.S corporate income tax law. Changes include a reduction in the federal corporate tax, changes to operating loss carry-forwards and carrybacks, and a repeal of the corporate alternative minimum tax. This legislation resulted in a reduction of the U.S. federal corporate income tax rates from a maximum of 35% to 21%, to which the subsidiaries incorporated in the United States are subject. 26. TAXATION (Continued) Income Tax (Continued) 3) Hong Kong The Company’s subsidiaries in Hong Kong were subject to Hong Kong profits tax at a rate of 16.5% on their taxable income generated from operations in Hong Kong before April 1, 2018. Starting from the financial year commencing on April 1, 2018, the two-tiered profits tax regime took effect, under which the tax rate is 8.25% for assessable profits on the first HK$2 million and 16.5% for any assessable profits in excess of HK$2 million. Additionally, payments of dividends by the subsidiaries incorporated in Hong Kong to the Company are not subject to any Hong Kong withholding tax. 4) Singapore The Company’s subsidiaries incorporated in Singapore are subject to an income tax rate of 17% for taxable income earned in Singapore. Singapore does not impose a withholding tax on dividends for resident companies. In the years ended December 31, 2019, 2020 and 2021, we did not incur any income tax as there was no estimated assessable profit that was subject to Singapore income tax. 5) China The Company’s subsidiaries, consolidated VIEs and subsidiary of the VIEs established in the PRC are subject to statutory income tax at a rate of 25%, unless preferential tax rates were applicable. The Enterprise Income Tax (“EIT”) Law and its implementing rules permit High and New Technology Enterprise (“HNTE”) to enjoy a reduced 15% EIT rate. Futu Network Technology (Shenzhen) Co., Ltd., one of the Company’s subsidiary, and Shenzhen Futu, the Group’s consolidated VIE, obtained the qualification certificate of HNTE under the EIT Law, subject to the tax rate of According to the relevant EIT Laws jointly promulgated by the Ministry of Finance of the PRC, State Tax Bureau of the PRC, and Ministry of Science of the PRC that became effective from 2018 onwards, enterprises engaging in research and development activities are entitled to claim 175% of their research and development expenses so incurred as tax deductible expenses when determining their assessable profits for that year (“Super Deduction”). Under the EIT Law enacted by the National People’s Congress of PRC on March 16, 2007 and its implementation rules which became effective on January 1, 2008, dividends generated after January 1, 2008 and payable by FIEs in the PRC to its foreign investors who are non-resident enterprises are subject to a 10% withholding tax, unless any such foreign investor’s jurisdiction of incorporation has a tax treaty with the PRC that provides for a different withholding arrangement. Under the taxation arrangement between the PRC and Hong Kong, a qualified Hong Kong tax resident which is the “beneficial owner” and directly holds 25% or more of the equity interest in a PRC resident enterprise is entitled to a reduced withholding tax rate of 5%. The Cayman Islands, where the Company was incorporated, does not have a tax treaty with PRC. The EIT Law includes a provision specifying that legal entities organized outside of the PRC will be considered resident enterprises for the PRC income tax purposes if the place of effective management or control is within the PRC. The implementation rules to the EIT Law provide that non-resident legal entities will be considered as PRC resident enterprises if substantial and overall management and control over the manufacturing and business operations, personnel, accounting, properties, etc., occurs within the PRC. Despite the present uncertainties resulting from the limited PRC tax guidance on the issue, the Group does not believe that the Group’s entities organized outside of the PRC should be treated as resident enterprises for the PRC income tax purposes. If the PRC tax authorities subsequently determine that the Company and its subsidiary registered outside the PRC should be deemed resident enterprises, the Company and its subsidiary registered outside the PRC will be subject to the PRC income tax, at a rate of 25%. 26. TAXATION (Continued) Income Tax (Continued) Dividends paid by the Group’s wholly foreign-owned subsidiaries in China to non-PRC-resident enterprises which do not have an establishment or place of business in the PRC, or which have such establishment or place of business but the relevant income is not effectively connected with the establishment or place of business, will be subject to a withholding tax rate of 10%, unless the relevant Hong Kong entity satisfies all the requirements under the Arrangement between the Mainland of China and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income and receives approval from the relevant tax authority. The undistributed earnings that are subject to dividend tax are expected to be indefinitely reinvested for the foreseeable future. The Group did not record any withholding tax for its PRC earnings and considered determination of such withholding tax amount not practicable. Composition of income tax expenses The following table sets forth current and deferred portion of income tax expenses: Year ended December 31, 2019 2020 2021 (HK$ in thousands) Current income tax expenses 13,858 137,939 396,512 Deferred income tax benefit (1,572) (13,146) (21,431) Income tax expenses 12,286 124,793 375,081 Reconciliation between the income tax expenses computed by applying the Hong Kong enterprise tax rate to income before income taxes and actual provision were as follows: Year ended December 31, 2019 2020 2021 (HK$ in thousands) Income before income tax 178,493 1,450,623 3,185,291 Tax expenses at Hong Kong profit tax rate of 16.5% 29,451 239,353 524,907 Changes of valuation allowance 30,172 14,348 101,653 Tax effect of permanent differences 5,486 9,029 22,047 Effect of income tax in jurisdictions other than Hong Kong (4,143) (4,386) (32,182) Super deduction of research and development expenses (19,277) (29,081) (62,966) Final settlement differences (18,038) — (602) Income not subject to tax (1) (11,365) (104,470) (177,776) Income tax expenses 12,286 124,793 375,081 (1) This amount mainly represents tax exemption relating to the offshore income of Futu Securities. The brokerage commission income derived from executing the clients’ orders of US listed securities was treated as offshore-sourced and non-taxable on the basis that these transactions were executed outside Hong Kong. 26. TAXATION (Continued) Deferred Tax Assets and Liabilities Deferred income tax expenses reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The components of the deferred tax assets and liabilities are as follows: As of December 31, 2020 2021 (HK$ in thousands) Deferred tax assets Net operating loss carryforwards 64,092 158,826 Accrued expenses and others 22,348 50,408 Less: valuation allowance (67,769) (169,422) Total deferred tax assets 18,671 39,812 Set-off of deferred tax liabilities pursuant to set-off provisions (1,497) (1,495) Net deferred tax assets 17,174 38,317 Total deferred tax liabilities 3,101 2,131 Set-off of deferred tax assets pursuant to set-off provisions (1,497) (1,495) Net deferred tax liabilities 1,604 636 Movement of Valuation Allowance Year ended December 31, 2019 2020 2021 (HK$ in thousands) Balance at beginning of the year 23,249 53,421 67,769 Additions 30,188 30,935 108,347 Reversals (16) (16,587) (6,694) Balance at end of the year 53,421 67,769 169,422 Valuation allowance is provided against deferred tax assets when the Group determines that it is more-likely-than-not that the deferred tax assets will not be utilized in the future. The Group considers positive and negative evidence to determine whether some portion or all of the deferred tax assets will be more-likely-than-not realized. This assessment considers, among other matters, the nature, frequency and severity of recent losses and forecasts of future profitability. These assumptions require significant judgment and the forecasts of future taxable income are consistent with the plans and estimates the Group is using to manage the underlying businesses. The statutory rate of 25%, 27.98%, 27.87%, 16.5%, 17% or the preferential tax rate of 15%, depending on which entity, was applied when calculating deferred tax assets. As of December 31, 2020 and 2021, the Group had net operating loss carryforwards of approximately HK$315,287 thousand and HK$764,251 thousand, respectively, which arose from the subsidiaries, VIEs and the VIEs’ subsidiaries established in Hong Kong, the U.S and PRC. As of December 31, 2020 and 2021, of the net operating loss carryforwards, HK$315,287 thousand and HK$761,417 thousand was provided for valuation allowance against deferred tax assets in entities where it was determined it was more likely than not that the benefits of the deferred tax assets of accrued expenses and others will not be realized. While the remaining nil and HK $2,834 thousand is expected to be utilized prior to expiration considering future taxable income for respective entities. 26. TAXATION (Continued) Uncertain Tax Position The Group evaluates the level of authority for each uncertain tax position (including the potential application of interest and penalties) based on the technical merits, and measures the unrecognized benefits associated with the tax positions. The Group continues to assess the uncertain tax positions in accordance with applicable income tax guidance and based on changes in facts and circumstances. |
DEFINED CONTRIBUTION PLAN
DEFINED CONTRIBUTION PLAN | 12 Months Ended |
Dec. 31, 2021 | |
DEFINED CONTRIBUTION PLAN | |
DEFINED CONTRIBUTION PLAN | 27. DEFINED CONTRIBUTION PLAN Full-time employees of the Group in the PRC are entitled to welfare benefits including pension insurance, medical insurance, unemployment insurance, maternity insurance, on-the-job injury insurance, and housing fund plans through a PRC government-mandated defined contribution plan. Chinese labor regulations require that the Group makes contributions to the government for these benefits based on certain percentages of the employees’ salaries, up to a maximum amount specified by the local government. The Group has no legal obligation for the benefits beyond the contributions. Total contributions by the Group for such employee benefits were RMB49,778 thousand and RMB110,997 thousand for the years ended December 31, 2020 and 2021, respectively. For the employees in Hong Kong, the Group pays contributions to publicly or privately administered pension insurance plans on a mandatory, contractual basis. The Group has no further payment obligations once the contributions have been paid. The contributions are recognized as employee benefit expense when they are due. Prepaid contributions are recognized as an asset to the extent that a cash refund or a reduction in the future payments is available. Included in employee compensation and benefits expenses in the consolidated statements of comprehensive income were HK$1,414 thousand and HK$2,197 thousand of plan contributions for the years ended December 31, 2020 and 2021, respectively. For the employees in Singapore, the Group makes monthly contributions to the mandatory social security savings scheme which serves to meet retirement, housing and healthcare needs. The Group was required to make contributions to the scheme based on certain percentages of the employees’ salaries. The Group has no legal obligation for the scheme beyond the contributions. Total contributions by the Group for such employee benefits were SGD5 thousand and SGD294 thousand for the years ended December 31, 2020 and 2021, respectively. |
REGULATORY REQUIREMENTS
REGULATORY REQUIREMENTS | 12 Months Ended |
Dec. 31, 2021 | |
REGULATORY REQUIREMENTS | |
REGULATORY REQUIREMENTS | 28. REGULATORY REQUIREMENTS The Company’s broker-dealer and insurance-broker subsidiaries, Futu Securities, Futu Inc., Futu Clearing Inc., Futu Singapore pte Ltd. and Futu Insurance Brokers (Hong Kong) Limited are subject to capital requirements determined by its respective regulators. Futu Securities, the Company’s subsidiary located in Hong Kong, was subject to the Securities and Futures (Financial Resources) Rules and the Securities and Futures Ordinance, Futu Securities is required to maintain minimum paid-up share capital and liquid capital. Futu Inc. and Futu clearing Inc., the Company’s subsidiaries located in the United States, were subject to the Uniform Net Capital Rule (Rule 15c3-1) under the Exchange Act, which requires the maintenance of minimum net capital. Futu Singapore pte Ltd., the Company’s subsidiary located in Singapore, was subject to the Securities and Futures (Financial and Margin Requirements for Holders of Capital Markets Services Licenses) Regulations, which requires the maintenance of financial resource over its total risk requirement. Futu Insurance Brokers (Hong Kong) Limited, was subject to Insurance (Financial and Other Requirements for Licensed Insurance Broker Companies) Rules, which requires minimum net assets. Futu Securities (Australia) Ltd., the Company’s subsidiary located in Australia, was subject to Regulatory Guide 166 Licensing: Financial requirements, which requires the maintenance of surplus liquid funds when licensees hold client money or property. As of December 31, 2021, Futu Securities (Australia) Ltd. has not hold any client money and property. 28. REGULATORY REQUIREMENTS (Continued) The tables below summaries the net capital, the requirement and the excess capital for the Group’s broker-dealer subsidiaries as of December 31, 2021: As of December 31, 2021 Net Capital/ Eligible Equity Requirement Excess (HK$ in thousands) Futu Securities 6,666,092 1,631,080 5,035,012 Futu Inc. 149,871 22,560 127,311 Futu Clearing Inc. 3,308,395 97,565 3,210,830 Futu Singapore pte Ltd. 345,424 156,646 188,778 Futu Insurance Brokers (Hong Kong) Limited 1,718 500 1,218 Regulatory capital requirements could restrict the operating subsidiaries from expanding their business and declaring dividends if their net capital does not meet regulatory requirements. As of December 31, 2020 and 2021, all of the regulated operating subsidiaries were in compliance with their respective regulatory capital requirements. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2021 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | 29. COMMITMENTS AND CONTINGENCIES Commitments The Group’s commitments primarily related to capital contribution obligation for certain investment funds. Total commitments contracted but not yet reflected in the consolidated financial statements amounted to nil and US$104 million as of December 31, 2020 and 2021, respectively. Contingencies The financial services industry is highly regulated. From time to time, the licensed companies in the financial industry may be required to assist in and/or are subject to inquiries and/or examination by the regulatory authorities of the jurisdiction in which they operate. As of the date of approval of the consolidated financial statements, the Group reviews its regulatory inquiries and other legal proceedings on an ongoing basis and evaluates whether potential regulatory fines are probable, estimable and material and for updating its contingency reserves and disclosures accordingly. As of December 31, 2020 and 2021, the Group did not make any provision for the aforementioned loss contingency. |
RELATED PARTY BALANCES AND TRAN
RELATED PARTY BALANCES AND TRANSACTIONS | 12 Months Ended |
Dec. 31, 2021 | |
RELATED PARTY BALANCES AND TRANSACTIONS | |
RELATED PARTY BALANCES AND TRANSACTIONS | 30. RELATED PARTY BALANCES AND TRANSACTIONS The table below sets forth major related parties of the Group and their relationships with the Group: Name of Entity or Individual Relationship with the Group Mr. Leaf Hua Li and his spouse Principal shareholder and member of his immediate families Tencent Holdings Limited and its subsidiaries(“Tencent Group”) Principal shareholder Individual directors and officers and their spouses Directors or officers of the Group and members of their immediate families (a) Cash and cash equivalent As of December 31, 2020 2021 (HK$ in thousands) Cash and cash equivalent 149 372 The balance represents the cash deposited by the Group in various payment channels of Tencent Group for funding marketing campaigns, of which could be withdrawn on demand. (b) Amounts Due to Related Parties As of December 31, 2020 2021 (HK$ in thousands) Payables to Tencent Group in relation to ESOP management services 70,750 1,307 Payables in relation to cloud equipment and services from Tencent Group 16,062 85,887 SMS channel services from Tencent Group 357 265 87,169 87,459 (c) Transactions with Related Parties Year ended December 31, 2019 2020 2021 (HK$ in thousands) Equipment purchased 40,218 4,496 45,658 Software purchased — 508 3,869 Cloud service fee 16,729 48,940 114,386 SMS channel service fee 1,523 2,511 1,197 Advertising expenses 682 159 — Human resource services — — 135 ESOP management service income 550 595 640 59,702 57,209 165,885 The Group utilizes the cloud services, equipment and software provided by Tencent Group to process large amount of complicated data in-house, which reduces the risks involved in data storage and transmission. SMS channel services is provided by Tencent Group, including verification code, notification and marketing message services for the Group to reach its end users. Tencent Group provides advertising services to the Group via Tencent Group’s social media. The Group also earns revenue from Tencent Group by providing ESOP management service. Tencent Group also provides human resources services to the Group. 30. RELATED PARTY BALANCES AND TRANSACTIONS (Continued) (d) Trade related transactions with Related Parties Included in payables to clients in the consolidated balance sheets as of December 31, 2020 and 2021, were payables to directors and officers of HK$42,019 thousand and HK$44,480 thousand, respectively. Revenue earned by providing brokerage services and margin loans to directors and officers and their spouses amounts to HK$2,211 thousand, HK$1,642 thousand and HK$1,430 thousand for the years ended December 31, 2019, 2020 and 2021, respectively. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2021 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | 31. SUBSEQUENT EVENTS The Group evaluated event subsequent to the balance sheet date of December 31, 2021 through the date of issuance of the consolidated financial statements. No material recordable or disclosable events or transactions occurred. |
SIGNIFICANT ACCOUNTING POLICI_2
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
SIGNIFICANT ACCOUNTING POLICIES | |
Basis of presentation | Basis of presentation The consolidated financial statements of the Group have been prepared in accordance with the accounting principles generally accepted in the United States of America (“U.S. GAAP”). Significant accounting policies followed by the Group in the preparation of the accompanying consolidated financial statements are summarized below. The Group continuously evaluates the reliability and relevance of the disclosure of financial information, and to keep comparable to the presentation of balance sheets of other companies in the same industry, certain reclassifications were made to the prior years to conform to the current-year presentation, which included reclassification of “Other assets” into “Other current assets” and “Other non-current assets”, reclassification of “Accured expenses and other liabilities” into “Accrued expenses and other current liabilities” and “Other non-current liabilities”, and reclassification of “Operating lease liabilities” into “Operating lease liabilities - current” and “Operating lease liabilities - non-current”. |
Basis of Consolidation | Basis of Consolidation The consolidated financial statements include the financial statements of the Company, its subsidiaries, the VIEs and subsidiary of the VIEs for which the Company or its subsidiary is the primary beneficiary. A subsidiary is an entity in which the Company, directly or indirectly, controls more than one half of the voting power; or has the power to appoint or remove the majority of the members of the Board of Directors; or to cast a majority of votes at the meeting of directors; or has the power to govern the financial and operating policies of the investee under a statute or agreement among the shareholders or equity holders. A consolidated VIE is an entity in which the Company, or its subsidiary, through contractual arrangements, has the power to direct the activities that most significantly impact the entity’s economic performance, bears the risks of and enjoys the rewards normally associated with ownership of the entity, and therefore the Company or its subsidiary is the primary beneficiary of the entity. All transactions and balances among the Company, its subsidiaries, the VIEs and subsidiaries of the VIEs have been eliminated upon consolidation. |
