Futu Prospectus

IMPORTANT
IMPORTANT: If you are in any doubt about any of the contents of this document, you should seek independent
professional advice.
Futu Holdings Limited

富途控股有限公司
(A company controlled through weighted voting rights and incorporated in the
Cayman Islands with limited liability)
LISTING BY WAY OF INTRODUCTION

ON THE MAIN BOARD OF
THE STOCK EXCHANGE OF HONG KONG LIMITED
Stock Code: 3588
Joint Sponsors
Sole Financial Advisor
Hong Kong Exchanges and Clearing Limited, The Stock Exchange of Hong Kong Limited and Hong Kong Securities
Clearing Company Limited take no responsibility for the contents of this document, make no representation as to its
accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in
reliance upon the whole or any part of the contents of this document.
This document is published in connection with the listing by way of introduction on the Main Board of The Stock
Exchange of Hong Kong Limited of the Class A ordinary shares of Futu Holdings Limited. This document contains
particulars given in compliance with the Rules Governing the Listing of Securities on The Stock Exchange of Hong
Kong Limited and the Securities and Futures (Stock Market Listing) Rules (Chapter 571V of the Laws of Hong Kong)
for the purpose of giving information with regard to our Company, subsidiaries and consolidated affiliated entities.
This document does not constitute an offer of, nor is it calculated to invite offers for, Class A ordinary shares
or other securities of our Company, nor has any such Class A ordinary shares or other securities been allotted
with a view to any of them being offered for sale to or subscription by members of the public. No new Shares
will be allotted and issued in connection with, or pursuant to, this document.
Prior to making an investment decision, prospective investors should consider carefully all of the information
set out in this document, including the risk factors set out in the section headed “Risk Factors” in this
document. Information regarding the proposed arrangements for the listing of, and dealings and settlement of
dealings in, our Class A ordinary shares following the Introduction is set out in “Market Arrangements to
Facilitate Dealings in Hong Kong” in this document.
The Company is controlled through weighted voting rights. Prospective investors should be aware of the
potential risks of investing in a company with a WVR structure, in particular that the WVR Beneficiary, whose
interests may not necessarily be aligned with those of our Shareholders as a whole, will be in a position to exert
significant influence over the outcome of Shareholders’ resolution. For further information about the risks
associated with our WVR structure, please refer to the section headed “Risk Factors — Risks Related to our
Class A Ordinary Shares and ADSs.” Prospective investors should make the decision to invest in the Company
only after due and careful consideration.
NEITHER THE SEC NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED
OF THESE SECURITIES OR DETERMINED IF THIS DOCUMENT IS TRUTHFUL OR COMPLETE. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
December 22, 2022

EXPECTED TIMETABLE(1)
The Company will publish an announcement on the website of the Stock Exchange
at www.hkexnews.hk and our website at ir.futuholdings.com if there is any change in the
following expected timetable of the Introduction.
Commencement of investor education activities as

described in “Market Arrangements to Facilitate
Dealings in Hong Kong — Investor Education”
from . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Thursday, December 22, 2022
• dissemination of electronic copies of this listing

document through the respective websites of our
Company at ir.futuholdings.com and the
Hong Kong Stock Exchange at www.hkexnews.hk
Daily announcement released on the respective

websites of the Hong Kong Stock Exchange at
www.hkexnews.hk and our Company at
ir.futuholdings.com, disclosing the previous day
closing price (in both US dollars and Hong Kong
dollars for reference) of ADSs (each representing
eight Class A Ordinary Shares) on the Nasdaq Global
Market, and developments and updates, if any,
with regard to bridging arrangements described in
“Market Arrangements to Facilitate Dealings in
Hong Kong” on . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Friday, December 23, 2022
Wednesday, December 28, 2022
Thursday, December 29, 2022
and no later than 8:30 a.m. on
Friday, December 30, 2022
Dealings in the Class A Ordinary Shares on the

Hong Kong Stock Exchange expected to
commence at 9:00 a.m. on . . . . . . . . . . . . . . . . . . . . . . . . . . . Friday, December 30, 2022
Notes:
(1) All times refer to Hong Kong local time, except as otherwise stated.
(2) Particulars of the Introduction are set out in “Information About this Document and the Introduction.”
–i–
CONTENTS
IMPORTANT NOTICE TO INVESTORS
We have not authorised anyone to provide you with information that is different from
what is contained in this document. Any information or representation not contained nor
made in this document must not be relied on by you as having been authorised by the
Company, the Joint Sponsors, any of their respective directors, officers, employees,
agents or representatives of any of them or any other parties involved in the Introduction.
Information contained in our website located at ir.futuholdings.com does not form part
of this document.
Page
Expected Timetable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . i
Contents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ii
Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Glossary of Technical Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Forward-looking Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Waivers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 134
Information about this Document and the Introduction . . . . . . . . . . . . . . . . . . . . 172
Directors and Parties Involved in the Introduction . . . . . . . . . . . . . . . . . . . . . . . . 180
Corporate Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 184
Industry Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 187
Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 205
History and Corporate Structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 284
Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 294
– ii –
CONTENTS
Contractual Arrangements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 365
Connected Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 389
Directors and Senior Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 402
Relationship with Our Controlling Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . 417
Substantial Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 421
Share Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 425
Financial Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 435
Future Plans and Prospects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 505
Market Arrangements to Facilitate Dealings in Hong Kong . . . . . . . . . . . . . . . . . 506
Appendix IA Accountant’s Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IA-1
Appendix IB Unaudited Interim Condensed Consolidated Financial

Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IB-1
Appendix II Unaudited Pro Forma Financial Information . . . . . . . . . . . . . . II-1
Appendix III Summary of the Constitution of the Company and

Cayman Companies Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . III-1
Appendix IV Statutory and General Information . . . . . . . . . . . . . . . . . . . . . IV-1
Appendix V Documents Available on Display . . . . . . . . . . . . . . . . . . . . . . . V-1
– iii –
SUMMARY
This summary aims to give you an overview of the information contained in this
document. As this is a summary, it does not contain all the information that may be
important to you. Moreover, there are risks associated with any investment. Some of the
particular risks of investing in our Shares are set out in “Risk factors”. You should read
the entire document carefully before you decide to invest in our Shares.
OVERVIEW
We are a leading one-stop financial technology platform transforming the investing

experience with our fully digitalized securities brokerage and wealth management product
distribution services in Hong Kong. We launched our business on the premise that no one
should be precluded from investing on the basis of prohibitive transaction costs or market
inexperience. Technology permeates every part of our business, allowing us to offer a redefined
user experience built upon a secure, stable, agile and scalable online platform. Today, we have
become a market leader in Hong Kong in the retail securities brokerage industry and a go-to
brand for retail securities trading. According to CIC, we are the largest securities broker in
terms of retail securities trading volume on the Hong Kong Stock Exchange, with a market
share of 10.7% as of December 31, 2021.
A securities brokerage service provider at inception, we are now an all-rounded online

financial services platform, seamlessly integrating services and products including trading,
wealth management product distribution, market data and information, user community,
investor education, and corporate services with a focus on the online securities brokerage
market. As an intuitive and easy-to-navigate platform, we are serving approximately 19.2
million users. We primarily attract the emerging affluent and tech-savvy generation of
investors, evidenced by the average paying client age of 37 and average paying client assets
of over HK$310,000 on our platform as of June 30, 2022. We provide a comprehensive range
of investment products, including equities and derivatives across major global exchanges,
margin financing and securities lending, as well as fund and bond investments. Our vibrant user
community further engages our users and provides them with direct access to listed companies,
fund houses, exchanges, media and research institutions that have accounts in our user
community through communication with their representatives.
We have developed a proprietary and highly automated technology infrastructure

encompassing every aspect of our business operations, from account opening, fund transfer,
trading and investment, to risk management. Our technology infrastructure provides us with
crucial advantages:
• Integrated cross-market platform. We have developed an easy-to-use and highly

integrated cross-market system which allows our clients to view and execute trades
in different markets as a unified market from one single platform, with streamlined
functionality extending from core trading, real-time risk management to multi-
currency, multi-market settlement.
• Security and stability. Our platform features an automated multi-level protection

mechanism and strict security measures such as data encryption and two-factor
authentication, to protect our clients’ personal information and trading data.
• Agility and scalability. Our platform is built on a cloud-based distributed

infrastructure and highly modularized architecture, each component of which can be
separately upgraded and replaced, significantly reducing the launch cycle,
accelerating response time, and enhancing scalability.
• Big data and AI capabilities. We have established an intelligent risk control

platform built on our proprietary algorithms, which is capable of analyzing different
types, sources and stages of risks and providing margin ratio adjustment
recommendations and early risk warnings. We have also developed AI-based
customer service function leveraging our big data analytic and natural language
processing capabilities.
–1–
SUMMARY
As a result of our relentless focus on technology development and product innovation, we

have achieved significant growth since inception, and especially during the Track Record
Period 1:
Paying Clients Average DAUs and MAUs
(in thousands) Average DAU (in millions)
19-21 CAGR 150% 19 -21 CAGR 118%
1,387.1
1,244.2 MAU (in millions)
19-21 CAGR 90% 2.2 2.1
1.8
516.7 1.0 1.0

0.6 0.7
198.4
0.2
Dec-19 Dec-20 Dec-21 Jun-22 Dec-19 Dec-20 Dec-21 Jun-22

As of the end of the period For the month
Trading Volume2 and DARTs Total Client Assets

Trading Volume (HK$ in billions) (HK$ in billions)
19-21 CAGR 165% 19-21 CAGR 116%
DARTs (in thousands)
19-21 CAGR 146% 640.6 585.1
331.1 407.8 433.6
6,138.9
105.5 285.2
3,463.6 2,672.7
872.7 87.1
2019 2020 2021 1H22 Dec-19 Dec-20 Dec-21 Jun-22

For the twelve months (2019-21) For the six months (1H22) As of the end of the period
Notes:
1 For each relevant period prior to January 1, 2021, figures are only inclusive of those under Futubull or Futu
International Hong Kong, as applicable. For each subsequent period since January 1, 2021, figures are also
inclusive of those under moomoo or Moomoo Financial Inc., Moomoo Financial Singapore and Futu Australia,
as applicable.
2 The trading volume presented is the aggregate volume of trading through our platform in securities listed on
multiple stock exchanges globally.
KEY OPERATING DATA

The table below sets forth the growth of our platform in terms of users, clients and client
assets during the Track Record Period1:
As of/For
the month
As of/For the month ended ended
December 31, June 30,
2019 2020 2021 2022
Users ьььььььььььььььььььь 7,513,887 11,916,648 17,374,296 18,649,821

MAUs ььььььььььььььььььь 615,199 1,831,807 2,219,274 2,060,040
Average DAUs ььььььььььььь 208,340 679,565 985,630 983,167
Clients ььььььььььььььььььь 717,842 1,419,734 2,751,239 3,021,790
Paying clients ььььььььььььь 198,382 516,721 1,244,222 1,387,146
Total client asset balance
(HK$ billion)ььььььььььььь 87.1 285.2 407.8 433.6
Average paying client
asset balance (HK$)ьььььььь 439,182 551,923 327,758 312,579
Note:
1 For each relevant year/period prior to January 1, 2021, figures are only inclusive of those under Futubull
or Futu International Hong Kong, as applicable. For each subsequent period since January 1, 2021,
figures are also inclusive of those under moomoo or Moomoo Financial Inc., Moomoo Financial
Singapore and Futu Australia, as applicable.
–2–
SUMMARY
Together with the growth of our trading platform, the client asset balance on our platform
also increased for the markets that we serve. Set forth below is a breakdown by stock exchange
of the total client asset balance on our platform during the Track Record Period:
For the
six months
ended
For the year ended December 31, June 30,
2019 2020 2021 2022
(HK$ in millions)
Hong Kong Stock Exchange 1 ьь 41,887 134,381 204,591 228,521
Major stock exchanges
in the U.S.ььььььььььььььь 23,790 93,829 124,630 113,557
Singapore Exchange ььььььььь – – 1,360 1,977
Australian Securities Exchange ь – – – 23
Others 2 ььььььььььььььььььь 21,449 56,980 77,223 89,515
Notes:
1 Includes qualified northbound securities under Stock Connect listed on the Shanghai Stock Exchange or
the Shenzhen Stock Exchange.
2 Includes cash, balance of wealth management products and net balance of futures products.
COMPETITIVE STRENGTHS
We believe the following competitive strengths contribute to our success:
• Market leading brand. We are a market leader in Hong Kong and a go-to brand for
retail securities trading, and have achieved consistently high growth.
• Premier investing experience. We make investing easier by crafting a premier user
experience through technology capabilities, redefining industry best practices.
• High-quality customer base. Our platform has attracted a vast base of high-quality
customers who are young, active, loyal and with potential to generate wealth.
• Flywheel effects of corporate and retail services. The high quality of our services
offered to enterprises and individuals resulted in flywheel effects and enabled us to
achieve efficient and effective customer acquisition.
• Vibrant user community. We make investing not alone through NiuNiu/Moo
Community, a vibrant online community with social media tools for our users to
interact, share, learn and grow.
GROWTH STRATEGIES
Our vision is to become an influential global financial services platform, which we will
continue to pursue through the following key strategies:
• Grow our user and client base. We strive to continuously grow our user and client
base by word-of-mouth referral and precision marketing.
• Enhance our ecosystem. We will further enhance our synergistic ecosystem,
through constantly broadening our product portfolio, adding new features and
enriching the content in our NiuNiu/Moo Community as well as investing in our
enterprise business.
• Invest in our platform. We will continue to invest in technology and talents, to
maintain our competitive advantages and to facilitate the execution of our strategies.
• Expand in various markets. We aim to expand our presence and improve our
product offering capabilities in various markets, to capture global opportunities and
nurture a global client base.
–3–
SUMMARY
MARKET OPPORTUNITY
• Increasing retail investor participation and online penetration
• Growing demand for diversified investment products
• Social community driving user engagement
OUR PLATFORM AND SERVICES
We operate a leading technology-driven online securities brokerage and wealth

management product distribution platform, which enables us to digitally provide a wide range
of products and services to our users and clients from a single profile. We ensure an
omni-terminal access to our platform from mobile phones, tablets and computers, either
through our purpose-built applications or internet browsers.
Futubull is our primary platform, which is mainly available to users based in Hong Kong
and Mainland China. We also launched moomoo in the U.S., Singapore and Australia as part
of our international expansion. Our users and clients can access to all of our products and
services seamlessly from a single profile on our platform, including: (i) trade execution for
securities across major exchanges in Hong Kong, Singapore, the U.S. and Australia; (ii) margin
financing and securities lending; (iii) wealth management product distribution including fund
and bond investments; (iv) market data and information; and (v) user community. We also offer
corporate services to enterprises, including: (i) IPO distribution; (ii) investor relations and
marketing; (iii) ESOP solution services and (iv) trust services.
COMPETITIVE LANDSCAPE
The markets for online securities brokerage and wealth management product distribution
services are emerging and rapidly evolving. We primarily compete with other online securities
brokers and traditional brokers. Traditional brokers include brokers with offline channels, and
brokerage business units within commercial banks. Compared to traditional brokers, online
securities brokers are able to deliver more accessible and more stable digitalized services and
comprehensive products supported by their technology capabilities and robust infrastructure.
Online securities brokers establish large and vibrant user base through their comprehensive
marketing tools and therefore gain great business potential for international expansion.
Compared to online brokers, traditional brokers have competitive strengths in providing
advanced products and services with a focus on institutional investors on the back of wide
offline client reach and long operating history. See “Industry Overview” for more details of the
competitive landscape of the industry in which we operate.
After ten years of rapid growth, we are now a market leader in Hong Kong in the retail
securities brokerage industry. According to CIC, as of December 31, 2021:
• We are the largest securities broker in terms of retail securities trading volume on
the Hong Kong Stock Exchange;
• Futubull repeatedly ranked the first in the finance category of Hong Kong iOS and
Android App Stores, and moomoo ranked the first in the finance category and free
download category of Singapore’s iOS and Android App Store within only two
months after launch.
–4–
SUMMARY
RISK FACTORS
Our operations and the Listing involve certain risks and uncertainties, some of which are
beyond our control and may affect your decision to invest in us and/or the value of your
investment. See the section headed “Risk Factors” for details of our risk factors, which we
strongly urge you to read in full before making an investment in our Shares. Some of the major
risks we face include:
• We are subject to extensive and evolving regulatory requirements in the markets we
operate in, non-compliance with which may result in penalties, limitations and
prohibitions on our future business activities or suspension or revocation of our
licenses and trading rights, and consequently may materially and adversely affect
our business, financial condition, operations and prospects. In addition, we are
involved in ongoing inquiries and investigation by relevant regulators;
• Our online client onboarding procedures historically did not strictly follow the
specified steps set out by the relevant authorities in Hong Kong, which may subject
us to regulatory actions in addition to remediation, which may include, reprimands,
fines, limitations or prohibitions on our future business activities and/or suspension
or revocation of Futu International Hong Kong’s licenses and trading rights, and
consequently may adversely affect our business, financial condition, operations,
brand reputation and prospects;
• We do not hold any license or permit for providing securities brokerage business in
Mainland China. Although we do not believe we engage in securities brokerage
business in Mainland China, there remain uncertainties as to the interpretation and
implementation of relevant PRC laws and regulations or if any new PRC laws and
regulations will be enacted to impose licensing requirements on us with respect to
our activities in Mainland China and/or our provision of services to our PRC-based
clients. If some of our activities in Mainland China were deemed by relevant
regulators as provision of securities business such as securities brokerage services,
investment consulting services, futures business and/or any other regulated services
and business activities in Mainland China, our business, financial condition, results
of operations and prospects may be materially and adversely affected;
• Our operations and services involve collection, processing, and storage of
significant amounts of data concerning our clients, business partners and employees
and may be subject to complex and evolving laws and regulations regarding privacy
and data protection and cybersecurity. If we fail to comply with the relevant laws
and regulations, our business, results of operations and financial condition may be
adversely affected;
• We depend on contractual arrangements with our VIEs and their shareholders to
operate a part of our business in China and to hold the necessary licenses for our
operations, which may not be as effective as direct ownership in providing
operational control and otherwise may have a material adverse effect as to our
business; and
• The ADSs could be delisted from the Nasdaq Global Market and prohibited from
trading “over the counter” if the Public Company Accounting Oversight Board is
unable to inspect auditors located in China. The delisting of the ADSs from the
Nasdaq Global Market and inability to trade, or the threat thereof, may materially
and adversely affect the value of your investment.
THE HFCAA
On April 21, 2022, the SEC conclusively listed Futu Holdings Limited as a Commission-
Identified Issuer under the HFCAA following the filing of our annual report on Form 20-F for
the fiscal year ended December 31, 2021. In accordance with the HFCAA, our securities will
be prohibited from being traded on a national securities exchange or in the over-the-counter
trading market in the United States if the PCAOB is unable to inspect or investigate completely
PCAOB-registered public accounting firms headquartered in China for three consecutive years,
or for two consecutive years if proposed changes to the law are enacted. As a result, the Nasdaq
may decide to delist our securities. On August 26, 2022, the PCAOB signed a Statement of
–5–
SUMMARY
Protocol with the China Securities Regulatory Commission and the Ministry of Finance of
China, the Chinese authorities governing inspections and investigations of audit firms based in
China, which marks taking the first step toward providing opening access for the PCAOB to
inspect and investigate registered public accounting firms headquartered in mainland China
and Hong Kong. On December 15, 2022, the PCAOB announced that it was able to secure
complete access to inspect and investigate PCAOB-registered public accounting firms
headquartered in mainland China and Hong Kong in 2022. The PCAOB vacated its previous
2021 determinations that the PCAOB was unable to inspect or investigate completely
registered public accounting firms headquartered in mainland China and Hong Kong. For this
reason, we do not expect to be identified as a Commission-Identified Issuer following the filing
of our annual report for the fiscal year ending December 31, 2022. However, whether the
PCAOB will continue to be able to satisfactorily conduct inspections of PCAOB-registered
public accounting firms headquartered in mainland China and Hong Kong is subject to
uncertainty and depends on a number of factors out of our, and our auditor’s, control. The
PCAOB is continuing to demand complete access in mainland China and Hong Kong moving
forward and is already making plans to resume regular inspections in early 2023 and beyond,
as well as to continue pursuing ongoing investigations and initiate new investigations as
needed. If our shares and the ADSs are prohibited from trading in the United States in the
future, such a prohibition would substantially impair the ability of our investors to sell or
purchase the ADSs when they wish to do so, and the risk and uncertainty associated with
delisting would have a negative impact on the price of our Class A Ordinary Shares or the
ADSs. For more details, see “Risk Factors — Risks Related to Our Presence in China — The
ADSs could be delisted from the Nasdaq Global Market and prohibited from trading “over the
counter” if the Public Company Accounting Oversight Board is unable to inspect auditors
located in China. The delisting of the ADSs from the Nasdaq Global Market and inability to
trade, or the threat thereof, may materially and adversely affect the value of your investment.”
Our Directors are of the view that the HFCAA and the potential prohibition of trading in the
United States do not have any material adverse impact on our business operations, financial
performance, or the Listing, as our securities will continue to be traded on the Hong Kong
Stock Exchange even if the prohibition of trading were to take place.
WEIGHTED VOTING RIGHTS AND OUR CONTROLLING SHAREHOLDERS
As of the Latest Practicable Date, our Company adopted a weighted voting rights
structure, under which our share capital comprises Class A Ordinary Shares (which entitles the
holders to exercise one vote) and Class B Ordinary Shares (which entitles the holders to
exercise 20 votes). On November 21, 2022, pursuant to our existing Articles of Association,
Mr. Li, being the WVR Beneficiary, has delivered an irrevocable written consent to the
Company, among other things, to consent to the modification of voting rights attached to each
Class B Ordinary Share from 20 votes to ten votes pursuant to Rule 8A.10 of the Listing Rules,
effective upon the Listing. Accordingly, each Class B Ordinary Share shall entitle its holder to
exercise ten votes, on all matters that require a Shareholder’s vote, subject to Rule 8A.24 of
the Listing Rules that requires a limited number of Reserved Matters to be voted on a one vote
per share basis (save for the specified exception for the compliance of Rule 8A.24 of the
Listing Rules). Our Company will put forth resolutions to amend the Articles of Association
at the next general meeting following the Listing (the “First GM”), which we have undertaken
to convene on or before June 30, 2023. For further details, please see “Waivers —
Requirements relating to the Articles of Association of the Company.”
Immediately upon completion of the Introduction, the WVR Beneficiary will be Mr. Li,
our founder, chairman of the Board, executive Director and chief executive officer. Assuming
(i) no further Shares are issued under the Share Incentive Plans between the Latest Practicable
Date and the Listing Date; and (ii) all Class B Ordinary Shares beneficially owned by Tencent
Group through Qiantang River Investment Limited are converted to Class A Ordinary Shares
upon the completion of the Introduction, Mr. Li will beneficially own and will control, through
entities affiliated with him (i.e. Lera Ultimate Limited and Lera Infinity Limited), an aggregate
of 239,750,000 Class B Ordinary Shares, representing (a) approximately 21.52% of our issued
and outstanding Shares; (b) approximately 73.28% of the effective voting rights in our
Company with respect to shareholder resolutions relating to matters other than the Reserved
Matters; and (c) approximately 21.52% with respect to shareholder resolutions relating to the
Reserved Matters upon completion of the Introduction.
–6–
SUMMARY
Mr. Li holds his interests in our Company through Lera Ultimate Limited and Lera
Infinity Limited, which are ultimately owned by Lera Direction Plus Trust and Lera Target
Trust, respectively. Each of Lera Direction Plus Trust and Lera Target Trust is a trust
established by Mr. Li (as the settlor) for the benefit of his family and himself. Therefore, Mr.
Li, Lera Ultimate Limited and Lera Infinity Limited together will constitute the Controlling
Shareholders of our Company after the Listing. Our Controlling Shareholders confirm that as
of the Latest Practicable Date, they did not have any interest in a business, apart from the
business of our Group, which competes or is likely to compete, directly or indirectly, with our
business that would require disclosure under Rule 8.10 of the Listing Rules. For further details
about our Controlling Shareholders, please refer to the section headed “Relationship with our
Controlling Shareholders.”
The Company’s WVR structure enables the WVR Beneficiary to exercise voting control
over the Company notwithstanding that the WVR Beneficiary does not hold a majority of
economic interest in the share capital of the Company. This will enable the Company to benefit
from the continuing vision and leadership of the WVR Beneficiary who will control the
Company with a view to its long-term prospects and strategy.
Mr. Li is the founder, chairman of the Board, executive Director and chief executive
officer of our Company. He has been the forefront of our Group’s growth and innovation since
its inception, providing the core vision and philosophy and participating in all of the key
management decisions that has led to the continued success and development of our Group. In
particular, Mr. Li has led the technology committee of our Company to formulate technology
development strategies, optimize the existing technology infrastructure and implement
large-scale technology projects of our Group. For Mr. Li’s biographical details, please refer to
“Directors and Senior Management” of this document.
Prospective investors are advised to be aware of the potential risks of investing in

companies with a WVR structure, in particular that the interests of the WVR Beneficiary may
not necessarily always be aligned with those of our Shareholders as a whole, and that the WVR
Beneficiary will be in a position to exert significant influence over the affairs of our Company
and the outcome of Shareholders’ resolutions. Prospective investors should make the decision
to invest in the Company only after due and careful consideration. For further information
about the risks associated with the WVR structure, see “Risk Factors — Risks related to our
Class A Ordinary Shares and ADSs.”
As we are seeking a dual primary listing as an issuer with a WVR structure, we are subject
to: (a) certain shareholder protection measures and governance safeguards under Chapter 8A
of the Listing Rules, including Rule 8A.44 of the Listing Rules, which requires our WVR
Structure to give force to the requirements of certain rules under Chapter 8A of the Listing
Rules by incorporating them into our Articles; and (b) the articles requirements set out in
Appendix 3 to the Listing Rules. Our Articles do not currently comply with some of the Listing
Rules Articles Requirements (the “Unmet Listing Rules Articles Requirements”), and we
undertake to put forth resolutions to amend our Articles to comply with these requirements at
the First GM.
Furthermore, we undertake to, at the First GM, seek shareholders’ approval to amend our
Articles to incorporate the Termination of Tencent’s Special Rights, the Quorum Requirement,
the GM Postponement Requirement, the Amendment of Directors’ Class Right Related Powers
and the Forum Selection Clarification into the Articles. Details of these proposed amendments
are set out in the section headed “Waivers — Requirements relating to the Articles of
Association of the Company.”
In addition, save for certain specified exceptions, we undertake to fully comply with the
Unmet Listing Rules Articles Requirements, the Termination of Tencent’s Special Rights, the
Quorum Requirement, the GM Postponement Requirement, the Amendment of Directors’ Class
Right Related Powers and the Forum Selection Clarification before our Articles are formally
amended such that immediately upon the Listing, we will be subject to, and will fully comply
with, such requirements as if they have already been incorporated into our existing Articles
upon the Listing. For further details, please see “Waivers — Requirements relating to the
Articles of Association of the Company” and “Share Capital — Weighted Voting Rights
Structure.”
–7–
SUMMARY
CONTRACTUAL ARRANGEMENTS
Our Consolidated Affiliated Entities are currently our VIEs and their respective
subsidiaries, which were all established under the PRC laws. Foreign investment in certain
areas of the industries in which Shenzhen Futu and Hainan Caixuetang currently operate are
subject to restrictions under the PRC laws and regulations. After consultation with our PRC
Legal Advisors, we determined that it was not viable for our Company to hold our Consolidated
Affiliated Entities directly through equity ownership. Instead, we decided that, in line with
common practice in the PRC for industries subject to foreign investment restrictions, we would
gain effective control over, and receive all the economic benefits generated by the businesses
currently operated by, our Consolidated Affiliated Entities through the Contractual
Arrangements between the WFOE, on the one hand, and our Consolidated Affiliated Entities
and the Registered Shareholders, on the other hand. For further details, please see the section
headed “Contractual Arrangements” in this document.
The following simplified diagram illustrates the flow of economic benefits from our
Consolidated Affiliated Entities to WFOE and our Company under the Contractual
Arrangements:
Our Company
100%
Registered
WFOE
Shareholders(1)
Service fees Technical and consulting services
Our VIEs and their subsidiaries
Shenzhen Futu Hainan Futu
100% 100% 100%
Beijing Futu Hainan Caixuetang Beijing Shensi Consulting
Notes:
(1) Each of Shenzhen Futu and Hainan Futu is held as to 85% by Mr. Li and as to 15% by Ms. Lei Li (Mr.
Li’s spouse).
(2) “ ” denotes direct legal and beneficial ownership in equity interest.
(3) “ ” denotes contractual relationship.
(4) “ ” denotes the control by the WFOE over our Consolidated Affiliated Entities through (i) the
powers of attorney to exercise all shareholders’ rights of the Registered Shareholders in our VIEs; (ii)
exclusive options to acquire all or part of the equity interest in our VIEs; and (iii) equity pledges by the
Registered Shareholders in favour of the WFOE over the equity interests in our VIEs.
(5) As of the Latest Practicable Date, Shenzhen Futu held a Valued-added Telecommunication Business
Operation License (《增值電信業務經營許可證》, the “ICP License”), a Radio and Television Program
Production and Operation License and an Internet Culture Operation License; and Hainan Caixuetang
held an Internet Culture Operation License, a Radio and Television Program Production and Operation
License, an ICP License and a Publication Operation License.
(6) Beijing Futu, Hainan Futu and Beijing Shensi Consulting have not yet commenced substantive business
operations and are not expected to have commenced any substantive business operations by the time of
the Listing, and will only carry out businesses which are subject to foreign investment restrictions under
the applicable PRC laws and regulations in the future.
–8–
SUMMARY
SUMMARY OF HISTORICAL FINANCIAL INFORMATION
The following tables set forth summary financial data from our consolidated financial
information for the Track Record Period, derived from the Accountant’s Report set out in
Appendix IA. The summary consolidated financial data set forth below should be read together
with, the consolidated financial statements in this document, including the related notes, as well
as the section headed “Financial Information — Reconciliation Between U.S. GAAP and IFRS.”
Selected items from the Consolidated Statements of Comprehensive Income
The following table sets forth a summary of our consolidated statements of

comprehensive income for the periods indicated:
For the Year ended December 31, For the Six Months ended June 30,
2019 2020 2021 2021 2022
% of % of % of % of % of
total total total total total
Amount revenue Amount revenue Amount revenue Amount revenue Amount revenue
HK$ HK$ HK$ HK$ HK$ US$
(in thousands except for percentages)
(unaudited)
Revenues ь ь ь ь ь ь ь 1,061,555 100.0 3,310,822 100.0 7,115,320 100.0 3,781,461 100.0 3,387,728 431,712 100.0
Costs ь ь ь ь ь ь ь ь ь (281,704) (26.6) (695,954) (21.0) (1,206,064) (16.9) (721,993) (19.1) (435,847) (55,543) (12.9)
Gross profit ь ь ь ь ь ь 779,851 73.4 2,614,868 79.0 5,909,256 83.1 3,059,468 80.9 2,951,881 376,169 87.1
Research and development

expenses ь ь ь ь ь ь ь (262,345) (24.7) (513,283) (15.5) (805,325) (11.3) (310,787) (8.2) (574,174) (73,169) (16.9)
Selling and marketing
expenses ь ь ь ь ь ь ь (164,701) (15.5) (385,320) (11.6) (1,392,070) (19.6) (652,036) (17.3) (507,235) (64,639) (15.0)
General and
administrative
expenses ь ь ь ь ь ь ь (164,850) (15.5) (248,404) (7.5) (529,048) (7.4) (174,365) (4.6) (388,532) (49,512) (11.5)
Operating expenses ь ь (591,896) (55.7) (1,147,007) (34.6) (2,726,443) (38.3) (1,137,188) (30.1) (1,469,941) (187,320) (43.4)
Income before income

tax expenses and share
of loss from equity
method investment ь ь 178,493 16.8 1,450,623 43.8 3,185,291 44.8 1,902,687 50.3 1,366,121 174,090 40.3
Net income ь ь ь ь ь ь 165,664 15.5 1,325,523 40.0 2,810,210 39.5 1,696,190 44.9 1,213,525 154,644 35.8
Our revenue increased from HK$1,061.6 million in 2019 to HK$7,115.3 million in 2021,
representing a CAGR of 158.9% from 2019 to 2021. The rapid growth in revenue from 2019
to 2021 was driven by the increase in the number of paying clients from 198.4 thousand as of
December 31, 2019 to 1.2 million as of December 31, 2021. However, our revenue amounted
to HK$3,387.7 million (US$431.7 million) for the six months ended June 30, 2022, which
represented a 10.4% decrease from HK$3,781.5 million for the same period in 2021. The
decrease was primarily due to (i) decrease in our brokerage commission and handling charge
income, which was mainly because trading volume declined compared to the same period in
2021 when market peaked, partially offset by an increase in the blended commission rate as
applied based on the trading volume, (ii) decrease in the underlying interest rates that we
charged for securities lending, and (iii) decrease in interest income derived from IPO financing
which was mainly attributable to decrease in the overall number of IPO transactions in the
capital market in the six months ended June 30, 2022. In the first half of 2021 when trading
activities were more active, there was higher volume of margin financing and securities
–9–
SUMMARY
lending, resulting in higher interest income derived therefrom. Given interest income from
margin financing accounts for the majority of our total interest income, the fluctuations of
interest income during the Track Record Period were mainly attributable to the scale of our
margin financing business and overall number of IPO transactions during the relevant period.
Our gross profit margin increased from 73.4% in 2019 to 87.1% for the six months ended
June 30, 2022, primarily attributable to higher operating leverage as a result of our larger
business scale and improved operating efficiency.
Our operating expenses increased by 93.8% from HK$591.9 million in 2019 to

HK$1,147.0 million in 2020, and further by 137.7% to HK$2,726.4 million in 2021. Our
operating expenses for the six months ended June 30, 2022 amounted to HK$1,469.9 million
(US$187.3 million), which increased by 29.3% from HK$1,137.2 million for the same period
in 2021. The increase was primarily due to the increase in research and development expenses
and general and administrative expenses as a result of our continued business growth.
The rapid increase in net income from HK$165.7 million in 2019 to HK$1,325.5 million
in 2020 and further to HK$2,810.2 million in 2021 were generally in line with the expansion
of our business and the trading activity of our paying clients during the same period. The
subsequent decrease in net income from HK$1,696.2 million in the six months ended June 30,
2021 to HK$1,213.5 million (US$154.6 million) in the same period in 2022 was generally in
line with the increase in operating expenses during the relevant period.
Solely based on the citizenship provided by the individual clients at the time of account
opening or further updated subsequently, approximately 68%, 31% and 1% of our individual
paying clients as of December 31, 2019, 55%, 44% and 1% of our individual paying clients as
of December 31, 2020, 38%, 39% and 23% of our individual paying clients as of December 31,
2021 and 35%, 39% and 26% of our individual paying clients as of June 30, 2022 were related
to Mainland China, Hong Kong and other markets, respectively. Solely based on the citizenship
provided by the individual clients at the time of account opening or further updated
subsequently, regardless of their residency, and the location where services were originated or
conducted for corporate counterparties, our revenue related to Mainland China, Hong Kong and
other markets accounted for approximately 69%, 30% and 1% of our total revenue in 2019,
60%, 39% and 1% of our total revenue in 2020, 52%, 46% and 2% of our total revenue in 2021,
and 44%, 48% and 8% of our total revenue for the six months ended June 30, 2022,
respectively. The decrease in the proportion of our revenue related to Mainland China during
the Track Record Period was mainly due to our Group’s global expansion strategies and our
growing and high proportion of newly added overseas clients. The revenue breakdown is not
derived from our management accounts and is solely based on the relevant business data and
our management estimate. Our Group does not distinguish between markets or segments for the
purpose of internal reporting and has only one reportable segment in its consolidated financial
statements.
During the Track Record Period, we generated revenues primarily from our online
brokerage and margin financing services. The following table sets forth the components of our
revenues by amounts and percentages of our total revenues for the periods indicated:
For the Year Ended December 31, For the Six Months Ended June 30,
2019 2020 2021 2021 2022
(unaudited)
Brokerage commission and handling
charge income ь ь ь ь ь ь ь ь 511,365 48.2 1,990,138 60.1 3,913,027 55.0 2,122,679 56.1 2,001,246 255,027 59.1
Interest income ь ь ь ь ь ь ь ь ь 464,903 43.8 965,627 29.2 2,518,198 35.4 1,268,940 33.6 1,195,661 152,368 35.3
Other income ь ь ь ь ь ь ь ь ь ь 85,287 8.0 355,057 10.7 684,095 9.6 389,842 10.3 190,821 24,317 5.6
Total ь ь ь ь ь ь ь ь ь ь ь ь ь 1,061,555 100.0 3,310,822 100.0 7,115,320 100.0 3,781,461 100.0 3,387,728 431,712 100.0
– 10 –
SUMMARY
The following table sets forth the components of our brokerage commission and handling
charge income by type of products traded during the Track Record Period:
2019 2020 2021 2021 2022
(in thousands)
(unaudited)
Securities and options

brokerage ь ь ь ь ь ь ь ь ь ь 480,677 1,878,038 3,688,149 2,024,838 1,810,496 230,719
Futures brokerage ь ь ь ь ь ь ь 37 32,530 130,775 53,857 154,060 19,632
IPO brokerageь ь ь ь ь ь ь ь ь 27,981 70,846 75,571 38,384 10,316 1,315
Others(1) ь ь ь ь ь ь ь ь ь ь ь ь 2,670 8,724 18,532 5,600 26,374 3,361
Totalь ь ь ь ь ь ь ь ь ь ь ь ь ь 511,365 1,990,138 3,913,027 2,122,679 2,001,246 255,027
Note:
(1) Others include (i) handling fees, such as dividend collection fees, equity interest collection fees,
corporate action handling fees, (ii) bond brokerage commission and (iii) service fees, such as ESOP
handling charges.
The revenue generated from our securities and options brokerage increased from
HK$480.7 million in 2019, to HK$1,878.0 million in 2020 and further to HK$3,688.1 million
2021, primarily due to the increase in our securities and options trading volume which was
driven by the growth of our paying client base and their increased trading activities. However,
the revenue generated from our securities and options brokerage decreased from HK$2,024.8
million for the first six months ended June 30, 2021 to HK$1,810.5 million (US$230.7 million)
for the first six months ended June 30, 2022, primarily because the securities and options
trading volume declined compared to the same period in 2021 when market peaked.
The revenue generated from our futures brokerage increased from HK$37 thousand in
2019, to HK$32.5 million in 2020, and further to HK$130.8 million in 2021, and from
HK$53.9 million for the six months ended June 30, 2021 to HK$154.1 million (US$19.6
million) for the six months ended June 30, 2022. The overall increase in revenue generated
from our futures brokerage throughout the Track Record Period was generally in line with the
expansion of our futures trading services and the increasing needs of investors for hedging
instruments when the market was highly volatile.
The revenue generated from our IPO brokerage increased from HK$28.0 million in 2019,
to HK$70.8 million in 2020 and further to HK$75.6 million 2021, primarily due to the
expansion of our IPO subscription services. However, the revenue generated from our IPO
brokerage decreased from HK$38.4 million for the first six months ended June 30, 2021 to
HK$10.3 million (US$1.3 million) for the first six months ended June 30, 2022, primarily due
to the decrease in the overall number of IPO transactions in the U.S. and Hong Kong markets
in the six months ended June 30, 2022.
The revenue from our other products and services increased from HK$2.7 million in 2019,
to HK$8.7 million in 2020, and further to HK$18.5 million in 2021, and from HK$5.6 million
for the six months ended June 30, 2021 to HK$26.4 million (US$3.4 million) for the six months
ended June 30, 2022. The increase in revenue from our other products and services was due to
an increase in income from ESOP handling charges, generally in line with the expansion of our
ESOP solution services during the Track Record Period.
– 11 –
SUMMARY
Selected items from the Consolidated Balance Sheets
The following table sets forth our selected balance sheets as of the dates indicated:
As of December 31, As of June 30,

2019 2020 2021 2022
HK$ HK$ HK$ HK$ US$
(in thousands)
Total current assets ь ь ь ь ь ь ь ь ь ь ь 21,072,369 70,842,465 100,702,456 108,236,029 13,792,949

Total non-current assetsь ь ь ь ь ь ь ь ь 327,555 495,302 836,058 1,522,251 193,987
Total assets ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 21,399,924 71,337,767 101,538,514 109,758,280 13,986,936
Total current liabilities ь ь ь ь ь ь ь ь ь 18,716,232 62,860,164 80,378,301 90,065,742 11,477,437

Total non-current liabilitiesь ь ь ь ь ь ь 135,139 169,913 174,654 139,718 17,805
Total liabilities ь ь ь ь ь ь ь ь ь ь ь ь ь 18,851,371 63,030,077 80,552,955 90,205,460 11,495,242
Net current assets ь ь ь ь ь ь ь ь ь ь ь ь 2,356,137 7,982,301 20,324,155 18,170,287 2,315,512
Net assets ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 2,548,553 8,307,690 20,985,559 19,552,820 2,491,694
Our total current assets increased throughout the Track Record Period, primarily
attributable to (i) the general increase in cash held on behalf of clients due to our continued
business expansion and (ii) the increase in loans and advances as a result of an increase in
margin loans, IPO loans extended to clients and other advances, collateralized by securities and
carried at the amortized cost, net of an allowance for credit losses.
Our net current assets generally increased throughout the Track Record Period. In
particular, our net current assets increased significantly from HK$2,356.1 million as of
December 31, 2019 to HK$7,982.3 million as of December 31, 2020, and further to
HK$20,324.2 million as of December 31, 2021, primarily due to (i) the increase in cash held
on behalf of clients, and (ii) the increase in loans and advances. Our net current assets
subsequently decreased from HK$20,324.2 million as of December 31, 2021 to HK$18,170.3
million (US$2,315.5 million) as of June 30, 2022, primarily due to the increase in our payables
to our clients and brokers.
We recorded net assets of HK$2,548.6 million, HK$8,307.7 million, HK$20,985.6 million

and HK$19,552.8 million (US$2,491.7 million) as of December 31, 2019, 2020 and 2021, and
June 30, 2022. Our net assets increased from HK$2,548.6 million as of December 31, 2019 to
HK$8,307.7 million as of December 31, 2020, primarily due to (i) our net profit of HK$1,325.5
million recognized in 2020, (ii) issuance of ordinary shares upon follow-on public offering of
HK$2,339.7 million, and (iii) issuance of pre-funded warrants of HK$2,035.1 million. Our net
assets increased from HK$8,307.7 million as of December 31, 2020 to HK$20,985.6 million as
of December 31, 2021, primarily due to (i) our net profit of HK$2,810.2 million recognized in
2021, and (ii) issuance of ordinary shares of HK$10,856.5 million, partially offset by treasury
stock purchases of HK$1,178.8 million. Our net assets decreased from HK$20,985.6 million as
of December 31, 2021 to HK$19,552.8 million (US$2,491.7 million) as of June 30, 2022,
primarily due to treasury share purchases of HK$2,731.0 million, partially offset by our net profit
of HK$1,213.5 million recognized in six months ended June 30, 2022.
– 12 –
SUMMARY
Selected items from the Consolidated Statements of Cash Flows
The following table sets forth a summary of our cash flows for the periods indicated:
2019 2020 2021 2021 2022
(in thousands)
(unaudited)
Net cash generated from/
(used in) operating activities ь 1,969,434 20,456,717 6,011,971 (14,351,728) 14,118,089 1,799,124
Net cash (used in)/generated
from investing activities ь ь ь (160,057) (244,175) (963,565) 271,378 786,121 100,179
Net cash generated from/(used
in) financing activities ь ь ь ь 1,151,622 8,406,896 10,554,218 34,721,267 (4,720,133) (601,505)
Effect of exchange rate changes
on cash, cash equivalents and
restricted cash ь ь ь ь ь ь ь ь (44,666) (1,117) 167,130 30,620 89,218 11,369
Net increase in cash, cash
equivalents and restricted
cashь ь ь ь ь ь ь ь ь ь ь ь ь ь 2,916,333 28,618,321 15,769,754 20,671,537 10,273,295 1,309,167
Cash, cash equivalents and
restricted cash at beginning of
the year/period ь ь ь ь ь ь ь ь 11,987,104 14,903,437 43,521,758 43,521,758 59,291,512 7,555,754

restricted cash at end of the
year/periodь ь ь ь ь ь ь ь ь ь 14,903,437 43,521,758 59,291,512 64,193,295 69,564,807 8,864,921
We had positive cash flow from operating activities of approximately HK$14.1 billion
(US$1.8 billion) for the six months ended June 30, 2022, which was mainly attributable to the
changes in the working capital. The changes were caused by increase in accounts payables to clients
and brokers and decrease in loans and advances throughout the Track Record Period. The increase
in accounts payable to clients and brokers was due to the increase of cash deposits as a result of
the expansion of our brokerage business. The decrease of loans and advances was due to a decrease
in trading activities of our clients. During the Track Record Period, we mainly relied on net
proceeds from our securities offerings, cash generated from operating activities and loans provided
by commercial banks, other licensed financial institutions and other parties for our cash resources.
We had negative cash flow from operating activities of approximately HK$14.4 billion for
the six months ended June 30, 2021, which was mainly attributable to the net increase in loans
and advances of HK$34.4 billion and net increase in accounts receivables from clients and
brokers of HK$4.3 billion for the period. The increase of loans and advances was primarily due
to several ongoing IPO cases of sizeable scale that are mainly financed by our borrowings from
banks as of June 30 2021, which were subsequently settled several days later and before the
completion of such IPOs.
– 13 –
SUMMARY
RECONCILIATION BETWEEN U.S. GAAP AND IFRS
The consolidated financial statements are prepared in accordance with U.S. GAAP, which
differ in certain respects from IFRS. The main reconciling items include classification and
measurement of preferred shares, issuance costs, operating leases, share-based compensation
and expected credit loss. The following tables set forth the effects of material differences
prepared under U.S. GAAP and IFRS:
For the Six Months

For the Year ended December 31, ended June 30,
2019 2020 2021 2021 2022
(HK$ in thousands)
(unaudited)
Reconciliation of net income

attributable to our
Company in the
consolidated statements of
comprehensive income
Net income attributable to our
Company in the consolidated
statements of comprehensive
income as reported under
U.S. GAAP ь ь ь ь ь ь ь ь ь ь ь ь 165,664 1,325,523 2,810,210 1,696,190 1,213,525
IFRS adjustments:
Classification and measurement
of preferred shares ь ь ь ь ь ь ь (216,140) – – – –
Issuance costs ь ь ь ь ь ь ь ь ь ь ь ь (26,971) – (14,336) – (4,731)
Operating leases ь ь ь ь ь ь ь ь ь ь (3,204) (1,913) (2,238) (1,741) (132)
Share-based compensation ь ь ь ь (10,681) (19,294) (76,461) (19,489) (74,697)
Expected credit loss ь ь ь ь ь ь ь ь 1,533 (7,475) (2,520) (2,636) (2,651)
Net (loss)/income attributable

to our Company in the
comprehensive income as
reported under IFRS ь ь ь ь ь (89,799) 1,296,841 2,714,655 1,672,324 1,131,314
As of
As of December 31, June 30,
2019 2020 2021 2022
(HK$ in thousands)
Reconciliation of total
shareholders’ equity in the
consolidated balance sheets
Total shareholders’ equity as
reported under U.S. GAAP ьь 2,548,553 8,307,690 20,985,559 19,552,820
IFRS adjustments:
Issuance costs ьььььььььььььь – – (14,336) (19,067)
Operating leases ьььььььььььь (4,303) (6,001) (8,454) (8,151)
Expected credit loss ььььььььь (2,330) (9,805) (12,342) (14,958)

reported under IFRS ьььььь 2,541,920 8,291,884 20,950,427 19,510,644
– 14 –
SUMMARY
KEY FINANCIAL RATIOS

The following table sets forth certain of our key financial ratios as of the dates indicated,
or for the periods indicated:
For the Year ended/as For the Six Months
of December 31, ended/as of June 30,
2019 2020 2021 2021 2022
(1)
Gross profit margin(2) ьь 73.4% 79.0% 83.1% 80.9% 87.1%
Net income margin ьь 15.5% 40.0% 39.5% 44.9% 35.8%
Return on equity (3) ьььь N.A. (5) 24.4% 19.2% N.A. (5) 12.0% (6)
Return on total
assets (4) ьььььььььь N.A. (5) 2.9% 3.3% N.A. (5) 2.3% (6)
Notes:
(1) Equals gross profit divided by revenues for the period.
(2) Equals net profit divided by revenues for the period.
(3) Equals net profit divided by the average of beginning and ending total shareholders’ equity for the
period.
(4) Equals net profit divided by the average of beginning and ending total asset for the period.
(5) Our audited financial information for the year ended December 31, 2018 and our unaudited consolidated
balance sheet as of June 30, 2021 are not included in this document.
(6) Return on assets and return on equity for the six months ended June 30, 2022 were calculated by
dividing the net profit for the period with average total shareholders’ equity and average total assets
multiplied by 2 in order to arrive at proforma annualized ratios.
APPLICATION FOR LISTING ON THE STOCK EXCHANGE

The ADSs each of which represents eight of our Class A Ordinary Shares, were listed on
the Nasdaq Global Market under the symbol “FHL” in March 2019 and currently traded under
the symbol of “FUTU.” We have applied to the Listing Committee of the Stock Exchange for
a dual primary listing of our Company’s Class A Ordinary Shares (as detailed below) on the
Main Board of the Stock Exchange as an issuer with weighted voting rights structure under
Chapter 8A of the Listing Rules.
We have applied to the Listing Committee of the Stock Exchange for the listing of, and
permission to deal in, (i) the Class A Ordinary Shares in issue; (ii) the Class A Ordinary Shares
to be issued pursuant to the Share Incentive Plans; and (iii) the Class A Ordinary Shares that
are issuable upon conversion of the Class B Ordinary Shares on a one to one basis.
Dealings in the Class A Ordinary Shares on the Stock Exchange are expected to
commence on December 30, 2022.
BRIDGING ARRANGEMENTS
In connection with the Listing, the Designated Dealer and/or the Alternate Designated
Dealer have been appointed as bridging dealer and alternate bridging dealer respectively and
intend to implement certain bridging arrangements during the Bridging Period (being one
month from and including the Listing Date). The Designated Dealer and the Alternate
Designated Dealer have been appointed for a period of one month commencing from the
Listing Date. The Bridging Period will end on January 29, 2023.
In connection with the bridging arrangements, on December 22, 2022, The Hongkong and
Shanghai Banking Corporation Limited as borrower, entered into a stock borrowing and
lending agreement (the “Stock Borrowing Agreement”) with Lera Ultimate Limited as lender
(the “Lender”). Pursuant to the Stock Borrowing Agreement, the Lender will make available
to the borrowers stock lending facilities of 50,000,000 Class A Ordinary Share (the “Borrowed
Shares”), or approximately 5.72% of the Class A Ordinary Shares in issue immediately upon
Listing (without taking into account the Class A Ordinary Shares to be issued pursuant to the
Share Incentive Plans), on one or more occasions, subject to applicable Laws. The Borrowed
Shares will be registered on our Hong Kong Share register and admitted into CCASS prior to
– 15 –
SUMMARY
and upon Listing. The Borrowed Shares shall be returned to the Lender no later than 20
Business Days after the expiry of the Bridging Period. For further details, see “Market
Arrangements to Facilitate Dealings in Hong Kong — Bridging Arrangements.”
INVESTOR EDUCATION
Prior to Listing, our Company and the Joint Sponsors will cooperate to inform the
investor community of general information about our Company, as well as developments
and/or changes to the market arrangements disclosed in this document. After Listing, our
Company and the Joint Sponsors may continue to take measures to educate the public. The
measures, including but not limited to media briefings and press interviews, analyst briefings
to local brokerages/research houses that cover Hong Kong-listed companies and publication of
announcements containing, among other matters, information on the developments and updates
of the liquidity arrangements, may be taken to enhance transparency of our Company and the
bridging arrangements as appropriate. For further details, see “Market Arrangements to
Facilitate Dealings in Hong Kong — Investor Education”.
LISTING EXPENSES
Listing expenses mainly include (i) sponsor-related expenses of approximately HK$23.5
million, and (ii) non-sponsor related expenses of approximately HK$70.4 million, which
consist of, professional fees paid to the reporting accountant, legal advisers and other
professional parties for their services rendered in relation to the Listing of approximately
HK$56.4 million and other fees and expenses of approximately HK$14.0 million.
Approximately HK$2.9 million and HK$2.1 million of the listing expenses were recognized
and charged to our consolidated statement of comprehensive income during the year ended
December 31, 2021 and the six months ended June 30, 2022, respectively. After June 30, 2022,
we expect approximately HK$88.9 million of the listing expenses will be charged to the profit
or loss of our Company. The listing expenses above are the latest practicable estimate and are
for reference only. The actual amount may differ from this estimate.
DIVIDEND AND DIVIDEND POLICY
Dividend
We did not declare or distribute any dividend to our Shareholders during the years ended
December 31, 2019, 2020, 2021, and for the six months ended June 30, 2022.
Dividend policy
Our board of Directors has discretion on whether to distribute dividends. In addition, our
shareholders may by ordinary resolution declare a dividend, but no dividend may exceed the
amount recommended by our board of Directors. In either case, all dividends are subject to
certain restrictions under Cayman Islands law, namely that our Company may only pay
dividends out of profits or share premium, and provided always that in no circumstances may
a dividend be paid if this would result in our Company being unable to pay its debts as they
fall due in the ordinary course of business. Even if we decide to declare dividends, the form,
frequency and amount will depend upon our future operations and earnings, capital
requirements and surplus, general financial condition, contractual restrictions and other factors
that our board of Directors may deem relevant.
We do not have any present plan to pay any cash dividends on our ordinary shares in the
foreseeable future. We currently intend to retain most, if not all, of our available funds and any
future earnings to operate and expand our business.
We are a holding company incorporated in the Cayman Islands. We may rely on dividends
from our subsidiaries in Hong Kong, Mainland China, Singapore, the United States and
Australia for our cash requirements, including any payment of dividends to our shareholders.
PRC regulations may restrict the ability of our PRC subsidiaries to pay dividends to us. See
“Regulations — Overview of the Laws and Regulations Relating to Our Presence in China —
Regulations on Foreign Exchange — Regulations on Dividend Distribution.”
– 16 –
SUMMARY
If we pay any dividends on our ordinary shares, we will pay those dividends which are
payable in respect of the ordinary shares underlying the ADSs to the depositary, as the registered
holder of such ordinary shares, and the depositary then will pay such amounts to the ADS holders
in proportion to ordinary shares underlying the ADSs held by such ADS holders, subject to the
terms of the deposit agreement, including the fees and expenses payable thereunder.
IMPACT OF THE COVID-19 PANDEMIC ON OUR OPERATIONS
The ongoing COVID-19 pandemic has disrupted the business operations of many
companies globally. We have taken a series of measures in response to the outbreak to protect
our employees. See “Business — Health, Work Safety, Social Responsibility and
Environmental Matters.” Our operations, including our services to our clients and internal
control over financial reporting, have not been materially and adversely affected by these
measures as we timely implemented our business continuity plan.
In July 2018, we were the first securities broker in Hong Kong to offer completely
online-based account opening services, according to CIC, while many traditional financial
institutions still utilize offline account opening and customer service models and had to
suspend the operations at their physical branches as a result of the pandemic from time to time,
which underscores the merits of a pure online one-stop financial technology platform where
clients can enjoy an end-to-end mobile experience for everything from account opening to
trade execution, margin lending, mutual fund investments, market news and social interaction.
We witnessed huge market volatility in the global capital markets in 2020, 2021, and the
six months ended June 30, 2022. Such volatility has led to new account sign-ups, increasing
trading velocity and higher net asset inflow, which benefited our operating and financial results
for these periods. In the second quarter of 2022, our total client assets increased by 12.3%
quarter-over-quarter to HK$433.6 billion, primarily due to strong net asset inflow across
regions. Our paying clients reached 1.38 million as of June 30, 2022, representing 38.6%
year-over-year growth. Despite the increased market volatility, our rigorous risk management
systems and procedures have prevented us from incurring any material losses in relation to
margin financing business, and we had not identified any material COVID-19-related
contingencies or impairments as of the Latest Practicable Date. Our business operation and
financial performance had not been materially and adversely affected by the COVID-19
pandemic during the Track Record Period and up to the Latest Practicable Date.
While we experienced business growth in 2020 and 2021, we cannot predict whether this
will continue at the same level in the future and whether client behavior will continue in a
manner that is favorable to us. The improvement in our business and financial performance in
2020, 2021 and the first half of 2022 may not be sustainable. As there is still uncertainty around
the duration of the pandemic, we cannot ascertain the potential impact of the pandemic on
investor sentiments and the possibility of other effects on our business. In the event that this
epidemic cannot be effectively and timely contained, our ability to consistently offer new
products and services in the future may be disrupted, which in turn may harm the growth rate
and retention of our clients, as well as our financial performance generally. The near-term
economic impact of the COVID-19 outbreak is also uncertain.
See “Financial Information — Impact of COVID-19 on Our Operations” for more details.
REGULATORY OVERVIEW AND RECENT REGULATORY DEVELOPMENT
Regulatory Overview
As an online financial services platform, our licensed entities are subject to the laws and
regulations of the relevant jurisdictions where they operate. Futu International Hong Kong is
a SFC-licensed corporation subject to the SFO. Moomoo Financial Inc. and Futu Clearing Inc.,
as SEC-registered broker-dealers, are subject to the rules and regulations of the SEC and
FINRA. Moomoo Financial Singapore, as a Capital Markets Services Licencee in Singapore,
is subject to the rules and regulations by the MAS and other relevant regulatory authorities in
Singapore. Futu Australia, which holds an Australian Financial Services License, is regulated
by the Australian Securities and Investments Commission and subject to its rules and
regulations. We do not engage in securities brokerage business in Mainland China and
therefore we do not hold any license or permit for providing securities brokerage business in
Mainland China.
– 17 –
SUMMARY
Our licensed entities are subject to various regulatory requirements, including those
specified in laws, regulations and guidelines issued by the competent regulatory authorities in
Hong Kong, US, Singapore and Australia, including but not limited to the SFC, MAS, SEC,
FINRA and the ASIC. Futu International Hong Kong is a licensed corporation under the SFO
and may be subject to SFC inquiries and investigations from time to time. As of the Latest
Practicable Date, Futu International Hong Kong was involved in certain ongoing inquiries
initiated by the SFC concerning matters including, among others, client onboarding processes,
risk management, client assets, cybersecurity, anti-money laundering, counter-financing
terrorism and operation of mobile application. In addition, Futu International Hong Kong was
involved in an ongoing investigation concerning matters, including, among others, online
account opening procedures and product due diligence. The SFC’s inquiries and investigation
remain ongoing and are subject to statutory secrecy under Section 378 of the SFO. Therefore,
no additional details about them can be disclosed in this document unless otherwise consented
by the SFC. As the foregoing inquiries and investigation from the SFC remain ongoing, it is
not possible for us to accurately predict if any disciplinary action will be taken against Futu
International Hong Kong after the conclusion of the inquiries and investigation, if so, the
nature and extent of any such action. If, after the SFC’s inquiries and investigation have been
concluded, the SFC identifies misconduct or material non-compliance, the SFC can take
various regulatory actions, which may include, among other things, reprimands, fines and/or
suspension or revocation of licenses and trading rights and, if imposed, might materially and
adversely affect our reputation, business, prospects and financial conditions. Our Group had
not been subject to any enforcement or disciplinary actions initiated by the SEC during the
Track Record Period and up to the Latest Practicable Date.
Key Regulatory Developments in China
Regulations relating to overseas listing
According to Article 6 of the Special Administrative Measures (Negative List) for Foreign
Investment Access (2021 Version) (《外商投資准入特別管理措施(負面清單)(2021年版)》) (the
“2021 Negative List”) which took effect on January 1, 2022, with respect to the securities
offering and listing in an overseas market by a domestic company engaging in the fields
prohibited by the 2021 Negative List, the consent of the relevant competent authorities of the
State shall be obtained, and overseas investors shall not participate in the operation and
management of the enterprise, and overseas investors’ shareholding percentage shall be subject
to the relevant provisions on administration of domestic securities investment by overseas
investors. On December 24, 2021, the CSRC issued the Provisions of the State Council on
Administration of Overseas Securities Offering and Listing by Domestic Companies (Draft for
Comments) 《國務院關於境內企業境外發行證券和上市的管理規定(草案徵求意見稿)》(the
“Draft Administration Provisions”), and the Administrative Measures for the Filing of
Overseas Securities Offering and Listing by Domestic Companies (Draft for Comments) 《境內
企業境外發行證券和上市備案管理辦法(徵求意見稿)》 (the “Draft Filing Measures”), which
were open for public comments until January 23, 2022. As of the Latest Practicable Date, the
Draft Administration Provisions and the Draft Filing Measures have not been formally adopted
and the relevant PRC laws and regulations have not yet made clear provisions on whether
regulatory opinions, record-filing or approval documents issued by the competent industry
authorities are required to be obtained for the indirect overseas issuance and listing of securities
by domestic companies through a VIE structure. It is also unclear how the CSRC will seek the
opinions of competent industry authorities or relevant authorities in the record-filing process in
case of companies involved in prohibited sectors under the 2021 Negative List. For details, see
“Risk Factors — Risks Related to Our Presence in China — The approval of the CSRC or other
PRC government authorities may be required in connection with the Listing under PRC law, and,
if require, we cannot predict whether or for how long we will be able to obtain such approval.”
and “Contractual Arrangements — Developments in the PRC Legislation on Foreign Investment
— Filings and Approvals from PRC Governmental Authorities”.
Regulations relating to Cybersecurity and Data Privacy
On June 10, 2021, the Standing Committee of the National People’s Congress
promulgated the PRC Data Security Law (《中華人民共和國數據安全法》), which took effect
in September 2021. On August 20, 2021, the Standing Committee of the National People’s
Congress promulgated the Personal Information Protection Law of the PRC (《中華人民共和
– 18 –
SUMMARY
國個人信息保護法》), effective from November 1, 2021. On July 7, 2022, the CAC

promulgated the Measures on Security Assessment of Cross-border Data Transfer (《數據出境
安全評估辦法》) which has become effective on September 1, 2022. Such data export
measures requires that any data processor which processes or exports personal information
exceeding certain volume threshold under such measures shall apply for security assessment by
the CAC before transferring any personal information abroad. For details on CAC assessment
of data transfer, see “Business — Regulatory Development — PRC Cybersecurity and Data
Protection — Other applicable PRC data security and cybersecurity laws and regulations” and
“Risk Factors — Risks Related to Our Business and Industry — Our operations and services
involve collection, processing, and storage of significant amounts of data concerning our
clients, business partners and employees and may be subject to complex and evolving laws and
regulations regarding privacy and data protection and cybersecurity. If we fail to comply with
the relevant laws and regulations, our business, results of operations and financial condition
may be adversely affected.”
On July 30, 2021, the State Council promulgated the Regulations on Protection of Security
of Critical Information Infrastructure (《關鍵信息基礎設施安全保護條例》), effective on
September 1, 2021. On December 28, 2021, the CAC, the NDRC, the MIIT, and several other
PRC regulatory authorities jointly issued the Cybersecurity Review Measures (《網絡安全審查
辦法》) which became effective on February 15, 2022. Pursuant to the Cybersecurity Review
Measures, critical information infrastructure operators that procure internet products and
services, and network platform operators engaging in data processing activities, must be subject
to the cybersecurity review if their activities affect or may affect national security. The
Cybersecurity Review Measures further stipulate that network platform operators holding over
one million users’ personal information shall apply with the Cybersecurity Review Office for a
cybersecurity review before listing in a foreign country (國外上市). Furthermore, on November
14, 2021, the CAC published the Regulations on Network Data Security Management (Draft for
Comment) (《網絡數據安全管理條例(徵求意見稿)》), or the Draft Regulations on Network
Data, which reiterate the circumstances under which data processors shall apply for cybersecurity
review. However, it provides no further explanation or interpretation as to how to determine what
“may affect national security,” and there remain uncertainties whether we would be subject to the
cybersecurity review for this Listing pursuant to such measures. For more details on
cybersecurity review, see “Business Regulatory Development — PRC Cybersecurity and Data
Protection” and “Risk Factors — Risks Related to Our Business and Industry — Our operations
and services involve collection, processing, and storage of significant amounts of data
concerning our clients, business partners and employees and may be subject to complex and
evolving laws and regulations regarding privacy and data protection and cybersecurity. If we fail
to comply with the relevant laws and regulations, our business, results of operations and financial
condition may be adversely affected.”
On March 12, 2021, the CAC, the MIIT, the MPS and the SAMR collectively promulgated
the Rules on the Scope of Necessary Personal Information for Common Types of Mobile
Internet Applications (《常見類型移動互聯網應用程序必要個人信息範圍規定》), which came
into effect on May 1, 2021. Furthermore, the CAC promulgated the Administrative Provisions
on Mobile Internet Application Information Services (《移動互聯網應用程序信息服務管理規
定》), or the Mobile Application Administrative Provisions, and further revised it on June 14,
2022, which became effective on August 1, 2022. Pursuant to the Mobile Application
Administrative Provisions, mobile internet app providers refer to the owners or operators of
mobile internet apps. For more details, please see “Regulations — Overview of the Laws and
Regulations Relating to Our Presence in China — Regulations on Cybersecurity and Privacy
— Regulations on Privacy Protection.”
RECENT DEVELOPMENT
Our Directors confirm that there has been no material adverse change in our financial or
trading position, indebtedness, mortgage, contingent liabilities, guarantees or prospects since
June 30, 2022, being the end date of the periods reported in the Accountant’s Report set out
in Appendix IA, and there is no event since June 30, 2022 that would materially affect the
information shown in the Accountant’s Report set out in Appendix IA up to the date of this
document. Our financial performance for the year ending December 31, 2022 is expected to be
adversely affected by a decline in trading volume of the global securities markets from the high
base in 2021 when market peaked.
– 19 –
SUMMARY
The table below summarizes our results of operations for the periods indicated, which
were extracted from the unaudited interim condensed consolidated financial information as set
out in Appendix IB:
For the Nine months ended
September 30,
2021 2022
HK$ HK$ US$
(in thousands)
(unaudited) (unaudited) (unaudited)
Total revenues ььььььььььььььььььь 5,512,511 5,333,308 679,420
Total costs ьььььььььььььььььььььь (989,211) (653,962) (83,309)
Total gross profitььььььььььььььььь 4,523,300 4,679,346 596,111
Total operating expenses ььььььььььь (1,900,940) (2,231,107) (284,225)
Income before income tax expenses
and share of loss from equity
method investment ьььььььььььььь 2,612,669 2,229,064 283,965
Net incomeьььььььььььььььььььььь 2,311,401 1,968,168 250,729
Nine Months Ended September 30, 2022 Compared to Nine Months Ended September 30, 2021
Revenues
Our revenues decreased by 3.3% from HK$5,512.5 million in the nine months ended
September 30, 2021 to HK$5,333.3 million (US$679.4 million) in the nine months ended
September 30, 2022.
• Brokerage commission and handling charge income. Our brokerage commission and
handling charge income decreased by 3.2% from HK$3,056.1 million in the nine
months ended September 30, 2021 to HK$2,959.1 million (US$377.0 million) in the
nine months ended September 30, 2022. The decrease was primarily due to a decline
in trading volume compared to the same period in 2021 when market peaked, which
was partially offset by an increase in the blended commission rate as applied based
on trading volume from 6.2 basis points to 7.9 basis points.
• Interest income. Interest income increased by 9.3% from HK$1,900.6 million in the
nine months ended September 30, 2021 to HK$2,076.5 million (US$264.6 million)
in the nine months ended September 30, 2022. The increase was mainly driven by
higher interest income from bank deposits amid rate hikes despite lower margin
financing income and IPO financing interest income.
• Other income. Our other income decreased by 46.4% from HK$555.8 million in the
nine months ended September 30, 2021 to HK$297.8 million (US$37.9 million) in
the nine months ended September 30, 2022. The decrease was primarily due to lower
IPO financing service charge income and underwriting fee income.
Costs
Our total costs decreased by 33.9% from HK$989.2 million in the nine months ended
September 30, 2021 to HK$654.0 million (US$83.3 million) in the nine months ended
September 30, 2022.
Operating expenses
Our total operating expenses increased by 17.4% from HK$1,900.9 million in the nine
months ended September 30, 2021 to HK$2,231.1 million (US$284.2 million) in the nine
months ended September 30, 2022. The increase was mainly driven by an increase in employee
compensation and benefits from HK$785.2 million to HK$ 1,497.8 million, which was
primarily due to (i) an increase in headcount for across various functions, and (ii) an increase
in the number of RSUs granted to our employees under the 2019 Share Incentive Plan in 2022.
– 20 –
SUMMARY
Net income and net income margin

We recorded net income of HK$1,968.2 million (US$250.7 million) and net income
margin at 36.9% in the nine months ended September 30, 2022, compared to net income of
HK$2,311.4 million and net income margin at 41.9% in the nine months ended September 30,
2021.
See “Financial Information — Recent Development — Nine Months Ended September
30, 2022 Compared to Nine Months Ended September 30, 2021.”
SUMMARY OF THIRD QUARTER 2022 HIGHLIGHTS
• Total revenues increased 12.4% year-over-year to HK$1,945.6 million (US$247.9
million).
• Total gross profit increased 18.0% year-over-year to HK$1,727.5 million
(US$220.1 million).
• Net income increased 22.7% year-over-year to HK$754.6 million (US$96.1
million).
• Total number of paying clients increased 23.8% year-over-year to 1,444,955 as of
September 30, 2022.
• Total number of users increased 15.6% year-over-year to 19.2 million as of
September 30, 2022.
– 21 –
DEFINITIONS
In this document, unless the context otherwise requires, the following expressions shall
have the following meanings.
“2014 Plan” the share incentive plan our Company adopted in October
2014 and amended in December 2018, as amended from
time to time, the principal terms of which are set out in
“Appendix IV — Statutory and General Information —
D. Share Incentive Plans”
“2019 Plan” the share incentive plan our Company adopted in

December 2018, as amended from time to time, the
principal terms of which are set out in “Appendix IV —
Statutory and General Information — D. Share Incentive
Plans”
“ADS(s)” American depositary shares, each of which represents

eight Class A Ordinary Shares
“AFRC” Accounting and Financial Reporting Council
“AMCM” Monetary Authority of Macao
“Articles” or “Articles of the fourth amended and restated articles of association of

Association” our Company adopted by a special resolution of the
shareholders of our Company on December 28, 2018 and
effective on March 12, 2019, as amended from time to
time, a summary of which is set out in “Appendix III —
Summary of the Constitution of the Company and
Cayman Companies Act”
“associate(s)” has the meaning ascribed to it under the Listing Rules
“Beijing Futu” Beijing Futu Network Technology Co., Ltd. (北京市富途

網絡科技有限公司), a company established under the
laws of PRC with limited liability on April 4, 2014, and
a Consolidated Affiliated Entity of our Company
“Beijing Shensi Consulting” Beijing Shensi Consulting Services Co., Ltd. (北京慎思
諮詢服務有限公司), a company established under the
laws of PRC with limited liability on December 8, 2021,
and a Consolidated Affiliated Entity of our Company
“Board” the board of directors of our Company
– 22 –
DEFINITIONS
“business day” any day (other than a Saturday, Sunday or public holiday
in Hong Kong) on which banks in Hong Kong or other
relevant jurisdictions are generally open for normal
banking business
“BVI” the British Virgin Islands
“CAC” the Cyberspace Administration of China (中華人民共和

國國家互聯網信息辦公室)
“Cayman Companies Act” the Companies Act, Cap. 22 (Act 3 of 1961, as

consolidated and revised) of the Cayman Islands, as
amended or supplemented or otherwise modified from
time to time
“CBIRC” China Banking and Insurance Regulatory Commission

(中國銀行保險監督管理委員會)
“CCASS” the Central Clearing and Settlement System established

and operated by HKSCC
“CCASS Clearing Participant” a person admitted to participate in CCASS as a direct

clearing participant or a general clearing participant
“CCASS Custodian Participant” a person admitted to participate in CCASS as a custodian

participant
“CCASS Investor Participant” a person admitted to participate in CCASS as an investor

participant
“CCASS Participant” a CCASS Clearing Participant, a CCASS Custodian

Participant or a CCASS Investor Participant
“China”, “Mainland China” or the People’s Republic of China for the purpose of this
the “PRC” document and for geographical reference only, except
where the context requires, references in this document to
“China”, “Mainland China” and the “PRC” do not apply
to Hong Kong, Macau Special Administrative Region of
the PRC and Taiwan Region
– 23 –
DEFINITIONS
“Class A Ordinary Shares” the Class A ordinary shares in the share capital of the
Company with a par value of US$0.00001 each,
conferring a holder of a Class A ordinary share one vote
per share on all matters subject to the vote at general
meetings of the Company
“Class B Ordinary Shares” the Class B ordinary shares in the share capital of the
Company with a par value of US$0.00001 each,
conferring weighted voting rights in our Company such
that a holder of a Class B ordinary share is entitled to,
upon Listing, ten votes per share on all matters subject to
the vote at general meetings of the Company, subject to
the requirements under Rule 8A.24 of the Listing Rules
that the Reserved Matters shall be voted on a one vote per
share basis. Please see “Share Capital — Weighted Voting
Rights Structure” for the specified exception for the
compliance of Rule 8A.24 of the Listing Rules for further
details
“Companies Ordinance” the Companies Ordinance (Chapter 622 of the Laws of

Hong Kong), as amended, supplemented or otherwise
modified from time to time
“Company”, “our Company”, Futu Holdings Limited, a company with limited liability
“the Company” incorporated in the Cayman Islands on April 15, 2014
“connected person(s)” has the meaning ascribed to it under the Listing Rules
“connected transaction(s)” has the meaning ascribed to it under the Listing Rules
“Consolidated Affiliated Entities” entities that we control wholly or partly through the
Contractual Arrangements, namely our VIEs and their
subsidiaries, details of which are set out in the sections
headed “History and Corporate Structure” and
“Contractual Arrangements”
“Contractual Arrangements” the series of contractual arrangements entered into

between the WFOE, our VIEs and the Registered
Shareholders (as applicable), as detailed in the section
headed “Contractual Arrangements”
– 24 –
DEFINITIONS
“Controlling Shareholder” has the meaning ascribed to it under the Listing Rules,
and unless the context otherwise requires, refers to Mr. Li
and the entities through which Mr. Li has an interest in
our Company, details of which are set out in the section
headed “Relationship with our Controlling Shareholders”
“CSRC” the China Securities Regulatory Commission (中國證券

監督管理委員會)
“Director(s)” the director(s) of our Company
“DTC” The Depository Trust Company, the central book-entry

clearing and settlement system for equity securities in the
U.S. and the clearance system for the ADSs
“FINRA” Financial Industry Regulatory Authority, Inc.
“Foreign Investment Law” the Foreign Investment Law of the PRC (《中華人民共和
國外商投資法》), promulgated by the National People’s
Congress in March 2019, which became effective on
January 1, 2020
“Futu Australia” Futu Securities (Australia) Ltd., a company with limited

liability incorporated in Australia on February 15, 2001
and our wholly-owned subsidiary
“Futu International Hong Kong” Futu Securities International (Hong Kong) Limited, a
or “Futu Securities” company incorporated in Hong Kong with limited
liability on April 17, 2012 and our wholly-owned
subsidiary
“GAAP” generally accepted accounting principles
“Group”, “our Group”, “the the Company and its subsidiaries and Consolidated
Group”, “we”, “our” or “us” Affiliated Entities from time to time or, where the context
so requires, in respect of the period prior to our Company
becoming the holding company of its present
subsidiaries, such subsidiaries as if they were
subsidiaries of our Company at the relevant time
“Hainan Caixuetang” Hainan Caixuetang Education Network Technology Co.,

Ltd. (海南財學堂教育網絡科技有限公司), a company
established under the laws of PRC with limited liability
on December 14, 2020, and a Consolidated Affiliated
Entity of our Company
– 25 –
DEFINITIONS
“Hainan Futu” Hainan Futu Information Services Co., Ltd. (海南富途信

息服務有限公司), a company established under the laws
of PRC with limited liability on May 25, 2018, and a
Consolidated Affiliated Entity of our Company
”HKMA” Hong Kong Monetary Authority
“HKSCC” Hong Kong Securities Clearing Company Limited, a

wholly-owned subsidiary of Hong Kong Exchanges and
Clearing Limited
“HKSCC Nominees” HKSCC Nominees Limited, a wholly-owned subsidiary

of HKSCC
“Hong Kong” or “HK” the Hong Kong Special Administrative Region of the
People’s Republic of China
“Hong Kong dollar(s)” or “HK Hong Kong dollars, the lawful currency of Hong Kong
dollar(s)” or “HKD” or “HK$”
“Hong Kong Share Registrar” Tricor Investor Services Limited
“IFRS” International Financial Reporting Standards, which

include standards, amendments and interpretations
promulgated by the International Accounting Standards
Board and the International Accounting Standards and
interpretation issued by the International Accounting
Standards Committee
“Joint Sponsors” Goldman Sachs (Asia) L.L.C. and UBS Securities Hong
Kong Limited
“Latest Practicable Date” December 15, 2022, being the latest practicable date for
ascertaining certain information in this document before
its publication
“Listing” or “Introduction” the listing of the Class A Ordinary Shares on the Main
Board of the Stock Exchange by way of introduction
pursuant to the Hong Kong Listing Rules
“Listing Date” the date, expected to be on or about Friday, December 30,

2022, on which the Class A Ordinary Shares are to be
listed and on which dealings in the Class A Ordinary
Shares are to be first permitted to take place on the Hong
Kong Stock Exchange
– 26 –
DEFINITIONS
“Listing Rules” or “Hong Kong the Rules Governing the Listing of Securities on The
Listing Rules” Stock Exchange of Hong Kong Limited, as amended,
supplemented or otherwise modified from time to time
“Main Board” the stock exchange (excluding the option market)

operated by the Stock Exchange which is independent
from and operates in parallel with the Growth Enterprise
Market of the Stock Exchange
“Memorandum” or the fourth amended and restated memorandum of

“Memorandum of Association” association of our Company adopted by a special
resolution of the shareholders of our Company on
December 28, 2018 and effective on March 12, 2019, as
amended from time to time, a summary of which is set
out in “Appendix III — Summary of the Constitution of
the Company and Cayman Companies Act”
“MIIT” the Ministry of Industry and Information Technology of

the PRC (中華人民共和國工業和信息化部) (formerly
known as the Ministry of Information Industry)
“MOF” the Ministry of Finance of the PRC (中華人民共和國財政

部)
“MOFCOM” the Ministry of Commerce of the PRC (中華人民共和國

商務部)
“Moomoo Financial Singapore” Moomoo Financial Singapore Pte. Ltd., a company with
limited liability incorporated in Singapore on December
17, 2019 and our wholly-owned subsidiary
“MPS” the Ministry of Public Security of the PRC (中華人民共

和國公安部)
“Mr. Li” Mr. Leaf Hua Li, our founder, chairman of the Board,
executive Director and chief executive officer, and the
Controlling Shareholder of our Company
“Nasdaq” or “Nasdaq Global The Nasdaq Global Market

Market”
“NDRC” National Development and Reform Commission of the

PRC (中華人民共和國國家發展和改革委員會)
“PBOC” The People’s Bank of China
– 27 –
DEFINITIONS
“PRC Legal Advisors” Han Kun Law Offices and CM Law Firm, our legal
advisors as to PRC laws
“Pre-Funded Warrant(s)” the pre-funded warrants to purchase 53,600,000 Class A

Ordinary Shares issued by the Company pursuant to a
securities purchase agreement dated December 8, 2020,
which were immediately exercisable upon the issuance
and had a termination date in June 2022
“Registered Shareholders” the registered shareholders of each of our VIEs, namely,

Mr. Li and Ms. Lei Li
“Reserved Matters” those matters resolutions with respect to which each

Share is entitled to one vote at general meetings of our
Company pursuant to Rule 8A.24 of the Listing Rules
“RMB” or “Renminbi” Renminbi, the lawful currency of China
“SAFE” the State Administration of Foreign Exchange of the PRC

(中華人民共和國國家外匯管理局)
“SAIC” the State Administration of Industry and Commerce

of the PRC (中華人民共和國國家工商行政管理總局),
which has now been merged into the SAMR
“SAMR” the State Administration for Market Regulation of the

PRC (中華人民共和國國家市場監督管理總局)
“SAT” the State Administration of Taxation of the PRC (中華人

民共和國國家稅務總局)
“SCNPC” the Standing Committee of the National People’s

Congress of the PRC (中華人民共和國全國人民代表大會
常務委員會)
“SEC” the U.S. Securities and Exchange Commission
“SFC” Securities and Futures Commission of Hong Kong
“SFO” or “Securities and Securities and Futures Ordinance (Chapter 571 of the
Futures Ordinance” Laws of Hong Kong), as amended, supplemented or
otherwise modified from time to time
“SGD” or “S$” Singapore dollars, the lawful currency of Singapore
– 28 –
DEFINITIONS
“Share(s)” the Class A Ordinary Shares and Class B Ordinary Shares

in the share capital of the Company, as the context so
requires
“Share Incentive Plans” collectively, the 2014 Plan and the 2019 Plan
“Shensi Beijing” Shensi Network Technology (Beijing) Co., Ltd. (慎思網

絡技術(北京)有限公司), a wholly foreign-owned
enterprise established under the laws of the PRC on
September 15, 2014, and our wholly-owned subsidiary
“Shenzhen Futu” Shenzhen Futu Network Technology Co., Ltd. (深圳市富

途網絡科技有限公司), a company established under the
laws of PRC with limited liability on December 18, 2007,
a Consolidated Affiliated Entity of our Company
“Stock Exchange” or “Hong The Stock Exchange of Hong Kong Limited

Kong Stock Exchange”
“subsidiary(ies)” has the meaning ascribed to it in section 15 of the

Companies Ordinance
“substantial shareholder(s)” has the meaning ascribed to it under the Listing Rules
“Takeovers Code” or “Hong Code on Takeovers and Mergers and Share Buy-backs
Kong Takeovers Code” issued by the SFC, as amended, supplemented or
otherwise modified from time to time
“Tencent” Tencent Holdings Limited, a company listed on the Stock

Exchange (stock code: 700), one of our substantial
shareholders
“Tencent Entities” collectively, Qiantang River Investment Limited, Image

Frame Investment (HK) Limited, Tencent Mobility
Limited, TPP Opportunity GP I, Ltd. and Distribution
Pool Limited which are entities controlled by Tencent and
are our Shareholders
“Tencent Group” Tencent and its subsidiaries and consolidated affiliated

entities, from time to time
“Track Record Period” the three years ended December 31, 2021 and the six
months ended June 30, 2022
– 29 –
DEFINITIONS
“U.S. dollars”, “US dollars”, United States dollars, the lawful currency of the United
“USD” or “US$” States
“U.S. GAAP” Generally Accepted Accounting Principles in the United

States
“U.S. Securities Act” United States Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder
“United States”, “U.S.” United States of America, its territories, its possessions
or “US” and all areas subject to its jurisdiction
“VIE(s)” Shenzhen Futu and Hainan Futu
“weighted voting right” has the meaning ascribed to it under the Listing Rules
“WFOE” Shensi Beijing
“WVR Beneficiary” has the meaning ascribed to it under the Listing Rules and
unless the context otherwise requires, refers to Mr. Li,
being the beneficial owner of the Class B Ordinary
Shares which carry weighted voting rights, details of
which are set out in the section headed “Share Capital”
“WVR structure” has the meaning ascribed to it in the Listing Rules
“%” per cent
– 30 –
GLOSSARY OF TECHNICAL TERMS
This glossary contains explanations of certain technical terms used in this

document. As such, these terms and their meanings may not correspond to standard
industry meanings or usage of these terms.
“ACH” Automated Clearing House
“AI” artificial intelligence
“API” Application Programming Interface
“ATM” automated teller machine
“AUM” assets under management
“availability rate” the ratio of the total time a service system is capable of
being used during the market hours of the relevant equity
markets
“average DAUs” the average number of DAUs on each trading day during
a specific period
“clients” the number of users who open one or more trading

accounts with us
“client asset balance” the asset balance in the trading accounts of our paying
clients
“DARTs” daily average revenue trades
“DAUs” the number of user accounts and visitors who access our
platforms Futubull and/or moomoo, at least once on a
given trading day. Some visitors may access our
platforms using more than one device on a given trading
day, and we calculate the number of visitors who access
our platforms based on the number of devices used by the
visitors to access our platforms
“DDA” Direct Debit Authentication
“eDDA” Electronic Direct Debit Authorization
“ESOP” Employee Stock Ownership Plan
– 31 –
“ETF” Exchange traded fund
“FPS” Faster Payment System
“grey market” undeclared transactions concluded outside the trading

system of the Hong Kong Stock Exchange, and the
trading of new shares of a company prior to their formal
trading on the Hong Kong Stock Exchange by persons
already in possession of or expected to be in possession
of the new shares (also commonly known as dark pool
trading services)
“institutional investor” an entity that is financially sophisticated and makes large

investments, often held in very large portfolios of
investments
“IPO” initial public offering
“KYC” Know-your-client
“loan-to-value ratio” calculated as net margin loan balance extended to margin

clients divided by value of collateral received from
margin clients
“MAUs” the number of user accounts and visitors who access

Futubull and/or moomoo at least once during the calendar
month in question. Some visitors may access our
platforms access our platforms using more than one
device in a given month, and we calculate the number of
visitors who access our platforms based on the number of
devices used by the visitors to access our platforms
“paying clients” the number of clients with assets in their trading accounts
with us
“professional investor” has the meaning ascribed to it under Part 1 of Schedule 1

to the SFO (including those prescribed by rules made
under section 397 of the SFO)
“retail investor” an individual investor that purchases securities and other

investment assets
“SMS” Short Messaging Service
– 32 –
“Stock Connect” Shanghai-Hong Kong Stock Connect and Shenzhen-Hong

Kong Stock Connect
“TWAP” time weighted average price
“UGC” user-generated content
“users” the number of user accounts registered with our

applications or websites
“VWAP” volume weighted average price
For each relevant period prior to January 1, 2021, “users”, “MAUs” and “average DAUs”
figures disclosed in this document are only inclusive of those under Futubull, due to
insignificant figures recorded under moomoo. Since January 1, 2021, the numbers disclosed in
this document include figures under Futubull and moomoo for each subsequent period. The
number of users is determined based on the user accounts registered with Futubull and
moomoo.
For each relevant period prior to January 1, 2021, “clients”, “paying clients”, “client asset
balance”, “trading volume” and other client-based figures disclosed in this document are only
inclusive of those under Futu International Hong Kong, due to insignificant figures recorded
under Moomoo Financial Inc.. Since January 1, 2021, the figures disclosed in this document
include those under Futu International Hong Kong, Moomoo Financial Inc., Moomoo Financial
Singapore and Futu Australia for each subsequent period.
– 33 –
FORWARD-LOOKING STATEMENTS
This document contains, and the documents incorporated by reference herein may certain
statements that are, or may be deemed to be, “forward-looking statements.” These forward-
looking statements may be identified by the use of forward-looking terminology, including the
terms “believe(s),” “aim(s),” “estimate(s),” “plan(s),” “project(s),” “anticipate(s),”
“expect(s),” “intend(s),” “may,” “seek(s),” “can,” “could,” “ought to,” “potential,” “will” or
“should” or similar expressions, or, in each case, their negative or other variations, or
comparable terminology, or by discussions of strategy, plans, objectives, goals, future events
or intentions. In particular, references to “estimate(s)” only refer to situations where best
estimates have been adopted by the management. These forward-looking statements include all
matters that are not historical facts. They appear in a number of places throughout this
document and include, but are not limited to, statements regarding our intentions, beliefs or
current expectations concerning, among other things, our business, results of operations,
financial position, liquidity, prospects, growth, strategies and the industries and markets in
which we operate or may operate in the future.
By their nature, forward-looking statements involve risk and uncertainty because they
relate to future events and circumstances. Forward-looking statements are not guarantees of
future performance or the actual results of our operations, financial position and liquidity. The
development of the markets and the industries in which we operate may differ materially from
the description or implication suggested by the forward-looking statements contained in this
document. In addition, even if our results of operations, financial position and liquidity as well
as the development of the markets and the industries in which we operate are consistent with
the forward-looking statements contained in this document, those results or developments may
not be indicative of results or developments in subsequent periods. A number of risks,
uncertainties and other factors could cause results and developments to differ materially from
those expressed or implied by the forward-looking statements including, without limitation:
• our operations and business prospects;
• our ability to maintain relationship with, and the actions and developments
affecting, our customers and suppliers;
• future developments, trends and conditions in the industries and markets in which
we operate;
• general economic, political and business conditions in the markets in which we

operate;
• changes to the regulatory environment in the industries and markets in which we

operate;
• the ability of third parties to perform in accordance with contractual terms and
specifications;
– 34 –
FORWARD-LOOKING STATEMENTS
• our ability to retain senior management and key personnel, and recruit qualified
staff;
• our business strategies and plans to achieve these strategies, including our expansion
plans;
• the actions and developments of our competitors;
• our ability to reduce costs and offer competitive prices;
• our ability to defend our intellectual rights and protect confidentiality;
• change or volatility in interest rates, foreign exchange rates, equity prices, trading
volumes, commodity prices and overall market trends;
• capital market developments; and
• our dividend policy.
Forward-looking statements may and often do differ materially from actual results. Any
forward-looking statements in this document reflect our management’s current view with
respect to future events and are subject to risks relating to future events and other risks,
uncertainties and assumptions. Investors should specifically consider the factors identified in
this document, which could cause actual results to differ, before making any investment
decision. Subject to the requirements of the Listing Rules and except as may be required by
applicable laws, we undertake no obligation to revise any forward-looking statements that
appear in this document to reflect any change in our expectations, or any events or
circumstances, that may occur or arise after the date of this document. All forward-looking
statements in this document are qualified by reference to this cautionary statement.
– 35 –
RISK FACTORS
An investment in our Class A Ordinary Shares or ADSs involves significant risks.

You should carefully consider all of the information in this document, including the risks
and uncertainties described below, as well as our financial statements and the related
notes, before deciding to invest in our Class A Ordinary Shares or ADSs. The following
is a description of what we consider to be our material risks. Any of the following risks
could have a material adverse effect on our business, financial condition, results of
operations and growth prospects. In any such event, the market price of our Class A
Ordinary Shares or ADSs could decline, and you may lose all or part of your investment.
These factors are contingencies that may or may not occur, and we are not in a
position to express a view on the likelihood of any such contingency occurring. The
information given is as of the Latest Practicable Date unless otherwise stated, will not
be updated after the date hereof, and is subject to the cautionary statements in
“Forward-looking Statements” in this document.
RISKS RELATED TO OUR BUSINESS AND INDUSTRY
Our historical growth rates may not be indicative of our future growth, which makes it
difficult to evaluate our future prospects.
We launched our online brokerage business in 2012 and experienced rapid growth in both
our businesses since our inception. Our total revenues increased by 211.9% from HK$1,061.6
million in 2019 to HK$3,310.8 million in 2020, and further by 114.9% to HK$7,115.3 million
in 2021 and decreased by 10.4% from HK$3,781.5 million for the six months ended June 30,
2021 to HK$3,387.7 million (US$431.7 million) for the same period in 2022. Our historical
growth rates may not be indicative of our future growth, and we cannot assure you that we will
be able to maintain similar growth rates in the future or our efforts may prove more costly than
we currently anticipate such that we may not succeed in increasing our revenues sufficiently
to offset these higher expenses. If our growth rate declines or fluctuates, investors’ perceptions
of our business and business prospects may be adversely affected and the market price of our
Class A Ordinary Shares or ADSs could decline. In addition, we have limited experience in new
services and products launched in the past few years. As our business develops and we respond
to competition, we may continue to introduce new service offerings, adjust our existing
services or our business operation in general. Any significant change to our business model that
does not achieve expected results may have a material and adverse impact on our financial
condition and results of operation. It is therefore difficult to effectively assess our future
prospects.
We may not be able to manage our expansion effectively. Continuous expansion may
increase the complexity of our business and place a strain on our management, operations,
technical systems, financial resources and internal control functions. Our current and planned
personnel, systems, resources and controls may not be adequate to support and effectively
manage our future operations.
– 36 –
RISK FACTORS
You should consider our business and prospects in light of the risks and uncertainties that
fast-growing companies in a quickly-evolving and extensively regulated industry may
encounter. These risks and challenges include, among other things, our ability to:
• sustain high growth in the future;
• navigate a complex and evolving regulatory environment as well as economic

condition and fluctuation;
• offer personalized and competitive online brokerage, wealth management product

distribution and other financial services;
• increase the utilization of our services by existing and new users and clients;
• offer attractive commission rates while driving the growth and profitability of our
business;
• maintain and enhance our relationships with business partners, including funding
partners for our margin financing business and fund companies for our wealth
management product distribution business;
• enhance our technology infrastructure to support the growth of our business and
maintain the security of our system and the confidentiality of the information
provided and utilized across our systems;
• improve our operational efficiency;
• attract, retain and motivate talented employees to support our business growth; and
• defend ourselves against legal and regulatory actions.
Our entrepreneurial and collaborative culture is important to us, and we believe it has
been a major contributor to our success. We may have difficulties maintaining such culture to
meet the needs of our future and evolving operations as we continue to grow, in particular as
we expand internationally. In addition, our ability to maintain our culture as a public company,
with changes in policies, practices, corporate governance and management requirements, may
be challenging. Failure to maintain our culture could have a material adverse effect on our
business.
– 37 –
RISK FACTORS
We are subject to extensive and evolving regulatory requirements in the markets we

operate in, non-compliance with which may result in penalties, limitations and
prohibitions on our future business activities or suspension or revocation of our licenses
and trading rights, and consequently may materially and adversely affect our business,
financial condition, operations and prospects. In addition, we are involved in ongoing
inquiries and investigation by relevant regulators.
We are subject to extensive regulations and the markets in which we operate including
Hong Kong, Singapore, the United States and Australia, are highly regulated. However, the
online brokerage service industry (including, for example, the use of cloud-based operating,
computing and record keeping technology as well as biometric identification technology) is at
a relatively early stage of development, and applicable laws, regulations and other
requirements may be changed and adopted from time to time. We may be subject to
examinations and inquiries by the relevant regulators on a regular or ad-hoc basis. Our business
operations in Hong Kong are subject to applicable Hong Kong laws, regulations, guidelines,
circulars, and other regulatory guidance, or collectively the HK Brokerage Regulations,
including, for example, the SFO and its subsidiary legislation. These HK Brokerage
Regulations set out the licensing requirements, regulate our operational activities and
standards, and impose requirements such as maintaining minimum liquidity or capital along
with other filing, record keeping and reporting obligations relevant to our business operations.
See “Regulations — Overview of the Laws and Regulations Relating to Our Business and
Operations in Hong Kong.” In addition, our operations in the United States are subject to
applicable United States laws, rules and regulatory guidance, or collectively the US Brokerage
Regulations, including, for example, the U.S. Securities and Exchange Act of 1934 (the
“Exchange Act”), rules and guidance adopted under the Exchange Act by the SEC and rules
and guidance adopted by the Financial Industry Regulatory Authority (the “FINRA”). Also,
our operations in Singapore are subject to applicable Singapore laws and regulatory
requirements, or collectively the Singapore Brokerage Regulations, including the Securities
and Futures Act 2001 of Singapore (2020 Revised Edition) (the “Securities and Futures Act”),
and its subsidiary legislation such as the Securities and Futures (Licensing and Conduct of
Business) Regulations. In Singapore, we hold a Capital Markets Services Licence issued by the
Monetary Authority of Singapore (the “MAS”), and we are required to abide by relevant
regulatory notices and guidelines issued by the MAS. See “Regulations — Overview of the
Laws and Regulations Relating to Our Business and Operations in the United States” and
“Regulations — Overview of the Laws and Regulations Relating to Our Business and
Operations in Singapore.” Futu Australia, which holds an Australian Financial Services
License, is regulated by the Australian Securities and Investments Commission. Failure to
comply with applicable laws and regulations in markets we operate can result in investigations
and regulatory actions, which may lead to penalties, including reprimands, fines, limitations or
prohibitions on our future business activities or suspension or revocation of our licenses or
trading rights. Any outcome of such nature may affect our ability to conduct business, harm our
reputation and, consequently, materially and adversely affect our business, financial condition,
results of operations and prospects.
– 38 –
RISK FACTORS
From time to time, Futu International Hong Kong, as a SFC-licensed corporation may be
subject to or required to assist in inquiries or investigations by relevant regulatory authorities
in Hong Kong, principally the SFC. The SFC conducts on-site reviews and off-site monitoring
to ascertain and supervise our business conduct and compliance with relevant regulatory
requirements and to assess and monitor, among other things, our financial soundness. We are
subject to such regulatory examination, reviews and inquiries from time to time. If any
misconduct is identified as a result of inquiries, reviews or investigations, the SFC may take
disciplinary actions which could lead to revocation or suspension of licenses, public or private
reprimand or imposition of pecuniary penalties against us, our responsible officers, licensed
representatives, directors or other officers. Any such disciplinary actions taken against us, our
responsible officers, licensed representatives, directors or other officers may have a material
and adverse impact on our business operations and financial results. In addition, we are subject
to statutory secrecy obligations under the SFO whereby we may not be permitted to disclose
details on any SFC inquiries, reviews or investigations without the consent of the SFC.
Moomoo Financial Inc. and Futu Clearing Inc., as SEC-registered broker-dealers, have been
subject to examinations and enquiries initiated by the SEC and FINRA from time to time. They
may also be subject to similar examinations, investigations, enquiries or other regulatory
actions by such and other regulatory authorities in the future. Moomoo Financial Singapore, as
a Capital Markets Services Licencee in Singapore, may be subject to similar examinations and
regulatory actions initiated by the MAS or other relevant regulatory authorities in Singapore.
Futu Australia, which holds an Australian Financial Services License, is regulated by the
Australian Securities and Investments Commission.
While we do not believe we are conducting securities business in China, we cannot rule
out the possibility that we will be subject to the supervision of the CSRC or other PRC
government authorities in the future.
Pursuant to Articles 118 and 120 of the Securities Law of the PRC, “securities business”
includes securities brokerage business, securities investment, securities margin trading,
investment consulting business and other businesses approved by the securities regulatory
authorities under the State Council. Shenzhen Futu, one of our operating entities in Mainland
China, having the link embedded in Futubull platform to redirect users to the brokerage
services provided by Futu International Hong Kong, the Company’s wholly-owned subsidiary
in Hong Kong and a licensed corporation under the SFO. As advised by our PRC Legal
Advisors, such services provided by Shenzhen Futu in Mainland China do not fall within the
definition of “securities business” under the Securities Law as of the date of this document.
As advised by our PRC Legal Advisors, Futu International Hong Kong is regarded as an
“overseas securities business entity” under Article 95 of the Regulations on Supervision and
Administration of Securities Firms (《證券公司監督管理條例》). The operation of Futubull
platform by Shenzhen Futu and the provision of securities services by Futu International Hong
Kong do not constitute the provision of securities business in Mainland China. Our Group’s
securities brokerage business is conducted outside Mainland China through its entities and
employees licensed with the relevant regulators, such as the SFC in Hong Kong, and not
through its operating subsidiaries in Mainland China. Therefore, our PRC legal advisors are of
– 39 –
RISK FACTORS
the view that the operation of Futubull platform by Shenzhen Futu and the provision of
securities services by Futu International Hong Kong do not violate the Securities Law, the
Regulations on Supervision and Administration of Securities Firms and the Administrative
Measures on Representative Offices of Foreign Securities Institutions Stationed in China (《外
國證券類機構駐華代表機構管理辦法》) as of the date of this document. See “Regulations —
Overview of the Laws and Regulations Relating to Our Presence in China — Draft Measures
on Securities Brokerage Business.” However, our PRC Legal Advisors also advised us that
there are substantial uncertainties regarding the interpretation and application of current and
future PRC laws and regulations over the definition of “securities business”, Securities Law of
the PRC and the Regulations on Supervision and Administration of Securities Firms (《證券
公司監督管理條例》 ). Accordingly, there can be no assurance that the PRC regulatory
authorities will not in the future take a view that is contrary to or otherwise different from the
above opinion of our PRC Legal Advisors. In addition, there is no clear indication as to whether
any new PRC laws and regulations will be enacted to impose any licensing requirements on us.
During the Track Record Period and as of the Latest Practicable Date, we had not been
subject to any other administrative penalty or investigation by CSRC or other relevant
authorities in the PRC concerning our regulatory compliance with the Securities Law of the
PRC that could, individually or in the aggregate, have a material adverse effect on the Group’s
business operations, financial results and financial position.
As of the Latest Practicable Date, Futu International Hong Kong was involved in certain
ongoing inquiries initiated by the SFC concerning matters including, among others, client
onboarding processes, risk management, client assets, cybersecurity, anti-money laundering,
counter-financing terrorism and operation of mobile application. In addition, Futu International
Hong Kong was involved in an ongoing investigation concerning matters, including, among
others, online account opening procedures and product due diligence. We are unable to
accurately predict the outcome of such inquiries and investigation given their ongoing nature.
See “Business — Legal Proceedings and Compliance — Ongoing Regulatory Actions.” We
have been and may continue to be subject to inquiries or investigations by the SFC. There
remains a risk that at the conclusion of the inquiries and the investigation, the SFC may
identify misconduct, deficiency or material non-compliance, undertake investigation and take
regulatory actions, which may include, among other things, reprimands, fines, limitations or
prohibitions on our future business activities or suspension or revocation of Futu International
Hong Kong’s licenses and trading rights. There also remains a risk that we may not be able to
rectify our practices to be in compliance with relevant HK Brokerage Regulations following
the identification of any such misconduct, deficiency or material non-compliance, which may
result in the SFC taking additional regulatory actions against us in the forms described above.
If any such outcome were to arise, there may be a material and adverse effect on our reputation,
business, results of operations, financial conditions and prospects.
– 40 –
RISK FACTORS
Our online client onboarding procedures historically did not strictly follow the specified
steps set out by the relevant authorities in Hong Kong, which may subject us to regulatory
actions in addition to remediation, which may include, reprimands, fines, limitations or
prohibitions on our future business activities and/or suspension or revocation of Futu
International Hong Kong’s licenses and trading rights, and consequently may adversely
affect our business, financial condition, operations, brand reputation and prospects.
As online brokerage services in Hong Kong and, in particular, the technologies and
practices involved in online account opening services are at relatively early stages of
development, applicable laws, regulations, guidelines, circulars and other regulatory guidance
with regard to online client onboarding procedures remain evolving and are subject to further
changes. For the online application procedures followed by certain clients outside Hong Kong
to open Hong Kong or U.S. trading accounts with us, see “Business — Retail Services —
Account Opening and Fund Transfer — Account Opening.” The SFC’s current position on the
expressly specified non-face-to-face approaches for account opening, including online account
opening, in light of the SFC regulatory requirements is summarized in paragraph 5.1 of the
SFC Code of Conduct, SFC circulars dated June 28, 2019, the relevant frequently asked
questions (FAQs) and the SFC’s website regarding account opening approaches that the SFC
would consider to be acceptable as updated by the SFC from time to time (together, the “SFC
Circulars”). There are various methods set out under the SFC Circulars for online account
opening, one of which is to use e-certification services provided by certification authorities
outside Hong Kong whose electronic signature certificates have obtained mutual recognition
status accepted by the Hong Kong government and the relevant local government when
onboarding clients. During the Track Record Period, our online client onboarding procedures
for certain clients outside Hong Kong did not strictly follow the specified methods set out in
the SFC Circulars, and we tested new e-certification procedures through mutually recognized
certification authorities as part of our online onboarding process. Since September 2021, we
have implemented new e-certification procedures through a mutually recognized certification
authority as the online client onboarding procedures for our new clients and existing clients
(who had not gone through such procedures or other specified methods set out in the SFC
Circulars). We have not been subject to any disciplinary action in relation to our online client
onboarding procedures. However, we have been and may continue to be subject to inquiries,
investigations or disciplinary action by the SFC regarding our current and historical client
onboarding procedures. See “— We are subject to extensive and evolving regulatory
requirements in the markets we operate in, non-compliance with which may result in penalties,
limitations and prohibitions on our future business activities or suspension or revocation of our
licenses and trading rights, and consequently may materially and adversely affect our business,
financial condition, operations and prospects. In addition, we are involved in ongoing inquiries
and investigation by relevant regulators.” There is no assurance that we will be able to achieve
full implementation in a timely manner, or at all, with respect to the adoption of e-certification
procedures or remediate our account opening or other procedures for all relevant existing
clients retroactively or to make further adjustments to our online client onboarding processes
as may be required by the SFC. We may need to take extensive time and incur additional costs
and our customer experience may be adversely impacted. As a result, such remediation or
adjustments may have a material adverse impact on our operations, business prospects, user
– 41 –
RISK FACTORS
experience and client acquisition and retention. If our online client onboarding procedures are
determined by the SFC to be, or have been, not in compliance with the applicable laws,
regulations, guidelines, circulars and other regulatory guidance, we may be subject to
regulatory actions, which may include, in addition to remediation, reprimands, fines,
limitations or prohibitions on our future business activities and/or suspension or revocation of
Futu International Hong Kong’s licenses and trading rights.
We do not hold any license or permit for providing securities brokerage business in
Mainland China. Although we do not believe we engage in securities brokerage business
in Mainland China, there remain uncertainties as to the interpretation and
implementation of relevant PRC laws and regulations or if any new PRC laws and
regulations will be enacted to impose licensing requirements on us with respect to our
activities in Mainland China and/or our provision of services to our PRC-based clients. If
some of our activities in Mainland China were deemed by relevant regulators as provision
of securities business such as securities brokerage services, investment consulting
services, futures business and/or any other regulated services and business activities in
Mainland China, our business, financial condition, results of operations and prospects
may be materially and adversely affected.
Pursuant to the relevant PRC laws and regulations, no entity or individual shall engage
in securities business without the approval of the securities regulatory authority of the State
Council. See “Regulations — Overview of the Laws and Regulations Relating to Our Presence
in China — Regulations on Securities Business.” We do not hold any license or permit in
relation to providing securities brokerage business in Mainland China. A significant portion of
our technology, research and development, management, supporting and other teams are based
in China and a large number of our users are PRC residents. While we do not believe the
activities we are conducting now through our subsidiaries or Consolidated Affiliated Entities
in China is securities brokerage business in China, we cannot assure you that certain of our
activities such as redirecting users in China through embedded link to brokers or other licensed
entities outside of China will not be deemed as operating securities brokerage business in
China. In the past, we received inquiries or scrutiny relating to certain aspects of our activities,
including publicity activities and investor education services, from certain regulatory
authorities in China. We timely took measures to modify and enhance our business and
platform to be in compliance with the current applicable PRC laws and regulations related to
securities brokerage business in China. However, we cannot assure you that the measures we
have taken or will take in the future will be effective or fully satisfy the relevant regulatory
authorities’ requirements.
Based on the opinion of our PRC Legal Advisors, we are not in violation of the current
applicable PRC laws and regulations related to securities brokerage business in China in any
material respect. However, there remain some uncertainties as to how the current and any
future PRC laws and regulations will be interpreted or enforced in the context of operating
securities related business in China. See “Regulations — Overview of the Laws and
Regulations Relating to Our Presence in China — Regulations on Securities Business.” It also
remains uncertain if PRC regulators will enact new laws and regulations to impose licensing
– 42 –
RISK FACTORS
requirements on us with respect to our activities in Mainland China and/or our provision of
services to our PRC-based clients. If some of our activities in China or our provision of
services to our client base in China were deemed by relevant regulators as provision of
securities business such as securities brokerage services, investment consulting services,
futures business and/or any other regulated services and business activities in China or any new
PRC laws and regulations are enacted to impose license requirements on us with respect to our
activities in China and/or our provision of services to our client base in China, we will be
required to obtain relevant licenses or permits from relevant regulatory bodies, including the
CSRC, and failure of obtaining such licenses or permits may subject us to regulatory actions
and penalties, including fines, suspension of parts or all of our operations or activities in the
PRC, and temporary suspension or removal of our websites, desktop devices and mobile
application in China. Solely based on the citizenship provided by the individual clients at the
time of account opening or further updated subsequently, approximately 68%, 31% and 1% of
our individual paying clients as of December 31, 2019, 55%, 44% and 1% of our individual
paying clients as of December 31, 2020, 38%, 39% and 23% of our individual paying clients
as of December 31, 2021 and 35%, 39% and 26% of our individual paying clients as of June
30, 2022 were related to Mainland China, Hong Kong and other markets, respectively. Solely
based on the citizenship provided by the individual clients at the time of account opening or
further updated subsequently, regardless of their residency, and the location where services
were originated or conducted for corporate counterparties, our revenue related to Mainland
China, Hong Kong and other markets accounted for approximately 69%, 30% and 1% of our
total revenue in 2019, 60%, 39% and 1% of our total revenue in 2020, 52%, 46% and 2% of
our total revenue in 2021, and 44%, 48% and 8% of our total revenue for the six months ended
June 30, 2022, respectively. The revenue breakdown is not derived from our management
accounts and is solely based on the relevant business data and our management estimate. Our
Group does not distinguish between markets or segments for the purpose of internal reporting
and has only one reportable segment in its consolidated financial statements. If we were to
become subject to any of the above-mentioned regulatory actions and penalties or we would not
be able to obtain the license or permit which may be imposed by any new PRC laws or
regulations in a timely manner or at all, our client base in China and revenue attributable to
such clients could be materially and adversely affected, resulting in a material adverse change
to our business, financial condition, results of operations and prospects. In addition, while we
have internal policies in place regulating relevant activities of our employees and their dealings
with our business partners, if our employees or business partners engage in certain activities
that relevant authorities would require permits or licenses for, we may be subject to regulatory
enquiries or penalties and negative publicity.
– 43 –
RISK FACTORS
We face significant competition in the online brokerage and wealth management

industries, and if we are unable to compete effectively, we may lose our market share and
our results of operations and financial condition may be materially and adversely
affected.
The market for online brokerage and wealth management product distribution services is
relatively new, rapidly evolving and intensely competitive. We expect competition to continue
and intensify in the future. We face competition from traditional retail brokerage firms and
financial service providers in Hong Kong and worldwide, as we currently have operations in
Singapore, the United States and Australia and may expand into other markets. In order to
satisfy the demands of their clients for hands-on electronic trading facilities, universal access
to markets, smart routing, better trading tools, lower commissions and financing rates, we have
embarked on building such facilities and service enhancements.
In addition, the online brokerage and wealth management industries exhibit massive
opportunities which may attract major internet companies to enter the market by adopting a
similar business model, which may significantly affect our market share and sales volume.
Further, major international brokerage companies that have large retail online brokerage
businesses as well as online brokerage units of commercial banks may also take advantage of
their established resources and satisfy applicable regulatory requirements through acquisitions
and organic development.
We expect competition to increase in the future as current competitors diversify and

improve their offerings and as new participants enter the market. We cannot assure you that we
will be able to compete effectively or efficiently with current or future competitors. They may
be acquired by, receive investment from or enter into strategic relationships with, established
and well-financed companies or investors, which would help enhance their competitiveness.
Furthermore, the current competitors and new entrants in the online brokerage and wealth
management industries may also seek to develop new service offerings, technologies or
capabilities that could render some of the services that we offer obsolete or less competitive,
and some of them may adopt more aggressive pricing policies or devote greater resources to
marketing and promotional campaigns than we do. The occurrence of any of these
circumstances may hinder our growth and reduce our market share, and thus our business,
results of operations, financial condition and prospects would be materially and adversely
affected.
– 44 –
RISK FACTORS
If we are unable to retain existing clients or attract new clients to increase their trading
volume, or if we fail to offer services to address the needs of our clients as they evolve, our
business and results of operations may be materially and adversely affected.
We derive a significant portion of our revenues from our online brokerage services
provided to our clients. To maintain the high growth momentum of our platform, we depend
on retaining current clients and attracting more new clients. If there is insufficient demand for
our online brokerage and margin financing services, we might not be able to maintain and
increase our trading volume and revenues as we expect, and our business and results of
operations may be adversely affected.
Our success depends largely on our ability to retain existing clients. Our clients may not
continue to place trading orders or increase the level of their trading activities through our
platform if we cannot match the prices offered by other market players or if we fail to deliver
satisfactory services. Failure to deliver services in a timely manner at competitive prices with
satisfactory experience will cause our clients to lose confidence in us and use our platform less
frequently or even stop using our platform altogether, which in turn will materially and
adversely affect our business. Even if we are able to provide high-quality and satisfactory
services through our platform in a timely manner and at favorable price terms, we cannot
assure you that we will be able to retain existing clients due to reasons out of our control, such
as our clients’ personal financial reasons or the deterioration of the capital markets condition.
If we are unable to maintain or increase our client retention rates or generate new clients
in a cost-effective manner, our business, financial condition and results of operations would
likely be adversely affected. Historically, we incurred HK$164.7 million, HK$385.3 million
and HK$1,392.1 million and HK$507.2 million (US$64.6 million) in selling and marketing
expenses, representing 15.5%, 11.6%, 19.6% and 15.0% of our total revenues in 2019, 2020,
2021 and the six months ended June 30, 2022, respectively. Although we have spent significant
financial resources on marketing expenses and plan to continue to do so, these efforts may not
be cost-effective to attract new clients. We cannot assure you that we will be able to maintain
or grow our client base in a cost-effective way. We must stay abreast of the needs and
preferences of our clients to serve their evolving trading needs as their investment demands
change. If we fail to retain our existing clients by offering services that cater to their evolving
investment and trading needs, we may not be able to maintain and continue to grow the trading
volume facilitated by our platform, and our business and results of operations may be adversely
affected. In addition, if we are unable to maintain, enhance or develop the methods we use to
retain clients, the costs of client retention will significantly increase, and our ability to retain
clients may be harmed.
– 45 –
RISK FACTORS
Similar to other brokerage and financial services providers, we cannot guarantee the
profitability of the investments made by clients through our platform. The profitability of our
clients’ investments is directly affected by elements beyond our control, such as economic and
political conditions, broad trends in business and finance, changes in volume of securities
transactions, changes in the markets in which such transactions occur and changes in how such
transactions are processed. While we do not provide securities investment consulting services
to our users and clients, we provide a social community to facilitate the provision of financial
and market information. Although these materials and commentaries contain prominent
disclaimers, our clients may seek to hold us responsible when they use such information to
make trading decisions and suffer financial loss on their trades, or if their trades are not as
profitable as they have expected. Furthermore, it is possible that some clients could solely rely
on certain predictive statements made by other clients on our platform, ignoring our alert
warnings that clients should make their own investment judgment and should not predict future
performance based on historical records. As a result, the financial loss of our clients may affect
our performance in terms of transaction volumes and revenues as clients decide to abort
trading. In addition, some clients who have suffered substantial losses through our platform
may blame our platform, seek to recover their damages from us or bring lawsuits against us.
Because our revenues and profitability depend largely on clients’ trading volume, they are
prone to significant fluctuations and are difficult to predict. Declines in clients’ trading
volume generally result in lower revenues from transaction execution activities, which
may affect our financial condition, results of operations and prospects.
Our revenues and profitability depend in part on the level of trading activity of the
securities of our clients, which are often affected by factors beyond our control, including
economic and political conditions, broad trends in business and finance and changes in the
markets in which such transactions occur. Weaknesses in the markets in which we operate,
including economic slowdowns, have historically resulted in reduced trading volumes for us.
Declines in trading volumes generally result in lower revenues from transaction execution
activities. Lower levels of volatility generally have the same directional impact. Declines in
market values of securities or other financial instruments can also result in illiquid markets,
which can also result in lower revenues and profitability from transaction execution activities.
Lower price levels of securities and other financial instruments, as well as compressed bid/ask
spreads, which often follow lower pricing, can further result in reduced revenues and
profitability. These factors can also increase the potential risk for losses on securities or other
financial instruments held in inventory and buyers and sellers may be unable to fulfill their
obligations, settle their trades, claims and litigation. Any of the foregoing factors could have
a material adverse effect on our business, financial condition, results of operations and cash
flows.
Our business is also subject to general economic and political conditions, in particular the
economic and political conditions in Hong Kong, the PRC, Singapore, the United States and
Australia, such as macroeconomic and monetary policies, legislation and regulations affecting
the financial and securities industries, upward and downward trends in the business and
financial sectors, inflation, currency fluctuations, availability of short-term and long-term
– 46 –
RISK FACTORS
funding sources, cost of funding and the level and volatility of interest rates. For example,
volatility and drops in stock market performance and uncertainties in macroeconomic
conditions caused by global calamities such as the ongoing COVID-19 pandemic and/or
eruptions of regional tensions could negatively impact our revenues and profitability. As a
result of these risks, our income and operating results may be subject to significant
fluctuations. See “— Risks Related to Our Business and Industry — A sustained outbreak of
the COVID-19 virus could have a material adverse impact on our business, operating results
and financial condition.”
Tensions in international economic relations, in particular those between the U.S. and
China, may have an adverse effect on our business, financial condition and results of
operation.
There have been rising tensions in international economic relations in recent periods,
including those between the United States and China. For example, in 2018 and 2019, the
United States imposed import tariffs on specified products imported from China, and China has
responded by imposing retaliatory tariffs on goods exported from the United States. In August
2020, political tensions between the United States and China have escalated due to, among
other things, trade disputes, the COVID-19 outbreak, sanctions imposed by the U.S.
Department of Treasury on certain officials of the Hong Kong Special Administrative Region
and the PRC central government and the executive orders issued by former U.S. President
Donald J. Trump prohibiting certain transactions with ByteDance Ltd. and WeChat-related
transactions with Tencent Holdings Ltd. and the respective subsidiaries of such companies.
Although the above-mentioned executive orders had been subsequently withdrawn by the
Biden Administration, rising trade, political and regulatory tension between the United States
and China could reduce levels of trades, investments, technological exchanges and other
economic activities between the two major economies, which would have a material adverse
effect on global economic conditions and the stability of global financial markets. Any of these
factors could have a material adverse effect on our business, prospects, financial condition and
results of operations.
On August 6, 2020, the former President of the United States issued an executive order
prohibiting “any transactions that is related to WeChat by any person or with respect to any
property, subject to the jurisdiction of the United States with Tencent Holdings Ltd., Shenzhen,
China, or any subsidiary of that entity, as identified by the Secretary of Commerce under
section 1(c) of this order.” The ban was subsequently lifted by the Biden Administration. As
of the Latest Practicable Date, entities directly or beneficially owned by Tencent owned
approximately 22.2% of the total issued share capital of the Company and approximately
35.0% of the voting power of the total issued and outstanding share capital of the Company,
and we have certain business collaborations with Tencent. We also have business operations
and hold relevant licenses in the United States, which had limited revenue contribution during
the Track Record Period. Although we are of the view that there had been no material impact
of the tensions between the U.S. and China on our business operations and financial
performance during the Track Record Period and as of the Latest Practicable Date, we cannot
assure you that there will not be rules or further executive orders prohibiting our business
– 47 –
RISK FACTORS
collaborations with Tencent. Upon the occurrence of such events, our business will be
adversely impacted. In addition, any current and future actions or escalations by either the
United States or China may cause global economic turmoil and potentially have a negative
impact on our business, financial condition and results of operations, and we cannot provide
any assurance as to whether such actions will occur or the form that they may take. See also
“— The ADSs could be delisted and prohibited from trading “over the counter” if the Public
Company Accounting Oversight Board is unable to inspect auditors located in China. The
delisting of the ADSs and inability to trade, or the threat thereof, may materially and adversely
affect the value of your investment.”
If we fail to protect our platform or the information of our users and clients, whether due
to cyber-attacks, computer viruses, physical or electronic break-in, breaches by third
parties or other reasons, we may be subject to liabilities imposed by relevant laws and
regulations, and our reputation and business may be materially and adversely affected.
Our computer system, the networks we use, the networks and online trading platforms of
the exchanges and other third parties with whom we interact, are potentially vulnerable to
physical or electronic computer break-ins, viruses and similar disruptive problems or security
breaches. A party that is able to circumvent our security measures could misappropriate
proprietary information or customer information, jeopardize the confidential nature of the
information we transmit over the Internet and mobile network or cause interruptions in our
operations. We or our service providers may be required to invest significant resources to
protect against the threat of security breaches or to alleviate problems caused by any breaches.
In addition, we collect, store and process certain personal and other sensitive data from
our users and clients, which makes us a potentially vulnerable target to cyber-attacks, computer
viruses or similar disruptions. While we have taken steps to protect the confidential
information that we have access to, our security measures could be breached. Because the
techniques used to sabotage or obtain unauthorized access to systems change frequently and
generally are not recognized until they are launched against a target, we may not be able to
anticipate these techniques or implement adequate preventative measures. Any accidental or
intentional security breaches or other unauthorized access to our system could cause
confidential user information to be stolen and used for criminal purposes. Security breaches or
unauthorized access to confidential information could also expose us to liability related to the
loss of the information, time-consuming and expensive litigation and negative publicity. We
have not experienced any material cyber-security breaches or been subject to any material
breaches of any of our cyber-security measures in the past.
In addition, leakages of confidential information may be caused by third-party service

providers or business partners. If security measures are breached because of third-party action,
employee error, malfeasance or otherwise, or if design flaws in our technology infrastructure
are exposed and exploited, our relationships with users and clients could be severely damaged,
we may become susceptible to future claims if our users and clients suffer damages, and could
incur significant liability and our business and operations could be adversely affected.
Furthermore, our corporate clients may utilize our technology to serve their own employees
– 48 –
RISK FACTORS
and customers. Any failure or perceived failure by us to prevent information security breaches
or to comply with privacy policies or privacy-related legal obligations, or any compromise of
security that results in the unauthorized release or transfer of personally identifiable
information or other customer data, could cause our clients to lose trust in us and could expose
us to legal claims.
Our operations and services involve collection, processing, and storage of significant
amounts of data concerning our clients, business partners and employees and may be
subject to complex and evolving laws and regulations regarding privacy and data
protection and cybersecurity. If we fail to comply with the relevant laws and regulations,
our business, results of operations and financial condition may be adversely affected.
We are subject to a variety of laws, regulations and other legal and regulatory obligations
related to the protection of personal data, privacy and information security in the regions where
we do business, and there has been and may continue to be a significant increase in such laws
and regulations that restrict or control the use of personal data. In China, the Cybersecurity
Law became effective in June 2017 and requires network operators to follow the principles of
legitimacy in collecting and using personal information. See “Regulations — Overview of the
Laws and Regulations Relating to Our Presence in China — Regulations on Cybersecurity and
Privacy.”
In addition, the Information Security Technology — Personal Information Security

Specification (《信息安全技術—個人信息安全規範》), or the China Specification, came into
force on October 1, 2020. Under the China Specification, after collecting the personal
information, the controller of the personal information must immediately conduct the data
de-identification, implement the technical and administrative measures to store separately the
de-identified data and the data which may be used to recover the identity of the persons and
make sure not to identify the persons in the subsequent process of processing the personal
information data. In addition, the data controller must provide the purpose of collecting and
using subject personal information, as well as the business functions of such purpose, and the
China Specification requires the data controller to distinguish its core function from additional
functions to ensure the data controller will only collect personal information as needed.
On August 20, 2021, the SCNPC promulgated the Personal Information Protection Law
of the PRC (《中華人民共和國個人信息保護法》), or the Personal Information Protection
Law, which integrates the scattered rules with respect to personal information rights and
privacy protection. The Personal Information Protection Law, which came into effect on
November 1, 2021, aims at protecting the personal information rights and interests, regulating
the processing of personal information, ensuring the orderly and free flow of personal
information in accordance with the law and promoting the reasonable use of personal
information. The Personal Information Protection Law applies to the processing of personal
information within China, as well as certain personal information processing activities
conducted by entities outside China for natural persons within China, including those for the
provision of products and services to natural persons within China or for the analysis and
– 49 –
RISK FACTORS
assessment of acts of natural persons within China. Therefore, our PRC operating entities and
our overseas subsidiary that directly collects personal data of PRC-based clients are subject to
relevant personal information protection laws of the PRC.
In addition, the Personal Information Protection Law imposes pre-approval and other
requirements for any cross-border data transfer by PRC entities. On July 7, 2022, the CAC
promulgated the Measures on Security Assessment of Cross-border Data Transfer (《數據出境
安全評估辦法》), or the Data Export Measures, which became effective on September 1, 2022.
The Data Export Measures require that any data processor which processes or exports personal
information exceeding certain volume threshold under such measures shall apply for security
assessment by the CAC before transferring any personal information abroad. The security
assessment requirement also applies to any transfer of important data outside of China. Since
the Personal Information Protection Law and the Data Export Measures are new, there are
uncertainties as to the interpretation and application of it, especially in relation to its
applicability and requirements for our offshore subsidiaries when they engage in personal
information processing activities for natural persons within China, including the information
collection activities conducted by our offshore subsidiaries outside the Mainland China. While
we do not believe the pre-approval requirements for any cross-border data transfer will apply
to the way we currently collect information from persons within China, if regulatory bodies
deem our current data collection model as a cross-border data transfer, we will be subject to
the relevant requirements. Furthermore, we may need to take certain additional measures in the
future to be in compliance with the Personal Information Protection Law. See “Business –
Regulatory Development – PRC Cybersecurity and Data Protection – Other applicable PRC
data security and cybersecurity laws and regulations.”
Regulatory requirements on cybersecurity and data privacy are constantly evolving and
can be subject to varying interpretations or significant changes, resulting in uncertainties about
the scope of our responsibilities in that regard. For example, the SCNPC promulgated the PRC
Data Security Law (《中華人民共和國數據安全法》), which took effect on September 1, 2021.
The Data Security Law provides for a security review procedure for the data activities that may
affect national security. In addition, the Personal Information Protection Law provides that
critical information infrastructure operators or personal information processors whose
processing of personal information reaches the threshold amount prescribed by the CAC, must
store within the territory of the PRC the personal information collected or generated by them
within the territory of the PRC. Unless otherwise a security assessment is not required as
provided by law, administrative regulations or the national cyberspace authority, where it is
necessary to provide such information to an overseas recipient, a security assessment organized
by the CAC must have been passed. Then the CAC published Network Data Security
Management Regulation (《網絡數據安全管理條例(徵求意見稿)》) on November 14, 2021
(the “Draft Regulation”), according to which, a data processor must apply to CAC for
cybersecurity review if its proposed listing in Hong Kong affects or may affect national
security. The Draft Regulation was in draft form for public comment and had not come into
effect as of the Latest Practicable Date, and it remains uncertain as to whether and when it will
take effect and to what extent it will take effect in its current form.
– 50 –
RISK FACTORS
On December 28, 2021, the CAC, the NDRC, the MIIT, and several other PRC
governmental authorities jointly issued the Cybersecurity Review Measures (《網絡安全審查
辦法》), which became effective on February 15, 2022 and replaced the Measures for
Cybersecurity Review published on April 13, 2020. Pursuant to Cybersecurity Review
Measures, critical information infrastructure operators (the “CIIO”) that purchase network
products and services and network platform operators engaging in data processing activities
that affect or may affect national security are subject to cybersecurity review under the
Cybersecurity Review Measures. According to the Cybersecurity Review Measures, before
purchasing any network products or services, a critical information infrastructure operator
shall assess potential national security risks that may arise from the launch or use of such
products or services and apply for a cybersecurity review with the cybersecurity review office
of the CAC if national security will or may be affected. In addition, network platform operators
who possess personal information of more than one million users and intend to be listed at a
foreign stock exchange must be subject to the cybersecurity review.
Furthermore, taking the Regulations on the Security Protection of Critical Information

Infrastructure (《關鍵信息基礎設施安全保護條例》), or the CIIO Security Protection
Regulations, and the Administrative Measures for Data Security in the Field of Industry and
Information Technology (Trial) (Draft) (《工業和信息化領域數據安全管理辦法(試行)(徵求意
見稿)》) issued by the MIIT, or the Draft Data Security Measures in the IIT Field, on February
10, 2022, into consideration, the exact scope of the CIIO under the Cybersecurity Review
Measures and the current regulatory regime also remains unclear. As the rules for identification
of CIIO with respect to our presence in the PRC have not been formulated nor promulgated yet
and our PRC Legal Advisors are of the view that the proposed Listing in Hong Kong and our
current business operations do not fall within the scope in which it is required to apply for such
cybersecurity review as required by the Cybersecurity Review Measures; and we have not
received any notice from any relevant governmental authority that we are identified as CIIO,
we do not believe we are classified as a CIIO as of the Latest Practicable Date. However, the
PRC government authorities may have wide discretion in the interpretation and enforcement of
these laws; therefore, it is uncertain whether we would be deemed as a CIIO under PRC law
in the future. In the event we are classified as a CIIO or otherwise become under investigation
or review by the CAC, we may have to substantially change certain of our current practice and
our operations may be materially and adversely affected.
Since many of the PRC laws and regulations on cybersecurity and privacy and data
privacy are constantly evolving, there are uncertainties as to the interpretation and application
of these regulations and how these will be enforced by relevant regulatory authorities, there
also remain uncertainties as to the applicability and requirements of these regulations for our
business, operation, or our presence in Mainland China.
We cannot assure you that the measures we have taken or will take in the future will be
effective or fully satisfy the relevant regulatory authorities’ requirements, and any failure or
perceived failure by us to comply with such laws and regulations may result in governmental
investigations, fines, removal of our app from the relevant application stores and/or other
sanctions on us. As of the Latest Practicable Date, we had not been involved in any
– 51 –
RISK FACTORS
investigations on cybersecurity review made by the CAC on such basis, and we had not
received any inquiry, notice, warning, or sanctions in such respect. Based on the foregoing, we
and our PRC Legal Advisors do not expect that, as of the Latest Practicable Date, the current
applicable PRC laws on privacy and data protection and cybersecurity would have a material
adverse impact on our business.
The relevant regulatory authorities in China continue to monitor the websites and apps in
relation to the protection of personal data, privacy and information security, and may impose
additional requirements from time to time. The relevant regulatory authorities also release,
from time to time, their monitoring results and require relevant enterprises listed in such
notices to rectify their non-compliance. We have been and may also in the future be subject to
the modification and rectification imposed by the relevant regulatory authorities, including
those issued publicly. For example, during the Track Record Period, we had received a few
such rectification notices and completed the rectification work in satisfaction of the relevant
notices and regulatory requirements. We have not received further comments from the
regulatory authorities on our rectification measures, nor have we received any final clearance
on these measures. There is no assurance that the regulatory authorities will deem our
rectification measures to be sufficient, or that they will issue any final clearance to us.
Similarly, Hong Kong, Singapore, the United States and Australia also have their
respective data privacy legislation that regulates the collection, use, protection and handling of
personal data. Under the relevant legislation, while the precise requirements may differ from
jurisdiction to jurisdiction, in general, data users are required to comply with various data
protection principles in relation to the requirement of lawful and fair collection of personal
data, consent of data subjects, retention of personal data, use and disclosure of personal data,
security of personal data, personal data policies and practices, and rights to access and
correction of personal data.
There are uncertainties as to the interpretation and application of laws in one jurisdiction
which may be interpreted and applied in a manner inconsistent to another jurisdiction and may
conflict with our current policies and practices or require changes to the features of our system.
If we are unable to address any information protection concerns, any compromise of security
that results unauthorized disclosure or transfer of personal data, or to comply with the then
applicable laws and regulations, we may incur additional costs and liability and result in
governmental enforcement actions, litigation, fines and penalties or adverse publicity and
could cause our users and clients to lose trust in us, which could have a material adverse effect
on our business, results of operations, financial condition and prospects. We may also be
subject to new laws, regulations or standards or new interpretations of existing laws,
regulations or standards, including those in the areas of data security and data privacy, which
could require us to incur additional costs and restrict our business operations.
– 52 –
RISK FACTORS
Our business growth and results of operations may be affected by changes in global and
regional macroeconomic conditions.
The strong growth of China’s offshore investment and wealth management markets in
recent years has been mainly driven by the rapid expansion in personal investable assets
attributable to the increased number of high net-worth individuals and affluent groups and their
increasing demands for geographically diverse investment portfolios. However, slowdowns in
the Chinese economy will affect the income growth of such individuals, who are the main
investors in the investment and wealth management markets outside China, and add
uncertainties to these markets.
In addition, uncertainties about China, Singapore, U.S., Australia and global economic
conditions and regulatory changes pose a risk as retail investors and businesses may postpone
spending in response to credit constraint, rising unemployment rates, financial market
volatility, government austerity programs, negative financial news, declines in income or asset
values and/or other factors. These worldwide and regional economic conditions could affect
and reduce investment behavior and appetites of retail investors and have a material adverse
effect on the demand for our products and services. Demand also could differ materially from
our expectations as a result of currency fluctuations. Other factors that could influence
worldwide or regional demand include changes in fuel and other energy costs, conditions in the
real estate and mortgage markets, unemployment, labor and healthcare costs, access to credit,
consumer confidence and other macroeconomic factors. These and other economic factors
could materially and adversely affect demand for our products and services. Additionally,
continued turbulence in the international markets may adversely affect our ability to access the
capital markets to meet liquidity needs.
A sustained outbreak of the COVID-19 virus could have a material adverse impact on our
business, operating results and financial condition.
There has been a sustained outbreak of the COVID-19 virus globally. COVID-19 had a
severe and negative impact on the global economy in 2020. Since 2020, governments around
the globe have taken measures to contain the spread of the COVID-19 virus. For example, in
response to intensifying efforts to contain the spread of COVID-19, governments worldwide
took a number of actions, which included extending holidays, quarantining individuals infected
with or suspected of having COVID-19, prohibiting residents from free travel, encouraging
employees of enterprises to work remotely from home and canceling public activities, among
others. COVID-19 has also resulted in temporary closure of many corporate offices globally.
In addition, as the outbreak continues to threaten global economies, it may continue to

cause significant market volatility and declines in general economic activities. Even before the
outbreak of COVID-19, the global macroeconomic environment was facing numerous
challenges. There is considerable uncertainty over the long-term effects of the expansionary
– 53 –
RISK FACTORS
monetary and fiscal policies which had been adopted by the central banks and financial
authorities of some of the world’s leading economies even before 2020. Unrest, terrorist threats
and the potential for war in the Middle East and elsewhere may increase market volatility
across the globe.
We have taken a series of measures in response to the outbreak to protect our employees,
including, among others, temporary closure of some offices, remote working arrangements for
our employees and travel restrictions or suspension. In general, while these measures reduced
the efficiency of our operations, we were not significantly impacted during the Track Record
Period and as of the Latest Practicable Date and have benefited from an increase in funds flow
and trading volume due to clients’ switching to online trading when physical, offline facilities
were closed. We cannot predict whether this increase in business activity will continue after
clients are once again able to visit physical facilities. The extent to which COVID-19 impacts
our results of operations will depend on the future developments of the pandemic, including the
global severity of and actions taken to contain the pandemic, which are highly uncertain and
unpredictable. In addition, our results of operations could be adversely affected to the extent
that the pandemic harms the global economy in general.
Any potential impact on our results will depend on, to a large extent, future developments
and new information that may emerge regarding the duration and severity of COVID-19 and
the actions taken by government authorities and other entities to contain COVID-19 or mitigate
its impact, almost all of which are beyond our control. Before vaccines are made available to
the general public, any relaxation of restrictions on economic and social life may lead to new
cases which may lead to the re-imposition of restrictions. Given the general slowdown in
global economic conditions, volatility in the capital markets as well as the general negative
impact of the COVID-19 pandemic on the brokerage and wealth management industry, we
cannot assure you that we can launch new products and services in time or that we can maintain
the growth rate we have experienced. Because of the uncertainty surrounding the COVID-19
pandemic, the financial impact related to the pandemic of and response to the coronavirus
cannot be accurately estimated at this time, and we cannot assure you that our financial
condition and operating results for 2022 will not be adversely affected. For a more detailed
description on the expected impact of COVID-19 on our business, see “Financial Information
— Impact of COVID-19 On Our Operations.”
We face risks related to natural disasters, health epidemics and other outbreaks, which
could significantly disrupt our operations and adversely affect our business, financial
condition or results of operation.
In addition to the impact of COVID-19, our business could be adversely affected by the
effects of the Ebola virus disease, H1N1 flu, H7N9 flu, avian flu, Severe Acute Respiratory
Syndrome (“SARS”), or other epidemics. Our business operations could be disrupted if any of
our employees is suspected of having the Ebola virus disease, H1N1 flu, H7N9 flu, avian flu,
SARS, or other epidemics, since it could require our employees to be quarantined and/or our
offices to be disinfected. In addition, our results of operations could be adversely affected to
the extent that any of these epidemics harms the Chinese and global economy in general.
– 54 –
RISK FACTORS
We are also vulnerable to natural disasters and other calamities. Fire, floods, typhoons,
earthquakes, power loss, telecommunications failures, break-ins, war, riots, terrorist attacks or
similar events may give rise to server interruptions, breakdowns, system failures, technology
platform failures or internet failures, which could cause the loss or corruption of data or
malfunctions of software or hardware as well as adversely affect our ability to provide products
and services through our platform.
In addition, our results of operations could be adversely affected to the extent that any
health epidemic, natural disaster or other calamities harms the Chinese and global economies
in general. Our headquarters are located in Shenzhen and Hong Kong, where most of our
management and employees currently reside. Most of our system hardware and back-up
systems are hosted in facilities located in Shenzhen, Hong Kong, Singapore, the United States
and Australia, and the storage location of our user data is dependent on the platform where
users are based and the jurisdiction in which users are registered. Consequently, if any natural
disasters, health epidemics or other public safety concerns were to affect Shenzhen, Hong
Kong, Singapore, the United States or Australia, our operation may experience material
disruptions, which may materially and adversely affect our business, financial condition and
Our current level of commission and fee rates may decline in the future. Any material
reduction in our commission or fee rates could reduce our profitability.
We derive a significant portion of our revenues from commissions and fees paid by our
clients for trading securities through our platform. In 2019, 2020, 2021 and six months ended
June 30, 2022, our brokerage commission income and handling charge income amounted to
HK$511.4 million, HK$1,990.1 million, HK$3,913.0 million and HK$2,001.2 million
(US$255.0 million), representing 48.2%, 60.1%, 55.0% and 59.1% of our total revenues during
the same periods, respectively. We may experience pressure on our commission or fee rates as
a result of competition we face in the online brokerage service industry. Some of our
competitors offer a broader range of services to a larger client base and enjoy higher trading
volumes than we do. Consequently, our competitors may be able to and willing to offer trading
services at lower commission or fee rates than we currently offer or may be able to offer. For
example, some brokers in Hong Kong and the United States offer zero commission fees or
similar policies to attract retail securities investors. As a result of this pricing competition, we
could lose both market share and revenues. We believe that any downward pressure on
commission or fee rates would likely continue and intensify as we continue to develop our
business and gain recognition in our markets. A decline in our commission or fee rates could
lower our revenues, which would adversely affect our profitability. In addition, our competitors
may offer other financial incentives such as rebates or discounts in order to induce trading in
their systems rather than in ours. If our commission or fee rate decreases significantly, our
operating and financial results may be materially and adversely affected.
– 55 –
RISK FACTORS
Fluctuations in market interest rates may negatively affect our financial condition and
We derive a part of our revenues from charging interests on margin balances in connection
with our margin financing and securities lending businesses. In 2019, 2020, 2021 and six
months ended June 30, 2022, our revenues from interest income derived from our margin
financing and securities lending businesses amounted to HK$258.9 million, HK$571.8 million,
HK$2,118.0 million and HK$948.8 million (US$120.9 million), representing 24.4%, 17.3%,
29.8% and 28.0% of our total revenues during the same periods, respectively. For the same
periods, our interest income derived from bank deposits were HK$187.2 million, HK$208.6
million, HK$197.4 million and HK$196.8 million (US$25.1 million), representing 17.6%,
6.3%, 2.8% and 5.8% of our total revenues during the same periods, respectively. The trend of
the level of interest rates is an important factor affecting our earnings. A decline in interest
rates may have a negative impact on our interest income and thus adversely impact our total
revenues. While we generally derive higher interest income when there is an increase in market
interest rates, a rise in interest rates may also cause our interest expenses to increase. If we are
unable to effectively manage our interest rate risk, changes in interest rates could have a
material adverse effect on our profitability.
Although our management believes that it has implemented effective management

strategies to reduce the potential effects of changes in interest rates on our results of operations,
any substantial, unexpected or prolonged change in market interest rates could have a material
adverse effect on our financial condition and results of operations. Also, our interest rate risk
modeling techniques and assumptions likely may not fully predict or capture the impact of
actual interest rate changes on our balance sheet. For further discussion of how changes in
interest rates could impact us, see “Financial Information — Disclosure about Financial Risk
— Interest Rate Risk.”
We may not be able to develop our margin financing and securities lending business as
expected and may be exposed to credit risks related to these businesses, primarily arising
from loans and advances, and receivables. In addition, we need adequate funding at
reasonable costs to successfully operate our margin financing business, and access to
adequate funding at reasonable costs cannot be assured.
Our margin financing and securities lending businesses may not develop as expected if
clients fail to perform contractual obligations or the value of collateral held to secure the
obligations is inadequate. Our loans and advances increased from HK$4.2 billion as of
December 31, 2019 to HK$18.8 billion as of December 31, 2020, further increased to HK$29.6
billion and HK$28.8 billion (US$3.7 billion) as of December 31, 2021 and June 30, 2022,
respectively. As our margin financing business expands, we may be subject to greater credit
risks.
We have adopted comprehensive internal policies and procedures designed to manage

such risks. For example, once the margin value falls below the outstanding amount of the
relevant loan extended as a result of a market downturn or adverse movement in the prices of
– 56 –
RISK FACTORS
the pledged securities, we will make a margin call requesting the client to deposit additional
funds, sell securities or pledge additional securities to top up their margin value. If the client’s
margin value still falls below the required standard, we will initiate our liquidation protection
mechanism on a real-time basis to bring the client’s account into margin compliance. As we
incurred losses from and experienced disputes arising out of margin financing historically, we
cannot assure you that we will not be exposed to any credit risks associated with our margin
financing and securities lending businesses and we may continue to experience disputes with
our clients after we make the margin calls. In particular, we may not always be able to fully
recover the margin value through margin calls and our exposure to credit loss may be
exacerbated during periods of high market volatility. In certain periods, the securities pledged
by our clients may be concentrated on a limited number of securities which may result in a
concentration of our credit exposures to such securities. In the event we need to liquidate a
large amount of certain pledged securities, it may put a further downward pressure on the price
of such securities and we may not be able to fully recover the margin value.
In addition, with regard to receivables, there is no assurance that all our counter-parties
will meet their payment obligations on time, in full or at all. As of December 31, 2019, 2020,
2021 and June 30, 2022, the balance of our Group’s receivables amounted to approximately
HK$1,794.3 million, HK$8,077.0 million, HK$10,447.8 million and HK$9,689.6 million
(US$1,234.8 million), respectively. If we fail to adequately manage our credit risks and
significant amounts due to us are not settled on time, our performance, liquidity and results of
operations and financial conditions will be adversely affected. See “— Risks Related to Our
Business and Industry — Our risk management policies and procedures may not be fully
effective in identifying or mitigating risk exposure in all market environments or against all
types of risks.”
Moreover, the growth and success of our margin financing business depend on the
availability of adequate funding to meet our client demand for loans through our platform. We
provided margin financing service and/or securities lending services for securities listed on the
Hong Kong Stock Exchange, the major stock exchanges in the U.S. and the Singapore
Exchange. As of June 30, 2022, our outstanding margin financing and securities lending
balance was HK$28.9 billion (US$3.7 billion). We derive the funding for our margin financing
business from a variety of sources, including funding secured from commercial banks, other
licensed financial institutions and other parties as well as financing generated from our
business operations. To the extent there is insufficient funding from institutional funding
partners who are willing to accept the credit risk related to the collateral from our clients, the
funds available for our margin financing business might be limited and our ability to provide
margin financing services to our clients to address their demand for loans would be adversely
impacted. In addition, as we strive to offer our clients competitively priced services and the
online brokerage market is intensely competitive, we may attempt to further reduce our interest
expenses from our funding partners. If we cannot continue to maintain our relationship with
these funding partners and obtain adequate funding at reasonable costs, we may not be able to
continue to offer or grow our margin financing business. To the extent that our funding partners
find the risk-adjusted returns with us less attractive, we may not be able to obtain the requisite
– 57 –
RISK FACTORS
level of funding at reasonable costs, or at all. If we are unable to provide our clients with
margin loans or fund the loans on a timely basis due to insufficient funding or less favorable
pricing compared to those of our competitors, it would harm our business, financial condition
and results of operations.
The wealth management products that we distribute involve various risks and failure to
identify or fully appreciate such risks may negatively affect our reputation, client
relationships, results of operations and financial conditions.
We offer our clients access to money market, fixed income, equity, balanced, private
funds as well as bonds, catering to the different investment targets and risk preferences of our
clients. These products often have complex structures and involve various risks, including
default risks, interest risks, liquidity risks, market risks, counterparty risks, fraud risks and
other risks. In addition, we are subject to regulations in relation to wealth management
products distributed in different jurisdictions, and there is no assurance that our operations will
be deemed as being in full compliance with such regulations at all times.
Our success in distributing our wealth management products and distribution services
depends, in part, on our ability to successfully identify the risks associated with such products
and services, and failure to identify or fully appreciate such risks may negatively affect our
reputation, client relationships, results of operations and financial conditions. Although we do
not guarantee the principal or the return of the wealth management products available through
our platform and do not bear any liabilities for any loss to capital invested in the products, we
must be cautious of the selection of the financial products we offer and must accurately
describe the risks associated with those products for our clients. Although we enforce and
implement strict risk management policies and procedures, such risk management policies and
procedures may not be fully effective in mitigating the risk exposure for all of our clients in
all market environments or covering all types of risks. If we fail to identify and fully appreciate
the risks associated with the financial products we offer, or fail to disclose such risks to our
clients, or if our clients suffer financial losses or other damages resulting from the financial
products we offer, our reputation, client relationships, results of operations and financial
conditions will be materially and adversely affected.
If we fail to respond in a timely and cost-effective manner to the needs of our users and
clients or if our new service offerings do not achieve sufficient market acceptance, our
business and results of operations may be materially and adversely affected.
Our future success will depend partially on our ability to develop and introduce new
service offerings to respond to the evolving needs of our users and clients in a timely and
cost-effective manner. We provide services in markets that are characterized by rapid
technological change, evolving industry standards, frequent new service introductions, and
increasing demand for higher levels of client experience. In recent years, we have expanded our
service offerings for our users and clients from online brokerage services to margin financing
services and further to other tools and functions, including the wealth management product
distribution service we launched in August 2019, and we may continue to expand our new
– 58 –
RISK FACTORS
service offerings in the future. In addition, we also provide certain services to corporate clients.
However, we have limited experience in new service offerings, and expansion into new service
offerings may involve new risks and challenges that we may not have experienced before. We
cannot assure you that we will be able to overcome such new risks and challenges and make
our new service offerings successful. Initial timetables for the introduction and development
of new service offerings may not be achieved and profitability targets may not prove feasible.
External factors, such as compliance with regulations, competition and shifting market
preferences, may also impact the successful implementation of our new service offerings. Our
personnel and technology systems may fail to adapt to the changes in such new areas or we may
fail to effectively integrate new services into our existing operations. We may lack experience
in managing our new service offerings. In addition, we may be unable to proceed our
operations as planned or compete effectively due to different competitive landscapes in these
new areas. Even if we expand our businesses into new jurisdictions or areas, the expansion may
not yield intended profitable results. Furthermore, any new service offerings could have a
significant impact on the effectiveness of our internal control system. Failure to successfully
manage these risks in the development and implementation of new service offerings could have
a material adverse effect on our business, results of operations and financial condition.
Our ability to anticipate and identify the evolving needs of our users and clients and to
develop and introduce new service offerings to address such needs will be a significant factor
in maintaining or improving our competitive position and prospects for growth. We may also
have to incur substantial unanticipated costs to maintain and further strengthen such ability.
Our success will also depend on our ability to develop and introduce new services and enhance
existing services for our users and clients in a timely manner. Even if we introduce new and
enhanced services to the market, they may not achieve market acceptance.
We believe that we must continue to make investments to support ongoing research and
development in order to develop new or enhanced service offerings to remain competitive. We
need to continue to develop and introduce new services that incorporate the latest technological
advancements in response to evolving user and client needs. Our business and results of
operations could be adversely affected if we do not anticipate or respond adequately to
technological developments or the changing needs of our users and clients. We cannot assure
you that any such investments in research and development will lead to any corresponding
increase in revenue.
We depend on our proprietary technology, and our future results may be impacted if we
cannot maintain technological superiority in our industry.
Our success in the past has largely been attributable to our sophisticated proprietary
technology that has empowered the efficient operations of our platform. We have benefited
from the fact that the type of proprietary technology equivalent to which we employ has not
been widely available to our competitors. If our technology becomes more widely available to
our current or future competitors for any reason, our operating results may be adversely
affected.
– 59 –
RISK FACTORS
Additionally, to keep pace with changing technologies and client demands, we must
correctly interpret and address market trends and enhance the features and functionality of our
technology in response to these trends, which may lead to significant research and development
costs. We may be unable to accurately determine the needs of our users and clients or the trends
in the online brokerage industry or to design and implement the appropriate features and
functionality of our technology in a timely and cost-effective manner, which could result in
decreased demand for our services and a corresponding decrease in our revenue. Also, any
adoption or development of similar or more advanced technologies by our competitors may
require that we devote substantial resources to the development of more advanced technology
to remain competitive. The markets in which we compete are characterized by rapidly changing
technology, evolving industry standards and changing trading systems, practices and
techniques. Although we have been at the forefront of many of these developments in the past,
we may not be able to keep up with these rapid changes in the future, develop new technology,
realize a return on amounts invested in developing new technologies or remain competitive in
the future.
In addition, we must protect our systems against physical damage from fire, earthquakes,
power loss, telecommunications failures, computer viruses, hacker attacks, physical break-ins
and similar events. Any software or hardware damage or failure that causes interruption or an
increase in response time of our proprietary technology could reduce client satisfaction and
decrease usage of our services.
Unexpected network interruptions, security breaches or computer virus attacks and

failures in our information technology systems could have a material adverse effect on our
business, financial condition and results of operations.
Our information technology systems support substantially all phases of our operations
and are an essential part of our technology infrastructure. If our systems fail to perform, we
could experience disruptions in operations, slower response time or decreased customer
satisfaction. We must process, record and monitor a large number of transactions and our
operations are highly dependent on the integrity of our technology systems and our ability to
make timely enhancements and additions to our systems. System interruptions, errors or
downtime can result from a variety of causes, including unexpected interruptions to the internet
infrastructure, technological failures, changes to our systems, erroneous or corrupted data,
changes in customer usage patterns, linkages with third-party systems and power failures. Our
systems are also vulnerable to disruptions from human error, execution errors, errors in models
such as those used for risk management and compliance, employee misconduct, unauthorized
trading, external fraud, computer viruses, distributed denial of service attacks, computer
viruses or cyberattacks, terrorist attacks, natural disaster, power outage, capacity constraints,
software flaws, events impacting our key business partners and vendors, and other similar
events.
– 60 –
RISK FACTORS
Our internet-based business depends on the performance and reliability of the internet
infrastructure. We cannot assure you that the internet infrastructure we depend on will remain
sufficiently reliable for our needs. Any failure to maintain the performance, reliability, security
or availability of our network infrastructure may cause significant damage to our ability to
attract and retain users and clients. Major risks involving our network infrastructure include:
• breakdowns or system failures resulting in a prolonged shutdown of our servers;
• disruption or failure in the national backbone networks in China, which would make
it impossible for users and clients to access our online and mobile platforms;
• physical or cyber based attacks on our servers and other network infrastructure,
which may result in disruptions to our network and damages to our technology
infrastructure;
• damage from natural disasters or other catastrophic events such as typhoon, volcanic
eruption, earthquake, flood, telecommunications failure, or other similar events; and
• any infection by or spread of computer viruses or other system failures.
In addition, any network interruptions or inadequacy on the part of our third-party

partners may result in disruptions to the services we provide to our users and clients. For
example, there have been occasions where some of our clients were not able to timely execute
trades because of poor or delayed performances of software, infrastructure or systems of our
third party partners, which may be exacerbated by sudden increase in trading or other user
activity volume. We also experienced system shutdown in the past. Such disruptions and other
interruptions in the availability of our services could reduce user and client satisfaction and
result in a reduction in the activity level of our users and clients as well as the number of clients
making trading transactions through our platform. See “— Risks Related to Our Business and
Industry — Failure or poor performance of third-party software, infrastructure or systems on
which we rely could adversely affect our business.” Furthermore, increases in the volume of
traffic on our online and mobile platforms could strain the capacity of our existing computer
systems and bandwidth, which could lead to slower response times or system failures. This
could cause a disruption or suspension in our service delivery, which could hurt our brand and
reputation. We may need to incur additional costs to upgrade our technology infrastructure and
computer systems in order to accommodate increased demand if we anticipate that our systems
cannot handle higher volumes of traffic and transaction in the future. In addition, it could take
an extended period of time to restore full functionality to our technology or other operating
systems in the event of an unforeseen occurrence, which could affect our ability to process and
settle client transactions. Despite our efforts to identify areas of risk, oversee operational areas
involving risks, and implement policies and procedures designed to manage these risks, there
can be no assurance that we will not suffer unexpected losses, reputational damage or
regulatory actions due to technology or other operational failures or errors, including those of
our vendors or other third parties.
– 61 –
RISK FACTORS
Failure or poor performance of third-party software, infrastructure or systems on which

we rely could adversely affect our business.
We rely on third parties to provide and maintain certain infrastructure that is critical to
our business. For example, a strategic partner provides services to us in connection with
various aspects of our operations and systems. If such services become limited, restricted,
curtailed or less effective or more expensive in any way or become unavailable to us for any
reason, our business may be materially and adversely affected. The infrastructure of our
third-party service providers may malfunction or fail due to events out of our control, which
could disrupt our operations and have a material adverse effect on our business, financial
condition, results of operations and cash flows. Any failure to maintain and renew our
relationships with these third parties on commercially favorable terms, or to enter into similar
relationships in the future, could have a material adverse effect on our business, financial
condition, results of operations and cash flows.
We also rely on certain third-party software, third-party computer systems and service
providers, including clearing systems, exchange systems, alternate trading systems, order-
routing systems, internet service providers, communications facilities and other facilities. Any
interruption in these third-party services or software, deterioration in their performance, or
other improper operation could interfere with our trading activities, cause losses due to
erroneous or delayed responses, or otherwise be disruptive to our business. In addition, as we
work with third parties to execute trading orders for U.S., Singapore and Australia stocks, our
ability to successfully and timely execute these trades for our clients depends on the
performance of third parties systems, failure of which may result in potential losses for our
clients, which in turn may result in potential claims or litigations brought against us and
adversely affect our business and reputation. In addition, if our arrangements with any third
party are terminated, we may not be able to find an alternative source of software or systems
support on a timely basis or on commercially reasonable terms. This could also have a material
adverse effect on our business, financial condition, results of operations and cash flows.
We rely on a number of external service providers for certain key market information and
data, technology, processing and supporting functions. Any disruptions with the provision
of their services may affect our ability to deliver products and services, maintain normal
business operations and as a result, affect our results of operations and financial condition
materially and adversely.
We rely on a number of external service providers for certain key market information and
data, technology, processing and supporting functions. Furthermore, external content providers
provide us with financial information, market news, charts, futures and stock quotes and other
fundamental data that we offer to our clients and users. These service providers face technical,
operational and security risks of their own. Any significant failures by them, including
improper use or disclosure of our confidential client, employee or company information, could
interrupt our business, cause us to incur losses and harm our reputation. Particularly, we have
contracted with affiliates of Nasdaq, Hong Kong Exchange and Clearing Limited and
Singapore Exchange and a few other institutions to allow our clients to access real-time market
– 62 –
RISK FACTORS
information data, which are essential for our clients to make their investment decisions and
take actions. If the data provided by such information providers were inaccurate or incomplete,
or if such information providers fail to update or deliver the data in a timely manner as
provided in the agreements, our clients may suffer losses and our business operations and
reputation can be materially and adversely affected.
We cannot assure you that the external service providers will be able to continue to
provide these services to meet our current needs in an efficient and cost-effective manner, or
that they will be able to adequately expand their services to meet our needs in the future. The
external service providers’ ability to consistently provide these services is subject to risks from
unfavorable political, economic, legal or other developments, such as social or political
instability, changes in governmental policies or changes in the applicable laws and regulations.
An interruption in or the cessation of service by any external service provider as a result

of system failures, capacity constraints, financial constraints or problems, unanticipated
trading market closures or for any other reason and our inability to make alternative
arrangements in a smooth and timely manner, if at all, could have a material adverse effect on
our business, results of operations and financial condition.
Further, disputes might arise out of or in connection with the agreements regarding our
or the service providers’ performance of the obligations thereunder. To the extent that any
service provider disagrees with us on the quality of the products or services, terms and
conditions of the payment or other provisions of such agreements, we may face claims,
disputes, litigations or other proceedings initiated by such service provider against us. We may
incur substantial expenses and require significant attention of management in defending
against these claims, regardless of their merit. We could also face damages to our reputation
as a result of such claims, and our business, financial condition, results of operations and
prospects could be materially and adversely affected.
If major mobile application distribution channels change their standard terms and
conditions in a manner that is detrimental to us, or terminate their existing relationship
with us, our business, financial condition and results of operations may be materially and
adversely affected.
We currently rely on Apple’s app store, Google’s Play Store and major PRC-based
Android app stores to distribute our mobile applications to users. As such, the promotion,
distribution and operation of our application are subject to such distribution platforms’
standard terms and policies for application developers, which are subject to the interpretation
of, and frequent changes by, these distribution channels. If these third-party distribution
platforms change their terms and conditions in a manner that is detrimental to us, or refuse to
distribute our application, or if any other major distribution channel with which we would like
to seek collaboration refuses to collaborate with us in the future, our business, financial
condition and results of operations may be materially and adversely affected.
– 63 –
RISK FACTORS
We have not obtained licenses from relevant PRC regulatory authorities in connection
with some of the information and services available on our platform. Future change in
regulations and rules may impose additional requirements or restrictions on our platform.
PRC regulations impose sanctions for engaging in disseminating analysis, forecasting,

advisory or other information related to securities and securities markets without having
obtained the Securities Investment Consultancy Qualifications in China. See “Regulations —
Overview of the Laws and Regulations Relating to Our Presence in China — Regulations on
Securities Business — Regulations on the Securities Investment Consulting Service.” We have
not obtained the Securities Investment Consultancy Qualifications in China. Without the
required qualifications, we should refrain from as well as explicitly prohibit our users from
sharing information related to securities analysis, forecasting or advisory on our platform.
However, we cannot assure you that our users will not post articles or share videos that contain
analysis, forecasting or advisory content related to securities on our platform. If any of the
information or content displayed on our platform is deemed as analysis, forecasting, advisory
or other information related to securities or securities markets, or any of our business in the
PRC is deemed to be a service providing such information, we may be subject to regulatory
measures including warnings, public condemnation, suspension of relevant business and other
measures in accordance with applicable laws and regulations. Any such penalties may disrupt
our business operations or materially and adversely affect our business, financial condition and
In addition, as part of our services, we post videos for investor education purpose and
allow certain of our users to upload and share videos on our platforms through NiuNiu
Community. According to the Administrative Provisions on Internet Audio-Video Program
Services (《互聯網視聽節目服務管理規定》), the provider of audio-video service, is required
to obtain the Audio and Video Service Permission. See “Regulations — Overview of the Laws
and Regulations Relating to Our Presence in China — Regulations on Internet Service —
Regulation on Internet Audio-Visual Program Services.” It is not eligible for us to do so
because current PRC laws and regulations require an applicant for the Audio and Video Service
Permission to be a wholly state-owned or state-controlled entity. We have not obtained such
license for providing internet audio-video program services through our platform in China and
may not be able to obtain such license in a timely manner, or at all. We have not received any
notices nor have we been subject to regulatory measures from the National Radio and
Television Administration (國家廣播電視總局) as of the Latest Practicable Date. During the
Track Record Period, the revenue generated from relevant internet audio-video program
services was less than 0.01% of our total revenue per year and the absence of such licence did
not have any material adverse impact on our business and operations. However, if we are
required to obtain an Audio and Video Service Permission or other additional licenses or
approvals in connection with our video-based services in China, we may be subject to various
penalties, such as confiscation of the net revenues that were generated through the unlicensed
internet activities, imposition of fines and termination or restriction of such service offering.
– 64 –
RISK FACTORS
Furthermore, PRC regulations require platforms that disseminate internet news and
information services to obtain the License for Internet News Information Services. See
Regulations on Internet Service — Regulation on Internet News Dissemination.” According to
the Provisions for the Administration of Internet News Information Services, various
qualifications and requirements which service providers shall meet have been provided in this
regulation, for example, it shall be staffed by full-time news editors, content reviewers and
technical support engineers who are suitable for its services and there are venues, facilities and
capital that are appropriate for its services. The Implementation Rules for the Administration
of the Licensing for Internet-based News Information Services further clarifies that only a
news agency (including the controlling shareholder of a news agency) or an entity under news
publicity authorities may apply for a license for editing and publishing services in respect of
internet-based news information. Besides, foreign-invested enterprises are not allowed to
establish any internet-based news information service entities. As none of our Group
companies is a news agency and we may not be able to fulfill such requirements, therefore we
have not obtained such license and may not be able to obtain such license in a timely manner,
or at all. As our platform displays news and information related to the financial market, we may
be deemed as engaging in disseminating news and information through the internet and subject
to penalties including imposition of fines and termination or restriction of such service
offering. In addition, the PRC government may impose specific requirement on financial
information services, which may also affect our business and operations.
In August 2019, we officially launched our online wealth management product

distribution service which gives our clients access to money market, fixed income and equity
funds products from leading fund houses. According to the Securities Investment Funds Law
(《證券投資基金法》), any entity that engages in the fund services, including but not limited
to sales, investment consulting, information technology system services, shall register or file
with the securities regulatory authority of the State Council. See “Regulations — Overview of
the Laws and Regulations Relating to Our Presence in China — Regulations on Securities
Business — Regulation on Fund Sales Business.” We do not hold any license or permit in the
promotion of, sales of, purchase of or redemption of funds in Mainland China. We do not
believe the business we are conducting now through our subsidiaries or Consolidated Affiliated
Entities in China should be deemed as fund services in China. However, we cannot assure you
that relevant regulatory will take the same view as ours. If certain of our activities in China
were deemed by relevant regulators as provision of fund services in China, we may be subject
to penalties including imposition of fines and suspend of such fund sales business.
PRC laws and regulations are evolving, and there are uncertainties relating to the
regulation of different aspects of the services we provide through our platforms in China. We
cannot assure you that we will not be found in violation of any future laws and regulations or
any of the laws and regulations currently in effect due to changes in or discrepancies with
respect to the relevant authorities’ interpretation of these laws and regulations. In addition, we
may be required to obtain additional license or approvals, and we cannot assure you that we
will be able to timely obtain or maintain all the required licenses or approvals or make all the
necessary filings in the future.
– 65 –
RISK FACTORS
In addition, as we do not provide cross-border currency conversion services related to

