Q3 2025 Futu Holdings Ltd Earnings Call
Speaker #1: Today's conference call is being recorded. If you have any objections, you may disconnect at this time. I would now like to turn the conference over to your host for today's conference call, Daniel Yuan.
Speaker #1: Chief of Staff to CEO, Head of Strategy and IR at Futu. Please go ahead.
Speaker #1: sir. Thanks, Operator.
Speaker #2: And thank you for joining us today to discuss our third quarter 2025 earnings results. Joining me on the call today are Mr. Leaf Lee, Chairman and Chief Executive Officer; Arthur Chen, Chief Financial Officer; and Robin Xu, Senior Vice President.
Speaker #2: As a reminder, today's call may include forward-looking statements, which represent the company's belief regarding future events. By their nature, these statements are not certain and are outside of the company's control.
Speaker #2: Forward-looking statements involving risks and uncertainties. We caution you that a number of important factors could cause actual results to differ materially from those contained in any forward-looking statements.
Speaker #2: For more information about the potential risks and uncertainties, please refer to the company's filings with the SEC, including its annual report. With that, I will now turn the call over to Leaf.
Speaker #2: Leaf will make his comments in Chinese, and I will translate.
Speaker #2: Thank you all for joining our earnings call. ????????????????????????????313??????43%?????9%??????????25.4??????65%?????25%??????????????????Today, we concluded the third quarter with 3.13 million funded accounts, marking a 43% year-over-year and a 9% quarter-over-quarter increase.
Speaker #2: During the quarter, we acquired 254,000 net new funded accounts, representing a 65% increase from a year ago and a 25% increase sequentially. We're encouraged to see accelerated client acquisition in all markets.
Speaker #3: Study 32.
Speaker #1: In the third quarter, Hong Kong posted the highest quarterly net adds since the first quarter of 2021 and remained the largest contributor to new funded accounts among markets, with four straight quarters.
Speaker #1: All effectively sparked clients captured interests and a quarter of strong equity market performance and busy IPO schedules, with a new IPO framework. Retail investors in Hong Kong increasingly consolidate their brokerage accounts to increase their chances of FPO getting, and they tend to pick a trusted allocation platform with the best overall user experience as their main brokerage account.
Speaker #2: Singapore . Wei . Changi . 20 . Malaysia . Singapore . New fat .
Speaker #1: In Singapore, new funded accounts again posted steady sequential growth, and we led our peers in dose by an even wider margin, further solidifying our position as the number one retail broker in Singapore.
Speaker #1: Following seven quarters of rapid expansion in Malaysia since launch, we still see a huge future runway for client growth as equity ownership continues to go up.
Speaker #1: In the third quarter, we further strengthened product localization by launching Bursa derivatives and SGX futures, along with upgraded AI tools to support Malay language and local stock analysis.
Speaker #1: Our annual flagship investor offline event , Moogfest , was held in Singapore in July and in Malaysia in October . Altogether attracting over 28,000 investors to sign up and further elevating image in the our brand region .
Speaker #2: Changzhou , Jiangsu .
Speaker #1: Thanks to our growing brand recognition and product experience, our U.S. business delivered another quarter of high-quality growth. We achieved a high double-digit sequential increase in new funded accounts.
Speaker #1: We also observed another quarter of more active derivatives trading activities, as both the number of option traders and option contracts traded recorded double-digit sequential growth.
Speaker #2: More . And yuan . Additions to AUM . The . Single . IPO . By yuan .
Speaker #1: As of quarter end . Total client assets reached 1.24 trillion HKD , up 79% year over year and 27% quarter over quarter growth was driven another quarter of robust net asset inflow , while the appreciation in client stock holdings also contributed meaningfully to the overall asset expansion this quarter .
Speaker #1: Average client assets locked in saw double-digit sequential increases and hit new highs in every market. Bullish sentiment on Hong Kong and U.S. equities prompted more leveraged positions in the Hong Kong IPO market, which also boosted financing demand.
Speaker #1: As a result , margin financing and securities lending balance 23% quarter over climbed quarter to 63.1 billion HKD .
Speaker #2: By one . Xiaoyu .
Speaker #1: Total trading volume rose 105% year over year and 9% quarter over quarter to HK$2.45 trillion on the back of favorable market dynamics and upbeat investor sentiment. Elevated trading velocity in names lifted technology.