VIE Companies | VIE Companies 1) Contractual Agreements with VIEs The following is a summary of the contractual agreements (collectively, “Contractual Agreements”) between the Company’s PRC subsidiary, Shen Si, and the VIEs. Through the Contractual Agreements, the VIEs are effectively controlled by the Company. Shareholders’ Voting Rights Proxy Agreements. Business Operation Agreements . 2. SIGNIFICANT ACCOUNTING POLICIES (Continued) VIE Companies (Continued) 1) Contractual Agreements with VIEs (Continued) Equity Interest Pledge Agreements. Exclusive Technology Consulting and Services Agreements. Exclusive Option Agreements. 2. SIGNIFICANT ACCOUNTING POLICIES (Continued) VIE Companies (Continued) 2) Risks in relation to the VIE structure The following table sets forth the assets, liabilities, results of operations and changes in cash and cash equivalents of the VIEs and their subsidiary taken as a whole, which were included in the Group’s consolidated financial statements with intercompany balances and transactions eliminated between the VIEs and their subsidiary: As of December 31, 2020 2021 (HK$ in thousands) Total assets 162,897 254,602 Total liabilities 145,693 176,204 Year ended December 31, 2019 2020 2021 (HK$ in thousands) Total operating revenue 65,681 103,433 210,161 Net income 8,807 20,727 52,741 Year ended December 31, 2019 2020 2021 (HK$ in thousands) Net cash (used in)/generated from operating activities (2,502) (14,847) 2,340 Net cash generated from/(used in) investing activities 2,233 17,104 (3,327) Net (decrease)/increase in cash, cash equivalents and restricted cash (269) 2,257 (987) Cash, cash equivalents and restricted cash at beginning of the year 1,750 1,481 3,738 Cash, cash equivalents and restricted cash at end of the year 1,481 3,738 2,751 Transactions between the VIE and other entities in the consolidated group Total assets for 2020 and 2021 include amounts due from internal companies in the consolidated group in the amount of HK $117,085 thousand and HK$190,424 thousand, respectively. Total liabilities include amounts due to the internal companies in the amount of HK$72,506 thousand and HK$80,435 thousand, respectively. During 2019, 2020 and 2021, the VIE earned inter-company revenues in the amounts of HK$ 63,742 thousand, HK$ 94,500 thousand and HK$ 187,774 thousand, respectively. In addition, the repayment of advances to Group companies by the VIE in 2019, 2020 and 2021 are in the amount of HK$32,740 thousand, nil , and nil , respectively. All of these balances and transactions have been eliminated in consolidation. Under the Contractual Agreements with the VIEs, the Company has the power to direct activities of the VIEs and VIEs’ subsidiaries, and can have assets transferred out of the VIEs and VIEs’ subsidiaries. Therefore, the Company considers itself the ultimate primary beneficiary of the VIEs and there is no asset of the VIEs that can only be used to settle obligations of the VIEs and VIEs’ subsidiaries, except for registered capital of the VIEs and their subsidiary amounting to RMB10 million as of December 31, 2019, 2020 and 2021, respectively. Since the VIEs are incorporated as limited liability companies under the PRC Company Law, creditors of the VIEs do not have recourse to the general credit of the Company. There is currently no contractual arrangement that would require the Company to provide additional financial support to the VIEs. However, as the Company is conducting certain businesses through its VIEs and VIEs’ subsidiary, the Company may provide such support on a discretionary basis in the future, which could expose the Company to a loss. 2. SIGNIFICANT ACCOUNTING POLICIES (Continued) VIE Companies (Continued) 2) Risks in relation to the VIE structure (Continued) In the opinion of the Company’s management, the contractual arrangements among its subsidiary, the VIEs and their respective Nominee Shareholders are in compliance with current PRC laws and are legally binding and enforceable. However, uncertainties in the interpretation and enforcement of the PRC laws, regulations and policies could limit the Company’s ability to enforce these contractual arrangements. As a result, the Company may be unable to consolidate the VIEs and VIEs’ subsidiaries in the consolidated financial statements. On March 15, 2019, the Foreign Investment Law was formally passed by the thirteenth National People’s Congress and it was taken effect on January 1, 2020. The Foreign Investment Law replaces the Law on Sino-Foreign Equity Joint Ventures, the Law on Sino-Foreign Cooperative Joint Ventures and the Law on Foreign-Capital Enterprises to become the legal foundation for foreign investment in the PRC. The Foreign Investment Law stipulates certain forms of foreign investment. However, the Foreign Investment Law does not explicitly stipulate contractual arrangements such as those we rely on as a form of foreign investment. Notwithstanding the above, the Foreign Investment Law stipulates that foreign investment includes “foreign investors investing through any other methods under laws, administrative regulations or provisions prescribed by the State Council.” Future laws, administrative regulations or provisions prescribed by the State Council may possibly regard Contractual Arrangements as a form of foreign investment. In the event that the State Council in the future promulgates laws and regulations that deem investments made by foreign investors through contractual arrangements as “foreign investment”, the Group’s ability to use the contractual arrangements with its VIEs and the Group’s ability to conduct business through the VIEs could be severely limited. The Company’s ability to control the VIEs also depends on the power of attorney Shen Si has to vote on all matters requiring shareholders’ approvals in the VIEs. As noted above, the Company believes these power of attorney are legally binding and enforceable but may not be as effective as direct equity ownership. In addition, if the Group’s corporate structure or the contractual arrangements with the VIEs were found to be in violation of any existing PRC laws and regulations, the PRC regulatory authorities could, within their respective jurisdictions: ● revoke the Group’s business and operating licenses; ● require the Group to discontinue or restrict its operations; ● restrict the Group’s right to collect revenues; ● block the Group’s websites; ● require the Group to restructure its operations, re-apply for the necessary licenses or relocate the Group’s businesses, staff and assets; ● impose additional conditions or requirements with which the Group may not be able to comply; or ● take other regulatory or enforcement actions against the Group that could be harmful to the Group’s business. 2. SIGNIFICANT ACCOUNTING POLICIES (Continued) The imposition of any of these restrictions or actions may result in a material adverse effect on the Group’s ability to conduct its business. In addition, if the imposition of any of these restrictions causes the Group to lose the right to direct the activities of the VIEs or the right to receive their economic benefits, the Group would no longer be able to consolidate the financial statements of the VIEs. In the opinion of management, the likelihood of losing the benefits in respect of the Group’s current ownership structure or the contractual arrangements with its VIEs is remote. |
Use of Estimates | Use of Estimates The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, related disclosures of contingent assets and liabilities at the balance sheet date, and the reported revenues, costs and expenses during the reported period in the consolidated financial statements and accompanying notes. These accounting estimates reflected in the Group’s consolidated financial statements mainly include, but are not limited to, the estimation of the expected usage and the estimated relative standalone selling price of the incentive points and coupons, the valuation and recognition of share-based compensation arrangements, depreciable lives of property and equipment, useful life of intangible assets, expected credit losses on financial instruments, assessment for impairment of long-term investments, present value for expected future leasing payment, contingency reserve, provision of income tax and valuation allowance for deferred tax asset, and valuation of financial instruments measured at fair value. Actual results could differ from those estimates. |
Comprehensive Income and Foreign Currency Translation | Comprehensive Income and Foreign Currency Translation The Group’s operating results are reported in the consolidated statements of comprehensive income pursuant to FASB ASC Topic 220, “Comprehensive Income”. Comprehensive income consists of two components: net income and other comprehensive income (“OCI”). The Group’s OCI is comprised of gains and losses resulting from translating foreign currency financial statements of entities, of which functional currency is other than Hong Kong dollar which is the presentational currency of the Group, net of related income taxes, where applicable. Such subsidiaries’ assets and liabilities are translated into Hong Kong dollars at period-end exchange rates, and revenues and expenses are translated at average exchange rates prevailing during the period. Adjustments that result from translating amounts from a subsidiary’s functional currency to the Hong Kong dollar (as described above) are reported net of tax, where applicable, in accumulated OCI in the consolidated balance sheets. |
Convenience Translation | Convenience Translation Translations of balances in the consolidated balance sheets, consolidated statements of comprehensive income and consolidated statements of cash flows from HK$ into US$ as of and for the year ended December 31, 2021 are solely for the convenience of the readers and were calculated at the rate of US$1.00=HK$7.7996, representing the noon buying rate set forth in the H.10 statistical release of the U.S. Federal Reserve Board on December 30, 2021. No representation is made that the HK$ amounts could have been, or could be, converted, realized or settled into US$ at that rate on December 30, 2021, or at any other rate. |
Current Expected Credit Losses | Current Expected Credit Losses Prior to January 1, 2020, the Group applied incurred loss methodology for recognizing credit losses that delays recognition until it is probable a loss has been incurred. The identified impairment loss was immaterial prior to January 1, 2020. On January 1, 2020, the Group adopted FASB ASC Topic 326 – “Financial Instruments – Credit Losses” (“ASC Topic 326”) which replaces the incurred loss methodology with the current expected credit loss (“CECL”) methodology. The new guidance applies to financial assets measured at amortized cost, held-to-maturity debt securities and off-balance sheet credit exposures. For on-balance sheet assets, an allowance must be recognized at the origination or purchase of in-scope assets and represents the expected credit losses over the contractual life of those assets. 2. SIGNIFICANT ACCOUNTING POLICIES (Continued) Current Expected Credit Losses (Continued) The Group adopted ASC Topic 326 using the modified retrospective approach for all in-scope assets. The adoption of ASC Topic 326 has no material impact on the Group’s retained earnings as of January 1, 2020. Results for reporting periods beginning after January 1, 2020 are presented under ASC Topic 326 while prior periods continue to be reported in accordance with previously applicable U.S. GAAP. The Group’s in-scope assets are primarily loans and advances that are collateralized by client securities and the collateral is required to be maintained at specified minimum levels at all times. The Group monitors margin levels and requires clients to provide additional collateral, or reduce margin positions, to meet minimum collateral requirements if the fair value of the collateral changes. The Group applies the practical expedient based on collateral maintenance provisions in estimating an allowance for credit losses for the loans and advances. In accordance with the practical expedient, when the Group reasonably expects that borrowers (or counterparties, as applicable) will replenish the collateral as required, there is no expectation of credit losses when the collateral’s fair value is greater than the amortized cost of the financial assets. If the amortized cost exceeds the fair value of collateral, then credit losses are estimated only on the unsecured portion. For the year ended December 31, 2020 and 2021, expected credit loss expenses of HK$9,075 thousand and HK$3,200 thousand resulting from the assessment of credit losses for the loans and advances under ASC Topic 326 at period-end were recognized in “Others, net” in the consolidated statements of comprehensive income respectively. An allowance for credit losses on other financial assets, including receivables from clients, brokers, clearing organizations and fund management companies and fund distributors, is estimated based on the aging of these financial receivables. Since most of the financial receivables are short-term in nature, the allowance for credit losses for other financial assets were immaterial for all periods presented. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents represent cash on hand, demand deposits and time deposits placed with banks or other financial institutions, which are unrestricted to withdrawal or use, and which have original maturities of three months or less. |
Cash Held on Behalf of Clients | Cash Held on Behalf of Clients The Group has classified the clients’ monies as cash held on behalf of clients under the assets section in the consolidated balance sheets and recognized the corresponding accounts payables to the respective clients under the liabilities section. |
Term Deposits | Term Deposit Term deposit consists of bank deposits with an original maturity of greater than three months. |
Restricted cash | Restricted Cash The Group is required to maintain restricted cash deposits for certain property leases. These funds are restricted and have been classified as such on our consolidated balance sheets due to the nature of restriction. |
Short-term Investments | Short-term Investments The Group classifies certain financial assets with highly liquidity and original maturities less than twelve months as short-term investments. The Group’s short-term investments consist of investments in money market funds. The Group values its money market funds using quoted prices in active markets for these investments, and accordingly, the Group classifies the valuation techniques that use these inputs as Level 1. |
Securities Purchased Under Agreements to Resell and Securities Sold Under Agreements to Repurchase | Securities Purchased Under Agreements to Resell and Securities Sold Under Agreements to Repurchase Transactions involving purchases of securities under agreements to resell (resell agreements) and transactions involving sales of securities under agreements to repurchase (repurchase agreements) are treated as collateralized financing transactions. Under resell agreements, the Group pays cash to counterparties and receives securities as collateral. These agreements are carried at amounts at which the securities will subsequently be resold, and the interest income received by the Group is recorded as interest income in the consolidated statements of comprehensive income. Under repurchase agreements, the Group receives cash from counterparties and provides securities as collateral. These agreements are carried at amounts at which the securities will subsequently be repurchased, and the interest expense incurred by the Group is recorded as interest expenses in the consolidated statements of comprehensive income. |
Loans and advances | Loans and advances Loans and advances include margin loans, IPO loans extended to clients and other advances, collateralized by securities and are carried at the amortized cost, net of an allowance for credit losses. Revenues earned from the loans and advances are included in interest income. Margin loans are extended to clients on a demand basis and are not committed facilities. Securities owned by the customers, which are not recorded in the consolidated balance sheets, are held as collateral for amounts due on the margin loans. IPO loans for subscription of new shares are normally settled within one week from the drawdown date. Once IPO stocks are allotted, the Group requires clients to repay the IPO loans. Force liquidation action would be taken if the clients fail to settle their shortfall after the IPO allotment result is announced. Other advances consist of bridge loans to enterprises which pledged unlisted or listed shares they hold as collateral. Loans and advances are initially recorded net of directly attributable transaction costs and are measured at subsequent reporting dates at amortized cost. Finance charges, premiums payable on settlement or redemption and direct costs are accounted for on an accrual basis to the surplus or deficit using the effective interest method and are added to the carrying amount of the instrument to the extent that they are not settled in the period in which they arise. The balances will be written off to the extent that there is no realistic prospect of recovery. This is generally the case when the Group determines that the debtor does not have assets or sources of income that could generate sufficient cash flows to repay the amounts subject to the write-off. |
Trading Receivables from and Payables to Clients | Trading Receivables from and Payables to Clients Trading receivables from and payables to clients include amounts due on brokerage transactions on a trade-date basis. |
Receivables from and Payables to Brokers, Clearing Organization and Fund Management Companies and Fund Distributors | Receivables from and Payables to Brokers, Clearing Organizations and Fund Management Companies and Fund Distributors Receivables from and payables to brokers, clearing organizations and fund management companies and fund distributors include receivables and payables from unsettled trades on a trade-date basis, including amounts receivable for securities, derivatives or funds trades not delivered by the Group to the purchaser by the settlement date and cash deposits, and amounts payable for securities, derivatives or funds trades not received by the Group from a seller by the settlement date. Clearing settlement fund deposited in the clearing organizations for the clearing purpose is recognized in receivables from clearing organizations. The Group borrowed margin loans from executing brokers, with the benchmark interest rate plus premium differentiated depending on the amount borrowed, and immediately lent to margin financing clients. Margin loans borrowed is recognized in the payables to brokers. The Group’s policy is to net the receivables from and payables to clearing organizations according to ASC Topic 210-20, when all of the following conditions are met: a) Each of two parties owes the other determinable amounts. b) The reporting party has the right to set off the amount owed with the amount owed by the other party. c) The reporting party intends to set off. d) The right of setoff is enforceable at law. |
Interest Receivable and Payable | Interest Receivable and Payable Interest receivable is calculated based on the contractual interest rate of bank deposit, loans and advances, securities loaned and receivables on an accrual basis, and is recorded as interest income as earned. Interest payable is calculated based on the contractual interest rates of payables, borrowings, securities borrowed and securities sold under agreements to repurchase on an accrual basis. |
Securities Borrowed and Securities Loaned | Securities Borrowed and Securities Loaned Securities borrowed and securities loaned are recorded at the amount of the cash collateral advanced or received. Securities borrowed transactions require the Group to provide counterparties with collateral, which may be in the form of cash, or other securities. With respect to securities loaned, the Group receives collateral, which may be in the form of cash or other securities in an amount generally in excess of the fair value of the securities loaned. The Group monitors the market value of securities borrowed and loaned on a daily basis, with additional collateral obtained or refunded as permitted contractually. Receivables and payables related to securities borrowed and securities loaned are included at receivables from and payables to brokers or clients in the consolidated balance sheets. Securities lending fees received and securities borrowing fees paid by the Group are included in interest income and interest expense, respectively, in the consolidated statements of comprehensive income. |
