Hello, ladies and gentlemen. Welcome to Futu Holdings Fourth Quarter and Full Year 2025 Earnings Conference Call. [Operator Instructions] 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, Chief Staff to CEO, Head of Strategy and IR at Futu. Please go ahead, sir.

Thanks, operator, and thank you for joining us today to discuss our fourth quarter and full year 2025 earnings results. Joining me on the call today are Mr. Leaf Li, Chairman and Chief Executive Officer; Arthur Chen, Chief Financial Officer; and Robin Xu, Senior Vice President. As a reminder, today's call may include forward-looking statements, which represent the company's belief regarding future events, which, by their nature, are not certain and are outside of the company's control. Forward-looking statements involve inherent 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. 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 Li. Li will make his comments in Chinese, and I will translate.

[Foreign Language]

[Interpreted] Thank you all for joining our earnings call today. In 2025, we delivered another year of strong client acquisition, adding more than 950,000 menu funded accounts and surpassing our full year guidance by 19%. Total funded accounts reached around $3.4 million, up 40% year-over-year. We remain confident in our ability to acquire 800,000 net new funded accounts in 2026, supported by strong bottom-up growth opportunities across both our established markets and newer ones.

[Foreign Language]

[Interpreted] And the robust growth in funded accounts in 2025 was broad-based, driven primarily by solid client additions from Hong Kong and Malaysia. In 2025, net new funded accounts in Hong Kong recorded high double-digit year-over-year increase as we continue to extend our market leadership on top of a high market share. Significant share gain was also observed in Malaysia, and we expect this momentum to continue given our competitive product offering and growing brand trust. In Japan, cumulative app downloads as of November last year crossed 2 million, further solidifying our position as the #1 foreign securities firm. Momo was also the most downloaded trading app in Australia in 2025.

[Foreign Language]

[Interpreted] In the fourth quarter, we added roughly 230,000 net new funded accounts, down 8% quarter-over-quarter, but up 9% year-over-year. While client growth in Hong Kong moderated sequentially following a sharp downturn in the local stock market, net new funded accounts in Japan and Malaysia recorded double-digit sequential growth, underpinned by strong client interest in U.S. stock trading and our superior U.S. stock offerings. In the U.S., we rolled out another round of off-line marketing campaign highlighting key features for active traders. During the quarter, the number of auction contracts traded at, stock and crypto training volume in the U.S. market all posted double-digit sequential growth.

[Foreign Language]

[Interpreted] In the fourth quarter, net asset inflow remained strong. The mark-to-market losses on clients' Hong Kong stock holdings weighed on overall client assets. Total client assets were HKD 1.23 trillion at quarter end, up 66% year-over-year and flat quarter-over-quarter, with Hong Kong and Singapore saw rising net outside flow contribution from high net worth clients. While in the U.S., average client assets recorded the fastest sequential increase among all regions. Underpinned by heightened U.S. stock margin trading activity, margin financing and securities lending balance expanded 7% sequentially to HKD 67.7 billion as of quarter end. A number of popular Hong Kong IPOs during the quarter further contributed to the increased use of leverage driving a double-digit sequential rise in daily average margin balance.

[Foreign Language]

[Interpreted] Total trading volume climbed to a record HKD 3.98 trillion, up 38% year-over-year and 2% quarter-over-quarter. The U.S. equity markets featuring numerous investment themes in 2025 and and we've observed our clients diversify and beyond large technology names into a broader range of sectors and across the AI value chain. As a result, U.S. stock trading turnover was up 17% sequentially to HKD 3 trillion in the fourth quarter. Hong Kong stock trading volume contracted 31% quarter-over-quarter to HKD 821 billion, as investor appetite to China technology stocks weighed the market correction in the second half. This decline was partially offset by elevated trading interest in gold and other precious metals related names. Crypto trading volume remained resilient at approximately HKD 20 billion despite market headwinds, with crystal penetration among trading clients rising across Hong Kong, Singapore and the U.S. During the quarter, we expanded our crypto offerings by adding more than 10 points in both Singapore and the U.S. and further enrich to our market data and information around crypto.