Speaker #1: Overall, Hong Kong stock trading volume increased by 43% sequentially to HKD 1.19 trillion, which accounted for 31% of the total trading volume, the highest percentage since 2023.
Speaker #1: US stock trading volume remained elevated at HKD 2.6 trillion, as many technology and crypto names posted new highs.
Speaker #2: In Taiwan, Yangon, the Solomon Islands, then the...
Speaker #1: Crypto trading volume surged 161% sequentially, driven by a 90% quarter-over-quarter increase in crypto balance assets and accelerated trading velocity. Ethereum trading volume quadrupled during the quarter, making it the most popular coin on our platform in Hong Kong.
Speaker #1: The launch of Solana for retail investors was well received . Solana contributed meaningfully to the growth of crypto turnover this quarter . We believe that as we continue to broaden Coin selections , strengthen product capabilities and deepen investor education , there is significant potential to further drive crypto trading penetration among our client base .
Speaker #2: Yu Chen, San Diego. To further in.
Speaker #1: wealth Period . End management assets rose 8% sequentially to 175.6 billion HKD . During the quarter . Clients increasingly allocated to fixed income funds alongside the inflow into sustained market money funds to better serve the bespoke needs of professional investors .
Speaker #1: We introduced a self-service request for quote function for structured products, whereby clients can customize products based on their desired parameters, access and compare quotes from a number of issuers, and execute trades seamlessly without human intervention.
Speaker #1: We leverage technology to remove friction in the client experience while driving operating efficiency.
Speaker #2: More financial details regarding the IPO to the leading candidates.
Speaker #1: We ended the quarter with 561 IPO distribution and IR clients, up 22% year over year. We continue to play a leading role in facilitating retail participation in the heated Hong Kong IPO market.
Speaker #1: In the third quarter , 12 IPOs each attracted over 100 billion HKD in subscription amount . On our platform . We served as joint Bookrunners for multiple well-known listings , including those of Cherry Automobile Group and Lens Technology , notably in the IPO , we assume the role of overall coordinators for the first time , underscoring the advancement of our enterprise service capabilities .
Speaker #1: Next , I'd like to invite our CFO , author to discuss our financial performance . Thank you . Daniel , please allow me to walk you through our financial performance in the third quarter .
Speaker #1: All the Hong Kong . Dollars . Unless otherwise noted . Total revenue was $6.4 billion , up 86% from $3.4 billion in .
Speaker #2: The third .
Speaker #1: Quarter of 2024. Brokerage commission and handling charge income.
Speaker #2: Was $2.9 billion .
Speaker #1: Up 9.1% .
Speaker #2: Year over year and 13% q q , both primarily driven by higher trading volume . The change in blend commission rate was mostly technical in nature .
Speaker #2: blended The commission rate declined year over year as client traded higher increase US options stronger to to the was due ago quarter , blend a year in low US priced compared activities stocks options .
Speaker #2: Interest income was $3 billion, up 79% year over year and 33% quarter over quarter. The increase in interest income was driven by higher returns from income securities, borrowing, and lending.
Speaker #2: Business financing and bank margin deposits . The Q4 was increase driven by higher was interest income from and security , lending business , as well as borrowing higher margin financing , interest .
Speaker #2: income income Other was $441 million , up 111% year over year , and flat q , q . The year over year increase was primarily attributable to higher currency exchange service income service distribution , income , and IPO subscription service charge income .
Speaker #2: Our total costs was $780 million , an increase of 25% from $625 million in the third quarter of 2024 . Brokerage commission handling and charge expenses were 161 million , up 97% year over year , and a flat Q q both the year over year and q q increase was roughly in line with the change over brokerage commission , and handling charge income , interest expenses were 474 million , up over year , 17% year and 25% q q both the and year over year qfc increase was mainly due to higher interest expenses associated with our security , borrowing and lending business , as well as higher margin financing , interest expenses , processing and servicing costs were 146 million , up 12% year over year and 10% Q4 Q the year over year increase was largely due to higher market information and data fee .
Speaker #2: The Q3 increase was mainly driven by higher market data as information and fees, as well as higher cloud service fees. As a result, our total gross profit was $5.6 billion, an increase of 100% from $2.8 billion in the third quarter of 2020.