Leases | Leases The Group accounts for leases in accordance with ASC 842, Leases (“ASC 842”), which requires lessees to recognize leases on the balance sheet and disclose key information about leasing arrangements. The Group determines if a contract contains a lease based on whether the contract conveys to the Group the right to control the use of an underlying asset for a period of time in exchange for consideration. If the Group determines that a contract contains a lease, it recognizes, in the consolidated balance sheets, a lease liability and a corresponding right-of-use asset on the commencement date of the lease. The lease liability is initially measured at the present value of the future lease payments over the lease term using the rate implicit in the lease or, if not readily determinable, the Group’s secured incremental borrowing rate. An operating lease right-of-use asset is initially measured at the value of the lease liability minus any lease incentives and initial direct costs incurred plus any prepaid rent. The group recognizes operating lease right-of-use assets and corresponding operating lease liabilities in the financial statement on the date when the lessor makes the underlying asset available for use. Each lease liability is measured using the Group’s secured incremental borrowing rate, which is based on an internally developed yield curve using interest rates of debt issued with a similar risk profile as the Group and a duration similar to the lease term. The Group’s leases have remaining terms of one The Group’s operating leases contain both lease components and non-lease components. Non-lease components are distinct elements of a contract that are not related to securing the use of the underlying assets, such as common area maintenance and other management costs. The Company elected to measure the lease liability by combining the lease and non-lease components as a single lease component. As such, the Company includes the fixed payments and any payments that depend on a rate or index that relate to the lease and non-lease components in the measurement of the lease liability. Some of the non-lease components are variable in nature and not based on an index or rate, and as a result, are not included in the measurement of the operating lease right-of-use assets or operating lease liability. Operating lease expense is recognized on a straight-line basis over the lease term and is included in rental and other related expenses in the Group’s consolidated statements of comprehensive income. All of the Group’s leases are classified as operating leases and primarily consist of real estate leases for corporate offices, data centers, and other facilities. As of December 31, 2020 and 2021, the weighted-average remaining lease term on these leases is approximately four years and three years , For the year ended December 31, 2020 and 2021, right-of-use assets obtained under operating leases was HK$85,827 thousand and HK$108,949 thousand, respectively. The Group’s lease agreements do not contain any residual value guarantees, restrictions or covenants. |
Refundable Deposit | Refundable Deposit Refundable deposit is included in other assets in the consolidated balance sheets. As a clearing member firm of securities and derivatives clearing organizations in Hong Kong and the U.S., the Group is also exposed to clearing member credit risk. These clearing organizations require member firms to deposit cash to a clearing fund. If a clearing member defaults in its obligations to the clearing organizations in an amount larger than its own margin and clearing fund deposits, the shortfall is absorbed pro rata from the deposits of the other clearing members. Many clearing organizations of which the Group is member have the authority to assess their members for additional funds if the clearing fund is depleted. A large clearing member default could result in a substantial cost if the Group is required to pay such additional funds. |
Property and Equipment, net | Property and Equipment, net Property and equipment, which are included in other assets in the consolidated balance sheets are stated at historical cost less accumulated depreciation and impairment, if any. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. Residual rate is determined based on the economic value of the property and equipment at the end of the estimated useful lives as a percentage of the original cost. Category Estimated useful lives Residual rate Computers equipment 3 5 % Furniture and fixtures 3 5 % Office equipment 3 5 % Vehicle 5 years 5 % Office building 30 years 5 % Expenditures for maintenance and repairs are expensed as incurred. |
Intangible Assets | Intangible Assets Intangible assets which are included in other assets in the consolidated balance sheets mainly consist of computer software and other intangible assets. Identifiable intangible assets are carried at acquisition cost less accumulated amortization and impairment loss, if any. Finite-lived intangible assets are tested for impairment if impairment indicators arise. Amortization of finite-lived intangible assets is computed using the straight-line method over their estimated useful lives, mainly including: Category Estimated useful lives Computer software 5 years Infinite-lived intangible assets mainly consist of the trading right and licenses. The Group had held a futures trading right as a clearing member firm of HKEx in order to trade futures through the trading facilities of the Stock Exchange, and has recognized it as intangible assets. The licences recognised as intangible assets consist of an insurance broker license and a financial services license. The Group obtained an insurance broker license through acquiring a member of the Hong Kong Professional Insurance Brokers Association. The Group acquired an Australian subsidiary that holds an Australian Financial Services License (AFSL) granted and regulated by the Australian Securities and Investments Commission (ASIC). The future trading right and licenses have an indefinite useful life and are carried at cost less accumulated impairment losses. The Group will not amortize the future trading right and licenses until its useful life is determined to be finite. |
Long-term investments | Long-term investments The Group’s long-term investments primarily consist of equity method investments and equity investments without readily determinable fair values. In accordance with ASC 323 Investment—Equity Method and Joint Ventures, the Group accounts for equity method investments over which the Group has significant influence but does not own a majority of the equity interest or otherwise controls and the investments are either common stock or in substance common stock using the equity method. The Group’s share of the investee’s profit and loss is recognized in the consolidated statements of comprehensive income of the period. 2. SIGNIFICANT ACCOUNTING POLICIES (Continued) Long-term investments (Continued) The carrying amount of equity method investments is tested for impairment whenever there is an indication that the carrying amount may be impaired in accordance with the policy described in “Impairment of long-lived assets”. In January 2019, the Group invested in a private company. The Group acquired 20% ordinary equity interest with a total consideration of HK$6,709 thousand. The Group exercises significant influence in the investee and therefore accounts for this as an equity method investment. Based on the Group’s assessment on the recoverable amounts of the equity method investment, as of December 31, 2020 and 2021, the impairment provision on the equity method investment was HK$5,888 thousand. In December 2021, the Group invested in a private equity fund. The Group acquired approximately 10% ordinary equity interest with a total consideration of HK$7,798 thousand. The Group exercises significant influence in the equity fund and therefore accounts for this as an equity method investment. Based on the Group’s assessment on the recoverable amounts of the equity method investment, impairment provision of nil on the equity method investment was recognized as of December 31, 2021. In accordance with ASC 321 Investment—Equity Securities, for those equity investments without readily determinable fair values, the Group elects to record these investments at cost, less impairment, and plus or minus subsequent adjustments for observable price changes. Under this measurement alternative, changes in the carrying value of the equity investment are required to be made whenever there are observable price changes in orderly transactions for the identical or similar investment of the same issuer. Pursuant to ASC 321, for those equity investments that the Group elects to use the measurement alternative, the Group makes a qualitative assessment of whether the investment is impaired at each reporting date. If a qualitative assessment indicates that the investment is impaired, the Group estimates the investment’s fair value in accordance with the principles of ASC 820. If the fair value is less than the investment’s carrying value, the Group recognizes an impairment loss equal to the difference between the carrying value and fair value. In December 2021, the Group invested in a private equity fund. The Group acquired approximately 2.75% ordinary equity interest with a total consideration of HK$15,596 thousand. Based on the Group’s impairment assessment of the investment, no impairment provision was made as of December 31, 2021. |
Impairment of Long-lived Assets | Impairment of Long-lived Assets Long-lived assets are evaluated for impairment whenever events or changes in circumstances (such as a significant adverse change to market conditions that will impact the future use of the assets) indicate that the carrying amount may not be fully recoverable or that the useful life is shorter than the Group had originally estimated. When these events occur, the Group evaluates the impairment by comparing carrying value of the assets to an estimate of future undiscounted cash flows expected to be generated from the use of the assets and their eventual disposition. If the sum of the expected future undiscounted cash flows is less than the carrying value of the assets, the Group recognizes an impairment loss based on the excess of the carrying value of the assets over the fair value of the assets. Impairment charge recognized for the years ended December 31, 2019, 2020 and 2021 was nil, HK$ 5,888 thousand and nil, respectively. |
Treasury stock | Treasury stock |
Fair Value Measurements | Fair Value Measurements Accounting guidance defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Group considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants would use when pricing the asset or liability. Accounting guidance establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Accounting guidance establishes three levels of inputs that may be used to measure fair value: Level 1 — Valuation techniques in which all significant inputs are unadjusted quoted prices from active markets for assets or liabilities that are identical to the assets or liabilities being measured. Level 2 — Valuation techniques in which significant inputs include quoted prices from active markets for assets or liabilities that are similar to the assets or liabilities being measured and/or quoted prices for assets or liabilities that are identical or similar to the assets or liabilities being measured from markets that are not active. Also, model-derived valuations in which all significant inputs and significant value drivers are observable in active markets are Level 2 valuation techniques. Level 3 — Valuation techniques in which one or more significant inputs or significant value drivers are unobservable. Unobservable inputs are valuation technique inputs that reflect the Group’s own assumptions about the assumptions that market participants would use in pricing an asset or liability. When available, the Group uses quoted market prices to determine the fair value of an asset or liability. If quoted market prices are not available, the Group will measure fair value using valuation techniques that use, when possible, current market-based or independently sourced market parameters, such as interest rates and currency rates. The carrying amount of cash and cash equivalents, cash held on behalf of clients, restricted cash, receivables from and payables to clients, brokers, clearing organizations and fund management companies and fund distributors, accrued interest receivable, accrued interest payable, amounts due to related parties, other financial assets and liabilities approximates fair value because of their short-term nature. Term deposit, loans and advances, borrowings, securities purchased under agreements to resell, securities sold under agreements to repurchase and operating lease liabilities are carried at amortized cost. The carrying amount of term deposit, loans and advances, borrowings and operating lease liabilities approximate their respective fair value as the interest rates applied reflect the current quoted market yield for comparable financial instruments. Short-term investments are measured at fair value. The Group’s non-financial assets, such as operating lease right-of-use assets, long-term investments, property and equipment and intangible assets, would be measured at fair value only if they were determined to be impaired. |
Revenue Recognition | Revenue Recognition 1) Brokerage commission and handling charge income Brokerage commission income earned for executing transactions is accrued on a trade-date basis. Handling charge income arise from the services such as clearing and settlement services, subscription and dividend collection handling services, etc., are accrued on a trade-date basis. Brokerage commission and handling charge income are recognised at a point in time when the service has been passed to the customer. 2) Interest income The Group earns interest income primarily in connection with its margin financing and securities lending services, IPO financing, bridge loan and deposits with banks, which are recorded on an accrual basis and are included in interest income in the consolidated statements of comprehensive income. Interest income is recognized as it is accrued over time using the effective interest method. 3) Other income Other income consists of enterprise public relations service charge income provided to corporate clients, underwriting fee income, IPO subscription service charge income, currency exchange service income from clients, income from market data service and funds distribution service income from fund management companies, employee share option plan (“ESOP”) management service income, etc. Enterprise public relations service charge income is charged to corporate clients by providing platform to post their detailed stock information and latest news in Futubull app, as well as providing a lively, interactive community among their potential investors to exchange investment views, share trading experience and socialize with each other. Unearned enterprise public relations service income of which the Group had received the consideration is recorded as contract liabilities (deferred revenue). IPO subscription service charge income is derived from provision of new share subscription services in relation to IPOs in the Hong Kong capital market. Underwriting fee income is generated from investment banking business primarily by providing equity sub-underwriting to corporate issuers. Funds distribution service income is charged to fund management companies for providing fund products distribution service to Futu’s individual clients.The Group, as an intermediary would receive subscription fees from fund management companies as agreed in the service contracts. Market information and data income is charged to Futubull and Moomoo app users for market data service. Currency exchange service income is charged to the Group’s paying clients for providing currency exchange service. ESOP management service income is derived from establishing and administrating the platforms for corporate clients’ ESOP. This includes all workflow and administration surrounding ESOP fulfillment, including employee communications, records management, data protection, users and administrators education, and other upgrading and customizing services on the ESOP platforms as agreed. For enterprise public relations service charge income, funds distribution service income, market information and data income and ESOP management service income, the service revenues are recognized ratably over the term of the service contracts. 2. SIGNIFICANT ACCOUNTING POLICIES (Continued) Revenue Recognition (Continued) 3) Other income (Continued) For IPO subscription service charge income, underwriting fee income and currency exchange service income, the Group recognizes the revenues upon the time when the services are rendered to customers. |
Customer loyalty program | Customer Loyalty Program The Group operates a customer loyalty program to its customers that offer various incentives in the form of incentive points and coupons for redemption of free or discounted goods or services. For the incentives generated from current sales transaction, the Group defers a portion of commission income with corresponding liability reflected as contract liability attributable to the incentives. The contract liability is determined by management based on the expected usage of the incentive points and coupons, and their estimated relative standalone selling price based on the related goods and services. Significant judgment was made by management in determining the expected usage and estimated relative standalone selling price of the incentive points and coupons, derived from historical trading volume, commission rates and redemption patterns, and an evaluation as to whether historical activities are representative of the expected future activities. For the incentives offered for future sales transaction, the Group nets a portion of brokerage commission income attributable to the incentives when points or coupons are actually redeemed. For the incentives not offered for future sales transaction, the Group considers them as a payment of other distinct goods that would be granted to clients. Such incentives are accounted for as selling and marketing expense with corresponding liability reflected as other liability in the consolidated balance sheet. The table below presents the deferred or netted brokerage commission income related to the customer loyalty program for the years ended December 31, 2019, 2020 and 2021. Year ended December 31, 2019 2020 2021 (HK$ in thousands) Brokerage commission income, gross 441,669 1,807,203 3,640,845 Less: revenue netted or deferred (89,044) (276,155) (493,235) Brokerage commission income, net 352,625 1,531,048 3,147,610 As of December 31, 2020 and 2021, related contract liabilities recorded were HK $8,249 thousand and HK $8,968 thousand, respectively. Refer to Note 12 for details. |
Brokerage Commission and Handling Charge Expenses | Brokerage Commission and Handling Charge Expenses Commission expenses for executing and/or clearing transactions are accrued on a trade-date basis. The commission expenses are charged by executing brokers for securities and derivative trades in the United States stock and derivative markets as the Group makes securities and derivative trades with these brokers as principal. Handling and settlement fee is charged by HKEx or executing brokers for clearing and settlement services, are accrued on a trade-date basis. IPO subscription service charge expenses are charged by commercial banks in connection with new share subscription services in relation to IPOs in the Hong Kong capital market. |
Interest Expenses | Interest Expenses Interest expenses primarily consist of interest expenses of borrowings from banks, other licensed financial institutions and other parties paid to fund the Group’s margin financing business and IPO financing business. |
Processing and Servicing Costs | Processing and Servicing Costs Processing and servicing costs consist of market information and data fee, data transmission fee, cloud service fee, system cost, and SMS service fee, etc. The nature of market information and data fee mainly represents for information and data fee paid to stock exchanges like HKEx, NASDAQ, and New York stock exchange, etc. Data transmission fee is the fee of data transmission among cloud server and data centers located in Shenzhen, PRC and Hong Kong, etc. Cloud service fee and SMS service fee mainly represent the data storage and computing service and the SMS channel service fee. The nature of system cost mainly represents for the fee to access and use the systems paid to software providers. |
Research and Development Expenses | Research and Development Expenses Research and development expenses consist of expenses related to developing transaction platform and website like Futubull app and other products, including payroll and welfare, rental expenses and other related expenses for personnel engaged in research and development activities. All research and development costs have been expensed as incurred as the costs qualifying for capitalization have been insignificant. |
Selling and Marketing Expenses | Selling and Marketing Expenses Selling and marketing expenses consist primarily of advertising and promotion costs, payroll, rental and related expenses for personnel engaged in marketing and business development activities. Advertising and promotion costs are expensed as incurred and are included within selling and marketing expenses in the consolidated statements of comprehensive income. |
