Since September, the average daily turnover of Hong Kong stocks has increased significantly. The recovery of liquidity has led to a rebound in the performance of Chinese funded securities businesses. The annual customer acquisition goal of Internet securities companies such as Futu Securities and Tiger Securities may be completed ahead of schedule.
Recently, a reporter from a securities firm in China learned from the third quarter report and performance conference of Chinese securities firms in Hong Kong and the United States that Futu Securities added 490000 new customers in the first nine months of this year, exceeding the original target of 550000 customers for the whole year. Among them, the number of customers in a single quarter increased by 138% year-on-year, and Hong Kong and Singapore together contributed more than one-third of the customer base.
Coincidentally, Tiger Securities added 50500 new customers in the third quarter, a year-on-year increase of over 100%. According to the company's performance conference, the market continued to rebound and trading activity in October, and the target of attracting 150000 customers for the whole year has been achieved.
Futu Securities' first cash dividend
Recently, Futu Securities disclosed its third quarter report and announced at a performance conference that it achieved a total revenue of HKD 3.4 billion in the third quarter of this year, a year-on-year increase of 30% compared to HKD 2.7 billion in the same period of 2023; Net profit was HKD 1.32 billion, with year-on-year and month on month growth of 21% and 9%, respectively.
Li Yehua, chairman and CEO of Futu, said that the company added 154000 new paying customers in the third quarter, up 138.0% year on year, and basically flat month on month. In the first nine months of this year, a total of 487000 new paying customers have been added, and it is expected that the annual growth will easily exceed our target of 550000, thanks to strong growth in mature markets and strong momentum in new markets.
The reporter learned that Hong Kong and Singapore together contributed over one-third of new customers, followed by Malaysia. Among them, the significant increase in trading volume in the Hong Kong stock market was the main driving force, resulting in Futu Securities' brokerage commission and handling fee income reaching HKD 1.5 billion in a single quarter, a year-on-year increase of 52%; The balance of margin trading and securities lending increased by 25.5% year-on-year to HKD 40.6 billion, driving a 13% year-on-year increase in interest income.
Data shows that the daily average trading volume of the Hong Kong stock market's main board and ChiNext in September reached HKD 169.2 billion, an increase of over 50% compared to the previous month; In October, liquidity continued to rebound, with a cumulative transaction amount of HKD 255 billion, exceeding the high point of 2021.
As of the end of the third quarter, Futu Securities had a total of approximately 2.2 million paying customers, an increase of 33% compared to the same period last year. In addition, Futu announced that it will distribute dividends, which is the first cash dividend in the company's history. It plans to distribute a special dividend of $2 per ADS, totaling $280 million, accounting for 61% of the net profit attributable to shareholders in the first three quarters.
Tiger Securities achieves 150000 customer acquisition target
Coincidentally, Wu Tianhua, Chairman and CEO of Tiger Securities, revealed at the earnings conference that the company has achieved its annual goal of adding 150000 new deposit customers.
According to reports, Tiger Securities added 50500 new deposit customers in the third quarter, more than double the number from the same period last year. At the end of the third quarter, the total number of deposit customers reached about 1032800. In October, the market remained active, and the number of new deposit customers this year has exceeded 150000.
As of the end of the third quarter, driven by strong net asset inflows from retail customers and gains from fair value changes, the total account balance of Tiger Securities increased by 6.7% compared to the previous quarter and 115.9% compared to the same period last year, reaching a historical high of $40.8 billion.
In terms of financial data, the company's total revenue for the third quarter reached a historic high of $101.1 million, with a month on month increase of 15.6% and a year-on-year increase of 44.1%. The net profit attributable to common shareholders reached 17.8 million US dollars, a month on month increase of 584.6% and a year-on-year increase of 34.0%. The non GAAP net profit attributable to common stockholders was $20.1 million, a month on month increase of 286.5% and a year-on-year increase of 25.6%.
From the trading data of Hong Kong stocks, it is expected that the number of net additional deposit users in October will continue the trend of rapid growth in Q3. The trading volume and commission income in October will perform strongly, possibly exceeding twice the average monthly trading volume and commission income in the first half of this year.
How sustainable is the performance?
Since September, the liquidity of Hong Kong stocks has rebounded, with a significant increase in trading volume. Currently, it appears that this trend has also continued in October. The increase in customer acquisition and brokerage commission income brought about by the increase in market trading volume will continue, but there will be fluctuations in customer total assets, margin trading balance, and wealth management business, as market conditions may not necessarily rise unilaterally.
According to a performance briefing by Futu Securities, the company's total customer assets at the end of the third quarter increased by 48.1% year-on-year and 19.7% month on month, reaching HKD 693.4 billion. However, the majority of the asset growth was driven by the appreciation of customer stock holdings at the end of the quarter. In Singapore, total assets and average customer assets increased by 18% and 10% respectively. The average customer assets of the United States, Canada, and Australia have also achieved double-digit month on month growth for three consecutive quarters.
From the third quarter perspective, the asset balance of Futu Wealth Management was HKD 97.3 billion, a year-on-year increase of 88% and a month on month increase of 22%, mainly from inflows of money market funds and fixed income funds. The fluctuation of margin trading and short selling balance is more obvious. With the rise of the Chinese stock market, some customers took profits and the margin trading and short selling balance of Futu decreased to HKD 40.6 billion at the end of the third quarter, but the daily average balance achieved a single digit month on month growth.
But whether it's Futu or Tiger Securities, a diversified overseas market layout, including US stocks, Hong Kong stocks, etc., as well as a diversified product line, including stocks, equity derivatives, cryptocurrencies, wealth management products, etc., are conducive to enhancing the stability and sustainability of the company's business. For example, on November 6th (the landing of the US presidential election), the order volume of the Tiger platform increased by 48% compared to the average in October, and the trading activity of the US stock market also increased more significantly.