Renminbi to Chinese residents or institutions, we do not require our clients to submit evidence
of approval or registration from relevant authorities with respect to the foreign currency used
for offshore investments. However, since the PRC authorities and the commercial banks
designated by the SAFE to conduct foreign exchange services have significant amount of
discretion in interpreting, implementing and enforcing the relevant foreign exchange rules and
regulations, and for many other factors that are beyond our control, we may be subject to
further regulatory requirements, including but not limited to verifying evidence of approval
from relevant authorities with respect to foreign currency exchange.
Employee misconduct could expose us to significant legal liability and reputational harm.
We operate in an industry in which integrity and the confidence of our users and clients
are of critical importance. During our daily operations, we are subject to the risks of errors and
misconduct by our employees, which include:
• engaging in misrepresentation or fraudulent activities when marketing or performing

online brokerage and other services to users and clients;
• improperly using or disclosing confidential information of our users and clients or

other parties;
• conducting unauthorized activities such as assisting with currency conversion by

Chinese investors; or
• otherwise not complying with applicable laws and regulations or our internal
policies or procedures.
If any of our employees engages in illegal or suspicious activities or other misconduct,

we could suffer serious harm to our reputation, financial condition, client relationships and
ability to attract new clients and even be subject to regulatory sanctions and significant legal
liability. If any sanction was imposed against an employee during his employment with us,
even for matters unrelated to us, and his ability to perform certain regulated functions at his
current employment with us was temporary impaired due to the sanction. We may also be
subject to negative publicity from the sanction that would adversely affect our brand, public
image and reputation, as well as potential challenges, suspicions, investigations or alleged
claims against us. It is not always possible to deter misconduct by our employees or senior
management during the ongoing operations of our business or uncover any misconduct
occurred in their past employment, and the precautions we take to detect and prevent any
misconduct may not always be effective. Misconduct by our employees, or even
unsubstantiated allegations of misconduct, could result in a material adverse effect on our
reputation and our business.
– 66 –
RISK FACTORS
Any future change in the regulatory and legal regime for the securities brokerage and
wealth management industries regions where we operate may have a significant impact on
our business model. Potential enforcement actions against industry peers could lead to
new rules or requirements and may subject us to higher regulatory scrutiny. If we are
deemed to have been engaged in any misleading digital engagement practices or trading
practices, there could be material adverse effect to our business operations, reputation
and prospects.
Firms in the securities brokerage and wealth management industries have been subject to
an increasingly regulated environment over recent years, and penalties and fines sought by
regulatory authorities have also increased. This regulatory and enforcement environment has
created uncertainties with respect to various types of products and services that historically had
been offered by us and that were generally believed to be permissible and appropriate. For
example, the U.S. securities regulators are currently conducting an industry-wide review of the
marketing and other business practices of online and app-based broker-dealers, and have also
pursued a number of enforcement actions against firms in our industry, including one which
resulted in the imposition of substantial monetary sanctions on a leading app-based
broker-dealer headquartered in California in the United States. The regulatory scrutiny appears
to focus on certain digital engagement practices utilized by on-line and app-based broker-
dealers, the adequacy of risk disclosures to retail customers, and whether or not payment for
order flow compromises a broker-dealer’s obligation to obtain best execution for its customers.
While our entities in the United States do not pay for order flow, certain of our user
engagement practices in the United States, such as offering prizes (of nominal value) and
badges (of no economic value) for trading activity, and related disclosures could be impacted
by the current regulatory scrutiny. In this regard, the Chairman of the SEC has indicated a
concern that certain digital engagement practices may encourage investors to trade more often
than might be appropriate, and has questioned whether this creates a conflict of interest
between the broker-dealers and their customers. The current regulatory review is at the stage
of information gathering and the SEC has not publicly concluded that any of the digital
engagement practices such as those that we use are illegal or improper. However, there can be
no assurance that the SEC will not adopt new rules or guidance that may adversely impact our
digital engagement practices, business and operating results.
In a separate matter, the State of Massachusetts has sued a leading app-based

broker-dealer headquartered in California alleging, among other things, that certain of their
customer communications constitute a form of recommendation, thereby triggering a duty of
the broker-dealer to act in the best interest of its customers. This case is currently pending.
Moomoo Financial Inc.’s business strategy is based on providing a trading platform without
making investment recommendations or providing investment advice. An expansion of the
definition of what constitutes an investment recommendation could have a material impact on
Moomoo Financial Inc.’s business operation. The pending study and enforcement actions
against other firms in our industry and relevant negative news coverage and perception could
lead to new rules or requirements that could have a material adverse effect upon our business
operations, and may subject us to higher regulatory scrutiny in the United States. If we are
deemed to have been engaged in any misleading digital engagement practices or trading
– 67 –
RISK FACTORS
practices, there could be material adverse effect to our business operations, reputation and
prospects. Legislative changes in rules promulgated by government agencies and self-
regulatory organizations in various jurisdictions that oversee our businesses and changes in the
interpretation or enforcement of existing laws and rules, such as the potential imposition of
transaction taxes, may directly affect our model of operation and profitability.
We have granted options and restricted shares, and may continue to grant awards under
our share option plans, which may result in increased share-based compensation
expenses. Such share-based compensation may have an adverse effect on our results of
operations and dilute the shareholdings of our existing shareholders.
We adopted the Share Incentive Plans for the purpose of granting share-based
compensation awards to employees, Directors and consultants to incentivize their performance
and align their interests with ours. Under our Share Incentive Plans, we are authorized to grant
options, restricted shares and restricted share units (“RSU”). We granted options and RSUs
with service condition only to employees. Under U.S. GAAP, the share-based compensation
expenses are recognized over the vesting period using straight-line method.
For the years ended December 31, 2019, 2020, 2021 and for the six months ended June
30, 2022, the Group granted nil, 6,067,400, 12,105,712, and 48,000 restricted shares to
employees pursuant to the 2019 Share Incentive Plan, respectively. For the years ended
December 31, 2019, 2020, 2021 and for the six months ended June 30, 2022, the Group granted
9,791,200, 2,489,832, 1,080,000, and nil stock options to employees pursuant to the 2014
Share Incentive Plan and 2019 Share Incentive Plan. Options exercised for the years ended
December 31, 2019, 2020, 2021 and for the six months ended June 30, 2022 were 106,295,232,
5,048,824, 5,875,592, and 1,197,536, respectively. We incurred share-based compensation
expenses of HK$16.0 million, HK$32.6 million, HK$98.9 million, and HK$97.3 million
(US$12.4 million) in 2019, 2020, 2021, and the first six months of 2022, respectively. We
believe the share-based compensation is an effective incentive to attract and retain key
personnel and employees, and we will continue to grant share-based compensation to
employees in the future. As a result, our expenses associated with share-based compensation
may increase, which may have an adverse effect on our results of operations and dilute the
shareholdings of our existing shareholders.
– 68 –
RISK FACTORS
If there is any negative publicity with respect to us, including our business model and
practices, our industry peers or our industries in general, the trading price of our Class A
Ordinary Shares and/or ADSs may be volatile and our business and results of operations
may be materially and adversely affected.
Our reputation and brand recognition plays an important role in earning and maintaining
the trust and confidence of individuals or enterprises that are current or potential users and
clients. Our reputation and brand are vulnerable to many threats that can be difficult or
impossible to control, and costly or impossible to remediate. Our reputation and brand have
been and may in the future be, negatively affected by a number of factors, including, among
others, regulatory developments, inquiries or investigations, lawsuits initiated by clients or
other third parties, employee misconduct, perceptions of conflicts of interest and rumors,
unfavorable statements made by media outlets, research firms or government officials.
Furthermore, despite our efforts to address negative publicity and correct misinformation about
our business model and practices, our reputation and brand may continue to be harmed by such
negative publicity and misinformation, and our Class A Ordinary Shares and/or ADSs may
experience substantial price volatility as a result. In addition, any perception that the quality
of our online brokerage and other financial services may not be the same as or better than that
of other online brokerage and financial service firms can also damage our reputation.
Moreover, any negative media publicity about the financial service industry in general or
product or service quality problems of other firms in the industry, including our competitors,
may also negatively impact our reputation and brand. If we are unable to maintain a good
reputation or further enhance our brand recognition, our ability to attract and retain users,
clients, third-party partners and key employees could be harmed and, as a result, our business
and revenues would be materially and adversely affected.
Policy change relating to investable assets could have an adverse impact on our
addressable market.
One of the key drivers for the growth of global online securities market is the investable
assets of retail investors. If the regulatory authorities of the relevant jurisdictions governing
investable assets of retail investors impose new or amended laws and regulations with respect
to these assets, for example, certain control on the funds flow or restricted use of the assets by
the investors, the size of investable assets readily available for the online securities market may
be significantly reduced, which will result in slow down of the growth of our total addressable
market and may subsequently adversely affect our business development and expansion.
In particular, the change of the regulations in the jurisdictions where we have presence
may affect the trading activities of our clients, which may significantly reduce the trading
volume facilitated by our platform. As our revenues from brokerage commission income
depends heavily on the total trading volume facilitated by our platform, the occurrence of any
of the above regulatory changes would have a material and adverse impact on our business,
operating and financial results.
– 69 –
RISK FACTORS
We may not succeed in promoting and sustaining our brand, which could have an adverse
effect on our future growth and business.
A critical component of our future growth is our ability to promote and sustain our brand.
Promoting and positioning our brand and platform will depend largely on the success of our
marketing efforts, our ability to attract users and clients cost-efficiently and our ability to
consistently provide high-quality services and a superior experience. We have incurred and will
continue to incur significant expenses related to advertising and other marketing efforts, which
may not be effective and may adversely affect our net margins.
In addition, to provide a high-quality user and client experience, we have invested and
will continue to invest substantial amounts of resources in the development and functionality
of our platform, website, technology infrastructure and client service operations. Our ability to
provide a high-quality user and client experience is also highly dependent on external factors
over which we may have little or no control, including, without limitation, the reliability and
performance of software vendors and business partners. Failure to provide our users and clients
with high quality services and experience for any reason could substantially harm our
reputation and adversely impact our efforts to develop a trusted brand, which could have a
material adverse effect on our business, results of operations, financial condition and
prospects.
Fraudulent or illegal activities on our platform could negatively impact our brand and
reputation and cause the loss of users and clients. As a result, our business may be
materially and adversely affected.
We have implemented stringent internal control policies, insider trading, anti-money

laundering and other anti-fraud rules and mechanisms on our platform. Nevertheless, we
remain subject to the risk of fraudulent or illegal activities both on our platform and associated
with our users and clients, funding and other business partners, and third parties handling user
and client information. Our resources, technologies and fraud detection tools may be
insufficient to accurately detect and prevent fraudulent or illegal activities. Significant
increases in fraudulent or illegal activities could negatively impact our brand and reputation,
reduce the trading volume facilitated by our platform and therefore harm our operating and
financial results. For example, the SFC has in the past issued restriction notices to us to
prohibit order placing in certain client accounts linked to suspected market misconduct. Any
misconduct of or violation by our clients of applicable laws and regulations could lead to
regulatory inquiries and investigations that involve us, which may affect our business operation
and prospects. We might also incur higher costs than expected in order to take additional steps
to reduce risks related to fraudulent and illegal activities. High-profile fraudulent or illegal
activities could also lead to regulatory intervention, and may divert our management’s attention
and cause us to incur additional regulatory and litigation expenses and costs. In addition, we
could suffer serious harm to our reputation, financial condition, client relationships and ability
to attract new clients and even be subject to regulatory sanctions and significant legal liability,
if any of our employees engages in illegal or suspicious activities or other misconduct. See
“— Risks Related to Our Business and Industry — Employee misconduct could expose us to
– 70 –
RISK FACTORS
significant legal liability and reputational harm.” Although we have not experienced any
material business or reputational harm as a result of fraudulent or illegal activities in the past,
we cannot rule out the possibility that any of the foregoing may occur causing harm to our
business or reputation in the future. If any of the foregoing were to occur, our results of
operations and financial conditions could be materially and adversely affected.
We face risks related to our “know-your-client” procedures when our clients provide
outdated, inaccurate, false or misleading information. We may be subject to certain legal
or regulatory inquiry, investigation or sanctions, fines or penalties, financial loss, or
damage to reputation and brand resulting from such violations.
We collect personal information during the account opening process and screen accounts
against databases for purposes of verifying client identity and detecting risks. Although we
require our clients to submit documents for proof of their identity and address for completing
the account registration and to update such information from time to time, we face risks as the
information provided by our clients may be outdated, inaccurate, false or misleading. Despite
the fact that we have appropriate ongoing monitoring procedures in place to keep customer
information up to date pursuant to applicable regulatory requirements, we cannot fully verify
the accuracy, currency and completeness of such information beyond reasonable effort. For
example, certain of our clients are holders of the PRC identity cards. As the PRC identity cards
are usually effective for more than ten years or some may have no expiration term, some clients
may have changed their domicile or citizenship during the terms of their PRC identity cards
and therefore be subject to applicable laws and regulations of jurisdictions other than the PRC.
In this situation, our provision of products and services to such clients could be in violation of
the applicable laws and regulations in the jurisdictions where those clients reside, of which we
may have no awareness until we are warned by the relevant supervising authorities. We could
still be subject to certain legal or regulatory sanctions, fines or penalties, financial loss, or
damage to reputation resulting from such violations.
Our platform and internal systems rely on software and technological infrastructure that
are highly technical, and if they contain undetected errors, our business could be
adversely affected.
Our platform and internal systems rely on software that is highly technical and complex.
In addition, our platform and internal systems depend on the ability of the software to store,
retrieve, process and manage immense amounts of data. The software on which we rely has
contained, and may now or in the future contain, undetected errors or bugs. Some errors may
only be discovered after the code has been released for external or internal use. Errors or other
design defects within the software on which we rely may result in a negative experience for
users and financial service providers, delay introductions of new features or enhancements,
result in errors or compromise our ability to protect data or our intellectual property. Any
errors, bugs or defects discovered in the software on which we rely could result in harm to our
reputation, loss of users or financial service providers or liability for damages, any of which
could adversely affect our business, results of operations and financial conditions.
– 71 –
RISK FACTORS
A significant decrease in our liquidity could negatively affect our business and financial
management as well as reduce client confidence in our company.
Maintaining adequate liquidity is crucial to our business operations. We meet our

liquidity needs primarily through cash generated by client trading activities and operating
earnings, as well as cash provided by external financing. Fluctuations in client cash or deposit
balances, as well as changes in regulatory treatment of client deposits or market conditions,
may affect our ability to meet our liquidity needs. A reduction in our liquidity position could
reduce our users’ and clients’ confidence, which could result in the loss of client trading
accounts, or could cause us to fail to satisfy our liquidity requirements. In addition, if we fail
to meet the liquidity requirements, regulators could limit our operations.
Factors which may adversely affect our liquidity position include having temporary
liquidity demands due to timing differences between brokerage transaction settlements and the
availability of segregated cash balances, unanticipated outflows of company cash, fluctuations
in cash held in banking or brokerage client trading accounts, a dramatic increase in clients’
margin-financing activities, increased capital requirements, changes in regulatory guidance or
interpretations, other regulatory changes, or a loss of market or client confidence.
If cash generated by client trading activities and operating earnings is not sufficient for
our liquidity needs, we may be forced to seek external financing. During periods of disruptions
in the credit and capital markets, potential sources of external financing could be reduced, and
borrowing costs could increase. Financing may not be available on acceptable terms, or at all,
due to market conditions or disruptions in the credit markets. If we experience any significant
decrease in our liquidity, our business, financial condition and results of operations could be
adversely impacted.
A significant change in clients’ cash allocations could negatively impact our net interest
revenues and financial results.
We derive interest income from depositing clients’ uninvested cash balances in accounts
opened with our bank partners. In 2019, 2020, 2021 and six months ended June 30, 2022, we
generated HK$187.2 million, HK$208.6 million, HK$197.4 million and HK$196.8 million
(US$25.1 million) in interest income from bank deposit, respectively, a significant portion of
which was derived from uninvested cash balances in our clients’ accounts. As a result, a
significant reduction in our clients’ allocation to cash, a change in the allocation of that cash
(for example as a result of using cash to purchase mutual funds through our platform), or a
transfer of cash out of their accounts opened through our platform could reduce our interest
income and negatively impact our financial results.
– 72 –
RISK FACTORS
Our clearing operations expose us to liability for errors in clearing functions, which may
adversely affect our business operations and financial conditions.
Our SFC-licensed subsidiary, Futu International Hong Kong, provides clearing and
execution services for our online brokerage business involving securities listed on the Hong
Kong Stock Exchange or qualified under the Hong Kong, Shanghai and Shenzhen Stock
Connect and listed on the Shanghai Stock Exchange or the Shenzhen Stock Exchange. Our U.S.
subsidiary, Futu Clearing Inc., has been approved to provide clearing and settlement services
for securities transactions in the U.S. financial markets. Clearing and execution services
include the confirmation, receipt, settlement, delivery and record-keeping functions involved
in securities transactions. Clearing brokers also assume direct responsibility for the possession
or control of client securities and other assets and the clearing of client securities transactions.
However, clearing brokers also must rely on third-party clearing system and organizations,
such as CCASS and the Depositary Trust Clearing Corporation and its subsidiaries in the
United States, in settling client securities transactions. Clearing brokers are also responsible
for protecting client assets and complying with relevant customer protecting regulations.
Clearing securities firms, such as Futu International Hong Kong and Futu Clearing Inc., are
subject to substantially more regulatory oversight and examination than introducing brokers
who rely on others to perform clearing functions. Errors in performing clearing functions,
including clerical and other errors related to the handling of funds and securities held by us on
behalf of clients, could lead to regulatory fines and civil penalties as well as losses and liability
in related legal proceedings brought by clients and others.
Our success depends on the continuing service of our key employees, including our senior
management members and other talent, who are highly sought after in the market. If we
fail to hire, retain and motivate our key employees, our business may suffer.
Our key executives and key employees have substantial experience and have made
significant contributions to our business, and our continued success is dependent upon the
retention of our key management executives, as well as the services provided by our staff of
trading system, technology and programming specialists and a number of other key managerial,
marketing, planning, financial, legal and compliance, technical and operations personnel. The
loss of such key personnel could have a material adverse effect on our business. Growth in our
business is dependent, to a large degree, on our ability to retain and attract such employees.
Competition for well-qualified employees in all aspects of our business, including

software engineers and other technology professionals, is intense globally. Our continued
ability to compete effectively depends on our ability to attract new employees and to retain and
motivate existing employees. If we do not succeed in attracting well-qualified employees or
retaining and motivating existing employees and key senior management, our business, results
of operations, financial condition and prospects may be adversely affected.
– 73 –
RISK FACTORS
Any failure to protect our intellectual property could harm our business and competitive
position.
We believe that trademarks, trade secrets, patents, copyright and other intellectual
property we use are critical to our business. We rely on a combination of trademark, patent,
copyright and trade secret protection laws, as well as confidentiality procedures and
contractual provisions to protect our intellectual property and our brand. Despite our efforts to
protect our intellectual property rights, the steps we take in this regard might not be adequate
to prevent or deter infringement or other misappropriation of our intellectual property rights by
competitors, former employees or other third parties. We have filed, and may in the future file,
intellectual property applications on certain of our innovations. We cannot guarantee that any
of our present or future patents or other intellectual property rights will not lapse or be
invalidated, circumvented, challenged, or abandoned. Litigation or proceedings before
governmental authorities, administrative and judicial bodies may be necessary in the future to
enforce our intellectual property rights and to determine the validity and scope of our rights.
As a result, we may not be able to adequately protect our intellectual property rights, which
could adversely affect our revenues and competitive position. Because of the rapid pace of
technological change, nor can we assure you that all of our proprietary technologies and similar
intellectual property will be patented in a timely or cost-effective manner, or at all.
Furthermore, parts of our business rely on technologies developed or licensed by other parties,
or co-developed with other parties, and we may not be able to obtain or continue to obtain
licenses and technologies from these other parties on reasonable terms, or at all.
In addition, while we typically require our employees who may be involved in the
development of intellectual property to execute agreements assigning such intellectual property
to us, we may be unsuccessful in executing such an agreement with each party who in fact
develops intellectual property that we regard as our own. In addition, such agreements may be
breached. Accordingly, we may be forced to bring claims against third parties, or defend claims
that they may bring against us related to the ownership of such intellectual property.
Furthermore, policing unauthorized use of proprietary technology is difficult and

expensive, and we may need to resort to litigation to enforce or defend intellectual property or
to determine the enforceability, scope and validity of our proprietary rights or those of others.
Such litigation and an adverse determination in any such litigation could result in substantial
costs and diversion of resources and management attention. The experience and capabilities of
China courts in handling intellectual property litigation varies and outcomes are unpredictable.
We may be subject to intellectual property infringement claims, which may be expensive

to defend and disruptive to our business and operations.
Content sourced from third parties is frequently posted on our platform by our employees
and users and clients. Although we follow common content management and review practices
to monitor the content uploaded to our platform, we may not be able to identify all content that
may infringe on third-party rights. We cannot be certain that information posted on our
platform and other aspects of our business do not or will not infringe upon or otherwise violate
– 74 –
RISK FACTORS
trademarks, copyrights, know-how, proprietary technologies or other intellectual property

rights held by other parties. In addition, we use third-party licensed software for our business
and on our platform. Nevertheless, we may be from time to time in the future be subject to legal
proceedings and claims relating to the intellectual property rights of others. In addition, there
may be other parties’ trademarks, copyrights, know-how, proprietary technologies or other
intellectual property rights that are infringed by our platform or services or other aspects of our
business without our knowledge. Holders of such intellectual property rights may seek to
enforce such intellectual property rights against us in China, Hong Kong, Singapore, the United
States, Australia or other jurisdictions. If any infringement claims are brought against us, we
may be forced to divert management’s time and other resources from our business and
operations to defend against these claims, regardless of their merits.
We may be held liable for information or content displayed on, retrieved from or linked
to our platform, which may materially and adversely affect our business and operating
results.
The PRC government has adopted regulations governing internet access and distribution
of information over the internet. Under these regulations, internet content providers and
internet publishers are prohibited from posting or displaying over the internet content that,
among other things, violates PRC laws and regulations, impairs public interest or the national
dignity of China, contains terrorism, extremism, or content of force or brutality, or is
reactionary, obscene, superstitious, fraudulent or defamatory. Failure to comply with these
requirements may result in the revocation of licenses to provide internet content and other
licenses, the closure of the concerned websites and criminal liabilities. In the past, failure to
comply with these requirements has resulted in the closure of certain websites. The website
operator may also be held liable for the censored information displayed on or linked to the
website.
In particular, the MIIT has published regulations that subject website operators to
potential liability for content displayed on their websites and the actions of users and others
using their systems, including liability for violations of PRC laws and regulations prohibiting
the dissemination of content deemed to be socially destabilizing. The MPS has the authority
to order any local internet service provider to block any internet website at its sole discretion,
or to stop the dissemination over the internet of information which it believes to be socially
destabilizing. Furthermore, we are required to report any suspicious content to relevant
governmental authorities, and to undergo computer security inspections. If it is found that we
fail to implement the relevant safeguards against security breaches, our business in China may
be shut down.
According to the Administrative Provisions on Mobile Internet Applications Information

Services (《移動互聯網應用程序信息服務管理規定》) which was promulgated by the CAC
and became effective in August 2022, providers of mobile apps shall be responsible for the
demonstration of the contents of the information and shall not create, publish or distribute
information and content through mobile applications that is prohibited by laws and regulations.
We are required to adopt and implement management systems of information security and
– 75 –
RISK FACTORS
establish and improve procedures on content examination and administration. We must adopt
measures such as warning, restricted release, suspension of updates and closing of accounts,
keep relevant records, and report unlawful content to competent government authorities. We
have implemented internal control procedures screening the information and content on our
platform interface to ensure their compliance with these provisions. However, there can be no
assurance that all of the information or content displayed on, retrieved from or linked to our
mobile apps complies with the requirements of the provisions at all times. If our mobile apps
are found to violate the provisions, we may be subject to penalties, including warning, service
suspension or removal of our mobile apps from the relevant mobile app store, which may
materially and adversely affect our business and operating results.
We may be subject to litigation and regulatory investigations and proceedings, and may
not always be successful in defending ourselves against such claims or proceedings, which
may affect our business operations and financial conditions.
We are subject to lawsuits and other claims in the ordinary course of our business. Our
business operations entail substantial litigation and regulatory risks, including the risk of
lawsuits and other legal actions relating to information disclosure, client on boarding
procedures, sales practices, product design, fraud and misconduct, and control procedures
deficiencies, as well as the protection of personal and confidential information of our clients.
We may be subject to arbitration claims and lawsuits in the ordinary course of our business.
We may also be subject to inquiries, inspections, investigations and proceedings by regulatory
and other governmental agencies. See “— Risks Related to Our Business and Industry — We
are subject to extensive and evolving regulatory requirements in the markets we operate in,
non-compliance with which may result in penalties, limitations and prohibitions on our future
business activities or suspension or revocation of our licenses and trading rights, and
consequently may materially and adversely affect our business, financial condition, operations
and prospects. In addition, we are involved in ongoing inquiries by relevant regulators.” See
“Business — Legal Proceedings and Compliance — Ongoing Regulatory Actions.” Actions
brought against us may result in settlements, injunctions, fines, penalties, suspension or
revocation of license, reprimands or other results adverse to us that could harm our reputation.
Even if we are successful in defending ourselves against these actions, the costs of defending
against such actions may be significant to us. In market downturns, the number of legal claims
and the amount of damages sought in legal proceedings may increase.
In addition, we may face arbitration claims and lawsuits brought by our users and clients
who have used our online brokerage or other financial services and found them unsatisfactory.
We may also encounter complaints alleging misrepresentation with regard to our platform
and/or services. This risk may be heightened during periods when credit, equity or other
financial markets are deteriorating in value or are volatile, or when clients are experiencing
losses. Actions brought against us may result in settlements, awards, injunctions, fines,
penalties or other results adverse to us including harm to our reputation. Even if we are
successful in defending against these actions, the defense of such matters may result in our
incurring significant expenses. Predicting the outcome of such matters is inherently difficult,
particularly where claimants seek substantial or unspecified damages, or when arbitration or
– 76 –
RISK FACTORS
legal proceedings are at an early stage. A significant judgment or regulatory action against us
or a material disruption in our business arising from adverse adjudications in proceedings
against the directors, officers or employees would have a material adverse effect on our
liquidity, business, financial condition, results of operations and prospects.
Our risk management policies and procedures may not be fully effective in identifying or
mitigating risk exposure in all market environments or against all types of risks, and as
a result, our business operations and financial conditions may be adversely affected.
We have devoted significant resources to developing our risk management policies and
procedures and will continue to do so. Nonetheless, our policies and procedures to identify,
monitor and manage risks may not be fully effective in mitigating our risk exposure in all
market environments or against all types of risks. Many of our risk management policies are
based upon observed historical market behavior or statistics based on historical models. During
periods of market volatility or due to unforeseen events, the historically derived correlations
upon which these methods are based may not be valid. As a result, these methods may not
predict future exposures accurately, which could be significantly greater than what our models
indicate. This could cause us to incur losses or cause our risk management strategies to be
ineffective. Other risk management methods depend upon the evaluation of information
regarding markets, business partners, clients, catastrophe occurrence or other matters that are
publicly available or otherwise accessible to us, which may not always be accurate, complete,
up-to-date or properly evaluated.
In addition, although we perform due diligence on potential clients, we cannot assure you
that we will be able to identify all the possible issues based on the information available to us.
If a user or client does not meet the relevant qualification requirements under applicable laws
but is still able to use our services, we may be subject to regulatory actions and penalties and
held liable for damages. Management of operational, legal and regulatory risks requires, among
other things, policies and procedures to properly record and verify a large number of
transactions and events, and these policies and procedures may not be fully effective in
mitigating our risk exposure in all market environments or against all types of risks.
From time to time we may evaluate and potentially consummate investments and
acquisitions or enter into alliances, which may require significant management attention,
disrupt our business and adversely affect our financial results.
We may evaluate and consider strategic investments, combinations, acquisitions or

alliances to further increase the value of our platforms and better serve our users and clients.
These transactions could be material to our financial condition and results of operations if
consummated. We may not have the financial resources necessary to consummate any
acquisitions in the future or the ability to obtain the necessary funds on satisfactory terms. Any
future acquisitions may result in significant transaction expenses and risks associated with
entering new markets in addition to integration and consolidation risks. Because acquisitions
historically have not been a core part of our growth strategy, we have no material experience
– 77 –
RISK FACTORS
in successfully utilizing acquisitions. We may not have sufficient management, financial and
other resources to integrate any such future acquisitions or to successfully operate new
businesses, and we may be unable to profitably operate our expanded company.
We may fail to realize profits from our short-term and long-term investments or lose some
or all of the capital invested.
During the Track Record Period, we invested in certain short-term investments, including
available-for-sale financial securities, money market funds, and financial assets at fair value
through profit or loss. As of December 31, 2019, 2020 and 2021 and June 30, 2022, our
short-term investments amounted to HK$93.8 million, nil, HK$1,169.7 million and HK$17.5
million (US$2.2 million), respectively. See “Financial Information – Discussion of Certain Key
Balance Sheet Items – Short-term investments”. Such investments are measured at fair value.
A decline in the value of our available-for-sale securities could result in the recognition of
impairment losses if management determines that such decline in value is not temporary or is
substantial. This evaluation is a matter of judgment, which includes the assessment of several
factors. If our management determines that an asset is impaired, the book value of the asset is
adjusted and a corresponding loss is recognized in earnings for the current period. The
deterioration in the market value of such short-term investments could result in the recognition
of impairment loss or fair value loss.
As of December 31, 2019, 2020 and 2021 and June 30, 2022, our long-term investments
amounted to HK$6.2 million, nil, HK$23.4 million and HK$249.6 million (US$31.8 million),
respectively. With respect of long-term investments, our investment committee is authorized
and empowered the investment committee to invest our funds in one or more entities by
purchase of equity or debt interests or assets, acquisition, merger, consolidation, capital
commitment or otherwise, in relation to certain material long-term investments. We have
limited control over the portfolio companies or funds in which we have invested. We are
subject to the risk that our portfolio companies or funds may make business, financial or
management decisions with which we do not agree or that the majority shareholders or the
management of the company may take risks or otherwise act in a manner that does not serve
our interests. Furthermore, our portfolio companies may fail to abide by their agreements with
us, for which we have limited or no recourse. If any of the foregoing were to occur, the value
of our long-term investments could decrease or we may face investment failure, in which case
our financial condition, results of operations and cash flow could be adversely affected.
Increases in labor costs and enforcement of stricter labor laws and regulations may
adversely affect our business and results of operations.
The economy in the countries and regions that we operate in has experienced increases
in inflation and labor costs in recent years. As a result, average wages are expected to continue
to increase. In addition, we are required by the local laws and regulations to make the required
contributions for various statutory employee benefits, such as pension, housing fund, medical
insurance, work-related injury insurance, unemployment insurance and maternity insurance to
designated government agencies and designated pension trustees, and take out employees’
– 78 –
RISK FACTORS
compensation insurance policies for the benefit and protection of our employees, to the extent
required under applicable local laws. The relevant government agencies may examine whether
an employer has paid the required contributions or has in place adequate insurance coverage
in relation to the statutory employee benefits, and those employers who fail to make adequate
payments may be subject to late payment fees, fines, imprisonment and/or other penalties. We
expect that our labor costs, including wages and employee benefits, will continue to increase.
Unless we are able to control our labor costs or pass on these increased labor costs, our
financial condition and results of operations may be adversely affected.
If we fail to maintain an effective system of internal controls, we may be unable to

accurately or timely report our results of operations or prevent fraud, and investor
confidence and the market price of the Class A Ordinary Shares and/or ADSs may be
Since our initial public offering, we have become subject to the Sarbanes-Oxley Act of
2002. Section 404 of the Sarbanes-Oxley Act (“Section 404”), requires that we include a report
from management on the effectiveness of our internal control over financial reporting in our
annual report on Form 20-F. In addition, as we have ceased to be an “emerging growth
company” as such term is defined in the JOBS Act, our independent registered public
accounting firm must attest to and report on the effectiveness of our internal control over
financial reporting.
Our management has concluded that our internal control over financial reporting was
effective as of December 31, 2021. Historically, we and our independent registered accounting
firm identified one material weakness relating to our lack of sufficient and competent
accounting and financial reporting personnel with appropriate knowledge of U.S. GAAP to
design and implement robust period-end financial reporting policies and procedures for the
preparation of consolidated financial statements and related disclosures in accordance with
U.S. GAAP and the financial reporting requirements set forth by the SEC, as latest as in the
course of auditing our consolidated financial statements for the year ended December 31, 2019.
As of December 31, 2020, based on our management’s assessment, we have implemented a
number of measures and accordingly determined that the material weakness in our internal
controls had been remediated. However, if we fail to maintain the adequacy of our internal
control over financial reporting, as these standards are modified, supplemented or amended
from time to time, we may not be able to conclude on an ongoing basis that we have effective
internal control over financial reporting in accordance with Section 404 and our independent
registered public accounting firm may not be able to conclude that we have effective internal
control over financial reporting at a reasonable assurance level. If we fail to achieve and
maintain an effective internal control environment, we could suffer material misstatements in
our financial statements and fail to meet our reporting obligations, which would likely cause
investors to lose confidence in our reported financial information. This could in turn limit our
access to capital markets, harm our results of operations, and lead to a decline in the trading
price of our Class A Ordinary Shares or ADSs. Additionally, ineffective internal control over
financial reporting could expose us to increased risk of fraud or misuse of corporate assets and
subject us to potential delisting from the stock exchange on which we list, regulatory
– 79 –
RISK FACTORS
investigations and civil or criminal sanctions. We may also be required to restate our financial
statements for prior periods. Furthermore, we have incurred and anticipate that we will
continue to incur considerable costs, management time and other resources in an effort to
comply with Section 404 of the Sarbanes-Oxley Act and other requirements.
Increasing focus with respect to environmental, social and governance matters may
impose additional costs on us or expose us to additional risks. Failure to comply with the
laws and regulations on environmental, social and governance matters may subject us to
penalties and adversely affect our business, financial condition and results of operations.
Relevant regulatory authorities and public advocacy groups have been increasingly
focused on environment, social and governance, or ESG, issues in recent years, making our
business more sensitive to ESG issues and changes in governmental policies and laws and
regulations associated with environment protection and other ESG-related matters. Investor
advocacy groups, certain institutional investors, investment funds, and other influential
investors are also increasingly focused on ESG practices and in recent years have placed
increasing importance on the implications and social cost of their investments. Regardless of
the industry, increased focus from investors and the relevant regulatory authorities on ESG and
similar matters may hinder access to capital, as investors may decide to reallocate capital or
to not commit capital as a result of their assessment of a company’s ESG practices. Any ESG
concern or issue could increase our regulatory compliance costs. If we do not adapt to or
comply with the evolving expectations and standards on ESG matters from investors and the
relevant regulatory authorities or are perceived to have not responded appropriately to the
growing concern for ESG issues, regardless of whether there is a legal requirement to do so,
we may suffer from reputational damage and the business, financial condition, and the price of
our Class A Ordinary Share and/or ADSs could be materially and adversely effected.
Fluctuations in exchange rates could have a material adverse effect on our results of
operations and the price of the Shares.
The conversion of Renminbi into foreign currencies, including U.S. dollars, is based on
rates set by the PBOC. The Renminbi has fluctuated against the U.S. dollar, at times
significantly and unpredictably. The value of Renminbi against the U.S. dollar and other
currencies is affected by changes in China’s political and economic conditions and by China’s
foreign exchange policies, among other things. We cannot assure you that Renminbi will not
appreciate or depreciate significantly in value against the U.S. dollar in the future. It is difficult
to predict how market forces or PRC or U.S. government policy may impact the exchange rate
between Renminbi and the U.S. dollar in the future.
Any significant appreciation or depreciation of Renminbi may materially and adversely

affect our costs, expenses and financial position, and the value of, and any dividends payable
on, our Class A Ordinary Shares or ADSs in U.S. dollars. For example, to the extent that we
need to convert U.S. dollars we receive into Renminbi to pay our operating expenses,
appreciation of Renminbi against the U.S. dollar would have an adverse effect on the RMB
– 80 –
RISK FACTORS
amount we would receive from the conversion. Conversely, a significant depreciation of

Renminbi against the U.S. dollar may significantly reduce the U.S. dollar equivalent of our
earnings, which in turn could adversely affect the price of our Class A Ordinary Shares or
ADSs.
Very limited hedging options are available in China to reduce our exposure to exchange
rate fluctuations. In 2021, we purchased derivatives in an effort to reduce our exposure to
foreign currency exchange risk due to exchange rate fluctuations between Hong Kong dollars
and Renminbi. However, the effectiveness of these hedges may be limited and we may not be
able to adequately hedge our exposure or at all. In addition, our currency exchange losses may
be magnified by PRC exchange control regulations that restrict our ability to convert Renminbi
into foreign currency. As a result, fluctuations in exchange rates may have a material adverse
effect on your investment.
Our anticipated international expansion will subject us to additional risks and increased
legal and regulatory requirements, which could have a material effect on our business.
Our historical operations have been focused in Hong Kong. We have expanded our
operations into the United States Singapore and Australia and may expand further into other
international markets. As we enter countries and markets that are new to us, we must tailor our
services and business model to the unique circumstances of such countries and markets, which
can be complex, difficult, costly and divert management and personnel resources. In addition,
we may face competition in other countries from companies that may have more experience
with operations in such countries or with global operations in general. Laws and business
practices that favor local competitors or prohibit or limit foreign ownership of certain
businesses or our failure to adapt our practices, systems, processes and business models
effectively to the client preferences of each country into which we expand, could slow our
growth. Certain markets in which we operate have, or certain new markets in which we may
operate in the future may have, lower margins than our more mature markets, which could have
a negative impact on our overall margins as our revenues from these markets grow over time.
In addition to the risks outlined elsewhere in this section, our international expansion is
subject to a number of other risks, including:
• currency exchange restrictions or costs and exchange rate fluctuations;
• exposure to local economic or political instability, threatened or actual acts of

terrorism and security concerns in general;
• weaker or uncertain enforcement of our contractual and intellectual property rights;
• preferences by local populations for local service providers;
– 81 –
RISK FACTORS
• slower adoption of the internet and mobile devices as advertising, broadcast and
commerce mediums and the lack of appropriate infrastructure to support widespread
internet and mobile device usage in those markets;
• difficulties in attracting and retaining qualified employees in certain international

markets, as well as managing staffing and operations due to increased complexity,
distance, time zones, language and cultural differences; and
• uncertainty regarding liability for services and content, including uncertainty as a

result of local laws and lack of precedent.
Such international expansion will also subject us to additional legal and regulatory
control and requirements. For example, as a result of our expansion into the United States,
Singapore and Australia, we are subject to the US Brokerage Regulations and the Singapore
Brokerage Regulations, and regulated by the Australian Securities and Investments
Commission, respectively. For securities including stocks, options and futures traded on the
major exchanges in the U.S., the Singapore Exchange and the Australian Securities Exchange,
we aggregate trade instructions from clients and collaborate with qualified local third-party
clearing brokers for execution and settlement. In the case of securities traded on the major U.S.
stock exchanges, we also execute and settle some of the transactions through our clearing
system platform. From our client’s perspective, the trading process is seamless as we handle
all client communications and touchpoints, including delivery and receipt of funds under both
scenarios. Our wholly-owned subsidiary, Moomoo Financial Inc., is registered with the SEC as
a broker-dealer and is a member in good standing of FINRA. Another wholly-owned subsidiary
of ours, Futu Clearing Inc., is also a member in good standing of FINRA and Depository Trust
& Clearing Corporation (“DTCC”), with capacity to provide clearing services in the U.S. As
we continue to expand our business in the United States, we will be subject to the rules and
regulations imposed by the SEC, FINRA and other regulatory authorities. In Singapore, our
wholly-owned subsidiary, Moomoo Financial Singapore is registered with the MAS as a
Capital Markets Services Licence holder, and is subject to the Singapore Brokerage
Regulations, as well as any rules and regulations imposed by the MAS. In November 2021, we
acquired 100% of the issued share capital of an Australian company and renamed it Futu
Securities (Australia) Ltd, which has since become our wholly-owned subsidiary. Futu
Securities (Australia) Ltd holds an Australian Financial Services License (AFSL), a license
granted and regulated by the Australian Securities and Investments Commission (ASIC). In
addition, U.S. domestic and foreign stock exchanges, other self-regulatory organizations and
state and foreign securities commissions can censure, fine, issue cease-and-desist orders, or
suspend or expel a broker-dealer or any of its officers or employees. Our ability to comply with
all applicable laws and rules is largely dependent on our internal system to ensure compliance,
as well as our ability to attract and retain qualified compliance personnel. We could be subject
to disciplinary or other actions in the future due to claimed noncompliance, which could have
a material adverse effect on our business, financial condition and results of operations. To
continue to expand our services internationally, we may have to comply with the regulatory
controls of each country in which we conduct or intend to conduct business, the requirements
– 82 –
RISK FACTORS
of which may not be clearly defined. The varying compliance requirements of these different
regulatory jurisdictions, which are often unclear, may limit our ability to continue existing
international operations and further expand internationally.
Any failure by us or our third-party service providers to comply with applicable

anti-money laundering laws and regulations could damage our reputation.
We are required to comply with applicable anti-money laundering and counter terrorism
laws and regulations in Hong Kong, Singapore, the U.S., Australia and other relevant
jurisdictions. These laws and regulations require financial institutions to establish sound
internal control policies and procedures to guard against money laundering and terrorist
financing. Such policies and procedures require us to, among other things, designate an
independent anti-money laundering reporting officer, establish a customer due diligence
system in accordance with relevant rules, record the details of client activities and report
suspicious transactions to the relevant authorities. In addition, we are required to train our
personnel and periodically test the adequacy of our policies and procedures.
We have implemented various policies and procedures in compliance with all applicable
anti-money laundering and counter-terrorist financing laws and regulations, including internal
controls and KYC procedures, for preventing money laundering and terrorist financing. In
addition, our institutional partners in Hong Kong, Singapore, the United States and Australia
have their own appropriate anti-money laundering policies and procedures with respect to
accounts opening services for our clients. Certain of our institutional partners are subject to
anti-money laundering obligations under applicable anti-money laundering laws and
regulations and are regulated in that respect by the relevant regulators. We have adopted
commercially reasonable procedures for monitoring our institutional partners. In the event that
we fail to fully comply with the applicable laws and regulations, the relevant government
authorities may freeze our assets or impose fines or other penalties on us. There can be no
assurance that there will not be failures in detecting money laundering or other illegal or
improper activities, which may adversely affect our business, reputation, financial condition
and results of operations.
Our policies and procedures may not be completely effective in detecting suspicious
activity and preventing other parties from using us or any of our institutional funding partners
as a conduit for money laundering (including illegal cash operations) or terrorist financing
without our knowledge. If we were to be associated with money laundering (including illegal
cash operations) or terrorist financing, our reputation could suffer and we could become subject
to regulatory fines, sanctions, or legal enforcement, including being added to any “blacklists”
that would prohibit certain parties from engaging in transactions with us, all of which could
have a material adverse effect on our financial condition and results of operations. Even if we
and our institutional funding partners comply with the applicable anti-money laundering laws
and regulations, we and our institutional funding partners may not be able to fully eliminate
money laundering and other illegal or improper activities in light of the complexity and the
secrecy of these activities. Any negative perception of the industry, such as that arising from
any failure of other online brokerage firms to detect or prevent money laundering activities,
– 83 –
RISK FACTORS
even if factually incorrect or based on isolated incidents, could compromise our image,
undermine the trust and credibility we have established, and negatively impact our financial
condition and results of operation. See also “— Risks Related to Our Business and Industry —
We are subject to extensive and evolving regulatory requirements in the markets we operate in,
non-compliance with which may result in penalties, limitations and prohibitions on our future
and prospects. In addition, we are involved in ongoing inquiries by relevant regulators.”
Our business may be affected by the Competition Ordinance of Hong Kong.
The Competition Ordinance (Chapter 619 of the Laws of Hong Kong) came into full
effect in Hong Kong on December 14, 2015. The Competition Ordinance prohibits and deters
undertakings in all sectors from adopting anti-competitive conduct which has the object or
effect of preventing, restricting or distorting competition in Hong Kong. Therefore, we are
subject to the Competition Ordinance generally. The key prohibitions include (i) prohibition of
agreements between businesses which have the object or effect of preventing, restricting or
distorting competition in Hong Kong (i.e. the “First Conduct Rule”); and (ii) prohibiting
companies with a substantial degree of market power, including monopolists, from abusing
their power by engaging in conduct that has the object or effect of harming competition in
Hong Kong (i.e. the “Second Conduct Rule”). Various factors may be taken into consideration
in determining whether an undertaking has a substantial degree of market power, including the
market share of the undertaking; the undertaking’s power to make pricing and other decisions;
any barriers to entry to competitors into the relevant market; and the relevant matters specified
in the guidelines issued under section 35 of the Competition Ordinance, including the
Guideline of the Second Conduct Rule jointly issued by the Competition Commission and the
Communications Authority.
There are very severe penalties for breaches of the Competition Ordinance, including
financial penalties of up to 10.0% of the total gross revenues obtained in Hong Kong for each
year of infringement, up to a maximum of three years in which the contravention occurs.
As we are the largest securities broker in terms of retail securities trading volume on the
Hong Kong Stock Exchange as of December 31, 2021 according to CIC, such factor may be
taken into account in assessing whether we have a substantial degree of market power in Hong
Kong. As there is no precedent of successful enforcement of the Second Conduct Rule in Hong
Kong, uncertainties exist in respect of the rule’s application. We are not currently subject to
any investigations, inquiries or penalties in respect of breaches under the Competition
Ordinance. We may nevertheless face difficulties and may need to incur legal costs in ensuring
our compliance with the Competition Ordinance. We may also inadvertently infringe the
Competition Ordinance and under such circumstance, we may be subject to fines, claims for
damages and/or other penalties, incur substantial legal costs and experience business disruption
and/or negative media coverage, which could adversely affect our business, results of
operations and reputation.
– 84 –
RISK FACTORS
We have limited business insurance coverage, which may be inadequate to protect us from
the liabilities or losses we may incur.
We currently carry limited insurance in connection with our online brokerage business.
However, we do not carry business interruption insurance to compensate for losses that could
occur to the extent not required. We also do not maintain general product liability insurance or
key-man insurance, and only maintain limited general property insurance. We consider our
insurance coverage to be reasonable in light of the nature of our business, but we cannot assure
you that our insurance coverage is sufficient to prevent us from any loss or that we will be able
to successfully claim our losses under our current insurance policies on a timely basis, or at all.
If we incur any loss that is not covered by our insurance policies, or the compensated amount
is significantly less than our actual loss, our business, financial condition and results of
operations could be materially and adversely affected.
We may not be able to obtain additional capital when desired, on favorable terms or at
all. If we fail to meet the capital requirement pursuant to the applicable rules, our
business operations and performance will be adversely affected.
We anticipate that the net proceeds we received from our securities offering, together with
our current cash, cash provided by operating activities and funds available through our bank
loans and credit facilities, will be sufficient to meet our current and anticipated needs for
general corporate purposes for at least the next 12 months following the Listing. However, we
need to make continued investments in facilities, hardware, software, technological systems
and to retain talented personnel to remain competitive. Due to the unpredictable nature of the
capital markets and our industry, we cannot assure you that we will be able to raise additional
capital on terms favorable to us, or at all, if and when required, especially if we experience
disappointing operating results. If adequate capital is not available to us as required, our ability
to fund our operations, take advantage of unanticipated opportunities, develop or enhance our
infrastructure or respond to competitive pressures could be significantly limited, which would
adversely affect our business, financial condition and results of operations. If we do raise
additional funds through the issuance of equity or convertible debt securities, the ownership
interests of our shareholders could be significantly diluted. These newly issued securities may
have rights, preferences or privileges senior to those of existing shareholders. Our broker-
dealer and insurance-broker subsidiaries, Futu International Hong Kong, Moomoo Financial
Inc., Futu Clearing Inc., Moomoo Financial Singapore, Futu Insurance Brokers (Hong Kong)
Limited and Futu Australia are subject to capital requirements determined by their respective
regulators. If we fail to maintain the required level of liquid capital, the SFC, the SEC, the
MAS or the ASIC may take actions against us and our business will be adversely affected.
– 85 –
RISK FACTORS
Internet-related issues may reduce or slow the growth in the use of our services in the
future. In particular, our future growth depends on the further acceptance of the internet
and particularly the mobile internet as an effective platform for assessing trading and
other financial services and content.
Critical issues concerning the commercial use of the internet, such as ease of access,
security, privacy, reliability, cost, and quality of service, remain unresolved and may adversely
impact the growth of internet use. If internet usage continues to increase rapidly, the internet
infrastructure may not be able to support the demands placed on it by this growth, and its
performance and reliability may decline. Continuous rapid growth in internet traffic may cause
decreased performance, outages and delays. Our ability to increase the speed with which we
provide services to users and clients and to increase the scope and quality of such services is
limited by and dependent upon the speed and reliability of our users’ and clients’ access to the
internet, which is beyond our control. If periods of decreased performance, outages or delays
on the internet occur frequently or other critical issues concerning the internet are not resolved,
overall internet usage or usage of our web-based services could increase more slowly or
decline, which would cause our business, results of operations and financial condition to be
Furthermore, while the internet and the mobile internet have gained increased popularity
in China and Hong Kong as well as other parts of the world as platforms for financial products
and content in recent years, many investors have limited experience in trading and using other
financial services online. For example, investors may not find online content to be a reliable
source of financial product information. If we fail to educate investors about the value of our
platform and our services, our growth will be limited and our business, financial performance
and prospects may be materially and adversely affected. The further acceptance of the internet
and particularly the mobile internet as an effective and efficient platform for trading and other
financial services and content is also affected by factors beyond our control, including negative
publicity around online and mobile brokerage services and restrictive regulatory measures
taken by the PRC government. If online and mobile networks do not achieve adequate
acceptance in the market, our growth prospects, results of operations and financial condition
could be harmed.
Legal defects regarding some of our leased properties may adversely affect our business,
financial condition and results of operations.
As of the Latest Practicable Date, we entered into 15 lease agreements for our leased
properties in the PRC and eight of them had not been registered and filed with the competent
PRC government authorities as required by applicable PRC laws and regulations. We cannot
assure you that the lessors will cooperate and complete the registration in a timely manner. Our
PRC Legal Advisors has advised us that failure to complete the registration and filing of lease
agreements will not affect the validity of such leases or impede our use of the relevant
properties but could result in the imposition of fines up to RMB10,000 for each leased property
– 86 –
RISK FACTORS
that is unregistered if we fail to rectify the noncompliance within the time frame prescribed by
the relevant authorities. As of the Latest Practicable Date, we were not aware of any notice or
allegation of penalty from PRC government authorities for our failure on the registration of
lease agreements.
Further, as of the Latest Practicable Date, the lessors of seven of our leased properties
failed to provide us with valid property ownership certificates or authorization documents
evidencing their rights to lease the properties, and our leased property interests under such
properties may be defective. If such lessors do not have the relevant property ownership
certificates, the relevant rightful title holders or other third parties may challenge our use of
such leased properties, and we may be forced to vacate these properties and be required to seek
alternative properties for lease. As of the Latest Practicable Date, we were not aware of any
challenge made by a third party or competent government authority on the titles of any of these
leased properties that might affect our current occupation.
RISKS RELATED TO OUR PRESENCE IN CHINA
Changes in social conditions, political and economic policies of the PRC government may
materially and adversely affect our business, financial condition and results of operations
and may result in our inability to sustain our growth and expansion strategies.
Our results of operations, financial condition and prospects are influenced by social,
economic, political and legal developments in China. China’s economy differs from the
economies of most developed countries in many respects, including with respect to the
framework and style of government supervision, level of development, growth rate, control of
foreign exchange and allocation of resources. Although the PRC government has implemented
measures emphasizing the utilization of market forces for economic reform, the reduction of
state ownership of productive assets, and the establishment of improved corporate governance
in business enterprises, a substantial portion of productive assets in China is still owned by the
government. The PRC government also exercises significant control over China’s economic
growth through strategically allocating resources, controlling the payment of foreign currency-
denominated obligations, setting monetary policy and providing preferential treatment to
particular industries or companies. While the Chinese economy has experienced significant
growth over the past decades, growth has been uneven, both geographically and among various
sectors of the economy. The Chinese government has implemented various measures to
encourage economic growth and guide the allocation of resources. Some of these measures may
benefit the overall Chinese economy, but may have a negative effect on us. The growth rate of
the Chinese economy has gradually slowed since 2010, and the impact of COVID-19 on the
Chinese economy in 2020 is reported to be severe. Any prolonged slowdown in the Chinese
economy may reduce the demand for our products and services and materially and adversely
affect our business and results of operations.
The new, stricter regulations or interpretations of existing regulations imposed by the

central or local governments may require additional expenditures and efforts on our part to
ensure our compliance with such regulations or interpretations, and if relevant regulations are
– 87 –
RISK FACTORS
issued and become effective in a short notice, we may not able to take the required actions in
a timely manner without allocating significant resource. See also “— Risks Related to Our
Business and Industry — If we fail to protect our platform or the information of our users and
clients, whether due to cyber-attacks, computer viruses, physical or electronic break-in,
breaches by third parties or other reasons, we may be subject to liabilities imposed by relevant
laws and regulations, and our reputation and business may be materially and adversely
affected.”
There are uncertainties regarding the interpretation and enforcement of PRC laws, rules
and regulations.
A part of our operations is conducted in the PRC and is governed by PRC laws, rules and
regulations. Our PRC subsidiaries and Consolidated Affiliates Entities are subject to laws,
rules and regulations applicable to foreign investment in China. Some of our activities outside
the PRC are also subject to the extra-territorial jurisdiction under the relevant PRC laws and
regulations. The PRC legal system is a civil law system based on written statutes. Unlike the
common law system, prior court decisions may be cited for reference but have limited
precedential value.
In 1979, the PRC government began to promulgate a comprehensive system of laws, rules
and regulations governing economic matters in general. The overall effect of legislation over
the past three decades has significantly enhanced the protections afforded to various forms of
foreign investment in China. However, China has not developed a fully integrated legal system,
and recently enacted laws, rules and regulations may not sufficiently cover all aspects of
economic activities in China or may be subject to significant degrees of interpretation by PRC
regulatory agencies. In particular, because these laws, rules and regulations are relatively new,
and because of the limited number of published decisions and the nonbinding nature of such
decisions, and because the laws, rules and regulations often give the relevant regulator
significant discretion in how to enforce them, the interpretation and enforcement of these laws,
rules and regulations involve uncertainties and can be inconsistent and unpredictable. In
addition, the PRC legal system is based in part on government policies and internal rules, some
of which are not published on a timely basis or at all, and which may have a retroactive effect.
As a result, we may not be aware of our violation of these policies and rules until after the
occurrence of the violation.
Any administrative and court proceedings in China may be protracted, resulting in

substantial costs and diversion of resources and management attention. Since PRC
administrative and court authorities have significant discretion in interpreting and
implementing statutory and contractual terms, it may be more difficult to evaluate the outcome
of administrative and court proceedings and the level of legal protection we enjoy than in more
developed legal systems. These uncertainties may impede our ability to enforce the contracts
we have entered into and could materially and adversely affect our business, financial
condition and results of operations.
– 88 –
RISK FACTORS
In addition, the PRC government has significant oversight and discretion over the conduct
of our operations and may intervene or influence our operations as the government deems
appropriate to further regulatory, political and social goals. The PRC government has recently
published new policies that significantly affected certain industries such as the internet
industries, and we cannot rule out the possibility that it will in the future release further
regulations or policies or take regulatory actions regarding our industry that could adversely
affect our business, financial condition and results of operations. Furthermore, the PRC
government has recently indicated an intent to exert more oversight and control over securities
offerings and other capital markets activities that are conducted overseas and foreign
investment in companies like us. See “Risk Factors — Risks related to our presence in China
— The approval of the CSRC or other PRC government authorities may be required in
connection with the Listing under PRC law, and, if required, we cannot predict whether or for
how long we will be able to obtain such approval.” Any such action, once taken by the PRC
government, could significantly limit or completely hinder our ability to offer or continue to
offer securities to investors and cause the value of such securities to significantly decline or
in extreme cases, become worthless.
The trade war between the U.S. and China, and on a larger scale internationally, may
dampen growth in China and other markets where the majority of our clients reside, and
our activities and results of operations may be negatively impacted.
In the past few years, the United States imposed additional import tariffs on specified
products imported from China. As a result, China has responded by imposing retaliatory tariffs
on goods exported from the United States. Although we are not subject to any of those tariff
measures, the proposed tariffs may adversely affect the economic growth in China and other
markets as well as the financial condition of our clients. With the potential decrease in the
spending powers of our target clients, we cannot guarantee that there will be no negative
impact on our operations. In addition, the current and future actions or escalations by either the
U.S. or China that affect trade relations may cause global economic turmoil and potentially
have a negative impact on our business, financial condition and results of operations, and we
cannot provide any assurance as to whether such actions will occur or the form that they may
take.
Uncertainties exist with respect to the enforcement of Anti-Monopoly Guidelines for

Internet Platforms and how it may impact our business operations.
According to Anti-monopoly Law of the PRC (《中華人民共和國反壟斷法》) (released

on August 30, 2007, last amended on June 24, 2022 and then effective from August 1, 2022),
business operators holding dominant market positions shall not abuse such position to restrict
trading counterparts to transact only with such business operators or only with designated
business operators without a justifiable reason. Where a business operator has violated the
Anti-monopoly Law of the PRC by abusing its dominant market position, the anti-monopoly
enforcement agency shall order the business operator to stop the illegal act and confiscate the
illegal income; a fine of 1% to 10% of the business operator’s revenue from the preceding year
shall be imposed.
– 89 –
RISK FACTORS
In February 2021, the Anti-monopoly Commission of the State Council (國務院反壟斷委

員會) promulgated the Guidelines to Anti-Monopoly in the Field of Internet Platforms (《關
於平台經濟領域的反壟斷指南》), or the Anti-Monopoly Guidelines for Internet Platforms.
The Anti-Monopoly Guidelines for Internet Platforms is consistent with the Anti-Monopoly
Law and prohibits monopoly agreements, abuse of a dominant position and concentration of
undertakings that may have the effect to eliminate or restrict competition in the field of
platform economy. More specifically, the Anti-Monopoly Guidelines for Internet Platforms
outlines certain practices that may, if without justifiable reasons, constitute abuse of a
dominant position, including without limitation, tailored pricing using big data and analytics,
actions or arrangements deemed as exclusivity arrangements, using technological means to
block competitors’ interface, using bundle services to sell services or products, and compulsory
collection of user data. To determine the abuse of dominant market positions in the field of
platform economy, relevant markets shall be firstly defined, and whether business operators
have dominant positions in the relevant markets should be analysed, and then whether abuse
of its dominant market positions is constituted shall be analysed specifically on a case-by-case
basis. In addition, the Anti-Monopoly Guidelines for Internet Platforms expressly provides that
concentration involving VIEs will also be subject to antitrust filing requirements.
On November 15, 2021, the SAMR published the Overseas Anti-monopoly Compliance
Guidelines for Enterprises (《企業境外反壟斷合規指引》 ), which is aimed at helping PRC
companies establish and strengthen overseas anti-monopoly compliance systems to reduce
overseas anti-monopoly compliance risks.
As the forementioned guidelines were newly promulgated, uncertainties exist with respect
to their enforcement. Although we believe we do not engage in any of the foregoing situations,
we cannot assure you that the regulators will take the same view as ours. If certain of our
activities in China were deemed by relevant regulators as violation of the Anti-Monopoly
Guidelines for Internet Platforms, it may result in governmental investigations, fines and/or
other sanctions against us. Furthermore, the amended Anti-monopoly Law increases the fines
for illegal concentration of business operators to no more than ten percent of its last year’s
sales revenue if the concentration of business operators has or may have an effect of excluding
or limiting competitions, or a fine of up to RMB5 million if the concentration of business
operators does not have an effect of excluding or limiting competition. Pursuant to the
amended Anti-monopoly Law, the relevant authorities shall investigate a transaction where
there is any evidence that the concentration has or may have the effect of eliminating or
restricting competitions, even if such concentration does not reach the filing threshold. As of
the Latest Practicable Date, we had not been subject to any administrative penalties, regulatory
actions or inquiries in connection with anti-monopoly.
– 90 –
RISK FACTORS
PRC regulations relating to investments in offshore companies by PRC residents may

subject our PRC-resident beneficial owners or our PRC subsidiaries to liability or
penalties or otherwise limit our PRC subsidiaries’ ability to increase their registered
capital or distribute profits.
In July 2014, SAFE promulgated the Circular on Relevant Issues Concerning Foreign
Exchange Control on Domestic Residents’ Offshore Investment and Financing and Roundtrip
Investment through Special Purpose Vehicles (《關於境內居民通過特殊目的公司境外投融資
及返程投資外匯管理有關問題的通知》) (“SAFE Circular 37”), which replaces the previous
SAFE Circular 75. SAFE Circular 37 requires PRC residents, including PRC individuals and
PRC corporate entities, to register with SAFE or its local branches in connection with certain
direct or indirect offshore investment activities. See “Regulations — Overview of the Laws and
Regulations Relating to Our Presence in China — Regulations on Foreign Exchange —
Regulations on Foreign Exchange Registration of Overseas Investment by PRC Residents.”
SAFE Circular 37 is applicable to our shareholders who are PRC residents and may be
applicable to any offshore acquisitions that we may make in the future.
Under SAFE Circular 37, PRC residents who make, or have prior to the implementation
of SAFE Circular 37 made, direct or indirect investments in offshore special purpose vehicles,
(“SPVs”), are required to register such investments with SAFE or its local branches. In
addition, any PRC resident who is a direct or indirect shareholder of an SPV, is required to
update its registration with the local branch of SAFE with respect to that SPV, to reflect any
material change. Moreover, any subsidiary of such SPV in China is required to urge the PRC
resident shareholders to update their registration with the local branch of SAFE to reflect any
material change. If any PRC resident shareholder of such SPV fails to make the required
registration or to update the registration, the subsidiary of such SPV in China may be
prohibited from distributing its profits or the proceeds from any capital reduction, share
transfer or liquidation to the SPV, and the SPV may also be prohibited from making additional
capital contributions into its subsidiaries in China. In February 2015, SAFE promulgated a
Notice on Further Simplifying and Improving Foreign Exchange Administration Policy on
Direct Investment (《關於進一步簡化和改進直接投資外匯管理政策的通知》) (“SAFE Notice
13”). Under SAFE Notice 13, applications for foreign exchange registration of inbound foreign
direct investments and outbound direct investments, including those required under SAFE
Circular 37, must be filed with qualified banks instead of SAFE. Qualified banks should
examine the applications and accept registrations under the supervision of SAFE. Prior to our
listing on the Nasdaq Global Market, we have used our best efforts to notify PRC residents or
entities who directly or indirectly hold shares in our Cayman Islands holding company and who
are known to us as being PRC residents to complete the foreign exchange registrations.
However, we may not be informed of the identities of all the PRC residents or entities holding
direct or indirect interest in our company, nor can we compel our beneficial owners to comply
with SAFE registration requirements. We cannot assure you that all other shareholders or
beneficial owners of ours who are PRC residents or entities have complied with, and will in
the future make, obtain or update any applicable registrations or approvals required by, SAFE
regulations. Failure by such shareholders or beneficial owners to comply with SAFE
regulations, or failure by us to amend the foreign exchange registrations of our PRC
– 91 –
RISK FACTORS
subsidiaries, could subject us to fines or legal sanctions, restrict our overseas or cross-border
investment activities, limit our PRC subsidiaries’ ability to increase their registered capitals or
to make distributions or pay dividends to us or affect our ownership structure, which could
adversely affect our business and prospects.
Furthermore, as these foreign exchange and outbound investment related regulations are
relatively new and their interpretation and implementation has been constantly evolving, it is
unclear how these regulations, and any future regulation concerning offshore or cross-border
investments and transactions, will be interpreted, amended and implemented by the relevant
government authorities. For example, we may be subject to a more stringent review and
approval process with respect to our foreign exchange activities, such as remittance of
dividends and foreign-currency-denominated borrowings, which may adversely affect our
financial condition and results of operations. We cannot assure you that we have complied or
will be able to comply with all applicable foreign exchange and outbound investment related
regulations. In addition, if we decide to acquire a PRC domestic company, we cannot assure
you that we or the owners of such company, as the case may be, will be able to obtain the
necessary approvals or complete the necessary filings and registrations required by the foreign
exchange regulations. This may restrict our ability to implement our acquisition strategy and
could adversely affect our business and prospects.
Any failure to comply with PRC regulations regarding our employee share incentive plans
may subject the PRC plan participants or us to fines and other legal or administrative
sanctions.
Under the applicable regulations and SAFE rules, PRC resident who participate in an
employee stock ownership plan or a stock option plan in an overseas publicly listed company
are required to register with SAFE and complete certain other procedures. In February 2012,
SAFE promulgated the Notices on Issues concerning the Foreign Exchange Administration for
Domestic Individuals Participating in Stock Incentive Plans of Overseas Publicly-Listed
Companies (《關於境內個人參與境外上市公司股權激勵計劃外匯管理有關問題的通知》), or
the Stock Option Rules. Pursuant to the Stock Option Rules, if a PRC resident participates in
any stock incentive plan of an overseas publicly-listed company, a qualified PRC domestic
agent must, among other things, file on behalf of such participant an application with SAFE to
conduct the SAFE registration with respect to such stock incentive plan and obtain approval for
an annual allowance with respect to the purchase of foreign exchange in connection with the
exercise or sale of stock options or stock such participant holds. Such participating PRC
residents’ foreign exchange income received from the sale of stock and dividends distributed
by the overseas publicly-listed company must be fully remitted into a PRC collective foreign
currency account opened and managed by the PRC agent before distribution to such
participants. We and our PRC resident employees who have been granted stock options or other
share-based incentives of our Company are subject to the Stock Option Rules since our
Company becomes an overseas listed company, and we currently withhold income tax from our
PRC resident employees in connection with their exercise of options. If we or our PRC resident
participants fail to comply with these regulations, or if our PRC resident participants fail to pay
or we fail to withhold their income taxes according to relevant laws, rules and regulations, we
– 92 –
RISK FACTORS
and/or our PRC resident participants may be subject to fines and legal sanctions and may also
limit our ability to contribute additional capital into our PRC subsidiaries and limit our PRC
subsidiaries’ ability to distribute dividends to us. We also face regulatory uncertainties that
could restrict our ability to adopt additional incentive plans for our directors, executive officers
and employees under PRC law. See “Regulations — Overview of the Laws and Regulations
Relating to Our Presence in China — Regulations on Foreign Exchange — Regulations on
Employee Share Incentive Plans of Overseas Publicly-Listed Company.”
In addition, on October 12, 2021, the SAT has issued the Notice of the State
Administration of Taxation on Several Measures for Deepening the Reform of “Streamlining
Administration, Instituting Decentralization, Improving Regulation and Optimizing Services”
in the Taxation Field to Cultivate and Stimulate the Vitality of Market Players (《國家稅務總
局關於進一步深化稅務領域“放管服”改革培育和激發市場主體活力若干措施的通知》), or the
SAT Notice 69. The SAT Notice 69 requires domestic enterprises to report their share incentive
plans to the tax authorities in charge, if they give the equities of relevant overseas enterprises
to their employees. Under the SAT Notice 69, our employees working in China who exercise
share incentive awards will be subject to PRC individual income tax. Our PRC subsidiary has
the obligation to make filings related to employee share incentive awards with relevant tax
authorities and to withhold individual income taxes of those employees who exercise their
share incentive awards. If our employees fail to pay or we fail to withhold their income taxes
according to relevant laws and regulations, we may face sanctions imposed by the tax
authorities or other PRC governmental authorities.
PRC regulation of loans to and direct investment in PRC entities by offshore holding
companies and governmental control of currency conversion may delay or prevent us
from using the proceeds of our securities offerings to make loans or additional capital
contributions to our PRC subsidiaries and our Consolidated Affiliated Entities.
Futu Holdings Limited is an offshore holding company with a part of our operations
conducted in China. We may make loans to our PRC subsidiaries and Consolidated Affiliated
Entities subject to the approval, registration, and filing with governmental authorities and
limitation of amount, or we may make additional capital contributions to our wholly
foreign-owned subsidiaries in China. Any loans provided by us to our PRC subsidiaries and
Consolidated Affiliated Entities are subject to PRC regulations and foreign exchange loan
registrations. Such loans to any of our PRC subsidiaries and Consolidated Affiliated Entities
cannot exceed a statutory limit and must be filed with SAFE through the online filing system
of SAFE pursuant to the applicable PRC regulations. Any loan to be provided by us to our PRC
subsidiaries and Consolidated Affiliated Entities with a term of one year or more must be
recorded and registered with the National Development and Reform Commission. In addition,
a foreign invested enterprise shall use its capital pursuant to the principle of authenticity and
self-use within its business scope. The capital of a foreign invested enterprise shall not be used
for the following purposes: (i) directly or indirectly used for payment beyond the business
scope of the enterprises or the payment prohibited by relevant laws and regulations; (ii)
directly or indirectly used for investment in securities or investments other than banks’
principal-secured products unless otherwise provided by relevant laws and regulations; (iii) the
– 93 –
RISK FACTORS
granting of loans to non-affiliated enterprises, except where it is expressly permitted in the

business license; and (iv) constructing or paying the expenses related to the purchase of real
estate that is not for self-use (except for the foreign-invested real estate enterprises).
In light of the various requirements imposed by PRC regulations on loans to and direct
investment in PRC entities by offshore holding companies, we cannot assure you that we will
be able to complete the necessary government registrations or obtain the necessary government
approvals or filings on a timely basis, if at all, with respect to future loans by us to our PRC
subsidiary or Consolidated Affiliated Entity or with respect to future capital contributions by
us to our PRC subsidiary. If we fail to complete such registrations or obtain such approvals,
our ability to use the proceeds from our securities offerings to capitalize or otherwise fund our
PRC operations may be negatively affected, which could adversely affect our liquidity and our
ability to fund and expand our business.
We may be treated as a resident enterprise for PRC tax purposes under the PRC
Enterprise Income Tax Law, and we may therefore be subject to PRC income tax on our
global income.
Under the PRC Enterprise Income Tax Law (《中華人民共和國企業所得稅法》) and its
implementation rules, an enterprise established outside the PRC with “de facto management
body” within the PRC is considered a “resident enterprise” and will be subject to the enterprise
income tax on its global income at the rate of 25%. The implementation rules define the term
“de facto management body” as the body that exercises full and substantial control and overall
management over the business, productions, personnel, accounts and properties of an
enterprise. The Notice Regarding the Determination of Chinese-Controlled Offshore-
Incorporated Enterprises as PRC Tax Resident Enterprises on the basis of de facto management
bodies (《關於境外註冊中資控股企業依據實際管理機構標準認定為居民企業有關問題的通
知》), or the SAT Circular 82, issued by SAT on April 22, 2009, and amended on December
29, 2017, provides certain specific criteria for determining whether the “de facto management
body” of a PRC-controlled enterprise that is incorporated offshore is located in China.
Although this circular only applies to offshore enterprises controlled by PRC enterprises or
PRC enterprise groups, not those controlled by PRC individuals or foreigners, the criteria set
forth in the circular may reflect the SAT’s general position on how the “de facto management
body” text should be applied in determining the tax resident status of all offshore enterprises.
According to SAT Circular 82, an offshore incorporated enterprise controlled by a PRC
enterprise or a PRC enterprise group will be regarded as a PRC tax resident by virtue of having
its “de facto management body” in China and will be subject to PRC enterprise income tax on
its global income only if all of the following conditions are met: (i) the primary location of the
day-to-day operational management is in the PRC; (ii) decisions relating to the enterprise’s
financial and human resource matters are made or are subject to approval by organizations or
personnel in the PRC; (iii) the enterprise’s primary assets, accounting books and records,
company seals, and board and shareholder resolutions, are located or maintained in the PRC;
and (iv) at least 50% of board members with voting rights or senior executives habitually reside
in the PRC.
– 94 –
RISK FACTORS
We believe that our Cayman Islands holding company, Futu Holdings Limited, is not a
PRC resident enterprise for PRC tax purposes. However, the tax resident status of an enterprise
is subject to determination by the PRC tax authorities and uncertainties remain with respect to
the interpretation of the term “de facto management body.” If the PRC tax authorities
determine that our Cayman Islands holding company is a PRC resident enterprise for enterprise
income tax purposes, non-resident enterprise shareholders, including the ADS holders, may be
subject to PRC tax at a rate of 10% on gains realized on the sale or other disposition of ADSs
or Class A Ordinary Shares, if such income is treated as sourced from within the PRC. Any
PRC tax liability may be reduced by an applicable tax treaty. However, it is unclear whether
non-PRC shareholders of our Company would be able to claim the benefits of any tax treaties
between their country of tax residence and the PRC in the event that we are treated as a PRC
resident enterprise. Any such tax may reduce the returns on your investment in the ADSs or
Class A Ordinary Shares.
In addition to the uncertainties as to the application of the “resident enterprise”

classification, we cannot assure you that the PRC government will not amend or revise the
taxation laws, rules and regulations to impose stricter tax requirements or higher tax rates. Any
of such changes could materially and adversely affect our financial condition and results of
operations.
Dividends payable to our foreign investors and gains on the sale of the ADSs or Class A
Ordinary Shares by our foreign investors may become subject to PRC tax.
Under the Enterprise Income Tax Law and its implementation regulations issued by the
State Council, a 10% PRC withholding tax is applicable to dividends payable to investors that
are non-resident enterprises, which do not have an establishment or place of business in the
PRC or which have such establishment or place of business but the dividends are not
effectively connected with such establishment or place of business, to the extent such dividends
are derived from sources within the PRC. Similarly, any gain realized on the transfer of ADSs
or Class A Ordinary Shares by such investors is also subject to PRC tax at a current rate of
10%, subject to any reduction or exemption set forth in applicable tax treaties or under
applicable tax arrangements between jurisdictions, if such gain is regarded as income derived
from sources within the PRC. If we are deemed a PRC resident enterprise, dividends paid on
our Class A Ordinary Shares or ADSs, and any gain realized from the transfer of our Class A
Ordinary Shares or ADSs, would be treated as income derived from sources within the PRC and
would as a result be subject to PRC taxation. Furthermore, if we are deemed a PRC resident
enterprise, dividends payable to individual investors who are non-PRC residents and any gain
realized on the transfer of ADSs or Class A Ordinary Shares by such investors may be subject
to PRC tax at a current rate of 20%, subject to any reduction or exemption set forth in
applicable tax treaties or under applicable tax arrangements between jurisdictions. If we or any
of our subsidiaries established outside China are considered a PRC resident enterprise, it is
unclear whether holders of the ADSs or Class A Ordinary Shares would be able to claim the
benefit of income tax treaties or agreements entered into between China and other countries or
areas. If dividends payable to our non-PRC investors, or gains from the transfer of the ADSs
– 95 –
RISK FACTORS
or Class A Ordinary Shares by such investors, are deemed as income derived from sources
within the PRC and thus are subject to PRC tax, the value of your investment in the ADSs or
Class A Ordinary Shares may decline significantly.
We and our shareholders face uncertainties with respect to indirect transfers of equity
interests in PRC resident enterprises or other assets attributed to a Chinese establishment
of a non-Chinese company, or immovable properties located in China owned by non-
Chinese companies.
In February 2015, SAT issued a Public Notice Regarding Certain Corporate Income Tax
Matters on Indirect Transfer of Properties by Non-Tax Resident Enterprises (《關於非居民企
業間接轉讓財產企業所得稅若干問題的公告》) (“SAT Public Notice 7”). SAT Public Notice 7
extends its tax jurisdiction to transactions involving transfer of other taxable assets through
offshore transfer of a foreign intermediate holding company. In addition, SAT Public Notice 7
provides clear criteria for assessment of reasonable commercial purposes and has introduced
safe harbors for internal group restructurings and the purchase and sale of equity through a
public securities market. SAT Public Notice 7 also brings challenges to both foreign transferor
and transferee (or other person who is obligated to pay for the transfer) of taxable assets. In
October 2017, SAT issued the Announcement of the State Administration of Taxation on Issues
Concerning the Withholding of Non-resident Enterprise Income Tax at Source (《關於非居民
企業所得稅源泉扣繳有關問題的公告》) (“SAT Bulletin 37”), which came into effect on
December 1, 2017. The SAT Bulletin 37 further clarifies the practice and procedure of the
withholding of non-resident enterprise income tax. Where a non-resident enterprise transfers
taxable assets indirectly by disposing of the equity interests of an overseas holding company,
which is an indirect transfer, the non-resident enterprise as either transferor or transferee, or
the PRC entity that directly owns the taxable assets, may report such Indirect Transfer to the
relevant tax authority. Using a “substance over form” principle, the PRC tax authority may
disregard the existence of the overseas holding company if it lacks a reasonable commercial
purpose and was established for the purpose of reducing, avoiding or deferring PRC tax. As a
result, gains derived from such indirect transfer other than transfer of shares or ADSs acquired
and sold on public markets may be subject to PRC enterprise income tax, and the transferee or
other person who is obligated to pay for the transfer is obligated to withhold the applicable
taxes, currently at a rate of 10%. Both the transferor and the transferee may be subject to
penalties under PRC tax laws if the transferee fails to withhold the taxes and the transferor fails
to pay the taxes.
We face uncertainties as to the reporting and other implications of certain past and future
transactions that involve PRC taxable assets, such as offshore restructuring, sale of the shares
in our offshore subsidiaries and investments. Our company may be subject to filing obligations
or taxed if our company is transferor in such transactions, and may be subject to withholding
obligations if our company is transferee in such transactions, under SAT Public Notice 7 or
SAT Bulletin 37, or both.
– 96 –
RISK FACTORS
We are subject to PRC restrictions on currency exchange.
Some of our expenses and a limited portion of our revenues are denominated in Renminbi.
The Renminbi is currently convertible under the “current account,” which includes dividends,
trade and service-related foreign exchange transactions, but not under the “capital account,”
which includes foreign direct investment and loans, including loans we may secure from our
onshore subsidiaries or Consolidated Affiliated Entities. Certain of our PRC subsidiaries may
purchase foreign currency for settlement of “current account transactions,” including payment
of dividends to us, without the approval of the SAFE by complying with certain procedural
requirements. However, the relevant PRC governmental authorities may limit or eliminate our
ability to purchase foreign currencies in the future for current account transactions. Foreign
exchange transactions under the capital account remain subject to limitations and require
approvals from, or registration with, the SAFE and other relevant PRC governmental
authorities. Since a part of our future net income and cash flow will be denominated in
Renminbi, any existing and future restrictions on currency exchange may limit our ability to
utilize cash generated in Renminbi to fund our business activities outside of the PRC or pay
dividends in foreign currencies to our shareholders, including holders of our Class A Ordinary
Shares or ADSs, and may limit our ability to obtain foreign currency through debt or equity
financing for our subsidiaries and Consolidated Affiliated Entities.
In addition, as we do not provide cross-border currency conversion services related to

Renminbi to our Chinese residents or institutions, we do not require our clients to submit
evidence of approval or registration from relevant authorities with respect to the foreign
currency used for offshore investments. However, since the PRC authorities and the
commercial banks designated by the SAFE to conduct foreign exchange services have
significant amount of discretion in interpreting, implementing and enforcing the relevant
foreign exchange rules and regulations, and for many other factors that are beyond our control,
we may be subject to further regulatory requirements, including but not limited to
implementing additional and burdensome measures to monitor the source and use of funds in
foreign currency in the accounts of our clients, or verify evidence of approval from relevant
authorities.
China’s M&A Rules and certain other PRC regulations establish complex procedures for
certain acquisitions of PRC companies by foreign investors, which could make it more
difficult for us to pursue growth through acquisitions in China.
A number of PRC laws and regulations have established procedures and requirements that
could make merger and acquisition activities in China by foreign investors more time
consuming and complex. In addition to the Anti-monopoly Law itself, these include the
Regulations on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors (《關
於外國投資者併購境內企業的規定》) the (“M&A Rules”), adopted by six PRC regulatory
agencies in 2006 and amended in 2009, and the Rules of the Ministry of Commerce on
Implementation of Security Review System of Mergers and Acquisitions of Domestic
Enterprises by Foreign Investors the (“Security Review Rules”) (《商務部實施外國投資者併
購境內企業安全審查制度的規定》), promulgated in 2011. These laws and regulations impose
– 97 –
RISK FACTORS
requirements in some instances that the Ministry of Commerce be notified in advance of any
change-of-control transaction in which a foreign investor takes control of a PRC domestic
enterprise. In addition, the Anti-Monopoly Law requires that the anti-monopoly enforcement
agency be notified in advance of any concentration of undertaking if certain thresholds are
triggered. On February 7, 2021, the Anti-Monopoly Committee of the State Council (國務院
反壟斷委員會) published the Anti-Monopoly Guidelines for the Internet Platform Economy
Sector (《關於平台經濟領域的反壟斷指南》), which stipulates that any concentration of
undertakings involving variable interest entities is subject to anti-monopoly review. Moreover,
the Security Review Rules specify that mergers and acquisitions by foreign investors that raise
“national defense and security” concerns and mergers and acquisitions through which foreign
investors may acquire de facto control over domestic enterprises that raise “national security”
concerns are subject to strict review by the Ministry of Commerce, and prohibit any attempt
to bypass a security review, including by structuring the transaction through a proxy or
contractual control arrangement. On December 19, 2020, the NDRC and the Ministry of
Commerce jointly issued the Measures for the Security Review for Foreign Investment (《外
商投資安全審查辦法》), which took effect on January 18, 2021. These measures set forth the
provisions concerning the security review mechanism on foreign investment, including, among
others, the types of investments subject to review, and the review scopes and procedures. In the
future, we may grow our business by acquiring complementary businesses. Complying with the
requirements of the relevant regulations to complete such transactions could be time
consuming, and any required approval processes, including approval from the Ministry of
Commerce and other PRC government authorities, may delay or inhibit our ability to complete
such transactions, which could affect our ability to expand our business or maintain our market
share.
The approval of the CSRC or other PRC government authorities may be required in
connection with the Listing under PRC law, and, if required, we cannot predict whether
or for how long we will be able to obtain such approval.
The M&A Rules requires an overseas special purpose vehicle formed for listing purposes
through acquisitions of PRC domestic companies and controlled by PRC persons or entities to
obtain the approval of the CSRC prior to the listing and trading of such special purpose
vehicle’s securities on an overseas stock exchange. The interpretation and application of the
regulations remain unclear, and the Listing may ultimately require approval of the CSRC. If the
CSRC approval is required, it is uncertain whether we can or how long it will take us to obtain
the approval and any failure to obtain or delay in obtaining the CSRC approval for the Listing
would subject us to sanctions imposed by the CSRC or other PRC regulatory authorities, which
could include fines and penalties on our operations in China, restrictions or limitations on our
ability to pay dividends outside of China, and other forms of sanctions that may materially and
adversely affect our business, financial condition, and results of operations.
– 98 –
RISK FACTORS
Recently, the relevant PRC government authorities issued the Opinions on Strictly
Cracking Down Illegal Securities Activities in Accordance with the Law (《關於依法從嚴打擊
證券違法活動的意見》), or the Opinions, which called for the enhanced administration and
supervision of overseas-listed China-based companies (中概股公司), proposed to revise the
relevant regulation governing the overseas issuance and listing of shares by such companies
and clarified the responsibilities of competent domestic industry regulators and government
authorities. As of the Latest Practicable Date, due to the lack of further clarifications or
detailed rules and regulations, the exact scope of China-based companies had yet been
promulgated, and there are still uncertainties regarding the interpretation and implementation
of the Opinions, including on China-based companies with a VIE structure. In addition, we
cannot guarantee that new rules or regulations promulgated in the future pursuant to the
Opinions will not impose any additional requirement on us. If it is determined that we are
subject to any CSRC approval, filing, other governmental authorisation or requirements for this
Listing or future capital raising activities, we may fail to obtain such approval or meet such
requirements in a timely manner or at all, or completion could be rescinded. Any failure to
obtain or delay in obtaining such approval or completing such procedures for this Listing or
future capital raising activities, or a rescission of any such approval obtained by us, would
subject us to sanctions by the CSRC or other PRC regulatory authorities. These regulatory
authorities may impose fines and penalties on our operations in the PRC, limit our ability to
pay dividends outside of the PRC, limit our operating privileges in the PRC, delay or restrict
future capital raising activities into the PRC, or take other actions that could materially and
adversely affect our business, financial condition, results of operations, and prospects, as well
as the proceeds of our shares.
On December 24, 2021, the CSRC released the Provisions of the State Council on
the Administration of Overseas Securities Offering and Listing by Domestic Companies (Draft
for Comments) (《國務院關於境內企業境外發行證券和上市的管理規定(草案徵求意見稿)》)
(the “Draft Administration Provisions”) and the Administrative Measures for the Filing
of Overseas Securities Offering and Listing by Domestic Companies (Draft for Comments)
(《境內企業境外發行證券和上市備案管理辦法(徵求意見稿)》) (the “Draft Filing
Measures”), both of which had a comment period that expired on January 23, 2022. The Draft
Administrative Provisions and the Draft Filing Measures regulate the system, filing
management and other related rules with respect to direct or indirect overseas issuance of listed
and traded securities by “domestic enterprises.” Assuming the Draft Administration
Regulations and the Draft Filing Measures become effective in their current forms, any of our
offerings in the future may be subject to the filing with the CSRC. If we cannot complete such
filing in a timely manner, our offerings may be materially effected.
On April 2, 2022, the CSRC released the Provisions on Strengthening the Confidentiality
and Archives Administration Related to the Overseas Securities Offering and Listing by
Domestic Enterprises (Drafts for Comments) (《關於加強境內企業境外發行證券和上市相關
保密和檔案管理工作的規定(徵求意見稿)》) (the “Confidentiality and Archives
Administration Provisions”), which were open for public comments until April 17, 2022. The
Confidentiality and Archives Administration Provisions require, among others, that PRC
domestic enterprises that seek to offer and list securities in overseas markets, either directly or
– 99 –
RISK FACTORS
indirectly, to complete approval and filing procedures to competent authorities, if such PRC
domestic enterprises or its overseas listing entities provide or publicly disclose documents or
materials involving state secrets and work secrets of PRC government agencies to relevant
securities companies, securities service institutions, overseas regulatory agencies and other
entities and individuals. It further stipulates that providing or publicly disclosing documents
and materials which may adversely affect national security or public interests, and accounting
files or copies of important preservation value to the state and society shall be subject to
corresponding procedures in accordance with relevant laws and regulations. As of the Latest
Practicable Date, the Confidentiality and Archives Administration Provisions had been released
for public comments only and the final version and effective date of such regulations are
subject to change with substantial uncertainty. If the Confidentiality and Archives
Administration Provisions become effective in its current form before the Listing is completed,
we may be required to complete relevant approval or filing procedures, or expend additional
resources to comply with the Confidentiality and Archives Administration Provisions if we are
recognized to fall within any of the foregoing circumstances.
The CSRC or other PRC regulatory authorities also may take actions requiring us, or
making it advisable for us, to halt the Listing or future capital raising activities before
settlement and delivery hereby. Consequently, if you engage in market trading or other
activities in anticipation of and prior to settlement and delivery, you do so at the risk that
settlement and delivery may not occur. In addition, if the CSRC or other regulatory authorities
later promulgate new rules or explanations requiring that we obtain their approvals or
accomplish the required filing or other regulatory procedures for the Listing or future capital
raising activities, we may be unable to obtain a waiver of such approval requirements, if and
when procedures are established to obtain such a waiver. Any uncertainties or negative
publicity regarding such approval, filing or other requirements could materially and adversely
affect our business, prospects, financial condition, reputation, and future capital raising
activities.
Discontinuation of any of the preferential tax treatments and government subsidies or

imposition of any additional taxes and surcharges could adversely affect our financial
Our PRC subsidiaries currently benefit from a number of preferential tax treatments. For
example, Shenzhen Futu, is entitled to enjoy, a 15% preferential enterprise income tax from
December 2020 as it has been qualified as a “High New Technology Enterprise” and an
“Advanced Technology Service Enterprise” under the PRC Enterprise Income Tax Law (《中
華人民共和國企業所得稅法》) and related regulations. Shenzhen Futu as assessed and
approved by the relevant government authorities as a Software Enterprise under the PRC
Enterprise Income Tax Law and relevant regulations, was entitled to an exemption from
enterprise income tax for the first two years, counting from the first year Shenzhen Futu has
made a profit. Futu Network Technology (Shenzhen) Co., Ltd. (富途網絡科技(深圳)有限公司)
is entitled to enjoy, a 15% preferential income tax from 2019 as it has been qualified as an
“Advanced Technology Service Enterprise” under the PRC Enterprise Income Tax Law (《中
華人民共和國企業所得稅法》) and related regulations. The discontinuation of any of the
– 100 –
RISK FACTORS
preferential income tax treatment that we currently enjoy could have a material and adverse
effect on our result of operations and financial condition. We cannot assure you that we will
be able to maintain or lower our current effective tax rate in the future.
In addition, our PRC subsidiaries have received various financial subsidies from PRC
local government authorities. The financial subsidies result from discretionary incentives and
policies adopted by PRC local government authorities. Local governments may decide to
change or discontinue such financial subsidies at any time. The discontinuation of such
financial subsidies or imposition of any additional taxes could adversely affect our financial
We may not be able to obtain certain benefits under relevant tax treaty on dividends paid
by our PRC subsidiaries to us through our Hong Kong subsidiary.
Futu Holdings Limited is a holding company incorporated under the laws of the Cayman
Islands and as such rely on dividends and other distributions on equity from our PRC
subsidiaries to satisfy part of our liquidity requirements. Pursuant to the PRC Enterprise
Income Tax Law (《中華人民共和國企業所得稅法》), a withholding tax rate of 10% currently
applies to dividends paid by a PRC “resident enterprise” to a foreign enterprise investor, unless
any such foreign investor’s jurisdiction of incorporation has a tax treaty with China that
provides for preferential tax treatment. Pursuant to the Arrangement between the Mainland
China and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation
and Tax Evasion on Income (《內地和香港特別行政區關於對所得避免雙重徵稅和防止偷漏稅
的安排》), such withholding tax rate may be lowered to 5% if a Hong Kong resident enterprise
owns no less than 25% of a PRC enterprise. Furthermore, the Administrative Measures for
Non-Resident Taxpayers to Enjoy Treatments under Treaties (《非居民納稅人享受協定待遇管
理辦法》), which became effective in January, 2020, require non-resident enterprises to
determine whether they are qualified to enjoy the preferential tax treatment under the tax
treaties and file relevant report and materials with the tax authorities. In addition, based on the
Notice on Issues concerning Beneficial Owner in Tax Treaties (《關於稅收協定中“受益所有
人”有關問題的公告》), or Circular 9, issued on February 3, 2018 by the SAT, which became
effective from April 1, 2018, when determining the applicant’s status of the “beneficial owner”
regarding tax treatments in connection with dividends, interests or royalties in the tax treaties,
several factors, including without limitation, whether the applicant is obligated to pay more
than 50% of the applicant’s income in twelve months to residents in third country or region,
whether the business operated by the applicant constitutes the actual business activities, and
whether the counterparty country or region to the tax treaties does not levy any tax or grant tax
exemption on relevant incomes or levy tax at an extremely low rate, will be taken into account,
and it will be analyzed according to the actual circumstances of the specific cases. There are
also other conditions for enjoying the reduced withholding tax rate according to other relevant
tax rules and regulations. See “Financial Information — Taxation — PRC.” As of June 30,
2022, the total retained earnings of our subsidiaries and Consolidated Affiliated Entities
located in China accounted for a relatively small portion of our Group’s total retained earnings
and we currently do not have any plan to make offshore distribution. We intend to re-invest all
earnings, if any, generated from our PRC subsidiaries for the operation and expansion of our
– 101 –
RISK FACTORS
business in China. Our determination regarding our qualification to enjoy the preferential tax
treatment could be challenged by the relevant tax authority and we may not be able to complete
the necessary filings with the relevant tax authority and enjoy the preferential withholding tax
rate of 5% under the arrangement with respect to dividends to be paid by our PRC subsidiaries
to our Hong Kong subsidiary.
The audit report included in SEC filings had historically been prepared by an auditor who
was not inspected by the Public Company Accounting Oversight Board and, as such, our
investors have been deprived of the benefits of such inspection.
Our independent registered public accounting firm that issued the audit report included in
SEC filings as auditors of companies that are traded publicly in the United States and a firm
registered with the U.S. Public Company Accounting Oversight Board (“PCAOB”), is required
by the laws of the United States to undergo regular inspections by the PCAOB to assess its
compliance with the laws of the United States and professional standards. Our auditor is
located in China, a jurisdiction where the PCAOB was unable to conduct inspections and
investigations before 2022. Inspections of other firms that the PCAOB has conducted outside
China have identified deficiencies in those firms’ audit procedures and quality control
procedures, which may be addressed as part of the inspection process to improve future audit
quality. We and investors in our securities are deprived of the benefits of such PCAOB
inspections. On December 15, 2022, the PCAOB announced that it was able to inspect and
investigate PCAOB-registered public accounting firms headquartered in mainland China and
Hong Kong completely in 2022. However, the inability of the PCAOB to conduct inspections
of auditors in China in the past made it more difficult to evaluate the effectiveness of our
independent registered public accounting firm’s audit procedures or quality control procedures
as compared to auditors outside of China that have been subject to the PCAOB inspections,
which could cause investors and potential investors in our securities to lose confidence in our
audit procedures and reported financial information and the quality of our financial statements.
The ADSs could be delisted from the Nasdaq Global Market and prohibited from trading
“over the counter” if the Public Company Accounting Oversight Board is unable to
inspect auditors located in China. The delisting of the ADSs from the Nasdaq Global
Market and inability to trade, or the threat thereof, may materially and adversely affect
the value of your investment.
On December 18, 2020, the Holding Foreign Companies Accountable Act (“HFCAA”),
was enacted. Under the HFCAA, the SEC will prohibit our securities from being listed on U.S.
securities exchanges or traded “over-the-counter” if we have filed audit reports issued by a
foreign accounting firm that cannot be inspected by the PCAOB for three consecutive years,
beginning in 2021 or any year thereafter.
– 102 –
RISK FACTORS
On December 2, 2021, the SEC adopted final amendments to its rules implementing the
HFCAA, or the Final Amendments. The Final Amendments include requirements to disclose
information, including the auditor name and location, the percentage of shares of the issuer
owned by governmental entities, whether governmental entities in the applicable foreign
jurisdiction with respect to the auditor has a controlling financial interest with respect to the
issuer, the name of each official of the Chinese Communist Party who is a member of the board
of the issuer, and whether the articles of incorporation of the issuer contains any charter of the
Chinese Communist Party. The Final Amendments also establish procedures the SEC will
follow in identifying issuers and prohibiting trading by certain issuers under the HFCAA.
According to the Final Amendments, the SEC will identify a Commission-Identified Issuer if
the issuer has filed an annual report containing an audit report issued by a registered public
accounting firm that the PCAOB has determined it is unable to inspect or investigate
completely, and will then impose a trading prohibition on such issuer for three consecutive
years. A Commission-Identified Issuer will be required to comply with the submission and
disclosure requirements in the annual report for each year in which it was identified. If a
registrant is identified as a Commission-Identified Issuer based on its annual report for the
fiscal year ended December 31, 2021, the registrant will be required to comply with the
submission or disclosure requirements in its annual report filing covering the fiscal year ended
December 31, 2022. On December 16, 2021, the PCAOB issued a report to notify the SEC of
its determination that the PCAOB was unable to inspect or investigate completely registered
public accounting firms headquartered in the Mainland China and Hong Kong, and our auditor
was subject to this determination. In April 2022, the SEC conclusively listed us as a
Commission-Identified Issuer under the HFCAA following the filing of our annual report on
Form 20-F for the fiscal year ended December 31, 2021. On December 15, 2022, the PCAOB
announced that it was able to inspect and investigate PCAOB-registered public accounting
firms headquartered in mainland China and Hong Kong completely in 2022. The PCAOB
vacated its prior determination that the PCAOB was unable to inspect or investigate completely
registered public accounting firms headquartered in mainland China and Hong Kong. For this
reason, we do not expect to be identified as a Commission-Identified Issuer following the filing
of our annual report for the fiscal year ending December 31, 2022. In accordance with the
HFCAA, however, our securities will be prohibited from being traded on a national securities
exchange or in the over-the-counter trading market in the United States if the PCAOB is unable
to inspect or completely investigate PCAOB-registered public accounting firms headquartered
in China for three consecutive years in the future, or two consecutive years if proposed changes
to the law, or the Accelerating Holding Foreign Companies Accountable Act, are enacted. In
the event of such prohibition, the Nasdaq may determine to delist our securities.
– 103 –
RISK FACTORS
The HFCAA or other efforts to increase U.S. regulatory access to audit information could
cause investor uncertainty for affected issuers, including us, and the market price of the ADSs
could be adversely affected. On June 22, 2021, the U.S. Senate passed a bill which would
reduce the number of consecutive non-inspection years required for triggering the prohibitions
under the HFCAA from three years to two. On February 4, 2022, the U.S. House of
Representatives passed a bill which contained, among other things, an identical provision. On
December 20, 2022, the Chair of the U.S. House Appropriations Committee joined the Chair
of the U.S. Senate Appropriations Committee in releasing proposed legislation entitled
“Consolidated Appropriations Act, 2023”, which also contains such provision. This proposed
legislation, a product of bipartisan negotiations, is expected to be considered for approval first
in the U.S. Senate and then in the U.S. House of Representatives on or before December 23,
2022. If this proposed legislation is approved by the U.S. Congress and signed into law by
President Biden in its current form, and the number of consecutive non-inspection years
required from triggering the prohibitions under the HFCAA is reduced from three years to two,
then our shares and the ADSs could be prohibited from trading in the United States in a shorter
period in the event that we become identified as a Commission-Identified Issuer.
If our shares and the ADSs are prohibited from trading in the United States, such a
prohibition would substantially impair the ability of our investors to sell or purchase the ADSs
when they wish to do so, and the risk and uncertainty associated with delisting would have a
negative impact on the price of our Class A ordinary shares or ADSs. Also, such a prohibition
would significantly affect our ability to raise capital on terms acceptable to us, or at all, which
would have a material adverse impact on our business, financial condition, and prospects.
It may be difficult for overseas authorities to conduct investigations or collect evidence

within China.
Shareholder claims or regulatory investigations that are common in the United States
generally are difficult to pursue as a matter of law or practicality in China. For example, in
China, there are significant legal and other obstacles to providing information needed for
regulatory investigations or litigations initiated outside China. Although the authorities in
China may establish a regulatory cooperation mechanism with the securities regulatory
authorities of another country or region to implement cross-border supervision and
administration, such cooperation with the securities regulatory authorities in the Unities States
may not be efficient in the absence of mutual and practical cooperation mechanism.
Furthermore, according to Article 177 of the PRC Securities Law (《中華人民共和國證券法》)
(“Article 177”), which became effective in March 2020, no overseas authorities, including the
SEC, the PCAOB, and the U.S. Department of Justice, can directly conduct investigation or
evidence collection activities within the PRC and no entity or individual in China may provide
documents and information relating to securities business activities to overseas authorities
without PRC government approval. The Confidentiality and Archives Administration
Provisions also emphasize that the investigation and evidence collection in relation to the
oversea securities offering and listing by the domestic companies by the oversea authorities
shall be conducted through the cross-border cooperation mechanism for supervision and
– 104 –
RISK FACTORS
administration. While detailed interpretation of or implementation rules under Article 177 are
yet to be promulgated, and the Confidentiality and Archives Administration Provisions are only
in the draft form for public comments, the inability for overseas authorities to directly conduct
investigation or evidence collection activities within China may further increase difficulties
faced by you in protecting your interests.
Proceedings instituted by the SEC against the “big four” PRC-based accounting firms,
including our independent registered public accounting firm, could result in financial
statements being determined to not be in compliance with the requirements of the
Exchange Act.
Starting in 2011 the “big four” China-based accounting firms, including our independent
registered public accounting firm, were affected by a conflict between U.S. and Chinese law.
Specifically, for certain U.S.-listed companies operating and audited in China, the SEC and the
PCAOB sought to obtain from the Chinese firms access to their audit work papers and related
documents. The firms were, however, advised and directed that under Chinese law, they could
not respond directly to the U.S. regulators on those requests, and that requests by foreign
regulators for access to such papers in China had to be channeled through the CSRC.
In late 2012, this impasse led the SEC to commence administrative proceedings under
Rule 102(e) of its Rules of Practice and also under the Sarbanes-Oxley Act of 2002 against the
Chinese accounting firms, including our independent registered public accounting firm. A first
instance trial of the proceedings in July 2013 in the SEC’s internal administrative court resulted
in an adverse judgment against the firms. The administrative law judge proposed penalties on
the firms including a temporary suspension of their right to practice before the SEC, although
that proposed penalty did not take effect pending review by the Commissioners of the SEC. On
February 6, 2015, before a review by the Commissioner had taken place, the firms reached a
settlement with the SEC. Under the settlement, the SEC accepted that future requests by the
SEC for the production of documents will normally be made to the CSRC. The firms were to
receive matching Section 106 requests, and are required to abide by a detailed set of procedures
with respect to such requests, which in substance require them to facilitate production via the
CSRC. If they failed to meet specified criteria, during a period of four years starting from the
settlement date, the SEC retained authority to impose a variety of additional remedial measures
on the firms depending on the nature of the failure. Under the terms of the settlement, the
underlying proceeding against the four China-based accounting firms was deemed dismissed
with prejudice four years after entry of the settlement. The four-year mark occurred on
February 6, 2019. We cannot predict if the SEC will further challenge the four China-based
accounting firms’ compliance with U.S. law in connection with U.S. regulatory requests for
audit work papers or if the results of such a challenge would result in the SEC imposing
penalties such as suspensions. If additional remedial measures are imposed on the “big four”
China-based accounting firms, including our independent registered public accounting firm, we
could be unable to timely file future financial statements in compliance with the requirements
of the Exchange Act.
– 105 –
RISK FACTORS
In the event the “big four” China-based accounting firms become subject to additional
legal challenges by the SEC or PCAOB, depending upon the final outcome, listed companies
in the United States with major PRC operations may find it difficult or impossible to retain
auditors in respect of their operations in the PRC, which could result in financial statements
being determined to not be in compliance with the requirements of the Exchange Act, including
possible delisting. Moreover, any negative news about any such future proceedings against
these audit firms may cause investor uncertainty regarding China-based, U.S.-listed companies
and the market price of our ordinary shares may be adversely affected.
If our independent registered public accounting firm was denied, even temporarily, the
ability to practice before the SEC and we were unable to timely find another registered public
accounting firm to audit and issue an opinion on our financial statements, our financial
statements could be determined not to be in compliance with the requirements of the Exchange
Act. Such a determination could ultimately lead to the delisting of the ADSs from Nasdaq
Global Market or deregistration from the SEC, or both, which would substantially reduce or
effectively terminate the trading of the ADSs in the United States.
RISKS RELATED TO OUR CORPORATE STRUCTURE
We depend on contractual arrangements with our VIEs and their shareholders to operate
a part of our business in China and to hold the necessary licenses for our operations,
which may not be as effective as direct ownership in providing operational control and
otherwise may have a material adverse effect as to our business.
Although the vast majority of our business is conducted in Hong Kong, we depend on our
Consolidated Affiliated Entities, which our Cayman Islands holding company does not have
equity interests in, to conduct a part of our operations in China and hold the necessary licenses
for our operations, for example, the ICP license. For the years ended December 31, 2019, 2020,
2021 and for the six months ended June 30, 2022, we generated 0.2%, 0.3%, 0.3% and 0.4%
of our total revenues through our Consolidated Affiliated Entities in China, respectively, whose
assets accounted for 0.1%, 0.1%, 0.1% and 0.1% of our total assets during the same periods,
respectively. For a description of these contractual arrangements, see “Contractual
Arrangements.” You are not purchasing equity interest in our Consolidated Affiliated Entities
in China, and instead are directly purchasing equity securities of a Cayman Islands holding
company. Our contractual arrangements with VIEs may not be as effective as direct ownership
in providing us with control over our Consolidated Affiliated Entities. If our VIEs or their
shareholders fail to perform their respective obligations under these contractual arrangements,
our recourse to the assets held by our Consolidated Affiliated Entities is indirect and we may
have to incur substantial costs and expend significant resources to enforce such arrangements
in reliance on legal remedies under PRC law. These remedies may not always be effective,
particularly in light of uncertainties in the PRC legal system. Furthermore, in connection with
litigation, arbitration or other judicial or dispute resolution proceedings, assets under the name
of any of record holder of equity interest in our Consolidated Affiliated Entities, including such
equity interest, may be put under court custody. As a consequence, we cannot be certain that
the equity interest will be disposed pursuant to the contractual arrangement or ownership by
the record holder of the equity interest.
– 106 –
RISK FACTORS
All of these contractual arrangements are governed by and interpreted in accordance with
PRC law, and disputes arising from these contractual arrangements will be resolved through
arbitration in China. However, such arbitration provisions do not apply to claims made under
the United States federal securities laws. The legal environment in the PRC is not as developed
as in other jurisdictions, such as the United States. As a result, uncertainties in the PRC legal
system and potential future actions by the PRC governments could limit our ability to enforce
these contractual arrangements. In the event that we are unable to enforce these contractual
arrangements, or if we suffer significant time delays or other obstacles in the process of
enforcing these contractual arrangements, it would be very difficult to exert effective control
over our Consolidated Affiliated Entities, and our ability to conduct our business and our
financial condition and results of operations may be materially and adversely affected. See “—
Risks Related to Our Presence in China — There are uncertainties regarding the interpretation
and enforcement of PRC laws, rules and regulations.” In the event that we are unable to enforce
these contractual arrangements, or if we suffer significant time delays or other obstacles in the
process of enforcing these contractual arrangements, our business, financial condition and
results of operations could be materially and adversely affected.
The shareholders of our VIEs in China may have potential conflicts of interest with us,
which may materially and adversely affect our business and financial condition.
In connection with our operations in China, we depend on the shareholders of our VIEs
to abide by the obligations under such contractual arrangements. The interests of these
shareholders in their individual capacities as the shareholders of our VIEs may differ from the
interests of our company as a whole, as what is in the best interests of our VIEs, including
matters such as whether to distribute dividends or to make other distributions to fund our
offshore requirement, may not be in the best interests of our company. There can be no
assurance that when conflicts of interest arise, any or all of these individuals will act in the best
interests of our company or those conflicts of interest will be resolved in our favor. In addition,
these individuals may breach or cause our VIEs and its subsidiaries to breach or refuse to renew
the existing contractual arrangements with us.
Currently, we do not have arrangements to address potential conflicts of interest the

shareholders of our VIEs may encounter, on one hand, and as a beneficial owner of our
company, on the other hand. We, however, could, at all times, exercise our option under the
exclusive option agreement to cause them to transfer all of their equity ownership in our VIEs
to a PRC entity or individual designated by us as permitted by the then applicable PRC laws.
In addition, if such conflicts of interest arise, we could also, in the capacity of attorney-in-fact
of the then existing shareholders of our VIEs as provided under the power of attorney
agreements, directly appoint new directors of our VIEs. We rely on the shareholders of our
VIEs to comply with PRC laws and regulations, which protect contracts and provide that
directors and executive officers owe a duty of loyalty to our company and require them to avoid
conflicts of interest and not to take advantage of their positions for personal gains, and the laws
of the Cayman Islands, which provide that directors have a duty of care and a duty of loyalty
to act honestly in good faith with a view to our best interests. However, the legal frameworks
of China and the Cayman Islands do not provide guidance on resolving conflicts in the event
– 107 –
RISK FACTORS
of a conflict with another corporate governance regime. If we cannot resolve any conflicts of
interest or disputes between us and the shareholders of our VIEs, we would have to rely on
legal proceedings, which could result in disruption of our business and subject us to substantial
uncertainty as to the outcome of any such legal proceedings.
If the PRC government deems that the contractual arrangements in relation to our
Consolidated Affiliated Entities do not comply with PRC regulatory restrictions on
foreign investment in the relevant industries, or if these regulations or the interpretation
of existing regulations change in the future, we could be subject to severe penalties or be
forced to relinquish our interests in those operations.
The PRC government regulates internet-based businesses through strict business

licensing requirements and other government regulations. These laws and regulations also
include limitations on foreign ownership of PRC companies that engage in internet-based
businesses. Specifically, the Special Administrative Measures for Entry of Foreign Investment
(Negative List) (2021 Version) (《外商投資准入特別管理措施(負面清單)(2021年版)》),
which came into effect on January 1, 2022 and replaced the previous version provides that
foreign investors are generally not allowed to own more than 50% of the equity interests in a
value-added telecommunication service provider other than an e-commerce service, domestic
multi-party communications service, store-and-forward service, and call center service
provider which does not apply to us. The Special Administrative Measures for Entry of Foreign
Investment (Negative List) (2021 Version) also provides that foreign investors are prohibited
to own any equity interests in network culture operation, and the production and operation of
broadcasting and television programs.
Futu Holdings Limited is a holding company incorporated in the Cayman Islands, which
has no material operations. We conduct a substantial majority of our operations through our
subsidiaries in Hong Kong and China and Consolidated Affiliated Entities in China. We control
and receive the economic benefits of our Consolidated Affiliated Entities’ operations through
certain contractual arrangements.
Because we are an exempted company incorporated in the Cayman Islands, we are

classified as a foreign enterprise under PRC laws and regulations, and our wholly-owned PRC
subsidiaries are foreign-invested enterprises, or FIEs. To comply with PRC laws and
regulations, we conduct our business in China through Shenzhen Futu and Hainan Futu, or our
VIEs, and their affiliates. Shensi Beijing has entered into a series of contractual arrangements
with our VIEs and its shareholders. In addition, pursuant to the resolutions of all shareholders
of Futu Holdings Limited and the resolutions of the board of directors of Futu Holdings
Limited, the board of directors of Futu Holdings Limited or any officer authorized by such
board shall cause Shensi Beijing to exercise Shensi Beijing’s rights under the power of attorney
agreements entered into among Shensi Beijing, each VIE and the shareholders of such VIE, as
well as Shensi Beijing’s rights under the exclusive option agreement between Shensi Beijing
and the VIE. As a result of these resolutions and the provision of unlimited financial support
– 108 –
RISK FACTORS
from our Company to Shenzhen Futu, we are considered to be the primary beneficiary of our
VIEs for accounting purposes under U.S. GAAP. For a description of these contractual
arrangements, see “Contractual Arrangements”.
We believe that our corporate structure and contractual arrangements comply with the
current applicable PRC laws and regulations. Our PRC Legal Advisors, based on its
understanding of the relevant laws and regulations currently in effect, are of the opinion that
each of the contracts among our wholly-owned PRC subsidiary, our VIEs and their
shareholders is valid, binding and enforceable in accordance with its terms. However, as there
are substantial uncertainties regarding the interpretation and application of PRC laws and
regulations, including the M&A Rules and the Telecommunications Regulations and the
relevant regulatory measures concerning the telecommunications industry, there can be no
assurance that the PRC government authorities, such as the MOFCOM, or the MIIT, or other
authorities that regulate the telecommunications industry, would agree that our corporate
structure or any of the above contractual arrangements comply with PRC licensing, registration
or other regulatory requirements, with existing policies or with requirements or policies that
may be adopted in the future. PRC laws and regulations governing the validity of these
contractual arrangements are uncertain and the relevant government authorities have broad
discretion in interpreting these laws and regulations.
If our corporate structure and contractual arrangements are deemed by the MIIT or the
MOFCOM or other regulators having competent authority to be illegal, either in whole or in
part, we may lose control of our Consolidated Affiliated Entities and have to modify such
structure to comply with regulatory requirements. However, there can be no assurance that we
can achieve this without material disruption to our business. Further, if our corporate structure
and contractual arrangements are found to be in violation of any existing or future PRC laws
or regulations or if these regulations or the interpretation of existing regulations change or are
interpreted differently in the future, the relevant regulatory authorities would have broad
discretion in dealing with such violations, including, but not limited to:
• revoking our business and operating licenses;
• levying fines on us;
• confiscating any of our income that they deem to be obtained through illegal
operations;
• shutting down our services;
• discontinuing or restricting our operations in China;
• imposing conditions or requirements with which we may not be able to comply;
– 109 –
RISK FACTORS
• requiring us to change our corporate structure and contractual arrangements,

including terminating the contractual arrangement with the VIE and deregistering
the equity pledges of the VIE, which in turn would affect our ability to consolidate
or exert effective control over the Consolidated Affiliated Entities;
• restricting or prohibiting our use of the proceeds from overseas offering to finance
our Consolidated Affiliated Entities’s business and operations; and
• taking other regulatory or enforcement actions that could be harmful to our business.
Furthermore, new PRC laws, rules and regulations may be introduced to impose
additional requirements that may be applicable to our corporate structure and contractual
arrangements. See “— Risks Related to Our Corporate Structure — Uncertainties exist with
respect to the interpretation and implementation of the PRC Foreign Investment Law and its
Implementation Regulations and how they may impact the viability of our current corporate
structure, corporate governance and business operations.” Our offshore holding company in the
Cayman Island, our VIEs and our investors may face uncertainties about potential future
actions relating to the VIE structure by Chinese government. Occurrence of any of these events
could materially and adversely affect the enforceability of the contractual arrangement with our
VIEs and, consequently, our business, financial condition and results of operations. In addition,
if the imposition of any of these penalties or requirement to restructure our corporate structure
causes us to lose the rights to direct the activities of our Consolidated Affiliated Entities or our
right to receive its economic benefits, we would no longer be able to consolidate the financial
results of our Consolidated Affiliated Entities in our consolidated financial statements. See
“Contractual Arrangements.” In addition, our shares may decline in value if we are unable to
assert our contractual control rights over the assets or receive the economic benefits of the VIE
and its subsidiaries that conduct some of our operations.
If we exercise the option to acquire equity ownership of our VIE, the ownership transfer
may subject us to certain limitations and substantial costs.
Pursuant to the Special Administration Measures (Negative List) for Foreign Investment
Access (2021) Edition (《外商投資准入特別管理措施(負面清單)(2021年版)》), and the
Provisions on Administration of Foreign-Invested Telecommunications Enterprises (《外商投
資電信企業管理規定》), or the FITE, the ultimate foreign equity ownership in a value-added
telecommunications services provider cannot exceed 50%. In addition, even though the
qualification requirements for the main foreign investors under the FITE, for which the main
foreign investor who invests in a value-added telecommunications business in China must
possess prior experience in operating value-added telecommunications businesses and a proven
track record of business operations in such industry, or the Qualification Requirements, has
been cancelled since May 1, 2022, according to the State Council’s Decision to Amend and
Abolish Certain Administrative Regulations (《國務院關於修改和廢止部分行政法規的決
定》). Currently, no applicable PRC laws, regulations or rules have provided further clear
guidance on specific requirement or regulatory procedures had been published for foreign
investment in the value-added telecommunications business in the PRC in view of the removal
– 110 –
RISK FACTORS
of the Qualification Requirements. Nevertheless, under the amended FITE Regulations, whilst
foreign investors are able to invest in entities holding an ICP License (holding up to 50% equity
interest and not more), whether an entity held by foreign shareholders may hold a value-added
telecommunication license is still subject to the examination of substance and merits by
relevant authority. In addition, the Special Administrative Measures (Negative List) for Foreign
Investment Access (2021 Edition) prohibits foreign investors from investing in internet
audio-visual program services and internet culture activities with the exception of music.
If the PRC laws were revised to allow foreign investors to hold more than 50% of the
equity interests of value-added telecommunications enterprises or to allow foreign investors to
invest in enterprise with internet audio-visual program or internet culture activities businesses
in China, due to the necessity of ICP services for internet audio-visual program services and
internet cultural activities, we might be unable to unwind the Contractual Arrangements due to
the reason that the relevant Consolidated Affiliated Entities provide commercial internet
information and operate “prohibited” businesses (i.e. radio and television program production
business and internet culture business) on the same platform. All these Relevant Businesses
form an integral part of the Group’s business and are operated on the same platform, which
cannot be separated apart from one another. According to the interview with the relevant
authorities, we understand that a foreign-invested enterprise will not be granted with an ICP
License if it also engages in foreign prohibited businesses such as radio and television program
production and operation in addition to value-added telecommunication businesses. See
“Contractual Arrangement” for further information.
Pursuant to the Contractual Arrangements, Shensi Beijing or its designated person has the
exclusive right to purchase all or part of the equity interests in our VIEs at the lower of the
amount of their respective paid-in capital in the VIE and the lowest price permitted under
applicable PRC laws. Subject to relevant laws and regulations, the shareholders of our VIEs
shall return any amount of purchase price they have received to Shensi Beijing. If such a
transfer takes place, the relevant tax authority may ask Shensi Beijing to pay enterprise income
tax for ownership transfer income with reference to the market value, in which case the amount
of tax could be substantial.
We may rely on dividends and other distributions on equity paid by our PRC subsidiaries
to fund any cash and financing requirements we may have, and any limitation on the
ability of our PRC subsidiaries to make payments to us could have a material and adverse
effect on our ability to conduct our business.
Futu Holdings Limited is a holding company, and we may rely on dividends and other
distributions on equity paid by our PRC subsidiaries for our cash and financing requirements,
including the funds necessary to pay dividends and other cash distributions to our shareholders
and service any debt we may incur. Current PRC regulations permit our PRC subsidiaries to
pay dividends to us only out of their accumulated after-tax profits upon satisfaction of relevant
statutory conditions and procedures, if any, determined in accordance with Chinese accounting
standards and regulations. In addition, each of our PRC subsidiaries is required to set aside at
least 10% of its after-tax profits each year, if any, to fund certain reserve funds until the total
– 111 –
RISK FACTORS
amount set aside reaches 50% of its registered capital. As of the Latest Practicable Date, our
VIEs had made appropriations to statutory reserves. For a detailed discussion of applicable
PRC regulations governing distribution of dividends, see “Regulations — Overview of the
Laws and Regulations Relating to Our Presence in China — Regulations on Foreign Exchange
— Regulations on Dividend Distribution.”
Additionally, if our PRC subsidiaries incur debt on their own behalf in the future, the
instruments governing their debt may restrict their ability to pay dividends or make other
distributions to us. Furthermore, the PRC tax authorities may require our subsidiaries to adjust
their taxable income under the contractual arrangements they currently have in place with our
VIEs in a manner that would materially and adversely affect their ability to pay dividends and
other distributions to us. See “— Risks Related to Our Corporate Structure — Our contractual
arrangements with our VIEs may result in adverse tax consequences to us in the PRC.”
Any limitation on the ability of our PRC subsidiaries to pay dividends or make other
distributions to us could materially and adversely limit our ability to grow, make investments
or acquisitions that could be beneficial to our business, pay dividends, or otherwise fund and
conduct our business. See “— Risks Related to Our Presence in China — We may be treated
as a resident enterprise for PRC tax purposes under the PRC Enterprise Income Tax Law, and
we may therefore be subject to PRC income tax on our global income.”
Our contractual arrangements with our VIEs may result in adverse tax consequences to
us in the PRC.
We could face adverse tax consequences if the PRC tax authorities determine that our
contractual arrangements with our VIEs were not made on an arm’s length basis and adjust our
income and expenses for PRC tax purposes by requiring a transfer pricing adjustment. A
transfer pricing adjustment could adversely affect us by (i) increasing the tax liabilities of our
VIEs without reducing the tax liability of our subsidiaries, which could further result in late
payment fees and other penalties to our VIEs for underpaid taxes; or (ii) limiting the ability of
our VIEs to obtain or maintain preferential tax treatments and other financial incentives.
If the custodians or authorized users of controlling non-tangible assets of our company,

including our corporate chops and seals, fail to fulfill their responsibilities, or
misappropriate or misuse these assets, our business and operations could be materially
and adversely affected.
Under PRC law, legal documents for corporate transactions, including agreements and
contracts such as the leases and sales contracts that our business relies on, are executed using
the chop or seal of the signing entity or with the signature of a legal representative whose
designation is registered and filed with the relevant local branch of the market supervision
administration.
– 112 –
RISK FACTORS
In order to maintain the physical security of our chops and the chops of our PRC entities,
we generally store these items in secured locations accessible only by the authorized personnel
of each of our PRC subsidiary and Consolidated Affiliated Entities. Although we monitor such
authorized personnel, there is no assurance such procedures will prevent all instances of abuse
or negligence. Accordingly, if any of our authorized personnel misuse or misappropriate our
corporate chops or seals, we could encounter difficulties in maintaining control over the
relevant entities and experience significant disruption to our operations. If a designated legal
representative obtains control of the chops in an effort to obtain control over any of our PRC
subsidiary or Consolidated Affiliated Entities, we, our PRC subsidiaries or Consolidated
Affiliated Entities would need to pass a new shareholder or board resolution to designate a new
legal representative and we would need to take legal action to seek the return of the chops,
apply for new chops with the relevant authorities, or otherwise seek legal redress for the
violation of the representative’s fiduciary duties to us, which could involve significant time and
resources and divert management attention away from our regular business. In addition, the
affected entity may not be able to recover corporate assets that are sold or transferred out of
our control in the event of such a misappropriation if a transferee relies on the apparent
authority of the representative and acts in good faith.
We may lose the ability to use and benefit from assets held by our VIEs that are material
to the operation of our business if either of our Consolidated Affiliated Entities goes
bankrupt or becomes subject to dissolution or liquidation proceeding.
As part of our contractual arrangements with our VIEs, these entities may in the future
hold certain assets that are material to the operation of our business. If either of our
Consolidated Affiliated Entities goes bankrupt and all or part of its assets become subject to
liens or rights of third-party creditors, we may be unable to continue some or all of our business
activities, which could materially and adversely affect our business, financial condition and
results of operations. Under the contractual arrangements, our Consolidated Affiliated Entities
may not, in any manner, sell, transfer, mortgage or dispose of their assets or legal or beneficial
interests in the business without our prior consent. If either of our VIEs undergoes voluntary
or involuntary liquidation proceeding, unrelated third-party creditors may claim rights to some
or all of these assets, thereby hindering our ability to operate our business, which could
materially and adversely affect our business, financial condition and results of operations. See
“Financial Information — Significant Accounting Policies and Estimates — Basis of
Consolidation.”
– 113 –
RISK FACTORS
Uncertainties exist with respect to the interpretation and implementation of the PRC
Foreign Investment Law and its Implementation Regulations and how they may impact
the viability of our current corporate structure, corporate governance and business
operations.
The National People’s Congress approved the Foreign Investment Law on March 15, 2019
and the State Council approved the Regulation on Implementing the Foreign Investment Law
(《外商投資法實施條例》), or the Implementation Regulations on December 26, 2019,
effective from January 1, 2020, to replace the trio of prior laws and their implementation rules
and ancillary regulations regulating foreign investment in China. The Foreign Investment Law
embodies an expected PRC regulatory trend to rationalize its foreign investment regulatory
regime in line with prevailing international practice and the legislative efforts to unify the
corporate legal requirements for both foreign and domestic investments. However, since the
Foreign Investment Law and the Implementation Regulations are relatively new, uncertainties
still exist in relation to its interpretation and implementation. For instance, under the Foreign
Investment Law, “foreign investment” refers to the investment activities directly or indirectly
conducted by foreign individuals, enterprises or other entities in China. Though it does not
explicitly classify contractual arrangements as a form of foreign investment, there is no
assurance that foreign investment via contractual arrangement would not be interpreted as a
type of indirect foreign investment activities under the definition in the future. In addition, the
definition contains a catch-all provision which includes investments made by foreign investors
through means stipulated in laws or administrative regulations or other methods prescribed by
the State Council. Therefore, it still leaves leeway for future laws, administrative regulations
or provisions promulgated by the State Council to provide for contractual arrangements as a
form of foreign investment. In any of these cases, it will be uncertain whether our contractual
arrangements will be deemed to be in violation of the market access requirements for foreign
investment under the PRC laws and regulations. Furthermore, if future laws, administrative
regulations or provisions prescribed by the State Council mandate further actions to be taken
by companies with respect to existing contractual arrangements, we may face substantial
uncertainties as to whether we can complete such actions in a timely manner, or at all. Failure
to take timely and appropriate measures to cope with any of these or similar regulatory
compliance challenges could materially and adversely affect our current corporate structure,
corporate governance and business operations.
– 114 –
RISK FACTORS
RISKS RELATED TO OUR CLASS A ORDINARY SHARES AND ADSs
The trading price of the ADSs and Class A Ordinary Shares may be volatile, which could
result in substantial losses to you.
The trading price of the ADSs has been volatile since the ADSs started to trade on the
Nasdaq Global Market on March 8, 2019. The market price for the ADSs may continue to be
volatile and subject to wide fluctuations in response to factors including, but not limited to, the
following:
• regulatory developments affecting us or our industry or China-based companies in

general;
• adverse market rumors, speculations, media reports or other negative publicity

involving us or our industry or China-based companies in general, some of which
may be unsubstantiated or inaccurate;
• announcements of studies and reports relating to the quality of our credit offerings
or those of our competitors;
• changes in the economic performance or market valuations of other financial service

providers;
• actual or anticipated fluctuations in our quarterly results of operations and changes

or revisions of our expected results;
• changes in financial estimates by securities research analysts;
• conditions in the market for financial services;
• announcements by us or our competitors of new product and service offerings,

acquisitions, strategic relationships, joint ventures, capital raisings or capital
commitments;
• additions to or departures of our senior management;
• fluctuations of exchange rates between the Renminbi and the U.S. dollar;
• release or expiry of lock-up or other transfer restrictions on our outstanding shares

or the ADSs; and
• sales or perceived potential sales of additional ordinary shares or ADSs.
– 115 –
RISK FACTORS
In addition, the stock market in general, and the market prices for internet-related
companies and companies with operations in China in particular, have experienced volatility
that often has been unrelated to the operating performance of such companies. The securities
of some China-based companies that have listed their securities in the United States have
experienced significant volatility since their initial public offerings in recent years, including,
in some cases, substantial declines in the trading prices of their securities, for example the
significant volatility of the share prices after a series of policies and proposals issued by the
Chinese government in relation to the education industry and cybersecurity review in 2021. See
also “— Risks Related to Our Presence in China — Changes in social conditions, political and
economic policies of the PRC government may materially and adversely affect our business,
financial condition and results of operations and may result in our inability to sustain our
growth and expansion strategies”. The trading performances of these companies’ securities
after their offerings may affect the attitudes of investors towards Chinese companies listed in
the United States in general, which consequently may impact the trading performance of our
Class A Ordinary Shares or ADSs, regardless of our actual operating performance. In addition,
any negative news or perceptions about inadequate corporate governance practices or
fraudulent accounting, corporate structure or other matters of other Chinese companies may
also negatively affect the attitudes of investors towards Chinese companies in general,
including us, regardless of whether we have engaged in any inappropriate activities.
Furthermore, the stock market in general has experienced large price and volume fluctuations
that have often been unrelated or disproportionate to the operating performance of companies
like us. These broad market and industry fluctuations may adversely affect the market price of
our Class A Ordinary Shares or ADSs. Volatility or a lack of positive performance in our Class
A Ordinary Shares or ADS price may also adversely affect our ability to retain key employees,
most of whom have been granted options or other equity incentives.
In the past, shareholders of public companies have often brought securities class action
suits against those companies following periods of instability in the market price of their
securities. We may be the target of this type of litigation in the future. If we were involved in
a class action suit, it could divert a significant amount of our management’s attention and other
resources from our business and operations and require us to incur significant expenses to
defend the suit, which could harm our results of operations. Any such class action suit, whether
or not successful, could harm our reputation and restrict our ability to raise capital in the future.
In addition, if a claim is successfully made against us, we may be required to pay significant
damages, which could have a material adverse effect on our financial condition and results of
operations.
Certain principal shareholders have substantial influence over our key corporate matters
and will continue to have such influence following the Listing, which may deprive you of
an opportunity to receive a premium for the Class A Ordinary Shares and/or ADSs and
materially reduce the value of your investment.
As of the Latest Practicable Date, Mr. Leaf Hua Li, our founder, chairman and chief
executive officer, beneficially owned approximately 36.2% of the total issued share capital of
the Company and approximately 59.4% of the voting power of the total issued and outstanding
– 116 –
RISK FACTORS
share capital of the Company. Accordingly, Mr. Li has significant influence in determining the
outcome of any corporate transaction or other matter submitted to the shareholders for
approval, including mergers, consolidations, election of directors and other significant
corporate actions. This concentration of ownership may also discourage, delay or prevent a
change in control of our company, which could deprive our shareholders of an opportunity to
receive a premium for their shares as part of a sale of our company and might reduce the price
of the Class A Ordinary Shares and/or ADSs. These actions may be taken even if they are
opposed by our other shareholders, including the holders of our Class A Ordinary Shares or
ADSs.
Our dual-class voting structure will limit your ability to influence corporate matters and
could discourage others from pursuing any change of control transactions that holders of
our Class A Ordinary Shares may view as beneficial, and may adversely affect the trading
market for the shares.
Our authorized share capital is divided into Class A Ordinary Shares and Class B Ordinary
Shares, together with certain undesignated shares which may be designated by our Board of
directors. Holders of Class A Ordinary Shares are entitled to one vote per share, while holders
of Class B Ordinary Shares are currently entitled to twenty votes per share as of the Latest
Practicable Date and will be further reduced to ten votes per share (except as required by
applicable law and in relation to the Reserved Matters) with effect from the Listing pursuant
to the irrevocable written consent dated November 21, 2022 delivered by Mr. Li. Please see
“Share Capital — Weighted Voting Rights Structure” for further details. Each Class B Ordinary
Share is convertible into one Class A Ordinary Share at any time by the holder thereof, while
Class A Ordinary Shares are not convertible into Class B Ordinary Shares under any
circumstances. Upon any sale, transfer, assignment or disposition of any Class B Ordinary
Shares by a holder thereof to any non-affiliate of such holder, each such Class B Ordinary
Share will be automatically and immediately converted into one Class A Ordinary Share.
As of the Latest Practicable Date, Mr. Leaf Hua Li, our founder, chairman of the board
of directors and chief executive officer, and Qiantang River Investment Limited, an existing
shareholder of ours beneficially owned all of our issued Class B Ordinary Shares. These Class
B Ordinary Shares constituted approximately 34.16% of our total issued and outstanding share
capital and approximately 91.21% of the aggregate voting power of our total issued and
outstanding share capital due to the disparate voting powers associated with our dual-class
share structure. The considerable influence of holders of our Class B Ordinary Shares will be
reduced immediately upon the Listing, as a result of (i) the conversion of Class B ordinary
shares held by Tencent Group into Class A ordinary shares upon the Listing and (ii) an
amendment to Class B Ordinary Share’s voting power, where Class B Ordinary Shares will be
capped at ten votes per share with effect from the Listing pursuant to the irrevocable written
consent dated November 21, 2022 delivered by Mr. Li, while Class A Ordinary Shares will
continue entitling the Shareholder to one vote per share. Upon the Listing and assuming that
no further Shares are issued under the Share Incentive Plans between the Latest Practicable
Date and the Listing Date), Mr. Li will become the sole owner of our Class B Ordinary Shares
and his Class B Ordinary Shares will represent approximately 73.28% of the voting rights in
our Company. On the other hand, as a result of the conversion of Class B Ordinary Shares held
– 117 –
RISK FACTORS
by Tencent Group into Class A Ordinary Shares upon Listing, Tencent Group will beneficially
own 247,418,662 Class A Ordinary Shares, representing approximately 7.56% of the voting
power of our total issued and outstanding shares assuming that no further Shares are issued
under the Share Incentive Plans between the Latest Practicable Date and the Listing Date. Such
conversion will have a dilutive impact on the voting right of our Class A Ordinary Shares in
matters that is submitted to the class voting of holders of Class A Ordinary Shares only.
As a result of the above-mentioned concentration of our Share’s voting power and

ownership, holders of Class B Ordinary Shares have considerable influence over matters such
as decisions regarding mergers and consolidations, election of directors and other significant
corporate actions. Such holders may take actions that are not in the best interest of us or our
other shareholders. Our dual-class share structure and this concentration of ownership may
discourage, delay or prevent a change in control of our company, which could have the effect
of depriving our other shareholders of the opportunity to receive a premium for their shares as
part of a sale of our company and may reduce the price of our Class A Ordinary Shares or
ADSs. This concentrated control will limit your ability to influence corporate matters and
could discourage others from pursuing any potential merger, takeover or other change of
control transactions that holders of Class A Ordinary Shares and ADSs may view as beneficial.
The structure of our share capital may render the Class A Ordinary Shares and/or ADSs
ineligible for inclusion in certain stock market indices, and thus adversely affect the
market price and liquidity of the Class A Ordinary Shares and/or ADSs.
We cannot predict whether our dual-class share structure with different voting rights will
result in a lower or more volatile market price of our Class A Ordinary Shares or the ADSs,
in adverse publicity, or other adverse consequences. Certain index providers have announced
restrictions on including companies with multi-class share structures in certain of their indices.
For example, S&P Dow Jones and FTSE Russell have changed their eligibility criteria for
inclusion of shares of public companies on certain indices, including the S&P 500, to exclude
companies with multiple classes of shares and companies whose public shareholders hold no
more than 5% of total voting power from being added to such indices. As a result, our
dual-class voting structure may prevent the inclusion of the ADSs representing our Class A
Ordinary Shares in such indices, which could adversely affect the trading price and liquidity
of the ADSs representing our Class A Ordinary Shares. In addition, several shareholder
advisory firms have announced their opposition to the use of multiple class structure and our
dual-class structure may cause shareholder advisory firms to publish negative commentary
about our corporate governance, in which case the market price and liquidity of our Class A
Ordinary Shares or the ADSs could be adversely affected.
– 118 –
RISK FACTORS
If securities or industry analysts do not publish research or publish inaccurate or

unfavorable research about our business, the market price for the Shares and/or ADSs
and trading volume could decline.
The trading market for our Class A Ordinary Shares and ADSs will depend in part on the
research and reports that securities or industry analysts publish about us or our business. If
research analysts do not establish and maintain adequate research coverage or if one or more
of the analysts who covers us downgrades our Class A Ordinary Shares and/or ADSs or
publishes inaccurate or unfavorable research about our business, the market price for our Class
A Ordinary Shares and/or ADSs would likely decline. If one or more of these analysts cease
coverage of our company or fail to publish reports on us regularly, we could lose visibility in
the financial markets, which, in turn, could cause the market price or trading volume for our
Class A Ordinary Shares and/or ADSs to decline.
Because we do not expect to pay dividends in the foreseeable future, you must rely on
price appreciation of the Class A Ordinary Shares or ADSs for return on your investment.
We currently intend to retain most, if not all, of our available funds and any future
earnings to fund the development and growth of our business. As a result, we do not expect to
pay any cash dividends in the foreseeable future. Therefore, you should not rely on an
investment in our Class A Ordinary Shares and ADSs as a source for any future dividend
income.
Our board of directors has complete discretion as to whether to distribute dividends. In

addition, our shareholders may by ordinary resolution declare a dividend, but no dividend may
exceed the amount recommended by our board of directors. In either case, all dividends are
subject to certain restrictions under Cayman Islands law, namely that our company may only
pay dividends out of profits or share premium, and provided that in no circumstances may a
dividend be paid if this would result in our company being unable to pay its debts as they fall
due in the ordinary course of business. Even if we decide to declare and pay dividends, the
timing, amount and form of future dividends, if any, will depend on, among other things, our
future results of operations and cash flows, our capital requirements and surplus, the amount
of distributions, if any, received by us from our subsidiaries, our financial condition,
contractual restrictions and other factors deemed relevant by our board of directors.
Accordingly, the return on your investment in our Class A Ordinary Shares and/or ADSs will
likely depend entirely upon any future price appreciation of our Class A Ordinary Shares and/or
ADSs (as the case may be). There is no guarantee that our Class A Ordinary Shares and/or
ADSs will appreciate in value or even maintain the price at which you purchased our Class A
Ordinary Shares and/or ADSs. You may not realize a return on your investment in the Class A
Ordinary Shares and/or ADSs and you may even lose your entire investment in our Class A
Ordinary Shares or ADSs.
– 119 –
RISK FACTORS
Substantial future sales or perceived potential sales of our listed securities in the public
market could cause their trading price to decline.
Sales of substantial amounts of our Class A Ordinary Shares and/or ADSs in the public
market, or the perception that these sales could occur, could adversely affect the market price
of our Class A Ordinary Shares and ADSs and could materially impair our future ability to raise
capital through equity offerings in the future. All of the ADSs representing our Class A
Ordinary Shares sold in our initial public offering and follow-on offering are freely tradable
without any restriction or further registration under the U.S. Securities Act of 1933, as
amended, or the Securities Act, unless held by our “affiliates” as that term is defined in Rule
144 under the Securities Act. All of our shares outstanding prior to our initial public offering
are “restricted securities” as defined in Rule 144 and, in the absence of registration, may not
be sold other than in accordance with Rule 144 under the Securities Act or another exemption
from registration.
The voting rights of holders of ADSs are limited by the terms of the deposit agreement,
and holders of the ADSs must act through the depositary to exercise those rights.
Holders of ADSs do not have the same rights as our registered shareholders. Holders of
ADSs do not have any right to attend general meetings of our shareholders or to cast any votes
at such meetings. ADS holders will only be able to exercise the voting rights which are carried
by the underlying Class A Ordinary Shares represented by their ADSs indirectly by giving
voting instructions to the depositary in accordance with the provisions of the deposit
agreement. If we instruct the depositary to ask for instructions from ADS holders, then upon
receipt of such voting instructions, the depositary will try, as far as practicable, to vote the
underlying Class A Ordinary Shares that are represented by the relevant ADSs, in accordance
with the instructions from the ADS holder. If we do not instruct the depositary to ask for
instructions from ADS holders, the depositary may still vote in accordance with instructions
you give, but it is not required to do so. Under the deposit agreement for the ADSs, if ADS
holders do not vote, the depositary will give us a discretionary proxy to vote our Class A
ordinary shares underlying ADSs at shareholders’ meetings if:
• we have timely provided the depositary with notice of meeting and related voting
materials;
• we have instructed the depositary that we wish a discretionary proxy to be given;
• we have informed the depositary that there is no substantial opposition as to a matter

to be voted on at the meeting; and
• a matter to be voted on at the meeting would not have a material adverse impact on
shareholders.
– 120 –
RISK FACTORS
The effect of this discretionary proxy is that if you do not vote at shareholders’ meetings,
you cannot prevent our Class A ordinary shares underlying your ADSs from being voted under
the circumstances described above. This may make it more difficult for shareholders to
influence the management of our company. Holders of our Class A ordinary shares are not
subject to this discretionary proxy. ADS holders will not be able to directly exercise their right
to vote with respect to the underlying Class A Ordinary Shares represented by their ADSs
unless they withdraw the shares and become the registered holder of such shares prior to the
record date for the general meeting. Under our currently effective amended and restated
memorandum and articles of association, the minimum notice period required for convening a
general meeting is 10 calendar days. When a general meeting is convened, ADS holders may
not receive sufficient advance notice of the meeting to withdraw the shares underlying their
ADSs and to vote directly with respect to any specific matter or resolution to be considered and
voted upon at the general meeting.
In addition, under our memorandum and articles of association, for the purposes of
determining those shareholders who are entitled to attend and vote at any general meeting, our
directors may close our register of members and/or fix in advance a record date for such
meeting, and such closure of our register of members or the setting of such a record date may
prevent an ADS holder from withdrawing the Class A Ordinary Shares underlying its ADSs and
becoming the registered holder of such shares prior to the record date, so that such holder
would not be able to attend the general meeting or to vote directly. If we ask for instructions
from ADS holders, the depositary will notify ADS holders of the upcoming vote and will
arrange to deliver our voting materials to them. We have agreed to give the depositary at least
30 days’ prior notice of shareholder meetings. Nevertheless, we cannot assure ADS holders that
they will receive the voting materials in time to ensure that they can instruct the depositary to
vote the underlying shares represented by their ADSs. In addition, the depositary and its agents
are not responsible for failing to carry out voting instructions or for their manner of carrying
out voting instructions received from ADS holders. This means that ADS holders may not be
able to exercise their rights to direct how the shares underlying their ADSs are voted and they
may have no legal remedy if the shares underlying their ADSs are not voted as they requested.
– 121 –
RISK FACTORS
The right of the ADS holders to participate in any future rights offerings may be limited,
which may cause dilution to your holdings.
We may from time to time distribute rights to our shareholders, including rights to acquire
our securities. However, we cannot make rights available to you in the United States unless we
register both the rights and the securities to which the rights relate under the Securities Act or
an exemption from the registration requirements is available. Under the deposit agreement, the
depositary will not make rights available to ADS holders unless both the rights and the
underlying securities to be distributed to ADS holders are either registered under the Securities
Act or exempt from registration under the Securities Act. We are under no obligation to file a
registration statement with respect to any such rights or securities or to endeavor to cause such
a registration statement to be declared effective and we may not be able to establish a necessary
exemption from registration under the Securities Act. Accordingly, ADS holders may be unable
to participate in our rights offerings in the future and may experience dilution in their holdings.
Holders of the ADSs may not receive cash dividends or other distributions if the
depositary decides it is impractical to make them available to you.
The depositary will pay cash distributions on the ADSs only to the extent that we decide
to distribute dividends on our Class A Ordinary Shares or other deposited securities, and we do
not have any present plan to pay any cash dividends in the foreseeable future. To the extent that
there is a distribution, the depositary has agreed to pay to holders of ADSs the cash dividends
or other distributions it or the custodian receives on our Class A Ordinary Shares or other
deposited securities after deducting its fees and expenses. ADS holders will receive these
distributions in proportion to the number of Class A Ordinary Shares their ADSs represent.
However, the depositary may, at its discretion, decide that it is inequitable or impractical to
make a distribution available to any holders of ADSs. For example, the depositary may
determine that it is not practicable to distribute certain property through the mail, or that the
value of certain distributions may be less than the cost of mailing them. In these cases, the
depositary may decide not to distribute such property to such ADS holders.
We and the depositary are entitled to amend the deposit agreement and to change the
rights of ADS holders under the terms of such agreement, and we may terminate the
deposit agreement, without the prior consent of the ADS holders.
We and the depositary are entitled to amend the deposit agreement and to change the
rights of the ADS holders under the terms of such agreement, without the prior consent of the
ADS holders. We and the depositary may agree to amend the deposit agreement in any way we
decide is necessary or advantageous to us. Amendments may reflect, among other things,
operational changes in the ADS program, legal developments affecting ADSs or changes in the
terms of our business relationship with the depositary. In the event that the terms of an
amendment are disadvantageous to ADS holders, ADS holders will only receive 30 days’
advance notice of the amendment, and no prior consent of the ADS holders is required under
the deposit agreement. Furthermore, we may decide to terminate the ADS facility at any time
for any reason. For example, terminations may occur when we decide to list our shares on a
– 122 –
RISK FACTORS
non-U.S. securities exchange and determine not to continue to sponsor an ADS facility or when
we become the subject of a takeover or a going-private transaction. If the ADS facility will
terminate, ADS holders will receive at least 90 days’ prior notice, but no prior consent is
required from them. Under the circumstances that we decide to make an amendment to the
deposit agreement that is disadvantageous to ADS holders or terminate the deposit agreement,
the ADS holders may choose to sell their ADSs or surrender their ADSs and become direct
holders of the underlying Class A Ordinary Shares, but will have no right to any compensation
whatsoever.
ADS holders may not be entitled to a jury trial with respect to claims arising under the
deposit agreement, which could result in less favorable outcomes to the plaintiff(s) in any
such action.
The deposit agreement governing the ADSs representing our Class A Ordinary Shares
provides that, to the fullest extent permitted by law, ADS holders waive the right to a jury trial
of any claim they may have against us or the depositary arising out of or relating to our shares,
the ADSs or the deposit agreement, including any claim under the U.S. federal securities laws.
If we or the depositary opposed a jury trial demand based on the waiver, the court would
determine whether the waiver was enforceable based on the facts and circumstances of that
case in accordance with the applicable state and federal law. To our knowledge, the
enforceability of a contractual pre-dispute jury trial waiver in connection with claims arising
under the federal securities laws has not been finally adjudicated by the United States Supreme
Court. However, we believe that a contractual pre-dispute jury trial waiver provision is
generally enforceable, including under the laws of the State of New York, which govern the
deposit agreement, by a federal or state court in the City of New York, which has non-exclusive
jurisdiction over matters arising under the deposit agreement. In determining whether to
enforce a contractual pre-dispute jury trial waiver provision, courts will generally consider
whether a party knowingly, intelligently and voluntarily waived the right to a jury trial. We
believe that this is the case with respect to the deposit agreement and the ADSs. It is advisable
that you consult legal counsel regarding the jury waiver provision before entering into the
deposit agreement.
If any holders or beneficial owners of ADSs bring a claim against us or the depositary in
connection with matters arising under the deposit agreement or the ADSs, including claims
under federal securities laws, such holder or beneficial owner may not be entitled to a jury trial
with respect to such claims, which may have the effect of limiting and discouraging lawsuits
against us and/or the depositary. If a lawsuit is brought against us and/or the depositary under
the deposit agreement, it may be heard only by a judge or justice of the applicable trial court,
which would be conducted according to different civil procedures and may result in different
outcomes than a trial by jury would have had, including results that could be less favorable to
the plaintiff(s) in any such action.
– 123 –
RISK FACTORS
Nevertheless, if this jury trial waiver provision is not permitted by applicable law, an
action could proceed under the terms of the deposit agreement with a jury trial. No condition,
stipulation or provision of the deposit agreement or ADSs serves as a waiver by any holder or
beneficial owner of ADSs or by us or the depositary of compliance with any substantive
provision of the U.S. federal securities laws and the rules and regulations promulgated
thereunder.
Holders of the ADSs may be subject to limitations on transfer of their ADSs.
The ADSs are transferable on the books of the depositary. However, the depositary may
close its books at any time or from time to time when it deems it expedient in connection with
the performance of its duties. The depositary may close its books from time to time for a
number of reasons, including in connection with corporate events such as a rights offering,
during which time the depositary needs to maintain an exact number of ADS holders on its
books for a specified period. The depositary may also close its books in emergencies, and on
weekends and public holidays. The depositary may refuse to deliver, transfer or register
transfers of the ADSs generally when our share register or the books of the depositary are
closed, or at any time if we or the depositary thinks it is advisable to do so because of any
requirement of law or of any government or governmental body, or under any provision of the
deposit agreement, or for any other reason.
Certain judgments obtained against us by our shareholders may not be enforceable.
We are an exempted company incorporated under the laws of the Cayman Islands. We
conduct substantially our operations outside the United States and substantially all of our assets
are located outside the United States. In addition, substantially all of our directors and
executive officers and the experts named in this document reside outside the United States, and
most of their assets are located outside the United States. As a result, it may be difficult or
impossible for you to bring an action against us or against them in the United States in the
event that you believe that your rights have been infringed under the U.S. federal securities
laws or otherwise. Even if you are successful in bringing an action of this kind, the laws of the
Cayman Islands, Hong Kong, China or other relevant jurisdiction may render you unable to
enforce a judgment against our assets or the assets of our directors and officers.
You may face difficulties in protecting your interests, and your ability to protect your
rights through Hong Kong or U.S. courts may be limited, because we are incorporated
under Cayman Islands law.
We are an exempted company limited by shares incorporated under the laws of the
Cayman Islands. Our corporate affairs are governed by our memorandum and articles of
association, the Companies Act (As Revised) of the Cayman Islands and the common law of
the Cayman Islands. The rights of shareholders to take action against our directors, actions by
our minority shareholders and the fiduciary duties of our directors to us under Cayman Islands
law are to a large extent governed by the common law of the Cayman Islands. The common law
of the Cayman Islands is derived in part from comparatively limited judicial precedent in the
– 124 –
RISK FACTORS
Cayman Islands as well as from the common law of England, the decisions of whose courts are
of persuasive authority, but are not binding, on a court in the Cayman Islands. The rights of our
shareholders and the fiduciary duties of our directors under Cayman Islands law are not as
clearly established as they would be under statutes or judicial precedent in some jurisdictions
in the United States. In particular, the Cayman Islands has a less developed body of securities
laws than the United States. Some U.S. states, such as Delaware, have more fully developed
and judicially interpreted bodies of corporate law than the Cayman Islands. In addition,
Cayman Islands companies may not have standing to initiate a shareholder derivative action in
a federal court of the United States.
Shareholders of Cayman Islands exempted companies like us have no general rights under
Cayman Islands law either (i) to inspect corporate records, other than the memorandum and
articles of association and any special resolutions passed by such companies, and the registers
of mortgages and charges of such companies, or (ii) to obtain copies of lists of shareholders
of these companies. Our directors have discretion under our memorandum and articles of
association to determine whether or not, and under what conditions, our corporate records may
be inspected by our shareholders, but are not obliged to make them available to our
shareholders. This may make it more difficult for you to obtain the information needed to
establish any facts necessary for a shareholder motion or to solicit proxies from other
shareholders in connection with a proxy contest.
Certain corporate governance practices in the Cayman Islands, which is our home
country, differ significantly from requirements for companies incorporated in other
jurisdictions such as the United States. As a result of all of the above, public shareholders may
have more difficulty in protecting their interests in the face of actions taken by our
management, members of our board of directors or our controlling shareholders than they
would as public shareholders of a company incorporated in the United States.
Our currently effective amended and restated memorandum and articles of association
contain anti-takeover provisions that could discourage a third party from acquiring us,
which could limit our shareholders’ opportunity to sell their shares at a premium.
Our Memorandum and Articles contain provisions to limit the ability of others to acquire
control of our company or cause us to engage in change-of-control transactions. These
provisions could have the effect of depriving our shareholders of an opportunity to sell their
shares at a premium over prevailing market prices by discouraging third parties from seeking
to obtain control of our company in a tender offer or similar transaction. For example, our
board of directors has the authority, without further action by our shareholders, to issue
preferred shares in one or more series and to fix their designations, powers, preferences,
privileges, and relative participating, optional or special rights and the qualifications,
limitations or restrictions, including dividend rights, conversion rights, voting rights, terms of
redemption and liquidation preferences, any or all of which may be greater than the rights
associated with our ordinary shares. Preferred shares could be issued quickly with terms
calculated to delay or prevent a change in control of our company or make removal of
– 125 –
RISK FACTORS
management more difficult. If our board of directors decides to issue preferred shares, the price
of our Class A Ordinary Shares and/or ADSs may fall and the voting and other rights of the
holders of our Class A Ordinary Shares and ADSs may be materially and adversely affected.
However, our exercise of any such power that may limit the ability of others to acquire
control of our Company or cause us to engage in change-of-control transactions under our
Articles after the Listing will be subject to our overriding obligations to comply with all
applicable Hong Kong laws and regulations, the Listing Rules, and the Takeovers Code. We
will at the First GM, propose to our Shareholders certain amendments to our Articles, including
removing the Directors’ powers under the Articles to authorize the division of shares into any
number of classes and to determine the relative rights, restrictions, preferences, privileges and
payment obligations as between the different classes and to issue the shares with such preferred
or other rights which may be greater than the rights of ordinary shares, as well as making the
Directors’ power to issue preferred shares to be subject to the Articles, compliance with the
Listing Rules (and only to such extent permitted thereby) and the Takeovers Code and any
applicable rules and regulations of authorities of places where the securities of the Company
are listed, and the condition that (x) no new class of shares with voting rights superior to Class
A Ordinary Shares will be created and (y) any variation in the relative rights as between the
different classes will not result in creating new class of shares with voting rights superior to
those of Class A Ordinary Shares. For a more detailed discussion on the proposed amendments
to our currently effective Articles, please see the paragraph headed “Waivers – Requirements
Relating to the Articles of Association of the Company” in this document.
We are a foreign private issuer within the meaning of the rules under the Exchange Act,
and as such we are exempt from certain provisions applicable to U.S. domestic public
companies.
Because we qualify as a foreign private issuer under the Exchange Act, we are exempt
from certain provisions of the securities rules and regulations in the United States that are
applicable to U.S. domestic issuers, including:
• the rules under the Exchange Act requiring the filing with the SEC of quarterly
reports on Form 10-Q or current reports on Form 8-K;
• the sections of the Exchange Act regulating the solicitation of proxies, consents, or
authorizations in respect of a security registered under the Exchange Act;
• the sections of the Exchange Act requiring insiders to file public reports of their
stock ownership and trading activities and liability for insiders who profit from
trades made in a short period of time; and
• the selective disclosure rules by issuers of material nonpublic information under