General and Administrative Expenses | General and Administrative Expenses General and administrative expenses consist of payroll, rental, related expenses for employees involved in general corporate functions, including finance, legal and human resources, costs associated with use of facilities and equipment, such as depreciation expenses, rental and other general corporate related expenses. |
Others, net | Others, net Others, net, mainly consist of non-operating income and expenses, foreign currency gains or losses, expected credit loss expenses and impairment from long-term investments for all periods presented. Non-operating expenses mainly consist of accrued social security underpayment surcharge. |
Foreign Currency Gains and Losses | Foreign Currency Gains and Losses Foreign currency transactions denominated in currencies other than the functional currency are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are remeasured at the applicable rates of exchange in effect at that date. Foreign currency gain or loss resulting from the settlement of such transactions and from remeasurement at period-end is recognized in “Others, net” in the consolidated statements of comprehensive income. |
Share-Based Compensation | Share-Based Compensation The Company follows ASC 718 to determine whether a share option and a restricted share units should be classified and accounted for as a liability award or equity award. All share-based awards to employees and directors classified as equity awards , such as stock options and restricted share units, are measured at the grant date based on the fair value of the awards. Share-based compensation, net of estimated forfeitures, is recognized as expenses on a straight-line method over the requisite service period, which is the vesting period. Options granted generally vest over four The modification of the terms or conditions of the existing shared-based award is treated as an exchange of the original award for a new award. The incremental compensation expenses are equal to the excess of the fair value of the modified award immediately after the modification over the fair value of the original award immediately before the modification. For stock options already vested as of the modification date, the Group immediately recognized the incremental value as compensation expenses. For stock options still unvested as of the modification date, the incremental compensation expenses are recognized over the remaining service period of these stock options. The Company determined the fair value of the restricted share units with reference to the fair value of the underlying shares as of the grant date. The Company utilizes the binomial option pricing model to estimate the fair value of stock options granted, with the assistance of an independent valuation firm. Forfeitures are estimated at the time of grant and revised in subsequent periods if actual forfeitures differ from those estimates. The Group uses historical data to estimate pre-vesting options and records share-based compensation expenses only for those awards that are expected to vest. See Note 16 for further discussion on share-based compensation. |
Fair Value of Preferred Shares and Pre-IPO Ordinary Shares | Fair Value of Preferred Shares and Pre-IPO Ordinary Shares Shares of the Company, which did not have quoted market prices, were valued based on the income approach. The income approach involves applying the discounted cash flow analysis based on projected cash flow using the Group’s best estimate as of the valuation dates. Estimating future cash flow requires the Group to analyze projected revenue growth, gross margins, effective tax rates, capital expenditures and working capital requirements. In determining an appropriate discount rate, the Group considered the cost of equity and the rate of return expected by venture capitalists. The Group also applied a discount for lack of marketability given that the shares underlying the award were not publicly traded at the time of grant. Determination of estimated fair value of the Group requires complex and subjective judgments due to its limited financial and operating history, unique business risks and limited public information on companies in China similar to the Group. Option-pricing method was used to allocate enterprise value to preferred shares and pre-IPO ordinary shares. The method treats preferred shares and pre-IPO ordinary shares as call options on the enterprise’s value, with exercise prices based on the liquidation preference of the preferred shares. The strike prices of the “options” based on the characteristics of the Group’s capital structure, including number of shares of each class of pre-IPO ordinary shares, seniority levels, liquidation preferences, and conversion values for the preferred shares. The option-pricing method also involves making estimates of the anticipated timing of a potential liquidity event, such as a sale of the Group or an IPO, and estimates of the volatility of the Group’s equity securities. The anticipated timing is based on the plans of board of directors and management of the Group. Estimating the volatility of the share price of a privately held company is complex because there is no readily available market for the shares. Volatility is estimated based on annualized standard deviation of daily stock price return of comparable companies. |
Taxation | Taxation 1) Income tax Current income taxes are provided on the basis of net income for financial reporting purposes, adjusted for income and expense items which are not assessable or deductible for income tax purposes, in accordance with the regulations of the relevant tax jurisdictions. Deferred income taxes are accounted for using an asset and liability method. Under this method, deferred income taxes are recognized for the tax consequences of temporary differences by applying enacted statutory rates applicable to future years to differences between the financial statement carrying amounts and the tax bases of existing assets and liabilities. The tax base of an asset or liability is the amount attributed to that asset or liability for tax purpose. The effect on deferred taxes of a change in tax rates is recognized in the consolidated statements of comprehensive income in the period of change. A valuation allowance is provided to reduce the amount of deferred tax assets if it is considered more likely than not that some portion of, or all of the deferred tax assets will not be realized. 2) Uncertain tax positions The Group did not recognize any interest and penalties associated with uncertain tax positions for the years ended December 31, 2019, 2020 and 2021. The Group continues to assess the uncertain tax positions in accordance with applicable income tax guidance and based on changes in facts and circumstances. |
Net income per share | Net income per share Basic net income per share is computed by dividing net income attributable to ordinary shareholder, considering the accretion of redemption feature and cumulative dividend related to the Company’s redeemable convertible preferred shares, and undistributed earnings allocated to redeemable convertible preferred shares by the weighted average number of ordinary shares outstanding during the period using the two-class method. Under the two-class method, net income is allocated between ordinary shares and other participating securities based on their participating rights. Net loss is not allocated to other participating securities if based on their contractual terms they are not obligated to share the losses. Diluted net income per share is calculated by dividing net income attributable to ordinary shareholder, as adjusted for the effect of dilutive ordinary equivalent shares, if any, by the weighted average number of ordinary and dilutive ordinary equivalent shares outstanding during the period. Ordinary equivalent shares consist of ordinary shares issuable upon the conversion of the redeemable convertible preferred shares, using the if-converted method, and shares issuable upon the exercise of share options and vesting of restricted share units using the treasury stock method. Ordinary equivalent shares are not included in the denominator of the diluted net income per share calculation when inclusion of such share would be anti-dilutive. |
Segment Reporting | Segment Reporting Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker has been identified as the Chief Executive Officer who allocates resources to and assesses the performance of the operating segments of an entity. The Group’s reporting segments are decided based on its operating segments while taking full consideration of various factors such as products and services, geographic location and regulatory environment related to administration of the management. Operating segments meeting the same qualifications are allocated as one reporting segment, providing independent disclosures. The Group engages primarily in online brokerage services and margin financing services. The Group does not distinguish between markets or segments for the purpose of internal reports. The Group does not distinguish revenues, costs and expenses between segments in its internal reporting, and reports costs and expenses by nature as a whole. Hence, the Group has only one reportable segment. |
Significant Risks and Uncertainties | Significant Risks and Uncertainties 1) Currency risk Currency risk arises from the possibility that fluctuations in foreign exchange rates will impact the financial instruments. The Group is not exposed to significant transactional foreign currency risk since almost all of its transactions, assets and liability are denominated in Hong Kong dollars and U.S. dollars and Hong Kong dollars are pegged against U.S. dollars. The impact of foreign currency fluctuations in the Group’s earnings is included in “Others, net” in the consolidated statements of comprehensive income. At the same time, the Group is exposed to translational foreign currency risk since some of the Company’s major subsidiaries have RMB as their functional currency. Therefore, RMB depreciation against Hong Kong dollars could have a material adverse impact on the foreign currency translation adjustment in the consolidated statements of comprehensive income. The Group enters into currency futures contracts to manage currency exposure associated with anticipated receipts and disbursements occurring in a currency other than the functional currency of the entity. The overall impact of the currency risk of other foreign currency assets held by the Group other than U.S. dollars and Renminbi is not significant. As of December 31, 2020 and 2021, the Group had RMB-denominated net liabilities of HK$262.9 million and net assets of HK$2,374.8 million, respectively. We estimate that a 10% depreciation of RMB against the U.S. dollar based on the foreign exchange rate on December 31, 2020 and 2021, would result in an increase of an increase of US$3.4 million and a decrease of US$30.5 million, respectively, in the Group’s pre-tax profit for the years ended December 31, 2020 and 2021. We estimate that a 10% appreciation of RMB against the U.S. dollar based on the foreign exchange rate on December 31, 2020 and 2021 would result in a decrease of US$3.4 million and an increase of US$30.5 million, respectively, in the Group’s pre-tax profit for the years ended December 31, 2020 and 2021. 2) Credit risk Cash held on behalf of clients are segregated and deposited in financial institutions as required by rules mandated by the Group’s primary regulators. These financial institutions are of sound credit ratings, therefore management believes that there is no significant credit risk related to cash held on behalf of clients. The Group’s securities and derivative trades activities are transacted on either a cash or margin basis. The Group’s credit risk is limited in that substantially all of the contracts entered into are settled directly at securities and derivatives clearing organizations. In margin transactions, the Group extends credit to the client, subject to various regulatory and internal margin requirements, collateralized by cash and securities in the client’s account. IPO loans are exposed to credit risk from clients who fails to repay the loans upon IPO stock allotment. The Group monitors the clients’ collateral level and has the right to dispose the newly allotted stocks once the stocks first start trading. Bridge loans to enterprise pledged by shares are exposed to credit risk from counterparties who fail to repay the loans, the Group monitors on the collateral level of bridge loans in real time, and has the right to dispose of the pledged shares once the collateral level falls under the minimal level required to get the loans repaid. Liabilities to other brokers and dealers related to unsettled transactions are recorded at the amount for which the securities were purchased, and are paid upon receipt of the securities from other brokers or dealers. In connection with its clearing activities, the Group is obligated to settle transactions with brokers and other financial institutions even if its clients fail to meet their obligations to the Group. Clients are required to complete their transactions by the settlement date, generally two business days after the trade date. If clients do not fulfill their contractual obligations, the Group may incur losses. The Group has established procedures to reduce this risk by generally requiring that clients deposit sufficient cash and/or securities into their account prior to placing an order. 2. SIGNIFICANT ACCOUNTING POLICIES (Continued) Significant Risks and Uncertainties (Continued) 2) Credit risk (Continued) For cash management purposes, the Group enters into short-term securities sold under agreements to repurchase transactions (“repos”) in addition to securities borrowing and lending arrangements, all of which may result in credit exposure in the event the counterparty to a transaction is unable to fulfill its contractual obligations. Repos are collateralized by securities with a market value in excess of the obligation under the contract. Similarly, securities lending agreements are collateralized by deposits of cash or securities. The Group attempts to minimize credit risk associated with these activities by monitoring collateral values on a daily basis and requiring additional collateral to be deposited with or returned to the Group as permitted under contractual provisions. Concentrations of Credit Risk The Group’s exposure to credit risk associated with its brokerage and other activities is measured on an individual counterparty basis, as well as by groups of counterparties that share similar attributes. There was no revenue from clients which individually represented greater than 10% of the total revenues for the years ended December 31, 2019, 2020 and 2021, respectively. Concentrations of credit risk can be affected by changes in political, industry, or economic factors. To reduce the potential for risk concentration, credit limits are established and exposure is monitored in light of changing counterparty and market conditions. As of December 31, 2020 and 2021, the Group did not have any material concentrations of credit risk within or outside the ordinary course of business. 3) Interest rate risk Fluctuations in market interest rates may negatively affect the Group’s financial condition and results of operations. The Group are exposed to floating interest rate risk on cash deposit and floating rate borrowings. We use net interest simulation modeling techniques to evaluate the effect that changes in interest rates might have on pre-tax profit or loss. The model includes all interest-sensitive assets and liabilities. The simulations involve assumptions that are inherently uncertain and, as a result, cannot precisely predict the impact that changes in interest rates will have on pre-tax profit or loss. Actual results may differ from simulated results due to differences in timing and frequency of rate changes, changes in market conditions and changes in management strategy that lead to changes in the mix of interest-sensitive assets and liabilities. The simulations assume that the asset and liability structure of the consolidated balance sheets would not be changed as a result of a simulated change in interest rates. The results of the simulations based on the Group’s financial position as of December 31, 2021 indicate that a gradual 1% (100 basis points) increase in interest rates over a 12-month period would result in approximately HK$246.4 million (US$31.6 million) pre-tax profit or loss and a gradual 1% (100 basis points) decrease in interest rates over a 12-month period would result in approximately HK$246.4 million (US$31.6 million) pre-tax profit or loss, depending largely on the extent and timing of possible changes in floating rates. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In June 2016, the FASB amended guidance related to impairment of financial instruments as part of ASU 2016-13 Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which is effective on January 1, 2020. The guidance replaces the incurred loss impairment methodology with an expected credit loss model for which the group is required to recognize an allowance based on its estimate of expected credit loss. In November 2018, FASB issued ASU No, 2018-19, Codification Improvements to Topic 326, further clarified the scope of the guidance in the amendments in ASU 2016-13. In May 2019, FASB issued ASU No.2019-05, Financial instrument—Credit Losses (Topic 326), Targeted Transition Relief, which provides an irrevocably fair value option to elect for eligible instruments. In November 2019, FASB issued ASU 2019-11 Codification Improvements to Topic 326, Financial Instruments-Credit Losses, which clarified and improved various aspects of ASU 2016-13. In March 2020, FASB issued ASU 2020-03, Codification Improvements to Financial Instruments, which improves and clarifies various financial instruments topics, including the current expected credit losses standard. As of January 1, 2020, the Group adopted ASC Topic 326 using the modified retrospective approach for all in-scope assets. The adoption of ASC Topic 326 has no impact on the Group’s retained earnings as of January 1, 2020. Results for reporting periods beginning after January 1, 2020 are presented under ASC Topic 326 while prior periods continue to be reported in accordance with previously applicable U.S. GAAP. In August 2018, the FASB issued ASU 2018-13, Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement. The amendments in this standard will remove, modify and add certain disclosures under ASC Topic 820, Fair Value Measurement, with the objective of improving disclosure effectiveness. ASU 2018-13 is effective for the Group’s fiscal year beginning January 1, 2020, with early adoption permitted. The update eliminates the requirement to disclose: (a) the amount and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy; (b) an entity’s policy for timing of transfers between levels; (c) and an entity’s valuation processes for Level 3 fair value measurements. The Group adopted ASU 2018-13 on January 1, 2020, and the adoption had no material impact on the Group’s consolidated financial statements. In December 2019, the FASB issued ASU 2019-12, Income taxes (Topic 740)-Simplifying the accounting for income taxes, which simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740, Income Taxes. The ASU will be effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. The Group adopted the ASU on January 1, 2021, which did not have a material impact on the consolidated financial statements. In March 2020, the FASB issued ASU 2020-04, Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional guidance for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting if certain criteria are met. The amendments in ASU 2020-04 provide optional expedients and exceptions for applying GAAP to contracts, hedging relationships and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. This guidance is effective immediately and the amendments may be applied prospectively through December 31, 2022. The adoption did not have a material accounting impact on the Group’s consolidated financial position or results of operations. |
ORGANIZATION AND PRINCIPAL ACTI
ORGANIZATION AND PRINCIPAL ACTIVITIES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
GENERAL INFORMATION, ORGANIZATION AND PRINCIPAL ACTIVITIES | |