[Foreign Language]

[Interpreted] Both management client assets reached HKD 179.6 billion, up 62% year-on-year and 2% sequentially. In response to growing client demand for portfolio diversification, we broadened our portfolio suite across key markets. In Hong Kong, we enhanced our lineup of high dividend funds and further lower the minimum investment threshold for structure product, making them more accessible to retail investors. In Singapore, we introduced more Singapore equity funds as well as for duration volume funds. In Malaysia, we launched sari-compliant bold tracker funds, which were met with strong demand from local investors.

[Foreign Language]

[Interpreted] During the quarter, we streamlined Airstar Bank's account opening processes and launched mutual funds and insurance products in the banking app. A desktop version was also introduced to clients with a seamless cross-platform experience. On the internal fund, we strengthened Airstar Bank's compliance and risk management capabilities by developing an anti-money laundering system and AI-powered fraud detection infrastructure. Looking ahead, we'll continue to enhance the technology infrastructure and user experience while exploring synergies between Airstar Bank and the group as we advance toward a comprehensive one-stop financial services platform in Hong Kong.

[Foreign Language]

[Interpreted] At quarter end, we have 600 IPO distribution in our clients, a 24% year-over-year increase. In 2025, we reinforced our standing as the leading online broker for Hong Kong IPO distribution and subscription. In 2025, we provided investment banking services to over half of the newly listed Hong Kong Board Company, with full year subscription amount on our platform, representing 49% of the total public offering subscription amount. The number of Hong Kong IPO subscribers on our platform grew nearly 5x year-over-year. In the fourth quarter, we assumed the role of overall coordinators for a number of high-profile Hong Kong IPOs, including those of Technology and.

[Foreign Language]

[Interpreted] Next, I'd like to invite our CFO, Author, to discuss our financial performance.

[Foreign Language] Thank you, Hua and Daniel. Please allow me to walk you through our financial performance in the fourth quarter. All the numbers are in Hong Kong dollars, unless otherwise noted. Total revenues were HKD 6.4 billion, up 45% from HKD 4.4 billion in the fourth quarter of 2024. We concluded another strong year with full year revenue growing HKD 22.8 billion, up 68% year-over-year. Brokerage commission and handling charge income was HKD 2.8 billion, up 35% year-over-year and down 5% Q-o-Q. Total trading volume grew both year-over-year and a Q-o-Q basis, while blended commission rates moderate as clients trade more higher-priced U.S. stocks and options during the quarter. Interest income was HKD 3 billion, up 50% year-over-year and the flat Q-Q. The year-over-year increase was driven by higher interest income from security borrowing and lending business, banking deposits and margin financing. On a sequential basis, interest income remained stable as higher interest income from banking deposits and margin financing was offset by lower interest income from security borrowing and the lending business. Other income was HKD 630 million, up 79% year-over-year and 42% Q-o-Q. The year-over-year increase was primarily attributable to higher fund distribution service income and IPO subscription service charge income. The Q-over-Q increase was mainly driven by higher enterprise public relationship service charge income and IPO subscription service charge income. Our total cost was HKD 729 million, a decrease of 6% from HKD 776 million in the fourth quarter of 2024. Brokerage commission and handling charge expenses was HKD 141 million, up 26% year-over-year and down 12% Q-over-Q. Both the year-over-year and Q-over-Q movement were roughly in line with the change of brokerage commission and handling charge income. The interest income were HKD 437 million, down 15% year-over-year and 8% Q-o-Q. Both the year-over-year and Q-o-Q…

[Operator Instructions] We will now take the first question from the line of Peter Zhang from JPMorgan.

[Foreign Language] This is Peter Zhang from JPMorgan, and many thanks for giving me the opportunity to ask questions and congratulations on the results. I have 2 questions. My first question is on the -- among the first quarter business trend. I'm wondering whether management can give us some color on the fee income growth, net asset inflow and trading velocity in the first quarter year-to-date? And also, how about the commission fee rate trend in 2026? My second question is regarding the trading volume breakdown particularly for the U.S. trading volume. This maybe because in the past few years, some investors may view Futu as stock to China. And some investors think that our clients trade a lot Chinese AR stocks. But I guess given that we have very successful overseas expansion, the trading volume mix may change over time. So I'm wondering whether management can give us some color on the breakdown of your U.S. stock trading volume into Chinese ADI and other stock.