Speaker #2: Gross margin was 87.8%, compared to 81.8% in Q1 of 2024. Operating expenses were up over the year by 57%, and the increase was 31% quarter over quarter to $1.7 billion. R&D expenses were $574 million, which was a 49% increase year over year and a 30% increase quarter over quarter.
Speaker #2: Driven by our investment in crypto and AI, the year capabilities, selling, and marketing greater expenses were $586 million, up 86% year over year, and 36% quarter over quarter.
Speaker #2: Both the year-over-year and the quarter-over-quarter increase was mainly attributable to higher new fund accounts and expenses, which amounted to $535 million, a 40% increase year-over-year and a 26% increase quarter-over-quarter.
Speaker #2: Both the year over year and q q was increase primarily due to general and increase in administrative . HeadCount result , income from operations .
Speaker #2: A's increased 127% year over year and 17% quarter over quarter to $3.9 billion. Operating margin increased to 61.3% from 50.4% in the third quarter of 2024, mostly due to strong top-line growth and operating leverage.
Speaker #2: Our net income increased by 143% year over year and 25% to $3.2 billion. The net income margin expanded to 50.1% in the third quarter, compared to 38.4% in the same quarter last year.
Speaker #2: Our effective tax rate for the quarter was 16.7%. That concludes our prepared remarks. We would now like to open the call to questions.
Speaker #2: Operator please go ahead .
Speaker #3: Thank you. If you wish to ask a question, you will need to press star one one on your telephone and wait for your name to be announced.
Speaker #3: your To question , please press star one . One again . We will take our first question , and the question the line comes from of Cindy Wang from China Renaissance .
Speaker #3: Please go ahead. Your line is open.
Speaker #4: Are had a . Mark to market gains . Now , in the . Target . Thanks for taking my call . And congrats for the very great results in Q3 .
Speaker #4: I have two questions here . First . Current assets perform very strong in Q3 . Could you break down by Mark to market gains and net asset inflows ?
Speaker #4: And what is the current run rate for net inflows and client assets in Q4? In Q3, customer acquisition costs were higher than in Q2 but still lower than your earlier full-year guidance.
Speaker #4: So given stock market poor back order today , what's the customer reason acquisition what do trend and you customer expect the cost acquisition Q4 ?
Speaker #4: Thank you .
Speaker #2: The . Market . Market . In the the . Market size Market . to the . To the . To the . To the .
Speaker #2: What can . The . So you can . See the . For the first questions regarding asset movement , around the one third comes the from net net clients as an inflow .
Speaker #2: And the remaining two thirds come from the market to market fluctuations . And fourth quarter , quarter to date , in the actually , the market market was implication negative .
Speaker #2: On flip, the asset inflows, we see the momentum remains very robust. There's no slowdown compared with the second quarter or the third quarter.
Speaker #2: Then in the third quarter , regarding the client acquisition , the average cap in the third quarter is around 2300 , slightly up on a Q basis .
Speaker #2: But on the absolute levels , it is very still remains . You know , our our full target year , the range of 2500 to 3000 HKD .
Speaker #2: And in the fourth quarter today, what I witnessed is that both the acquisition client momentum and the client acquisition cost remain quite healthy.
Speaker #2: So overall speaking , I feel more optimistic regarding the our over years client acquisition cost versus our versus our objective in the beginning of this Thank you year .
Speaker #2: .
Speaker #3: Thank you. We will take our next question. Your next question comes from the line of Peter Zhang from JP Morgan. Please go ahead.
Speaker #3: is Your line open .
Speaker #5: Oh , it's . Peter Zhang . Jiang . To . Chen . Try . Jing . Margin financing . Security . Security . Borrowing .
Speaker #5: Zhang . Woman . Woman . What ? Crypto . And crypto business to do the . The . She . Crypto . The .
Speaker #5: Crypto derivatives business or business is not. Thanks for giving me the opportunity to ask questions. Peter, John from JP Morgan.
Speaker #5: We have two questions. The first question is related to interest income. We saw the third quarter interest income record a very strong sequential growth.
Speaker #5: We would like we to understand the what driving forces behind the strong momentum and commandment help us to break down the cost income , interest into the key items such as the interest income from the client , cash idle from margin financing business and from the security lending .