Schedule of principal subsidiaries, consolidated VIE and subsidiary of VIE | Place of Percentage of Date of Incorporation/ Incorporation/ Direct or Indirect Subsidiaries Establishment/ Establishment Economic Interest Principal Activities Futu Securities International (Hong Kong) Limited (“Futu Securities”) April 17, 2012 Hong Kong 100 % Financial services Futu Inc. December 17, 2015 Delaware, USA 100 % Financial services Futu Clearing Inc. August 13, 2018 Delaware, USA 100 % Financial services Futu Singapore Pte. Ltd December 17, 2019 Singapore 100 % Financial services Futu Securities (Australia) Ltd. February 15, 2001 New South Wales, AUS 100 % Financial services Futu Securities (Hong Kong) Limited May 2, 2014 Hong Kong 100 % Investment holding Futu Network Technology Limited May 17, 2015 Hong Kong 100 % Research and development and technology services Futu Network Technology (Shenzhen) Co., Ltd. October 14, 2015 Shenzhen, PRC 100 % Research and development and technology services Shen Si Network Technology (Beijing) Co., Ltd. (“Shen Si”) September 15, 2014 Beijing, PRC 100 % No substantial business VIE Shenzhen Futu Network Technology Co., Ltd. (1) December 18, 2007 Shenzhen, PRC 100 % Research and development and technology services Note: (1) Mr. Leaf Hua Li and Ms. Lei Li are beneficiary owners of the Company and held 85% and 15% equity interest in Shenzhen Futu, respectively. Mr. Leaf Hua Li is the founder, chairman and chief executive officer of the Company, and Ms. Lei Li is Mr. Leaf Hua Li’s spouse. |
SIGNIFICANT ACCOUNTING POLICI_3
SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
SIGNIFICANT ACCOUNTING POLICIES | |
Schedule of consolidated financial statements with intercompany balances and transactions eliminated between the VIE and its subsidiary | As of December 31, 2020 2021 (HK$ in thousands) Total assets 162,897 254,602 Total liabilities 145,693 176,204 Year ended December 31, 2019 2020 2021 (HK$ in thousands) Total operating revenue 65,681 103,433 210,161 Net income 8,807 20,727 52,741 Year ended December 31, 2019 2020 2021 (HK$ in thousands) Net cash (used in)/generated from operating activities (2,502) (14,847) 2,340 Net cash generated from/(used in) investing activities 2,233 17,104 (3,327) Net (decrease)/increase in cash, cash equivalents and restricted cash (269) 2,257 (987) Cash, cash equivalents and restricted cash at beginning of the year 1,750 1,481 3,738 Cash, cash equivalents and restricted cash at end of the year 1,481 3,738 2,751 |
Schedule of property and equipment at the end of the estimated useful lives | Category Estimated useful lives Residual rate Computers equipment 3 5 % Furniture and fixtures 3 5 % Office equipment 3 5 % Vehicle 5 years 5 % Office building 30 years 5 % |
Schedule of finite-lived intangible assets using estimated useful lives | Category Estimated useful lives Computer software 5 years |
Schedule of brokerage commission income related to incentive program | Year ended December 31, 2019 2020 2021 (HK$ in thousands) Brokerage commission income, gross 441,669 1,807,203 3,640,845 Less: revenue netted or deferred (89,044) (276,155) (493,235) Brokerage commission income, net 352,625 1,531,048 3,147,610 |
FINANCIAL ASSETS AND FINANCIA_2
FINANCIAL ASSETS AND FINANCIAL LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
FINANCIAL ASSETS AND FINANCIAL LIABILITIES | |
Schedule of financial assets measured at fair value | Financial Assets At Fair Value as of December 31, 2021 Level 1 Level 2 Level 3 Total (HK$ in thousands) Financial assets, measured at fair value Short-term investments 1,169,741 — — 1,169,741 Other financial assets (1) — 598 — 598 Total financial assets, measured at fair value 1,169,741 598 — 1,170,339 (3) The Group enters into currency futures contracts to manage currency exposure associated with anticipated receipts and disbursements occurring in a currency other than the functional currency of the entity. The currency futures contracts are valued using broadly distributed bank and broker prices, and are classified as Level 2 of the fair value hierarchy since inputs to their valuation can be generally corroborated by market data. The Group did not hold any financial assets measured at fair value as of December 31, 2020. |
Schedule of financial instruments not measured at fair value | As of December 31, 2021 Carrying Fair Value Value (HK$ in thousands) Financial assets, not measured at fair value Cash and cash equivalents 4,555,096 4,555,096 Cash held on behalf of clients 54,734,351 54,734,351 Restricted Cash 2,065 2,065 Securities purchased under resale agreements 106,203 106,203 Loans and advances 29,587,306 29,587,306 Receivables: Clients 469,577 469,577 Brokers 7,893,927 7,893,927 Clearing organizations 1,961,121 1,961,121 Fund management companies and fund distributors 72,340 72,340 Interest 50,829 50,829 Other financial assets 387,072 387,072 Total financial assets, not measured at fair value 99,819,887 99,819,887 As of December 31, 2021 Carrying Fair Value Value (HK$ in thousands) Financial liabilities, not measured at fair value Amounts due to related parties 87,459 87,459 Payables: Clients 59,127,439 59,127,439 Brokers 7,599,233 7,599,233 Clearing organizations 393,782 393,782 Fund management companies and fund distributors 56,690 56,690 Interest 15,359 15,359 Borrowings 6,357,405 6,357,405 Securities sold under agreements to repurchase 4,467,861 4,467,861 Operating lease liabilities 260,579 260,579 Other financial liabilities 937,970 937,970 Total financial liabilities, not measured at fair value 79,303,777 79,303,777 3. FINANCIAL ASSETS AND FINANCIAL LIABILITIES (Continued) Financial Assets and Liabilities Not Measured at Fair Value (Continued) As of December 31, 2020 Carrying Fair Value Value (HK$ in thousands) Financial assets, not measured at fair value Cash and cash equivalents 1,034,668 1,034,668 Cash held on behalf of clients 42,487,090 42,487,090 Term deposit 300,000 300,000 Loans and advances 18,825,366 18,825,366 Receivables: Clients 735,145 735,145 Brokers 5,780,461 5,780,461 Clearing organizations 1,243,928 1,243,928 Fund management companies and fund distributors 297,622 297,622 Interest 19,876 19,876 Other financial assets 251,672 251,672 Total financial assets, not measured at fair value 70,975,828 70,975,828 As of December 31, 2020 Carrying Fair Value Value (HK$ in thousands) Financial liabilities, not measured at fair value Amounts due to related parties 87,169 87,169 Payables: Clients 46,062,842 46,062,842 Brokers 4,533,581 4,533,581 Clearing organizations 324,266 324,266 Fund management companies and fund distributors 127,442 127,442 Interest 5,493 5,493 Borrowings 5,482,818 5,482,818 Securities sold under agreements to repurchase 5,453,037 5,453,037 Operating lease liabilities 222,231 222,231 Other financial liabilities 96,800 96,800 Total financial liabilities, not measured at fair value 62,395,679 62,395,679 |
Schedule of amounts of financial instruments that are not offset in the consolidated balance sheets, but could be netted against cash or financial instruments with specific counterparties under master netting agreements | Effects of offsetting on the balance sheet Related amounts not offset Gross Amounts amounts Net amounts subject to set off in the Presented in master Financial Gross balance the balance netting instrument Net As of December 31, 2021 amount sheet sheet arrangements collateral amount HK$in thousands Financial Assets Amounts due from clearing organizations 7,596,090 (5,634,969) 1,961,121 — — 1,961,121 Financial liabilities Amounts due to clearing organizations 6,028,751 (5,634,969) 393,782 — — 393,782 Effects of offsetting on the balance sheet Related amounts not offset Gross Amounts amounts Net amounts subject to set off in the presented in master Financial Gross balance the balance netting instrument Net As of December 31, 2020 amount sheet sheet arrangements collateral amount HK$ in thousands Financial Assets Amounts due from clearing organizations 12,614,684 (11,370,756) 1,243,928 — — 1,243,928 Financial liabilities Amounts due to clearing organizations 11,695,022 (11,370,756) 324,266 — — 324,266 |
SHORT-TERM INVESTMENTS (Tables)
SHORT-TERM INVESTMENTS (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
SHORT-TERM INVESTMENTS | |
Summary of short-term investments | As of December 31, 2020 2021 (HK$ in thousands) Money market funds — 1,169,741 Total — 1,169,741 |
LEASE (Tables)
LEASE (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
LEASE | |
Summary of balances reported in the consolidated balance sheet related to the leases | As of December 31, 2020 2021 (HK$ in thousands) Operating lease right-of-use assets 208,863 243,859 Operating lease liabilities 222,231 260,579 |
Summary of operating lease cost reported in the consolidated statements of comprehensive (loss)/income | Year ended December 31, 2019 2020 2021 (HK$ in thousands) Operating lease cost 64,756 64,594 106,459 |
Summary of undiscounted cash flows of leases to present value of operating lease payments | December 31, 2021 (HK$ in thousands) 2022 102,767 2023 96,326 2024 38,306 2025 30,688 2026 and thereafter 7,455 Total undiscounted operating lease payments 275,542 Less: imputed interest (14,963) Present value of operating lease liabilities 260,579 |
LOANS AND ADVANCES (Tables)
LOANS AND ADVANCES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
LOANS AND ADVANCES | |
Schedule of loans and advances | As of December 31, 2020 2021 (HK$ in thousands) Margin loans 18,424,972 29,084,958 IPO loans 400,394 34,348 Other advances — 468,000 Total 18,825,366 29,587,306 |
PROPERTY AND EQUIPMENT, NET (Ta
PROPERTY AND EQUIPMENT, NET (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
PROPERTY AND EQUIPMENT, NET | |
Schedule of property and equipment | As of December 31, 2020 2021 (HK$ in thousands) Gross carrying amount Computers and equipment 60,039 109,989 Furniture and fixtures 34,704 64,507 Office equipment 42,276 64,822 Office building 27,983 28,239 Vehicle 632 635 Total of gross carrying amount 165,634 268,192 Less: accumulated depreciation Computers and equipment (17,295) (29,852) Furniture and fixtures (13,738) (23,828) Office equipment (24,282) (35,860) Office building (1,403) (2,291) Vehicle (600) (604) Total of accumulated depreciation (57,318) (92,435) Property and equipment, net 108,316 175,757 |
INTANGIBLE ASSETS, NET (Tables)
INTANGIBLE ASSETS, NET (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
INTANGIBLE ASSETS, NET | |
Schedule of Intangible assets | As of December 31, 2020 2021 (HK$ in thousands) Gross carrying amount Computer software 8,525 15,596 License 2,000 4,261 Others 3,563 3,638 Total of gross carrying amount 14,088 23,495 Less: accumulated amortization Computer software (3,041) (5,172) Others (831) (1,105) Total of accumulated amortization (3,872) (6,277) Intangible assets, net 10,216 17,218 |
LONG-TERM INVESTMENTS (Tables)
LONG-TERM INVESTMENTS (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Long-term Investments | |
Schedule of Long term Investments | As of December 31, 2020 2021 (HK$ in thousands) Equity method investments (1) — 7,798 Equity investments without readily determinable fair values (2) — 15,596 Total — 23,394 |
OTHER ASSETS (Tables)
OTHER ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
OTHER ASSETS | |
Schedule of other assets | As of December 31, 2020 2021 (HK$ in thousands) Current: Staff advances 36,468 26,527 Others 70,419 55,067 Total 106,887 81,594 Non-current: Refundable deposit 150,733 337,513 Property and equipment, net (Note 7) 108,316 175,757 Deferred tax assets (Note 26) 17,174 38,317 Intangible assets, net (Note 8) 10,216 17,218 Total 286,439 568,805 |
BORROWINGS (Tables)
BORROWINGS (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
BORROWINGS | |
Schedule of borrowings | As of December 31, 2020 2021 (HK$ in thousands) Borrowings from: Banks (1) 5,182,620 6,357,405 Other financial institutions 300,198 — Total 5,482,818 6,357,405 |
ACCRUED EXPENSES AND OTHER LI_2
ACCRUED EXPENSES AND OTHER LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
ACCRUED EXPENSES AND OTHER LIABILITIES | |
Schedule of accrued expenses and other liabilities | As of December 31, 2020 2021 (HK$ in thousands) Current: Payables to corporate clients in relation to ESOP management services 17,801 870,283 Accrued payroll and welfare expenses 317,428 531,409 Tax payables 173,911 494,744 Accrued advertising and promotion fee 37,652 152,305 Temporary payables in relation to fund distribution services 70,793 48,240 Accrued professional fee 6,952 22,066 Stamp duty, trading levy and trading fee payables 26,007 19,447 Accrued market information and data fee 13,143 12,832 Contract liabilities - current 2,958 3,058 Refund from depositary bank - current 2,756 2,773 Others 47,782 19,056 Total 717,183 2,176,213 Non-current: Contract liabilities - non-current 5,291 5,910 Refund from depositary bank - non-current 7,120 4,389 Deferred tax liabilities (Note 26) 1,604 636 Total 14,015 10,935 |
SHARE-BASED COMPENSATION (Table
SHARE-BASED COMPENSATION (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
SHARE-BASED COMPENSATION | |
Schedule of Share-based compensation recognized in operating expenses | Year ended December 31, 2019 2020 2021 (HK$ in thousands) Research and development expenses 12,055 20,579 75,755 General and administrative expenses 3,374 10,354 14,020 Selling and marketing expenses 538 1,640 9,138 Total share-based compensation expenses 15,967 32,573 98,913 |
Summary of the stock option activity under the 2014 and 2019 Share Incentive Plan | Options granted Weighted average share number exercise price per option (US$) Outstanding at December 31, 2019 23,718,626 0.5161 Exercised (5,048,824) 0.4293 Granted 2,489,832 0.6810 Forfeited (2,117,298) 0.5588 Outstanding at December 31, 2020 19,042,336 0.5628 Exercised (5,875,592) 0.4365 Granted 1,080,000 0.0444 Forfeited (905,278) 0.6539 Outstanding at December 31, 2021 13,341,466 0.5703 |
Summary of share options outstanding | As of December 31, 2021 Weighted- average Weighted- remaining average exercise Options exercise price contractual life Aggregate number per option (years) intrinsic value US$ US$ in thousand Options Outstanding 13,341,466 0.5703 3.42 165,157 Exercisable 2,825,014 0.5729 2.85 34,964 Expected to vest 10,516,452 0.5696 3.57 130,193 |
Summary of fair value of options granted using the binomial option pricing model | 2019 2020 2021 Risk-free interest rate 1.67 % 0.27%-0.36 % 0.09%-0.89 % Expected term (in years) 5.00 5.00 5.00 Expected dividend yield 0 % 0 % 0 % Expected volatility 45 % 40 % 40 % Expected forfeiture rate (post-vesting) 15 % 15 % 15 % |
Summary of activities of the restricted share units granted to employees under the plan | The following table summarizes activities of the Company’s restricted share units granted to employees under the plan: Weighted average grant date Shares awarded number fair value per share(US$) Outstanding at December 31, 2020 6,067,400 4.6827 Vested (929,672) 4.6827 Granted 12,105,712 5.7371 Forfeited (281,576) 5.4426 Outstanding at December 31, 2021 16,961,864 5.6793 |
NET INCOME PER SHARE (Tables)
NET INCOME PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
NET INCOME PER SHARE | |
Schedule of earnings per share, basic and diluted | Year ended December 31, 2019 2020 2021 (HK$ in thousands, except for share and per share data) Basic net income per share calculation: Numerator: Net income attributable to ordinary shareholders of the Company 143,159 1,325,523 2,810,210 Denominator: Weighted average number of ordinary shares outstanding - basic 832,790,329 1,036,865,727 1,200,912,670 Net income per share attributable to ordinary shareholders of the Company - basic 0.17 1.28 2.34 Diluted net income per share calculation: Numerator: Net income attributable to ordinary Shareholders of the Company 143,159 1,325,523 2,810,210 Denominator: Weighted average number of ordinary shares outstanding - basic 832,790,329 1,036,865,727 1,200,912,670 Dilutive effect of share options and restricted shares units 85,107,097 13,277,287 18,759,838 Weighted average number of ordinary shares outstanding - diluted 917,897,426 1,050,143,014 1,219,672,508 Net income per share attributable to ordinary shareholders of the Company - diluted 0.16 1.26 2.30 |
COLLATERALIZED TRANSACTIONS (Ta
COLLATERALIZED TRANSACTIONS (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
COLLATERALIZED TRANSACTIONS | |
Schedule of margin loans and client's collateral received and repledged | As of December 31, 2020 2021 (HK$ in thousands) Margin loan extended to margin clients 18,424,972 29,084,958 Securities purchased under agreements to resell transactions — 106,203 Collateral received from margin clients 89,404,131 119,745,500 Collateral received from brokers — 144,156 Collateral repledged to commercial banks and other financial institutions 58,255,907 20,953,603 |
Schedule of market value of securities borrowed and lent and cash collateral received and deposited | As of December 31, 2020 2021 (HK$ in thousands) Securities borrowed and lent 4,307,346 8,436,638 Cash collateral received from borrowers 5,067,828 9,737,786 Cash collateral deposited with lenders 3,645,214 3,120,123 |
BROKERAGE COMMISSION AND HAND_3
BROKERAGE COMMISSION AND HANDLING CHARGE INCOME (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
BROKERAGE COMMISSION AND HANDLING CHARGE INCOME | |
Schedule of brokerage commission and handling charge income | Year ended December 31, 2019 2020 2021 (HK$ in thousands) Brokerage commission income 352,625 1,531,048 3,147,610 Handling charge income 158,740 459,090 765,417 Total 511,365 1,990,138 3,913,027 |
INTEREST INCOME (Tables)
INTEREST INCOME (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
INTEREST INCOME | |
Schedule of interest income | Year ended December 31, 2019 2020 2021 (HK$ in thousands) Interest income from: Margin financing 221,648 497,975 1,720,473 Securities lending 37,202 73,792 397,505 IPO financing 12,658 184,226 200,567 Bank deposits 187,223 208,556 197,390 Bridge loan 6,172 1,078 1,872 Other financing — — 391 Total 464,903 965,627 2,518,198 |
OTHER INCOME (Tables)
OTHER INCOME (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
OTHER INCOME | |
Schedule of other income | Year ended December 31, 2019 2020 2021 (HK$ in thousands) Currency exchange service income 4,670 67,000 201,030 IPO subscription service charge income 26,537 159,682 169,336 Enterprise public relations service charge income 16,156 29,988 96,327 Underwriting fee income 19,579 30,797 86,880 Funds distribution service income 10,447 42,658 68,856 Market information and data income 2,692 18,463 43,921 Others 5,206 6,469 17,745 Total 85,287 355,057 684,095 |
BROKERAGE COMMISSION AND HAND_4
BROKERAGE COMMISSION AND HANDLING CHARGE EXPENSES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
BROKERAGE COMMISSION AND HANDLING CHARGE EXPENSES | |
Schedule of brokerage commission and handling charge expenses | Year ended December 31, 2019 2020 2021 (HK$ in thousands) Commission, handling and settlement expenses 95,064 302,800 524,470 IPO subscription service charge expenses 5,486 58,686 47,689 Total 100,550 361,486 572,159 |
INTEREST EXPENSES (Tables)
INTEREST EXPENSES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
INTEREST EXPENSES | |
Schedule of interest expenses | Year ended December 31, 2019 2020 2021 (HK$ in thousands) Interest expenses for margin financing Due to banks 36,206 45,545 125,002 Due to other licensed financial institutions 28,636 38,246 51,179 Due to other parties 3,930 — — Interest expenses for securities borrowed Due to clients 1,298 7,984 132,034 Due to brokers 9,077 13,853 18,624 Interest expenses for IPO financing Due to banks 10,091 79,337 50,063 Due to other parties — 125 — Total 89,238 185,090 376,902 |
PROCESSING AND SERVICING COSTS
PROCESSING AND SERVICING COSTS (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
PROCESSING AND SERVICING COSTS | |
Schedule of processing and servicing costs | Year ended December 31, 2019 2020 2021 (HK$ in thousands) Cloud service fee 16,729 48,940 122,269 Market information and data fee 54,282 68,274 70,387 Data transmission fee 13,890 23,072 46,289 System cost 4,334 4,476 12,160 SMS service fee 1,523 2,511 1,197 Others 1,158 2,105 4,701 Total 91,916 149,378 257,003 |
NON-INTEREST COST AND EXPENSE_2
NON-INTEREST COST AND EXPENSES BY NATURE (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
NON-INTEREST COST AND EXPENSES BY NATURE | |
Summary of non-interest cost and expenses by nature | Year ended December 31, 2019 2020 2021 (HK$ in thousands) Employee compensation and benefits 327,441 682,068 1,248,682 Marketing and branding 130,528 297,170 1,163,495 Brokerage commission and handling charge expenses (Note 22) 100,550 361,486 572,159 Processing and servicing costs (Note 24) 91,916 149,378 257,003 Rental and other related expenses 64,756 64,594 106,459 Depreciation and amortization 16,547 27,231 36,435 Professional services 28,757 32,988 59,697 Others 23,867 42,956 111,675 Total 784,362 1,657,871 3,555,605 |
TAXATION (Tables)
TAXATION (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
TAXATION | |
Schedule of current and deferred portion of income tax expenses | Year ended December 31, 2019 2020 2021 (HK$ in thousands) Current income tax expenses 13,858 137,939 396,512 Deferred income tax benefit (1,572) (13,146) (21,431) Income tax expenses 12,286 124,793 375,081 |
Schedule of reconciliation between the income tax (benefit)/expenses computed by applying the Hong Kong enterprise tax rate to income before income taxes and actual provision | Year ended December 31, 2019 2020 2021 (HK$ in thousands) Income before income tax 178,493 1,450,623 3,185,291 Tax expenses at Hong Kong profit tax rate of 16.5% 29,451 239,353 524,907 Changes of valuation allowance 30,172 14,348 101,653 Tax effect of permanent differences 5,486 9,029 22,047 Effect of income tax in jurisdictions other than Hong Kong (4,143) (4,386) (32,182) Super deduction of research and development expenses (19,277) (29,081) (62,966) Final settlement differences (18,038) — (602) Income not subject to tax (1) (11,365) (104,470) (177,776) Income tax expenses 12,286 124,793 375,081 (1) This amount mainly represents tax exemption relating to the offshore income of Futu Securities. The brokerage commission income derived from executing the clients’ orders of US listed securities was treated as offshore-sourced and non-taxable on the basis that these transactions were executed outside Hong Kong. |