[Foreign Language] Let me just do the translation for your second question, I will do the answers regarding the Chinese ADR contribution for our U.S. stock trading volumes in the latest quarter, this portion is less than 10%. And even we compare with the third quarter last year, the number was still roughly around 10%. So I think structure-wise, the contribution from Chinese ADRs to our overall U.S. stock has been gradually decreased. I will now hand over to my colleague, Daniel, who will answer your first question.

[Foreign Language] So based on the trends we have seen year-to-date, we expect net new funded accounts and trading volume to be flattish quarter-over-quarter. And we've seen very strong bottom activities from our clients. So we expect a double-digit sequential increase in net asset inflows, and we expect the quarterly net asset inflow in the first quarter to be the highest quarterly number. And mark-to-market impact had -- was pretty strong, and it was pretty negative quarter-to-date. So we expect, all in all, total client assets to increase modestly by the end of the first quarter. Thank you. And in terms of commissions -- blended commission rate, so far, I think we are seeing flattish Q-on-Q blended commission rate. Thanks.

We will now take the next question from the line of Emma Xu from Bank of America Securities.

[Foreign Language] The first one is about the crypto business. So what are the latest developments in the crypto-related business after the relaxation of Hong Kong's regulatory policies in February this year? What new products have been launched? And what is the current implementation status and performance? The second question is about the AI. What specific empowerment that AI currently bring to your business? Will AI bring challenges to some business or put pressure on given the SLI model of your business?

[Foreign Language] In terms of the crypto development, I think in the first -- in Hong Kong, we are still waiting for the Hong Kong regulators for our VAT license approvals. We are very confident in the near future, we can get this license. And after the launch of the VAT piece, hopefully, we can, in the near future, Futu can start to provide our traditional clients for crypto trading on the back of the margin using their stock for the margins. And also, we will provide taking service for them as well. In the future, we also wish to provide a crypto service to our high net worth clients alongside with the service to our institution clients for the one-stop solutions. And then in the past one quarter, we further enriched our product offering trading different tokens in Singapore and in the U.S. And at the same time, as we've mentioned in the opening remarks, in Hong Kong, Singapore and the U.S., the number of clients trading for the cryptos all include a double-digit increase, and the penetration rate for these [indiscernible] trading crypto also increased a lot to the latest high single-digit and low teen levels. We think this penetration rate can continue to grow in the foreseeable future. Thank you.

[Foreign Language]

[Interpreted] So AI is the company level of strategic priority at Futu. We've actually started AI assessments in 2022 and over the past few quarters, we have ramp up AI investment by deeply integrating AI capabilities into our product experience and internal operations. We now leverage AI to enhance the efficiency with which our clients discover investment opportunities and gather information. Our AI-generated daily and weekly reports automatically filter and key insights, cover over 20 types of market data, including technical indicators, patterns and loads and these offer better timeliness and broader content coverage compared to our peers. Furthermore, AI power's summaries of earnings reports and news has also significantly improved client efficiency and gathering information. In the fourth quarter, we launched AI which allows users to generate quantitative trading strategies using simple natural language. This feature has been very well received by the advanced traders on our platform, lowering the barrier to creating professional investment strategy. We have also expanded the asset classes coverage of our AI chatbot and AI analysis. So for the open it's quite popular recently. We now offer access through our open API. We've actually started developing open API in 2014 has been optimizing that experience ever since. And we've also supported skills that are accessible to open as well. So thanks to the years of development and accumulation and market data information in the trading infrastructure as well as our execution and clearing capabilities as well as our determination to embrace AI and our capabilities and leveraging AI to empower our business. We believe Futu will stay as a leading player in the AI era. Thank you.

We will now take the next question from the line of Chiyao Huang from Morgan Stanley.

[Foreign Language] So the first question is regarding the HKD 800,000 guidance on new founded accounts, which is a very strong number. And considering the rising market volatility year-to-date, I'm just wondering what will be the main drivers and the main areas that the management sees has larger potential to help achieve this target, especially including any new markets that we are targeting? Second question is regarding the Airstar Bank. Just wondering what's the long-term planning -- strategic planning for the bank's positioning in the market? What kind of differentiation will be there compared to other virtual bank and the traditional banks? And do we have a time line of the product pipelines? Over time, what would be the expected revenue structure for Airstar Bank will be more balance sheet business or more fee income business in wealth management?