Regulation FD.
– 126 –
RISK FACTORS
We are required to file an annual report on Form 20-F within four months of the end of
each fiscal year. In addition, we intend to publish our results on a quarterly basis as press
releases, distributed pursuant to the rules and regulations of the Nasdaq Global Market. Press
releases relating to financial results and material events will also be furnished to the SEC on
Form 6-K. However, the information we are required to file with or furnish to the SEC will be
less extensive and less timely compared to that required to be filed with the SEC by U.S.
domestic issuers. As a result, you may not be afforded the same protections or information that
would be made available to you were you investing in a U.S. domestic issuer.
As a company incorporated in the Cayman Islands, we are permitted to adopt certain

home country practices in relation to corporate governance matters that differ
significantly from the Nasdaq listing standards; these practices may afford less protection
to shareholders than they would enjoy if we complied fully with the Nasdaq listing
standards.
As a Cayman Islands company listed on the Nasdaq Global Market, we are subject to the
Nasdaq listing standards. However, the Nasdaq rules permit a foreign private issuer like us to
follow the corporate governance practices of its home country. Certain corporate governance
practices in the Cayman Islands, which is our home country, may differ significantly from the
Nasdaq listing standards. Currently, we rely on home country practice as our audit committee
consists of two independent directors. We also rely on home country practice exemption with
respect to the requirement for annual shareholders meeting and did not hold an annual
shareholders meeting in 2021. As a result, our shareholders are afforded less protection than
they would otherwise enjoy under the Nasdaq listing standards applicable to U.S. domestic
issuers.
We are a “controlled company” within the meaning of the Nasdaq Stock Market Rules
and, as a result, can rely on exemptions from certain corporate governance requirements
that provide protection to shareholders of other United States domestic companies.
We are a “controlled company” as defined under the Nasdaq Stock Market Rules because
Mr. Leaf Hua Li, our founder, chairman of the board of directors and chief executive officer,
owns more than 50% of our total voting power. We are permitted to elect to rely, and are
currently relying, on certain exemptions from corporate governance rules under the Nasdaq
Stock Market Rules. Currently, the majority of our board of directors are not independent
directors. In addition, the compensation of our executive officers are not determined or
recommended solely by independent directors, and our director nominees are not selected or
recommended solely by independent directors. As a result, you do not have the same protection
afforded to shareholders of companies that are subject to these corporate governance
requirements.
– 127 –
RISK FACTORS
There can be no assurance that we will not be a passive foreign investment company, or
PFIC, for United States federal income tax purposes for any taxable year, which could
subject United States investors in the ADSs or Class A Ordinary Shares to significant
adverse United States income tax consequences.
We will be classified as a passive foreign investment company (“PFIC”), for any taxable
year if either (a) 75% or more of our gross income for such year consists of certain types of
“passive” income or (b) 50% or more of the value of our assets (generally determined on the
basis of a quarterly average) during such year produce or are held for the production of passive
income, or the asset test. Although the law in this regard is unclear, we intend to treat our VIEs
(including their subsidiaries) as being owned by us for United States federal income tax
purposes, not only because we exercise effective control over the operation of such entities but
also because we are entitled to substantially all of their economic benefits, and, as a result, we
consolidate their results of operations in our consolidated financial statements. Assuming that
we are the owner of our VIEs (including their subsidiaries) for United States federal income
tax purposes, and based upon our current and expected income and assets, we do not believe
that we were a PFIC for the taxable year ended December 31, 2021 and do not expect to be a
PFIC for the current taxable year or the foreseeable future.
While we do not expect to become a PFIC, because the value of our assets for purposes
of the asset test may be determined by reference to the market price of our Class A Ordinary
Shares and/or ADSs, fluctuations in the market price of our Class A Ordinary Shares and/or
ADSs may cause us to become a PFIC for the current or subsequent taxable years. The
determination of whether we will be or become a PFIC will also depend, in part, on the
composition and classification of our income and assets. Because there are uncertainties in the
application of the relevant rules, it is possible that the IRS may challenge our classification of
certain income and assets as non-passive which may result in our being or becoming a PFIC
in the current or subsequent years. In addition, the composition of our income and assets will
also be affected by how, and how quickly, we use our liquid assets. If we determine not to
deploy significant amounts of cash for active purposes or if it were determined that we do not
own the stock of our VIEs for United States federal income tax purposes, our risk of being a
PFIC may substantially increase. Because there are uncertainties in the application of the
relevant rules and PFIC status is dependent upon the actual financial results for each year in
question, there can be no assurance that we will not be a PFIC for the current taxable year or
any future taxable year.
If we are a PFIC in any taxable year, a U.S. person who invests in the ADSs or ordinary
shares may incur significantly increased United States income tax on gain recognized on the
sale or other disposition of the ADSs or ordinary shares and on the receipt of distributions on
the ADSs or ordinary shares to the extent such gain or distribution is treated as an “excess
distribution” under the United States federal income tax rules and such holder may be subject
to burdensome reporting requirements. Further, if we are a PFIC for any year during which a
U.S. Holder holds the ADSs or our ordinary shares, we generally will continue to be treated
as a PFIC for all succeeding years during which such U.S. Holder holds the ADSs or our
ordinary shares.
– 128 –
RISK FACTORS
We incur and may continue to incur increased costs as a result of being a public company.
As a public company, we incur significant legal, accounting and other expenses that we
did not incur as a private company. The Sarbanes-Oxley Act of 2002, as well as rules
subsequently implemented by the SEC and the Nasdaq Global Market, impose various
requirements on the corporate governance practices of public companies. We expect these rules
and regulations to increase our legal and financial compliance costs and to make some
corporate activities more time-consuming and costlier. As we are no longer an “emerging
growth company,” we expect to incur significant expenses and devote substantial management
effort toward ensuring compliance with the requirements of Section 404 of the Sarbanes-Oxley
Act of 2002 and the other rules and regulations of the SEC. For example, as a result of
becoming a public company, we need to adopt policies regarding internal controls and
disclosure controls and procedures. Operating as a public company will make it more difficult
and more expensive for us to obtain director and officer liability insurance, and we may be
required to accept reduced policy limits and coverage or incur substantially higher costs to
obtain the same or similar coverage. In addition, we incur additional costs associated with our
public company reporting requirements. It may also be more difficult for us to find qualified
persons to serve on our board of directors or as executive officers. We will also incur additional
costs as a result of the Listing on the Hong Kong Stock Exchange. We are currently evaluating
and monitoring developments with respect to these rules and regulations, and we cannot predict
or estimate with any degree of certainty the amount of additional costs we may incur or the
timing of such costs.
We may be involved in class action lawsuits in the United States in the future. Such
lawsuits could divert a significant amount of our management’s attention and other resources
from our business and operations, which could harm our results of operations and require us
to incur significant expenses to defend the lawsuits. See “— Risks Related to Our Class A
Ordinary Shares and ADSs — The trading price of the ADSs and Class A Ordinary Shares may
be volatile, which could result in substantial losses to you.”
Techniques employed by short sellers may drive down the market price of our Class A
Ordinary Shares and ADSs.
Short selling is the practice of selling securities that the seller does not own but rather has
borrowed from a third-party with the intention of buying identical securities back at a later date
to return to the lender. The short seller hopes to profit from a decline in the value of the
securities between the sale of the borrowed securities and the purchase of the replacement
shares, as the short seller expects to pay less in that purchase than it received in the sale. As
it is in the short seller’s interest for the price of the security to decline, many short sellers
publish, or arrange for the publication of, negative opinions regarding the relevant issuer and
its business prospects in order to create negative market momentum and generate profits for
themselves after selling a security short. These short attacks have, in the past, led to selling of
shares in the market.
– 129 –
RISK FACTORS
Public companies listed in the United States that have substantially all of their operations
in China have been the subject of short selling. Much of the scrutiny and negative publicity has
centered on allegations of a lack of effective internal control over financial reporting resulting
in financial and accounting irregularities and mistakes, inadequate corporate governance
policies or a lack of adherence thereto and, in many cases, allegations of fraud. As a result,
many of these companies are now conducting internal and external investigations into the
allegations and, in the interim, are subject to shareholder lawsuits and/or SEC enforcement
actions.
It is not clear what effect such negative publicity could have on us. If we were to become
the subject of any unfavorable allegations, whether such allegations are proven to be true or
untrue, we could have to expend a significant amount of resources to investigate such
allegations and/or defend ourselves. While we would strongly defend against any such short
seller attacks, we may be constrained in the manner in which we can proceed against the
relevant short seller by principles of freedom of speech, applicable state law or issues of
commercial confidentiality. Such a situation could be costly and time-consuming and could
distract our management from growing our business. Even if such allegations are ultimately
proven to be groundless, allegations against us could severely impact our business operations
and stockholder’s equity, and any investment in our Class A Ordinary Shares or ADSs could
be greatly reduced or rendered worthless.
Your investment in our Class A Ordinary Shares or ADS may be impacted if we are
encouraged to issue CDRs in the future.
PRC government authorities have issued new rules that allow PRC technology companies
listed outside China to list on the Mainland China stock market through the creation of Chinese
Depositary Receipts (“CDRs”). However, as the CDR mechanism is newly established, there
are substantial uncertainties in the interpretation and implementation of these rules. We might
consider and be encouraged by the evolving PRC governmental policies to issue CDRs and
allow investors to trade our CDRs on PRC stock exchanges in the future. However, there are
uncertainties as to whether a pursuit of CDRs in China would bring positive or negative impact
on your investment in our Class A Ordinary Shares or ADSs.
RISKS RELATED TO THE LISTING
An active trading market for our Class A Ordinary Shares on the Stock Exchange might
not develop or be sustained, their trading prices might fluctuate significantly and the
effectiveness of the bridging and liquidity arrangements might be limited.
Following the completion of the Listing, we cannot assure you that an active trading
market for our Class A Ordinary Shares on the Hong Kong Stock Exchange will develop or be
sustained. The trading price or liquidity for the ADSs on the Nasdaq Global Market might not
be indicative of those of our Class A Ordinary Shares on the Hong Kong Stock Exchange
– 130 –
RISK FACTORS
following the completion of the Listing. If an active trading market of our Class A Ordinary
Shares on the Hong Kong Stock Exchange does not develop or is not sustained after the
Listing, the market price and liquidity of our Class A Ordinary Shares could be materially and
adversely affected.
In 2014, the Hong Kong, Shanghai, and Shenzhen stock exchanges collaborated to create
an inter-exchange trading mechanism called Stock Connect that allows international and PRC
investors to trade eligible equity securities listed in each other’s markets through the trading
and clearing facilities of their home exchange. Stock Connect currently covers over 2,000
equity securities trading in the Hong Kong, Shanghai, and Shenzhen markets. Stock Connect
allows PRC investors to trade directly in eligible equity securities listed on the Hong Kong
Stock Exchange, known as Southbound Trading; without Stock Connect, PRC investors would
not otherwise have a direct and established means of engaging in Southbound Trading. In
October 2019, the Shanghai and Shenzhen stock exchanges separately announced their
amended implementation rules in connection with Southbound Trading to include shares of
WVR companies to be traded through Stock Connect. However, since these rules are relatively
new, there remains uncertainty as to the implementation details, especially with respect to
shares of those companies with a secondary or dual-primary listing on the Hong Kong Stock
Exchange. It is unclear whether and when the Class A Ordinary Shares of our Company, a WVR
company with a dual-primarily listing in Hong Kong upon the Listing, will be eligible to be
traded through Stock Connect, if at all. The ineligibility or any delay of our Class A Ordinary
Shares for trading through Stock Connect will affect PRC investors’ ability to trade our Class
A Ordinary Shares and therefore may limit the liquidity of the trading of our Class A Ordinary
Shares on the Hong Kong Stock Exchange.
Throughout the Bridging Period, the Designated Dealers intend to implement certain
bridging and liquidity arrangements as set out in the section headed “Market Arrangements to
Facilitate Dealings in Hong Kong — Bridging Arrangements.” While such arrangements are
expected to contribute towards liquidity to meet demand for our Class A ordinary shares in
Hong Kong and to maintain a fair and orderly market, investors should be aware that such
bridging and liquidity arrangements are subject to the Designated Dealers’ ability to obtain
sufficient numbers of our Class A ordinary shares to meet demand.
There is no guarantee that such bridging and liquidity arrangements will attain and/or
maintain liquidity in our Class A Ordinary Shares at any particular level on the Hong Kong
Stock Exchange, nor is there any assurance that the price of our Class A Ordinary Shares in
Hong Kong will not exhibit significant volatility. We also cannot guarantee you that the price
at which our Class A Ordinary Shares are traded on the Hong Kong Stock Exchange will be
substantially the same as or similar to the price at which the ADSs are traded on the Nasdaq
Global Market or that any particular volume of our Class A Ordinary Shares will be traded on
the Hong Kong Stock Exchange. The bridging and liquidity arrangements being implemented
in connection with the Listing are not equivalent to the price stabilization activities which may
be undertaken in connection with an initial public offering. The bridging and liquidity
arrangements will terminate and cease to continue beyond the Bridging Period. Accordingly,
there may be volatility in the Hong Kong market after the Bridging Period.
– 131 –
RISK FACTORS
The characteristics of the U.S. capital markets and the Hong Kong capital markets are
different.
The Nasdaq Global Market and the Hong Kong Stock Exchange have different trading
hours, trading characteristics (including trading volume and liquidity), trading and listing
rules, and investor bases (including different levels of retail and institutional participation). As
a result of these differences, the trading prices of our Class A Ordinary Shares and the ADSs
representing them might not be the same, even allowing for currency differences. Fluctuations
in the price of the ADSs due to circumstances peculiar to its home capital market could
materially and adversely affect the price of the Class A Ordinary Shares. Because of the
different characteristics of the U.S. and Hong Kong equity markets, the historic market prices
of the ADSs may not be indicative of the performance of our securities (including the ordinary
shares) after the Listing.
There is uncertainty as to whether Hong Kong stamp duty will apply to the trading of the
ADSs or to interchanges between ADSs and Class A Ordinary Shares following listing of
our Class A Ordinary Shares on the Stock Exchange.
In connection with listing of our Class A Ordinary Shares in Hong Kong, or the Listing,
we will establish a branch register of members in Hong Kong, or the Hong Kong Share register.
Our Class A Ordinary Shares that are traded on the Hong Kong Stock Exchange will be
registered on the Hong Kong Share register, and the trading of these Shares on the Stock
Exchange will be subject to the Hong Kong stamp duty. To facilitate ADS-ordinary share
conversion and trading between the Nasdaq Global Market and the Stock Exchange, we also
intend to move a portion of our issued Class A Ordinary Shares from our register of members
maintained in the Cayman Islands to our Hong Kong Share register.
Under the Hong Kong Stamp Duty Ordinance, any person who effects any sale or
purchase of Hong Kong stock, defined as stock the transfer of which is required to be registered
in Hong Kong, is required to pay Hong Kong stamp duty. The stamp duty is currently set at
a total rate of 0.26% of the greater of the consideration for, or the value of, shares transferred,
with 0.13% payable by each of the buyer and the seller. See “Information about This Document
and the Introduction — Dealings and Settlement of Class A Ordinary Shares in Hong Kong.”
To the best of our knowledge, Hong Kong stamp duty has not been levied in practice on
the trading or conversion of ADSs representing shares of companies that are listed in both the
United States and Hong Kong and that have maintained all or a portion of their common shares,
including common shares underlying ADSs, in their Hong Kong share registers or on
interchanges between those shares and ADSs. However, it is unclear whether, as a matter of
Hong Kong law, the trading of these ADSs or deposits in or withdrawals from these ADS
facilities for these dual-listed companies constitutes a sale or purchase of the underlying Hong
Kong-registered common shares that is subject to Hong Kong stamp duty. We advise investors
to consult their own tax advisors on this matter. If Hong Kong stamp duty is determined by the
– 132 –
RISK FACTORS
competent authority to apply to the trading of the ADSs or interchanges between the ADSs and
our Class A Ordinary Shares, the trading price and the value of your investment in our Class
A Ordinary Shares and/or the ADSs may be affected.
Exchange between our Class A Ordinary Shares and the ADSs may adversely affect the
liquidity and/or trading price of each other.
The ADSs are currently traded on the Nasdaq Global Market. Subject to compliance with
U.S. securities laws and the terms of the deposit agreement, holders of our Class A Ordinary
Shares may deposit Class A Ordinary Shares with the depositary in exchange for the issuance
of the ADSs. Any holder of ADSs may also withdraw the underlying Class A Ordinary Shares
represented by the ADSs pursuant to the terms of the deposit agreement for trading on the Hong
Kong Stock Exchange. In the event that a substantial number of Class A Ordinary Shares are
deposited with the depositary in exchange for ADSs or vice versa, the liquidity and trading
price of our Class A Ordinary Shares on the Hong Kong Stock Exchange and the ADSs on the
Nasdaq Global Market may be adversely affected.
The time required for the exchange between Class A Ordinary Shares and ADSs might be
longer than expected and investors might not be able to settle or effect any sale of their
securities during this period, and the exchange of Class A Ordinary Shares into ADSs
involves costs.
There is no direct trading or settlement between the Nasdaq Global Market and the Hong
Kong Stock Exchange on which the ADSs and our Class A Ordinary Shares are respectively
traded. In addition, the time differences between Hong Kong and New York, unforeseen market
circumstances, or other factors may delay the deposit of Class A Ordinary Shares in exchange
for the ADSs or the withdrawal of Class A Ordinary Shares underlying the ADSs. Investors will
be prevented from settling or effecting the sale of their securities during such periods of delay.
In addition, we cannot assure you that any exchange for Class A Ordinary Shares into ADSs
(and vice versa) will be completed in accordance with the timelines that investors may
anticipate.
Furthermore, the depositary for the ADSs is entitled to charge holders fees for various
services including for the issuance of ADSs upon deposit of Class A Ordinary Shares,
cancelation of ADSs, distributions of cash dividends or other cash distributions, distributions
of ADSs pursuant to share dividends or other free share distributions, distributions of securities
other than ADSs, and annual service fees. As a result, shareholders who exchange Class A
Ordinary Shares into ADSs, and vice versa, may not achieve the level of economic return the
shareholders may anticipate.
– 133 –
WAIVERS
In preparation for the Listing, we have sought the following waivers from strict
compliance with the relevant provisions of the Listing Rules:
No. Rules Subject matter
1. Rule 8.12 of the Listing Rules Management Presence in Hong Kong
2. Rules 3.28 and 8.17 of the Listing Joint Company Secretaries

Rules
3. Chapter 14A of the Listing Rules Continuing Connected Transactions
4. Rule 8A.44 of, and Appendix 3 to, the Requirements relating to the Articles of
Listing Rules Association of the Company
5. Rules 4.10 and 4.11 of, and Note 2.1 to Use of U.S. GAAP
paragraph 2 of the Appendix 16 to, the
Listing Rules
6. Rule 9.09(b) of the Listing Rules Dealing in Shares prior to Listing
7. Rule 17.02(1)(b) of, and paragraph 27 Waiver in relation to the 2014 Plan and
of Appendix 1A to, the Listing Rules the 2019 Plan
8. Note (1) to Rule 17.03(9) of the Listing Exercise price of options to be granted
Rules pursuant to the 2014 Plan and the 2019
Plan after the Listing
9. Rules 4.04(2) and 4.04(4)(a) of the Acquisition after the Track Record
Listing Rules Period
10. Paragraph 26 of Part A of Appendix 1 Disclosure Requirements with respect

to the Listing Rules to Changes in the Share Capital
11. Rule 10.08 of the Listing Rules Waiver in relation to Share Issuance
within Six Months from the Listing
Date
– 134 –
WAIVERS
MANAGEMENT PRESENCE IN HONG KONG
Rule 8.12 of the Listing Rules requires that a new applicant applying for a primary listing
on the Stock Exchange must have a sufficient management presence in Hong Kong. This
normally means that at least two of its executive directors must be ordinarily resident in Hong
Kong.
Notwithstanding our Group operates as an all-round online financial services platform

based in Hong Kong with an extended international footprint in the U.S. and Singapore as well
as strong background and abundant resources in the PRC, our executive Directors and a
majority of our senior management members are and will continue to be based in Shenzhen,
the PRC, being the city where we commenced our operations in December 2007 and locate a
majority of our management and administration resources.
Accordingly, we have applied to the Stock Exchange for, and the Stock Exchange has
granted a waiver from strict compliance with the requirements set out in Rule 8.12 of the
Listing Rules. In order to maintain effective communication with the Stock Exchange, we will
put in place the following measures in order to achieve regular communication with the Stock
Exchange:
(a) The Company has appointed Mr. Li, our founder, chairman of the Board, executive
Director and chief executive officer, and Ms. Lam Wing Chi (“Ms. Lam”, one of the
joint company secretaries of the Company), as the authorized representatives
(“Authorized Representatives”) for the purpose of Rule 3.05 of the Listing Rules.
They will act as the Company’s principal channel of communication with the Stock
Exchange. Each of them has confirmed that he/she can be readily contactable by
phone, facsimile and email to deal promptly with enquiries from the Stock
Exchange. In addition, in order to further ensure that enquiries from the Stock
Exchange will be promptly dealt with, Mr. Arthur Yu Chen (“Mr. Chen”), our chief
financial officer who ordinarily resides in Hong Kong, has also been appointed as
an alternate authorized representative of the Company for communication with the
Stock Exchange. The Company has provided contact details of the two Authorized
Representatives and Mr. Chen to the Stock Exchange and will inform the Stock
Exchange as soon as practicable in respect of any change in the Company’s
authorized representatives. Mr. Li has also confirmed that he possesses valid travel
documents to visit Hong Kong and will be able to meet with the Stock Exchange
within a reasonable period of time, when required. The Directors have also provided
their contacts to the Stock Exchange and the Authorized Representatives pursuant to
Rule 3.20 of the Listing Rules;
(b) Our Authorized Representatives and Mr. Chen have means of contacting all
Directors (including the independent non-executive Directors) promptly at all times
as and when the Stock Exchange proposes to contact a Director with respect to any
matters;
– 135 –
WAIVERS
(c) All the Directors who are not ordinarily resident in Hong Kong have or can apply
for valid travel documents to visit Hong Kong for business purposes and would be
able to meet with the Stock Exchange upon reasonable notice;
(d) Our Company has appointed Guotai Junan Capital Limited as our compliance
adviser (the “Compliance Adviser”) in compliance with Rules 3A.19 and 8A.33 of
the Listing Rules. The Compliance Adviser will, among other things and in addition
to the Authorized Representatives, provide our Company with professional advice
on continuing obligations under the Listing Rules and act as additional channel of
communication of our Company with the Stock Exchange from the Listing. Further,
pursuant to Rule 8A.33 of the Listing Rules, the Company is required to engage a
compliance advisor on a permanent basis; and
(e) Meetings between the Stock Exchange and our Directors could be arranged through
our Authorized Representatives or our Compliance Adviser, or directly with our
Directors within a reasonable period. Our Company will inform the Stock Exchange
as soon as practicable in respect of any change in the Authorized Representatives,
the Directors and/or the Compliance Adviser of the Company in accordance with the
Listing Rules.
JOINT COMPANY SECRETARIES
Pursuant to Rules 3.28 and 8.17 of the Listing Rules, a new applicant for listing on the
Stock Exchange must appoint a company secretary who, by virtue of his/her academic or
professional qualifications or relevant experience, is, in the opinion of the Stock Exchange,
capable of discharging the functions of the company secretary.
Pursuant to Note 1 to Rule 3.28 of the Listing Rules, the Stock Exchange considers the
following academic or professional qualifications to be acceptable:
(a) a member of The Hong Kong Institute of Chartered Secretaries;
(b) a solicitor or barrister (as defined in the Legal Practitioners Ordinance (Chapter 159
of the Laws of Hong Kong)); and
(c) a certified public accountant (as defined in the Professional Accountants Ordinance
(Chapter 50 of the Laws of Hong Kong)).
– 136 –
WAIVERS
In addition, pursuant to Note 2 to Rule 3.28 of the Listing Rules, in assessing “relevant
experience”, the Stock Exchange will consider the individual’s:
(a) length of employment with the issuer and other issuers and the roles he/she played;
(b) familiarity with the Listing Rules and other relevant laws and regulations including
the SFO, Companies Ordinance, Companies (Winding Up and Miscellaneous
Provisions) Ordinance, and the Takeovers Code;
(c) relevant training taken and/or to be taken in addition to the minimum requirement
under Rule 3.29 of the Listing Rules; and
(d) professional qualifications in other jurisdictions.
We have appointed Mr. Yu Qian (“Mr. Yu”) and Ms. Lam, as the joint company
secretaries of our Company. Mr. Yu is currently the legal director of the Company and has
extensive experience in handling corporate, legal and regulatory compliance and administrative
matters, as well as a thorough understanding of the daily operations and internal administration
of our Group. Mr. Yu presently does not possess the qualifications under Rules 3.28 and 8.17
of the Listing Rules, and may not be able to fulfill the requirements of the Listing Rules on his
own. Therefore, our Company has appointed Ms. Lam, who fully meets the requirements
stipulated under Rules 3.28 and 8.17 of the Listing Rules, to act as the other joint company
secretary and provide assistance to Mr. Yu for an initial period of three years from the Listing
Date. Ms. Lam is a Chartered Secretary, a Chartered Governance Professional and an associate
of both The Hong Kong Chartered Governance Institute (formerly “The Hong Kong Institute
of Chartered Secretaries”) and The Chartered Governance Institute (formerly “The Institute of
Chartered Secretaries and Administrators”) in the United Kingdom. For further details about
Mr. Yu and Ms. Lam’s qualifications and experiences, please see “Directors and Senior
Management — Joint Company Secretaries” in this document.
Accordingly, we have applied to the Stock Exchange for, and the Stock Exchange has
granted, a waiver from strict compliance with the requirements under Rules 3.28 and 8.17 of
the Listing Rules for an initial period of three years from the Listing Date in accordance with
Guidance Letter HKEX-GL108-20, on the basis of the proposed arrangements below:
(a) Mr. Yu will endeavor to attend relevant training courses, including briefings on the
latest changes to the relevant applicable Hong Kong laws and regulations and the
Listing Rules which will be organized by our Hong Kong legal advisers on an
invitation basis and seminars organized by the Stock Exchange for listed issuers
from time to time;
– 137 –
WAIVERS
(b) Both Mr. Yu and Ms. Lam have confirmed that each of them will be attending a total
of no less than 15 hours of training courses on the Listing Rules, corporate
governance, information disclosure, investors relation as well as the functions and
duties of the company secretary of a Hong Kong listed issuer during each financial
year as required under Rule 3.29 of the Listing Rules;
(c) Ms. Lam will assist Mr. Yu to enable him to acquire the relevant experience (as
required under Rule 3.28 of the Listing Rules) to discharge the duties and
responsibilities as our company secretary;
(d) Ms. Lam will communicate regularly with Mr. Yu on matters relating to corporate
governance, the Listing Rules and any other laws and regulations which are relevant
to our Company and its affairs. Ms. Lam will work closely with, and provide
assistance for, Mr. Yu in the discharge of his duties as a company secretary,
including organizing our Board meetings and Shareholders’ general meetings;
(e) Upon expiry of Mr. Yu’s initial term of appointment as the company secretary of our
Company, our Company will evaluate his experience in order to determine if he has
acquired the qualifications required under Rule 3.28 of the Listing Rules, and
whether on-going assistance should be arranged so that Mr. Yu’s appointment as the
company secretary of the Company continues to satisfy the requirements under
Rules 3.28 and 8.17 of the Listing Rules;
(f) The Company has appointed Guotai Junan Capital Limited as our Compliance
Adviser pursuant to Rules 3A.19 and 8A.33 of the Listing Rules which will act as
the additional communication channel with the Stock Exchange from the Listing
Date and provide professional guidance and advice to the Company and Mr. Yu as
to the compliance with the Listing Rules and all other applicable laws and
regulations; and
(g) The waiver can be revoked with immediate effect if there are material breaches of
the Listing Rules by the Company.
Prior to the expiry of the initial three-year period, the qualification of Mr. Yu will be
re-evaluated to determine whether the requirements as stipulated in Note 2 to Rule 3.28 of the
Listing Rules can be satisfied.
– 138 –
WAIVERS
CONTINUING CONNECTED TRANSACTIONS
We have entered into, and are expected to continue certain transactions which will
constitute non-exempt continuing connected transactions of our Company under the Listing
Rules upon the Listing. Accordingly, we have applied to the Stock Exchange for, and the Stock
Exchange has granted, waivers from strict compliance with (where applicable) (i) the
announcement, (ii) annual reporting requirement, (iii) independent Shareholders’ approval
requirement, (iv) the annual cap requirement, and (v) the requirement of limiting the term of
the continuing connected transactions under Chapter 14A of the Listing Rules. For further
details in this respect, see “Connected Transactions” in this document.
REQUIREMENTS RELATING TO THE ARTICLES OF ASSOCIATION OF THE

COMPANY
As the Company is applying for a dual primary listing on the Stock Exchange, the Articles
are required to comply with Appendix 3 to the Listing Rules, which sets out the core
shareholder protection standards. Rule 19.30(1)(b) of the Listing Rules provides that the Stock
Exchange may refuse a listing if it is not satisfied that the overseas issuer’s primary listing is
or is to be on an exchange where the standards of shareholder protection are at least equivalent
to those provided in Hong Kong.
Rule 8A.44 of the Listing Rules requires issuers with WVR structure such as our
Company to give force to the requirements of Rules 8A.07, 8A.09, 8A.10, 8A.13, 8A.14,
8A.15, 8A.16, 8A.17, 8A.18, 8A.19, 8A.21, 8A.22, 8A.23, 8A.24, 8A.26, 8A.27, 8A.28, 8A.29,
8A.30, 8A.31, 8A.32, 8A.33, 8A.34, 8A.35, 8A.37, 8A.38, 8A.39, 8A.40 and 8A.41 of the
Listing Rules by incorporating them into their articles of association or equivalent document
(together with the requirements under Appendix 3 to the Listing Rules, the “Listing Rules
Articles Requirements”).
The Articles do not comply with some of the Listing Rules Articles Requirements,
namely, (i) paragraphs 4(2), 14(1), 14(2), 14(3), 14(4), 14(5), 15, 16, 17, 19, 20 and 21 of
Appendix 3 to the Listing Rules, (ii) Rules 8A.09, 8A.10, 8A.13 to 8A.19, 8A.22 to 8A.24,
8A.26 to 8A.35 and 8A.37 to 8A.41 of the Listing Rules (together, the “Unmet Listing Rules
Articles Requirements”). Other than the said Unmet Listing Rules Articles Requirements, the
remaining Listing Rules Articles Requirements are met by the Articles. The Company will seek
Shareholders’ approval to incorporate the Unmet Listing Rules Articles Requirements into its
Articles at its first general meeting to be convened on or before June 30, 2023 (the “First
GM”).
– 139 –
WAIVERS
Details of the Unmet Listing Rules Articles Requirements to be incorporated into the
Articles are set out below:
(a) To be approved by Dual Class-based Resolution (defined below)
(1) The articles of association shall stipulate that a super-majority vote (at least
three-fourths of the voting rights of the members holding shares in that class
present and voting in person or by proxy at a separate general meeting of
members of the class where the quorum for such meeting shall be holders of
at least one third of the issued shares of the class) of the issuer’s members of
the class to which the rights are attached shall be required to approve a change
to those rights (paragraph 15 of Appendix 3 to the Listing Rules);
(b) To be approved by Single Class-based Resolution (defined below)
(2) Non-WVR shareholders (as defined under the Listing Rules) must be entitled
to cast at least 10% of the votes that are eligible to be cast on resolutions at the
listed issuer’s general meetings.
Note 1: Compliance with this rule means, for example, that an issuer cannot
list with a WVR structure that attaches 100% of the right to vote at general
meetings to the beneficiaries of weighted voting rights.
Note 2: A beneficiary of weighted voting rights must not take any action that
would result in a non-compliance with this rule.
A listed issuer must not increase the proportion of shares that carry weighted
voting rights above the proportion in issue at the time of listing.
Note: If the proportion of shares carrying weighted voting rights is reduced

below the proportion in issue at the time of listing, Rule 8A.13 of the Listing
Rules shall apply to the reduced proportion of shares carrying weighted voting
rights (Rules 8A.09 and 8A.13 of the Listing Rules);
(3) A class of shares conferring weighted voting rights in a listed issuer must not
entitle the beneficiary to more than ten times the voting power of ordinary
shares, on any resolution tabled at the issuer’s general meetings (Rule 8A.10
of the Listing Rules);
– 140 –
WAIVERS
(4) A listed issuer with a WVR structure may only allot, issue or grant shares
carrying weighted voting rights with the prior approval of the Stock Exchange
and pursuant to (a) an offer made to all the issuer’s shareholders pro rata (apart
from fractional entitlements) to their existing holdings; (b) a pro rata issue of
shares to all the issuer’s shareholders by way of scrip dividends; or (c)
pursuant to a stock split or other capital reorganization; provided that the Stock
Exchange is satisfied that the proposed allotment or issuance will not result in
an increase in the proportion of shares carrying weighted voting rights:
(i) if, under a pro rata offer, beneficiaries of weighted voting rights do not
take up any part of the shares carrying weighted voting rights (or rights
to those shares) offered to them, those shares (or rights) not taken up
could only be transferred to another person on the basis that such
transferred rights will only entitle the transferee to an equivalent number
of ordinary shares; and
(ii) to the extent that rights in a listed issuer’s shares not carrying weighted
voting in a pro rata offer are not taken up in their entirety (e.g. in the case
where the pro rata offering is not fully underwritten), the number of the
listed issuer’s shares carrying weighted voting rights that can be allotted,
issued or granted must be reduced proportionately (Rule 8A.14 of the
Listing Rules);
(5) If a listed issuer with a WVR structure reduces the number of its shares in issue
(e.g. through a purchase of its own shares) the beneficiaries of weighted voting
rights must reduce their weighted voting rights in the issuer proportionately
(for example through conversion of a proportion of their shareholding with
those rights into shares without those rights), if the reduction in the number of
shares in issue would otherwise result in an increase in the proportion of the
listed issuer’s shares that carry weighted voting rights (Rule 8A.15 of the
Listing Rules);
(6) After listing, a listed issuer with a WVR structure must not change the terms
of a class of its shares carrying weighted voting rights to increase the weighted
voting rights attached to that class (Rule 8A.16 of the Listing Rules);
Note: If a listed issuer wishes to change the terms of a class of its shares
carrying weighted voting rights to reduce those rights it may do so but must,
in addition to complying with any requirements under law, first obtain the prior
approval of the Stock Exchange and, if approval is granted, must announce the
change.
– 141 –
WAIVERS
(7) The beneficiary’s weighted voting rights in a listed issuer must cease if, at any
time after listing, the beneficiary is:
(i) deceased;
(ii) no longer a member of the issuer’s board of directors;
(iii) deemed by the Stock Exchange to be incapacitated for the purpose of

performing his or her duties as a director; or
(iv) deemed by the Stock Exchange to no longer meet the requirements of a

director set out in the Listing Rules.
The weighted voting rights attached to a beneficiary’s shares must cease upon
transfer to another person of the beneficial ownership of, or economic interest
in those shares or the control over the voting rights attached to them (through
voting proxies or otherwise). A limited partnership, trust, private company or
other vehicle may hold shares carrying weighted voting rights on behalf of a
beneficiary of weighted voting rights provided that such an arrangement does
not result in a circumvention of Rule 8A.18(1) of the Listing Rules. The Stock
Exchange would not consider a lien, pledge, charge or other encumbrance on
shares carrying weighted voting rights to be a transfer for the purpose of Rule
8A.18 of the Listing Rules on condition that this does not result in the transfer
of the legal title or beneficial ownership of those shares or the voting rights
attached to them (through voting proxies or otherwise). The Stock Exchange
would consider a transfer to have occurred under Rule 8A.18 of the Listing
Rules if a beneficiary of weighted voting rights and a non-WVR shareholder(s)
enter into any arrangement or understanding to the extent that this resulted in
a transfer of weighted voting rights from the beneficiary of those weighted
voting rights to the non-WVR shareholder (Rules 8A.17, 8A.18(1), 8A.18(2)
and 8A.19 of the Listing Rules).
If a vehicle holding shares carrying weighted voting rights in a listed issuer on

behalf of a beneficiary no longer complies with Rule 8A.18(2) of the Listing
Rules, the beneficiary’s weighted voting rights in the listed issuer must cease.
The issuer and beneficiary must notify the Stock Exchange as soon as
practicable with details of the non-compliance;
(8) A listed issuer’s WVR structure must cease when none of the beneficiaries of
the weighted voting rights at the time of the issuer’s initial listing have
beneficial ownership of shares carrying weighted voting rights (Rule 8A.22 of
the Listing Rules);
– 142 –
WAIVERS
(9) Any weighted voting rights attached to any class of shares in a listed issuer
must be disregarded and must not entitle the beneficiary to more than one vote
per share on any resolution to approve the following matters: (i) changes to the
listed issuer’s constitutional documents, however framed; (ii) variation of
rights attached to any class of shares; (iii) the appointment or removal of any
independent non-executive director; (iv) the appointment or removal of
auditors; and (v) the voluntary winding-up of the listed issuer (Rule 8A.24 of
the Listing Rules);
(c) To be approved by Non-class-based Resolution (defined below)
(10) Non-WVR shareholders must be able to convene an extraordinary general

meeting and add resolutions to the meeting agenda. The minimum stake
required to do so must not be higher than 10% of the voting rights on a one vote
per share basis in the share capital of the listed issuer (Rule 8A.23 of the
Listing Rules);
(11) The articles of association shall stipulate that any person appointed by the
directors to fill a casual vacancy on or as an addition to the board shall hold
office only until the first annual general meeting of the issuer after his
appointment, and shall then be eligible for re-election (paragraph 4(2) of
Appendix 3 to the Listing Rules);
(12) The articles of association shall require the issuer to hold a general meeting for
each financial year as its annual general meeting (paragraph 14(1) of Appendix
3 to the Listing Rules);
(13) The articles of association shall stipulate that any annual general meeting must
be called by notice of at least 21 days, and that any other general meeting
(including an extraordinary general meeting) must be called by notice of at
least 14 days (paragraph 14(2) of Appendix 3 to the Listing Rules);
(14) The articles of association shall stipulate that members must have the right to
(i) speak at a general meeting; and (ii) vote at a general meeting except where
a member is required, by the Listing Rules, to abstain from voting to approve
the matter under consideration (paragraph 14(3) of Appendix 3 to the Listing
Rules);
(15) The articles of association shall provide that, where any shareholder is, under
the Listing Rules, required to abstain from voting on any particular resolution
or restricted to voting only for or only against any particular resolution, any
votes cast by or on behalf of such shareholder in contravention of such
requirement or restriction shall not be counted (paragraph 14(4) of Appendix 3
to the Listing Rules);
– 143 –
WAIVERS
(16) The articles of association shall stipulate that members holding a minority
stake in the total number of issued shares must be able to convene an
extraordinary general meeting and add resolutions to a meeting agenda. The
minimum stake required to do so must not be higher than 10% of the voting
rights, on a one vote per share basis, in the share capital of the issuer
(paragraph 14(5) of Appendix 3 to the Listing Rules);
three-fourths of the voting rights of the members present and voting in person
or by proxy in a general meeting) shall be required to approve changes to the
issuer’s constitutional documents, however framed (paragraph 16 of Appendix
3 to the Listing Rules);
(18) The articles of association shall stipulate that the appointment, removal and
remuneration of auditors must be approved by a majority of the issuer’s
members or other body that is independent of the board of directors (paragraph
17 of Appendix 3 to the Listing Rules);
(19) The articles of association shall stipulate that HKSCC must be entitled to
appoint proxies or corporate representatives to attend the issuer’s general
meetings and creditors meetings and those proxies/corporate representatives
must enjoy rights equivalent to the rights of other shareholders, including the
right to speak and vote (paragraph 19 of Appendix 3 to the Listing Rules);
(20) The articles of association shall provide for the branch register of members in
Hong Kong to be open for inspection by members but may permit the company
to close the register on terms equivalent to section 632 of the Companies
Ordinance (paragraph 20 of Appendix 3 to the Listing Rules);
three-fourths of the total voting rights of the members present and voting in
person or by proxy at the general meeting) of the issuer’s members in a general
meeting shall be required to approve a voluntary winding up of an issuer
(paragraph 21 of Appendix 3 to the Listing Rules);
(22) The role of an independent non-executive director of a listed issuer with a

WVR structure must include but is not limited to the functions described in
Code Provisions C.1.2, C.1.6 and C.1.7 in Part 2 of Appendix 14 to the Listing
Rules:
(i) participating in board meetings to bring an independent judgment to bear

on issues of strategy, policy, performance, accountability, resources, key
appointments and standards of conduct;
(ii) taking the lead where potential conflicts of interests arise;
– 144 –
WAIVERS
(iii) serving on the audit, compensation, nomination and other governance

committees, if invited; and
(iv) scrutinizing the issuer’s performance in achieving agreed corporate goals

and objectives, and monitoring performance reporting;
Independent non-executive directors and other non-executive directors, as

equal board members, shall give the board and any committees on which they
serve the benefit of their skills, expertise and varied backgrounds and
qualifications through regular attendance and active participation. Generally,
they should also attend general meetings to gain and develop a balanced
understanding of the views of the shareholders; and
Independent non-executive directors and other non-executive directors should

make a positive contribution to the development of the issuer’s strategy and
policies through independent, constructive and informed comments (Rule
8A.26 of the Listing Rules).
(23) Issuers with a WVR structure must establish a nomination committee that
complies with Code Provision B.3 of Appendix 14 to the Listing Rules to:
(i) review the structure, size and composition (including the skills,
knowledge and experience) of the board at least annually and make
recommendations on any proposed changes to the board to complement
the issuer’s corporate strategy;
(ii) identify individuals suitably qualified to become board members and

select or make recommendations to the board on the selection of
individuals nominated for directorships;
(iii) assess the independence of independent non-executive directors; and
(iv) make recommendations to the board on the appointment or re-

appointment of directors and succession planning for directors, in
particular the chairman and the chief executive.
The nomination committee should make available its terms of reference

explaining its role and the authority delegated to it by the board by including
them on the Stock Exchange’s website and the issuer’s website.
Issuers should provide the nomination committee sufficient resources to

perform its duties. Where necessary, the nomination committee should seek
independent professional advice, at the issuer’s expense, to perform its
responsibilities.
– 145 –
WAIVERS
Where the board proposes a resolution to elect an individual as an independent

non-executive director at the general meeting, it should set out in the circular
to shareholders and/or explanatory statement accompanying the notice of the
relevant general meeting:
(i) the process used for identifying the individual and why the board believes
the individual should be elected and the reasons why the board considers
the individual to be independent;
(ii) if the proposed independent non-executive director will be holding their

seventh (or more) listed company directorship, why the board believes the
individual would still be able to devote sufficient time to the board;
(iii) the perspectives, skills and experience that the individual can bring to the
board; and
(iv) how the individual contributes to diversity of the board (Rule 8A.27 of
the Listing Rules);
(24) The nomination committee established under Rule 8A.27 of the Listing Rules
must be chaired by an independent non-executive director (Rules 8A.28 of the
Listing Rules);
(25) The independent non-executive directors of an issuer with a WVR structure

must be subject to retirement by rotation at least once every three years.
Independent non-executive directors are eligible for re-appointment at the end
of the three year term (Rule 8A.29 of the Listing Rules);
(26) An issuer with a WVR structure must establish a corporate governance

committee with at least the terms of reference set out in Code Provision A.2.1
of Appendix 14 to the Listing Rules, and the following additional terms to:
(i) develop and review the issuer’s policies and practices on corporate
governance and make recommendations to the board;
(ii) review and monitor the training and continuous professional development
of directors and senior management;
(iii) review and monitor the issuer’s policies and practices on compliance with
legal and regulatory requirements;
(iv) develop, review and monitor the code of conduct and compliance manual
(if any) applicable to employees and directors;
– 146 –
WAIVERS
(v) review the issuer’s compliance with the code and disclosure in the
Corporate Governance Report (as defined in the Listing Rules);
(vi) review and monitor whether the issuer is operated and managed for the
benefit of all of its shareholders;
(vii) confirm, on an annual basis, that beneficiaries of weighted voting rights

have been members of the listed issuer’s board of directors throughout the
year and that no matters under Rule 8A.17 of the Listing Rules have
occurred during the relevant financial year;
(viii) confirm, on an annual basis, whether or not the beneficiaries of weighted

voting rights have complied with Rules 8A.14, 8A.15, 8A.18 and 8A.24
of the Listing Rules throughout the year;
(ix) review and monitor the management of conflicts of interests and make a
recommendation to the board on any matter where there is a potential
conflict of interest between the issuer, a subsidiary of the issuer and/or
shareholders of the issuer (considered as a group) on the one hand and
any beneficiary of weighted voting rights on the other;
(x) review and monitor all risks related to the issuer’s WVR structure,
including connected transactions between the issuer and/or a subsidiary
of the issuer on one hand and any beneficiary of weighted voting rights
on the other and make a recommendation to the board on any such
transaction;
(xi) make a recommendation to the board as to the appointment or removal of

the Compliance Adviser (as defined under the Listing Rules);
(xii) seek to ensure effective and on-going communication between the issuer
and its shareholders, particularly with regards to the requirements of Rule
8A.35 of the Listing Rules;
(xiii) report on the work of the corporate governance committee on at least a

half-yearly and annual basis covering all areas of its terms of reference;
and
(xiv) disclose, on a comply or explain basis, its recommendations to the board

in respect of matters in sub-paragraphs (ix) to (xi) above in the report
referred to in sub-paragraph (xiii) above (Rule 8A.30 of the Listing
Rules);
– 147 –
WAIVERS
(27) The corporate governance committee must be comprised entirely of

independent non-executive directors, one of whom must act as the chairman
(Rule 8A.31 of the Listing Rules);
(28) The Corporate Governance Report produced by a listed issuer with a WVR
structure to comply with Appendix 14 to the Listing Rules must include a
summary of the work of the corporate governance committee, with regards to
its terms of reference, for the accounting period covered by both the
half-yearly and annual report and disclose any significant subsequent events
for the period up to the date of publication of the half-yearly and annual report,
to the extent possible (Rule 8A.32 of the Listing Rules);
(29) Rule 3A.19 of the Listing Rules is modified to require an issuer with a WVR
structure to appoint a Compliance Adviser on a permanent basis commencing
on the date of the issuer’s initial listing (Rule 8A.33 of the Listing Rules);
(30) An issuer must consult with and, if necessary, seek advice from its Compliance
Adviser, on a timely and ongoing basis in the circumstances set out in Rule
3A.23 of the Listing Rules and also on any matters related to: (i) the WVR
structure; (ii) transactions in which any beneficiary of weighted voting rights
in the issuer has an interest; and (iii) where there is a potential conflict of
interest between the issuer, a subsidiary of the issuer and/or holders of the
issuer (considered as a group) on the one hand and any beneficiary of weighted
voting rights in the issuer on the other (Rule 8A.34 of the Listing Rules);
(31) An issuer with a WVR structure must comply with Section F “Shareholders
Engagement” in Part 2 of Appendix 14 to the Listing Rules (Rule 8A.35 of the
Listing Rules);
(32) An issuer with a WVR structure must include the warning “A company
controlled through weighted voting rights” on the front page of all its listing
documents, periodic financial reports, circulars, notifications and
announcements required by the Listing Rules, and describe its WVR structure,
the issuer’s rationale of such structure and the associated risks for the members
prominently in its listing documents and periodic financial reports. This
warning statement shall inform prospective investors of the potential risks of
investing in an issuer with a WVR structure and that they should make the
decision to invest only after due and careful consideration (Rule 8A.37 of the
Listing Rules);
(33) The documents of or evidencing title for the listed equity securities of an issuer
with a WVR structure must prominently include the warning “A company
controlled through weighted voting rights” (Rule 8A.38 of the Listing Rules);
– 148 –
WAIVERS
(34) An issuer with a WVR structure must in its listing documents and its interim
and annual reports: (i) identify the beneficiaries of weighted voting rights; (ii)
disclose the impact of a potential conversion of WVR shares into ordinary
shares on its share capital; and (iii) disclose all circumstances in which the
weighted voting rights attached to the WVR shares shall cease (Rules 8A.39,
8A.40 and 8A.41 of the Listing Rules).
Under articles 88(f) and 88(h) of our existing Articles, Image Frame Investment (HK)
Limited and Qiantang River Investment Limited (being entities affiliated with Tencent and
defined in our existing Articles as “Tencent Investors”) are entitled to appoint and remove one
director of the Company, subject to certain conditions. Further, pursuant to article 158 of our
existing Articles, articles 88(f) and 88(h) of the Articles may not be amended without the prior
written consent of the Tencent Investors. Other than such rights entitled to by Tencent
Investors, the Company has not granted any other special rights to its other Shareholders. To
comply with Rule 2.03(4) of the Listing Rule, which requires that all holders of listed securities
be treated fairly and equally, and to reflect the full conversion of Class B Ordinary Shares
beneficially owned by Tencent Group through Qiantang River Investment Limited upon
Listing, Tencent Investors have provided consent in writing to terminate such special rights
entitled by them upon the Listing and the Company will at the First GM put forth a resolution
to remove such special rights of Tencent Investors from the Articles (“Termination of
Tencent’s Special Rights”).
In addition, to further enhance its shareholder protection measures, the Company will at
the First GM propose to its Shareholders the following amendments to its Articles: (a) lowering
the quorum of general meeting (which is not a class meeting) from no less than one-third of
all votes attaching to all shares in issue and entitled to vote at such general meeting in the
Company as currently provided for under article 65 in the existing Articles to 10% of all votes
attaching to all shares in issue and entitled to vote at such general meeting in the Company (on
a one vote per share basis) (the “Quorum Requirement”); (b) where a general meeting is
postponed by the directors pursuant to article 71 of the existing Articles, requiring such
meeting to be postponed to a specific date, time and place (the “GM Postponement
Requirement”); and (c) removing the Directors’ discretion to, for the purpose of variation of
rights attached to any class of shares, treat all the classes or any two or more classes as forming
one class if they consider that all such classes would be affected in the same way by the
proposals under consideration under article 17 of the existing Articles, as well as the Directors’
powers to authorize the division of Shares into any number of classes and to determine the
relative rights and obligations as between the different classes and to issue such shares with
preferred or other rights that may be greater than the rights of the Class A Ordinary Shares
under article 9 of the existing Articles as well as making the Directors’ powers to issue
preferred shares under article 9 of the existing Articles to be subject to the Articles, compliance
with the Listing Rules and the Takeovers Code and the conditions that (x) no new class of
shares with voting rights superior to those of Class A Ordinary Shares will be created and (y)
any variations in the relative rights as between the different classes will not result in creating
new class of shares with voting rights superior to those of Class A Ordinary Shares
(“Amendment of Directors’ Class Right Related Powers”).
– 149 –
WAIVERS
At the First GM, the Company will also propose amendments to the Articles to clarify that
the Company, its Shareholders, Directors and officers agree to submit to the jurisdiction of the
courts of the Cayman Islands and Hong Kong, to the exclusion of other jurisdictions, to hear,
settle and/or determine any dispute, controversy or claim whether arising out of or in
connection with the Articles or otherwise. For the avoidance of doubt, the applicable rights of
purchasers, holders, and sellers of the ADSs are not governed by the preceding sentence but are
exclusively governed by the applicable deposit agreement pursuant to which the ADSs were
issued, regardless of whether their dispute, controversy or claim arises out of or in connection
with the Articles or otherwise (the “Forum Selection Clarification”, together with the Unmet
Listing Rules Articles Requirements, the Termination of Tencent’s Special Rights, the Quorum
Requirement, the GM Postponement Requirement, and the Amendment of Directors’ Class
Right Related Powers, the “Unmet Articles Requirements”). For completeness, the Company,
the DTC and holders and beneficial owners of the ADSs each agree that, with regard to any
claim or dispute or difference of whatever nature between or involving the parties hereto
arising directly or indirectly from the relationship created by the deposit agreement, the DTC,
in its sole discretion, shall be entitled to refer such dispute or difference for final settlement
by arbitration in accordance with the Commercial Arbitration Rules of the American
Arbitration Association then in force. Judgment upon the award rendered by the arbitrators may
be enforced in any court having jurisdiction thereof. The seat and place of any reference to
arbitration shall be New York City, New York, and the procedural law of such arbitration shall
be New York law. For the avoidance of doubt this does not preclude holders and beneficial
owners of the ADSs from pursuing claims under the Securities Act or the Exchange Act in
federal courts. Holders and beneficial owners of the ADSs each irrevocably agree that any legal
suit, action or proceeding against or involving the Company or the DTC, arising out of or based
upon the deposit agreement, ADSs, American Depositary Receipts or the transactions
contemplated thereby or by virtue of ownership thereof, may only be instituted in a state or
federal court in New York, New York and irrevocably submits to the exclusive jurisdiction of
such courts in any such suit, action or proceeding.
As advised by the Company’s legal advisor as to Cayman Islands laws, the incorporation
of the following Unmet Articles Requirements will require the following:
(a) as the requirement as set out in paragraph 15 of Appendix 3 to the Listing Rules
would materially adversely vary the rights attached to both Class B Ordinary Shares
and Class A Ordinary Shares, respectively, a special resolution to incorporate such
Unmet Articles Requirement into the Company’s Articles (the “Dual Class-based
Resolution”) will need to be approved at separate class meetings of both holders of
Class B Ordinary Shares (the “Class B Meeting”) and of Class A Ordinary Shares
(the “Class A Meeting”) in accordance with the Company’s existing Articles. The
quorum for separate class meetings is one or more persons holding or representing
by proxy at least one-third in nominal or par value amount of the issued shares of
the relevant class. The Dual Class-based Resolution requires approval of a special
resolution by no less than two-thirds of the votes cast by the holders of issued Class
– 150 –
WAIVERS
B Ordinary Shares and approval of a special resolution by no less than two-thirds of

the votes cast by the holders of issued Class A Ordinary Shares who attend and vote
at the Class B Meeting and the Class A Meeting, respectively, pursuant to article 17
of the existing Articles.
(b) as certain Unmet Articles Requirements, namely requirements as set out in Rules
8A.09, 8A.10, 8A.13, 8A.14, 8A.15, 8A.16, 8A.17, 8A.18(1), 8A.18(2), 8A.19,
8A.22 and 8A.24 of the Listing Rules, would materially adversely vary the rights
attached to Class B Ordinary Shares only, a special resolution to incorporate these
Unmet Articles Requirement into the Company’s Articles (the “Single Class-based
Resolution”, together with Dual Class-based Resolution, the “Class-based
Resolutions”) will need to be approved by the requisite holders of Class B Ordinary
Shares in Class B Meeting only in accordance with the Company’s existing Articles.
The quorum for Class B Meeting is one or more persons holding or representing by
proxy at least one-third in nominal or par value amount of the issued Class B
Ordinary Shares. The Single Class-based Resolution at the Class B Meeting requires
approval of a special resolution by no less than two-thirds of the votes cast by the
holders of issued Class B Ordinary Shares who attend and vote at the Class B
Meeting pursuant to article 17 of the existing Articles.
The passing of the Single Class-based Resolution at the Class B Meeting, without
separate approval, consent or sanction by the holders of Class A Ordinary Shares at
the Class A Meeting, would constitute valid and effective authorization under the
existing Articles for the incorporation of those Unmet Articles Requirements (which
are the subject of the Single Class-based Resolution) into the Company’s Articles,
and such amendments (when duly incorporated into the Company’s Articles by
virtue of and pursuant to the Non-class-based Resolution (as defined below) to be
passed at the Full Shareholders Meeting (as defined below)) will be valid and
effective. Further, because the incorporation of such Unmet Articles Requirements
(which are the subject of the Single Class-based Resolution) would not materially
adversely vary the rights attached to Class A Ordinary Shares, no separate consent
or sanction is required from the holders of Class A Ordinary Shares under the
existing Articles, and no holder of Class A Ordinary Shares would be able to validly
challenge the passing of the Single Class-based Resolution solely by the holders of
Class B Ordinary Shares in the manner described above.
– 151 –
WAIVERS
(c) if (i) the Dual Class-based Resolution is passed at both the Class B Meeting and Class
A Meeting; and (ii) the Single Class-based Resolution is passed at Class B Meeting,
at the full Shareholders’ meeting where all Shareholders may vote as a single class
(the “Full Shareholders’ Meeting”), the Shareholders will be asked to vote on the
Class-based Resolutions. In addition, the Shareholders will also be asked to vote on
another resolution (the “Non-class-based Resolution”) to incorporate into the
Company’s Articles those Unmet Articles Requirements which are not covered by the
Class-based Resolutions, and the voting of the Non-class-based Resolution is not
conditional on the passing of the Class-based Resolutions. If the Class-based
Resolutions are not approved at either the Class B Meeting or Class A Meeting (as the
case may be), then the Shareholders at the Full Shareholders’ Meeting will only be
asked to vote on the Non-class-based Resolution.
Notwithstanding that article 65 of the existing Articles provides the quorum for the
Company’s shareholders’ meeting to be one or more members holding Shares which
carry in aggregate (or representing by proxy) not less than one-third of all votes
attaching to all Shares in issue and entitled to vote present in person or by proxy, the
quorum for the Full Shareholders’ Meeting will comply with the Quorum
Requirement, being 10% of all votes attaching to all shares in issue and entitled to
vote at such general meeting in the Company (on a one vote per share basis), in light
of the Undertaking for Interim Compliance (as defined below) to be given by the
Company and the WVR Beneficiary.
At the Full Shareholders’ Meeting, each of the Class-based Resolutions and the
Non-class-based Resolution will require approval of a special resolution by not less
than two-thirds of the votes cast by such Shareholders as, being entitled to do so,
vote in person or by proxy or, in the case of corporations, by their duly authorized
representatives at the Full Shareholders’ Meeting, in accordance with article 158 of
the existing Articles.
For the avoidance of doubt, weighted voting rights will apply in connection with
passing the Class-based Resolutions and the Non-class based Resolution at the Full
Shareholders’ Meeting. In addition, the Termination of Tencent’s Special Rights will
require the prior written consent of the Tencent Investors, and Tencent Investors
have irrevocably consent to the Company that such special rights entitled by Tencent
Investors shall be terminated upon Listing, and the Company may amend the
Articles to give effect to the Termination of Tencent’s Special Rights.
– 152 –
WAIVERS
The Company has applied for, and the Stock Exchange has granted, a waiver from strict
compliance with the Unmet Articles Requirements, subject to the conditions that:
(1) at the First GM, the Company will put forth: (i) the Dual Class-based Resolution at
the Class B Meeting and the Class A Meeting; (ii) the Single Class-based Resolution
at the Class B Meeting; and (iii) the Class-based Resolutions (if adopted at the Class
B Meeting and Class A Meeting (where applicable)) and the Non-class-based
Resolution at the Full Shareholders’ Meeting (together, the “Proposed
Resolutions”) to amend its Articles to comply with the Unmet Articles
Requirements;
(2) the Company will, prior to the Listing, irrevocably undertake to the Stock Exchange
that if any of the Proposed Resolutions are not passed at the First GM, it will put
forth the Proposed Resolutions that have not been passed at each subsequent annual
general meeting until they are all approved by the Shareholders;
(3) the WVR Beneficiary will, prior to the Listing, irrevocably undertake to the
Company that:
(i) he will be present (whether in person or by proxy), and where any Share is held
by intermediaries held or controlled by him, will procure such intermediaries
to be present (whether in person or by proxy) at the Class A Meeting, the
Class B Meeting and/or the Full Shareholders Meeting (as the case may be),
and to vote in favor of the Proposed Resolutions;
(ii) he will be present at the First GM (whether in person or by proxy) and any
general meeting that may be convened after the Listing and before the First
GM, and to vote in favor of the Proposed Resolutions; and
(iii) if any of the Proposed Resolutions are not passed at the First GM, until they
are all approved, he or the said intermediaries will continue to be present
(whether in person or by proxy) and vote in favor of such Proposed Resolutions
at each subsequent class meeting of the holders of the Class A Ordinary Shares,
class meeting of the holders of the Class B Ordinary Shares, and/or general
meeting (as the case may be) at which the Company puts forth such Proposed
Resolutions;
– 153 –
WAIVERS
(4) Tencent (together with the WVR Beneficiary, the “Undertaking Shareholders”)
will, prior to the Listing, irrevocably undertake to the Company to, and if any Class
A Ordinary Share is held by intermediaries held or controlled by him/it, procure
such intermediaries to be present at the Class A Meeting and the Full Shareholders’
Meeting (whether in person or by proxy) and to vote in favor of the Proposed
Resolutions and that, if any of the Proposed Resolutions are not passed at the First
GM, until they are all approved, it or he or the said intermediaries will continue to
attend (whether in person or by proxy) each subsequent class meeting of the holders
of the Class A Ordinary Shares and general meeting at which the Company puts forth
the Proposed Resolutions and vote in favor of such Proposed Resolutions;
(5) the Company will issue a press release announcing its support publicly for the
Proposed Resolutions each year after the Listing until all the Proposed Resolutions
are adopted;
(6) the Company and the WVR Beneficiary will, prior to the Listing, irrevocably
undertake to the Stock Exchange that it or he will comply with the Unmet Articles
Requirements in full (the “Undertaking for Interim Compliance”) upon the
Listing and before its existing Articles are formally amended to incorporate the
Unmet Articles Requirements, except for:
(i) paragraph 15 of Appendix 3 to the Listing Rules such that, prior to the Articles
being amended, the threshold for passing a resolution in a separate class
meeting will be approval of a special resolution by no less than two-thirds of
the votes cast by the issued shares of that class pursuant to article 17 of the
existing Articles;
(ii) Rules 8A.24(1) and (2) of the Listing Rules such that, prior to the Articles
being amended, weighted voting rights will apply in connection with passing
the Proposed Resolutions; and
(iii) paragraph 16 of Appendix 3 to the Listing Rules such that, prior to the Articles
being amended, the threshold for passing a special resolution for amendments
to the Company’s Articles will be approved by members holding not less than
two-thirds of the voting rights of those present and voting in person or by
proxy at the general meeting in accordance with article 158 of the Company’s
existing Articles.
For the avoidance of doubt, the above exceptions are only applicable to the passing
of the Proposed Resolutions, and the Company shall irrevocably undertake to the
Stock Exchange to comply with paragraphs 15 and 16 of Appendix 3 to and Rules
8A.24(1) and (2) of the Listing Rules for passing any resolution at a separate class
meeting and any special resolution after the Listing (other than the Proposed
– 154 –
WAIVERS
Resolutions) under the Undertaking for Interim Compliance, and if any of the
Class-based Resolution is not passed at the First GM, the Undertaking for Interim
Compliance will remain valid until the Class-based Resolution is passed;
(7) the WVR Beneficiary will, prior to the Listing, irrevocably undertake to the
Company and the Stock Exchange that:
(i) he will procure the Company to give effect to the Undertaking for Interim
Compliance upon the Listing and before its existing Articles are formally
amended;
(ii) in the event any Class B Ordinary Share is to be transferred to an affiliate (as
defined in the Articles) of the WVR Beneficiary that is not a director holding
vehicle after the Listing but before the existing Articles are formally amended,
he will convert such Class B Ordinary Shares into Class A Ordinary Shares by
delivering a written notice to the Company in accordance with the Articles and
only transfer the resultant Class A Ordinary Shares to such affiliate;
(iii) after the Listing but before the existing Articles are formally amended, he will
not effect any change in his holding structure of any Class B Ordinary Shares
unless and until the Stock Exchange has approved such change; and
(iv) he will procure each of Lera Ultimate Limited and Lera Infinity Limited to,
prior to the Listing, deliver a written conversion notice to the Company in
accordance with article 13 of the existing Articles that all of the Class B
Ordinary Shares it holds shall be converted to Class A Ordinary Shares on a
one-for-one basis immediately upon any event listed in Rule 8A.17 of the
Listing Rules occurring after the Listing and before the Articles are formally
amended. Such conversion notice shall expire immediately upon the Articles
are formally amended.
A director holding vehicle, for the purpose of the above paragraph, means (a) a
partnership of which the WVR Beneficiary is a partner and the terms of which must
expressly specify that the voting rights attached to any and all of the Class B
Ordinary Shares held by such partnership are solely dictated by the WVR
Beneficiary; (b) a trust of which the WVR Beneficiary is a beneficiary and that
meets the following conditions: (i) the WVR Beneficiary must in substance retain an
element of control of the trust and any immediate holding companies of, or, if not
permitted in the relevant tax jurisdiction, retain a beneficial interest in any and all
of the Class B Ordinary Shares held by such trust; and (ii) the purpose of the trust
must be for estate planning and/or tax planning purposes; or (c) a private company
or other vehicle wholly-owned and wholly controlled by the WVR Beneficiary or by
a trust referred to in paragraph (b) above;
– 155 –
WAIVERS
(8) if any holders of any ADSs fail to give valid or timely voting instructions to the DTC
with respect of the Proposed Resolutions, the Company will exercise any
discretionary proxy it may have under the deposit agreement for the ADSs to vote
the underlying Class A Ordinary Shares represented by such ADSs in favor of the
Proposed Resolutions at any general meetings; and
(9) the Company remains listed on the Nasdaq.
The Company’s legal advisor as to the laws of the Cayman Islands confirms that the
Undertaking for Interim Compliance will not violate the laws and regulations of the Cayman
Islands, and the Company confirms that, having consulted its other legal advisors, the
Undertaking for Interim Compliance will also not violate other laws and regulations applicable
to the Company.
The WVR Beneficiary acknowledged and agreed that our Shareholders may rely on the
WVR Beneficiary’s undertakings described in paragraphs (3), (6) and (7) above (the “WVR
Beneficiary’s Articles Undertaking”) in acquiring and holding their Shares and that such
undertakings are intended to confer a benefit on the Company and all existing and future
Shareholders and may be enforced by the Company and/or any such Shareholder against the
WVR Beneficiary.
The WVR Beneficiary’s Articles Undertaking shall automatically terminate upon the
earliest of (i) the date on which the proposed amendments to the Articles described in this
sub-section headed “— Requirements relating to the Articles of Association of the Company”
have become effective; (ii) the date of delisting of the Company from the Stock Exchange; and
(iii) the date on which the WVR Beneficiary ceases to be a beneficiary of weighted voting
rights in the Company. For the avoidance of doubt, the termination of the WVR Beneficiary’s
Articles Undertaking shall not affect any rights, remedies, obligations or liabilities of the
Company and/or any Shareholder and/or the WVR Beneficiary himself that have accrued up to
the date of termination, including the right to claim damages and/or apply for any injunction
in respect of any breach of the WVR Beneficiary’s Articles Undertaking which existed at or
before the date of termination. The WVR Beneficiary’s Articles Undertaking shall be governed
by the laws of Hong Kong and all matters, claims or disputes arising out of the WVR
Beneficiary’s Articles Undertaking shall be subject to the exclusive jurisdiction of the courts
of Hong Kong.
Assuming (i) no further Shares are issued under the Share Incentive Plans between the
Latest Practicable Date and the Listing Date and (ii) all Class B Ordinary Shares beneficially
held by Tencent Group through Qiantang River Investment Limited have been converted to
Class A Ordinary Shares, the Undertaking Shareholders (namely, the WVR Beneficiary and
Tencent) will, immediately upon the Listing, beneficially own 239,750,000 Class B Ordinary
Shares and 411,505,230 Class A Ordinary Shares (including any Class A Ordinary Shares
underlying any ADSs they held) respectively, representing in aggregate (a) approximately
47.07% of the total issued Class A Ordinary Shares and approximately 47.07% of the total
voting rights of the Class A Ordinary Shares voting as a separate class, (b) 100% of the total
– 156 –
WAIVERS
issued Class B Ordinary Shares and 100% of the total voting rights of the Class B Ordinary
Shares voting as a separate class, and (c) approximately 85.85% of the voting rights in the
Company (on weighted voting rights basis). Assuming (i) no further Shares are issued under
the Share Incentive Plans between the Latest Practicable Date and the Listing Date, (ii) all
Class B Ordinary Shares beneficially held by Tencent Group through Qiantang River
Investment Limited have been converted to Class A Ordinary Shares and there are no changes
to the number of Class A Ordinary Shares held by the depositary between the Latest Practicable
Date and the Listing Date, to the best knowledge of the Company, the depositary will,
immediately upon the Listing, hold a total of 461,695,904 Class A Ordinary Shares underlying
the ADSs (excluding those represented by the ADSs held by the Undertaking Shareholders
deposited with the depositary, which have already been counted in the foregoing and the Class
A Ordinary Shares issued to our depositary bank for bulk issuance of ADS and reserved for
future issuance under the Share Incentive Plans), representing (x) approximately 52.81% of the
total issued Class A Ordinary Shares and approximately 52.81% of the total voting rights of the
Class A Ordinary Shares voting as a separate class and (y) approximately 14.11% of the voting
rights in the Company (on weighted voting rights basis). Despite the undertaking given by the
Undertaking Shareholders (being the WVR Beneficiary and Tencent) to vote in favour of the
relevant Proposed Resolutions to ensure that they will be adopted at the Class B Meeting and
the Full Shareholders’ Meeting, there is no guarantee that the Dual Class-based Resolution
(being the resolution to incorporate requirements under paragraph 15 of Appendix 3 to the
Listing Rules) will be passed at the Class A Meeting. As the Company has not, since its listing
on the Nasdaq, held a general meeting, it is uncertain as to whether the Dual Class-based
Resolution will be approved with sufficient support from our shareholders at the Class A
Meeting.
For the avoidance of doubt, even though article 17 of the existing Articles provides that
the rights attached to any such class of Shares may, subject to any rights or restrictions for the
time being attached to any class of Shares, only be materially adversely varied either (a) with
the consent in writing of the holders of two-thirds of all of the issued Shares of that class or
(b) with the sanction of an special resolution passed at a separate meeting of the holders of the
Shares of that class, the Company expects to adopt the approach in (b) rather than in (a) to seek
the relevant shareholders’ approval for the Class-based Resolutions at a general meeting. Also,
even though under the existing Articles a special resolution can be (x) passed by not less than
two-thirds of the votes cast by such shareholders as, being entitled to do so, vote in person or,
where proxies are allowed, by proxy, or, in the case of corporations, by their duly authorized
representatives, at a general meeting of the Company, or (y) approved in writing by all of the
shareholders entitled to vote at a general meeting of the Company in one or more instruments
each signed by one or more of the shareholders, the Company expects to adopt the approach
in (x) rather than in (y) to seek the shareholders’ approval for the Class-based Resolution and
the Non-class-based Resolution at a general meeting. This is because, as a public company, it
would involve heavy administrative work for the Company and will be practically impossible
for the Company to collect written consents from a sufficiently large number of its public
shareholders.
– 157 –
WAIVERS
After the Listing, the Company will in its annual reports confirm whether it has, in the
preceding financial year, complied with the Corporate Governance Code set out in Appendix
14 to the Listing Rules to the extent required by Chapter 8A of the Listing Rules.
In the event of any failure to adhere to the requirements of Chapter 8A of the Listing
Rules as determined by the Stock Exchange, the Stock Exchange may, as it considers necessary
for the protection of the investors or the maintenance of an orderly market and in addition to
any other action that the Stock Exchange considers appropriate under the Listing Rules,
exercise absolute discretion to:
(1) direct a trading halt or suspend dealings of any securities of the Company or cancel
the listing of any securities of the Company as set out in Rule 6.01 of the Listing
Rules;
(2) impose the disciplinary sanctions set out in Rule 2A.09 of the Listing Rules against
the parties set out in Rule 2A.10 of the Listing Rules;
(3) withhold (a) approval for an application for the listing of securities; and/or (b)
clearance for the issuance of a circular to the Company’s shareholders unless and
until all necessary steps have been taken to address the non-compliance as directed
by the Stock Exchange to its satisfaction.
USE OF U.S. GAAP
Rules 4.10 and 4.11 of, and note 2.1 to paragraph 2 of the Appendix 16 to, the Listing
Rules require the Company to prepare its financial statements in the listing document and the
subsequent financial reports issued after listing to be in conformity with: (a) Hong Kong
Financial Reporting Standards (“HKFRS”); (b) IFRS; or (c) China Accounting Standards for
Business Enterprises in the case of companies incorporated in China. Rule 19.12 of the Listing
Rules requires an accountant’s report of an overseas issuer to have been audited to a standard
comparable to that required in Hong Kong. Rule 19.13 of the Listing Rules states that
accountants’ reports are required to conform to financial reporting standards acceptable to the
Stock Exchange, which are normally HKFRS or IFRS. Rule 19.14 of the Listing Rules states
that where the Stock Exchange allows a report to be drawn up otherwise than in conformity
with HKFRS or IFRS, the report will be required to conform with accounting standards
acceptable to the Stock Exchange. In such cases, the Stock Exchange will normally require the
report to contain a statement of the financial effect of the material differences (if any) from
either of the above accounting standards. Rule 19.25A of the Listing Rules states that the
annual accounts are required to conform with financial reporting standards acceptable to the
Stock Exchange, which are normally HKFRS or IFRS. Where the Stock Exchange allows
annual accounts to be drawn up otherwise than in conformity with HKFRS or IFRS, the annual
accounts will be required to conform with financial reporting standards acceptable to the Stock
Exchange. In such cases the Stock Exchange will normally require the annual accounts to
contain a reconciliation statement setting out the financial effect of the material differences (if
any) from either HKFRS or IFRS.
– 158 –
WAIVERS
As a company listed on the Nasdaq, our Company has been using U.S. GAAP and the
corresponding auditing standards for the filing of its financial statements with the U.S.
Securities and Exchange Commission as determined by the U.S. Public Company Accounting
Oversight Board. U.S. GAAP is well recognized and accepted by the international investment
community, and significant progress has been made in the convergence between U.S. GAAP
and IFRS. In addition, we note that it might lead to confusion among the Company’s investors
and shareholders if the Company was required to adopt different accounting standards for its
disclosures in Hong Kong from those in the U.S. Aligning the accounting standards used for
disclosures in both markets will alleviate any such confusion. Adoption of U.S. GAAP for the
preparation of its financial statements will also allow the potential investors and shareholders
of our Company to compare the results of the Group against our peers listed in overseas stock
markets which use U.S. GAAP for the preparation of their financial statements more easily.
Our Company has applied to the Hong Kong Stock Exchange for, and the Stock Exchange
has granted, a waiver from strict compliance with the requirements of Rules 4.10, 4.11, 19.13
and 19.25A of, and note 2.1 to paragraph 2 of the Appendix 16 to, the Listing Rules to allow
the financial statements and accountant’s report in the listing document to be prepared based
on U.S. GAAP, subject to the following conditions:
(i) the Company will include adequate disclosure, including (a) a description of the
relevant key differences between U.S. GAAP and IFRS; and (b) a statement showing
the financial effect of any material differences between the financial statements
during the track record period prepared using U.S. GAAP and IFRS (the
“Reconciliation Statement”) in the Company’s accountant’s report of the listing
document and annual reports after the Proposed Listing, and such Reconciliation
Statements will be included as a note to the audited accountant’s report or audited
financial statements in the annual report;
(ii) the Company will include a Reconciliation Statement in the Company’s interim
reports after the Listing; such Reconciliation Statement will be included as a note to
the reviewed financial statements in the interim reports. Where the relevant financial
statements are not reviewed by its auditors, the Reconciliation Statement required to
be included as a note to such financial statements should be reviewed by its auditors
in accordance with a standard comparable to International Standard on Assurance
Engagements 3000 or Hong Kong Standard on Assurance Engagements 3000;
(iii) if the Company is no longer listed in the U.S. or is not obliged to make financial
disclosure in the U.S., the Company will adopt either HKFRS or IFRS in the
preparation of the Company’s financial statements; and
(iv) the Company will comply with Rule 4.08, 19.12, 19.14 of, and note 2.6 to paragraph
2 of Appendix 16 to the Listing Rules.
– 159 –
WAIVERS
DEALINGS IN SHARES PRIOR TO LISTING
According to Rule 9.09(b) of the Listing Rules, there must be no dealing in the securities
of a new applicant for which listing is sought by any core connected person of the issuer from
four clear business days before the expected hearing date until listing is granted (the “Relevant
Period”).
As a company listed on the Nasdaq, the Company has a diverse shareholder base with the
ADSs are widely held and publicly traded. The Company considers that it is therefore not in
a position to control the investment decisions of its shareholders or the investing public in the
U.S.
Solely based on public filings with the SEC as of the Latest Practicable Date, there are
two shareholders who hold more than 10% of the total issued share capital of the Company,
being:
(a) Mr. Li, the founder, chairman and chief executive officer of the Company that is
deemed to be the beneficial owner of (i) 100,000,000 Class A Ordinary Shares held
by Lera Ultimate Limited, (ii) 64,000,000 Class A Ordinary Shares held by Lera
Infinity Limited (iii) 86,568 Class A Ordinary Shares held by Mr. Li, (iv)
202,812,500 Class B Ordinary Shares held by Lera Ultimate Limited and (v)
36,937,500 Class B Ordinary Shares held by Lera Infinity Limited, which in the
aggregate represents approximately 36.2% of the total issued share capital of the
Company and approximately 59.4% of the voting power of the total issued and
outstanding share capital of the Company; and
(b) Tencent Group is deemed to be the beneficial owner of (i) 71,024,142 Class A
Ordinary Shares held by Image Frame Investment (HK) Limited; (ii) 28,840,949
Class A Ordinary Shares and 140,802,051 Class B Ordinary Shares held by Qiantang
River Investment Limited; (iii) 1,161,840 Class A Ordinary Shares represented by
145,230 ADSs held of record by TPP Opportunity GP I, Ltd.; (iv) 5,412,888 Class
A Ordinary Shares represented by 676,611 ADSs held of record by Tencent Mobility
Limited; and (v) 176,792 Class A Ordinary Shares represented by 22,099 ADSs held
of record by Distribution Pool Limited, which in the aggregate represents
approximately 22.2% of the total issued share capital of the Company and
approximately 35.0% of the voting power of the total issued and outstanding share
capital of the Company as of the Latest Practicable Date.
– 160 –
WAIVERS
For a company whose securities are listed and traded in the U.S., the Company notes that
it is a common practice for substantial shareholders and corporate insiders, including directors,
executives and other members of management, to set up trading plans that meet the
requirements of Rule 10b5-1 under the U.S. Exchange Act (the “Rule 10b5-1 Plan(s)”) to buy
or sell the company’s securities. A Rule 10b5-1 Plan is a written plan, set up with a broker, to
trade securities that (a) is entered into at a time when the person trading the securities is not
aware of any material non-public information; (b) specifies the amount of securities to be
purchased or sold and the price at which and the date on which the securities were to be
purchased or sold; and (c) does not allow the person trading the securities to exercise any
subsequent influence over how, when, or whether to effect purchases or sales. Persons who
trade securities pursuant to a Rule 10b5-1 Plan have an affirmative defense against insider
trading allegations under U.S. securities law.
On the basis of the above, the Company considers that the following categories of persons
(collectively, the “Permitted Persons”) should not be subject to the dealing restrictions set out
in Rule 9.09(b) of the Hong Kong Listing Rules:
(a) Mr. Li (the Company’s Controlling Shareholder, founder, chairman of the Board,
executive Director, and chief executive officer), Tencent Group and their respective
close associates in respect of his or their dealings (as the case may be) pursuant to
any Rule 10b5-1 Plans that have been set up prior to the Relevant Period
(“Category 1”);
(b) the Company’s Directors (other than Mr. Li), and the directors and chief executives
of its significant subsidiaries and Consolidated Affiliated Entities (that are,
subsidiaries and Consolidated Affiliated Entities that are not “insignificant
subsidiaries” as defined under the Listing Rules, “Significant Subsidiaries”), in
respect of (i) their respective use of the Shares as security (including, for the
avoidance of doubt, using their respective Shares as security in connection with
entering into financing transactions during the Relevant Period as well as satisfying
any requirements to top-up security under the terms of financing transactions
entered into prior to the Relevant Period), provided that there will be no change in
the beneficial ownership of the Shares at the time of entering into any such
transactions during the Relevant Period and (ii) their respective dealings pursuant to
Rule 10b5-1 Plans that have been set up prior to the Relevant Period (“Category
2”);
(c) directors, chief executives and substantial shareholders of the Company’s

insignificant subsidiaries (as defined under the Listing Rules) and their close
associates (“Category 3”); and
(d) any other person (whether or not an existing Shareholder) who may, as a result of
dealings, become the Company’s substantial shareholder and who is not its director
or chief executive, or a director or chief executive of the Company’s subsidiaries and
Consolidated Affiliated Entities, or their close associates (“Category 4”).
– 161 –
WAIVERS
For the avoidance of doubt:
(a) as the foreclosure, enforcement or exercise of other rights by the lenders in respect
of a security interest over the Shares (including, for the avoidance of doubt, any
security interest created pursuant to any top-up of security) will be subject to the
terms of the financing transaction underlying such security and not within the
control of the pledgor, any change in the beneficial owner of the Shares during the
Relevant Period resulting from the foreclosure, enforcement or exercise of other
rights by the lenders in respect of such security interest will not be subject to Rule
9.09(b) of the Listing Rules; and
(b) persons in Category 1 and Category 2 who (i) use their respective Shares other than
as described in this section headed “Dealings in Shares prior to Listing” or (ii) who
are not dealing in the Company’s securities according to Rule 10b5-1 Plans set up
before the Relevant Period are subject to the restrictions under Rule 9.09(b) of the
Listing Rules.
Mr. Li, our Controlling Shareholder, founder, chairman of the Board, executive Director
and chief executive officer, may pledge the Shares that he beneficially owns as security
(including charges and pledges) in connection with financing activities. As at the Latest
Practicable Date, 50,000,000 Class A Ordinary Shares held by Lera Ultimate Limited (in which
Mr. Li is deemed to be the beneficial owner) had been pledged as security. Save as disclosed
above, to the best knowledge and information of the Company, as at the Latest Practicable
Date, none of the Categories 1 and 2 of the Permitted Persons had pledged their respective
Shares as security.
We have applied for, and the Stock Exchange has granted, a waiver from strict compliance
with Rule 9.09(b) of the Listing Rules to be granted on the following conditions:
(a) Categories 1 and 2 of the Permitted Persons who entered into Rule 10b5-1 Plans
have no discretion over dealings in the ADSs after the plans have been entered into.
Where Categories 1 and 2 of the Permitted Persons use the Shares as security, other
than those set out in the waiver above, there will be no change in the beneficial
ownership of the Shares at the time of entering into the relevant transactions during
the Relevant Period;
(b) Categories 3 and 4 of the Permitted Persons do not have any influence over the
Introduction and do not possess any non-public inside information of the Company
given that such persons are not in a position with access to information that is
considered material to the Company taken as a whole. Given the large number of the
Company’s subsidiaries and Consolidated Affiliated Entities and the vast ADS
holder base, the Company and its management do not have effective control over the
investment decisions of Categories 3 and 4 of the Permitted Persons in the ADSs;
– 162 –
WAIVERS
(c) the Company will promptly release any inside information to the public in the
United States and Hong Kong in accordance with the relevant laws and regulations
of the U.S. and Hong Kong. Accordingly, the Permitted Persons (other than
Category 1 and Category 2 persons) are not in possession of any non-public inside
information of which the Company is aware and will not have any influence over the
Introduction;
(d) the Company will notify the Stock Exchange of any breaches of the dealing
restrictions by any of its core connected persons during the Relevant Period when
it becomes aware of the same other than dealings by the core connected persons who
are Permitted Persons within the permitted scopes set out above; and
(e) prior to the Listing Date, other than within the permitted scopes set out above, the
Company’s Directors and chief executive and the directors and chief executives of
its Significant Subsidiaries and their respective close associates will not deal in the
Shares or the ADSs during the Relevant Period provided that such dealing
restrictions in the Shares shall not include the granting, vesting, payment or exercise
(as applicable) of incentive and non-statutory options, restricted shares, dividend
equivalents, and share payments under the Group’s share incentive plans.
The Company believes that the circumstances relating to this waiver align with those set
out in the Stock Exchange’s Guidance Letter HKEX-GL42-12 and the grant of this waiver will
not prejudice the interests of potential investors.
WAIVER IN RELATION TO THE 2014 PLAN AND 2019 PLAN
The Listing Rules prescribes certain disclosure requirements in relation to the share
options granted by the Company (the “Share Option Disclosure Requirements”):
(a) Rule 17.02(1)(b) of the Listing Rules stipulates that all the terms of a scheme must
be clearly set out in this document. The Company is also required to disclose in this
document full details of all outstanding options and their potential dilution effect on
the shareholdings upon listing as well as the impact on the earnings per share arising
from the exercise of such outstanding options.
(b) Paragraph 27 of Appendix 1A to the Listing Rules requires the Company to set out
in this document particulars of any capital of any member of the Group that is under
option, or agreed conditionally or unconditionally to be put under option, including
the consideration for which the option was or will be granted and the price and
duration of the option, and the name and address of the grantee.
– 163 –
WAIVERS
As of the Latest Practicable Date, our Company had granted outstanding options under the
2014 Plan and the 2019 Plan (the “Relevant Plans”) to 241 grantees (including a connected
person of the Company and other employees of our Group), to subscribe for an aggregate of
10,386,058 Class A Ordinary Shares. As of the Latest Practicable Date, among the outstanding
options, 1,000,000 were held by a connected person of the Company in his capacity as director
of our material subsidiaries, and 9,386,058 were held by employees of our Group (who are not
Directors or connected persons of the Company). The Class A Ordinary Shares underlying such
outstanding options granted represent approximately 0.93% of the total number of Shares in
issue immediately after completion of the Introduction (assuming that no further Shares are
issued under the Share Incentive Plans between the Latest Practicable Date and the Listing
Date). For further details of our Share Incentive Plans, see the section headed “Statutory and
General Information — D. Share Incentive Plans” in Appendix IV to this document.
We have applied to the Stock Exchange for a waiver from strict compliance with the
requirements under Rule 17.02(1)(b) of the Listing Rules and paragraph 27 of Appendix 1A to
the Listing Rules in connection with the disclosure of certain details relating to the options and
certain grantees in this document on the ground that the waiver and the exemption will not
prejudice the interest of the investing public and strict compliance with the above requirements
would be unduly burdensome for our Company for the following reasons, among others:
(a) as of the Latest Practicable Date, we had granted outstanding options to a total of
241 grantees under the Relevant Plans to acquire an aggregate of 10,386,058 Class
A Ordinary Shares, representing approximately 0.93% of the total number of Shares
in issue immediately after completion of the Introduction (assuming that no further
Shares are issued under the Share Incentive Plans between the Latest Practicable
Date and the Listing Date). The grantees under the Relevant Plans include one
connected person of the Company in his capacity as director of our material
subsidiaries, and 240 employees of our Group (who are not Directors or connected
persons of our Company);
(b) our Directors consider that it would be unduly burdensome to disclose in the listing
document full details of all the options granted by us to each of the grantees, which
would significantly increase the cost and time required for information compilation
and prospectus preparation of this document for strict compliance with such
disclosure requirements. For example, we would need to collect and verify the
addresses of over 240 grantees to meet the disclosure requirement. Further, the
disclosure of the personal details of each grantee, including their names, addresses
and the number of options granted, may require obtaining consent from the grantees
in order to comply with personal data privacy laws and principles and it would be
unduly burdensome for our Company to obtain such consents given the number of
grantees;
– 164 –
WAIVERS
(c) material information on the options has been disclosed in this document to provide
prospective investors with sufficient information to make an informed assessment of
the potential dilutive effect and impact on earnings per Share of the options in
making their investment decision, and such information includes: (i) a summary of
the latest terms of the Relevant Plans; (ii) the aggregate number of Class A Ordinary
Shares subject to the options and the percentage of our Shares of which such number
represents; (iii) the dilutive effect and the impact on earnings per Share upon full
exercise of the options immediately following completion of the Introduction
(assuming no further Shares are issued under the Share Incentive Plans between the
Latest Practicable Date and the Listing Date); (iv) full details of the options granted
to connected persons (if any) of our Company, on an individual basis, are disclosed
in this document, and such details include all the particulars required under Rule
17.02(1)(b) of the Listing Rules and paragraph 27 of Appendix 1A to the Listing
Rules; (v) with respect to the options granted to other grantees (other than those
referred to in (iv) above), the following details will be disclosed in this document,
including the aggregate number of such grantees and the number of Class A
Ordinary Shares subject to the options, the consideration paid for the grant of the
options and the exercise period and the exercise price for the options; and (vi) the
particulars of the waiver and exemption granted by the Stock Exchange. The above
disclosure is consistent with the conditions ordinarily expected by the Stock
Exchange in similar circumstances as set out in Guidance Letter HKEX-GL11-09
issued in July 2009 and updated in March 2014 by the Stock Exchange;
(d) the 240 grantees who are not Directors, or connected persons of the Company, have
been granted options under the Relevant Plans to acquire an aggregate of 9,386,058
Class A Ordinary Shares, which is not material in the circumstances of our
Company, and the exercise in full of such options will not cause any material
adverse change in the financial position of our Company;
(e) our Directors consider that non-compliance with the above disclosure requirements
would not prevent our Company from providing potential investors with sufficient
information for an informed assessment of the activities, assets, liabilities, financial
position, management and prospects of our Group. Strict adherence to the disclosure
requirements, including to disclose the names, addresses, and entitlements on an
individual basis of over 240 grantees without reflecting the materiality of the
information does not provide any additional meaningful information to the investing
public; and
(f) a full list of all the grantees containing all details as required under Rule 17.02(1)(b)
of the Listing Rules, paragraph 27 of Appendix 1A to the Listing Rules will be made
available for public inspection at the Company’s principal place of business in Hong
Kong at 11/F, Bangkok Bank Building, No. 18 Bonham Strand West, Sheung Wan,
Hong Kong during normal business hours up to and including the date which is 14
days from the date of this document.
– 165 –
WAIVERS
In light of the above, our Directors are of the view that the grant of the waiver and
exemption sought under this application and the non-disclosure of the required information
will not prejudice the interests of the investing public.
The Stock Exchange has granted to our Company a waiver from strict compliance with
the disclosure requirements under Rule 17.02(1)(b) of the Listing Rules and paragraph 27 of
Appendix 1A to the Listing Rules with respect to the options granted under the Relevant Plans
on the condition that:
(a) on an individual basis, full details of the outstanding options granted under the
Relevant Plans to each of the Directors and connected persons (if any) of the
Company, will be disclosed in the section headed “Appendix IV — Statutory and
General Information — D. Share Incentive Plans” as required under Rule
17.02(1)(b) of, and paragraph 27 of Appendix 1A to, the Listing Rules;
(b) in respect of the outstanding options granted under the Relevant Plans to other
grantees (other than those set out in (a) above), disclosure will be made on an
aggregate basis, including (1) the aggregate number of the grantees other than those
set out in (a) above and the number of Shares subject to the outstanding options
granted to them under the Relevant Plans, (2) the consideration paid for the grant of
the outstanding options under the Relevant Plans, and (3) the exercise period and the
exercise price for the outstanding options granted under the Relevant Plans;
(c) the aggregate number of Class A Ordinary Shares underlying the outstanding options
granted under the Relevant Plans and the percentage of the Company’s total issued
share capital represented by such number of Shares as of the Latest Practicable Date
will be disclosed in this document;
(d) the dilutive effect and impact on earnings per Share upon the full exercise of the
outstanding options under the Relevant Plans will be disclosed in the section headed
“Appendix IV — Statutory and General Information — D. Share Incentive Plans”;
(e) a summary of the major terms of the Relevant Plans will be disclosed in the section
headed “Appendix IV — Statutory and General Information — D. Share Incentive
Plans”;
(f) the particulars of this waiver will be disclosed in this document;
(g) a list of all the grantees (including those persons whose details have already been
disclosed) containing all the particulars as required under Rule 17.02(1)(b) of and
paragraph 27 of Appendix 1A to the Listing Rules will be made available for public
inspection in the section headed “Appendix V — Documents Available on Display.”
– 166 –
WAIVERS
EXERCISE PRICE OF OPTIONS TO BE GRANTED PURSUANT TO THE 2014 PLAN

AND THE 2019 PLAN AFTER THE LISTING
Note (1) to Rule 17.03(9) of the Listing Rules states that the exercise price of an option
must be at least the higher of: (i) the closing price of the securities as stated in the Stock
Exchange’s daily quotations sheet on the date of grant, which must be a business day; and (ii)
the average closing price of the securities as stated in the Stock Exchange’s daily quotations
sheets for the five business days immediately preceding the date of grant.
Since the ADSs, representing our Class A Ordinary Shares, were listed on the Nasdaq in
March 2019, it has been the Company’s practice to issue options exercisable into ADSs (each
of which represents eight underlying Class A Ordinary Shares) under the 2014 Plan and the
2019 Plan and the Company will continue to issue options exercisable into ADSs after the
Listing. By definition, ADSs are denominated in U.S. dollars, and the exercise price for options
with respect to ADSs will necessarily be presented in U.S. dollars. Pursuant to the waiver from
strict compliance with Rules 4.10 and 4.11 of, and Note 2.1 to Paragraph 2 of Appendix 16 to
the Listing Rules described under the sub-section headed “— Use of U.S. GAAP” above, the
Company will continue to prepare its accounts based on U.S. GAAP after the Listing in line
with its established practice of granting options with exercise prices and RSUs with grant
values denominated in U.S. dollars and tied to the market price of its Nasdaq-traded ADSs.
On the basis that (a) the method for determining the exercise price of the options based
on the market price of ADSs substantially replicates the requirement in Note (1) to Rule
17.03(9) of the Listing Rules, and (b) it has been the Company’s practice to issue options
exercisable into ADSs with exercise prices denominated in U.S. dollars, and the Company will
continue to grant options under the 2014 Plan and the 2019 Plan with exercise prices based on
the market price of the ADSs which are denominated in U.S. dollars after the Listing, the
Company has applied for, and the Stock Exchange has granted, a waiver from strict compliance
with Note (1) to Rule 17.03(9) of the Listing Rules such that the Company will be able to
determine the exercise price for options granted or to be granted under its Share Incentive Plans
based on the higher of: (i) the per-share closing price of the ADSs on the Nasdaq on the date
of grant, which must be a Nasdaq trading day; and (ii) the average per-share closing price of
the ADSs on the Nasdaq for the five Nasdaq trading days immediately preceding the date of
grant, subject to the condition that the Company shall not issue any share options with an
exercise price denominated in Hong Kong dollars unless such exercise price complies with
Note (1) to Rule 17.03(9) of the Listing Rules.
ACQUISITION AFTER THE TRACK RECORD PERIOD
Pursuant to Rules 4.04(2) and 4.04(4)(a) of the Listing Rules, the accountant’s report to
be included in a listing document must include the income statements and balance sheets of any
subsidiary or business acquired, agreed to be acquired or proposed to be acquired since the date
to which its latest audited accounts have been made up in respect of each of the three financial
years immediately preceding the issue of the listing document.
– 167 –
WAIVERS
Since June 30, 2022 (the date to which our Company’s latest audited accounts will have
been made up in this document), our Company has made the following acquisition, the details
of which are set out below:
Company A
In November 2021, the Company entered into a definitive agreement with the then owners
of Company A, pursuant to which the Company proposed to acquire 85% interest in Company
A for a consideration of approximately HK$18 million (the “Acquisition”). The consideration
is determined based on arm’s length negotiations between the then owners of Company A and
the Company, taking into account a number of factors including the potential strategic alliance
in the relevant businesses. The Company used its internal resources to satisfy the cash
consideration.
Company A, is primarily engaged in financial service business. The Company believes

that the Acquisition is complementary to our Group’s principal businesses. The Acquisition has
completed in November 2022. The Company believes that the terms of the Acquisition are fair
and reasonable and in the interests of the Shareholders as a whole. To the Company’s best
knowledge, information and belief, having made all reasonable enquiries, Company A and its
ultimate beneficial owners are third parties independent of the Company and its connected
persons.
We have applied for, and the Stock Exchange has granted to us, a waiver from strict
compliance with Rules 4.04(2) and 4.04(4)(a) of the Listing Rules in respect of the Acquisition
on the following grounds:
(a) The percentage ratios of the Acquisition are all less than 5% by reference to the most
recent financial year of the Track Record Period:
The relevant percentage ratios calculated in accordance with Rule 14.07 of the Listing
Rules of the Acquisition are all significantly less than 5% by reference to the most recent
financial year of the Track Record Period.
Accordingly, the Company believes that the Acquisition is immaterial and does not expect
the Acquisition to result in any significant changes to its financial position since June 30, 2022,
and all information that is reasonably necessary for potential investors to make an informed
assessment of its activities or financial position has been included in this document. As such,
the Company considers that a waiver from compliance with the requirements under Rules
4.04(2) and 4.04(4)(a) of the Listing Rules would not prejudice the interests of the investors.
– 168 –
WAIVERS
(b) The historical financial information of Company A fulfilling the disclosure

requirement under Rule 4.04 of the Listing Rules would be unduly burdensome to
obtain or prepare:
The Acquisition was only completed in November 2022, and the Company did not have
full access to the books and records of Company A until then. It would require considerable
time and resources for the Company and its reporting accountant to fully familiarize
themselves with the management accounting policies of Company A, and compile the
necessary financial information and supporting documents for the disclosure in this document.
As such, we believe it would be impracticable and unduly burdensome within the tight
timeframe for us to disclose the audited financial information of Company A in accordance
with the U.S. GAAP in this document as required under Rules 4.04(2) and 4.04(4) of the Hong
Kong Listing Rules.
In addition, having considered the Acquisition to be immaterial and that the Company
does not expect the Acquisition to have any material effect on its business, financial condition
or operations, the Company believes that it would not be meaningful and would be unduly
burdensome for it to prepare and include the financial information of Company A during the
Track Record Period in accordance with U.S. GAAP in this document. As the Company does
not expect the Acquisition to result in any material changes to its financial position after the
Track Record Period, the Company does not believe that the non-disclosure of the required
information pursuant to Rules 4.04(2) and 4.04(4)(a) of the Listing Rules would prejudice the
interests of the investors.
(c) Alternative disclosure of the Acquisition in the listing document:
The Company has disclosed alternative information about the Acquisition in this
document. Such information includes that which would be required for a discloseable
transaction under Chapter 14 of the Listing Rules that the Company’s Directors consider to be
material, including, for example, descriptions of the principal business activities, the expected
investment amounts, and a statement as to whether the core connected persons at the level of
the Company is a controlling shareholder of Company A. Further, the Acquisition was not
required to be disclosed in the U.S. market pursuant to the applicable U.S. laws and regulations
(including applicable listing rules). The Company has however excluded disclosure on the
name of Company A in this document. The Company considers that in light of the competitive
nature of the industry in which the Company operates, it is commercially sensitive to disclose
the identity of Company A as such information may enable the Company’s competitors to
anticipate the Company’s investment strategy and business expansion plan. Since each of the
relevant percentage ratios of the Acquisition is less than 5% by reference to the most recent
financial year of the Track Record Period, the Company does not expect the Acquisition to
result in any material changes to its financial position after the Track Record Period. As such,
the Company does not believe that the non-disclosure of the required information pursuant to
Rules 4.04(2) and 4.04(4)(a) of the Listing Rules would prejudice the interests of the investors,
and believes the current disclosure is adequate for potential investors to form an informed
assessment of the Company.
– 169 –
WAIVERS
DISCLOSURE REQUIREMENTS WITH RESPECT TO CHANGES IN SHARE

CAPITAL
We have applied for, and the Stock Exchange has granted, a waiver from strict compliance
with the requirements of paragraph 26 of Part A of Appendix 1 to the Listing Rules in respect
of disclosing the particulars of any alterations in the capital of any member of the Group within
two years immediately preceding the issue of this document.
We have identified ten entities that we consider are our major subsidiaries and
Consolidated Affiliated Entities primarily responsible for the track record results of our Group
(the “Principal Entities,” and each a “Principal Entity”). For further details, see “History and
Corporate Structure — Our Major Subsidiaries and Consolidated Affiliated Entities.” Globally,
our Group has approximately 32 subsidiaries and Consolidated Affiliated Entities, across six
different jurisdictions. It would be unduly burdensome for our Company to disclose
information relating to the change of share capital of all of its subsidiaries and Consolidated
Affiliated Entities, which would not be material or meaningful to investors. By way of
illustration, (a) for the three years ended December 31, 2019, 2020, 2021 and the six months
ended June 30, 2022, the aggregate revenue of the Principal Entities represented approximately
97.8%, 99.0%, 98.9% and 97.7% of the Group’s total revenues, respectively; and (b) as of
December 31, 2019, 2020, 2021 and the six months ended June 30, 2022, the aggregate assets
of the Principal Entities represented approximately 99.2%, 99.8%, 98.1% and 97.6% of the
Group’s total assets, respectively. Accordingly, the remaining subsidiaries and Consolidated
Affiliated Entities in our Group are not significant to the overall operations and financial
results of the Group. Additionally, our non-Principal Entities do not hold major or material
assets (save for passive financial products and equity investments of the Group), intellectual
property rights or other major proprietary technologies or major research and development
functions of the Group.
Particulars of the changes in the share capital of the Company and the Principal Entities
have been disclosed in “Statutory and General Information — A. Further Information about our
Group — 2. Changes in share capital of our Company” and “Statutory and General Information
— A. Further Information about our Group — 3. Changes in the share capital of our major
subsidiaries and Consolidated Affiliated Entities” in Appendix IV to this document.
WAIVER IN RELATION TO SHARE ISSUANCE WITHIN SIX MONTHS FROM THE

LISTING DATE
Rule 10.08 of the Listing Rules provides that no further shares or securities convertible
into equity securities of a listed issuer may be issued or form the subject of any agreement to
such an issue within six months from the date on which securities of the listed issuer first
commence dealings on the Stock Exchange (whether or not such issue of shares or securities
will be completed within six months from the commencement of dealing) except for the
circumstances more particularly stated in the Listing Rules.
– 170 –
WAIVERS
The Company has been listed on the Nasdaq for more than 12 months. The Company will
not raise any new funds pursuant to the Introduction, thus the Shareholders would not suffer
any dilution of their interests in the Company as a result of the Introduction. However, it is
essential for the Company to have flexibility in raising funds by way of further issue of new
Shares or entering into further acquisitions for share consideration should an appropriate
opportunity arise. In addition, the Company considers that any issue of new Shares by the
Company will enhance the Shareholders’ base and increase the trading liquidity of the Shares.
The interests of the existing Shareholders and prospective investors would be prejudicial if the
Company could not raise funds for its business development or expansion due to the
restrictions under Rule 10.08 of the Listing Rules.
Therefore, the Company has applied for, and the Stock Exchange has granted, a waiver
from strict compliance with the requirement under Rule 10.08 of the Listing Rules on the
conditions that:
(a) any further issue of new Class A Ordinary Shares will be (i) made under a general
mandate or (ii) subject to the Shareholders’ approval as required under Rule 13.36
of the Listing Rules with the total number of Class A Ordinary Shares that are issued
or may be issued not exceeding 20% of the total number of Class A Ordinary Shares
in issue as at the Listing Date. Upon the completion of any issuance(s) within six
months after the Listing Date, the aggregate voting power of the Controlling
Shareholders in the Company would be no less than 74.32%;
(b) the dilution of the Controlling Shareholders’ interest resulting from any issue of new
Class A Ordinary Shares will not result in the Controlling Shareholders ceasing to
be Controlling Shareholders within 12 months after the Listing Date in compliance
with Rule 10.07(1) of the Listing Rules; and
(c) any issue of Class A Ordinary Shares by the Company within the first six months
from the Listing Date must be either (i) for consideration to fund a specific
acquisition of assets or business that will contribute to the growth of the Group’s
operation or for full or partial settlement of the consideration for such acquisition;
or (ii) pursuant to a general mandate approved by our Shareholders for the issue of
further Class A Ordinary Shares as disclosed in this document.
Solely for illustration purpose, assuming a maximum issue of 20% of the total number of
Class A Ordinary Shares in issue as at the Listing Date, the Controlling Shareholders are
expected to control approximately 74.32% of the total voting power in the Company
immediately upon the completion of such issue.
– 171 –
INFORMATION ABOUT THIS DOCUMENT AND THE INTRODUCTION
DIRECTORS’ RESPONSIBILITY FOR THE CONTENTS OF THIS DOCUMENT
This document, for which our Directors collectively and individually accept full
responsibility, includes particulars given in compliance with the Securities and Futures (Stock
Market Listing) Rules (Chapter 571V of the Laws of Hong Kong) and the Hong Kong Listing
Rules for the purpose of giving information to the public with regard to our Group. Our
Directors, having made all reasonable enquiries, confirm that to the best of their knowledge
and belief the information contained in this document is accurate and complete in all material
respects and not misleading or deceptive, and there are no other matters the omission of which
would make any statement herein or this document misleading.
NO CHANGE IN THE NATURE OF OUR BUSINESS
No change in the nature of our business is contemplated immediately following the

Introduction.
APPLICATION FOR LISTING ON THE STOCK EXCHANGE
We have applied to the Listing Committee of the Stock Exchange for the listing of, and
permission to deal in, (i) the Class A Ordinary Shares in issue; (ii) the Class A Ordinary Shares
to be issued pursuant to the Share Incentive Plans; and (iii) the Class A Ordinary Shares that
are issuable upon conversion of the Class B Ordinary Shares on a one to one basis.
Dealings in the Class A Ordinary Shares on the Stock Exchange are expected to
commence on Friday, December 30, 2022. The ADSs are currently listed on and dealt in the
Nasdaq. Other than the foregoing, no part of our share or loan capital is listed on or dealt in
on any other stock exchange and no such listing or permission to list is being or proposed to
be sought on the Stock Exchange or any other stock exchange as of the Latest Practicable Date.
A portion of the Class A Ordinary Shares will be registered on the Hong Kong Share register
of our Company in order to enable them to be traded on the Stock Exchange.
PROFESSIONAL TAX ADVICE RECOMMENDED
You should consult your professional advisers if you are in any doubt as to the taxation
implications of subscribing for, purchasing, holding or disposing of, or dealing in, our Class
A Ordinary Shares or ADSs or exercising any rights attaching to the foregoing securities. We
emphasize that none of our Company, the Joint Sponsors, any of our or their respective
directors, officers or representatives or any other person involved in the Introduction accepts
responsibility for any tax effects or liabilities resulting from the subscription, purchase,
holding or disposing of, or dealing in, our Class A Ordinary Shares or ADSs or the exercise of
any rights attaching to the foregoing securities.
– 172 –
REGISTER OF MEMBERS AND HONG KONG STAMP DUTY
Our principal register of members will be maintained by our principal share registrar,
Maples Fund Services (Cayman) Limited, in the Cayman Islands, and our Hong Kong branch
register of members will be maintained by the Hong Kong Share Registrar, Tricor Investor
Services Limited, in Hong Kong.
Dealings in our Class A Ordinary Shares registered on our Hong Kong Share register will
be subject to Hong Kong stamp duty. The stamp duty is charged to each of the seller and
purchaser at the ad valorem rate of 0.13% of the consideration for, or (if greater) the value of,
our Class A Ordinary Shares transferred. In other words, a total of 0.26% is currently payable
on a typical sale and purchase transaction of our Class A Ordinary Shares. In addition, a fixed
duty of HK$5.00 is charged on each instrument of transfer (if required).
To facilitate ADS-ordinary share conversion and trading between Nasdaq and the Hong
Kong Stock Exchange, we also intend to move a portion of our issued ordinary shares from our
Cayman share register to our Hong Kong Share register. It is unclear whether, as a matter of
Hong Kong law, the trading of ADSs or interchanges between ADSs and our Class A Ordinary
Shares constitutes a sale or purchase of the underlying Hong Kong-registered ordinary shares
that is subject to Hong Kong stamp duty. We advise investors to consult their own tax advisors
on this matter.
CLASS A ORDINARY SHARES WILL BE ELIGIBLE FOR ADMISSION INTO CCASS
Subject to the granting of the listing of, and permission to deal in, the Class A Ordinary
Shares on the Stock Exchange and compliance with the stock admission requirements of
HKSCC, the Class A Ordinary Shares will be accepted as eligible securities by HKSCC for
deposit, clearance and settlement in CCASS with effect from the date of commencement of
dealings in the Class A Ordinary Shares on the Stock Exchange or on any other date as
determined by HKSCC. Settlement of transactions between participants of the Stock Exchange
is required to take place in CCASS on the second settlement day after any trading day. All
activities under CCASS are subject to the General Rules of CCASS and CCASS Operational
Procedures in effect from time to time.
Investors should seek the advice of their stockbroker or other professional advisor for
details of the settlement arrangements as such arrangements may affect their rights and
interests. All necessary arrangements have been made to enable our Class A ordinary shares to
be admitted into CCASS.
LISTINGS
We have applied for a listing of our Class A Ordinary Shares on the Main Board by way
of Introduction under Chapter 7 (Equity Securities) as well as Chapter 8A (Weighted Voting
Rights) of the Listing Rules.
– 173 –
Our Company currently has a primary listing of ADSs on the Nasdaq, which it intends to
maintain alongside its proposed dual primary listing of Class A Ordinary Shares on the Stock
Exchange.
REGISTRATION OF SUBSCRIPTION, PURCHASE AND TRANSFER OF SHARES
Our principal register of members will be maintained by our principal share registrar,
Maples Fund Services (Cayman) Limited, in the Cayman Islands, and our Hong Kong branch
register of members holding Class A Ordinary Shares listed on the Hong Kong Stock Exchange
will be maintained by the Hong Kong Share Registrar, Tricor Investor Services Limited, in
Hong Kong.
EXCHANGE RATE CONVERSION
Solely for your convenience, this document contains conversions among certain amounts
denominated in Renminbi, Hong Kong dollars and U.S. dollars. No representation is made that
the amounts denominated in one currency could actually be converted into the amounts
denominated in another currency at the rates indicated, or at all. Unless indicated otherwise,
the conversions between U.S. dollars and Renminbi were made at the rate of RMB6.6981 to
US$1.00 and the conversions between U.S. dollars and Hong Kong dollars were made at the
rate of HK$7.8472 to US$1, the respective exchange rate on June 30, 2022 set forth in the H.10
statistical release of The Board of Governors of the Federal Reserve Board. All translations of
financial data as of and for the nine months ended September 30, 2022 between U.S. dollars
and Hong Kong dollars were made at the rate of HK$7.8498 to US$1.00, the respective
exchange rate on September 30, 2022 in the H.10 statistical release of The Board of Governors
of the Federal Reserve Board. Any discrepancies in any table between totals and sums of
amounts listed therein are due to rounding.
OWNERSHIP OF ADSs
An owner of ADSs may hold his or her ADSs either by means of an ADR registered in
his or her name, through a brokerage or safekeeping account, or through an account established
by the depositary bank in his or her name reflecting the registration of uncertificated ADSs
directly on the books of the depositary bank (commonly referred to as the “direct registration
system” or “DRS”). The direct registration system reflects the uncertificated (book-entry)
registration of ownership of ADSs by the depositary bank. Under the direct registration system,
ownership of ADSs is reported by transaction statements sent by the depositary bank to the
holders of the ADSs. The direct registration system provides for automated transfers between
the depositary bank and the DTC, the central book-entry clearing and settlement system for
equity securities in the United States. If an owner of ADSs decides to hold his or her ADSs
through his or her brokerage or safekeeping account, he or she must rely on the procedures of
his or her broker or bank to assert his or her rights as ADS owner. Banks and brokers typically
hold securities such as the ADSs through clearing and settlement systems such as DTC. All
ADSs held through DTC will be registered in the name of a nominee of DTC.
– 174 –
DEALINGS AND SETTLEMENT OF CLASS A ORDINARY SHARES IN HONG KONG
Dealings in our Class A Ordinary Shares on the Stock Exchange will be conducted in
Hong Kong dollars. Our Class A Ordinary Shares will be traded on the Stock Exchange in
board lots of 100 Class A Ordinary Shares.
The transaction costs of dealings in our Class A ordinary shares on the Hong Kong Stock
Exchange include:
• Hong Kong Stock Exchange trading fee of 0.005% (which will be increased to
0.00565% on January 1, 2023) of the consideration of the transaction, charged to
each of the buyer and seller;
• SFC transaction levy of 0.0027% of the consideration of the transaction, charged to

each of the buyer and seller;
• AFRC transaction levy of 0.00015% of the consideration of the transaction, charged

to each of the buyer and seller;
• trading tariff of HK$0.50 on each and every purchase or sale transaction (such
trading tariff will be removed on January 1, 2023). The decision on whether or not
to pass the trading tariff onto investors is at the discretion of brokers;
• transfer deed stamp duty of HK$5.00 per transfer deed (if applicable), payable by
the seller;
• ad valorem stamp duty at a total rate of 0.26% of the value of the transaction, with
0.13% payable by each of the buyer and the seller;
• stock settlement fee, which is currently 0.002% of the gross transaction value,
subject to a minimum fee of HK$2.00 and a maximum fee of HK$100.00 per side
per trade;
• brokerage commission, which is freely negotiable with the broker (other than
brokerage commissions for IPO transactions which are currently set at 1% of the
subscription or purchase price and will be payable by the person subscribing for or
purchasing the securities); and
• the Hong Kong Share Registrar will charge between HK$2.50 to HK$20, depending
on the speed of service (or such higher fee as may from time to time be permitted
under the Hong Kong Listing Rules), for each transfer of ordinary shares from one
registered owner to another, each Share certificate canceled or issued by it and any
applicable fee as stated in the share transfer forms used in Hong Kong.
– 175 –
Investors in Hong Kong must settle their trades executed on the Stock Exchange through
their brokers directly or through custodians. For an investor in Hong Kong who has deposited
his/her Class A Ordinary Shares in his/her stock account or in his/her designated CCASS
Participant’s stock account maintained with CCASS, settlement will be effected in CCASS in
accordance with the General Rules of CCASS and CCASS Operational Procedures in effect
from time to time. For an investor who holds the physical certificates, settlement certificates
and the duly executed transfer forms must be delivered to his/her broker or custodian before
the settlement date.
DEPOSITARY
The depositary for the ADSs is The Bank of New York Mellon (the “Depositary”), whose
office is located at 240 Greenwich Street, New York, New York 10286, United States. The
certificated ADSs are evidenced by certificates referred to as American Depositary Receipts
(“ADRs”) that are delivered by the Depositary.
Each ADS represents ownership interests in eight Class A Ordinary Shares, and any and
all securities, cash or other property deposited with the Depositary in respect of such Shares
but not distributed to ADS holders.
ADSs may be held either (1) directly (a) by having an ADR registered in the holder’s
name or (b) by holding in the DRS, pursuant to which the Depositary may register the
ownership of uncertificated ADSs, which ownership shall be reported by transaction statements
sent by the Depositary to the ADS holders entitled thereto, or (2) indirectly through the
holder’s broker or other financial institution. The following discussion regarding ADSs
assumes the holder holds its ADSs directly. If a holder holds the ADSs indirectly, it must rely
on the procedures of its broker or other financial institution to assert the rights of ADS holders
described in this section. If applicable, you should consult with your broker or financial
institution to find out what those procedures are.
We do not treat ADS holders as Shareholders, and ADS holders have no Shareholder
rights. Cayman Islands law governs Shareholder rights. Because the Depositary actually holds
the legal title to our Shares represented by ADSs (through the Depositary’s Custodian (as
defined below)), ADS holders must rely on it to exercise the rights of a Shareholder. The
obligations of the Depositary are set out in the deposit agreement among us, The Bank of New
York Mellon and the ADS holders and beneficial owners from time to time (the “Deposit
Agreement”). The Deposit Agreement and the ADRs evidencing ADSs are governed by the law
of the State of New York.
Transfer of Shares to Hong Kong Share Register
All of our Shares are currently registered on the principal register of members in the
Cayman Islands. For the purposes of trading on the Hong Kong Stock Exchange, the relevant
Class A Ordinary Shares must be registered in the Hong Kong Share register. ADSs are quoted
for trading on Nasdaq. An investor who holds Shares and wishes to trade ADSs on Nasdaq must
– 176 –
deposit or have his/her broker deposit with The Hongkong and Shanghai Banking Corporation
Limited, as custodian of the Depositary (the “Depositary’s Custodian”), the relevant Class A
Ordinary Shares, so as to receive the corresponding ADSs as described below. Our principal
register of members holding unlisted Shares and a portion of our Class A Ordinary Shares will
be maintained by our Principal Share Registrar in the Cayman Islands, and our branch register
of members holding Class A Ordinary Shares listed on the Hong Kong Stock Exchange and all
Class A Ordinary Shares represented by the ADSs will be maintained by our Hong Kong Share
Registrar in Hong Kong.
Converting Class A Ordinary Shares Trading in Hong Kong to ADSs
An investor who holds Class A Ordinary Shares registered in Hong Kong and who intends
to exchange them for ADSs to trade on the Nasdaq must deposit or have his or her broker
deposit the Class A Ordinary Shares with the depositary’s Hong Kong custodian, The
Hongkong and Shanghai Banking Corporation Limited, or the custodian, in exchange for
ADSs.
A deposit of Class A Ordinary Shares trading in Hong Kong in exchange for ADSs
involves the following procedures:
• If Class A Ordinary Shares have been deposited with CCASS, the investor must
transfer ordinary shares to the depositary’s account with the custodian within
CCASS by following the CCASS procedures for transfer and submit and deliver a
duly completed and signed conversion form to the custodian via his or her broker.
• If Class A Ordinary Shares are held outside CCASS, the investor must arrange to
deposit his or her Class A Ordinary Shares into the CCASS for delivery to the
depositary’s account with the custodian within CCASS, and must submit and deliver
a duly completed and signed conversion form to the custodian via his or her broker.
• Upon payment of its fees and expenses and of any taxes or charges, such as stamp
taxes or stock transfer taxes or fees, if applicable, and subject in all cases to the
terms of the deposit agreement, the depositary will register the corresponding
number of ADSs in the name(s) requested by an investor and will deliver the ADSs
as instructed in the conversion form.
For Class A Ordinary Shares deposited in CCASS, under normal circumstances, the above
steps generally require two business days, provided that the investor has provided timely and
complete instructions. For Class A Ordinary Shares held outside CCASS in physical form, the
above steps may take 14 business days, or more, to complete. Temporary delays may arise. For
example, the transfer books of the depositary may from time to time be closed to ADS
issuances. The investor will be unable to trade the ADSs until the procedures are completed.
– 177 –
Converting ADSs to Class A Ordinary Shares Trading in Hong Kong
An investor who holds ADSs and who intends to exchange his or her ADSs for Class A
Ordinary Shares that trade on the Hong Kong Stock Exchange must cancel the ADSs the
investor holds and withdraw Class A Ordinary Shares from the ADS program and cause his or
her broker or other financial institution to trade such Class A Ordinary Shares on the Hong
Kong Stock Exchange.
An investor that holds ADSs indirectly through a broker or other financial institution
should follow the procedure of the broker or financial institution and instruct the broker to
arrange for cancelation of the ADSs, and transfer of the underlying Class A Ordinary Shares
from the depositary’s account with the custodian within the CCASS system to the investor’s
Hong Kong stock account.
For investors holding ADSs directly, the following steps must be taken:
• To withdraw Class A Ordinary Shares from the ADS program, an investor who holds
ADSs may turn in such ADSs at the office of the depositary (and the applicable
ADR(s) if the ADSs are held in certificated form), and send an instruction to cancel
such ADSs to the depositary.
• Upon payment or net of its fees and expenses and of any taxes or charges, such as
stamp taxes or stock transfer taxes or fees, if applicable, and subject in all cases to
the terms of the deposit agreement, the depositary will instruct the custodian to
deliver Class A Ordinary Shares underlying the canceled ADSs to the CCASS
account designated by an investor.
• If an investor prefers to receive Class A Ordinary Shares outside CCASS, he or she

must receive Class A Ordinary Shares in CCASS first and then arrange for
withdrawal from CCASS. Investors can then obtain a transfer form signed by
HKSCC Nominees Limited (as the transferor) and register Class A Ordinary Shares
in their own names with the Hong Kong Share Registrar.
For Class A Ordinary Shares to be received in CCASS, under normal circumstances, the
above steps generally require two business days, provided that the investor has provided timely
and complete instructions.
For Class A Ordinary Shares to be received outside CCASS in physical form, the above
steps may take 14 business days, or more, to complete. The investor will be unable to trade the
Class A Ordinary Shares on the Hong Kong Stock Exchange until the procedures are
completed.
Temporary delays may arise. For example, the transfer books of the depositary may from
time to time be closed to ADS cancelations.
– 178 –
Depositary Requirements
Before the Depositary delivers ADSs or permits withdrawal of Class A Ordinary Shares,
the Depositary may require:
• production of satisfactory proof of the identity and genuineness of any signature or

other information it deems necessary; and
• compliance with procedures it may establish, from time to time, consistent with the
deposit agreement, including completion and presentation of transfer documents.
The Depositary may refuse to deliver, transfer, or register issuances, transfers and
cancelations of ADSs generally when the transfer books of the Depositary or our Hong Kong
Share Registrar or Cayman share registrar are closed or at any time if the Depositary or we
determine it advisable to do so, subject to such refusal complying with U.S. federal securities
laws.
All costs attributable to the transfer of ordinary shares to effect a withdrawal from or
deposit of Class A Ordinary Shares into the ADS program will be borne by the investor
requesting the transfer. In particular, holders of Ordinary Shares and ADSs should note that the
Hong Kong Share Registrar will charge between HK$2.50 to HK$20, depending on the speed
of service (or such higher fee as may from time to time be permitted under the Listing Rules),
for each transfer of Class A Ordinary Shares from one registered owner to another, each Share
certificate canceled or issued by it and any applicable fee as stated in the share transfer forms
used in Hong Kong. In addition, holders of ordinary shares and ADSs must pay up to US$5.00
per 100 ADSs (or portion thereof) for each issuance of ADSs and each cancelation of ADSs,
as the case may be, in connection with the deposit of Class A Ordinary Shares into, or
withdrawal of ordinary shares from, the ADS program.
LANGUAGE
If there is any inconsistency between the English version of this document and the
Chinese translation of this document, the English version of this document shall prevail unless
otherwise stated. However, if there is any inconsistency between the names of any of the
entities mentioned in this English document which are not in the English language and their
English translations, the names in their respective original languages shall prevail.
ROUNDING
Any discrepancies in any table in this document between total and sum of amounts listed
therein are due to rounding.
– 179 –
DIRECTORS AND PARTIES INVOLVED IN THE INTRODUCTION
DIRECTORS
Name Address Nationality
Executive Directors
Leaf Hua Li (李華) Room 2, 27/F, Block 2 Chinese

Yang Guang Dai Hai Bin Cheng Phase 2
Nanshan District
Shenzhen
PRC
Nineway Jie Zhang (張傑) Room 501, No. 4 Building, Yang Guang Chinese
Si Ji
No. 1 Shi Xia North Road
Futian District
Shenzhen
PRC
Non-executive Director
Shan Lu (盧山) No. 80 Yunxuan, Yuan Meng Yuan Chinese

Garden
Futian Bonded Zone
Futian District
Shenzhen
PRC
Independent non-executive
Directors
Vic Haixiang Li (李海翔) Flat A10, 88 Wong Ma Kok Road Chinese

Regalia Bay, Stanley
Hong Kong
Brenda Pui Man Tam (譚沛雯) 932 Weldwood Ct #3, Los Gatos Chinese
CA, 95032
United States of America
Yijiang Wang (王一江) Flat B, 6/F, Block 32 Chinese

Phase 6, Park Island
Ma Wan, New Territories
Hong Kong
– 180 –
PARTIES INVOLVED IN THE INTRODUCTION
Joint Sponsors Goldman Sachs (Asia) L.L.C.

68/F, Cheung Kong Center
2 Queen’s Road Central
Hong Kong
UBS Securities Hong Kong Limited

52/F, Two International Finance Centre
8 Finance Street
Central
Hong Kong
Sole Financial Advisor The Hongkong and Shanghai Banking

Corporation Limited
Hong Kong
Auditor and Reporting Accountant PricewaterhouseCoopers

Certified Public Accountants
Registered Public Interest Entity Auditor
22/F, Prince’s Building
Central
Hong Kong
– 181 –
Legal Advisors to our Company As to Hong Kong and U.S. laws:

Clifford Chance
27th Floor, Jardine House
One Connaught Place
Central
Hong Kong
Special counsel with respect to U.S.

regulatory and compliance matters:
Cooley HK
Suites 3501-3505, 35/F
Two Exchange Square
8 Connaught Place
Central
Hong Kong
As to PRC law:
Han Kun Law Offices
9/F, Office Tower C1
Oriental Plaza, 1 East Chang An Avenue
Beijing 100738 China
CM Law Firm
Room 2805, Plaza 66
1366 West Nanjing Road
Shanghai
PRC
As to Cayman Islands laws:

Maples and Calder (Hong Kong) LLP
26th Floor, Central Plaza
18 Harbour Road
Wanchai
Hong Kong
– 182 –
Legal Advisors to the Joint Sponsors As to Hong Kong and U.S. laws:
Latham & Watkins LLP
18th Floor, One Exchange Square
8 Connaught Place
Central
Hong Kong
As to PRC law:
Haiwen & Partners
Unit 2605, Jing An Kerry Center Tower 1
No.1515 Nan Jing West Road
Shanghai
PRC
20/F, Fortune Financial Center

5 Dong San Huan Central Road
Chaoyang District
Beijing
PRC
Legal advisor to the Designated Dealer As to Hong Kong and U.S. laws:
and the Alternate Designated Dealer Latham & Watkins LLP
18th Floor, One Exchange Square
8 Connaught Place
Central
Hong Kong
Industry Consultant China Insights Industry Consultancy

Limited
10F, Block B, Jing’an International Center
88 Puji Road, Jing’an District
Shanghai 200070 China
– 183 –
CORPORATE INFORMATION
Registered Office in the Cayman Islands PO Box 309

Ugland House
Grand Cayman KY1-1104
Cayman Islands
Principal Corporate Offices and Principal 11/F, Bangkok Bank Building

Place of Business in Hong Kong No. 18 Bonham Strand West
Sheung Wan
Hong Kong
Company’s Website https://ir.futuholdings.com

(A copy of this document is available on the
Company’s website. Except for the
information contained in this document,
none of the other information contained on
the Company’s website forms part of this
document.)
Joint Company Secretaries Mr. Yu Qian

28/F, Building D1
Kexing Science Park
Nanshan District
Shenzhen
PRC
Ms. Lam Wing Chi

(ACG, HKACG)
5/F, Manulife Place,
348 Kwun Tong Road
Kowloon
Hong Kong
– 184 –
Authorized Representatives Mr. Leaf Hua Li

Room 2, 27/F, Block 2
Yang Guang Dai Hai Bin Cheng, Phase 2
Nanshan District
Shenzhen
PRC
Ms. Lam Wing Chi

5/F, Manulife Place,
348 Kwun Tong Road
Kowloon
Hong Kong
Alternate to authorised representatives:

Mr. Arthur Yu Chen
11/F, Bangkok Bank Building
No. 18 Bonham Strand West
Sheung Wan
Hong Kong
Audit Committee Mr. Vic Haixiang Li

Ms. Brenda Pui Man Tam (Chairperson)
Mr. Yijiang Wang
Compensation Committee Mr. Vic Haixiang Li (Chairperson)

Ms. Brenda Pui Man Tam
Mr. Leaf Hua Li
Nomination Committee Mr. Vic Haixiang Li (Chairperson)

Mr. Leaf Hua Li
Corporate Governance Committee Mr. Vic Haixiang Li

Mr. Yijiang Wang (Chairperson)
– 185 –
Compliance Adviser Guotai Junan Capital Limited

27/F, Low Block, Grand Millennium Plaza
Hong Kong
Hong Kong Share Registrar Tricor Investor Services Limited

17/F, Far East Finance Centre
16 Harcourt Road
Hong Kong
Principal Share Registrar and Transfer Maples Fund Services (Cayman) Limited
Office PO Box 1093
Boundary Hall
Cricket Square
Grand Cayman
KY1-1102
Cayman Islands
Principal Banker(s) Bank of China (Hong Kong) Limited

10/F, Bank of China Centre
Olympian City
11 Hoi Fai Road
West Kowloon, Hong Kong
Industrial and Commercial Bank of China

(Asia) Ltd
34/F, ICBC Tower
3 Garden Road
Central, Hong Kong
Hang Seng Bank Limited

15/F, 83 Des Voeux Road Central
Hong Kong
The Hongkong and Shanghai Banking

Corporation Limited
Hong Kong
– 186 –
INDUSTRY OVERVIEW
The information presented in this section, including certain facts, statistics and
data, is derived from the market research report prepared by CIC, which was
commissioned by us, and from various official government publications and other
publicly available publications, unless otherwise indicated. The information derived from
official government publications has not been independently verified by the Company, the
Joint Sponsors nor any of our or their respective directors, officers, representatives or
any other persons involved in the Listing.
SOURCES OF INFORMATION
This section contains information extracted from the CIC Report, independently prepared
by CIC, which has been commissioned by us for this document. We expect to pay CIC a total
of RMB830,000 for the CIC Report and our use thereof. CIC is a consulting company
established in Hong Kong which provides industry consulting services, commercial due
diligence and strategic consulting services for a variety of industries.
CIC undertook both primary and secondary research using various resources to construct
this report. Primary research involved interviewing key industry experts and leading industry
participants. Secondary research involved analyzing data from various publicly available data
sources, including those from the World Federation of Exchanges (“WFE”), the National
Bureau of Statistics of China (“NBS”), Shanghai Stock Exchange (“SSE”), Shenzhen Stock
Exchange (“SZEX”), China Securities Depository and Clearing Corporation Limited
(“CSDC”), the Hong Kong Exchanges and Clearing Limited (“HKEX”), the New York Stock
Exchange (“NYSE”), Nasdaq, the Singapore Exchange (“SGX”) and SFC. The information and
data collected by CIC have been analyzed, assessed and validated using CIC’s in-house
analysis models and techniques. The methodology used by CIC is based on information
gathered from multiple levels, which allows for such information to be cross-referenced for
reliability and accuracy.
CIC prepared its report on the following basis and assumptions for historical data and
projections: (i) the overall social, economic and political environment in China, Singapore and
the U.S. is expected to remain stable during the forecast period; (ii) the relevant key industry
drivers are likely to propel continued growth in the global securities market throughout the
forecast period, including growing penetration of online securities brokerage services,
increasing demands for overseas asset diversification by investors, and improving legal and
regulatory environment; and (iii) there will be no extreme force majeure or unforeseen industry
regulations which may affect the market significantly or fundamentally.
– 187 –
INDUSTRY OVERVIEW
OVERVIEW OF THE GLOBAL SECURITIES MARKET
The global securities market, including markets for stocks, bonds, ETFs, derivatives and
other securities, experienced a growth in trading volume from US$163.3 trillion in 2017 to
US$269.6 trillion in 2021 at a CAGR of 13.4%. The trading volume is projected to further
reach US$334.5 trillion in 2026 at a CAGR of 4.4%. Such growth is driven by multiple factors,
including enterprises’ continuous fundraising demands through capital markets, the robust
increase of retail investors’ disposable income and innovations in brokerage products and
services. However, the global securities trading volume is expected to experience slight
decreases in 2022 and 2023 in view of a slowdown in global economic growth and the
weakening performance of global securities market due to the tightening financial conditions
in most regions introduced to tackle rising inflation and living costs, geopolitical conflicts and
the lingering impact of the COVID-19 pandemic. The global securities trading volume is
expected to increase in 2024 and afterwards in view of the factors that global economies will
recover and geopolitical uncertainties will be alleviated in the long run.
Global Securities Trading Volume by Listing Venue (1), 2017-2026E
CAGR (2017-2021) CAGR (2021-2026E)

Hong Kong 17.4% 9.6%
The U.S. 17.9% 5.4%
Singapore 6.0% 5.3%
Mainland China 27.4% 7.4%
US$ trillion
Others 4.6% 1.0%
Total 13.4% 4.4%
350 334.5
310.7 8.3
287.7 7.0
300
269.6 268.5 265.5 5.9
5.3 4.6 4.9
250 233.3 155.3
4.1 138.2
122.0
200 180.6 119.6 114.2 106.8
163.3
3.4 162.1 106.5 0.4 0.5
2.8 0.4
2.7 0.4 0.4
150 0.4
62.0 84.2 61.8 66.1 70.4
71.6 0.4 49.2 53.6 57.4
100 0.3 38.6
18.6 15.3 0.3 0.3
22.0
50 83.7 95.2 95.7 96.1 97.7 99.0 100.0
79.6 77.5 65.5
0
2017 2018 2019 2020 2021 2022E 2023E 2024E 2025E 2026E
Source: HKEX, NYSE, Nasdaq, SGX, SSE, SZSE, CSDC, WFE, CIC
Note:
(1) The calculation is based on trading volume from retail investors and institutional investors, both of which
include trading volume from market makers.
– 188 –
INDUSTRY OVERVIEW
Current market trends of the global securities market
• Accelerating online penetration. The development of mobile technology and

investors’ growing preference for online trading have advanced digital brokerage
services which enable investors to place and submit orders to brokers online and
execute securities transactions electronically. The outbreak of the COVID-19
pandemic has further accelerated the migration of trading activities from offline
channels to online platforms. As a result, from 2017 to 2021, the penetration rate of
online trading has increased from 40.4% to 53.2% and is expected to further increase
to 62.2% in 2026.
• Increasing retail participation. The number of global retail investors continues to

grow over the years, driven by improved financial literacy and a lower barrier to
access financial markets. In 2021, trading volume from retail investors accounted
for approximately 47.4% of the total trading volume of the global securities market,
up from 39.6% in 2017, and is expected to account for 48.8% in 2026. Retail
investors have been net buyers of securities globally and are exerting increasing
influence on stock performance. For example, U.S. retail investors’ average weekly
net purchases of equities increased five-fold to over US$5.0 billion from 2019 to
2021. Notably Hong Kong, Singapore and the U.S. presented the highest retail
participation globally. In 2021, retail investors in these three markets represented
53.5%, 52.3% and 43.0% of their respective adult population, significantly higher
than the global average of 16.3%.
• Emerging demand for vibrant social communities. An increasing number of

young and tech-savvy retail investors actively engage in social communities. In Asia
and North America, online brokerage platforms, which typically offer social
communities, have gained popularity, evidenced by an approximately 10% annual
growth in active users’ daily average time spent thereon from 2019 to 2021. Younger
investors tend to use social networks to share investment experiences, acquire
market data and information and seek investment advice.
• Diversifying product and service portfolio. Many leading market players have
transformed from securities brokerage tools into one-stop financial service
platforms that integrate online trading, margin financing and securities lending,
wealth management and other value-added services.
– 189 –
INDUSTRY OVERVIEW
Market size of the global online securities market
Driven by investors’ rising preference for digital investment channels, the global online
securities market demonstrated strong growth in the past five years. The trading volume of the
global online securities market grew rapidly at a CAGR of 21.5% from US$66.0 trillion in
2017 to US$143.5 trillion in 2021.
The global online securities market will continue to experience robust growth due to the
expansion of global capital markets, growing acceptance of online financial services and
products and technology upgrades of online brokers. The trading volume of the global online
securities market is projected to increase at a CAGR of 7.7% from 2021 to 2026 and reach
US$208.1 trillion in 2026. The online securities trading penetration rate is estimated to reach
62.2% globally in 2026, while retail investors’ contribution to global online securities trading
is expected to grow from 58.6% in 2021 to 59.2% in 2026.
Global Online Securities Trading Volume (1) by Listing Venue, 2017-2026E
CAGR (2017-2021) CAGR (2021-2026E)

Hong Kong 22.2% 12.1%
The U.S. 27.5% 8.9%
Singapore 12.4% 10.2%
Mainland China 30.9% 11.7%
US$ trillion
Others 10.6% 2.1%
250 Total 21.5% 7.7%
208.1
200 186.3 6.1
166.2 4.9
143.5 144.9 147.6 4.0 105.5
150 3.3 90.7
3.4 3.0
117.2 77.2
2.5 66.9 65.1
100 69.0
77.4 56.5 0.3 0.3
66.0 73.2 0.2
2.0 0.2 0.2 0.2 48.8
1.5 1.7 39.3 44.0
37.3 33.3 0.2 28.1 31.2 34.9
50 26.1 24.6
9.6 0.1 8.8 0.1 12.7 0.1 47.5
33.5 42.8 43.5 44.2 45.4 46.5
28.7 29.2 25.5
0
2017 2018 2019 2020 2021 2022E 2023E 2024E 2025E 2026E
Global securities
online trading 40.4% 42.8% 45.2% 50.2% 53.2% 54.0% 55.6% 57.8% 60.0% 62.2%
penetration rate(2)
Notes:
(2) The global securities online trading penetration rate refers to the percentage of global online securities market
out of the total global securities market measured by trading volume.
– 190 –
INDUSTRY OVERVIEW
Global Online Securities Trading Volume (1) by End Investor Type, 2017-2026E
CAGR (2017-2021) CAGR (2021-2026E)

Retail investor 25.4% 8.0%
Institutional investor 16.8% 7.4%
US$ trillion
Total 21.5% 7.7%
250
208.1
200 186.3
166.2
143.5 144.9 147.6
150 123.2
117.2 110.1
97.9
100 84.0 85.1 86.8
66.0 77.4 73.2 68.5
50 34.0 41.0 40.3
68.3 76.3 84.9
48.7 59.5 59.8 60.9
31.9 36.3 32.9
0
2017 2018 2019 2020 2021 2022E 2023E 2024E 2025E 2026E
Retail investor
51.6% 53.0% 55.1% 58.5% 58.6% 58.7% 58.8% 58.9% 59.1% 59.2%
participation
rate(2)
Notes:
(2) The retail investor participation rate of global online securities market refers to retail investors’ trading volume
as percentage of total trading volume of global online securities market. Retail investors’ online securities
trading volume can be conducted through online brokers or traditional brokers.
HONG KONG, THE U.S. AND SINGAPORE ONLINE RETAIL SECURITIES

MARKETS
Ranked as the first and fifth online securities market by trading volume in 2021, U.S. and
Hong Kong were also among the world’s fastest-growing online retail securities markets from
2017 to 2021, with a CAGR of 32.9% and 18.2%, respectively. Besides, Southeast Asian
countries, including Singapore, Indonesia, Malaysia and Thailand, constitute a blue ocean
market opportunity for online retail brokers. The growth of Singapore’s retail investor base is
expected to drive the growth of online retail trading volume not only in the Singapore securities
market, but also in the U.S. and Hong Kong securities markets, due to retail investors’
increasing appetite for global investment opportunities and asset diversification, and the
introduction of online platforms that facilitates access to investment products and services.
– 191 –
INDUSTRY OVERVIEW
Market drivers for Hong Kong, the U.S. and Singapore online retail securities markets
• Growing retail investor base. A large number of retail investors worldwide have
been attracted by a wide range of diversified investment products through online
trading services provided in Hong Kong, the U.S. and Singapore securities markets.
From 2017 to 2021, each of these three countries and regions has experienced a
double-digit CAGR in terms of retail investor base in the online retail securities
market due to retail investors’ increasing appetite for global investment
opportunities and asset diversification, and increasing online trading services.
• Integrated online services. Digitalized trading platforms that provide intuitive

interfaces and charge low commission fees have made securities markets more
accessible to retail investors, particularly for the younger and tech-savvy
generations. Digitalized trading platforms typically offer users a large variety of
integrated products and services across multiple markets and currencies on a single
platform. For example, users can access standard investment services, such as trade
execution, margin financing and securities lending and wealth management, as well
as other value-added services, such as market data and information services,
interactive social communities and robo-advisory solutions.
• Abundant investment opportunities. Hong Kong, the U.S. and Singapore are
popular listing venues for companies globally. From 2017 to 2021, IPO fundraising
in the U.S. and Hong Kong increased by a CAGR of approximately 63.7% and
36.8%, respectively, primarily attributable to the deep pool of investors and high
trading liquidity in these two markets. In particular, Hong Kong has introduced a
new listing regime to facilitate the listing of innovative companies with weighted
voting rights, pre-revenue biotech companies, and the secondary listing of qualified
overseas listed companies. Implementation of these new listing rules effectively
expands the availability of investment opportunities. Singapore, long known as a
financial hub in Southeast Asia, is also highly recognized by its rich and diversified
investment product offerings, including FTSE China A50 index futures and REITs.
– 192 –
INDUSTRY OVERVIEW
Market size of the Hong Kong online retail securities market
Driven by growth in the number of retail investors, the trading volume of the Hong Kong
online retail securities market increased from US$701.1 billion in 2017 to US$1,367.1 billion
in 2021 at a CAGR of 18.2% and is expected to reach US$2,488.5 billion in 2026 at a CAGR
of 12.7%. Hong Kong securities market’s overall retail participation rate measured by trading
volume was 36.1% in 2021, and is projected to reach 37.9% in 2026. Hong Kong securities
market’s overall online penetration rate measured by trading volume increased from 55.4% in
2017 to 65.1% in 2021, and is expected to reach 72.8% in 2026.
Hong Kong Online Retail Securities Trading Volume (1),

by Citizenship of Retail Investors, 2017-2026E
CAGR (2017-2021) CAGR (2021-2026E)
Investors from Hong Kong 15.8% 10.8%

Investors from the U.S. 24.8% 18.5%
Investors from Singapore 37.4% 21.5%
US$ billion Investors from Mainland China 19.7% 13.6%
Investors from other countries and regions 22.5% 15.0% 2,488.5
2,500
Total 18.2% 12.7%
2,025.6
2,000
1,351.7
1,648.9
1,500 1,130.7
1,367.1 1,328.6
1,220.3
946.0
1,047.2
147.2
1,000 810.0
892.4 784.3 145.7
751.7 723.1 112.5
701.1 106.8
668.5
535.7 85.4
63.1 63.5 77.8 619.6
500 450.9 478.4 57.3
55.1 55.3 497.9
45.4 31.5 49.1
26.0 400.1
26.9 26.5 30.4 327.6 292.6 318.0
15.4 198.7 15.6
181.5 270.2
159.4 177.7 224.3
49.4 85.7 49.7 46.7 111.3 98.2 107.5 139.7
0
2017 2018 2019 2020 2021 2022E 2023E 2024E 2025E 2026E
Overall retail
38.7% 37.3% 39.3% 36.5% 36.1% 36.4% 36.8% 37.2% 37.5% 37.9%
participation rate(2)
Overall online
55.4% 59.2% 60.9% 60.5% 65.1% 65.5% 67.1% 68.7% 70.3% 72.8%
penetration rate(3)
Source: HKEX, WFE, CIC
Notes:
(1) The calculation is based on trading volume from retail investors, including trading volume from market
makers.
(2) The overall retail participation rate of the Hong Kong securities market refers to the percentage of Hong Kong
retail securities market out of the overall Hong Kong securities market measured by trading volume.
(3) The overall online penetration rate of the Hong Kong securities market refers to the percentage of Hong Kong
online securities market out of the overall Hong Kong securities market measured by trading volume.
– 193 –
INDUSTRY OVERVIEW
The number of retail investors participating in the Hong Kong online retail securities
market grew at a CAGR of 31.4% from 2.9 million in 2017 to 8.6 million in 2021, and is
expected to reach 13.7 million in 2026 at a CAGR of 9.7%. Among others, investors from
Mainland China played a significant role in the expansion of retail investor base of the Hong
Kong online retail securities market. In 2021, 45.9% of retail investors participating in the
Hong Kong online retail securities market were from Mainland China, compared to 21.3% in
2017, and this percentage is expected to reach 48.1% in 2026.
Retail Investors in Hong Kong Online Retail Securities Market

by Citizenship of Investors, 2017-2026E
CAGR (2017-2021) CAGR (2021-2026E)
Million Investors from Hong Kong 15.8% 4.3%

15
13.7
Investors from Mainland China 59.2% 10.7%
Investors from other countries and regions 13.2% 7.5% 12.5
12 Total 31.4% 9.7% 3.5
11.3
3.3
10.2
3.2 0.9
9.2
9 8.6 0.8
3.0
2.1
2.9 0.7
7.2 2.8 1.8
0.7
1.6
6 2.5 0.6 1.3
0.5
0.9 1.1
4.7
0.4
3.7 0.5 6.6
1.8 5.9
3 2.9 5.2
1.8 0.3 4.6
0.4 4.0 4.1
1.6 3.3
0.3
0.2 0.2 0.3 1.8
1.0
0.6 0.6 0.6 0.7 0.7
0 0.3 0.3 0.3 0.4 0.5 0.5
2017 2018 2019 2020 2021 2022E 2023E 2024E 2025E 2026E
Source: HKEX, WFE, CIC
– 194 –
INDUSTRY OVERVIEW
Market size of the U.S. online retail securities market
The trading volume of the U.S. online retail securities market was US$29.8 trillion in
2021, growing from US$9.6 trillion in 2017 at a CAGR of 32.9%, and is projected to reach
US$47.2 trillion in 2026 at a CAGR of 9.7%. U.S. securities market’s overall retail
participation rate measured by trading volume increased from 34.9% in 2017 to 39.8% in 2021,
and is projected to reach 41.2% in 2026. U.S. securities market’s overall online penetration rate
measured by trading volume grew from 42.1% in 2017 to 57.7% in 2021, and is expected to
reach 67.9% in 2026.
U.S. Online Retail Securities Trading Volume (1)

CAGR (2017-2021) CAGR (2021-2026E)

US$ trillion
Investors from other countries and regions 40.8% 12.4%
60
Total 32.9% 9.7%
50 47.2
0.6
40.2
40 0.5
33.9
0.4
29.8 28.8
30 28.3
0.3 0.3 36.8
0.3
24.5
0.2 31.6
20 26.9
23.2 22.6
24.2
13.2
0.1 11.5
9.6 20.1
10 0.1 0.4
1.5
0.1 1.2 0.3
11.2 9.5 0.8 0.2 1.0 0.2
8.2
0.6 0.1 0.7 0.1 0.7 0.2
5.4 6.6 7.9
0.3 0.04 3.5 4.4 4.4 4.4
0 1.1 0.1 0.02 1.7 0.2 0.03 1.5
2017 2018 2019 2020 2021 2022E 2023E 2024E 2025E 2026E
Overall retail 34.9% 34.0% 33.2% 39.5% 39.8% 39.7% 40.0% 40.4% 40.8% 41.2%
participation rate(2)
Overall online
penetration rate(3) 42.1% 44.3% 46.4% 53.1% 57.7% 58.6% 61.0% 63.3% 65.6% 67.9%
Source: NYSE, Nasdaq, WFE, CIC
Notes:
makers.
(2) The overall retail participation rate of the U.S. securities market refers to the percentage of U.S. retail
securities market out of the overall U.S securities market measured by trading volume.
(3) The overall online penetration rate of the U.S. securities market refers to the percentage of U.S. online
securities market out of the overall U.S. securities market measured by trading volume.
– 195 –
INDUSTRY OVERVIEW
The number of retail investors participating in the U.S. online retail securities market
grew at a CAGR of 12.2% from 79.9 million in 2017 to 126.5 million in 2021, and is expected
to reach 165.5 million in 2026 at a CAGR of 5.5%.
Retail Investors in the U.S. Online Retail Securities Market

CAGR (2017-2021) CAGR (2021-2026E)

Million
200 Total 12.2% 5.5%
165.5
157.6 3.0
160 150.3 2.7
143.0 2.4
135.7 2.1
126.5 1.8
1.6
120 110.4
1.3 105.9
102.3
90.4 98.7
85.2 0.8 95.3
79.9 91.9
0.7
80 0.6 88.7
80.0
67.0 2.2
61.9 64.5 1.9 9.9
40 1.2 7.0 1.4 7.7 1.7 8.8
6.5
6.2 1.1
5.6 0.7 44.5
1.7 0.4 3.2 0.5 34.3 37.2 39.8 41.9
1.0 0.3 22.8 29.0
16.2 17.8 18.9
0
2017 2018 2019 2020 2021 2022E 2023E 2024E 2025E 2026E
Source: NYSE, Nasdaq, WFE, CIC
– 196 –
INDUSTRY OVERVIEW
Market size of the Singapore online retail securities market
The trading volume of the Singapore online retail securities market grew from US$38.6
billion in 2017 to US$67.4 billion in 2021 at a CAGR of 14.9%, and is expected to reach
US$109.9 billion in 2026 at a CAGR of 10.3%. The increase is primarily due to Singapore’s
conducive financial policies and expanding personal wealth of local residents. Singapore
securities market’s overall retail participation rate measured by trading volume was 35.1% in
2021, and is projected to reach 36.1% in 2026. Singapore securities market’s overall online
penetration rate measured by trading volume grew from 36.9% in 2017 to 46.5% in 2021, and
is expected to reach 58.4% in 2026.
Singapore Online Retail Securities Trading Volume (1),

CAGR (2017-2021) CAGR (2021-2026E)
Investors from Hong Kong, China 21.3% 11.7%

US$ billion
120 Total 14.9% 10.3%
109.9
9.2
97.8
8.1 11.3
90 86.8
7.1 10.0
77.0
72.0 6.2 8.9
67.4 5.7
5.3 7.8
7.3
60 56.6 6.8
4.4 66.4
5.7 59.0
41.9 40.1 52.4
38.6 2.9 3.0 46.4
2.5 4.1 43.3
3.7 4.0 40.5
30 34.0
23.7 25.4 24.0
9.3 10.6
6.7 7.2 8.2
5.4 6.4
3.5 4.3 4.5 10.3 11.3 12.3
5.2 5.2 7.1 8.4 8.9 9.3
0 4.5
2017 2018 2019 2020 2021 2022E 2023E 2024E 2025E 2026E
Overall retail
participation rate(2) 35.5% 36.0% 36.5% 35.8% 35.1% 35.3% 35.5% 35.7% 35.9% 36.1%
Overall online
penetration rate(3) 36.9% 39.5% 41.5% 43.5% 46.5% 49.4% 51.7% 53.9% 56.1% 58.4%
Source: SGX, WFE, CIC
Notes:
makers.
(2) The overall retail participation rate of the Singapore securities market refers to the percentage of Singapore
retail securities market out of the overall Singapore securities market measured by trading volume.
(3) The overall online penetration rate of the Singapore securities market refers to the percentage of Singapore
online securities market out of the overall Singapore securities market measured by trading volume.
– 197 –
INDUSTRY OVERVIEW
The number of retail investors participating in the Singapore online retail securities
market grew at a CAGR of 18.0% from 1.9 million in 2017 to 3.7 million in 2021, and is
expected to reach 6.2 million in 2026 at a CAGR of 10.6%.
Retail Investors in Singapore Online Retail Securities Market

CAGR (2017-2021) CAGR (2021-2026E)
Investors from Hong Kong, China 21.9% 11.3%

Million
7 Total 18.0% 10.6%
6.2
6 5.7 0.4
0.4 0.8
5.1
5 0.4 0.7
4.6
0.3 0.6
4.2
3.7 0.6
4 0.3
0.2 2.6
3.2 0.5
0.5 2.4
0.2 2.1
3
2.5 0.4 1.9
2.2 0.1 1.7
1.9 0.3 1.6
0.1 0.7
2 0.3 1.4 0.6
0.1
0.2 0.6
1.2 0.5
1.1 0.5 0.5
1 1.0 0.4
0.3 1.6 1.7
0.2 1.3 1.4
0.2 1.0 1.1
0.6 0.8
0.4 0.5
0
2017 2018 2019 2020 2021 2022E 2023E 2024E 2025E 2026E
Source: SGX, WFE, CIC
Market opportunities in other Southeast Asia markets
The online retail securities markets in other Southeast Asian countries, including
Indonesia, Malaysia and Thailand, demonstrate enormous growth potential, mainly attributable
to the growing number of retail investors, investable assets and demands for convenient online
securities investment tools.
• Development of mobile internet. Southeast Asia has some of the fastest-growing

mobile internet markets in the world. In Indonesia, Malaysia and Thailand, adult
users of mobile internet grew from 169.3 million in 2017 to 217.4 million in 2021
at a CAGR of 6.5%. The increase was driven by multiple factors, including a high
population growth rate, a large smartphone user base and the rapid development of
telecom infrastructure. As a result, the weighted average penetration rate measured
by number of mobile internet users out of the total population in Indonesia, Malaysia
and Thailand increased from 46.7% in 2017 to 58.0% in 2021, and is expected to
reach 67.5% in 2026.
– 198 –
INDUSTRY OVERVIEW
• Improving access to financial services. Over 50% of the total adult population in
Indonesia, Malaysia and Thailand are yet to gain full access to financial services as
of 2021, which translates to a huge potential market for financial services providers,
including online brokers. Robust economic growth outlook in the region will
accelerate household wealth accumulation. At the same time, the digital financial
infrastructure is expected to develop rapidly amid favorable regulatory and financial
environment. For example, Central Bank of Malaysia issued the policy document on
Licensing Framework for Digital Banks in 2020 to encourage licensed digital banks
to offer banking products and services through digital means, enabling innovative
application of technology in the financial services sector. In the same year, Bank of
Thailand set up a three-year strategic plan (2020-2022) to enhance the digitalization
of domestic financial system and the development of open infrastructure for
financial services sector. Furthermore, the Financial Services Authority of Indonesia
launched Master Plan for the Indonesian Financial Services Sector (2021-2025) in
2021 to promote the digitalization of financial products and business operations. As
a result, the financial services penetration rate measured by banked adults out of the
total adult population is expected to rise from 31.7% in 2021 to 46.8% in 2026.
Meanwhile, venture capitalists have been actively investing into the FinTech space
in Indonesia, Malaysia and Thailand, which ultimately helps facilitate access to
financial services and promote greater financial inclusion. In total, FinTech
companies’ capital raised in these three countries surged from US$0.1 billion in
2017 to US$1.5 billion in 2021 at a CAGR of 81.0%.
• Popularity of online securities brokerage due to increasing financial asset

allocation. In 2021, households in Indonesia, Malaysia and Thailand allocated only
38.4% of their wealth to financial assets, significantly lower than the global average
of 60.6%. As the penetration of mobile internet and accessibility to financial
services rise, these countries are expected to follow the same path observed in other
Asian countries and regions and experience a structural shift in investment from
properties and pensions to stocks, mutual funds and other liquid assets. Online
brokers are expected to win the majority of these new retail investors and assets,
primarily due to their ability to offer intuitive user interface, seamless trading
experience and low commission fees.
– 199 –
INDUSTRY OVERVIEW
COMPETITIVE LANDSCAPE ANALYSIS
The online securities brokerage market generally consists of two types of participants: (i)
online brokers and (ii) traditional brokers. Traditional brokers include brokers with offline
channels, and brokerage business units within commercial banks.
Online brokers typically present the following features:
• operating securities brokerage business substantially online;
• adopting asset-light business models typically with technological capabilities

enabling frequent product iterations and functionality upgrades; and
• offering market intelligence and social networking functions, as one of the major
approaches for client acquisition and engagement.
Traditional brokers typically present the following features:
• offering comprehensive financial services including securities brokerage business

primarily offline;
• providing online functions and tools with limited product iterations and
functionality upgrades; and
• having generally long operating history with established client base focusing on
institutional investors and relying on offline branches’ sales network for client
outreach.
Compared to traditional brokers, online brokers are able to deliver more accessible and
more stable digitalized services and comprehensive products supported by their technology
capabilities and robust infrastructure. Online brokers establish large and vibrant user bases
through their comprehensive marketing capabilities and are well-positioned to expand beyond
geographical boundaries. Compared to online brokers, traditional brokers have competitive
strengths in providing advanced products and services with a focus on institutional investors
on the back of wide offline client reach and long operating history.
The Group held the largest market share of 10.7% in the Hong Kong retail securities
brokerage market. The Group’s total retail securities trading volume on the Hong Kong Stock
Exchange was US$283.2 billion in 2021.
– 200 –
INDUSTRY OVERVIEW
Top Five Brokers in Hong Kong Retail Securities Brokerage Market by

Trading Volume, 2021
Total retail Market share in Total online

securities trading terms of total retail securities
volume retail trading trading volume
on the Hong volume on the on the Hong
Kong Stock Hong Kong Kong Stock
Ranking Broker Type Exchange(5) Stock Exchange Exchange(5)
(US$ billion) (%) (US$ billion)
1ь ь ь ь The Group Online broker 283.2 10.7% 283.2

2ь ь ь ь Company A(1) Traditional broker 127.0 4.8% 105.0
3ь ь ь ь Company B(2) Online broker 110.0 4.1% 110.0
4ь ь ь ь Company C(3) Traditional broker 95.0 3.6% 76.0
5ь ь ь ь Company D(4) Online broker 63.0 2.4% 63.0
Others 1,978.8 74.5% 1,276.8
Total 2,657.0 100.0% 1,914.0
Source: CIC
Notes:
(1) Established in 2002, Company A is a brokerage business unit within a Chinese commercial bank that is listed
on the Shanghai Stock Exchange and the Hong Kong Stock Exchange, providing comprehensive financial
services including banking, investment, wealth management, and securities brokerage.
(2) Established in 1977, Company B is an international online broker listed on the NASDAQ, providing securities
brokerage, margin financing and wealth management.
(3) Established in 1959, Company C is a brokerage business unit within an international commercial bank that is
listed on the Hong Kong Stock Exchange, providing a wide range of financial services including banking,
investment, wealth management, and securities brokerage.
(4) Established in 2014, Company D is an online broker listed on the NASDAQ, focusing on Chinese investors
and primarily providing securities brokerage, margin financing, and wealth management. As of December 31,
2021, it facilitated securities trading primarily through cooperation with other licensed brokers.
(5) Rounding adjustments have been applied to certain amounts of securities trading volume.
– 201 –
INDUSTRY OVERVIEW
Operating Indicators Comparison of Top Five Brokers in Hong Kong Retail

Securities Brokerage Market, 2021
Retention rate(2)
Number of of paying clients
Total number Total number of MAUs(1) in in the fourth
Broker of clients paying clients December 2021 quarter of 2021
(million) (million) (million) (%)
The Group ь ь ь ь ь ь ь ь 2.8 1.2 2.2 97%

Company A ь ь ь ь ь ь ь ь 1.2 0.4 0.4 83%
Company B ь ь ь ь ь ь ь ь 1.7 N/A(3) N/A(3) N/A(3)
Company C ь ь ь ь ь ь ь ь 0.8 0.3 0.3 85%
Company D ь ь ь ь ь ь ь ь 1.8 0.7 0.5 89%
Source: CIC
Notes:
(1) MAUs (monthly active users) refer to the number of users and visitors who access the platform at least once
during the calendar month.
(2) Retention rate of paying clients for a given quarter is calculated by dividing the number of paying clients for
the previous quarter whose trading accounts retain assets in the current quarter by the total number of paying
clients for the previous quarter.
(3) It is not meaningful for comparison purposes as the publicly available data of Company B only includes
aggregate figures from both its institutional and retail clients.
Key success factors of online brokers
• Strong brand recognition. Online brokers with strong brand images tend to be
perceived by retail investors as more trustworthy and having superior fund security
and system stability. Thus, they are better-positioned to attract and retain customers.
• Advanced technological capabilities. Market leaders are usually equipped with

advanced technology, solid infrastructure and strong research and development
capabilities to handle sudden trading volume surge, maintain system and data
security, and release new functionalities and upgrade product offerings in a timely
manner.
• Superior user experience. Leading online brokers are committed to innovation and
superior user experience. For example, leading online brokers can complete the
account-opening process within five to ten minutes which may take one business day
for other players. They can also provide users with a seamless trading experience by
executing trades on an almost real-time basis.
– 202 –
INDUSTRY OVERVIEW
• Vibrant social community. Retail investors tend to favor social networks to

exchange investment ideas and share market information. Online brokers with
interactive social platforms typically enjoy higher client engagement and retention
rates, and thus bear better monetization potential.
• Comprehensive product offerings. Leading online brokers offer comprehensive

product offerings including securities trading, margin financing, securities lending,
real-time market information, as well as wealth management product distribution
services. These services appeal to investors who prefer to have an integrated
platform that can cater to their various investment needs.
• Efficient user acquisition approaches. Leading online brokers usually implement

innovative marketing strategies to capture user mindshare and efficiently acquire
users at relatively low cost.
HONG KONG WEALTH MANAGEMENT MARKET
As a competitive asset and wealth management center and a preferred place of fund
domicile, Hong Kong witnessed rapid expansion of its wealth management market from
US$1.2 trillion in 2017 to US$1.7 trillion in 2021 at a CAGR of 10.2%. This market is expected
to reach US$2.8 trillion in 2026 at a CAGR of 9.6%.
Market Size of Hong Kong Wealth Management Market by Assets Under

Management (1), 2017-2026E
CAGR (2017-2021E) CAGR (2021E-2026E)

Public fund 10.1% 9.7%
Private fund 10.5% 9.3%
US$ trillion
Total 10.2% 9.6%
3.0
2.8
2.5 2.5
2.3
2.0 2.1
1.9
1.6 1.7 1.9
1.5 1.3 1.8
1.6
1.2 1.1 1.3 1.4
1.0 1.2 1.2
1.0
0.8 0.7
0.5
0.7 0.7 0.8
0.5 0.5 0.6 0.6
0.3 0.4 0.4
0.0
2017 2018 2019 2020 2021 2022E 2023E 2024E 2025E 2026E
Source: SFC, CIC
Note:
(1) The assets under management represents the sum of the net asset value of the public funds and private funds.
Public funds include both SFC-authorized funds and those from other jurisdictions. Private funds include
hedge funds, private equity and venture capital.
– 203 –
INDUSTRY OVERVIEW
Market drivers of the Hong Kong wealth management market
• Comprehensive investment product suites. Hong Kong appeals to global investors

with its rich investment offerings across asset classes and abundant market liquidity.
As of December 31, 2020, approximately 64.0% of the total assets under
management by the asset and wealth management business in Hong Kong were
sourced from investors domiciled outside Hong Kong, including those from the
Asia-Pacific region, the U.S., Canada, Europe and other countries and regions. In
2021, Hong Kong wealth management market offered 2,839 authorized collective
investment schemes, including public and private funds from local and international
fund houses. In addition, Hong Kong differentiates itself by offering a variety of
structured products such as Callable Bull/Bear Contracts. Hong Kong has also
become a preferred listing venue for Chinese new economy companies as a result of
the introduction of a new listing regime in 2018.
• Development of Greater Bay Area Initiatives. Hong Kong is the most preferred
offshore investment destination for Chinese investors, partly due to its geographical
and cultural proximity to Mainland China. Chinese investors have demonstrated
rising interests in overseas markets in the past decade and recently been re-
allocating their offshore assets from real estate to equities and funds for greater asset
diversification. In response to such market dynamics, the Hong Kong Monetary
Authority (“HKMA”), the Monetary Authority of Macao (“AMCM”) and the
People’s Bank of China (“PBOC”) officially launched the Cross-boundary Wealth
Management Connect (“WMC”) Pilot Scheme in the Guangdong-Hong Kong-
Macao Greater Bay Area (粵港澳大灣區“跨境理財通”業務試點) in September 2021.
Investors in the region are allowed to access cross-boundary investment in wealth
management products. As of May 31, 2022, over 29,000 individual investors
participated in the WMC with the value of cross-boundary fund remittances
exceeding RMB1.0 billion. The implementation of Greater Bay Area initiatives is
expected to drive continued growth of Hong Kong wealth management market.
• Infrastructure upgrade to facilitate access to wealth management products.