Schedule of components of the deferred tax assets and liabilities | As of December 31, 2020 2021 (HK$ in thousands) Deferred tax assets Net operating loss carryforwards 64,092 158,826 Accrued expenses and others 22,348 50,408 Less: valuation allowance (67,769) (169,422) Total deferred tax assets 18,671 39,812 Set-off of deferred tax liabilities pursuant to set-off provisions (1,497) (1,495) Net deferred tax assets 17,174 38,317 Total deferred tax liabilities 3,101 2,131 Set-off of deferred tax assets pursuant to set-off provisions (1,497) (1,495) Net deferred tax liabilities 1,604 636 |
Schedule of movement of valuation allowance | Year ended December 31, 2019 2020 2021 (HK$ in thousands) Balance at beginning of the year 23,249 53,421 67,769 Additions 30,188 30,935 108,347 Reversals (16) (16,587) (6,694) Balance at end of the year 53,421 67,769 169,422 |
REGULATORY REQUIREMENTS (Tables
REGULATORY REQUIREMENTS (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
REGULATORY REQUIREMENTS | |
Summary of the net capital, the requirement and the excess capital for the Group's broker-dealer subsidiaries | As of December 31, 2021 Net Capital/ Eligible Equity Requirement Excess (HK$ in thousands) Futu Securities 6,666,092 1,631,080 5,035,012 Futu Inc. 149,871 22,560 127,311 Futu Clearing Inc. 3,308,395 97,565 3,210,830 Futu Singapore pte Ltd. 345,424 156,646 188,778 Futu Insurance Brokers (Hong Kong) Limited 1,718 500 1,218 |
RELATED PARTY BALANCES AND TR_2
RELATED PARTY BALANCES AND TRANSACTIONS (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
RELATED PARTY BALANCES AND TRANSACTIONS | |
Schedule of Related Party Transactions | Name of Entity or Individual Relationship with the Group Mr. Leaf Hua Li and his spouse Principal shareholder and member of his immediate families Tencent Holdings Limited and its subsidiaries(“Tencent Group”) Principal shareholder Individual directors and officers and their spouses Directors or officers of the Group and members of their immediate families (a) Cash and cash equivalent As of December 31, 2020 2021 (HK$ in thousands) Cash and cash equivalent 149 372 The balance represents the cash deposited by the Group in various payment channels of Tencent Group for funding marketing campaigns, of which could be withdrawn on demand. (b) Amounts Due to Related Parties As of December 31, 2020 2021 (HK$ in thousands) Payables to Tencent Group in relation to ESOP management services 70,750 1,307 Payables in relation to cloud equipment and services from Tencent Group 16,062 85,887 SMS channel services from Tencent Group 357 265 87,169 87,459 (c) Transactions with Related Parties Year ended December 31, 2019 2020 2021 (HK$ in thousands) Equipment purchased 40,218 4,496 45,658 Software purchased — 508 3,869 Cloud service fee 16,729 48,940 114,386 SMS channel service fee 1,523 2,511 1,197 Advertising expenses 682 159 — Human resource services — — 135 ESOP management service income 550 595 640 59,702 57,209 165,885 |
GENERAL INFORMATION, ORGANIZA_2
GENERAL INFORMATION, ORGANIZATION AND PRINCIPAL ACTIVITIES (Details) | Dec. 31, 2021 | Dec. 18, 2007 |
"Futu Securities" or the "Operating Company" | ||
ORGANIZATION AND PRINCIPAL ACTIVITIES | ||
Percentage of Direct or Indirect Economic Interest, Subsidiaries | 100.00% | |
Futu Securities (Hong Kong) Limited | ||
ORGANIZATION AND PRINCIPAL ACTIVITIES | ||
Percentage of Direct or Indirect Economic Interest, Subsidiaries | 100.00% | |
Futu Network Technology Limited | ||
ORGANIZATION AND PRINCIPAL ACTIVITIES | ||
Percentage of Direct or Indirect Economic Interest, Subsidiaries | 100.00% | |
Futu Network Technology (Shenzhen) Co., Ltd | ||
ORGANIZATION AND PRINCIPAL ACTIVITIES | ||
Percentage of Direct or Indirect Economic Interest, Subsidiaries | 100.00% | |
Shen Si | ||
ORGANIZATION AND PRINCIPAL ACTIVITIES | ||
Percentage of Direct or Indirect Economic Interest, Subsidiaries | 100.00% | |
Futu Inc | ||
ORGANIZATION AND PRINCIPAL ACTIVITIES | ||
Percentage of Direct or Indirect Economic Interest, Subsidiaries | 100.00% | |
Shenzhen Futu | ||
ORGANIZATION AND PRINCIPAL ACTIVITIES | ||
Percentage of Direct or Indirect Economic Interest, Subsidiaries | 100.00% | |
Futu Clearing Inc. | ||
ORGANIZATION AND PRINCIPAL ACTIVITIES | ||
Percentage of Direct or Indirect Economic Interest, Subsidiaries | 100.00% | |
Futu Singapore Pte. Ltd | ||
ORGANIZATION AND PRINCIPAL ACTIVITIES | ||
Percentage of Direct or Indirect Economic Interest, Subsidiaries | 100.00% | |
Futu Securities (Australia) Ltd. | ||
ORGANIZATION AND PRINCIPAL ACTIVITIES | ||
Percentage of Direct or Indirect Economic Interest, Subsidiaries | 100.00% | |
Mr. Leaf Hua Li | Shenzhen Futu | ||
ORGANIZATION AND PRINCIPAL ACTIVITIES | ||
Percentage of equity interest (as a percent) | 85.00% | |
Ms. Lei Li | Shenzhen Futu | ||
ORGANIZATION AND PRINCIPAL ACTIVITIES | ||
Percentage of equity interest (as a percent) | 15.00% |
SIGNIFICANT ACCOUNTING POLICI_4
SIGNIFICANT ACCOUNTING POLICIES - Exclusive Option Agreement (Details) | 12 Months Ended |
Dec. 31, 2021CNY (¥)¥ / shares | |
SIGNIFICANT ACCOUNTING POLICIES | |
Purchase price for equity interests in Shenzhen Futu under exclusive option agreement | ¥ / shares | ¥ 1 |
Threshold of Shenzhen Futu disposes of Shenzhen Futu's material assets without prior written consent of Shen Si | ¥ | ¥ 500,000 |
SIGNIFICANT ACCOUNTING POLICI_5
SIGNIFICANT ACCOUNTING POLICIES - VIE Companies (Details) $ in Thousands, $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2021HKD ($) | Dec. 31, 2021USD ($) | Dec. 31, 2020HKD ($) | Dec. 31, 2019HKD ($) | Dec. 31, 2021USD ($) | |
Variable Interest Entity [Line Items] | |||||
Total assets | $ 101,538,514 | $ 71,337,767 | $ 13,018,425 | ||
Total liabilities | 80,552,955 | 63,030,077 | $ 10,327,832 | ||
Total operating revenue | 7,115,320 | $ 912,267 | 3,310,822 | $ 1,061,555 | |
Net income | 2,810,210 | 360,302 | 1,325,523 | 165,664 | |
Net cash (used in)/generated from operating activities | 6,011,971 | 770,803 | 20,456,717 | 1,969,434 | |
Net cash generated from/(used in) investing activities | (963,565) | (123,539) | (244,175) | (160,057) | |
Net (decrease)/increase in cash, cash equivalents and restricted cash | 15,769,754 | 2,021,866 | 28,618,321 | 2,916,333 | |
Cash, cash equivalents and restricted cash at beginning of the year | 43,521,758 | 5,579,999 | 14,903,437 | 11,987,104 | |
Cash, cash equivalents and restricted cash at end of the year | 59,291,512 | $ 7,601,865 | 43,521,758 | 14,903,437 | |
VIEs and its subsidiary | |||||
Variable Interest Entity [Line Items] | |||||
Total assets | 254,602 | 162,897 | |||
Total liabilities | 176,204 | 145,693 | |||
Total operating revenue | 210,161 | 103,433 | 65,681 | ||
Net income | 52,741 | 20,727 | 8,807 | ||
Net cash (used in)/generated from operating activities | 2,340 | (14,847) | (2,502) | ||
Net cash generated from/(used in) investing activities | (3,327) | 17,104 | 2,233 | ||
Net (decrease)/increase in cash, cash equivalents and restricted cash | (987) | 2,257 | (269) | ||
Cash, cash equivalents and restricted cash at beginning of the year | 3,738 | 1,481 | 1,750 | ||
Cash, cash equivalents and restricted cash at end of the year | $ 2,751 | $ 3,738 | $ 1,481 |
SIGNIFICANT ACCOUNTING POLICI_6
SIGNIFICANT ACCOUNTING POLICIES - Transactions between the VIE and other entities in the consolidated group (Details) - VIEs and its subsidiary $ in Thousands, ¥ in Millions | 12 Months Ended | |||||
Dec. 31, 2021HKD ($) | Dec. 31, 2020HKD ($) | Dec. 31, 2019HKD ($) | Dec. 31, 2021CNY (¥) | Dec. 31, 2020CNY (¥) | Dec. 31, 2019CNY (¥) | |
Variable Interest Entity [Line Items] | ||||||
Due from internal companies | $ 190,424 | $ 117,085 | ||||
Due to internal companies | 80,435 | 72,506 | ||||
Revenues earned | 187,774 | 94,500 | $ 63,742 | |||
Repayment of advances | $ 0 | $ 0 | $ 32,740 | |||
Registered capital | ¥ | ¥ 10 | ¥ 10 | ¥ 10 |
SIGNIFICANT ACCOUNTING POLICI_7
SIGNIFICANT ACCOUNTING POLICIES - Convenience Translation (Details) | Dec. 31, 2021$ / $ |
Convenience Translation | |
Exchange rate of HK$ per US$1.00 | 7.7996 |
SIGNIFICANT ACCOUNTING POLICI_8
SIGNIFICANT ACCOUNTING POLICIES - Current Expected Credit Losses (Details) $ in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021HKD ($) | Dec. 31, 2021USD ($) | Dec. 31, 2020HKD ($) | |
SIGNIFICANT ACCOUNTING POLICIES | |||
Expected credit loss expenses | $ 3,200 | $ 410 | $ 9,075 |
SIGNIFICANT ACCOUNTING POLICI_9
SIGNIFICANT ACCOUNTING POLICIES - Leases (Details) - HKD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Lessee, Lease, Description [Line Items] | ||
Weighted-average remaining lease term | 3 years | 4 years |
Weighted-average discount rate | 4.71% | 4.75% |
Right-of-use assets obtained under operating leases | $ 108,949 | $ 85,827 |
Minimum | ||
Lessee, Lease, Description [Line Items] | ||
Remaining terms | 1 year | |
Maximum | ||
Lessee, Lease, Description [Line Items] | ||
Remaining terms | 5 years |
SIGNIFICANT ACCOUNTING POLIC_10
SIGNIFICANT ACCOUNTING POLICIES - Property and Equipment, net (Details) $ in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021HKD ($) | Dec. 31, 2021USD ($) | Dec. 31, 2020HKD ($) | |
PROPERTY AND EQUIPMENT, NET | |||
Assets Sold under Agreements to Repurchase, Carrying Amount | $ 4,467,861 | $ 572,832 | $ 5,453,037 |
Computers and equipment | |||
PROPERTY AND EQUIPMENT, NET | |||
Residual rate (as a percent) | 5.00% | 5.00% | |
Computers and equipment | Minimum | |||
PROPERTY AND EQUIPMENT, NET | |||
Estimated useful lives | P3Y | ||
Computers and equipment | Maximum | |||
PROPERTY AND EQUIPMENT, NET | |||
Estimated useful lives | P5Y | ||
Furniture and fixtures | |||
PROPERTY AND EQUIPMENT, NET | |||
Residual rate (as a percent) | 5.00% | 5.00% | |
Furniture and fixtures | Minimum | |||
PROPERTY AND EQUIPMENT, NET | |||
Estimated useful lives | P3Y | ||
Furniture and fixtures | Maximum | |||
PROPERTY AND EQUIPMENT, NET | |||
Estimated useful lives | P5Y | ||
Office equipment | |||
PROPERTY AND EQUIPMENT, NET | |||
Residual rate (as a percent) | 5.00% | 5.00% | |
Office equipment | Minimum | |||
PROPERTY AND EQUIPMENT, NET | |||
Estimated useful lives | P3Y | ||
Office equipment | Maximum | |||
PROPERTY AND EQUIPMENT, NET | |||
Estimated useful lives | P5Y | ||
Vehicle | |||
PROPERTY AND EQUIPMENT, NET | |||
Estimated useful lives | P5Y | ||
Residual rate (as a percent) | 5.00% | 5.00% | |
Office building | |||
PROPERTY AND EQUIPMENT, NET | |||
Estimated useful lives | P30Y | ||
Residual rate (as a percent) | 5.00% | 5.00% |
SIGNIFICANT ACCOUNTING POLIC_11
SIGNIFICANT ACCOUNTING POLICIES - Intangible Assets (Details) | 12 Months Ended |
Dec. 31, 2021 | |
Computer software | |
Intangible assets | |
Estimated useful lives | 5 years |
SIGNIFICANT ACCOUNTING POLIC_12
SIGNIFICANT ACCOUNTING POLICIES - Long-term investments (Details) $ in Thousands, $ in Thousands | 1 Months Ended | 12 Months Ended | ||||
Dec. 31, 2021HKD ($) | Jan. 31, 2019HKD ($) | Dec. 31, 2021HKD ($) | Dec. 31, 2021USD ($) | Dec. 31, 2020HKD ($) | Dec. 31, 2019HKD ($) | |
Schedule of Equity Method Investments [Line Items] | ||||||
Total consideration | $ 23,394 | $ 2,999 | $ 0 | $ 6,709 | ||
Impairment from equity method investments | 5,888 | |||||
Zhixiang Technology (Shenzhen) Co., Ltd | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Equity interest acquired | 20.00% | |||||
Total consideration | $ 6,709 | |||||
Impairment from equity method investments | $ 5,888 | $ 5,888 | ||||
TH Fund LP | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Equity interest acquired | 10.00% | 20.00% | 10.00% | 10.00% | ||
Total consideration | $ 7,798 | |||||
Impairment from equity method investments | $ 0 | |||||
Newflow Amity Fund I, LP | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Equity interest acquired | 2.75% | 2.75% | 2.75% | |||
Total consideration | $ 15,596 | |||||
Impairment from equity method investments | $ 0 |
SIGNIFICANT ACCOUNTING POLIC_13
SIGNIFICANT ACCOUNTING POLICIES - Impairment of Long-lived Assets (Details) - HKD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
SIGNIFICANT ACCOUNTING POLICIES | |||
Impairment charge | $ 0 | $ 5,888 | $ 0 |
SIGNIFICANT ACCOUNTING POLIC_14
SIGNIFICANT ACCOUNTING POLICIES - Customer loyalty program (Details) $ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2021HKD ($) | Dec. 31, 2021USD ($) | Dec. 31, 2020HKD ($) | Dec. 31, 2019HKD ($) | |
Brokerage commission income, gross | $ 3,640,845 | $ 1,807,203 | $ 441,669 | |
Less: revenue netted or deferred | (493,235) | (276,155) | (89,044) | |
Brokerage commission income, net | 3,147,610 | 1,531,048 | 352,625 | |
Selling and marketing expenses | 1,392,070 | $ 178,480 | 385,320 | $ 164,701 |
Customers loyalty program | ||||
Contract liabilities | $ 8,968 | $ 8,249 |
SIGNIFICANT ACCOUNTING POLIC_15
SIGNIFICANT ACCOUNTING POLICIES - Share-Based Compensation (Details) - Share Options | 1 Months Ended | 12 Months Ended |
Oct. 31, 2014 | Dec. 31, 2021 | |
Minimum | ||
SHARE-BASED COMPENSATION | ||
Options vesting period | 4 years | 4 years |
Maximum | ||
SHARE-BASED COMPENSATION | ||
Options vesting period | 5 years | 5 years |
SIGNIFICANT ACCOUNTING POLIC_16
SIGNIFICANT ACCOUNTING POLICIES - Taxation (Details) | 36 Months Ended |
Dec. 31, 2021HKD ($) | |
Uncertain tax positions | |
Interest and penalties associated with uncertain tax positions | $ 0 |
SIGNIFICANT ACCOUNTING POLIC_17
SIGNIFICANT ACCOUNTING POLICIES - Segment Reporting (Details) | 12 Months Ended |
Dec. 31, 2021segment | |
Segment Reporting | |
Number of reportable segments | 1 |
SIGNIFICANT ACCOUNTING POLIC_18
SIGNIFICANT ACCOUNTING POLICIES - Significant Risks and Uncertainties (Details) $ in Millions, $ in Millions | 12 Months Ended | |||
Dec. 31, 2021HKD ($) | Dec. 31, 2021USD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2020HKD ($) | |
Currency risk | ||||
Gradual increase in basis | 1.00% | |||
pre-tax income | $ 246.4 | $ 31.6 | ||
Gradual decrease in basis | 1.00% | 1.00% | ||
Pre-tax loss | $ 246.4 | $ 31.6 | ||
China, Yuan Renminbi | ||||
Currency risk | ||||
Net liabilities | $ 2,374.8 | $ 262.9 | ||
Estimated depreciation of Renminbi against the U.S. dollar (as a percent) | 10.00% | 10.00% | ||
Appreciation in pre tax income | $ 30.5 | $ 3.4 | ||
Estimated appreciation of Renminbi against the U.S. dollar (as a percent) | 10.00% | 10.00% | ||
Depreciation in pre tax income | $ 30.5 | $ 3.4 |
FINANCIAL ASSETS AND FINANCIA_3
FINANCIAL ASSETS AND FINANCIAL LIABILITIES - Financial Assets and Liabilities Measured at value (Details) $ in Thousands | Dec. 31, 2021HKD ($) |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Short-term investments | $ 1,169,741 |
Other financial assets | 598 |
Total financial assets, measured at fair value | 1,170,339 |
Level 1 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Short-term investments | 1,169,741 |
Total financial assets, measured at fair value | 1,169,741 |
Level 2 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Other financial assets | 598 |
Total financial assets, measured at fair value | $ 598 |
FINANCIAL ASSETS AND FINANCIA_4
FINANCIAL ASSETS AND FINANCIAL LIABILITIES - Transfers Between Level 1 and Level 2 (Details) - HKD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
FINANCIAL ASSETS AND FINANCIAL LIABILITIES | ||
Fair value asset transferred from level 1 to level 2 | $ 0 | $ 0 |
Fair value asset transferred from level 2 to level 1 | 0 | 0 |
Fair value liabilities transferred from level 1 to level 2 | 0 | 0 |
Fair value liabilities transferred from level 2 to level 1 | $ 0 | $ 0 |
FINANCIAL ASSETS AND FINANCIA_5
FINANCIAL ASSETS AND FINANCIAL LIABILITIES - Financial Assets and Liabilities Not Measured at Fair Value (Details) - HKD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Carrying Value | ||
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items] | ||
Total financial assets, not measured at fair value | $ 99,819,887 | $ 70,975,828 |
Total financial liabilities, not measured at fair value | 79,303,777 | 62,395,679 |
Fair Value | ||
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items] | ||
Total financial assets, not measured at fair value | 99,819,887 | 70,975,828 |
Total financial liabilities, not measured at fair value | 79,303,777 | 62,395,679 |
Cash and cash equivalents | Carrying Value | ||
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items] | ||
Total financial assets, not measured at fair value | 4,555,096 | 1,034,668 |
Cash and cash equivalents | Fair Value | ||
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items] | ||
Total financial assets, not measured at fair value | 4,555,096 | 1,034,668 |
Cash held on behalf of clients | Carrying Value | ||
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items] | ||
Total financial assets, not measured at fair value | 54,734,351 | 42,487,090 |
Cash held on behalf of clients | Fair Value | ||
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items] | ||
Total financial assets, not measured at fair value | 54,734,351 | 42,487,090 |
Restricted Cash | Carrying Value | ||
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items] | ||
Total financial assets, not measured at fair value | 2,065 | |
Restricted Cash | Fair Value | ||
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items] | ||
Total financial assets, not measured at fair value | 2,065 | |
Securities purchased under resale agreements | Carrying Value | ||
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items] | ||
Total financial assets, not measured at fair value | 106,203 | |
Securities purchased under resale agreements | Fair Value | ||
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items] | ||
Total financial assets, not measured at fair value | 106,203 | |
Term deposit | Carrying Value | ||
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items] | ||
Total financial assets, not measured at fair value | 300,000 | |
Term deposit | Fair Value | ||
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items] | ||
Total financial assets, not measured at fair value | 300,000 | |
Loans and advances | Carrying Value | ||
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items] | ||
Total financial assets, not measured at fair value | 29,587,306 | 18,825,366 |
Loans and advances | Fair Value | ||
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items] | ||
Total financial assets, not measured at fair value | 29,587,306 | 18,825,366 |
Receivables: Clients | Carrying Value | ||
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items] | ||
Total financial assets, not measured at fair value | 469,577 | 735,145 |
Receivables: Clients | Fair Value | ||
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items] | ||
Total financial assets, not measured at fair value | 469,577 | 735,145 |
Receivables: Brokers | Carrying Value | ||
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items] | ||
Total financial assets, not measured at fair value | 7,893,927 | 5,780,461 |
Receivables: Brokers | Fair Value | ||
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items] | ||
Total financial assets, not measured at fair value | 7,893,927 | 5,780,461 |
Receivables: Clearing organizations | Carrying Value | ||
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items] | ||
Total financial assets, not measured at fair value | 1,961,121 | 1,243,928 |
Total financial liabilities, not measured at fair value | 324,266 | |
Receivables: Clearing organizations | Fair Value | ||
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items] | ||
Total financial assets, not measured at fair value | 1,961,121 | 1,243,928 |
Total financial liabilities, not measured at fair value | 324,266 | |
Receivables: Fund management companies and fund distributors | Carrying Value | ||
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items] | ||
Total financial assets, not measured at fair value | 72,340 | 297,622 |
Receivables: Fund management companies and fund distributors | Fair Value | ||
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items] | ||
Total financial assets, not measured at fair value | 72,340 | 297,622 |
Receivables: Interest | Carrying Value | ||
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items] | ||
Total financial assets, not measured at fair value | 50,829 | 19,876 |
Receivables: Interest | Fair Value | ||
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items] | ||
Total financial assets, not measured at fair value | 50,829 | 19,876 |
Other financial assets | Carrying Value | ||
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items] | ||
Total financial assets, not measured at fair value | 387,072 | 251,672 |
Other financial assets | Fair Value | ||
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items] | ||