[Foreign Language] For the first question, for our 800 fund accounts, this number we have already in that one new markets, we will have potential to enter into in 2026. Despite the year-to-date, there is some market volatility arising from geopolitical tensions and a lot of macro headwinds, our client acquisitions run rate still remain very robust, and we are very confident to achieve these targets towards the end of this year. Then for the Airstar Banks, we will continue to focus how to generate meaningful synergies between Airstar banks and the Futu existing business. As Leaf mentioned in the opening remarks in the fourth quarter and also in the next couple of quarters, our most work in Airstar Bank will center around in 2 aspects, externally is to upgrade the user experience and internally, we will further to enrich the infrastructure. On the -- in the external side, we have already launched some new wealth management products in Airstar Bank app. Like mutual funds and insurance products, there will be more wealth management-related products to be launched in the app in the next couple of quarters. Then internally, we further to enhance the compliance and the risk controls, a lot of proprietary developed products to enhance the business efficiency and the lower operating cost for the banks. In the long run, we think the revenue stream will be more schooled to these fee income arising from the wealth management and associated activities supplement by some balance sheet expansion business. But having said that, this is a very long-term targets for revenue generation. So in the near term, we will still continue to focus the 2 aspects I mentioned before. Thank you very much.

We will now take the next question from the line of You Fan from CICC.

[Foreign Language] This is You Fan from CICC, and I have 2 questions. The first one is about the user regional breakdown. We still see strong customer growth we've captured despite the market downturn. So what's the regional breakdown of our existing and also the new paying clients? And the second question is about AUM. How much is from client net asset inflow and how much from market-to-market depreciation? And what is the regional breakdown of the client asset?

[Foreign Language] For the contribution of the fourth quarter net add, Malaysia and Hong Kong collectively contribute over 50% of new client adds in the fourth quarter. Then other remaining markets like U.S., Singapore and Japan, their contribution rate is in the percentage of 10% to 20%. And as the year ends, the fund accounts in the universe of our overseas brand moomoo has already increased to 55% of total group fund accounts. Among them the contribution from Singapore and the U.S. was most. And for the second question regarding the new net asset flow inflows in the fourth quarter. The Q-on-Q basis, the net asset inflows have some moderations in the fourth quarter. But on the absolute levels, it remains in a very high levels, the momentum keeps very strong, but you can imagine in the fourth quarter, Hong Kong market got a lot of retreat. For instance, Hansa Index down 5% Q-o-Q and Hansa Tech Index, down 15% Q-o-Q. Therefore, we got some negative impact from the market-to-market loans, which almost fully offset the net asset inflows in the fourth quarter. And at year-end, Hong Kong remains the largest in terms of clients' assets AUM breakdown, followed by Singapore and some new markets like Japan and the U.S. the contribution, we see a very good momentum to increase. Thank you very much.

We will now take the next question from the line of Leon Qi from CLSA.

[Foreign Language] I will briefly translate my questions into English. This is Leon Qi from CLSA and congrats again on very strong fourth quarter results. I have 2 questions today. First one is actually a follow-up on our new markets this year. Is it possible for management to give us some clues in terms of our rationale of entering these new markets? Is it going to replicate one of our existing markets? Is the significance mostly on new paying clients or any new strategy in terms of products, et cetera. So if it is possible for management to share with us some clues of entering market this year? The second question is actually a bit operational. We just want to understand the reasons behind the very resilient quarterly net asset inflow. In particular, in Hong Kong, we do understand that high net worth clients a few years ago. How do we evaluate the performance of our relationship managers for these high net worth clients, is net client inflow, a major metric that we actually look at or we actually look at other metrics such as total assets, new funded accounts or even metrics such as the performance of client assets or the number of different products that our clients hold. So this kind of operational metrics will be very helpful for us.

[Foreign Language] Regarding the first question for this new market, it is still too early to share the exactly the market name, given that we are still in the process of the license applications, but we think this market will be in the universe of Asia. Then for the second question for the certain performance measurements for our internal colleagues regarding the high net worth clients. As you said, the new asset inflow is definitely one factor of the -- of our overall metrics which is very comprehensive and also outline is to care about the clients like and values. Therefore, the net asset inflows and also including the clients' total asset retention rate all these factors into this metrics. Thank you.