Investors continue to seek investment opportunities beyond traditional products
such as bank deposits, which enables them to allocate their investments toward asset
classes with a variety of risk and return profile. The optimization of financial
infrastructure facilitates this trend. For example, the launch of the Fast Payment
System realizes instant money transfer and gives investors easier access to wealth
management products in the Hong Kong market.
– 204 –
REGULATIONS
This section sets forth a summary of the most significant rules and regulations that
may affect our business activities.
OVERVIEW OF THE LAWS AND REGULATIONS RELATING TO OUR BUSINESS

AND OPERATIONS IN HONG KONG
As we provide online brokerage services primarily from our subsidiaries in Hong Kong,
our business operations are subject to the laws of Hong Kong. The key laws and regulations
which relate to our business and operations in Hong Kong are summarized as follows:
Introduction
The Securities and Futures Ordinance, or the SFO, including its subsidiary legislation, is
the principal legislation regulating the securities and futures industry in Hong Kong, including
the regulation of securities, futures and leveraged foreign exchange markets, the offering of
investments to the public in Hong Kong, and intermediaries and their conduct of regulated
activities. In particular, Part V of the SFO deals with licensing and registration matters.
The SFO is administered by the SFC which is an independent statutory body in Hong
Kong set up to regulate the securities and futures markets and the non-bank leveraged foreign
exchange market in Hong Kong.
In addition, the Companies (Winding Up and Miscellaneous Provisions) Ordinance

(Chapter 32 of the Laws of Hong Kong), or the CWUMPO, including its subsidiary legislation
provides that the SFC is responsible for authorizing the registration of prospectuses for
offerings of shares and debentures in Hong Kong and/or granting exemptions from strict
compliance with the provisions in the CWUMPO. The SFO provides that the SFC is also
responsible for authorizing certain securities (including the relevant offering documents) that
are not shares or debentures.
The Hong Kong securities and futures industry (with respect to listed instruments) is also
governed by the rules and regulations introduced and administered by the Hong Kong Stock
Exchange and the Hong Kong Futures Exchange.
– 205 –
REGULATIONS
Types of regulated activities
The SFO provides a licensing regime where a person needs to obtain a license to carry
on a business in any of the following regulated activities as defined in Schedule 5 to the SFO:
License Regulated Activity (1)
License ььььь Regulated Activity

Type 1: ььььь Dealing in securities
Type 2: ььььь Dealing in futures contracts
Type 3: ььььь Leveraged foreign exchange trading
Type 4: ььььь Advising on securities
Type 5: ььььь Advising on futures contracts
Type 6: ььььь Advising on corporate finance
Type 7: ььььь Providing automated trading services
Type 8: ььььь Securities margin financing
Type 9: ььььь Asset management
Type 10: ьььь Providing credit rating services
Type 11: ьььь Dealing in OTC derivative products or advising on OTC derivative
products (2)
Type 12: ьььь Providing client clearing services for OTC derivative transactions (3)
Notes:
(1) On September 27, 2019, the SFC launched a consultation on a proposal to regulate depositaries of
SFC-authorized collective investment schemes. Depositaries operating in Hong Kong would be licensed
by or registered with the SFC for a new type of regulated activity (Type 13 (acting as a depositary
(trustee/custodian) of a SFC-authorized collective investment scheme)) and be subject to the ongoing
supervision of the SFC or the HKMA. As of the Latest Practicable Date, the consultation is still ongoing
and the licensing requirement with respect to Type 13 regulated activity is not yet in operation.
(2) The amendments to the SFO in relation to Type 11 regulated activity are not yet in operation. The day
on which the Type 11 regulated activity will come into operation will be appointed by the Secretary for
Financial Services and the Treasury Bureau by notice published in the Gazette.
(3) The Type 12 regulated activity added by the Securities and Futures (Amendment) Ordinance 2014 (6 of
2014) came into operation on September 1, 2016, in so far as it relates to paragraph (c) of the new
definition of excluded services in Part 2 of Schedule 5 to the SFO. The licensing requirement with
respect to Type 12 regulated activity is not yet in operation and the effective date will be appointed by
the Secretary for Financial Services and the Treasury Bureau by notice published in the Gazette.
– 206 –
REGULATIONS
As of the Latest Practicable Date, Futu International Hong Kong was licensed under the
SFO to conduct the following regulated activities:
Regulated Activities by Type of License
Futu International Type 1, Type 2, Type 3(1), Type 4, Type 5, Type 7(2) and Type 9(3)
Hong Kong ььььь
Notes:
(1) The following condition is currently imposed on Futu International Hong Kong in relation to Type 3
regulated activity:
(i) the licensee shall not provide discretionary account services to clients.
(2) The following conditions are currently imposed on Futu International Hong Kong in relation to Type 7
regulated activity:
(i) the licensee or any company within the same group of companies as the licensee shall not engage
in any principal trading activities in the platform.
(ii) the licensee shall: (1) notify the SFC of any incident of material service breakdown or disruption
of the operations of the platform affecting its clients within one business day. (2) provide the SFC
with any updated independent review report of the platform when available. (3) provide the SFC
with the following reports within two weeks after the end of each month or upon request: (a) a
statistical summary of shares allotted pursuant to an initial public offering for which transactions
have been executed; (b) a statistical summary of transaction volume, expressed in number of
trades; number of shares traded; and total settlement value in respect of each issuer’s shares
reported in (a) above; (c) a statistical summary of transaction volume expressed in total
settlement value by each of the top ten clients in respect of each issuer’s shares reported in (a)
above; (d) an analysis of (i) amount receivable from each of the top ten clients; and (ii) amount
payable to each of the top ten clients arising from dealing in each issuer’s shares reported in (a)
above, including, the name of each client and type of client account (i.e. cash or margin account)
and relevant amount receivable or payable to each client at the end of the trading day; (e) a
statistical summary of total number of clients participated in the pre-initial public offering trading
with breakdown into different client types in each issuer’s shares reported in (a) above; and (f)
a statistical summary of total value of trades recorded in the pre-initial public offering trading
with breakdown into trades executed for different client types in each issuer’s shares reported in
(a) above. (4) for the avoidance of doubt, have arrangements in place to ensure that it and its
clients will be able to comply with the Client Identity Rule Policy issued by the SFC. (5) upon
request, provide the SFC with: (a) a list of all clients who have access to the platform; and (b)
a list of all clients who have placed orders or traded on the platform in respect of any particular
trading day.
(iii) the licensee shall: (1) have appropriate arrangements in place that enable it to: (a) monitor orders
placed into and transactions undertaken on the platform to identify suspected breaches of any
rules relating to fair and orderly trading on the platform and conduct that may constitute market
abuse; (b) report to the SFC as soon as practicable any suspected breaches of its rules relating to
fair and orderly trading on the platform or suspected market abuse; and (c) upon request from the
SFC, supply relevant information to the SFC as soon as practicable regarding any suspected
breaches or suspected market abuse and provide full assistance to the SFC in inquiring into or
investigating the suspected breaches or suspected market abuse. (2) notify the SFC of any
material changes to the matters specified below, prior to the changes taking effect: (a) corporate
structure and governance arrangements; (b) business plans or operations; (c) the platform
(including changes in trading rules, operating hours, operator of the system, hardware, software,
and other technology); and (d) its contractual responsibilities for clients of the platform. (3)
notify the SFC as soon as practicable of the causes, or possible causes, of and the remedial actions
for material delay or failure to the operation of the platform effecting the clients upon its
– 207 –
REGULATIONS
occurrence. (4) notify the SFC as soon as practicable of any suspected breaches of its rules
relating to fair and orderly trading on the platform or suspected market abuse. (5) put in place
appropriate business continuity plans and disaster recovery programmes for its operations and the
platform and notify the SFC of any material changes to the plans or programmes.
(iv) the licensee shall: (1) only provide Automated Trading Services via an electronic trading
platform, for the purpose of trading shares allotted pursuant to an initial public offering only on
the day immediately before their official listing on The Stock Exchange of Hong Kong Limited
(SEHK). (2) have controls that: (a) are designed to ensure the integrity of its trading
methodology; and (b) enable fair and orderly trading on the platform. (3) provide sufficient
pre-trade order information and post-trade transaction information to its clients. (4) have
appropriate arrangements in place that ensure the required information about executed
transactions of shares allotted pursuant to an initial public offering is reported to SEHK in the
prescribed manner and within the prescribed time limit in accordance with the rules of SEHK. (5)
have appropriate arrangements in place to minimise the settlement failure of executed
transactions. (6) have appropriate written policies and procedures to handle outstanding orders
and executed transactions under contingency situations including, but not limited to, (a)
postponement, cancellation or alternation to the terms and conditions of an initial public offering;
(b) suspension, breakdown, or disruption of the platform; and (c) adverse weather like typhoon
or black rainstorm. These policies and procedures should be provided to its clients prior to their
using of the platform. (7) keep for a period of not less than seven years the following records in
respect of the activities on the platform in such a manner as to enable them to be readily
accessible and readily convertible into written form in the Chinese or English language; and
provide any of those records to the SFC upon request: (a) client details, including their registered
names and addresses, dates of admission and cessation, authorised traders and related details, and
client agreements; (b) details of restricting, suspending, or terminating any client’s access,
including related reasons; (c) all notices and other information, whether written or communicated
through electronic means, provided to clients generally; (d) routine daily and monthly summary
of trading on the platform including: (i) shares allotment details of clients pursuant to an initial
public offering; and (ii) transaction volume, expressed in number of trades; number of shares
traded; and total settlement value. (8) keep for a period of not less than two years time-sequenced
records of orders and any other actions or activities on the platform as particularised below in
such a manner as to enable them to be readily accessible and readily convertible into written form
in the Chinese or English language; and provide any of those records to the SFC upon request:
(a) date and time that the order was received, executed, modified, cancelled and expired (where
applicable); (b) identity of the client and authorised trader initiating the entry, modification,
cancellation and execution of the order; (c) particulars of the order and any subsequent
modification and execution of the order (where applicable), including but not limited to, the
shares involved, the size and side (buy or sell) of the order, the order type, and any order
designation, time and price limit and other conditions specified by the client initiating the order;
and (d) particulars of the allocation and re-allocation (where applicable) of an execution.
(3) The following conditions are currently imposed on Futu International Hong Kong in relation to Type 9
regulated activity:
(i) the licensee shall not provide a service of managing a portfolio of futures contracts for another
person; and
(ii) the licensee shall only provide services to “professional investors” as defined under the SFO and
its subsidiary legislation.
– 208 –
REGULATIONS
In addition to the above licenses granted to Futu International Hong Kong by the SFC,
Futu Lending Limited also holds a money lenders license issued by the licensing court under
the Money Lenders Ordinance, which allows it to provide loans to its clients in its ordinary
course of business. Furthermore, Futu International Hong Kong has been registered as a
Mandatory Provident Fund Intermediary with the Mandatory Provident Fund Schemes
Authority in Hong Kong since August 2020.
Overview of Licensing Requirements under the SFO
Under the SFO, any person who carries on a business in a regulated activity or holds itself
out as carrying on a business in a regulated activity must be licensed under the relevant
provisions of the SFO to carry on that regulated activity, unless any exemption under the SFO
applies. This applies to a corporation carrying on a business in a regulated activity and to any
individuals acting on behalf of that corporation in carrying on such activities, as further
described below. It is an offense for a person to conduct any regulated activity without the
appropriate license issued by the SFC.
Further, if a person (whether by itself or another person on his behalf, and whether in
Hong Kong or from a place outside of Hong Kong) actively markets to the public in Hong
Kong any services that it provides and such services, if provided in Hong Kong, would
constitute a regulated activity, then that person is also subject to the licensing requirements
under the SFO.
Responsible Officers
In order for a licensed corporation to carry on any of the regulated activities, it must
appoint no less than two Responsible Officers for each regulated activity conducted by a
licensed corporation, at least one of whom must be an executive director, to supervise each
regulated activity.
An “executive director” of a licensed corporation is defined as a director of the

corporation who (a) actively participates in or (b) is responsible for directly supervising, the
business of a regulated activity or activities for which the corporation is licensed. Every
executive director of the licensed corporation who is an individual must apply to the SFC to
be approved as a Responsible Officer of such licensed corporation in relation to the regulated
activities.
– 209 –
REGULATIONS
Managers-in-Charge of Core Functions, or MICs
A licensed corporation is required to designate certain individuals as MICs and provide

to the SFC information about its MICs and their reporting lines. MICs are individuals
appointed by a licensed corporation to be principally responsible, either alone or with others,
for managing each of the following eight core functions of the licensed corporation:
(a) overall management oversight;
(b) key business lines;
(c) operational control and review;
(d) risk management;
(e) finance and accounting;
(f) information technology;
(g) compliance; and
(h) anti-money laundering and counter-terrorist financing.
The management structure of a licensed corporation (including its appointment of MICs)

should be approved by the board of the licensed corporation. The board should ensure that each
of the licensed corporation’s MICs has acknowledged his or her appointment as MIC and the
particular core function(s) for which he or she is principally responsible.
Licensed Representatives
In addition to the licensing requirements for corporations that carry on regulated

activities, any individual who:
(a) performs any regulated function for his principal which is a licensed corporation in
relation to a regulated activity carried on as a business; or
(b) holds himself out as performing such regulated function,
must separately be licensed under the SFO as a Licensed Representative accredited to his
principal.
– 210 –
REGULATIONS
Fit and Proper Requirement
Persons who apply for licenses to carry on regulated activities under the SFO must satisfy,
and continue to satisfy the SFC after the grant of such licenses by the SFC, that they are fit and
proper persons to be so licensed. The Fit and Proper Guidelines issued by the SFC under
section 399 of the SFO summaries certain matters that the SFC will generally consider when
determining whether the applicant is a fit and proper person to be licensed under the SFO.
Effective from January 1, 2022, the additional fit and proper guidelines for corporations and
authorized financial institutions applying or continuing to act as sponsors and compliance
advisers are addressed under the Guidelines on Competence and Guidelines on Continuous
Professional Training.
Under the Fit and Proper Guidelines, the SFC will consider the following matters of the
applicant in addition to any other issues as it may consider to be relevant:
(a) the financial status or solvency;
(b) the educational or other qualifications or experience having regard to the nature of
the functions to be performed;
(c) the ability to carry on the regulated activity competently, honestly and fairly; and
(d) the reputation, character, reliability and financial integrity.
The SFC will consider the above matters in respect of the person (if an individual), the
corporation and any of its officers (if a corporation) or the institution, its directors, chief
executive, managers and executive officers (if an authorized financial institution).
In addition to the above, the SFC may also take into account of the following matters:
(a) any decisions made by the HKMA, the Insurance Authority, the Mandatory
Provident Fund Schemes Authority or any other authorities or organizations
performing similar functions as those of SFC (in the SFC’s opinion) whether in
Hong Kong or elsewhere in respect of the applicant;
(b) any information relating to:
(i) any person who is or is to be employed by, or associated with, the applicant for
the purpose of the regulated activity in question;
(ii) any person who will be acting for or on behalf of the applicant in relation to
the regulated activity in question; and
(iii) if the applicant is a corporation in a group of companies, any other corporation

within the same group of companies or any substantial shareholder or officer
of any such corporation;
– 211 –
REGULATIONS
(c) whether the applicant has established effective internal control procedures and risk
management systems to ensure its compliance with all applicable regulatory
requirements under any of the relevant provisions; and
(d) the state of affairs of any other business which the person carries on or proposes to
carry on.
Continuing Obligations of Licensed Corporations
Licensed corporations, Licensed Representatives and Responsible Officers must remain

fit and proper at all times. They are required to comply with all applicable provisions of the
SFO and its subsidiary rules and regulations, as well as the codes and guidelines issued by the
HK SFC.
Outlined below are some of the key continuing obligations of our licensed corporations
under the SFO:
• maintenance of minimum paid-up share capital and liquid capital, and submission of
financial resources returns to the SFC in accordance with the requirements under the
Securities and Futures (Financial Resources) Rules of Hong Kong (“FRR”);
• maintenance of segregated account(s), and custody and handling of client securities

in accordance with the requirements under the Securities and Futures (Client
Securities) Rules (Chapter 571H of the Laws of Hong Kong);
• maintenance of segregated account(s), and holding and payment of client money in

accordance with the requirements under the Securities and Futures (Client Money)
Rules (Chapter 571I of the Laws of Hong Kong);
• issuance of contract notes, statements of account and receipts in accordance with the
requirements under the Securities and Futures (Contract Notes, Statements of
Account and Receipts) Rules (Chapter 571Q of the Laws of Hong Kong);
• maintenance of proper records in accordance with the requirements prescribed under

the Securities and Futures (Keeping of Records) Rules (Chapter 571O of the Laws
of Hong Kong);
• submission of audited accounts and other required documents in accordance with the
requirements under the Securities and Futures (Accounts and Audit) Rules (Chapter
571P of the Laws of Hong Kong);
• maintenance of insurance against specific risks for specified amounts in accordance

with the requirements under the Securities and Futures (Insurance) Rules (Chapter
571AI of the Laws of Hong Kong);
– 212 –
REGULATIONS
• payment of annual fees and submission of annual returns to the SFC within one
month after each anniversary date of the license;
• notification to the SFC of certain changes and events in accordance with the
requirements under the Securities and Futures (Licensing and Registration)
(Information) Rules (Chapter 571S of the Laws of Hong Kong);
• notification to the SFC of any changes in the appointment of MICs or any changes
in certain particulars of MICs pursuant to the Circular to Licensed Corporations
Regarding Measures for Augmenting the Accountability of Senior Management
dated December 16, 2016 issued by the SFC;
• compliance with the continuous professional training and related record keeping
requirements under the Guidelines on Continuous Professional Training issued by
the SFC;
• implementation of appropriate policies and procedures relating to client acceptance,

client due diligence, record keeping, identification and reporting of suspicious
transactions and staff screening, education and training in accordance with the
requirements under the Guideline on Anti-Money Laundering and Counter-
Financing of Terrorism (For Licensed Corporations) issued by the SFC, or the
AMLCTF Guideline;
• compliance with the business conduct requirements under the Code of Conduct for
Persons Licensed by or Registered with the SFC, the Management, Supervision and
Internal Control Guidelines for Persons Licensed by or Registered with the
Securities and Futures Commission, the Fund Manager Code of Conduct and the Fit
and Proper Guidelines;
• compliance with employee dealings requirements under the Code of Conduct for
Persons Licensed by or Registered with the Securities and Futures Commission,
which requires licensed corporations to implement procedures and policies on
employee trading, to actively monitor the trading activities in their employees’
accounts and their related accounts;
• compliance with the Advertising Guidelines Applicable to Collective Investment

Schemes Authorized under the Product Codes, the Guidelines on Disclosure of Fees
and Charges Relating to Securities Services and other applicable codes, circulars
and guidelines issued by the SFC; and
• compliance with the requirements in relation to provision of order execution,

distribution or advisory services in respect of investment products via online
platforms under the Guidelines on Online Distribution and Advisory Platforms
issued by the SFC.
– 213 –
REGULATIONS
The Securities and Futures (Financial Resources) Rules of Hong Kong
Subject to certain exemptions specified under the FRR, a licensed corporation is required
to maintain minimum paid-up share capital in accordance with the FRR. The following table
sets out a summary of the key requirements on minimum paid-up share capital under the FRR
which are applicable to Futu International Hong Kong:
Minimum
Amount of Paid-up
Regulated Activities Share Capital
Futu International A corporation licensed for Type 1, Type 2, Type 3, HK$30,000,000

Hong Kong ь ь ь ь ь Type 4, Type 5, Type 7 and Type 9 regulated
activities
In addition, the FRR also requires a licensed corporation to maintain minimum liquid
capital. The minimum liquid capital requirements under the FRR that are applicable to Futu
International Hong Kong are the higher of the amount of (a) and (b) below:
(a) the amount of:
Minimum
Amount of Paid-up
Regulated Activities Share Capital
Futu International A corporation licensed for Type 1, Type 2, Type 3, HK$15,000,000

Hong Kong ь ь ь Type 4, Type 5, Type 7 and Type 9 regulated
activities
(b) in the case of a corporation licensed for Type 3 regulated activity (whether or not
it is also licensed for any other regulated activity), means the sum of its variable
required liquid capital which means 5% of the aggregate of (i) its adjusted liabilities,
(ii) the aggregate of the initial margin requirements in respect of outstanding futures
contracts and outstanding unlisted options contracts held by it on behalf of its
clients, and (iii) the aggregate of the amounts of margin required to be deposited in
respect of outstanding futures contracts and outstanding unlisted options contracts
held by it on behalf of its clients, to the extent that such contracts are not subject to
the requirement of payment of initial margin requirements and 1.5% of its aggregate
gross foreign currency position which means the aggregate of (i) the value of assets,
other than fixed assets, beneficially owned by Futu International Hong Kong which
are denominated in the foreign currency, (ii) all of Futu International Hong Kong’s
on-balance sheet liabilities, other than excluded liabilities, which are denominated
in the foreign currency and (iii) the aggregate of the total amount of the foreign
currency in respect of which Futu International Hong Kong is exposed to the risk of
a decline or rise in the value of the foreign currency under outstanding contracts
(including spot contracts).
– 214 –
REGULATIONS
Securities and Futures (Client Securities) Rules (Chapter 571H of the Laws of Hong
Kong) (the “Client Securities Rules”)
The repledging limit stipulated under section 8A of the Client Securities Rules applies to
an intermediary which is licensed for dealing in securities and/or securities margin financing
and where the intermediary or an associated entity of such intermediary repledges securities
collateral of the intermediary. On each business day, the intermediary shall ascertain the
aggregate market value of the repledged securities collateral, which shall be calculated by
reference to the respective closing prices of the collateral on that business day.
Pursuant to section 8A of the Client Securities Rules, if the aggregate market value of the
repledged securities collateral as calculated above exceeds 140% of the intermediary’s
aggregate margin loans on the same business day, or the Relevant Day, the intermediary shall
by the close of business on the next business day following the Relevant Day, or the Specified
Time, withdraw, or causes to be withdrawn, from deposit an amount of repledged securities
collateral such that the aggregate market value of the repledged securities collateral at the
Specified Time, which is calculated by reference to the respective closing prices on the
Relevant Day, does not exceed 140% of the intermediary’s aggregate margin loans as of the
close of business on the Relevant Day.
Exchange and Clearing Participantship
As of the Latest Practicable Date, Futu International Hong Kong was a participant of the
following:
Exchange/Clearing House Type of Participantship
The Stock Exchange of Hong Kong Participant

Limited (SEHK) ьььььььььььььь China Connect Exchange Participant
Options Trading Exchange Participant
Hong Kong Securities Clearing Direct Clearing Participant

Company Limited (HKSCC) ььььь China Connect Clearing Participant
SEHK Options Clearing House Direct Clearing Participant

Limited (SEOCH) ььььььььььььь
HKFE Clearing Corporation Limited Clearing Participant

(HKCC)ььььььььььььььььььььь
Hong Kong Futures Exchange Futures Commission Merchant

Limited (HKFE) ьььььььььььььь
– 215 –
REGULATIONS
Trading Rights
In addition to the licensing requirements under the SFO, the rules promulgated by the
Stock Exchange of Hong Kong and the Hong Kong Futures Exchange require any person who
wishes to trade on or through their respective facilities to hold a trading right, or Trading Right.
The Trading Right confers on its holder the eligibility to trade on or through the relevant
exchange. However, the holding of a Trading Right does not, of itself, permit the holder to
actually trade on or through the relevant exchange. In order to do this, it is also necessary for
the person to be registered as a participant of the relevant exchange in accordance with its
rules, including those requiring compliance with all relevant legal and regulatory requirements.
The Stock Exchange of Hong Kong Trading Rights and the Hong Kong Futures Exchange
Trading Rights are issued by the Stock Exchange of Hong Kong and the Hong Kong Futures
Exchange at a fee and in accordance with the procedures set out in their respective rules.
Alternatively, the Stock Exchange of Hong Kong Trading Rights and the Hong Kong Futures
Exchange Trading Rights can be acquired from existing Trading Right holders subject to the
rules of the respective exchanges.
Exchange Participantship
The table below sets out a summary of the key requirements for becoming an exchange
participant of the relevant exchange:
Stock Exchange Participant/Stock Options Futures Exchange

Exchange Participant Participant
Legal Status ь ь ь ь ь ь ь ь Being a company limited by shares incorporated

in Hong Kong
SFC Registrationь ь ь ь ь Being a licensed corporation qualified to carry out Being a licensed
Type 1 regulated activity under the SFO corporation qualified
to carry out Type 2
regulated activity
under the SFO
Trading Right ь ь ь ь ь ь ь Holding a Stock Exchange Trading Right Holding a Futures

Exchange Trading
Right
Financial Standingь ь ь ь Having good financial standing and integrity
Financial Resources Complying with the minimum capital requirement,

Requirement ь ь ь ь ь ь liquid capital requirement and other financial
resources requirements as specified by the FRR
– 216 –
REGULATIONS
Clearing Participantship
An entity must be an exchange participant of the relevant exchange before it can become
a clearing participant of the following clearing houses, namely the HKSCC, HKCC and
SEOCH.
HKSCC
HKSCC has, among others, two categories of participantship: (1) the Direct Clearing
Participant; and (2) the General Clearing Participant. The requirements of Direct Clearing
Participantship are as follows:
• to be an Exchange Participant of the Stock Exchange of Hong Kong;
• to undertake to (i) sign a participant agreement with HKSCC; (ii) pay to HKSCC an
admission fee of HK$50,000 in respect of each Stock Exchange Trading Right held
by it; and (iii) pay to HKSCC its contribution to the guarantee fund of HKSCC as
determined by HKSCC from time to time subject to a minimum cash contribution of
the higher of HK$50,000 or HK$50,000 in respect of each Stock Exchange Trading
Right held by it;
• to open and maintain a single current account with one of the CCASS designated
banks and execute authorizations to enable the designated bank to accept electronic
instructions from HKSCC to credit or debit the account for CCASS money
settlement, including making payment to HKSCC;
• to provide a form of insurance to HKSCC as security for liabilities arising from

defective securities deposited by it into CCASS, if so required by HKSCC; and
• to have a minimum liquid capital of HK$3,000,000.
SEOCH
SEOCH has two categories of participantship: (1) the Direct Clearing Participant; and
(2) the General Clearing Participant. The requirements of Direct Clearing Participantship are
as follows:
• be an Options Trading Exchange Participant of the Stock Exchange of Hong Kong;
• have in place procedures and a back office computer system appropriate to the type
of SEOCH Participant applied for;
– 217 –
REGULATIONS
• have a liquid capital of not less than the higher of:
(a) its required liquid capital under the Securities and Futures (Financial
Resources) Rules; or
(b) HK$5,000,000; and
• contribute HK$1,500,000 to the reserve fund under the rules of SEOCH.
HKCC
HKCC has two categories of participantship: (1) the General Clearing Participant; and
(2) the Clearing Participant. The requirements of Clearing Participantship are as follows:
• be an Exchange Participant of the Hong Kong Futures Exchange;
• have a liquid capital of not less than the higher of:
(a) its required liquid capital under the Securities and Futures (Financial
Resources) Rules; or
(b) HK$5,000,000; and
• contribute HK$1,500,000 participant deposit to the reserve fund under the rules of
HKCC.
China Connect Exchange Participant
China Connect is open to all Exchange Participants, but Exchange Participants who wish
to participate must satisfy certain eligibility requirements published on the Stock Exchange
website at http://www.hkex.com.hk/mutualmarket.
Only the following Exchange Participants shall be eligible to apply for registration and
to remain registered as China Connect Exchange Participants: (1) Exchange Participants that
are CCASS Clearing Participants, and (2) Exchange Participants that are not CCASS Clearing
Participants but have entered into a valid, binding and effective CCASS Clearing Agreement
with a CCASS GCP which is and remains registered by HKSCC as a China Connect CCASS
Clearing Participant for the clearing of its China Connect Securities Trades (capitalized terms
of which are defined in the Rules of the Hong Kong Stock Exchange).
The Stock Exchange may publish the China Connect Exchange Participant Registration
Criteria (as defined in the Rules of the Stock Exchange) and a list of the China Connect
Exchange Participants registered from time to time on the website of the Stock Exchange or
by other means that it considers appropriate.
– 218 –
REGULATIONS
China Connect Clearing Participant
Only China Connect Clearing Participants may use China Connect Clearing Services
relating to the clearing and settlement of China Connect Securities Trades. The requirements
for being accepted for registration and remaining registered as a China Connect Clearing
Participant are as follows:
• to be a Direct Clearing Participant or a General Clearing Participant;
• to undertake to pay HKSCC such amount of Mainland Settlement Deposit, Mainland

Security Deposit, Marks and Collateral as may be specified by HKSCC in
accordance with the Operational Procedures of HKSCC in relation to CCASS; and
• to meet all other relevant China Connect Clearing Participant Registration Criteria.
HKSCC may from time to time prescribe additional eligibility criteria for participants to
be accepted for registration and to remain registered as China Connect Clearing Participants.
HKSCC may publish the China Connect Clearing Participant Registration Criteria and a list of
China Connect Clearing Participants on the website of the Stock Exchange or by other means
that it considers appropriate.
Anti-Money Laundering and Counter-Terrorist Financing
Licensed corporations are required to comply with the applicable anti-money laundering
and counter-terrorist financing laws and regulations in Hong Kong as well as the AMLCTF
Guideline and the Prevention of Money Laundering and Terrorist Financing Guideline issued
by the Securities and Futures Commission for Associated Entities.
The AMLCTF Guideline provides practical guidance to assist licensed corporations and
their senior management in formulating and implementing their own policies, procedures and
controls in order to meet applicable legal and regulatory requirements in Hong Kong. Under
the AMLCTF Guideline, licensed corporations should, among other things:
• assess the risks of any new products and services before they are introduced and
ensure that appropriate additional measures and controls are implemented to
mitigate and manage the risks associated with money laundering and terrorist
financing;
• consider the delivery and distribution channels (which may include sales through
online, postal or telephone channels where a non-face-to-face account opening
approach is used and business sold through intermediaries) and the extent to which
they are vulnerable to abuse for money laundering and terrorist financing;
– 219 –
REGULATIONS
• identify the client and verify the client’s identity and any beneficial owner’s identity
by reference to any documents, information or data from reliable and independent
sources, and take steps from time to time to ensure that the client information
obtained is up-to-date and relevant;
• conduct on-going monitoring of activities of the clients to ensure that they are
consistent with the nature of business, the risk profile and source of funds, as well
as identify transactions that are complex, large or unusual, or patterns of
transactions that have no apparent economic or lawful purpose and which may
indicate money laundering and terrorist financing;
• maintain a database of names and particulars of terrorist suspects and designated

parties which consolidates the information from various lists that have been made
known to them, as well as conduct comprehensive on-going screening of the client
database; and
• conduct on-going monitoring for identification of suspicious transactions and ensure

compliance with their legal obligations of reporting funds or property known or
suspected to be proceeds of crime or terrorist property to the Joint Financial
Intelligence Unit, a unit jointly run by the Hong Kong Police Force and the Hong
Kong Customs and Excise Department to monitor and investigate suspicious
financial or money laundering activities.
We set out below a brief summary of the principal legislation in Hong Kong that is
concerned with anti-money laundering and counter-terrorist financing.
Anti-Money Laundering and Counter-Terrorist Financing Ordinance (Chapter 615 of the

Laws of Hong Kong), or the AMLO
Among other things, the AMLO imposes on certain institutions (which include licensed
corporations as defined under the SFO) certain requirements relating to customer due diligence
and record-keeping. The AMLO empowers the relevant regulatory authorities to supervise
compliance with the requirements under the AMLO. In addition, a financial institution must
take all reasonable measures to (1) ensure that proper safeguards exist to prevent contravention
of specific provisions in the AMLO, and (2) mitigate money laundering and terrorist financing
risks.
Licensing Requirements for Trust or Company Service Providers (“TCSP”) under the AMLO
A person who carries on or wishes to carry on a trust or company service business in Hong
Kong is required to apply for a licence under the AMLO, unless any exemption under the
AMLO applies. The Companies Registry of Hong Kong is responsible for the administration
of the licensing regime for TCSPs. It is an offense for a person to carry on a trust or company
service business in Hong Kong without a licence.
– 220 –
REGULATIONS
A TCSP licence, once granted, will generally be valid for three years. The Companies
Registry of Hong Kong is empowered to grant, refuse to grant, renew, suspend or revoke a
licence, and impose or vary any conditions in relation to a licence. TCSP licensees are required
to obtain prior approval from the Registrar of Companies of Hong Kong before any person
becomes an ultimate owner, a partner or a director of a licensee. They should also give
notifications to the Registrar of Companies of Hong Kong of any changes in particulars
previously provided in connection with an application for the grant or renewal of a licence
within one month of the change. A TCSP licensee who intends to cease to carry on the trust or
company service business is also required to, before the intended date of cessation, notify the
Registrar of Companies of Hong Kong of that intention and the intended date of cessation.
TCSP licensees are also required to comply with the statutory customer due diligence and
record-keeping requirements as set out in Schedule 2 to the AMLO.
The Companies Registry of Hong Kong published the “Guideline on Licensing of Trust
or Company Service Providers” to provide information on the licensing requirements and the
“Guideline on Compliance of Anti-Money Laundering and Counter-Terrorist Financing
Requirements for Trust or Company Service Providers” to provide guidance on the ongoing
obligations of TCSP licensees. The register of licensees, which contains the name and business
address of every TCSP licensee, is maintained by the Registrar of Companies of Hong Kong
and is available for public inspection.
Drug Trafficking (Recovery of Proceeds) Ordinance (Chapter 405 of the Laws of Hong
Kong), or the DTROP
Among other things, the DTROP contains provisions for the investigation of assets
suspected to be derived from drug trafficking activities, the freezing of assets on arrest and the
confiscation of the proceeds from drug trafficking activities by the competent authorities. It is
an offense under the DTROP for a person to deal with any property knowing or having
reasonable grounds to believe it to represent the proceeds from drug trafficking. The DTROP
requires a person to report to an authorized officer if he/she knows or suspects that any
property (in whole or in part directly or indirectly) represents the proceeds of drug trafficking
or is intended to be used or was used in connection with drug trafficking, and failure to make
such disclosure constitutes an offense under the DTROP.
Organized and Serious Crimes Ordinance (Chapter 455 of the Laws of Hong Kong), or the
OSCO
Among other things, the OSCO empowers officers of the Hong Kong Police Force and the
Hong Kong Customs and Excise Department to investigate organized crime and triad activities,
and confers jurisdiction on the Hong Kong courts to confiscate the proceeds of organized and
serious crimes, to issue restraint orders and charging orders in relation to the property of
defendants of specified offenses under the OSCO. The OSCO extends the money laundering
offense to cover the proceeds from all indictable offenses in addition to drug trafficking.
– 221 –
REGULATIONS
United Nations (Anti-Terrorism Measures) Ordinance (Chapter 575 of the Laws of Hong
Kong), or the UNATMO
Among other things, the UNATMO stipulates that it is a criminal offense to: (1) provide
or collect property (by any means, directly or indirectly) with the intention or knowledge that
the property will be used to commit, in whole or in part, one or more terrorist acts; or (2) make
any property or financial (or related) services available, by any means, directly or indirectly,
to or for the benefit of a person knowing that, or being reckless as to whether, such person is
a terrorist or terrorist associate, or collect property or solicit financial (or related) services, by
any means, directly or indirectly, for the benefit of a person knowing that, or being reckless as
to whether, the person is a terrorist or terrorist associate. The UNATMO also requires a person
to disclose his knowledge or suspicion of terrorist property to an authorized officer, and failure
to make such disclosure constitutes an offense under the UNATMO.
Personal Data (Privacy) Ordinance (Chapter 486 of the Laws of Hong Kong), or the PDPO
The PDPO imposes a statutory duty on data users to comply with the requirements of the
six data protection principles (the “Data Protection Principles”) contained in Schedule 1 to
the PDPO. The PDPO provides that a data user shall not do an act, or engage in a practice, that
contravenes a Data Protection Principle unless the act or practice, as the case may be, is
required or permitted under the PDPO. The six Data Protection Principles are:
• Principle 1 – purpose and manner of collection of personal data;
• Principle 2 – accuracy and duration of retention of personal data;
• Principle 3 – use of personal data;
• Principle 4 – security of personal data;
• Principle 5 – information to be generally available; and
• Principle 6 – access to personal data.
Non-compliance with a Data Protection Principle may lead to a complaint to the Privacy
Commissioner for Personal Data (the “Privacy Commissioner”). The Privacy Commissioner
may serve an enforcement notice to direct the data user to remedy the contravention and/or
instigate prosecution actions. A data user who contravenes an enforcement notice commits an
offense which may lead to a fine and imprisonment.
– 222 –
REGULATIONS
The PDPO also gives data subjects certain rights, inter alia:
• the right to be informed by a data user whether the data user holds personal data of
which the individual is the data subject;
• if the data user holds such data, to be supplied with a copy of such data; and
• the right to request correction of any data they consider to be inaccurate.
The PDPO criminalizes, including but not limited to, the misuse or inappropriate use of
personal data in direct marketing activities, non-compliance with a data access request and the
unauthorized disclosure of personal data obtained without the relevant data user’s consent. An
individual who suffers damage, including injured feelings, by reason of a contravention of the
PDPO in relation to his or her personal data may seek compensation from the data user
concerned.
Money Lenders Ordinance (Chapter 163 of the Laws of Hong Kong)
Money lenders and money-lending transactions in Hong Kong are regulated by the Money
Lenders Ordinance. In general, any person who carries on business as a money lender must
apply for and maintain a money lenders license (valid for 12 months) granted by the licensing
court under the Money Lenders Ordinance, unless any exemption under the Money Lenders
Ordinance applies.
An application for or renewal of this license is subject to any objection by the Registrar
of Money Lenders (the role is presently performed by the Registrar of Companies) and the
Commissioner of Police. The Commissioner of Police is responsible for enforcing the Money
Lenders Ordinance, including carrying out examinations on applications for money lenders
licenses, renewal of licenses and endorsements on licenses, and is responsible for
investigations of complaints against money lenders.
The register of licensed money lenders is currently kept in the Companies Registry of
Hong Kong and is available for inspection. The Money Lenders Ordinance provides for
protection and relief against excessive interest rates and extortionate stipulations in respect of
loans by, for example, making it an offense for a person to lend money at an effective interest
rate exceeding or extortionate provisions. On October 26, 2022, the Legislative Council passed
a resolution to reduce, with effect from December 30, 2022, the statutory interest rate limits
under the Money Lenders Ordinance, including reducing the interest rate cap under section 24
from 60% per annum to 48% per annum. The resolution was published in the Gazette on
October 28, 2022. It also stipulates various mandatory documentary and procedural
requirements that are required to be observed by a money lender in order to enforce in the
courts of law a lending agreement or security being the subject of the Money Lenders
Ordinance.
– 223 –
REGULATIONS
Recently, the Companies Registry of Hong Kong has introduced more stringent licensing
conditions on all money lenders licenses, with an aim to facilitate effective enforcement of the
statutory ban on separate fee charging by money lenders and their connected parties, ensure
better protection of privacy of intending borrowers, enhance transparency and disclosure,
promote the importance of prudent borrowing, address increasing public concern about
over-indebtedness and ensure better regulation of money lending-related practices. For
example, one of the additional licensing conditions is that all money lenders should include a
warning statement in their advertisements in relation to their money lending business, namely
“Warning: You have to repay your loans. Don’t pay any intermediaries.”
Additional licensing conditions came into effect on December 1, 2016, October 11, 2018
and March 16, 2021. The Companies Registry of Hong Kong also published “Guidelines on
Licensing Conditions of Money Lenders License” to provide guidance for money lenders
licenses on the requirements of the licensing conditions. One of the additional licensing
conditions is that a money lender shall comply with the Guideline on Compliance of
Anti-Money Laundering and Counter-Terrorist Financing Requirements for Licensed Money
Lenders, which is similar to the AMLCTF Guideline.
Insurance Ordinance (Chapter 41 of the Laws of Hong Kong), or the IO
The IO (along with its subsidiary legislation) provides the regulatory framework for the
business of insurers and insurance intermediaries (covering insurance agents and brokers) in
Hong Kong. The IO provides that a person must not carry on a regulated activity, or must not
hold out that the person is carrying on a regulated activity, in the course of business or
employment, or for reward unless the person holds an appropriate type of insurance
intermediary license or is exempt under the IO. Regulated activities include:
• negotiating or arranging a contract of insurance;
• inviting or inducing a person to enter into a contract of insurance (or attempting to

do so);
• inviting or inducing a person to make a material decision in relation to a contract of

insurance (or attempting to do so); and
• giving regulated advice.
– 224 –
REGULATIONS
Types of Licensed Insurance Brokers
The licensing regime under the IO prescribes two types of licensed insurance brokers:
• licensed insurance broker companies, which is a company that is granted a license

to carry out regulated activities and to perform the act of negotiating or arranging
an insurance contract as an agent of any policy holder or potential policy holder; and
• licensed technical representatives (broker), which is an individual who is granted a

license to carry on regulated activities, as an agent of any licensed insurance broker
company.
Application for licensing
An application for an insurance intermediary license under the IO should be made to the
Insurance Authority of Hong Kong, or the IA.
Effective September 23, 2019, the IA took over the regulation of insurance intermediaries
from the three self-regulatory organizations (i.e., the Insurance Agents Registration Board, or
the IARB, established under the Hong Kong Federation of Insurers, the Hong Kong
Confederation of Insurance Brokers, or the HKCIB and the Professional Insurance Brokers
Association, or the PIBA, and became the sole regulator to license and supervise all insurance
intermediaries in Hong Kong.
A license granted to a licensed insurance broker company or licensed technical

representative by the IA is valid for three years or, if the IA considers it appropriate in a
particular case, another period determined by the IA. The IA maintains a register of licensed
intermediaries on its website.
Transitional Arrangements for Insurance Brokers
To facilitate a smooth transition, all insurance brokers who were validly registered with
the IARB, the HKCIB and the PIBA immediately before September 23, 2019 are deemed as
licensed insurance brokers under the IO for a period of three years. The incumbent chief
executives and responsible officers of the insurance broker companies are also eligible for the
transitional arrangements. The IA will, staggered over the three-year transitional period, invite
deemed licensees to submit applications to the IA for granting of formal licenses and approvals.
– 225 –
REGULATIONS
Requirements for Broker Companies
Under the IO, a person who is, is applying to be, or is applying for a renewal of a license
to be, a licensed insurance broker is required to satisfy the IA that he/she/it is a fit and proper
person. In addition, the responsible officer(s), controller(s), and director(s) (where applicable)
of a licensed insurance broker company are also required to be fit and proper persons. These
“fit and proper” requirements aim at ensuring that the licensed insurance brokers are
competent, reliable and financially sound, and have integrity.
The IO imposes requirements (set out in rules made under section 129 of the IO) on
licensed insurance broker companies in relation to the following aspects:
• capital and net assets;
• professional indemnity insurance;
• client accounts;
• proper books and accounts; and
• accounting disclosure.
The IO (and rules, regulations, codes and guidelines administered or issued by the IA)
also includes requirements, which focus on the interactions which licensed insurance brokers
have with policy holders and potential policy holders when carrying on regulated activities.
These requirements include:
• the statutory conduct requirements, with which licensed insurance brokers must
comply in carrying on regulated activities, in sections 90 and 92 of the IO;
• the relevant requirements set out in the rules, regulations, codes and guidelines made
or issued under the IO; and
• the general principles, standards and practices set out in the Code of Conduct for
Licensed Insurance Brokers.
– 226 –
REGULATIONS
Hong Kong Taxation
Hong Kong profits tax is chargeable on every person, including corporations, carrying on
a trade, profession or business in Hong Kong in respect of profits arising in or derived from
Hong Kong from such trade, profession or business (excluding profits arising from the sale of
capital assets). However, profits arising from the sale of capital assets are not subject to Hong
Kong profit tax. Whether (i) an activity amounted to trade, profession or business; (ii) an asset
is capital in nature or revenue in nature; and/or (iii) profits are arising in or derived from Hong
Kong are questions of fact. Under the current Hong Kong Inland Revenue Ordinance, Hong
Kong profits tax for a corporation from the year of assessment 2018/2019 onwards is generally
8.25% on assessable profits up to HK$2.0 million; and 16.5% on any part of assessable profits
over HK$2.0 million.
In addition, if the transfer of a share is required to be registered in a share register in Hong

Kong, or Hong Kong Share, stamp duty will be payable by the person(s) who effects any sale
or purchase of such Hong Kong Share. The stamp duty in relation to transfer of Hong Kong
Share is charged at the ad valorem rate of 0.13% of the consideration for, or (if greater) the
value of, the shares transferred on each of the seller and purchaser. In other words, a total of
0.26% of the consideration for, or (if greater) the value of, the shares transferred is currently
payable on a typical sale and purchase transaction of Hong Kong Share. In addition, the
instrument of transfer (if required) will be subject to a flat rate of stamp duty of HK$5.00.
Regulations on Employment in Hong Kong
The principle legislations that govern employment matters in Hong Kong include: (i) the
Employment Ordinance (Chapter 57 Laws of Hong Kong); (ii) Minimum Wage Ordinance
(Chapter 608 Laws of Hong Kong); (iii) Occupational Retirement Schemes Ordinance (Chapter
426 Laws of Hong Kong); (iv) Mandatory Provident Fund Schemes Ordinance (Chapter 485
Laws of Hong Kong); (v) Employees’ Compensation Ordinance (Chapter 282 Laws of Hong
Kong); and (vi) Occupational Safety and Health Ordinance (Chapter 509 Laws of Hong Kong).
According to the legislations above, although there is no specific requirement that

employment contracts must be in written form, an employer is required to provide particulars
of the terms of employment to the employee upon request. Wages should not be lower than the
statutory minimum wage and shall be paid to the employees within seven days from the end
of the relevant wage period. Employers also required to take out sufficient employees
compensation insurance in respect of their liability to compensate employees for any injury or
accident arising out of and in the course of employment. In addition, all employers are required
to provide a safe and healthy work environment to all employees and put in place appropriate
measures in the workplace. Violations of the relevant legislation may result in the imposition
of fines or imprisonments and also claims from the employees.
– 227 –
REGULATIONS
Regulations on Social Welfare in Hong Kong
Employers in Hong Kong are required by Hong Kong laws to enrol all eligible employees
to their mandatory provident fund (“MPF”) scheme. Both the employer and the employee are
each required to contribute an amount equal to at least 5% of an employee’s salary (subject to
a statutory cap at HK$1,500) per month to a retirement scheme that is registered as a MPF
scheme. Some employers in Hong Kong may provide occupational retirement scheme as an
alternative or additional benefit through occupational retirement scheme. Failure to maintain
a retirement scheme, enrol eligible employees to its retirement scheme, or make the required
contributions would be a criminal offence. Employers who are in breach may be subject to fine
or imprisonment.
OVERVIEW OF THE LAWS AND REGULATIONS RELATING TO OUR PRESENCE

IN CHINA
This section sets forth a summary of the most significant laws, regulations and rules that
affect our business activities in the PRC or the rights of our shareholders to receive dividends
and other distributions from us.
Regulations on Securities Business
Regulations on the Engagement of Securities Business within the Territory of the PRC by
Foreign-Invested Securities Companies
On December 29, 1998, the SCNPC, promulgated the Securities Law of the PRC (《中
華人民共和國證券法》), or the Securities Law, and most recently amended on December 28,
2019 and became effective on March 1, 2020, governs all the issuance or trading of shares,
corporate bonds or any other securities approved by the State Council within China. No entities
or individuals shall engage in securities business in the name of a securities company without
the approval by the securities regulatory authority of the State Council. Offering and trading
of securities outside China which disrupt the domestic market order of China and harm the
legitimate rights and interests of domestic investors shall be dealt with pursuant to the relevant
provisions of the Securities Law of the PRC. However, there are no further explanations or
detailed rules and regulations with respect to the implementation of these rules.
The State Council promulgated the Regulations on the Supervision and Administration of
Securities Companies (《證券公司監督管理條例》) on April 23, 2008 and most recently
amended on July 29, 2014, which clarifies that the operation of securities businesses or
establishment of representative agencies in China by foreign-invested securities companies
shall be subject to the approval of the securities regulatory authority of the State Council.
– 228 –
REGULATIONS
If some of our activities in China or our provision of services to our client base in China
were deemed by relevant regulators as provision of securities business as stated in such laws
and/or regulations mentioned above such as securities brokerage services, investment
consulting services, futures business and/or any other regulated services and business activities
in China or any new PRC laws and regulations are enacted to impose license requirements on
us with respect to our activities in China and/or our provision of services to our client base in
China, we will be required to obtain relevant licenses or permits from relevant regulatory
bodies, including the CSRC, and failure of obtaining such licenses or permits may subject us
to regulatory actions and penalties, including fines, suspension of parts or all of our operations
or activities in the PRC, and temporary suspension or removal of our websites, desktop devices
and mobile application in China, which, in each case, may have adverse effect on our provision
of service to PRC-based clients. See “Risk Factors — Risks Related to Our Business and
Industry — We do not hold any license or permit for providing securities brokerage business
in Mainland China. Although we do not believe we engage in securities brokerage business in
Mainland China, there remain uncertainties as to the interpretation and implementation of
relevant PRC laws and regulations or if any new PRC laws and regulations will be enacted to
impose licensing requirements on us with respect to our activities in Mainland China and/or our
provision of services to our PRC-based clients. If some of our activities in Mainland China
were deemed by relevant regulators as provision of securities business such as securities
brokerage services, investment consulting services, futures business and/or any other regulated
services and business activities in Mainland China, our business, financial condition, results of
operations and prospects may be materially and adversely affected.”
Regulations on the Securities Investment Consulting Service
On December 25, 1997, the former Securities Commission of the State Council issued the
Interim Measures for the Administration of Securities or Futures Investment Consulting (《證
券、期貨投資諮詢管理暫行辦法》), or the Interim Measures for Securities Investment
Consulting, which became effective on April 1, 1998. According to the Interim Measures for
Securities Investment Consulting, the securities investment consulting service means any
securities investment analysis, prediction, recommendations or other directly or indirectly
charged consulting services provided by securities investment consulting institutions and their
investment consultants to securities investors or clients, including: (i) to accept any
entrustment from any investor or client to provide securities or futures investment consulting
services; (ii) to hold any consulting seminar, lecture or analysis related to securities or futures
investment; (iii) to write any article, commentary or report on securities or futures investment
consultancy in any newspaper or periodical, or to provide securities or futures investment
consulting services through media such as radio or television; (iv) to provide securities or
futures investment consulting services through telecommunications facilities such as
telephone, fax, computer network; and (v) other forms recognized by the CSRC. In addition,
all institutions shall obtain the operation permits issued by the CSRC and all person must
obtain professional qualification as a securities investment consultant and joining a qualified
securities investment consulting institution before engaged in securities investment consulting
service.
– 229 –
REGULATIONS
On October 11, 2001, the CSRC promulgated the Notice with Respect to Certain Issues
on Regulating the Securities Investment Consulting Services Provided for the Public (《關於
規範面向公眾開展的證券投資諮詢業務行為若干問題的通知》), which became effective on
the same day and was amended on October 30, 2020, stipulates that media which disseminate
securities-related information shall not publish or broadcast any analysis, prediction or
recommendation in respect of the trends of securities markets and securities products, as well
as the feasibility of the securities investment made by any institution which does not obtain the
operation permits for securities investment consulting services from CSRC or any individual
who is not employed by a qualified securities investment consulting services institution and
who does not satisfy the relevant professional requirements. Any media in violation of the
foregoing stipulation will be subject to reprimand or exposure by the CSRC, or be transferred
to competent department or judicial organ for further handling.
On December 5, 2012, the CSRC published the Interim Provisions on Strengthening the
Regulation over Securities Investment Consulting Services by Using “Stock Recommendation
Software” Products (《關於加強對利用「薦股軟件」從事證券投資諮詢業務監管的暫行規
定》), or the Interim Provisions, which came into effect on January 1, 2013 and was most
recently amended on October 30, 2020. Pursuant to the Interim Provisions, “stock
recommendation software” are defined as any software products, software tools or terminal
devices with one or more of the following securities investment consulting services: (i)
Providing investment analysis on specific securities investment products or predicting the price
trends of specific securities investment products; (ii) Recommending the selection of specific
securities investments products; (iii) Recommending the timing for trading specific securities
investments products; and/or (iv) Providing other securities investment analysis, prediction or
recommendations. Therefore, selling or providing “stock recommendation software” products
to investors and directly or indirectly obtain economic benefits therefrom shall be considered
as engaging in securities investment consulting business and the operation permits for
securities investment consulting services from CSRC shall be obtained.
On July 14, 2021, the CSRC issued the Measures for Administrative Penalties on Illegal
Securities and Futures Activities (《證券期貨違法行為行政處罰辦法》), which became
effective on the same day. Pursuant to the Measures for Administrative Penalties on Illegal
Securities and Futures Activities, any individual or entity may be subject to an administrative
penalty when violates any of the relevant laws, regulations, or rules on securities and futures.
On December 20, 2019, PBOC, CBIRC, CSRC and SAFE promulgated the Notice on
Further Regulating Financial Marketing and Publicity Activities (《關於進一步規範金融營銷
宣傳行為的通知》), which came into effect on January 25, 2020. Pursuant to the Notice on
Further Regulating Financial Marketing and Publicity Activities, “financial marketing and
publicity activities” refers to the advertising and promotional activities of the financial
institutions from the banking, securities and insurance sectors as well as institutions that
conduct financial activities or financial related activities, or the Financial Offerings Providers,
via the use of various promotional tools and approaches, which shall be conducted within the
scope of the financial businesses approved by the financial supervision authorities under the
State Council and its local regulatory agencies. A market entity which fails to obtain the
– 230 –
REGULATIONS
required qualifications for the relevant financial activities is prohibited from carrying out
marketing and advertising activities relating to such financial activities, except for marketing
and advertising activities performed by information publishing platforms or medias as
entrusted by Financial Offerings Providers that have acquired qualifications for financial
business operations by operation of law.
Regulations on Offshore Stocks Investment
On January 29, 1996, the State Council promulgated the Foreign Exchange
Administration Regulations of the PRC (《中華人民共和國外匯管理條例》), which was last
amended and such amendment became effective on August 5, 2008. Pursuant to the Foreign
Exchange Administration Regulations of the PRC, Chinese nationals shall register with the
foreign exchange administration department of the State Council for any foreign direct
investment or engagement in any issuance or transaction of offshore valuable securities or
derivative products. On December 25, 2006, PBOC promulgated the Administrative Measures
for Personal Foreign Exchange (《個人外匯管理辦法》), which became effective on February
1, 2007, to further clarify that any offshore equity, fixed-income or other approved financial
investments by Chinese nationals, shall be conducted through a qualified domestic financial
institution. On January 5, 2007, the SAFE published the Implementation of the Administrative
Measures for Personal Foreign Exchange (《個人外匯管理辦法實施細則》) and last amended
on May 29, 2016, under which Chinese nationals are limited to a foreign exchange quota of
US$50,000 per year for approved uses only.
In addition, pursuant to the SAFE Officials Interview on Improving the Management of

Declarations of Individual Foreign Exchange Information (《國家外匯管理局有關負責人就改
進個人外匯信息申報管理答記者問》) on December 31, 2016, Chinese nationals can only
engage in offshore investments under capital items only via methods such as Qualified
Domestic Institutional Investors, otherwise Chinese nationals can only purchase foreign
currency for the purpose of external payments within the scope of current items, including
private travel, overseas study, business trips, family visits, overseas medical treatment, trade
in goods, purchase of non-investment insurance and consulting services. Furthermore, in 2016,
CSRC published a response letter to investors on its website to remind domestic investors that
any offshore investments conducted by ways which are not explicitly specified under
applicable PRC Laws, may not be adequately protected by the PRC Laws.
As we do not provide cross-border currency conversion services related to Renminbi to

Chinese residents or institutions, we do not require our clients (including PRC-based users) to
submit evidence of approval or registration from relevant authorities with respect to the foreign
currency used for offshore investments. However, since the PRC authorities and the
commercial banks designated by the SAFE to conduct foreign exchange services have
significant amount of discretion in interpreting, implementing and enforcing the relevant
foreign exchange rules and regulations including the abovementioned laws and regulations, and
for many other factors that are beyond our control, we may be subject to further regulatory
requirements, including but not limited to verifying evidence of approval from relevant
authorities with respect to foreign currency exchange, which, in each case, may have adverse
– 231 –
REGULATIONS
effect on our provision of service to PRC-based clients. See “Risk Factors — Risks Related to
Our Business and Industry — We have not obtained licenses from relevant PRC regulatory
authorities in connection with some of the information and services available on our platform.
Future change in regulations and rules may impose additional requirements or restrictions on
our platform.”
Regulations on brokerage business involving securities qualified under the Hong Kong,
Shanghai and Shenzhen Stock Connect
On September 30, 2016, the CSRC promulgated the Several Provisions on the
Inter-connected Mechanism for Trading on Stock Markets in China and Hong Kong (《內地與
香港股票市場交易互聯互通機制若干規定》), or the Several Provisions, which regulates that
the Shanghai Stock Exchange and the Shenzhen Stock Exchange separately shall set up
technical connections with the Stock Exchange of Hong Kong Limited to allow investors in
China and Hong Kong to, through their local securities companies or brokers, trade qualified
shares listed on the stock exchange of the other side, including the Shanghai-Hong Kong Stock
Connect Program and the Shenzhen-Hong Kong Stock Connect Program, together the Stock
Connect. On June 10, 2022, the CSRC further amended the Several Provisions, which became
effective on July 25, 2022, stating that such investors that entitle to the rights and interests of
stocks purchased through the Stock Connect shall not include investors from Mainland China.
Moreover, such investors from Mainland China, or the Mainland Investors, who has already
obtained the trading permission to trade under the Stock Connect shall not purchase any
A-shares since July 24, 2023.
The latest version of The Implementing Measures of the Shanghai Stock Exchange for the
Shanghai-Hong Kong Stock Connect Program and the latest version of the Implementing
Measures of the Shenzhen Stock Exchange for the Shenzhen-Hong Kong Stock Connect
Program, together the Implementing Measures, promulgated by the Shanghai Stock Exchange
and the Shenzhen Stock Exchange on June 24, 2022 respectively, further clarified that the
Mainland Investors shall include individuals that possess China ID documents and corporate
or unincorporated entities which are registered in the China, however Chinese citizens that
hold overseas permanent residence permits shall not be included.
Moreover, the Implementing Measures state that a transitional period of one year shall be
set up from July 25, 2022. After the transitional period, Mainland Investors who have already
obtained the trading permission to trade under the Stock Connect shall not proactively buy any
securities under the Stock Connect through Stock Connect (including subscription for right
issues), but excluding obtaining securities under the Stock Connect passively as a result of
corporate actions (such as distribution of stock dividends) or selling such securities.
Regulation on Fund Sales Business
On October 28, 2003, the SCNPC promulgated the Securities Investment Funds Law
(《證券投資基金法》) and newly amended on April 24, 2015, which indicated that any
agencies that engages in the fund services, including but not limited to sales, investment
– 232 –
REGULATIONS
consulting, information technology system services, shall be registered or filed with the
provisions of the securities regulatory authority of the State Council. The Measures for
Supervision and Administration of Sales Agencies for Publicly-offered Securities Investment
Funds (《公開募集證券投資基金銷售機構監督管理辦法》), which was promulgated by the
CSRC on August 28, 2020 and became effective on October 1, 2020, further regulates that
securities companies and other institutions, subject to satisfaction of the relevant requirements,
shall apply for business qualification for sales of funds from the local branches of the CSRC.
Draft Measures on Securities Brokerage Business
In July 2019, the CSRC published the Measures for the Administration of Securities
Brokerage Business (Draft for Comment) (《證券經紀業務管理辦法(徵求意見稿) 》), or the
Draft Measures on Securities Brokerage Business, for public comments, which had not been
formally adopted as effective laws as of the Latest Practicable Date.
Article 45 of the Draft Measures on Securities Brokerage Business stipulates that an

overseas securities business entity violating Article 95 of the Regulations on Supervision and
Administration of Securities Firms (《證券公司監督管理條例》), directly or through its
affiliates conducting activities such as opening account, marketing and other activities of
overseas securities trading services for domestic investors without authorization, shall be
penalized according to the Securities Law.
Article 95 of the Regulations on Supervision and Administration of Securities Firms

(《證券公司監督管理條例》) stipulates that an overseas securities business entity that
conducts securities business or establishes a representative office in Mainland China shall
obtain the approval of the securities regulatory authority of the State Council. The specific
measures shall be formulated by the securities regulatory agency of the State Council and
submitted to the State Council for approval.
As advised by our PRC Legal Advisors, Article 45 of the Draft Measures on Securities
Brokerage Business (assuming they were to be implemented in the current form) would not be
applicable to our Group as violation of Article 45 (in its current form) can only be established
if there is a violation of Article 95 of the Regulations on Supervision and Administration of
Securities Firms by an overseas securities business entity.
As advised by our PRC Legal Advisors, securities business refers to “securities brokerage
business, securities investment, investment consulting business, securities margin trading and
other businesses approved by the securities regulatory authorities under the State Council” as
defined in Articles 118 and 120 of the Securities Law. Whether or not a company engages in
or is deemed to have engaged in securities business in the PRC (and hence a PRC securities
license is required) depends on the substance of the business operation (whether the business
operated by such company falls within the definition of securities business as defined under the
Securities Law).
– 233 –
REGULATIONS
Our brokerage services involve securities listed on the major exchanges in Hong Kong
(including eligible northbound securities under the Stock Connect and listed on the Shanghai
Stock Exchange or the Shenzhen Stock Exchange), the U.S., Singapore and Australia. As
advised by our PRC Legal Advisors, a PRC securities license (經營證券期貨業務許可證)
granted by the CSRC under the Securities Law only allows the clients of such PRC securities
broker to trade securities listed on the A-share markets and eligible southbound securities
under the Stock Connect, but not the other securities listed in Hong Kong or elsewhere.
Therefore, the PRC securities license granted by the CSRC under the Securities Law is not
required for our brokerage services.
As advised by our PRC Legal Advisors, as of the date of this document, neither the
operation of Futubull mobile and desktop applications and “futunn.com” website (the
“Futubull platform”) by Shenzhen Futu nor the provision of securities services outside
Mainland China by Futu International Hong Kong would constitute engaging in securities
business in the PRC as stipulated under the Securities Law or the Regulations on Supervision
and Administration of Securities Firms. Accordingly, such operations do not violate Articles
118 and 120 of the Securities Law or Article 95 of the Regulations on Supervision and
Administration of Securities Firms.
Administration of Securities Firms. However, the operation of Futubull platform by Shenzhen
Futu and the provision of securities services by Futu International Hong Kong do not constitute
the provision of securities business in Mainland China. Also according to Administrative
Measures on Representative Offices of Foreign Securities Institutions Stationed in China (《外
國證券類機構駐華代表機構管理辦法》), “representative offices (代表處)” means the offices
established in the PRC which conduct consultation, business solicitation, market research and
other non-operational activities in the name of the foreign securities business entity (外國證券
類機構在中國境內獲准設立並從事諮詢、聯絡、市場調查等非經營性活動的派出機構). Our
operating subsidiaries in Mainland China mainly engage in technology and R&D services and
other business activities (such as provision of ESOP solution services, market data, information
services, user community and investor education, which are not regulated by the Securities
Law in the PRC) in their own name, but not in the name of or on behalf of Futu International
Hong Kong. In this regard, our PRC Legal Advisors are of the view that these operating
subsidiaries in Mainland China are not the representative offices of Futu International Hong
Kong. Furthermore, we have not been notified by the CSRC that any of our operating
subsidiaries in Mainland China is regarded as a representative office of Futu International
Hong Kong. Our Group’s securities brokerage business is conducted outside Mainland China
through its entities and employees licensed with the relevant regulators, such as the SFC in
Hong Kong, and not through its operating subsidiaries in Mainland China.
– 234 –
REGULATIONS
Therefore, as advised by our PRC Legal Advisors, the operation of Futubull platform by
Shenzhen Futu and the provision of securities services by Futu International Hong Kong do not
violate Article 95 of the Regulations on Supervision and Administration of Securities Firms.
Accordingly, as of the date of this document, Article 45 of the Draft Measures on Securities
Brokerage Business would not be applicable to our Group even if they were to be implemented
in the current form.
However, our PRC Legal Advisors also advised us that there are substantial uncertainties
regarding the interpretation and application of current and future PRC laws and regulations
over the applicable PRC laws and regulations, including but not limited to, Securities Law of
公司監督管理條例》) and Administrative Measures on Representative Offices of Foreign
Securities Institutions Stationed in China (《外國證券類機構駐華代表機構管理辦法》).
Accordingly, there can be no assurance that the PRC regulatory authorities will not in the
future take a view that is contrary to or otherwise different from the above opinion of our PRC
Legal Advisors.
We believe that we will be able to re-configure our platforms within a reasonably short
period of time to comply with the new regulations in the PRC should they become effective
even if these new regulations were to prohibit our Group from onboarding any new PRC-based
clients, such as restricting account opening and access to certain functions on our platforms to
IP addresses outside of the PRC.
Based on the above analysis, the Joint Sponsors’ PRC legal advisor is of the view that,
the operation of Futubull platform by Shenzhen Futu and the provision of securities services
by Futu International Hong Kong do not violate the Article 45 of the Draft Measures on
Securities Brokerage Business if they were to be implemented in the current form.
However, as advised by our PRC Legal Advisors, the Draft Measures on Securities
Brokerage Business is only a draft form for public comment and had not come into effect as
of the Latest Practicable Date, and it remains uncertain as to whether and when it will take
effect and to what extent it will take effect in its current form. There has not been any further
publicly disclosed update on the Draft Measures on Securities Brokerage Business since its
first publication in 2019. It remains to be seen as to how certain key legal concepts in the Draft
Measures on Securities Brokerage Business will be interpreted by the regulatory authorities
with the support of implementation rules in the finalized Draft Measures on Securities
Brokerage Business, including Article 45.
– 235 –
REGULATIONS
Regulations on Internet Service
Regulation on Foreign Investment
The Foreign Investment Law (《中華人民共和國外商投資法》), promulgated by the

National People’s Congress on March 15, 2019, has come into effect on January 1, 2020 and
has replaced the trio of old laws regulating foreign investment in China, namely, the
Sino-foreign Equity Joint Venture Enterprise Law (《中外合資經營企業法》), the Sino-foreign
Cooperative Joint Venture Enterprise Law (《中外合作經營企業法》) and the Wholly Foreign-
invested Enterprise Law (《外資企業法》), together with their implementation rules and
ancillary regulations. The Foreign Investment Law is formulated to further expand opening-up,
vigorously promote foreign investment and protect the legitimate rights and interests of foreign
investors. According to the Foreign Investment Law, China adopts a system of national
treatment plus Negative List with respect to foreign investment administration, and the
Negative List will be issued by, amended or released upon approval by the State Council, from
time to time. Foreign investment and domestic investment in industries outside the scope of the
Negative List would be treated equally.
Pursuant to the Provisions on Administration of Foreign-Invested Telecommunications

Enterprises (《外商投資電信企業管理規定》), promulgated by the State Council with the
latest amendments becoming effective in May 2022, the ultimate foreign equity ownership in
a value-added telecommunication services provider must not exceed 50%. On December 27,
2021, the Ministry of Commerce, or the MOFCOM and the NDRC promulgated the Special
Administrative Measures for Entrance of Foreign Investment (Negative List) (2021 version)
(《外商投資准入特別管理措施(負面清單)(2021年版)》), or the Negative List (《負面清單》),
which became effective on January 1, 2022. The Negative List sets out the industries in which
foreign investments are prohibited or restricted. Foreign investors would not be allowed to
make investments in prohibited industries, while foreign investments must satisfy certain
conditions stipulated in the Negative List for investment in restricted industries. According to
the Negative List, the proportion of foreign investment in entities engaged in value-added
telecommunication services (excluding e-commerce, domestic multiparty communications
services, store-and-forward services, and call center services) shall not exceed 50%.
On December 26, 2019, the Stated Council issued the Implementation Regulations for the
Foreign Investment Law of the PRC (《中華人民共和國外商投資法實施條例》), or the
Implementation Regulations, which also became effective on January 1, 2020. Under the
Implementation Regulations, in the event of any discrepancy between provisions or regulations
on foreign investment formulated or promulgated prior to January 1, 2020 and the Foreign
Investment Law and the Implementation Regulations, the Foreign Investment Law and the
Implementation Regulations shall prevail. The Implementation Regulations also indicated that
foreign investors that invest in sectors on the Negative List in which foreign investment is
restricted shall comply with special management measures with respect to shareholding, senior
management personnel and other matters in the Negative List.
– 236 –
REGULATIONS
On December 30, 2019, the MOFCOM and the SAMR jointly promulgated the Measures
for Information Reporting on Foreign Investment (《外商投資信息報告辦法》), which became
effective on January 1, 2020, replacing the then existing filing and approval procedures
regarding the establishment and change of foreign-invested companies. Where foreign
investors make investments in China directly or indirectly, such foreign investors or
foreign-invested enterprises shall submit their investment information to the competent
commerce authorities in accordance with the Measures for Information Reporting on Foreign
Investment.
On December 19, 2020, the NDRC and the MOFCOM jointly promulgated the Measures
for the Security Review of Foreign Investment (《外商投資安全審查辦法》), which became
effective on January 18, 2021. Pursuant to the Measures for the Security Review of Foreign
Investment, the NDRC and the MOFCOM will establish a working mechanism office in charge
of the security review of foreign investment, and any foreign investment which has or could
have an impact on national security shall be subject to security review by such working
mechanism office. The Measures for the Security Review of Foreign Investment further require
that a foreign investor or its domestic affiliate shall apply for clearance of national security
review with the working mechanism office before they conduct any investment into any of the
following fields: (i) investment in the military industry or military-related industry, and
investment in areas in proximity of defense facilities or military establishment; and (ii)
investment in any important agricultural product, important energy and resources, critical
equipment manufacturing, important infrastructure, important transportation services,
important cultural products and services, important information technologies and internet
products and services, important financial services, critical technologies and other important
fields which concern the national security where actual control over the invested enterprise is
obtained.
Regulations on Telecommunication Services
The Telecommunications Regulations of the PRC (2016 Revision) (《中華人民共和國電

信條例(2016年修訂)》), or the Telecom Regulations, promulgated on September 25, 2000 by
the State Council and most recently amended on February 6, 2016, which distinguish “basic
telecommunication services” from “value-added telecommunication services.” The basic
telecommunications services provider who provides public network infrastructure, public data
transmission and basic voice communications services shall obtain a Basic
Telecommunications Service Operating License, and the value-added telecommunications
service provider shall obtain an operating license from the Ministry of Industry and
Information Technology, or the MIIT, or its counterparts at provincial level prior to its
commencement of operations. The Administrative Measures for Telecommunication Business
Operating License (《電信業務經營許可管理辦法》), promulgated by the MIIT with latest
amendments becoming effective in September 2017, set forth the types of licenses required for
value-added telecommunication services and the qualifications and procedures for obtaining
such licenses.
– 237 –
REGULATIONS
The Administrative Measures on Internet Information Services (2011 Revision) (《互聯

網信息服務管理辦法(2011修訂)》), promulgated on September 25, 2000 and amended on
January 8, 2011 by the State Council, further defines that commercial internet information
services providers, which mean providers of information and/or other services to internet users
with charge, shall obtain an Internet Content Provider License or the ICP License, from
competent government authorities before providing any commercial internet content services
within the PRC. To comply with the relevant laws and regulations, Shenzhen Futu holds a valid
ICP License. The Catalog of Classification of Telecommunications Services (2015 Edition)
(《電信業務分類目錄(2015年版)》), promulgated by the MIIT in December 2015 and
amended in June 2019 further divides ICP services into information publication platform and
delivery services, information search and inquiry services, information communities platform
services, instant message services, and information security and management services.
Regulation on Internet Audio-Visual Program Services
The Administrative Provisions on the Internet Audio-Video Program Service (《互聯網視

聽節目服務管理規定》), or the Audio-Video Program Provisions, promulgated on December
20, 2007, and amended on August 28, 2015, by the Ministry of Information Industry (the
predecessor of the MIIT) and the State Administration of Press, Publication, Radio, Film and
Television (the predecessor of the National Radio and Television Administration), or the
SAPPRFT, stipulates that providers of internet audio-visual program services should obtain an
Audio and Video Service Permission, or AVSP. The Categories of the Internet Audio-Video
Program Services (《互聯網視聽節目服務業務分類目錄(試行)》), or the Audio-Video
Program Categories, promulgated on March 17, 2010, and amended on March 10, 2017, by
SAPPRFT, classifies internet audio-video programs into four categories. Aggregating and
broadcasting service of arts, entertainment, technology, finance and economics, sports,
education and other specialized audio-video programs falls into Category II of above four
categories. In general, providers of internet audio-visual program services must be either
state-owned or state-controlled entities, and their businesses must satisfy the overall planning
and guidance catalog for internet audio-visual program service determined by SAPPRFT. In
addition, foreign-invested enterprises are not allowed to engage in the above-mentioned
services.
Regulation on Internet Culture Activities
The Interim Administrative Provisions on Internet Culture (《互聯網文化管理暫行規

定》), or the Internet Culture Provisions, promulgated on February 17, 2011, and amended on
December 15, 2017, by the Ministry of Culture (the predecessor of the Ministry of Culture and
Tourism), stipulates that providers of internet cultural products or services, such as internet
shows or programs and internet games must file an application for establishment to the
competent culture administration authorities for approval and must obtain the online culture
operating permit. If any entity engages in commercial internet culture activities without
approval, the cultural administration authorities or other relevant government may order such
– 238 –
REGULATIONS
entity to cease to operate internet culture activities as well as levying penalties including
administrative warning and fines up to RMB30,000. In addition, foreign-invested enterprises
are not allowed to engage in the above-mentioned services except online music.
Regulation on Production and Operation of Radio and Television Programs
The Administration of Production and Operation of Radio and Television Programs (《廣
播電視節目製作經營管理規定》), promulgated on July 19, 2004, and amended on August 28,
2015 by the SAPPRFT and October 29, 2020 by the National Radio and Television
Administration, provides that entities engaging in the production of radio and television
programs must obtain a License for Production and Operation of Radio and TV Programs from
the SAPPRFT or its counterparts at the provincial level. Entities with the License for
Production and Operation of Radio and TV Programs must conduct their business operations
strictly in compliance with the approved scope of production and operations. In addition,
foreign-invested enterprises are not allowed to product or operate the radio and TV programs.
Regulation on Internet News Dissemination
The Provisions for the Administration of Internet News Information Services (《互聯網
新聞信息服務管理規定》) was promulgated by the Cyberspace Administration of China, or
CAC, on May 2, 2017, and became effective on June 1, 2017 stipulates that the providers of
internet news information (includes reports and comments relating to social and public affairs
such as politics, economy, military affairs and foreign affairs, as well as relevant reports and
comments on social emergencies) services to the public in a variety of ways, including editing
and publishing internet news information, reposting internet news information and offering
platforms for users to disseminate internet news information, shall obtain the internet news
license from CAC. Various qualifications and requirements which service providers shall meet
have been provided in this regulation. For those who carrying out Internet-based news
information service activities without being licensed or beyond the licensed scope, the
competent cyberspace administration shall order them to cease the relevant service activities
and impose a fine no less than RMB10,000 and up to RMB30,000. In addition, such regulation
also stipulates that no organization may establish Internet-based news information service
agencies in the form of Sino-foreign joint ventures, Sino-foreign cooperative ventures or
wholly foreign-owned enterprises.
The Implementation Rules for the Administration of the Licensing for Internet-based
News Information Services (《互聯網新聞信息服務許可管理實施細則》), promulgated on
May 22, 2017, by the CAC, and became effective on June 1, 2017, further clarifies that only
a news agency (including the controlling shareholder of a news agency) or an entity under news
publicity authorities may apply for a license for editing and publishing services in respect of
internet-based news information. Foreign-invested enterprises are not allowed to establish any
internet-based news information service entities.
– 239 –
REGULATIONS
Displaying news on a website and disseminating news through the internet are highly
regulated in the PRC. The Administration of Engagement by Internet Sites in the Business of
News Publication Tentative Provisions (《互聯網站從事登載新聞業務管理暫行規定》),
jointly promulgated by the News Office of State Council and the Ministry of Information
Industry in November 2000, require an internet site (other than a government authorized news
unit) to obtain an approval from the News Office of State Council to post news or to
disseminate news through the internet. Furthermore, the disseminated news must come from
government-approved sources pursuant to contracts between the internet site and the sources,
copies of which must be filed with the relevant government authorities.
Regulations on Cybersecurity and Privacy
Regulations on Cybersecurity
On December 13, 2005, the Ministry of Public Security, or the MPS, promulgated the
Provisions on Technological Measures for the Internet Security Protection (《互聯網安全保護
技術措施規定》), or the Internet Protection Measures, which took effect on March 1, 2006.
Pursuant to the Internet Protection Measures, internet service providers and entity users of
interconnection shall not public or divulge user registration information without the consent of
the users or otherwise specified in the relevant laws and regulations. In addition, the Internet
Protection Measures requires all internet service providers and entity users of interconnection
to take proper measures to control computer viruses, back up data, and keep records of certain
information about their users (including user registration information, log-in and log-out time,
IP address, content and time of posts by users) for at least sixty days. On June 22, 2007, the
Administrative Measures for Multi-level Protection of Information Security (《信息安全等級
保護管理辦法》) were jointly promulgated by four PRC regulatory agencies, including the
MPS, under which companies operating and using information systems shall protect the
information systems and any system equal to or above level II as determined in accordance
with these measures, a record-filing with the competent authority is required.
On November 7, 2016, the SCNPC promulgated the Cybersecurity Law of the PRC (《中
華人民共和國網絡安全法》), or the Cybersecurity Law, which became effective on June 1,
2017. The Cybersecurity Law regulates all the construction, operation, maintenance, use of
networks and the supervision and administration of network security within the territory of
China, and pursuant to which, network operators shall follow their cybersecurity obligations
pursuant to the requirements of the classified protection system for cybersecurity, including:
(a) formulating internal security management systems and operating instructions, determining
the persons responsible for cybersecurity, and implementing the responsibility for
cybersecurity protection; (b) taking technological measures to prevent computer viruses,
network attacks, network intrusions and other actions endangering cybersecurity; (c) taking
technological measures to monitor and record the network operation status and cybersecurity
incidents, and such records shall be kept for no less than 6 months; (d) taking measures such
as data classification, and back-up and encryption of important data; and (e) other obligations
stipulated by laws and administrative regulations. In addition, the Cybersecurity Law further
requires network operators to take all necessary measures in accordance with applicable laws,
– 240 –
REGULATIONS
regulations and compulsory national requirements to safeguard the safe and stable operation of
the networks, respond to network security incidents effectively, prevent illegal and criminal
activities, and maintain the integrity, confidentiality and usability of network data. In addition,
on September 22, 2020, the MPS issued the Guiding Opinions on Implementing the
Cybersecurity Protection System and Critical Information Infrastructure Security Protection
System (《貫徹落實網絡安全等級保護制度和關鍵信息基礎設施安全保護制度的指導意見》)
to further improve the national cybersecurity prevention and control system.
On December 29, 2017, the Information Security Technology — Personal Information

Security Specification (《信息安全技術—個人信息安全規範》), or the China Specification,
was promulgated by the General Administration of Quality Supervision, Inspection and
Quarantine and last amended on March 6, 2020 and came into force on October 1, 2020, which
set a national standard for personal information security. Although the China Specification is
not a mandatory regulation, it is likely that the China Specification will be relied on by Chinese
government agencies as a standard to determine whether businesses have abided by China’s
data protection rules.
On December 28, 2021, the CAC, the NDRC, the MIIT and several other PRC
governmental authorities jointly issued the Cybersecurity Review Measures (《網絡安全審查
辦法》), which became effective on February 15, 2022 and replaced the Measures for
Cybersecurity Review published on April 13, 2020. Pursuant to Cybersecurity Review
Measures, critical information infrastructure operators that purchase network products and
services and network platform operators engaging in data processing activities that affect or
may affect national security are subject to cybersecurity review under the Cybersecurity
Review Measures. According to the Cybersecurity Review Measures, before purchasing any
network products or services, a critical information infrastructure operator shall assess
potential national security risks that may arise from the launch or use of such products or
services, and apply for a cybersecurity review with the cybersecurity review office of CAC if
national security will or may be affected. In addition, network platform operators who possess
personal information of more than one million users, and intend to be listed at a foreign stock
exchange must be subject to the cybersecurity review.
On June 10, 2021, the SCNPC issued the Data Security Law of the PRC (《中華人民共
和國數據安全法》), or the Data Security Law, which came into effective on September 1,
2021. The Data Security Law clarifies the scope of data to cover a wide range of information
records generated from all aspects of production, operation and management of government
affairs and enterprises in the process of the gradual transformation of digitalization, and
requires that data collection shall be conducted in a legitimate and proper manner, and theft or
illegal collection of data is not permitted. Data processors shall establish and improve the
whole-process data security management rules, organize and implement data security trainings
as well as take appropriate technical measures and other necessary measures to protect data
security. In addition, data processing activities shall be conducted on the basis of the graded
protection system for cybersecurity. Monitoring of the data processing activities shall be
strengthened, and remedial measures shall be taken immediately in case of discovery of risks
– 241 –
REGULATIONS
regarding data security related defects or bugs. In case of data security incidents, responding
measures shall be taken immediately, and disclosure to users and report to the competent
authorities shall be made in a timely manner.
On July 30, 2021, the State Council promulgated the Regulations on Protection of
Security of Critical Information Infrastructure (《關鍵信息基礎設施安全保護條例》),
effective on September 1, 2021, pursuant to which, a “critical information infrastructure” refers
to critical network facilities and information systems involved in important industries and
sectors, such as public communication and information services, energy, transportation, water
conservancy, finance, public services, governmental digital services, science and technology
related to national defense industry, as well as those which may seriously endanger national
security, national economy and citizen’s livelihood or public interests if damaged or
malfunctioned, or if any leakage of data in relation thereto occurs. The competent
governmental departments and supervision and management departments of the
aforementioned important industries will be responsible for (i) organizing the identification of
critical information infrastructures in their respective industries in accordance with relevant
identification rules, and (ii) promptly notifying the identified operators and the public security
department of the State Council of the identification results. In the event of occurrence of any
major cybersecurity incident or discovery of any major cybersecurity threat for the critical
information infrastructure, the operator shall report to the protection authorities and the public
security authorities as required.
On December 31, 2021, the CAC and other relevant PRC government authorities
promulgated the Administrative Provisions on Internet Information Service Algorithm
Recommendation (《互聯網信息服務算法推薦管理規定》), which came into effect on March
1, 2022. The Administrative Provisions on Internet Information Service Algorithm
Recommendation implements classification and hierarchical management for algorithm
recommendation service providers based on varies criteria. Moreover, it requires algorithmic
recommendation service providers to provide users with options that are not specific to their
personal characteristics, or provide users with convenient options to cancel algorithmic
recommendation services. If the users choose to cancel the algorithm recommendation service,
the algorithm recommendation service provider shall immediately stop providing relevant
services. Algorithmic recommendation service providers shall also provide users with the
function to select, modify or delete user labels which are used for algorithmic recommendation
services.
On December 31, 2021, the National Information Security Standardization Technical

Committee issued the Practical Guidance on Cybersecurity Standard — the Guideline on
Network Data Classification and Grading (《網絡安全標準實踐指南––網絡數據分類分級指
引》),which provide guidance on data classification and grading.
On July 7, 2022, the CAC promulgated the Measures on Security Assessment of

Cross-border Data Transfer (《數據出境安全評估辦法》)which has become effective on
September 1, 2022. Such data export measures requires that any data processor which
processes or exports personal information exceeding certain volume threshold under such
– 242 –
REGULATIONS
measures shall apply for security assessment by the CAC before transferring any personal
information abroad, including the following circumstances: (i) important data will be provided
overseas by any data processor; (ii) personal information will be provided overseas by any
operator of critical information infrastructure or any data processor who processes the personal
information of more than 1,000,000 individuals; (iii) personal information will be provided
overseas by any data processor who has provided the personal information of more than
100,000 individuals in aggregate or has provided the sensitive personal information of more
than 10,000 individuals in aggregate since January 1 of last year; and (iv) other circumstances
where the security assessment is required as prescribed by the CAC. A data processor shall,
before applying for the security assessment of an outbound data transfer, conduct a
self-assessment of the risks in the outbound data transfer. The security assessment of a
cross-border data transfer shall focus on assessing risks that may be brought about by the
cross-border data transfer to national security, public interests, or the lawful rights and interests
of individuals or organizations.
Pursuant to the Ninth Amendment to the Criminal Law (《刑法修正案(九)》), issued by

the SCNPC on August 29, 2015, which became effective on November 1, 2015, any internet
service provider that fails to fulfill the obligations related to internet information security
administration and refuses to rectify upon orders is subject to criminal penalty for causing (i)
any dissemination of illegal information in large scale; (ii) any significant damages due to the
leakage of the client’s information; (iii) any serious loss of criminal evidence; or (iv) other
serious harm, and any individual or entity information may be subject to criminal penalty for
(a) illegally selling or providing personal information to third parties, or (b) stealing or
illegally obtaining any personal information.
On July 6, 2021, the relevant PRC government authorities made public the Opinions on
Strictly Combatting Illegal Securities Activities in Accordance with the Law (《關於依法從嚴
打擊證券違法活動的意見》), or the July 6 Opinion, which called for the enhanced cross-
border regulatory cooperation and administration and supervision of overseas-listed China-
based companies. Along with the promulgation of the July 6 Opinion, laws and regulations
regarding data security, cross-border data flow and management of confidential information are
expected to undergo further changes, which may require increased information security
responsibilities and stronger cross-border information management mechanism and process.
On September 17, 2021, the CAC, together with eight other departments, issued the
Guidance Opinions on Strengthening the Comprehensive Governance of Internet Information
Service Algorithms (《關於加強互聯網信息服務算法綜合治理的指導意見》), effective on the
same day, providing that an algorithm security comprehensive governance pattern shall be
gradually established in the coming three years. According to this Guidance Opinions,
enterprises should establish algorithmic security responsibility system and scientific and
technological ethics review system, improve the algorithm security management organization,
strengthen risk prevention and trouble detection, improve the ability and level of responding
to algorithmic security emergencies. Enterprises should also strengthen the sense of
responsibility and take the main responsibility for the results produced by the application of
algorithms.
– 243 –
REGULATIONS
Regulations on Privacy Protection
The PRC Constitution states that PRC law protects the freedom and privacy of
communications of citizens and prohibits infringement of these rights. In recent years, PRC
government authorities have enacted legislation on internet use to protect personal information
from any unauthorized disclosure. On May 28, 2020, the National People’s Congress adopted
the Civil Code (《民法典》), which came into effect on January 1, 2021. The Civil Code
provides in a stand-alone chapter of right of personality and reiterates that the personal
information of a natural person shall be protected by the law. Any organization or individual
shall legitimately obtain such person information of others in due course on a need-to-know
basis and ensure the safety and privacy of such information, and refrain from excessively
handling or using such information.
On December 29, 2011, the MIIT issued The Several Provisions on Regulating the Market
Order of Internet Information Services (《規範互聯網信息服務市場秩序的若干規定》), which
became effective on March 15, 2012 and provides that an internet information service provider
may not collect any user’s personal information or provide any such information to third
parties without such user’s consent. Pursuant to The Several Provisions on Regulating the
Market Order of Internet Information Services, internet information service providers are
required to, among others, (i) expressly inform the users of the method, content and purpose
of the collection and processing of such users’ personal information and may only collect such
information necessary for the provision of its services; and (ii) properly maintain the users’
personal information, and in case of any leak or possible leak of a user’s personal information,
internet information service providers must take immediate remedial measures and, in severe
circumstances, make an immediate report to the telecommunications regulatory authority.
In addition, on December 28, 2012, the Decision on Strengthening Network Information

Protection (《關於加強網絡信息保護的決定》) promulgated by the SCNPC which requires
internet service providers to establish and publish policies regarding the collection and use of
electronic personal information and to take necessary measures to ensure the security of the
information and to prevent leakage, damage or loss. On July 16, 2013, MIIT promulgated the
Regulations on Protection of the Personal Information of Telecommunications and Internet
Users (《電信和互聯網用戶個人信息保護規定》), or the Regulations on Personal Information
Protection, which took effect on September 1, 2013, to enhance the legal protection over user
information security and privacy on the Internet. The Regulations on Personal Information
Protection require that telecommunications business operators and internet information service
providers shall, in the course of providing services, collect and use the personal information
of users in a lawful and proper manner by following the principle that information collection
or use is necessary and responsible for the security of the personal information of users
collected and used in the course of providing services.
Any violation of these laws and regulations may subject the internet information service
provider to warnings, fines, confiscation of illegal gains, revocation of licenses, cancellation
of filings, closedown of websites or even criminal liabilities.
– 244 –
REGULATIONS
With respect to the security of information collected and used by operators of mobile
apps, pursuant to the Announcement of Conducting Special Supervision against the Illegal
Collection and Use of Personal Information by Apps (《關於開展App違法違規收集使用個人
信息專項治理的公告》), which was issued on January 23, 2019, the operators shall collect and
use personal information in compliance with the Cybersecurity Law and be responsible for the
security of personal information obtained from users and take effective measures to strengthen
the protection of personal information.
Furthermore, in order to improve the protection of personal information, the National

Information Security Standardization Technical Committee also issued the Guide to Self-
evaluation of Collection and Use of Personal Information by Mobile Internet Applications
(Apps) (《移動互聯網應用程序(APP)收集使用個人信息自評估指南》) on July 22, 2020
regarding the security of information collected and used by operators of mobile apps. On
March 12, 2021, the CAC, the MIIT, the MPS and the SAMR collectively promulgated the
Rules on the Scope of Necessary Personal Information for Common Types of Mobile Internet
Applications (《常見類型移動互聯網應用程序必要個人信息範圍規定》), which came into
effect on May 1, 2021. The notice clarifies that network operators shall not collect personal
information irrelevant to the services they provide, and the app operators shall not refuse to
provide basic services to users on the ground of users’ refusal to provide their personal
non-essential information. In particular, as for online communities apps, the necessary personal
information includes mobile phone numbers of registered users, and as for online streaming
and online video apps, the basic functional services should be accessible without collecting
personal information from users.
Furthermore, the CAC promulgated the Administrative Provisions on Mobile Internet

Application Information Services (《移動互聯網應用程序信息服務管理規定》), or the Mobile
Application Administrative Provisions, and further revised it on June 14, 2022, which became
effective on August 1, 2022. Pursuant to the Mobile Application Administrative Provisions,
mobile internet app providers refer to the owners or operators of mobile internet apps. A mobile
internet app provider must verify a user’s mobile phone number and other identity information
under the principle of mandatory real name registration at the back-office end and voluntary
real name display at the front-office end. A mobile internet app provider must not enable
functions that can collect a user’s geographical location information, access user’s contact list,
activate the camera or recorder of the user’s mobile smart device or other functions irrelevant
to its services, nor is it allowed to conduct bundle installations of irrelevant apps, unless it has
clearly indicated to the user and obtained the user’s consent on such functions and apps. Mobile
internet app providers shall not compel users to agree to non-essential personal information
collection out of any reason and are prohibited from banning users from their basic functional
services due to the users’ refusal of providing non-essential personal information.
– 245 –
REGULATIONS
On April 10, 2019, the MPS issued the Guidelines for Internet Personal Information
Security Protection (《互聯網個人信息安全保護指南》), which is applicable to entities or
individuals who control and process personal information by providing services through the
Internet, private networks or non-networked environments, and require such entities and
individuals to establish personal information management systems, implement technical
protection measures and protect personal information in business processes.
The SCNPC promulgated the Personal Information Protection Law of the PRC (《中華人
民共和國個人信息保護法》), or the Personal Information Protection Law on August 20, 2021,
which entered into force on November 1, 2021. According to the Personal Information
Protection Law, personal information is all kinds of information, recorded by electronic or
other means, related to identified or identifiable natural persons, not including information
after anonymization handling. The principles of legality, propriety, necessity, and sincerity
shall be observed for personal information handling. Moreover, the Personal Information
Protection Law specifically specified the rules for handling sensitive personal information,
which means personal information that, once leaked or illegally used, may easily cause harm
to the dignity of natural persons or grave harm to personal or property security, including
information on biometric characteristics, financial accounts and individual location tracking, as
well as the personal information of minors under the age of 14. Personal information handlers
shall bear responsibility for their personal information handling activities, and adopt the
necessary measures to safeguard the security of the personal information they handle.
Otherwise, the personal information handlers will be ordered to correct or suspend or terminate
the provision of services, confiscation of illegal income, fines or other penalties. Any personal
information processor outside the territory of the PRC under the circumstance where the
activities of domestic natural persons are analyzed and evaluated shall establish a special
agency or designate a representative within the territory of the PRC to be responsible for
handling matters relating to personal information protection. Where a personal information
processor really needs to provide personal information outside the territory of the People’s
Republic of China due to business or other needs, it shall meet one of the conditions prescribed
by the Personal Information Protection Law, such as, passing the security evaluation organized
by the CAC, or other conditions prescribed by laws, administrative regulations or the CAC.
Where an overseas organization or individual engages in the personal information processing
activities infringing upon the personal information rights and interests of PRC citizens or
endangering the national security and public interests of the PRC, the CAC may include such
organization or individual in the list of subjects to whom provision of personal information is
restricted or prohibited, announce the same, and take measures such as restricting or
prohibiting provision of personal information to such organization or individual.
On June 27, 2022, the CAC issued the Administrative Provisions on the Account
Information of Internet Users (《互聯網用戶賬號信息管理規定》), or the Internet Users
Account Information Provisions, which became effective on August 1, 2022. Pursuant to the
Internet Users Account Information Provisions, Internet-based information service providers
that provide internet users with information release services, shall formulate and make public
the rules for the management of accounts of Internet users and platform conventions, enter into
service agreements with Internet users, and shall authenticate the real identity information of
– 246 –
REGULATIONS
the users who apply for registration of accounts for production of information content in the
fields of economy, education, medical care and health, justice, etc., Internet-based information
service providers shall require them to provide relevant materials such as service qualification,
professional qualification and professional background, verify the same and add a special mark
to the account information. Any Internet-based information service provider in violation of the
present Provisions shall be punished in accordance with relevant laws and administrative
regulations.
Our PRC Legal Advisors are of the view that the Group has adopted necessary measures
with respect to the data security and cybersecurity according to the applicable PRC laws and
regulations, and they are not aware of any material non-compliance by the Group of the data
security, cybersecurity or personal information protection under the current PRC laws and
regulations. However, since many of the PRC laws and regulations on cybersecurity and
privacy and data privacy are constantly evolving, there are uncertainties as to the interpretation
and application of these regulations and how these will be enforced by relevant regulatory
authorities, there also remain uncertainties as to the applicability and requirements of these
regulations for our business, operation, or our presence in Mainland China. We cannot assure
you that the measures we have taken or will take in the future will be effective or fully satisfy
the relevant regulatory authorities’ requirements, and any failure or perceived failure by us to
comply with such laws and regulations may result in governmental investigations, fines,
removal of our app from the relevant application stores and/or other sanctions on us and may
affect our clients and users in conducting investment activities on the Group’s platform, which,
in each case, may have adverse effect on our provision of service to PRC-based clients.
Regulations on Intellectual Property
Software
The State Council and the National Copyright Administration have promulgated various
rules and regulations relating to protection of software in China. According to these rules and
regulations, software owners, licensees and transferees may register their rights in software
with the Copyright Protection Center or its local branches and obtain software copyright
registration certificates. Although such registration is not mandatory under PRC law, software
owners, licensees and transferees are encouraged to go through the registration process and
registered software copyrights may be entitled to better protections.
Trademark
According to the Trademark Law of the PRC (《中華人民共和國商標法》), adopted in

1982 and last amended in 2019, as well as the Implementation Regulation of the Trademark
Law of the PRC (《中華人民共和國商標法實施條例》) adopted by the State Council in 2002
and subsequently amended in 2014, the Trademark Law of the PRC has adopted a “first-to-file”
principle with respect to trademark registrations, and the registered trademarks are granted a
term of ten years which may be renewed for consecutive ten-year periods upon request by the
trademark owner. Upon expiry of the period of validity, the registrant shall go through the
– 247 –
REGULATIONS
formalities for renewal within twelve months prior to the date of expiry as required if the
registrant needs to continue to use the trademark. Where the registrant fails to do so, a grace
period of six months may be granted. The period of validity for each renewal of registration
is ten years, from the day immediately after the expiry of the preceding period of validity for
the trademark. In the absence of a renewal upon expiration, the registered trademark shall be
cancelled.
Copyright
On September 7, 1990, the SCNPC promulgated the PRC Copyright Law (《中華人民共
和國著作權法》), which was last amended on November 11, 2020 and such amendment
became effective on June 1, 2021, and the Implementation of Copyright Law of PRC (《中華
人民共和國著作權法實施條例》), was last amended on January 30, 2013 and became effective
on March 1, 2013. The PRC Copyright Law and its implementation regulations are the
principal laws and regulations governing related matters of copyright. Pursuant to the amended
PRC Copyright Law, products disseminated over the internet and software products, among the
subjects, are entitled to copyright protections. Registration of copyright is voluntary, and it is
administrated by the China Copyright Protection Center.
On May 18, 2006, the State Council promulgated the Regulations on the Protection of the
Right to Network Dissemination of Information (《信息網絡傳播權保護條例》), as amended
on January 30, 2013. Under these regulations, an owner of the network dissemination rights
with respect to written works or audio or video recordings who believes that information
storage, search or link services provided by an internet service provider infringe his or her
rights may require that the internet service provider delete, or disconnect the links to, such
works or recordings.
Domain name
In China, the administration of PRC internet domain names is mainly regulated by the
MIIT, under supervision of the China Internet Network Information Center, or CNNIC. On
August 24, 2017, the MIIT promulgated the Administrative Measures for Internet Domain
Names (《互聯網域名管理辦法》), or the Domain Name Measures, and became effective on
November 1, 2017. The principle of “first apply, first register” applies to domain name
registration service in accordance with the Domain Name Measures. In the event that there is
any change to the contact information of a domain name holder, the holder shall go through
formalities for changes to the registered information of its domain name with the domain name
registrar concerned within 30 days after such change arises.
According to the Circular of the MIIT on Regulating the Use of Domain Names in
Providing Internet based Information Services (《關於規範互聯網信息服務使用域名的通
知》) issued by the MIIT on November 27, 2017, and became effective on January 1, 2018, an
internet access service provider shall, pursuant to requirements stated in the Anti-Terrorism
– 248 –
REGULATIONS
Law of the PRC (《中華人民共和國反恐怖主義法》) and the Cybersecurity Law, verify the
identities of internet-based information service providers, and the internet access service
providers shall not provide access services for those who fail to provide their real identity
information.
Patent
The National People’s Congress promulgated the PRC Patent Law (《中華人民共和國專
利法》) in 1984 and last amended on October 17, 2020 and such amendment became effective
on June 1, 2021. Any invention, utility model or design must meet three conditions to be
patentable: novelty, inventiveness and practical applicability. Patents cannot be granted for
scientific discoveries, rules and methods for intellectual activities, methods used to diagnose
or treat diseases, animal and plant breeds or substances obtained by means of nuclear
transformation. The Patent Office under the China National Intellectual Property
Administration is responsible for receiving, examining and approving patent applications. A
patent is valid for a twenty-year term for an invention, a ten-year term for a utility model and
a fifteen-year term for a utility design, starting from the application date. Except under certain
specific circumstances provided by law, any third party user must obtain consent or a proper
license from the patent owner to use the patent, or else the use will constitute an infringement
of the rights of the patent holder.
Regulations on Foreign Exchange
Regulations on Foreign currency exchange
The core regulations governing foreign currency exchange in China is the PRC Foreign
Exchange Administration Regulation (《中華人民共和國外匯管理條例》), which was
promulgated in 1996 and last amended in August 2008. Under the PRC Foreign Exchange
Administration Regulations, Renminbi is freely convertible into foreign currencies without
prior approval from SAFE for payments of current account items, such as distribution of
dividends, interest payments and trade and service-related foreign exchange transactions. On
the contrast, approval from or registration with appropriate government authorities is required
where Renminbi is to convert into foreign currency and remitted out of China to pay capital
account items, such as direct investments, repayment of foreign currency-denominated loans,
repatriation of investments and investments in securities outside of China.
Pursuant to the Circular of Further Improving and Adjusting Foreign Exchange

Administration Policies on Foreign Direct Investment (《關於進一步改進和調整直接投資外匯
管理政策的通知》), or the SAFE Circular 59 promulgated by SAFE on November 19, 2012,
which became effective on December 17, 2012 and last amended on December 30, 2019, the
opening of various special purpose foreign exchange accounts, such as pre-establishment
expenses accounts, foreign exchange capital accounts and guarantee accounts, the reinvestment
of Renminbi proceeds by foreign investors in the PRC, and remittance of foreign exchange
profits and dividends by a foreign invested enterprise to its foreign shareholders no longer
require the approval or verification of SAFE, and multiple capital accounts for the same entity
may be opened in different provinces, which was not possible previously.
– 249 –
REGULATIONS
On March 30, 2015, SAFE promulgated the Notice of the State Administration of Foreign
Exchange on Reforming the Administration of Foreign Exchange Settlement of Capital of
Foreign-invested Enterprises (《國家外匯管理局關於改革外商投資企業外匯資本金結匯管理
方式的通知》), or SAFE Circular 19, which became effective on June 1, 2015 and was
amended on December 30, 2019, in replacement of the Circular on the Relevant Operating
Issues Concerning the Improvement of the Administration of the Payment and Settlement of
Foreign Currency Capital of Foreign – Invested Enterprises (《關於完善外商投資企業外匯資
本金支付結匯管理有關業務操作問題的通知》). According to SAFE Circular 19, foreign-
invested enterprises are allowed, within the scope of business, to settle their foreign exchange
capital in their capital accounts, for which the relevant foreign exchange bureau has confirmed
monetary capital contribution rights and interests (or for which the bank has registered the
injection of the monetary capital contribution into the accounts), on a discretionary basis
according to the actual needs of their business operation. SAFE promulgated the Notice of the
State Administration of Foreign Exchange on Reforming and Standardizing the Foreign
Exchange Settlement Management Policy of Capital Account (《國家外匯管理局關於改革和
規範資本項目結匯管理政策的通知》), or SAFE Circular 16, which became effective in June
2016. SAFE Circular 19 and SAFE Circular 16 prohibit foreign-invested enterprises from using
Renminbi fund converted from their foreign exchange capitals for expenditure beyond their
business scopes, providing entrusted loans or repaying loans between non-financial enterprises.
On October 23, 2019, the SAFE issued the Notice of the State Administration of Foreign
Exchange on Further Promoting the Facilitation of Cross-border Trade and Investment (《國
家外匯管理局關於進一步促進跨境貿易投資便利化的通知》), or SAFE Circular 28, which
expressly allows non-investing foreign-invested enterprises that do not have equity
investments in their approved business scope to use their capital obtained from foreign
exchange settlement to make domestic equity investments provided that the investments are
bona fide investments and comply with the foreign investment-related laws and regulations.
In January 2017, SAFE promulgated the Circular on Further Improving Reform of

Foreign Exchange Administration and Optimizing Genuineness and Compliance Verification
(《關於進一步推進外匯管理改革完善真實合規性審核的通知》), or SAFE Circular 3, which
stipulates several capital control measures with respect to the outbound remittance of profit of
more than USD50,000 from domestic entities to offshore entities, including that banks shall
check board resolutions regarding profit distribution, the original version of tax filing records
and audited financial statements. Besides, SAFE Circular 3 also requires domestic entities to
hold their income to account for previous years’ losses before remitting the profits. Further,
according to SAFE Circular 3, domestic entities shall make detailed explanations of the sources
of capital and utilization arrangements, and provide board resolutions, contracts and other
proof when completing the registration procedures in connection with an outbound investment.
According to the SAFE Circular on Optimizing Foreign Exchange Administration to

Support the Development of Foreign-related Business (《國家外匯管理局關於優化外匯管理支
持涉外業務發展的通知》), which was promulgated and became effective on April 10, 2020,
the reform to facilitate payment of income under capital accounts shall be extended nationwide.
Enterprises, if they meet the bona fide and compliant use of funds requirements under the
– 250 –
REGULATIONS
prevailing administrative provisions on use of income from capital projects, may use income
under capital accounts, such as capital funds, proceeds from issuance of foreign debt and
overseas listing, in domestic payment without the need to provide banks with verification
materials for each transaction.
Regulations on Dividend distribution
The principal regulations governing distribution of dividends of foreign-owned

enterprises include the Company Law of the PRC (《中華人民共和國公司法》), and the
Foreign Investment Law (《中華人民共和國外商投資法》). Pursuant to these regulations, a
wholly foreign-owned enterprise in China, or a WFOE, may pay dividends only out of its
accumulated profits, if any, determined in accordance with PRC accounting standards and
regulations. In addition, a WFOE is required to allocate at least 10% of its accumulated profits
each year, if any, to statutory surplus funds unless its reserves have reached 50% of the
registered capital of the enterprises. These reserves are not distributable as cash dividends. The
proportional ratio for withdrawal of rewards and welfare funds for employees shall be
determined at the discretion of the WFOE. Profits of a WFOE shall not be distributed before
the losses thereof before the previous accounting years have been made up. Any undistributed
profit for the previous accounting years may be distributed together with the distributable
profit for the current accounting year.
Regulations on Foreign Exchange Registration of Overseas Investment by PRC Residents
Pursuant to the Circular on Relevant Issues Concerning Foreign Exchange Control on

Domestic Residents’ Offshore Investment and Financing and Roundtrip Investment through
Special Purpose Vehicles (《關於境內居民通過特殊目的公司境外投融資及返程投資外匯管理
有關問題的通知》), or SAFE Circular 37, which was issued and became effective on July 4,
2014, PRC residents, including PRC institutions and individuals, are required to register with
local branches of SAFE in connection with their direct establishment or indirect control of an
offshore entity, for the purpose of overseas investment and financing, with such PRC residents’
legally owned assets or equity interest in domestic enterprises or offshore assets or interests,
referred to in SAFE Circular 37 as a “special purpose vehicle.” SAFE Circular 37 further
requires amendment to the registration in the event of any significant changes with respect to
the special purpose vehicle, including but not limited to increase or decrease of capital
contributed by PRC individuals, share transfer or exchange, merger, division or other material
event.
In the event that a PRC shareholder holding interests in a special purpose vehicle fails to
fulfill the required SAFE registration, the PRC subsidiaries of that special purpose vehicle may
be prohibited from making distributions of profit to the offshore parent and from carrying out
subsequent cross-border foreign exchange activities and the special purpose vehicle may be
restricted in their ability to contribute additional capital into its PRC subsidiary. Failure to
comply with the various SAFE registration requirements described above could result in
liability under PRC law for foreign exchange evasion, including (i) of up to 30% of the total
amount of foreign exchange remitted overseas and deemed to have been evasive, and (ii) in
– 251 –
REGULATIONS
circumstances involving serious violations, a fine of no less than 30% of and up to the total
amount of remitted foreign exchange deemed evasive. Furthermore, the persons-in-charge and
other persons at our PRC subsidiaries who are held directly liable for the violations may be
subject to criminal sanctions.
In February 2015, SAFE promulgated the Circular of Further Simplifying and Improving
the Policies of Foreign Exchange Administration Applicable to Direct Investment (《關於進一
步簡化和改進直接投資外匯管理政策的通知》), or SAFE Circular 13, which became effective
on June 1, 2015 and amended on December 30, 2019. The SAFE Circular 13 cancels the
administrative approval requirements of foreign exchange registration of foreign direct
investment and overseas direct investment, and simplifies the procedure of foreign exchange-
related registration, and foreign exchange registrations of foreign direct investment and
overseas direct investment will be handled by the banks designated by the foreign exchange
authority instead of SAFE and its branches.
Regulations on Employee Share Incentive Plans of Overseas Publicly-Listed Company
In February 2012, SAFE promulgated the Notice on Issues Concerning the Foreign
Exchange Administration for Domestic Individuals Participation in Share Incentive Plan of
Companies Listed Overseas (《關於境內個人參與境外上市公司股權激勵計劃外匯管理有關問
題的通知》), or the 2012 SAFE Notice. Under such notice and other relevant rules and
regulations, PRC residents, including PRC citizens or non-PRC citizens who reside in China
for a continuous period of not less than one year, that participate in any share incentive plan
of any overseas publicly-listed company are required to register with SAFE or its local
branches and complete certain other procedures. Participants of a share incentive plan who are
PRC residents must retain a qualified PRC agent, which could be a PRC subsidiary of the
overseas publicly listed company or another qualified institution selected by the PRC
subsidiary, to conduct the SAFE registration and other procedures with respect to the share
incentive plan on behalf of the participants.
Regulations on M&A
Six PRC regulatory agencies, including the CSRC, jointly issued the Regulations on
Mergers and Acquisitions of Domestic Enterprises by Foreign Investors (《關於外國投資者併購
境內企業的規定》), or the M&A Rules, which became effective in September 2006 and was
amended in June 2009. The M&A Rules, among other things, require offshore special purpose
vehicles, formed for overseas listing purposes through acquisitions of PRC domestic companies
and controlled by PRC companies or individuals, must obtain approval from the CSRC prior to
publicly listing such special purpose vehicle’s securities on an overseas stock exchange.
In addition, pursuant to the Circular of the General Office of State Council on

Establishing the Security Review System for Merger and Acquisition of Domestic Enterprises
by Foreign Investors (《國務院辦公廳關於建立外國投資者併購境內企業安全審查制度的通
知》) issued by the General Office of the State Council on February 3, 2011 and took effect
on March 3, 2011 and the Provisions of the Ministry of Commerce on the Implementation of
– 252 –
REGULATIONS
the Safety Review System for Merger and Acquisition of Domestic Enterprises by Foreign
Investors (《商務部實施外國投資者併購境內企業安全審查制度的規定》) issued by the
MOFCOM that became effective in September 2011, mergers and acquisitions by foreign
investors that raise “national defense and security” concerns and mergers and acquisitions
through which foreign investors may acquire de facto control over domestic enterprises that
raise “national security” concerns are subject to strict review by the MOFCOM, and the rules
prohibit any activities attempting to bypass a security review, including by structuring the
transaction through a proxy or contractual control arrangement. On July 6, 2021, the General
Office of the State Council and General Office of the Central Committee of the Communist
Party of China issued Opinions on Strictly Cracking Down Illegal Securities Activities in
Accordance with the Law (《關於依法從嚴打擊證券違法活動的意見》). The opinions
emphasized the need to strengthen the administration over illegal securities activities and the
supervision on overseas listings by China-based companies and proposed to take effective
measures, such as promoting the construction of relevant regulatory systems to deal with the
risks and incidents faced by China-based overseas-listed companies.
Regulations on Tax
Regulations on Enterprise Income Tax
On March 16, 2007, the National People’s Congress promulgated the Enterprise Income
Tax Law of the PRC (《中華人民共和國企業所得稅法》), which was most recently amended
on December 29, 2018.
On December 6, 2007, the State Council enacted the Regulations for the Implementation of
the Enterprise Income Tax Law (《中華人民共和國企業所得稅法實施條例》), which was
amended on April 23, 2019, or collectively with the Enterprise Income Tax Law of the PRC, the
EIT Laws. Under the EIT Laws, both resident enterprises and non-resident enterprises are subject
to tax in the PRC. Resident enterprises are defined as enterprises that are established in China in
accordance with PRC laws, or that are established in accordance with the laws of foreign
countries but are actually or in effect controlled from within the PRC. Non-resident enterprises
are defined as enterprises that are organized under the laws of foreign countries and whose actual
management is conducted outside the PRC, but have established institutions or premises in the
PRC, or have no such established institutions or premises but have income generated from inside
the PRC. Under the EIT Laws and relevant implementing regulations, a uniform corporate
income tax rate of 25% is applied. However, if non-resident enterprises have not formed
permanent establishments or premises in the PRC, or if they have formed permanent
establishment or premises in the PRC but there is no actual relationship between the relevant
income derived in the PRC and the established institutions or premises set up by them, enterprise
income tax is set at the rate of 10% with respect to their income sourced from inside the PRC.
– 253 –
REGULATIONS
Pursuant to the EIT Laws and relevant implementing regulations, a High and New
Technology Enterprise, or HNTE, is subject to a reduced enterprise income tax rate of 15%.
Pursuant to the EIT Laws and other relevant implementing regulations, an entity qualified as
software enterprise, or SE, is entitled to an exemption from income taxation for the first two
years, counting from the first year the entity makes a profit, and a reduction of half EIT tax
rate for the next three years.
Regulations on Value-added Tax
The Provisional Regulations of on Value-added Tax of the PRC (《中華人民共和國增值

稅暫行條例》) were promulgated by the State Council on December 13, 1993, which most
recently amended on November 19, 2017. The Implementation Rules for the Implementation
of Provisional Regulations of on Value-added Tax of the PRC (《中華人民共和國增值稅暫行
條例實施細則》) were promulgated by the Ministry of Finance on December 25, 1993 and
subsequently amended on December 15, 2008 and October 28, 2011, and the latest amendment
became into effect on November 1, 2011. Based on the Provisional Regulations of on
Value-added Tax of the PRC (《中華人民共和國增值稅暫行條例》) and the Implementation
Rules for the Implementation of Provisional Regulations of on Value-added Tax of the PRC
(《中華人民共和國增值稅暫行條例實施細則》), the State Council promulgated the Order on
Abolishing the Provisional Regulations of the PRC on Business Tax and Amending the
Provisional Regulations of on Value-added Tax of the PRC (《國務院關於廢止〈中華人民共
和國營業稅暫行條例〉和修改〈中華人民共和國增值稅暫行條例〉的決定》), on November
19, 2019, pursuant to which all enterprises and individuals engaged in the sale of goods, the
provision of processing, repair and replacement services, sales of services, intangible assets,
real property and the importation of goods within the territory of the PRC are the taxpayers of
Value-added Tax. The Value-added Tax rates generally applicable are simplified as 17%, 11%,
6% and 0%, and the Value-added Tax rate applicable to the small-scale taxpayers is 3%.
On April 4, 2018, the Ministry of Finance and the SAT issued the Circular on Adjustment
of Value-added Tax Rates (《關於調整增值稅稅率的通知》). According to which relevant
Value-added Tax rates have been reduced from May 1, 2018, such as the deduction rates of 17%
and 11% applicable to the taxpayers who have Value-Added taxable sales activities or imported
goods have been adjusted to 16% and 10%, respectively.
– 254 –
REGULATIONS
Regulations on Dividend Withholding Tax
The EIT Laws provide that since January 1, 2008, an income tax rate of 10% will
normally be applicable to dividends declared to non-PRC resident investors which do not have
an establishment or place of business in the PRC, or which have such establishment or place
of business but the relevant income is not effectively connected with the establishment or place
of business, to the extent such dividends are derived from sources within the PRC.
Pursuant to an Arrangement Between the China and the Hong Kong Special
Administrative Region for the Avoidance of Double Taxation and the Prevention of Fiscal
Evasion with Respect to Taxes on Incomes (《內地和香港特別行政區關於對所得避免雙重徵
稅和防止偷漏稅的安排》), or the Double Tax Avoidance Arrangement, and other applicable
PRC laws, if a Hong Kong resident enterprise is determined by the competent PRC tax
authority to have satisfied the relevant conditions and requirements under such Double Tax
Avoidance Arrangement and other applicable laws, the 10% withholding tax on the dividends
the Hong Kong resident enterprise receives from a PRC resident enterprise may be reduced to
5%. However, based on the Circular on Certain Issues with Respect to the Enforcement of
Dividend Provisions in Tax Treaties (《國家稅務總局關於執行稅收協定股息條款有關問題的
通知》), or the SAT Circular 81, effective on February 20, 2009 by the SAT, if the relevant PRC
tax authorities determine, in their discretions, that a company benefits from such reduced
income tax rate due to a structure or arrangement that is primarily tax-driven, such PRC tax
authorities may adjust the preferential tax treatment. According to the Circular on Several
Questions regarding the “Beneficial Owner” in Tax Treaties (《關於稅收協定中“受益所有人”
有關問題的公告》), which was effective on April 1, 2018, when determining the applicant’s
status of the “beneficial owner” regarding tax treatments in connection with dividends,
interests or royalties in the tax treaties, several factors apply, including without limitation: (i)
whether the applicant is obligated to pay more than 50% of his or her income in twelve months
to residents in third country or region, (ii) whether the business operated by the applicant
constitutes the actual business activities, and (iii) whether the counterparty country or region
to the tax treaties levies any tax or grant tax exemption on relevant incomes or levies tax at a
very low rate, will be taken into account, and it will be analyzed according to the actual
circumstances of the specific cases. This circular further provides that applicants who intend
to prove his or her status of the “beneficial owner” shall submit the relevant documents to the
relevant tax bureau according to the Announcement on Issuing the Measures for the
Administration of Non-Resident Taxpayers’ Enjoyment of the Treatment under Tax Agreements
(《非居民納稅人享受協定待遇管理辦法》), which was issued by the SAT on October 14, 2019
and became effective on January 1, 2020.
– 255 –
REGULATIONS
Regulations on Tax regarding Indirect Transfer
On February 3, 2015, the SAT issued the Circular on Issues of Enterprise Income Tax on
Indirect Transfers of Assets by Non-PRC Resident Enterprises (《關於非居民企業間接轉讓財
產企業所得稅若干問題的公告》), or Circular 7. Pursuant to Circular 7, an “indirect transfer”
of assets, including equity interests in a PRC resident enterprise, by non-PRC resident
enterprises, may be re-characterized and treated as a direct transfer of PRC taxable assets, if
such arrangement does not have a reasonable commercial purpose and was established for the
purpose of avoiding payment of PRC enterprise income tax. As a result, gains derived from
such indirect transfer may be subject to PRC enterprise income tax. When determining whether
there is a “reasonable commercial purpose” of the transaction arrangement, considerations
include, inter alia, (i) whether the main value of the equity interest of the relevant offshore
enterprise derives directly or indirectly from PRC taxable assets; (ii) whether the assets of the
relevant offshore enterprise mainly consists of direct or indirect investment in China or if its
income is mainly derived from China; and (iii) whether the offshore enterprise and its
subsidiaries directly or indirectly holding PRC taxable assets have real commercial nature
evidenced by their actual function and risk exposure. According to the Circular 7, where the
payer fails to withhold any or sufficient tax, the transferor shall declare and pay such tax to the
tax authority by itself within the statutory time limit. Late payment of applicable tax will
subject the transferor to default interest. The Circular 7 does not apply to transactions of sale
of shares by investors through a public stock exchange where such shares were acquired on a
public stock exchange. On October 17, 2017, the Announcement of the State Administration of
Taxation on Issues Concerning the Withholding of Non-resident Enterprise Income Tax at
Source (《國家稅務總局關於非居民企業所得稅源泉扣繳有關問題的公告》), or SAT Circular
37, last amended on June 15, 2018 and such amendment became effective on the same day,
which further elaborates the relevant implemental rules regarding the calculation, reporting and
payment obligations of the withholding tax by the non-resident enterprises. Nonetheless, there
remain uncertainties as to the interpretation and application of the SAT Circular 7. The SAT
Circular 7 may be determined by the tax authorities to be applicable to our offshore
transactions or sale of our shares or those of our offshore subsidiaries where non-resident
enterprises, being the transferors, were involved.
Regulations on Employment and Social Welfare
Regulations on Employment in PRC
The principle regulations that govern employment and labor matters in PRC include: (i)
Labor Law of the PRC (《中華人民共和國勞動法》), which was promulgated by the SCNPC
on July 5, 1994 and last amended on December 29, 2018; (ii) the Labor Contract Law of the
PRC (《中華人民共和國勞動合同法》) which was promulgated by the SCNPC on June 29,
2007 and last amended on December 28, 2012, and (iii) the Implementing Regulations of the
Labor Contract Law of the PRC (《中華人民共和國勞動合同法實施條例》) which was
promulgated by the State Council on September 18, 2008.
– 256 –
REGULATIONS
According to the regulations above, labor relationships between employers and

employees must be executed in written form, and wages shall not be lower than local standards
on minimum wages and shall be paid to employees timely. In addition, all employers are
required to establish a system for labor safety and sanitation, strictly comply with state rules
and standards and provide employees with workplace safety training. Violations of the PRC
Labor Contract Law and the PRC Labor Law may result in the imposition of fines and other
administrative penalties. For serious violations, criminal liability may arise.
Regulations on Social Welfare in PRC
Employers in China are required by PRC laws and regulations to provide employees with
welfare schemes covering pension insurance, unemployment insurance, maternity insurance,
work-related injury insurance, medical insurance and housing funds. According to the Social
Insurance Law of the PRC (《中華人民共和國社會保險法》) promulgated by the SCNPC on
October 28, 2010 and amended on December 29, 2018, together with other relevant laws and
regulations, any employer shall register with the local social insurance agency within thirty
days after its establishment and shall register for the employee with the local social insurance
agency within thirty days after the date of hiring. An employer shall declare and make social
insurance contributions in full and on time. The occupational injury insurance and maternity
insurance shall be only paid by employers while the contributions of basic pension insurance,
medical insurance and unemployment insurance shall be paid by both employers and
employees. Any employer that fails to make social insurance contributions may be ordered to
pay the required contributions within a stipulated deadline. If the employer still fails to rectify
the noncompliance within the stipulated deadline, it may be subject to a fine ranging from one
to three times the amount overdue.
According to the Regulations on Administration of Housing Fund (《住房公積金管理條

例》) promulgated by the State Council on April 3, 1999, and last amended on March 24, 2019,
an enterprise that fails to make housing fund contributions may be ordered to rectify the
noncompliance and pay the required contributions within a stipulated deadline; otherwise, a
petition may be made to a local court for enforcement. In addition, the PRC Individual Income
Tax Law (《中華人民共和國個人所得稅法》) requires companies operating in China to
withhold individual income tax on employees’ salaries based on the actual salary of each
employee upon payment. We have not made adequate contributions to employee benefit plans,
as required by applicable PRC laws and regulations.
Regulations on Anti-Monopoly Matters related to Internet Platform Companies
The Anti-monopoly Law of the PRC (《中華人民共和國反壟斷法》), which was

promulgated by the SCNPC on August 30, 2007 and took effect on August 1, 2008, On June
24, 2022, the SCNPC revised the Anti-monopoly Law which became effective on August 1,
2022. The Anti-monopoly Law prohibits monopolistic conduct, such as entering into monopoly
agreements, abuse of dominant market position and concentration of undertakings that have the
effect of eliminating or restricting competition.
– 257 –
REGULATIONS
The PRC Anti-monopoly Law requires that the Anti-monopoly law enforcement agency
be notified in advance of any transaction where the parties’ turnover in the China market and/or
global market exceed certain thresholds and the buyer would obtain control of, or decisive
influence over, the target as a result of the business combination. As further clarified by the
Provisions of the State Council on the Threshold of Filings for Undertaking Concentrations
(《國務院關於經營者集中申報標準的規定》) issued by the State Council in 2008 and
amended in September 2018, such thresholds include: (i) the total global turnover of all
operators participating in the transaction exceeds RMB10 billion in the preceding fiscal year
and at least two of these operators each had a turnover of more than RMB400 million within
China in the preceding fiscal year, or (ii) the total turnover within China of all the operators
participating in the transaction exceeded RMB2 billion in the preceding fiscal year, and at least
two of these operators each had a turnover of more than RMB400 million within China in the
preceding fiscal year. There are numerous factors the Anti-monopoly law enforcement agency
considers in determining “control” or “decisive influence,” and, depending on certain criteria,
the Anti-monopoly law enforcement agency may conduct Anti-monopoly review of
transactions in respect of which it was notified.
On September 11, 2020, the Anti-monopoly Commission of the State Council issued the
Anti-monopoly Compliance Guideline for Operators (《經營者反壟斷合規指南》), which
requires, under the PRC Anti-monopoly Law, operators to establish Anti-monopoly compliance
management systems to prevent Anti- monopoly compliance risks.
On February 7, 2021, the Anti-monopoly Commission of the State Council published the
Guidelines to Anti-Monopoly in the Field of Internet Platforms (《關於平台經濟領域的反壟斷
指南》), or the Anti-Monopoly Guidelines for Internet Platforms. The Anti-Monopoly
Guidelines for Internet Platforms prohibits certain monopolistic acts of Internet platforms so
as to protect market competition and safeguard interests of users and undertakings participating
in Internet platform economy, including without limitation, prohibiting platforms with
dominant position from abusing their market dominance (such as discriminating customers in
terms of pricing and other transactional conditions using big data and analytics, using bundle
services to sell services or products).
On November 15, 2021, the SAMR published the Overseas Anti-monopoly Compliance
Guidelines for Enterprises (《企業境外反壟斷合規指引》), which is aimed at helping PRC
companies establish and strengthen overseas anti-monopoly compliance systems to reduce
overseas anti-monopoly compliance risks. The Guidelines apply to both PRC enterprises that
conduct business and operation overseas and PRC enterprises that conduct business and
operations in the PRC and may have certain impacts on overseas markets, in particular for
those that conduct import and export trade, overseas investments, acquisition, transfer or
license of intellectual properties and tendering and bidding activities.
On December 24, 2021, the NDRC and other eight governmental authorities jointly issued
the Opinions on Promoting the Standardized, Healthy and Sustainable Development of the
Platform Economy (《國家發展改革委等部門關於推動平台經濟規範健康持續發展的若干意
見》) which provide guidelines on regulating various aspects of online platform businesses in
– 258 –
REGULATIONS
China, including, among other, anti-monopoly, unfair competition, platform-related price

behaviors, investments in financial institutions and user data issues in the internet platform
economy, to promote the industry’s sound and sustained development.
Anti-unfair Competition Law
Competition among business operators is generally governed by the Anti-unfair

Competition Law of the PRC (《中華人民共和國反不正當競爭法》), or the Anti-unfair
Competition Law (《反不正當競爭法》), which was promulgated by the SCNPC on September
2, 1993 and amended on November 4, 2017 and April 23, 2019 respectively. According to the
Anti-unfair Competition Law, when trading on the market, operators must abide by the
principles of voluntariness, equality, fairness and honesty and observe laws and business
ethics. Acts of operators constitute unfair competition where they contravene the provisions of
the Anti-unfair Competition Law and disturb market competition with a result of damaging the
lawful rights and interests of other operators or consumers. When the lawful rights and
interests of an operator are damaged by the acts of unfair competition, it may institute
proceedings in a People’s court. In comparison, where an operator commits unfair competition
in contravention of the provisions of the Anti-unfair Competition Law and causes damage to
another operator, it will be responsible for compensating for the damages.