Speaker #5: we notice that also the the security borrowings And contribution to interest income have strong been very in second and third We wish to quarter .
Speaker #5: Is this purely due to the overall market, or is there something that we have been doing at the company level that has led to strong growth?
Speaker #5: Our second question is related to the crypto business. We wish to understand the latest contribution of the crypto business to your revenue in the third quarter, and looking ahead, what will be the driving forces for the crypto business to expand?
Speaker #5: For example , for example , is it more mostly due to the expansion of the token offering on your platform ? Or do management ?
Speaker #5: See other other other potential business like derivatives or say , staking business may have some may have some upside or to your crypto business .
Speaker #5: Thank you .
Speaker #2: Daniel . Yes . So . the To margin . So you number . You . Had to borrow . The . Your . Regarding the breakdown of the interest income in the we third quarters , have two different source arising from arising from the interest income .
Speaker #2: Number one is from the client's idle cash. The second is from the margin financing. And the third is the security borrower and the.
Speaker #2: Actually , in the third quarters , the the percentage for these three sources are quite even regarding security , borrowing and the lending business , we see a very strong momentum in the second quarter and the third quarter , but mainly the the force driving was market from the itself , in particular .
Speaker #2: There will be more utilization of certain hardware for borrowing stocks in the third quarter. Thank you.
Speaker #1: Peter .
Speaker #1: Daniel, this is my second question. Hi, regarding crypto in our business. First of all, I'm going to give you a breakdown of the exponential growth we saw in the third quarter.
Speaker #1: then discuss And the outlook for this business . So strong the crypto growth was quite broad based three markets that across the we currently offer .
Speaker #1: Crypto trading in Hong Kong for example , our clients crypto AUM and crypto trading volume , both recorded triple digit sequential growth . we mentioned And as , our opening remarks , the Solana was very popular among our clients , which retail is the new coin we launched in the third quarter .
Speaker #1: And in Singapore . We also saw triple digit growth in crypto trading volume and continuously growing penetration among our funded accounts in the US , we launched a number of new functions , including market orders , and added ten new which really helps driving crypto AUM and volume .
Speaker #1: And so far as we've seen in the third quarter , there's a lot of volatility in the crypto market . But we've seen that a lot of our clients really took advantage of those volatility October , for in example , we've seen the crypto volume continue to grow high double digit month over month .
Speaker #1: And hit a new high this month, with a continuous uptick in volume and crypto penetration. So, these are all very encouraging signs.
Speaker #1: But still , crypto contributed a very small percentage to current revenue . But we think there is a long runway for growth of driving in terms crypto penetration on our client and base driving crypto revenue .
Speaker #1: And in terms of some of the factors and catalysts that are going to help with that revenue growth, I agree with a lot of the things mentioned just now, like token offerings. Broadening our reach will be quite helpful and we will be a direct beneficiary of that.
Speaker #1: Of course , derivatives with higher take rate is going to with help monetization . lot of these developments will But a be contingent on regulatory approvals .
Speaker #1: Term, but long optimistic about the growth we're quite of this business. And we understand that a lot of these new businesses, they don't really grow in a linear fashion.
Speaker #1: Peter will . I . Crypto . Be should opening remarks . Solana . Is a good to that the do one of the .
Speaker #1: on Of . Crypto . That . You . Can . Crypto crypto . That . about Is . crypto Thank you .
Speaker #5: To income interest . Can I interest of the question ? We wish up on understand . to the What's the interest on , particularly income for your security borrowing you see the business ?
Speaker #5: Do momentum continue in the fourth quarter? Thank you.
Speaker #5: Do momentum continue in the fourth quarter? Thank you.
Speaker #2: well . We to your . The
Speaker #2: very happy to borrowing give you an update during fourth quarter results . Thank you .
Speaker #3: you . We will take our next question . Your . question comes Thank of Imasu from Bank of America Securities . Please go ahead .
Speaker #3: Your line is open .
Speaker #4: Okay .
Speaker #4: . R&D for the Can you . from the line crypto AI . Take in the So . questions . have two The first one is about the I to the fed rate cut .
Speaker #4: And the second one is about your R&D DNA and analysis. They increase notably quarter over quarter and year over year. You mentioned the expense is mainly related to the crypto earlier AI capacity investment.