Total financial assets, not measured at fair value | 387,072 | 251,672 |
Amounts due to related parties | Carrying Value | ||
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items] | ||
Total financial liabilities, not measured at fair value | 87,459 | 87,169 |
Amounts due to related parties | Fair Value | ||
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items] | ||
Total financial liabilities, not measured at fair value | 87,459 | 87,169 |
Payables: Clients | Carrying Value | ||
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items] | ||
Total financial liabilities, not measured at fair value | 59,127,439 | 46,062,842 |
Payables: Clients | Fair Value | ||
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items] | ||
Total financial liabilities, not measured at fair value | 59,127,439 | 46,062,842 |
Payables: Brokers | Carrying Value | ||
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items] | ||
Total financial liabilities, not measured at fair value | 7,599,233 | 4,533,581 |
Payables: Brokers | Fair Value | ||
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items] | ||
Total financial liabilities, not measured at fair value | 7,599,233 | 4,533,581 |
Payables: Clearing organizations | Carrying Value | ||
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items] | ||
Total financial liabilities, not measured at fair value | 393,782 | |
Payables: Clearing organizations | Fair Value | ||
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items] | ||
Total financial liabilities, not measured at fair value | 393,782 | |
Payables: Fund management companies and fund distributors | Carrying Value | ||
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items] | ||
Total financial liabilities, not measured at fair value | 56,690 | 127,442 |
Payables: Fund management companies and fund distributors | Fair Value | ||
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items] | ||
Total financial liabilities, not measured at fair value | 56,690 | 127,442 |
Payables: Interest | Carrying Value | ||
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items] | ||
Total financial liabilities, not measured at fair value | 15,359 | 5,493 |
Payables: Interest | Fair Value | ||
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items] | ||
Total financial liabilities, not measured at fair value | 15,359 | 5,493 |
Payables: Borrowings | Carrying Value | ||
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items] | ||
Total financial liabilities, not measured at fair value | 6,357,405 | 5,482,818 |
Payables: Borrowings | Fair Value | ||
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items] | ||
Total financial liabilities, not measured at fair value | 6,357,405 | 5,482,818 |
Securities sold under agreement to repurchase | Carrying Value | ||
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items] | ||
Total financial liabilities, not measured at fair value | 4,467,861 | 5,453,037 |
Securities sold under agreement to repurchase | Fair Value | ||
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items] | ||
Total financial liabilities, not measured at fair value | 4,467,861 | 5,453,037 |
Operating lease liabilities | Carrying Value | ||
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items] | ||
Total financial liabilities, not measured at fair value | 260,579 | 222,231 |
Operating lease liabilities | Fair Value | ||
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items] | ||
Total financial liabilities, not measured at fair value | 260,579 | 222,231 |
Other financial liabilities | Carrying Value | ||
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items] | ||
Total financial liabilities, not measured at fair value | 937,970 | 96,800 |
Other financial liabilities | Fair Value | ||
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items] | ||
Total financial liabilities, not measured at fair value | $ 937,970 | $ 96,800 |
FINANCIAL ASSETS AND FINANCIA_6
FINANCIAL ASSETS AND FINANCIAL LIABILITIES - Netting of Financial Assets (Details) - Amounts due from clearing organizations - HKD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Effects of offsetting on the balance sheet | ||
Gross amounts | $ 7,596,090 | $ 12,614,684 |
Gross amounts set off in the balance sheet | (5,634,969) | (11,370,756) |
Net amounts presented in the balance sheet | 1,961,121 | 1,243,928 |
Related amounts not offset | ||
Net amount | $ 1,961,121 | $ 1,243,928 |
FINANCIAL ASSETS AND FINANCIA_7
FINANCIAL ASSETS AND FINANCIAL LIABILITIES - Netting of Financial Liabilities (Details) - Amounts due to clearing organizations - HKD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Effects of offsetting on the balance sheet | ||
Gross amounts | $ 6,028,751 | $ 11,695,022 |
Gross amounts set off in the balance sheet | (5,634,969) | (11,370,756) |
Net amounts presented in the balance sheet | 393,782 | 324,266 |
Related amounts not offset | ||
Net amount | $ 393,782 | $ 324,266 |
SHORT-TERM INVESTMENTS (Details
SHORT-TERM INVESTMENTS (Details) - Dec. 31, 2021 $ in Thousands, $ in Thousands | HKD ($) | USD ($) |
Cash and Cash Equivalents [Line Items] | ||
Short-term investments | $ 1,169,741 | $ 149,974 |
Money market funds | ||
Cash and Cash Equivalents [Line Items] | ||
Short-term investments | $ 1,169,741 |
SHORT-TERM INVESTMENTS - Additi
SHORT-TERM INVESTMENTS - Additional information (Details) - HKD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
SHORT-TERM INVESTMENTS | |||
Investment income | $ 0 | $ 665 | $ 707 |
Realized gain from short-term investments | $ 665 | $ 707 |
LEASE - Balances reported in th
LEASE - Balances reported in the consolidated balance sheets (Details) $ in Thousands, $ in Thousands | Dec. 31, 2021HKD ($) | Dec. 31, 2021USD ($) | Dec. 31, 2020HKD ($) |
Balances reported in the consolidated balance sheets related to the leases | |||
Operating lease right-of-use assets | $ 243,859 | $ 31,266 | $ 208,863 |
Operating lease liabilities | $ 260,579 | $ 222,231 |
LEASE - Operating lease cost re
LEASE - Operating lease cost reported in the consolidated statements (Details) - HKD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Operating lease cost | |||
Operating lease cost | $ 106,459 | $ 64,594 | $ 64,756 |
LEASE - Undiscounted cash flows
LEASE - Undiscounted cash flows of the Group's leases (Details) - HKD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Undiscounted cash flows of the leases to the present value of its operating lease payments | ||
2022 | $ 102,767 | |
2023 | 96,326 | |
2024 | 38,306 | |
2025 | 30,688 | |
2026 and thereafter | 7,455 | |
Total undiscounted operating lease payments | 275,542 | |
Less: imputed interest | (14,963) | |
Present value of operating lease liabilities | $ 260,579 | $ 222,231 |
LOANS AND ADVANCES (Details)
LOANS AND ADVANCES (Details) $ in Thousands, $ in Thousands | Dec. 31, 2021HKD ($) | Dec. 31, 2021USD ($) | Dec. 31, 2020HKD ($) |
Total | $ 29,587,306 | $ 3,793,439 | $ 18,825,366 |
Margin loans | |||
Total | 29,084,958 | 18,424,972 | |
IPO loans | |||
Total | 34,348 | $ 400,394 | |
Other advances | |||
Total | $ 468,000 |
PROPERTY AND EQUIPMENT, NET (De
PROPERTY AND EQUIPMENT, NET (Details) - HKD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
PROPERTY AND EQUIPMENT, NET | |||
Gross carrying amount | $ 268,192 | $ 165,634 | |
Less: accumulated depreciation | (92,435) | (57,318) | |
Property and equipment, net | 175,757 | 108,316 | |
Depreciation expenses on property and equipment | 34,118 | 25,792 | $ 15,647 |
Computers and equipment | |||
PROPERTY AND EQUIPMENT, NET | |||
Gross carrying amount | 109,989 | 60,039 | |
Less: accumulated depreciation | (29,852) | (17,295) | |
Furniture and fixtures | |||
PROPERTY AND EQUIPMENT, NET | |||
Gross carrying amount | 64,507 | 34,704 | |
Less: accumulated depreciation | (23,828) | (13,738) | |
Office equipment | |||
PROPERTY AND EQUIPMENT, NET | |||
Gross carrying amount | 64,822 | 42,276 | |
Less: accumulated depreciation | (35,860) | (24,282) | |
Office building | |||
PROPERTY AND EQUIPMENT, NET | |||
Gross carrying amount | 28,239 | 27,983 | |
Less: accumulated depreciation | (2,291) | (1,403) | |
Vehicle | |||
PROPERTY AND EQUIPMENT, NET | |||
Gross carrying amount | 635 | 632 | |
Less: accumulated depreciation | $ (604) | $ (600) |
INTANGIBLE ASSETS, NET (Details
INTANGIBLE ASSETS, NET (Details) - HKD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
INTANGIBLE ASSETS, NET | |||
Gross carrying amount | $ 23,495 | $ 14,088 | |
Less: accumulated amortization | (6,277) | (3,872) | |
Intangible assets, net | 17,218 | 10,216 | |
Amortization expense on intangible assets | 2,317 | 1,439 | $ 900 |
Computer software | |||
INTANGIBLE ASSETS, NET | |||
Gross carrying amount | 15,596 | 8,525 | |
Less: accumulated amortization | (5,172) | (3,041) | |
License | |||
INTANGIBLE ASSETS, NET | |||
Gross carrying amount | 4,261 | 2,000 | |
Others | |||
INTANGIBLE ASSETS, NET | |||
Gross carrying amount | 3,638 | 3,563 | |
Less: accumulated amortization | $ (1,105) | $ (831) |
LONG-TERM INVESTMENTS - equity
LONG-TERM INVESTMENTS - equity method investments and equity investments (Details) $ in Thousands, $ in Thousands | Dec. 31, 2021HKD ($) | Dec. 31, 2021USD ($) | Dec. 31, 2020HKD ($) | Jan. 31, 2019HKD ($) |
Long-term Investments | ||||
Equity method investments (1) | $ 7,798 | $ 0 | $ 6,709 | |
Equity investments without readily determinable fair values (2) | 15,596 | |||
Total | $ 23,394 | $ 2,999 |
LONG-TERM INVESTMENTS Additiona
LONG-TERM INVESTMENTS Additional Information (Details) - HKD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 | Jan. 31, 2019 |
Schedule of Equity Method Investments [Line Items] | |||
Equity method investments (1) | $ 7,798 | $ 0 | $ 6,709 |
Impairment provision of equity method investments | 0 | $ 5,888 | |
Equity investments without readily determinable fair values (2) | 15,596 | ||
Impairment provision of equity investments without readily determinable fair values | $ 0 | $ 0 | |
TH Fund LP | |||
Schedule of Equity Method Investments [Line Items] | |||
Percentage of equity interest (as a percent) | 10.00% | 20.00% | |
Newflow Amity Fund I, LP | |||
Schedule of Equity Method Investments [Line Items] | |||
Percentage of equity interest (as a percent) | 2.75% |
OTHER ASSETS (Details)
OTHER ASSETS (Details) $ in Thousands, $ in Thousands | Dec. 31, 2021HKD ($) | Dec. 31, 2021USD ($) | Dec. 31, 2020HKD ($) |
Current: | |||
Staff advances | $ 26,527 | $ 36,468 | |
Others | 55,067 | 70,419 | |
Total | 81,594 | $ 10,461 | 106,887 |
Non-current: | |||
Refundable Deposit | 337,513 | 150,733 | |
Property and equipment, net | 175,757 | 108,316 | |
Deferred tax assets | 38,317 | 17,174 | |
Intangible assets, net | 17,218 | 10,216 | |
Total | $ 568,805 | $ 72,928 | $ 286,439 |
BORROWINGS (Details)
BORROWINGS (Details) $ in Thousands, $ in Thousands | Dec. 31, 2021HKD ($) | Dec. 31, 2021USD ($) | Dec. 31, 2020HKD ($) |
Borrowings | |||
Total borrowings | $ 6,357,405 | $ 815,094 | $ 5,482,818 |
Banks | |||
Borrowings | |||
Total borrowings | $ 6,357,405 | 5,182,620 | |
Other financial institutions | |||
Borrowings | |||
Total borrowings | $ 300,198 |
BORROWINGS - Additional Informa
BORROWINGS - Additional Information (Details) - HKD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Borrowings | ||
Borrowings weighted average interest rate | 1.15% | 1.82% |
Banks | ||
Borrowings | ||
Unused borrowing facilities | $ 14,695,095 | $ 3,285,909 |
ACCRUED EXPENSES AND OTHER LI_3
ACCRUED EXPENSES AND OTHER LIABILITIES (Details) $ in Thousands, $ in Thousands | Dec. 31, 2021HKD ($) | Dec. 31, 2021USD ($) | Dec. 31, 2020HKD ($) |
Current: | |||
Payables to corporate clients in relation to ESOP management services | $ 870,283 | $ 17,801 | |
Accrued payroll and welfare expenses | 531,409 | 317,428 | |
Tax payables | 494,744 | 173,911 | |
Accrued advertising and promotion fee | 152,305 | 37,652 | |
Temporary payables in relation to fund distribution services | 48,240 | 70,793 | |
Accrued professional fee | 22,066 | 6,952 | |
Stamp duty, trading levy and trading fee payables | 19,447 | 26,007 | |
Accrued market information and data fee | 12,832 | 13,143 | |
Contract liabilities - current | 3,058 | 2,958 | |
Refund from depositary bank - current | 2,773 | 2,756 | |
Others | 19,056 | 47,782 | |
Total | 2,176,213 | $ 279,015 | 717,183 |
Non-current: | |||
Contract liabilities - non-current | 5,910 | 5,291 | |
Refund from depositary bank - non-current | 4,389 | 7,120 | |
Deferred tax liabilities (Note 26) | 636 | 1,604 | |
Total | $ 10,935 | $ 1,404 | $ 14,015 |
ORDINARY SHARES AND TREASURY _2
ORDINARY SHARES AND TREASURY STOCK (Details) $ / shares in Units, $ in Thousands, $ in Thousands | Apr. 24, 2021USD ($)shares | Apr. 24, 2021HKD ($)shares | Dec. 03, 2020shares | Aug. 22, 2020USD ($)shares | Aug. 22, 2020HKD ($)shares | Mar. 08, 2019Vote$ / sharesshares | Sep. 22, 2016Vote$ / sharesshares | Dec. 31, 2020USD ($)$ / sharesshares | Dec. 31, 2020HKD ($) | Dec. 31, 2021USD ($)$ / sharesshares | Dec. 31, 2021HKD ($)shares | Dec. 31, 2020HKD ($)shares | Dec. 31, 2019HKD ($) | Nov. 03, 2021shares | Jun. 11, 2021shares | Mar. 31, 2019shares | Sep. 21, 2016$ / sharesshares |
Class of Stock [Line Items] | |||||||||||||||||
Ordinary shares, shares authorized | 403,750,000 | 807,500 | |||||||||||||||
Ordinary shares, par value (in dollars per share) | $ / shares | $ 0.00001 | $ 0.00001 | $ 0.0050 | ||||||||||||||
Number of vote | Vote | 1 | ||||||||||||||||
Net proceeds after deducting commissions and offering expenses | $ 1,391,933 | $ 10,856,524 | $ 2,339,718 | $ 1,259,317 | |||||||||||||
Number of shares repurchased | 1,178,755,000 | 1,178,755,000 | |||||||||||||||
Average price of share repurchase | $ / shares | $ 5.13 | ||||||||||||||||
Total consideration | $ 151,200 | $ 1,178,800 | |||||||||||||||
ADR | |||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||
Number of shares authorized to repurchase | 29,462,760 | ||||||||||||||||
Number of shares repurchased | 29,462,760 | 29,462,760 | |||||||||||||||
Average price of share repurchase | $ / shares | $ 41.04 | ||||||||||||||||
ADR | Maximum | |||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||
Number of shares authorized to repurchase | 300,000,000 | ||||||||||||||||
Class A ordinary shares | |||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||
Ordinary shares, shares authorized | 48,700,000,000 | 48,700,000,000 | 48,700,000,000 | ||||||||||||||
Ordinary shares, par value (in dollars per share) | $ / shares | $ 0.00001 | $ 0.00001 | $ 0.00001 | ||||||||||||||
Number of vote | Vote | 1 | ||||||||||||||||
Issuance of ordinary shares (in shares) | 87,400,000 | 87,400,000 | 76,000,000 | 76,000,000 | |||||||||||||
Net proceeds after deducting commissions and offering expenses | $ 1,398,000 | $ 10,857,000 | $ 301,800 | $ 2,339,700 | |||||||||||||
Number of shares issued and outstanding preferred shares converted into ordinary shares | 237,129,043 | ||||||||||||||||
Redesignation of ordinary shares into Class B ordinary shares (in shares) | 50,000,000 | ||||||||||||||||
Shares issued upon exercise of employee share options (in shares) | 5,875,592 | 5,875,592 | 5,048,824 | ||||||||||||||
Shares issued upon vest of outstanding restricted shares units | 929,672 | 929,672 | 0 | ||||||||||||||
Class A ordinary shares | Concurrent Private Placement | |||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||
Aggregate gross proceeds from private placement | $ 262,500 | $ 2,035,000 | |||||||||||||||
Price per share | $ / shares | $ 4.89751 | ||||||||||||||||
Class B ordinary shares | |||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||
Ordinary shares, shares authorized | 800,000,000 | 800,000,000 | 800,000,000 | ||||||||||||||
Ordinary shares, par value (in dollars per share) | $ / shares | $ 0.00001 | $ 0.00001 | |||||||||||||||
Number of vote | Vote | 20 | ||||||||||||||||
Ordinary shares, number of shares undesignated with par value | 500,000,000 | ||||||||||||||||
Number of shares issued and outstanding preferred shares converted into ordinary shares | 140,802,051 | ||||||||||||||||
Pre-funded warrants | Class A ordinary shares | |||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||
Warrants to purchase shares of ordinary shares | 53,600,000 | 53,599,890 | |||||||||||||||
Shares cancelled | 110 | ||||||||||||||||
Warrants exercise price | $ / shares | $ 0.00001 | ||||||||||||||||
Pre-funded warrants | Class A ordinary shares | Concurrent Private Placement | |||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||
Warrants to purchase shares of ordinary shares | 53,600,000 | 53,599,890 | |||||||||||||||
Shares cancelled | 110 | ||||||||||||||||
Warrants exercise price | $ / shares | $ 0.00001 |
RESTRICTED NET ASSETS (Details)
RESTRICTED NET ASSETS (Details) - HKD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
RESTRICTED NET ASSETS | ||
Required percentage of after-tax-profit under PRC GAAP to be set aside as a general reserve fund | 10.00% | |
Required registered capital ratio to de-force compulsory net profit allocation to general reserve fund | 50.00% | |
Restricted net assets | $ 304,377 | $ 229,035 |
Restricted net assets as a percentage of consolidated net assets | 25.00% |
REDEEMABLE CONVERTIBLE PREFER_2
REDEEMABLE CONVERTIBLE PREFERRED SHARES (Details) | Mar. 08, 2019Vote | Sep. 22, 2016Vote | Mar. 31, 2019shares | Dec. 31, 2017$ / shares | Dec. 31, 2016$ / shares | Dec. 31, 2015$ / shares | Dec. 31, 2014$ / shares |
Temporary Equity [Line Items] | |||||||
Preferred shares, par value | $ / shares | $ 0.00001 | $ 0.00001 | $ 0.00001 | $ 0.00001 | |||
Preferred shares, conversion and redesignation, ratio | 1 | ||||||
Number of votes per share | 1 | ||||||
Class A ordinary shares | |||||||
Temporary Equity [Line Items] | |||||||
Number of votes per share | 1 | ||||||
Shares issued for each shares converted | shares | 237,129,043 | ||||||
Class B ordinary shares | |||||||
Temporary Equity [Line Items] | |||||||
Number of votes per share | 20 | ||||||
Shares issued for each shares converted | shares | 140,802,051 |
SHARE-BASED COMPENSATION - Shar
SHARE-BASED COMPENSATION - Share-based compensation expenses (Details) $ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2021HKD ($) | Dec. 31, 2021USD ($) | Dec. 31, 2020HKD ($) | Dec. 31, 2019HKD ($) | |
SHARE-BASED COMPENSATION | ||||
Total share-based compensation expenses | $ 98,913 | $ 12,682 | $ 32,573 | $ 15,967 |
Research and development expenses | ||||
SHARE-BASED COMPENSATION | ||||
Total share-based compensation expenses | 75,755 | 20,579 | 12,055 | |
General and administrative expenses | ||||
SHARE-BASED COMPENSATION | ||||
Total share-based compensation expenses | 14,020 | 10,354 | 3,374 | |
Selling and marketing expenses | ||||
SHARE-BASED COMPENSATION | ||||
Total share-based compensation expenses | $ 9,138 | $ 1,640 | $ 538 |
SHARE-BASED COMPENSATION - Sh_2
SHARE-BASED COMPENSATION - Share Options (Details) $ / shares in Units, $ in Thousands, $ in Thousands | Dec. 31, 2019HKD ($)shares | Dec. 31, 2019USD ($)$ / sharesshares | Dec. 31, 2018 | Oct. 31, 2014shares | Dec. 31, 2021$ / sharesshares | Dec. 31, 2020$ / sharesshares | Dec. 31, 2019$ / sharesshares |
Summary of the stock option activity, Options granted share Number: | |||||||
Outstanding at end of year (in shares) | 13,341,466 | ||||||
Summary of the stock option activity, Weighted average exercise price per option: | |||||||
Outstanding at end of year (in dollars per share) | $ / shares | $ 0.5703 | ||||||
Share Options | |||||||
Summary of the stock option activity, Options granted share Number: | |||||||
Exercised (in shares) | (5,875,592) | (5,048,824) | (106,295,232) | ||||
Share Options | Minimum | |||||||
SHARE-BASED COMPENSATION | |||||||
Vesting period (in years) | 4 years | 4 years | |||||
Share Options | Maximum | |||||||
SHARE-BASED COMPENSATION | |||||||
Vesting period (in years) | 5 years | 5 years | |||||
2014 Share Incentive Plan | Share Options | |||||||
SHARE-BASED COMPENSATION | |||||||
Maximum number of shares under the plan | 135,032,132 | ||||||
Expire period | 10 years | ||||||
Modification of exercise price of number of stock options granted | 8,113,145 | 8,113,145 | |||||
Modified of exercise price of stock options granted | $ / shares | $ 0.60 | ||||||
Incremental compensation expenses | $ 3,008 | $ 386 | |||||
2019 Share Incentive Plan | Share Options | Maximum | |||||||
SHARE-BASED COMPENSATION | |||||||
Maximum percentage of shares available for issuance, based on total number of shares issued and outstanding on September 29, 2019 | 2.00% | ||||||
Maximum percentage of number of shares increased in each year | 2.00% | ||||||
Maximum percentage of aggregate number of shares initially reserved and subsequently increased during the term of the total number of shares issued and outstanding on September 29 | 8.00% | ||||||
2014 Share Incentive Plan and 2019 Share Incentive Plan | Share Options | |||||||
Summary of the stock option activity, Options granted share Number: | |||||||
Outstanding at beginning of year (in shares) | 19,042,336 | 23,718,626 | |||||
Exercised (in shares) | (5,875,592) | (5,048,824) | |||||
Granted (in shares) | 1,080,000 | 2,489,832 | 9,791,200 | ||||
Cancelled/forfeited (in shares) | (905,278) | (2,117,298) | |||||