AND OPERATIONS IN THE UNITED STATES
As SEC-registered broker-dealers, Moomoo Financial Inc. and Futu Clearing Inc. are
subject to various laws and regulations in the United States. This overview summarizes certain
material aspects of those laws and regulations as they pertain to Moomoo Financial Inc. and
Futu Clearing Inc.
Licensing
Broker-dealers operating in the United States are, with limited exceptions, required to
register with the SEC. Registration with the SEC is conditioned upon the broker-dealer
becoming a member in good standing of FINRA. There are not separate categories of
broker-dealer registration with the SEC. However, a broker-dealer’s membership agreement
with FINRA will specify the nature of the business which may be conducted by the
broker-dealer. Any material changes in the broker-dealer’s business must be approved by
FINRA. Moomoo Financial Inc. is currently authorized to conduct business as an introducing
broker, engaging in transactions in domestic equity securities, mutual funds and options as well
as foreign securities. It is also authorized to act as an underwriter or selling group participant
in offerings of corporate securities other than mutual funds. Futu Clearing Inc. is currently
authorized to conduct business as a clearing broker in equity securities and options and to
arrange transactions in listed and over-the-counter securities.
– 259 –
REGULATIONS
In addition to SEC and FINRA registration, broker-dealers in the United States are
required to register with certain states, based upon the location of their business facilities and
the nature of their operations in any particular state. However, while state governments may
require registration and prosecute misconduct, they are generally prohibited from imposing
additional regulatory requirements on broker-dealers.
The principals and employees of U.S. broker-dealers are also required to be licensed with
FINRA and the applicable states unless their conduct is limited to ministerial activities. There
are a variety of individual license categories for both supervisors and other employees, each
of which requires the individual to pass a specific examination.
All broker-dealers in the United States are also required to become members of the
Securities Investor Protection Corporation, or the SIPC, which insures customer accounts
against losses (subject to a cap) that result from the broker-dealer’s failure. SIPC does not
insure against investment losses.
Net Capital and Customer Protection
Broker-dealers in the United States are required to maintain minimum net capital in
accordance with SEC Rule 15c3-1. The computation of net capital is intended to determine the
broker-dealer’s liquidity and requires various adjustments to GAAP net worth. The amount of
required net capital varies based upon the nature and scope of the broker-dealer’s business.
Clearing brokers that carry customer accounts typically have substantially higher net capital
requirements than introducing brokers. Broker-dealers that fall out of compliance with the net
capital requirements must immediately correct the shortfall or suspend doing business until
they are again in compliance with the requirements.
Rule 15c3-3, the SEC’s customer protection rule, requires broker-dealers who have
custody of client assets to establish a segregated bank account for the exclusive benefit of its
customers. The rule also requires broker-dealers to obtain possession or control of securities
carried by the broker-dealer for the account of clients, places limitations on the ability of a
broker-dealer to access client funds or securities for use in the broker-dealer’s business and
delineates the requirements for directing free credit balances in a customer account to a bank
pursuant to a sweep program. Rule 15c3-3 also delineates requirements for broker-dealers who
want to lend fully paid or excess margin securities held in a customer’s account.
– 260 –
REGULATIONS
Margin Lending
Margin lending by broker-dealers is subject to the margin rules adopted by the Federal
Reserve Board (“Regulation T”) and certain FINRA rules. Futu customers in the U.S.
generally trade through margin accounts. Regulation T provides that broker-dealers may only
extend credit for the purchase of “margin securities”; generally securities traded on a
recognized stock exchange. The initial extension of credit may not exceed 50% of the value of
the securities to be purchased. Regulation T requires broker-dealers to impose trading
restrictions on accounts that fail to make timely payment for securities.
FINRA rules supplement Regulation T, particularly with respect to the maintenance

margin required. In addition, broker-dealers are free to impose their own margin requirements
that are more restrictive than those required by Regulation T or FINRA.
Before a customer may trade on margin, the broker-dealer must provide the customer with
extensive disclosure about the risks of margin trading and the customer must agree in writing
to the margin terms offered by the broker-dealer.
Know Your Customer; Anti-Money Laundering
Under the Bank Secrecy Act and related SEC and FINRA rules, broker-dealers are
required to guard against money laundering and terrorist financing. This requires broker-
dealers to implement a customer identification program to verify a customer’s identity and to
determine if a proposed customer is on any lists of restricted persons with whom business is
prohibited. In addition, broker-dealers must adopt and enforce a written anti-money laundering
compliance program, reasonably designed to achieve and monitor compliance with the
requirements of the Bank Secrecy Act and its implementing regulations. Such programs must
include policies and procedures that: (i) can be reasonably expected to detect and cause the
reporting of suspicious transactions; (ii) provide for independent testing for compliance, (iii)
designate and identify an individual or individuals responsible for implementing and
monitoring the day-to-day operations and internal controls of the program and (iv) provide
ongoing training for appropriate broker-dealer personnel.
Disclosures to Clients
All broker-dealers that provide any brokerage services to retail customers must provide
the customers with certain disclosures on Form CRS. Disclosures in the Form CRS include the
nature of the services offered by the broker-dealer, fees and charges, conflicts of interest and
whether or not any of the broker-dealer’s personnel have been subjected to disciplinary
proceedings. The Form CRS must also be filed with the SEC and made available on the
broker-dealer’s website.
– 261 –
REGULATIONS
Broker-dealers are also required to disclose to their clients in new account documentation
and/or through their website various matters such as the risks of investing in foreign securities,
the risks of margin trading, the risks of investing in penny stocks, the risks of day trading, any
arrangements the broker-dealer may have for payment for order flow and the broker-dealer’s
business continuity plan.
SEC and FINRA rules require broker-dealers to provide clients with trade confirmations
that comply with the requirements of SEC Rule 10b-10. In addition, clients must be provided
with an account statement not less than once a quarter. Clients may consent to electronic
delivery of confirmations, statements and other communications from the broker-dealer.
Sales Practices
SEC and FINRA rules prohibit the use of false, deceptive and misleading sales practices.
The SEC and FINRA are currently conducting an industry-wide review to determine if certain
digital engagement practices used by broker-dealers improperly incentivize customers to
undertake excessive or risky trading. Following this review, the SEC and/or FINRA might
adopt new rules regulating digital engagement practices by broker-dealers.
Because neither Moomoo Financial Inc. nor Futu Clearing Inc. make investment
recommendations or otherwise solicit specific trading actions, they are not required to comply
with the “best interest” provisions of SEC Regulation BI or FINRA’s suitability requirements.
Best Execution
The SEC and FINRA require broker-dealers that execute trades, like Futu Clearing Inc.,
to use reasonable diligence to obtain for their clients the most favorable terms available under
prevailing market conditions. In determining how to best execute an order, the broker-dealer
may consider the size of the order, the availability of the security in various markets, liquidity,
timing and any other requirements of the client. Broker-dealers that receive third party
payments for order flow must ensure that such arrangements do not compromise their duty of
obtaining best execution for their clients.
Participation in Underwritten Offerings
Broker-dealers that act as underwriters or selling group members in SEC-registered,

underwritten offerings are required to comply with various SEC rules governing such offerings.
Such requirements include a prohibition on accepting customer orders prior the SEC declaring
the relevant registration statement effective, limitations on the timing and content of marketing
materials that may be used in connection with the offering, and restrictions on trading activity
during the period immediately preceding and following a new issue or an underwritten offering
for a thinly traded stock.
– 262 –
REGULATIONS
Prevention of Insider Trading
All broker-dealers are required to adopt policies and procedures intended to prevent
unlawful trading based on material, non-public information. Neither broker-dealers nor their
employees may use material non-public information obtained in the course of their business to
trade securities or to provide trading tips to other persons. Such policies and procedures should
include a clear statement of the policy provided to all personnel, on-going training, procedures
to monitor trading by all personnel and, as appropriate, internal information barriers to prevent
the sharing of material non-public information with persons who do not need access to such
information.
Protecting Privacy of Customer Data and Information
Regulation S-P requires broker-dealers to provide their customers with a copy of their
privacy policy, which describes among other things what non-public information about
customers is collected by the broker-dealer, and what non-public information might be shared
with affiliates or third parties. With limited exceptions, customers must be provided with an
opportunity to opt out of disclosures to third parties. Certain states such as California have
imposed additional privacy requirements.
Regulation S-P also requires broker-dealers to adopt policies and procedures designed to
safeguard customer data and records from unauthorized access. Broker-dealers are required to
implement appropriate cybersecurity measures that include administrative, technical and
physical safeguards. The cybersecurity measures must be periodically tested for effectiveness.
Regulatory authorities in the United States have recently increased their scrutiny of the
programs implemented by broker-dealers to prevent cybersecurity breaches or unauthorized
access to customer accounts.
Records and Reporting
SEC-registered broker-dealers are subject to extensive recordkeeping and reporting

requirements. SEC Rule 17a-3 specifies a range of records that must be maintained, including
trading and customer account records, financial records and net capital computations,
employee records and copies of all advertisements and written communications with
customers. In addition, broker-dealers must ensure that all of their email communications
relating to the broker-dealer’s business are transmitted using authorized systems and are
archived for future access.
All required records must be preserved for various periods of time specified in SEC Rule
17a-4. Generally, records may be preserved electronically, as long as the electronic system
satisfies minimum standards to ensure the records are accessible and not subject to alteration.
Certain records may be maintained with third party providers, including cloud services, if the
third party agrees to make the records available to the SEC and other regulatory authorities
upon request.
– 263 –
REGULATIONS
Broker-dealers must file with the SEC annual reports that include audited financial
systems, as well as quarterly financial reports. In addition, net capital computations must be
filed on a quarterly or monthly basis, depending upon the nature of the broker-dealer’s
business. An additional annual filing is required with FINRA to address the firm’s compliance
with its regulatory obligations.
U.S. broker-dealers are also required to report to the SEC and FINRA most customer
complaints and legal actions. The broker-dealer must update the reporting to disclose how the
matter was resolved.
Supervision
All SEC-registered broker-dealers must adopt written supervisory procedures and

implement supervisory controls and procedures designed to enable the broker-dealer to monitor
and enforce compliance with applicable regulatory requirements. Such supervisory procedures
are required not only by FINRA rules, but also to protect the broker-dealer against customer
claims or regulatory sanctions based on the misconduct of its supervised personnel.
Supervisory procedures should include, among other things, a designated chief compliance
officer, internal inspections, reviews of correspondence and emails, periodic monitoring of
customer activity and reasonable investigations of new hires. The broker-dealer must also
prohibit its employees from engaging in outside business activities or from maintaining outside
securities accounts unless such activity has been disclosed to and approved by the broker-
dealer. Broker-dealers are required to review and approve advertising materials that promote
their business, including materials prepared or disseminated by affiliates or third party
contractors. The broker-dealer must also ensure that it implements an appropriate training
program for its personnel that complies with specific requirements delineated by FINRA.
Regulatory Oversight
Broker-dealers conducting business in the United States may be examined at any time by
officials from the SEC, FINRA or any state in which the broker-dealer is licensed. Following
an examination, the regulatory authority will usually issue a written report discussing any
identified deficiencies. The broker-dealer is provided an opportunity to respond to the report.
While most deficiencies are resolved through mutually agreed corrective actions, more serious
violations may be referred for administrative or civil proceedings. Such proceedings may result
in the imposition of fines, cease and desist orders, disgorgement orders, the suspension of
personnel or lines of business or the revocation of licenses to conduct business. While
broker-dealers have the right to contest proceedings brought against them by regulatory
authorities, as a practical matter most such proceedings are resolved through a negotiated
settlement. The resolution is a public record, unless the sanction is a fine of US$2,500 or less.
Under the Exchange Act, a broker-dealer and its principals may be held responsible for
misconduct committed by persons under their supervision. It is fairly common in regulatory
enforcement proceedings for a broker-dealer and its supervisory personnel to be sanctioned
whenever there has been serious misconduct by any of the broker-dealer’s personnel.
– 264 –
REGULATIONS

AND OPERATIONS IN SINGAPORE
As we provide online brokerage services in Singapore through our subsidiary, Moomoo

Financial Singapore, our business operations are subject to the laws of Singapore. The key laws
and regulations which relate to our business and operations in Singapore are summarized as
follows:
Regulatory Requirements under the Securities and Futures Act
The Securities and Futures Act 2001 of Singapore (2020 Revised Edition) (the “SFA”) is
the principal legislation regulating activities and institutions in the securities and derivatives
industry in Singapore.
The SFA is administered by the Monetary Authority of Singapore (the “MAS”), which is
Singapore’s central bank and integrated financial regulator. As an integrated financial
supervisor, the MAS has oversight of all financial institutions in Singapore, including banks,
insurers, capital market intermediaries (such as Moomoo Financial Singapore), and financial
advisors. To this end, the MAS also establishes rules for such financial institutions which are
implemented through legislation, regulations, directions and notices. MAS guidelines are also
formulated and published to encourage best practices among financial institutions in
Singapore.
In particular, Part 4 of the SFA provides for the licensing and regulation of certain
regulated activities typically carried out by capital markets intermediaries (such as Moomoo
Financial Singapore).
Types of Regulated Activities under Part 4 of the SFA
Part 4 of the SFA governs the conduct of regulated activities typically carried out by
capital market intermediaries. Under Section 82(1) of the SFA, a person carrying on business
in a regulated activity is required to hold a Capital Markets Services Licence (“CMSL”),
issued by the MAS, unless an exemption applies. The CMSL system is a modular licensing
system, in that an entity will hold one single CMSL covering the different types of regulated
activities under the SFA which it engages or intends to engage in.
– 265 –
REGULATIONS
The categories of activities regulated under the SFA are set out under Part 1 of the Second
Schedule to the SFA as follows:
(1) dealing in capital markets products;
(2) advising on corporate finance;
(3) fund management;
(4) real estate investment trust management;
(5) product financing;
(6) providing credit rating services; and
(7) providing custodial services.
It is an offense for a person to carry on business, or hold himself out as carrying on

business, in any regulated activity without the appropriate licence issued by the MAS.
In addition, where a CMSL has been granted by the MAS, the grant may be subject to
such conditions and restrictions as the MAS thinks fit. It is an offence for a person to
contravene any such condition or restriction in the licence.
Activities which Moomoo Financial Singapore is Licensed to Conduct in Singapore
As at the Latest Practicable Date, Moomoo Financial Singapore holds a CMSL (License
No. CMS101000) and is licensed under the SFA to conduct the following regulated activities:
(1) dealing in capital markets products;
(2) product financing; and
(3) providing custodial services.
Under the SFA, “capital markets products” include, amongst others, securities, (1) units in
a collective investment scheme, derivatives contracts, and spot foreign exchange contracts for
the purposes of leveraged foreign exchange trading. The term “dealing in capital markets
products” in turn means (whether as principal or agent) making or offering to make with any
person, or inducing or attempting to induce any person to enter into or to offer to enter into any
agreement for or with a view to acquiring, disposing of, entering into, effecting, arranging,
subscribing for, or underwriting any capital markets product. This definition thus captures both
the role of executing transactions involving capital markets products as well as the role of
– 266 –
REGULATIONS
soliciting transactions involving capital markets products. Currently, under the CMSL granted
to it, Moomoo Financial Singapore may carry on business in dealing in capital markets
products only in respect of securities, units in a collective investment scheme and exchange-
traded derivatives contracts.
“Product financing” is described under the SFA as referring generally to providing any
credit facility, advance or loan to facilitate (directly or indirectly) the subscription or purchase
of specified products (2) listed or to be listed on an organised market, (3) the purchase of
specified products prescribed by the MAS, or the continued holding of such specified products
(whether or not the specified products are pledged as security).
Notes:
(1) Under the SFA, the term “securities” generally refers to shares, debentures, and units in a business trust
or any instrument conferring or representing a legal or beneficial ownership interest in a corporation,
partnership or limited liability partnership.
(2) Under the SFA, “specified products” means securities, specified securities-based derivatives contracts
or units in a collective investment scheme.
(3) “Organised market” typically refers to securities exchanges, and is defined under the SFA to mean
(among other things), a place at which, or a facility (whether electronic or otherwise) by means of
which, offers or invitations to exchange, sell or purchase derivatives contracts, securities or units in
collective investment schemes, are regularly made on a centralised basis, being offers or invitations that
are intended or may reasonably be expected to result, whether directly or indirectly, in the acceptance
or making, respectively, of offers to exchange, sell or purchase derivatives contracts, securities or units
in collective investment schemes (whether through that place or facility or otherwise). The term
however does not include a place or facility used by only one person to regularly make offers or
invitations, or to regularly accept offers, to sell, purchase or exchange derivatives contracts, securities
or units in collective investment schemes.
“Providing custodial services” is described under the SFA to mean broadly, in relation to
specified products, providing or agreeing to provide any service where the person providing the
service has, under an arrangement with another person (the customer), possession or control of
the specified products of the customer and carries out one or more of the following functions
for the customer:
(a) settlement of transactions relating to the specified products;
(b) collecting or distributing dividends or other pecuniary benefits derived from

ownership or possession of the specified products;
(c) paying tax or other costs associated with the specified products;
(d) exercising rights, including without limitation voting rights, attached to or derived
from the specified products; and
(e) any other function necessary or incidental to the safeguarding or administration of

the specified products.
– 267 –
REGULATIONS
The CMSL granted to Moomoo Financial Singapore by the MAS is subject to certain
conditions. (4)
Notes:
(4) The conditions are as follows:
1. Moomoo Financial Singapore shall obtain the prior approval of the MAS for any change of its
members or shareholdings of its members which will result in any person, alone or acting together
with any connected person, being in a position to control not less than 20% of the voting power
in Moomoo Financial Singapore or to hold interest in not less than 20% of the issued shares of
Moomoo Financial Singapore. Moomoo Financial Singapore shall immediately notify the MAS
of any other changes of its members or shareholding of its members.
2. Moomoo Financial Singapore shall inform MAS of (i) the resignation of its chief executive
officer or any of its directors; (ii) any change in the nature of appointment or country of residence
of the chief executive officer or any of its directors; and (iii) any change in the business interests
or shareholdings of its chief executive officer or any of its directors provided to the MAS in the
prescribed form.
3. Moomoo Financial Singapore shall not acquire or hold, whether directly or indirectly, an interest
of 20% or more of the share capital of any corporation, or establish any branch (whether in
Singapore or elsewhere), without first obtaining the prior approval of MAS.
4. Moomoo Financial Singapore shall immediately inform MAS of any matter which may adversely
affect its financial position to a material extent.
5. Moomoo Financial Singapore shall conduct its business in such a manner as to avoid conflicts of
interests, and should such conflicts arise, shall ensure that they are resolved fairly and equitably.
6. Prior to the cessation of its business in the regulated activities for which it is licensed, Moomoo
Financial Singapore shall ensure that its liabilities and obligations to all customers have been
fully discharged or provided for.
7. Moomoo Financial Singapore shall immediately inform the MAS when it becomes aware of the
occurrence of any of the following:
(i) where any offence is committed by or any disciplinary action is taken against Moomoo
Financial Singapore or any of its officers or representatives, whether in Singapore or
elsewhere;
(ii) where Moomoo Financial Singapore or any of its officers or representatives is the subject
of an investigation or when any civil or criminal proceedings are instituted against
Moomoo Financial Singapore or any of its officers or representatives, whether in
Singapore or elsewhere;
(iii) where there is any breach of any laws or regulations, business rules or codes of conduct,
whether in Singapore or elsewhere; or
(iv) any other matter that would affect Moomoo Financial Singapore or any of its officers’ or
representatives’ ability to meet the criteria set out in the Guidelines on Fit and Proper
Criteria issued by MAS.
8. Moomoo Financial Singapore shall produce its books to independent auditors to be selected by
the MAS to conduct any audit on Moomoo Financial Singapore. All expenses arising from such
audit shall be borne by Moomoo Financial Singapore.
– 268 –
REGULATIONS
9. Moomoo Financial Singapore shall give written notice to MAS seven days prior to the execution
of an agreement for the purchase, sale, merger or any other business combination of all or any
part of the business (where such part could operate as a viable business enterprise if it were a
stand-alone entity) in a regulated activity under the SFA for which its CMSL is granted. Where
any transaction, as described in the foregoing, is not documented in an agreement, Moomoo
Financial Singapore shall give written notice to MAS seven days prior to the execution of the
transaction.
10. Moomoo Financial Singapore shall ensure that any person it employs or appoints to act as its
representative in respect of any regulated activity for which Moomoo Financial Singapore is
licensed to provide is an appointed, temporary or provisional representative in respect of that
regulated activity.
11. Moomoo Financial Singapore shall not carry on any moneylending without the prior approval of
the MAS.
12. Moomoo Financial Singapore shall inform MAS promptly when it has fewer than 2 full-time
appointed representatives in respect of each relevant regulated activity under the SFA.
13. Moomoo Financial Singapore shall provide MAS with a Letter of Responsibility, Letter of
Undertaking, Banker’s Guarantee and/or Professional Indemnity Insurance, as may be required by
MAS and in such form as MAS may require. Moomoo Financial Singapore shall ensure that such
Letter of Responsibility, Letter of Undertaking, Banker’s Guarantee and/or Professional
Indemnity Insurance, as may be required by MAS, remain(s) in force as long as the licence
remains valid.
14. Moomoo Financial Singapore and its representatives shall at all times, comply with all foreign
laws and regulations that apply to the activities that they conduct.
15. Moomoo Financial Singapore must ensure that each of its appointed, temporary or provisional
representatives only carries on business in dealing in capital markets products in respect of 1 or
more types of capital markets product that are indicated against the name of that representative
in the public register of representatives. The aforementioned “types of capital markets products”
refer to each of the following classes:
(a) securities;
(b) units in a collective investment scheme;
(c) exchange-traded derivatives contracts;
(d) over-the-counter derivatives contracts; or
(e) spot foreign exchange contracts for the purposes of leveraged foreign exchange trading.
16. Moomoo Financial Singapore must notify the MAS of any addition to the list of capital markets
products indicated against its appointed representative’s name in the public register of
representatives, by lodging a notice in a prescribed form and in the manner specified at
http://www.mas.gov.sg.
17. Moomoo Financial Singapore shall, no later than the next business day after the day on which any
of its appointed representatives, provisional representatives or temporary representatives has
ceased to carry on business in dealing in capital markets products in respect of any or all types
of capital markets products indicated against his name in the public register of representatives,
notify the MAS by lodging a notice in the prescribed form and in the manner specified at
http://www.mas.gov.sg.
– 269 –
REGULATIONS
18. Where Moomoo Financial Singapore intends to carry on business in dealing in capital markets
products in respect of any additional type of capital markets products other than securities, units
in a collective investment scheme and exchange-traded derivatives contracts, Moomoo Financial
Singapore must seek MAS’ approval to deal in those additional types of capital markets products
by lodging a notice in the prescribed form and in the manner specified at http://www.mas.gov.sg.
The MAS may require Moomoo Financial Singapore to furnish it with such information or
documents as the MAS considers necessary in relation to its request.
19. Where Moomoo Financial Singapore ceases carrying on business in dealing in capital markets
products in respect of any type of capital markets products, but has not ceased to carry on
business in dealing in capital markets products in the remaining types of capital markets products,
Moomoo Financial Singapore must notify MAS of such cessation by lodging a notice in the
prescribed form and in the manner specified at http://www.mas.gov.sg, by not later than 14 days
from the date of cessation.
20. Where Moomoo Financial Singapore has commenced carrying on business in dealing in capital
markets products in respect of some types of capital markets products but not others for which
it is allowed to deal in under its licence by the end of the period of 6 months from the date on
which its licence was granted (or such longer period as the MAS may allow in any particular
case), Moomoo Financial Singapore must immediately lodge with the MAS a notice in the
prescribed form.
21. Where the MAS varies the types of capital markets products in respect of which Moomoo
Financial Singapore carries on business in dealing after receiving the request in condition 18
above, or the notifications in conditions 19 or 20 above, the MAS may issue a new licence to
Moomoo Financial Singapore which reflects the types of capital markets products in respect of
which it carries on business in dealing.
22. Moomoo Financial Singapore must carry on business in dealing in capital markets products only
in respect of capital markets products that are securities, units in a collective investment scheme
and exchange-traded derivatives contracts.
23. Moomoo Financial Singapore shall satisfy itself of compliance with all relevant laws and
requirements in the relevant foreign jurisdictions, before it starts offering products and services
to investors residing in that foreign jurisdiction.
Representatives, Directors, and CEO Requirements
Under Section 99B(1) of the SFA, individuals who are employed by or who are acting for
a CMSL holder in Singapore to carry out the regulated activities are required to be appointed,
provisional or temporary representatives under the SFA, unless exempted.
In addition, pursuant to the MAS Guidelines SFA 04-G01 on Criteria for the Grant of a
Capital Markets Services Licence (last revised on August 2, 2022), Moomoo Financial
Singapore is required to employ at least two full-time individuals as appointed representatives
in respect of each of the regulated activities which it is being licensed to conduct. Moomoo
Financial Singapore should also ensure a minimum of two directors on its board, at least one
of whom is resident in Singapore. The chief executive officer of Moomoo Financial Singapore
should also be resident in Singapore. The approval of the MAS should be obtained prior to the
appointment of its chief executive officer, resident directors, and any director who is directly
responsible for its business in Singapore.
– 270 –
REGULATIONS
‘Fit and Proper’ Requirement
Persons applying to the MAS for a CMSL under the SFA, as well as its directors,
representatives, and shareholders, must satisfy, and continue to satisfy after the grant of the
CMSL by the MAS, that they are fit and proper persons. Generally, a fit and proper person
means one who is financially sound, competent, honest, and has not been in breach of relevant
laws and regulations. MAS administers this regime through a set of Fit and Proper Guidelines
which all classes of regulated entities (including CMSL holders) are ordinarily expected to
follow.
Base Capital Requirements
A corporation granted a CMSL in respect of regulated activities shall at all times meet the
base capital requirement thresholds under the Securities and Futures (Financial and Margin
Requirements for Holders of Capital Markets Services Licences) Regulations (“SF(FMR)R”),
in respect of the regulated activities for which it is licensed to conduct. In view of this
obligation, it would be prudent for the CMSL holder to maintain an additional capital buffer
over and above the requisite base amount. The base capital requirement thresholds applicable
to the regulated activities carried on by Moomoo Financial Singapore are set out under the First
Schedule to the SF(FMR)R as follows:
Base capital
Regulated activity requirement
Dealing in capital markets products that are securities, units in

a collective investment scheme or exchange-traded derivatives
contracts and the applicant is not a member of an approved
exchange. (5) ьььььььььььььььььььььььььььььььььььььььььь S$1 million
Carrying out product financing. ьььььььььььььььььььььььььььь S$1 million
Providing custodial services. ььььььььььььььььььььььььььььььь S$1 million
Generally, where more than one base capital requirement is applicable to a CMSL holder,
the highest of such base capital requirements will apply. Hence, the base capital requirement
of Moomoo Financial Singapore is S$1 million.
By Regulation 4 of the SF(FMR)R, a CMSL holder shall not cause or permit its base
capital to fall below the base capital requirement applicable to it. Where the base capital falls
below the base capital requirement or where the CMSL holder becomes aware that the base
capital will fall below the base capital requirement, the MAS must be notified immediately.
Notes:
(5) Under the SFA, an “approved exchange” means a corporation that is approved by the MAS under the
SFA as an approved exchange. An example of such an approved exchange is the Singapore Exchange
Securities Trading Limited, or SGX.
– 271 –
REGULATIONS
Risk Capital Requirements
Furthermore, a CMSL holder shall at all times meet the risk-based capital requirement in
the SF(FMR)R upon obtaining its licence. The particular capital requirements are generally
based on various risk factors faced by the CMSL holder, and the risk measurements are proxied
from various items of information within the CMSL holder’s financial statements. In this
regard, under Regulations 6 and 7 of the SF(FMR)R, a licensed corporation shall:
(a) not cause or permit its financial resources (as defined in the SF(FMR)R and by
notices issued by MAS) to fall below the total risk requirement (as defined in the
SF(FMR)R and by notices issued by MAS); and
(b) immediately notify the MAS if its financial resources fall below 120% of its total
risk requirements.
Continuing Obligations
An entity licensed under Part 4 of the SFA would typically expect that various ongoing
operational obligations would apply, in addition to any specific conditions which the MAS may
impose when granting its licence. There are different ongoing business conduct compliance
obligations depending on the relevant licensing category. In respect of Moomoo Financial
Singapore, these include, but are not limited to, the following requirements under the Securities
and Futures (Licensing and Conduct of Business) Regulations (“SF(LCB)R”):
(a) maintenance of a minimum deposit sum of S$100,000 with the MAS (Regulation 7
of the SF(LCB)R);
(b) implement, and ensure compliance with, effective written policies on all operational
areas, including financial policies, accounting and internal controls, and internal
auditing (Regulation 13(b)(i) of the SF(LCB)R);
(c) identify, address and monitor the risks associated with the trading or business
activities (Regulation 13(b)(iii) of the SF(LCB)R);
(d) ensure that its business activities are subject to adequate internal audit (Regulation
13(b)(iv) of the SF(LCB)R);
(e) detailed book-keeping and record-keeping obligations (Regulation 39 of the

SF(LCB)R);
(f) provision of statements to customers (Regulation 40 of the SF(LCB)R); and
(g) regulations on product advertisements (Regulation 46 of the SF(LCB)R).
– 272 –
REGULATIONS
Licensing Regime under the Financial Advisers Act
For completeness, the provision of financial advisory services is regulated in Singapore

under the Financial Advisers Act 2001 (2020 Revised Edition) (“FAA”), and its related
subsidiary legislation.
Under Section 6(1) of the FAA, a person is not to act as a financial adviser in Singapore
in respect of any financial advisory services unless he is authorised to do so in respect of that
financial advisory service by a financial adviser’s licence (“FAL”), or is an exempt financial
adviser. Further, under Section 6(4) of the FAA, a person who contravenes Section 6(1) will
be liable on conviction to a maximum fine of S$75,000 or imprisonment for a term of up to
3 years or both.
The term “financial adviser” generally refers to a person who carries on a business of
providing any financial advisory service under the FAA. There are currently 3 types of
financial advisory services under the FAA:
a. advising others, either directly or through publications or writings, and whether in

electronic, print or other form, concerning any investment product; (6)
b. advising others by issuing or promulgating research analyses or research reports,

whether in electronic, print or other form, concerning any investment product; and
c. arranging of any contract of insurance in respect of life policies (other than a

contract of reinsurance).
As at the Latest Practicable Date, Moomoo Financial Singapore is an exempt financial

adviser under the FAA, but has not commenced to conduct the above regulated activities in
Singapore yet.
Notes:
(6) Under the FAA, “investment product” includes any capital markets products, spot foreign exchange
contracts other than for the purposes of leveraged foreign exchange trading, and any life policy.
Anti-Money Laundering And Counter-Terrorist Financing (“AML/CTF”)
Sector-specific requirements applicable to capital markets intermediaries
In Singapore, corporations which are licensed by the MAS are required to comply with
the applicable anti-money laundering and counter-terrorist financing laws and regulations in
Singapore as well as various notices and guidelines. In particular, Moomoo Financial
Singapore as a CMSL holder will be required to comply with the Notice on Prevention of
Money Laundering and Countering the Financing of Terrorism – Capital Markets
Intermediaries (last revised on April 20, 2022) (“SFA 04-N02”) issued by the MAS, read
together with the Guidelines to MAS Notice SFA 04-N02 (collectively, the “AML/CTF
Notices and Guidelines”).
– 273 –
REGULATIONS
The AML/CTF Notices and Guidelines establish a framework within which CMSL
holders are to design and develop their own AML/CTF policies, procedures and controls to
help prevent money laundering and terrorism financing in Singapore. A CMSL holder should,
among other things:
(a) take appropriate steps to identify, assess and update its money laundering and
terrorism financing risks in relation to the launch or use of new products, new
business practices, new delivery mechanisms, or new or developing technologies,
and to ensure that appropriate measures and controls are implemented to mitigate
and manage such risks;
(b) conduct anti-money laundering and customer due diligence (“CDD”) checks on all
new customers (extending to the beneficial owners, connected parties of the
customer and persons appointed to act on the customer’s behalf), and update its
CDD checks on existing customers from time to time;
(c) perform such CDD checks where the licensed corporation first establishes business
relations with any customer, where the licensed corporation undertakes any
transaction of a value exceeding S$20,000 for any customer who has not otherwise
established business relations with it, where there is a suspicion of money
laundering or terrorism financing, or where the licensed corporation has doubts
about the veracity or adequacy of any information previously obtained;
(d) reserve the right to request for such information as deemed necessary to verify the
identity, tax status and/or source of payment of a customer in order to comply with
any applicable law or regulation of any jurisdiction;
(e) implement internal risk management systems, policies, procedures and controls to
determine if particular business relations with or transactions for any customer
presents a higher risk for money laundering or terrorism financing;
(f) conduct on-going monitoring of activities of its customers to ensure that they are
consistent with the nature of business, the risk profile and source of funds, as well
as identify transactions that are complex, large or unusual, or patterns of
transactions that have no apparent economic or lawful purpose;
(g) conduct comprehensive on-going screening against the United Nations watch lists,
other relevant money laundering and terrorism financing sources and lists and
information provided by the MAS or other relevant authorities in Singapore; and
(h) report transactions suspected to contain the proceeds of criminal conduct or that is
connected in any way with money laundering, tax evasion or terrorist financing to
the Suspicious Transactions Reporting Office and the MAS, and document the basis
for its assessment and the decision to report the transaction.
– 274 –
REGULATIONS
Aside from the AML/CTF Notices and Guidelines, Singapore’s AML/CTF legal
framework is governed by a patchwork of legal instruments. We set out below the key
legislations in Singapore applicable to Moomoo Financial Singapore which concern money
laundering and terrorist financing.
Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act
The Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits)
Act 1992 of Singapore (2020 Revised Edition) (“CDSA”) criminalises money laundering and
organises money laundering offences into two main groups: drug-related offences and other
criminal offences. In particular, Part 6 of the CDSA criminalises the laundering of proceeds
generated by drug trafficking and criminal conduct via the following principal offences:
(a) the assistance of another person in retaining, controlling or using the benefits of
drug dealing or criminal conduct under an arrangement (whether by concealment,
removal from jurisdiction, transfer to nominees or otherwise) (Sections 50(1) and
51(1) of the CDSA);
(b) the concealment, conversion, transfer or removal from the jurisdiction, or the
acquisition, possession or use of benefits of drug dealing or criminal conduct
(Sections 53(1) and 54(1) of the CDSA);
(c) the concealment, conversion, transfer or removal from the jurisdiction of another
person’s benefits of drug dealing or criminal conduct (Sections 53(2) and 54(2) of
the CDSA);
(d) the acquisition, possession or use of another person’s benefits of drug dealing or
criminal conduct (Sections 53(3) and 54(3) of the CDSA); and
(e) the possession or use of any property that may be reasonably suspected of being
benefits of drug dealing or criminal conduct, without a satisfactory account as to
how the property had been occasioned (Section 55(1) of the CDSA).
Upon conviction of an offence under Sections 50, 51, 53, 54 and 55 of the CDSA,
individuals will be liable to a maximum fine of S$500,000 or imprisonment for a term of up
to 10 years or both, while non-individuals will be liable to a maximum fine of S$1 million or
twice the value of the benefits of drug dealing or criminal conduct in respect of which the
money laundering offence was committed, whichever is higher. If convicted under Section 55
of the CDSA, individuals will be liable to a maximum fine of S$150,000 or imprisonment for
a term of up to 3 years, or both, while non-individuals will be liable to a maximum fine of
S$300,000.
In addition to any criminal liability, the CDSA also allows for the confiscation of
proceeds of crime. In particular, a confiscation, restraint or charging order may be made by the
court in respect of realisable property. A confiscation order under Section 64 of the CDSA is
an order for the defendant to pay an amount of money assessed to correspond to the value of
– 275 –
REGULATIONS
the benefit he or she derived from drug dealing or criminal conduct, a restraint order under
Section 19 serves to prohibit any person from dealing with realisable property, and a charging
order under Section 20 (applicable to immovable property and to capital markets products)
serves to secure payment of any amount payable under a confiscation order.
In terms of reporting requirements, Section 45(1) of the CDSA provides for the mandatory
reporting of suspicious transactions when a person, in the course of his or her trade, profession,
business or employment, knows or has reasonable grounds to suspect money laundering.
Suspicious transaction reports are to be made to the Commercial Affairs Department of the
Singapore Police Force. A failure to report a suspicious transaction would constitute an offence
under Section 45(3) of the CDSA. Individuals will be liable on conviction to a fine not
exceeding S$250,000 or to imprisonment for a term not exceeding 3 years or to both, while
non-individuals would be liable on conviction to a fine not exceeding S$500,000.
The CDSA also provides for the offence of tipping-off. Section 57 of the CDSA provides
that it is an offence if: (i) a person, who knows or reasonably suspects that an authorised officer
is acting or proposing to act in a money laundering investigation, discloses, to a second person,
any information that is likely to prejudice that investigation or proposed investigation; or (ii)
a person, who knows or reasonably suspects that a suspicious transaction report has been filed,
discloses to a second person, any information that is likely to prejudice any investigation that
might be conducted following the suspicious transaction report. A contravention of Section 57
will lead to an offence, and a fine not exceeding S$250,000 or to imprisonment for a term not
exceeding 3 years or to both.
Terrorism (Suppression of Financing) Act
The Terrorism (Suppression of Financing) Act 2002 of Singapore (2020 Revised Edition)
(“TSOFA”) implements within Singapore the provisions of the International Convention for
the Suppression of Financing of Terrorism, as well as resolutions of the United Nations (“UN”)
Security Council concerning terrorism-related sanctions. It broadly operates in parallel with
the CDSA, and like the CDSA, it also provides for mandatory reporting of suspicious
transactions. Transactions reported under the TSOFA are also made to the Commercial Affairs
Department of the Singapore Police Force.
The TSOFA sets out various actions which are deemed terrorist financing acts and
constitute offence under the TSOFA. Broadly speaking, the TSOFA criminalises the handling
of terrorist property and the provision of services (including financial support) for terrorist
activity. This effectively prohibits any and all dealings with terrorists and terrorist property,
including the provision of services supporting terrorism. As such, financial institutions must
ensure that they do not, inadvertently or otherwise, have dealings with persons or entities
which have been designated as terrorists under the TSOFA.
The TSOFA also has a designation regime, whereby certain individuals and entities may
be designated as terrorists by the Singapore government or by the UN Security Council.
– 276 –
REGULATIONS
Sanctions
Within the financial sector, the United Nations sanctions are given effect to via
regulations issued by the MAS pursuant to Section 27A of the Monetary Authority of Singapore
Act 1970 of Singapore (2020 Revised Edition) (the “MAS Act”). As at the Latest Practicable
Date, the MAS sanctions regulations which have been issued pursuant to Section 27A of the
MAS Act are as follows:
(a) MAS (Freezing of Assets of Persons – Democratic Republic of the Congo)

Regulations 2006;
(b) MAS (Freezing of Assets of Persons – Sudan) Regulations 2006;
(c) MAS (Sanctions and Freezing of Assets of Persons – Somalia) Regulations 2010;
(d) MAS (Sanctions and Freezing of Assets of Persons – Libya) Regulations 2011;
(e) MAS (Freezing of Assets of Persons – South Sudan) Regulations 2015;
(f) MAS (Freezing of Assets of Persons – Yemen) Regulations 2015;
(g) MAS (Sanctions and Freezing of Assets of Persons – Democratic People’s Republic
of Korea) Regulations 2016; and
(h) MAS (Sanctions and Freezing of Assets of Persons – Iran) Regulations 2016.
While specific provisions may differ, broadly speaking, these above regulations
generally:
(i) prohibit financial institutions from entering into transactions with or relating to a
sanctioned person;
(ii) prohibit financial institutions from entering into transactions that have a specific
purpose which is being targeted by the sanctions rule; or
(iii) require financial institutions to freeze assets that may be in their possession or
control, where the assets belong to or are controlled by a sanctioned person or where
the assets are for the specific purpose that the sanctions rule is targeting, and to
notify the authorities accordingly.
The failure to comply with any MAS sanctions regulation is an offence under Section
27A(5) of the MAS Act, for which the financial institution will be liable on conviction to a fine
of up to S$1 million.
– 277 –
REGULATIONS
Employees
The Employment Act 1968 of Singapore (2020 Revised Edition) (the “EA”) is regulated
by the Ministry of Manpower (the “MOM”) and sets out the basic terms and conditions of
employment and the rights and responsibilities of employers as well as employees who are
covered under the EA.
In particular, Section 35 of the Employment Act provides that Part 4 of the EA, which sets
out requirements for rest days, hours of work and other conditions of service, apply in respect
of workmen who receive monthly basic salaries not exceeding S$4,500 and employees (other
than workmen) who receive monthly basic salaries not exceeding S$2,600.
Section 38(8) of the EA provides that an employee is not allowed to work for more than
12 hours in any one day except in specified circumstances, such as where the work is essential
to the life of the community, defence or security. In addition, Section 38(5) of the EA limits
the extent of overtime work that an employee can perform to 72 hours a month. An employer
who breaches the above provisions shall be guilty of an offence and shall be liable on
conviction to a fine not exceeding S$5,000, and for a second or subsequent offence to a fine
not exceeding S$10,000 or to imprisonment for a term not exceeding 12 months or to both,
pursuant to Section 53 of the EA.
Employment of Foreign Manpower Act
The employment of foreign workers in Singapore is governed by the Employment of

Foreign Manpower Act 1990 (2020 Revised Edition) (the “EFMA”) and is regulated by the
MOM.
In Singapore, under Section 5(1) of the EFMA, no person shall employ a foreign
employee unless he has obtained a valid work pass which allows the foreign worker to work
for him. Section 5(6) of the EFMA provides that any person who fails to comply with or
contravenes Section 5(1) of the EFMA shall be guilty of an offence and shall (a) be liable on
conviction to a fine not less than S$5,000 and not more than S$30,000 or to imprisonment for
a term not exceeding 12 months or to both; and (b) on a second or subsequent conviction, (i)
in the case of an individual, be punished with a fine of not less than S$10,000 and not more
than S$30,000 and with imprisonment for a term of not less than one month and not more than
12 months; or (ii) in any other case, be punished with a fine not less than S$20,000 and not
more than S$60,000.
An employer of foreign workers is also subject to, amongst others, the provisions set out
in the EA, the EFMA, the Immigration Act 1959 of Singapore (2020 Revised Edition) (the
“Immigration Act”) and the regulations issued pursuant to the Immigration Act.
– 278 –
REGULATIONS
Central Provident Fund Act
The Central Provident Fund (the “CPF”) system is a mandatory social security savings
scheme funded by contributions from employers and employees. Pursuant to the Central
Provident Fund Act 1953 of Singapore (2020 Revised Edition) (the “CPFA”), an employer is
obliged to make CPF contributions for all employees who are citizens or permanent residents
of Singapore who are employed in Singapore under a contract of service and employed under
a permanent, part-time or casual basis (with the exception of a contract of service or other
agreement entered into in Singapore as a master, a seaman or an apprentice in any vessel where
the owners have been exempted from the provisions of the CPFA).
CPF contributions are required for both ordinary wages and additional wages (subject to
the respective CPF contribution ceilings) of employees at the applicable prescribed rates which
are dependent on, inter alia, the amount of monthly wages and the age of the employee.
Ordinary wages are wages due wholly or exclusively for an employee’s employment in a month
and are payable before the due date of CPF contributions for that month, whereas additional
wages are wages which are not granted wholly and exclusively for the employment in a month,
such as annual bonus and leave pay.
Under Section 7 of the CPFA, an employer shall pay both the employer’s and employee’s
shares of the monthly CPF contribution. However, pursuant to Section 7(2) of the CPFA, an
employer is entitled to recover its employee’s share of the CPF contribution by deducting such
a share from the wages of the employee. An employer who fails to pay the CPF contributions
in accordance with the CPFA shall be guilty of an offence and may be liable on conviction to
a fine not exceeding S$10,000 or to imprisonment for a term not exceeding 7 years or to both,
pursuant to Section 7(3) of the CPFA.
Personal Data Protection Act
The Personal Data Protection Act 2012 (2020 Revised Edition) (the “PDPA”) is the main
legislation governing the protection and handling (collection, storage, use or onward
disclosure) of personal data in Singapore. The PDPA also established the Personal Data
Protection Commission (“PDPC”) to administer and enforce the PDPA.
Under Section 2 of the PDPA, “personal data” means any data, whether true or not, about
an individual who can be identified from that data, or from that data and some other
information to which an organization has or is likely to have access.
– 279 –
REGULATIONS
Under the PDPA, an organisation will have to comply with the following general
obligations when dealing with personal data:
(a) obtain the consent of the individual before collecting, using or disclosing his
personal data for a purpose. Consent is not considered given unless the purpose of
collection, use or disclosure is notified to the individual and his consent is obtained
in relation to such notified purpose;
(b) collect, use or disclose personal data about an individual only for purposes that a
reasonable person would consider appropriate and, if applicable, have been notified
to the individual concerned;
(c) notify the individual of the purposes for which an individual’s personal data is
intended to be collected, used or disclosed on or before such collection, use or
disclosure;
(d) give an individual reasonable access to his or her own personal data which the
organization has in its possession or control (including informing the individual of
the ways in which his personal data has been used or disclosed over the past year);
(e) correct errors and omissions in the personal data of an individual if the individual
so requests;
(f) make reasonable effort to ensure that personal data collected by it is accurate and
complete;
(g) take reasonable security measures to protect the personal data from unauthorised
access, collection, use, disclosure, tampering or disposal, and the loss of any storage
medium or device on which the personal data is stored;
(h) not retain personal data or to remove the means by which personal data can be
associated with particular individuals, as soon as it is reasonable to assume that the
original purpose of the collection is no longer served by retention and that retention
is also no longer needed for legal or business purposes;
(i) ensure that when personal data is transferred out of Singapore to another country, a
standard of protection comparable to that under Singapore law is given to the
transferred personal data;
(j) notify the PDPC of a data breach that results in or is likely to result in significant
harm to an affected individual or that is or is likely to be of a significant scale; and
(k) implement policies and procedures to comply with the PDPA and to make
information about such policies and procedures publicly available.
– 280 –
REGULATIONS
If an organisation intentionally or negligently fails to comply with its obligations under

the PDPA, it will be liable under Sections 48J(1)(a) and 48J(3) of the PDPA to pay a financial
penalty of up to S$1 million. In all instances of non-compliance, the PDPC has the power under
Section 48I(2) of the PDPA to direct organisations to stop collecting, using or disclosing
personal data in contravention of the PDPA, to destroy personal data collected in contravention
of the PDPA, or to comply with any direction of the PDPC to provide access to or to correct
personal data.
Failure to comply with requirements of the PDPA may also separately attract civil
liability. A person who suffers loss or damage directly as a result of a breach by an organisation
of various provisions of the PDPA is able to bring an action against the organisation in a civil
court for compensation.
In addition to the obligations above, the PDPA also established a Do-Not-Call Registry
(“DNC Registry”) under Part 9 of the PDPA, which allows individuals to register their
Singapore telephone numbers to opt out of receiving marketing phone calls, mobile text
messages and faxes from organisations. Under Section 43 of the PDPA, no person shall send
a “specified message” addressed to a Singapore telephone number unless it has been confirmed
that the number is not listed on the relevant DNC Registry. A “specified message” is one that,
among others, purports to offer to supply or advertise or promote goods and services.
Any person who fails to confirm that a Singapore telephone number is not listed in the
DNC Registry, prior to sending a specified message to that number, will be liable to a fine of
up to S$10,000 or imprisonment for a term of up to 3 years or to both.
Laws and Regulations Relating to Companies in Singapore
Our Singapore subsidiary, Moomoo Financial Singapore, is incorporated and governed

under the provisions of the Companies Act 1967 of Singapore (2020 Revised Edition) (the
“Companies Act”). The Companies Act generally governs, amongst others, matters relating to
the status, power and capacity of a company, shares and share capital of a company (which
includes issue of new shares (including preference shares), treasury shares, share buybacks,
redemption, share capital reduction), declaration of dividends, financial assistance, directors
and officers and shareholders of a company (including meetings and proceedings of directors
and shareholders, dealings between such persons and the company), protection of minority
shareholders’ rights, accounts, arrangements, reconstructions and amalgamations, winding up
and dissolution. Members of a company are also subject to, and are bound by the provisions
in its constitution.
In addition, members of a company are subject to, and bound by, the provisions of the
constitution of the company. The constitution of a company contains, inter alia, provisions
relating to some of the matters in the foregoing paragraph, transfers of shares as well as sets
out the rights and privileges attached to the different classes of shares of the company (if
applicable).
– 281 –
REGULATIONS
Dividend Distributions
Our operations in Singapore are conducted via our Singapore subsidiary, Moomoo
Financial Singapore, which has limited revenue contribution during the Track Record Period.
Pursuant to Section 403 of the Companies Act, dividends are only payable out of profits.
Typically, the directors will recommend a particular rate of dividend and the company in
general meeting will declare the dividend subject to the maximum recommended by the
directors.
Singapore adopts a one-tier corporate tax system under which the tax collected from
corporate profits is a final tax and the after-tax profits of a company resident in Singapore can
be distributed to its shareholders as tax-exempt dividends. Such dividends are tax-exempt in
the hands of the shareholders, irrespective of whether the shareholder is a company or an
individual and whether or not the shareholder is a Singapore tax resident. Singapore does not
currently impose withholding tax on dividends paid to resident or non-resident shareholders.
Singapore Taxation
The following summary of the laws and regulations relating to taxation in Singapore is
based on laws, regulations and interpretations presently in effect. The laws, regulations and
interpretations, however, may change at any time, and any change could be retroactive. These
laws and regulations are also subject to various interpretations and the relevant tax authorities
or the courts of Singapore may later disagree with the explanations or conclusions set out
below. This summary is not intended to constitute a complete or exhaustive description of all
of the Singapore tax considerations and do not purport to deal with the tax consequences
applicable to all categories of investors of the notes. It is not intended to be and does not
constitute legal or tax advice.
Corporate Income Tax
The prevailing corporate tax rate in Singapore is 17% with effect from Year of Assessment
2010. In addition, the partial tax exemption scheme for Year of Assessment 2019 and before
applies on the first S$300,000 of normal chargeable income; specifically 75% of up to the first
S$10,000 of a company’s normal chargeable income, and 50% of up to the next S$290,000 is
exempt from corporate tax. Starting from Year of Assessment 2020, the partial tax exemption
scheme applies on the first S$200,000 of a company’s normal chargeable income; specifically
75% of up to the first S$10,000 of a company’s normal chargeable income, and 50% of up to
the next S$190,000 is exempt from corporate tax. The remaining chargeable income (after the
partial tax exemption) will be taxed at 17%. For the Years of Assessment 2019 and 2020,
companies will be granted a corporate income tax rebate of 20% and 25% respectively of the
tax payable for the year of assessment, subject to a cap of S$10,000 and S$15,000 respectively
per year of assessment.
– 282 –
REGULATIONS
Singapore has a tax exemption scheme for new start-up companies to support
entrepreneurship and help the growth of local enterprises. Where any of the first three (3) years
of assessment falls in or after Year of Assessment 2020, there will be 75% exemption on the
first S$100,000 of normal chargeable income, and a further 50% exemption on the next
S$100,000 of normal chargeable income.
Moomoo Financial Singapore is subject to Singapore corporate income tax at a rate of

17%.
Goods and Services Tax (“GST”)
GST in Singapore is a consumption tax that is levied on import of goods into Singapore,
as well as nearly all supplies of goods and services in Singapore at a prevailing rate of 7%.
– 283 –
HISTORY AND CORPORATE STRUCTURE
OVERVIEW
Our Group is a leading one-stop financial technology platform transforming the investing
distribution services in Hong Kong. We commenced our operations in December 2007 through
Shenzhen Futu to provide internet technology and software development services. Since then,
Mr. Li (our founder, chairman of the Board, executive Director and chief executive officer) has
devoted his strong technology background and vision in financial technology industry and
placed great emphasis on R&D and innovations in developing the Group’s business. Futu
International Hong Kong was incorporated in April 2012, obtained a Type 1 License for dealing
in securities from the SFC, and successfully launched our proprietary Hong Kong securities
trading system and commenced the operation of our online securities brokerage business in
Hong Kong in October 2012. We have been led by our founder, Mr. Li, who has over 20 years
of experience and expertise in the technology and internet sectors in China. Please see the
section headed “Directors and Senior Management” for further details of the work experiences
of Mr. Li.
In April 2014, our Company was incorporated under the laws of the Cayman Islands as
our holding company. Our Company conducts its businesses through our subsidiaries and
Consolidated Affiliated Entities controlled by us through the Contractual Arrangements. A
securities brokerage service provider at inception, our Group is now an all-round online
financial services platform, integrating trading, wealth management product distribution,
market data and information, user community, investor education, and corporate services. As
of the Latest Practicable Date, our Group held 51 licenses, registrations and memberships
across Hong Kong, Singapore, the U.S., Australia and Europe, serving approximately 19.2
million users.
In March 2019, we listed the ADSs on the Nasdaq under the symbol “FHL” and currently
traded under the symbol of “FUTU”.
BUSINESS MILESTONES
The following is a summary of our key business development milestones:
Date Event
December 2007 ььььььььььььь Our Group commenced its operations to provide

internet technology and software development
services.
October 2012 ьььььььььььььь We obtained a Type 1 License for dealing in

securities from the SFC, launched our proprietary
Hong Kong securities trading system and commenced
the operation of our online securities brokerage
business in Hong Kong.
January 2018 ьььььььььььььь We became registered in the U.S. as a broker-dealer.
– 284 –
Date Event
July 2018 ььььььььььььььььь We started to provide completely online-based

account opening services as the first securities broker
in Hong Kong.
March 2019 ььььььььььььььь Our Company became listed on Nasdaq.
August 2019 ььььььььььььььь We launched our wealth management product

distribution services business on our platform.
March 2021 ььььььььььььььь We launched moomoo in Singapore.
March 2022 ььььььььььььььь We launched moomoo in Australia.
OUR MAJOR SUBSIDIARIES AND CONSOLIDATED AFFILIATED ENTITIES
The principal business activities and dates and places of establishment of the major
subsidiaries and Consolidated Affiliated Entities of our Group that made a material
contribution to our results of operation during the Track Record Period are shown below:
Date of Place of
Principal business establishment establishment/
Name activities of business incorporation
Futu International Hong Kong ь Financial services April 2012 Hong Kong
Futu Securities (Hong Kong) Investment holding May 2014 Hong Kong
Limited ь ь ь ь ь ь ь ь ь ь ь ь ь ь
Futu Network Technology Research and development August 2015 Hong Kong
Limited ь ь ь ь ь ь ь ь ь ь ь ь ь ь and technology services
Futu Network Technology Research and development October 2015 PRC
(Shenzhen) Co., Ltd.ь ь ь ь ь ь and technology services
Shensi Beijing ь ь ь ь ь ь ь ь ь ь ь No substantial business September 2014 PRC
Moomoo Financial Inc. ь ь ь ь ь Financial services December 2015 U.S.
Futu Clearing Inc. ь ь ь ь ь ь ь ь ь Financial services August 2018 U.S.
Moomoo Financial Singapore ь Financial services December 2019 Singapore
Shenzhen Futu ь ь ь ь ь ь ь ь ь ь ь Research and development December 2007 PRC
and technology services
Futu Australia ь ь ь ь ь ь ь ь ь ь ь Financial services February 2001(1) Australia
Note:
1. Futu Australia was acquired by the Company in November 2021.
For further details, please see note 1 to the Accountant’s Report in Appendix IA to this
document.
– 285 –
CORPORATE DEVELOPMENT AND LISTING ON THE NASDAQ
In April 2014, our Company was incorporated under the laws of the Cayman Islands as
our holding company. A securities brokerage service provider at inception, our Group is now
an all-round online financial services platform, integrating trading, wealth management
product distribution, market data and information, user community, investor education, and
corporate services.
In 2016 and 2017, we had net losses of HK$98.5 million and HK$8.1 million,
respectively. As a result, we recorded an accumulated deficit of HK$148.9 million as of
December 31, 2018, which resulted in a net liabilities position of approximately HK$1,100.3
million as of the same date. We have become profitable since 2018, and witnessed an increase
in the trading volume on our platform.
On March 8, 2019, the ADSs representing our Class A Ordinary Shares commenced
trading on Nasdaq under the symbol “FHL” (currently traded under the symbol “FUTU”). Our
Company issued and sold an aggregate of 8,625,000 ADSs (including 1,125,000 ADSs sold
upon the full exercise of the underwriters’ over-allotment option), representing 69,000,000
Class A Ordinary Shares at a public offering price of US$12.0 per ADS. Concurrently with the
completion of our initial public offering, we issued and sold 46,666,666 Class A Ordinary
Shares to General Atlantic Singapore FT Pte. Ltd., a non-U.S. and non-affiliated entity at the
same price per Share. The net proceeds received by our Company from the initial public
offering on Nasdaq and such concurrent private placement (after deducting commissions and
offering expenses) were approximately US$161.7 million (or approximately HK$1,259.3
million).
On August 22, 2020, we completed our follow-on offering on Nasdaq where we issued
and sold a total of 76,000,000 Class A Ordinary Shares represented by ADSs at a public
offering price of US$33.0 per ADS, raising net proceeds of approximately US$301.8 million
(or approximately HK$2,339.7 million), after deducting commissions and offering expenses, to
our Company.
On April 24, 2021, we completed another follow-on offering on Nasdaq where we issued
and sold a total of 87,400,000 Class A Ordinary Shares represented by ADSs at a public
offering price of US$130.0 per ADS, raising net proceeds of approximately US$1,397.5 million
(or approximately HK$10,856.5 million), after deducting commissions and offering expenses,
to our Company.
Our Directors confirm that since the date of our listing on the Nasdaq and up to the Latest
Practicable Date, we had no instances of non-compliance with the rules of the Nasdaq in any
material respects and to the best knowledge of our Directors having made all reasonable
enquiries, there is no matter that should be brought to investors’ attention in relation to our
compliance record on the Nasdaq.
– 286 –
REASONS FOR THE LISTING
Our Board is of the view that the Listing will present us with an opportunity to broaden
our access to capital markets to grow our customer base, enhance our ecosystem, and continue
to invest in our platform and expand our presence in various markets as disclosed in the
sections headed “Business — Growth Strategies” in this document. As our Group had a long
history commencing our online brokerage business in Hong Kong, it has additional strategic
value to us to be listed in Hong Kong.
MAJOR SHAREHOLDING CHANGES OF OUR COMPANY
Our Company was incorporated in the Cayman Islands on April 15, 2014 to serve as the
holding company of our Group. Upon incorporation, our Company had an authorized share
capital of US$50,000.00 divided into 10,000,000 shares of a par value of US$0.005 each. The
major shareholding changes of our Company were as set out below:
Upon our incorporation, we issued one ordinary share to Nominees Services Ltd., which
subsequently transferred such ordinary share to Mr. Li, our founder, chairman of the Board,
executive Director and chief executive officer, for a consideration of US$0.005. On the same
date, we further issued 807,499 ordinary shares to Mr. Li for an aggregate consideration of
US$4,037.495.
On October 31, 2014, we issued 178,571 Series A preferred shares to Qiantang River
Investment Limited for an aggregate consideration of US$5.0 million, 71,429 Series A
preferred shares to Matrix Partners China III Hong Kong Limited for an aggregate
consideration of US$2.0 million and 46,875 Series A-1 preferred shares to Sequoia Capital CV
IV Holdco, Ltd. for an aggregate consideration of US$1.5 million.
On May 27, 2015, we issued 160,715 Series B preferred shares to Qiantang River
Investment Limited for an aggregate consideration of approximately US$27.3 million, 9,740
Series B preferred shares to Matrix Partners China III Hong Kong Limited for an aggregate
consideration of approximately US$1.7 million and 6,392 Series B preferred shares to Sequoia
Capital CV IV Holdco, Ltd. for an aggregate consideration of approximately US$1.1 million.
On September 22, 2016, we effected a one-to-500 share split whereby (A) all of our
807,500 ordinary shares of par value US$0.005 each issued and outstanding at the time, were
converted into 403,750,000 ordinary shares of par value US$0.00001 each; (B) all of our
250,000 Series A preferred shares of par value US$0.005 each issued and outstanding at the
time were converted into 125,000,000 Series A preferred shares of par value US$0.00001 each;
(C) all of our 46,875 Series A-1 preferred shares of par value US$0.005 each issued and
outstanding at the time were converted into 23,437,500 Series A-1 preferred shares of par value
US$0.00001 each; and (D) all of our 176,847 Series B preferred shares of par value US$0.005
each issued and outstanding at the time were converted into 88,423,500 Series B preferred
shares of par value US$0.00001 each. As a result of the share split, the number of our total
authorized shares was increased from 10,000,000 to 5,000,000,000 on September 22, 2016,
among which the number of our authorized ordinary shares was increased from 9,526,278 to
– 287 –
4,763,139,000, the number of our authorized Series A preferred shares was increased from
250,000 to 125,000,000, the number of our authorized Series A-1 preferred shares was
increased from 46,875 to 23,437,500 and the number of our authorized Series B preferred
shares was increased from 176,847 to 88,423,500. The share split has been retroactively
reflected for all periods presented herein.
On May 22, 2017, we issued 128,844,812 Series C preferred shares to Image Frame
Investment (HK) Limited for an aggregate consideration of US$91.4 million, 7,381,311 Series
C-1 preferred shares to Matrix Partners China III Hong Kong Limited for an aggregate
consideration of US$7.6 million and 4,843,971 Series C-1 preferred shares to SCC Venture VI
Holdco, Ltd. for an aggregate consideration of US$5.0 million.
On November 24, 2017, Image Frame Investment (HK) Limited transferred 28,205,205
Series C preferred shares to TPP Follow-on I Holding A Limited for an aggregate consideration
of US$20.0 million and 29,615,465 Series C preferred shares to TPP Opportunity I Holding A
Limited for an aggregate consideration of US$21.0 million.
On March 8, 2019, we issued a total of 115,666,666 Class A Ordinary Shares pursuant to

our initial public offering on the Nasdaq and the concurrent private placement. On August 22,
2020, we issued and sold a total of 76,000,000 Class A Ordinary Shares represented by ADSs
at a public offering price of US$33.00 per ADS. On April 24, 2021, we issued and sold a total
of 87,400,000 Class A Ordinary Shares represented by ADSs at a public offering price of
US$130.00 per ADS. Further details of our initial public offering on Nasdaq and the follow-on
offerings are set out in the section headed “— Listing on the Nasdaq.”
In December 2020, we raised US$262.5 million in net proceeds from the private
placement of 53,600,000 Class A Ordinary Shares in the form of Pre-Funded Warrants to a
leading global investment firm at a price of US$4.89751 less a nominal exercise price of
US$0.00001 per pre-funded warrant. Such Pre-Funded Warrants were immediately exercisable
and had a termination date in June 2022. On June 11, 2021, the Pre-Funded Warrants were
exercised in full and 53,599,890 Class A Ordinary Shares have been issued upon full exercise
of such Pre-Funded Warrants.
Please also see the paragraphs headed “Appendix IV — Statutory and General
Information — A. Further Information about our Group — 2. Changes in share capital of our
Company” and “Appendix IV — Statutory and General Information — A. Further Information
about our Group — 3. Changes in the share capital of our major subsidiaries and Consolidated
Affiliated Entities” for further details.
Our Group adopted a WVR structure, consisting of Class A Ordinary Shares and Class B
Ordinary Shares, which became effective immediately prior to the completion of our
Company’s initial public offering on the Nasdaq. Immediately prior to the completion of our
initial public offering on the Nasdaq, (i) all of the then issued and outstanding preferred shares
were converted and re-designated into ordinary shares on a one-to-one basis; (ii) all of the
ordinary shares ultimately held by the Company’s founder, chairman of the Board, executive
– 288 –
Director, and chief executive officer, Mr. Li, and 140,802,051 ordinary shares (including such
ordinary shares converted from the re-designation of preferred shares) held by Qiantang River
Investment Limited were re-designated into Class B Ordinary Shares on a one-to-one basis; and
(iii) all of the remaining ordinary shares (including ordinary shares resulting from the
conversion and re-designation of preferred shares) were re-designated into Class A Ordinary
Shares on a one-to-one basis. In respect of matters requiring the votes of shareholders, holders
of Class A Ordinary Shares were entitled to one vote per share, while holders of Class B
Ordinary Shares were entitled to 20 votes per share upon the completion of the initial public
offering on the Nasdaq.
Tencent Group has been our principal shareholder since October 2014. Our Group works
with Tencent Group across a number of cooperation areas in a mutually beneficial relationship,
and such collaboration is in part driven by our shared values of technological excellence and
innovation. For further details of the transactions between our Group and Tencent Group upon
Listing, please refer to the section headed “Connected Transactions” in this document. As of
the Latest Practicable Date, Tencent Group, through Qiantang River Investment Limited,
beneficially owned an aggregate of 140,802,051 Class B Ordinary Shares. On October 25,
2021, the relevant Tencent Entity delivered a share conversion notice to the Company to
convert all of the 140,802,051 Class B Ordinary Shares held by it to Class A Ordinary Shares,
on a one-to-one basis, upon Listing. Each Class B Ordinary Share is convertible into one Class
A Ordinary Share at any time by the holder thereof. Upon the conversion of 140,802,051 Class
B Ordinary Shares held by such relevant Tencent Entity into Class A Ordinary Shares, the
Company will issue 140,802,051 Class A Ordinary Shares, representing approximately 16.10%
the total number of issued Class A Ordinary Shares upon completion of the Introduction and
conversion of Class B Ordinary Shares into Class A Ordinary Shares (assuming no further
Shares are issued under the Share Incentive Plans between the Latest Practicable Date and the
Listing Date).
On November 21, 2022, pursuant to our existing Articles of Association, Mr. Li, being the
WVR Beneficiary, delivered an irrevocable written consent to the Company to consent to the
modification of voting rights attached to each Class B Ordinary Share from 20 votes to ten
votes pursuant to Rule 8A.10 of the Listing Rules, effective upon the Listing. As advised by
our legal advisor as to Cayman Islands laws, such an irrevocable agreement from Mr. Li will
constitute his legal, valid and binding obligations enforceable in accordance with its terms, and
do not conflict with or result in a breach of any of the terms or provisions of the Company’s
existing Articles or any law, public rule or regulation applicable to the Company currently in
force in the Cayman Islands. The modification of voting rights attached to each Class B
Ordinary Shares from 20 votes to ten votes pursuant to Rule 8A.10 of the Listing Rules will
become legally valid and effective as a matter of Cayman Islands corporate law when our
existing Articles are amended in line with the Listing Rules requirements (including the
modification of the number of votes per Class B Ordinary Share from 20 votes to ten votes)
at the Company’s general meeting to be convened on or before June 30, 2023.
Please also see the section headed “Share Capital — Weighted Voting Rights Structure”
for further details.
– 289 –
OUR INVESTORS PRIOR TO THE NASDAQ LISTING
The Company has received meaningful third-party investment from investors over the
past years. In October 2014, Tencent Group participated in the equity fundraising of the
Company, and as of the Latest Practicable Date, based on the information available to the
Company, held approximately 22.2% of the total issued share capital of the Company and
approximately 35.0% of the voting power of the total issued and outstanding share capital of
the Company.
Tencent is a company incorporated in the Cayman Islands and listed on the Stock
Exchange (stock code: 700). Tencent Group is a leading provider of Internet value-added
services in China, including communications and social, digital content, advertising, fintech
and cloud services, and has closely collaborated with the Company over the years across areas
such as business services and technology infrastructure.
Tencent Group is expected to be a substantial shareholder of our Company following the

Listing. Tencent Group is a sophisticated investor of our Company and in accordance with
Guidance Letter HKEX-GL93-18, has undertaken to the Company that it will retain an
aggregate 50% of its investment at the time of the Listing for a period of six months following
the Listing.
MAJOR ACQUISITIONS, DISPOSALS AND MERGERS
We have not conducted any acquisitions, disposals or mergers since our inception that we
consider to be material to us.
PRC REGULATORY REQUIREMENTS
The Regulations on Mergers and Acquisitions of Domestic Enterprises by Foreign

Investors (《關於外國投資者併購境內企業的規定》), or the M&A Rules, jointly issued by
MOFCOM, the State-Owned Assets Supervision and Administration Commission of the State
Council of the PRC, the SAT, the CSRC, the SAIC (currently known as the SAMR) and the
SAFE on August 8, 2006, effective as of September 8, 2006 and amended on June 22, 2009
with immediate effect, require that a special purpose vehicle, formed for overseas listing
purposes and controlled directly or indirectly by PRC companies or individuals through
acquisitions of shares of or equity interests in PRC domestic companies, shall obtain the
approval of the CSRC prior to the listing and trading of such special purpose vehicle’s
securities on an overseas stock exchange.
– 290 –
Our PRC Legal Advisors are of the opinion that prior CSRC approval for the Listing is
not required because (i) the CSRC currently has not issued any definitive rule or interpretation
concerning whether listings like ours under this document are subject to the M&A Rules; (ii)
our wholly-owned PRC subsidiaries were not established through mergers or acquisitions of
domestic companies owned by PRC companies or individuals as defined under the M&A Rules
that are the beneficial owners of our Company; and (iii) that no provision in the M&A Rules
clearly classified contractual arrangements as a type of transaction subject to the M&A Rules.
However, our PRC Legal Advisors further advise that there is uncertainty as to how the M&A
Rules will be interpreted or implemented.
SAFE REGISTRATION IN THE PRC
Pursuant to the Notice on Relevant Issues Concerning Foreign Exchange Administration

for Domestic Residents to Engage in Overseas Investment, Financing and Round Trip
Investment via Special Purpose Vehicles (《國家外匯管理局關於境內居民通過特殊目的公司
境外投融資及返程投資外匯管理有關問題的通知》), or SAFE Circular 37, promulgated by
SAFE on July 4, 2014 with immediate effect which replaced the Circular of the SAFE on
Foreign Exchange Administration of Equity Financing and Round-Trip Investments by
Domestic Residents via Special Purpose Vehicles (《國家外匯管理局關於境內居民通過境外特
殊目的公司融資及返程投資外匯管理有關問題的通知》), or the SAFE Circular 75, (a) a PRC
resident must register with the local SAFE counterpart before he or she contributes assets or
equity interests in an overseas special purpose vehicle (the “Overseas SPV”) that is directly
established or indirectly controlled by the PRC resident for the purpose of conducting
investment or financing; and (b) following the initial registration, the PRC resident is also
required to register with the local SAFE counterpart for any major change in respect of the
Overseas SPV, including, among other things, a change of Overseas SPV’s PRC resident
shareholder(s), the name of the Overseas SPV, terms of operation, or any increase or reduction
of the Overseas SPV’s capital, share transfer or swap, and merger or division. Pursuant to
SAFE Circular 37, failure to comply with these registration procedures may result in penalties.
Pursuant to the Notice on Further Simplifying and Improving the Foreign Currency
Management Policy on Direct Investment (《國家外匯管理局關於進一步簡化和改進直接投資
外匯管理政策的通知》), or the SAFE Circular 13, promulgated by SAFE on February 13, 2015
and became effective on June 1, 2015, the power of foreign exchange registration was
delegated from the local SAFE counterpart to qualified local banks where the domestic entity
was incorporated.
As advised by our PRC Legal Advisors, Mr. Li has completed the registration under the
SAFE Circular 37.
– 291 –
OUR STRUCTURE
The following diagram illustrates the simplified corporate and shareholding structure of our Group immediately upon Listing (assuming there
is no change in the shareholding of the public Shareholders from the Latest Practicable Date to immediately prior to the Introduction, without taking
into account the Class A Ordinary Shares issued to our depositary bank for bulk issuance of ADS and reserved for future issuance under the Share
Incentive Plans, and assuming no further Shares are issued under the Share Incentive Plans between the Latest Practicable Date and the Listing Date):
Other ADS holders and

Mr. Li(1) Other Directors(2) Tencent Entities(3) investors(4)
36.3% 0.4% 22.2% 41.1%
The Company
(Cayman Islands)
100% 100% 100% 100% 100% 100% 100%
Futu
International Futu Securities Futu Financial Futu Network Futu VB
Futu Lending Futu US Inc.
Hong Kong (Hong Kong) Limited Technology Holdings
Limited (U.S.)
(Hong Kong) Limited (Hong Kong) Limited Limited
(Hong Kong)
(Hong Kong) (Hong Kong) (Hong Kong)
20% 20% 20% 20% 20%
100% 100% 100% 100% 100% 100% 100%

100% 100% 100% 100% 100% 100%
Futu Trustee
Futu Futu Limited
FORTUNE Futu
– 292 –
Futu Insurance (Hong Futu VB Moomoo Moomoo
Moomoo GATEWAY Nominee Corporate Futu Futu Futures Futu Wealth Moomoo
Holdings Brokers Kong) Limited Financial Technologies
Financial NZ Service Service Clearing Inc. Inc. Advisors,Inc. Crypto Inc.
(Singapore) (Hong Kong) (Hong Inc. Inc.
Singapore LIMITED Limited Limited (U.S.) (U.S.) (U.S.) (U.S.)
Pte. Ltd. Limited Kong) (U.S.) (U.S.)
(Singapore) (New (Hong (Hong
(Singapore) (Hong
Zealand) Kong) Kong)
Kong)
100% 100%
Futu Trustee
Futu
(Singapore)
Australia
Pte. Ltd.
(Australia)
(Singapore)
Offshore
Onshore
100% 100% 100% 100% 100% 100% 100%
Futu Information Futu Business Information

Shenzhen Futu Shensi Beijing Futu Network Technology
Shenzhen Qianhai Technology (Hainan) Co., Consulting (Hainan) Co.,
Shanghai Futu (PRC) (PRC) (Shenzhen) Co., Ltd.
Fuzhitu Investment Ltd. Ltd.
Enterprise (PRC)
Shenzhen Shidai Futu (PRC) (PRC)

Consulting
Consulting Co., Ltd. Development
Management
(PRC) Co., Ltd.
Co., Ltd.
(PRC) (PRC)
100%
Beijing Futu Hainan Futu

(PRC) (PRC) Equity interest
Contractual arrangements
100% 100%
Hainan Caixuetang Beijing Shensi Consulting

(PRC) (PRC)
Notes:
(1) Representing 100,000,000 Class A Shares (of which 50,000,000 Class A Ordinary Shares are represented by 6,250,000 ADSs held of record) by Lera Ultimate Limited,
202,812,500 Class B Ordinary Shares held by Lera Ultimate Limited, 36,937,500 Class B Ordinary Shares held by Lera Infinity Limited, 64,000,000 Class A Ordinary Shares
held by Lera Infinity Limited and 86,568 Class A Ordinary Shares represented by 10,821 ADSs held of record by Mr. Li. Lera Ultimate Limited is a BVI business company
ultimately owned by Lera Direction Plus Trust and Lera Infinity Limited is a BVI business company ultimately owned by Lera Target Trust. Lera Direction Plus Trust and Lera
Target Trust were established by Mr. Li (as the settlor) for the benefit of Mr. Li and his family. Mr. Li has the sole power to direct the retention or disposal of, and the exercise
of any voting and other rights attached to the shares held by Lera Ultimate Limited and Lera Infinity Limited in our Company. Mr. Li is deemed to be interested in the Shares
held by Lera Ultimate Limited and Lera Infinity Limited.
(2) Representing:
(a) 1,442,720 Class A Ordinary Shares held by Mr. Shan Lu;
(b) 3,336,000 Class A Ordinary Shares held by Mr. Nineway Jie Zhang; and
(c) 760 Class A Ordinary Shares held by Mr. Yijiang Wang.
(3) Representing (a) 169,643,000 Class A Ordinary Shares directly held by Qiantang River Investment Limited; (b) 71,024,142 Class A Ordinary Shares held by Image Frame
Investment (HK) Limited; (c) 1,161,840 Class A Ordinary Shares represented by 145,230 ADSs held of record by TPP Opportunity GP I, Ltd.; (d) 5,412,888 Class A Ordinary
Shares represented by 676,611 ADSs held of record by Tencent Mobility Limited; and (e) 176,792 Class A Ordinary Shares represented by 22,099 ADSs held of record by
– 293 –
Distribution Pool Limited.
(4) Representing Shareholders who, to the best knowledge of the Directors, hold less than 5% of our issued share capital and are independent third parties.
BUSINESS
OVERVIEW
We are a leading one-stop financial technology platform transforming the investing

distribution services in Hong Kong. We launched our business on the premise that no one
should be precluded from investing on the basis of prohibitive transaction costs or market
inexperience. Technology permeates every part of our business, allowing us to offer a redefined
user experience built upon a secure, stable, agile and scalable online platform. Today, we have
become a market leader in Hong Kong in the retail securities brokerage industry and a go-to
brand for retail securities trading. According to CIC, we are the largest securities broker in
terms of retail securities trading volume on the Hong Kong Stock Exchange, with a market
share of 10.7% as of December 31, 2021.

financial services platform, seamlessly integrating services and products including trading,
wealth management product distribution, market data and information, user community,
investor education, and corporate services with a focus on the online securities brokerage
market. As an intuitive and easy-to-navigate platform, we are serving approximately 19.2
million users. We provide a comprehensive range of investment products, including equities
and derivatives across major global exchanges, margin financing and securities lending, as well
as fund and bond investments, leveraging our 51 licenses, registrations and memberships
across Hong Kong, Singapore, the U.S., Australia and Europe as of the Latest Practicable Date.
Our vibrant user community further engages our users and provides them with direct access to
listed companies, fund houses, exchanges, media and research institutions that have accounts
in our user community through communication with their representatives. In addition, our
platform equips our users with necessary investment knowledge for them to make informed
investment decisions.
Our platform has attracted and gathered a vast base of young and high-quality users and
clients, evidenced by the average paying client age of 37 and average paying client assets of
over HK$310,000 on our platform as of June 30, 2022, the latter being the highest average
retail client asset level among online securities brokers in Hong Kong, according to CIC. The
emerging affluent and tech-savvy population we primarily serve allows us to pursue the
massive opportunity in the digitalization of the securities brokerage and wealth management
industry. We grow our client base mainly through word-of-mouth referrals, corporate services,
as well as online and offline marketing and promotional activities. We benefit from the
significant organic traffic arising from our high brand awareness, contributing over half of our
new paying clients during the year 2021. As of June 30, 2022, we had over 18.6 million users,
3.0 million clients, and around 1.4 million paying clients.
– 294 –
BUSINESS
We have developed a proprietary and highly automated technology infrastructure

encompassing every aspect of our business operations, from account opening, fund transfer,
trading and investment to risk management. Our team is centered around research and
development — 63.5% of our employees engaged in research and development as of June 30,
2022. Our founder, chairman of the board and chief executive officer Mr. Leaf Hua Li, who has
over 20 years of experience and expertise in the technology and internet sectors in China, is
directly in charge of our technology committee, which is responsible for formulating
technology development strategies, optimizing the existing technology infrastructure and
implementing large-scale technology projects. Our technology infrastructure provides us with
crucial advantages:
• Integrated cross-market platform. We have developed an easy-to-use and highly

integrated cross-market system which allows our clients to view and execute trades
in different markets as a unified one from a single platform, with streamlined
functionality extending from core trading, real-time risk management to multi-
currency, multi-market settlement.
• Security and stability. Our platform features an automated multi-level protection

mechanism and strict security measures such as data encryption and a two-factor
authentication, to protect our clients’ personal information and trading data. We
invest significantly to ensure platform stability, and were able to achieve over 99.9%
service availability rate on our platform in 2020 and 2021, the highest among
securities brokers in Hong Kong, according to CIC.
• Agility and scalability. Our platform is built on a cloud-based distributed

infrastructure and highly modularized architecture, each component of which can be
separately upgraded and replaced, significantly reducing the launch cycle,
accelerating response time, and enhancing scalability. According to CIC,
• we were able to offer completely online-based account opening services within

ten days from SFC’s release of relevant guidance in July 2018, as the first
securities broker in Hong Kong;
• we provided 153 application upgrades and incorporated 5,689 new product

features for our users in 2021, the most in the Hong Kong retail securities
brokerage market; and
• we were capable of processing 1,004 Hong Kong listed securities trades per
second as of June 30, 2022, highest in the Hong Kong retail securities
brokerage market.
– 295 –
BUSINESS
• Big data and AI capabilities. We have established an intelligent risk control platform
built on our proprietary algorithms, which is capable of analyzing different types,
sources and stages of risks and providing margin ratio adjustment recommendations
and early risk warnings. Leveraging our big data analytic capabilities, we have
developed AI-based customer service function which can predict users’ questions
based on their past interactions with our application. We can also intelligently and
accurately identify the true semantics behind the text of our users’ questions through
our natural language processing capabilities.
As a result of our relentless focus on technology development and product innovation, we

have achieved significant growth since inception, and especially during the Track Record
Period 1:
Paying Clients Average DAUs and MAUs

(in thousands) Average DAU (in millions)
19-21 CAGR 150% 19 -21 CAGR 118%
1,387.1
1,244.2 MAU (in millions)
19-21 CAGR 90% 2.2 2.1
1.8
516.7 1.0 1.0

0.6 0.7
198.4
0.2

As of the end of the period For the month
Trading Volume and DARTs Total Client Assets

Trading Volume (HK$ in billions) (HK$ in billions)
19-21 CAGR 165% 19-21 CAGR 116%
DARTs (in thousands)
19-21 CAGR 146% 640.6 585.1
331.1 407.8 433.6
6,138.9
105.5 285.2
3,463.6 2,672.7
872.7 87.1
2019 2020 2021 1H22 Dec-19 Dec-20 Dec-21 Jun-22

For the twelve months (2019-21) For the six months (1H22) As of the end of the period
Margin Financing and Securities Lending Balance Wealth Management Total Assets
(HK$ in billions) (HK$ in billions)
19-21 CAGR 152% 19-21 CAGR 76%
30.3 28.9 21.9

18.8
19.5
10.2
6.1
4.8

As of the end of the period As of the end of the period
Note:
1 For each relevant period prior to January 1, 2021, figures are only inclusive of those under Futubull or Futu
International Hong Kong, as applicable. For each subsequent period since January 1, 2021, figures are also
inclusive of those under moomoo or Moomoo Financial Inc., Moomoo Financial Singapore and Futu Australia,
as applicable.
– 296 –
BUSINESS
MARKET OPPORTUNITY
Increasing retail investor participation and online penetration
Driven by growing disposable income of retail investors, continued enterprise fundraising

demands through capital markets, and technological innovations in securities brokerage
services, the global securities market (including stocks, bonds, ETFs, derivatives and other
securities) has continued to grow in terms of trading volume, from US$163.3 trillion in 2017
to US$269.6 trillion in 2021, and is projected to further grow to US$334.5 trillion in 2026. Two
trends have been driving trading volume growth: the increase in retail investor participation
and the increase in online penetration.
Global retail investor base continues to grow over the years, driven by improved financial
literacy and lower threshold of financial markets access. Specifically, digitalized and
user-friendly trading applications that charge low commissions have dramatically lowered the
investment barriers for retail investors. In addition, Hong Kong, the U.S., Singapore and
Australia securities markets provide a wide range of diversified investment products, thereby
attracting a large number of retail investors worldwide. The retail investors’ contribution to
global securities trading increased from 39.6% in 2017 to 47.4% in 2021, and is projected to
further increase to 48.8% in 2026. Securities investing is particularly popular in Hong Kong,
with 53.5% of the adult population owning a securities investment account in 2021, according
to CIC. Retail investors contribute meaningful trading volumes and have become a formidable
force in the global securities market.
Furthermore, the development of mobile internet prompts the migration of trading

activities from offline channels to online platforms. This trend has been further accelerated by
the COVID-19 pandemic. The global online securities trading penetration rate in terms of
trading volume increased from 40.4% in 2017 to 53.2% in 2021, and is projected to reach
62.2% in 2026. The U.S. and Hong Kong ranked as the first and fifth largest online securities
market in terms of trading volume in 2021, and both markets were among the fastest-growing
online retail securities markets in terms of trading volume from 2017 to 2021, with CAGRs of
32.9% and 18.2%.
These trends have reshaped the competitive landscape of the securities brokerage industry
and greatly driven the popularity of online securities brokers, most of which are purpose-built
to serve retail investors’ online trading needs.
– 297 –
BUSINESS
Growing demand for diversified investment products
With increasing wealth accumulation and growing understanding of financial markets,

retail investors ranging from the mass affluent to the ultra-high-net-worth demand more
diversified investment products, from stocks and ETFs to derivatives. Many retail investors
have become aware of investment opportunities outside of their home countries, especially in
the U.S. and Hong Kong markets.
Specifically, the offshore investment market for Chinese investors is growing rapidly,
driven by the expanding population of global Chinese communities, the increasing investable
assets per capita, and growing appetite for equities and fund products. Hong Kong, as a
competitive asset and wealth management center and a preferred place of fund domicile, has
enjoyed strong growth in its wealth management market, from US$1.2 trillion in 2017 to
US$1.7 trillion in 2021 at a CAGR of 10.2%. This market is projected to further grow to reach
US$2.8 trillion in 2026 at a CAGR of 9.6%, driven by a number of favorable factors including
the Greater Bay Area initiatives, mutual recognition of funds arrangement with the Mainland
China and European markets, and continuous development in local financial infrastructure.
This growing demand for diversified investment products leads to a redefined retail
investment landscape with increasing preference for “one-stop” platforms that deliver
comprehensive financial products and services in a digitalized and easily accessible way.
Social community driving user engagement
User community has become a critical differentiating factor for securities brokers given
its appeal to retail investors. Through exchanging market views and investment experience,
posting transaction stories and establishing relationships with other people who share the same
enthusiasm for investing, retail investors feel accompanied on their investment journey and
build a strong sense of belonging and accomplishment. Therefore, social community plays an
increasingly important role to uplift user experience and improve client retention.
Retail investors are growing increasingly active on online communities, driven by the
growth of younger and tech-savvy investor base globally. In Asia and North America, online
brokerage platforms with social communities gained increasing popularity, with leading
players realizing approximately 10% year-on-year increase in daily average time spent by
active users from 2019 to 2021, according to CIC. Retail investors tap into social networks to
share investment experience, acquire market data and information, and seek investment advice.
Online securities brokers with interactive social platforms usually enjoy high client conversion
and retention rates.
– 298 –
BUSINESS
COMPETITIVE STRENGTHS
Market leading brand
After ten years of rapid growth, we are now a market leader in Hong Kong in the retail
securities brokerage industry and a go-to brand for retail securities trading. As of December 31,
2021 and according to CIC:
• We were the largest securities broker in terms of retail securities trading volume on
the Hong Kong Stock Exchange;
• Futubull was repeatedly ranked the first in the finance category of Hong Kong iOS
and Android App Stores; and
• We were the first and only online securities broker classified by the Hong Kong
Stock Exchange as a Category A Exchange Participant (top 14 exchange participants
in terms of turnover).
Our great success in the Hong Kong market has laid a solid foundation in terms of
technology and industry knowhow for our international expansion. We launched moomoo, the
international version of Futubull, in the U.S., Singapore and Australia, and plan to extend our
reach to more international markets. moomoo has demonstrated broad popularity and robust
momentum since its debut in Singapore on March 8, 2021 — reaching the number one spot
under the finance category and free download category of Singapore’s iOS and Android App
Store within two months, respectively, and attracting over 220,000 users and 100,000 paying
clients within three months.
Creating a market-leading and trustworthy brand has brought us high growth. Our total
client asset balance increased from HK$87.1 billion as of December 31, 2019 to HK$433.6
billion as of June 30, 2022, up by about five-fold in two and a half years. Our revenue, gross
profit and net income grew from 2019 to 2021 at a CAGR of 158.9%, 175.3% and 311.9%,
respectively.
Premier user experience
We make investing easier by crafting a premier user experience through technology

capabilities, redefining industry best practices.
The relentless pursuit for offering best-in-class user experiences has been the core of our
culture, which stemmed from our founder Mr. Leaf Hua Li, who was Tencent’s 18th founding
employee, an early and significant research and development participant of Tencent QQ, the
founder of Tencent Video leading product design and development, and former head of
Tencent’s multi-media business and its innovation center. This culture is also permeated
throughout the company, manifested by how our employees approach product development.
– 299 –
BUSINESS
Our premier user experience is reflected in several important areas:
• Flexible Platform. We ensure an omni-terminal access to our platform from mobile

phones, tablets and computers, either through our purpose-built applications or
internet browsers. Across all channels, we deliver intuitive, easy-to-navigate,
efficient, and elegant user interfaces, creating a well-received platform without
technical terms or barriers for users to make informed investment decisions.
• Seamless Operational Process. Our operational processes are fully digitalized and
seamless. We provide a completely online account opening process and multiple
channels of fund transfers. By virtue of our technology edge, we are able to
complete new account opening online in three minutes and bank-to-brokerage fund
transfers in as fast as a few seconds, both at the highest level among Hong Kong
online securities brokers, according to CIC.
• Rich and Tailored Market Insights. We offer real-time market data, including unique
and valuable analytics, such as institutional trading volumes, trading order flows,
and free Hong Kong Level II stock quotes, to all Mainland China-based clients, the
first among online securities brokers in Hong Kong, according to CIC. Leveraging
our proprietary algorithms and deep-learning models, we automatically aggregate
information, produce stock analysis and provide personalized content. We also
provide advanced and intuitive tools to allow our users to customize the manner in
which they monitor the market.
• Continuous Product Upgrade and Innovation. We strive to prioritize clients’

potential demands in the ever-changing market environment by constantly
expanding our product offerings. In 2021, we provided 153 application upgrades and
incorporated 5,689 new product features for our users, the most in the Hong Kong
retail securities brokerage market, according to CIC. As a market pioneer, we are the
first online securities broker in Hong Kong to launch many new product features
according to CIC, including proprietary grey market trading services for Hong Kong
IPOs and the option for clients to automatically subscribe for and redeem money
market funds based on their cash positions.
• Direct Communication Channels. We have a proprietary and tailored customer

service system, directly connecting our users with our customer service specialists
and technology experts through online chat or hotline. Our users can also directly
interact with our official accounts, product managers and even our founder through
NiuNiu/Moo Community where they can provide product feedback and suggestions.
We highly treasure active client engagement and strive to respond promptly.
– 300 –
BUSINESS
Our relentless efforts on user experience enable us to cultivate customer loyalty and
minimize the attrition rate:
• During the six months ended June 30, 2022, our DAUs on average opened our
application 16.9 times and spent an aggregate of 26.6 minutes on our platform per
trading day;
• In June 2022, the ratio of our average DAU over MAU was as high as 47.7%,
indicating strong user activeness and stickiness on our platform;
• Among new paying clients joining in the six months ended June 30, 2022, within six
months after using our platform, 50.8% of them had two or more types of products
in their portfolio (product types including stocks, options, futures, warrants, funds,
bonds), and cumulative funds transferred to our platform on average increased by
186.2%;
• According to a survey conducted by CIC in August 2021 covering 1,000 users, 92%
of respondents are willing to recommend us to other people.
High-quality customer base
Offering best-in-class products and user experience, our platform has become the go-to
choice for retail investors and attracted a vast base of high-quality customers:
• Young. Whilst the number of our clients has grown over four-fold from 717,842 as
of December 31, 2019 to 3,021,790 as of June 30, 2022, the average paying client
age remains around 37 years old, which indicates our platform’s ability to
continuously attract many young people to become our clients over time;
• Potential to Generate Wealth. Many of our clients work in new economy industries
— over 25% of our clients worked in internet, information technology and financial
services sectors as of June 30, 2022. Our paying clients substantially increased
during the Track Record Period, from less than 200,000 as of December 31, 2019 to
approximately 1,400,000 as of June 30, 2022. Our clients had average paying client
assets of over HK$310,000 on our platform, as of June 30, 2022;
• Loyal. During the Track Record Period, on average we retained around 98% of our
paying client base on a quarterly basis, one of the highest retention rates among
online securities brokers in Hong Kong, according to CIC. Such high retention rates
drive revenue visibility and generate additional sources of income for us as clients
mature and adopt more financial services on our platform.
– 301 –
BUSINESS
From June 30, 2019 to June 30, 2022, our users, clients and paying clients grew at a
CAGR of 44.9%, 70.1% and 103.5%, respectively, demonstrating our ability to attract users
and convert them into clients. We expect our clients to continue their wealth accumulation,
grow their asset balance with us and seek more comprehensive investing services on our
platform, leading to significant customer lifetime value.
Flywheel effects of corporate and retail services
Our high-quality services offered to enterprises and individuals have resulted in flywheel
effects and enabled us to achieve efficient and effective customer acquisition.
Serving China’s new economy companies has been one of our key growth strategies.
Through launching a series of corporate services including IPO distribution, investor relations
and marketing, ESOP solution and trust services, we have become a long-term partner of new
economy companies, which in turn enhanced our brand recognition among retail investors:
• IPO distribution, Investor Relations and Marketing. With a large retail investor
base, we have become a preferred IPO distribution partner for China’s new economy
companies and a popular platform for them to conduct investor relations and
marketing activities. As of June 30, 2022, we had participated in ten Hong Kong
primary IPOs with WVR structure (usually an indicator of new economy company)
and generated over HK$10 billion of subscription amount each for 29 Hong Kong
IPOs. We also participated in 86.7% of the U.S. IPOs of China-based companies that
raised over USD500 million from August 2020 to June 2021. More than 1,000
companies had created their corporate accounts on our platform as of June 30, 2022,
to publish their earnings releases or carry out marketing campaigns regularly. Most
new economy companies come naturally with “traffic”, and therefore it is also a
publicity event for us every time we serve a new economy company for its IPO.
• ESOP Solutions. Our ESOP solution services have emerged as our signature
corporate service and proved pivotal for efficient client acquisition. Once an ESOP
account of a corporate is established, we can connect with beneficiary employees,
and are better positioned to serve their ongoing stock trading needs once their stock
awards are vested. Many of these employees are high-income individuals with
significant wealth accumulation potential. Our ESOP solution services have a
dominant market share among Chinese new economy companies. As of June 30,
2022, we had 519 ESOP solutions clients, covering the largest number of Chinese
new economy companies listed overseas since 2018, according to CIC. Through
providing ESOP solution services, we can secure IPO distribution mandates and
establish relationships with corporate executives to potentially provide wealth
management product distribution and trust services.
– 302 –
BUSINESS
The high-quality retail customer base we accumulated has also contributed to our
recognition among corporate clients. The majority of our users actively follow and understand
the value of new economy companies, and have both the willingness and financial resources
to purchase their stocks and products. They are exactly the target retail investors and customers
that new economy companies hope to attract.
Vibrant user community
We make investing not alone through fostering the NiuNiu/Moo Community, a vibrant
online community with social media tools for our users to interact, share, learn and grow. Our
user community transforms the traditionally monotonous investment experience and has
differentiated us among our peers.
Our NiuNiu/Moo Community has developed into an investment ecosystem with 18.6
million participants, including a large number of retail investors as well as various types of
enterprises. As of June 30, 2022, over 1,500 enterprises had accounts on our NiuNiu/Moo
Community, including over 1,000 public and private companies, 392 media institutions, as well
as 66 research institutions, fund houses, and exchanges. Our NiuNiu Community has become
the largest online social investing community and the second largest online forum in Hong
Kong in terms of average MAUs in Hong Kong in 2021, according to CIC.
For retail investors, the investing journey can be turbulent and lonely as they study
business fundamentals, analyze macroeconomic trends, make investment decisions, monitor
market performances, and review investing decisions, over and over again. Our NiuNiu/Moo
Community enables a much more enriching experience where our users can stay connected
with, share the moments of ups and downs with, and learn from, people who bear the same
enthusiasm for investment. Through years of cultivation and dedicated operation, we have built
up a unique community culture — curious, caring, supportive and inclusive — which will bring
long-term value to our future growth.
We have further demystified investing by directly connecting our users with many
companies, fund houses, exchanges, media and research institutions so that they can get
first-hand information from different channels to support investment decision-making. Users
can watch live broadcasts of corporate events and directly interact with executives from over
1,000 companies. According to CIC, our NiuNiu Community on Futubull was one of the first
investor communities that Tesla joined. Multiple global leading fund houses have livestreamed
on our platform to promote their mutual funds products and investment knowledge. At the same
time, users seeking to improve their investment capabilities can watch our pre-recorded
investment knowledge videos on our platforms. We also encourage more high-quality UGCs
through our systematic creator incentive program.
– 303 –
BUSINESS
The NiuNiu/Moo Community fulfills our users’ information and social needs. Futubull and
moomoo had around one million average DAUs in June 2022, and maintained a similar level
of daily activity on weekends. During the six months ended June 30, 2022, Futubull and
moomoo on average generated an aggregate of approximately 138,000 UGCs on each trading
day. Among our MAUs in June 2022, those who visited NiuNiu/Moo Community for ten or
more days on average spent as much as 30.4 minutes per day on our platform, as compared to
5.4 minutes by those who visited for less than ten days.
GROWTH STRATEGIES
As we envision ourselves to become an influential global financial services platform, we

will pursue the following strategies:
Grow our user and client base
We will continue to grow our user and client base, especially through word-of-mouth
referral and precision marketing. We plan to further leverage our market-leading brand and
powerful word-of-mouth referral network to drive organic growth in our user and client base.
We will also leverage our data analytics capabilities to launch more targeted marketing to
increase our customer service quality.
Enhance our ecosystem
We will further enhance our synergistic ecosystem, through constantly broadening our
product portfolio, adding new functions, and enriching the content in our NiuNiu/Moo
Community, to attract more users and expand wallet share. At the same time, we will continue
to invest in our enterprise business and grow our new economy corporate client base to
diversify revenue and efficiently acquire retail investors.
Invest in our platform
We will continue to invest in technology and talents to maintain our competitive

advantages and to facilitate the execution of our strategies. Our investment in technology
would focus on areas including risk control, system availability, product innovation, big data
and AI technologies. We will also continue to build our strong and experienced team of product
managers, developers, marketing and supporting staff.
Expand in various markets
We aim to expand our presence and improve our product offerings in various new markets
to capture global opportunities and nurture a global client base. We plan to selectively pursue
strategic partnerships, alliances, investments and acquisitions to facilitate growth in new
markets. We believe our products and services that seek for depth, perfection and connectivity
can provide highly differentiated value propositions to investors in other markets.
– 304 –
BUSINESS
OUR ACHIEVEMENTS
Since our inception, we have continued to expand our scope of services, achieving many
“firsts” along the way within the industry. Set out below are our key business milestones:
Date Key Business Milestones
October 2012 ьььььььь We obtained a Type 1 License for dealing in securities from the
SFC, launched our proprietary Hong Kong securities trading
system and commenced the operation of our online securities
brokerage business in Hong Kong.
January 2018 ьььььььь We became registered in the U.S. as a broker-dealer.
July 2018 ььььььььььь We started to provide completely online-based account opening

services as the first securities broker in Hong Kong.
March 2019 ььььььььь We became listed on Nasdaq.
May 2019 ььььььььььь We obtained a clearing license in the U.S.
August 2019 ььььььььь We launched our wealth management product distribution services
business on our platform.
February 2021ьььььььь We reached one million DAUs on our platform.
March 2021 ььььььььь We launched moomoo in Singapore and achieved 100,000 paying
March 2022 ььььььььь We launched our business in Australia after acquisition of

Australian subsidiary that holds Australian Financial Services
License (AFSL).
June 2022 ььььььььььь We became the first online broker to officially receive full SGX
memberships.
INNOVATIVE COMPANY
We are a pioneer in the online brokerage industry, with innovation as our core focus.
Through our one-stop financial technology platform, we have achieved many “firsts” within
the industry through our innovative business model. In July 2018, we were the first securities
broker in Hong Kong to offer completely online-based account opening services, according to
CIC, and since then, became the first online securities broker in Hong Kong to provide ESOP
solution services to corporate clients, integrated money market instruments with trading, grey
market trading services for Hong Kong IPOs and free Hong Kong Level II stock quotes for all
Mainland China-based clients. We have integrated our various business streams across market
data and information, user community and wealth management product distribution on one
platform, providing customers with seamless all-round financial service experiences. We have
– 305 –
BUSINESS
large user base in our user community, generating huge quantity of UGCs that facilitate user
communication and interaction. We have established an intelligent risk control platform built
on our proprietary algorithms, which is capable of analyzing different types, sources and stages
of risks and providing margin ratio adjustment recommendations and early risk warnings.
Leveraging our big data analytic capabilities, we have developed AI-based customer service
function which can predict users’ questions based on their past interactions with our
application. We can also intelligently and accurately identify the true semantics behind the text
of our users’ questions through our natural language processing capabilities. Supported by our
innovation, we have achieved substantial business growth in the rapidly growing online
securities market.
Research and development in technology has contributed significantly to our business

growth and success since our inception, allowing us to continually increase our portfolio of
intellectual properties and improve products and services for our clients and users. In 2019,
2020, 2021 and the six months ended June 30, 2022, our research and development expenses
amounted to approximately HK$262.3 million, HK$513.3 million, HK$805.3 million and
HK$574.2 million (US$73.2 million), respectively, accounting for 44.3%, 44.7%, 29.5% and
39.1% of our operating expenses for each corresponding period, respectively. Our ability to
develop innovative solutions and enhance our existing service offerings is demonstrated by our
heavily technology and research and development oriented employee structure. As of June 30,
2022, 1,641, or 63.5% of our total employees were engaged in our research and development
function.
OUR PLATFORM
We operate a technology-driven online securities brokerage and wealth management

product distribution platform, which enables us to digitally deliver a wide range of products
and services to our users and clients in an integrated way. We enable an omni-terminal access
to our platform from mobile phones, tablets and computers, either through our purpose-built
applications or internet browsers.
Our primary platform, Futubull, is mainly available to users based in Hong Kong and
Mainland China. Futubull allows investors to trade securities across major exchanges in Hong
Kong and the U.S. and qualified securities under Stock Connect listed on the Shanghai Stock
Exchange or the Shenzhen Stock Exchange quickly and securely, with access to margin
financing and securities lending. We also offer wealth management product distribution
services through our Money Plus brand on our Futubull and moomoo platform, where our
clients can get access to a suite of fund and bond products. In addition to our core investment
offerings, we also provide our users with a variety of value-added services designed to
facilitate the investing process, including real-time stock quotes, market data and news as well
as an interactive user community where our users can exchange investment views and
experience. We also offer corporate services through our Futu I&E brand, such as IPO
distribution, investor relations and marketing, as well as ESOP solution services. We also
provide trust services to corporate clients.
– 306 –
BUSINESS
As part of our international expansion, we developed and launched moomoo, the

international version of Futubull, first in the U.S. in 2018 and more recently in Singapore in
March 2021 and Australia in 2022. Our moomoo platform provides tailored services to clients
in the U.S., Singapore and Australia through our local licensed entities Moomoo Financial Inc.,
Moomoo Financial Singapore and Futu Australia, respectively, after they open trading accounts
with us in compliance with our account opening application, verification procedures and
regulatory requirements in the relevant jurisdiction. For clients that have eligible identity
documents for multiple jurisdictions, they may open multiple accounts on Futubull and/or
moomoo through our respective local licensed entities as long as they open such trading
accounts with us in compliance with the above-mentioned requirements in the relevant
jurisdiction. Such accounts would be maintained separately by the respective local licensed
entities with no asset or user data transferable in between. We provide differentiated offerings
through our respective local licensed entities considering the varying customer demand and
regulatory requirements. While all of our local licensed entities provide securities trading
services on the Hong Kong Stock Exchange and the major exchanges in the U.S., additionally,
our moomoo platform in Singapore and Australia, through Moomoo Financial Singapore and
Futu Australia, also allows investors to trade securities listed on the Singapore Exchange or the
Australian Securities Exchange, respectively. We have seen robust growth momentum and
received encouraging user feedback since our debut in Singapore. moomoo reached the number
one spot under the finance category and free download category of Singapore’s iOS and
Android App store within two months, and attracted over 220,000 users and 100,000 paying
Our platform is underpinned by a premier user experience. We are the first securities
broker to provide completely online-based account opening services in Hong Kong, according
to CIC. We have streamlined the account opening, fund transfer and trade execution processes
on our platform to provide convenient and seamless investment experiences. Account opening
on our platform requires filling out an online application which takes less than three minutes,
followed by verification procedures facilitated by automated risk management systems. We
also provide easy-to-use fund transfer services facilitating swift deposit and withdrawal of
funds, allowing for bank-to-brokerage fund transfers in as fast as a few seconds. In addition,
we provide our users and clients with access to all of our products and services from a single
profile on our platform.
We serve both users and clients. Our “users” access Futubull and moomoo through our
mobile or desktop applications or our website with registered user accounts. Our “clients” are
our users who open one or more trading accounts with us; and our “paying clients” are our
clients with assets in their trading accounts with us. As of June 30, 2022, we had over 18.6
million users, 3.0 million clients and around 1.4 million paying clients. In June 2022, our
MAUs and average DAUs were approximately 2.1 million and 1.0 million, respectively.
– 307 –
BUSINESS
OUR SERVICES
We provide our users and clients a comprehensive set of services throughout their
investing experience. Our core services include trade execution, margin financing and
securities lending, as well as wealth management product distribution. We provide a variety of
value-added services in addition to our core offerings, many of which are free of charge, to
address our clients’ broader investment demands as well as increase general client engagement.
All our services can be accessed through our platforms with a single profile across various
terminals. The following diagram illustrates the comprehensive services we provide to our
users and clients:
– 308 –
BUSINESS
The following table sets forth the components of our revenues by amounts and
percentages of our total revenues for the periods indicated:
2019 2020 2021 2021 2022
(unaudited)

2019 2020 2021 2021 2022
(in thousands)
(unaudited)

Note:
handling charges.
– 309 –
BUSINESS
The following table sets forth the components of our interest income by product type
during the Track Record Period:
For the Year ended December 31, For the Six months ended June 30,
2019 2020 2021 2021 2022
(in thousands)
(unaudited)
Interest income
Margin financing ь ь ь ь ь ь 221,648 497,975 1,720,473 786,095 766,722 97,706
Securities lending ь ь ь ь ь 37,202 73,792 397,505 233,929 182,124 23,209
Bank deposit ь ь ь ь ь ь ь ь 187,223 208,556 197,390 88,916 196,807 25,080
Bridge loan ь ь ь ь ь ь ь ь ь 6,172 1,078 1,872 – 48,235 6,147
IPO financingь ь ь ь ь ь ь ь 12,658 184,226 200,567 160,000 750 96
Other financing(1) ь ь ь ь ь ь – – 391 – 1,023 130
Totalь ь ь ь ь ь ь ь ь ь ь ь ь ь 464,903 965,627 2,518,198 1,268,940 1,195,661 152,368
Note:
(1) Other financing mainly includes the securities purchased under agreements to resell.
RETAIL SERVICES
Trade Execution
We provide easy-to-use trade execution services, allowing our clients to trade securities,
such as stocks, ETFs, warrants, options and futures, across different markets. We serve clients
from different countries and regions through our licensed subsidiaries in Hong Kong,
Singapore, the U.S. and Australia:
• Hong Kong: We operate our securities brokerage business in Hong Kong through
Futu International Hong Kong, our wholly-owned subsidiary incorporated in Hong
Kong. We have been licensed by the SFC to carry out securities dealing and have
become a participant of the Hong Kong Stock Exchange as a licensed broker since
2012. We also cooperate with CCASS to provide clearing and execution services for
our brokerage business involving securities listed on the Hong Kong Stock
Exchange and stocks qualified under Stock Connect listed on the Shanghai Stock
Exchange or the Shenzhen Stock Exchange.
– 310 –
BUSINESS
• Singapore: We carry out our operations in Singapore through our Singapore-

incorporated subsidiary Moomoo Financial Singapore, a licensed corporation
registered with the Monetary Authority of Singapore with the Capital Markets
Services Licence.
• The U.S.: We carry out our operations in the U.S. through our US-incorporated
subsidiaries, including Moomoo Financial Inc., a licensed broker-dealer in the U.S.,
and Futu Clearing Inc., a licensed provider of clearing and settlement services for
securities transactions in the U.S. financial markets in cooperation with the
Depositary Trust Clearing Corporation and its subsidiaries. See “— Licenses and
Regulatory Approvals”.
• Australia: We carry out our operations in Australia through our Australia-

incorporated subsidiary, Futu Australia, which holds an Australian Financial
Services License granted and regulated by the Australian Securities and Investments
Commission.
We provide comprehensive order types to meet our clients’ different trading strategies,
including limit/market order, auction limit/market order, odd-lot order, stop loss limit/market
order, touch limit/market order, trailing stop loss limit/market order and TWAP/VWAP order.
In addition, we provide API services which allow clients to trade through our platform using
their own program.
The trade execution process is entirely online and automated. We aggregate orders
simultaneously and form trading instructions which are subsequently delivered to respective
exchanges. Funds or securities are then transferred to or from our accounts upon settlement,
which we then further remit back to the relevant trading accounts, after deducting the fees for
our securities brokerage services, and are normally settled within two business days.
Prior to using our platform for the first time, our users and clients are required to accept
our standard general terms and conditions which set out the key terms to our operations, and
include other provisions such as anti-money laundering and data privacy.
As a licensed securities broker in Hong Kong with integration into the trading systems of
the Hong Kong Stock Exchange and CCASS, we can independently manage all steps involved
in processing securities transactions, including order confirmation, receipt, settlement,
delivery, dividend collection and record-keeping, for securities listed on the Hong Kong Stock
Exchange, including stocks, ETFs, warrants, options, futures, callable bull/bear contracts and
stocks under Stock Connect listed on the Shanghai Stock Exchange or the Shenzhen Stock
Exchange. We also provide new share subscription and proprietary grey market trading services
(also known as dark pool trading services) for IPOs on the Hong Kong Stock Exchange.
Additionally, we had 502 throttling controllers connected to the trading system of the Hong
Kong Stock Exchange as of June 30, 2022, allowing us to execute a large number of trading
– 311 –
BUSINESS
transactions simultaneously and respond quickly to sudden surges in order volumes. As of June
30, 2022, we were capable of processing 1,004 Hong Kong listed securities trades per second,
highest among securities brokers in the Hong Kong retail securities brokerage market,
according to CIC.
For securities including stocks, options and futures traded on the major exchanges in the
U.S., the Singapore Exchange and the Australian Securities Exchange, we aggregate trade
instructions from clients and, without disclosing underlying client names or fund details,
collaborate with qualified local third-party clearing brokers for execution and settlement. In
most cases, the agreements we enter into with such third-party clearing brokers are for an
indefinite term, charging a tiered commission rate which they deduct directly from our account
with them. In the case of securities traded on the major U.S. stock exchanges, we also execute
and settle transactions through our self-clearing business except clearing for over-the-counter
market and certain other products for which we are in the process of developing our support
capabilities. From our client’s perspective, the trading process is seamless as we handle all
client communications and touchpoints, including delivery and receipt of funds. We intend to
further enhance our self-clearing coverage and continue to develop our self-clearing business.
We also provide new share subscription services in relation to selected IPOs on the New York
Stock Exchange, the Nasdaq Stock Market and the Singapore Exchange.
As a result of the operational efficiencies afforded by our technology, we sustainably

charge a competitive brokerage commission rate for online trading as compared to most of our
market peers. In general, our revenues from securities brokerage services include brokerage
commissions and handling charges from our clients, which are recognized on a trade-date basis
when the relevant transactions are executed. During the Track Record Period, we charged
commission rates of 0.03-0.05% of the total transaction amount for securities traded on the
Hong Kong Stock Exchange, 0.01-0.03% of the total transaction amount for qualified securities
under Stock Connect listed on the Shanghai Stock Exchange or the Shenzhen Stock Exchange,
and US$0.0049 to US$0.01 per share or US$5 per transaction for securities on the major
exchanges in the U.S. As of the Latest Practicable Date, we charged a commission rate of
0.03% of the transaction amount and a fixed or tiered platform service fee between HK$1 to
HK$30 per order for securities traded on the Hong Kong Stock Exchange, a commission rate
of 0.03% of the transaction amount and a fixed platform service fee of RMB15 per order for
qualified securities on the Stock Connect listed on the Shanghai Stock Exchange or the
Shenzhen Stock Exchange, a commission rate of 0.03% of the transaction amount and a
platform service fee of 0.03% of the transaction amount for securities traded on the Singapore
Exchange, a commission rate of 0.03% of the transaction amount and a platform service fee of
0.05% of the transaction amount for securities traded on the Australian Securities Exchange,
and a commission fee of US$0.0049 per share per transaction and a platform service fee of
US$0.99 per order or US$0.003 to US$0.01 per share per transaction for securities on the major
exchanges in the U.S.
– 312 –
BUSINESS
The total trading volume of transactions executed through our platform and the
breakdown with respect to securities listed on different stock exchanges, over the Track Record
Period, is shown as below:
Trading Volume by Stock Exchanges (in HK$bn)
8000
7000
6,138.9 6.0
6000
154.2
5000 2,272.1
3,463.6
40.7
4000
2,672.7 5.0
3000
1,261.3 50.9
871.4
2000
3,706.5
872.7
17.8 2,161.7 1,745.4
1000
427.6
427.3
0
2019 2020 2021 1H22
Major Exchanges in the U.S. Hong Kong Stock Exchange

Stock Connect for securities listed on the Shanghai Singapore Exchange & Australian Securities Exchange
Stock Exchange or the Shenzhen Stock Exchange
The brokerage commission and handling charge income we earned for securities traded
on the Hong Kong Stock Exchange and the major exchanges in the U.S. accounted for 24.7%
and 23.4% of our total revenues in 2019, 21.4% and 38.7% of our total revenues in 2020, and
17.3% and 37.6% of our total revenues in 2021 and 16.5% and 42.4% of our total revenues for
the six months ended June 30, 2022, respectively.
Margin Financing and Securities Lending Services
We provide real-time and cross-market securities-backed financing to clients. Our margin

financing and securities lending services have grown rapidly since introduction, reflecting our
ability to cross-sell and our clients’ receptivity to sophisticated investing services. As of
June 30, 2022, 41.6% of our clients who had traded through our platform had used our margin
financing and securities lending services.
Margin Financing
We started to offer margin financing to clients who trade securities listed on the Hong
Kong Stock Exchange, the major exchanges in the U.S., qualified securities under the Stock
Connect listed on the Shanghai Stock Exchange or the Shenzhen Stock Exchange and securities
listed on the Singapore Exchange in July 2016, February 2017, July 2018 and January 2022,
respectively.
– 313 –
BUSINESS
All financing extended to our clients is secured by acceptable securities pledged to us.
Our trading system can automatically pledge cross-market account assets so that the value in
a client’s multiple trading accounts, which may include cash in different currencies and
acceptable securities listed on different markets, will be aggregated when calculating the value
of the client’s collateral based on real time market foreign exchange rates. This provides
significant efficiencies as it eliminates the costs and procedures involved in cross-market
currency translation or exchange.
Our clients are eligible for margin financing services when they hold securities that are
acceptable as pledges to us in their accounts. The credit line for each eligible client is
determined based on the value of the securities across all of his or her trading accounts. Our
eligible clients need to open margin financing accounts with us to enjoy such services. The
eligible clients need to confirm the use of margin financing services when the funds in their
accounts are not sufficient to purchase the desired securities and there is still sufficient balance
in their credit lines. As of the Latest Practicable Date, we charged margin rates of 6.8% per
annum for securities traded on the Hong Kong Stock Exchange, 4.8% per annum for securities
traded on the Singapore Exchange, 4.8%-6.8% per annum for securities on the major exchanges
in the U.S., and 6.8%-8.8% per annum for the qualified securities on the Stock Connect listed
on the Shanghai Stock Exchange or the Shenzhen Stock Exchange.
A list of securities acceptable as collateral to us and their respective margin ratios are
regularly updated and shared with our clients. The margin ratio for each of the acceptable
securities is individually determined by our risk management team based on a number of
factors including market capitalization, historical price volatility and turnover, financial
fundamentals, prevailing market conditions, as well as financing terms offered by major
financial institutions. The margin ratio is monitored in real time, and reviewed and adjusted on
a regular basis, more frequently in the case of a significant and rapid price fluctuation. See “—
Risk Management and Internal Control — Risk Management — Margin Financing and
Securities Lending Risk Management.”
When we launched our margin financing business, we financed mostly from our own
working capital and shareholder loans. We have since diversified the funding source of our
margin financing through collaboration with our long-term independent third-party financial
institution partners , which are all licensed banks or securities firms in the jurisdictions where
we operate, where we can combine collateral from our clients into portfolios and pledge the
portfolios to financial institutions for commercial loans with sound credit extension terms. As
of June 30, 2022, 66.8% of margin financing was financed through our financial institution
partners. For margin financing services related to securities listed on the Hong Kong Stock
Exchange and major exchanges in the U.S., we have entered into loan facility agreements with
commercial banks in which we agree on the maximum facility limit, maturity and annualized
interest rates. In addition, for securities listed on the major exchanges in the U.S., an
independent third-party Nasdaq-listed multinational brokerage company headquartered in the
United States that we partner with for trade execution and settlement also extends to us margin
financing credit on an aggregate basis, which we then distribute to our clients based on their
orders after the relevant commissions and fees that we incur are deducted by such third-party
– 314 –
BUSINESS
brokerage company. The business agreement we have entered into with such partner has an
indefinite term, and requires us to continuously maintain sufficient margin requirements to
reduce the risks involved with margin financing. Another source of funding comes from
short-term securities sold under global master repurchase agreements to repurchase
transactions with financial institution partners on industry-standard terms.
During the Track Record Period, we recorded substantial growth in our margin financing
business. As of December 31, 2019, 2020 and 2021 and June 30, 2022, the number of our
margin financing clients was 20,423, 70,374, 137,421 and 135,642, respectively, with balance
of margin financing amounted to HK$4.14 billion, HK$18.4 billion, HK$29.1 billion and
HK$26.7 billion, respectively. We kept our default rate, calculated as our allowance for credit
losses divided by balance of margin loans, at nil, 0.05%, 0.04% and 0.08% as of December 31,
2019, 2020 and 2021 and June 30, 2022, respectively.
Securities Lending
For clients who trade securities listed on the Hong Kong Stock Exchange and major
exchanges in the U.S., we offer securities lending service which allows our clients to pursue
short-selling strategies. We launched our securities lending services for U.S. listed securities
in February 2017, and for Hong Kong listed securities in December 2020. To borrow securities,
our clients must pledge cash or acceptable securities from their trading accounts with us. For
securities lending that we collaborate with third-party partners, the interest rate that we charge
our clients is based on an annualized interest rate charged by our securities lending partners,
plus a certain premium that we earn as interest income which is calculated based on the market
value of securities borrowed by our clients, the duration of the borrowing and the short-selling
interest rate.
After clients make a margin financing or securities lending order, the relevant funds or
securities will be transferred to the client. Any margin financing or securities lending costs,
including interests and securities lending fees for the month, are automatically deducted from
our client’s account at the end of each month.
As of December 31, 2019, 2020 and 2021 and June 30, 2022, we maintained a
loan-to-value ratio with our margin financing clients of 21.2%, 20.6%, 24.3% and 22.3%,
respectively, against the collateral value of the securities pledged to us. As of September 30,
2022, our loan-to-value ratio was 26.3%. We continuously monitor the loan-to-value ratio, and
our Directors believe that we maintained a stable loan-to-value ratio throughout the Track
Record Period. We also have a set of detailed measures aimed at mitigating our exposure to
risks related our margin financing business. Please refer to “— Risk Management and Internal
Control — Risk Management — Margin Financing and Securities Lending Risk Management”
for details.
– 315 –
BUSINESS
As of December 31, 2019, 2020 and 2021 and June 30, 2022, our margin financing and
securities lending balance was HK$4.8 billion, HK$19.5 billion, HK$30.3 billion and HK$28.9
billion (US$3.7 billion), respectively. For the years ended December 31, 2019, 2020 and 2021
and the six months ended June 30, 2022, our interest income derived from margin financing
and securities lending business was 24.4%, 17.3%, 29.8% and 28.0% of our total revenues,
respectively.
In October 2019, we launched the Stock Yield Enhancement Program with a third-party
brokerage company, allowing clients to earn interest on their U.S. securities positions by
lending to such third-party brokerage company. Our clients can choose to opt in and out of the
program at any time. When clients choose to participate in the program, we transfer their U.S.
securities positions into a stock yield enhancement program account with the third-party
brokerage company. Any interest income earned from these securities borrowed from our
clients is split among the third-party brokerage company, the client and us on a monthly basis,
after we receive payment from the third-party brokerage company.
Wealth Management Product Distribution Services
We offer online wealth management product distribution services under Money Plus
brand through our Futubull and moomoo platforms, which provide our clients with access to
mutual funds, private funds, bonds and other wealth management products, catering to their
different investment targets and risk preferences. Except for certain limited securities
investment advisory services provided in Hong Kong by Futu International Hong Kong, a
corporation licensed for type 4 (advising on securities) regulated activities under the SFO, we
had not provided any securities investment consultancy services in the PRC and/or any other
jurisdictions during the Track Record Period and up to the Latest Practicable Date. Our income
generated from wealth management product distribution services is categorized as other
income in our financial statements.
• Mutual Funds. We selectively work with established fund houses to distribute their
fund products, including money market, fixed income, equity and balanced fund
products. In addition, our clients can opt to automatically invest idle cash in their
accounts to money market funds to earn interest, which can be instantaneously
redeemed upon trading, being the first online securities broker to offer such services
in Hong Kong, according to CIC. Our clients can also choose to rebalance their fund
allocation manually or automatically according to portfolio changes made by
selected portfolio managers. We currently charge zero subscription fees from our
clients, and share management fees based on negotiated commercial terms with the
fund houses that provide mutual fund products, generally on a non-exclusive basis,
such agreement being effective for an indefinite period. During the Track Record
Period, our share of the management fees ranged from 0.04% to 1.4% of the AUM
of the mutual funds.
– 316 –
BUSINESS
• Private Funds. In June 2020, we began to offer private funds on Futubull, including
fixed income funds, hedge funds and alternative investments, to professional
investors only. Professional investor clients can view private funds information and
make purchases on Futubull. Usually, subscription or redemption of private fund
products can be made on a periodical basis. Clients can register an order on the
platform, which records the order information but does not immediately make the
subscription or redemption of the fund products. The subscription or redemption
only happens after the deadline for the subscription or redemption of the private
fund products has passed. We collect client orders and submit them to the
corresponding fund houses after the deadline of the subscription or redemption of
the private fund products. After the fund houses confirm the subscription or
redemption orders, for the subscription orders, we will confirm the shares of funds
to the clients, and for the redemption orders, we will confirm the net asset value and
transfer the amount to the clients’ accounts after receiving the proceeds from the
fund houses. We charge a subscription fee on the private funds in most cases, which
will be deducted from clients’ accounts. Along with the subscription payment, we
share management fees and, in some cases, incentive fees with the fund houses. We
generally charge a subscription fee between 0% and 1.5% of the AUM of the private
funds.
• Bond Trading. In September 2020, we launched our bond trading services on

Futubull for fixed income securities, which are available to professional investors
only. For bond trading, we charge the individual paying clients a fixed commission
rate based on the trading volume, a platform service fee per transaction and an
annualized fee on settlement as custodian. We do not charge bond issuers any fees.
• Cash Sweep. We started to offer cash sweep services to Moomoo Financial Inc.
clients in November 2021 per their consent. Cash sweep services automatically
deposit a client’s idle U.S. dollar cash into interest-earning bank accounts
maintained by us every working day. This service allows clients to earn interest
income on their idle cash, while such cash remains available for trading as the cash
deposited in the bank (“swept cash”) can be redeemed upon trading. When clients’
idle cash (including swept cash) is greater in amount than the swept cash, the
difference will be transferred from the securities account to the bank, and when the
idle cash is smaller in amount than the swept cash, the difference will be
automatically withdrawn from the bank to the securities account. In terms of fund
flow, we open corporate accounts with banks to deposit clients’ idle cash at floating
or fixed interest rates. We provide our cash sweep clients with interest income at
certain interest rates, and the difference between interest income earned on our
corporate accounts opened with banks and the clients’ interest income we pay to
them at pre-agreed interest rates after deducting service fees becomes our income.
– 317 –
BUSINESS
We may enter into distribution or sub-distribution agreements with fund houses or other
distributors to offer fund products. Fund houses or third-party platforms appoint us to distribute
relevant fund products and pay commissions to us according to the terms of such agreements.
At the same time, we are expected to comply with the terms specifying sales behavior in the
distribution agreement. We do not disclose client information to the fund houses we collaborate
with, and execute transactions solely through our own aggregated accounts. Our clients
complete the entire transaction, access updated transaction records and monitor changes in
positions through our Futubull and moomoo platform. The relevant fund management fees are
charged by the funds, and are reflected in the net asset value of the funds. For mutual fund
products, we share the management fees with the funds with no additional payment from the
clients. For private fund products, we charge subscription fees in most cases and share the
management fees with the funds.
As of December 31, 2019, 2020 and 2021 and June 30, 2022, 17,573, 42,082, 139,178 and
202,736 clients held our wealth management products respectively, with client asset balance
totaling HK$6.1 billion, HK$10.2 billion, HK$18.8 billion and HK$21.9 billion respectively
during the same periods. As of June 30, 2022, we had established partnerships with 66
reputable asset management companies, and offered 151 fund products to clients on Futubull
and 97 mutual fund products on moomoo to clients in Singapore.
Market Data and Information Services
We further enhance the investing experience with market data and information services
such as news, research, and powerful analytical tools, providing clients with a data-rich
foundation to simplify the investment decision-making process.
Market Data
We provide real-time stock quotes across the Hong Kong, Mainland China, the U.S.,
Singapore and Australia equity markets. Our Hong Kong Level II stock quotes are free for all
Mainland China-based clients, being the first online securities broker in Hong Kong to do so,
according to CIC, and for a monthly fee for clients based elsewhere. We also offer a variety
of advanced stock quote services to our clients, for which we charge a monthly fee.
We provide a number of advanced and intuitive tools which allow our users and clients
to customize the manner in which they monitor the capital markets. For instance, they can filter
the broader market across a range of criteria including industry, valuation, trading volume and
price volatility over a certain period of time. These filters are available across markets so our
users and clients can monitor multiple markets simultaneously.
– 318 –
BUSINESS
On an individual company basis, our users and clients can review and track detailed
fundamental and technical analyses, including recent transaction details such as trading
volumes by major brokers, historical and current valuations, analyst ratings and target prices,
operating and financial metrics, compiled news and research, and other company specific
content.
For each mutual fund, our users and clients can monitor fund performances, review
detailed quantitative analyses, read complied news and fund specific content, and understand
fund basics such as duration, top holdings and geographic and industry concentrations.
We generally enter into agreements with our market data suppliers with the salient terms
as follows:
• Term: Usually one year, some with automatic one-year renewal
• Service Content: Services may include license authorization of market data and
information for external and internal usages, and direct access line for various data
feed. Indirect data vendors are contractually responsible for maintaining high data
quality and stable data access
• Fees: Usually a fixed charge annually for data license and access, plus additional per
user data charges
• Payment: Mostly on a monthly basis, while some are on a quarterly or yearly basis
Information Services
We distill investment information and trends into engaging, accessible and diversified
content, guiding investors along their investing experience and helping to simplify the
decision-making process. Our information services generally include real-time news alerts,
earnings releases and corporate announcements, topical industry or company-level deep dives
and proprietary data flows such as IPO pipeline that we complied from external sources. Our
information services are provided to the users free of charge.
We aggregate and curate our content through our internal content creation team and our
collaboration with third-party resources, including leading international news agencies and
market centers. We deliver our content across different formats including short-form news,
graphics and extensive articles. Content is grouped by animated tags that facilitate easy
searches and allow our users and clients to customize information feeds.
– 319 –
BUSINESS
We generally enter into agreements with our information service suppliers with the salient
terms as follows:
• Term: Usually one year
• Service Content: Services may include license authorization of market news, which
are generally transmitted through API. Suppliers will be responsible for the API
stability and content generation
• Fees: Generally a fixed charge annually, with a few per person/usage charges
• Payment: Periodic payment or pay-per-use
User Community
We broaden our reach and promote the exchange of information through NiuNiu/Moo
Community, our social network services on Futubull and moomoo platform, which has
embedded social media tools to create a network centered around users. This user community
reduces information asymmetry, supports the discovery of investment opportunities, facilitates
investment decision-making and establishes a sense of camaraderie among our users.
On NiuNiu/Moo Community, we provide a variety of interactive tools and free content,

including:
• Courses. We provide our users with necessary investment knowledge through

pre-recorded videos and graphical presentations on financial terminology,
investment products and other investment related topics, leveraging both our
in-house and external resources;
• Live Broadcasts. Our users can watch live broadcasts hosted by enterprise clients
such as listed companies and fund houses. Live broadcasts include earnings results,
product launch and promotions, as well as investor Q&A sessions, which can be later
replayed on demand; and
• Forum. Our clients can post and share their trading history, investment views and
market insights, and interact with each other.
– 320 –
BUSINESS
We have fostered a vibrant NiuNiu/Moo Community, which serves as an open forum for
users to share insights, ask questions and exchange ideas, thereby enabling our users to
maintain a strong sense of belonging. Specifically, NiuNiu/Moo Community offers the
following unique features:
• Participant diversity. Our users can interact directly with other users, company
executives and analysts within the investing community;
• Extensive content. Our content ranges from investing basics to sophisticated

analytical guides for professional investors;
• Lively and dynamic delivery. All our content is designed for digital consumption
and delivered through multiple media formats, such as short-form videos, recorded
online lessons, chat rooms, live broadcasts and presentation slides; and
• Feedback channel. We use NiuNiu/Moo Community as an important source of

feedback, which guides us to continue to optimize our product and service offerings.
As of June 30, 2022, over 1,500 enterprises, including public and private companies, fund
houses, exchanges, and media and research institutions, held accounts in our user community.
During 2021, on average we had an aggregate of approximately 190,000 UGCs generated on
NiuNiu/Moo Community each trading day, which included a multitude of posts, comments and
other interactive reactions to social media content. We continuously find ways to enhance the
quality of content within our ecosystem. For example, we launched NiuNiu Stars, a systematic
creator incentive program where we invite and reward content creators to further contribute to
our user community with creative and high-quality content.
– 321 –
BUSINESS
– 322 –
BUSINESS
– 323 –
BUSINESS
– 324 –
BUSINESS
Account Opening and Fund Transfer
Account Opening
Our users and clients can access all of our products and services with a single profile
created on our platform. Opening a securities trading account has historically been a
time-consuming and paper-intensive process. In developing our platform, we intended to
reduce unnecessary friction and meaningfully improve the account opening process, which we
believe is a significant driver of our client base growth. Our users can open multiple trading
accounts for different products under a single profile at once, and we are the first securities
broker to provide completely online-based account opening services in Hong Kong, according
to CIC. Users can complete an account opening application online in as little as three minutes
on our platform.
For investors who are residents in Hong Kong, the U.S., Singapore and Australia, the two
steps involved in opening trading accounts with us are set forth below:
• Step 1: Online application. Users of our Futubull or moomoo platform, either

through our mobile or desktop application, can click an embedded link to submit an
online account opening application by following simple instructions. Users are
required to submit personal information, employment history, financial conditions,
source of funds and other related information. Users must also read and consent to
a standard client agreement and other required documents and review a disclaimer
audio which discloses trading risks presented by our licensed personnel.
• Step 2: Verification procedures. Upon receiving a completed online application, our

automated risk management system will proceed to verify the applicant’s identity.
We automatically use the information supplied by the user to perform
know-your-client and anti-money laundering screening. If a user’s application
passes the screening, the user is approved for a trading account. When we discover
errors or inconsistencies during our examination of the applications, a second tier of
review may require the clients to go through a few additional steps to authenticate
their identities or verify their credentials.
For residents in Hong Kong, the prospective client can choose to complete such
procedures either online or offline.
o Online: A prospective client is required to (i) submit a copy of his or her Hong
Kong photo identification, Hong Kong residential address proof and other
relevant identification documents, (ii) link the trading account to be opened
with his or her personal bank account opened with a qualified bank in Hong
Kong or other eligible jurisdictions, and (iii) transfer a minimum of
HK$10,000 or US$1,500 into the trading account from that personal bank
account, or mail to us a cheque in such amount together with relevant
identification documents. Once the prospective client’s bank account
information and other submitted documents match the information submitted
during the online application, the online identification verification will be
completed, and the trading account will be automatically opened.
– 325 –
BUSINESS
o Offline: A prospective client is required to meet a member of our verification

team and conduct the abovementioned verification process with paper copies
of critical documents.
Our prospective clients outside of Hong Kong can also open accounts with us following
similar procedures with specific adjustments based on relevant regulatory requirements. The
vast majority of our clients have opened accounts with us online. For further details on our
verification procedures, see “— Risk Management and Internal Control — Risk Management
— Securities Brokerage Service Risk Management.”
Corporates that would like to open an account with us are required to satisfy our
counterparty risk requirements, such as providing a deed of guarantee. In addition, we perform
our corporate due diligence procedures (including but not limited to, obtaining and verifying
its identity and its ultimate beneficial owner, and conducting background check and client risk
assessments) in accordance with the anti-money laundering guidelines issued and updated by
the SFC from time to time. After the corporate is onboarded, we monitor their transactions and
conduct due diligence on an ongoing basis.
Fund Transfer
We provide timely and free fund transfer services to our clients, enabling them to capture
fast-moving investment opportunities. We support various fund transfer methods for payment
of Hong Kong dollar, US dollar and offshore RMB. For payment from Hong Kong bank
accounts, we support fund transfer via eDDA, bank-securities account transfer, FPS, internet
banking, ATM/over-the-counter transfer and cheque. For payment from bank accounts of other
overseas regions, we support fund transfer via ACH, wire transfer, DDA and local payment
apps. In particular, bank-to-brokerage fund transfers can be completed in as fast as a few
seconds, and are normally completed within five minutes. We do not allow payment from PRC
bank accounts. See “— Legal Proceedings and Compliance — Currency Conversion.”
We do not charge our clients any withdrawal fees from their trading accounts. Cash
withdrawal from trading accounts are normally completed within one trading day, whereas
withdrawals from fund products normally take approximately two to five trading days, due to
longer fund settlement time of the fund houses.
As the technologies and practices in connection with online trading accounts opening
services are in the early stages of development, we are subject to evolving laws, regulations,
guidelines, and other regulatory requirements with respect to our online account opening
procedures. See “Risk Factors — Risks related to Our Business and Industry — We are subject
to extensive and evolving regulatory requirements in the markets we operate in, non-
compliance with which may result in penalties, limitations and prohibitions on our future
and prospects. In addition, we are involved in ongoing inquiries by several regulators.” See
“Risk Factors — Risks related to Our Business and Industry — Our online client onboarding
– 326 –
BUSINESS
procedures historically did not strictly follow the specified steps set out by the relevant
authorities in Hong Kong, which may subject us to regulatory actions in addition to
remediation, which may include, reprimands, fines, limitations or prohibitions on our future
business activities and/or suspension or revocation of Futu International Hong Kong’s licenses
and trading rights.”
CORPORATE SERVICES
We provide value-added corporate services to our corporate clients through our integrated
enterprise service brand, Futu I&E, which primarily include IPO distribution, investor relations
and marketing and ESOP solution services. We also provide trust services to corporate clients.
As of June 30, 2022, we had 276 IPO distribution and investor relations clients as well as 519
ESOP solutions clients. We have become a long-term partner of many leading new economy
companies in China.
IPO Distribution
We have acted as the underwriter on 81 Hong Kong IPOs and 15 U.S. IPOs during the
Track Record Period, including a number of landmark IPOs, such as those of Meituan
Dianping, Xiaomi and XPeng. As of June 30, 2022, we had participated in ten IPOs on the
Hong Kong Stock Exchange with WVR structure, which is usually an indicator of a new
economy company, and generated over HK$10 billion of subscription amount each for 29 Hong
Kong IPOs. From August 2020 to June 2021, we have also participated in 86.7% of U.S. IPOs
conducted by China-based companies that raised over USD500 million.
Set out below is a breakdown of our IPO distribution activity as an underwriter during the
Track Record Period:
For the
six months
ended
2019 2020 2021 2022
Number of IPO transactions ььььь 9 24 51 12
We promote global offerings through multiple channels including targeted push

notifications and professional investor roadshows, and keep the lead underwriters updated on
the orders placed with us on a daily basis. After the bookbuilding process, we will make
reasonable allocations to investors who have placed orders with us in accordance with
allocation results and the requirements of the relevant stock exchanges. After the listing, our
underwriting fees will be settled based on the underwriting fee rates and our underwriting
results.
– 327 –
BUSINESS
In addition, we also provide retail marketing services for Hong Kong IPO clients after
commencement of Hong Kong public offerings through push notifications and deal information
display on our platform.
Investor Relations and Marketing
We provide a wide range of investor relations and marketing tools and services to help
companies manage their ongoing relationships with shareholders and market their brand.
Through creating a corporate account on NiuNiu/Moo Community, our corporate clients can
livestream their earnings release and product launch campaigns, post business milestones and
advertisements, and interact directly with our users. Therefore, our platform provides a direct
channel for our corporate clients to communicate with their existing and prospective investors
and increase their brand and product awareness.
We enter into marketing agreements with our corporate clients, normally on a fixed term
basis, and charge fees for promotional events based on negotiated commercial terms, taking
into account market fee rates and the services provided. We provide flexibility to our clients
in terms of settlement, allowing them to make payments before or after the relevant event, or
in instalments.
ESOP Solution Services
We provide one-stop ESOP solution services to help our corporate clients with their ESOP
administration, including the granting, vesting, exercise and settlement of the stock awards. In
addition, we collaborate with other professional third parties to provide relevant tax planning
and withholding services. Under our ESOP solution service agreements, we provide clients
with instruction manuals, maintain and update our system periodically and backup our clients’
data, and usually charge our clients quarterly based on the level of services they require,
together with miscellaneous fees such as management and system implementation fees. If the
customer has other needs such as training, we will make a separate quotation and enter into a
supplementary agreement with the client for the required service. The service will be delivered
after the clients’ payments upon receiving our invoice.
ESOP solution has emerged as a signature corporate service of ours. We were the first
online securities broker in Hong Kong to offer ESOP solution services to corporate clients,
according to CIC. The service plays an increasingly important role in our client acquisition,
allowing us to attract quality clients in a cost-effective manner. As of June 30, 2022, we had
519 ESOP solutions clients, covering the largest number of China’s new economy companies
listed overseas since 2018, according to CIC.
– 328 –
BUSINESS
Trust Services
We launched our trust services in Hong Kong in March 2021 to provide employee benefit
trust and family trust solutions, encompassing company formation, trust establishment and
trust management. We charge one-off trust establishment fees and annual administrative fees
for our trust services in accordance with the trust service agreements signed with our clients
in Hong Kong.
Bridge Loan Services
One of our subsidiaries in Hong Kong, Futu Lending Limited, also holds a money lenders
license issued by the licensing court under the Money Lenders Ordinance, which allows it to
provide loans to its clients in its ordinary course of business. We provide limited bridge loan
services to our selected clients on a case-by-case basis.
RISK MANAGEMENT AND INTERNAL CONTROL
Risk Management
We have established a comprehensive and robust technology-driven risk management

system to manage risks across our business and ensure compliance with relevant laws and
regulations. Our risk management committee formulates key risk management policies and
procedures and consists of a compliance officer with over 20 years of experience in the
auditing, compliance and regulatory profession, a certified accounting officer with the Hong
Kong Institute of Certified Public Accountants with over 10 years of experience in the financial
industry, a risk officer who has over 17 years of experience in trading and risk management
businesses, and 4 officers seasoned in the brokerage industry. Our risk management committee
empowers our risk management team, consisting of eight employees having relevant
experience between 8 to 22 years, to execute these policies and procedures.
Our risk management team meets regularly to examine credit, operational, compliance
and enterprise risks and update guidelines and measures as necessary. Key tasks of our risk
management team include client verifications, storage of client information, evaluation of
clients’ risk profiles, monitoring of infrastructure performance and stability, evaluation of risk
concentrations, building and maintaining credit models, performing system-wide stress tests
and conducting peer benchmarking and exogenous risk assessments. Our internal control, legal
and compliance, and internal audit teams coordinate with our risk management team to jointly
conduct regular and ad hoc audits on our business to ensure more effective internal control,
daily operation, finance and accounting management and business operation.
– 329 –
BUSINESS
Securities Brokerage Service Risk Management
We monitor client transactions on a real-time basis, seeking to identify any unusual or

irregular trading activity. We have dedicated personnel to monitor account opening, security of
funds and trading activities of clients and evaluate any irregularities immediately. In
accordance with the relevant laws and regulations regarding client funds custody, we are
required to maintain accounts with recognized commercial banks for the deposit of our client
funds for settlement. To prevent misappropriation of client deposits, we have centralized the
storage of our clients’ trading data. We have also centralized management of the securities
brokerage trading systems and settlement systems to enhance the security of client deposits.
As part of our risk management practice, we operate a strict due diligence of client
information during the “know-your-client” process. Our account opening procedures are
designed to ensure that our clients’ account opening information is accurate, sufficient and in
compliance with applicable regulations and our internal control policies. For Hong Kong-based
clients who apply to open trading accounts with us online on Futubull, in addition to submitting
personal identity information and documents, we require each prospective client to link his or
her personal bank account opened with a qualified bank in Hong Kong or other eligible
jurisdictions with the trading account to be opened with us and transfer no less than HK$10,000
or US$1,500. For our clients based outside of Hong Kong, we have similar due diligence
procedures for account opening on Futubull in accordance with the relevant local laws and
regulations. For offline account opening application, our verification staff will meet the
prospective clients in person and interview them to verify the information submitted. On
moomoo, Singapore, U.S. and Australia-based clients apply to open trading accounts with us
online after submitting personal identity information and documents. As part of the customer
due diligence and KYC process, the customer will also be screened against databases provided
by third-party vendors.
For assessing investor suitability and risk profile, clients are required to provide personal
financial status, investment experience and risk tolerance during the account opening process.
For margin financing services, our eligible clients need to open margin financing accounts with
us to have access to such services. When the funds in client accounts are not sufficient to
purchase the desired securities and there is still sufficient balance in their credit lines, an alert
will pop up and the eligible clients need to confirm the use of margin financing services. When
a client submits an order to trade high-risk products, a pop-up window will be shown to ask
for confirmation on their past related investment experience and understanding of the risk
associated with the trades before proceeding.
We have established rigorous anti-money laundering internal control policies covering

client identification, record keeping of client identity information and transaction records,
reporting on large-sum and suspicious transactions, internal operation rules and control
measures, confidentiality, training and publicity, anti-money laundering auditing, assisting
investigation and execution as well as on-site inspections.
– 330 –
BUSINESS
Margin Financing and Securities Lending Risk Management
We maintain and regularly update a list of acceptable securities as collateral, and

determine the margin ratio for each such security individually, taking into consideration factors
including market value, historical price volatility and turnover, financial fundamentals,
prevailing market conditions and margin ratio offered by other market players. Our risk
management team monitors and adjusts the list of acceptable securities and their margin ratios
on a regular basis, and will promptly amend the list in the case of significant market movement.
We calculate margin requirements of each of our clients on a real-time basis across

different markets and currencies. To control the overall risks involved in our margin financing
business, we have adopted a margin call mechanism to ensure that the clients meet the margin
requirements. A margin call will be triggered by a decline in the value of the collaterals and
requires our clients to pledge additional cash or acceptable securities to meet the required
margin ratio.
Once a margin call is initiated, we will request the client to increase pledged collateral
or reduce exposure by liquidating all or some of the securities portfolio. If the client is unable
to satisfy the margin call requirement within 48 hours and the value of the collateral remains
below the required level, normally we will exercise our sole discretion to liquidate securities
positions to facilitate margin compliance. In some cases, if the value of the collateral falls
below the required level and deteriorates sharply, we may liquidate positions without giving
prior notification to the client.
Our risk management system closely monitors and manages clients’ credit risks. The
purchasing power for each eligible client is determined based on the collateral held across all
of his/her trading accounts and the pre-approved margin limit. The values of all collaterals and
client account status are reflected in the system on a real-time basis. We also closely monitor
concentration levels of top stocks in margin financing and securities lending services and the
potential impact on excess liquid capital among other regulatory requirements on an ongoing
basis. The system will automatically send a reminder message to clients if the client accounts
are under margin calls. This feature allows our clients to proactively manage their positions in
a timely manner and minimize the forced liquidation being taken.
Effective from January 1, 2020, we have adopted FASB ASC Topic 326 — “Financial
Instruments — Credit Losses,” or ASC Topic 326, which replaced the incurred loss
methodology with the current expected credit loss methodology. We adopted ASC Topic 326
using the modified retrospective approach for all in-scope assets. See “Financial Information
— Significant Accounting Policies and Estimates — Current Expected Credit Losses” for
further details.
– 331 –
BUSINESS
Wealth Management Product Distribution Risk Management
We perform due diligence on all investment products and assign risk ratings for each
mutual fund, private fund and bond we offer. We also perform client suitability assessment
where each client is required to fill in a suitability questionnaire to determine his or her risk
profile. A client can only purchase wealth management products with risk ratings that match
his or her risk profile. Only professional investors can access private funds and bonds through
our platform. We are not subject to any liability towards our paying clients in the event of
default or misrepresentation of any of these wealth management products offered by external
parties.
For investment in fund products, since we process each purchase and redemption order
automatically online and record in our system in real time, both our risk management team and
our clients can monitor corresponding changes in positions and orders in real time. We then
submit aggregated orders to the corresponding fund houses, and upon their confirmation of
successful purchase or redemption, we will update the client’s account accordingly. As a result,
we do not undertake any credit risk in connection with our wealth management product
distribution services.
In order to ensure data accuracy in the transaction settlement process, we have developed
a strict verification and reconciliation process, including the reconciliation of purchase and
redemption orders and changes in clients’ positions with corresponding fund houses within
each trading day.
For bond trading, we submit each buy and sell order to a financial institution partner
through real-time APIs, and record such order in our system. For each buy order, we first freeze
a client’s cash based on the expected order amount, and then submit the order to a financial
institution partner. When the trade is completed, we will update the client’s account
accordingly and unfreeze the order amount. We therefore ensure that the client has sufficient
cash to close the trade.
User Community Risk Management
We have adopted a number of measures to monitor and manage potential risks in

connection with information disseminated on our NiuNiu/Moo Community. For example, we
have an automatic filtering mechanism that prevents offensive, fraudulent and other
inappropriate content from being posted to our platform. Moreover, we perform manual
inspection of each post and live broadcast video uploaded to our NiuNiu/Moo Community, to
ensure that content that is against our platform policies and applicable laws and regulations
will be removed in time and responsible content creators will be banned from posting. In
addition, we frequently share information on stock investment risks on NiuNiu/Moo
Community to provide warnings against fraudulent activities and raise our users’ risk
awareness.
– 332 –
BUSINESS
Treasury policy
As a substantial number of R&D personnel are mainly located in Mainland China and
R&D related expenses are primarily incurred in Mainland China, we typically maintain a
certain level of cash balance in Mainland China to meet such payment obligations. As such
payments are generally made around the same time each month, we historically would estimate
the surplus funds in our cash balance. We have a designated staff that monitors the cash balance
on a monthly basis. For such surplus funds, we maintain an internal process in determining how
to deploy such funds, taking into consideration such factors as our short-term payment
obligations, fund safety, liquidity and profitability. During the Track Record Period, we
generally deployed our surplus funds either into short-term bank deposits or to purchase certain
available-for-sale financial securities, which include wealth management products issued by a
commercial bank in Mainland China.
Our daily or short-term wealth management products are generally quoted as low risk in
the product description guides published by the issuers. In order to maintain flexibility in
anticipation of cash needs, the Group can redeem the units held upon request. During the Track
Record Period, when we did not invest in these wealth management products, the surplus funds
were deposited directly with banks.
We closely monitor our daily cash flows, bank deposits, future payment obligations,
interest rates and foreign exchange rates. We also prepare monthly consolidated fund report to
provide a timely overview of our overall cash position and liquidity and risk control
measurements. Such reports are reviewed by our Chief Financial Officer, our financial
controller and relevant teams in Hong Kong. We conduct routine trust reconciliation to ensure
the consistency between our bank account and corporate internal record.
We maintain segregated deposit accounts with banks and authorized institutions of sound
credit ratings to hold cash on behalf of clients arising from our normal course of business. We
also strictly segregate and independently manage funds in our clients’ trading accounts. Cash
held on behalf of our clients are segregated and deposited in financial institutions as required
by the Securities and Futures Ordinance and the Uniform Net Capital Rule (Rule 15c3-1).
– 333 –
BUSINESS
Internal Control Measures
To ensure the ongoing implementation of our internal control and risk management
policies, we have adopted among other things, the following risk management and internal
control measures:
• We have established an audit committee comprising independent non-executive

Directors to supervise our internal control systems;
• We have established an independent internal audit team with direct reporting lines
to the audit committee to provide an independent evaluation of the effectiveness of
our risk management and internal control systems through, among others, the
deployment of various internal audit projects, receiving whistleblower reports
through various channels and following up and investigating alleged fraudulent
activities and monitoring the management’s continuous improvement over our risk
management and internal control systems;
o Historically, we and our independent registered public accounting firm

identified a material weakness in our internal controls in the course of auditing
our consolidated financial statements as of and for the year ended December
31, 2019. The material weakness identified related to our lack of sufficient and
competent accounting and financial reporting personnel with appropriate
knowledge of U.S. GAAP to design and implement robust period-end financial
reporting policies and procedures for the preparation of consolidated financial
statements and related disclosures in accordance with U.S. GAAP and the
financial reporting requirements set forth by the SEC. Such weakness has since
been rectified, and starting in 2019, to remediate such weakness, we have
implemented effective internal control steps by taking various measures,
including:
(i) hiring additional qualified financial accounting staff with working

experience of U.S. GAAP and SEC reporting requirements;
(ii) establishing clear roles and responsibilities for accounting and financial
reporting staff to address complex accounting and financial reporting
issues;
(iii) formalizing the procedures and controls regarding the financial reporting
process, and developing and implementing a comprehensive set of U.S.
GAAP policies and standardized financial closing and reporting
procedures;
(iv) sufficient and appropriate training for financial reporting and accounting
personnel from time to time; and
– 334 –
BUSINESS
(v) enhancing internal control function to ensure proper design and

implementation of our accounting policies and financial reporting
procedures.
As of December 31, 2020, based on our management’s assessment on the performance of

the remediation measures, we determined that the material weakness had been remediated.
In preparation for the Listing, the Group has engaged an independent third party
consultant (the “Internal Control Consultant”) to perform a review over selected areas of our
internal controls over financial reporting in October 2021 (the “Internal Control Review”).
The scope of the Internal Control Review performed by the Internal Control Consultant
was agreed between us, the Sponsor and the Internal Control Consultant. The selected areas of
our internal controls over financial reporting that were reviewed by the Internal Control
Consultant included entity level controls and business process level controls, including revenue
and receivables, purchases and payables, fixed assets, treasury, financial reporting, payroll and
IT general controls.
The Internal Control Consultant performed the follow-up review in July 2022 to review
the status of the management actions taken by the Company to address the findings of the
Internal Control Review (the “Follow-up Review”). The Internal Control Consultant did not
have any further recommendation in the Follow up Review.
The Internal Controls Review and the Follow up Review were conducted pursuant to
Technical Bulletin-AATB1 “Assistance Options to New Applicants and Sponsors in connection
with Due Diligence Obligations, including Internal Controls over Financial Reporting” issued
by the HKICPA and based on information provided by the Group and no assurance or opinion
on internal controls was expressed by the Internal Control Consultant. Our Directors are of the
view that the information provided by our Group to the Internal Control Consultant is true,
accurate, complete and not misleading in all material respects and our Directors consider the
internal control of our Group is adequate.
• Our legal and compliance department will continue to oversee our legal and
regulatory compliance related matters, including closely monitoring any update to
applicable laws and regulations;
• We have established an internal control team to work closely with our business units
to (i) offer professional advice with respect to risk management, (ii) improve
internal process efficiency and monitor internal control effectiveness, and (iii)
enhance risk awareness among our key management members; and
• We have developed additional measures, including implementation of internal

control policy and provision of training programs to the relevant personnel.
– 335 –
BUSINESS
Internal control on Treasury Policy
We have recorded the cash held on behalf of clients and the corresponding liabilities as
accounts payable to our clients on the grounds that we are liable for any loss or
misappropriation of our clients’ monies. In Hong Kong, the “Securities and Futures (Customer
Money) Rules” implementing the related provisions of the Securities and Futures Ordinance
impose similar restrictions. Accordingly, to safeguard the cash held on behalf of clients, we
have adopted among other things, the following internal control measures:
• to maintain segregated deposit accounts with banks and authorized institutions to

hold cash on behalf of clients arising from our normal course of business;
• to deposit funds from clients in various banks and authorized financial institutions
to reduce concentration risks;
• to regularly review the credit rating of these banks and authorized financial
institutions to assess overall risks; and
• to strictly segregate and independently manage funds in our clients’ trading

accounts.
OUR USERS AND CLIENTS
Users and Clients
Our users engage Futubull and moomoo by downloading our mobile or desktop
applications, or visiting our website, and registering a user account. Users are able to receive
market data, technical analysis and other information services and engage in our community
free of charge. The number of our users is determined based on the user accounts registered
with Futubull and moomoo.
Our clients are defined as users who have opened trading accounts with us, and our
paying clients are defined as our clients who have assets in their trading accounts with us.
Our clients are generally young and high earning. As of June 30, 2022, the average age
of our paying clients was 37, which is also representative of the demographics of our user base.
As of June 30, 2022, each of our paying clients had on average over HK$310,000 of assets in
their trading accounts with us.
Our users and clients are also active and loyal. In June 2022, our users who were active
on a daily basis spent an average of 27.1 minutes per trading day on our Futubull platform. In
June 2022, among the clients who visited Futubull and moomoo platform at least once, a client
visited for 12.6 days on average. During the Track Record Period, we retained on average 98%
of our paying client base on a quarterly basis, one of the highest retention rates among online
securities brokers in Hong Kong, according to CIC.
– 336 –
BUSINESS
As of June 30, 2022, there were 15.6 million users who were yet to become our clients,
representing an important pipeline for our client acquisition. We have significant potential to
convert these users into clients and paying clients, and thus fuel the growth of our trading
volume and revenues.
The table below sets forth the growth of our platform in terms of users, clients and client
assets during the Track Record Period 1:
As of/For
the month
As of/For the month ended ended
December 31, June 30,
2019 2020 2021 2022
Users ьььььььььььььььььььь 7,513,887 11,916,648 17,374,296 18,649,821

MAUs ььььььььььььььььььь 615,199 1,831,807 2,219,274 2,060,040
Average DAUs ььььььььььььь 208,340 679,565 985,630 983,167
Clients ььььььььььььььььььь 717,842 1,419,734 2,751,239 3,021,790
Paying clients ььььььььььььь 198,382 516,721 1,244,222 1,387,146
Total client asset balance
(HK$ billion)ььььььььььььь 87.1 285.2 407.8 433.6
Average paying client
asset balance (HK$)ьььььььь 439,182 551,923 327,758 312,579
Note:
1 For each relevant year/period prior to January 1, 2021, figures are only inclusive of those under Futubull
or Futu International Hong Kong, as applicable. For each subsequent period since January 1, 2021,
figures are also inclusive of those under moomoo or Moomoo Financial Inc., Moomoo Financial
Singapore and Futu Australia, as applicable.
As of June 30, 2022, we had approximately 1.5 million users, over 614,000 clients and
365,000 paying clients on our moomoo platform, with a total client asset balance of
approximately HK$15.1 billion. Our MAUs and average DAUs on our moomoo platform for
June 2022 were approximately 317,000 and 120,000, respectively. Our users and clients on our
moomoo platform are primarily based in Singapore, the U.S. and Australia.
– 337 –
BUSINESS
Together with the growth of our trading platform, the client asset balance on our platform
also increased for the markets that we serve. Set forth below is a breakdown by stock exchange
of the total client asset balance on our platform during the Track Record Period:
For the
six months
ended
2019 2020 2021 2022
(HK$ in millions)
Hong Kong Stock Exchange 1 ьь 41,887 134,381 204,591 228,521

Major stock exchanges
in the U.S.ььььььььььььььь 23,790 93,829 124,630 113,557
Singapore Exchange ььььььььь – – 1,360 1,977
Australian Securities Exchange ь – – – 23
Others 2 ььььььььььььььььььь 21,449 56,980 77,223 89,515
Notes:
1 Includes qualified northbound securities under Stock Connect listed on the Shanghai Stock Exchange or
the Shenzhen Stock Exchange.
2 Includes cash, balance of wealth management products and net balance of futures products.
Solely based on the citizenship provided by the individual clients at the time of account
opening or further updated subsequently, approximately 68%, 31% and 1% of our individual
paying clients as of December 31, 2019, 55%, 44% and 1% of our individual paying clients as
of December 31, 2020, 38%, 39% and 23% of our individual paying clients as of December 31,
2021 and 35%, 39% and 26% of our individual paying clients as of June 30, 2022 were related
to Mainland China, Hong Kong and other markets, respectively. Solely based on the citizenship
provided by the individual clients at the time of account opening or further updated
subsequently, regardless of their residency, and the location where services were originated or
conducted for corporate counterparties, our revenue related to Mainland China, Hong Kong and
other markets accounted for approximately 69%, 30% and 1% of our total revenue in 2019,
60%, 39% and 1% of our total revenue in 2020, 52%, 46% and 2% of our total revenue in 2021,
and 44%, 48% and 8% of our total revenue for the six months ended June 30, 2022,
respectively. The decrease in the proportion of our revenue related to Mainland China during
the Track Record Period was mainly due to our Group’s global expansion strategies and our
growing and high proportion of newly added overseas clients. The revenue breakdown is not
derived from our management accounts and is solely based on the relevant business data and
our management estimate. Our Group does not distinguish between markets or segments for the
purpose of internal reporting and has only one reportable segment in its consolidated financial
statements.
– 338 –
BUSINESS
Corporate Clients
Our corporate clients are defined as corporate users to whom we have provided any of our
corporate services. Our corporate client base has been expanding since we started to provide
corporate services.
Our corporate clients actively contribute to our user community by delivering timely
product and business updates to our users, thereby breaking down information asymmetry and
providing bases for investment decisions.
User and Client Acquisition
We grow our client base mainly through (i) word-of-mouth referrals, (ii) corporate
services and (iii) online and offline marketing and promotional activities. For further details,
see “— Sales and Marketing” below.
User and Client Support
We have developed our proprietary and customized customer service system to connect
our users and clients with our customer service staff and technology experts directly through
online chat or customer service hotline around the clock. Our customer service representatives
receive regular training regarding our platform and services as well as critical communication
skills such as managing client complaints. Users can also post feedback and suggestions on
NiuNiu/Moo Community tagging our official accounts, product managers or even our chief
executive officer, which we will strive to respond to promptly.
We also proactively seek user and client feedback. For example, we initiate online
communications and activities on major social media platforms and our NiuNiu/Moo
Community to seek feedback from our users and clients. We reach out to our clients to discuss
their experience with our platform and solicit ways in which we can improve. We also provide
our corporate clients with similar services, where we have dedicated customer service teams
to attend to any issues our corporate clients may encounter, striving to respond as soon as
possible. Our corporate clients can also reach out to us anytime and discuss any improvements
and changes to the services that we provide.
– 339 –
BUSINESS
SALES AND MARKETING
Word-of-mouth referrals
We grow our client base through word-of-mouth referral, thanks to our premier user
experience and high client loyalty. As a result of our high brand awareness, we benefited from
significant organic traffic, contributing to over half of our new paying clients in 2020 and 2021.
Corporate Services
We also bring in clients through corporate services. For example, our ESOP solution
services have emerged as our signature corporate service and proved pivotal for efficient client
acquisition. Once an ESOP account of a corporate is established, we can connect with
beneficiary employees, and are better positioned to serve their ongoing stock trading needs
once their stock awards are vested. This has allowed us to attract quality clients in a
cost-effective manner. By providing IPO distribution services to new economy companies with
high demand in the market, we can promote our brand and attract new clients.
Online and offline marketing and promotional activities
We cooperate with external marketing channels for user and client acquisition. For
example, we purchase keyword search services on search engines for marketing purposes, post
promotional videos on popular video sharing sites, host online seminars and lectures, and
periodically send e-mails and messages to our users about our latest services and events. In
addition, we also conduct offline advertising via outdoor bulletin boards, magazines, campus
promotions and television commercials, which plays an important role in generating brand
exposure.
We also conduct promotions and marketing campaigns on our platform from time to time,
such as offering free commissions to clients who open trading accounts with us within a certain
period of time. We have a marketing committee responsible for formulating our monthly
marketing and brand promotion strategies and guiding our dedicated marketing team for
strategy implementation. We have a skilled and dedicated marketing team that is familiar with
and in sync with ever-changing market trends and preferences.
During the Track Record Period, we recorded selling and marketing expenses of
HK$164.7 million, HK$385.3 million, HK$1,392.1 million and HK$507.2 million (US$64.6
million) for the years ended December 31, 2019, 2020 and 2021 and the six months ended June
30, 2022, respectively.
– 340 –
BUSINESS
OUR TECHNOLOGY
Our commitment to improving our technology has played an important role in our ability
to continually develop and improve our products and services for our users and clients, which
has enabled us to maintain our competitive advantage and facilitate the execution of our growth
strategies. The purpose-built nature of our technology enables our platform to be adaptable and
we can react quickly to industry and regulatory changes in a highly scalable way.
In May 2020, we established a technology committee headed by Mr. Leaf Hua Li, our
founder, chairman and chief executive officer, and comprised of key personnel in our research
and development department. The key responsibilities of the technology committee include
formulating technology development strategies, optimizing the existing technology
infrastructure and implementing large-scale technology projects. The committee members have
extensive experience in the industry and will further boost our technology leadership and
advancement.
Industry-leading proprietary integrated cross-market system
Our proprietary, easy-to-use and integrated cross-market system allows our clients to
execute trades for securities listed on the Hong Kong Stock Exchange, the major exchanges in
the U.S., the Singapore Exchange or the Australian Securities Exchange or qualified under the
Stock Connect and listed on the Shanghai Stock Exchange or the Shenzhen Stock Exchange
from a single platform. The system provides unified functionality extending from core trading
to risk management, as well as multi-currency and multi-market settlement through our
self-developed modularized architecture, supported by real-time advanced service-level-
agreement monitoring and quality monitoring services, in order to ensure a superior client
experience. By virtue of our technical edge, the online application process for opening an
account can typically be completed in as little as three minutes, also an industry high among
our other major competitors in the Hong Kong retail securities brokerage market, according to
CIC.
Highly stable, scalable and secure system
Our distributed, cloud-based infrastructure is the foundation of our trading system,

employing a number of interrelated servers to mitigate the risk of a single server disrupting the
whole system. We invest significantly to ensure platform stability, and achieved over 99.9% of
service availability rate on our platform in 2020 and 2021, the highest among securities brokers
in Hong Kong, according to CIC. As of June 30, 2022, our platform was able to support
approximately 1,004 Hong Kong listed securities trades per second, being the highest among
our major competitors in the Hong Kong retail securities brokerage market, according to CIC.
Our platform adopts modular architecture that consists of multiple connected

components, each of which can be separately upgraded and replaced without compromising the
functionality of other components.
– 341 –
BUSINESS
We utilize sophisticated user interface design technology and embed a number of modules
in each user interface. By simply duplicating one specific existing user interface module as
needed, we effectively improve the efficiency of user interface development and the stability
and consistency of performance and functionality among different user interfaces, which
eventually improves user experience.
We recognize that the reliability and security of our platform is critical to our clients. Our
platform features an automated multi-level protection mechanism to ensure the services we
deliver to our users and clients are secure. We have adopted strict security policies and
measures, including data encryption and a two-factor authentication function, to protect our
proprietary data such as clients’ personal information and trading data. Our technology system
analyzes and predicts malicious attacks and enables us to respond to challenges and attacks
promptly.
Agile research and development capabilities
Through the construction and continual optimization of research and development tools
and components, we have achieved a high level of research and development efficiency, while
ensuring service quality and system stability. In 2021, we released 153 application upgrades
and 5,689 new product features for our users, the most in the Hong Kong retail securities
brokerage market, according to CIC. To further improve research and development efficiency,
we built our activity configuration system with configurable template abstraction for various
routine operational activities. The average launch cycle and necessary manpower for such
activities have been effectively reduced compared to traditional development methods.
In addition, we believe that our heavily tech- and research- and development-oriented
employee structure lays a solid foundation for our ability to continually develop innovative
solutions and enhance our existing service offerings. Our research and development teams are
primarily organized into four areas, including finance business, internet business, big data and
growth as well as engineering technology. Our core research and development team consists of
experienced engineers and technology experts with extensive experience in structure design
supporting massive transactions, and the majority of them have professional working
experience with leading internet and technology platforms in China. Most of our research and
development personnel are based in Shenzhen, China. See “— Data Security and Privacy”
below for further information.
– 342 –
BUSINESS
DATA SECURITY AND PRIVACY
We have established a comprehensive security system, Futu Monolith Safety Protection

System (“FMSPS”) to provide industry-leading level of protection of information related to our
clients, their accounts and their transactions with the support of our network situational
awareness and risk management system. FMSPS has obtained ISO27001 Information
Securities Management System Certification.
We have a data security team of engineers and technicians dedicated to protecting the
security of our data. We have also adopted a strict data protection policy to ensure the security
of our proprietary data. We apply encryption algorithms with high security levels to all user
activities such as logins, account asset reviews and transaction records to ensure data safety.
Our official website is equipped with a 2048-bit EV certificate, and all data transmissions are
completed through encrypted channels. Our platform maintains a high data protection standard,
with a random key applied to each data transmission to ensure the security of the information.
To ensure data security and avoid data leakage, we have established stringent internal
protocols under which we have clear instructions on how to handle and store the different types
of data that we receive. We categorize the operating, business and management data that we
receive into varying levels of sensitivity. For confidential personal data, we grant classified
access only to limited employees with strictly defined and layered access authority. We have
also set up a firewall to segregate our core user data and require strict access digital permission
to access any core data throughout our entire operation. We strictly control and manage the use
of data within our various departments and do not share any personal data of our users and
clients with external third parties. We have measures in place to prevent staff from improperly
using client information. We also seek consent from our users as to the methods and ways in
which we collect and use their data, in accordance with the data protection laws and regulations
in the relevant local jurisdictions.
On the client side, we have developed a proprietary two-factor authentication function to

provide enhanced account security. If a client logs in to his or her account through a different
device, both the account password and a dynamic verification token are required for
authentication. Two-factor authentication is also required when a client wants to access his or
her core data, such as account opening information and account assets. We store such core data
on an isolated network separately from other data, which has greatly improved our data
security. A client can also activate the two-factor authentication function for placing trading
orders, where he or she is required to provide both the transaction password and a dynamic
verification token.
– 343 –
BUSINESS
Aside from maintaining regular self-inspection to ensure compliance, we have also

engaged external law firms and professional cybersecurity teams to conduct regular
cybersecurity studies, examinations and inspections so as to optimize our systems and boost
our risk prevention capabilities. While we are subject to similar data and privacy protection
requirements in other markets in which we operate, including the U.S., Singapore and
Australia, we have been closely monitoring the latest regulatory developments and optimizing
our compliance practices. We continuously and actively communicate with regulators,
strengthen internal training to enhance employees’ awareness on personal information
protection, and hone our capabilities of safeguarding personal information. See “Risk Factors
— Risks Related to Our Business and Industry — If we fail to protect our platform or the
information of our users and clients, whether due to cyber-attacks, computer viruses, physical
or electronic break-in, breaches by third parties or other reasons, we may be subject to
liabilities imposed by relevant laws and regulations, and our reputation and business may be
materially and adversely affected.”
INTELLECTUAL PROPERTY
Intellectual property is fundamental to our success and competitiveness. We currently

hold a collection of intellectual property rights relating to certain aspects of our business
operation. As of June 30, 2022, we owned over 100 computer software copyrights in China. We
also maintained trademark registrations worldwide, including over 340 in Mainland China,
over 120 in Hong Kong, 20 in the United States, 40 in Singapore and over 200 in other
countries and regions. As of June 30, 2022, we had over 150 patents granted in China, 3 patents
granted in Hong Kong, 10 patents granted in Singapore and 10 patents granted in Australia. As
of June 30, 2022, we had registered over 100 domain names.
We protect our intellectual property rights, including trademarks, patents, copyrights and
domain names, strictly in accordance with the relevant laws and regulations. We regularly
improve and update our intellectual property management system in line with the development
of our business. We seek to maintain registration of intellectual property rights that are material
to our business under appropriate categories and in appropriate jurisdictions. We also typically
require our employees who may be involved in the development of intellectual property to
execute agreements assigning such intellectual property to us.
During the Track Record Period and up to the Latest Practicable Date, we were not aware
of any material infringement (i) by us of any intellectual property rights owned by third parties,
or (ii) by any third parties of any intellectual property rights owned by us. However,
unauthorized use of our intellectual property by third parties and the expenses incurred in
protecting our intellectual property rights from such unauthorized use may adversely affect our
business and results of operations.
For details of our intellectual property rights, see “Appendix IV — Statutory and General
Information — B. Further Information about our Business — 2. Intellectual Property Rights”.
– 344 –
BUSINESS
OUR CUSTOMERS AND SUPPLIERS
We have a broad base of customers, primarily consisting of (i) paying clients and (ii)
corporate clients. Our top five customers over the Track Record Period accounted for less than
10% of our total revenue for each of the years ended December 31, 2019, 2020 and 2021 and
for the six months ended June 30, 2022. To the best of our knowledge, all of our top five
customers during the Track Record Period are independent third parties. None of our Directors,
their respective associates or any shareholder who, to the knowledge of our Directors, owned
more than 5% of our issued share capital as of the Latest Practicable Date, has any interest in
any of our top five customers during the Track Record Period.
We have no major suppliers due to the characteristics of our principal business activities.
COMPETITION
The market for online securities brokerage services is emerging and rapidly evolving. As
a pioneer in online securities brokerage market, we position ourselves as an online retail
securities broker based in Hong Kong with an expanded international footprint in Singapore,
the United States, Australia, as well as strong background and abundant resources in the PRC.
We currently compete with two types of competitors in these markets, including (i) pure-play
online securities brokerage companies; (ii) traditional securities brokerage companies,
featuring a combination of online and offline channels, and securities brokerage business units
within commercial banks.
We compete primarily on the basis of:
• client base and user engagement;
• technology infrastructure;
• research and development capabilities;
• security and credibility of the platform;
• brand recognition and reputation;
• operational compliance with applicable regulatory requirements; and
• operating leverage.
We believe that we are well-positioned to effectively compete on the basis of the factors
listed above. However, many of our current or future competitors may have longer operating
histories, greater brand recognition, stronger infrastructure, larger client bases or greater
financial, technical or marketing resources than we do. See “Risk Factors — Risks Relating to
– 345 –
BUSINESS
our Business and Industry — We face significant competition in the online securities brokerage
and wealth management industries, and if we are unable to compete effectively, we may lose
our market share and our results of operations and financial condition may be materially and
adversely affected.”
EMPLOYEES
As of June 30, 2022, we had a total of 2,586 employees. Among these employees, 2,286
employees were located in Mainland China, 147 employees were located in Hong Kong, 86
employees were located in the United States, 48 employees were located in Singapore and 19
employees were located in Australia. We had a total of 847, 1,315 and 2,318 employees as of
December 31, 2019, 2020 and 2021, respectively.
The following table sets forth a breakdown of our employees by function as of June 30,
2022:
As of June 30, 2022