Speaker #4: And for for R&D Ghana . Stuff increase . So could you what's your tell us your Ghana is plan target or for investment in these areas ?
Speaker #2: And the . Your . The . . The the . The . remark Opening should be . Number . If you . AI want the .
Speaker #2: AI agent . AI that . You . . Need To . So you should . A are regarding the interest . You know now sensitivities fed as we from the incomes market give the estimation some for every 25 basis cut by the fed rate , our monthly pre-tax profit will be negatively impacted by the said having 7 million HKD .
Speaker #2: the by have a lot of positive such as the factors trading But velocity increase and also more You know , asset clients . definitely will offset , partially fully if not potential negative implications from the that , cut Regarding the second question for .
Speaker #2: increase on R&D and the expenses for the GNN expenses , we do have some loading front costs the preparation in certain new of markets .
Speaker #2: open in the two years . next we secondly , will we have invest a lot crypto side on the especially , you The , on the system in the of preparation certain license applications , not only including Hong Kong , but also in markets and also the AI's .
Speaker #2: open in the two years . next we secondly , will we have invest a lot crypto side on the especially , you The , on the system in the of preparation certain license applications , not only including Hong Kong , but also in markets and also the regarding We will further our AI other capabilities , especially for the external part .
Speaker #2: There will be further optimization for AI for our agent clients, and internally we will further utilize our AI to optimize capabilities, enhance our business, and improve our operating efficiency.
Speaker #2: you .
Speaker #3: Thank you . We will take our next question . Your next question comes from the line of Fan from Yu Please go SIC .
Speaker #3: Ahead. Your line is open.
Speaker #6: Hey , you can . Can . Q4 . 2020 . Single . No taking . Thanks for my question . Congratulations on the outstanding results .
Speaker #6: Achieved this quarter . This is from SIC . I have two questions here . The first question see the strong growth customer quarter .
Speaker #6: The regional breakdown of the existing market, along with the new pain points, is evident. The client question is regarding the U.S. Would you please provide further details on this?
Speaker #6: share more color on the market . Our and what our competitive advantages strategy to the other this peers in market ? Thank . you
Speaker #2: the . Now . The . The . The . The . Social number on the the SMB . So . The the . For breakdown of the the funding .
Speaker #2: New fund accounts in the in the Hong Kong and third quarter , Malaysia collectively contribute 50% of total new fund accounts . Contribute in the in the third quarter , except certain around new small markets or markets .
Speaker #2: We enter recently , such as Canada small The remaining markets contributions is in the range of 5% to 15% for the for Zealand .
Speaker #2: and US , the third quarter . The end of the China clients contribute around the total group account 46% of the accounts , and fund the remaining , you know , overseas markets to 54% of total accounts contribute .
Speaker #2: .
Speaker #1: I'll take your second question
Speaker #1: our US on Daniel . business . As you This is saw mentioned , we very strong momentum in terms of new accounts and also in terms of engagement of our existing clients with a number of options traders and options contracts traded , both logging digits double growth .
Speaker #1: that really our thanks to brand increasing I think influence , and if you've been to . New York recently , you'll see that we've launched another large scale branding New York City , in the heart of New York City .
Speaker #1: And another important factor is obviously we have a very superior product experience for our target clients . US is probably most competitive market in the world , but also unequivocally the largest brokerage market out there , which means to be is going diversified client needs that there to be different satisfied by .
Speaker #1: We think that our product players is built for the active sophisticated , traders , and those are the clients who want to serve and will continue to optimize our product experience for that client .
Speaker #1: Over . To . The . Not . To the Championship . So .
Speaker #6: Thank you .
Speaker #3: Thank you. We will take our next question. Your next question comes from the line of Charles Zhao from UBS. Please go ahead.
Speaker #3: you Thank . We will take our next question . Your question next from the line comes of Charles Zhao UBS . from line is ahead . Please go open Your .
Speaker #5: UBS Joe Cheng .
Speaker #7: Bank . Shanghai Net inflow . Original mix . 500 . Net inflow . share A . Can be . So this is , you know .
Speaker #7: this is So from UBS . So first of all , congratulations to your very good results . It's also a beat to the market consensus .
Speaker #7: strong So I have two questions . So my first question is about the IR star bank . Could you please share what investments have you made since to acquire 44% equity stake in IR star bank I think last June .
