Another Tencent-based unicorn company went public in the United States. On the evening of March 8, Futu Securities officially registered on Nasdaq , becoming the first Chinese Internet brokerage to list overseas. As of the close, Futu Securities rose 27.67% to US$15.32, with a market value of US$1.709 billion. .
It is worth noting that as the largest institutional shareholder of Futu Securities, Tencent holds 38.2% of the shares. Based on Futu Securities’ latest closing price of US$15.32 per share, Tencent’s first-day book floating profit has reached 991 million yuan.
’s share price rose 27.67% on its first day of listing
html On the evening of March 8, under the aura of being “the first Chinese Internet brokerage to list overseas”, Futu Securities officially went public in the United States. The company's stock price also had a "good start" on the first day of listing of. Its opening price was US$14.76, which was 23% higher than the issue price of US$12.00; it once reached US$17.39 during the session, with the maximum increase of nearly 45%. As of the close, Futu Securities rose 27.67% to US$15.32, with a market value of US$1.709 billion and a total share capital of 112 million shares.
Li Hua, founder and chairman of Futu Securities, said after the listing that Futu’s mission is to innovate the investment experience with technology and the unremitting pursuit of user experience. The IPO is just a starting point. We look forward to continuing to grow in the future, staying true to our original aspirations, and creating long-term value for users and shareholders.
Last year, it turned a loss into a profit.
Futu Securities was established in 2012. It mainly provides customers with Hong Kong stocks and US stocks securities account opening and trading services. It is a licensed corporation recognized by the Hong Kong Securities Regulatory Commission and has been issued by the Hong Kong Securities Regulatory Commission. Class 2/4/9 license. Founder Li Hua is Tencent’s employee No. 18.
to take a look at its listing process. On December 29, 2018, Futu Holdings, the parent company of Futu Securities, submitted its IPO prospectus to the United States in the early morning, and updated its IPO (initial public offering) prospectus to the U.S. Securities and Exchange Commission (SEC) on February 20, 2019. According to the F-1/A supplementary document, in the early morning of February 27, Futu updated its U.S. listing prospectus and announced the pricing range. The latest data from the
prospectus shows that as of December 31, 2018, Futu Securities had 5.6 million users, including more than 502,000 registered users and more than 132,000 paying users. Throughout 2018, Futu Securities' user assets and trading volume increased by 14.7% and 75.1% respectively compared with 2017, and the total user brokerage transactions reached 907 billion Hong Kong dollars (approximately US$115.8 billion).
What is most noteworthy is that despite the harsh winter experienced by securities companies last year and a sharp decline in revenue, Futu Securities turned a profit. Its net profit increased from a loss of HK$8.1 million in 2017 to a profit of HK$138.5 million in 2018.
Futu Securities’ income sources are also diversified, mainly including commissions and handling fees collected by providing online brokerage services, interest income from margin financing and securities lending services, interest income from bank deposits, and interest income from IPO financing, etc.
As of the end of 2018, the proportions of transaction commission and fee income, interest income and other income were 50.3%, 44.4% and 5.3% respectively.
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Tencent led three rounds of investment
The first-day book profit was nearly 1 billion yuan
Futu Securities is also a Tencent company. Since the establishment of
, Futu Securities has completed three rounds of financing in 2014, 2015 and 2017, all led by Tencent, followed by Matrix Partners and Sequoia Capital . Before the IPO, Li Hua held 51.7% of the shares and was the largest individual shareholder, while Tencent was the largest institutional shareholder of Futu with a shareholding ratio of 38.2%. In this Futu IPO, Tencent also continued to subscribe for US$30 million. Share, after the completion of the IPO, Tencent will still be the largest institutional shareholder of Futu.
Based on Futu Securities’ latest closing price of US$15.32 per share, Tencent’s floating profit on the first day has reached 991 million yuan.
In December 2018, Futu Holdings and Tencent reached a strategic cooperation framework agreement to cooperate in areas such as traffic, content, cloud, ESOP services and management, talent recruitment and training through Tencent's online platform. In the future, the two parties will further explore and seek more cooperation opportunities, carry out potential cooperation in financial technology-related products and services, and expand the international business layout of both parties.
Tencent CEO Ma Huateng once said, "The Futu team has good Internet genes and product technology capabilities, focuses on user experience, and also shows good learning ability in the financial direction."
The relationship between Futu Securities and Tencent is not only in investment. Li Hua, the founder and chairman of the company, was once a "Tencent person."
Li Hua joined Tencent in 2000 and became the company's 18th employee. He was also one of the earliest R&D participants in QQ. In 2012, Li Hua resigned from Tencent, where he had worked for 8 years, and then founded Futu Securities. The company's main business is to provide Hong Kong stocks, US stocks and A-share trading services.
Li Hua’s WeChat signature is “Insist on doing the right thing, not the easy thing.” Looking back on the past, Li Hua feels that the most correct decision he made was that Futu chose to obtain a license and accept supervision as soon as possible, and it was Conduct business and research and development systems based on the entire regulation. "This allows all our early accumulation to be truly accumulated and can be applied continuously in the future." He said that if we choose to create a traffic diversion model at the beginning, we will just make a front-end App to divert traffic to securities companies. If it is divided into shares, although it starts quickly, it will be very difficult to deepen the business and make more innovations, and the cost of time lost will be very high.
Internet brokerage companies are accelerating their overseas expansion.
Tiger Securities has submitted a prospectus for an IPO in the United States.
Internet securities companies are speeding up their overseas expansion significantly. Futu Securities is also about to welcome its competitor Tiger Brokers in the US stock market. On February 22, Eastern Time, Tiger Brokers, an Internet brokerage established in 2014, submitted a prospectus to the U.S. Securities and Exchange Commission and planned to list on Nasdaq with the planned trading code "TIGR".
Tiger Securities’ IPO prospectus shows that the company’s total revenue in 2018 was US$33.56 million, a year-on-year increase of 98%. The revenue from 2016 to 2017 was US$5.476 million and US$16.949 million respectively. In 2018, the company's annual net loss based on non-GAAP was US$10.089 million. From 2016 to 2018, the compound annual growth rate of operating income was 148%. At the same time, in 2018, Tiger Brokers’ annual trading volume was US$119.2 billion.
Tiger Securities’ income mainly comes from transaction commissions, financing service fees, investment income, interest and other income. Among them, transaction commissions and financing service fees are its main sources of income. In 2018, transaction commission income was US$26.043 million, accounting for approximately 77.6%, and financing service fee income was US$6.442 million, accounting for approximately 19.2%. From this point of view, its transaction commission contribution to revenue is higher than that of Futu Securities.
Just like the Internet giant Tencent is behind Futu Securities, and Xiaomi are also behind Tiger Securities. In September 2015, Tiger Brokers announced that it had received a 100 million yuan Series A investment from Xiaomi Technology. According to the prospectus, Xiaomi currently holds 14.1% of the shares of Tiger Brokers through People Better Limited, with 5.2% of the voting rights. Interactive Brokers, the largest Internet brokerage in the United States, holds 7.7% of the shares, with 2.9% of the voting rights.
This article comes from China Fund News
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