Pedestrians in Hong Kong walked past a sign with the logo of online financial services platform Futu Holdings, which is bounced back in the government’s crackdown.
Sebastian Ng/sopa image/lightrocket by Getty image
Li Hua, founder of China’s online brokerage and wealth management platform Futu Holdings, saw his net worth triple to $9.6 billion in 2024, demonstrating a successful strategy to resist government crackdowns that threaten his core business.
The 47-year-old Futu chairman and CEO, whose wealth comes from shares in a Nasdaq-listed company. In the past year, stocks have risen more than 200% over the past year as investors approve the company’s international expansion and advances in attracting new customers and investors using one of the company’s apps.
Futu made this vote of confidence after the government crackdown began in 2022. Concerned about capital outflows and data security, authorities in mainland China asked Futu and its competitor Fintech Fintech Holding to stop using new onshore application users. The company’s Futubull Trading app was removed from the Chinese mainland app store in 2023, another blow to its attempts to develop. Existing users can still access the platform.
Today, onshore investors in mainland China still cannot use Futubull. But over the past three years, Lee has expanded to international markets including Malaysia, Singapore and the United States, and the company has designed clever marketing activities, including offering free Apple stock to users in Malaysia and retail retail users in markets such as the United States and Hong Kong. In the U.S., equity in the U.S., where Futu’s retail users can trade stocks through its MOOM.
“They have made harsh progress in user acquisition, profitability and sales,” Wechat said. “I think the company is still in its early stages of development.”
Futu refused to let Li conduct an interview. In a written statement to Forbes, CFO Arthur Yu Chen said Futu’s goal is to “capture a wider global customer base” through measures such as partnerships and acquisitions.
In the results announced last week, Futu said sales rose 69.7% year-on-year to HK$5.3 billion (US$676.6 million) in the second quarter of June. During the same period, net income increased by 112.7% year-on-year to HK$2.6 billion.
About 70% of the company’s new app users come from markets such as Singapore and the United States, while the rest are based on offshore in Hong Kong, estimated to be 86 Research’s Wang. According to its second-quarter results announcement, Futu manages a total of HK$973.9 billion worth of user assets.
Wang said Futu could also generate more growth from new businesses such as cryptocurrency trading. It has begun to offer users in markets such as Hong Kong and U.S. services to buy and sell major digital currencies from Bitcoin to Ethereum.
However, the company faces uncertainty. Wang said that if the global stock market boom gradually fades, user growth may slow.
Despite the expectation that the Fed will lower interest rates soon, this may be a boon for stocks, as policy migration is seen as boosting the economy and supporting higher assets, China’s sharp slowdown could hurt Hong Kong sentiment.
However, recent rally at Asian financial hubs may continue, according to a Nomura study published on Monday, as Chinese stocks are still considered cheaper than historically high levels a decade ago. In addition, investors expect that if China’s economy weakens further, the authorities will release a new round of fiscal stimulus.
“We expect the ongoing net asset inflows to be supported by strong market momentum,” Deutsche Bank analyst Johnny Xie wrote in an August 26 FUTU study.
In the long run, it remains to be seen whether Futu can make progress in more international markets. Wang said the company quickly gained traction in Malaysia and Singapore due to the lack of strong local competitors. But in Japan, users tend to use local trading platforms rather than trying diplomatic services, he said. In addition, Robinhood, the AOL broker, is actively expanding in Asia and stepping up competition to Futu.
Futu’s Chen said the company remains committed to global expansion, demonstrating its strength in developing new products and services, such as cryptocurrency trading.
“We have also strategically expanded our financial products and services,” he wrote in the statement. “In addition, we have seen high net worth individuals and their assets increasingly flow to our platform, and we aim to further develop through dedicated customer service and diversified products.”