Speaker #7: And also how do you see the IR star Bank strategic role Futu business in terms of within short term , medium term and long also term perspective ?
Speaker #7: My second question is regarding the regional mix of the client , not AUM inflow . Can you maybe just , you know , give us a little bit more color about the breakdown of the regional say for example , does Hong Kong still account for mix , over 70% and also , are we seeing like a rising share from high net worth clients in the third quarter ?
Speaker #7: Thank you .
Speaker #2: Daniel . How The ? . Net inflow . The . The balance are not on the on the . On the on the .
Speaker #2: On the . On the can . Watch the . You . You can do the . For To go you . . In the .
Speaker #2: To be the number one . The channel . Regarding the the breakdown of the net inflow by regions . Actually , we see the percentage contributed by Hong Kong .
Speaker #2: Got a slight decrease on a Q1 quarter-on-quarter basis, mainly due to certain overseas markets such as Singapore and Malaysia also recording strong asset inflows.
Speaker #2: very So proportion wise , Kong Hong contribution was down a little bit and regarding the cohort , the we do think we do see more and more high net worth clients contributions in Hong Kong .
Speaker #2: And we do think this kind of trend will remain in the next coming quarters. We believe we have a very meaningful potential in terms of further upgrading our clients' quality in Hong Kong through management, etc.
Speaker #2: . Thank you .
Speaker #1: Hi . Charles , this is Daniel . I will take your first question on Airstar Bank . First of all , to give you an update on during the third quarter .
Speaker #1: Upon regulatory approval and the discussion between the shareholders, we have increased our stake in Airstar Bank, thereby becoming the controlling shareholder with 68.4%.
Speaker #1: So in the short term , we'll continue to focus improving on customer experience to enrich enriching , enriching products and capabilities . And we believe that is a lot of there integration opportunities between the banking business and the brokerage business .
Speaker #1: And in the long term , we believe that the banking business can help you to increase client stickiness and to improve client's wallet share , and will enable clients to complete fund investments , lending and consumption .
Speaker #1: We can satisfy all these various financial needs within a few ecosystem , and we can continue to enhance clients our , our brand perception of food to as a one stop financial services platform .
Speaker #1: And so far, Futu is the only online brokerage platform in Hong Kong that has integrated digital banking capabilities. We believe the scarcity of that license and the diversity of products and services we can offer under this license will continue to widen our competitive moat.
Speaker #1: And after this round of capital injection, Airstar Bank will be consolidated into Futu Financial in the next statements 2 to 3 years.
Speaker #1: We'll still be in investment mode for Airstar Bank, but we believe that as Futu's client quality improves across markets and as various markets become profitable and play out that operating leverage, the drag of Airstar Bank's loss to Futu's P&L overall will be limited.
Speaker #1: And after the capital injection, Futu in Xiaomi Group will continue to work very closely and take advantage of each other's resources. In the respective ecosystems, we will operate this bank together.
Speaker #1: And Charles . Update . The . In . Futu . Futu . In Hong . An .
Speaker #3: Thank you. We will take our next question. Your next question comes from the line of Qiao Huang from Morgan Stanley. Please go ahead.
Speaker #3: Your line is open .
Speaker #8: Crypto tokenization . Your pipeline . Tokenization . Tokenization . Crypto . M&A . Crypto . Yu Chen . So I questions . One is about have two the product pipeline from crypto and tokenization .
Speaker #8: In the next 1 or 2 quarters . And then bit longer term , what kind of value proposition maybe a we try to do achieve on tokenization to our And clients ?
Speaker #8: is about whether any plan on M&A in the crypto management have space to accelerate capability the building and what kind of key capability of crypto are we build in looking to the near term ?
Speaker #8: Thank you .
Speaker #2: The tokenization , tokenization . And . The . The . Decision to switch to . The . Crypto from the in the . Crypto .
Speaker #2: The . The . The the the the . Regarding your two questions about crypto you number one for know the products new products , pipelines and also do have a lot of tokenization , we preparations and internal discussions .
Speaker #2: Even some of certain layout products in in that connections . But as you can understand , tokenization is a very new concept to the market nowadays .