Number %
Research and development ьььььььььььььььььь 1,641 63.5

Customer services and operations ььььььььььььь 396 15.3
General and administration ьььььььььььььььььь 349 13.5
Marketing ььььььььььььььььььььььььььььььь 200 7.7
Total ььььььььььььььььььььььььььььььььььь 2,586 100.0
We participate in various employee social security plans that are organized by municipal
and provincial governments, including housing, pension, medical insurance and unemployment
insurance, as required by laws and regulations in the PRC. We are required under PRC law to
make contributions to employee benefit plans at specified percentages of the salaries, bonuses
and certain allowances of our employees, up to a maximum amount specified by the local
government from time to time. We are also required under Hong Kong laws to enroll all eligible
employees in Hong Kong to their mandatory provident fund (“MPF”) scheme. Both the
employees and us are each required to contribute certain percentage of an employee’s salary
(subject to a statutory cap at HK$1,500) per month to a retirement scheme that is registered as
a MPF scheme. For our employees in the United States, we make similar contributions to a
defined contribution retirement plan under section 401(k) of the Internal Revenue Code. For
our employees in Singapore, we make payments to the Central Provident Fund as part of their
defined contribution retirement plan.
We also have a systematic performance evaluation system which provides the basis for
human resource decisions such as remuneration adjustments, career promotion and talent
cultivation.
– 346 –
BUSINESS
We enter into standard labor contracts with our employees. We also enter into standard
confidentiality and non-compete agreements with our senior management. The non-compete
restricted period ranges typically between six months and two years after the termination of
employment, depending on the jurisdiction in which our employees are located, and we agree
to compensate the employee with a certain percentage of his or her pre-departure salary during
the restricted period.
We believe that we maintain a good working relationship with our employees, and we had
not experienced any significant labor disputes during the Track Record Period.
HEALTH, WORK SAFETY, SOCIAL RESPONSIBILITY AND ENVIRONMENTAL

MATTERS
We do not operate any production facilities. Therefore, we are not subject to significant
health, work safety, social or environmental risks. We strive to provide employees with a safe
and healthy work environment. We have not had any significant workplace accidents in our
history. During the Track Record Period and up to the Latest Practicable Date, we had not been
subject to any fines or other penalties due to non-compliance with health, safety or
environmental regulations.
We have adopted internal policies on (i) our governance regarding ESG risks, (ii) our ESG
strategies and (iii) identification of the relevant metrics and targets in the long run. Such
internal policies include our Code of Business Conduct and Ethics, Anti-Corruption
Compliance Policy and Employee Code of Conduct. Our Board of Directors is responsible for
the oversight and management of key ESG risks, and the implementation of our ESG strategies
is taken care by our management and relevant departments. We are aware of the impact of
potential changes in social trend and political policies relating to ESG on our business model,
and will keep close monitor of the relevant changes in accordance with the aforementioned
scheme. See “Risk Factors — Risks Related to Our Business and Industry — Increasing focus
with respect to environmental, social and governance matters may impose additional costs on
us or expose us to additional risks. Failure to comply with the laws and regulations on
environmental, social and governance matters may subject us to penalties and adversely affect
our business, financial condition and results of operations.”
During the Track Record Period and up to the Latest Practicable Date, our business,
financial conditions and results of operations had not been materially adversely impacted by
ESG risks including those relating to health, work safety, environmental, social or climate-
related issues. We do not operate any production facility and the potential impact of
environment related regulatory development on our business operations and financial
conditions is limited. As an online financial services platform, we do not currently foresee any
materials risks in this regard. However, we have been committed to mitigating any potential
risks in the mid- to long-term. For instance, we proactively monitor risks posed by climate
changes, assess their potential impact on our business operations, and take appropriate actions
to mitigate such risks. The primary risks posed by climate changes to our business include
physical risks and transition risks. The physical risks mainly result from extreme climate
– 347 –
BUSINESS
hazards and long-term chronic risks. In addition, sea level rise and other risks may result in
depreciation and loss of physical assets. We have formulated emergency measures for extreme
climate hazards to minimize the risk of interruption to our operations and loss of assets. In
addition, as part of our carbon neutrality initiatives, we have taken steps to deal with transition
risks arisen from accelerated transformation to low-carbon lifestyle globally.
We endeavor to limit our carbon emissions and promote green operations during the
ordinary course of business and it has become part of our corporate culture. As an online
financial services platform that provides almost all of our financial services online, we have
been a pioneer in the industry to embrace paperless trading environment and substantially
decrease the consumption of resources including water, electricity and paper in our daily
operations. In July 2018, we were the first securities broker in Hong Kong to offer completely
online-based account opening services, according to CIC. Clients can access their monthly or
daily statements through our Futubull and moomoo platform. We also send electronic
statements for their easy reference through emails, and therefore completely get rid of paper
applications, orders and statements which have been heavily used by traditional financial
service providers since long ago and till today. We have been constantly expanding our
business operations supported by public cloud services, with future plans to limit utilization of
physical data centres. We anticipate substantial reduction of procurement and operational costs
through the transfer to public cloud services, and will be able to support the further reduction
in energy consumption brought by upgraded cloud technologies. In addition, we have also
initiated our upgrade of technology infrastructure to Go language and cloud-native architecture
since 2022, with anticipated reduction of server costs through auto scaling after completion of
the upgrade and expected enhancement in resource consumption efficiency.
We operate most of our businesses digitally and utilize cloud-based services to reduce
consumption of paper from client end and in all the offices and renovate our offices with
environmental-friendly materials, in an effort to keep our carbon consumption low. For
example, we arrange our office superintendents to inspect the building regularly and turn down
the lights in empty rooms and urge the employees to turn off the computers before leaving
office. We have imposed office policies for air conditioning in considerations of season,
weather and use scenarios to manage the energy consumption of air conditioning and have
displayed notices on environmental protection around the office to remind our employees of
the potential positive environmental impact that could be brought by taking steps forward.
We have taken a series of health and safety measures in response to the COVID-19
pandemic to protect our employees, including the following:
• Control over the entry and exit points of our office premises. We require persons
who come into our office to wear masks and pass temperature checks, before they
are allowed to enter our premises. Our employees are also required to present their
staff identification cards, and visitors are required to provide their personal
information before entering. Our entrances and exits are also located in different
parts of the building, minimizing interaction.
– 348 –
BUSINESS
• Office premises and equipment management. We arrange for frequent disinfectant or

alcohol cleaning of our common areas, including conference rooms, pantries,
corridors and lavatories, as well as office workstations and equipment. We also
ensure proper air circulation within our office premises. In addition, we recommend
our employees to dine separately to reduce the risk of cross-infection.
• Contingency arrangements. We have established protocols to timely update our

employees in COVID-related emergencies. Employees who have been to high-risk
areas, or have recorded high temperatures, are required to self-isolate and undergo
testing before they are permitted to return to our office premises. For our
headquarters in Shenzhen, China, we have a dedicated isolation room should we
ever encounter an emergency.
Social Responsibility
Contributing to the wider community
We are committed to social responsibility and contributing to the wider community. First
and foremost, we will continue to lower investment barriers and make investing easier for
everyone. Our free investment videos on Futubull and moomoo provide users with investment
knowledge and help them better understand investment risks. We seek to improve our user’s
financial literacy, which we believe is critical for them to achieve their long-term investment
goals.
Over the years, we have participated in the “Trailwalker” fundraising event organized by
Oxfam, the contributions of which are used to alleviate global poverty and provide disaster
relief. We encourage our employees to participate in this hiking event while also raising
awareness on inequality and fostering a mindset of social responsibility.
We have always strived to bring positive benefits to the environment and wider society
as a whole. Our Hong Kong subsidiary, Futu Securities, regularly participates in voluntary
shoreline cleanup operations in Hong Kong. The operations aim to support the community and
respond to the problem of marine debris with actions to create a cleaner coast, which are in line
with our continuous commitment to sustainability and innovation.
During the COVID-19 pandemic, Futu Securities has also distributed testing kits and
masks to the general public in Hong Kong through simple sign-ups on the Futubull platform,
contributing to the aggregated efforts of the community to fight against the pandemic.
– 349 –
BUSINESS
Employee development
As a “people’s first” company, our employees are an integral part of our business, and we
seek to identify and develop talents through the following methods:
• Comprehensive training. We provide our employees with a variety of training, and

support their personal development. In the six months ended June 30, 2022, we have
scheduled training sessions over many different topics that had an accumulated
attendance of 30,170, allowing our employees to broaden their knowledge in
different areas.
• Leadership courses. We also provide our employees with leadership training based
on their different career development stages, ranging from reserve deputy team
leader to director level and above training. We also provide a series of management
and leadership courses every quarter for management at all levels. In 2021, our
employees collectively spent over 430 hours on management training. For the six
months ended June 30, 2022, our employees collectively spent over 2,518 hours on
online and offline management training, the accumulated attendance of which
reached 1,299.
• Graduate training. In July 2021, we also provided a full-time training program to

145 fresh graduates over a week, to help them gain workplace skills, accumulate
industry knowledge and quickly integrate into the working environment.
• Personal qualifications. We also encourage and sponsor our employees to further

their education and obtain additional qualifications, including professional and
recognized qualifications within the financial industry.
Health, safety and wellbeing
It is our priority to protect the physical and mental health, safety and wellbeing of our
employees, and we have implemented various internal policies and measures accordingly,
including:
• Healthy work-life balance. Together with our comprehensive benefits package, we

encourage our employees to pursue a healthy work-life balance. We provide fitness
facilities and regularly organize social and team-bonding activities to ensure a
positive and cohesive work environment for all.
– 350 –
BUSINESS
• Internal feedback. From time to time, we conduct internal employee satisfaction

surveys on an anonymous basis to obtain feedback and address any issues
accordingly. In 2021, we invited over 1,100 employees to partake in a survey
regarding the organizational and talent management of our Group, for which we
achieved a response rate of over 76%. Based on the survey feedback, we were one
of the four winners out of 249 companies of the “2021 China Organizational
Capabilities Survey Best Practice Award” co-sponsored by KNX, Tencent
Consulting and YCA Y-Triangle CEO Alliance, recognized for our capabilities to
achieve effective internal management.
• Anti-discrimination. We have strict policies on equal employment opportunities,

prohibiting any form of discrimination based on race, color, belief, religion, gender,
sexual orientation, among others.
• Anti-sexual harassment. We have a zero-tolerance policy on sexual harassment

within and outside the workplace, and we treat any complaints we receive seriously
and in strict confidence. We have established effective reporting channels, such as
via email and corporate social messaging accounts, and will retain written evidence
in relation to all complaints to be handled by our relevant departments. We will also
review our decisions, should the relevant person(s) disagree with the results of our
internal investigations.
Proper business practices
We have implemented internal control policies in relation to our business operations,

including anti-corruption and compliance, anti-money laundering, anti-bribery, fraud, business
conduct and ethics. We require our employees to complete relevant exams each quarter, and our
employees have already accumulated 14,798 attendance and over 3,677 learning hours on
compliance matters for the six months ended June 30, 2022.
We have established several layers of scrutiny, including establishing our internal audit
department responsible for leading investigations and reporting cases to the audit committee, and
our internal control department that assists the internal audit department with investigation and
follow-ups on rectification and improvement measures. Our suppliers and other business partners
are generally required to enter into an anti-bribery agreement with us prior to working with us.
We adopt anti-money laundering policies and review and update policies and procedures, if
needed, as part of our framework in managing money laundering and terrorism financing risks.
We also regularly conduct internal audits on our high-risk business operations and management
areas, and evaluate the effectiveness of our internal control, in order to ensure compliance with
the proper and ethical business practices which we seek to uphold. In response to potential
enhanced regulatory scrutiny with regard to digital communications and trading practices by
brokers, our Group has promulgated and adopted internal policies, protocols and guidelines to
manage the relevant regulatory and reputational risks. During the Track Record Period and up to
the Latest Practicable Date, our Group had not (i) sold any of its clients’ trading data to
third-parties to further front-run clients’ orders or (ii) engaged in any misleading communications
– 351 –
BUSINESS
and trading practices to encourage its clients to trade. See “Risk Factors — Risks Related to Our
Business and Industry — Any future change in the regulatory and legal regime for the securities
brokerage and wealth management industries regions where we operate may have a significant
impact on our business model. Potential enforcement actions against industry peers could lead to
new rules or requirements and may subject us to higher regulatory scrutiny. If we are deemed to
have been engaged in any misleading digital engagement practices or trading practices, there
could be material adverse effect to our business operations, reputation and prospects.”
We also have whistleblowing policies in place and have set up various reporting channels,
whilst making every effort to ensure the confidentiality of any reports in accordance with the
applicable laws and regulations. Our employees responsible for handling whistleblower reports
are required to sign a confidentiality agreement, and any employee who discloses any
information to any reporters or investigators in contravention of the relevant laws and
regulations will be dismissed.
Environmental protection
As a high-tech company, we encourage our employees to adopt sustainable practices in

order to reduce our carbon footprint, including promoting energy-saving measures,
encouraging online virtual office, reducing paper wastage and avoiding unnecessary travels, all
of which are included in our employee handbook. We have also cooperated with a ride-hailing
company to provide employees with electric vehicle ride home and thus reduce carbon
emissions. We actively respond to any government requirements on waste sorting, recycling
and waste reduction, in an effort to further lessen waste and environmental pollution.
LICENSES AND REGULATORY APPROVALS
Licenses, Permits and Approvals
We are required to obtain various licenses, permits and certifications for our operations. As
of the Latest Practicable Date, we held 51 licenses, registrations and memberships across Hong
Kong, Singapore, the U.S., Australia and Europe. Our Group had complied with the requirements
and conditions of the material licenses it held in all material aspects during the Track Record
Period. As of the Latest Practicable Date, we had duly obtained and maintained all material
licenses, permits and certificates required by laws and regulations for our operations, and such
licenses, permits and certificates have remained in full effect. As of the Latest Practicable Date,
Shenzhen Futu held a Valued-added Telecommunication Business Operation License (《增值電
信業務經營許可證》, the “ICP License”), a Radio and Television Program Production and
Operation License and an Internet Culture Operation License; and Hainan Caixuetang held an
Internet Culture Operation License, a Radio and Television Program Production and Operation
License, an ICP License and a Publication Operation License. As confirmed by our PRC Legal
Advisors, we are not required to obtain any other licenses from any regulatory authorities for our
presence in the PRC.
– 352 –
BUSINESS
Regulated Activities in Hong Kong
As of the Latest Practicable Date, Futu International Hong Kong, one of our operating
subsidiaries, was licensed under the SFO to conduct the following regulated activities:
Regulated Activities by Type of License Effective Date
Type 1 (Dealing in Securities) ььььььььььььььььььььььь October 2012

Type 2 (Dealing in Futures Contracts) ььььььььььььььььь July 2013
Type 3 (Leverage Foreign Exchange Trading) ьььььььььььь December 2020
Type 4 (Advising on Securities) ьььььььььььььььььььььь June 2015
Type 5 (Advising on Futures Contracts) ьььььььььььььььь August 2018
Type 7 (Providing Automated Trading Services) ьььььььььь August 2019
Type 9 (Asset Management) ььььььььььььььььььььььььь July 2015
In addition to the above licenses, one of our subsidiaries in Hong Kong also holds a
money lenders license issued by the licensing court under the Money Lenders Ordinance,
which allows it to provide loans to its clients in its ordinary course of business. We have also
been registered as a Mandatory Provident Fund Intermediary with the Mandatory Provident
Fund Schemes Authority in Hong Kong. For further details, please refer to “Regulation –
Overview of the Laws and Regulations Relating to Our Business and Operations in Hong
Kong.”
Regulated Activities Overseas
For our overseas operations, we hold licenses, registrations and memberships in

Singapore, the U.S., Australia and Europe. In particular, Moomoo Financial Singapore is a
licensed corporation registered with the Monetary Authority of Singapore with the Capital
Markets Services Licence (CMSL). Moomoo Financial Inc. is registered as a broker-dealer
with the SEC and is a member in good standing with FINRA, authorized to conduct business
as an introducing broker in compliance with the SEC and FINRA rules. Futu Clearing Inc. is
also a member in good standing of FINRA and DTCC capable of providing clearing business
in the U.S. For further details, please refer to the “Regulation” section of this document. Futu
Australia, which holds an Australian Financial Services License, is regulated by the Australian
Securities and Investments Commission.
– 353 –
BUSINESS
REGULATORY DEVELOPMENT
PRC Cybersecurity and Data Protection
We have taken the following steps to ensure compliance with the relevant requirements
of CAC in light of the recent development in China’s cybersecurity and data protection
regulatory framework.
Measures for Cybersecurity Review ( 《網絡安全審查辦法》, the “Revised Cybersecurity

Review Measures”)
The Revised Cybersecurity Review Measures were jointly promulgated by the CAC and
other twelve PRC regulatory authorities on December 28, 2021 and took effect on February 15,
2022. The Revised Cybersecurity Review Measures provide that, among others, (i) the
purchase of cyber products and services by critical information infrastructure operators (the
“CIIOs”) and the network platform operators (the “Network Platform Operators”) which
engage in data processing activities that affect or may affect national security shall be subject
to the cybersecurity review by the Cybersecurity Review Office (網絡安全審查辦公室), the
department which is responsible for the implementation of cybersecurity review under the
CAC; and (ii) the Network Platform Operators with personal information data of more than one
million users that seek for listing in a foreign country are obliged to apply for a cybersecurity
review by the Cybersecurity Review Office.
Our PRC Legal Advisors are of the view that the proposed Listing in Hong Kong and our
current business operations do not fall within the scope in which it is required to apply for such
cybersecurity review as required by the Revised Cybersecurity Review Measures. The reasons
are as follows:
(i) the term “listing abroad (國外上市)” under the Revised Cybersecurity Review
Measures exempts listing in Hong Kong from the mandatory obligation of ex-ante
declaration of cybersecurity review;
(ii) according to the Security Protection Regulations for Critical Information

Infrastructure (《關鍵信息基礎設施安全保護條例》), the protection authorities are
responsible for identifying CIIOs in various industry sectors and timely notify the
CIIOs concerned of such identification results. As of the Latest Practicable Date, the
Company had not been notified by any protection authority of it being recognized
as a CIIO;
– 354 –
BUSINESS
(iii) the Company is a Network Platform Operator under the Revised Cybersecurity
Review Measures. According to the assessment of the PRC Legal Advisors on the
internet security, data security and protection of personal information as of the
Latest Practicable Date, it has not found that we had any national security risk
clearly set forth under Article 10 of the Revised Cybersecurity Review Measures. In
addition, except the security risks listed in the Article 10 of the Revised
Cybersecurity Review Measures, no PRC laws and regulations provide further
clarification or guidance on the criteria for determining “other factors that may
endanger the security of critical information infrastructure, network security or data
security” or “affect or may affect national security”. Therefore, taking into account
that the Group has adopted internal measures to ensure compliance and will
continually and closely monitor the legislative process and seek guidance from
relevant regulatory authorities in a timely manner to ensure its compliance, as of the
date of this document, our PRC Legal Advisers are of the view that the Revised
Cybersecurity Review Measures will not materially adversely affect the Group; and
(iv) the Company also confirmed that, based on the due diligence conducted by its PRC
Legal Advisors, as of the Latest Practicable Date, it had not received any
notification from the Cybersecurity Review Office of CAC or other authorities
requiring the Company to apply for cybersecurity review. In addition, the Company
has not been subject to any punishment or any interview, investigation, legal
proceedings or other regulatory measures taken by the Cybersecurity Review Office
of CAC or relevant regulatory authorities for its failure to apply for cybersecurity
review.
The consultation papers for Network Data Security Management Regulation ( 《網絡數據安
全管理條例(徵求意見稿)》) published on November 14, 2021 (the “Draft Regulation”)
According to the Draft Regulation, a data processor must apply to CAC for cybersecurity
review if its proposed listing in Hong Kong affects or may affect national security.
Notwithstanding the above, as advised by our PRC Legal Advisors, the Draft Regulation
is in draft form for public consultation purpose and had not been formally adopted as effective
laws as of the Latest Practicable Date. It remains unclear when and to what extent the Draft
Regulation will take effect in its current draft form. Certain key legal concepts in the Draft
Regulation, such as “affect or may affect national security”, remains unclear.
That said, our PRC Legal Advisors are of the view that, assuming the Draft Regulation
is implemented in its current form, our PRC Legal Advisors do not reasonably expect any
substantive difficulties for the Group to be in compliance with the Draft Regulation in all
material aspects, nor do they reasonably expect that the Draft Regulation would cause any
material adverse impact on the Company’s operation or its proposed Listing.
As of the Latest Practicable Date, we had not received any request for cybersecurity
review or relevant inquiries from CAC in connection with its proposed Listing.
– 355 –
BUSINESS
Other applicable PRC data security and cybersecurity laws and regulations
We, through one of our operating entities in Mainland China Shenzhen Futu, primarily
provide two types of services in the PRC through Futubull platform, namely (i) providing users
with market data and other Internet information services; and (ii) having the links embedded,
which enable to redirect users to the brokerage services provided by another wholly-owned
subsidiary of the Company, Futu International Hong Kong, which is a licensed corporation
under the SFO. As part of the account opening process, clients’ personal information relating
to opening account for online trading activities is directly collected, processed, used and stored
in the server(s) engaged by Futu International Hong Kong, and outside Mainland China.
Shenzhen Futu does not approve any account opening procedure, nor process any securities
transaction information. As of the date of this document such services are not in violation of
the applicable data security and cybersecurity PRC laws and regulations in any material respect
according to our PRC Legal Advisors.
Article 38 of the Personal Information Protection Law of the PRC (《中華人民共和國個

人信息保護法》, the “PIPL”) applies to operators within Mainland China that provide
personal information to any foreign entity. Based on the above and taking into consideration
the Measures on Security Assessment of Cross-border Data Transfer (《數據出境安全評估辦
法》) (the “Data Export Measures”), which were issued recently, and considering the
uncertainties regarding how they would be interpreted and enforced which remain unclear, our
PRC Legal Advisors have advised us that the direct collection of personal information of its
PRC-based users and clients by Futu International Hong Kong outside Mainland China does
not fall within the scope of “cross-border provision of personal information by operators within
Mainland China to foreign entities” as expressly prescribed in Article 38 of the PIPL as of the
date of this document, as (i) Futu International Hong Kong is not a “domestic personal
information handler” regulated under Article 38 of the PIPL, (ii) there is no transfer (or
“export”) of personal data of users and clients by Shenzhen Futu out of the PRC, and (iii) there
is no cross-border provision of important data and personal information that was collected or
produced in the course of operations within the territory of Mainland China, and therefore is
not in violation of any applicable PRC laws in this regard. The Joint Sponsors’ PRC legal
advisor concurred with the aforementioned opinion of the Company’s PRC Legal Advisors.
– 356 –
BUSINESS
The Data Export Measures require that any data processor which processes or exports
personal information exceeding certain volume threshold under such measures shall apply for
security assessment by the CAC before transferring any personal information abroad. The
security assessment requirement also applies to any transfer of important data outside of China.
Since the Personal Information Protection Law and the Data Export Measures are new, there
are uncertainties as to the interpretation and application of it, especially in relation to its
applicability and requirements for our offshore subsidiaries when they engage in personal
information processing activities for natural persons within China, including the information
collection activities conducted by our offshore subsidiaries outside the Mainland China. As of
the date of this document, the exact scope and the calculation method of “important data” under
the current regulatory regime remains unclear, and the PRC government authorities may have
discretion in the interpretation and enforcement of the applicable laws. Therefore, it is
uncertain whether we would be required to report any security assessment for cross-border data
transfers to the CAC, and there can be no assurance that the PRC regulatory authorities will
not in the future take a view that is contrary to or otherwise different from the above opinion
of our PRC Legal Advisors. While we do not believe the pre-approval requirements for any
cross-border data transfer will apply to the way Futu International Hong Kong currently
collects information from persons within China, in the event we need to transfer certain data
from our PRC entities to our offshore subsidiaries or if regulatory bodies deem our current data
collection model as a cross-border data transfer, we will be subject to the relevant
requirements. Furthermore, we may need to take certain additional measures in the future to be
in compliance with the Personal Information Protection Law. Notwithstanding the foregoing
uncertainties, if we are required to report security assessments for cross-border data transfers,
to the reasonable knowledge of our PRC Legal Advisors, as of the Latest Practicable Date, they
are of the view that they do not foresee any material legal impediments for us to comply with
Data Export Measures in all material respects.
During the Track Record Period and up to the Latest Practicable Date, we had established
comprehensive security system, Futu Monolith Safety Protection System (“FMSPS”), which
has been awarded the ISO27001 Information Management System Certification, to provide
protection of information related to our users and clients, their accounts and transactions with
the support of our network situational awareness and risk management system. We have a data
security team of engineers and technicians dedicated to protecting the security of our data, and
have established stringent internal protocols in this regard. For details of our data security
measures, see “— Data Security and Privacy.”
Based on the legal due diligence conducted by our PRC Legal Advisors, our PRC Legal
Advisors are of the view that the Group has adopted necessary measures with respect to the
data security and cybersecurity according to the applicable PRC laws and regulations, and they
are not aware of any material non-compliance by the Group of the data security, cybersecurity
or personal information protection under the current PRC laws and regulations.
– 357 –
BUSINESS
During the Track Record Period and up to the Latest Practicable Date, (i) there had not
been any material leakage of data or personal information by our Group; and (ii) we had not
been involved in any material investigation, inquiry, penalty or other legal proceedings
initiated by the applicable governmental or regulatory authorities in the PRC in relation to our
compliance with the applicable data security and cybersecurity laws and regulations in the
PRC. Further, as advised by our PRC Legal Advisors, they do not currently expect that the
applicable PRC laws on data security and cybersecurity would have a material adverse impact
on our business operations, financial results and financial position.
LEGAL PROCEEDINGS AND COMPLIANCE
Save as disclosed in this subsection, during the Track Record Period and up to the Latest
Practicable Date, we had not been involved in any non-compliance incidents that led to fines,
enforcement actions or other penalties that could, individually or in the aggregate, have a
material adverse effect on our business, financial condition or results of operations. Our
Directors are of the view that, save as disclosed in “— Properties”, we had complied with all
relevant laws and regulations in all material respects during the Track Record Period and up
to the Latest Practicable Date.
Ongoing Regulatory Actions
We are subject to various regulatory requirements, including those specified in laws,

regulations and guidelines issued by the competent regulatory authorities in Hong Kong, US,
Singapore and Australia, including but not limited to the SFC, MAS, SEC, FINRA and the
ASIC.
Futu International Hong Kong is a licensed corporation under the SFO and may be subject
to SFC inquiries and investigations from time to time. As of the Latest Practicable Date, Futu
International Hong Kong was involved in certain ongoing inquiries initiated by the SFC
concerning matters including, among others, client onboarding processes, risk management,
client assets, cybersecurity, anti-money laundering, counter-financing terrorism and operation
of mobile application. In addition, Futu International Hong Kong was involved in an ongoing
investigation concerning matters, including, among others, online account opening procedures
and product due diligence. The SFC’s inquiries and investigation remain ongoing and are
subject to statutory secrecy under Section 378 of the SFO. Therefore, no additional details
about them can be disclosed in this document unless otherwise consented by the SFC.
– 358 –
BUSINESS
As the foregoing inquiries and investigation from the SFC remain ongoing, it is not
possible for us to accurately predict if any disciplinary action will be taken against Futu
International Hong Kong after the conclusion of the inquiries and investigation, if so, the
nature and extent of any such action. If, after the SFC’s inquiries and investigation have been
concluded, the SFC identifies misconduct or material non-compliance, the SFC can take
various regulatory actions, which may include, among other things, reprimands, fines and/or
suspension or revocation of licenses and trading rights and, if imposed, might materially and
adversely affect our reputation, business, prospects and financial conditions. See “Risk Factors
— Risks related to Our Business and Industry — We are subject to extensive and evolving
regulatory requirements in the markets we operate in, non-compliance with which may result
in penalties, limitations and prohibitions on our future business activities or suspension or
revocation of our licenses and trading rights, and consequently may materially and adversely
affect our business, financial condition, operations and prospects. In addition, we are involved
in ongoing inquiries and investigation by relevant regulators.”
Regulated Activities
Pursuant to Articles 118 and 120 of the Securities Law of the PRC, “securities business”
includes securities brokerage business, securities investment, investment consulting business
and other businesses approved by the securities regulatory authorities under the State Council.
Shenzhen Futu, one of our operating entities in Mainland China, having the link embedded in
Futubull platform to redirect users to the brokerage services provided by Futu International
Hong Kong, the Company’s wholly-owned subsidiary in Hong Kong and a licensed corporation
under the SFO. As advised by our PRC Legal Advisors, as of the date of this document such
services provided by Shenzhen Futu in Mainland China do not fall within the definition of
“securities business” under the Securities Law.
During the Track Record Period and as of the Latest Practicable Date, we had not been
subject to any other administrative penalty or investigation by CSRC or other relevant
authorities in the PRC concerning our regulatory compliance with the Securities Law of the
PRC that could, individually or in the aggregate, have a material adverse effect on the Group’s
business operations, financial results and financial position.
Administration of Securities Firms (《證券公司監督管理條例》). The operation of Futubull
platform by Shenzhen Futu and the provision of securities services by Futu International Hong
Kong do not constitute the provision of securities business in Mainland China. Our Group’s
securities brokerage business is conducted outside Mainland China through its entities and
employees licensed with the relevant regulators, such as the SFC in Hong Kong, and not
through its operating subsidiaries in Mainland China. Therefore, our PRC legal advisors are of
the view that, as of the date of this document, the operation of Futubull platform by Shenzhen
Futu and the provision of securities services by Futu International Hong Kong do not violate
– 359 –
BUSINESS
the Securities Law, the Regulations on Supervision and Administration of Securities Firms and
the Administrative Measures on Representative Offices of Foreign Securities Institutions
Stationed in China (《外國證券類機構駐華代表機構管理辦法》).
over the applicable PRC laws and regulations, including but not limited to, Securities Law of
公司監督管理條例》) and Administrative Measures on Representative Offices of Foreign
Securities Institutions Stationed in China (《外國證券類機構駐華代表機構管理辦法》).
Accordingly, there can be no assurance that the PRC regulatory authorities will not in the
future take a view that is contrary to or otherwise different from the above opinion of our PRC
Legal Advisors.
Currency Conversion
Pursuant to the applicable laws and regulations in the PRC (including but not limited to
the PRC Foreign Exchange Administration Regulation (《中華人民共和國外匯管理條例》)),
any institution, unit or individual may not engage in foreign exchange business without the
approval of the PRC foreign exchange control authority or other financial regulatory authority.
We are not licensed under applicable PRC laws and regulations to provide, and we do not
provide, any currency conversion or remittance of funds out of Mainland China services to our
PRC-based clients.
The PRC-based clients may only use their PRC bank accounts for identification purpose
during the account opening processes through the e-certification procedure through a mutually
recognized certification authority (“E-Certification Procedure”) as allowed by the SFC
Circular on Acceptable Account Opening Approaches published in June 2019 (the “2019 SFC
Circular”). Furthermore, the PRC-based clients cannot use their PRC bank accounts for their
initial payments or ongoing fund movements via our platform. For fund transfer (such as when
the PRC-based clients conduct trades on our platform), we do not allow the PRC-based clients
to use their PRC bank accounts for fund transfer via our platform and our platform only accepts
remittance of funds through either a Hong Kong bank account or an overseas bank account for
either initial payments or ongoing fund movements. We require our clients to complete
registration of their bank accounts for fund transfer purposes on our platform and we do not
accept PRC bank accounts for such purposes. Our guidelines and policy are also clearly stated
to users who would like to open a trading account on Futubull. As advised by our PRC Legal
Advisors, the current applicable PRC laws and regulations also do not require our clients to
submit or us to request and review evidence of approval or registration from relevant
authorities with respect to the foreign currency used for investments. For details of our
processes of account opening and fund transfer for our clients, see “— Our Services — Retail
Services — Account Opening and Fund Transfer.”
– 360 –
BUSINESS
In addition, we conduct regular employee training sessions to emphasize the compliance

with foreign exchange control regulations, including but not limited to the prohibition on
facilitating any form of currency conversion. To ensure compliance with the applicable
regulatory guidelines and the Group’s internal policies, we have required our employees to
comply with the relevant laws and regulations in respect of offshore investment transactions
by PRC residents and prohibits employees from facilitating in any form currency conversion
and remittance by PRC-based clients in violation of applicable laws and regulations. In
addition, we have established anti-money laundering policies covering client identification,
fund transfer and transaction execution in compliance with the applicable anti-money
laundering and counter-terrorist financing laws and regulations in Hong Kong. We have also
posted the PRC foreign exchange laws and regulations including the PRC Foreign Exchange
Administration Regulation (《中華人民共和國外匯管理條例》) and the Implementation of the
Administrative Measures for Personal Foreign Exchange (《個人外匯管理辦法實施細則》) on
both our website and mobile app for our clients’ information. We also maintain a regular
compliance review over the communication between employees and clients, and will take
disciplinary action against any non-compliance noted during the review. We will also conduct
review and take similar measures when receiving report from employees on irregularity
identified or suspected in this respect.
To strengthen our internal control, we have established and set up our internal control
requirements, which may have stricter obligations or higher standards than the applicable laws
and regulations. During the Track Record Period and up to the Latest Practicable Date, we had
identified several incidents of staff’s misconducts in relation to noncompliance with our
internal requirements on fund transfer and remittance. Such misconducts mainly concerned the
staff’s inappropriate responses to clients’ queries on fund transfers by sharing their knowledge
of the procedures and requirements regarding the PRC banks’ currency conversion and
remittance policy, and such responses were not in strict compliance with our internal policies.
These misconducts were identified by us during our regular compliance review over the
communications between our employees and clients. As advised by our PRC Legal Advisors,
such misconducts were not compliant with our internal policies and requirements, and none of
them could be seen as a violation of currently applicable PRC laws and regulations by our
Group. Our PRC Legal Advisors are of the view that such misconducts will not result in any
penalty or enforcement actions against our Group by relevant regulatory authorities.
We have adopted an internal appraisal system where employees’ work performance is

ranked by scores. We would take disciplinary actions against the personnel violating our
internal policies and deduct the relevant personnel’s performance scores based on the
seriousness of the misconduct and our internal appraisal policy.
– 361 –
BUSINESS
In addition, we have taken a comprehensive range of internal control measures to prevent

and avoid any potential violations and misconducts, including:
(i) discussing between the relevant staff and his/her team leader and/or department
manager with respect to the details of the identified violations and/or misconducts
and the consequences. Case studies would also be provided to other employees;
(ii) providing regular compliance trainings to our employees to emphasize the

compliance with foreign exchange control regulations, including but not limited to
the prohibition on facilitating any form of currency conversion;
(iii) actively conducting review on our staff’s performance. Each customer service staff
is required to sign a compliance undertaking, which highlights the key requirements
on their service standards and acknowledgement to adhere to our internal policies
and compliance manuals from time to time; and
(iv) maintaining regular compliance review over the communications between our
employees (such as the customer service staff) and our clients, including ad hoc
review of the records on the online service platform and/or telephone recordings to
monitor the staff’s responses given to PRC-based clients.
Our Directors are of the view that the above-mentioned comprehensive range of internal
control measures have been adequate and effective in preventing and avoiding potential
violations and misconducts, as since May 2022 and up to the Latest Practicable Date, we had
not identified any staff misconduct in relation to our internal requirements on account opening
and fund transfer and remittance. During the Track Record Period and as of the Latest
Practicable Date, we had not been subject to any administrative penalty or investigation by
SAFE or other relevant authorities in the PRC concerning our compliance with the relevant
PRC laws and regulations on currency conversion or remittance of funds out of Mainland
China that could, individually or in the aggregate, have a material adverse effect on the
Group’s business operations, financial results and financial position.
Cross-border Data Transfer
Certain of our operations may involve cross-border data transfer as our overseas operating
subsidiaries Moomoo Financial Inc., Moomoo Financial Singapore and Futu Securities
Australia have outsourced their customer services to PRC service providers. As of the Latest
Practicable Date, such arrangements had not been restricted by the relevant regulatory
authorities in the jurisdictions that such overseas operating subsidiaries operate in. See
“— Regulatory Development — PRC Cybersecurity and Data Protection — Other Applicable
PRC Data Security and Cybersecurity Laws and Regulations” for discussion of the direct
collection of personal information of PRC-based users and clients by Futu International Hong
Kong outside Mainland China.
– 362 –
BUSINESS
AWARDS AND RECOGNITIONS
Since our inception, we received recognition for the quality and popularity of our
offerings and services. Some of the significant awards and recognition we have received are set
forth below.
Awarding entity Award/Recognition Award year
Shenzhen Science and Technology Certificate of High-tech 2019, 2020

Innovation Commission, Enterprise
Shenzhen Finance Bureau,
Shenzhen Tax Service, State
Taxation Administration ьььььь
Torch High Technology Industry Technologically advanced 2020
Development Center, Ministry enterprise
of Science & Technology ььььь
Hong Kong Stock Exchange ььььь Top Breakthrough Exchange 2020
Participant – Leverage and
Inverse (L&I) Product Turnover
Top 3 Active Exchange 2020
Participants in Stock Options
Hurun Report ьььььььььььььььь 2020 China New Finance Top 100 2020
The Asset ььььььььььььььььььь The Asset Triple A Digital 2019
Awards 2019, Digital
Brokerage of the Year
Triple A Digital Awards 2020, 2020
Best Digital Collaboration
Hong Kong Stock Exchange ььььь HKEX Awards 2021 2021
INSURANCE
We provide social security insurance including medical insurance, maternity insurance,

workplace injury insurance, unemployment insurance and pension benefits through a PRC
government-mandated multi-employer defined contribution plan for our PRC-based
employees. We also offer additional life and medical insurance to our PRC-based employees
through commercial providers. We contribute to Mandatory Provident Fund and provide labor
insurance and medical insurance for our Hong Kong-based employees. In accordance with the
Securities and Futures (Insurance) Rules of Hong Kong (Chapter 571AI of the laws of Hong
Kong), we have purchased and maintained insurance for any loss incurred by us due to any loss
to our clients’ assets in our custody that are caused by fraudulent conduct of our employees,
robbery, theft or other misconduct. In addition, our Singapore and U.S. subsidiaries provide
health insurances to our Singapore and U.S.-based employees, respectively. We do not maintain
business interruption insurance or key-man insurance, and we only maintain limited general
property insurance. We believe that our insurance coverage is adequate to cover our key assets,
facilities and liabilities.
– 363 –
BUSINESS
Moomoo Financial Singapore contributes to the Central Provident Fund (CPF), a

compulsory comprehensive savings and pension plan for working Singaporeans and permanent
residents. Besides CPF, we provide medical insurance and work-injury compensation insurance
for all our Singapore-based employees. We also acquired public liability insurance that covers
our Singapore offices.
If we incur any uninsured loss, or the compensated amount is significantly less than our
actual loss, our business, financial condition and results of operations could be materially and
adversely affected. See “Risk Factors — Risks Related to Our Business and Industry — We
have limited business insurance coverage.”
PROPERTIES
Our corporate headquarters are located at in Hong Kong, China. As of the Latest
Practicable Date, we leased 28 properties in China, Hong Kong, the U.S., Singapore and
Australia, with an aggregate gross floor area of approximately 36,000 square meters. Our
leased properties are primarily used for corporate offices, data centers and other facilities. The
relevant lease agreements have a term of one to five years. As of the Latest Practicable Date,
we owned one property in California, the U.S. for corporate office purpose.
As of the Latest Practicable Date, eight of our lease agreements for our properties in the
PRC had not been registered and filed with the competent PRC government authorities as
required by applicable PRC laws and regulations, due to the relevant landlords not having
completed the relevant property leasing and registrations. As advised by our PRC Legal
Advisor, such non-compliance does not affect the validity of the relevant property lease
agreement, and will not have a material adverse effect on the Listing, but could result in the
imposition of fines up to RMB10,000 for each leased property that is unregistered if we fail
to rectify the non-compliance within the time frame prescribed by the relevant authorities.
Nonetheless, if we are required to relocate our leased office premises, such relocation will not
be considerably burdensome and difficult, as we do not have any immovable equipment nor
specific office space requirements. As such, we would only expect to incur minor relocation
service costs, without having to incur a significant increase in rental rates given the abundance
of office premises that would be suitable for our business operations.
– 364 –
PRC LAWS AND REGULATIONS RELATING TO FOREIGN OWNERSHIP

RESTRICTIONS
Foreign investment activities in the PRC are mainly governed by the Negative List and
the Catalog of Industries for Encouraging Foreign Investment (《鼓勵外商投資產業目錄》)
(the “Encouraging Catalog”), which were promulgated and are amended from time to time
jointly by the MOFCOM and the NDRC. The Negative List and the Encouraging Catalog
divide industries into three categories in terms of foreign investment, namely, “encouraged”,
“restricted” and “prohibited.” Industries not listed under the Negative List and the Encouraging
Catalog are generally deemed as falling into a fourth category “permitted.” The currently
effective Negative List is the Special Administrative Measures (Negative List) for the Access
of Foreign Investment (2021 Version) (《外商投資准入特別管理措施(負面清單)(2021年版)》)
(the “2021 Negative List”), which became effective on January 1, 2022.
As advised by our PRC Legal Advisors, a summary of the business operations of

Shenzhen Futu and Hainan Caixuetang that are subject to foreign investment restriction or
prohibition in accordance with the 2021 Negative List and other applicable PRC laws and
regulations is set out below (the “Relevant Businesses”):
Categories Relevant Businesses
Value-added The business operation of Shenzhen Futu and Hainan

telecommunication Caixuetang through our websites and apps falls within
services ьььььььььььььь the scope of commercial internet information services
under the Telecommunications Regulations of the PRC,
for which each of them is required to hold, and has
obtained, a Value-added Telecommunication Business
Operation License (《增值電信業務經營許可證》) (the
“ICP License”) under the applicable PRC laws and
regulations.
According to the 2021 Negative List and other

applicable PRC laws and regulations, provision of
value-added telecommunication services business
(including commercial internet content provision
services) is a “restricted” business, and foreign
investors are not allowed to hold more than 50% of the
equity interest in enterprise conducting such business
(excluding electronic commerce, domestic multi-party
communication, storage-forwarding and call center).
– 365 –
Categories Relevant Businesses
Radio and television program Shenzhen Futu and Hainan Caixuetang create certain
production ььььььььььььь video contents, including but not limited to stock
information and live broadcasts of corporate events,
pursuant to the Provisions on the Administration of
Production and Operation of Radio and Television
Programs (《廣播電視節目製作經營管理規定》), for
which each of them is required to hold, and has
obtained, a Radio and Television Program Production
and Operation License (《廣播電視節目製作經營許可
證》) under the applicable PRC laws and regulations.

applicable PRC laws and regulations, radio and
television program production is a “prohibited”
business, and foreign investors are prohibited from
holding equity interest in any enterprise conducting
such business.
Internet culture activities ььь Shenzhen Futu and Hainan Caixuetang create certain
video contents (requiring a Radio and Television
Program Production and Operation License as discussed
above) and publish such video contents on our websites
and apps, which fall within the scope of “internet
culture businesses” under the Interim Provisions for the
Administration of Internet Culture (《互聯網文化管理
暫行規定》). For publication of such video contents,
each of them is required to hold, and has obtained, an
Internet Culture Operation License (《網絡文化經營許
可證》) under the applicable PRC laws and regulations.

applicable PRC laws and regulations, operation of
internet culture activities (excluding music) is a
“prohibited” business, and foreign investors are
prohibited from holding equity interest in any enterprise
conducting such business.
– 366 –
The Relevant Businesses
The revenue contribution of all of our Consolidated Affiliated Entities to our Group
amounted to 0.2%, 0.3%, 0.3% and 0.4% of the total revenue of our Group for the years ended
December 31, 2019, 2020, 2021 and the six months ended June 30, 2022, respectively, and the
total assets of all of our Consolidated Affiliated Entities amounted to 0.1%, 0.1%, 0.1% and
0.1% of the total assets of our Group as at December 31, 2019, 2020, 2021 and the six months
ended June 30, 2022, respectively.
Shenzhen Futu, one of our Consolidated Affiliated Entities, is principally engaged in

providing comprehensive services to our users and clients on our Futubull platform, which
generally involves provision of market data and information and production and publication of
video contents for investor education and corporate introduction. Hainan Caixuetang, one of
our Consolidated Affiliated Entities, is also engaged in creation and provision of video contents
on investment knowledge for our users and clients. The services provided by Shenzhen Futu
and Hainan Caixuetang involve a mix of radio and video program production business, internet
culture business and value-added telecommunication service business under the applicable
PRC laws and regulations. Further, given that the video content produced by Shenzhen Futu
and Hainan Caixuetang are launched and displayed on our Futubull platform, the radio and
video program production business and internet culture business (which are considered
“prohibited” where foreign investment is strictly forbidden) carried out by each of Shenzhen
Futu and Hainan Caixuetang and the value-added telecommunication service business (which
is considered “restricted”) operated by them collectively form our integrated content offering
through Futubull platform, and are therefore inseparable from each other and cannot be
artificially segregated and operated through different entities within the Group.
As advised by our PRC Legal Advisors, we cannot hold or acquire any equity interest in
our Consolidated Affiliated Entities as, under the 2021 Negative List and other applicable PRC
laws and regulations, foreign investors are:
(a) prohibited from holding any equity interest in a PRC enterprise engaging in radio
and television program production business and internet culture business (excluding
music); and
(b) restricted from holding more than 50% of the equity interest in a PRC enterprise
providing commercial internet information services, which are categorized as
“value-added telecommunication service business.” In addition, as confirmed by the
Company, the relevant Consolidated Affiliated Entities provide commercial internet
information and operate “prohibited” businesses (i.e. radio and television program
production business and internet culture business) on the same platform. All these
Relevant Businesses form an integral part of the Group’s business and are operated
on the same platform, which cannot be separated apart from one another.
– 367 –
Based on the above, we believe that to maintain the business operations and the
effectiveness of licenses held by our Consolidated Affiliated Entities, they must be controlled
by our Company through the Contractual Arrangements. Furthermore, since the businesses
operated by our Consolidated Affiliated Entities fall within both the “prohibited” and
“restricted” business categories under the 2021 Negative List, we are unable to set up
alternative corporate structure that allows us to hold all such businesses according to the
applicable PRC laws and regulations. Further, as Shenzhen Futu and Hainan Caixuetang
operate the “prohibited” businesses simultaneously, in the event that Shenzhen Futu and
Hainan Caixuetang become sino-foreign joint-ventures, both Shenzhen Futu and Hainan
Caixuetang are unlikely to obtain and maintain an ICP License due to the lack of guidance on
specific requirement or regulatory procedures for foreign investment in the value-added
telecommunications business in the PRC in view of the removal of the Qualification
Requirements (as defined below). Please see “— Recent Update on the FITE Regulations” and
“— Legality of our Contractual Arrangements” for details. Accordingly, we are of the view that
our Contractual Arrangements are narrowly tailored, as they are used to enable us to achieve
our business and operation purposes under the current PRC regulatory framework so as to
minimize the potential conflict with relevant PRC laws and regulations.
Recent Update on the FITE Regulations
Foreign investment in a company providing value-added telecommunication services,

including Internet content provision services, is subject to the Provisions on the Administration
of Foreign-invested Telecommunications Enterprises (《外商投資電信企業管理規定》), or the
FITE Regulations, which were promulgated by the State Council on December 11, 2001, and
subsequently amended on September 10, 2008, February 6, 2016 and recently on April 7, 2022
by the State Council’s Decision to Amend and Abolish Certain Administrative Regulations
(《國務院關於修改和廢止部分行政法規的決定》, the “Order No. 752”). Following the issue
of Order No. 752, the qualification requirements (the “Qualification Requirements”)
previously set out in the FITE Regulations, for which the main foreign investor must satisfy
for investing in a PRC value-added telecommunication business was removed with effect from
May 1, 2022. Nevertheless, under the amended FITE Regulations, whilst foreign investors are
able to invest in entities holding an ICP License (holding up to 50% equity interest and not
more), whether an entity held by foreign shareholders may hold a value-added
telecommunication license is still subject to the examination of substance and merits by
relevant authority.
– 368 –
According to the interviews conducted by our PRC Legal Advisors and the Joint
Sponsors’ PRC legal advisor with the Communication Administration Bureaus (“CAB”) of
Guangdong Province (廣東省通信管理局) and of Hainan Province (海南省通信管理局) in
September 2021, each CAB confirmed that there are no detailed rules and standards for the
Qualification Requirements and the MIIT will decide whether an applicant meets the
Qualification Requirements on a case-by-case basis and there will be significant uncertainty for
the relevant entities to obtain or maintain the license for operating value-added
telecommunication services if such entities are held directly or indirectly by foreign
shareholders that do not have any substantial operation or business. Further, both of the CAB
officers confirmed that a foreign-invested enterprise will not be granted with an ICP License
if it also engages in foreign prohibited businesses such as radio and television program
production and operation in addition to value-added telecommunication businesses. Both of the
CAB officers work in the respective division of the relevant CAB responsible for accepting
application from and supervising daily operation of value-added telecommunication enterprises
located within the respective jurisdiction of the relevant CAB, including annual report
submission and change of shareholder. Our PRC Legal Advisors are of the view that each of
the CAB officers who attended the consultation was a competent person to provide the
aforementioned confirmation.
In addition, as advised by our PRC Legal Advisors, as of the Latest Practicable Date, (i)
no applicable PRC laws, regulations or rules have provided further clear guidance on specific
requirement or regulatory procedures had been published for foreign investment in the
value-added telecommunications business in the PRC in view of the removal of the
Qualification Requirements. As such, whether an entity held by foreign shareholders may hold
a value-added telecommunication license is still subject to the examination of substance and
merits by relevant authority; and (ii) the removal of the Qualification Requirements would not
invalidate our ICP License or require us to adjust the Contractual Arrangements under
applicable PRC laws.
We will continue to monitor the regulatory developments following the Listing to keep
abreast of any regulatory developments, and will adjust the Contractual Arrangements to
satisfy the “narrowly tailored” principle as soon as practicable after further guidance from the
relevant PRC authorities is published with respect to the specific requirements under the then
PRC laws and regulations and the regulatory procedures that we need to follow to complete
such adjustment.
– 369 –
OUR CONTRACTUAL ARRANGEMENTS
Overview
Our Consolidated Affiliated Entities are currently our VIEs and their respective
subsidiaries, which were all established under the PRC laws. As described above, investment
in certain areas of the industries in which Shenzhen Futu and Hainan Caixuetang currently
operate are subject to restrictions under current PRC laws and regulations. After consultation
with our PRC Legal Advisors, we determined that it was not viable for our Company to hold
our Consolidated Affiliated Entities directly through equity ownership. Instead, we decided
that, in line with common practice in the PRC for industries subject to foreign investment
restrictions, we would gain effective control over, and receive all the economic benefits
generated by the businesses currently operated by our Consolidated Affiliated Entities through
the Contractual Arrangements between the WFOE, on the one hand, and our Consolidated
Affiliated Entities and the Registered Shareholders, on the other hand.
In order to comply with the relevant PRC laws and regulations described above, while
maintaining effective control over all of our operations, our Company has control over our
Consolidated Affiliated Entities by having entered into a series of contractual arrangements
through the WFOE, our VIEs and their Registered Shareholders initially in October 2014
(which were amended and restated in May 2015 and September 2018) (the “Original
Contractual Arrangements”). In connection with the Listing and in order to ensure that our
Contractual Arrangements are, and will continue to remain, in compliance with the Stock
Exchange’s requirements, we entered into the current set of Contractual Arrangements on
September 30, 2021 and entered into the termination agreements among our VIEs, the WFOE
and the Registered Shareholders on September 30, 2021 to terminate and replace the Original
Contractual Arrangements. As a result, the WFOE has maintained effective control over the
financial and operational policies of the Consolidated Affiliated Entities and have been entitled
to all the economic benefits derived from their operations.
Certain of our Consolidated Affiliated Entities, namely Beijing Futu, Hainan Futu and
Beijing Shensi Consulting, have not yet commenced substantive business operations and are
not expected to have commenced any substantive business operations by the time of the
Listing. Our Company has undertaken to the Stock Exchange that it will not conduct any
businesses within their respective business segments that are not subject to foreign investment
restrictions or prohibitions through these entities or, to the extent that it does, it will transfer
such entities outside of the Contractual Arrangements prior to engaging in any substantive and
unrestricted businesses.
– 370 –
Contractual Arrangements
The following simplified diagram illustrates the flow of economic benefits from our
Consolidated Affiliated Entities to WFOE and our Company under the Contractual
Arrangements:
Our Company
100%
Registered
WFOE
Shareholders(1)
Service fees Technical and consulting services
Our VIEs and their subsidiaries
Shenzhen Futu Hainan Futu
100% 100% 100%
Beijing Futu Hainan Caixuetang Beijing Shensi Consulting
Notes:
(1) Each of Shenzhen Futu and Hainan Futu is held as to 85% by Mr. Li and as to 15% by Ms. Lei Li (Mr.
Li’s spouse).
(2) “ ” denotes direct legal and beneficial ownership in equity interest.
(3) “ ” denotes contractual relationship.
(4) “ ” denotes the control by the WFOE over our Consolidated Affiliated Entities through (i) the
powers of attorney to exercise all shareholders’ rights of the Registered Shareholders in our VIEs; (ii)
exclusive options to acquire all or part of the equity interest in our VIEs; and (iii) equity pledges by the
Registered Shareholders in favour of the WFOE over the equity interests in our VIEs.
(5) As of the Latest Practicable Date, Shenzhen Futu held an ICP License, a Radio and Television Program
Production and Operation License and an Internet Culture Operation License; and Hainan Caixuetang
held an Internet Culture Operation License, a Radio and Television Program Production and Operation
License, an ICP License and a publication operation license.
(6) Beijing Futu, Hainan Futu and Beijing Shensi Consulting have not yet commenced substantive business
operations and are not expected to have commenced any substantive business operations by the time of
the Listing, and will only carry out businesses which are subject to foreign investment restrictions under
the applicable PRC laws and regulations in the future.
– 371 –
Circumstances under which we will unwind our Contractual Arrangements
If the Relevant Businesses are no longer prohibited or restricted under the applicable PRC
laws and regulations and it is practical for us to apply for and maintain the applicable licenses
for the Relevant Business, we will unwind and terminate the Contractual Arrangements as soon
as practicable in respect of such Relevant Businesses. In that case, the WFOE will exercise the
call option under the Exclusive Option Agreements (as defined below) to acquire the equity
interest and/or assets of our VIEs and unwind the Contractual Arrangements, and we will
directly hold the maximum percentage of ownership interests permissible under relevant PRC
laws and regulations.
Summary of the material terms of our Contractual Arrangements
A description of each of the specific agreements that comprise our Contractual

Arrangements entered into by WFOE and each of our VIEs and the Registered Shareholders is
set out below:
Exclusive Business Cooperation Agreements
Under the exclusive business cooperation agreements dated September 30, 2021 between
our VIEs and the WFOE (the “Exclusive Business Cooperation Agreements”), in exchange
for a service fee, payable monthly, our VIEs agreed to engage the WFOE as its exclusive
provider of certain technical and consulting services, including but not limited to (i) licensing
of the relevant software, trademarks and technologies for use by our VIEs, (ii) providing
development, maintenance and update of relevant application software required by our VIEs’
business, (iii) providing design, installation, daily management and maintenance, and update
of VIEs’ computers, network software, hardware equipment and databases, (iv) providing
technical support and training to personnel of our VIEs, (v) providing technical consultation
and research for our VIEs, and (vi) other relevant services required by our VIEs’ business needs
and in consideration of WFOE’s capacity as agreed between the parties.
Under the Exclusive Business Cooperation Agreements, the service fee shall consist of
100% of the total consolidated profit of our VIEs, after the deduction of any accumulated
deficit of the VIEs in respect of the preceding financial year(s), operating costs, expenses,
taxes and other statutory contributions. Notwithstanding the foregoing, the WFOE may adjust
the amount of the services fee in accordance with PRC tax law principles and tax practices and
with reference to the operational needs of our VIEs, and our VIEs will accept such adjustment.
The WFOE shall calculate the service fee on a monthly basis and issue a corresponding invoice
to our VIEs. Our VIEs must make the payment to the WFOE within ten business days of
receiving such invoice.
– 372 –
In addition, without the prior written consent of the WFOE, during the term of the
Exclusive Business Cooperation Agreements, with respect to the services subject to the
Exclusive Business Cooperation Agreements and other matters, our VIEs shall not accept the
same or any similar services provided by any third party. In addition, without the prior consent
of the WFOE, our VIEs shall not enter into any business cooperation with any third party, and
the WFOE shall have the exclusive right of first refusal in respect of such business cooperation
with our VIEs under the same terms.
The Exclusive Business Cooperation Agreements also provide that the WFOE has the
exclusive proprietary rights to and interests in any and all intellectual property rights
developed or created by our VIEs during the performance of the Exclusive Business
Cooperation Agreements.
The Exclusive Business Cooperation Agreements shall remain effective unless otherwise
terminated by the WFOE in writing or in accordance with the provisions of the Exclusive
Business Cooperation Agreements. If, during the term of the Exclusive Business Cooperation
Agreement, the operation period under the business license of either the WFOE or our VIEs
expires and the renewal of which is declined or rejected by the relevant government authorities,
the Exclusive Business Cooperation Agreements shall be terminated at the expiry of such
operation period.
Exclusive Option Agreements
As part of the Contractual Arrangements, each of the Registered Shareholders

respectively entered into an exclusive option agreement (the “Exclusive Option Agreements”)
on September 30, 2021 with our VIEs and the WFOE, each of which contains similar terms and
conditions. Pursuant to the Exclusive Option Agreements, the WFOE has the exclusive and
irrevocable right to require the Registered Shareholders to transfer any or all their equity
interests in our VIEs to the WFOE and/or any third party/parties designated by it, in whole or
in part at any time and from time to time, at the lower of the amount of the Registered
Shareholders’ respective paid-in capital in our VIEs and the lowest price permitted under
applicable PRC laws at the time.
– 373 –
Each of our VIEs and the respective Registered Shareholders of our VIEs, among other
things, has covenanted that:
(i) without the prior written consent of the WFOE, they shall not in any manner
supplement, change or amend the constitutional documents of our VIEs, increase or
decrease their registered capital, or change the structure of their registered capital in
other manner;
(ii) they shall maintain our VIEs’ corporate existence in accordance with good financial
and business standards and practices, and prudently and effectively operate their
business and handle their affairs, and shall obtain the prior written consent of the
WFOE for the annual budget and final accounts of our VIEs;
(iii) without the prior written consent of the WFOE, they shall not at any time from the
signing of the Exclusive Option Agreements sell, transfer, pledge or dispose of in
any manner any equity interest of our VIEs and their subsidiaries, or allow the
encumbrance thereon of any security interest;
(iv) without the prior written consent of the WFOE, they shall not at any time from the
signing of the Exclusive Option Agreements sell, transfer, pledge or dispose of in
any manner any material asset, business or revenue of our VIEs and their
subsidiaries or the legal or beneficial interest therein, or allow the encumbrance
thereon of any security interest;
(v) without the prior written consent of the WFOE, our VIEs shall not incur, inherit,
guarantee or assume any debt, except for (i) debts incurred in the ordinary course of
business other than payables incurred by way of a loan, and (ii) intra-group debts
between our VIEs and their respective subsidiaries;
(vi) our VIEs shall always operate all of their and their respective subsidiaries’
businesses during the ordinary course of business to maintain their asset value and
refrain from any action or omission that may adversely affect our VIEs’ and their
respective subsidiaries operating status and asset value;
(vii) without the prior written consent of the WFOE, our VIEs and their respective
subsidiaries shall not execute any material contracts, except the contracts executed
in the ordinary course of business;
(viii) without the prior written consent of the WFOE, our VIEs and their respective
subsidiaries shall not provide any person with any loan or credit, except for the
provision of loan or credit by our VIEs to their respective wholly-owned
subsidiaries;
(ix) they shall provide the WFOE with information on the business operations and
financial conditions of our VIEs and their respective subsidiaries at the request of
WFOE;
– 374 –
(x) if so requested by the WFOE, they shall procure and maintain insurance in respect
of the assets and businesses of our VIEs and their respective subsidiaries from an
insurance carrier acceptable to the WFOE, at an amount and type of coverage typical
for companies that operate similar businesses or hold similar properties or assets in
the same region;
(xi) without the prior written consent of the WFOE, our VIEs and their respective
subsidiaries shall not merge, consolidate with, acquire or invest in any person;
(xii) they shall immediately notify the WFOE of the occurrence or possible occurrence of
any litigation, arbitration or administrative proceedings relating to the assets,
businesses or revenues of our VIEs and their respective subsidiaries;
(xiii) for the purpose of maintaining the ownership by our VIEs and their respective
subsidiaries of all of their assets, they shall execute all necessary or appropriate
documents, take all necessary or appropriate actions, file all necessary or
appropriate complaints, or raise necessary or appropriate defences against all
claims;
(xiv) without the prior written consent of the WFOE, our VIEs shall not in any manner
distribute dividends, provided that upon the request of the WFOE, our VIEs shall
immediately distribute all distributable profits to their shareholders;
(xv) at the request of WFOE, they shall appoint any persons designated or approved by
WFOE as the directors, supervisors (if applicable) and senior management of our
VIEs and their respective subsidiaries, and/or remove the office of any director,
supervisor or senior management of our VIEs and their respective subsidiaries, and
they shall pass all relevant resolution and make all relevant filings;
(xvi) without the prior written consent of the WFOE, our VIEs and their respective
subsidiaries shall not engage in any business that competes with that of the WFOE
or its affiliates; and
(xvii) without the prior written consent of the WFOE, our VIEs and their respective
subsidiaries shall not be liquidated or dissolved unless otherwise required by the
PRC laws.
– 375 –
In addition, each of the Registered Shareholders of our VIEs, among other things, has
covenanted that:
(i) without the written consent of the WFOE, they shall not at any time from the signing
of the Exclusive Option Agreements sell, transfer, pledge or dispose of in any other
manner the legal or beneficial interest in our VIEs, or allow the encumbrance
thereon of any security interest, except for encumbrances under the Equity Pledge
Agreements (as defined below) and the Power of Attorney (as defined below);
(ii) they shall procure our VIEs’ shareholders’ meeting and/or the board of directors not
to approve, without the written consent of WFOE, at any time from the signing of
the Exclusive Option Agreements any sale, transfer, pledge or disposal of in any
other manner the relevant Registered Shareholder’s legal or beneficial interest in our
VIEs, or allow the encumbrance thereon of any security interest, except for the
approval of the Registered Shareholder’s encumbrances under the Equity Pledge
Agreements (as defined below) and the Power of Attorney (as defined below);
(iii) they shall procure our VIEs’ shareholders’ meeting and/or the board of directors not
to approve, without the written consent of the WFOE, our VIEs to merge,
consolidate with, acquire or invest in any person;
(iv) they shall immediately notify the WFOE of the occurrence or possible occurrence of
any litigation, arbitration or administrative proceedings relating to their equity
interest in our VIEs;
(v) they shall procure our VIEs’ shareholders’ meeting and/or the board of directors to
vote in favour or any transfer of equity interest pursuant to the Exclusive Option
Agreements and take any other action at the request of the WFOE;
(vi) for the purpose of maintaining the ownership of equity interest in our VIEs, they
shall execute all necessary or appropriate documents, take all necessary or
appropriate actions, file all necessary or appropriate complaints, or raise necessary
or appropriate defences against all claims;
(vii) at the request of WFOE, they shall appoint any persons designated or approved by
WFOE as the directors, supervisors (if applicable) and senior management of our
VIEs and their respective subsidiaries;
– 376 –
(viii) they shall waive the pre-emptive right (if any) he/she/it is entitled to with respect to
the transfer of equity interest to the WFOE or any party/parties designated by the
WFOE by other existing shareholder(s) of our VIEs, agree the other existing
shareholder(s) of our VIEs may enter into the Exclusive Option Agreements, the
Equity Pledge Agreements (as defined below) and the Power of Attorney (as defined
below) with the WFOE or the party/parties designated by the WFOE and our VIEs,
and undertake not to take any action that conflicts with such other documents
entered into by the other existing shareholder(s);
(ix) each of them will immediately gift any profits, dividends, distributions or
liquidation proceeds received from our VIEs to the WFOE or a person designated by
the WFOE to the extent permitted by the PRC laws; and
(x) each of them will strictly abide by the provisions of the Exclusive Option
Agreements and any other agreement(s) collectively or separately entered into
among the Registered Shareholders, our VIEs and the WFOE, perform the
obligations under these agreements in a practical manner, and refrain from any
action or omission which would affect the validity of such agreements. If any the
Registered Shareholders has any right under the Exclusive Option Agreements, the
Equity Pledge Agreements (as defined below), unless with the written instruction of
the WFOE, the Registered Shareholders shall not exercise such rights.
The Exclusive Option Agreements shall remain effective unless otherwise terminated in
the event that the entire equity interest in our VIEs held by the Registered Shareholders or their
respective successors or transferees have been transferred to the WFOE or its appointee(s) or
in accordance with the provisions of the Exclusive Option Agreements.
Equity Pledge Agreements
As part of the Contractual Arrangements, each of the Registered Shareholders

respectively entered into the equity pledge agreements (the “Equity Pledge Agreements”) on
September 30, 2021 with our VIEs and the WFOE, each of which contains similar terms and
conditions. Pursuant to the Equity Pledge Agreements, the Registered Shareholders have
agreed to pledge all their respective equity interests in our VIEs that they own, including any
dividend or distribution derived from the shares, to WFOE as a security interest to guarantee
the performance of contractual obligations and the payment of outstanding debts.
The pledges under the Equity Pledge Agreements have been effective upon completion of
registration with the relevant administration for market regulation under the Original
Contractual Arrangements and shall remain valid until after all the contractual obligations of
the Registered Shareholders of our VIEs and our VIEs under the relevant Contractual
Arrangements have been fully performed and all the outstanding debts of the Registered
Shareholders of our VIEs and our VIEs under the relevant Contractual Arrangements have been
paid.
– 377 –
Upon the occurrence and during the continuance of an event of default (as defined in the
Equity Pledge Agreements), the WFOE shall have the right to exercise all such rights as a
secured party under the Equity Pledge Agreements and any applicable PRC law, including
without limitations, being paid in priority with the equity interests based on the monetary
valuation that such equity interests are converted into or from the proceeds from auction or sale
of the equity interest upon written notice to the Registered Shareholders of our VIEs.
As of the Latest Practicable Date, the registrations of the Equity Pledge Agreements in
relation to our VIEs had been completed.
Powers of Attorney
The Registered Shareholders have executed the powers of attorney dated September 30,
2021 (the “Powers of Attorney”). Under the Powers of Attorney, the Registered Shareholders
irrevocably appointed the WFOE and its designated person(s) (including but not limited to the
Directors of our Company and their successors and the liquidators replacing such Directors or
successors, but excluding those non-independent or who may give rise to conflict of interests)
as their exclusive attorneys-in-fact to exercise on their behalf, any and all rights that they have
in respect of their equity interests in our VIEs, including without limitation:
(i) to convene and attend shareholders’ meetings of our VIEs and execute the relevant
resolutions and meeting minutes;
(ii) to file documents with the relevant companies registry;
(iii) to exercise the voting rights and any power they are entitled to as shareholders of
our VIEs under the applicable laws and the articles of association of our VIEs,
including but not limited to the sale, transfer, pledge or disposal of all or part of
his/her equity interest; and
(iv) to nominate and appoint the legal representatives, directors, supervisors, general
manager and other members of senior management of our VIEs.
Further, the Powers of Attorney are irrevocable and shall remain effective for so long as
each Registered Shareholder holds equity interests in our VIEs.
– 378 –
Confirmations from the Registered Shareholders
Each of the Registered Shareholders has confirmed to the effect that (i) his/her equity
interests (together with any other interests therein) do not fall within the scope of communal
properties, and his/her spouse does not have the right to claim such interests in the respective
VIEs; (ii) his/her spouse does not exert influence, whether directly or indirectly, on the
day-to-day management and voting matters of the respective VIEs; (iii) in the event of divorce
with his/her spouse, the Registered Shareholder will take all actions that the WFOE deems
necessary to ensure the performance of the Contractual Arrangements; and (iv) in the event of
his/her death, disappearance, incapacity, divorce or marriage or any other event that causes
his/her inability to exercise his/her rights as a shareholder of the respective VIEs, his/her
successors (including his/her spouse) will not take any actions that would affect his/her
obligations under the Contractual Arrangements.
Spouse undertakings
The spouse of each of the relevant Registered Shareholders, where applicable, has signed
undertakings to the effect that, among other things, (i) he/she has no right to or control over
the equity interests in our VIEs (together with any other interests therein) presently or in the
future held by the respective Registered Shareholder and will not have any claim on such
interests; (ii) the Registered Shareholder’s equity interests in our VIEs (together with any other
interests therein) do not fall within the scope of communal properties; (iii) he/she has not
participated, and does to plan to participate in, the day-to-day management and voting matters
of the respective VIEs; (iv) he/she confirms that the respective Registered Shareholder may
further amend or terminate the Contractual Arrangements without the need for authorization or
consent by him/her; and (v) if he/she is being transferred any shares held by their spouse for
any reason, he/she will be bound by the Contractual Arrangements and will observe obligations
as a shareholder of our VIEs, and will sign all necessary documents and to take all necessary
actions to ensure the Contractual Arrangements are properly preformed.
Other key terms under our Contractual Arrangements
Dispute Resolution
Each of the agreements under our Contractual Arrangements contains a dispute resolution
provision. Pursuant to such provision, in the event of any dispute arising from the performance
of or relating to our Contractual Arrangements, any party has the right to submit the relevant
dispute to the China International Economic and Trade Arbitration Commission (“CIETAC”)
for arbitration, in accordance with the then effective arbitration rules. The arbitral tribunal shall
consist of three arbitrators appointed in accordance with the arbitration rules, with the claimant
and respondent each appointing one arbitrator and the third arbitrator being agreed and
appointed by the first two arbitrators or by CIETAC. The seat of arbitration shall be in Beijing,
and the arbitration award shall be final and binding on all parties. The dispute resolution
provisions also provide that to the extent permitted by PRC law, the arbitral tribunal may award
remedies over the shares or assets of our VIEs and its subsidiaries or injunctive relief (for
– 379 –
example, limiting the conduct of business, limiting or restricting transfer or sale of shares or
assets) or order the winding up of our VIEs. The WFOE may apply to the courts of the PRC,
Hong Kong, the Cayman Islands (being the place of incorporation of our Company) and the
places where the principal assets of the WFOE or our VIEs are located for interim remedies or
injunctive relief in support of arbitration proceedings. During the arbitration, except for the
disputed areas which are subject to arbitration, the parties shall continue to perform their other
obligations under the Contractual Arrangements.
In connection with the dispute resolution method as set out in our Contractual
Arrangements and the practical consequences, we are advised by our PRC Legal Advisors that:
(a) under PRC laws, an arbitral body does not have the power to grant any injunctive relief or
provisional or final liquidation order for the purpose of protecting assets of or equity interest
in our Consolidated Affiliated Entities in case of disputes. As such, these remedies may not be
available to our Group under PRC laws; (b) further, under the PRC laws, courts or judicial
authorities in the PRC generally would not award remedies over the shares and/or assets of our
Consolidated Affiliated Entities, injunctive relief or winding-up of each of our Consolidated
Affiliated Entities as interim remedies, before there is any final outcome of arbitration; (c)
however, the PRC laws do not disallow the arbitral body to give award of transfer of assets of
or an equity interest in each of our VIEs at the request of arbitration applicant. In the event of
non-compliance with such award, enforcement measures may be sought from the court.
However, the court may or may not support such award of the arbitral body when deciding
whether to take enforcement measures; (d) in addition, interim remedies or enforcement orders
granted by overseas courts such as Hong Kong and the Cayman Islands may not be
recognizable or enforceable in the PRC; therefore, in the event we are unable to enforce the
Contractual Arrangements, we may not be able to exert effective control over each of our
Consolidated Affiliated Entities, and our ability to conduct our business may be negatively
affected; and (e) even if the aforementioned provisions may not be enforceable under PRC
laws, the remaining provisions of the dispute resolution clauses are legal, valid and binding on
the parties to the agreement under the Contractual Arrangements.
As a result of the above, in the event that our VIEs or their respective Registered
Shareholders breach any of the Contractual Arrangements, we may not be able to obtain
sufficient remedies in a timely manner, and our ability to exert effective control over our
Consolidated Affiliated Entities and conduct our business could be materially and adversely
affected. See “Risk Factors — Risks Related to our Corporate Structure” for further details.
Loss sharing
Under the relevant PRC laws and regulations, none of our Company and the WFOE is
legally required to share the losses of, or provide financial support to, our Consolidated
Affiliated Entities. Further, our Consolidated Affiliated Entities are limited liability companies
and shall be solely liable for their own debts and losses with assets and properties owned by
them. The WFOE intends to continuously provide to or assist our Consolidated Affiliated
Entities in obtaining financial support when deemed necessary. In addition, given that our
Group conducts a substantial portion of its business operations in the PRC through our
– 380 –
Consolidated Affiliated Entities, which hold the requisite the PRC operational licenses and
approvals, and that their financial position and results of operations are consolidated into our
Group’s financial statements under the applicable accounting principles, our Company’s
business, financial position and results of operations would be adversely affected if our
Consolidated Affiliated Entities suffer losses.
However, as provided in the Exclusive Option Agreements, without the prior written
consent of WFOE, our VIEs shall not, among others, (i) sell, transfer, pledge or dispose of in
any manner any material asset, business or revenue of our VIEs and their subsidiaries or the
legal or beneficial interest therein, or allow the encumbrance thereon of any security interest;
(ii) incur, inherit, guarantee or assume any debt, except for (a) debts incurred in the ordinary
course of business other than payables incurred by way of a loan, and (b) intra-group debts
between our VIEs and their respective subsidiaries; (iii) execute any material contracts, except
the contracts executed in the ordinary course of business; (iv) provide any person with any loan
or credit, except for the provision of loan or credit by our VIEs to their respective
wholly-owned subsidiaries; and (v) enter into any consolidation or merger with any third party,
or being acquired by or invest in any third party. Therefore, due to the relevant restrictive
provisions in the agreements, the potential adverse effect on the WFOE and our Company in
the event of any loss suffered from our VIEs can be limited to a certain extent.
Conflict of interests
Each of the Registered Shareholders of our VIEs has given their irrevocable undertakings
in the Powers of Attorney which address potential conflicts of interests that may arise in
connection with the Contractual Arrangements. For further details, see the sub-paragraph
headed “— Powers of Attorney” above.
Liquidation
Pursuant to the Equity Pledge Agreements, in the event of a mandatory liquidation

required by the PRC laws upon the request of the WFOE, the Registered Shareholders of our
VIEs shall transfer the proceeds they received from liquidation to the account designated by
the WFOE under the management of the WFOE, or give such proceeds as a gift to the WFOE
or the party/parties designated by the WFOE to the extent permitted by the PRC laws.
Insurance
There are certain risks involved in our operations, in particular, those relating to our
corporate structure and Contractual Arrangements. See “Risk Factors — Risks Related to Our
Business and Industry” and “Risk Factors — Risks Related to Our Corporate Structure” for
further details. We have determined that the costs of insurance for the risks associated with
business liability or disruption and the difficulties associated with acquiring such insurance on
commercially reasonable terms make it impractical for us to have such insurance. Accordingly,
as of the Latest Practicable Date, our Company had not purchased any insurance to cover the
risks relating to our Contractual Arrangements.
– 381 –
Our confirmation
Our Directors confirm that, as of the Latest Practicable Date, we had not encountered any
interference or encumbrance from any PRC governing bodies in operating our businesses
through our Consolidated Affiliated Entities under the Contractual Arrangements.
LEGALITY OF OUR CONTRACTUAL ARRANGEMENTS
Based on the above, our PRC Legal Advisors are of the opinion that our Contractual
Arrangements are narrowly tailored to minimize the potential conflict with relevant PRC laws
and regulations to the maximum extent and that:
(i) each of the WFOE and our VIEs is a duly incorporated and validly existing company
and their respective establishment is valid, effective and complies with the relevant
PRC laws;
(ii) as confirmed by the parties to each of the agreements under the Contractual
Arrangements, each of them has obtained all necessary approvals and authorizations
to execute the agreements and perform their respective obligations thereunder. Each
of such agreements is binding on the parties thereto and none of them is void or may
become invalid pursuant to the Civil Code of the PRC (《中華人民共和國民法
典》);
(iii) none of the agreement under the Contractual Arrangements violates any provisions
of the respective articles of association of our VIEs or the WFOE;
(iv) no approvals or authorizations from the PRC governmental authorities are required
for the execution and performance of our Contractual Arrangements, except that:
a. the exercise of the option by the WFOE or its designee of its rights under the
Exclusive Option Agreements to acquire all or part of the equity interests in our
VIEs is subject to the approvals of, consent of, filing with and/or registrations
with the PRC governmental authorities;
b. the equity pledges contemplated under the Equity Pledge Agreements are
subject to the registration with the relevant state or local administration bureau
for market regulation;
c. the arbitration awards/interim remedies provided under the dispute resolution

provision of our Contractual Arrangements shall be recognized by the PRC
courts before compulsory enforcement; and
– 382 –
(v) each of the agreements under our Contractual Arrangements is valid, legal and
binding under the PRC laws, except that our Contractual Arrangements provide that
the arbitral body may award interim remedies over the shares and/or assets of our
VIEs, injunctive relief (such as for the conduct of business or to compel the transfer
of assets) and/or order the winding up of our VIEs, and that courts of Hong Kong,
the Cayman Islands (being the place of incorporation of our Company) and the PRC
(being the place of incorporation of our VIEs) also have jurisdiction for the grant
and/or enforcement of arbitral award and interim remedies against the shares and/or
assets of our VIEs, while under PRC laws, an arbitral body has no power to grant
injunctive relief and may not directly issue a provisional or final liquidation order
for the purpose of protecting assets of or equity interests in our VIEs in case of
disputes. In addition, interim remedies or enforcement orders granted by overseas
courts such as Hong Kong and the Cayman Islands may not be recognizable or
enforceable in China.
over the validity of our Contractual Arrangements. Accordingly, there can be no assurance that
the PRC regulatory authorities will not in the future take a view that is contrary to or otherwise
different from the above opinion. See “Risk Factors — Risks Related to Our Corporate
Structure.“
During the interviews with the Culture, Radio, Television, Tourism and Sports Bureaus
(“CRTTSB”) of Nanshan District, Shenzhen (深圳市南山區文化廣播電視旅遊體育局) and of
Haikou (海口市旅遊和文化廣電體育局) conducted by our PRC Legal Advisors and the Joint
Sponsors’ PRC legal advisor on September 3, 2021 and September 16, 2021, respectively, the
officers of the CRTTSB, who work in the division of their respective CRTTSB responsible for
the law enforcement of Internet cultural market, radio and television production and operation
activities and Internet audio-visual programs, confirmed that foreign investors are prohibited
from engaging in the radio and television program production and internet culture activities
conducted by Shenzhen Futu and Hainan Caixuetang. In addition, during the interviews with
the CAB conducted by our PRC Legal Advisors and the Joint Sponsors’ PRC legal advisor on
September 27 and September 28, 2021, respectively, the officers of the CAB respectively
confirmed that as Shenzhen Futu and Hainan Caixuetang operates the “prohibited” businesses,
i.e., the radio and television program production and operation of internet culture activities
(excluding music), and the “restricted” businesses simultaneously on the same Futubull
Platform, they are unlikely to obtain and maintain an ICP License.
Notwithstanding the foregoing, during the interviews with CRTTSB and CAB conducted
by our PRC Legal Advisors and the Joint Sponsors’ PRC legal advisor on September 9,
September 16, September 27 and September 28, 2021, the officers of CRTTSB and CAB
confirmed that our Contractual Arrangements would not be challenged by them or subject to
penalty imposed by them due to violation of any relevant PRC laws or regulations.
– 383 –
Our PRC Legal Advisors are of the view that (a) the CRTTSB and CAB are the competent
regulatory authorities for business activities of Shenzhen Futu and Hainan Caixuetang and
taking into account the positions held by the interviewees with CRTTSB and CAB and their
respective responsibilities, the officers interviewed have competent authorities to give the
confirmations above; (b) based on these interviews, our adoption of the Contractual
Arrangements is unlikely to be deemed ineffective or invalid under the applicable PRC laws
and regulations; and (c) our adoption of the Contractual Arrangements does not contravene any
current applicable PRC laws and regulations.
Based on the above analysis and advice from our PRC Legal Advisors, our Directors are
of the view that the adoption of the Contractual Arrangements is unlikely to be deemed
ineffective or invalid under the applicable PRC laws and regulations. See the section headed
“Risk Factors — Risks Related to Our Corporate Structure — If the PRC government deems
that the contractual arrangements in relation to our Consolidated Affiliated Entities do not
comply with PRC regulatory restrictions on foreign investment in the relevant industries, or if
these regulations or the interpretation of existing regulations change in the future, we could be
subject to severe penalties or be forced to relinquish our interests in those operations.”
ACCOUNTING ASPECTS OF OUR CONTRACTUAL ARRANGEMENTS
Under the Exclusive Business Cooperation Agreements, it was agreed that, in

consideration of the services provided by WFOE, each of our Consolidated Affiliated Entities
will pay services fees to the WFOE. The services fees, subject to the WFOE’s adjustment, are
equal to the entire total consolidated net income of our Consolidated Affiliated Entities. The
WFOE may adjust the service fee amount at its sole discretion according to the services
provided by our Consolidated Affiliated Entities. Accordingly, the WFOE has the ability, at
their sole discretion, to extract all of the economic benefit of our Consolidated Affiliated
Entities through the Exclusive Business Cooperation Agreements.
In addition, under the Exclusive Business Cooperation Agreements and the Exclusive
Option Agreements, the WFOE has absolute contractual control over the distribution of
dividends or any other amounts to the Registered Shareholders as the WFOE’s prior written
consent is required before any distribution can be made.
As a result of these Contractual Arrangements, our Company exercises control over the
operations of our Consolidated Affiliated Entities and receives substantially all of their
economic benefits and residual returns. Accordingly, our Consolidated Affiliated Entities are
accounted as subsidiary of our Company and their results of operations, assets and liabilities
and cash flows are consolidated into our Group’s financial statements. The basis of
consolidating the results of our Consolidated Affiliated Entities is disclosed in note 2 to the
Accountant’s Report in Appendix IA to this document.
– 384 –
OUR DIRECTORS’ VIEW
Based on the above, our Directors are of the view that our Contractual Arrangements are
narrowly tailored, as they are used to enable our Group to conduct business in industries that
are subject to foreign investment restrictions in the PRC and minimize the potential for conflict
with relevant PRC laws and regulations to the maximum extent. Our Directors further believe
that our Contractual Arrangements are fair and reasonable, taking into account (i) our
Contractual Arrangements are negotiated on arm’s length basis and entered into between
WFOE, our Consolidated Affiliated Entities and the respective Registered Shareholders; (ii) by
entering into the Exclusive Business Cooperation Agreements with WFOE, which is a PRC
subsidiary of our Company, our Consolidated Affiliated Entities will enjoy better economic and
technical support from us, as well as a better market reputation after the Listing; and (iii) a
number of other companies use similar contractual arrangements to achieve the same purpose.
DEVELOPMENT IN THE PRC LEGISLATION ON FOREIGN INVESTMENT
Background of the Foreign Investment Law
On March 15, 2019, the National People’s Congress approved the Foreign Investment
Law (《外商投資法》) which became effective on January 1, 2020. The Foreign Investment
Law replaced the Sino-Foreign Equity Joint Venture Enterprise Law (《中外合資經營企業
法》), the Sino-Foreign Cooperative Joint Ventures Enterprise Law (《中外合作經營企業法》
and the Wholly Foreign-Invested Enterprises Law (《外資企業法》) to become the legal
foundation for foreign investment in the PRC. It is formulated to further expand opening-up,
vigorously promote foreign investment and protect the legitimate interests and right of foreign
investors. According to the Foreign Investment Law, China adopts a system of national
treatment together with the 2021 Negative List with respect to foreign investment
administration, and the 2021 Negative List will be issued by, amended or released upon
approval by the State Council, from time to time. The 2021 Negative List sets out the industries
in which foreign investments are prohibited or restricted. Foreign investors would not be
allowed to make investments in prohibited industries, while foreign investment must satisfy
certain conditions stipulated in the 2021 Negative List for investment in restricted industries.
Foreign investment and domestic investment in industries outside the scope of the 2021
Negative List shall be treated equally. On December 26, 2019, the State Council promulgated
the Regulations on the Implementation of the Foreign Investment Law (《中華人民共和國外
商投資法實施條例》) (the “Implementation Regulations”), which came into effect on
January 1, 2020. As advised by our PRC Legal Advisors, the Foreign Investment Law stipulates
certain forms of foreign investment, but does not explicitly stipulate contractual arrangements
as a form of foreign investment, and the Implementation Regulations are also silent on whether
foreign investment includes contractual arrangements.
– 385 –
Impact and consequences of the Foreign Investment Law
Conducting operations through contractual arrangements has been adopted by many

PRC-based companies, including our Group. We use the Contractual Arrangements to establish
control of our Consolidated Affiliated Entities, by the WFOE, through which we operate our
business in the PRC. As advised by our PRC Legal Advisors, since contractual arrangements
are not specified as a form of foreign investment under the Foreign Investment Law and if
future laws, regulations and provisions prescribed by the State Council do not incorporate
contractual arrangements as a form of foreign investment, our Contractual Arrangements as a
whole and each of the agreements comprising the Contractual Arrangements will not be
affected and will continue to be legal, valid and binding on the parties with an exception, for
which, see “— Legality of Our Contractual Arrangements” above.
Filings and Approvals from PRC Governmental Authorities
On December 24, 2021, the CSRC released the Provisions of the State Council on the
Administration of Overseas Securities Offering and Listing by Domestic Companies (Draft for
Comments) (the “Draft Administration Provisions”) and the Administrative Measures for the
Filing of Overseas Securities Offering and Listing by Domestic Companies (Draft for
Comments) (the “Draft Filing Measures”), both of which had a comment period that expired
on January 23, 2022. The Draft Administrative Provisions and the Draft Filing Measures
regulate the system, filing management and other related rules with respect to direct or indirect
overseas issuance of listed and traded securities by “domestic enterprises.” Furthermore,
pursuant the 2021 Negative List, PRC domestic enterprises engaged in foreign investment
prohibited business and intend to offer and list securities in an overseas exchange market shall
obtain approval from relevant government authorities. At the press conference held on January
18, 2022, officials from the NDRC clarified that the aforementioned requirement only applies
to direct overseas offering and listing by a PRC domestic enterprise, and as for the
requirements for indirect overseas offering and listing by a PRC domestic enterprise, it will be
subject to the abovementioned Draft Administration Provisions and the Draft Filing Measures
promulgated by the CSRC.
In addition, according to the “Reply to the Reporters” Question by the CSRC Responsible
Officers” (證監會有關負責人答記者問) dated December 24, 2021, the CSRC clarified that it
adheres to the principle of non-retroactivity of the law, and the CSRC would start with the
incremental enterprises (增量企業), i.e., impose filing procedures on incremental enterprises as
well as stock enterprises (存量企業) with refinancing requests, while filing by other stock
enterprises (其他存量企業) will be arranged separately so as to give them a sufficient
transitional period. However, the CSRC Responsible Officers did not provide a clear definition
of these terms. Therefore, whether our Company, for the purpose of this Listing, is an
“incremental enterprise (增量企業)” or a “stock enterprise (存量企業)” is subject to further
explanation by the CSRC. If we are categorized as a “stock enterprise (存量企業)”, we may
still face more stringent regulatory requirements as compared to its current status.
– 386 –
However, the Draft Administration Provisions and Draft Filing Measures will allow a
proper transition period for existing overseas-listed China-based companies that do not have an
imminent plan for public offerings to comply with the filing requirement in due course.
Further, the officials from the CSRC have confirmed that companies with VIE structure that
comply with the applicable PRC laws and regulations can still conduct overseas offering and
listing upon the completion of the requisite procedures. Our PRC Legal Advisors advise that
the Draft Administration Provisions and the Draft Filing Measures allow PRC domestic
companies with a VIE structure which comply with applicable PRC laws and regulations to
conduct overseas offerings and listings. As such, our Directors, as advised by our PRC Legal
Advisors, are of the view that, as of the Latest Practicable Date, a listing adopting VIE
structure through contractual arrangement, such as ours, does not fall within the scope of
Article 6 of the 2021 Negative List. Therefore, we do not foresee that the Draft Administration
Provisions and the Draft Filing Measures (if they become effective in their current forms)
would have a material adverse impact on our VIE structure or our business operations.
As advised by our PRC Legal Advisors, as of the Latest Practicable Date, there are no
laws, regulations or regulatory documents cited by either the CSRC or other relevant industry
authorities in effect that would explicitly require the Company to comply with any approval,
verification or filing procedures for overseas securities offering and listing. To our best
knowledge information and belief, we and our PRC Legal Advisors are not aware of the
existence of any circumstances that would prohibit us from conducting the Listing under the
Draft Administration Provisions and the Draft Filing Measures. Nevertheless, uncertainties of
the filing procedures may be further clarified in the final version of the Draft Administration
Provisions and the Draft Filing Measures and/or their implementation rules, any failure to
comply with the regulations relating to overseas listing may subject us to fines, penalties or
other sanctions which may have certain adverse effects on our business and financial
conditions. But if the Draft Administration Provisions and the Draft Filing Measures become
effective in their current form before or after the Listing is completed, we do not foresee any
impediment for us to comply with the Draft Administration Provisions and the Draft Filing
Measures in any material respect.
Notwithstanding the above, the Foreign Investment Law stipulates that foreign
investment includes “foreign investors invest in China through any other methods under laws,
administrative regulations or provisions prescribed by the State Council” without elaboration
on the meaning of “other methods.” There are possibilities that future laws, administrative
regulations or provisions prescribed by the State Council may regard contractual arrangements
as a form of foreign investment, at which time it will be uncertain whether the Contractual
Arrangements will be deemed to be in violation of the foreign investment access requirements
and how the above-mentioned Contractual Arrangements will be handled. Therefore, there is
no guarantee that the Contractual Arrangements and the business of our Consolidated Affiliated
Entities will not be materially and adversely affected in the future due to changes in PRC laws
and regulations. See “Risk Factors — Risks Related to Our Corporate Structure.”
– 387 –
COMPLIANCE WITH OUR CONTRACTUAL ARRANGEMENTS
Our Group has adopted the following measures to ensure the effective operation of our
Group with the implementation of the Contractual Arrangements and compliance with our
Contractual Arrangements:
(i) major issues arising from the implementation and compliance with our Contractual
Arrangements or any regulatory enquiries from government authorities will be
submitted to our Board, if necessary, for review and discussion on an occurrence
basis;
(ii) our Board will review the overall performance of and compliance with our
Contractual Arrangements at least once a year;
(iii) our Company will disclose the overall performance of and compliance with our
Contractual Arrangements in our annual reports; and
(iv) our Company will engage external legal advisors or other professional advisors, if
necessary, to assist the Board to review the implementation of our Contractual
Arrangements, review the legal compliance of the WFOE and our Consolidated
Affiliated Entities to deal with specific issues or matters arising from our
Contractual Arrangements.
– 388 –
CONNECTED TRANSACTIONS
Following the Listing, the following transactions between members of our Group and our
connected persons will constitute continuing connected transactions of our Company under
Chapter 14A of the Listing Rules.
OUR CONNECTED PERSONS
The table below sets forth the connected persons of our Company involved in the
non-exempt continuing connected transactions upon the Listing and the nature of their
connection with our Company.
Name Connected relationship
Mr. Leaf Hua Li ььььььььь Mr. Li is the founder, chairman of the Board, executive
Director and chief executive officer of our Company.
Therefore, Mr. Li and his associates are connected
persons of our Company.
Tencent ьььььььььььььььь Tencent is a substantial shareholder of our Company.
Therefore, Tencent and its associates are connected
persons of our Company. Shenzhen Tencent Computer
Systems Company Limited (深圳市騰訊計算機系統有
限公司) (“Tencent Computer”) is a subsidiary of
Tencent and a connected person of our Company.
SUMMARY OF OUR CONTINUING CONNECTED TRANSACTIONS
We have entered into the following transactions with the above-mentioned connected
persons that will constitute continuing connected transactions under Rule 14A.31 of the Listing
Rules upon the Listing:
Proposed Annual Caps

for the Year ending
Applicable December 31,
No. Transactions Listing Rules Waivers 2022 2023 2024
(HK$’000)
Fully-exempt continuing connected transactions

1. ь ь Provision of brokerage 14A.34, 14A.52, N/A N/A N/A N/A
services by our Group 14A.53, 14A.76
to certain Directors, and 14A.105
connected persons and
their respective
associates
2. ь ь Provision of ESOP 14A.34, 14A.52, N/A N/A N/A N/A
Services by our Group 14A.53, 14A.76
to Tencent Group and 14A.105
3. ь ь Provision of SMS 14A.34, 14A.52, N/A N/A N/A N/A
Services by Tencent 14A.53, 14A.76
Group to our Group and 14A.105
– 389 –
Proposed Annual Caps

for the Year ending
Applicable December 31,
No. Transactions Listing Rules Waivers 2022 2023 2024
(HK$’000)
Non-exempt continuing connected transactions

1. ь ь Provision of Cloud 14A.34, 14A.35, Requirements as to 197,475 241,179 313,533
Services and Related 14A.36, announcement,
Services and 14A.49, circular,
Equipment by Tencent 14A.71, 14A.76 independent
Group to our Group and 14A.105 Shareholders’
approval
2. ь ь Contractual 14A.34, 14A.35, Requirements as to N/A N/A N/A
Arrangements 14A.36, announcement,
14A.49, circular,
14A.52, 14A.53 independent
to 59, 14A.71 Shareholders’
and 14A.105 approval, annual
caps, and fixed
term of not more
than three years
FULLY-EXEMPT CONTINUING CONNECTED TRANSACTIONS
We set out below a summary of the continuing connected transactions of our Company,
which are fully exempt from all of the reporting, annual review, announcement, circular and
independent shareholders’ approval requirements under Chapter 14A of the Listing Rules.
1. Provision of Brokerage Services by our Group to certain Directors, Connected

Persons and their respective Associates
We provide brokerage services to some of our Directors (including Mr. Li, Mr. Nineway
Jie Zhang and Mr. Shan Lu), our former directors of our Company, directors of the members
of our Group and their respective associates (who are our connected persons) in our ordinary
course of business. The terms and conditions of the brokerage services (including but not
limited to the commission and fee charged by us) which we offered to such connected persons
are on normal commercial terms comparable to those offered to independent clients. It is
expected that we will continue to provide such services to such connected persons after Listing,
which will constitute continuing connected transactions of our Company under Chapter 14A of
the Listing Rules.
– 390 –
As all of the applicable percentage ratios (other than the profits ratio) under the Listing
Rules in respect of these transactions are expected to be less than 0.1% on annual basis, the
brokerage services to our Directors, our former directors of our Company, directors of the
members of our Group and their respective associates will be exempted from the reporting,
annual review, announcement, circular and independent shareholders’ approval requirements
under Chapter 14A of the Listing Rules.
2. Provision of ESOP Services by our Group to certain Members of Tencent Group
We provide ESOP management services to certain members of Tencent Group in our

ordinary course of business and will continue to do so after Listing. In provision of such ESOP
management services to certain members of Tencent Group, we will execute and administer
certain employee stock incentive plans (including but not limited to all workflow and
administration surrounding ESOP fulfilment, including employee communications and records
management) of certain members of the Tencent Group (the “ESOP Services”). The terms and
conditions of the ESOP Services (including but not limited to the commission and fee charged
by us) which we offered to such connected persons are on normal commercial terms
comparable to those offered to independent corporate clients. Separate underlying agreements
will be entered into between the relevant parties, which will set out the precise scope of
services, basis of service fees, payment terms and other details of the services to be provided
by us pursuant to the terms of each of the ESOP Services. It is expected that we will continue
to provide the ESOP Services to such connected persons after Listing, which will constitute
continuing connected transactions of our Company under Chapter 14A of the Listing Rules.
Rules in respect of these transactions contemplated under the ESOP Services are expected to
be less than 0.1% on annual basis, the ESOP Services to certain members of Tencent Group will
be exempted from the reporting, annual review, announcement, circular and independent
shareholders’ approval requirements under Chapter 14A of the Listing Rules.
3. Provision of SMS Services by Tencent Group to our Group
We engage the Tencent Group to provide us with short messaging service (SMS) to us for
reaching our users and clients in our ordinary course of business (the “SMS Services”). In
return, we will pay service fees calculated based on the prescribed fee rate and the type and
number of SMS text message. The terms and conditions (including but not limited to the fees
charged by the Tencent Group) are on normal commercial terms, and are comparable to those
that it offers to other independent third parties and to those offered by other third party SMS
service providers. Separate underlying agreements will be entered into between the relevant
parties, which will set out the precise scope of services, basis of service fees, payment terms
and other details of the services to be provided by the Tencent Group in respect of the SMS
Services. It is expected that we will continue to procure the SMS Services from the Tencent
Group after Listing, which will constitute continuing connected transactions of our Company
– 391 –
Rules in respect of these transactions contemplated under the SMS Services are expected to be
less than 0.1% on annual basis, the SMS Services provided by the Tencent Group to our Group
will be exempted from the reporting, annual review, announcement, circular and independent
NON-EXEMPT CONTINUING CONNECTED TRANSACTIONS
We set out below a summary of the continuing connected transactions of our Company,
which are subject to the reporting, annual review, announcement, circular and independent
1. Provision of Cloud Services and Related Services and Equipment by Tencent Group
to our Group
(a) Parties
Our Company; and
Tencent Computer
(b) Principal Terms
On December 21, 2022, our Company (for itself and on behalf of other members of our
Group) entered into a cloud services and related services and equipment framework agreement
(the “Cloud Services Framework Agreement”) with Tencent Computer (for itself and on
behalf of Tencent and its associates, the “Represented Tencent Group”), pursuant to which
the Represented Tencent Group will provide cloud services and related services and equipment
(including but not limited to, cloud servers, cloud database, cloud security, risk monitoring and
management, cloud assessment, computing and network, domain name resolution service, and
other related hardware and software services) to us. In return, we will pay service fees and/or
equipment fees to the Represented Tencent Group.
Separate underlying agreements will be entered into between the relevant parties, which
will set out the precise scope of services, type and quantity of equipment, basis of service fees
and/or equipment fees, payment terms and other details of the services to be provided by the
Represented Tencent Group pursuant to the terms of the Cloud Services Framework
Agreement.
The initial term of the Cloud Services Framework Agreement will commence on the
Listing Date and end on December 31, 2024, subject to the renewal upon the mutual agreement
of both parties and in compliance with the Listing Rules.
– 392 –
(c) Reasons for the Transactions
As the Represented Tencent Group is a leading integrated service provider for a wide
range of cloud services and technical services in China and is able to provide quality, reliable
and cost-efficient services. Part of our servers are operated by cloud-based technology and
certain data are retained on cloud database. Leveraging on cloud services, we can effectively
and flexibly manage the number of our physical servers on as-needed basis. Considering our
business has undergone, and is expected to undergo, rapid growth, it is expected that obtaining
such services from an integrated service provider is a cost-effective alternative to support our
technology infrastructure.
(d) Pricing Policies
Before entering to any separate underlying agreement in respect of the cloud services and
related services and equipment to be provided by the Represented Tencent Group, we will
assess our business need and compare the terms and conditions and scope of services proposed
by the Represented Tencent Group with those offered by comparable service providers who are
independent third parties, and we will consider various factors, including but not limited to, (i)
the service fee and equipment fee rates offered by different service providers; (ii) the quality,
stability and reliability of cloud and related services of different service providers; and (iii) the
quantity, quality and type of related equipment offered by different service providers. We will
engage, and enter into the specific agreement(s) under the Cloud Services Framework
Agreement with, the Represented Tencent Group if the terms and conditions are fair and
reasonable and on normal commercial terms (or terms that are no less favourable than those
offered by independent third parties who can provide comparable services) and in the interest
of our Company and its Shareholders as a whole.
The service fee proposed by the Represented Tencent Group is based on a predetermined
pricing mechanism set by the Represented Tencent Group, which is published on Tencent
Cloud’s website and similar to fee rates offered to other third parties. The service fee rates of
the cloud services and technical services vary depending on the exact type of services involved
and actual utilization of such services, to be specific, (i) cloud server service fee is charged
based on data traffic consumed each month, and the service fee rate is predetermined taking
into consideration of servers, bandwidth, etc.; (ii) the service fee of cloud security is charged
based on different packages and the fee rates of packages are predetermined based on
bandwidth, servers and specific security services included in such packages; and (iii) the data
storage service fee is charged based on the data consumed.
– 393 –
(e) Historical Amounts, Proposed Annual Caps and Basis of the Caps
The following tables set forth (a) the aggregate amount of fees paid by us to the
Represented Tencent Group for the provision of cloud and technical services and related
equipment to us during the Track Record Period; and (b) the proposed annual caps under the
Cloud Services Framework Agreement:
For the
six months
ended
2019 2020 2021 2022
(HK$’000)
Service fees and related

equipment fees paid by
us to the Represented
Tencent Group ьььььььь 56,947 53,944 163,913 93,702
For the year ending December 31,

2022 2023 2024
(HK$’000)
Service fees and related equipment fees
payable by us to the Represented
Tencent Group ьььььььььььььььььь 197,475 241,179 313,533
When estimating the proposed annual caps under the Cloud Services Framework
Agreement, we have considered various factors, including:
(i) the historical service fees and related equipment fees paid by us and the existing
agreements between our Group and the Represented Tencent Group. During the
Track Record Period, we incurred significantly increasing service fees and related
equipment fees paid to the Represented Tencent Group in respect of cloud services
and related equipment due to the growth of our business and the resultant demand
for cloud services and related services and equipment for our growing user and
client base. The service fees and related equipment fees paid by us to the
Represented Tencent Group were approximately HK$56.9 million, HK$53.9 million
and HK$163.9 million in 2019, 2020 and 2021, respectively, and approximately
HK$93.7 million for the six months ended June 30, 2022;
– 394 –
(ii) the expected overall business growth and the expected growth in our user and client
base. During the Track Record Period, our user base has grown from 7.5 million as
of December 31, 2019 to 17.4 million as of December 31, 2021 and further to 18.6
million as of June 30, 2022, and our client base has grown from 717,842 as of
December 31, 2019 to 2.8 million as of December 31, 2021 and further to 3.0 million
as of June 30, 2022. Along with such growth of user and client base, we expect
higher user engagement on our platform and continual development of our services
and products, resulting in an increase in our demand for cloud services and related
services and equipment (including but not limited to the higher demand for cloud
servers, cloud database, cloud security, risk monitoring and management to handle
such user traffic and data amount). The proposed annual caps in respect of the cloud
services and related services and equipment are expected to increase along with the
overall business growth; and
(iii) our estimated demand for the cloud services and technology services from the
Represented Tencent Group for the three years ending December 31, 2022, 2023 and
2024 is expected to increase with a CAGR of approximately 26% due to our growing
demand for its market-leading technologies having considered the expected overall
business growth and development.
(f) Listing Rules Implications
In respect of the transactions contemplated under the Cloud Services Framework

Agreement, as the highest applicable percentage ratios (other than the profits ratio) under the
Listing Rules is expected to be more than 5%, the transactions will be subject to the reporting,
annual review, announcement, circular and independent shareholders’ approval requirements
2. Contractual Arrangements
(a) Background
Due to regulatory restrictions on foreign ownership in the PRC, we conduct a portion of

our business through our Consolidated Affiliated Entities in the PRC. We do not hold any
equity interests in our Consolidated Affiliated Entities. The Contractual Arrangements among
relevant members of our Group, our Consolidated Affiliated Entities and shareholders of our
Consolidated Affiliated Entities enable us to (i) exercise effective control over our
Consolidated Affiliated Entities and their subsidiaries; (ii) receive substantially all of the
economic benefits from our Consolidated Affiliated Entities; and (iii) have an exclusive option
to purchase all or part of the equity interests in, and/or assets, our Consolidated Affiliated
Entities when and to the extent permitted by the PRC laws.
Please see the section headed “Contractual Arrangements” for details of the agreements
underlying the Contractual Arrangements.
– 395 –
(b) Listing Rules Implications
The transactions contemplated under the Contractual Arrangements constitute continuing

connected transactions of our Company under the Listing Rules upon Listing as certain parties
to the Contractual Arrangements, namely Mr. Li and Ms. Lei Li (Mr. Li’s spouse), are
connected persons of our Group.
(c) Waiver Application
Our Directors (including the independent non-executive Directors) are of the view that
the Contractual Arrangements and the transactions contemplated therein are fundamental to our
legal structure and business operations, that such transactions have been and will be entered
into in our ordinary and usual course of business, are normal commercial terms or better, and
the terms are fair and reasonable and in the interests of our Group and our Shareholders as a
whole.
Our Directors also believe that our structure, whereby the financial results of our
Consolidated Affiliated Entities are consolidated into our financial statements as if they were
our Company’s subsidiaries and all the economic benefits of their business flows to our Group,
places our Group in a special position in relation to the connected transaction rules.
Accordingly, notwithstanding that the transactions contemplated under the Contractual
Arrangements and any new transactions, contracts and agreements or renewal of existing
transactions, contracts and agreements to be entered into, among others, by our Consolidated
Affiliated Entities and any member of our Group from time to time (“New Intergroup
Agreements”) will technically constitute continuing connected transactions under Chapter
14A of the Listing Rules. Our Directors consider that it would be unduly burdensome and
impracticable, and would add unnecessary administrative costs to our Company, for all such
transactions to be subject to strict compliance with the requirements set out under Chapter 14A
of the Listing Rules, including, among other things, the announcement and independent
shareholders’ approval requirements. In addition, given the Contractual Arrangements were
entered into prior to the Listing and are disclosed in this document, and potential investors of
our Company will participate in the Listing on the basis of such disclosure, our Directors
consider that compliance with the announcement and the independent shareholders’ approval
requirements in respect thereof immediately after Listing would add unnecessary
administrative costs to our Company.
WAIVERS
In respect of the non-exempt continuing connected transactions contemplated under the

Cloud Services Framework Agreement, we have applied for, and the Stock Exchange has
granted, waivers from strict compliance with the reporting, annual review, announcement,
circular and independent shareholders’ approval requirements under Chapter 14A of the Listing
Rules.
– 396 –
In respect of the Contractual Arrangements and the New Intergroup Agreements, we have
applied for, and the Stock Exchange has granted, (i) a waiver from strict compliance with
announcement, circular and independent shareholders’ approval requirements under Chapter
14A of the Listing Rules; (ii) a waiver from strict compliance with the requirements to set a
term not exceeding three years under Rule 14A.52 of the Listing Rules; and (iii) a waiver from
strict compliance with the requirements to set monetary annual caps under Rule 14A.53 of the
Listing Rules, subject to the following conditions:
(a) No change without independent non-executive Directors’ approval
Save as described below, no change to the Contractual Arrangements (including with

respect to any fees payable to the WFOEs thereunder) will be made without the approval of our
independent non-executive Directors.
(b) No change without independent Shareholders’ approval
Save as described in paragraph (d) below, no change to the agreements governing the
Contractual Arrangements will be made without the approval of our independent Shareholders.
Once independent Shareholders’ approval of any change has been obtained, no further
announcement or approval of the independent Shareholders will be required under Chapter 14A
of the Listing Rules unless and until further changes are proposed. The periodic reporting
requirement regarding the Contractual Arrangements in the annual reports of our Company will
however continue to be applicable.
(c) Economic benefits and flexibility
The Contractual Arrangements shall continue to enable our Group to receive the
economic benefits derived by the Consolidated Affiliated Entities through (i) our Group’s
options (if and when so allowed under the applicable PRC laws) to acquire, all or part of the
equity interests in our Consolidated Affiliated Entities held by the Registered Shareholders for
nil consideration or the minimum amount of consideration permitted by applicable PRC laws
and regulations; (ii) the business structure under which the profit generated by our
Consolidated Affiliated Entities is substantially retained by our Group, such that no annual cap
shall be set on the amount of service fees payable to the WFOEs by our Consolidated Affiliated
Entities under the Contractual Arrangements; and (iii) our Group’s right to control the
management and operation of, as well as, in substance, a substantial portion of the voting rights
of our Consolidated Affiliated Entities.
– 397 –
(d) Renewal and reproduction
On the basis that the Contractual Arrangements provide an acceptable framework for the
relationship between, on the one hand, our Company and the subsidiaries in which our
Company has direct shareholding and, on the other hand, the Consolidated Affiliated Entities,
this framework may be renewed and/or reproduced without an announcement, circular, or
obtaining the approval of our Shareholders (i) upon the expiry of the existing arrangements;
(ii) in connection with any changes to the shareholders or directors of, or of their shareholdings
in, our Consolidated Affiliated Entities; or (iii) in relation to any existing, new or acquired
wholly foreign-owned enterprise or operating company (including branch company) engaging
in a business similar or relating to those of our Group. The directors, chief executive or
substantial shareholders of any existing, new or acquired wholly foreign-owned enterprise or
operating company (including branch company) engaging in a business similar or relating to
those of our Group will, upon renewal and/or reproduction of the Contractual Arrangements,
be treated as connected persons of our Group and transactions between these connected persons
and our Group other than those under similar Contractual Arrangements shall comply with
Chapter 14A of the Listing Rules. This condition is subject to relevant PRC laws, regulations
and approvals. Any such renewed or reproduced agreements will be on substantially the same
terms and conditions as the existing Contractual Arrangements.
(e) Ongoing reporting and approvals
We will disclose details relating to the Contractual Arrangements on an ongoing basis:
• the Contractual Arrangements in place during each financial period will be disclosed
in our Company’s annual report and accounts in accordance with the relevant
provisions of the Listing Rules;
• our independent non-executive Directors will review the Contractual Arrangements

annually and confirm in our Company’s annual report that for the relevant year (i)
the transactions carried out during such year have been entered into in accordance
with the relevant provisions of the Contractual Arrangements; (ii) no dividends or
other distributions have been made by our Consolidated Affiliated Entities to the
holders of its equity interests which are not otherwise subsequently assigned or
transferred to our Group; and (iii) any new contracts entered into, renewed or
reproduced between our Group and our Consolidated Affiliated Entities are fair and
reasonable, or advantageous, so far as our Group is concerned and in the interests
of our Shareholders as a whole;
– 398 –
• our Company’s auditors will carry out review procedures annually on the
transactions carried out pursuant to the Contractual Arrangements and will provide
a letter to our Directors with a copy to the Stock Exchange, confirming that the
transactions have been approved by our Board, have been entered into in accordance
with the relevant Contractual Arrangements and that no dividends or other
distributions have been made by our Consolidated Affiliated Entities to the holders
of its equity interests which are not otherwise subsequently assigned or transferred
to our Group;
• for the purpose of Chapter 14A of the Listing Rules, and in particular the definition
of “connected person,” our Consolidated Affiliated Entities will be treated as our
Company’s subsidiaries, but at the same time, the directors, chief executives or
substantial shareholders of our Consolidated Affiliated Entities and their associates
will be treated as connected persons of our Company as applicable under the Listing
Rules (excluding for this purpose, the Consolidated Affiliated Entities themselves),
and therefore transactions between these connected persons and our Group
(including for this purpose, our Consolidated Affiliated Entities), other than those
under the Contractual Arrangements, will be subject to requirements under Chapter
14A of the Listing Rules; and
• our Consolidated Affiliated Entities will, for so long as our Class A Ordinary Shares
are listed on the Stock Exchange, provide our Group’s management and our
Company’s auditors with full access to their relevant records for the purpose of
reporting on the connected transactions.
INTERNAL CONTROL MEASURES
In order to ensure that the terms under the relevant agreements for the continuing
connected transactions are fair and reasonable, and the transactions are carried out based on
normal or no less than favourable commercial terms, we have adopted the following internal
control procedures:
• we have adopted and implemented a management system on connected transactions.

Under such systems, our audit committee is responsible for conducting review on
compliance with relevant laws and regulations, our Company’s policies and the
Listing Rules in respect the continuing connected transactions. In addition, our audit
committee, the Board and other internal departments of our Company (including our
finance and legal departments) are jointly responsible for evaluating the terms under
framework agreements for the continuing connected transactions, in particular, the
fairness of the pricing policies and annual caps under each agreement;
– 399 –
• our audit committee, the Board and other internal departments of our Company also
regularly review and monitor the performance status, transaction update and the
pricing policies of the specific business agreements entered into under the
framework agreements;
• our independent non-executive Directors and auditors will conduct annual review of
the continuing connected transactions under the framework agreements and provide
annual confirmation to ensure that in accordance with Rules 14A.55 and 14A.56 of
the Listing Rules the transactions are conducted in accordance with the terms of the
agreements, on normal commercial terms and in accordance with the relevant
pricing policies;
• when considering service fees for the services and fees for equipment to be provided
to our Group by our connected persons or the service fees for the services to be
provided by our Group to our connected persons, we will regularly consider the
prevailing market conditions and practices and make reference to the pricing and
terms between us and independent third parties for similar transactions, to make sure
that the terms and conditions offered by/to our connected transactions from mutual
commercial negotiations (as the case may be) are fair and reasonable and are based
on normal or no less favourable commercial terms than those offered by/to other
comparable independent third parties; and
• when considering any renewal or amendment to the framework agreements after

Listing, our interested Directors and Shareholders shall abstain from voting on the
resolutions to approve such transactions at Board meetings or Shareholders’ general
meetings (as the case may be), and our independent non-executive Directors and
independent Shareholders have the right to consider if the terms of the non-exempt
continuing connected transactions (including the proposed annual caps) are fair and
reasonable, and on normal commercial terms and in the interests of our Company
and our Shareholders as a whole. If the independent non-executive Directors’ or
independent Shareholders’ approvals cannot be obtained, we will not continue the
transactions under the framework agreement(s) to the extent that they constitute
non-exempt continuing connected transactions under Rule 14A.35 of the Listing
Rules.
– 400 –
CONFIRMATION FROM THE DIRECTORS
(i) the non-exempt continuing connected transactions contemplated under the Cloud Services
Framework Agreement above have been and will be entered into in our ordinary and usual
course of business, on normal commercial terms or better, and the terms are fair and reasonable
and in the interests of our Company and the Shareholders as a whole, and (ii) the proposed caps
under such non-exempt continuing connected transactions are fair and reasonable and in the
interests of our Company and the Shareholders as a whole.
(i) the Contractual Arrangements and the transactions contemplated therein are fundamental to
our legal structure and business operations; (ii) such transactions have been and will be entered
into in our ordinary and usual course of business, on normal commercial terms or better, and
the terms are fair and reasonable and in the interests of our Company and the Shareholders as
a whole; and (iii) it is a justifiable and normal business practice for the Contractual
Arrangements of this type to be of a term greater than three years.
CONFIRMATION FROM THE JOINT SPONSORS
The Joint Sponsors have (i) reviewed the relevant documents and information provided
by the Company in relation to the above continuing connected transactions; (ii) obtained
necessary representations and confirmations from the Company and the Directors, and (iii)
participated in the due diligence and discussions with the management of our Group.
Based on the above, the Joint Sponsors are of the view that the aforesaid continuing
connected transactions, for which waivers have been sought, have been entered into in the
ordinary and usual course of our business on normal commercial terms that are fair and
reasonable and in the interest of our Company and our Shareholders as a whole, and that the
proposed annual caps in respect of these non-exempt continuing connected transactions are fair
and reasonable and in the interests of our Company and our Shareholders as a whole.
With respect to the term of the relevant agreements underlying the Contractual
Arrangements which is of a duration longer than three years, the Joint Sponsors are of the view
that it is a justifiable and normal business practice to ensure that (i) policies of the
Consolidated Affiliated Entities can be effectively controlled by the WFOE, (ii) the WFOE can
obtain the economic benefits derived from our Consolidated Affiliated Entities, (iii) any
possible leakage of assets and values of our Consolidated Affiliated Entities can be prevented
on an uninterrupted basis, and (iv) it is normal business practice for the Contractual
Arrangements to be of a term greater than three years.
– 401 –
DIRECTORS AND SENIOR MANAGEMENT
BOARD OF DIRECTORS
Upon Listing, our Board will consist of six Directors, including two executive Directors,
one non-executive Director and three independent non-executive Directors. The following
table provides certain information about our Directors:
Date of
appointment Date of joining
Name Position Age as Director our Group Role and responsibility
Leaf Hua Li Founder, Chairman 45 April 15, December 2007 Responsible for the overall
(李華) ь ь ь ь ь ь of the Board, 2014 strategy, research and
Executive development, business
Director and development and
Chief Executive management of our Group
Officer
Nineway Jie Executive Director 48 October 31, October 2013 Responsible for the overall
Zhang 2014 strategy and business
(張傑) ь ь ь ь ь ь development of our Group
Shan Lu Non-executive 47 October 31, October 2014 Participating in the

(盧山) ь ь ь ь ь ь Director 2014 formulation of the overall
strategy of our Group
Vic Haixiang Li Independent 50 March 7, March 2019 Providing professional

(李海翔)ь ь ь ь ь Non-executive 2019 opinion and advice to the
Director(1) Board
Brenda Pui Man Independent 52 March 7, March 2019 Providing professional

Tam (譚沛雯) ь Non-executive 2019 opinion and advice to the
Director(2) Board
Yijiang Wang Independent 69 Listing Date Listing Date Providing professional

(王一江)ь ь ь ь ь Non-executive opinion and advice to the
Director(3) Board
Notes:
(1) Mr. Vic Haixiang Li is our independent director under applicable U.S. regulations and is also an independent
non-executive Director for the purpose of the Listing Rules.
(2) Ms. Brenda Pui Man Tam is our independent director under applicable U.S. regulations and is also an
independent non-executive Director for the purpose of the Listing Rules. We have determined that Ms. Tam
qualifies as an “audit committee” financial expert under the applicable rules of the SEC and has the appropriate
professional accounting or financial management experience.
(3) The appointment of Mr. Yijiang Wang as our independent non-executive Director will take effect from the
Listing Date.
(4) Other than their roles as Directors, there are no family or other relationships among any of the Directors.
– 402 –
Executive Directors
Leaf Hua Li (李華), aged 45, is our founder, chairman of the Board, executive Director
and chief executive officer. Mr. Li currently holds various positions in other members of the
Group, including director, chief executive officer, legal representative and general manager. He
is responsible for the overall strategy, research and development, business development and
management of our Company. Mr. Li also leads the technology committee of our Company to
formulate technology development strategies, optimize the existing technology infrastructure
and implement large-scale technology projects of our Group.
Mr. Li has rich experience and expertise in the technology and internet sectors in China.
Before founding our Company, Mr. Li had served in several senior management roles at
Tencent, including the head of Tencent’s multi-media business and its innovation center. He
joined Tencent in 2000 and was the 18th founding employee of Tencent. He was an early and
significant research and development participant of Tencent QQ, the founder of Tencent Video
and also led the product design and development of Tencent Video. Mr. Li invented over ten
international and domestic patents during his service at Tencent.
Mr. Li has been an independent director of Boqii Holding Limited, a company listed on
the NYSE (stock symbol: BQ), since September 2020.
Mr. Li received his bachelor’s degree in computer science and technology from Hunan
University in June 2000.
Nineway Jie Zhang (張傑), aged 48, is our executive Director. Mr. Zhang currently holds
various positions in other members of the Group, including director, legal representative and
general manager. Mr. Zhang is responsible for the overall strategy and business development
of our Group.
Mr. Zhang has been working in internet securities trading business since 2002. Prior to
joining our Group, Mr. Zhang served as the deputy head of the business department of the
Shenzhen branch of China Galaxy Securities Co., Ltd. (中國銀河證券股份有限公司), a
company listed on the Stock Exchange (stock code: 6881), responsible for the development of
online retail business.
Mr. Zhang received an associate’s degree in marketing from Nanjing University of

Science and Technology in June 1994, a master’s degree in business administration from South
China University of Technology in June 2009 and an executive master’s degree in business
administration from Cheung Kong Graduate School of Business in September 2013.
– 403 –
Non-executive Director
Shan Lu (盧山), aged 47, is our non-executive Director and participates in the
formulation of the overall strategy of our Group.
Mr. Lu joined Tencent in 2000 and currently serves as the Senior Executive Vice President
of Tencent and President of the Technology and Engineering Group of Tencent. Previously, Mr.
Lu served as General Manager of the IM Product Division, Vice President of the Platform
Research and Development System and Senior Vice President of the Operations Platform
System of Tencent. Since March 2008, he has been responsible for managing Tencent’s
operating system. Since May 2012, he has been leading Tencent’s Technology and Engineering
Group. Mr. Lu has extensive experience in Internet technology. Mr. Lu has served as a director
of China United Network Communications Limited (中國聯合網絡通信股份有限公司), a
company listed on the Shanghai Stock Exchange (stock code: 600050), since February 2018.
Mr. Lu received a Bachelor of Science degree in Computer Science and Technology from
the University of Science and Technology of China (USTC) in July 1998.
Independent Non-executive Directors
Vic Haixiang Li (李海翔), aged 50, is our independent non-executive Director, and is
mainly responsible for providing professional opinion and advice to the Board.
Mr. Vic Li is the founder and managing partner of Virtus Inspire Ventures, a boutique
venture capital fund that offers seed, venture, and growth stage funding, responsible for
providing strategic advice on the overall development of Virtus Inspire Ventures. Prior to
founding Virtus Inspire Ventures, Mr. Vic Li had served as the Senior Executive Vice President
of Tencent since 1999 and was responsible for the planning, construction and management and
operation of its platforms. From 2010 to 2012, he was in charge of Tencent’s online search
business. Mr. Vic Li left Tencent in 2012. He now focuses on investments in technology, media
and telecommunications as well as medical technology companies in China.
Mr. Vic Li received his bachelor’s degree in computer software from South China
University of Technology in July 1994 and his master’s degree in business administration from
China Europe International Business School in September 2017. He was recognized as “China
Top CIO” by the CEO and CIO magazine in 2008.
Brenda Pui Man Tam (譚沛雯), aged 52, is our independent non-executive Director and
is responsible for providing professional opinion and advice to the Board.
Ms. Tam served as a partner at the Beijing office of PricewaterhouseCoopers China and
PricewaterhouseCoopers Hong Kong from 2007 to 2016 and a senior manager at the Beijing
office of PricewaterhouseCoopers China from 2006 to 2007. Prior to that, Ms. Tam served as
– 404 –
an audit experienced manager and an audit senior manager at the San Jose office of
PricewaterhouseCoopers LLP from 2000 to 2006. Ms. Tam also served in multiple audit
positions at PricewaterhouseCoopers Hong Kong from 1995 to 2000 and at Ernst & Young
Hong Kong from 1992 to 1995.
Ms. Tam received her bachelor’s degree in accountancy from City University of Hong
Kong in November 1992. Ms. Tam is qualified as a certified public accountant in the United
States (California), a fellow member of the Hong Kong Institute of Certified Public
Accountants and the Association of Chartered Certified Accountants in the United Kingdom.
Yijiang Wang (王一江), aged 69, is our independent non-executive Director and is
responsible for providing professional opinion and advice to the Board. Dr. Wang’s
appointment will take effect from the Listing Date.
Dr. Wang is currently a professor of economics and human resources management and the
associate dean for academic affairs of the Cheung Kong Graduate School of Business
(“CKGSB”). Prior to joining CKGSB, Dr. Wang held positions including a member of the
Chinese Economists’ Society in the U.S. Dr. Wang has been editorial board member, co-editor
and/or chief editor of various internationally renowned journals, including the China Economic
Review, South China Economics, Annals of Economics and Finance and Journal of
Comparative Economics.
Dr. Wang has been an independent non-executive director of Shenzhen Overseas Chinese
Town Co., Ltd. (深圳華僑城股份有限公司), a company listed on the Shenzhen Stock Exchange
(stock code: 000069) since April 2020, China VAST Industrial Urban Development Co., Ltd.,
a company listed on the Stock Exchange (stock code: 6166) since November 2017 and TCL
Electronics Holdings Limited, a company listed on the Stock Exchange (stock code: 1070)
since February 2016. He has also been a non-executive director of Zhejiang Red Dragonfly
Footwear Co., Ltd. (浙江紅蜻蜓鞋業股份有限公司), a company listed on the Shanghai Stock
Exchange (stock code: 603116) since September 2019. He was an independent non-executive
director of Zhuhai Holdings Investment Group Limited, a company which was listed on and has
been delisted from the Stock Exchange, from August 2015 to June 2016. He was also an
independent director of Shenzhen Zhongqingbao Interactive Network Co. Ltd. (深圳中青寶互
動網絡股份有限公司), a company listed on the Shenzhen Stock Exchange (stock code: 300052)
from March 2014 to May 2020.
Dr. Wang received his bachelor’s degree in economics from Peking University in July
1982, master’s degree in economics from Peking University in July 1985, master’s degree in
economics from Harvard University in June 1989 and Doctor of Philosophy in economics from
Harvard University in November 1991.
– 405 –
Other Disclosure Pursuant to Rule 13.51(2) of the Listing Rules
Save as disclosed in this document, (i) none of the Directors had held any other
directorships in any other company listed in Hong Kong or overseas during the three years
immediately prior to the Latest Practicable Date; (ii) there is no other matter in respect of each
of our Directors that is required to be disclosed pursuant to Rules 13.51(2)(a) to (v) of the
Listing Rules; and (iii) there is no other material matter relating to our Directors that needs to
be brought to the attention of our Shareholders.
SENIOR MANAGEMENT
Our senior management is responsible for the day-to-day management of our business.
The following table sets out certain information in respect of the senior management of the
Group:
Date of
joining
Name Position Age our Group Role and responsibility
Leaf Hua Li Founder, Chairman 45 December Responsible for the overall

(李華) ьььь of the Board, 2007 strategy, research and
Executive development, business
Director and development and
Chief Executive management of our
Officer Group
Arthur Yu Chief Financial 46 September Responsible for the

Chen Officer 2017 accounting, finance and
(陳宇) ьььь internal controls
functions, and the
capital markets activities
of our Group
Robin Li Xu Senior Vice 39 August 2013 Responsible for product

(徐禮) ьььь President development, operations,
marketing and business
growth of our Group
Note:
(1) Other than their roles as our senior management members, there are no family or other relationships
among any of the senior management members.
– 406 –
Leaf Hua Li (李華), aged 45, is our founder, chairman of the Board, executive Director
and chief executive officer. For further details, please refer to the section headed “— Executive
Directors” above.
Arthur Yu Chen (陳宇), aged 46, has served as our chief financial officer since
September 2017 and is responsible for the accounting, finance and internal controls functions,
and the capital markets activities of our Group.
Prior to joining our Group, Mr. Chen served as a director at Citigroup Global Markets
Asia Limited from 2009 to 2016 in its equity business, responsible for management of
institutional stock business. Mr. Chen also served as a vice president at China International
Capital Corporation from 2005 to 2009.
Mr. Chen received his bachelor’s degree in economics from Shanghai University of
Finance & Economics in June 1998 and his master’s degree in business administration from
China Europe International Business School in December 2005.
Robin Li Xu (徐禮), aged 39, has served as a senior vice president of our Company since
September 2019 and is responsible for product development, operations, marketing and
business growth of our Group.
Mr. Xu served as our vice president from August 2013 to September 2019. Prior to joining
our Group, Mr. Xu has over ten years of experience in the internet industry including seven
years at Tencent where he was a senior product manager responsible for online payment
product development and operations for Tenpay.
Mr. Xu received his bachelor’s degree in science from Heilongjiang University in July
2006.
Other Disclosure Pursuant to Rule 13.51(2) of the Listing Rules
Save as disclosed in this document, (i) none of the senior management members had held
any other directorships in any other company listed in Hong Kong or overseas during the three
years immediately prior to the Latest Practicable Date; (ii) there is no other matter in respect
of each of our senior management members that is required to be disclosed pursuant to Rules
13.51(2)(a) to (v) of the Listing Rules; and (iii) there is no other material matter relating to our
senior management members that needs to be brought to the attention of our Shareholders.
– 407 –
JOINT COMPANY SECRETARIES
Yu Qian (于千), aged 35, has been appointed as our joint company secretary taking effect
from October 25, 2021.
Mr. Yu has been the legal director of our Group, responsible for overseeing our legal and
compliance department since July 2020. Prior to joining our Group, he was a senior legal
counsel at Baidu Group (百度集團) from April 2015 to July 2020 and was the chairman of the
supervisory board of Beijing Huanxiang Zongheng Network Technology Co., Ltd. (北京幻想
縱橫網絡技術有限公司). He also previously worked as a legal counsel at China National Oil
and Gas Exploration and Development Company Ltd. (中國石油國際勘探開發有限公司)
(formerly known as China National Oil and Gas Exploration and Development Company (中
國石油天然氣勘探開發公司)).
Mr. Yu received his bachelor’s degree in law from Guangdong University of Foreign
Studies in June 2009 and juris doctor degree from Texas Tech University School of Law in May
2012.
Lam Wing Chi (林穎芝), has been appointed as our joint company secretary taking effect
from June 30, 2022.
Ms. Lam is a senior manager of Corporate Services of Tricor Services Limited, an Asia’s
leading business expansion specialist specializing in integrated Business, Corporate and
Investor Services. Ms. Lam has over nine years of experience in the corporate secretarial field.
Ms. Lam is a Chartered Secretary, a Chartered Governance Professional and an associate of
both The Hong Kong Chartered Governance Institute (HKCGI) (formerly “The Hong Kong
Institute of Chartered Secretaries”) and The Chartered Governance Institute (CGI) (formerly
“The Institute of Chartered Secretaries and Administrators”) in the United Kingdom. Ms. Lam
currently serves as the company secretary of Raffles Interior Limited (stock code: 1376),
Canggang Railway Limited (stock code: 2169), GoFintech Innovation Limited (formerly
known as China Fortune Financial Group Limited (stock code: 290)) and AIM Vaccine Co., Ltd
(stock code: 6660).
Ms. Lam received her bachelor’s degree in accounting from Hong Kong Shue Yan
University in July 2012.
– 408 –
DIRECTORS’ REMUNERATION
For details of the appointment letters that we have entered into with our Directors, see
“Statutory and General Information — C. Further Information about our Directors —
1. Particulars of Directors’ service contracts and appointment letters” in Appendix IV to this
document.
The remuneration of our Directors and senior management is paid in the form of fees,
basic salaries, housing fund, allowances and benefits in kind, employer’s contributions to a
retirement benefit scheme, discretionary bonuses and share-based compensation.
The aggregate amount of remuneration (including fees, basic salaries, housing fund,
allowances and benefits in kind, employer’s contributions to a retirement benefit scheme,
discretionary bonuses and share-based compensation) for our Directors for the years ended
December 31, 2019, 2020, 2021 and the six months ended June 30, 2022 were HK$6.4 million,
HK$14.3 million, HK$17.7 million and HK$7.3 million, respectively.
The aggregate amount of remuneration (including basic salaries, housing fund,

allowances and benefits in kind, employer’s contributions to a retirement benefit scheme,
discretionary bonuses and share-based compensation) for the five highest paid individuals of
the Group, excluding our Directors, for the years ended December 31, 2019, 2020, 2021 and
the six months ended June 30, 2022 were HK$12.1 million, HK$16.7 million, HK$34.5 million
and HK$29.4 million, respectively.
Under the arrangement currently in force, the Company expects that the aggregate amount
of remuneration (including fees, basic salaries, housing fund, allowances and benefits in kind,
employer’s contributions to a retirement benefit scheme, discretionary bonuses and share-
based compensation) to be paid to our Directors for the year ending December 31, 2022 will
be approximately HK$25.0 million.
Further information on the remuneration of the Directors and the five highest paid
individuals during the Track Record Period is set out in the Accountant’s Report in Appendix
IA to this document. For share incentive grants to our Directors and executive officers, see
“Statutory and General Information — D. Share Incentive Plans” in Appendix IV to this
document. Our PRC subsidiaries and Consolidated Affiliated Entities are required by law to
make contributions equal to certain percentages of each employee’s salary for his or her
medical insurance, maternity insurance, workplace injury insurance, unemployment insurance,
pension benefits through a PRC government-mandated multi-employer defined contribution
plan and other statutory benefits. Our Hong Kong subsidiaries are required by the Hong Kong
Mandatory Provident Fund Schemes Ordinance (Chapter 485 of the Laws of Hong Kong) to
make monthly contributions to the mandatory provident fund scheme in an amount equal to 5%
of an employee’s salary subject to the statutory maximum at HK$1,500.
Save as disclosed above, no other payments have been paid or are payable in respect of
the Track Record Period to our Directors by our Company.
– 409 –
During the Track Record Period, no remuneration was paid to any Director or any of the
five highest paid individuals of our Group as an inducement to join or upon joining our Group.
No compensation was paid to or receivable by any Director or any of the five highest paid
individuals during the Track Record Period for the loss of any office in connection with the
management of the affairs of any member of our Group. None of our Directors waived any
emoluments during the Track Record Period.
CORPORATE GOVERNANCE
Audit Committee
Our audit committee is in compliance with Rule 3.21 of the Listing Rules and the
Corporate Governance Code as set out in Appendix 14 to the Listing Rules with effect from
Listing. Our audit committee oversees our accounting and financial reporting processes and the
audits of the financial statements of our Group. Our audit committee is responsible for, among
other things:
• appointing the independent auditors and pre-approving all auditing and non-auditing
services permitted to be performed by the independent auditors;
• reviewing with the independent auditors any audit problems or difficulties and
management’s response;
• discussing the annual audited financial statements with management and the
independent auditors;
• reviewing the adequacy and effectiveness of our accounting and internal control
policies and procedures and any steps taken to monitor and control major financial
risk exposures;
• reviewing and approving all proposed related party transactions;
• meeting separately and periodically with management and the independent auditors;
and
• monitoring compliance with our code of business conduct and ethics, including
reviewing the adequacy and effectiveness of our procedures to ensure proper
compliance.
Upon Listing, our audit committee will consist of three members, namely Mr. Vic
Haixiang Li, Ms. Brenda Pui Man Tam and Mr. Yijiang Wang. The chairperson of the audit
committee is Ms. Brenda Pui Man Tam, who is an independent Director with the appropriate
accounting and related financial management expertise as required under Rules 3.10(2) and
3.21 of the Listing Rules. For the avoidance of doubt, the appointment of Mr. Yijiang Wang to
our audit committee will take effect upon Listing.
– 410 –
Compensation Committee
Our compensation committee is in compliance with Rule 3.25 of the Listing Rules and the
Listing. Our compensation committee assists the Board in reviewing and approving the
compensation structure, including all forms of compensation, relating to our Directors and
executive officers. Our compensation committee is responsible for, among other things:
• reviewing and approving, or recommending to the Board for its approval, the
compensation for our chief executive officer and other executive officers;
• reviewing and recommending to the Board for determination with respect to the
compensation of our non-employee directors;
• reviewing periodically and approving any incentive compensation or equity plans,

programs or similar arrangements; and
• selecting compensation consultant, legal counsel or other adviser only after taking
into consideration all factors relevant to that person’s independence from
management.
Upon Listing, our compensation committee will consist of three members, namely Mr. Vic
Haixiang Li, Ms. Brenda Pui Man Tam and Mr. Li. The chairperson of the compensation
committee is Mr. Vic Haixiang Li.
Nomination Committee
Our nomination committee is in compliance with Chapter 8A of the Listing Rules and
Listing. Our existing nominating and corporate governance committee will be re-designated
and separated into (i) the nomination committee, and (ii) corporate governance committee with
effect from Listing. Our nomination committee, among other things, assists the Board in
selecting individuals qualified to become our Directors and in determining the composition of
the Board and its committees. Our nomination committee is responsible for, among other
things:
• selecting and recommending to the director nominees for election by the

Shareholders or appointment by the Board;
• reviewing annually with the Board the current composition of the Board with
regards to characteristics such as independence, knowledge, skills, experience and
diversity; and
• making recommendations on the frequency and structure of Board meetings and

monitoring the functioning of the committees of the Board.
– 411 –
Upon Listing, our nomination committee will consist of three members, namely Mr. Vic
Haixiang Li, Ms. Brenda Pui Man Tam and Mr. Li. The chairperson of the nomination
committee is Mr. Vic Haixiang Li.
Corporate Governance Committee
Our corporate governance committee is in compliance with Chapter 8A of the Listing

Rules and the Corporate Governance Code set out in Appendix 14 to the Listing Rules with
effect from Listing. Our existing nominating and corporate governance committee will be
re-designated and separated into (i) the nomination committee, and (ii) corporate governance
committee with effect from Listing.
The primary duties of the corporate governance committee are, among other things, to
advise the Board periodically with regards to significant developments in the law and practice
of corporate governance as well as our compliance with applicable laws and regulations, and
make recommendations to the board on all matters of corporate governance and on any
remedial action to be taken.
Upon Listing, our corporate governance committee will consist of three independent
non-executive Directors, namely Mr. Vic Haixiang Li, Ms. Brenda Pui Man Tam and Mr.
Yijiang Wang. The chairperson of the corporate governance committee is Mr. Yijiang Wang.
For the avoidance of doubt, the appointment of Mr. Yijiang Wang to our corporate governance
committee will take effect upon Listing. For details of their experience in corporate governance
related matters, please refer to their biographies in the sub-section headed “— Board of
Directors — Independent Non-executive Directors” above.
In accordance with Rule 8A.30 of the Listing Rules and the Corporate Governance Code
as set out in Appendix 14 to the Listing Rules, the work of our corporate governance committee
as set out in its terms of reference includes:
(a) to develop and review our Company’s policies and practices on corporate
governance and make recommendations to the Board;
(b) to review and monitor the training and continuous professional development of
Directors and senior management;
(c) to review and monitor our Company’s policies and practices on compliance with
legal and regulatory requirements;
(d) to develop, review and monitor the code of conduct and compliance manual (if any)
applicable to employees and Directors;
– 412 –
(e) to review our Company’s compliance with the Corporate Governance Code as set
out in Appendix 14 to the Listing Rules and disclosure in the Corporate Governance
Report;
(f) to review and monitor whether the Company is operated and managed for the benefit
of all of its Shareholders;
(g) to confirm, on an annual basis, that the beneficiaries of weighted voting rights have
been members of the Board throughout the year and that no matters under Rule
8A.17 of the Listing Rules have occurred during the relevant financial year;
(h) to confirm, on an annual basis, whether or not the beneficiaries of weighted voting
rights have complied with Rules 8A.14, 8A.15, 8A.18 and 8A.24 of the Listing
Rules throughout the year;
(i) to review and monitor the management of conflicts of interests and make
recommendation to the Board on any matter where there is a potential conflict of
interest between our Company, its subsidiaries or Consolidated Affiliated Entities
and/or Shareholder on one hand and any beneficiary of weighted voting rights on the
other;
(j) to review and monitor all risks related to our Company’s WVR structure, including
connected transactions between our Company and/or its subsidiaries or
Consolidated Affiliated Entities on one hand and any beneficiary of weighted voting
rights on the other and make recommendation to the Board on any such transaction;
(k) to make recommendation to the Board as to the appointment or removal of the

compliance adviser of the Company;
(l) to seek to ensure effective and on-going communication between our Company and
its Shareholders, particularly with regards to the requirements of Rule 8A.35 of the
Listing Rules; and
(m) to report on the work of the corporate governance committee on at least a half-yearly
and annual basis covering all areas of its terms of reference, including disclosing,
on a comply or explain basis, its recommendations to the Board in respect of the
matters in items (i) to (k) above.
Pursuant to Rule 8A.32 of the Listing Rules, the Corporate Governance Report prepared
by our Company for inclusion in our interim and annual reports after Listing will include a
summary of the work of the corporate governance committee for the relevant period.
– 413 –
Roles of our Independent Non-executive Directors
Pursuant to Rule 8A.26 of the Listing Rules, the role of the independent non-executive
directors of a listed company with WVR structure must include, but is not limited to, the
functions described in Code Provisions A.6.2, A.6.7 and A.6.8 of the Corporate Governance
Code as set out in Appendix 14 to the Listing Rules. The functions of our independent
non-executive Directors include:
(a) participating in Board meetings to bring an independent judgment to bear on issues

of strategy, policy, performance, accountability, resources, key appointments and
standards of conduct;
(b) taking the lead where potential conflicts of interests arise;
(c) serving on the audit, compensation, nomination and corporate governance

committees, if invited;
(d) scrutinizing our Company’s performance in achieving agreed corporate goals and
objectives, and monitoring performance reporting;
(e) giving the Board and any committees on which they serve the benefit of their skills,
expertise and varied backgrounds and qualifications through regular attendance and
active participation;
(f) making positive contribution to the development of our Company’s strategy and
policies through independent, constructive and informed comments; and
(g) attending general meetings and developing a balanced understanding of the views of
our Shareholders.
Chairman of the Board and Chief Executive
Pursuant to code provision A.2.1 of the Corporate Governance Code as set out in
Appendix 14 to the Listing Rules, companies listed on the Stock Exchange are expected to
comply with, but may choose to deviate from the requirement that the responsibilities between
the chairman and the chief executive officer should be segregated and should not be performed
by the same individual. We do not have a separate chairman and chief executive officer and Mr.
Li currently performs these two roles. The Board believes that vesting the roles of both
chairman and chief executive officer in the same person has the benefit of ensuring consistent
leadership within the Group and enables more effective and efficient overall strategic planning
for the Group. The Board considers that the balance of power and authority for the present
arrangement will not be impaired and this structure will enable the Company to make and
implement decisions promptly and effectively. The Board will continue to review and consider
splitting the roles of chairman of the Board and the chief executive officer of the Company at
a time when it is appropriate by taking into account the circumstances of the Group as a whole.
– 414 –
BOARD DIVERSITY POLICY
We will adopt a board diversity policy (“Board Diversity Policy”) which sets out the
approach to achieve and maintain diversity in our Board prior to Listing. Our Company
recognises and embraces the benefits of having a diverse Board. Pursuant to our Board
Diversity Policy, selection of Board candidates will be based on a range of diversity
perspectives, including but not limited to gender, age, cultural and educational background,
industry experience, technical capabilities, professional qualifications and skills, knowledge,
length of service and other related factors. We will also consider our own business model and
special needs. The ultimate selection of Director candidates will be based on merits of the
candidates and contribution that the candidates will bring to our Board.
Our Board comprises of six members, including one female Director. Our Directors also
have a balanced mix of knowledge, skills and experience, including property development,
business management, finance and investment. They obtained degrees in various majors
including computer science, business administration, accountancy, science and economics. We
have three independent non-executive Directors who have different industry backgrounds,
representing half of our Board members. In recognition of the particular importance of gender
diversity, our Company has taken, and will continue to take steps to promote gender diversity
in our Board. Further, our Company will continue to consider increasing the proportion of
female Board members over time when selecting suitable new or additional candidates for
appointments to our Board so as to ensure that appropriate gender diversity is achieved with
reference to stakeholders’ expectation and international and local recommended best practices,
where appropriate.
Our nomination committee will be responsible for the implementation of our board
diversity policy. Upon completion of the Listing, our nomination committee will review our
board diversity policy from time to time to ensure its continued effectiveness and we will
disclose the implementation of our board diversity policy in our Corporate Governance Report
on an annual basis.
– 415 –
COMPLIANCE ADVISER
We have appointed Guotai Junan Capital Limited as our compliance adviser (the
“Compliance Adviser”) pursuant to Rules 3A.19 and 8A.33 of the Listing Rules. The
Compliance Adviser will provide us with guidance and advice as to compliance with the
requirements under the Listing Rules and applicable Hong Kong laws. Pursuant to Rules 3A.23
and 8A.34 of the Listing Rules, the Compliance Adviser will advise our Company, among
others, in the following circumstances:
(a) before the publication of any regulatory announcement, circular, or financial report;
(b) where a transaction, which might be a notifiable or connected transaction, is

contemplated, including share issues and share repurchases;
(c) where the business activities, development or results of our Company deviate from
any forecast, estimate or other information in this document;
(d) where the Hong Kong Stock Exchange makes an inquiry to the Company regarding
unusual movements in the price or trading volume of its listed securities or any other
matters in accordance with Rule 13.10 of the Listing Rules;
(e) the WVR structure;
(f) transactions in which any beneficiary of weighted voting rights in the Company has
an interest; and
(g) where there is a potential conflict of interest between the Company, its subsidiary
and/or Shareholders (considered as a group) on one hand and any beneficiary of
weighted voting rights in the Company on the other.
The term of appointment of the Compliance Adviser shall commence on the Listing Date.
Pursuant to Rule 8A.33 of the Listing Rules, the Company is required to engage a compliance
adviser on a permanent basis.
DISCLOSURE UNDER RULE 8.10 OF THE LISTING RULES
Each of the Directors confirms that as of the Latest Practicable Date, he/she did not have
any interest in a business which materially competes or is likely to compete, directly or
indirectly, with our business, and requires disclosure under Rule 8.10 of the Listing Rules.
– 416 –
RELATIONSHIP WITH OUR CONTROLLING SHAREHOLDERS
OUR CONTROLLING SHAREHOLDERS
Immediately following the Listing, Mr. Li will be interested in and will control a total of
239,750,000 Class B Ordinary Shares held by Lera Ultimate Limited and Lera Infinity Limited,
a total of 164,086,568 Class A Ordinary Shares held by Lera Ultimate Limited and Lera Infinity
Limited, and directly in the form of ADSs. Lera Ultimate Limited and Lera Infinity Limited are
ultimately owned by trusts established by Mr. Li (as the settlor) for the benefit of Mr. Li and
his family. For details, please see the section headed “Share Capital.”
Assuming that no further Shares are issued under the Share Incentive Plans between the
Latest Practicable Date and the Listing Date, and considering that (A) the voting rights
attached to Class B Ordinary Shares will be modified from 20 votes to ten votes per Share with
effect from the Listing pursuant to the irrevocable written consent dated November 21, 2022
delivered by Mr. Li; and (B) all Class B Ordinary Shares held by Tencent Group through
Qiantang River Investment Limited will be converted into Class A Ordinary Shares upon
Listing, Mr. Li will be interested in approximately 36.25% of our issued and outstanding share
capital, and will be entitled to exercise approximately 78.29% of the voting rights in the
Company (except for resolutions with respect to the Reserved Matters, in relation to which
each Share is entitled to one vote) upon the completion of the Introduction.
Therefore, Mr. Li, Lera Ultimate Limited and Lera Infinity Limited together will
constitute the Controlling Shareholders of our Company after the Listing. See “Share Capital
— Weighted Voting Rights Structure” for details of the weighted voting rights attached to the
Class B Ordinary Shares of our Company.
INDEPENDENCE FROM OUR CONTROLLING SHAREHOLDERS
Having considered the following factors, our Directors are satisfied that we are capable
of carrying on our business independently from our Controlling Shareholders and their close
associates after the Listing.
Management Independence
Our business is managed and conducted by our Board and senior management. Upon
Listing, our Board will consist of six Directors, including two executive Directors, one
non-executive Director and three independent non-executive Directors. Mr. Li, a Controlling
Shareholder, is our founder, chairman of the Board, executive Director and chief executive
officer. For further details, please see the section headed “Directors and Senior Management.”
– 417 –
Our Directors consider that our Board and senior management will function
independently of our Controlling Shareholders because:
(a) each Director is aware of his/her fiduciary duties as a director which require each
of them to, among others, act for the benefit and in the interest of our Group and not
to allow any conflict between their duties as a Director and their personal interests,
and Director with potential conflict of interest should abstain from voting at the
relevant Board meeting;
(b) our daily management and operations are carried out by our a senior management
team, all of whom have substantial experience in the industry in which our Group
is engaged, and will therefore be able to make business decisions that are in the best
interests of our Group;
(c) we have three independent non-executive Directors and certain matters of our
Company must always be referred to the independent non-executive Directors for
review;
(d) in the event that there is a potential conflict of interest arising out of any transaction
to be entered into between our Group and our Directors or their respective
associates, the interested Director(s) would be required to declare the nature of such
interest before voting at the relevant Board meeting; and
(e) we have adopted other corporate governance measures to manage conflicts of

interest, if any, between our Group and our Controlling Shareholders, as detailed in
“— Corporate Governance Measures” below.
Based on the above, our Directors believe that our business is managed independently of
our Controlling Shareholders.
Operational Independence
Our Group is not operationally dependent on the Controlling Shareholders. Our Group
holds all relevant licenses, and owns all relevant intellectual properties and technologies,
which are necessary and material to carry on our business. We have sufficient capital, facilities,
equipment and employees to operate our business independently from our Controlling
Shareholders. We also have independent access to our customers and an independent
management team to operate our business.
Based on the above, our Directors believe that our business is operationally independent
of our Controlling Shareholders.
– 418 –
Financial Independence
Our Group has an independent accounting and internal control system and makes
financing decisions according to our own business needs. We have an independent finance
department responsible for discharging the treasury function. We can obtain financing from
third parties, if necessary, without reliance on our Controlling Shareholders.
In 2018, we provided certain margin services in our ordinary course of business to Mr. Li.
Our Group does not currently provide such margin services to Mr. Li. Save as the above, during
the Track Record Period, our Controlling Shareholders or their associates had not provided any
loan or guarantee in favour of the Group, and our Group had not granted to our Controlling
Shareholders or their associates any such loan or guarantee. Upon Listing, there will be no
outstanding loan or guarantees provided by, or granted to, our Controlling Shareholders or their
respective associates.
Based on the above, our Directors believe that our business is financially independent of
our Controlling Shareholders.
DISCLOSURE UNDER RULE 8.10 OF THE LISTING RULES
Our Controlling Shareholders confirm that as of the Latest Practicable Date, they did not
have any interest in a business, apart from the business of our Group, which competes or is
likely to compete, directly or indirectly, with our business that would require disclosure under
Rule 8.10 of the Listing Rules.
CORPORATE GOVERNANCE MEASURES
Our Company and our Directors are committed to upholding and implementing the
highest standards of corporate governance and recognize the importance of protecting the
rights and interests of all Shareholders, including the rights and interests of our minority
Shareholders.
In light of the above, our Company has established a corporate governance committee
which has adopted terms of reference consistent with Code Provision D.3.1 of Appendix 14 to,
and Rule 8A.30 of, the Listing Rules. Our corporate governance committee consists of all our
independent non-executive Directors with experience in overseeing corporate governance
related functions of private and listed companies. The primary duties of the corporate
governance committee are to ensure that our Company is operated and managed for the benefit
of all Shareholders and to ensure our Company’s compliance with the Listing Rules and
safeguards relating to its WVR structure.
– 419 –
We will also adopt the following corporate governance measures to resolve actual or
potential conflict of interests between our Group and our Controlling Shareholders:
(a) where a Shareholders’ meeting is held pursuant to the Listing Rules to consider
proposed transactions or arrangements in which our Controlling Shareholders or any
of their associates have a material interest, our Controlling Shareholder(s) shall
abstain from voting and their votes shall not be counted;
(b) our Company has established internal control measures to identify connected
transactions and will comply with the applicable Listing Rules if the Group enters
into connected transactions with our Controlling Shareholders or any of their
associates after the Listing;
(c) where our Directors reasonably request the advice of independent professionals,
such as financial advisers, the appointment of such independent professionals will
be made at our Company’s expense;
(d) we have appointed Guotai Junan Capital Limited as our Compliance Adviser to
provide advice and guidance to us in respect of compliance with the applicable laws
and regulations, as well as the Listing Rules, including various requirements relating
to corporate governance; and
(e) we have established our audit committee, compensation committee, nomination

committee and corporate governance committee with written terms of reference in
compliance with the Listing Rules and the Corporate Governance Code and
Corporate Governance Report in Appendix 14 to the Listing Rules.
Based on the above, our Directors believe that sufficient corporate governance measures
have been put in place to manage conflicts of interest between our Group and our Controlling
Shareholders, and to protect minority Shareholders’ interests after the Listing.
– 420 –
SUBSTANTIAL SHAREHOLDERS
As of the Latest Practicable Date, the following persons directly or indirectly held, or are
entitled to exercise the control of 5% or more of our share capital (without taking into account
the Class A Ordinary Shares issued to our depositary bank for bulk issuance of ADS reserved
for future issuance upon the exercise or vesting of awards granted under the Share Incentive
Plans):
Approximate
Percentage of
shareholding in
the issued share
Capacity/Nature Number of capital of our
Name of substantial shareholder of interest Class of Shares Shares Company
Tencent(1)(2)(3)(4)(5) ь ь ь ь ь ь ь ь ь ь Interest in controlled Class A Ordinary 106,616,611 9.57%

corporations Shares
Class B Ordinary 140,802,051 12.64%
Shares
Image Frame Investment (HK) Beneficial interest Class A Ordinary 71,024,142 6.38%
Limited ь ь ь ь ь ь ь ь ь ь ь ь ь ь
(1)
Shares
Qiantang River Investment Beneficial interest Class A Ordinary 28,840,949 2.59%
Limited(2) ь ь ь ь ь ь ь ь ь ь ь ь ь ь Shares
Shares
Tencent Mobility Limited(3)ь ь ь ь ь Beneficial interest Class A Ordinary 5,412,888 0.49%
Shares
TPP Opportunity GP I, Ltd.(4) ь ь ь Beneficial interest Class A Ordinary 1,161,840 0.10%
Shares
Distribution Pool Limited(5) ь ь ь ь Beneficial interest Class A Ordinary 176,792 0.02%
Shares
Mr. Li(6) ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь Interest in controlled Class A Ordinary 164,000,000 14.72%
corporations/founder Shares
of a discretionary
trust/beneficiary of a
trust
Beneficial interest Class A Ordinary 86,568 0.01%
Shares
Interest in controlled Class B Ordinary 239,750,000 21.52%
corporations/founder Shares
of a discretionary
trust/beneficiary of a
trust
– 421 –
Approximate
Percentage of
shareholding in
the issued share
Capacity/Nature Number of capital of our
Name of substantial shareholder of interest Class of Shares Shares Company
Lera Ultimate Limited(6) ь ь ь ь ь ь Beneficial interest Class A Ordinary 100,000,000 8.98%