Outstanding at end of year (in shares) | 23,718,626 | 23,718,626 | 13,341,466 | 19,042,336 | 23,718,626 | ||
Summary of the stock option activity, Weighted average exercise price per option: | |||||||
Outstanding at beginning of year (in dollars per share) | $ / shares | $ 0.5628 | $ 0.5161 | |||||
Exercised (in dollars per share) | $ / shares | 0.4365 | 0.4293 | |||||
Granted (in dollars per share) | $ / shares | 0.0444 | 0.6810 | |||||
Cancelled/forfeited (in dollars per shares) | $ / shares | 0.6539 | 0.5588 | |||||
Outstanding at end of year (in dollars per share) | $ / shares | $ 0.5161 | $ 0.5703 | $ 0.5628 | $ 0.5161 |
SHARE-BASED COMPENSATION - Sh_3
SHARE-BASED COMPENSATION - Share Options Granted (Details) $ / shares in Units, $ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2021USD ($)$ / sharesshares | Dec. 31, 2021HKD ($)shares | Dec. 31, 2020$ / sharesshares | Dec. 31, 2019$ / sharesshares | |
SHARE-BASED COMPENSATION | ||||
Outstanding (in shares) | shares | 13,341,466 | |||
Exercisable (in shares) | shares | 2,825,014 | |||
Expected to vest (in shares) | shares | 10,516,452 | |||
Outstanding (in dollars per share) | $ / shares | $ 0.5703 | |||
Exercisable (in dollars per share) | $ / shares | 0.5729 | |||
Expected to vest (in dollars per share) | $ / shares | $ 0.5696 | |||
Outstanding (in years) | 3 years 5 months 1 day | 3 years 5 months 1 day | ||
Exercisable (in years) | 2 years 10 months 6 days | 2 years 10 months 6 days | ||
Outstanding (in dollars) | $ | $ 165,157 | |||
Exercisable (in dollars) | $ | 34,964 | |||
Expected to vest (in dollars) | $ | $ 130,193 | |||
Share Options | ||||
SHARE-BASED COMPENSATION | ||||
Expected to vest (in years) | 3 years 6 months 25 days | 3 years 6 months 25 days | ||
Weighted average grant date fair value | $ / shares | $ 18.9219 | $ 1.5239 | $ 0.7345 | |
Options exercised (in shares) | shares | 5,875,592 | 5,875,592 | 5,048,824 | 106,295,232 |
Intrinsic value of options exercised | $ 79,093 | $ 614,738 |
SHARE-BASED COMPENSATION - Fair
SHARE-BASED COMPENSATION - Fair value of options granted and compensation expenses (Details) $ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2021HKD ($) | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2021USD ($) | |
Fair value of options granted estimation: | ||||
Risk-free interest rate (as a percent) | 1.67% | |||
Expected term (in years) | 5 years | 5 years | 5 years | |
Expected dividend yield (as a percent) | 0.00% | 0.00% | 0.00% | |
Expected volatility (as a percent) | 40.00% | 40.00% | 45.00% | |
Expected forfeiture rate (post-vesting) (as a percent) | 15.00% | 15.00% | 15.00% | |
Minimum | ||||
Fair value of options granted estimation: | ||||
Risk-free interest rate (as a percent) | 0.09% | 0.27% | ||
Maximum | ||||
Fair value of options granted estimation: | ||||
Risk-free interest rate (as a percent) | 0.89% | 0.36% | ||
Share Options | ||||
Fair value of options granted estimation: | ||||
Unrecognized compensation expenses | $ 201,948 | $ 25,897 | ||
Weighted-average period expected to be recognized for unrecognized compensation expense (in years) | 3 years 11 months 15 days |
SHARE-BASED COMPENSATION - Rest
SHARE-BASED COMPENSATION - Restricted Shares Plan (Details) - Restricted shares $ / shares in Units, $ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2021HKD ($)$ / sharesshares | Dec. 31, 2020$ / sharesshares | Dec. 31, 2019shares | Dec. 31, 2021USD ($) | |
Shares awarded number | ||||
Outstanding at beginning | 6,067,400 | |||
Granted | 12,105,712 | |||
Vested | (929,672) | |||
Forfeited | (281,576) | |||
Outstanding at end | 16,961,864 | 6,067,400 | ||
Weighted-average grant date fair value per share | ||||
Outstanding at beginning | $ / shares | $ 4.6827 | |||
Granted | $ / shares | 5.7371 | |||
Vested | $ / shares | 4.6827 | |||
Forfeited | $ / shares | 5.4426 | |||
Outstanding at end | $ / shares | $ 5.6793 | $ 4.6827 | ||
Unrecognized compensation expenses related to the restricted shares | $ 694,749 | $ 89,092 | ||
Unrecognized compensation expenses related to the restricted shares expected to be recognized over a weighted-average period | 4 years 7 months 20 days | |||
2019 Share Incentive Plan | ||||
Shares awarded number | ||||
Granted | 12,105,712 | 6,067,400 | 0 |
NET INCOME PER SHARE (Details)
NET INCOME PER SHARE (Details) - Pre-funded warrants - Class A ordinary shares - $ / shares | Dec. 31, 2021 | Dec. 31, 2020 |
Class of Warrant or Right [Line Items] | ||
Warrants to purchase shares of ordinary shares | 53,599,890 | 53,600,000 |
Warrants exercise price | $ 0.00001 | |
Shares cancelled | 110 |
NET INCOME PER SHARE - Computat
NET INCOME PER SHARE - Computation of earnings per share (Details) $ / shares in Units, $ / shares in Units, $ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2021HKD ($)$ / sharesshares | Dec. 31, 2021USD ($)$ / sharesshares | Dec. 31, 2020HKD ($)$ / sharesshares | Dec. 31, 2019HKD ($)$ / sharesshares | |
Numerator: | ||||
Net income attributable to ordinary shareholder of the Company | $ 2,810,210 | $ 360,302 | $ 1,325,523 | $ 143,159 |
Denominator: | ||||
Weighted average number of ordinary shares outstanding - basic | 1,200,912,670 | 1,200,912,670 | 1,036,865,727 | 832,790,329 |
Net income per share attributable to ordinary shareholders of the Company - basic | (per share) | $ 2.34 | $ 0.30 | $ 1.28 | $ 0.17 |
Numerator: | ||||
Net income attributable to ordinary Shareholder of the Company | $ | $ 2,810,210 | $ 1,325,523 | $ 143,159 | |
Denominator: | ||||
Weighted average number of ordinary shares outstanding - basic | 1,200,912,670 | 1,200,912,670 | 1,036,865,727 | 832,790,329 |
Weighted average number of ordinary shares outstanding - diluted | 1,219,672,508 | 1,219,672,508 | 1,050,143,014 | 917,897,426 |
Net income per share attributable to ordinary shareholders of the Company - diluted | (per share) | $ 2.30 | $ 0.30 | $ 1.26 | $ 0.16 |
Share Options | ||||
Denominator: | ||||
Dilutive effect | 18,759,838 | 18,759,838 | 13,277,287 | 85,107,097 |
NET INCOME PER SHARE - Antidilu
NET INCOME PER SHARE - Antidilutive securities (Details) - shares | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Share Options | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-dilutive shares excluded from the calculation of diluted net income per share | 357,978 | 4,800,584 | 3,747,975 |
COLLATERALIZED TRANSACTIONS (De
COLLATERALIZED TRANSACTIONS (Details) $ in Thousands, $ in Thousands | Dec. 31, 2021HKD ($) | Dec. 31, 2021USD ($) | Dec. 31, 2020HKD ($) |
COLLATERALIZED TRANSACTIONS | |||
Margin loan extended to margin clients | $ 29,084,958 | $ 18,424,972 | |
Securities purchased under agreements to resell transactions | 106,203 | $ 13,616 | |
Collateral received from margin clients | 119,745,500 | 89,404,131 | |
Collateral received from brokers | 144,156 | ||
Collateral repledged to commercial banks and other financial institutions | 20,953,603 | 58,255,907 | |
Securities borrowed and lent | 8,436,638 | 4,307,346 | |
Cash collateral received from borrowers | 9,737,786 | 5,067,828 | |
Cash collateral deposited with lenders | $ 3,120,123 | $ 3,645,214 |
BROKERAGE COMMISSION AND HAND_5
BROKERAGE COMMISSION AND HANDLING CHARGE INCOME (Details) $ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2021HKD ($) | Dec. 31, 2021USD ($) | Dec. 31, 2020HKD ($) | Dec. 31, 2019HKD ($) | |
BROKERAGE COMMISSION AND HANDLING CHARGE INCOME | ||||
Total | $ 3,913,027 | $ 501,696 | $ 1,990,138 | $ 511,365 |
Brokerage commission income | ||||
BROKERAGE COMMISSION AND HANDLING CHARGE INCOME | ||||
Total | 3,147,610 | 1,531,048 | 352,625 | |
Handling charge income | ||||
BROKERAGE COMMISSION AND HANDLING CHARGE INCOME | ||||
Total | $ 765,417 | $ 459,090 | $ 158,740 |
INTEREST INCOME (Details)
INTEREST INCOME (Details) $ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2021HKD ($) | Dec. 31, 2021USD ($) | Dec. 31, 2020HKD ($) | Dec. 31, 2019HKD ($) | |
INTEREST INCOME | ||||
Margin financing | $ 1,720,473 | $ 497,975 | $ 221,648 | |
Securities lending | 397,505 | 73,792 | 37,202 | |
IPO financing | 200,567 | 184,226 | 12,658 | |
Bank deposits | 197,390 | 208,556 | 187,223 | |
Bridge loan | 1,872 | 1,078 | 6,172 | |
Other financing | 391 | |||
Total | $ 2,518,198 | $ 322,862 | $ 965,627 | $ 464,903 |
OTHER INCOME (Details)
OTHER INCOME (Details) $ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2021HKD ($) | Dec. 31, 2021USD ($) | Dec. 31, 2020HKD ($) | Dec. 31, 2019HKD ($) | |
OTHER INCOME | ||||
Currency exchange service income | $ 201,030 | $ 67,000 | $ 4,670 | |
IPO subscription service charge income | 169,336 | 159,682 | 26,537 | |
Enterprise public relations service charge income | 96,327 | 29,988 | 16,156 | |
Underwriting fee income | 86,880 | 30,797 | 19,579 | |
Funds distribution service income | 68,856 | 42,658 | 10,447 | |
Market information and data income | 43,921 | 18,463 | 2,692 | |
Others | 17,745 | 6,469 | 5,206 | |
Total | $ 684,095 | $ 87,709 | $ 355,057 | $ 85,287 |
BROKERAGE COMMISSION AND HAND_6
BROKERAGE COMMISSION AND HANDLING CHARGE EXPENSES (Details) $ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2021HKD ($) | Dec. 31, 2021USD ($) | Dec. 31, 2020HKD ($) | Dec. 31, 2019HKD ($) | |
BROKERAGE COMMISSION AND HANDLING CHARGE EXPENSES | ||||
Total | $ 572,159 | $ 73,357 | $ 361,486 | $ 100,550 |
Commission, handling and settlement expenses | ||||
BROKERAGE COMMISSION AND HANDLING CHARGE EXPENSES | ||||
Total | 524,470 | 302,800 | 95,064 | |
IPO subscription service charge expenses | ||||
BROKERAGE COMMISSION AND HANDLING CHARGE EXPENSES | ||||
Total | $ 47,689 | $ 58,686 | $ 5,486 |
INTEREST EXPENSES (Details)
INTEREST EXPENSES (Details) - HKD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
INTEREST EXPENSES | |||
Interest expenses for margin financing - Due to banks | $ 125,002 | $ 45,545 | $ 36,206 |
Interest expenses for margin financing - Due to other licensed financial institutions | 51,179 | 38,246 | 28,636 |
Interest expenses for margin financing - Due to other parties | 3,930 | ||
Interest expenses for securities borrowed - Due to clients | 132,034 | 7,984 | 1,298 |
Interest expenses for securities borrowed - Due to brokers | 18,624 | 13,853 | 9,077 |
Interest expenses for IPO financing - Due to banks | 50,063 | 79,337 | 10,091 |
Interest expenses for IPO financing - Due to other parties | 125 | ||
Total | $ 376,902 | $ 185,090 | $ 89,238 |
PROCESSING AND SERVICING COST_2
PROCESSING AND SERVICING COSTS (Details) $ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2021HKD ($) | Dec. 31, 2021USD ($) | Dec. 31, 2020HKD ($) | Dec. 31, 2019HKD ($) | |
PROCESSING AND SERVICING COSTS | ||||
Cloud service fee | $ 122,269 | $ 48,940 | $ 16,729 | |
Market information and data fee | 70,387 | 68,274 | 54,282 | |
Data transmission fee | 46,289 | 23,072 | 13,890 | |
System cost | 12,160 | 4,476 | 4,334 | |
SMS service fee | 1,197 | 2,511 | 1,523 | |
Others | 4,701 | 2,105 | 1,158 | |
Total | $ 257,003 | $ 32,951 | $ 149,378 | $ 91,916 |
NON-INTEREST COST AND EXPENSE_3
NON-INTEREST COST AND EXPENSES BY NATURE (Details) $ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2021HKD ($) | Dec. 31, 2021USD ($) | Dec. 31, 2020HKD ($) | Dec. 31, 2019HKD ($) | |
NON-INTEREST COST AND EXPENSES BY NATURE | ||||
Employee compensation and benefits | $ 1,248,682 | $ 682,068 | $ 327,441 | |
Marketing and branding | 1,163,495 | 297,170 | 130,528 | |
Brokerage commission and handling charge expenses (Note 23) | 572,159 | 361,486 | 100,550 | |
Processing and servicing costs (Note 25) | 257,003 | $ 32,951 | 149,378 | 91,916 |
Rental and other related expenses | 106,459 | 64,594 | 64,756 | |
Depreciation and amortization | 36,435 | 27,231 | 16,547 | |
Professional services | 59,697 | 32,988 | 28,757 | |
Others | 111,675 | 42,956 | 23,867 | |
Total | $ 3,555,605 | $ 1,657,871 | $ 784,362 |
TAXATION - Income Tax - Applica
TAXATION - Income Tax - Applicable Tax Rates (Details) | Apr. 01, 2018 | Dec. 22, 2017 | Dec. 21, 2017 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2020 |
TAXATION | |||||||
Withholding tax rate (as a percent) | 10.00% | ||||||
Withholding tax rate applicable to beneficial owner ( as a percent) | 5.00% | ||||||
The United States ("US") | |||||||
TAXATION | |||||||
Applicable tax rate (as a percent) | 21.00% | 35.00% | 35.00% | ||||
Hong Kong | |||||||
TAXATION | |||||||
Applicable tax rate (as a percent) | 16.50% | ||||||
Hong Kong | Assessable profits on the first HK$2 million | |||||||
TAXATION | |||||||
Applicable tax rate (as a percent) | 8.25% | ||||||
Hong Kong | Assessable profits in excess of HK$2 million | |||||||
TAXATION | |||||||
Applicable tax rate (as a percent) | 16.50% | ||||||
China | |||||||
TAXATION | |||||||
Applicable tax rate (as a percent) | 25.00% | ||||||
Preferential tax rate (as a percent) | 15.00% | ||||||
Super deduction of research and development expenses (as a percent) | 175.00% | ||||||
China | Futu Network Technology (Shenzhen) Co., Ltd | |||||||
TAXATION | |||||||
Preferential tax rate (as a percent) | 15.00% | ||||||
Preferential tax rate, valid period | 3 years | 3 years | |||||
SINGAPORE | |||||||
TAXATION | |||||||
Applicable tax rate (as a percent) | 17.00% |
TAXATION - Composition of incom
TAXATION - Composition of income tax expenses (Details) $ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2021HKD ($) | Dec. 31, 2021USD ($) | Dec. 31, 2020HKD ($) | Dec. 31, 2019HKD ($) | |
TAXATION | ||||
Current income tax expenses | $ 396,512 | $ 137,939 | $ 13,858 | |
Deferred income tax expenses | (21,431) | (13,146) | (1,572) | |
Income tax expenses | $ 375,081 | $ 48,090 | $ 124,793 | $ 12,286 |
TAXATION - Tax Reconciliation (
TAXATION - Tax Reconciliation (Details) $ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2021HKD ($) | Dec. 31, 2021USD ($) | Dec. 31, 2020HKD ($) | Dec. 31, 2019HKD ($) | |
Income Tax Disclosure [Line Items] | ||||
Income before income tax | $ 3,185,291 | $ 1,450,623 | $ 178,493 | |
Tax expenses at Hong Kong profit tax rate of 16.5% | 524,907 | 239,353 | 29,451 | |
Changes of valuation allowance | 101,653 | 14,348 | 30,172 | |
Tax effect of permanence differences | 22,047 | 9,029 | 5,486 | |
Effect of income tax in jurisdictions other than Hong Kong | (32,182) | (4,386) | (4,143) | |
Super deduction of research and development expenses | (62,966) | (29,081) | (19,277) | |
Final settlement differences | (602) | (18,038) | ||
Income not subject to tax (1) | (177,776) | (104,470) | (11,365) | |
Income tax expenses | $ 375,081 | $ 48,090 | $ 124,793 | $ 12,286 |
Hong Kong | ||||
Income Tax Disclosure [Line Items] | ||||
Hong Kong profit tax rate (as a percent) | 16.50% | 16.50% | ||
Recognition of previously unrecognised tax losses | 16.50% | 16.50% |
TAXATION - Components of the de
TAXATION - Components of the deferred tax assets (Details) - HKD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Deferred tax assets | ||||
Net operating loss carryforwards | $ 158,826 | $ 64,092 | ||
Accrued expenses and others | 50,408 | 22,348 | ||
Less: valuation allowance | (169,422) | (67,769) | $ (53,421) | $ (23,249) |
Total deferred tax assets | 39,812 | 18,671 | ||
Set off of deferred tax liabilities pursuant to set off provisions | (1,495) | (1,497) | ||
Net deferred tax assets | 38,317 | 17,174 | ||
Total deferred tax liabilities | 2,131 | 3,101 | ||
Set-off of deferred tax assets pursuant to set-off provisions | (1,495) | (1,497) | ||
Net deferred tax liabilities | $ 636 | $ 1,604 |
TAXATION - Movement of Valuatio
TAXATION - Movement of Valuation Allowance (Details) - HKD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Movement of Valuation Allowance | |||
Balance at beginning of the year | $ 67,769 | $ 53,421 | $ 23,249 |
Additions | 108,347 | 30,935 | 30,188 |
Reversals | (6,694) | (16,587) | (16) |
Balance at end of the year | $ 169,422 | $ 67,769 | $ 53,421 |
TAXATION - Net operating loss c
TAXATION - Net operating loss carry forwards (Details) - HKD ($) $ in Thousands | Dec. 22, 2017 | Dec. 21, 2017 | Dec. 31, 2021 | Dec. 31, 2020 |
Income Tax Disclosure [Line Items] | ||||
Statutory rate 1 (as percent) | 25.00% | |||
Statutory rate 2 (as percent) | 27.98% | |||
Statutory rate 3 (as percent) | 27.87% | |||
Statutory rate 4 (as percent) | 16.50% | |||
Statutory rate 5 (as percent) | 17.00% | |||
Net operating loss carryforwards | $ 764,251 | $ 315,287 | ||
Net operating loss carryforwards, provided for valuation allowance | 761,417 | 315,287 | ||
Net operating loss carryforwards, expected to be utilized prior to expiration | $ 2,834 | $ 0 | ||
The United States ("US") | ||||
Income Tax Disclosure [Line Items] | ||||
Applicable tax rate (as a percent) | 21.00% | 35.00% | 35.00% | |
Hong Kong | ||||
Income Tax Disclosure [Line Items] | ||||
Applicable tax rate (as a percent) | 16.50% | |||
China | ||||
Income Tax Disclosure [Line Items] | ||||
Preferential tax rate (as a percent) | 15.00% | |||
Applicable tax rate (as a percent) | 25.00% |
DEFINED CONTRIBUTION PLAN (Deta
DEFINED CONTRIBUTION PLAN (Details) ¥ in Thousands, $ in Thousands, $ in Thousands | 12 Months Ended | ||||||
Dec. 31, 2021HKD ($) | Dec. 31, 2021CNY (¥) | Dec. 31, 2021SGD ($) | Dec. 31, 2020HKD ($) | Dec. 31, 2020CNY (¥) | Dec. 31, 2020SGD ($) | Dec. 31, 2019HKD ($) | |
Defined Contribution Plan Disclosure [Line Items] | |||||||
Employee compensation and benefits expenses | $ 1,248,682 | $ 682,068 | $ 327,441 | ||||
China | |||||||
Defined Contribution Plan Disclosure [Line Items] | |||||||
Total contributions | ¥ | ¥ 110,997 | ¥ 49,778 | |||||
Hong Kong Plan | |||||||
Defined Contribution Plan Disclosure [Line Items] | |||||||
Employee compensation and benefits expenses | $ 2,197 | $ 1,414 | |||||
SINGAPORE | |||||||
Defined Contribution Plan Disclosure [Line Items] | |||||||
Total contributions | $ 294 | $ 5 |
REGULATORY REQUIREMENTS (Detail
REGULATORY REQUIREMENTS (Details) $ in Thousands | Dec. 31, 2021HKD ($) |
Futu Securities (Hong Kong) Limited | |
Regulatory Requirements, Disclosure [Line Items] | |
Net Capital/ Eligible Equity | $ 6,666,092 |
Requirement | 1,631,080 |
Excess | 5,035,012 |
Futu Inc | |
Regulatory Requirements, Disclosure [Line Items] | |
Net Capital/ Eligible Equity | 149,871 |
Requirement | 22,560 |
Excess | 127,311 |
Futu Clearing Inc | |
Regulatory Requirements, Disclosure [Line Items] | |
Net Capital/ Eligible Equity | 3,308,395 |
Requirement | 97,565 |
Excess | 3,210,830 |
Futu Singapore pte Ltd. | |
Regulatory Requirements, Disclosure [Line Items] | |
Net Capital/ Eligible Equity | 345,424 |
Requirement | 156,646 |
Excess | 188,778 |
Futu Insurance Brokers (Hong Kong) Limited | |
Regulatory Requirements, Disclosure [Line Items] | |
Net Capital/ Eligible Equity | 1,718 |
Requirement | 500 |
Excess | $ 1,218 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
COMMITMENTS AND CONTINGENCIES | ||
Total minimum investment commitments | $ 104,000,000 | $ 0 |
RELATED PARTY BALANCES AND TR_3
RELATED PARTY BALANCES AND TRANSACTIONS (Details) $ in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2021HKD ($) | Dec. 31, 2020HKD ($) | Dec. 31, 2019HKD ($) | Dec. 31, 2021USD ($) | |
Related Party Transaction [Line Items] | ||||
Cash and cash equivalent | $ 4,555,096 | $ 1,034,668 | $ 362,574 | $ 584,016 |
Amounts due to related parties | 87,459 | 87,169 | $ 11,213 | |
Human Resource Services | ||||
Related Party Transaction [Line Items] | ||||
Transactions with Related Parties | 135 | |||
Tencent Group | ||||
Related Party Transaction [Line Items] | ||||
Cash and cash equivalent | 372 | 149 | ||
Amounts due to related parties | 87,459 | 87,169 | ||
Transactions with Related Parties | 165,885 | 57,209 | 59,702 | |
Tencent Group | Equipment purchased | ||||
Related Party Transaction [Line Items] | ||||
Services provided by related parties | 45,658 | 4,496 | 40,218 | |
Tencent Group | Software purchased | ||||
Related Party Transaction [Line Items] | ||||
Services provided by related parties | 3,869 | 508 | ||
Tencent Group | Cloud equipment and services | ||||
Related Party Transaction [Line Items] | ||||
Amounts due to related parties | 85,887 | 16,062 | ||
Tencent Group | Cloud service | ||||
Related Party Transaction [Line Items] | ||||
Services provided by related parties | 114,386 | 48,940 | 16,729 | |
Tencent Group | SMS channel services | ||||
Related Party Transaction [Line Items] | ||||
Amounts due to related parties | 265 | 357 | ||
Services provided by related parties | 1,197 | 2,511 | 1,523 | |
Tencent Group | Advertising expenses | ||||
Related Party Transaction [Line Items] | ||||
Services provided by related parties | 159 | 682 | ||
Tencent Group | ESOP management service | ||||
Related Party Transaction [Line Items] | ||||
Amounts due to related parties | 1,307 | 70,750 | ||
ESOP management service income | $ 640 | $ 595 | $ 550 |
RELATED PARTY BALANCES AND TR_4
RELATED PARTY BALANCES AND TRANSACTIONS - Additional Information (Details) - HKD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Payables to clients | |||
Related Party Transaction [Line Items] | |||
Payables to directors and officers | $ 44,480 | $ 42,019 | |
Directors and officers and their spouses | Brokerage Services and Margin Loans | |||
Related Party Transaction [Line Items] | |||
Revenues earned | $ 1,430 | $ 1,642 | $ 2,211 |