Speaker #2: And subject to different regulatory , you regimes examinations . So it is very difficult for us to lay out a very , you know , clear roadmap product for the launch , given that a lot of factors will be regulatory dependent .
Speaker #2: And regarding the Ma in the side , definitely we are very open crypto . You know , in this directions , given the crypto is a very strict strategical important considerations in our business direction down the road .
Speaker #2: So, definitely we will keep this option open afterwards. Thank you.
Speaker #3: Thank you. We will take our next question. Your next question comes from the line of Leon Qi from CLSA. Over to you.
Speaker #3: Your line, "Please go," is open.
Speaker #9: Hi . Thanks for taking my questions . This is from CRC . I have two questions today . Firstly , we are very glad to see that Hong , for the fourth consecutive quarter has led Kong new client additions .
Speaker #9: I'm just interested the client profile of in our new customers being acquired in Hong Kong for the past quarter and actually for the four quarters in general , given Hong Kong's equity market started to become quite past active since around four quarters ago , are there any meaningful differences in terms of these new customers in Hong of , in terms per per average AUM ages trading velocity , the products they are buying , if there are any notable differences for these new clients , compared our compared with our existing Hong Kong customers , most of which were acquired during probably the market a few years ago .
Speaker #9: So bull that's the first question on Hong Kong new customer profile . second And question , I'm interested in the gross margin trend in markets outside Hong Kong .
Speaker #9: I'm very we're very pleasantly surprised to see gross margin disclosed in the third quarter . Was was very strong and given we also have very good AUM growth in markets like Singapore and a lot of new clients in Malaysia , I presume the economy of scale kicking in is very rapidly .
Speaker #9: If possible, could management share with us some gross margin figures for Singapore and the trends in Malaysia? Where are they currently standing in these margins now, or what do you want us to know if a...?
Speaker #9: I . Who . Can . Trading velocity from home on the who the on . Singapore . Malaysia . Gross margin trend . Can you AUM .
Speaker #9: On the margin, margin in, margin which?
Speaker #1: Thank you for these two questions . This is Daniel . I'll take these two questions . First of all , regarding our Hong Kong in fact , in the third quarter , we have seen continued upward trajectory in average client assets of our new clients .
Speaker #1: And that the coupled with continuous net asset inflow , very robust net asset inflow of our clients , existing a double digit sequential growth in average client assets in Hong Kong .
Speaker #1: And I is think that representative happened in the past couple of quarters . As we continue to enhance our brand image , I think we can of what continue track , to attract more and more high quality clients and there'll be more clients that are inclined to do one stop allocation within asset platform .
Speaker #1: And in Futu these clients behavior , trading behavior specifically , I think that's very much market As you driven . terms of know , in our total trading volume in the past year or so , it's mostly kind of US stocks .
Speaker #1: But in Q3 this year, as the Hong Kong equities market outperformed, a lot of our clients quickly flocked to Hong Kong and engaged actively.
Speaker #1: So I think this is very much driven by the performance of equities and the relative outperformance of different equity markets. We believe this behavior is more cyclical than structural in terms of clients' trading behavior.
Speaker #1: And to your second question , we think yes , that online brokerage business inherently has huge operating leverage . gross margin But on the it's been a very across all of healthy our markets because mostly a relates to trading or and trading product .
Speaker #1: And margin product . All have very high margins . So the operating it's mostly kicks in the operating leverage from . And as continue to scale and a lot of these international markets , have seen we a very rapid expansion and operating And maybe leverage .
Speaker #1: you some our Singapore business for a couple consecutive months , we have seen our the operating margin in our Singapore business consistently topped 60% .
Speaker #1: still And it's expanding . I think that really speaks to the strong operating leverage in our business model . So . Which . Your and .
Speaker #1: Yu Chen Futu Holdings Ltd page . On the . Outperformance . In . The . The . Expense side . The share . Operating margin In the .
Speaker #1: The catch up . .
Speaker #9: Thanks a lot , Daniel . Very helpful .
Speaker #3: you . This Thank concludes today's question and answer session . I'll now call back to Daniel Yuan for closing remarks .
Speaker #1: That concludes our call today . On behalf of the management team , like to I'd thank you joining us for today . If you have any further questions , do not hesitate to please any of our Investor Relations representatives .
Speaker #1: Thank you and goodbye
Speaker #3: This