We will now take the next question from the line of Cindy Wang from China Renaissance.

[Foreign Language] Congrats for the great fourth quarter results. So I have 2 questions here. First, for your new funding accounts target HKD 800,000 in 2026, could you break down the expected contributions from Hong Kong and overseas market? And what is the expected average customer acquisition cost for the whole year? Second is quarter-to-date, we saw a strong market really starting in January, but followed by recent stock market volatility due to geopolitical risk. So based on investors' trading activity on your platform, could you provide some guidance on trading volume, trading velocity and margin financing and security spending demand trend in first quarter?

[Foreign Language] In terms of the breakdown of the new fund account targets for 2026, we think largely it will be the same stock contributions from different markets in 2025. And Hong Kong will continue to be a very strong contributor in terms of the geographic locations. Then for the cap, our initial objective for this year's cap will be around 25,000 to 30,000 -- sorry, 250,000 to -- sorry, HKD 2,500 to HKD 3,000 considering the uncertainty of this year's market volatility. And also, there will be some fund loaded cost in this new market expansion, as I mentioned before. Therefore, there we want to leave some flexibility in the CAC objective. But year-to-date, we think the CAC acquisition situations remain very robust and CAC for the first 2 months, I think will be in the low end or even lower than the range I mentioned before.

[Foreign Language] So in the first quarter, quarter-to-date, the market has been quite volatile, and we've seen our clients engaging very actively with the market. We expect the first quarter's total trading volume to be flattish during the quarter. So it's going to stay at the historic high that we've seen in the fourth quarter last year. And when the market experienced a pullback, we've seen lots of activities from our clients. We're expected a sequential increase in our margin financing and securities lending balance. And as we shared earlier, net asset inflow is also very strong, and we expect a historic high quarterly net asset inflow in the first quarter. Thank you.

We will now take the next question from the line of Zoey Zong from Jefferies.

[Foreign Language] This Zoey from Jefferies. I have 2 questions. First, could you please elaborate on the competitive landscape in Hong Kong? And how do we see the market share momentum in Q4 and recently in Q1? And second, in November last year, we announced a share repurchase program of up to [ USD 800 million ] till December '27, could you please give us an update on the progress? And how should we expect the pace in the next 2 years?

[Foreign Language] Regarding share buyback programs, so far, in the fourth quarter, actually, we have not conducted any share buyback within this [ 800 million ] share buyback programs, which will cover toward the end of 2027. So we will continue to closely work the market conditions and looking for potential market opportunities to come up with share buyback program, which is more preemptive. Thank you.

[Foreign Language] So we haven't seen any incremental changes in terms of the competitive landscape in Hong Kong. We think our performance in Hong Kong is still influenced by the overall market sentiment. And in the fourth quarter due to the sharp pullback of the Hong Kong stocks, the Hong Kong retail investors had -- was overall quite bearish about the market. So our client acquisition decelerated sequentially of the very active Hong Kong IPO market to some extent listed investor sentiment. And just looking back at 2025, Hong Kong contributed the highest number of net funded accounts within the Food Group and the net funding accounts achieved high double-digit year-over-year increase. So we're able to extend our leadership and further solidified our leadership on top of a very high market share. And we not only saw very strong client growth in 2025, we also saw very strong net asset inflow. And we've seen a higher percentage of contribution in terms of net asset inflow from our high net worth claims, which was largely due to a growing portfolio of wealth management products and our more professional -- in our image of a professional finance platform, thanks to the series of brand initiatives that we carried out and lots of investment forms and lectures that we did throughout the year. And we think that very strong performance in Hong Kong 2025 really speaks to our assessment of the market potential earlier. We believe that Hong Kong has huge headroom to growth for us in terms of both client numbers and client assets. And looking to [ 2026 ], we'll continue to enhance our product capabilities. We'll continue to invest in brand building, and we are very optimistic about the long-term growth opportunity in Hong Kong. Thank you.

We will now take -- sorry, I would like to hand back over to the speakers for closing remarks.

That concludes our call today. On behalf of the Futu management team, I would like to thank you for joining us. If you have any further questions, please do not hesitate to contact me or any of our Investor Relations representatives. Thank you, and goodbye.

This concludes today's conference call. Thank you for participating. You may now disconnect. [Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.