Shares
Shares
Lera Infinity Limited(6) ь ь ь ь ь ь ь Beneficial interest Class A Ordinary 64,000,000 5.74%
Shares
Shares
Notes:
(1) Image Frame Investment (HK) Limited is a company incorporated in Hong Kong. Image Frame Investment
(HK) Limited is a wholly owned subsidiary of Tencent. As of the Latest Practicable Date, Image Frame
Investment (HK) Limited directly held 71,024,142 Class A Ordinary Shares. As such, Tencent is deemed to be
interested in the Class A Ordinary Shares held by Image Frame Investment (HK) Limited.
(2) Qiantang River Investment Limited is a company incorporated in British Virgin Islands. Qiantang River
Investment Limited is a wholly owned subsidiary of Tencent. As of the Latest Practicable Date, Qiantang River
Investment Limited directly held 28,840,949 Class A Ordinary Shares and 140,802,051 Class B Ordinary
Shares. As such, Tencent is deemed to be interested in the Class A Ordinary Shares and Class B Ordinary
Shares held by Qiantang River Investment Limited.
(3) As of the Latest Practicable Date, 5,412,888 Class A Ordinary Shares, represented by 676,611 ADSs, were held
of record by Tencent Mobility Limited, a wholly-owned subsidiary of Tencent. As such, Tencent is deemed to
be interested in the Class A Ordinary Shares held by Tencent Mobility Limited.
of record by TPP Opportunity GP I, Ltd., an entity controlled by Tencent. As such, Tencent is deemed to be
interested in the Class A Ordinary Shares held by TPP Opportunity GP I, Ltd.
(5) As of the Latest Practicable Date, 176,792 Class A Ordinary Shares, represented by 22,099 ADSs, were held
of record by Distribution Pool Limited, an entity controlled by Tencent. As such, Tencent is deemed to be
interested in the Class A Ordinary Shares held by Distribution Pool Limited.
(6) Lera Ultimate Limited is a BVI business company ultimately owned by Lera Direction Plus Trust and Lera
Infinity Limited is a BVI business company ultimately owned by Lera Target Trust. Lera Direction Plus Trust
and Lera Target Trust were established by Mr. Li (as the settlor) for the benefit of Mr. Li and his family. Mr.
Li has the sole power to direct the retention or disposal of, and the exercise of any voting and other rights
attached to the shares held by Lera Ultimate Limited and Lera Infinity Limited in our Company. Mr. Li is
deemed to be interested in the Shares held by Lera Ultimate Limited and Lera Infinity Limited.
– 422 –
So far as our Directors are aware, immediately following the completion of the
Introduction and assuming that no further Shares are issued under the Share Incentive Plans
between the Latest Practicable Date and the Listing Date, the following persons will have
interests and/or short positions (as applicable) in the Shares or underlying Shares of our
Company which would fall to be disclosed to the Company and the Stock Exchange pursuant
to the provisions of Divisions 2 and 3 of Part XV of the SFO, or, will be, directly or indirectly,
interested in 10 % or more of the nominal value of any class of our share capital carrying rights
to vote in all circumstances at general meetings of our Company or any other member of our
Group:
Approximate
percentage of
shareholding
in each class of
share of
our Company
Capacity/Nature of Number of immediately after
Name of substantial shareholder interest Shares(1) the Introduction(1)
Class A Ordinary Shares

Tencent(2)(3)(4)(5)(6) ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь Interest in controlled 247,418,662 28.30%
corporations
Image Frame Investment (HK) Limited(2) ь ь Beneficial interest 71,024,142 8.12%
Qiantang River Investment Limited(3) ь ь ь ь ь Beneficial interest 169,643,000 19.40%
Tencent Mobility Limited(4) ь ь ь ь ь ь ь ь ь ь ь Beneficial interest 5,412,888 0.62%
TPP Opportunity GP I, Ltd.(5) ь ь ь ь ь ь ь ь ь ь Beneficial interest 1,161,840 0.13%
Distribution Pool Limited(6) ь ь ь ь ь ь ь ь ь ь ь Beneficial interest 176,792 0.02%
Mr. Li(7) ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь Interest in controlled 164,000,000 18.76%
corporations/founder of
a discretionary trust/
beneficiary of a trust
Beneficial interest 86,568 0.01%
Lera Ultimate Limited(7) ь ь ь ь ь ь ь ь ь ь ь ь ь Beneficial interest 100,000,000 11.44%
Lera Infinity Limited(7) ь ь ь ь ь ь ь ь ь ь ь ь ь Beneficial interest 64,000,000 7.32%
Class B Ordinary Shares

Mr. Li(7) ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь Interest in controlled 239,750,000 100.00%
corporations/founder of
a discretionary trust/
beneficiary of a trust
Lera Ultimate Limited ь ь ь ь ь ь ь ь ь ь ь ь ь Beneficial interest
(7)
202,812,500 84.59%
Lera Infinity Limited(7) ь ь ь ь ь ь ь ь ь ь ь ь ь ь Beneficial interest 36,937,500 15.41%
– 423 –
Notes:
(1) The table above assumes (i) no further Shares are issued under the Share Incentive Plans between the Latest
Practicable Date and the Listing Date, and (ii) the Class B Ordinary Shares beneficially owned by Tencent
Group through Qiantang River Investment Limited are converted into Class A Ordinary Shares on one-on-one
basis. Each Class A Ordinary Share entitles the holder thereof to exercise one vote at the Company’s general
meetings. This table also excludes Class A Ordinary Shares issued to our depositary bank for bulk issuance of
ADS reserved for future issuance upon the exercise or vesting of awards granted under the Share Incentive
Plans.
(2) Image Frame Investment (HK) Limited is a company incorporated in Hong Kong. Image Frame Investment
(HK) Limited is a wholly owned subsidiary of Tencent. As of the Latest Practicable Date, Image Frame
Investment (HK) Limited directly held 71,024,142 Class A Ordinary Shares. As such, Tencent is deemed to be
interested in the Class A Ordinary Shares held by Image Frame Investment (HK) Limited.
(3) Qiantang River Investment Limited is a company incorporated in British Virgin Islands. Qiantang River
Investment Limited is a wholly owned subsidiary of Tencent. As of the Latest Practicable Date, Qiantang River
Investment Limited directly held 28,840,949 Class A Ordinary Shares and 140,802,051 Class B Ordinary
Shares. Pursuant to a conversion notice dated October 25, 2021, all of the 140,802,051 Class B Ordinary
Shares held by Qiantang River Investment Limited will be converted into Class A ordinary shares upon Listing.
As such, Tencent is deemed to be interested in the Class A Ordinary Shares (including 140,802,051 Class B
Ordinary Shares to be converted into Class A Ordinary Shares on one-on-one basis upon the completion of the
Introduction) held by Qiantang River Investment Limited.
of record by Tencent Mobility Limited, a wholly-owned subsidiary of Tencent. As such, Tencent is deemed to
be interested in the Class A Ordinary Shares held by Tencent Mobility Limited.
of record by TPP Opportunity GP I, Ltd., an entity controlled by Tencent. As such, Tencent is deemed to be
interested in the Class A Ordinary Shares held by TPP Opportunity GP I, Ltd.
(6) As of the Latest Practicable Date, 176,792 Class A Ordinary Shares, represented by 22,099 ADSs, were held
of record by Distribution Pool Limited, an entity controlled by Tencent. As such, Tencent is deemed to be
interested in the Class A Ordinary Shares held by Distribution Pool Limited.
(7) Lera Ultimate Limited is a BVI business company ultimately owned by Lera Direction Plus Trust and Lera
Infinity Limited is a BVI business company ultimately owned by Lera Target Trust. Lera Direction Plus Trust
and Lera Target Trust were established by Mr. Li (as the settlor) for the benefit of Mr. Li and his family. Mr.
Li has the sole power to direct the retention or disposal of, and the exercise of any voting and other rights
attached to the shares held by Lera Ultimate Limited and Lera Infinity Limited in our Company. Mr. Li is
deemed to be interested in the Shares held by Lera Ultimate Limited and Lera Infinity Limited.
Except as disclosed above, our Directors are not aware of any other person (other than a
Director or chief executive of the Company) who will, immediately following the completion
of the Introduction (and assuming that no further Shares are issued under the Share Incentive
Plans between the Latest Practicable Date and the Listing Date), have any interest and/or short
positions in the Shares or underlying Shares of our Company which would fall to be disclosed
to the Company pursuant to the provisions of Divisions 2 and 3 of Part XV of the SFO, or, who
is, directly or indirectly, interested in 10% or more of the nominal value of any class of our
share capital carrying rights to vote in all circumstances at general meetings of our Company.
Our Directors are not aware of any arrangement which may at a subsequent date result in a
change of control of our Company or any other member of our Group.
– 424 –
SHARE CAPITAL
AUTHORIZED AND ISSUED SHARE CAPITAL
The following is a description of the authorized and issued share capital of our Company
upon the Listing:
Authorized Share Capital
Aggregate
Number of nominal value
Shares Description of Shares of Shares
(US$)
48,700,000,000 Class A Ordinary Shares of a par value of 487,000.00

US$0.00001 each
800,000,000 Class B Ordinary Shares of a par value of 8,000.00

US$0.00001 each
500,000,000 Undesignated shares of a par value of 5,000.00

US$0.00001 each
50,000,000,000 Total 500,000.00
Issued and outstanding as of Latest Practicable Date
Approximate
Aggregate percentage of
Number of nominal value the issued
Shares Description of Shares of Shares share capital
(US$)
733,502,308 (1) Class A Ordinary Shares of a 7,335.02308 65.84%

par value of US$0.00001 each
140,802,051 (2) Class B Ordinary Shares of a 1,408.02051 12.64%

which are beneficially owned
by the relevant Tencent Entity
874,304,359 Sub-total 8,743.04359 78.48%
– 425 –
SHARE CAPITAL
Approximate
(US$)
239,750,000 Class B Ordinary Shares of a 2,397.50000 21.52%

by Mr. Li
1,114,054,359 Total 11,140.54 100%
Notes:
(1) This reflects the number of Class A Ordinary Shares issued and outstanding immediately prior to
conversion of Class B Ordinary Shares by Qiantang River Investment Limited, one of the Tencent
Entities.
(2) The Class B Ordinary Shares beneficially owned by Tencent Group through Qiantang River Investment
Limited will be converted into Class A Ordinary Shares upon the completion of the Introduction
pursuant to the conversion notice delivered by Qiantang River Investment Limited.
Conversion of Class B Ordinary Shares by the relevant Tencent Entity
As of the Latest Practicable Date, Tencent Group, through Qiantang River Investment
Limited, beneficially owned an aggregate of 140,802,051 Class B Ordinary Shares. On October
25, 2021, Qiantang River Investment Limited, one of the Tencent Entities, delivered a share
conversion notice to the Company to convert all of the 140,802,051 Class B Ordinary Shares
held by the relevant Tencent Entity to Class A Ordinary Shares upon Listing. Each Class B
Ordinary Share is convertible into one Class A Ordinary Share at any time by the holder
thereof. Upon the conversion of a total of the 140,802,051 Class B Ordinary Shares held by the
relevant Tencent Entity into Class A Ordinary Shares which will take effect upon Listing, the
Company will issue 140,802,051 Class A Ordinary Shares, representing approximately 16.10%
the total number of issued Class A Ordinary Shares upon completion of the Introduction and
conversion of Class B Ordinary Shares into Class A Ordinary Shares (assuming no further
Shares are issued under the Share Incentive Plans between the Latest Practicable Date and the
Listing Date).
– 426 –
SHARE CAPITAL
Issued and outstanding following the completion of the Introduction
The issued share capital of our Company immediately following the completion of the
Introduction (assuming no further Shares are issued under the Share Incentive Plans between
the Latest Practicable Date and the Listing Date and without taking into account the Class A
Ordinary Shares issued (as of the Latest Practicable Date) to our depositary bank for bulk
issuance of ADS reserved for future issuance upon the exercise or vesting of awards granted
under the Share Incentive Plans) will be as follows:
Approximate
(US$)
874,304,359 Class A Ordinary Shares of a 8,743.04359 78.48%

239,750,000 Class B Ordinary Shares of a 2,397.50000 21.52%

by Mr. Li
1,114,054,359 Total 11,140.54359 100%
WEIGHTED VOTING RIGHTS STRUCTURE
WVR Structure
As of the Latest Practicable Date, our Company adopted a weighted voting rights
structure, under which our share capital comprises Class A Ordinary Shares (which entitles the
holders to exercise one vote) and Class B Ordinary Shares (which entitles the holders to
exercise 20 votes). On November 21, 2022, pursuant to our existing Articles of Association,
Mr. Li, being the WVR Beneficiary, delivered an irrevocable written consent to the Company,
among other things, to consent to the modification of voting rights attached to each Class B
Ordinary Share from 20 votes to ten votes pursuant to Rule 8A.10 of the Listing Rules,
effective upon the Listing. Accordingly, each Class B Ordinary Share shall entitle its holder to
exercise ten votes, with effect from the Listing on all matters that require a shareholder’s vote,
subject to Rule 8A.24 of the Listing Rules that requires a limited number of Reserved Matters
to be voted on a one vote per share basis as set out below (save for the specified exception for
the compliance of Rule 8A.24 of the Listing Rules).
– 427 –
SHARE CAPITAL
The Reserved Matters are:
(i) any amendment to the Memorandum of Association or Articles of Association,

including the variation of the rights attached to any class of shares;
(ii) the appointment, election or removal of any independent non-executive Director;
(iii) the appointment or removal of the Company’s auditors; and
(iv) the voluntary liquidation or winding-up of the Company.
In addition, our Articles of Association do not currently satisfy some of the articles
requirements under Chapter 8A (including Rule 8A.10) of, and Appendix 3 to, the Listing
Rules (the “Unmet Listing Rules Articles Requirements”), and we will also put forth
resolutions to incorporate the Unmet Listing Rules Articles Requirements into our Articles of
Association at the next general meeting following the Listing (the “First GM”), which we have
undertaken to convene on or before June 30, 2023.
Furthermore, we undertake to, at the First GM, seek shareholders’ approval to amend our
Articles to incorporate the Unmet Articles Requirements into the Articles. Details of these
proposed amendments are set out in the section headed “Waivers — Requirements relating to
the Articles of Association of the Company” of this document.
In addition, save for the exceptions specified below, we have undertaken to the Stock
Exchange to fully comply with the Unmet Articles Requirements upon the Listing and before
our Articles are formally amended:
• paragraph 15 of Appendix 3 to the Listing Rules such that, prior to the Company’s
Articles being amended, the threshold for passing a resolution in a separate class
meeting will be approval by two-thirds of the votes cast by the issued shares of that
class pursuant to article 17 of the Company’s existing Articles;
• Rules 8A.24(1) and (2) of the Listing Rules such that, prior to the Company’s
Articles being amended, weighted voting rights will apply in connection with
passing the Proposed Resolutions; and
• paragraph 16 of Appendix 3 to the Listing Rules such that, prior to the Company’s
Articles being amended, the threshold for passing a special resolution for
amendments to the Company’s Articles will be approved by members holding not
less than two-thirds of the voting rights of those present and voting in person or by
proxy at the general meeting in accordance with article 158 of the Company’s
existing Articles.
– 428 –
SHARE CAPITAL
For further details, please see “Waivers — Requirements relating to the Articles of
Association of the Company” and the summary of the Articles of Association in Appendix III
to this document.
The table below sets out the ownership and voting rights to be held by the WVR
Beneficiary upon the completion of the Introduction:
Approximate %
of issued and Approximate %
Number of outstanding of total
Shares share capital (1) voting rights (1)(2)
Class A Ordinary Shares ьььььььь 164,086,568 14.73% 5.02%

Class B Ordinary Shares ьььььььь 239,750,000 21.52% 73.28%
Totalььььььььььььььььььььььь 403,836,568 36.25% 78.29%
Notes:
(1) Assuming no further Shares are issued under the Share Incentive Plans between the Latest Practicable
Date and the Listing Date and all Class B Ordinary Shares held by Tencent Group through Qiantang
River Investment Limited will be converted to Class A Ordinary Shares on a one-on-one basis upon the
completion of the Introduction.
(2) Class A Ordinary Shares entitle the Shareholder to one vote per share and Class B Ordinary Shares
entitle the Shareholder to ten (10) votes per share with effect from the Listing, except for resolutions
with respect to the Reserved Matters for which each Share entitles each Shareholder to one vote per
share.
Class B Ordinary Shares may be converted into Class A Ordinary Shares on a one-on-one
basis. Immediately after the completion of the Introduction, upon the conversion of all the
issued and outstanding Class B Ordinary Shares into Class A Ordinary Shares, the Company
will issue 239,750,000 Class A Ordinary Shares, representing approximately 27.42% of the
total number of issued and outstanding Class A Ordinary Shares upon completion of the
Introduction (assuming no further Shares are issued under the Share Incentive Plans between
the Latest Practicable Date and the Listing Date).
The weighted voting rights attached to our Class B Ordinary Shares will cease when the
WVR Beneficiary no longer has beneficial ownership of any of our Class B Ordinary Shares,
in accordance with Rule 8A.22 of the Listing Rules. This may occur:
(i) upon the occurrence of any of the circumstances set out in Rule 8A.17 of the Listing
Rules, in particular where the WVR Beneficiary is: (1) deceased; (2) no longer a
member of our Board; (3) deemed by the Stock Exchange to be incapacitated for the
purpose of performing his duties as a director; or (4) deemed by the Stock Exchange
to no longer meet the requirements of a director set out in the Listing Rules;
– 429 –
SHARE CAPITAL
(ii) when the holders of Class B Ordinary Shares have transferred to another person the
beneficial ownership of, or economic interest in, all of the Class B Ordinary Shares
or the voting rights attached to them, other than in the circumstances permitted by
Rule 8A.18 of the Listing Rules;
(iii) where a vehicle holding Class B Ordinary Shares on behalf of a WVR Beneficiary
no longer complies with Rule 8A.18(2) of the Listing Rules; or
(iv) when all of the Class B Ordinary Shares have been converted to Class A Ordinary
Shares.
Save for the weighted voting rights attached to Class B Ordinary Shares, the rights
attached to all classes of Shares are identical. For further information about the rights,
preferences, privileges and restrictions of the Class A Ordinary Shares and Class B Ordinary
Shares, see “Summary of the Constitution of the Company and Cayman Companies Act —
Summary of the Constitution of the Company — 2. Articles of Association” in Appendix III for
further details.
WVR Beneficiary
Immediately upon completion of the Introduction, the WVR Beneficiary will be Mr. Li,
our founder, chairman of the Board, executive Director and chief executive officer. Assuming
upon the completion of the Introduction, Mr. Li will beneficially own and will control, through
entities affiliated with him (i.e. Lera Ultimate Limited and Lera Infinity Limited), an aggregate
of 239,750,000 Class B Ordinary Shares, representing (a) approximately 21.52% of our issued
and outstanding Shares; (b) approximately 73.28% of the effective voting rights in our
Company with respect to shareholder resolutions relating to matters other than the Reserved
Matters; and (c) approximately 21.52% with respect to shareholder resolutions relating to the
Reserved Matters upon completion of the Introduction. Lera Ultimate Limited and Lera Infinity
Limited are ultimately owned by Lera Direction Plus Trust and Lera Target Trust, respectively,
each of which is a trust established by Mr. Li (as the settlor) for the benefit of his family and
himself.
– 430 –
SHARE CAPITAL
The Company confirms that the holding arrangement through which the WVR Beneficiary
holds the Class B Ordinary Shares as described above meets the requirements in Rule 8A.18
of the Listing Rules and the holding arrangement is permitted under the “Consultation
Conclusions-a listing regime for companies from emerging and innovative sectors” issued by
the Stock Exchange in April 2018, namely: (a) a partnership of which the WVR Beneficiary is
a partner and the terms of which must expressly specify that the voting rights attached to any
and all of the Class B Ordinary Shares held by such partnership are solely dictated by the WVR
Beneficiary; (b) a trust of which the WVR Beneficiary is a beneficiary and that meets the
following conditions: (i) the WVR Beneficiary must in substance retain an element of control
of the trust and any immediate holding companies of, or, if not permitted in the relevant tax
jurisdiction, retain a beneficial interest in any and all of the Class B Ordinary Shares held by
such trust; and (ii) the purpose of the trust must be for estate planning and/or tax planning
purposes; or (c) a private company or other vehicle wholly-owned and wholly controlled by the
WVR Beneficiary or by a trust referred to in paragraph (b) above.
Each of the Company and Mr. Li confirms that there is no encumbrance over any Class
B Ordinary Shares as at the date of this document and that no new encumbrance will be created
over any Class B Ordinary Shares before the proposed amendments to the Articles as described
in the section headed “Waivers — Requirements relating to the Articles of Association of the
Company” have become effective.
The Company’s WVR structure enables the WVR Beneficiary to exercise voting control
over the Company notwithstanding that the WVR Beneficiary does not hold a majority
economic interest in the share capital of the Company. This will enable the Company to benefit
from the continuing vision and leadership of the WVR Beneficiary who will control the
Company with a view to its long-term prospects and strategy.
Mr. Li is the founder, chairman of the Board, executive Director and chief executive
officer of our Company. He has been the forefront of our Group’s growth and innovation since
its inception, providing the core vision and philosophy and participating in all of the key
management decisions that has led to the continued success and development of our Group. In
particular, Mr. Li has led the technology committee of our Company to formulate technology
development strategies, optimize the existing technology infrastructure and implement
large-scale technology projects of our Group. For Mr. Li’s biographical details, please refer to
“Directors and Senior Management” of this document.
Prospective investors are advised to be aware of the potential risks of investing in

companies with a WVR structure, in particular that the interests of the WVR Beneficiary may
not necessarily always be aligned with those of our Shareholders as a whole, and that the WVR
Beneficiary will be in a position to exert significant influence over the affairs of our Company
and the outcome of Shareholders’ resolutions. Prospective investors should make the decision
to invest in the Company only after due and careful consideration. For further information
about the risks associated with the WVR structure, see “Risk factors — Risks related to our
Class A Ordinary Shares and ADSs.”
– 431 –
SHARE CAPITAL
Undertakings by the WVR Beneficiary
Pursuant to Rule 8A.43 of the Listing Rules, the WVR Beneficiary is required to give a
legally enforceable undertaking to the Company that he will comply with the relevant
requirements as set out in Rule 8A.43 of the Listing Rules, which is intended to be for the
benefit of and enforceable by the Shareholders. On December 20, 2022, Mr. Li made an
undertaking to the Company (the “Undertaking”), that for so long as he is a WVR Beneficiary:
(a) he shall comply with (and, if the shares to which the weighted voting rights that he
is beneficially interested in are attached are held through a limited partnership, trust,
private company, or other vehicle, use his best endeavors to procure that such
limited partnership, trust, private company or other vehicle complies with) all
applicable requirements under Rules 8A.09, 8A.14, 8A.15, 8A.17. 8A.18 and 8A.24
of the Listing Rules from time to time in force (the “Requirements”); and
(b) he shall use his best endeavors to procure that the Company complies with all
applicable Requirements, to the extent not waived by the Stock Exchange.
For the avoidance of doubt, the Requirements are subject to Rule 2.04 of the Listing
Rules. The WVR Beneficiary acknowledged and agreed that the Shareholders rely on the
Undertaking in acquiring and holding their shares. The WVR Beneficiary acknowledged and
agreed that the Undertaking is intended to confer a benefit on the Company and all
Shareholders and may be enforced by the Company and/or any Shareholder against the WVR
Beneficiary.
The Undertaking shall automatically terminate upon the earlier of (i) the date of delisting
of the Company from the Stock Exchange, and (ii) the date on which the WVR Beneficiary
ceases to be a beneficiary of weighted voting rights in the Company. For the avoidance of
doubt, the termination of the Undertaking shall not affect any rights, remedies, obligations or
liabilities of the Company and/or any Shareholder and/or the WVR Beneficiary himself that
have accrued up to the date of termination, including the right to claim damages and/or apply
for any injunction in respect of any breach of the Undertaking which existed at or before the
date of termination.
The Undertaking shall be governed by the laws of Hong Kong and all matters, claims or
disputes arising out of the Undertaking shall be subject to the exclusive jurisdiction of the
courts of Hong Kong.
– 432 –
SHARE CAPITAL
SHAREHOLDING BY OUR MAJOR SHAREHOLDERS
The table below sets forth the number of Shares held, voting rights and beneficial
interests of the Company’s major shareholders and other shareholders upon Listing, assuming
upon the completion of the Introduction.
Approximate
% of issued
Approximate and
Number of % of voting outstanding
Shareholders Class of Shares Shares rights (1) share capital
WVR Beneficiary ььь Class A Ordinary 164,086,568 5.02% 14.73%

Shares
Class B Ordinary 239,750,000 73.28% 21.52%
Shares
Tencent Entities ььььь Class A Ordinary 247,418,662 7.56% 22.21%
Shares
Other Directors ьььь Class A Ordinary 4,779,480 0.15% 0.43%
Shares
Other Shareholders (2) ь Class A Ordinary 458,019,649 14.00% 41.11%
Shares
Notes:
(1) Class A Ordinary Shares entitle the Shareholder to one vote per share and Class B Ordinary Shares
entitle the Shareholder to ten (10) votes per share with effect from the Listing, except for resolutions
with respect to the Reserved Matters for which each Share entitles each Shareholder to one vote per
share.
(2) Representing Shareholders who, to the best knowledge of the Directors, hold less than 5% of our issued
share capital and are independent third parties.
SHARE INCENTIVE PLANS
See “Statutory and General Information — D. Share Incentive Plans” as set out in
Appendix IV to this document for details about our Share Incentive Plans.
– 433 –
SHARE CAPITAL
POTENTIAL CHANGES TO SHARE CAPITAL
Circumstances under which General Meeting and Class Meeting are Required
Our Company may by ordinary resolution (i) increase its share capital by the creation of
new shares; (ii) consolidate and divide all or any of its share capital into shares of a larger
amount than its existing shares; (iii) cancel any shares which at the date of the passing of the
resolution have not been taken or agreed to be taken by any person; and (iv) sub-divide its
shares or any of them into shares of smaller amount. In addition, our Company may by special
resolution reduce its share capital or any capital redemption reserve subject to any conditions
prescribed by the Cayman Companies Act.
See “Summary of the Constitution of the Company and Cayman Companies Act —
Summary of the Constitution of the Company — Articles of Association — Summary of the
Constitution of the Company — 2. Articles of Association — 2.11 Changes in Share Capital”
in Appendix III for further details.
If at any time the share capital of our Company is divided into different classes of shares,
all or any of the rights attached to any class of shares for the time being issued (unless
otherwise provided for in the terms of issue of the shares of that class) may, subject to the
provisions of the Cayman Companies Act, be varied or abrogated only with (in addition to a
special resolution to amend the Memorandum or the Articles) the consent in writing of the
holders of not less than two-thirds in nominal value of the issued shares of that class or with
the sanction of a special resolution passed at a separate meeting of the holders of the shares
of that class Present (as defined in the Articles) and voting at such meeting.
See “Summary of the Constitution of the Company and Cayman Companies Act —
Summary of the Constitution of the Company — Articles of Association — Summary of the
Constitution of the Company — 2. Articles of Association — 2.7 Variation of Rights of Shares”
in Appendix III for further details.
– 434 –
FINANCIAL INFORMATION
You should read the following discussion and analysis in conjunction with our
audited consolidated financial statements as of and for the years ended December 31,
2019, 2020 and 2021, including the notes thereto, included in the Accountant’s Report in
Appendix IA, together with the respective accompanying notes. Our consolidated
financial information has been prepared in accordance with U.S. GAAP.
The Stock Exchange has granted us a waiver from strict compliance with the
requirements of Rules 4.10, 4.11, 19.13 and 19.25A of, and note 2.1 to paragraph 2 of the
Appendix 16 to, the Listing Rules, to allow us to prepare the Accountant’s Report set out
in Appendix IA in conformity with U.S. GAAP, provided that a reconciliation of such
financial information in accordance with IFRS, is included in this document. In addition,
the Stock Exchange has allowed us to prepare our accounts in accordance with GAAP
after listing for the purposes of our financial reporting required under the Listing Rules,
subject to the condition that, among others, our annual consolidated financial statements
should include a reconciliation of our financial information in accordance with IFRS in
the form and substance adopted in Appendix IA to this document.
The following discussion and analysis contain forward-looking statements that

involve risks and uncertainties. These statements are based on our assumptions and
analysis in light of our experience and perception of historical trends, current conditions,
and expected future developments, as well as other factors that we believe are
appropriate under the circumstances. However, our actual results could differ materially
from those anticipated in these forward-looking statements as a result of various factors,
including those set forth under “Risk Factors” and elsewhere in this document. For
further details, see “Forward-Looking Statements.”
OVERVIEW
We are a leading one-stop financial technology platform transforming investing

experience with our fully digitalized brokerage and wealth management product distribution
services in Hong Kong. We launched our business on the premise that no one should be
precluded from investing on the basis of prohibitive transaction costs or market inexperience.
Today, we have become a market leader in Hong Kong in the retail securities brokerage
industry and a go-to brand for retail securities trading. According to CIC, we are the largest
securities broker in terms of retail securities trading volume on the Hong Kong Stock
Exchange, with a market share of 10.7% as of December 31, 2021.

financial services platform, integrating services including trading, wealth management product
distribution, market data and information, user community, investor education, and corporate
services, serving approximately 19.2 million users. We provide a comprehensive range of
investment products, including equities and derivatives across major global exchanges, margin
– 435 –
financing and securities lending, as well as fund and bond investments. We have developed a
proprietary and highly automated technology infrastructure encompassing account opening,
fund transfer, trading and investment and risk management to support every aspect of our
business operations.
We experienced robust growth during the Track Record Period. Our revenue increased
from HK$1,061.6 million in 2019 to HK$3,310.8 million in 2020, and further to HK$7,115.3
million in 2021, representing a CAGR of 158.9% from 2019 to 2021. Our revenue decreased
by 10.4% from HK$3,781.5 million for the six months ended June 30, 2021 to HK$3,387.7
million (US$431.7 million) for the six months ended June 30, 2022. Our gross profit increased
from HK$779.9 million in 2019 to HK$2,614.9 million in 2020 and further increased to
HK$5,909.3 million in 2021, representing a CAGR of 175.3% from 2019 to 2021. Our gross
profit decreased from HK$3,059.5 million for the six months ended June 30, 2021 to
HK$2,951.9 million (US$376.2 million) for the six months ended June 30, 2022. In 2019,
2020, 2021 and the six months ended June 30, 2022, we recorded net income of HK$165.7
million, HK$1,325.5 million, HK$2,810.2 million and HK$1,213.5 million (US$154.6 million)
respectively.
KEY FACTORS AFFECTING OUR RESULTS OF OPERATIONS
Our business and results of operations are influenced by general factors affecting the
online retail brokerage industry in the regions we operate, including the overall economic,
regulatory and market conditions, level of per capita disposable income in these regions, and
the growth of the online brokerage and related services markets. In particular, as our securities
brokerage business depends heavily on trading volume, our financial performance is highly
dependent on the market conditions in which our business operates. Changes in market
conditions can have a significant impact on investor sentiment and trading volume, resulting
in fluctuation in brokerage commission and fee income. Our margin financing business is
subject to influences from market factors such as market liquidity, interest rate as well as
investor sentiment.
In addition, our business and results of operations are also affected by factors driving
online brokerage demand from Hong Kong, Mainland China, Singapore, the U.S. and Australia,
such as the increasing number of affluent middle class residents, the growing number of retail
investors having interests and needs in investing securities in global capital markets, the usage
and penetration rate of the internet and mobile internet, the changing investor preferences with
respect to trading and investment platforms and the competitive environment, governmental
policies and regulatory environment. Unfavorable changes in any of these general factors could
negatively affect demand for our services and materially and adversely affect our results of
operations.
– 436 –
While our business is influenced by general factors affecting our industry, our results of
operations are more directly affected by certain company specific factors, including:
Brand awareness and market position
We are now a market leader in Hong Kong in the retail securities brokerage industry and
a go-to brand for retail securities trading. Our ability to strengthen our brand recognition and
maintain our current market position is crucial for us to build and maintain relationships with
our users and business partners and revenue growth. We have proven to be a trustworthy and
reliable platform for our clients, which enabled us to achieve consistent and high growth in key
aspects of our operation, and in turn further solidified our leadership. In order to strengthen our
brand recognition and maintain market leadership, we strive to increase the engagement and
loyalty of our clients and enhance the competitiveness and attractiveness of our platform by
offering superior investing experience, insightful market intelligence and social connectivity.
The number of our paying clients increased from 198,382 as of December 31, 2019 to 516,721
as of December 31, 2020, to 1,244,222 as of December 31, 2021 and further to 1,387,146 as
of June 30, 2022. As a result, our total client asset balance increased from HK$87.1 billion as
of December 31, 2019 to HK$285.2 billion as of December 31, 2020, and to HK$407.8 billion
as of December 31, 2021, and further to HK$433.6 billion (US$55.3 billion) as of June 30,
2022. We will continue to promote our brand name among our target client groups and enhance
our appeal across different demographics.
Trading activities of our client and commission rate
Growth in the trading volume on our platform is the key driver of our revenue growth,
which is in turn driven by total client asset balance and turnover of trading volume over client
assets. The trading volume on our platform increased significantly from 2019 to 2021. The
change of the trading volume was primarily driven by our total client asset balance, which
significantly impacted our brokerage commission and handling charge income and interest
income during the Track Record Period. Our total client asset balance is affected by a number
of factors, including, primarily, the number of our paying clients and to a lesser extent, the
level of per capita disposable income as well as the engagement and loyalty of our clients. The
trading volume on our platform declined year-over-year in the six months ended June 30, 2022
compared to the same period in 2021, primarily due to weak performance of global capital
market and declining investor sentiment. We plan to continue to grow our business organically
by attracting new clients, retaining existing clients and increasing our total client asset balance,
and to improve the turnover of trading volume over client asset by introducing new products
and services on our platform and providing high-quality, reliable and convenient online
brokerage and ancillary services to investors at low costs. In addition to trading volume, our
brokerage commission and handling charge income is also affected by the commission rate we
charge. During the Track Record Period, we offered competitive commission rates to drive our
growth and profitability.
– 437 –
Margin financing and securities lending balance and interest spread
To provide our investors with comprehensive investment services, we offer margin

financing and securities lending services on our platform. Since then, benefiting from our
high-growth client base, increasingly attractive products and broader financing partners
network, our margin financing and securities lending businesses have grown rapidly. The
increase in our daily average margin financing and securities lending balance has been
primarily driven by the increase in the number of margin financing and securities lending
clients. The margin financing and securities lending balance is also affected by factors
including client asset balance, margin financing and securities lending balance as a percentage
of client assets, expansion of international markets and our ability to continue to secure funding
and securities from third parties.
The net interest income from our margin financing and securities lending businesses is
affected by our margin financing and securities lending balance, as well as annualized interest
rates and interest spread we earn from margin financing and securities lending. We have
benefited from the increase in client demand for margin financing and securities lending
services, which in turn strengthened our bargaining power against third-party funding and
securities lenders and allowed us to optimize interest expenses. To continue to expand our
margin financing and securities lending businesses, we plan to deepen our cooperation with
third-party funding and securities lenders as well as allocate our own capital to increase the
funds available. As a publicly listed company, we are perceived as a strong debtor by market
and have received a “BBB-” credit rating from S&P Global Ratings as the first online
brokerage in the Asia-Pacific region to secure an international rating and the first Hong
Kong-based online broker to obtain a standalone investment grade issuer rating according to
CIC, which will further diversify our funding sources and improve our funding terms. The
market condition may change from time to time and our ability to manage our capital
effectively is crucial for our margin financing and securities lending businesses. We have
established liquidity policies to support the growth of our margin financing business while
ensuring sufficient capital reserve is maintained to meet operational needs and comply with
applicable regulatory requirements.
We have also been developing and offering innovative solutions for our clients who wish
to lend their securities, such as our stock yield enhancement program. Our revenue growth will
be affected by our ability to effectively execute these initiatives and increase our margin
financing and securities lending balance and interest spread.
Ability to broaden service offerings and expand in various markets
Our results of operations are also affected by our ability to invest in and develop new
service offerings and further penetrate our client base. We currently derive a substantial portion
of our revenues from our securities brokerage and margin financing and securities lending
businesses, and as a result, our profitability depends largely on the performance of these
businesses. While we expect our brokerage commission and handling charge income and
interest income to increase and continue to be a major source of our revenues in the future, we
– 438 –
also expect to increase the revenue contribution from other businesses with relatively higher
profit margins, such as our wealth management product distribution services and corporate
services. We also intend to further broaden our financial services footprint and launch new
products and services, including more mutual funds, fixed income products, and derivatives, as
well as other value-added services including market data and information, social community.
Our great success in the Hong Kong market laid a solid foundation for our international
expansion into various markets. We launched moomoo, the international version of Futubull,
in the U.S., Singapore and Australia as our first steps. In particular, moomoo has demonstrated
broad popularity and robust momentum since its debut in Singapore in March 2021, attracting
over 220,000 users and 100,000 paying clients within three months. Further, our platform is
fully-licensed to conduct securities brokerage, wealth management product distribution and
other financial services across various markets. We hold 51 licenses, registrations and
memberships across Hong Kong, Singapore, the U.S., Australia and Europe.
We believe that our comprehensive offering of financial products and services and our
strong technology capability in developing new products and services will allow us to capture
new market opportunities. In addition, our ability to expand into various markets will enable
us to respond to changes in the different markets in terms of client demand and client
preferences to remain competitive.
Investment in technology and talent
Our technology is critical for us to retain and attract clients. We have made significant
investments into our one-stop financial technology platform, which has evolved into a
highly-automated, multi-product, multi-market, closed-loop proprietary technology
infrastructure that drives every function of our business including trading, risk management,
clearing, market data, news feeds and social functions. We will continue to make significant
investments in research and development and technology to enhance our platform to address
the diverse needs of our clients and improve operating efficiency. Aiming to transform and
improve the investing experience for the upcoming generation of investors, we intend to focus
on developing a comprehensive range of innovative applications, products and services aimed
at providing more convenience to clients and improving our user experience, service quality
and system efficiency. In addition, there is a strong demand in online retail brokerage industry
for talented and experienced personnel. We must recruit, retain and motivate talented
employees while controlling our personnel-related expenses, including share-based
compensation expenses.
Operating leverage and operating efficiency
Our results of operations depend on our ability to manage our costs and expenses. We
expect our costs and expenses to continue to increase as we grow our business and attract more
clients to our platform. However, we believe our platform has significant operating leverage,
which enables us to realize cost savings structurally. We have built a secure and scalable
brokerage platform that is fully digitalized and supports the full transaction lifecycle from the
– 439 –
front-end to the back-office through our proprietary cloud-based technology, which in turn
allows us to efficiently manage our operating expenses. We believe our proprietary and
modularized technology infrastructure has been fully funded, enabling us to bring in new
products and enter new markets with moderate investment and marginal cost. As a result, the
costs associated with the operation of our platform as well as our operating expenses do not
increase in line with our revenues as we do not require a proportional increase in the size of
our workforce to support our growth.
In addition, by leveraging the client insights we generate from our large client base, we
are able to attract corporate clients to utilize our distribution solution, public relations, brand
promotion services, ESOP and other corporate services, which in turn generates strong demand
for our brokerage and margin financing services from retail clients. The provision of ESOP and
other corporate services to our corporate clients is also an innovative and efficient acquisition
channel for our brand to reach quality retail investors, which indirectly allow us to expand our
presence at a lower cost. The scale, demographics and depth of engagement of our client base
also translate to high lifetime values. As our business further grows in scale, we believe our
massive scale, coupled with the network effects, will allow us to acquire clients more
cost-effectively and benefit from substantial economies of scale.
IMPACT OF COVID-19 ON OUR OPERATIONS
An outbreak of respiratory illness namely COVID-19, caused by a novel coronavirus, was

reported in December 2019 and was subsequently declared as a pandemic by the World Health
Organization in March 2020. In an effort to halt the outbreak, governments around the world
placed significant restrictions on travel, implemented mandatory quarantine and/or closed
certain businesses, work places and facilities.
The ongoing COVID-19 pandemic has disrupted the business operations of many
companies worldwide. We have taken a series of measures in response to the outbreak to
protect our employees. See “Business — Health, Work Safety, Social Responsibility and
Environmental Matters.” Our operations, including our services to our clients and internal
control over financial reporting, have not been materially and adversely affected by these
measures as we timely implemented our business continuity plan.
Many traditional financial institutions that rely heavily on offline account opening and
customer service models have had to suspend the operations at their physical branches as a
result of the pandemic, which underscores the merits of a pure online one-stop financial
technology platform where clients can enjoy an end-to-end mobile experience for everything
from account opening to trade execution, margin lending, mutual fund investments, market
news and social interaction.
We witnessed huge market volatility in the global capital markets in 2020, 2021 and the
six months ended June 30, 2022. Such volatility has led to new trading account opening,
increasing trading velocity and higher net asset inflow, which benefited our operating and
financial results for these periods. In the first half of 2022, our total client assets increased by
– 440 –
6.3% from the year ended December 31, 2021 to HK$433.6 billion, primarily due to strong net
asset inflow across regions. Our paying clients reached 1.38 million as of June 30, 2022,
representing 38.6% year-over-year growth. Despite the increased market volatility, our
rigorous risk management systems and procedures have prevented us from incurring any
material losses in relation to margin financing business, and we had not identified any material
COVID-19-related contingencies or impairments as of the Latest Practicable Date. Our
business operation and financial performance had not been materially and adversely affected
by the COVID-19 pandemic during the Track Record Period and up to the Latest Practicable
Date.
While we experienced business growth in 2020 and 2021, we cannot predict whether this
will continue at the same level in the future and whether client behavior will continue in a
manner that is favorable to us. The improvement in our business and financial performance in
2020, 2021 and the first half of 2022 may not be sustainable. As there is still uncertainty around
the duration of the pandemic, we cannot ascertain the potential impact of the pandemic on
investor sentiments and the possibility of other effects on our business. In the event that this
epidemic cannot be effectively and timely contained, our ability to consistently offer new
products and services in the future may be disrupted, which in turn may harm the growth rate
and retention of our clients, as well as our financial performance generally. The near-term
economic impact of the COVID-19 outbreak is also uncertain.
SIGNIFICANT ACCOUNTING POLICIES AND ESTIMATES
An accounting policy is considered critical if it requires an accounting estimate to be

made based on assumptions about matters that are highly uncertain at the time such estimate
is made, and if different accounting estimates that reasonably could have been used, or changes
in the accounting estimates that are reasonably likely to occur periodically, could materially
impact the consolidated financial statements.
We prepare our financial statements in conformity with U.S. GAAP, which requires us to
make judgments, estimates and assumptions. We continually evaluate these estimates and
assumptions based on the most recently available information, our own historical experiences
and various other assumptions that we believe to be reasonable under the circumstances. Since
the use of estimates is an integral component of the financial reporting process, actual results
could differ from our expectations as a result of changes in our estimates. Some of our
accounting policies require a higher degree of judgment than others in their application and
require us to make significant accounting estimates.
The following descriptions of critical accounting policies, judgments and estimates

should be read in conjunction with our consolidated financial statements and accompanying
notes and other disclosures included in this document. When reviewing our financial
statements, you should consider (i) our selection of critical accounting policies, (ii) the
judgments and other uncertainties affecting the application of such policies and (iii) the
sensitivity of reported results to changes in conditions and assumptions.
– 441 –
The consolidated financial statements include the financial statements of our Company,
our subsidiaries, our Consolidated Affiliated Entities for which we or a subsidiary of ours is
the primary beneficiary. See Note 2 to the Accountant’s Report set out in Appendix IA to this
document for a description of other significant accounting policies.
Basis of Consolidation
A subsidiary is an entity in which we, directly or indirectly, control more than one half
of the voting power; or have the power to appoint or remove the majority of the members of
the board of directors; or to cast a majority of votes at the meeting of directors; or have the
power to govern the financial and operating policies of the investee under a statute or
agreement among the shareholders or equity holders.
A consolidated VIE is an entity in which we, or our subsidiary, through contractual

arrangements, have the power to direct the activities that most significantly impact the entity’s
economic performance, bears the risks of and enjoys the rewards normally associated with
ownership of the entity, and therefore we or our subsidiary is the primary beneficiary of the
entity.
All transactions and balances among us, our subsidiaries, our VIEs and its subsidiaries
have been eliminated upon consolidation.
Use of Estimates
The preparation of the consolidated financial statements in conformity with U.S. GAAP
requires management to make estimates and assumptions that affect the reported amounts of
assets and liabilities, related disclosures of contingent assets and liabilities at the balance sheet
date, and the reported revenues, costs and expenses during the reported period in the
consolidated financial statements and accompanying notes. These accounting estimates
reflected in our consolidated financial statements mainly include, but are not limited to, the
estimation of the expected usage and the estimated relative standalone selling price of the
incentive points and coupons, the valuation and recognition of share-based compensation
arrangements, depreciable lives of property and equipment, useful life of intangible assets,
expected credit losses on financial instruments, assessment for impairment of equity method
investment, present value for expected future leasing payment, contingency reserve, provision
of income tax and valuation allowance for deferred tax asset. Actual results could differ from
those estimates.
Revenue Recognition
Brokerage commission and handling charge income
Brokerage commission income earned for executing transactions is accrued on a

trade-date basis.
– 442 –
Handling charge income arise from the services such as clearing and settlement services,
subscription, and dividend collection handling services, etc., is accrued on a trade-date basis.
Brokerage commission and handling charge income is recognized at a point in time when
the service has been passed to the customer.
Interest income
We earn interest income primarily in connection with our margin financing and securities
lending services, IPO financing, bridge loan and deposits with banks, which is recorded on an
accrual basis and is included in interest income in the consolidated statements of
comprehensive income. Interest income is recognized as it is accrued over time using the
effective interest method.
Customer loyalty program
We operate a customer loyalty program to our customers that offers various incentives in
the form of incentive points and coupons for redemption of free or discounted goods or
services.
For the incentives generated from current sales transaction, we defer a portion of
commission income with corresponding liability reflected as contract liability attributable to
the incentives. The contract liability is determined by management based on the expected usage
of the incentive points and coupons, and their estimated relative standalone selling price.
Significant judgment was made by management in determining the expected usage and
estimated relative standalone selling price of the incentive points and coupons, derived from
historical trading volume, commission rates and redemption patterns, and an evaluation as to
whether historical activities are representative of the expected future activities.
For the incentives offered for future sales transaction, we net a portion of brokerage
commission income attributable to the incentives when points or coupons are actually
redeemed.
For the incentives not offered for future sales transaction, we considers them as a payment
of other distinct goods that would be granted to clients. Such incentives are accounted for as
selling and marketing expense with corresponding liability reflected as other liability on the
consolidated balance sheet.
Current Expected Credit Losses
Prior to January 1, 2020, we applied incurred loss methodology for recognizing credit
losses that delays recognition until it is probable a loss has been incurred and the identified
impairments loss was immaterial.
– 443 –
On January 1, 2020, we adopted FASB ASC Topic 326 — “Financial Instruments —

Credit Losses” (“ASC Topic 326”) which replaces the incurred loss methodology with the
current expected credit loss (“CECL”) methodology. The new guidance applies to financial
assets measured at amortized cost, held-to-maturity debt securities and off-balance sheet credit
exposures. For on-balance sheet assets, an allowance must be recognized at the origination or
purchase of in-scope assets and represents the expected credit losses over the contractual life
of those assets.
We adopted ASC Topic 326 using the modified retrospective approach for all in-scope
assets. The adoption of ASC Topic 326 has no material impact on our retained earnings as of
January 1, 2020. Results for reporting periods beginning after January 1, 2020 are presented
under ASC Topic 326 while prior periods continue to be reported in accordance with previously
applicable U.S. GAAP. Our in-scope assets are primarily loans and advances that are
collateralized by client securities and the collateral is required to be maintained at specified
minimum levels at all times. We monitor margin levels and requires clients to provide
additional collateral, or reduce margin positions, to meet minimum collateral requirements if
the fair value of the collateral changes. We apply the practical expedient based on collateral
maintenance provisions in estimating an allowance for credit losses for the loans and advances.
In accordance with the practical expedient, when we reasonably expect that borrowers (or
counterparties, as applicable) will replenish the collateral as required, there is no expectation
of credit losses when the collateral’s fair value is greater than the amortized cost of the
financial asset. If the amortized cost exceeds the fair value of collateral, then credit losses are
estimated only on the unsecured portion. For the year ended December 31, 2020, 2021 and the
six months ended June 30, 2021 and 2022, expected credit loss expenses of HK$9.1 million,
HK$3.2 million, HK$8.8 million and HK$7.8 million (US$1.0 million), respectively, resulting
from the assessment of credit losses for the loans and advances under ASC Topic 326 at
period-end were recognized in “Others, net” in the consolidated statements of comprehensive
income.
An allowance for credit losses on other financial assets, including receivables from
clients, brokers, clearing organizations and fund management companies and fund distributors,
is estimated based on the aging of these financial assets. Receivables from clients are due
within the settlement period commonly adopted in the relevant market practices, which is
usually within a few days from the trade date. Because these receivables involve customers
who have no recent history of default, and the settlement periods are usually short, the credit
risk arising from receivables from clients is considered low. In respect of the receivables from
brokers, clearing organizations and fund management companies and fund distributors, the
management considers that these receivables have a low risk of default and the counterparties
have a strong capacity to meet their contractual obligation. As a result, the allowance for credit
losses for other financial assets were immaterial for all periods presented.
– 444 –
Leases
Summary of impact of applying ASC 842
On January 1, 2019, we adopted FASB ASC Topic 842, “Leases,” (“ASC Topic 842”)
which requires that a lessee recognize in the consolidated balance sheet a lease liability and a
corresponding right-of-use asset, including for those leases that we currently classify as
operating leases. The right-of-use asset and the lease liability was initially measured using the
present value of the remaining lease payments. ASC Topic 842 was implemented using a
modified retrospective approach which resulted in no cumulative-effect adjustment in the
opening balance of retained earnings as of January 1, 2019. As a result, the consolidated
balance sheet prior to January 1, 2019 was not restated and continues to be reported under
FASB ASC Topic 840, “Leases,” (“ASC Topic 840”), which did not require the recognition of
a right-of-use asset or lease liability for operating leases.
We review all relevant contracts to determine if the contract contains a lease at its
inception date. In an operating lease, we obtains control of only the use of the underlying asset,
but not the underlying asset itself. An operating lease is recognized as a right-of-use asset with
a corresponding liability at the date which the leased asset is available for our use. Our
operating leases contain both lease components and non-lease components. Non-lease
components are distinct elements of a contract that are not related to securing the use of the
underlying assets, such as common area maintenance and other management costs. Our
Company makes an accounting policy election not to separate non-lease components to
measure the lease liability and lease asset.
The lease liability is initially measured at the present value of the future lease payments
over the lease term. The lease terms may include options to extend or terminate the lease when
it is reasonably certain that we will exercise that option. The lease payments are discounted
using the rate implicit in the lease or, if not readily determinable, our secured incremental
borrowing rate, which is based on an internally developed yield curve using interest rates of
debt issued with a similar risk profile as our Company and a duration similar to the lease term.
An operating lease right-of-use asset is initially measured at the value of the lease liability
minus any lease incentives and initial direct costs incurred plus any prepaid rent.
After commencement of the operating lease, we recognize lease expenses on a

straight-line basis over the lease term. The subsequent measurement of the lease liability is
based on the present value of the remaining lease payments using the discount rate determined
at lease commencement. The right-of-use asset is subsequently measured at cost less
accumulated amortization and any impairment provision. The amortization of the right-of-use
asset represents the difference between the straight-line lease expense and the accretion of
interest on the lease liability each period. The interest amount is used to accrete the lease
liability and to amortize the right-of-use asset. There is no amount recorded as interest expense.
All of our leases are classified as operating leases and primarily consist of real estate
leases for corporate offices, data centers and other facilities.
– 445 –
Fair Value Measurements
Accounting guidance defines fair value as the price that would be received from selling
an asset or paid to transfer a liability in an orderly transaction between market participants at
the measurement date. When determining the fair value measurements for assets and liabilities
required or permitted to be recorded at fair value, we consider the principal or most
advantageous market in which we would transact and we consider assumptions that market
participants would use when pricing the asset or liability.
Accounting guidance establishes a fair value hierarchy that requires an entity to maximize
the use of observable inputs and minimize the use of unobservable inputs when measuring fair
value. A financial instrument’s categorization within the fair value hierarchy is based upon the
lowest level of input that is significant to the fair value measurement. Accounting guidance
establishes three levels of inputs that may be used to measure fair value:
• Level – 1 — Valuation techniques in which all significant inputs are unadjusted

quoted prices from active markets for assets or liabilities that are identical to the
assets or liabilities being measured.
• Level – 2 — Valuation techniques in which significant inputs include quoted prices

from active markets for assets or liabilities that are similar to the assets or liabilities
being measured and/or quoted prices for assets or liabilities that are identical or
similar to the assets or liabilities being measured from markets that are not active.
Also, model-derived valuations in which all significant inputs and significant value
drivers are observable in active markets are Level 2 valuation techniques.
• Level – 3 — Valuation techniques in which one or more significant inputs or

significant value drivers are unobservable. Unobservable inputs are valuation
technique inputs that reflect our own assumptions about the assumptions that market
participants would use in pricing an asset or liability.
When available, we use quoted market prices to determine the fair value of an asset or
liability. If quoted market prices are not available, we will measure fair value using valuation
techniques that use, when possible, current market-based or independently sourced market
parameters, such as interest rates and currency rates.
The carrying amount of cash and cash equivalents, cash held on behalf of clients,
restricted cash, receivables from and payables to clients, brokers, clearing organizations and
fund management companies and fund distributors, accrued interest receivable, accrued
interest payable, amounts due to related parties, other financial assets and liabilities
approximates fair value because of their short-term nature. Term deposits, loans and advances,
borrowings, securities purchased under agreements to resell, securities sold under agreements
to repurchase and operating lease liabilities are carried at amortized cost. The carrying amount
– 446 –
of term deposits, loans and advances, borrowings and operating lease liabilities approximate
their respective fair value as the interest rates applied reflect the current quoted market yield
for comparable financial instruments. Short-term investments are measured at fair value.
Our non-financial assets, such as operating lease right-of-use assets, equity method
investment, property and equipment and intangible assets, would be measured at fair value only
if they were determined to be impaired.
Share-Based Compensation
We follow ASC 718 to determine whether a share option and a restricted share unit should
be classified and accounted for as a liability aware or equity award. All share-based awards to
employees and directors classified as equity awards, such as stock options and restricted share
units, are measured at the grant date based on the fair value of the awards. Share-based
compensation, net of estimated forfeitures, is recognized as expenses on a straight-line method
over the requisite service period, which is the vesting period. Options and restricted share units
granted generally vest over four or five years.
We use the fair value of each of our ordinary shares on the grant date to estimate the fair
value of share options and restricted share units.
Forfeitures are estimated at the time of grant and revised in subsequent periods if actual
forfeitures differ from those estimates. We use historical data to estimate pre-vesting option
and records share-based compensation expense only for those awards that are expected to vest.
Recently Issued Accounting Pronouncements
A list of recently issued accounting pronouncements that are relevant to us is included in

Note 2 to our consolidated financial statements shown in the Accountant’s Report in Appendix
IA to this document.
– 447 –
RESULTS OF OPERATIONS
The table below summarizes our results of operations and as percentages of our total
revenue for the periods indicated:
2019 2020 2021 2021 2022
(unaudited)
Revenues
charge income ь ь ь ь ь ь ь ь ь 511,365 48.2 1,990,138 60.1 3,913,027 55.0 2,122,679 56.1 2,001,246 255,027 59.1
Total revenues ь ь ь ь ь ь ь ь ь 1,061,555 100.0 3,310,822 100.0 7,115,320 100.0 3,781,461 100.0 3,387,728 431,712 100.0
Costs
charge expenses ь ь ь ь ь ь ь ь (100,550) (9.5) (361,486) (10.9) (572,159) (8.0) (359,002) (9.5) (183,221) (23,349) (5.4)
Interest expenses ь ь ь ь ь ь ь ь ь (89,238) (8.4) (185,090) (5.6) (376,902) (5.3) (246,967) (6.5) (65,827) (8,389) (2.0)
Processing and servicing costs ь ь ь (91,916) (8.7) (149,378) (4.5) (257,003) (3.6) (116,024) (3.1) (186,799) (23,805) (5.5)
Total costs ь ь ь ь ь ь ь ь ь ь ь (281,704) (26.6) (695,954) (21.0) (1,206,064) (16.9) (721,993) (19.1) (435,847) (55,543) (12.9)
Total gross profit ь ь ь ь ь ь ь ь 779,851 73.4 2,614,868 79.0 5,909,256 83.1 3,059,468 80.9 2,951,881 376,169 87.1
Operating expenses
expensesь ь ь ь ь ь ь ь ь ь ь ь (262,345) (24.7) (513,283) (15.5) (805,325) (11.3) (310,787) (8.2) (574,174) (73,169) (16.9)
Selling and marketing expensesь ь ь (164,701) (15.5) (385,320) (11.6) (1,392,070) (19.6) (652,036) (17.3) (507,235) (64,639) (15.0)
General and administrative
expensesь ь ь ь ь ь ь ь ь ь ь ь (164,850) (15.5) (248,404) (7.5) (529,048) (7.4) (174,365) (4.6) (388,532) (49,512) (11.5)
Total operating expenses ь ь ь ь ь (591,896) (55.7) (1,147,007) (34.6) (2,726,443) (38.3) (1,137,188) (30.1) (1,469,941) (187,320) (43.4)
Others, netь ь ь ь ь ь ь ь ь ь ь ь (9,462) (0.9) (17,238) (0.5) 2,478 0.0 (19,593) (0.5) (115,819) (14,759) (3.4)
method investmentь ь ь ь ь ь ь 178,493 16.8 1,450,623 43.8 3,185,291 44.8 1,902,687 50.3 1,366,121 174,090 40.3
Income tax expenses ь ь ь ь ь ь ь (12,286) (1.2) (124,793) (3.8) (375,081) (5.3) (206,497) (5.4) (143,198) (18,248) (4.2)
Share of loss from equity method
investment ь ь ь ь ь ь ь ь ь ь ь (543) (0.1) (307) 0.0 – 0.0 – 0.0 (9,398) (1,198) (0.3)
Net income ь ь ь ь ь ь ь ь ь ь ь 165,664 15.5 1,325,523 40.0 2,810,210 39.5 1,696,190 44.9 1,213,525 154,644 35.8
– 448 –
DESCRIPTION OF MAJOR COMPONENTS OF OUR RESULTS OF OPERATIONS
Revenues
During the Track Record Period, we generate revenues primarily from our online
brokerage and margin financing services.
The following table sets forth the components of our revenues by amounts and
percentages of our total revenues for the periods indicated:
2019 2020 2021 2021 2022
(unaudited)

Brokerage commission income primarily consists of commissions and execution fees

from our clients for whom we act as executing and clearing brokers. We generate commissions
and execution fees on securities brokerage services by trading equities and equity-linked
derivatives on behalf of our clients. Handling charge income primarily consists of fees from
clearing and settlement services, subscription and dividend collection handling services. Our
commission and fee rates remained relatively stable with slight increase and our trading
volume generally increased throughout the Track Record Period. The slight increase in our
commission and fee rates was due to (i) the decrease in the average share price under our
commission-per-share pricing model for securities on major exchanges in the U.S., which
results in higher blended commission rate as applied based on trading volume, and (ii) the
higher contributions from our clients’ derivatives trading. Brokerage commission and handling
charge income is recognized at a point in time when the service has been passed to the
customer. See “— Significant Accounting Policies and Estimates — Revenue recognition.”
– 449 –
2019 2020 2021 2021 2022
(in thousands)
(unaudited)

Note:
handling charges.
The revenue generated from our securities and options brokerage increased from
HK$480.7 million in 2019, to HK$1,878.0 million in 2020 and further to HK$3,688.1 million
2021, primarily due to the increase in our securities and options trading volume which was
driven by the growth of our paying client base and their increased trading activities. However,
the revenue generated from our securities and options brokerage decreased from HK$2,024.8
million for the first six months ended June 30, 2021 to HK$1,810.5 million (US$230.7 million)
for the first six months ended June 30, 2022, primarily because the securities and options
trading volume declined compared to the same period in 2021 when market peaked.
The revenue generated from our futures brokerage increased from HK$37 thousand in
2019, to HK$32.5 million in 2020, and further to HK$130.8 million in 2021, and from
HK$53.9 million for the six months ended June 30, 2021 to HK$154.1 million (US$19.6
million) for the six months ended June 30, 2022. The overall increase in revenue generated
from our futures brokerage throughout the Track Record Period was generally in line with the
expansion of our futures trading services and the increasing needs of investors for hedging
instruments when the market was highly volatile.
The revenue generated from our IPO brokerage increased from HK$28.0 million in 2019,
to HK$70.8 million in 2020 and further to HK$75.6 million 2021, primarily due to the
expansion of our IPO subscription services, where we charge commission and fee rates to the
newly subscribed shares. However, the revenue generated from our IPO brokerage decreased
– 450 –
from HK$38.4 million for the six months ended June 30, 2021 to HK$10.3 million (US$1.3
million) for the six months ended June 30, 2022, primarily due to the decrease in the overall
number of IPO transactions in the U.S. and Hong Kong markets in the six months ended June
30, 2022.
Our income from our other products and services increased from HK$2.7 million in 2019,
to HK$8.7 million in 2020, and further to HK$18.5 million in 2021, and from HK$5.6 million
for the six months ended June 30, 2021 to HK$26.4 million (US$3.4 million) for the six months
ended June 30, 2022. The increase in revenue from our other products and services was due to
an increase in income from ESOP handling charges, generally in line with the expansion of our
ESOP solution services during the Track Record Period.
Interest income
Interest income primarily consists of interest income from (i) margin financing, (ii) bank
deposit, (iii) IPO financing, namely arranging the financing for our clients in connection with
their subscriptions in initial public offerings, and (iv) securities lending services. Interest
income is recognized as it is accrued over time using the effective interest method. See
“— Significant Accounting Policies and Estimates — Revenue recognition.”
The following table sets forth the components of our interest income by product type
during the Track Record Period:
For the Year ended December 31, For the Six months ended June 30,
2019 2020 2021 2021 2022
(in thousands)
(unaudited)
Interest income
Margin financing ь ь ь ь ь ь 221,648 497,975 1,720,473 786,095 766,722 97,706
Securities lending ь ь ь ь ь 37,202 73,792 397,505 233,929 182,124 23,209
Bank deposit ь ь ь ь ь ь ь ь 187,223 208,556 197,390 88,916 196,807 25,080
Bridge loan ь ь ь ь ь ь ь ь ь 6,172 1,078 1,872 – 48,235 6,147
IPO financingь ь ь ь ь ь ь ь 12,658 184,226 200,567 160,000 750 96
Other financing(1) ь ь ь ь ь ь – – 391 – 1,023 130
Totalь ь ь ь ь ь ь ь ь ь ь ь ь ь 464,903 965,627 2,518,198 1,268,940 1,195,661 152,368
Note:
(1) Other financing mainly includes the securities purchased under agreements to resell.
– 451 –
The increase in interest income generated from our margin financing business was
generally in line with the increase in the daily average margin financing balances throughout
the Track Record Period. The daily average margin financing balances increased from HK$3.7
billion in 2019, to HK$8.4 billion in 2020, and further to HK$28.6 billion in 2021. However,
the daily average margin financing balances decreased from HK$26.9 billion for the six months
ended June 30, 2021 to HK$25.5 billion (US$3.2 billion) for the six months ended June 30,
2022.
The increase in interest income generated from securities lending is generally in line with
the expansion of our securities lending business. Our clients are generally required to pay the
accrued securities lending fees at the end of each month, which are automatically deducted
from our clients’ accounts. As the daily average securities lending balances increased from
2019 to 2021, the interest income generated therefrom increased. However, as the underlying
interest rates for securities lending decreased from the six months ended June 30, 2021 to the
same period in 2022 when the trading activities were slower, the interest income generated
therefrom decreased from HK$233.9 million for the first six months of 2021 to HK$182.1
million (US$23.2 million) for the same period in 2022.
The interest income generated from bank deposits is generally affected by the interest
rates and the amount of cash held on behalf of clients that are placed in bank deposits. The
interest income generated from bank deposits generally increased throughout the Track Record
Period, with an increase from HK$88.9 million in the first six months of 2021 to HK$196.8
million (US$25.1 million) in the same period in 2022, primarily due to the increase in interest
rates, which was partially offset by the decrease in daily average balance of client cash
deposits.
The interest income generated from bridge loans generally decreased from 2019 to 2021,
primarily because we reduced the grants of bridge loans in 2021. For the six months ended June
30, 2022, we recorded interest income generated from bridge loans of HK$48.2 million
(US$6.1 million), primarily as a result of certain bridge loans granted to clients.
The interest income generated from IPO financing is generally affected by the expansion
of our IPO financing business as well as the overall number of IPO transactions in the capital
market. As our IPO financing business expanded from 2019 to 2021, the interest income
generated therefrom increased. However, as the overall number of IPO transactions in the
capital market decreased sharply in the six months ended June 30, 2022, compared to the same
period in 2021, the interest income generated therefrom decreased from HK$160.0 million for
the first six months of 2021 to HK$0.8 million (US$95.6 thousand) for the same period in
2022.
Other income
Other income primarily consists of certain income that is recognized at a point in time
(namely, (i) currency exchange service income, (ii) market information and data income, (iii)
underwriting fee income and (iv) IPO subscription service charge income), and certain income
– 452 –
that is recognised over time (namely, (i) funds distribution service income, and (ii) enterprise
public relations service charge income). We generate IPO subscription service charge income
from provision of new share subscription services in relation to IPOs in the Hong Kong capital
market. We generate currency exchange service income from providing currency exchange
services to our paying clients. We generate underwriting fee income in our investment banking
business primarily by providing equity sub-underwriting to corporate issuers. We generate
enterprise public relations service charge income by providing institutional clients with public
relations and investor relations services, including distributing company information and news
and providing communication channels with retail investors. We generate funds distribution
service income from our wealth management product distribution business. We generate
market information and data income primarily by providing fee-based market data services to
users and clients.
Costs
The following table sets forth the components of our costs by amounts and percentages
of costs for the periods indicated:
2019 2020 2021 2021 2022
Amount % Amount % Amount % Amount % Amount %
(unaudited)
Brokerage commission and

handling charge expenses ь ь ь ь 100,550 35.7 361,486 51.9 572,159 47.4 359,002 49.7 183,221 23,349 42.0
Interest expenses ь ь ь ь ь ь ь ь ь 89,238 31.7 185,090 26.6 376,902 31.3 246,967 34.2 65,827 8,389 15.1
Processing and servicing costs ь ь ь 91,916 32.6 149,378 21.5 257,003 21.3 116,024 16.1 186,799 23,805 42.9
Total ь ь ь ь ь ь ь ь ь ь ь ь ь ь 281,704 100.0 695,954 100.0 1,206,064 100.0 721,993 100.0 435,847 55,543 100.0
Brokerage commission and handling charge expenses
Brokerage commission and handling charge expenses consist of fees charged by

executing brokers as we transact with them, expenses charged by stock exchanges or executing
brokers for our use of their clearing and settlement systems and expenses charged by
commercial banks or stock exchanges for providing clearing and settlement services in
connection with IPO subscriptions.
– 453 –
Interest expenses
Interest expenses primarily consist of interest expenses of borrowings from commercial

banks, other licensed financial institutions and other parties to fund our margin financing
business, securities borrowing and lending service and IPO financing businesses. As we also
procure external funding for our margin financing, securities lending and IPO financing
businesses and thus subject to the fluctuations in market interest rates, the interest expenses are
affected by the interest rates charged by these counterparties.
Processing and servicing costs
Processing and servicing costs consist of market information and data fee, data
transmission fee, cloud service fee, system cost and SMS service fee paid to stock exchanges
and data and other service providers.
Gross profit and gross profit margin
Our gross profit margin for a particular period represents the amount of gross profit
divided by the amount of our total revenue during the period. Our gross profit margin generally
increased from 73.4% in 2019 to 79.0% in 2020 and further to 83.1% in 2021, and increased
from 80.9% for the six months ended June 30, 2021 to 87.1% for the six months ended June 30,
2022, respectively. Our gross profit margin is affected by the change in the level of costs
relative to the revenue we generate during the same period.
The table below sets forth our gross profit and gross profit margin for the periods
indicated:
For the Year ended For the Six Months

December 31, ended June 30,
2019 2020 2021 2021 2022
(unaudited)
Gross profit ь ь ь ь ь ь ь ь ь 779,851 2,614,868 5,909,256 3,059,468 2,951,881 376,169
Gross profit margin ь ь ь ь 73.4% 79.0% 83.1% 80.9% 87.1%
Our gross profit margin is largely affected by the underlying commission and fee rates for
the brokerage commission and handling charge expenses and the underlying interest rates for
the interest expenses.
– 454 –
The table below sets forth our gross profit (1) and gross profit margin by certain type of
revenue for the periods indicated:
2019 2020 2021 2021 2022
Gross Gross Gross Gross Gross Gross Gross Gross Gross
profit Margin profit Margin profit Margin profit Margin Gross profit Margin
HK$ % HK$ % HK$ % HK$ % HK$ US$ %
(unaudited)
Brokerage
commission
and handling
charge ь ь ь 410,815 80.3 1,628,652 81.8 3,340,868 85.4 1,763,677 83.1 1,818,025 231,678 90.8
Interest ь ь ь ь 375,665 80.8 780,537 80.8 2,141,296 85.0 1,021,973 80.5 1,129,834 143,979 94.5
Note:
(1) This does not account for other income and processing and servicing costs.
Our gross profit in relation to brokerage commission and handling charge(1) increased
from HK$410.8 million in 2019, to HK$1,628.7 million in 2020 and further to HK$3,340.9
million 2021, and increased from HK$1,763.7 million in the six months ended June 30, 2021
to HK$1,818.0 million (US$231.7 million) in the six months ended June 30, 2022. The increase
was in line with the increase in trading volume facilitated on our platform, which was driven
by the growth of our paying client base and their increased trading activities.
Our gross profit margin for brokerage commission and handling charge (1) in 2019, 2020,
2021, the six months ended June 30, 2021, and the six months ended June 30, 2022 remained
relatively stable between 80-91%, respectively. The effective commission rate was 5.9 basis
points, 5.7 basis points, 6.4 basis points, 6.0 basis points and 7.5 basis points in 2019, 2020,
2021, the six months ended June 30, 2021 and 2022, respectively. Whilst our commission and
fee rates remained relatively stable with slight increase throughout the Track Record Period,
our costs fluctuated from time to time based on the changes in (i) fee rates charged by
executing brokers as we transacted with them, (ii) fee rates charged by executing brokers for
our use of their clearing and settlement systems and (iii) fee rates charged by commercial banks
for providing clearing and settlement services in connection with IPO subscriptions.
– 455 –
Interest income
Our gross profit in relation to our interest income (2) increased from HK$375.7 million in
2019, to HK$780.5 million in 2020 and further to HK$2,141.3 million 2021, and increased
from HK$1,022.0 million in the six months ended June 30, 2021 to HK$1,129.8 million
(US$144.0 million) in the six months ended June 30, 2022. The increase was mainly
attributable to the expansion of our margin financing business, which was primarily driven by
the increase in the daily average margin financing balances throughout the Track Record
Period.
Our gross profit margin for interest income (2) improved generally from 2019 to 2021, and
increased to 94.5% for the six months ended June 30, 2022. This was primarily because of the
increased portion of funding from our own capital, the change in the underlying interest rates
for our borrowings from commercial banks, other licensed financial institutions and other
parties to fund our margin financing business, securities borrowing and lending service and
IPO financing businesses. As the interest rates charged to our clients remained relatively stable
throughout the Track Record Period, the gross profit margins for interest income were affected
by the fluctuations in these interest rates charged by the counterparties.
Notes:
(1) Equals net brokerage commission and handling charge income divided by total brokerage commission and
handling charge income. Net brokerage commission and handling charge income is the difference between the
total brokerage commission and handling charge income and our brokerage commission and handling charge
expenses.
(2) Equals net interest income divided by total interest income. Net interest income is the difference between the
total interest income and our interest expenses.
– 456 –
Operating expenses
The following table sets forth the components of our operating expenses by amounts and
percentages of operating expenses for the periods indicated:
2019 2020 2021 2021 2022
Amount % Amount % Amount % Amount % Amount %
(unaudited)

expenses ь ь ь ь ь ь ь ь ь ь ь ь 262,345 44.3 513,283 44.7 805,325 29.5 310,787 27.3 574,174 73,169 39.1
expenses ь ь ь ь ь ь ь ь ь ь ь ь 164,701 27.8 385,320 33.6 1,392,070 51.1 652,036 57.3 507,235 64,639 34.5
expenses ь ь ь ь ь ь ь ь ь ь ь ь 164,850 27.9 248,404 21.7 529,048 19.4 174,365 15.4 388,532 49,512 26.4
Total ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 591,896 100.0 1,147,007 100.0 2,726,443 100.0 1,137,188 100.0 1,469,941 187,320 100.0
Research and development expenses. Research and development expenses consist of

expenses related to developing service platforms, including website, mobile apps and other
products, as well as payroll and welfare, rental expenses and other related expenses for our
research and development professionals.
Selling and marketing expenses. Selling and marketing expenses consist primarily of
advertising and promotion costs, as well as payroll, rental and related expenses for selling and
marketing personnel. Advertising costs primarily consist of costs of online advertising and
offline promotional events.
General and administrative expenses. General and administrative expenses consist of

payroll, rental, and related expenses for employees involved in general corporate functions,
including senior management, finance, legal and human resources, expenses for third-party
professional agents, costs associated with use of facilities and equipment and other general
corporate related expenses.
– 457 –
TAXATION
Cayman Islands
The Cayman Islands currently levies no taxes on individuals or corporations based upon
profits, income, gains or appreciation and there is no taxation in the nature of inheritance tax
or estate duty. There are no other taxes likely to be material to us levied by the government of
the Cayman Islands except for stamp duties which may be applicable on instruments executed
in, or, after execution, brought within the jurisdiction of the Cayman Islands. In addition, the
Cayman Islands does not impose withholding tax on dividend payments.
Hong Kong
Our subsidiaries incorporated in Hong Kong, such as Futu Securities (Hong Kong)
Limited, Futu Financial Limited, Futu Lending Limited, Futu Network Technology Limited and
Futu International Hong Kong, are subject to Hong Kong profit tax on their profits arising from
their business operations carried out in Hong Kong. Hong Kong profits tax for a corporation
from the year of assessment 2018/2019 onwards is generally 8.25% on assessable profits up to
HK$2.0 million; and 16.5% on any part of assessable profits over HK$2.0 million. Under the
Hong Kong Inland Revenue Ordinance, profits that we derive from sources outside of Hong
Kong are generally not subject to Hong Kong profits tax. In addition, payments of dividends
from our Hong Kong subsidiaries to us are not subject to any Hong Kong withholding tax.
PRC
Generally, our PRC subsidiaries, VIEs and its subsidiaries are subject to enterprise
income tax on their taxable income in China at a statutory rate of 25%. Our wholly-owned PRC
subsidiary, Futu Network Technology (Shenzhen) Co., Ltd., and our VIE, Shenzhen Futu, are
recognized as “high and new technology enterprises” and eligible for a preferential tax rate of
15% with a valid period of three years starting from 2019 and 2020, respectively. The
enterprise income tax is calculated based on the entity’s global income as determined under
PRC tax laws and accounting standards.
We are subject to value-added tax at a rate of 6% for the income arising from providing
financial technology services to our clients in China. We are also subject to surcharges on
value-added tax payments in accordance with PRC law.
Dividends paid by our WFOE in China to non-PRC-resident enterprises which do not

have an establishment or place of business in the PRC, or which have such establishment or
place of business but the relevant income is not effectively connected with the establishment
or place of business, will be subject to a withholding tax rate of 10%, unless the relevant Hong
Kong entity satisfies all the requirements under the Arrangement between the Mainland of
China and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation
and the Prevention of Fiscal Evasion with respect to Taxes on Income (《內地和香港特別行政
區關於對所得避免雙重徵稅和防止偷漏稅的安排》) and receives approval from the relevant
– 458 –
tax authority. If our Hong Kong subsidiary satisfies all the requirements under the tax
arrangement and receives approval from the relevant tax authority, then the dividends paid to
the Hong Kong subsidiary would be subject to withholding tax at the standard rate of 5%.
Effective from November 1, 2015, the abovementioned approval requirement has been
abolished, but a Hong Kong entity is still required to file an application package with the
relevant tax authority, and settle any overdue taxes if the preferential tax rate of 5% is denied
based on the subsequent review of the application package by such authority.
If our holding company in the Cayman Islands or any of our subsidiaries outside of China
were deemed to be a “resident enterprise” under the PRC Enterprise Income Tax Law, it would
be subject to enterprise income tax on its worldwide income at a rate of 25%. See “Risk Factors
— Risks Related to Our Presence in China — We may be treated as a resident enterprise for
PRC tax purposes under the PRC Enterprise Income Tax Law, and we may therefore be subject
to PRC income tax on our global income.”
Singapore
Our subsidiaries incorporated in Singapore are subject to an income tax rate of 17% for
taxable income earned in Singapore. Singapore does not impose a withholding tax on dividends
for resident companies. In the years ended December 31, 2019, 2020 and 2021 and six months
ended June 30, 2022, we did not incur any Singapore income tax as there was no estimated
assessable profit that was subject to Singapore income tax.
The United States
The Tax Cuts and Jobs Act of 2017 significantly revised the U.S. corporate income tax
law. Changes include a reduction in the federal corporate tax, changes to operating loss
carry-forwards and carry-backs, and a repeal of the corporate alternative minimum tax. This
legislation resulted in a reduction of the U.S. federal corporate income tax rates from a
maximum of 35% to 21%, to which our subsidiaries incorporated in the United States are
subject.
In addition, the Biden administration has indicated an intention to enact tax legislation
that could impact the taxation of our subsidiaries incorporated in the United States. No
assurance can be given as to whether, when, or in what form, such federal income tax laws
applicable to our subsidiaries in the United States may be enacted.
– 459 –
PERIOD TO PERIOD COMPARISON OF RESULTS OF OPERATIONS
Six months ended June 30, 2022 compared to six months ended June 30, 2021
Revenues
Our revenues decreased by 10.4% from HK$3,781.5 million in the six months ended
June 30, 2021 to HK$3,387.7 million (US$431.7 million) in the six months ended June 30,
2022.
Brokerage commission and handling charge income. Our brokerage commission and
handling charge income decreased by 5.7% from HK$2,122.7 million in the six months ended
June 30, 2021 to HK$2,001.2 million (US$255.0 million) in the six months ended June 30,
2022. The decrease was primarily due to a decline in trading volume compared to the same
period in 2021 when market peaked, which was partially offset by an increase in the blended
commission rate as applied based on trading volume from 6.0 basis points to 7.5 basis points.
Interest income. Interest income decreased by 5.8% from HK$1,268.9 million in the six
months ended June 30, 2021 to HK$1,195.7 million (US$152.4 million) in the six months
ended June 30, 2022. The decrease was mainly due to (i) lower interest income from margin
financing and securities borrowing and lending business, resulting from the decrease in daily
average margin financing and securities lending balance by 1.9% from HK$27.9 billion in the
six months ended June 30, 2021 to HK$27.3 billion in the six months ended June 30, 2022, and
(ii) lower IPO financing interest income.
Interest income derived from margin financing and securities lending decreased by 7.0%
from HK$1,020.0 million in the six months ended June 30, 2021 to HK$948.8 million (US$
120.9 million) in the six months ended June 30, 2022, which was mainly due to the decrease
in daily average margin financing and securities lending balance from the six months ended
June 30, 2021 to the same period in 2022 when the trading activities were slower. In the first
half of 2021 when trading activities were more active, there was higher volume of margin
financing and securities lending, resulting in higher interest income derived therefrom. Interest
income derived from bank deposit increased by 121.4% from HK$88.9 million in the six
months ended June 30, 2021 to HK$196.8 million (US$25.1 million) in the six months ended
June 30, 2022, which was mainly attributable to the increase in market interest rates, partially
offset by the decrease in daily average balance of client cash deposit. Interest income derived
from IPO financing decreased by 99.5% from HK$160.0 million in the six months ended June
30, 2021 to HK$0.8 million (US$95.6 thousand) in the six months ended June 30, 2022, which
was mainly attributable to a decrease in the overall number of IPO transactions in the capital
market in the six months ended June 30, 2022.
Other income. Our other income decreased by 51.1% from HK$389.8 million in the six
months ended June 30, 2021 to HK$190.8 million (US$24.3 million) in the six months ended
June 30, 2022. The decrease was primarily due to lower IPO financing service charge income
and underwriting fee income.
– 460 –
Costs
Our total costs decreased by 39.6% from HK$722.0 million in the six months ended
June 30, 2021 to HK$435.8 million (US$55.5 million) in the six months ended June 30, 2022.
Brokerage commission and handling charge expenses. Our brokerage commission and
handling charge expenses decreased by 49.0% from HK$359.0 million in the six months ended
June 30, 2021 to HK$183.2 million (US$23.3 million) in the six months ended June 30, 2022.
Brokerage commission expenses declined by a wider margin than brokerage commission
income primarily due to cost savings from our U.S. self-clearing business and an upgraded
service package with our U.S. clearing house.
Interest expenses. Our interest expenses decreased by 73.4% from HK$247.0 million in
the six months ended June 30, 2021 to HK$65.8 million (US$8.4 million) in the six months
ended June 30, 2022. The decrease in interest expenses was primarily due to (i) lower margin
and IPO financing interest expenses due to a decrease in our interest bearing borrowings
balances and (ii) lower interest expenses associated with our securities borrowing and lending
business due to slower trading activities.
Processing and servicing costs. Our processing and servicing costs increased by 61.0%
from HK$116.0 million in the six months ended June 30, 2021 to HK$186.8 million (US$23.8
million) in the six months ended June 30, 2022. The increase was primarily due to higher cloud
service fees to support international market expansion and process a higher number of
concurrent trades.
Gross Profit and Gross Profit Margin
As a result of the foregoing, our total gross profit decreased by 3.5% from HK$3,059.5
million in the six months ended June 30, 2021 to HK$2,951.9 million (US$376.2 million) in
the six months ended June 30, 2022. Our gross profit margin increased from 80.9% in the six
months ended June 30, 2021 to 87.1% in the six months ended June 30, 2022, primarily
attributable to cost savings from our U.S. self-clearing business and an upgraded service
package with our U.S. clearing house and higher operating leverage as a result of our larger
business scale.
Operating expenses
Our total operating expenses increased by 29.3% from HK$1,137.2 million in the six
months ended June 30, 2021 to HK$1,469.9 million (US$187.3 million) in the six months
ended June 30, 2022.
– 461 –
Research and development expenses. Our research and development expenses increased
by 84.7% from HK$310.8 million in the six months ended June 30, 2021 to HK$574.2 million
(US$73.2 million) in the six months ended June 30, 2022. The increase was primarily due to
an increase in research and development headcount to build U.S. clearing capabilities and
support new product offerings in existing and new markets.
Selling and marketing expenses. Selling and marketing expenses decreased by 22.2%
from HK$652.0 million in the six months ended June 30, 2021 to HK$507.2 million (US$64.6
million) in the six months ended June 30, 2022. The decrease was primarily due to lower
overall marketing spending amid weak market sentiments.
General and administrative expenses. Our general and administrative expenses increased
by 122.8% from HK$174.4 million in the six months ended June 30, 2021 to HK$388.5 million
(US$49.5 million) in the six months ended June 30, 2022. The increase was primarily due to
an increase in headcount for general and administrative personnel.
Income tax expenses
We recorded income tax expenses of HK$143.2 million (US$18.2 million) in the six
months ended June 30, 2022, compared to HK$206.5 million in the six months ended June 30,
2021, primarily due to decrease in our income before income tax expenses.
As a result of the foregoing, we recorded net income of HK$1,213.5 million (US$154.6

million) and net income margin at 35.8% in the six months ended June 30, 2022, compared to
HK$1,696.2 million and net income margin at 44.9% in the six months ended June 30, 2021.
Year ended December 31, 2021 compared to year ended December 31, 2020
Revenues
Our total revenues increased by 114.9% from HK$3,310.8 million in 2020 to HK$7,115.3
million in 2021.
handling charge income increased by 96.6% from HK$1,990.1 million in 2020 to HK$3,913.0
million in 2021. The increase was mainly attributable to the 77.2% year-over-year increase in
trading volume and higher blended commission rate as applied based on trading volume. The
increase in our trading volume from HK$3,463.6 billion in 2020 to HK$6,138.9 billion in 2021
was primarily driven by the growth of our paying client base. The number of our paying clients
was 1,244,222 as of December 31, 2021, which represented a 140.8% increase from 516,721
as of December 31, 2020. The blended commission rate in terms of trading volume increased
from 5.7 basis points in 2020 to 6.4 basis points in 2021.
– 462 –
Interest income. Our interest income increased by 160.8% from HK$965.6 million in
2020 to HK$2,518.2 million in 2021. Interest income derived from margin financing increased
by 245.5% from HK$498.0 million in 2020 to HK$1,720.5 million in 2021, which was mainly
attributable to the increase in daily average margin financing balance by 240.5% from HK$8.4
billion in 2020 to HK$28.6 billion in 2021. Interest income derived from securities lending
increased by 438.6% from HK$73.8 million in 2020 to HK$397.5 million in 2021, which was
mainly attributable to higher contribution from our securities lending business with financial
institutions as a result of larger business scale. Interest income derived from IPO financing
increased by 8.9% from HK$184.2 million in 2020 to HK$200.6 million in 2021, which was
mainly attributable to an active Hong Kong IPO market in 2021.
Other income. Our other income increased by 92.6% from HK$355.1 million in 2020 to
HK$684.1 million in 2021. The increase was primarily due to an increase in currency exchange
service income, enterprise public relationship service charge income and underwriting fee
income.
Costs
Our total costs increased by 73.3% from HK$696.0 million in 2020 to HK$1,206.1
million in 2021.
handling charge expenses increased by 58.3% from HK$361.5 million in 2020 to HK$572.2
million in 2021. The increase was primarily due to the growth of our trading volume. However,
the expenses did not grow in tandem with brokerage commission and handling charges income
due to an upgraded service package with our U.S. clearing house.
Interest expenses. Our interest expenses increased by 103.6% from HK$185.1 million in
2020 to HK$376.9 million in 2021. The increase in interest expenses was primarily due to
higher margin financing interest expenses and higher expenses associated with our securities
lending business. Interest expenses for margin financing did not rise in tandem with margin
financing interest income due to lower funding costs for the year, which were attributable to
the decreasing trend of Hong Kong Interbank Offered Rates (HIBOR).
from HK$149.4 million in 2020 to HK$257.0 million in 2021. The increase was primarily due
to the increase in cloud service fees and data transmission fees to enhance our IT infrastructure.
As a result of the foregoing, our total gross profit increased by 126.0% from HK$2,614.9
million in 2020 to HK$5,909.3 million in 2021. Our gross profit margin increased from 79.0%
in 2020 to 83.1% in 2021, primarily attributable to an upgraded service package with our U.S.
clearing house and higher operating leverage as a result of our larger business scale.
– 463 –
Operating expenses
Our total operating expenses increased by 137.7% from HK$1,147.0 million in 2020 to
HK$2,726.4 million in 2021.
by 56.9% from HK$513.3 million in 2020 to HK$805.3 million in 2021. The increase was
primarily due to an increase in research and development headcount to support new product
offerings, build U.S. clearing capabilities for our self-clearing business, and provide more
customized products in international markets.
Selling and marketing expenses. Our selling and marketing expenses increased by
261.3% from HK$385.3 million in 2020 to HK$1,392.1 million in 2021. The increase was
primarily due to higher branding and marketing expenses in 2021, especially in international
markets in particular, Singapore and the United States. As a result of our enhanced marketing
efforts, moomoo has demonstrated broad popularity and robust momentum since its debut in
Singapore in March 2021, attracting over 220,000 users and 100,000 paying clients within
three months. Such spending in sales and marketing efforts is in line with our expansion plans
in the international markets, which are still at the early stage of development.
General and administrative expenses. Our general and administrative expenses increased
primarily due to an increase in headcount for general and administrative personnel.
Income tax expenses
We recorded income tax expenses of HK$375.1 million in 2021, compared to HK$124.8

million in 2020, primarily due to the 119.6% year-over-year increase in our income before
income tax expenses.
As a result of the foregoing, we recorded net income of HK$2,810.2 million and net
income margin at 39.5% in 2021, compared to HK$1,325.5 million and net income margin at
40.0% in 2020.
Year ended December 31, 2020 compared to year ended December 31, 2019
Revenues
Our revenues increased by 211.9% from HK$1,061.6 million in 2019 to HK$3,310.8

million in 2020.
– 464 –
handling charge income increased by 289.1% from HK$511.4 million in 2019 to HK$1,990.1
million in 2020. The increase was mainly attributable to the 296.9% year-over-year growth of
total trading volume from HK$872.7 billion in 2019 to HK$3,463.6 billion in 2020. The
increase in our total trading volume was primarily driven by the growth of our paying client
base and their increased trading activities. The number of our paying clients was 516,721 as
of December 31, 2020, which represents a 160.5% increase from 198,382 as of December 31,
2019. On average, a client who traded in 2020 executed over 189 trades with a total trading
volume of HK$7.6 million, compared to over 167 trades with a total trading volume of HK$5.6
million in 2019. The turnover of trading volume over client assets increased from 12.6 in 2019
to 18.6 in 2020.
Interest income. Our interest income increased by 107.7% from HK$464.9 million in
2019 to HK$965.6 million in 2020. Interest income derived from margin financing and
securities lending increased by 120.9% from HK$258.9 million in 2019 to HK$571.8 million
in 2020, which was mainly attributable to the increase in daily average margin financing and
securities lending balance by 121.8% from HK$4,209.2 million in 2019 to HK$9,335.5 million
in 2020. Interest income derived from bank deposit increased by 11.4% from HK$187.2 million
in 2019 to HK$208.6 million in 2020, which was mainly attributable to the increase in daily
average balance of client cash deposit by 158.7% from HK$12.6 billion in 2019 to HK$32.6
billion in 2020, partially offset by the decrease of market interest rates. Interest income derived
from IPO financing was up 13.5 times from HK$12.7 million in 2019 to HK$184.2 million in
2020, which was mainly attributable to an active Hong Kong IPO market in 2020.
Other income. Our other income increased by 316.3% from HK$85.3 million in 2019 to
HK$355.1 million in 2020. The growth was primarily due to an increase in our IPO
subscription service charge income, currency exchange service income and funds distribution
service income.
Costs
Our total costs increased by 147.1% from HK$281.7 million in 2019 to HK$696.0 million
in 2020.
handling charge expenses increased by 259.3% from HK$100.6 million in 2019 to HK$361.5
million in 2020, which was in line with the increases in our total trading volume and brokerage
commission and handling charge income.
Interest expenses. Our interest expenses increased by 107.5% from HK$89.2 million in
2019 to HK$185.1 million in 2020. The increase in interest expenses was primarily due to the
increase in interest expenses for IPO financing business, as well as the increase of our interest
bearing borrowings balances, partially offset by the decrease in market interest rates.
– 465 –
from HK$91.9 million in 2019 to HK$149.4 million in 2020. The increase was primarily due
to the increase in cloud service fee, market information and data fee as well as data
transmission fee to support a larger business scale.
As a result of the foregoing, our total gross profit increased by 235.3% from HK$779.9
million in 2019 to HK$2,614.9 million in 2020. Our gross profit margin increased from 73.4%
in 2019 to 79.0% in 2020, primarily attributable to the higher operating leverage as a result of
our larger business scale and improved operating efficiency, as well as higher net interest
margin in 2020.
Operating expenses
Our total operating expenses increased by 93.8% from HK$591.9 million in 2019 to
HK$1,147.0 million in 2020.
primarily due to the continued increase in research and development headcount to support our
business growth.
Selling and marketing expenses. Our selling and marketing expenses increased by
133.9% from HK$164.7 million in 2019 to HK$385.3 million in 2020. The increase was
primarily due to higher branding and marketing expenses in 2020.
General and administrative expenses. Our general and administrative expenses were
HK$248.4 million in 2020, an increase of 50.6% from HK$164.9 million in 2019. The increase
was primarily due to an increase in headcount for general and administrative personnel.
Income tax expenses
We had income tax expenses of HK$124.8 million in 2020, compared to HK$12.3 million
in 2019, primarily due to significant year-over-year increase in our income before income tax
expenses.
As a result of the foregoing, we had net income of HK$1,325.5 million and net income
margin at 40.0% in 2020, compared to HK$165.7 million and net income margin at 15.5% in
2019.
– 466 –
DISCUSSION OF CERTAIN KEY BALANCE SHEET ITEMS
The following table sets forth selected information from our consolidated balance sheets
as of the dates indicated, which have been extracted from our audited consolidated financial
statements included in Appendix IA to this document:

2019 2020 2021 2022
HK$ HK$ HK$ HK$ US$
(in thousands)
Total current assets ь ь ь ь ь ь 21,072,369 70,842,465 100,702,456 108,236,029 13,792,949

Operating lease right-of-use
assets ь ь ь ь ь ь ь ь ь ь ь ь ь ь 161,617 208,863 243,859 212,529 27,083
Long-term investments ь ь ь ь ь 6,166 – 23,394 249,588 31,806
Other non-current assets ь ь ь ь 159,772 286,439 568,805 1,060,134 135,098
Total non-current assets(1) ь ь 327,555 495,302 836,058 1,522,251 193,987
Total assets ь ь ь ь ь ь ь ь ь ь ь ь 21,399,924 71,337,767 101,538,514 109,758,280 13,986,936
Total current liabilities ь ь ь ь 18,716,232 62,860,164 80,378,301 90,065,742 11,477,437

Operating lease liabilities –
non-current ь ь ь ь ь ь ь ь ь ь 123,371 155,898 163,719 123,624 15,754
Other non-current liabilities ь ь 11,768 14,015 10,935 16,094 2,051
Total non-current
liabilities ь ь ь ь ь ь ь ь ь ь ь ь 135,139 169,913 174,654 139,718 17,805
Total liabilitiesь ь ь ь ь ь ь ь ь ь 18,851,371 63,030,077 80,552,955 90,205,460 11,495,242
Net current assets ь ь ь ь ь ь ь 2,356,137 7,982,301 20,324,155 18,170,287 2,315,512
Total shareholders’ equity ь ь ь 2,548,553 8,307,690 20,985,559 19,552,820 2,491,694
Total liabilities
and shareholders’ equity ь ь 21,399,924 71,337,767 101,538,514 109,758,280 13,986,936
Note:
(1) Non-current assets include refundable deposits paid to clearing organizations in Hong Kong, Singapore
and the U.S., which amounted to HK$32.9 million, HK$150.7 million, HK$337.5 million and HK$779.5
million as of December 31, 2019, 2020, 2021 and June 30, 2022, respectively. As these clearing
organizations require member firms, such as our Group, to deposit cash to a clearing fund, the increase
in such refundable deposits throughout the Track Record Period was in line with the expansion of our
clearing operations.
– 467 –
Net Current Assets
The following table sets forth the breakdown of our current assets and current liabilities
as of the dates indicated:
As of December 31, As of June 30, As of October 31,

2019 2020 2021 2022 2022
HK$ HK$ HK$ HK$ US$ HK$ US$
(in thousands)
(unaudited)
Current assets
Cash and cash equivalents ь ь ь ь ь 362,574 1,034,668 4,555,096 6,300,400 802,885 7,764,352 989,442
Cash held on behalf of clients ь ь ь 14,540,863 42,487,090 54,734,351 63,262,436 8,061,785 48,744,189 6,211,666
Term deposit ь ь ь ь ь ь ь ь ь ь ь ь – 300,000 – 5,750 733 5,330 679
Restricted cash ь ь ь ь ь ь ь ь ь ь – – 2,065 1,971 251 1,844 235
Short-term investments ь ь ь ь ь ь ь 93,773 – 1,169,741 17,501 2,230 17,975 2,291
Securities purchased under
agreements to resell ь ь ь ь ь ь ь – – 106,203 – – 19,423 2,475
Loans and advances ь ь ь ь ь ь ь ь 4,188,689 18,825,366 29,587,306 28,829,926 3,673,912 26,168,139 3,334,710
Receivables:
Clients ь ь ь ь ь ь ь ь ь ь ь ь ь ь 247,017 735,145 469,577 1,438,510 183,315 362,971 46,255
Brokers ь ь ь ь ь ь ь ь ь ь ь ь ь 1,226,348 5,780,461 7,893,927 6,125,217 780,561 5,104,037 650,428
Clearing organizations ь ь ь ь ь ь 304,080 1,243,928 1,961,121 1,915,872 244,147 1,565,258 199,467
Fund management companies and
fund distributors ь ь ь ь ь ь ь ь – 297,622 72,340 120,537 15,361 94,869 12,090
Interest ь ь ь ь ь ь ь ь ь ь ь ь ь 16,892 19,876 50,829 89,458 11,400 171,003 21,792
Prepaid assets ь ь ь ь ь ь ь ь ь ь ь 12,470 11,422 18,306 19,711 2,512 26,643 3,395
Other current assets ь ь ь ь ь ь ь ь 79,663 106,887 81,594 108,740 13,857 243,654 31,050
Total current assets ь ь ь ь ь ь ь ь 21,072,369 70,842,465 100,702,456 108,236,029 13,792,949 90,289,687 11,505,975
Current liabilities
Amounts due to related parties ь ь ь 33,628 87,169 87,459 64,439 8,212 64,965 8,279
Payables:
Clients ь ь ь ь ь ь ь ь ь ь ь ь ь ь 15,438,879 46,062,842 59,127,439 67,951,394 8,659,317 54,488,995 6,943,750
Brokers ь ь ь ь ь ь ь ь ь ь ь ь ь 1,484,243 4,533,581 7,599,233 14,365,158 1,830,609 12,120,239 1,544,530
Clearing organizations ь ь ь ь ь ь – 324,266 393,782 1,359,746 173,278 581,662 74,124
fund distributors ь ь ь ь ь ь ь ь 26,381 127,442 56,690 49,545 6,314 52,395 6,677
Interest ь ь ь ь ь ь ь ь ь ь ь ь ь 519 5,493 15,359 10,334 1,317 18,377 2,342
Borrowingsь ь ь ь ь ь ь ь ь ь ь ь ь 1,467,586 5,482,818 6,357,405 4,353,919 554,837 2,860,000 364,461
Securities sold under agreements to
repurchase ь ь ь ь ь ь ь ь ь ь ь ь 1,590 5,453,037 4,467,861 – – – –
Operating lease liabilities —
current ь ь ь ь ь ь ь ь ь ь ь ь ь ь 49,095 66,333 96,860 104,121 13,269 98,946 12,609
Accrued expenses and other current
liabilitiesь ь ь ь ь ь ь ь ь ь ь ь ь 214,311 717,183 2,176,213 1,807,086 230,284 1,122,777 143,080
Total current liabilities ь ь ь ь ь ь 18,716,232 62,860,164 80,378,301 90,065,742 11,477,437 71,408,356 9,099,852
Net current assets ь ь ь ь ь ь ь ь 2,356,137 7,982,301 20,324,155 18,170,287 2,315,512 18,881,331 2,406,123
– 468 –
Our net current assets increased by 3.9% from HK$18,170.3 million (US$2,315.5 million)
as of June 30, 2022 to HK$18,881.3 million (US$2,406.1 million) as of October 31, 2022. The
change was primarily due to (i) the decrease of HK$13,462.4 million in our payables to clients,
(ii) the decrease of HK$2,244.9 million in our payables to brokers, and (iii) the decrease of
HK$1,493.9 million in borrowings, partially offset by (i) the decrease of HK$14,518.2 million
in cash held on behalf of clients and (ii) the decrease of HK$2,661.8 million in loans and
advances.
Our net current assets decreased by 10.6% from HK$20,324.2 million as of December 31,
2021 to HK$18,170.3 million (US$2,315.5 million) as of June 30, 2022. The change was
primarily due to (i) the increase of HK$8,824.0 million in our payables to clients, and (ii) the
increase of HK$6,765.9 million in our payables to brokers, partially offset by (i) the increase
of HK$8,528.1 million in cash held on behalf of clients, (ii) the decrease of HK$2,003.5
million in borrowings and (iii) the decrease of HK$4,467.9 million in securities sold under
agreements to repurchase.
Our net current assets increased by 154.6% from HK$7,982.3 million as of December 31,
2020 to HK$20,324.2 million as of December 31, 2021, primarily due to (i) the increase of
HK$12,247.3 million in cash held on behalf of clients, and (ii) the increase of HK$10,761.9
million in loans and advances, partially offset by (i) the increase of HK$13,064.6 million in our
payables to clients, and (ii) the increase of HK$3,065.7 million in our payables to brokers.
Our net current assets increased by 238.8% from HK$2,356.1 million as of December 31,
2019 to HK$7,982.3 million as of December 31, 2020, primarily due to (i) the increase of
HK$27,946.2 million in cash held on behalf of clients, and (ii) the increase of HK$14,636.7
million in loans and advances, partially offset by (i) the increase of HK$30,624.0 million in our
payables to clients, and (ii) the increase of HK$5,451.4 million in securities sold under
agreements to repurchase.
– 469 –
Short-term investments
Our investments are presented on the consolidated balance sheets as follows:
As of
2019 2020 2021 2022
(HK$ in
(HK$ in thousands) thousands)
Available-for-sale financial
securities (1) ьььььььььььь 93,773 – – –
Money market funds (2) ььььь – – 1,169,741 –
Financial assets at fair value
through profit or loss (3) ььь – – – 17,501
Totalььььььььььььььььььь 93,773 – 1,169,741 17,501
Notes:
(1) Available-for-sale financial securities mainly include wealth management products issued by a
commercial bank in China.
(2) Money market funds purchased are standard products with very low risk and high liquidity issued by
established financial institutions with good reputation.
(3) Financial assets at fair value through profit or loss mainly include equity investments in certain overseas
companies.
Short-term investments include debt securities and money market funds, both of which
are measured at fair value. Investments classified as short-term investments are reported at fair
value with unrealized gains or losses, if any, recorded in accumulated other comprehensive
income in the consolidated statements of changes in shareholders’ equity. Debt securities in
this category are wealth management products with expected return rate or variable interest
rate indexed to investment horizon. These wealth management products are issued by a
commercial bank in China and our Group can redeem the units held upon request. The balance
of our short-term investments decreased from HK$93.8 million as of December 31, 2019 to nil
as of December 31, 2020, as a result of a change of our fund management arrangement. In
2020, we adjusted such arrangement and ceased to purchase wealth management products. As
such, our short-term investments decreased to nil in 2020. The balance of our short-term
investments increased to HK$1,169.7 million as of December 31, 2021 and HK$17.5 million
(US$2.2 million) as of June 30, 2022, respectively, which was primarily attributable to our
flexible investment strategy towards money market funds in oversea markets and equity
investments in certain overseas companies. After the Listing, our short-term investments will
be subject to compliance with Chapter 14 of the Listing Rules.
– 470 –
We endeavor to increase the return of idle cash and bank balances by placing investments
in debt securities and money market funds such that our risk exposure arising from such
investments can be limited. Our investment policy in relation to such investments is to monitor
our level of idle cash and bank balances and, based on the working capital required at the
relevant time, utilize such idle cash to increase the return. In addition, in order to monitor and
control the investment risks associated with our portfolio of investments, we have adopted a
comprehensive set of internal policies and guidelines to manage our investments. Our finance
department is responsible for proposing, analyzing and evaluating potential investments. Our
management, including our finance department, has extensive experience in managing the
financial aspects of an enterprise’s operations. In particular, Mr. Arthur Yu Chen, our chief
financial officer, has approximately 14 years of experience in financial services. If applicable,
we will also involve our local personnel in each market where we have operations, to assist on
the assessment of prospective investments. Prior to making any material investments, the
proposal shall be reviewed and approved by Mr. Arthur Yu Chen. According to our Articles of
Association, such decision does not require a decision by the Board.
No amount was recognized in other comprehensive income for short-term debt

investments classified as available-for-sale during the Track Record Period, because such
investments were disposed in 2019 and the amount recognized in other comprehensive income
was transferred to investment gains in the consolidated statements of comprehensive income.
Loans and advances
Loans and advances include margin loans, IPO loans extended to clients and other
advances, collateralized by securities and are carried at the amortized cost, net of an allowance
for credit losses. Revenues earned from the loans and advances are included in our interest
income. Our loans and advances increased from HK$4.2 billion as of December 31, 2019 to
HK$18.8 billion as of December 31, 2020, and further increased to HK$29.6 billion as of
December 31, 2021, mainly attributable to the expansion of our margin financing business. Our
loans and advances decreased from HK$29.6 billion as of December 31, 2021 to HK$28.8
billion (US$3.7 billion) as of June 30, 2022, and further to HK$26.2 billion (US$3.3 billion)
as of October 31, 2022, primarily due to a decrease in trading activities of our clients.
– 471 –
The table below sets forth the breakdown of loans and advances by type of loan:

2019 2020 2021 2022
HK$ HK$ HK$ HK$ US$
(in thousands)
Margin loans ь ь ь ь ь ь ь ь ь ь ь ь ь 4,141,962 18,434,047 29,097,216 26,722,627 3,405,371

IPO loans ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь – 400,394 34,348 178,584 22,758
Other advances ь ь ь ь ь ь ь ь ь ь ь ь 46,727 – 468,000 1,948,857 248,350
Subtotal ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 4,188,689 18,834,441 29,599,564 28,850,068 3,676,479
Less: Allowance for credit losses ь ь – (9,075) (12,258) (20,142) (2,567)
Total ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 4,188,689 18,825,366 29,587,306 28,829,926 3,673,912
The balance of margin loans increased from HK$4.1 billion as of December 31, 2019 to
HK$18.4 billion as of December 31, 2020, and further to HK$29.1 billion as of December 31,
2021, primarily due to the increasing volume of our margin financing business. Our balance of
margin loans decreased from HK$29.1 billion as of December 31, 2021 to HK$26.7 billion
(US$3.4 billion) as of June 30, 2022, primarily due to the decline in trading activities of our
clients.
The balance of IPO loans decreased from HK$400.4 million as of December 31, 2020 to
HK$34.3 million as of December 31, 2021, primarily due to the decrease in IPO financing
activities. As of December 31, 2019, there were no outstanding IPO loans and total amount of
them were collected subsequently. The balance of IPO loans amounted to HK$178.6 million
(US$22.8 million) as of June 30, 2022 due to the outstanding IPO loans at the time. As of
October 31, 2022, all of the IPO loans as of June 30, 2022 had been settled.
The other advances as of December 31, 2019, 2020 and 2021 and June 30, 2022 were
collateralized bridge loans provided to third parties. As of Latest Practicable Date, all of the
bridge loans as of June 30, 2022 remained outstanding.
The allowance for credit losses increased from nil as of December 31, 2019 to HK$9.1
million as of December 31, 2020, to HK$12.3 million as of December 31, 2021 and further to
HK$20.1 million (US$2.6 million) as of June 30, 2022. The overall increasing trend was in line
with the increase in balances of borrowings that will be written off to the extent that there is
no realistic prospect of recovery.
– 472 –
Prior to January 1, 2020, we applied incurred loss methodology for recognizing credit
losses that delays recognition until it is probable a loss has been incurred. The identified
impairment loss was immaterial prior to January 1, 2020.
Since January 1, 2020, our Group adopted ASC Topic 326 using the modified
retrospective approach for all in-scope assets, which are primarily loans and advances that are
collateralized by client securities and the collateral is required to be maintained at specified
minimum levels at all times. We monitor margin levels and requires clients to provide
additional collateral, or reduce margin positions, to meet minimum collateral requirements if
the fair value of the collateral changes. We apply the practical expedient based on collateral
maintenance provisions in estimating an allowance for credit losses for the loans and advances.
In accordance with the practical expedient, when we reasonably expect that borrowers (or
counterparties, as applicable) will replenish the collateral as required, there is no expectation
of credit losses when the collateral’s fair value is greater than the amortized cost of the
financial assets. If the amortized cost exceeds the fair value of collateral, then credit losses are
estimated only on the unsecured portion. For the year ended December 31, 2020, 2021 and six
months ended June 30, 2021 and 2022, expected credit loss expenses of HK$9,075 thousand,
HK$3,200 thousand, HK$8,819 thousand and HK$7,849 thousand, resulting from the
assessment of credit losses for the loans and advances under ASC Topic 326 at period-end were
recognized in “Others, net” in the consolidated statements of comprehensive income,
respectively.
An allowance for credit losses on other financial assets, including receivables from
clients, brokers, clearing organizations and fund management companies and fund distributors,
is estimated based on the aging of these financial assets.
Receivables from clients are due within the settlement period commonly adopted in the
relevant market practices, which is usually within a few days from the trade date. Because
these receivables involve customers who have no recent history of default, and the settlement
periods are usually short, the credit risk arising from receivables from clients is considered low.
In respect of the receivables from brokers, clearing organizations and fund management
companies and fund distributors, we consider that these receivables have a low risk of default
and the counterparties have a strong capacity to meet their contractual obligation. As a result,
the allowance for credit losses for other financial assets were immaterial for all periods
presented.
See Note 2 to the Accountant’s Report set out in Appendix IA to this document for
allowance for credit losses.
– 473 –
Receivables
Our accounts receivable are primarily unsettled transaction accounts with maturities
within 3 months from clients, brokers, clearing organizations and fund management companies
and fund distributors. The impairment loss calculated according to the CECL model were
immaterial. Based on historical experience and post-period payments, no actual losses had
occurred in accounts receivable during the Track Record Period and up to the Latest Practicable
Date.
Trading Receivables from Clients
Trading receivables from clients include amounts due on brokerage transactions on a

trade-date basis. The fluctuations in trading receivables from clients throughout the Track
Record Period were mainly due to the fluctuations in the volume of unsettled trades with our
clients at each period end. As of October 31, 2022, all of our trading receivables from clients
as of June 30, 2022 had been settled.
Receivables from Brokers, Clearing Organizations, Fund Management Companies and

Fund Distributors
Receivables from and payables to brokers, clearing organizations, fund management

companies and fund distributors include receivables and payables from unsettled trades on a
trade-date basis, including amounts receivable for securities, derivatives or funds trades not
delivered to the seller by the settlement date and cash deposits, and amounts payable for
securities, derivatives or funds trades not received from a purchaser by the settlement date.
Clearing settlement fund deposited in the clearing organizations for the clearing purpose
is recognized in receivables from clearing organizations.
We borrowed margin loans from executing brokers, with the benchmark interest rate plus
premium differentiated depending on the amount borrowed, and immediately lent to margin
financing clients. Margin loans borrowed is recognized in the payables to brokers.
Our trading receivables from brokers, clearing organizations and fund management
companies and fund distributors increased from HK$1.5 billion as of December 31, 2019 to
HK$7.3 billion as of December 31, 2020, further increased to HK$9.9 billion as of
December 31, 2021 and decreased to HK$8.2 billion (US$1.0 billion) as of June 30, 2022,
primarily due to the fluctuation in our total unsettled transactions at each period end. The
fluctuations in receivables from the clearing organization, which decreased from HK$1,961.1
million as of December 31, 2021 to HK$1,915.9 million (US$244.1 million) as of June 30,
2022, and further to HK$1,565.3 million (US$199.5 million) as of October 31, 2022, were
mainly influenced by the daily trading volume by our clients trading stocks on the stock
exchanges at each period end. The fluctuations in receivables from fund management
companies and fund distributors, which increased from HK$72.3 million as of December 31,
2021 to HK$120.5 million (US$15.4 million) as of June 30, 2022, and decreased to HK$94.9
– 474 –
million (US$12.1 million) as of October 31, 2022, were mainly due to the fluctuations in
unsettled redemption of funds at each period end. As of October 31, 2022, all of our trading
receivables from brokers, clearing organizations and fund management companies and fund
distributors as of June 30, 2022 had been settled.
Interest Receivable
Interest receivable which is included in receivables is calculated based on the contractual

interest rate of bank deposit, loans and advances, securities loaned and other receivables on an
accrual basis, and is recorded as interest income as earned. Our interest receivable increased
throughout the Track Record Period and up to June 30, 2022, which was in line with the
increase in the interest rates of bank deposits during relevant period. As of October 31, 2022,
all of our interest receivable as of June 30, 2022 had been settled.
Payables
Our accounts payable to clients are the funds received from clients. Our accounts payable
are primarily unsettled transaction accounts, brokers, clearing organizations and fund
management companies and fund distributors. All of the accounts payables are expected to be
settled within one year or are repayable on demand.
Payables to Clients
Our trading payables to clients reflect the funds received from clients that would be used
in the execution of their trades. The ending balance of payables to clients increased from
HK$15.4 billion as of December 31, 2019 to HK$46.1 billion as of December 31, 2020, further
increased to HK$59.1 billion as of December 31, 2021 and to HK$68.0 billion (US$8.7 billion)
as of June 30, 2022, primarily due to the increase in the number of our paying clients.
Our trading payables to clients decreased from HK$68.0 billion as of June 30, 2022 to
HK$54.5 billion (US$6.9 billion) as of October 31, 2022, primarily due to sluggish equity
capital market performance.
Payables to Brokers, Clearing Organizations, Fund Management Companies and Fund

Distributors
Our trading payables to brokers, clearing organizations and fund management companies
and fund distributors increased from HK$1.5 billion as of December 31, 2019 to HK$5.0
billion as of December 31, 2020, further increased to HK$8.0 billion as of December 31, 2021
and to HK$15.8 billion (US$2.0 billion) as of June 30, 2022 primarily due to the increase in
securities lending business. The increase in payables to the clearing organizations, which
increased from HK$393.8 million as of December 31, 2021 to HK$1,359.7 million (US$173.3
million) as of June 30, 2022, were primarily due to the increase of the daily trading volume by
our clients trading stocks on the Hong Kong stock exchange at each period end. The decrease
in payables to fund management companies and fund distributors from HK$127.4 million as of
– 475 –
December 31, 2020 to HK$56.7 million as of December 31, 2021, then to HK$49.5 million
(US$6.3 million) as of June 30, 2022, was primarily due to the decrease in unsettled
subscription of fund at each period end.
Interest Payable
Interest payable which is included in payables is calculated based on the contractual

interest rates of payables, borrowings, securities borrowed and securities sold under
agreements to repurchase on an accrual basis. Our interest payable increased from HK$0.5
million as of December 31, 2019 to HK$5.5 million as of December 31, 2020, and further to
HK$15.4 million as of December 31, 2021. Our interest payable subsequently decreased from
HK$15.4 million as of December 31, 2021 to HK$10.3 million (US$1.3 million) as of June 30,
2022. The change was in line with the fluctuations in our borrowings to support our margin
financing business.
Securities sold under agreements to repurchase
Transactions involving sales of securities under agreements to repurchase (“repurchase

agreements”) are treated as collateralized financing transactions. Under repurchase
agreements, we receive cash from counterparties and provide securities as collateral. These
agreements are carried at amounts at which the securities will subsequently be repurchased,
and the interest expense incurred is recorded as interest expenses on the consolidated
statements of comprehensive income. Our securities sold under agreements to repurchase
decreased from HK$5,453.0 million as of December 31, 2020 to HK$4,467.9 million as of
December 31, 2021, further to nil and nil as of June 30, 2022 and October 31, 2022,
respectively. The decreases in our securities sold under agreements to repurchase in 2021 and
the first half of 2022 were primarily due to the increase of cash from our financing activities
in 2021 and securities lending business in the first half of 2022, respectively.
Accrued expenses and other current liabilities
Accrued expenses and other current liabilities mainly include certain payables to
corporate clients in relation to our ESOP management services. As we provide ESOP
management services to certain corporate clients, we execute and administer certain employee
stock incentive plans, where we deduct (i) exercise price upon vesting such incentives to the
employees, and (ii) applicable tax withheld, which are recorded as payables to corporate clients
in relation to our ESOP management services. The payables to corporate clients in relation to
our ESOP management services increased from HK$16.5 million as of December 31, 2019 to
HK$17.8 million as of December 31, 2020, and further to HK$870.3 million as of December
31, 2021, which was in line with the expansion of our ESOP management business. The
payables to corporate clients in relation to our ESOP management services decreased from
HK$870.3 million as of December 31, 2021 to HK$508.4 million as of June 30, 2022, primarily
because we had partially settled certain such payables with our corporate clients in the first half
of 2022.
– 476 –
In addition, our other liabilities include, among other things, contract liabilities in relation
to the customer loyalty program, which our Group operates to its customers that offers various
incentives in the form of incentive points and coupons for redemption of free or discounted
goods or services. For the incentives generated from current sales transaction, our Group defers
a portion of commission income with corresponding liability reflected as contract liability
attributable to the incentives. As of December 31, 2019, 2020 and 2021 and June 30, 2022,
contract liabilities (including non-current portion) in relation to the customer loyalty program
were HK$2.1 million, HK$8.2 million and HK$9.0 million and HK$7.1 million, respectively.
See Note 2 to the Accountant’s Report in Appendix IA to this document.
LIQUIDITY AND CAPITAL RESOURCES
To date, we have financed our operating and investing activities through net proceeds
from our securities offerings, cash generated from operating activities, historical equity
financing activities and credit facilities provided by commercial banks, other licensed financial
institutions and other parties. As of June 30, 2022, our cash and cash equivalents were
HK$6,300.4 million (US$802.9 million). Our cash and cash equivalents primarily consist of
cash on hand, demand deposits and time deposits with initial terms of less than three months
placed with banks or other financial institutions, which are unrestricted for withdrawal or use.
Our net cash generated from operating activities for the year ended December 31, 2021
was HK$6,012.0 million, compared with HK$1,969.4 million and HK$20,456.7 million for the
years ended December 31, 2019 and 2020, respectively. Our net cash generated from operating
activities for the six months ended June 30, 2022 was HK$14,118.1 million (US$1,799.1
million), compared with our net cash used in operating activities of HK$14,351.7 million for
the six months ended June 30, 2021.
We intend to manage and improve our liquidity position through (i) improving the balance
of our loans and advances, and (ii) actively managing our receivables from clients, brokers,
clearing organizations, fund management companies and fund distributors. We have adopted
various measure to accelerate the collection of our accounts receivables, including, but not
limited to: (i) reviewing aging analysis of the trade receivables on a monthly basis, (ii)
following up with counterparties with outstanding balance of receivables, (iii) implementing
any additional measures to further improve our collection rate, and (iv) collecting and retaining
supporting documents (including demand notes and reminder letters) to provide support for
chasing payments and enforcing our rights under those documents. After the Listing, we may
decide to enhance our liquidity position or increase our cash reserve for future investments
through additional capital and finance funding. The issuance and sale of additional equity
would result in further dilution to our shareholders. The incurrence of indebtedness would
result in increased fixed obligations and could result in operating covenants that would restrict
our operations. We cannot assure you that financing will be available in amounts or on terms
acceptable to us, if at all.
– 477 –
Working Capital Sufficiency Statement
Our Directors are of the opinion that, taking into account the financial resources available
to us, including cash and cash equivalents and available financing facilities, we have sufficient
working capital for our present requirements, that is at least 12 months from the date of this
document.
Regulatory Capital Requirements
Our broker-dealer and insurance-broker subsidiaries, Futu International Hong Kong,

Moomoo Financial Inc., Futu Clearing Inc., Moomoo Financial Singapore, Futu Insurance
Brokers (Hong Kong) Limited and Futu Australia are subject to capital requirements
determined by their respective regulators. Futu International Hong Kong, our subsidiary
located in Hong Kong, is subject to the Securities and Futures (Financial Resources) Rules and
the Securities and Futures Ordinance, and Futu International Hong Kong is required to
maintain minimum paid-up share capital and liquid capital. Moomoo Financial Inc. and Futu
Clearing Inc., our subsidiaries located in the United States, are subject to the Uniform Net
Capital Rule (Rule 15c3-1) under the Exchange Act, which requires the maintenance of
minimum net capital. Moomoo Financial Singapore, our subsidiary located in Singapore, is
subject to the Securities and Futures (Financial and Margin Requirements for Holders of
Capital Markets Services Licences) Regulations, which requires the maintenance of financial
resource over its total risk requirement. Futu Insurance Brokers (Hong Kong) Limited, our
subsidiary located in Hong Kong, is subject to the Insurance (Financial and Other
Requirements for Licensed Insurance Broker Companies) Rules, and is required to maintain
minimum net asset. Futu Securities (Australia) Ltd., the Company’s subsidiary located in
Australia, is subject to Regulatory Guide 166 Licensing: Financial requirements, which
requires the maintenance of surplus liquid funds when licensees hold client money or property.
The table below summarizes the net capital, the requirement and the excess capital for our
broker-dealer and insurance broker subsidiaries as of June 30, 2022:
As of June 30, 2022

Net Capital/
Eligible Equity Requirement Excess
(HK$ in thousands)
Futu Securities ьььььььььььььььь 6,243,794 1,593,608 4,650,186

Futu Clearing Inc. ьььььььььььььь 3,456,065 303,734 3,152,331
Moomoo Financial Inc. ьььььььььь 109,105 21,343 87,762
Moomoo Financial Singapore ььььь 685,433 193,142 492,291
Futu Insurance Brokers
(Hong Kong) Limited ььььььььь 1,498 500 998
Futu Securities (Australia) Ltd. ьььь 90,381 1,250 89,131
– 478 –
Regulatory capital requirements could restrict the operating subsidiaries from expanding
their business and declaring dividends if their net capital does not meet regulatory
requirements.
As of December 31, 2019, 2020 and 2021 and June 30, 2022, all of the regulated operating
subsidiaries were in compliance with their respective regulatory capital requirements. See Note
28 to the Accountant’s Report in Appendix IA to this document.
Cash Flows
The following table sets forth a summary of our cash flows for the periods indicated:
2019 2020 2021 2021 2022
(in thousands)
(unaudited)
Net cash generated from/(used in)

operating activities ь ь ь ь ь ь ь ь 1,969,434 20,456,717 6,011,971 (14,351,728) 14,118,089 1,799,124
– Operating profit before changes
in working capital ь ь ь ь ь ь ь 253,530 1,450,827 2,872,763 1,754,565 1,337,445 170,436
– Changes in working capital ь ь ь 1,715,904 19,005,890 3,139,208 (16,106,293) 12,780,644 1,628,688
Net cash (used in)/generated from

investing activities ь ь ь ь ь ь ь ь (160,057) (244,175) (963,565) 271,378 786,121 100,179
financing activities ь ь ь ь ь ь ь ь 1,151,622 8,406,896 10,554,218 34,721,267 (4,720,133) (601,505)
Effect of exchange rate changes on
cash, cash equivalents and
restricted cash ь ь ь ь ь ь ь ь ь ь (44,666) (1,117) 167,130 30,620 89,218 11,369
Net increase in cash, cash
equivalents and restricted cash ь ь 2,916,333 28,618,321 15,769,754 20,671,537 10,273,295 1,309,167
Cash, cash equivalents and restricted
cash at beginning of the
year/period ь ь ь ь ь ь ь ь ь ь ь ь 11,987,104 14,903,437 43,521,758 43,521,758 59,291,512 7,555,754

restricted cash at end of the
year/periodь ь ь ь ь ь ь ь ь ь ь ь 14,903,437 43,521,758 59,291,512 64,193,295 69,564,807 8,864,921
– 479 –
Operating activities
Net cash generated from operating activities in the six months ended June 30, 2022 was
HK$14,118.1 million (US$1,799.1 million), as compared to net income of HK$1,213.5 million
(US$154.6 million) in the same period. The difference was primarily due to net increase of
HK$15.6 billion (US$2.0 billion) in accounts payable to clients and brokers, and net decrease
of HK$749.5 million (US$95.5 million) in loans and advances, partially offset by net decrease
in securities sold under agreements to repurchase of HK$4,467.9 million (US$569.4 million).
The decrease of loans and advances was due to a decrease in margin loans in light of the
decline in trading activities of our clients. The increase in accounts payable to clients and
brokers was due to the increase of cash deposits as a result of the expansion of our brokerage
business. The principal non-cash items affecting the difference between our net income and our
net cash generated from operating activities in the six months ended June 30, 2022 were
HK$92.2 million (US$11.8 million) in foreign exchange gains and HK$97.3 million (US$12.4
million) in share-based compensation.
Net cash generated from operating activities in 2021 was HK$6.0 billion, as compared to
net income of HK$2,810.2 million in the same year. The difference was primarily due to net
increases of HK$16.1 billion in accounts payable to clients and brokers, partially offset by net
increase of HK$1.8 billion in accounts receivable from clients and brokers and net increase of
HK$10.8 billion in loans and advances. The increase in accounts payable to clients and brokers
was due to the increase of cash deposits as a result of the expansion of our brokerage business.
The increase of loans and advances was due to the expansion of our margin financing business.
The principal non-cash items affecting the difference between our net income and our net cash
generated from operating activities in 2021 were HK$138.2 million in foreign exchange gains
and HK$98.9 million in share-based compensation expenses.
Net cash generated from operating activities in 2020 was HK$20.5 billion, as compared
to net income of HK$1,325.5 million in the same year. The difference was primarily due to net
increases of HK$33.7 billion in accounts payable to clients and brokers and of HK$5.5 billion
in securities sold under repurchase agreements, partially offset by net increase of HK$5.0
billion in accounts receivable from clients and brokers and net increase of HK$14.6 billion in
loans and advances. The increase in accounts payable to clients and brokers was due to the
increase of cash deposits as a result of the expansion of our brokerage business. The increase
of loans and advances was due to the expansion of our margin financing business. The principal
non-cash items affecting the difference between our net income and our net cash generated
from operating activities in 2020 were HK$32.6 million in share-based compensation expenses
and HK$27.2 million in depreciation and amortization expenses.
Net cash generated from operating activities in 2019 was HK$2.0 billion, as compared to
net income of HK$165.7 million in the same year. The difference was primarily due to net
increase of HK$3.7 billion in accounts payable to clients and brokers, partially offset by net
increase of HK$927.3 million in accounts receivable from clients and brokers and net increase
of HK$1,101.8 million in loans and advances. The increase in accounts payable to clients and
brokers was due to the increase of cash deposits as a result of the expansion of our brokerage
– 480 –
business. The increase in loans and advances was due to the expansion of our margin financing
business. The principal non-cash items affecting the difference between our net income and our
net cash generated from operating activities in 2019 were HK$16.0 million in share-based
compensation expenses and HK$16.5 million in depreciation and amortization.
Investing Activities
Net cash generated from investing activities in the six months ended June 30, 2022 was
HK$786.1 million (US$100.2 million), primarily due to the proceeds from disposal of
short-term investments of HK$4,548.0 million (US$579.6 million), partially offset by the
purchase of short-term investments of HK$3,361.8 million (US$428.4 million).
Net cash used in investing activities in 2021 was HK$963.6 million, primarily due to the
purchase of short-term investments of HK$1,169.7 million and the purchase of property and
equipment and intangible assets of HK$70.5 million, partially offset by the maturity of term
deposits of HK$300.0 million.
placement of term deposit of HK$300.0 million with initial terms of over three months and the
purchase of short-term investments of HK$206.8 million, partially offset by the proceeds from
disposal of short-term investments of HK$307.3 million.
purchase of short-term investments of HK$285.8 million and the purchase of property,
equipment and intangible assets of HK$118.3 million, partially offset by the proceeds from
disposal of short-term investments of HK$250.8 million.
Financing Activities
Net cash used in financing activities in the six months ended June 30, 2022 was HK$4.7
billion (US$601.5 million), primarily attributable to repayment of other borrowings of
HK$39.8 billion (US$5.1 billion) and purchase of treasury stock of HK$2.7 billion (US$348.0
million), partially offset by proceeds from other borrowings of HK$37.8 billion (US$4.8
billion).
Net cash generated from financing activities in 2021 was HK$10.6 billion, primarily
attributable to proceeds of HK$53.5 billion from other borrowings and proceeds of HK$10.9
billion from our follow-on offering, partially offset by repayment of other borrowings of
HK$52.3 billion.
billion from our securities offerings, including issuance of prefunded warrants, partially offset
by repayment of other borrowings of HK$20.1 billion.
– 481 –
billion from our initial public offering and concurrent private placement, partially offset by
repayment of other borrowings of HK$6.9 billion.
The consolidated financial statements are prepared in accordance with U.S. GAAP, which
differ in certain respects from IFRS. The main reconciling items include classification and
measurement of preferred shares, issuance costs, operating leases, share-based compensation
and expected credit loss. The following tables set forth the effects of material differences
prepared under U.S. GAAP and IFRS:
For the Six Months

For the Year ended December 31, ended June 30,
2019 2020 2021 2021 2022
(HK$ in thousands)
(unaudited)

attributable to our
Company in the
Net income attributable to our
Company in the consolidated
statements of comprehensive
income as reported under
U.S. GAAP ь ь ь ь ь ь ь ь ь ь ь ь 165,664 1,325,523 2,810,210 1,696,190 1,213,525
IFRS adjustments:
Classification and measurement
of preferred shares(1) ь ь ь ь ь ь (216,140) – – – –
Issuance costs(2) ь ь ь ь ь ь ь ь ь ь (26,971) – (14,336) – (4,731)
Operating leases(3) ь ь ь ь ь ь ь ь ь (3,204) (1,913) (2,238) (1,741) (132)
Share-based compensation(4) ь ь (10,681) (19,294) (76,461) (19,489) (74,697)
Expected credit loss(5) ь ь ь ь ь ь 1,533 (7,475) (2,520) (2,636) (2,651)

to our Company in the
reported under IFRS ь ь ь ь ь (89,799) 1,296,841 2,714,655 1,672,324 1,131,314
– 482 –
As of June
As of December 31, 30,
2019 2020 2021 2022
(HK$ in thousands)
reported under U.S. GAAP ьь 2,548,553 8,307,690 20,985,559 19,552,820
IFRS adjustments:
Issuance costs (2) ььььььььььь – – (14,336) (19,067)
Operating leases (3) ьььььььььь (4,303) (6,001) (8,454) (8,151)
Expected credit loss (5) ьььььььь (2,330) (9,805) (12,342) (14,958)

reported under IFRS ьььььь 2,541,920 8,291,884 20,950,427 19,510,644
Notes:
(1) Under U.S. GAAP, SEC guidance provides for mezzanine-equity (temporary equity) category in
addition to the financial liability and permanent equity categories. The purpose of this “in-between”
category is to indicate that a security may not be a permanent part of equity. Our Group classified the
Preferred Shares as mezzanine equity in the consolidated balance sheets and are recorded initially at fair
value, net of issuance costs. Our Group recognized accretion to the respective redemption value of the
Preferred Shares over the period starting from issuance date to the earliest redemption date.
IFRS 9, “Financial Instruments” has been adopted since January 1, 2018. Under IFRS, there is no
concept of mezzanine or temporary equity classification. Our Group designated the Preferred Shares as
financial liabilities at fair value through profit or loss which are initially recognized and subsequently
measured at fair value. Subsequent to initial recognition, the amounts of changes in fair value of the
Preferred Shares that were attributed to changes in credit risk of the Preferred Shares were recognized
in other comprehensive income, and the remaining amounts of changes in fair value of the Preferred
Shares were recognized in the profit or loss.
(2) Under U.S. GAAP, specific incremental issuance costs directly attributable to a proposed or actual
offering of securities may be deferred and charged against the gross proceeds of the offering, shown in
equity as a deduction from the proceeds.
Under IFRS, such issuance costs apply a different criterion for capitalization when the listing involves
both existing shares and a concurrent issuance of new shares of our Group in the capital market, and
were allocated proportionately between the existing and new shares. As a result, our Group recorded
issuance costs associated with the listing of existing shares in the profit or loss.
(3) Under U.S. GAAP, for operating leases, the amortization of right-of-use assets and the interest expense
element of lease liabilities are recorded together as operating lease expenses, which results in a
straight-line recognition effect in the consolidated statements of operations and comprehensive loss.
– 483 –
Under IFRS, the amortization of the right-of-use asset is on a straight-line basis while the interest
expense related to the lease liabilities are measured using the effective interest rate method, which
generally yields a “front-loaded” expense with more expense recognized in earlier years of the lease.
(4) Our Group granted options and RSUs with service condition only to employees and modified the
exercise price of 8,113,145 stock options granted under 2014 Share Incentive Plan from US$1.20 to
US$0.60 on December 30, 2019.
Under U.S. GAAP, the share-based compensation expenses are recognized over the vesting period using
straight-line method.
Under IFRS, the graded vesting method must be applied, which means we should treat each installment
of the award as a separate grant. As a result, each installment would be separately measured and
attributed to expense over the related vesting period which would accelerate the expense recognition.
(5) Our Group is mainly exposed to credit risk associated with loans and advances. We apply the practical
expedient based on collateral maintenance provisions in estimating an allowance for credit losses for the
loans and advances. In accordance with the practical expedient (ASC 326-20-35-6), when we reasonably
expect that borrowers (or counterparties, as applicable) will replenish the collateral as required, there
is no expectation of credit losses when the collateral’s fair value is greater than the amortized cost of
the financial asset. If the amortized cost exceeds the fair value of collateral, then credit losses are
estimated only on the unsecured portion. The allowance for credit losses on the financial asset is limited
to the difference between the fair value of the collateral at the reporting date and the amortized cost basis
of the financial assets.
Under U.S. GAAP, prior to January 1, 2020, our Group applied incurred loss methodology for
recognizing credit losses. On January 1, 2020, our Group adopted FASB ASC Topic 326 and applies the
practical expedient based on collateral maintenance provisions in estimating an allowance for credit
losses for the loans and advances.
Under IFRS, impairment model of financial assets is an expected loss model. Our Group applies a
three-stage impairment model to calculate our impairment allowance and recognise our expected credit
losses from January 1, 2018 for loans and advances. Our Group considers the credit risk characteristics
of loans and advances when determining if there is significant increase in credit risk since the initial
recognition. For loans and advances with or without significant increase in credit risk, lifetime or
12-month expected credit losses are provided respectively. The expected credit loss is the result of
discounting the product of exposure at default, probabilities of default and loss given default, based on
our Group’s past history, existing market conditions as well as forward looking estimates.
INDEBTEDNESS
The following table sets forth a breakdown of our indebtedness for the periods indicated:
As of As of
As of December 31, June 30, October 31,
2019 2020 2021 2022 2022
(HK$ in thousands)
(unaudited)
Borrowingsь ь ь ь ь ь ь ь 1,467,586 5,482,818 6,357,405 4,353,919 2,860,000

Lease liabilities ь ь ь ь 172,466 222,231 260,579 227,745 205,283
Totalь ь ь ь ь ь ь ь ь ь ь ь 1,640,052 5,705,049 6,617,984 4,581,664 3,065,283
– 484 –
Borrowings
The following table sets forth a breakdown of our borrowings as our Group for the periods
indicated:
As of As of
As of December 31, June 30, October 31,
2019 2020 2021 2022 2022
(HK$ in thousands)
(unaudited)
Borrowings from:
Banks(1) ь ь ь ь ь ь ь ь ь ь 1,467,586 5,182,620 6,357,405 4,353,919 2,860,000
Third parties(2) ь ь ь ь ь – 300,198 – – –
Totalь ь ь ь ь ь ь ь ь ь ь ь 1,467,586 5,482,818 6,357,405 4,353,919 2,860,000
Notes:
(1) We have unused borrowing facilities of HK$3,326.6 million, HK$3,285.9 million, HK$14,695.1 million,
HK$17,955.7 million and HK$19,181.3 million (US$2,444.3 million) from banks as of December 31,
2019, 2020, 2021, June 30, 2022 and October 31, 2022, respectively, which are uncommitted. These
bank borrowings were pledged by margin clients’ shares as the primary source of credit risk mitigation
of the lenders, and bore floating interest rates based on various benchmarks including Hong Kong Prime
Rate, Hong Kong Interbank Offered Rate, and CNH Hong Kong Interbank Offered Rate.
(2) We had borrowings of HK$300.2 million from third parties as of December 31, 2020 which were one-off
in nature.
As of December 31, 2019, 2020, 2021, June 30, 2022 and October 31, 2022, the total
amounts of our outstanding short-term borrowings were HK$1,467.6 million, HK$5,482.8
million, HK$6,357.4 million, HK$4,353.9 million (US$554.8 million) and HK$2,860.0 million
(US$364.5 million), respectively. Such outstanding short-term borrowings bear weighted
average interest rates of 4.29% per annum, 1.82% per annum, 1.15% per annum, 1.75% per
annum and 3.82% per annum, respectively, which is an average that is adjusted to reflect the
contribution of such outstanding borrowings to the total borrowings. The general decreasing
trend of such weighted average interest rates is in line with that of HIBOR, which subsequently
experienced upward trend in second half of 2022.
As of October 31, 2022, we had total facilities of HK$22.0 billion (US$2.8 billion) from
bank (excluding overdraft facilities), of which HK$19.1 billion (US$2.4 billion) were
unutilized and unrestricted. Most of the bank borrowings were pledged by margin clients’
shares as the primary source of credit risk mitigation of the lenders, and bear floating interest
rates based on HIBOR.
We did not have any facility from a third party as of October 31, 2022.
– 485 –
Other than the above, we did not have any significant capital and other commitments,
long-term obligations, or guarantees as of October 31, 2022.
As of October 31, 2022, we had HK$50.0 million (US$6.4 million) overdraft facilities,
of which HK$50.0 million (US$6.4 million) were unutilized and unrestricted. As a measure to
manage our cash and liquidity position, the bank facilities allow us to maintain adequate
sources to fund our working capital requirements or other financing needs and provide the
flexibility for us to borrow additional funds on an as-needed basis.
Lease Liabilities
All of our leases are classified as operating leases and primarily consist of real estate
leases for corporate offices, data centers, and other facilities. As of December 31, 2019, 2020
and 2021 and June 30, 2022, the weighted-average remaining lease term on these leases was
approximately four years, four years, three years and three years, respectively, and the
weighted-average discount rate used to measure the lease liabilities was approximately 4.75%,
4.75%, 4.71% and 4.69%, respectively. As of December 31, 2019, 2020, 2021, June 30, 2022
and October 31, 2022, operating lease liabilities were HK$172.5 million, HK$222.2 million,
HK$260.6 million, HK$227.7 million (US$29.0 million) and HK$205.3 million (US$26.2
million). Our lease agreements do not contain any residual value guarantees, restrictions or
covenants.
Contingent Liabilities
As of December 31, 2019, 2020 and 2021, June 30, 2022 and October 31, 2022, we did
not have any material contingent liabilities.
Indebtedness Statement
Except as disclosed above, as of October 31, 2022, being the latest practicable date for
determining our indebtedness, we did not have any outstanding mortgages, charges,
debentures, other issued debt capital, bank overdrafts, borrowings, liabilities under acceptance
or other similar indebtedness, hire purchase commitments, guarantees or other material
contingent liabilities. Our Directors have confirmed that there is no material change in our
indebtedness since October 31, 2022 and up to the Latest Practicable Date.
CAPITAL EXPENDITURES
Our capital expenditures are primarily incurred for purchase of property, equipment and
intangible assets. Our capital expenditures were HK$118.3 million in 2019, HK$44.6 million
in 2020, HK$70.5 million in 2021 and HK$62.7 million (US$8.0 million) in the six months
ended June 30, 2022.
The capital expenditures in the six months ended June 30, 2022 were primarily due to the
purchase of computers and other office equipment.
– 486 –
The capital expenditures in 2021 were primarily due to the purchase of computers and
equipment.
The capital expenditures in 2020 were primarily due to the renovation of our new office
space.
The capital expenditures in 2019 were primarily due to the purchase of private cloud
equipment to enhance our infrastructure.
We intend to fund our future capital expenditures with our existing cash balance. We will
continue to make capital expenditures to meet the expected growth of our business.
CONTRACTUAL OBLIGATIONS
The following table sets forth our contractual obligations as of June 30, 2022:
Payment due by December 31,

2026 and
Total 2022 2023 2024 2025 thereafter
HK$ US$ HK$ HK$ HK$ HK$ HK$
(in thousands)
Operating lease
commitments(1) ь ь 244,738 31,188 54,101 100,453 42,159 33,622 14,403
Total ь ь ь ь ь ь ь ь ь ь 244,738 31,188 54,101 100,453 42,159 33,622 14,403
Note:
(1) Operating lease commitments consist of the commitments under the lease agreements for our office
premises. We lease our office facilities under non-cancellable operating leases with various expiration
dates through August 30, 2027.
Other than as shown above, we did not have any significant long-term obligations or
guarantees as of June 30, 2022.
Our commitments primarily related to capital contribution obligation for certain

investment funds. Our total commitments contracted but not yet reflected in the consolidated
financial statements amounted to nil, nil, HK$814.6 million (US$104.0 million) and HK$580.7
million (US$74.0 million) as of December 31, 2019, 2020 and 2021 and June 30, 2022,
respectively.
– 487 –
KEY FINANCIAL RATIOS
The following table sets forth certain of our key financial ratios as of the dates indicated,
or for the periods indicated:
For the Year ended/as For the Six Months

of December 31, ended/as of June 30
2019 2020 2021 2021 2022
Gross profit margin (1) ьь 73.4% 79.0% 83.1% 80.9% 87.1%

Net income margin (2) ььь 15.5% 40.0% 39.5% 44.9% 35.8%
Return on equity (3) ььььь N.A. (5) 24.4% 19.2% N.A. (5) 12.0% (6)
Return on total assets (4) ь N.A. (5) 2.9% 3.3% N.A. (5) 2.3% (6)
Notes:
(1) Equals gross profit divided by revenues for the period.
(2) Equals net profit divided by revenues for the period.
(3) Equals net profit divided by the average of beginning and ending total shareholders’ equity for the
period.
(4) Equals net profit divided by the average of beginning and ending total asset for the period.
(5) Our audited financial information for the year ended December 31, 2018 and our unaudited financial
information as of June 30, 2021 are not included in this document.
(6) Return on assets and return on equity for the six months ended June 30, 2022 were calculated by
dividing the net profit for the period with average total shareholders’ equity and average total assets
multiplied by 2 in order to arrive at proforma annualized ratios.
Gross profit margin
Our gross profit margin increased steadily from 73.4% for the year ended December 31,
2019 to 87.1% for the six months ended June 30, 2022, primarily due to higher operating
leverage as a result of our larger business scale as well as higher gross profit margins for
interest income in 2019, 2020 and 2021 and the six months ended June 30, 2022.
Net income margin
Our net income margin was 15.5%, 40.0%, 39.5%, 44.9% and 35.8% for the years ended
December 31, 2019, 2020, 2021 and for six months ended June 30, 2021 and 2022,
respectively. The overall increasing trend in our net income margin was primarily driven by
increase in gross profit margin for reasons set out above, as well as generally higher operating
leverage in operating expenses as a result of our larger business scale.
– 488 –
Return on equity
Our return on equity was 24.4%, 19.2% and 12.0% for the years ended December 31,
2020 and 2021 and the six months ended June 30, 2022, respectively. This was mainly due to
an increase in our average of beginning and ending total shareholders’ equity for the
corresponding periods from approximately HK$5.4 billion for the period from December 31,
2019 to December 31, 2020 to HK$14.6 billion for the period from December 31, 2020 to
December 31, 2021 and further to HK$20.3 billion for the period from December 31, 2021 to
June 30, 2022, derived from issuance of ordinary shares and accumulation of retained earnings
from our business operations. The decrease from 19.2% for the year ended December 31, 2021
to 12.0% for the six months ended June 30, 2022 was mainly due to the decrease in annualized
net profit, partially offset by the effect of share repurchase in the first half of 2022.
Return on total assets
Our return on total assets was 2.9%, 3.3% and 2.3% for the years ended December 31,
2020 and 2021 and the six months ended June 30, 2022, respectively. The increase from 2.9%
for the year ended December 31, 2020 to 3.3% for the year ended December 31, 2021 was
mainly due to continued increase in profits recorded and overall increasing trend in profit
margin, partially offset by the increase in our total assets at a slower rate from approximately
HK$71.3 billion as of December 31, 2020 to HK$101.5 billion as of December 31, 2021,
derived from continued increase in balance of cash held on behalf of clients and loans and
advances as a result of our continued business expansion. The decrease from 3.3% for the year
ended December 31, 2021 to 2.3% for the six months ended June 30, 2022 was mainly due to
the decrease in annualized net profit as well as the increase in our total assets from
approximately HK$101.5 billion as of December 31, 2021 to HK$109.8 billion (US$14.0
billion) as of June 30, 2022.
DISCLOSURE ABOUT FINANCIAL RISK
We are exposed to a variety of financial risks, including foreign exchange risk, credit risk,
interest rate risk and inflation. Our overall risk management program focuses on the
unpredictability of financial markets and seeks to minimize potential adverse effects on our
financial performance.
Foreign Exchange Risk
Most of our revenues are denominated in Hong Kong dollar and a significant portion of
our expenses are denominated in Renminbi. The value of your investment in the ADSs will be
affected by the exchange rate between U.S. dollar and Hong Kong dollar because the value of
our business is effectively denominated in Hong Kong dollars, while the ADSs are traded in
U.S. dollars.
– 489 –
Currency risk arises from the possibility that fluctuations in foreign exchange rates will
impact the financial instruments. Futu International Hong Kong is not exposed to significant
transactional foreign currency risk since almost all of its transactions, assets and liability are
denominated in Hong Kong dollars and U.S. dollars and Hong Kong dollars are pegged against
U.S. dollars. The impact of foreign currency fluctuations in our earnings is included in “Others,
net” in the consolidated statements of comprehensive income. At the same time, we are
exposed to translational foreign currency risk since some of our major subsidiaries have RMB
as their functional currency. Therefore, RMB depreciation against Hong Kong dollars could
have a material adverse impact on the foreign currency translation adjustment in the
consolidated statements of comprehensive income.
As of December 31, 2019, 2020 and 2021 and June 30, 2022, we had RMB-denominated
net liabilities of HK$94.3 million, net liabilities of HK$262.9 million, net assets of
HK$2,374.8 million and net assets of HK$2,378.5 million (US$303.1 million), respectively.
We estimate that a 10% depreciation of Renminbi against the U.S. dollar based on the foreign
exchange rate on December 31, 2019, 2020 and 2021 and June 30, 2022 would result in an
increase of US$1.2 million, an increase of US$3.4 million, a decrease of US$30.5 million and
a decrease of US$30.3 million respectively, in our pre-tax profit for the years ended December
31, 2019, 2020, 2021 and for the six months ended June 30, 2022.
Credit Risk
Cash held on behalf of clients are segregated and deposited in financial institutions as
required by the Securities and Futures Ordinance and the Uniform Net Capital Rule (Rule
15c3-1). These financial institutions are of sound credit ratings, therefore management believes
that there is no significant credit risk related to cash held on behalf of clients.
Our securities and derivative trading activities are transacted either on a cash or margin
loan basis. Our credit risk is limited in that substantially all of the contracts entered into are
settled directly at securities and derivative clearing organizations.
In margin transactions, we extend credit to the clients, subject to various regulatory and
internal margin requirements, collateralized by cash and securities in the client’s account. IPO
loans are exposed to credit risk from clients who fail to repay the loans upon IPO stock
allotment. We monitor our clients’ collateral level and have the right to dispose the newly
allotted stocks once the stocks start trading. Bridge loans to enterprise pledged by shares are
exposed to credit risk from counterparties who fails to repay the loans. We monitor the
collateral level of bridge loans in real time, and have the right to dispose of the pledged shares
once the collateral level falls below the minimal level required to get the loans repaid.
Liabilities to other brokers and dealers related to unsettled transactions are recorded at the
amount for which the securities were purchased, and are paid upon receipt of the securities
from other brokers or dealers.
– 490 –
In connection with our clearing activities, we are obligated to settle transactions with
brokers and other financial institutions even if our clients fail to meet their obligations to us.
Clients are required to complete their transactions by the settlement date, generally two
business days after the trade date. If clients do not fulfill their contractual obligations, we may
incur losses. We have established procedures to reduce this risk by generally requiring that
clients deposit sufficient cash and/or securities into their account prior to placing an order.
Our exposure to credit risk associated with trading and other activities is measured on an
individual counterparty basis, as well as by groups of counterparties that share similar
attributes. There was no revenue from clients which individually represented greater than 10%
of the total revenues for the years ended December 31, 2019, 2020, 2021 and for the six months
ended June 30, 2022, respectively. Concentrations of credit risk can be affected by changes in
political, industry, or economic factors. To reduce the potential for risk concentration, credit
limits are established and exposure is monitored in light of changing counterparty and market
conditions. As of December 31, 2019, 2020, 2021 and June 30, 2022, we did not have any
material concentrations of credit risk within or outside the ordinary course of business.
Interest rate risk
Fluctuations in market interest rates may negatively affect our financial condition and
results of operations. We are exposed to floating interest rate risk on cash deposit and floating
rate borrowings. We use net interest simulation modeling techniques to evaluate the effect that
changes in interest rates might have on pre-tax income. The model includes all interest-
sensitive assets and liabilities. The simulations involve assumptions that are inherently
uncertain and, as a result, cannot precisely predict the impact that changes in interest rates will
have on pre-tax income. Actual results may differ from simulated results due to differences in
timing and frequency of rate changes, changes in market conditions and changes in
management strategy that lead to changes in the mix of interest-sensitive assets and liabilities.
The simulations assume that the asset and liability structure of the consolidated balance
sheets would not be changed as a result of a simulated change in interest rates. The results of
the simulations based on our financial position as of June 30, 2022 indicate that a gradual 1%
(100 basis points) increase/decrease in interest rates over a 12-month period would have
increased/decreased our profit before tax by approximately HK$346.8 million (US$44.3
million), depending largely on the extent and timing of possible changes in floating rates.
Inflation
To date, inflation in China and Hong Kong has not materially affected our results of
operations. According to the National Bureau of Statistics of China, the year-over-year percent
changes in the consumer price index for December 2019, 2020, 2021 and June 2022 were
increases of 4.5%, 0.2%, 1.5% and 2.5% respectively, and according to the Census and
Statistics Department of Hong Kong, the year-over-year percent changes in the consumer price
index were increases of 2.9% for December 2019, -1.0% for December 2020, 2.4% for
December 2021 and 1.8% for June 2022. The global economic growth has, in the past, been
– 491 –
accompanied by periods of high inflation. In response, governments have implemented policies

from time to time to control inflation, such as restriction on the availability of credit by
imposing tighter bank lending policies or higher interest rates, and may take similar measures
in response to future inflationary pressures. Rampant inflation without such mitigation policies
would likely increase our funding costs, thereby significantly reducing our profitability.
Although we have not been materially affected by inflation in the past, we may be affected if
China or Hong Kong experiences higher rates of inflation in the future.
OFF-BALANCE SHEET ARRANGEMENTS
We have entered into various off-balance sheet arrangements in the ordinary course of
business, primarily to meet the needs of our clients. These arrangements include the margin
financing and securities borrowing and lending agreements. The margin loans extended to the
clients are collateralized by the cash or securities pledged in clients’ accounts at a required
margin level determined at our sole discretion. Securities borrowing and lending transactions
require us to deposit cash collateral with the lender and receive the cash collateral from the
borrower. The cash collateral is generally in excess of the market value of the securities
borrowed and lent. Increases in security prices may cause the fair value of the securities loaned
to exceed the amount of cash received as collateral. In the event the borrower of these
transactions does not return the loaned securities or provide additional cash collateral, we may
be exposed to the risk of acquiring the securities at prevailing market prices in order to satisfy
our obligations to return the securities. We monitor required margin and collateral level on a
daily basis in compliance with regulatory and internal guidelines and control our risk exposure
through risk management system. Under applicable agreements, clients are required to deposit
additional collateral or reduce holding positions, when necessary to avoid forced liquidation of
their positions. See Note 18 to the Accountant’s Report in Appendix IA to this document.
We have not entered into any derivative contracts that are indexed to our shares and
classified as shareholder’s equity or that are not reflected in our consolidated financial
statements. Furthermore, we do not have any retained or contingent interest in assets
transferred to an unconsolidated entity that serves as credit, liquidity or market risk support to
such entity. We do not have any variable interest in any unconsolidated entity that provides
liquidity, capital resources, market risk support or credit support to us or engages in leasing,
hedging or product development services with us.
HOLDING COMPANY STRUCTURE
We began our operations in December 2007 through Shenzhen Futu to provide internet
technology and software development services. We undertook the Reorganization to facilitate
our initial public offering in the United States. Shensi Beijing, our wholly owned subsidiary,
entered into a series of contractual agreements with Shenzhen Futu and its shareholders in
September 2018 enable us to (i) exercise effective control over our VIE; (ii) receive
substantially all of the economic benefits of our VIE; and (iii) have an exclusive option to
purchase all or part of the equity interests in and/or assets of our VIEs when and to the extent
permitted by PRC laws.
– 492 –
Futu Holdings Limited, our holding company was incorporated in April 2014. Being a
holding company, Futu Holdings Limited has no material operations of its own. We conduct our
operations primarily through our subsidiaries in Hong Kong , Singapore, the U.S. and
Australia, and our VIEs and its subsidiaries in China. As a result, Futu Holdings Limited’s
ability to pay dividends depends upon dividends paid by our subsidiaries in Hong Kong,
Singapore, the U.S. and Australia. If our existing Hong Kong, Singapore, the U.S. and Australia
subsidiaries or any newly formed ones incur debt on their own behalf in the future, the
instruments governing their debt may restrict their ability to pay dividends to us. In addition,
our wholly foreign-owned subsidiaries in China are permitted to pay dividends to us only out
of its retained earnings, if any, as determined in accordance with PRC accounting standards and
regulations. Under PRC law, each of our subsidiaries, our VIEs and its subsidiaries in China
is required to set aside at least 10% of its after-tax profits each year, if any, to fund certain
statutory reserve funds until such reserve funds reach 50% of their registered capital. In
addition, our wholly foreign-owned subsidiaries in China may allocate a portion of their
after-tax profits based on PRC accounting standards to enterprise expansion funds and staff
bonus and welfare funds at their discretion, and our VIEs may allocate a portion of its after-tax
profits based on PRC accounting standards to a surplus fund at their discretion. The statutory
reserve funds and the discretionary funds are not distributable as cash dividends. Remittance
of dividends by a wholly foreign-owned company out of China is subject to examination by the
banks designated by SAFE. Our PRC subsidiaries have not paid dividends as of the Latest
Practicable Date and may pay dividends until when generate accumulated profits and meet the
requirements for statutory reserve funds.
RELATED-PARTY TRANSACTIONS
We enter into transactions with our related parties from time to time. Related party
transactions are trade in nature and are set out in Note 30 to the Accountant’s Report set out
in Appendix IA to this document. Our Directors confirm that these transactions were conducted
in the ordinary and usual course of business and on an arm’s length basis.
– 493 –
UNAUDITED PRO FORMA FINANCIAL INFORMATION
The following unaudited pro forma adjusted net tangible assets attributable to
shareholders of our Company prepared in accordance with Rule 4.29 of the Listing Rules are
set out below for the purpose of illustrating the effect of the Listing on the unaudited
consolidated net tangible assets attributable to shareholders of our Company as at September
30, 2022 as if the Listing had taken place on that date.
The unaudited pro forma adjusted net tangible assets attributable to shareholders of our
Company have been prepared for illustrative purposes only and because of its hypothetical
nature, it may not give a true picture of the consolidated net tangible assets attributable to
shareholders of our Company as at September 30, 2022 or at any future dates following the
completion of the Listing. The unaudited pro forma adjusted net tangible assets attributable to
shareholders of our Company are based on the unaudited consolidated net tangible assets
attributable to the shareholders of our Company as at September 30, 2022, as shown in the
Unaudited Interim Condensed Consolidated Financial Information of the Group, the text of
which is set out in Appendix IB to this listing document, and adjusted as described below.
Unaudited Unaudited pro

consolidated net Unaudited pro forma adjusted
tangible assets forma adjusted net tangible assets
attributable to net tangible assets attributable to
shareholders of our Estimated attributable to shareholders of
Company as at listing shareholders of our Company
September 30, 2022(1) expenses(2) our Company per Share
HK$’000 HK$’000 HK$’000 HK$(3)
Based on
1,123,267,879
Shares(3) ь ь ь ь ь ь ь 20,135,122 (88,888) 20,046,234 17.85
Notes:
(1) The unaudited consolidated net tangible assets attributable to shareholders of our Company as at
September 30, 2022 has been extracted from the Unaudited Interim Condensed Consolidated Financial
Information of the Group as set out in Appendix IB to this listing document which is based on the
unaudited consolidated net assets attributable to shareholders of the Company as at September 30, 2022
of approximately HK$20,186.2 million with adjustment for intangible assets as at September 30, 2022
of HK$51.1 million.
(2) The estimated listing expenses in an aggregate amount of approximately HK$88.9 million (excluding
listing expenses of approximately HK$5.0 million which have been accounted for in the consolidated
statements of comprehensive income of the Group prior to September 30, 2022) mainly include
professional fees to the Joint Sponsors, legal advisers, the legal advisers to the Joint Sponsors and the
reporting accountant.
– 494 –
(3) The unaudited pro forma adjusted net tangible assets attributable to shareholders of our Company per
Share is arrived at after the adjustments referred to in the preceding paragraphs and on the basis that
1,123,267,879 Shares were in issue (for the purpose of this unaudited pro forma financial information
excluding 110,839,528 Shares which are regarded as treasury stock under the share repurchase program
of the Company) assuming that the Listing had been completed on September 30, 2022 but does not take
into account any Shares which may be issued upon the exercise of options granted under the Share
Incentive Plans or any Shares which may be issued or repurchased by our Company.
(4) No adjustment has been made to reflect any trading result or other transactions of our Group entered into
subsequent to September 30, 2022.
DIVIDEND AND DIVIDEND POLICY
Dividend
We did not declare or distribute any dividend to our Shareholders during the years ended
December 31, 2019, 2020, 2021, and for the six month ended June 30, 2022.
Dividend policy
Our board of Directors has discretion on whether to distribute dividends. In addition, our
shareholders may by ordinary resolution declare a dividend, but no dividend may exceed the
amount recommended by our board of Directors. In either case, all dividends are subject to
certain restrictions under Cayman Islands law, namely that our Company may only pay
dividends out of profits or share premium, and provided always that in no circumstances may
a dividend be paid if this would result in our Company being unable to pay its debts as they
fall due in the ordinary course of business. Even if we decide to pay dividends, the form,
frequency and amount will depend upon our future operations and earnings, capital
requirements and surplus, general financial condition, contractual restrictions and other factors
that our board of Directors may deem relevant.
We do not have any present plan to pay any cash dividends on our ordinary shares in the
foreseeable future. We currently intend to retain most, if not all, of our available funds and any
future earnings to operate and expand our business.
We are a holding company incorporated in the Cayman Islands. We may rely on dividends
from our subsidiaries in Hong Kong, Mainland China, Singapore, the United States and
Australia for our cash requirements, including any payment of dividends to our shareholders.
PRC regulations may restrict the ability of our PRC subsidiaries to pay dividends to us. See
Regulations on Foreign Exchange — Regulations on Dividend Distribution.”
– 495 –
If we pay any dividends on our ordinary shares, we will pay those dividends which are
payable in respect of the ordinary shares underlying the ADSs to the depositary, as the
registered holder of such ordinary shares, and the depositary then will pay such amounts to the
ADS holders in proportion to ordinary shares underlying the ADSs held by such ADS holders,
subject to the terms of the deposit agreement, including the fees and expenses payable
thereunder.
DISTRIBUTABLE RESERVES
As of June 30, 2022, we had retained profit of HK$5,366.0 million (US$683.8 million).
LISTING EXPENSES
Listing expenses mainly include (i) sponsor-related expenses of approximately HK$23.5

million, and (ii) non-sponsor related expenses of approximately HK$70.4 million, which
consist of, professional fees paid to the reporting accountant, legal advisers and other
professional parties for their services rendered in relation to the Listing of approximately
HK$56.4 million and other fees and expenses of approximately HK$14.0 million.
Approximately HK$2.9 million and HK$2.1 million of the listing expenses were recognized
and charged to our consolidated statement of comprehensive income during the year ended
December 31, 2021 and the six months ended June 30, 2022, respectively. After June 30, 2022,
we expect approximately HK$88.9 million of the listing expenses will be charged to the profit
or loss of our Company. The listing expenses above are the latest practicable estimate and are
for reference only. The actual amount may differ from this estimate.
NO MATERIAL ADVERSE CHANGE
Our Directors confirm that there has been no material adverse change in our financial or
trading position, indebtedness, mortgage, contingent liabilities, guarantees or prospects since
June 30, 2022, the end date of the periods reported in the Accountant’s Report set out in
Appendix IA, and there is no event since June 30, 2022 that would materially affect the
information shown in the Accountant’s Report set out in Appendix IA up to the date of this
document.
DISCLOSURE REQUIRED UNDER LISTING RULES
Our Directors confirm that, as of the Latest Practicable Date, there are no circumstances
that would give rise to a disclosure requirement under Rules 13.13 to 13.19 of the Listing
Rules.
– 496 –
RECENT DEVELOPMENT
The table below summarizes our results of operations for the periods indicated, which
were extracted from the unaudited interim condensed consolidated financial information as set
out in Appendix IB:

September 30,
2021 2022
HK$ HK$ US$
(in thousands)
Revenues
charge income ьььььььььььььььььь 3,056,091 2,959,050 376,959
Interest income ььььььььььььььььььь 1,900,608 2,076,484 264,527
Other income ьььььььььььььььььььь 555,812 297,774 37,934
Total revenues ььььььььььььььььььь 5,512,511 5,333,308 679,420
Costs
charge expensesььььььььььььььььь (484,462) (265,795) (33,860)
Interest expensesьььььььььььььььььь (321,286) (110,525) (14,080)
Processing and servicing costs ььььььь (183,463) (277,642) (35,369)
Total costs ьььььььььььььььььььььь (989,211) (653,962) (83,309)
Total gross profitььььььььььььььььь 4,523,300 4,679,346 596,111
Operating expenses
Research and development expenses ььь (534,692) (887,613) (113,075)
Selling and marketing expenses ьььььь (1,055,101) (742,692) (94,613)
General and administrative expenses ььь (311,147) (600,802) (76,537)
Total operating expenses ььььььььььь (1,900,940) (2,231,107) (284,225)
– 497 –

September 30,
2021 2022
HK$ HK$ US$
(in thousands)
Others, net ьььььььььььььььььььььь (9,691) (219,175) (27,921)

method investment ьььььььььььььь 2,612,669 2,229,064 283,965
Income tax expenses ььььььььььььььь (301,268) (247,572) (31,539)

Share of loss from equity method
investment ььььььььььььььььььььь – (13,324) (1,697)
Net incomeьььььььььььььььььььььь 2,311,401 1,968,168 250,729
Nine Months Ended September 30, 2022 Compared to Nine Months Ended September 30,
2021
Revenues
Our revenues decreased by 3.3% from HK$5,512.5 million in the nine months ended
September 30, 2021 to HK$5,333.3 million (US$679.4 million) in the nine months ended
September 30, 2022.
• Brokerage commission and handling charge income. Our brokerage commission and
handling charge income decreased by 3.2% from HK$3,056.1 million in the nine
months ended September 30, 2021 to HK$2,959.1 million (US$377.0 million) in the
nine months ended September 30, 2022. The decrease was primarily due to a decline
in trading volume from the high base during the same period in 2021 when market
peaked, which was partially offset by an increase in the blended commission rate as
applied based on trading volume from 6.2 basis points to 7.9 basis points.
• Interest income. Interest income increased by 9.3% from HK$1,900.6 million in the
nine months ended September 30, 2021 to HK$2,076.5 million (US$264.6 million)
in the nine months ended September 30, 2022. The increase was mainly driven by
higher interest income from bank deposits amid rate hikes despite lower margin
financing income and IPO financing interest income.
– 498 –
• Other income. Our other income decreased by 46.4% from HK$555.8 million in the
the nine months ended September 30, 2022. The decrease was primarily due to lower
IPO financing service charge income and underwriting fee income.
Costs
Our total costs decreased by 33.9% from HK$989.2 million in the nine months ended
September 30, 2021 to HK$654.0 million (US$83.3 million) in the nine months ended
September 30, 2022.
• Brokerage commission and handling charge expenses. Our brokerage commission

and handling charge expenses decreased by 45.1% from HK$484.5 million in the
the nine months ended September 30, 2022. Brokerage commission expenses
declined by a wider margin than brokerage commission income primarily due to cost
savings from our U.S. self-clearing business.
• Interest expenses. Our interest expenses decreased by 65.6% from HK$321.3 million
in the nine months ended September 30, 2021 to HK$110.5 million (US$14.1
million) in the nine months ended September 30, 2022. The decrease in interest
expenses was primarily due to (i) lower margin and IPO financing interest expenses
due to a decrease in our interest-bearing borrowings balances and (ii) lower interest
expenses associated with our securities borrowing and lending business due to
slower trading activities.
• Processing and servicing costs. Our processing and servicing costs increased by
51.3% from HK$183.5 million in the nine months ended September 30, 2021 to
HK$277.6 million (US$35.4 million) in the nine months ended September 30, 2022.
The increase was primarily due to higher cloud service fees to support international
market expansion.
As a result of the foregoing, our total gross profit increased by 3.4% from HK$4,523.3
million in the nine months ended September 30, 2021 to HK$4,679.3 million (US$596.1
million) in the nine months ended September 30, 2022. Our gross profit margin increased from
82.1% in the nine months ended September 30, 2021 to 87.7% in the nine months ended
September 30, 2022, primarily attributable to cost savings from our U.S. self-clearing business
and an upgraded service package with our U.S. clearing house and higher operating leverage
as a result of our larger business scale.
– 499 –
Operating expenses
Our total operating expenses increased by 17.4% from HK$1,900.9 million in the nine
months ended September 30, 2021 to HK$2,231.1 million (US$284.2 million) in the nine
months ended September 30, 2022. The increase was mainly driven by an increase in employee
compensation and benefits from HK$785.2 million to HK$ 1,497.8 million, which was
primarily due to (i) an increase in headcount for across various functions, and (ii) an increase
in the number of RSUs granted to our employees under the 2019 Share Incentive Plan in 2022.
• Research and development expenses. Our research and development expenses

increased by 66.0% from HK$534.7 million in the nine months ended September 30,
2021 to HK$887.6 million (US$113.1 million) in the nine months ended September
30, 2022. The increase was primarily due to the increase in research and
development headcount to build U.S. clearing capabilities and support new product
offerings in existing and new markets.
• Selling and marketing expenses. Selling and marketing expenses decreased by

29.6% from HK$1,055.1 million in the nine months ended September 30, 2021 to
HK$742.7 million (US$94.6 million) in the nine months ended September 30, 2022.
The decrease was primarily due to fewer net new paying client during the period,
leading to lower selling and marketing expense.
• General and administrative expenses. Our general and administrative expenses

increased by 93.1% from HK$311.1 million in the nine months ended September 30,
2021 to HK$600.8 million (US$76.5 million) in the nine months ended September
30, 2022. The increase was primarily due to an increase in headcount for general and
administrative personnel.
Income tax expenses
We recorded income tax expenses of HK$247.6 million (US$31.5 million) in the nine
months ended September 30, 2022, compared to HK$301.3 million in the nine months ended
September 30, 2021, primarily due to decrease in our income before income tax expenses.
As a result of the foregoing, we recorded net income of HK$1,968.2 million (US$250.7

million) and net income margin at 36.9% in the nine months ended September 30, 2022,
compared to HK$2,311.4 million and net income margin at 41.9% in the nine months ended
September 30, 2021.
– 500 –
CASH FLOW DATA
The following table sets forth a summary of our cash flows for the periods indicated,
which were extracted from the unaudited interim condensed consolidated financial information
as set out in Appendix IB:

September 30,
2021 2022 2022
HK$ HK$ US$
(in thousands)
Net cash generated from operating

activities ьььььььььььььььььььььь 5,204,783 2,170,283 276,476
Net cash generated from investing

activities ьььььььььььььььььььььь 242,581 769,963 98,087

financing activities ьььььььььььььь 13,335,444 (2,593,823) (330,432)
Effect of exchange rate changes on

cash, cash equivalents and restricted
cashьььььььььььььььььььььььььь 88,578 (108,099) (13,770)
Net increase in cash, cash equivalents

and restricted cash ььььььььььььь 18,871,386 238,324 30,361
cash at beginning of the period ььььь 43,521,758 59,291,512 7,553,251

cash at end of the periodььььььььь 62,393,144 59,529,836 7,583,612
Operating activities
Net cash generated from operating activities in the nine months ended September 30,
2022 was HK$2,170.3 million (US$276.5 million), as compared to net income of HK$1,968.2
million (US$250.7 million) in the same period. The difference was primarily due to net
decrease of HK$3.0 billion (US$0.4 billion) in account receivables from clients and brokers,
and net increase of HK$1.7 billion (US$0.2 billion) in accounts payables to clearing
organization, partially offset by net decrease of HK$4.5 billion (US$0.6 billion) in securities
sold under agreements to repurchase.
– 501 –
Investing activities
Net cash generated from investing activities in the nine months ended September 30, 2022
was HK$770.0 million (US$98.1 million), primarily due to the proceeds from disposal of
short-term investments of HK$4,560.1 million (US$580.9 million), partially offset by the
purchase of short-term investments of HK$3,377.2 million (US$430.2 million).
Financing activities
Net cash used in financing activities in the nine months ended September 30, 2022 was
HK$2,593.8 million (US$330.4 million), primarily attributable to repayment of short-term
borrowings of HK$55.3 billion (US$7.0 billion) and purchase of treasury stock of HK$2,796.5
million (US$356.3 million), partially offset by proceeds from short-term borrowings of
HK$55.5 billion (US$7.1 billion).
The unaudited interim consolidated financial statements are prepared in accordance with
U.S. GAAP, which differ in certain respects from IFRS and are extracted from the unaudited
interim condensed consolidated financial information as set out in Appendix IB. The main
reconciling items include issuance costs, operating leases, share-based compensation and
expected credit loss. The following tables set forth the effects of material differences prepared
under U.S. GAAP and IFRS:
Nine months ended

September 30,
2021 2022
(HK$ in thousands)
(unaudited) (unaudited)
Reconciliation of net income attributable to our

Company in the consolidated statements of
Net income attributable to our Company in the
consolidated statements of comprehensive
income as reported under U.S. GAAP ьььььььь 2,311,401 1,968,168
IFRS adjustments:
Issuance costs (1) ьььььььььььььььььььььььььь – (5,195)
Operating leases (2) ьььььььььььььььььььььььь (1,664) (196)
Share-based compensation (3) ььььььььььььььььь (49,247) (106,549)
Expected credit loss (4) ьььььььььььььььььььььь (1,313) 683
Net income attributable to our Company in the

consolidated statements of comprehensive
income as reported under IFRS ььььььььььь 2,259,177 1,856,911
– 502 –
As of As of
December 31, September 30,
2021 2022
(HK$ in thousands)
(unaudited)
Reconciliation of total shareholders’ equity in

the consolidated balance sheets
Total shareholders’ equity as reported under U.S.
GAAP ьььььььььььььььььььььььььььььььь 20,985,559 20,186,243
IFRS adjustments:
Issuance costs (1) ьььььььььььььььььььььььььь (14,336) (19,531)
Operating leases (2) ьььььььььььььььььььььььь (8,454) (7,869)
Expected credit loss (4) ьььььььььььььььььььььь (12,342) (11,624)
Total shareholders’ equity as reported under

IFRS ььььььььььььььььььььььььььььььььь 20,950,427 20,147,219
Notes:
(1) Under U.S. GAAP, specific incremental issuance costs directly attributable to a proposed or actual
offering of securities may be deferred and charged against the gross proceeds of the offering, shown in
equity as a deduction from the proceeds.
Under IFRS, such issuance costs apply a different criterion for capitalization when the listing involves
both existing shares and a concurrent issuance of new shares of our Group in the capital market, and
were allocated proportionately between the existing and new shares. As a result, our Group recorded
issuance costs associated with the listing of existing shares in the profit or loss.
(2) Under U.S. GAAP, for operating leases, the amortization of right-of-use assets and the interest expense
element of lease liabilities are recorded together as operating lease expenses, which results in a
straight-line recognition effect in the consolidated statements of operations and comprehensive loss.
Under IFRS, the amortization of the right-of-use asset is on a straight-line basis while the interest
expense related to the lease liabilities are measured using the effective interest rate method, which
generally yields a “front-loaded” expense with more expense recognized in earlier years of the lease.
(3) Our Group granted options and restricted share units with service condition only to employees and
modified the exercise price of 8,113,145 stock options granted under 2014 Share Incentive Plan to from
US$1.20 to US$0.60 on December 30, 2019.
straight-line method. While under IFRS, the graded vesting method must be applied, our Group should
treat each installment of the award as a separate grant, this means that each installment would be
separately measured and attributed to expense over the related vesting period, which would accelerate
the expense recognition.
– 503 –
(4) Our Group is mainly exposed to credit risk associated with loans and advances.
Under U.S. GAAP, prior to January 1, 2020, our Group applied incurred loss methodology for
recognizing credit losses. On January 1, 2020, our Group adopted FASB ASC Topic 326 and applies the
practical expedient based on collateral maintenance provisions in estimating an allowance for credit
losses for the loans and advances.
Under IFRS, impairment model of financial assets is an expected loss model. Our Group applies a
three-stage impairment model to calculate their impairment allowance and recognise their expected
credit losses from January 1, 2018 for loans and advances. Our Group considers the credit risk
characteristics of loans and advances when determining if there is significant increase in credit risk
since the initial recognition. For loans and advances with or without significant increase in credit risk,
lifetime or 12-month expected credit losses are provided respectively. The expected credit loss is the
result of discounting the product of exposure at default, probabilities of default and loss given default,
based on the past history, existing market conditions as well as forward looking estimates.
CAPITAL EXPENDITURES
Our capital expenditures primarily incurred for purchase of property, equipment and
intangible assets. Our capital expenditures were HK$75.5 million (US$9.6 million) for the nine
months ended September 30, 2022. We intend to fund our future capital expenditures with our
existing cash balance. We will continue to make capital expenditures to meet the expected
growth of our business.
– 504 –
FUTURE PLANS AND PROSPECTS
FUTURE PLANS AND PROSPECTS
See “Business — Growth Strategies” for a detailed discussion of our future plans and
prospects.
REASONS FOR THE LISTING
Our Directors consider that it would be desirable and beneficial for our Company to apply
for a dual-primary Listing on the Stock Exchange by way of Introduction. Please see
“Information about This Document and the Introduction” in this document for further details.
The Listing on the Stock Exchange further strengthens our brand. It also allows us to share the
benefits from the long-term stable development and diversified investor base of Hong Kong
capital markets. Our Directors consider that this is important for our Company’s future growth
and long-term competitiveness.
– 505 –
MARKET ARRANGEMENTS TO FACILITATE DEALINGS IN HONG KONG
REGISTRATION, DEALINGS AND SETTLEMENT
Please refer to the section headed “Information about this Document and the
Introduction” for further details about: (i) registration and stamp duty; (ii) Share certificates in
respect of Shares registered in our Hong Kong Share register; (iii) converting ADSs to Class
A Ordinary Shares registered in Hong Kong; (iv) eligibility of Class A Ordinary Shares for
admission into CCASS; (v) dealings in Class A Ordinary Shares on the Hong Kong Stock
Exchange; and (vi) settlement information.
ARRANGEMENTS TO FACILITATE TRANSFERS TO HONG KONG AND

CONVERSION OF ADSs TO SHARES
Arrangements have been made to facilitate: (a) for holders of our Class A Ordinary
Shares, the migration of Shares from our principal share register in the Cayman Islands to our
Hong Kong Share register; and (b) for holders of ADSs, services for converting ADSs to Class
A Ordinary Shares, to ensure that there would be sufficient liquidity immediately upon and
shortly after, commencement of dealings in Hong Kong. Please refer to the section headed
“Information about this Document and the Introduction — Depositary” for further details.
If you do not currently have a broker/CCASS account open through which you can trade
Hong Kong listed securities on the Hong Kong Stock Exchange, please contact a broker to open
an account.
For holders of our Class A Ordinary Shares who have already submitted the specimen
signature(s) to the Hong Kong Share Registrar and opened a broker account in Hong Kong or
otherwise have a CCASS Investor Participant stock account, such Shareholders shall make
necessary arrangements with the broker or arrange personally for deposit of their Class A
Ordinary Shares into the relevant CCASS Participant’s stock account or CCASS Investor
Participant stock account.
For ADS holders who wish to cancel their ADSs to withdraw the Class A Ordinary Shares
they represent, and who have already opened a broker account in Hong Kong or otherwise have
a CCASS Investor Participant stock account, such ADS holders shall instruct the broker to
arrange, or arrange personally, for surrender of the ADSs to the depositary for cancellation of
the ADSs and the transfer of the Class A Ordinary Shares withdrawn from the depositary’s
account with the custodian within the CCASS system to the investor’s Hong Kong stock
account.
We have arranged with our principal share registrar in the Cayman Islands and the Hong
Kong Share Registrar to arrange for the removal of a portion of our Class A Ordinary Shares
(which includes all of our Class A Ordinary Shares represented by ADSs) from our Cayman
Islands share register to our Hong Kong Share register prior to the Listing at no additional cost
to the Shareholders.
– 506 –
BRIDGING ARRANGEMENTS
Intended market arrangements during the Bridging Period
Designated Dealers
We have appointed HSBC Securities Brokers (Asia) Limited as the designated securities
dealer (designated dealer identity number: 7691) (the “Designated Dealer”) and Goldman
Sachs (Asia) Securities Limited (designated dealer identity number: 7692) as the alternate
designated securities dealer (the “Alternate Designated Dealer”), each being a regulated
entity approved by the Hong Kong Stock Exchange, to carry out below bridging and other
trading arrangements in good faith and on arm’s length terms with a view to contributing
towards liquidity to meet demand for our Shares in Hong Kong and to maintain an orderly
market. The Designated Dealer and the Alternate Designated Dealer have been appointed for
a period of one month, commencing from the Listing Date.
The designated dealer identity numbers have been set up solely for the purposes of
carrying out arbitrage trades, covered short-sales and other trades in Hong Kong as described
in this document, in order to ensure identification and enhance transparency of such trades in
the Hong Kong market. Any change in a designated dealer identity number will be disclosed
as soon as practicable by way of announcement on the websites of our Company and the Hong
Kong Stock Exchange as well as our Company’s filings with the SEC published on the SEC’s
website on or before the first day of the Bridging Period.
Bridging and liquidity arrangements
For a period of one month commencing on the Listing Date (the “Bridging Period”), the
Designated Dealer and/or its affiliates will seek to undertake, or, under the circumstance that
the trades cannot be undertaken by the Designated Dealer as a result of technical failures,
request the Alternate Designated Dealer to undertake, certain trading activities in
circumstances as described below. The Bridging Period will end on January 29, 2023 (being the
period of one month from and including the Listing Date). The Alternate Designated Dealer
will only undertake trading activities at the request of the Designated Dealer. The Designated
Dealer and the Alternate Designated Dealer envisage undertaking the below activities for the
purposes of facilitating the trading of our Class A Ordinary Shares in Hong Kong upon Listing
and maintaining an orderly market for our Class A Ordinary Shares on the Hong Kong Stock
Exchange:
(a) Stock borrowing arrangements. On December 22, 2022, The Hongkong and
Shanghai Banking Corporation Limited as borrower, entered into a stock borrowing
and lending agreement (the “Stock Borrowing Agreement”) with Lera Ultimate
Limited as lender (the “Lender”) to ensure that the Designated Dealer and/or the
Alternate Designated Dealer will have ready access to appropriate quantities of
Class A Ordinary Shares for settlement purposes upon Listing and throughout the
Bridging Period.
– 507 –
Pursuant to the Stock Borrowing Agreement, the Lender will make available to the
borrower stock lending facilities of approximately 50,000,000 Class A Ordinary
Shares (the “Borrowed Shares”), or approximately 5.72% of the Class A Ordinary
Shares in issue immediately upon Listing (without taking into account the Class A
Ordinary Shares to be issued pursuant to the Share Incentive Plans), on one or more
occasions, subject to applicable Laws. The Borrowed Shares will be registered on
our Hong Kong Share register and admitted into CCASS prior to and upon Listing.
Under the Stock Borrowing Agreement, the Borrowed Shares shall be returned to the
Lender no later than 20 business days after the expiry of the Bridging Period. To
close out their borrowed positions, the Designated Dealer and/or the Alternate
Designated Dealer may purchase ADSs from Nasdaq and convert such ADSs into
Class A Ordinary Shares, purchase Class A Ordinary Shares from the Hong Kong
Stock Exchange or use any unutilised Borrowed Shares registered on our Hong
Kong Share register to transfer to the Lender.
The Designated Dealer and/or the Alternate Designated Dealer may sell Class A
Ordinary Shares in the Hong Kong market, in order to provide liquidity to meet
demand for our Class A Ordinary Shares in the Hong Kong market during the
Bridging Period. In the unlikely event that the amount of Borrowed Shares falls
short of what is required, the Designated Dealer and the Alternate Designated Dealer
have the option to purchase additional ADSs from the U.S. market and convert these
to Class A Ordinary Shares in Hong Kong in order to facilitate the liquidity
arrangements if necessary.
(b) the Designated Dealer and the Alternate Designated Dealer will closely monitor the
trading of our Class A Ordinary Shares and continue to replenish their Share
inventory while carrying out the liquidity trades. Once the market opens and during
the Continuous Trading Period (as defined in the Rules and Regulations of the
Exchange and the Options Trading Rules (“Rules of the Exchange”)), the
Designated Dealer and/or the Alternate Designated Dealer may adopt various
quantitative and qualitative parameters, including continuous monitoring of the
bid/ask price, closing price, last recorded price, day high/low price, trading volume,
intra-day volatility, availability of sell orders in the market, macro backdrop, sector
and company related news, in order to form a view as to the fair market value and
a reasonable trading range for the stock. The Designated Dealer and/or the Alternate
Designated Dealer will monitor the market closely to ensure on a timely basis such
sell orders are placed in the market as necessary to provide and facilitate liquidity
while helping to maintain an orderly and fair market. On the other hand, should
supply exceed demand, they may opt to build up their inventory by purchasing stock
from sellers. If the Designated Dealer and/or the Alternate Designated Dealer choose
to purchase ADSs overnight on Nasdaq, the date of settlement for ADSs is on the
second business day following the trade date (T+2). The Designated Dealer and/or
the Alternate Designated Dealer can subsequently present ADRs evidencing such
ADSs at the office of the Depositary, and send an instruction to cancel such ADSs
to the Depositary. Upon payment of fees, expenses, taxes or charges and subject in
– 508 –
all cases to the terms of the deposit agreement, the Depositary will instruct its
custodian to deliver the Class A Ordinary Shares underlying the cancelled ADSs to
Designated Dealer’s and/or Alternate Designated Dealer’s CCASS participant stock
accounts provided in the instruction, in all cases subject to there being a sufficient
number of Class A Ordinary Shares on the Hong Kong Share register to facilitate a
withdrawal from the ADS program directly into the CCASS system. If there is no
delay, these Shares will be available the following morning Hong Kong time (T+2)
at the earliest for settlement of Shares sold on or after T+2 by the Designated Dealer
and/or the Alternate Designated Dealer on the Hong Kong Stock Exchange. While
such transfer of Class A Ordinary Shares take place, the Designated Dealer and/or
the Alternate Designated Dealer will utilize Class A Ordinary Shares borrowed
under the Stock Borrowing Agreement for settlement of the sales made in Hong
Kong. Alternatively, the Designated Dealer and/or Alternate Designated Dealer may
purchase Class A Ordinary Shares from the Hong Kong market to replenish their
Share inventory.
(c) The Designated Dealer and/or Alternate Designated Dealer will enter into such
bridging and liquidity arrangements (including the arbitrage activities) with a view
to contributing towards the liquidity of our Class A Ordinary Shares in Hong Kong,
and they intend for such bridging arrangements to constitute proprietary transactions
for them and/or their affiliates.
In light of the above bridging and liquidity arrangements, our Company and the
Joint Sponsors are of the view that there are adequate and effective precautionary
measures in place to facilitate the maintenance of an orderly, informed and fair
market in the securities of our Company upon and following its Listing in Hong
Kong. Other than the Designated Dealer and the Alternate Designated Dealer,
trading activities may be carried out by market participants who have access to our
Class A Ordinary Shares. Also, other existing Shareholders who have converted their
shareholdings into our Class A Ordinary Shares in Hong Kong upon the
commencement of trading can also carry out trades in our Class A Ordinary Shares
to facilitate the liquidity of the trading of our Class A Ordinary Shares on the Hong
Kong Stock Exchange. Such activities will depend on the number of market
participants (other than the Designated Dealer and the Alternate Designated Dealer)
who elect to enter into such bridging and liquidity arrangements.
The bridging and liquidity arrangements being implemented in connection with the
Listing are not equivalent to the price stabilization activities which may be
undertaken in connection with an initial public offering.
– 509 –
It should be noted that each of the Designated Dealer and the Alternate Designated
Dealer and any persons acting for it may, in connection with the proposed liquidity
activities, maintain a long position in the Class A Ordinary Shares. There is no
certainty regarding the extent, time or the period for which each of the Designated
Dealer and the Alternate Designated Dealer and any persons acting for it may
maintain such a long position in the Class A Ordinary Shares. The liquidation of any
such long position by the Designated Dealer and the Alternate Designated Dealer or
any persons acting for it may have an adverse impact on the market price of the
Class A Ordinary Shares.
There are no restrictions on existing Shareholders to dispose of their Shares under

Hong Kong laws. Under the Hong Kong Listing Rules, apart from the restrictions
under Rules 9.09(b) (in which a waiver has been sought and obtained from the Hong
Kong Stock Exchange), there are no other restrictions on existing Shareholders in
relation to the disposal of Shares. For further details in respect of the waiver from
strict compliance with Rule 9.09(b) of the Hong Kong Listing Rules, please refer to
the section headed “Waivers — Dealing in Shares prior to Listing” in this document.
Exemption in relation to short selling
Certain trades envisaged to be carried out by the Designated Dealer and the Alternate
Designated Dealer during the Bridging Period may constitute covered short-selling (or be
deemed to constitute short-selling) under Hong Kong Laws. The Rules of the Exchange
prohibit short-selling other than short selling of Designated Securities (as defined in the Rules
of the Exchange) during the Continuous Trading Period (as defined in the Rules of the
Exchange).
The Designated Dealer and the Alternate Designated Dealer, have applied to the Hong
Kong Stock Exchange for, and the Hong Kong Stock Exchange has granted, an exemption: (i)
in order to permit the Designated Dealer and the Alternate Designated Dealer to conduct the
proposed activities described above which may constitute (or may be deemed to constitute)
short-selling of securities during the pre-opening session (as defined in the Rules of the
Exchange as being from 9:00 a.m. to 9:30 a.m. on the commencement of the morning trading
session, Hong Kong time), the Continuous Trading Period in circumstances where the Shares
are not Designated Securities, and closing auction session (as defined in the Rules of Exchange
as being from 4:00 p.m. to 4:10 p.m. on closing of afternoon session or, when there is no
afternoon session on the eves of Christmas, New Year and Lunar New Year, from 12:00 noon
to 12:10 p.m., Hong Kong time); and (ii) from the regulation that a short sale shall not be made
on the Hong Kong Stock Exchange below the POS reference price, the best current ask price
or the CAS reference price except where the Designated Security is a Market Making Security
(as defined in the Rules of the Exchange) approved by the SFC to be excluded from the
application of the regulation.
– 510 –
No person, other than the Designated Dealer and the Alternate Designated Dealer
(including their respective affiliates authorised to carry out trading activities), is permitted to
enter into short sales of our Class A Ordinary Shares on the Hong Kong Stock Exchange during
the Bridging Period or thereafter unless the Shares are designated for short-selling by the Hong
Kong Stock Exchange. Upon the expiry of the Bridging Period, the Designated Dealer and the
Alternate Designated Dealer will not be able to engage in further bridging and liquidity
activities described above in its capacity as the Designated Dealer or Alternate Designated
Dealer (as the case may be) in respect of our Class A Ordinary Shares on the Hong Kong Stock
Exchange.
Spread of shareholdings
It is expected that the following measures and factors will assist in creating and/or
improving the spread of holdings of our Class A Ordinary Shares available for trading on the
Hong Kong Stock Exchange following the Listing.
ADS holders may at their discretion cancel their ADRs and withdraw their Class A
Ordinary Shares from the ADS program as described in the section headed “Information about
this Document and the Introduction” in this document. For further details, please refer to the
section headed “Information about this Document and the Introduction”. To the extent that
existing ADS holders elect to cancel their ADRs and to receive Class A Ordinary Shares
tradable on the Hong Kong Stock Exchange shortly after Listing, such converted Class A
Ordinary Shares will help contribute to the general liquidity of our Class A Ordinary Shares in
the Hong Kong market.
Our Directors consider that, having regard to the arrangements described in “— Intended
market arrangements during the Bridging Period” and “— Investor education” in this section,
all reasonable efforts have been made to facilitate the migration of our Shares to the Hong
Kong Share register which shall provide sufficient basis for an open market at the time of the
Listing.
Benefits of bridging and liquidity arrangements
We believe that the above market arrangements will benefit the Listing in the following
ways:
(a) the above stock borrowing will ensure that the Designated Dealer and the Alternate
Designated Dealer have sufficient Class A Ordinary Shares registered on our Hong
Kong Share register and admitted into CCASS to meet the demands of public
investors in Hong Kong from the commencement of Listing and for a reasonable
period of time, being the Bridging Period, to maintain liquidity in the trading of our
Class A Ordinary Shares on the Hong Kong Stock Exchange;
– 511 –
(b) additionally, trades carried out by the Designated Dealer and the Alternate
Designated Dealer during the Bridging Period would be according to guidelines for
the additional purpose of maintaining an orderly market in which our Class A
Ordinary Shares are traded in Hong Kong;
(c) the bridging arrangements are perceived to be a mechanism which is fair to all
market participants who have access to our Shares, as it is open to all of our
Shareholders and other market participants who have such access to carry out trades
similar to those to be carried out by the Designated Dealer and the Alternate
Designated Dealer to facilitate the liquidity in the trading of our Class A Ordinary
Shares in the Hong Kong market; and
(d) by seeking to minimize the risk of a disorderly market developing from significant
demand for Class A Ordinary Shares not fulfilled in Hong Kong upon and during the
initial period after Listing.
INVESTOR EDUCATION
Arrangements involving our Company and the Joint Sponsors
Prior to the Listing, our Company and the Joint Sponsors will cooperate to inform the
investor community of general information about our Company, as well as developments
and/or changes to the market arrangements disclosed in this document.
After Listing, our Company and the Joint Sponsors may continue to take measures to
educate the public. The following measures may be taken to enhance transparency of our
Company and the market arrangements, as appropriate:
(a) media briefings and press interviews to inform investors of the arrangements;
(b) analyst briefings to local brokerages/research houses that cover Hong Kong-listed
companies;
(c) investor relations activities, such as a non-deal road show, to maintain the interest
of investors in our Class A Ordinary Shares and our business;
(d) details of the available pool of Class A Ordinary shares (with the aggregate number
of Class A Ordinary Shares which have been registered on the Hong Kong Share
register and the inventory held by the Designated Dealer, and the designated dealer
identity number(s) for carrying out liquidity activities) at the time of the Listing to
meet the demand in the Hong Kong market will be disclosed by way of an
announcement on the websites of our Company and the Hong Kong Stock Exchange
as well as our Company’s filings with the SEC published on the SEC’s website not
later than one business day before the commencement of trading of our Class A
Ordinary Shares on the Hong Kong Stock Exchange;
– 512 –
(e) information, including the previous day closing price of our Company, trading
volume and other relevant historical trading data will be disclosed by way of a daily
announcement on the websites of our Company and the Hong Kong Stock Exchange
during a period of three business days prior to the commencement of dealings in our
Class A Ordinary Shares on the Hong Kong Stock Exchange;
(f) information on developments and updates of the liquidity arrangements (for

example, updates on the accumulated average daily trading volume of our Class A
Ordinary Shares on the Hong Kong Stock Exchange at interim periods) will be
disclosed by way of announcement on the websites of our Company and the Hong
Kong Stock Exchange on a weekly basis during the Bridging Period; and
(g) electronic copies of this document will be available for public download from the
websites of our Company and the Hong Kong Stock Exchange.
Historical trading information in respect of the ADSs on Nasdaq
Historical ADSs prices may not be indicative of the prices at which the ADSs will be
traded following completion of the Introduction. See “Risk Factors — Risks Related to our
Class A Ordinary Shares and ADSs” for further details. The following table summarises the
reported highs, lows, month ends and monthly averages of the closing trading prices of the
ADSs from March 8, 2019 to the Latest Practicable Date:
Monthly
High Low Month End average
US$ US$ US$ US$
2019
March ьььььььььььььь 18.57 15.32 18.52 17.31
April ььььььььььььььь 18.62 13.76 13.95 16.03
May ььььььььььььььь 14.24 10.98 10.98 12.46
June ььььььььььььььь 10.98 9.55 10.57 10.06
Julyьььььььььььььььь 11.40 10.54 11.33 11.09
August ььььььььььььь 11.32 9.90 10.80 10.60
September ььььььььььь 12.42 10.63 10.97 11.58
October ььььььььььььь 10.87 10.40 10.77 10.69
November ььььььььььь 11.56 10.45 10.45 10.96
December ььььььььььь 10.45 9.92 10.32 10.11
– 513 –
Monthly
High Low Month End average
US$ US$ US$ US$
2020
January ььььььььььььь 12.18 10.17 11.11 10.95
February ьььььььььььь 13.41 10.91 11.57 12.12
2021
2022
December to the Latest
Practicable Date ьььь 70.33 60.95 67.09 66.50
– 514 –
The following table set forth the average daily trading volume and turnover of each month
of the ADSs from the commencement of trading of the ADSs on Nasdaq on March 8, 2019 to
the Latest Practicable Date:
Average
Average daily trading daily
volume * turnover *
(% of total
(ADSs in underlying (US$ in
millions) Shares) millions)
2019
March ьььььььььььььььььььььььььь 1.5 1.3% 25.3
April ььььььььььььььььььььььььььь 0.6 0.5% 9.3
May ььььььььььььььььььььььььььь 0.5 0.5% 6.2
June ььььььььььььььььььььььььььь 0.3 0.3% 3.4
Julyьььььььььььььььььььььььььььь 0.1 0.1% 1.5
August ььььььььььььььььььььььььь 0.1 0.1% 1.5
September ььььььььььььььььььььььь 0.1 0.1% 1.4
October ььььььььььььььььььььььььь 0.1 0.0% 0.6
November ььььььььььььььььььььььь 0.1 0.1% 0.7
December ььььььььььььььььььььььь 0.1 0.1% 0.8
2020
January ььььььььььььььььььььььььь 0.2 0.2% 2.3
February ьььььььььььььььььььььььь 0.2 0.2% 3.0
– 515 –
Average
Average daily trading daily
volume * turnover *
(% of total
(ADSs in underlying (US$ in
millions) Shares) millions)
2021
February ьььььььььььььььььььььььь 13.9 10.3% 2,186.5
March ьььььььььььььььььььььььььь 12.9 9.5% 1,782.9
April ььььььььььььььььььььььььььь 7.4 5.0% 1,083.0
2022
February ьььььььььььььььььььььььь 3.2 2.1% 136.5
December to the Latest Practicable
Date ььььььььььььььььььььььььь 2.8 2.0% 187.3
* Source: FactSet
– 516 –
Inventory of Shares to meet Hong Kong demand
Taking into account the average daily trading volume of the ADSs on Nasdaq in the 46
months prior to the Latest Practicable Date, the average daily trading volume, within one (1)
month, three (3) months and six (6) months immediately after listings, of certain dual-listed
companies recently listed in Hong Kong with market capitalization and turnover similar to that
of our Company and the investor education measures as stated above, the Joint Sponsors
believe that the above arrangements should provide a reasonable basis to facilitate the
development of an open and orderly market in Hong Kong for the Shares.
DISCLOSURE AND OTHER SOURCES OF INFORMATION
Disclosure of market arrangements and investor education
As disclosed in “— Investor education” above, we have, and will continue to, take various
measures to keep our Shareholders, investors and the market informed about our market
arrangements, including dealing activities under the bridging and liquidity arrangements, and
investor education prior to and after Listing. This includes, in addition to those disclosed in
“— Investor education” above, the following measures:
(a) publishing an announcement on the websites of the Company and the Hong Kong
Stock Exchange as soon as practicable and in any event before 9:00 a.m., Hong
Kong time, on the business day immediately before the Listing Date disclosing the
number of Class A Ordinary Shares to be removed from our principal share register
in the Cayman Islands and registered on our Hong Kong Share register;
(b) the interests of, and changes in interests from the dealings of, the Designated Dealer
and the Alternate Designated Dealer in our Class A Ordinary Shares will be
disclosed on the website of the Hong Kong Stock Exchange in accordance with Part
XV of the SFO and other applicable Laws; and
(c) additional information about our Company can be found in our Company’s filings
with the SEC published on the SEC’s website.
Sources of information
Source Designated website
Company ir.futuholdings.com
Hong Kong Stock Exchange www.hkexnews.hk
U.S. Securities and Exchange Commission www.sec.gov
– 517 –
APPENDIX IA ACCOUNTANT’S REPORT
The following is the text of a report set out on pages IA-1 to IA-3, received from the
Company’s reporting accountant, PricewaterhouseCoopers, Certified Public Accountants,
Hong Kong, for the purpose of incorporation in this listing document. It is prepared and
addressed to the directors of the Company and to the Joint Sponsors pursuant to the
requirements of HKSIR 200, Accountants’ Reports on Historical Financial Information in
Investment Circulars issued by the Hong Kong Institute of Certified Public Accountants.
ACCOUNTANT’S REPORT ON HISTORICAL FINANCIAL INFORMATION TO THE

DIRECTORS OF FUTU HOLDINGS LIMITED AND GOLDMAN SACHS (ASIA) L.L.C.
AND UBS SECURITIES HONG KONG LIMITED
Introduction
We report on the historical financial information of Futu Holdings Limited (the

“Company”) and its subsidiaries (together, the “Group”) set out on pages IA-4 to IA-75, which
comprises the consolidated balance sheets as at December 31, 2019, 2020 and 2021 and June
30, 2022, the company balance sheets as at December 31, 2019, 2020, and 2021 and June 30,
2022, and the consolidated statements of comprehensive income, the consolidated statements
of changes in shareholders’ equity and the consolidated statements of cash flows for each of
the years ended December 31, 2019, 2020 and 2021 and the six months ended June 30, 2022
(the “Track Record Period”) and a summary of significant accounting policies and other
explanatory information (together, the “Historical Financial Information”). The Historical
Financial Information set out on pages IA-4 to IA-75 forms an integral part of this report,
which has been prepared for inclusion in the listing document of the Company dated
December 22, 2022 (the “Listing Document”) in connection with the listing of shares of the
Company on the Main Board of The Stock Exchange of Hong Kong Limited.
Directors’ responsibility for the Historical Financial Information
The directors of the Company are responsible for the preparation of Historical Financial
Information that gives a true and fair view in accordance with the basis of presentation set out
in Note II.2 to the Historical Financial Information, and for such internal control as the
directors determine is necessary to enable the preparation of Historical Financial Information
that is free from material misstatement, whether due to fraud or error.
Reporting accountant’s responsibility
Our responsibility is to express an opinion on the Historical Financial Information and to

report our opinion to you. We conducted our work in accordance with Hong Kong Standard on
Investment Circular Reporting Engagements 200, Accountants’ Reports on Historical
Financial Information in Investment Circulars issued by the Hong Kong Institute of Certified
Public Accountants (“HKICPA”). This standard requires that we comply with ethical standards
and plan and perform our work to obtain reasonable assurance about whether the Historical
Financial Information is free from material misstatement.
– IA-1 –
Our work involved performing procedures to obtain evidence about the amounts and
disclosures in the Historical Financial Information. The procedures selected depend on the
reporting accountant’s judgement, including the assessment of risks of material misstatement
of the Historical Financial Information, whether due to fraud or error. In making those risk
assessments, the reporting accountant considers internal control relevant to the entity’s
preparation of Historical Financial Information that gives a true and fair view in accordance
with the basis of presentation set out in Note II.2 to the Historical Financial Information in
order to design procedures that are appropriate in the circumstances, but not for the purpose
of expressing an opinion on the effectiveness of the entity’s internal control. Our work also
included evaluating the appropriateness of accounting policies used and the reasonableness of
accounting estimates made by the directors, as well as evaluating the overall presentation of
the Historical Financial Information.
We believe that the evidence we have obtained is sufficient and appropriate to provide a
basis for our opinion.
Opinion
In our opinion, the Historical Financial Information gives, for the purposes of the
accountant’s report, a true and fair view of the financial position of the Company as at
December 31, 2019, 2020, and 2021 and June 30, 2022 and the consolidated financial position
of the Group as at December 31, 2019, 2020 and 2021 and June 30, 2022 and of its consolidated
financial performance and its consolidated cash flows for the Track Record Period in
accordance with the basis of presentation set out in Note II.2 to the Historical Financial
Information.
Review of stub period comparative financial information
We have reviewed the stub period comparative financial information of the Group which
comprises the consolidated statement of comprehensive income, the consolidated statement of
changes in shareholders’ equity and the consolidated statement of cash flows for the six months
ended June 30, 2021 and other explanatory information (the “Stub Period Comparative
Financial Information”). The directors of the Company are responsible for the presentation and
preparation of the Stub Period Comparative Financial Information in accordance with the basis
of presentation set out in Note II.2 to the Historical Financial Information. Our responsibility
is to express a conclusion on the Stub Period Comparative Financial Information based on our
review. We conducted our review in accordance with International Standard on Review
Engagements 2410, Review of Interim Financial Information Performed by the Independent
Auditor of the Entity issued by the International Auditing and Assurance Standards Board
(“IAASB”). A review consists of making inquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other review procedures. A
review is substantially less in scope than an audit conducted in accordance with International
Standards on Auditing and consequently does not enable us to obtain assurance that we would
become aware of all significant matters that might be identified in an audit. Accordingly, we
do not express an audit opinion. Based on our review, nothing has come to our attention that
causes us to believe that the Stub Period Comparative Financial Information, for the purposes
of the accountant’s report, is not prepared, in all material respects, in accordance with the basis
of presentation set out in Note II.2 to the Historical Financial Information.
– IA-2 –
Report on matters under the Rules Governing the Listing of Securities on The Stock
Exchange of Hong Kong Limited (the “Listing Rules”)
Adjustments
In preparing the Historical Financial Information, no adjustments to the Historical

Financial Statements as defined on page IA-4 have been made.
PricewaterhouseCoopers
Hong Kong
December 22, 2022
– IA-3 –
I. HISTORICAL FINANCIAL INFORMATION OF THE GROUP
Preparation Of Historical Financial Information
Set out below is the Historical Financial Information which forms an integral part of this
accountant’s report.
The Historical Financial Information in this report was prepared by the directors of the
Company based on the previously issued consolidated financial statements of the Group for the
years ended December 31, 2019, 2020 and 2021 and the unaudited condensed financial
information of the Group for the six months ended June 30, 2022 (“Historical Financial
Statements”), after making additional disclosures for the purpose of this report. The previously
issued consolidated financial statements were prepared in accordance with accounting
principles generally accepted in the United States of America (“U.S. GAAP”). The previously
issued consolidated financial statements of the Group for the years ended December 31, 2019,
2020 and 2021 were audited by PricewaterhouseCoopers Zhong Tian LLP in accordance with
the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”)
and were published on the website of the Securities and Exchange Commission of the United
States pursuant to the regulatory requirement as set out in Rule 101(a) of Regulation S-T.
The Historical Financial Information is presented in HK dollars and all values are
rounded to the nearest thousand (HK$’000) except when otherwise indicated.
– IA-4 –
CONSOLIDATED BALANCE SHEETS

(In thousands, except for share and per share data)
As of
Note 2019 2020 2021 2022
HK$ HK$ HK$ HK$
ASSETS
Cash and cash equivalents ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 362,574 1,034,668 4,555,096 6,300,400
Cash held on behalf of clients ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 14,540,863 42,487,090 54,734,351 63,262,436
Term deposit ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь – 300,000 – 5,750
Restricted cash ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь – – 2,065 1,971
Short-term investments ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 4 93,773 – 1,169,741 17,501
Securities purchased under agreements to resell ь ь ь ь ь – – 106,203 –
Loans and advances (net of allowance of nil, HK$9,075
thousand, HK$12,258 thousand and HK$20,142
thousand as of December 31, 2019, 2020 and 2021
and June 30, 2022, respectively) ь ь ь ь ь ь ь ь ь ь ь ь 6 4,188,689 18,825,366 29,587,306 28,829,926
Receivables:
Clients ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 7 247,017 735,145 469,577 1,438,510
Brokers ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 7 1,226,348 5,780,461 7,893,927 6,125,217
Clearing organizations ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 7 304,080 1,243,928 1,961,121 1,915,872
Fund management companies and fund distributorsь ь 7 – 297,622 72,340 120,537
Interest ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 7 16,892 19,876 50,829 89,458
Prepaid assetsь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 12,470 11,422 18,306 19,711
Other current assets ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 8 79,663 106,887 81,594 108,740
Total current assetsь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 21,072,369 70,842,465 100,702,456 108,236,029
Operating lease right-of-use assetsь ь ь ь ь ь ь ь ь ь ь ь ь 5 161,617 208,863 243,859 212,529

Long-term investments ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 9 6,166 – 23,394 249,588
Other non-current assets ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 8 159,772 286,439 568,805 1,060,134
Total non-current assets ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 327,555 495,302 836,058 1,522,251
Total assetsь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 21,399,924 71,337,767 101,538,514 109,758,280
LIABILITIES
Amounts due to related parties ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 30(b) 33,628 87,169 87,459 64,439
Payables:
Clients ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 11 15,438,879 46,062,842 59,127,439 67,951,394
Brokers ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 11 1,484,243 4,533,581 7,599,233 14,365,158
Clearing organizations ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 11 – 324,266 393,782 1,359,746
Fund management companies and fund distributorsь ь 11 26,381 127,442 56,690 49,545
Interest ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 11 519 5,493 15,359 10,334
Borrowings ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 10 1,467,586 5,482,818 6,357,405 4,353,919
Securities sold under agreements to repurchase ь ь ь ь ь 1,590 5,453,037 4,467,861 –
Operating lease liabilities – current ь ь ь ь ь ь ь ь ь ь ь ь 5 49,095 66,333 96,860 104,121
Accrued expenses and other current liabilities ь ь ь ь ь ь 12 214,311 717,183 2,176,213 1,807,086
Total current liabilities ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 18,716,232 62,860,164 80,378,301 90,065,742
Operating lease liabilities – non-current ь ь ь ь ь ь ь ь ь 5 123,371 155,898 163,719 123,624

Other non-current liabilities ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 12 11,768 14,015 10,935 16,094
Total non-current liabilities ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 135,139 169,913 174,654 139,718
Total liabilities ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 18,851,371 63,030,077 80,552,955 90,205,460
Commitments and Contingencies (Note 29)
– IA-5 –
As of
Note 2019 2020 2021 2022
HK$ HK$ HK$ HK$
SHAREHOLDERS’ EQUITY
Class A ordinary shares (US$0.00001 par value;
48,700,000,000, 48,700,000,000, 48,700,000,000 and
48,700,000,000 shares authorized as of December 31,
2019, 2020 and 2021 and June 30, 2022,
respectively; 459,090,941, 590,139,760, 737,944,914
and 739,142,450 shares issued and outstanding as of
December 31, 2019, 2020 and 2021 and June 30,
2022, respectively) ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 13 36 47 58 58
Class B ordinary shares (US$0.00001 par value;
800,000,000, 800,000,000, 800,000,000 and
800,000,000 shares authorized as of December 31,
2019, 2020 and 2021 and June 30, 2022,
respectively; 544,552,051, 494,552,051, 494,552,051,
Additional paid-in capital ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 2,536,182 6,960,369 17,935,752 18,039,055
Treasury stock (nil, nil, 29,462,760 and 109,041,760
shares as of December 31, 2019, 2020 and 2021 and
June 30, 2022, respectively) ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 13 – – (1,178,755) (3,909,782)
Accumulated other comprehensive (loss)/income ь ь ь ь (4,446) 4,974 75,994 57,454
Retained earnings ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 16,739 1,342,262 4,152,472 5,365,997
Total shareholders’ equity ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 2,548,553 8,307,690 20,985,559 19,552,820
Total liabilities and shareholders’ equity ь ь ь ь ь ь ь ь 21,399,924 71,337,767 101,538,514 109,758,280
– IA-6 –
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Six months ended
Year ended December 31, June 30,
Note 2019 2020 2021 2021 2022
HK$ HK$ HK$ HK$ HK$
(unaudited)
Revenues
Brokerage commission and handling charge
income ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 19 511,365 1,990,138 3,913,027 2,122,679 2,001,246
Interest income ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 20 464,903 965,627 2,518,198 1,268,940 1,195,661
Other income ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 21 85,287 355,057 684,095 389,842 190,821
Total revenues ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 1,061,555 3,310,822 7,115,320 3,781,461 3,387,728
Costs
Brokerage commission and handling charge
expensesь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 22, 25 (100,550) (361,486) (572,159) (359,002) (183,221)
Interest expensesь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 23 (89,238) (185,090) (376,902) (246,967) (65,827)
Processing and servicing costs ь ь ь ь ь ь ь ь ь ь 24, 25 (91,916) (149,378) (257,003) (116,024) (186,799)
Total costsь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь (281,704) (695,954) (1,206,064) (721,993) (435,847)
Total gross profit ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 779,851 2,614,868 5,909,256 3,059,468 2,951,881
Operating expenses
Research and development expenses ь ь ь ь ь ь ь 25 (262,345) (513,283) (805,325) (310,787) (574,174)
Selling and marketing expenses ь ь ь ь ь ь ь ь ь 25 (164,701) (385,320) (1,392,070) (652,036) (507,235)
General and administrative expensesь ь ь ь ь ь ь 25 (164,850) (248,404) (529,048) (174,365) (388,532)
Total operating expenses ь ь ь ь ь ь ь ь ь ь ь ь (591,896) (1,147,007) (2,726,443) (1,137,188) (1,469,941)
Others, net ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь (9,462) (17,238) 2,478 (19,593) (115,819)
Income before income tax expenses and share
of loss from equity method investment ь ь ь 178,493 1,450,623 3,185,291 1,902,687 1,366,121
Income tax expenses ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 26 (12,286) (124,793) (375,081) (206,497) (143,198)
Share of loss from equity method investment ь ь (543) (307) – – (9,398)
Net income ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 165,664 1,325,523 2,810,210 1,696,190 1,213,525
Preferred shares redemption value accretion ь ь ь (12,309) – – – –

Income allocation to participating preferred
shareholders ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь (10,196) – – – –
Net income attributable to ordinary
shareholders of the Company ь ь ь ь ь ь ь ь 143,159 1,325,523 2,810,210 1,696,190 1,213,525
Net income ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 165,664 1,325,523 2,810,210 1,696,190 1,213,525

Other comprehensive income/(loss), net of tax
Foreign currency translation adjustment ь ь ь ь ь (3,147) 9,420 71,020 2,954 (18,540)
Total comprehensive income ь ь ь ь ь ь ь ь ь ь 162,517 1,334,943 2,881,230 1,699,144 1,194,985
Net income per share attributable to ordinary

shareholders of the Company 17
Basicь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 0.17 1.28 2.34 1.45 1.05
Dilutedь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 0.16 1.26 2.30 1.42 1.04
Net income per ADS
Basicь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 1.38 10.23 18.72 11.56 8.38
Dilutedь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 1.25 10.10 18.43 11.36 8.30
Weighted average number of ordinary shares
used in computing net income per share 17
Basicь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 832,790,329 1,036,865,727 1,200,912,670 1,173,661,489 1,158,972,163
Dilutedь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 917,897,426 1,050,143,014 1,219,672,508 1,194,580,873 1,169,572,515
– IA-7 –
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
Accumulated (Accumulated
Ordinary shares Class A ordinary shares Class B ordinary shares Additional other deficit)/ Total
Number of Number of Number of paid in comprehensive Retained (deficit)/
Note Shares Amount Shares Amount Shares Amount capital loss earnings equity
APPENDIX IA
HK$ HK$ HK$ HK$ HK$ HK$ HK$
As of January 1, 2019 ь ь ь ь ь ь ь ь ь ь ь ь 403,750,000 31 – – – – – (1,299) (148,925) (150,193)

Profit for the year ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь – – – – – – – – 165,664 165,664
Share-based compensation ь ь ь ь ь ь ь ь ь ь ь 16 – – – – – – 15,967 – – 15,967
Preferred shares redemption value accretion ь ь – – – – – – (12,309) – – (12,309)
Conversion and redesignation of preferred
shares into ordinary shares ь ь ь ь ь ь ь ь ь – – 237,129,043 19 140,802,051 11 1,262,751 – – 1,262,781
Issuance of ordinary shares upon Initial Public
Offering (“IPO”)ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь – – 115,666,666 9 – – 1,259,308 – – 1,259,317
Redesignation of ordinary shares into Class B
– IA-8 –
ordinary shares ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь (403,750,000) (31) – – 403,750,000 31 – – – –
Shares issued upon exercise of employee share
optionsь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 16 – – 106,295,232 8 – – 10,465 – – 10,473
Foreign currency translation adjustment, net of
tax ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь – – – – – – – (3,147) – (3,147)
Balance at December 31, 2019 ь ь ь ь ь ь ь ь – – 459,090,941 36 544,552,051 42 2,536,182 (4,446) 16,739 2,548,553
ACCOUNTANT’S REPORT
Accumulated
Ordinary shares Class A ordinary shares Class B ordinary shares Treasury stock purchases Additional other
Number of Number of Number of Number of paid in comprehensive Retained Total
Note Shares Amount Shares Amount Shares Amount Shares Amount capital (loss)/income earnings equity
HK$ HK$ HK$ HK$ HK$ HK$ HK$ HK$
As of January 1, 2020 ь ь ь ь ь ь ь – – 459,090,941 36 544,552,051 42 – – 2,536,182 (4,446) 16,739 2,548,553
– – – – – – – – – – 1,325,523 1,325,523
APPENDIX IA
Profit for the year ь ь ь ь ь ь ь ь ь

Share-based compensation ь ь ь ь ь 16 – – – – – – – – 32,573 – – 32,573
Shares issued upon exercise of
employee share optionsь ь ь ь ь ь 16 – – 5,048,824 – – – – – 16,799 – – 16,799
Issuance of ordinary shares upon
follow-on public offering ь ь ь ь ь 13 – – 76,000,000 7 – – – – 2,339,711 – – 2,339,718
Surrendered and cancellation of
Class A ordinary shares ь ь ь ь ь – – (5) – – – – – – – – –
Share conversion from Class B to
Class A ь ь ь ь ь ь ь ь ь ь ь ь ь 13 – – 50,000,000 4 (50,000,000) (4) – – – – – –
Issuance of pre-funded warrantsь ь ь 13 – – – – – – – – 2,035,104 – – 2,035,104
Foreign currency translation
adjustment, net of tax ь ь ь ь ь ь – – – – – – – – – 9,420 – 9,420
– IA-9 –
Balance at December 31, 2020ь ь ь – – 590,139,760 47 494,552,051 38 – – 6,960,369 4,974 1,342,262 8,307,690
As of January 1, 2021 ь ь ь ь ь ь ь – – 590,139,760 47 494,552,051 38 – – 6,960,369 4,974 1,342,262 8,307,690

Profit for the year ь ь ь ь ь ь ь ь ь – – – – – – – – – – 2,810,210 2,810,210
employee share options/restricted
share units (“RSUs”) ь ь ь ь ь ь ь 16 – – 6,805,264 – – – – – 19,957 – – 19,957
Issuance of ordinary shares ь ь ь ь ь 13 – – 87,400,000 7 – – – – 10,856,517 – – 10,856,524
Treasury stock purchases ь ь ь ь ь ь 13 – – – – – – (29,462,760) (1,178,755) – – – (1,178,755)
Exercise of pre-funded warrantsь ь ь 13 – – 53,599,890 4 – – – – (4) – – –
Balance at December 31, 2021ь ь ь – – 737,944,914 58 494,552,051 38 (29,462,760) (1,178,755) 17,935,752 75,994 4,152,472 20,985,559
Accumulated
Note Shares Amount Shares Amount Shares Amount Shares Amount capital (loss)/income earnings equity
APPENDIX IA
As of January 1, 2022 ь ь ь ь ь ь ь – – 737,944,914 58 494,552,051 38 (29,462,760) (1,178,755) 17,935,752 75,994 4,152,472 20,985,559
Profit for the period ь ь ь ь ь ь ь ь – – – – – – – – – – 1,213,525 1,213,525
Treasury share purchases ь ь ь ь ь ь 13 – – – – – – (79,579,000) (2,731,027) – – – (2,731,027)
adjustment, net of tax ь ь ь ь ь ь – – – – – – – – – (18,540) – (18,540)
Balance at June 30, 2022 ь ь ь ь ь – – 739,142,450 58 494,552,051 38 (109,041,760) (3,909,782) 18,039,055 57,454 5,365,997 19,552,820
– IA-10 –
Accumulated
Note Shares Amount Shares Amount Shares Amount Shares Amount capital income earnings equity
APPENDIX IA
(unaudited)
As of January 1, 2021 ь ь ь ь ь ь ь – – 590,139,760 47 494,552,051 38 – – 6,960,369 4,974 1,342,262 8,307,690
Profit for the period ь ь ь ь ь ь ь ь – – – – – – – – – – 1,696,190 1,696,190
Issuance of ordinary shares ь ь ь ь ь – – 87,400,000 7 – – – – 10,856,518 – – 10,856,525
Exercise of Pre-funded warrants ь ь – – 53,599,890 4 – – – – (4) – – –
– – 733,535,042 58 494,552,051 38 – – 17,858,421 7,928 3,038,452 20,904,897
– IA-11 –
Balance at June 30, 2021 ь ь ь ь ь
CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)
Six months ended
Year Ended December 31, June 30,
Note 2019 2020 2021 2021 2022
HK$ HK$ HK$ HK$ HK$
(unaudited)
Cash flows from operating activities
Net income ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 165,664 1,325,523 2,810,210 1,696,190 1,213,525
Adjustments for:
Depreciation and amortization ь ь ь ь ь ь ь ь ь 25 16,547 27,231 36,436 15,368 27,537
Expected credit loss expenses ь ь ь ь ь ь ь ь ь 6(a) – 9,075 3,200 8,819 7,849
Share of loss from equity method investment ь 543 307 – – 9,398
Impairment from equity method investment
and other non-current assets ь ь ь ь ь ь ь ь ь – 5,888 – – 32,326
Foreign exchange losses/(gains) ь ь ь ь ь ь ь ь 7,539 11,493 (138,234) (27,008) (92,231)
Share-based compensation ь ь ь ь ь ь ь ь ь ь ь 16 15,967 32,573 98,913 33,416 97,251
Realized gain from short-term investments ь ь (707) (665) – – (12,491)
Fair value (gains)/losses ь ь ь ь ь ь ь ь ь ь ь – – (26) – 6,867
Deferred income tax benefit ь ь ь ь ь ь ь ь ь ь 26 (1,576) (13,146) (21,431) (8,791) (534)
Amortisation of right-of-use assetsь ь ь ь ь ь ь 49,553 52,548 83,695 36,571 47,948
Changes in operating assets:
Net (increase)/decrease in securities purchased
under agreements to resellь ь ь ь ь ь ь ь ь ь – – (106,203) – 106,203
Net (increase)/decrease in loans and advances ь (1,101,785) (14,645,752) (10,765,123) (34,368,174) 749,496
Net (increase)/decrease in accounts receivable
from clients and brokersь ь ь ь ь ь ь ь ь ь ь (927,260) (5,042,241) (1,847,898) (4,327,609) 799,777
from clearing organizations ь ь ь ь ь ь ь ь ь (128,125) (939,848) (717,193) 607,850 49,169
from fund management companies and fund
distributors ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь – (297,622) 225,282 153,270 (48,197)
Net decrease/(increase) in interest receivable ь 32,535 (2,984) (30,953) (16,563) (38,629)
Net (increase)/decrease in prepaid assetsь ь ь ь (3,660) 1,048 (6,653) (20,698) 156
Net decrease/(increase) in other assets ь ь ь ь ь 20,860 (156,222) (105,145) (3,318) (485,889)
Changes in operating liabilities:
Net increase/(decrease) in amounts due to
related parties ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 25,037 83,429 (37,983) (59,635) 12,708
Net increase in accounts payable to clients and
brokers ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 3,697,534 33,673,301 16,130,249 20,794,806 15,589,859
Net increase in accounts payable to clearing
organizations ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь – 324,266 69,516 512,718 965,964
Net increase/(decrease) in accounts payable to
fund management companies and fund
distributors ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 26,381 101,061 (70,752) (31,236) (7,145)
Net increase/(decrease) in payroll and welfare
payable ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 33,990 217,200 213,981 (23,472) 66,425
Net (decrease)/increase in interest payableь ь ь (1,886) 4,974 9,866 8,649 (5,025)
Net decrease in operating lease liabilities ь ь ь (38,704) (38,077) (79,544) (31,120) (32,540)
Net increase/(decrease) in securities sold under
agreements to repurchase ь ь ь ь ь ь ь ь ь ь 1,590 5,451,447 (985,176) 182,982 (4,467,861)
Net increase/(decrease) in other liabilities ь ь ь 79,397 271,910 1,242,937 515,257 (473,827)
Net cash generated from/(used in) operating

activities ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 1,969,434 20,456,717 6,011,971 (14,351,728) 14,118,089
– IA-12 –
Six months ended

Year Ended December 31, June 30,
Note 2019 2020 2021 2021 2022
HK$ HK$ HK$ HK$ HK$
(unaudited)
Cash flows from investing activities
Proceeds from disposal of property and
equipment and intangible assets ь ь ь ь ь ь ь 9 – – – –
Purchase of property and equipment and
intangible assets ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь (118,341) (44,649) (70,456) (28,622) (62,660)
Purchase of short-term investments ь ь ь ь ь ь (285,784) (206,793) (1,169,715) – (3,361,817)
Proceeds from disposal of short-term
investments ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 250,768 307,267 – – 4,548,040
Acquisition of long-term investments ь ь ь ь ь (6,709) – (23,394) – (235,434)
Placement of term deposits ь ь ь ь ь ь ь ь ь ь – (300,000) – – –
Maturity of term deposits ь ь ь ь ь ь ь ь ь ь ь – – 300,000 300,000 –
Cash paid for acquisition, net of cash
acquired ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь – – – – (102,008)
Net cash (used in)/generated from investing

activities ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь (160,057) (244,175) (963,565) 271,378 786,121
Cash flows from financing activities

Proceeds from public offering, net of
issuance costs ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 1,259,317 2,339,718 10,856,524 10,856,525 –
Proceeds from exercise of employee share
options ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 969 16,842 23,492 18,548 12,937
Proceeds from issuance of pre-funded
warrants ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь – 2,035,104 – – –
Purchase of treasury stock ь ь ь ь ь ь ь ь ь ь ь – – (1,178,755) – (2,731,027)
IPO loan borrowings (net) ь ь ь ь ь ь ь ь ь ь ь – 300,199 (300,199) – –
Proceeds from other borrowings ь ь ь ь ь ь ь ь 6,764,524 23,808,006 53,483,435 50,788,801 37,827,127
Repayment of other borrowings ь ь ь ь ь ь ь ь (6,873,188) (20,092,973) (52,313,417) (26,942,607) (39,827,600)
Payment of other financing expenses ь ь ь ь ь – – (16,862) – (1,570)
Net cash generated from/(used in) financing

activities ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 1,151,622 8,406,896 10,554,218 34,721,267 (4,720,133)
Effect of exchange rate changes on cash,

cash equivalents and restricted cashь ь ь ь (44,666) (1,117) 167,130 30,620 89,218
Net increase in cash, cash equivalents and

restricted cash ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 2,916,333 28,618,321 15,769,754 20,671,537 10,273,295
Cash, cash equivalents and restricted cash at
beginning of the year/periodь ь ь ь ь ь ь ь ь 11,987,104 14,903,437 43,521,758 43,521,758 59,291,512
Cash, cash equivalents and restricted cash

at end of the year/periodь ь ь ь ь ь ь ь ь ь 14,903,437 43,521,758 59,291,512 64,193,295 69,564,807

Cash and cash equivalents ь ь ь ь ь ь ь ь ь ь ь 362,574 1,034,668 4,555,096 1,773,938 6,300,400
Cash held on behalf of clients ь ь ь ь ь ь ь ь ь 14,540,863 42,487,090 54,734,351 62,419,357 63,262,436
Restricted Cash ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь – – 2,065 – 1,971

at end of the year/periodь ь ь ь ь ь ь ь ь ь 14,903,437 43,521,758 59,291,512 64,193,295 69,564,807
Non-cash financing activities

Accretion to preferred shares redemption
value ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 12,309 – – – –
Supplemental disclosure
Interest paid ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь (89,238) (181,706) (367,036) (238,318) (70,852)
Income tax paid ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь (15,117) (16,250) (102,890) (79,825) (216,122)
Cash paid for amounts included in operating
lease liabilities ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь (50,629) (58,686) (89,427) (39,704) (52,028)
– IA-13 –
COMPANY BALANCE SHEETS AS OF DECEMBER 31, 2019, 2020 AND 2021 AND
JUNE 30, 2022
(In thousands)
As of
Note 2019 2020 2021 2022
HK$ HK$ HK$ HK$
ASSETS
Cash and cash equivalents ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 7,990 37,349 37,574 38,670
Amounts due from subsidiaries and variable interest
entities (“VIEs”) and VIEs’ subsidiaries ь ь ь ь ь ь ь ь 31 737,652 4,184,401 6,969,446 4,884,398
Prepaid assetsь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 191 – – –
Short-term investments ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 4 – – 1,169,741 –
Other current assets ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 11,765 9,624 21,589 21,946
Total current assetsь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 757,598 4,231,374 8,198,350 4,945,014
Investments in subsidiaries and VIEs and VIEs’

subsidiariesь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 1 1,823,885 5,086,681 13,514,216 14,949,366
Other non-current assets ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 102 31 31 31
Total non-current assets ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 1,823,987 5,086,712 13,514,247 14,949,397
Total assetsь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 2,581,585 9,318,086 21,712,597 19,894,411
LIABILITIES
Amounts due to subsidiaries and VIEs and VIEs’
subsidiariesь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 31 13,675 15,833 21,955 12,542
Interest payables ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь – 695 131 139
Borrowings ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 10 – 977,735 689,869 290,000
Accrued expenses and other current liabilities ь ь ь ь ь ь 9,437 9,013 10,694 35,888
Total current liabilities ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 23,112 1,003,276 722,649 338,569
Other non-current liabilities ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 9,920 7,120 4,389 3,022
Total Non-current liabilities ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 9,920 7,120 4,389 3,022
Total liabilities ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 33,032 1,010,396 727,038 341,591
– IA-14 –
As of
Note 2019 2020 2021 2022
HK$ HK$ HK$ HK$
48,700,000,000, 48,700,000,000, 48,700,000,000 and
48,700,000,000 shares authorized as of December 31,
2019, 2020 and 2021 and June 30, 2022,
respectively; 459,090,941, 590,139,760, 737,944,914
800,000,000, 800,000,000, 800,000,000 and
800,000,000 shares authorized as of December 31,
2019, 2020 and 2021 and June 30, 2022,
respectively; 544,552,051, 494,552,051, 494,552,051
Additional paid-in capital ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 2,536,182 6,960,369 17,935,752 18,039,055
Treasury stock (nil, nil, 29,462,760 and 109,041,760
shares as of December 31, 2019, 2020 and 2021 and
June 30, 2022, respectively) ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 13 – – (1,178,755) (3,909,782)
Accumulated other comprehensive (loss)/income ь ь ь ь (4,446) 4,974 75,994 57,454
Retained earnings ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 16,739 1,342,262 4,152,472 5,365,997
Total shareholders’ equity ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 2,548,553 8,307,690 20,985,559 19,552,820
Total liabilities and shareholders’ equity ь ь ь ь ь ь ь ь 2,581,585 9,318,086 21,712,597 19,894,411
– IA-15 –
II. NOTES TO THE HISTORICAL FINANCIAL INFORMATION
1. GENERAL INFORMATION, ORGANIZATION AND PRINCIPAL ACTIVITIES
Futu Holdings Limited (the “Company”) is an investment holding company incorporated in the Cayman Islands with limited liability and conducts its business mainly through
its subsidiaries, variable interest entities (“VIEs”) and subsidiaries of the VIEs (collectively referred to as the “Group”). The Group principally engages in online financial services
including securities and derivative trades brokerage, margin financing and fund distribution services based on internally developed software and digital platform “Futubull” and
“Moomoo”. The Group also provides financial information and online community services, etc. The Company completed its IPO on March 8, 2019 on the Nasdaq Global Market. Each
American Depositary Shares (“ADSs”) of the Company represents eight Class A ordinary shares.
APPENDIX IA
As of December 31, 2019, 2020 and 2021 and June 30, 2022, the Company’s principal subsidiaries, consolidated VIE are as follows:
Company name Attributable equity interest of the Group Statutory auditors
Registered/Issued
Country/place and date of and paid-up December 31, June 30, December 31,
Subsidiaries Incorporation/Establishment capital 2019 2020 2021 2022 Principal activities 2019 2020 2021
Futu Securities International Hong Kong, HKD5,200,000,000 100% 100% 100% 100% Financial services PricewaterhouseCoopers PricewaterhouseCoopers PricewaterhouseCoopers
(Hong Kong) Limited April 17, 2012 Certified Public Certified Public Certified Public
(“Futu Securities”) ь ь ь ь ььь Accountants Accountants Accountants
Futu Securities (Hong Kong) Hong Kong, HKD5,000,000 100% 100% 100% 100% Investment holding Gary K. K. Leung & Co. Gary K. K. Leung & Co. Gary K. K. Leung & Co.
Limited ь ь ь ь ь ь ь ь ь ььь May 2, 2014
Futu Network Technology Hong Kong, HKD10,000,000 100% 100% 100% 100% Research and development Gary K. K. Leung & Co. Gary K. K. Leung & Co. Gary K. K. Leung & Co.
Limited ь ь ь ь ь ь ь ь ь ь ь ь August 17, 2015 and technology services
Futu Network Technology Shenzhen, PRC, USD20,000,000 100% 100% 100% 100% Research and development Shenzhen Mingguan Shenzhen Yuanfeng Shenzhen Yuanfeng
(Shenzhen) Co., Ltd. ь ь ь ь ь ь October 14, 2015 and technology services Certified Public Certified Public Certified Public
– IA-16 –
Accountants Accountants Accountants
Shen Si Network Technology Beijing, PRC, USD3,000,000 100% 100% 100% 100% No substantial business N/A N/A N/A
(Beijing) Co., Ltd. (“Shen
(1)
Si”)ь ь September 15, 2014
Moomoo Financial Inc. Delaware, USA, USD2 100% 100% 100% 100% Financial services Baker Tilly US, LLP Baker Tilly US, LLP Baker Tilly US, LLP
(previous name: Futu Inc.) ь ь ь December 17, 2015
Futu Clearing Inc. ь ь ь ь ь ь ь ь Delaware, USA, August 13, USD0.1 100% 100% 100% 100% Financial services Baker Tilly US, LLP Baker Tilly US, LLP Baker Tilly US, LLP
2018
Moomoo Financial Singapore Singapore, SGD18,000,000 N/A 100% 100% 100% Financial services N/A CS Practice Pac BDO LLP, Singapore
Pte. Ltd(1) (previous name: Futu December 17, 2019
Singapore Pte. Ltd)ь ь ь ь ь ь ь
Futu Securities (Australia) Ltd. ь ь New South Wales, Australia, AUD23,600,203 N/A N/A 100% 100% Financial services Pitcher Partners Pitcher Partners Hall Chadwick
February 15, 2001
VIE
Shenzhen Futu Network Technology Shenzhen, PRC, RMB10,000,000 100% 100% 100% 100% Research and development Shenzhen Mingguan Shenzhen Yuanfeng Shenzhen Yuanfeng
Co., Ltd.(2) (“Shenzhen Futu”) ь ь December 18, 2007 and technology services Certified Public Certified Public Certified Public
Accountants Accountants Accountants
Notes:
(1) These subsidiaries changed company names in June 2022.
(2) Mr. Leaf Hua Li and Ms. Lei Li are beneficiary owners of the Company and held 85% and 15% equity interest in Shenzhen Futu, respectively. Mr. Leaf Hua Li is the founder,
chairman and chief executive officer of the Company, and Ms. Lei Li is Mr. Leaf Hua Li’s spouse.
2. SIGNIFICANT ACCOUNTING POLICIES
Basis of presentation
The consolidated financial statements of the Group have been prepared in accordance with the accounting
principles generally accepted in the United States of America (“U.S. GAAP”). Significant accounting policies
followed by the Group in the preparation of the accompanying consolidated financial statements are summarized
below.
The consolidated financial statements include the financial statements of the Company, its subsidiaries, the
VIEs and subsidiary of the VIEs for which the Company or its subsidiary is the primary beneficiary.
A subsidiary is an entity in which the Company, directly or indirectly, controls more than one half of the voting
power; or has the power to appoint or remove the majority of the members of the Board of Directors; or to cast a
majority of votes at the meeting of directors; or has the power to govern the financial and operating policies of the
investee under a statute or agreement among the shareholders or equity holders.
A consolidated VIE is an entity in which the Company, or its subsidiary, through contractual arrangements, has
the power to direct the activities that most significantly impact the entity’s economic performance, bears the risks
of and enjoys the rewards normally associated with ownership of the entity, and therefore the Company or its
subsidiary is the primary beneficiary of the entity.
All transactions and balances among the Company, its subsidiaries, the VIEs and subsidiaries of the VIEs have
been eliminated upon consolidation.
VIE Companies
(1) Contractual Agreements with VIEs
The following is a summary of the contractual agreements (collectively, “Contractual Agreements”) between
the Company’s PRC subsidiary, Shen Si, and the VIEs. Through the Contractual Agreements, the VIEs are effectively
controlled by the Company.
Shareholders’ Voting Rights Proxy Agreements. Pursuant to the Shareholders’ Voting Rights Proxy
Agreements, each shareholder of VIEs irrevocably authorized Shen Si or any person(s) designated by Shen Si to
exercise such shareholder’s rights in VIEs, including without limitation, the power to participate in and vote at
shareholder’s meetings, the power to nominate and appoint the directors, senior management, and other shareholders’
voting right permitted by the articles of association of VIEs. The shareholders’ voting rights proxy agreements remain
irrevocable and continuously valid from the date of execution until the expiration of the business term of Shen Si and
can be renewed upon request by Shen Si.
Business Operation Agreements. Pursuant to the Business Operation Agreements, VIEs and their shareholders
undertake that without Shen Si’s prior written consent, VIEs shall not enter into any transactions that may have a
material effect on VIEs’ assets, business, personnel, obligations, rights or business operations. VIEs and their
shareholders shall elect directors nominated by Shen Si and such directors shall nominate officers designated by Shen
Si. The business operation agreements will remain effective until the end of Shen Si’s business term, which will be
extended if Shen Si’s business term is extended or as required by Shen Si.
Equity Interest Pledge Agreements. Pursuant to the Equity Interest Pledge Agreements, each shareholder of
VIEs agrees that, during the term of the Equity Interest Pledge Agreements, he or she will not dispose of the pledged
equity interests or create or allow any encumbrance on the pledged equity interests without the prior written consent
of Shen Si. The Equity Interest Pledge Agreements remain effective until the latter of the full payment of all secured
debt under the equity interest pledge agreements and VIEs and their shareholders discharge all their obligations under
the contractual arrangements.
– IA-17 –
Exclusive Technology Consulting and Services Agreements. Under the Exclusive Technology Consulting and
Services Agreements between Shen Si and the VIEs, Shen Si has the exclusive right to provide VIEs with technology
consulting and services related to, among other things, technology research and development, technology application
and implementation, maintenance of software and hardware. Without Shen Si’s written consent, VIEs shall not accept
any technology consulting and services covered by these agreements from any third party. VIEs agree to pay a service
fee at an amount equivalent to all of its net profit to Shen Si. Unless otherwise terminated in accordance with the
terms of these agreements or otherwise agreed with Shen Si, these agreements will remain effective until the
expiration of Shen Si’s business term, and will be renewed if Shen Si’s business term is extended.
Exclusive Option Agreements. Pursuant to the Exclusive Option Agreements, each shareholder of VIEs has
irrevocably granted Shen Si an exclusive option, to the extent permitted by PRC laws, to purchase, or have its
designated person or persons to purchase, at its discretion, all or part of the shareholder’s equity interests in VIEs.
Unless PRC laws and/or regulations require valuation of the equity interests, the purchase price shall be RMB1.00
or the lowest price permitted by the applicable PRC laws, whoever is higher. Each shareholder of VIEs undertakes
that, without the prior written consent of Shen Si, he or she will not, among other things, (i) create any pledge or
encumbrance on his or her equity interests in VIEs, (ii) transfer or otherwise dispose of his or her equity interests
in VIEs, (iii) change VIEs’ registered capital, (iv) amend VIEs’ articles of association, (v) liquidate or dissolve VIEs,
or (vi) distribute dividends to the shareholders of VIEs. In addition, VIEs undertake that, without the prior written
consent of Shen Si, they will not, among other things, dispose of VIEs’ material assets, provide any loans to any third
parties, enter into any material contract with a value of more than RMB500,000, or create any pledge or encumbrance
on any of their assets, or transfer or otherwise dispose of their material assets. Unless otherwise terminated by Shen
Si, these agreements will remain effective until the expiration of Shen Si’s business term, and will be renewed if Shen
Si’s business term is extended.
(2) Risks in relation to the VIE structure
The following table sets forth the assets, liabilities, results of operations and changes in cash and cash
equivalents of the VIEs and their subsidiary taken as a whole, which were included in the Group’s consolidated
financial statements with intercompany balances and transactions eliminated between the VIEs and their subsidiary:
As of
2019 2020 2021 2022
(HK$ in
Total assets ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 68,480 162,897 254,602 296,738

Total liabilities ь ь ь ь ь ь ь ь ь ь ь ь ь 73,271 145,693 176,204 179,039
Year ended December 31, Six months ended June 30,

2019 2020 2021 2021 2022
(HK$ in thousands) (HK$ in thousands)
(unaudited)
Total operating revenue ь ь 65,681 103,433 210,161 86,930 144,398

Net income ь ь ь ь ь ь ь ь ь ь 8,807 20,727 52,741 22,456 37,236
– IA-18 –

2019 2020 2021 2021 2022
(unaudited)
Net cash (used in)/

generated from operating
activities ь ь ь ь ь ь ь ь ь ь (2,502) (14,847) 2,340 (3,204) 26,055
Net cash generated from/
(used in) investing
activities ь ь ь ь ь ь ь ь ь ь 2,233 17,104 (3,327) – –
Net cash generated from
financing activities ь ь ь ь – – – – 7,388
Net (decrease)/increase in
cash and cash
equivalents ь ь ь ь ь ь ь ь (269) 2,257 (987) (3,204) 33,443
Cash and cash equivalents

at beginning of the
year/period ь ь ь ь ь ь ь ь 1,750 1,481 3,738 3,738 2,751
Cash and cash equivalents

at end of the
year/period ь ь ь ь ь ь ь ь 1,481 3,738 2,751 534 36,194
Transactions between the VIE and other entities in the consolidated group
As of December 31, 2019, 2020 and 2021 and June 30, 2022, total assets include amounts due from internal
companies in the consolidated group in the amount of HK$36,759 thousand, HK$117,085 thousand, HK$190,424
thousand and HK$211,692 thousand, respectively. Total liabilities include amounts due to the internal companies in
the amount of HK$52,097 thousand, HK$72,506 thousand, HK$80,435 thousand and HK$91,479 thousand,
respectively. For the years ended December 31, 2019, 2020 and 2021 and for the six months ended June 30, 2021
and 2022, the VIE earned inter-company revenues in the amounts of HK$63,742 thousand, HK$94,500 thousand,
HK$187,774 thousand, HK$75,000 thousand and HK$131,834 thousand, respectively. In addition, for the years
ended December 31, 2019, 2020 and 2021 and for the six months ended June 30, 2021 and 2022, the repayment of
advances to Group companies by the VIE are in the amount of HK$32,740 thousand, nil, nil, nil and nil, and VIE
proceeded from advances from Group companies in the amount of HK$32,740 thousand, nil, nil, nil and HK$7,388
thousand, respectively. All of these balances and transactions have been eliminated in consolidation.
Under the Contractual Agreements with the VIEs, the Company has the power to direct activities of the VIEs
and VIEs’ subsidiaries, and can have assets transferred out of the VIEs and VIEs’ subsidiaries. Therefore, the
Company considers itself the ultimate primary beneficiary of the VIEs and there is no asset of the VIEs that can only
be used to settle obligations of the VIEs and VIEs’ subsidiaries, except for registered capital of the VIEs and their
subsidiary amounting to RMB10 million as of December 31, 2019, 2020 and 2021 and June 30, 2021 and 2022,
respectively. Since the VIEs are incorporated as limited liability companies under the PRC Company Law, creditors
of the VIEs do not have recourse to the general credit of the Company. There is currently no contractual arrangement
that would require the Company to provide additional financial support to the VIEs. However, as the Company is
conducting certain businesses through its VIEs and VIEs’ subsidiary, the Company may provide such support on a
discretionary basis in the future, which could expose the Company to a loss.
In the opinion of the Company’s management, the contractual arrangements among its subsidiary, the VIEs and
their respective Nominee Shareholders are in compliance with current PRC laws and are legally binding and
enforceable. However, uncertainties in the interpretation and enforcement of the PRC laws, regulations and policies
could limit the Company’s ability to enforce these contractual arrangements. As a result, the Company may be unable
to consolidate the VIEs and VIEs’ subsidiaries in the consolidated financial statements.
– IA-19 –
On March 15, 2019, the Foreign Investment Law was formally passed by the thirteenth National People’s
Congress and it was taken effect on January 1, 2020. The Foreign Investment Law replaces the Law on Sino-Foreign
Equity Joint Ventures, the Law on Sino-Foreign Cooperative Joint Ventures and the Law on Foreign-Capital
Enterprises to become the legal foundation for foreign investment in the PRC.
The Foreign Investment Law stipulates certain forms of foreign investment. However, the Foreign Investment
Law does not explicitly stipulate contractual arrangements such as those we rely on as a form of foreign investment.
Notwithstanding the above, the Foreign Investment Law stipulates that foreign investment includes “foreign investors
investing through any other methods under laws, administrative regulations or provisions prescribed by the State
Council.” Future laws, administrative regulations or provisions prescribed by the State Council may possibly regard
Contractual Arrangements as a form of foreign investment. In the event that the State Council in the future
promulgates laws and regulations that deem investments made by foreign investors through contractual arrangements
as “foreign investment”, the Group’s ability to use the contractual arrangements with its VIEs and the Group’s ability
to conduct business through the VIEs could be severely limited.
The Company’s ability to control the VIEs also depends on the power of attorney Shen Si has to vote on all
matters requiring shareholders’ approvals in the VIEs. As noted above, the Company believes these power of attorney
are legally binding and enforceable but may not be as effective as direct equity ownership. In addition, if the Group’s
corporate structure or the contractual arrangements with the VIEs were found to be in violation of any existing PRC
laws and regulations, the PRC regulatory authorities could, within their respective jurisdictions:
• revoke the Group’s business and operating licenses;
• require the Group to discontinue or restrict its operations;
• restrict the Group’s right to collect revenues;
• block the Group’s websites;
• require the Group to restructure its operations, re-apply for the necessary licenses or relocate the
Group’s businesses, staff and assets;
• impose additional conditions or requirements with which the Group may not be able to comply; or
• take other regulatory or enforcement actions against the Group that could be harmful to the Group’s
business.
The imposition of any of these restrictions or actions may result in a material adverse effect on the Group’s
ability to conduct its business. In addition, if the imposition of any of these restrictions causes the Group to lose the
right to direct the activities of the VIEs or the right to receive their economic benefits, the Group would no longer
be able to consolidate the financial statements of the VIEs. In the opinion of management, the likelihood of losing
the benefits in respect of the Group’s current ownership structure or the contractual arrangements with its VIEs is
remote.
Use of Estimates
The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management
to make estimates and assumptions that affect the reported amounts of assets and liabilities, related disclosures of
contingent assets and liabilities at the balance sheet date, and the reported revenues, costs and expenses during the
reported period in the consolidated financial statements and accompanying notes. These accounting estimates
reflected in the Group’s consolidated financial statements mainly include, but are not limited to, the estimation of the
expected usage and the estimated relative standalone selling price of the incentive points and coupons, the valuation
and recognition of share-based compensation arrangements, depreciable lives of property and equipment, useful life
of intangible assets, expected credit losses on financial instruments, assessment for impairment of long-term
investments and other non-current assets, present value for expected future leasing payment, contingency reserve,
provision of income tax and valuation allowance for deferred tax asset, and valuation of financial instruments
measured at fair value. Actual results could differ from those estimates.
– IA-20 –
Comprehensive Income and Foreign Currency Translation
The Group’s operating results are reported in the consolidated statements of comprehensive income pursuant
to FASB ASC Topic 220, “Comprehensive Income”. Comprehensive income consists of two components: net income
and other comprehensive income (“OCI”). The Group’s OCI is comprised of gains and losses resulting from
translating foreign currency financial statements of entities, of which functional currency is other than Hong Kong
dollar which is the presentational currency of the Group, net of related income taxes, where applicable. Such
subsidiaries’ assets and liabilities are translated into Hong Kong dollars at period-end exchange rates, and revenues
and expenses are translated at average exchange rates prevailing during the period. Adjustments that result from
translating amounts from a subsidiary’s functional currency to the Hong Kong dollar (as described above) are
reported net of tax, where applicable, in accumulated OCI in the consolidated balance sheets.
Prior to January 1, 2020, the Group applied incurred loss methodology for recognizing credit losses that delays
recognition until it is probable a loss has been incurred. The identified impairment loss was immaterial prior to
January 1, 2020.
On January 1, 2020, the Group adopted FASB ASC Topic 326 – “Financial Instruments – Credit Losses” (“ASC
Topic 326”), which replaces the incurred loss methodology with the current expected credit loss (“CECL”)
methodology. The new guidance applies to financial assets measured at amortized cost, held-to-maturity debt
securities and off-balance sheet credit exposures. For on-balance sheet assets, an allowance must be recognized at the
origination or purchase of in-scope assets and represents the expected credit losses over the contractual life of those
assets.
The Group adopted ASC Topic 326 using the modified retrospective approach for all in-scope assets. The
adoption of ASC Topic 326 has no material impact on the Group’s retained earnings as of January 1, 2020. Results
for reporting periods beginning after January 1, 2020 are presented under ASC Topic 326 while prior periods continue
to be reported in accordance with previously applicable U.S. GAAP. The Group’s in-scope assets are primarily loans
and advances that are collateralized by client securities and the collateral is required to be maintained at specified
minimum levels at all times. The Group monitors margin levels and requires clients to provide additional collateral,
or reduce margin positions, to meet minimum collateral requirements if the fair value of the collateral changes. The
Group applies the practical expedient based on collateral maintenance provisions in estimating an allowance for
credit losses for the loans and advances. In accordance with the practical expedient, when the Group reasonably
expects that borrowers (or counterparties, as applicable) will replenish the collateral as required, there is no
expectation of credit losses when the collateral’s fair value is greater than the amortized cost of the financial assets.
If the amortized cost exceeds the fair value of collateral, then credit losses are estimated only on the unsecured
portion. For the year ended December 31, 2020, 2021 and six months ended June 30, 2021 and 2022, expected credit
loss expenses of HK$9,075 thousand, HK$3,200 thousand, HK$8,819 thousand and HK$7,849 thousand, resulting
from the assessment of credit losses for the loans and advances under ASC Topic 326 at period-end were recognized
in “Others, net” in the consolidated statements of comprehensive income, respectively.
An allowance for credit losses on other financial assets, including receivables from clients, brokers, clearing
organizations and fund management companies and fund distributors, is estimated based on the aging of these
financial assets.
Receivables from clients are due within the settlement period commonly adopted in the relevant market
practices, which is usually within a few days from the trade date. Because these receivables involve customers who
have no recent history of default, and the settlement periods are usually short, the credit risk arising from receivables
from clients is considered low. In respect of the receivables from brokers, clearing organizations and fund
management companies and fund distributors, the management considers that these receivables have a low risk of
default and the counterparties have a strong capacity to meet their contractual obligation. As a result, the allowance
for credit losses for other financial assets were immaterial for all periods presented.
Cash and Cash Equivalents
Cash and cash equivalents represent cash on hand, demand deposits and time deposits placed with banks or
other financial institutions, which are unrestricted to withdrawal or use, and which have original maturities of three
months or less.
– IA-21 –
Cash Held on Behalf of Clients
The Group has classified the clients’ monies as cash held on behalf of clients under the assets section in the
consolidated balance sheets and recognized the corresponding accounts payables to the respective clients under the
liabilities section.
Term Deposit
Term deposit consists of bank deposits with an original maturity of greater than three months.
Restricted Cash
The Group is required to maintain restricted cash deposits for certain property leases. These funds are
restricted and have been classified as such on our consolidated balance sheets due to the nature of restriction.
Short-term Investments
The Group classifies certain financial assets with highly liquidity and original maturities less than twelve
months as short-term investments. The Group’s short-term investments consist of investments in available-for-sale
financial securities, money market funds and financial assets at fair value through profit or loss. To estimate the fair
value of available-for-sale financial securities, the Group refers to the quoted rate of return provided by financial
institutions using discounted cash flow method, and accordingly, the Group classifies the valuation techniques that
use these inputs as Level 2. The Group values its money market funds and financial assets at fair value through profit
or loss using quoted prices in active markets for these investments, and accordingly, the Group classifies the valuation
techniques that use these inputs as Level 1.
Securities Purchased Under Agreements to Resell and Securities Sold Under Agreements to Repurchase
Transactions involving purchases of securities under agreements to resell (resell agreements) and transactions
involving sales of securities under agreements to repurchase (repurchase agreements) are treated as collateralized
financing transactions.
Under resell agreements, the Group pays cash to counterparties and receives securities as collateral. These
agreements are carried at amounts at which the securities will subsequently be resold, and the interest income
received by the Group is recorded as interest income in the consolidated statements of comprehensive income.
Under repurchase agreements, the Group receives cash from counterparties and provides securities as
collateral. These agreements are carried at amounts at which the securities will subsequently be repurchased, and the
interest expense incurred by the Group is recorded as interest expenses in the consolidated statements of
comprehensive income.
Loans and advances
Loans and advances include margin loans, IPO loans extended to clients and other advances, collateralized by
securities and are carried at the amortized cost, net of an allowance for credit losses. Revenues earned from the loans
and advances are included in interest income.
Margin loans are extended to clients on a demand basis and are not committed facilities. Securities owned by
the customers, which are not recorded in the consolidated balance sheets, are held as collateral for amounts due on
the margin loans.
IPO loans for subscription of new shares are normally settled within one week from the drawdown date. Once
IPO stocks are allotted, the Group requires clients to repay the IPO loans. Force liquidation action would be taken
if the clients fail to settle their shortfall after the IPO allotment result is announced.
Other advances mainly consist of bridge loans to enterprises which pledged unlisted or listed shares they hold
as collateral.
– IA-22 –
Loans and advances are initially recorded net of directly attributable transaction costs and are measured at
subsequent reporting dates at amortized cost. Finance charges, premiums payable on settlement or redemption and
direct costs are accounted for on an accrual basis to the surplus or deficit using the effective interest method and are
added to the carrying amount of the instrument to the extent that they are not settled in the period in which they arise.
The balances will be written off to the extent that there is no realistic prospect of recovery. This is generally
the case when the Group determines that the debtor does not have assets or sources of income that could generate
sufficient cash flows to repay the amounts subject to the write-off.
Trading Receivables from and Payables to Clients
Trading receivables from clients include amounts due on brokerage transactions on a trade-date basis. Trading
payables to clients represent the closing cash balance to the customers, which mainly include cash deposits and
amounts due on brokerage transactions on a trade date basis.
Receivables from and Payables to Brokers, Clearing Organizations and Fund Management Companies and
Fund Distributors
Receivables from and payables to brokers, clearing organizations and fund management companies and fund
distributors include receivables and payables from unsettled trades on a trade-date basis, including amounts
receivable for securities, derivatives or funds trades not delivered by the Group to the purchaser by the settlement
date and cash deposits, and amounts payable for securities, derivatives or funds trades not received by the Group from
a seller by the settlement date.
Clearing settlement fund deposited in the clearing organizations for the clearing purpose is recognized in
receivables from clearing organizations.
The Group borrowed margin loans from executing brokers, with the benchmark interest rate plus premium
differentiated depending on the amount borrowed, and immediately lent to margin financing clients. Margin loans
borrowed is recognized in the payables to brokers.
The Group’s policy is to net the receivables from and payables to clearing organizations according to ASC
Topic 210-20, when all of the following conditions are met:
(a) Each of two parties owes the other determinable amounts.
(b) The reporting party has the right to set off the amount owed with the amount owed by the other party.
(c) The reporting party intends to set off.
(d) The right of setoff is enforceable at law.
Interest Receivable and Payable
Interest receivable which is included in receivables is calculated based on the contractual interest rate of bank
deposit, loans and advances, securities loaned and receivables on an accrual basis, and is recorded as interest income
as earned.
Interest payable which is included in payables is calculated based on the contractual interest rates of payables,
borrowings, securities borrowed and securities sold under agreements to repurchase on an accrual basis, and is
recorded as interest expense when incurred.
Securities Borrowed and Securities Loaned
Securities borrowed transactions require the Group to provide counterparties with collateral, which may be in
the form of cash, or other securities. With respect to securities loaned, the Group receives collateral, which may be
in the form of cash or other securities in an amount generally in excess of the fair value of the securities loaned. The
Group monitors the market value of securities borrowed and loaned on a daily basis, with additional collateral
obtained or refunded as permitted contractually.
– IA-23 –
Securities borrowed and securities loaned are recorded at the amount of the cash collateral advanced or
received. Receivables and payables related to securities borrowed and securities loaned are included at receivables
from and payables to brokers or clients in the consolidated balance sheets. Securities lending fees received and
securities borrowing fees paid by the Group are included in interest income and interest expense, respectively, in the
Leases
In an operating lease, a lessee obtains control of only the use of the underlying asset, but not the underlying
asset itself. An operating lease is recognized as a right-of-use asset with a corresponding liability at the date which
the leased asset is available for use by the Group.
The Group’s operating leases contain both lease components and non-lease components. Non-lease
components are distinct elements of a contract that are not related to securing the use of the underlying assets, such
as common area maintenance and other management costs. The Company makes an accounting policy election not
to separate non-lease components to measure the lease liability and lease asset.
The lease liability is initially measured at the present value of the future lease payments over the lease term.
The lease terms may include options to extend or terminate the lease when it is reasonably certain that the Group will
exercise that option. The lease payments are discounted using the rate implicit in the lease or, if not readily
determinable, the Group’s secured incremental borrowing rate, which is based on an internally developed yield curve
using interest rates of debt issued with a similar risk profile as the Group and a duration similar to the lease term.
An operating lease right-of-use asset is initially measured at the value of the lease liability minus any lease incentives
and initial direct costs incurred plus any prepaid rent.
After commencement of the operating lease, the Group recognizes lease expenses on a straight-line basis over
the lease term. The subsequent measurement of the lease liability is based on the present value of the remaining lease
payments using the discount rate determined at lease commencement. The right-of-use asset is subsequently
measured at cost less accumulated amortization and any impairment provision. The amortization of the right-of-use
asset represents the difference between the straight-line lease expense and the accretion of interest on the lease
liability each period. The interest amount is used to accrete the lease liability and to amortize the right-of-use asset.
There is no amount recorded as interest expense.
All of the Group’s leases are classified as operating leases and primarily consist of real estate leases for
corporate offices, data centers, and other facilities.
As of December 31, 2019, 2020 and 2021 and June 30, 2022, the weighted-average remaining lease term on
these leases is approximately four years, four years, three years and three years, respectively, and the weighted-
average discount rate used to measure the lease liabilities was approximately 4.75%, 4.75%, 4.71% and 4.69%,
respectively.
For the years ended December 31, 2019, 2020 and 2021 and for the six months ended June 30, 2022,
right-of-use assets obtained under operating leases was HK$211,170 thousand, HK$85,827 thousand, HK$108,949
thousand and HK$7,642 thousand, respectively. The Group’s lease agreements do not contain any residual value
guarantees, restrictions or covenants.
Refundable Deposit
Refundable deposit is included in other assets in the consolidated balance sheets. As a clearing member firm
of securities and derivatives clearing organizations in Hong Kong, Singapore and the U.S., the Group is also exposed
to clearing member credit risk. These clearing organizations require member firms to deposit cash to a clearing fund.
If a clearing member defaults in its obligations to the clearing organizations in an amount larger than its own margin
and clearing fund deposits, the shortfall is absorbed pro rata from the deposits of the other clearing members. Many
clearing organizations of which the Group is member have the authority to assess their members for additional funds
if the clearing fund is depleted. A large clearing member default could result in a substantial cost if the Group is
required to pay such additional funds.
– IA-24 –
Property and Equipment, net
Property and equipment, which are included in other assets in the consolidated balance sheets are stated at
historical cost less accumulated depreciation and impairment, if any. Depreciation is computed using the straight-line
method over the estimated useful lives of the assets. Residual rate is determined based on the economic value of the
property and equipment at the end of the estimated useful lives as a percentage of the original cost.
Estimated
Category useful lives Residual rate
Computers equipment ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 3-5 years 5%

Furniture and fixtures ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 3-5 years 5%
Office equipment ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 3-5 years 5%
Office building ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 30 years 5%
Vehicle ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 5 years 5%
Expenditures for maintenance and repairs are expensed as incurred.
Intangible Assets
Intangible assets which are included in other assets in the consolidated balance sheets mainly consist of
computer software, licences and other intangible assets.
Finite-lived intangible assets are carried at historical cost less accumulated amortization and accumulated
impairment losses, if any. Amortization of finite-lived intangible assets is calculated using the straight-line method
to allocate costs over the estimated useful lives. Pursuant to topic ASC 350 Intangibles — Goodwill and Other, the
useful life of an intangible asset to an entity is the period over which the asset is expected to contribute directly or
indirectly to the future cash flows of that entity. If an income approach is used to measure the fair value of the license,
in determining the useful life of the intangible asset for amortization purposes, the period of expected cash flows used
to measure the fair value of the license should be considered. The following is a summary of estimated useful lives:
Estimated
Category useful lives
Computer software ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 5 years

Licenses(1) ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 10 years
(1) The income approach was used to measure the fair value of the licenses, and the period of expected cash
flows used to measure the fair value of the licenses is considered by the Group in determining the useful
lives of the related licenses. Based on historical performance, market prospects and other
macroeconomic conditions, the Group estimates that the useful lives of the related licenses are 10 years.
The other licenses recognised as infinite-lived intangible assets consist of an insurance broker license and a
financial services license. The Group obtained an insurance broker license through acquiring a member of the Hong
Kong Professional Insurance Brokers Association. The Group obtained some financial securities licenses via
acquisition of subsidiaries. Such intangible assets were recognised as indefinite-lived as the cash flows were expected
to continue indefinitely on the brokerage and financial service business in above regions.
The Group had held a futures trading right as a clearing member firm of HKEx in order to trade futures through
the trading facilities of the Stock Exchange, and has recognized it as intangible assets. As trading right has an
indefinite useful life and have no foreseeable limit to the period over which the Group can use to generate net cash
flows, it will not be amortised until their useful lives are determined to be finite.
The aforementioned indefinite-lived intangible assets are carried at cost less accumulated impairment losses.
The Group evaluates the remaining useful life of an indefinite-lived intangible asset that is not being amortized each
reporting period to determine whether events and circumstances continue to support an indefinite useful lives. The
Group will not amortize the indefinite-lived intangible assets until their useful lives are determined to be finite. An
intangible asset that is not subject to amortization will be tested for impairment annually and more frequently if
events or changes in circumstances indicate that it is more likely than not that the asset is impaired.
– IA-25 –
Long-term investments
1) Equity method investments
The Group’s long-term investments primarily consist of equity method investments and equity investments
without readily determinable fair values.
In accordance with ASC 323 Investment – Equity Method and Joint Ventures, the Group accounts for equity
method investments over which the Group has significant influence but does not own a majority of the equity interest
or otherwise controls and the investments are either common stock or in substance common stock using the equity
method. For the investments in limited partnerships, the equity method of accounting for investments is generally
appropriate for accounting by limited partners. According to ASC 323-30-S99-1, the investments in all limited
partnerships should be accounted for pursuant to paragraph 970-323-25-6. That guidance requires the use of the
equity method unless the investor’s interest “is so minor that the limited partner may have virtually no influence over
partnership operating and financial policies.” Investments of more than 3 to 5 percent are generally viewed to be more
than minor. The Group’s share of the investee’s profit and loss is recognized in the consolidated statements of
comprehensive income of the period.
The carrying amount of equity method investments is tested for impairment whenever there is an indication
that the carrying amount may be impaired in accordance with the policy described in “Impairment of long-lived
assets”.
2) Equity investments without readily determinable fair values
In accordance with ASC 321 Investment – Equity Securities, for those equity investments without readily
determinable fair values, the Group elects to record these investments at cost, less impairment, and plus or minus
subsequent adjustments for observable price changes. Under this measurement alternative, changes in the carrying
value of the equity investment are required to be made whenever there are observable price changes in orderly
transactions for the identical or similar investment of the same issuer.
Pursuant to ASC 321, for those equity investments that the Group elects to use the measurement alternative,
the Group makes a qualitative assessment of whether the investment is impaired at each reporting date. If a qualitative
assessment indicates that the investment is impaired, the Group estimates the investment’s fair value in accordance
with the principles of ASC 820. If the fair value is less than the investment’s carrying value, the Group recognizes
an impairment loss equal to the difference between the carrying value and fair value.
Impairment of Long-lived Assets
Long-lived assets are evaluated for impairment whenever events or changes in circumstances (such as a
significant adverse change to market conditions that will impact the future use of the assets) indicate that the carrying
amount may not be fully recoverable or that the useful life is shorter than the Group had originally estimated. When
these events occur, the Group evaluates the impairment by comparing carrying value of the assets to an estimate of
future undiscounted cash flows expected to be generated from the use of the assets and their eventual disposition. If
the sum of the expected future undiscounted cash flows is less than the carrying value of the assets, the Group
recognizes an impairment loss based on the excess of the carrying value of the assets over the fair value of the assets.
Impairment charge recognized for the years ended December 31, 2019, 2020 and 2021 and for the six months ended
June 30, 2021 and 2022 was nil, HK$5,888 thousand, nil, nil and nil, respectively.
Treasury stock
The Group accounted for those shares repurchased as treasury stock at cost of purchase, Treasury stock, and
is shown separately in the shareholders’ equity as the Group has not yet decided on the ultimate disposition of those
shares acquired. When the Group decides to cancel the treasury stock, the difference between the original issuance
price and the repurchase price is debited into additional paid-in capital. Refer to Note 13 for details.
– IA-26 –
Accounting guidance defines fair value as the price that would be received from selling an asset or paid to
transfer a liability in an orderly transaction between market participants at the measurement date. When determining
the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Group
considers the principal or most advantageous market in which it would transact and it considers assumptions that
market participants would use when pricing the asset or liability.
Accounting guidance establishes a fair value hierarchy that requires an entity to maximize the use of
observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s
categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair
value measurement. Accounting guidance establishes three levels of inputs that may be used to measure fair value:
Level 1 — Valuation techniques in which all significant inputs are unadjusted quoted prices from active
markets for assets or liabilities that are identical to the assets or liabilities being measured.
Level 2 — Valuation techniques in which significant inputs include quoted prices from active markets for
assets or liabilities that are similar to the assets or liabilities being measured and/or quoted prices for assets or
liabilities that are identical or similar to the assets or liabilities being measured from markets that are not active. Also,
model-derived valuations in which all significant inputs and significant value drivers are observable in active markets
are Level 2 valuation techniques.
Level 3 — Valuation techniques in which one or more significant inputs or significant value drivers are
unobservable. Unobservable inputs are valuation technique inputs that reflect the Group’s own assumptions about the
assumptions that market participants would use in pricing an asset or liability.
When available, the Group uses quoted market prices to determine the fair value of an asset or liability. If
quoted market prices are not available, the Group will measure fair value using valuation techniques that use, when
possible, current market-based or independently sourced market parameters, such as interest rates and currency rates.
The carrying amount of cash and cash equivalents, cash held on behalf of clients, restricted cash, receivables
from and payables to clients, brokers, clearing organizations and fund management companies and fund distributors,
accrued interest receivable, accrued interest payable, amounts due to related parties, other financial assets and
liabilities approximates fair value because of their short-term nature. Term deposit, loans and advances, borrowings,
securities purchased under agreements to resell, securities sold under agreements to repurchase and operating lease
liabilities are carried at amortized cost. The carrying amount of term deposit, loans and advances, borrowings and
operating lease liabilities approximate their respective fair value as the interest rates applied reflect the current
quoted market yield for comparable financial instruments. Short-term investments are measured at fair value.
The Group’s non-financial assets, such as operating lease right-of-use assets, long-term investments, property
and equipment and intangible assets, would be measured at fair value only if they were determined to be impaired.
– IA-27 –
Revenue Recognition
(1) Brokerage commission and handling charge income
Brokerage commission income earned for executing transactions is accrued on a trade-date basis.
Handling charge income arise from the services such as clearing and settlement services, subscription and
dividend collection handling services, etc., are accrued on a trade-date basis.
Brokerage commission and handling charge income are recognised at a point in time when the service has been
passed to the customer.
(2) Interest income
The Group earns interest income primarily in connection with its margin financing and securities lending
services, IPO financing, bridge loan and deposits with banks, which are recorded on an accrual basis and are included
in interest income in the consolidated statements of comprehensive income. Interest income is recognized as it is
accrued over time using the effective interest method.
(3) Other income
Other income consists of enterprise public relations service charge income provided to corporate clients,
underwriting fee income, IPO subscription service charge income, currency exchange service income from clients,
income from market data service and funds distribution service income from fund management companies, etc.
Enterprise public relations service charge income is charged to corporate clients by providing platform to post
their detailed stock information and latest news in Futubull app, as well as providing a lively, interactive community
among their potential investors to exchange investment views, share trading experience and socialize with each other.
Unearned enterprise public relations service income of which the Group had received the consideration is recorded
as contract liabilities (deferred revenue).
Underwriting fee income is generated from investment banking business primarily by providing equity
sub-underwriting to corporate issuers.
IPO subscription service charge income is derived from provision of new share subscription services in relation
to IPOs in the Hong Kong capital market.
Currency exchange service income is charged to the Group’s paying clients for providing currency exchange
service.
Market information and data income is charged to Futubull and Moomoo app users for market data service.
Funds distribution service income is charged to fund management companies for providing fund products
distribution service to Futu’s individual clients. The Group, as an intermediary would receive subscription fees from
fund management companies as agreed in the service contracts.
For enterprise public relations service charge income, funds distribution service income, market information
and data income and ESOP management service income, the service revenues are recognized ratably over the term
of the service contracts.
For IPO subscription service charge income, underwriting fee income and currency exchange service income,
the Group recognizes the revenues upon the time when the services are rendered to customers.
– IA-28 –
Customer Loyalty Program
The Group operates a customer loyalty program to its customers that offer various incentives in the form of
incentive points and coupons for redemption of free or discounted goods or services.
For the incentives generated from current sales transaction, the Group defers a portion of commission income
with corresponding liability reflected as contract liability attributable to the incentives. The contract liability is
determined by management based on the expected usage of the incentive points and coupons, and their estimated
relative standalone selling price based on the related goods and services. Significant judgment was made by
management in determining the expected usage and estimated relative standalone selling price of the incentive points
and coupons, derived from historical trading volume, commission rates and redemption patterns, and an evaluation
as to whether historical activities are representative of the expected future activities.
For the incentives offered for future sales transaction, the Group nets a portion of brokerage commission
income attributable to the incentives when points or coupons are actually redeemed.
For the incentives not offered for future sales transaction, the Group considers them as a payment of other
distinct goods that would be granted to clients. Such incentives are accounted for as selling and marketing expense
with corresponding liability reflected as other liability in the consolidated balance sheet.
The table below presents the deferred or netted brokerage commission income related to the customer loyalty
program for the years ended December 31, 2019, 2020 and 2021 and for the six months ended June 30, 2021 and
2022.

2019 2020 2021 2021 2022
(unaudited)
Brokerage commission
income, gross ь ь ь ь ь ь ь 441,669 1,807,203 3,640,845 1,982,242 1,798,892
Less: revenue netted or
deferred ь ь ь ь ь ь ь ь ь ь (89,044) (276,155) (493,235) (279,758) (180,255)
income, net ь ь ь ь ь ь ь ь 352,625 1,531,048 3,147,610 1,702,484 1,618,637
As of December 31, 2019, 2020 and 2021 and June 30, 2022, contract liabilities recorded related to the
customer loyalty program were HK$2,126 thousand, HK$8,249 thousand and HK$8,968 thousand and HK$7,143
thousand, respectively. The Group expects to recognize the revenue when points and coupons are actually redeemed.
Historically, the revenue was usually recognized within 1-3 years from the time the contract liability was first
recognized.
Brokerage Commission and Handling Charge Expenses
Commission expenses for executing and/or clearing transactions are accrued on a trade-date basis. The
commission expenses are charged by executing brokers for securities and derivative trades in stock and derivative
markets as the Group makes securities and derivative trades with these brokers as principal.
Handling and settlement fee is charged by HKEx or executing brokers for clearing and settlement services, are
accrued on a trade-date basis.
IPO subscription service charge expenses are charged by commercial banks in connection with new share
subscription services in relation to IPOs in the Hong Kong capital market.
– IA-29 –
Interest Expenses
Interest expenses primarily consist of interest expenses of borrowings from banks, other licensed financial
institutions and other parties paid to fund the Group’s margin financing business, securities borrowing business and
IPO financing business.
Processing and Servicing Costs
Processing and servicing costs consist of market information and data fee, data transmission fee, cloud service
fee, system cost, and SMS service fee, etc. The nature of market information and data fee mainly represents for
information and data fee paid to stock exchanges like HKEx, NASDAQ, and New York stock exchange, etc. Data
transmission fee is the fee of data transmission among cloud server and data centers located in Shenzhen, PRC and
Hong Kong, etc. Cloud service fee and SMS service fee mainly represent the data storage and computing service and
the SMS channel service fee. The nature of system cost mainly represents for the fee to access and use the systems
paid to software providers.
Research and Development Expenses
Research and development expenses consist of expenses related to developing transaction platform and
website like Futubull app and other products, including payroll and welfare, rental expenses and other related
expenses for personnel engaged in research and development activities. All research and development costs have been
expensed as incurred as the costs qualifying for capitalization have been insignificant.
Selling and Marketing Expenses
Selling and marketing expenses consist primarily of advertising and promotion costs, payroll, rental and
related expenses for personnel engaged in marketing and business development activities. Advertising and promotion
costs are expensed as incurred and are included within selling and marketing expenses in the consolidated statements
of comprehensive income.
General and Administrative Expenses
General and administrative expenses consist of payroll, rental, related expenses for employees involved in
general corporate functions, including finance, legal and human resources, costs associated with use of facilities and
equipment, such as depreciation expenses, rental and other general corporate related expenses.
Others, net
Others, net, mainly consist of non-operating income and expenses, foreign currency gains or losses, expected
credit loss expenses, gain or loss from investments and impairment from long-term investments and other non-current
assets for all periods presented.
Foreign Currency Gains and Losses
Foreign currency transactions denominated in currencies other than the functional currency are translated into
the functional currency using the exchange rates prevailing at the dates of the transactions. Monetary assets and
liabilities denominated in foreign currencies at the balance sheet date are remeasured at the applicable rates of
exchange in effect at that date. Foreign currency gain or loss resulting from the settlement of such transactions and
from remeasurement at period-end is recognized in “Others, net” in the consolidated statements of comprehensive
income.
The Company follows ASC 718 to determine whether a share option and a restricted share units should be
classified and accounted for as a liability award or equity award. All share-based awards to employees and directors
classified as equity awards, such as stock options and restricted share units, are measured at the grant date based on
the fair value of the awards. Share-based compensation, net of estimated forfeitures, is recognized as expenses on a
straight-line method over the requisite service period, which is the vesting period. Options granted generally vest
over four or five years.
– IA-30 –
The modification of the terms or conditions of the existing shared-based award is treated as an exchange of
the original award for a new award. The incremental compensation expenses are equal to the excess of the fair value
of the modified award immediately after the modification over the fair value of the original award immediately before
the modification. For stock options already vested as of the modification date, the Group immediately recognized the
incremental value as compensation expenses. For stock options still unvested as of the modification date, the
incremental compensation expenses are recognized over the remaining service period of these stock options.
The Company determined the fair value of the restricted share units with reference to the fair value of the
underlying shares as of the grant date. The Company utilizes the binomial option pricing model to estimate the fair
value of stock options granted, with the assistance of an independent valuation firm.
Forfeitures are estimated at the time of grant and revised in subsequent periods if actual forfeitures differ from
those estimates. The Group uses historical data to estimate pre-vesting options and records share-based compensation
expenses only for those awards that are expected to vest. See Note 16 for further discussion on share-based
compensation.
Fair Value of Preferred Shares and Pre-IPO Ordinary Shares
Shares of the Company, which did not have quoted market prices, were valued based on the income approach.
The income approach involves applying the discounted cash flow analysis based on projected cash flow using the
Group’s best estimate as of the valuation dates. Estimating future cash flow requires the Group to analyze projected
revenue growth, gross margins, effective tax rates, capital expenditures and working capital requirements. In
determining an appropriate discount rate, the Group considered the cost of equity and the rate of return expected by
venture capitalists. The Group also applied a discount for lack of marketability given that the shares underlying the
award were not publicly traded at the time of grant. Determination of estimated fair value of the Group requires
complex and subjective judgments due to its limited financial and operating history, unique business risks and limited
public information on companies in China similar to the Group.
Option-pricing method was used to allocate enterprise value to preferred shares and pre-IPO ordinary shares.
The method treats preferred shares and pre-IPO ordinary shares as call options on the enterprise’s value, with exercise
prices based on the liquidation preference of the preferred shares. The strike prices of the “options” based on the
characteristics of the Group’s capital structure, including number of shares of each class of pre-IPO ordinary shares,
seniority levels, liquidation preferences, and conversion values for the preferred shares. The option-pricing method
also involves making estimates of the anticipated timing of a potential liquidity event, such as a sale of the Group
or an IPO, and estimates of the volatility of the Group’s equity securities. The anticipated timing is based on the plans
of board of directors and management of the Group. Estimating the volatility of the share price of a privately held
company is complex because there is no readily available market for the shares. Volatility is estimated based on
annualized standard deviation of daily stock price return of comparable companies.
Taxation
(1) Income tax
Current income taxes are provided on the basis of net income for financial reporting purposes, adjusted for
income and expense items which are not assessable or deductible for income tax purposes, in accordance with the
regulations of the relevant tax jurisdictions. Deferred income taxes are accounted for using an asset and liability
method. Under this method, deferred income taxes are recognized for the tax consequences of temporary differences
by applying enacted statutory rates applicable to future years to differences between the financial statement carrying
amounts and the tax bases of existing assets and liabilities. The tax base of an asset or liability is the amount
attributed to that asset or liability for tax purpose. The effect on deferred taxes of a change in tax rates is recognized
in the consolidated statements of comprehensive income in the period of change. A valuation allowance is provided
to reduce the amount of deferred tax assets if it is considered more likely than not that some portion of, or all of the
deferred tax assets will not be realized.
(2) Uncertain tax positions
The Group did not recognize any interest and penalties associated with uncertain tax positions for the years
ended December 31, 2019, 2020 and 2021 and for the six months ended June 30, 2022, the Group continues to assess
the uncertain tax positions in accordance with applicable income tax guidance and based on changes in facts and
circumstances.
– IA-31 –
Net income per share
Basic net income per share is computed by dividing net income attributable to ordinary shareholder,
considering the accretion of redemption feature and cumulative dividend related to the Company’s redeemable
convertible preferred shares, and undistributed earnings allocated to redeemable convertible preferred shares by the
weighted average number of ordinary shares outstanding during the period using the two-class method. Under the
two-class method, net income is allocated between ordinary shares and other participating securities based on their
participating rights. Net loss is not allocated to other participating securities if based on their contractual terms they
are not obligated to share the losses.
Diluted net income per share is calculated by dividing net income attributable to ordinary shareholder, as
adjusted for the effect of dilutive ordinary equivalent shares, if any, by the weighted average number of ordinary and
dilutive ordinary equivalent shares outstanding during the period. Ordinary equivalent shares consist of ordinary
shares issuable upon the conversion of the redeemable convertible preferred shares, using the if-converted method,
and shares issuable upon the exercise of share options and vesting of restricted share units using the treasury stock
method. Ordinary equivalent shares are not included in the denominator of the diluted net income per share
calculation when inclusion of such share would be anti-dilutive.
Segment Reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief
operating decision-maker. The chief operating decision-maker has been identified as the Chief Executive Officer who
allocates resources to and assesses the performance of the operating segments of an entity. The Group’s reporting
segments are decided based on its operating segments while taking full consideration of various factors such as
products and services, geographic location and regulatory environment related to administration of the management.
Operating segments meeting the same qualifications are allocated as one reporting segment, providing independent
disclosures.
The Group engages primarily in online brokerage services and margin financing services. The Group does not
distinguish between markets or segments for the purpose of internal reports. The Group does not distinguish
revenues, costs and expenses between segments in its internal reporting, and reports costs and expenses by nature as
a whole. Hence, the Group has only one reportable segment.
Significant Risks and Uncertainties
(1) Currency risk
Currency risk arises from the possibility that fluctuations in foreign exchange rates will impact the financial
instruments. The Group is not exposed to significant transactional foreign currency risk since almost all of its
transactions, assets and liability are denominated in Hong Kong dollars and U.S. dollars and Hong Kong dollars are
pegged against U.S. dollars. The impact of foreign currency fluctuations in the Group’s earnings is included in
“Others, net” in the consolidated statements of comprehensive income. At the same time, the Group is exposed to
translational foreign currency risk since some of the Company’s major subsidiaries have RMB as their functional
currency. Therefore, RMB depreciation against Hong Kong dollars could have a material adverse impact on the
foreign currency translation adjustment in the consolidated statements of comprehensive income. The Group enters
into currency futures contracts to manage currency exposure associated with anticipated receipts and disbursements
occurring in a currency other than the functional currency of the entity. The overall impact of the currency risk of
other foreign currency assets held by the Group other than U.S. dollars and Renminbi is not significant.
As of December 31, 2019, 2020 and 2021 and June 30, 2022, the Group had RMB-denominated net liabilities
of HK$94.3 million, net liabilities of HK$262.9 million, net assets of HK$2,374.8 million and net assets of
HK$2,378.5 million, respectively. We estimate that a 10% depreciation of RMB against the U.S. dollar based on the
foreign exchange rate on December 31, 2019, 2020 and 2021 and June 30, 2022, would result in an increase of
US$1.2 million, an increase of US$3.4 million, a decrease of US$30.5 million and a decrease of US$30.3 million,
respectively, in the Group’s pre-tax profit for the years ended December 31, 2019, 2020 and 2021 and for the six
months ended June 30, 2022. We estimate that a 10% appreciation of RMB against the U.S. dollar based on the
foreign exchange rate on December 31, 2019, 2020 and 2021 and June 30, 2022 would result in a decrease of US$1.2
million, a decrease of US$3.4 million, an increase of US$30.5 million and an increase of US$30.3 million,
respectively, in the Group’s pre-tax profit for the years ended December 31, 2019, 2020 and 2021 and for the six
months ended June 30, 2022.
– IA-32 –
(2) Credit risk
Cash held on behalf of clients are segregated and deposited in financial institutions as required by rules
mandated by the Group’s primary regulators. These financial institutions are of sound credit ratings, therefore
management believes that there is no significant credit risk related to cash held on behalf of clients.
The Group’s securities and derivative trades activities are transacted on either a cash or margin basis. The
Group’s credit risk is limited in that substantially all of the contracts entered into are settled directly at securities and
derivatives clearing organizations. In margin transactions, the Group extends credit to the client, subject to various
regulatory and internal margin requirements, collateralized by cash and securities in the client’s account. IPO loans
are exposed to credit risk from clients who fails to repay the loans upon IPO stock allotment. The Group monitors
the clients’ collateral level and has the right to dispose the newly allotted stocks once the stocks first start trading.
Bridge loans to enterprise pledged by shares are exposed to credit risk from counterparties who fail to repay the loans,
the Group monitors on the collateral level of bridge loans in real time, and has the right to dispose of the pledged
shares once the collateral level falls under the minimal level required to get the loans repaid.
Liabilities to other brokers and dealers related to unsettled transactions are recorded at the amount for which
the securities were purchased, and are paid upon receipt of the securities from other brokers or dealers.
In connection with its clearing activities, the Group is obligated to settle transactions with brokers and other
financial institutions even if its clients fail to meet their obligations to the Group. Clients are required to complete
their transactions by the settlement date, generally two business days after the trade date. If clients do not fulfill their
contractual obligations, the Group may incur losses. The Group has established procedures to reduce this risk by
generally requiring that clients deposit sufficient cash and/or securities into their account prior to placing an order.
For cash management purposes, the Group enters into short-term securities sold under agreements to
repurchase transactions (“repos”) in addition to securities borrowing and lending arrangements, all of which may
result in credit exposure in the event the counterparty to a transaction is unable to fulfill its contractual obligations.
Repos are collateralized by securities with a market value in excess of the obligation under the contract. Similarly,
securities lending agreements are collateralized by deposits of cash or securities. The Group attempts to minimize
credit risk associated with these activities by monitoring collateral values on a daily basis and requiring additional
collateral to be deposited with or returned to the Group as permitted under contractual provisions.
Concentrations of Credit Risk
The Group’s exposure to credit risk associated with its brokerage and other activities is measured on an
individual counterparty basis, as well as by groups of counterparties that share similar attributes. There was no
revenue from clients which individually represented greater than 10% of the total revenues for the years ended
December 31, 2019, 2020 and 2021 and for the six months ended June 30, 2021 and 2022, respectively.
Concentrations of credit risk can be affected by changes in political, industry, or economic factors. To reduce the
potential for risk concentration, credit limits are established and exposure is monitored in light of changing
counterparty and market conditions. As of December 31, 2019, 2020 and 2021 and June 30, 2022, the Group did not
have any material concentrations of credit risk within or outside the ordinary course of business.
(3) Interest rate risk
Fluctuations in market interest rates may negatively affect the Group’s financial condition and results of
operations. The Group are exposed to floating interest rate risk on cash deposit and floating rate borrowings. We use
net interest simulation modeling techniques to evaluate the effect that changes in interest rates might have on pre-tax
profit or loss. The model includes all interest-sensitive assets and liabilities. The simulations involve assumptions that
are inherently uncertain and, as a result, cannot precisely predict the impact that changes in interest rates will have
on pre-tax profit or loss. Actual results may differ from simulated results due to differences in timing and frequency
of rate changes, changes in market conditions and changes in management strategy that lead to changes in the mix
of interest-sensitive assets and liabilities.
The simulations assume that the asset and liability structure of the consolidated balance sheets would not be
changed as a result of a simulated change in interest rates. The results of the simulations based on the Group’s
financial position as of June 30, 2022 indicate that a gradual 1% (100 basis points) increase/decrease in interest rates
over a 12-month period would have increased/decreased the Group’s profit before tax by approximately HK$346.8
million (US$44.3 million), depending largely on the extent and timing of possible changes in floating rates.
– IA-33 –
Recent Accounting Pronouncements
In June 2016, the FASB amended guidance related to impairment of financial instruments as part of ASU
2016-13 Financial Instruments–Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,
which is effective on January 1, 2020. The guidance replaces the incurred loss impairment methodology with an
expected credit loss model for which the group is required to recognize an allowance based on its estimate of
expected credit loss. In November 2018, FASB issued ASU No, 2018-19, Codification Improvements to Topic 326,
further clarified the scope of the guidance in the amendments in ASU 2016-13. In May 2019, FASB issued ASU
No.2019-05, Financial instrument–Credit Losses (Topic 326), Targeted Transition Relief, which provides an
irrevocably fair value option to elect for eligible instruments. In November 2019, FASB issued ASU 2019-11
Codification Improvements to Topic 326, Financial Instruments–Credit Losses, which clarified and improved various
aspects of ASU 2016-13. In March 2020, FASB issued ASU 2020-03, Codification Improvements to Financial
Instruments, which improves and clarifies various financial instruments topics, including the current expected credit
losses standard. As of January 1, 2020, the Group adopted ASC Topic 326 using the modified retrospective approach
for all in-scope assets. The adoption of ASC Topic 326 has no impact on the Group’s retained earnings as of January
1, 2020. Results for reporting periods beginning after January 1, 2020 are presented under ASC Topic 326 while prior
periods continue to be reported in accordance with previously applicable U.S. GAAP.
In August 2018, the FASB issued ASU 2018-13, Disclosure Framework–Changes to the Disclosure
Requirements for Fair Value Measurement. The amendments in this standard will remove, modify and add certain
disclosures under ASC Topic 820, Fair Value Measurement, with the objective of improving disclosure effectiveness.
ASU 2018-13 is effective for the Group’s fiscal year beginning January 1, 2020, with early adoption permitted. The
update eliminates the requirement to disclose: (a) the amount and reasons for transfers between Level 1 and Level
2 of the fair value hierarchy; (b) an entity’s policy for timing of transfers between levels; (c) and an entity’s valuation
processes for Level 3 fair value measurements. The Group adopted ASU 2018-13 on January 1, 2020, and the
adoption had no material impact on the Group’s consolidated financial statements.
In December 2019, the FASB issued ASU 2019-12, Income taxes (Topic 740)–Simplifying the accounting for
income taxes, which simplifies the accounting for income taxes by removing certain exceptions to the general
principles in Topic 740, Income Taxes. The ASU will be effective for fiscal years, and interim periods within those
fiscal years, beginning after December 15, 2020. The Group adopted the ASU on January 1, 2021, which did not have
a material impact on the consolidated financial statements.
In March 2020, the FASB issued ASU 2020-04, Facilitation of the Effects of Reference Rate Reform on
Financial Reporting, which provides optional guidance for a limited period of time to ease the potential burden in
accounting for (or recognizing the effects of) reference rate reform on financial reporting if certain criteria are met.
The amendments in ASU 2020-04 provide optional expedients and exceptions for applying GAAP to contracts,
hedging relationships and other transactions that reference LIBOR or another reference rate expected to be
discontinued because of reference rate reform. This guidance is effective immediately and the amendments may be
applied prospectively through December 31, 2022. The adoption did not have a material accounting impact on the
Group’s consolidated financial position or results of operations.
– IA-34 –
3. FINANCIAL ASSETS AND FINANCIAL LIABILITIES
Financial Assets and Liabilities Measured at Fair Value
The following tables set forth, by level within the fair value hierarchy (see Note 3), financial assets and
financial liabilities measured at fair value as of December 31, 2019, 2020 and 2021 and June 30, 2022. As required
by ASC Topic 820, financial assets and financial liabilities are classified in their entirety based on the lowest level
of input that is significant to the respective fair value measurement.
Financial Assets At Fair Value as of December 31, 2019

Level 1 Level 2 Level 3 Total
(HK$ in thousands)
Short-term investments ь ь ь ь ь ь ь ь ь – 93,773 – 93,773

(HK$ in thousands)
Short-term investments ь ь ь ь ь ь ь ь – – – –

(HK$ in thousands)
Short-term investments ь ь ь ь ь ь ь ь 1,169,741 – – 1,169,741

Other financial assets(1) ь ь ь ь ь ь ь ь – 598 – 598
Total financial assets, measured

at fair value ь ь ь ь ь ь ь ь ь ь ь ь ь 1,169,741 598 – 1,170,339
Financial Assets and Liabilities At Fair Value

as of June 30, 2022
(HK$ in thousands)
Short-term investments ь ь ь ь ь ь ь ь ь 17,501 – – 17,501

at fair value ь ь ь ь ь ь ь ь ь ь ь ь ь ь 17,501 – – 17,501
Other financial liabilities(1) ь ь ь ь ь ь ь 6,134 7,460 – 13,594
Total financial liabilities, measured

at fair value ь ь ь ь ь ь ь ь ь ь ь ь ь ь 6,134 7,460 – 13,594
– IA-35 –
(1) The Group enters into currency futures contracts to manage currency exposure associated with
anticipated receipts and disbursements occurring in a currency other than the functional currency of the
entity. The currency futures contracts are valued using broadly distributed bank and broker prices, and
are classified as Level 2 of the fair value hierarchy since inputs to their valuation can be generally
corroborated by market data. As of December 31, 2021 and June 30, 2022, the currency futures are
included in other current assets or other current liabilities.
The Group held trading liabilities and classified them as Level 1 of the fair value hierarchy since the
fair value are determined based on the quoted market price, as of June 30, 2022, the trading liabilities
are included in other current liabilities.
Transfers Between Level 1 and Level 2
Transfers of financial assets and financial liabilities at fair value to or from Levels 1 and 2 arise where the
market for a specific financial instrument has become active or inactive during the period. The fair values transferred
are ascribed as if the financial assets or financial liabilities had been transferred as of the end of the period. During
the years ended December 31, 2019, 2020 and 2021 and the six months ended June 30, 2021 and 2022, there were
no transfers between levels for financial assets and liabilities, at fair value.
Financial Assets and Liabilities Not Measured at Fair Value
The following financial instruments are not measured at fair value in the Group’s consolidated balance sheets
as of December 31, 2019, 2020 and 2021 and June 30, 2022, but require disclosure of their fair values: cash and cash
equivalents, cash held on behalf of clients, term deposit, restricted cash, securities purchased under resale
agreements, loans and advances, receivables, other financial assets, amounts due to related parties, payables,
borrowings, securities sold under agreements to repurchase and other financial liabilities. The estimated fair value
of such instruments at December 31, 2019, 2020 and 2021 and June 30, 2022 approximates their carrying value due
to their generally short maturities. If measured at fair value in the financial statements, these financial instruments
would be classified based on the lowest level of any input that is significant to the fair value measurement.
Netting of Financial Assets and Financial Liabilities
The Group’s policy is to net the receivables from and payables to clearing organizations that meet the
offsetting requirements prescribed in ASC Topic 210-20. The following tables represents the amounts of financial
instruments that are offset in the consolidated balance sheets as of December 31, 2019, 2020 and 2021 and June 30,
2022.
Effects of offsetting on the balance sheet Related amounts not offset

Gross
amounts set Net amounts Amounts
off in the presented in subject to Financial
Gross balance the balance master netting instrument
As of December 31, 2019 amount sheet sheet arrangements collateral Net amount
(HK$ in thousands)
Financial Assets
Amounts due from clearing
organizations ь ь ь ь ь ь ь ь 2,925,936 (2,621,856) 304,080 – – 304,080
Financial liabilities
Amounts due to clearing
organizations ь ь ь ь ь ь ь ь 2,621,856 (2,621,856) – – – –
– IA-36 –

Gross
(HK$ in thousands)
Financial Assets
organizations ь ь ь ь ь ь ь ь 12,614,684 (11,370,756) 1,243,928 – – 1,243,928

Gross
(HK$ in thousands)
Financial Assets
organizations ь ь ь ь ь ь ь 6,028,751 (5,634,969) 393,782 – – 393,782

Gross
As of June 30, 2022 amount sheet sheet arrangements collateral Net amount
(HK$ in thousands)
Financial Assets
organizations ь ь ь ь ь ь ь 10,857,308 (8,941,436) 1,915,872 – – 1,915,872
– IA-37 –
4. SHORT-TERM INVESTMENTS
The Group’s short-term investments are presented on the consolidated balance sheets as follows:
As of
2019 2020 2021 2022
(HK$ in
Available-for-sale financial
securities ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 93,773 – – –
Money market funds ь ь ь ь ь ь ь ь ь ь – – 1,169,741 –
Financial assets at fair value through
profit or loss ь ь ь ь ь ь ь ь ь ь ь ь ь – – – 17,501
Totalь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 93,773 – 1,169,741 17,501
For the years ended December 31, 2019, 2020 and 2021 and for the six months ended June 30, 2021 and 2022,
the Group recorded realized gain of HK$707 thousand, HK$665 thousand, nil, nil and HK$12,491 thousand related
to short-term investments in the consolidated statements of comprehensive income, respectively.
The Company’s short-term investments are presented on the balance sheets as follows:
As of
2019 2020 2021 2022
(HK$ in
Money market funds ь ь ь ь ь ь ь ь ь ь – – 1,169,741 –
Totalь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь – – 1,169,741 –
5. LEASE
The following table presents balances reported in the consolidated balance sheets related to the Group’s leases:
As of
2019 2020 2021 2022
(HK$ in
Operating lease right-of-use

assets ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 161,617 208,863 243,859 212,529
Operating lease liabilities ь ь ь ь ь ь ь 172,466 222,231 260,579 227,745
– IA-38 –
The following table presents operating lease expense reported in the consolidated statements of comprehensive
income related to the Group’s leases:

2019 2020 2021 2021 2022
(unaudited)
Operating lease expense ь ь 64,756 64,594 106,459 47,543 57,682
The following table reconciles the undiscounted cash flows of the Group’s leases as of December 31, 2019,
2020 and 2021 and June 30, 2022 to the present value of its operating lease payments:
As of
2019 2020 2021 2022
(HK$ in
2020 ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 56,714 – – –
2021 ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 46,968 74,740 – –
2022 ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 44,354 70,180 102,767 54,101
2023 ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 40,346 62,559 96,326 100,453
2024 ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь – 17,004 38,306 42,159
2025 ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь – 16,190 30,688 33,622
2026 and thereafter ь ь ь ь ь ь ь ь ь ь ь – – 7,455 14,403
Total undiscounted operating lease

payments ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 188,382 240,673 275,542 244,738
Less: imputed interest ь ь ь ь ь ь ь ь ь (15,916) (18,442) (14,963) (16,993)
Present value of operating lease

liabilities ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 172,466 222,231 260,579 227,745
6. LOANS AND ADVANCES
As of
2019 2020 2021 2022
(HK$ in
Margin loans ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 4,141,962 18,434,047 29,097,216 26,722,627

IPO loans ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь – 400,394 34,348 178,584
Other advances ь ь ь ь ь ь ь ь ь ь ь ь ь 46,727 – 468,000 1,948,857
Subtotal ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 4,188,689 18,834,441 29,599,564 28,850,068
Less: Allowance for credit losses ь ь – (9,075) (12,258) (20,142)
Totalь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 4,188,689 18,825,366 29,587,306 28,829,926
– IA-39 –
Margin clients are required to pledge securities collateral to the Group in order to obtain credit facilities for
securities trading. The amount of credit facilities granted to them is determined by the discounted value of securities
accepted by the Group. Margin loans due from margin clients were repayable on demand. The Group continuously
updating a client account’s securities and margin requirements and, if the account’s securities falls below its
minimum margin requirements, automatically issuing liquidating orders in a smart sequence designed to minimize the
impact on the account’s equity. Under applicable contract, the Group have the right to dispose of the pledge when
stock falls below a certain percentage requirement. As of December 31, 2019, 2020 and 2021 and June 30, 2022, the
total market value of securities pledged as collateral in respect of the loans to margin clients are disclosed in Note 18.
IPO loans are extended to clients and collected once IPO stocks are alloted. The terms of IPO loans are
normally within one week. As of December 31, 2019, 2020 and 2021 and June 30, 2022, there were no overdue IPO
loans and total amount of them were collected subsequently.
as collateral, the Group monitors on the collateral level of bridge loans in real time, and has the right to dispose of
the pledged shares once the collateral level falls under the minimal level required to get the loans repaid. The terms
of other advances are usually within one year. As of December 31, 2019, 2020 and 2021 and June 30, 2022, there
were no overdue other advances.
(a) Loss allowance of loans and advances
Movements on the allowance for credit losses:
Six months ended

2019 2020 2021 2021 2022
(unaudited)
At January 1 ь ь ь ь ь ь ь ь ь ь ь ь ь – – 9,075 9,075 12,258

Loss allowance recognized ь ь ь ь – 9,075 3,200 8,819 7,849
Exchange difference ь ь ь ь ь ь ь ь – – (17) – 35
At end of the year/period ь ь ь ь – 9,075 12,258 17,894 20,142
7. ACCOUNT RECEIVABLE

2019 2020 2021 2022
Receivables:
Clients ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 247,017 735,145 469,577 1,438,510
Brokers ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 1,226,348 5,780,461 7,893,927 6,125,217
Clearing organizations ь ь ь ь ь ь ь ь 304,080 1,243,928 1,961,121 1,915,872
fund distributors ь ь ь ь ь ь ь ь ь ь – 297,622 72,340 120,537
Interest ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 16,892 19,876 50,829 89,458
Subtotal ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 1,794,337 8,077,032 10,447,794 9,689,594
Less: Allowance for credit

losses ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь – – – –
Total ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 1,794,337 8,077,032 10,447,794 9,689,594
– IA-40 –
Accounts from clients, brokers, clearing organizations, fund management companies and fund distributors and
interest are current. These represent (1) pending trades arising from the business of dealing in securities and fund
management, which are normally due within a few days after the trade date, (2) margin deposits arising from the
business of dealing in futures and options contracts and (3) interest arising from margin financing and securities
lending.
8. OTHER ASSETS

2019 2020 2021 2022
Current:
Staff advances ь ь ь ь ь ь ь ь ь ь ь ь 61,745 36,468 26,527 17,854
Deposit ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 12,676 64,471 23,032 40,523
Others ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 5,242 5,948 32,035 50,363
Total ьььььььььььььььььь 79,663 106,887 81,594 108,740
Non-current:
Refundable deposit ь ь ь ь ь ь ь ь ь ь 32,873 150,733 337,513 779,453
Property and equipment, net
(Note a) ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 117,630 108,316 175,757 160,107
Deferred tax assets (Note 26) ь ь ь ь 1,576 17,174 38,317 36,486
Intangible assets, net (Note b) ь ь ь 7,693 10,216 17,218 52,805
Others ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь – – – 31,283
Total ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 159,772 286,439 568,805 1,060,134
(a) Property and equipment, net, consisted of the following:

2019 2020 2021 2022
Gross carrying amount

Computers and equipment ь ь ь ь ь ь ь 56,175 60,039 109,989 106,806
Furniture and fixtures ь ь ь ь ь ь ь ь ь ь 34,588 34,704 64,507 70,504
Office equipment ь ь ь ь ь ь ь ь ь ь ь ь ь 29,938 42,276 64,822 65,639
Office building ь ь ь ь ь ь ь ь ь ь ь ь ь ь 28,110 27,983 28,239 30,982
Vehicle ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 634 632 635 639
Total of gross carrying amount ь ь ь ь 149,445 165,634 268,192 274,570
Less: accumulated depreciation

Computers and equipment ь ь ь ь ь ь ь (8,289) (17,295) (29,852) (38,700)
Furniture and fixtures ь ь ь ь ь ь ь ь ь ь (6,234) (13,738) (23,828) (31,314)
Office equipment ь ь ь ь ь ь ь ь ь ь ь ь ь (16,241) (24,282) (35,860) (41,101)
Office building ь ь ь ь ь ь ь ь ь ь ь ь ь ь (519) (1,403) (2,291) (2,740)
Vehicle ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь (532) (600) (604) (608)
Total of accumulated depreciationь ь ь (31,815) (57,318) (92,435) (114,463)
Property and equipment, net ь ь ь ь ь 117,630 108,316 175,757 160,107
– IA-41 –
Depreciation expenses on property and equipment which are included in research and development expenses,
selling and marketing expenses and general and administrative expenses in the consolidated statements of
comprehensive income for the years ended December 31, 2019, 2020 and 2021 and for the six months ended June 30,
2021 and 2022 were HK$15,647 thousand, HK$25,792 thousand, HK$34,118 thousand, HK$14,459 thousand and
HK$25,213 thousand, respectively.
(b) Intangible assets, net, consisted of the following:

2019 2020 2021 2022

Computer software ь ь ь ь ь ь ь ь ь ь ь ь 6,328 8,525 15,596 21,381
License ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 2,000 2,000 4,261 29,060
Others ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 1,678 3,563 3,638 10,491
Total of gross carrying amount ь ь ь 10,006 14,088 23,495 60,932
Less: accumulated amortization

Computer software ь ь ь ь ь ь ь ь ь ь ь ь (1,647) (3,041) (5,172) (6,442)
License ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь – – – (209)
Others ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь (666) (831) (1,105) (1,476)
Total of accumulated amortization ь ь (2,313) (3,872) (6,277) (8,127)
Intangible assets, net ь ь ь ь ь ь ь ь ь ь 7,693 10,216 17,218 52,805
Amortization expenses on intangible assets which are included in research and development expenses, selling
and marketing expenses and general and administrative expenses in the consolidated statements of comprehensive
income for the years ended December 31, 2019, 2020 and 2021 and for the six months ended June 30, 2021 and 2022
were HK$900 thousand, HK$1,439 thousand, HK$2,317 thousand, HK$909 thousand and HK$2,324 thousand,
respectively.
9. LONG-TERM INVESTMENTS

2019 2020 2021 2022
Equity method investments (1) ь 6,166 – 7,798 233,834

Equity investments without
readily determinable fair
values (2) ь ь ь ь ь ь ь ь ь ь ь ь – – 15,596 15,754
Total ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 6,166 – 23,394 249,588
(1) Equity method investments
As of December 31, 2019, 2020 and 2021 and June 30, 2022, the Group’s investments accounted for under the
equity method totaled HK$6,166 thousand, nil, HK$7,798 thousand and HK$233,834 thousand, respectively. The
Group applies the equity method of accounting to account for its equity method investments over which it has
significant influence but does not own a majority equity interest or otherwise control.
– IA-42 –
In January 2019, the Group invested in a private company by acquiring 20% ordinary equity interest with a
total consideration of HK$6,709 thousand. The Group accounts for this as an equity method investment. For the years
ended December 31, 2019 and 2020, loss on investment recognized were HK$543 thousand and HK$278 thousand,
respectively. Based on the Group’s assessment on the recoverable amounts of the equity method investment, as of
December 31, 2019, 2020 and 2021 and June 30, 2022, the impairment provision on the equity method investment
was nil, HK$5,888 thousand, HK$5,888 thousand, and HK$5,888 thousand, respectively.
In December 2021, the Group invested in a private equity fund by acquiring approximately 10% ordinary
equity interest with a total consideration of HK$7,798 thousand. The Group accounts for this as an equity method
investment. Based on the Group’s assessment on the recoverable amounts of this equity method investment, as of
December 31, 2021 and June 30, 2022, no impairment provision on the equity method investment was recognized.
In June 2022, the Group invested in a private equity fund by acquiring approximately 16% ordinary equity
interest with a total consideration of HK$235,434 thousand. The Group accounts for this as an equity method
investment. For the period ended June 30, 2022, loss on investment recognized were HK$9,398 thousand. Based on
the Group’s assessment on the recoverable amounts of this equity method investment, as of June 30, 2022, no
impairment provision on the equity method investment was recognized.
(2) Equity investments without readily determinable fair values
As of December 31, 2019, 2020 and 2021 and June 30, 2022, the Group’s equity investments without readily
determinable fair values totaled nil, nil, HK$15,596 thousand and HK$15,754 thousand, respectively. In December
2021, the Group invested in a private equity fund by acquiring 2.75% ordinary equity interest with a total
consideration of HK$15,596 thousand. Equity securities without determinable fair values of the Group represent
investments in privately held companies with no readily determinable fair value. The Group elected measurement
alternative and recorded these investments at cost, less impairment, adjusted for subsequent observable price changes.
As of December 31, 2021 and June 30, 2022, no impairment provision on the equity investments without readily
determinable fair values were recognized.
10. BORROWINGS
The Group’s borrowings are presented on the consolidated balance sheets as follows:

2019 2020 2021 2022
Borrowings from:
Banks (a) ь ь ь ь ь ь ь ь ь ь ь ь ь ь 1,467,586 5,182,620 6,357,405 4,353,919
Third party ь ь ь ь ь ь ь ь ь ь ь ь ь – 300,198 – –
Total ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 1,467,586 5,482,818 6,357,405 4,353,919
The Group obtained borrowings mainly to support its margin financing business in Hong Kong securities
market. Those borrowings bear weighted average interest rates of 4.29%, 1.82%, 1.15% and 1.75% as of December
31, 2019, 2020 and 2021 and June 30, 2022, respectively.
– IA-43 –
The Group’s borrowings were repayable as follows:

2019 2020 2021 2022
Within 1 year ь ь ь ь ь ь ь ь ь ь ь 1,467,586 5,482,818 6,357,405 4,353,919
(a) The Group has unused borrowing facilities of HK$3,326,555 thousand, HK$3,285,909 thousand,
HK$14,695,095 thousand and HK$17,955,662 thousand from banks as of December 31, 2019, 2020 and
2021 and June 30, 2022, respectively, which are uncommitted. These bank borrowings were pledged by
margin clients’ shares as the primary source of credit risk mitigation of the lenders, and beared floating
interest rates based on various benchmarks including Hong Kong Prime Rate, Hong Kong Interbank
Offered Rate (“HIBOR”), CNH HIBOR, etc.
The Company’s borrowings are presented on the balance sheets as follows:

2019 2020 2021 2022
Borrowings from:
Banks (a) ь ь ь ь ь ь ь ь ь ь ь ь – 977,735 689,869 290,000
Total ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь – 977,735 689,869 290,000
The Company obtained borrowings mainly to support its margin financing business in Hong Kong securities
market. Those borrowings bear weighted average interest rates of nil, 1.82%, 1.39% and 1.59% as of December 31,
2019, 2020 and 2021 and June 30, 2022, respectively.
The Company’s borrowings were repayable as follows:

2019 2020 2021 2022
Within 1 year ь ь ь ь ь ь ь ь ь ь ь – 977,735 689,869 290,000
(a) The Company has unused borrowing facilities of nil, HK$9,888 thousand, HK$1,160,000 thousand and
HK$560,000 thousand from banks as of December 31, 2019, 2020 and 2021 and June 30, 2022,
respectively, which are uncommitted.
– IA-44 –
11. ACCOUNTS PAYABLES

2019 2020 2021 2022
Payables:
Clients ь ь ь ь ь ь ь ь ь ь ь ь ь ь 15,438,879 46,062,842 59,127,439 67,951,394
Brokers ь ь ь ь ь ь ь ь ь ь ь ь ь 1,484,243 4,533,581 7,599,233 14,365,158
Clearing organizations ь ь ь ь – 324,266 393,782 1,359,746
Fund management companies
and fund distributors ь ь ь ь 26,381 127,442 56,690 49,545
Interest ь ь ь ь ь ь ь ь ь ь ь ь ь ь 519 5,493 15,359 10,334
Totalь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 16,950,022 51,053,624 67,192,503 83,736,177
All of the accounts payables are expected to be settled within one year or are repayable on demand.
12. ACCRUED EXPENSES AND OTHER LIABILITIES

2019 2020 2021 2022
Current:
Payables to corporate clients in
relation to ESOP management
services (1) ь ь ь ь ь ь ь ь ь ь ь ь ь 16,492 17,801 870,283 508,375
Accrued payroll and welfare
expenses ь ь ь ь ь ь ь ь ь ь ь ь ь ь 100,228 317,428 531,409 597,834
Tax payables ь ь ь ь ь ь ь ь ь ь ь ь ь 50,803 173,911 494,744 403,700
Accrued advertising and
promotion fee ь ь ь ь ь ь ь ь ь ь ь 10,862 37,652 152,305 92,278
Temporary payables in relation to
fund distribution services ь ь ь ь – 70,793 48,240 47,111
Accrued professional feeь ь ь ь ь ь 5,710 6,952 22,066 40,209
Stamp duty, trading levy and
trading fee payables ь ь ь ь ь ь ь 5,612 26,007 19,447 45,058
Accrued market information and
data fee ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 5,646 13,143 12,832 7,765
Contract liabilities – current ь ь ь 278 2,958 3,058 1,714
Refund from depositary bank –
current ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 2,769 2,756 2,773 2,790
Others ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 15,911 47,782 19,056 60,252
Total ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 214,311 717,183 2,176,213 1,807,086
Non-current:
Contract liabilities –
non-current ь ь ь ь ь ь ь ь ь ь ь ь 1,848 5,291 5,910 5,429
Refund from depositary bank –
non-current ь ь ь ь ь ь ь ь ь ь ь ь 9,920 7,120 4,389 3,022
Deferred tax liabilities
(Note 26) ь ь ь ь ь ь ь ь ь ь ь ь ь ь – 1,604 636 7,643
Total ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 11,768 14,015 10,935 16,094
(1) Payables to corporate clients in relation to ESOP management services mainly consist of exercise
payment of share options and related withholding tax.These payables are usually expected to be settled
within one year.
– IA-45 –
13. ORDINARY SHARES AND TREASURY STOCK
Ordinary shares
The Company’s original Memorandum and articles of association authorized the Company to issue 807,500
ordinary shares with a par value of US$0.0050 per share. After a share split effective on September 22, 2016, the
Company’s amended Memorandum and articles of association authorized the Company to issue 403,750,000 ordinary
shares with a par value of US$0.00001 per share. Each ordinary share is entitled to one vote. The holders of ordinary
shares are also entitled to receive dividends whenever funds are legally available and when declared by the Board
of Directors, subject to prior rights of holders of all other classes of shares outstanding.
1) Dividend distribution
Dividend distribution to the Company’s shareholder is recognized as a liability in the Group’s consolidated
financial statements in the period in which the dividends are approved by the Group’s shareholders or directors,
where appropriate. Cash dividend on ordinary shares, if any, will be paid in U.S. dollars.
2) Variation of share capital
In December 2018, written resolutions were passed by the board of directors of the Company and its
shareholders, pursuant to which, below major matters have been approved by the board of directors and its
shareholders:
(a) the Group will adopt a dual-class share structure, consisting of Class A ordinary shares and Class B
ordinary shares, which will become effective immediately prior to the completion of the Company’s
initial public offering. Immediately prior to the completion of the initial public offering, (i) the
conversion and re-designation of all of the then currently issued and outstanding preferred shares into
ordinary shares on a one-to-one basis; (ii) all of the ordinary shares ultimately held by the Company’s
founder, chairman of the board of directors and chief executive officer, Mr. Leaf Hua Li, and
140,802,051 ordinary shares (including ordinary shares resulting from the conversion and re-designation
of preferred shares) held by Qiantang River Investment Limited will be re-designated into Class B
ordinary shares on a one-to-one basis and (iii) all of the remaining ordinary shares (including ordinary
shares resulting from the conversion and re-designation of preferred shares) will be re-designated into
Class A ordinary shares on a one-to-one basis. In respect of matters requiring the votes of shareholders,
holders of Class A ordinary shares will be entitled to one vote per share, while holders of Class B
ordinary shares will be entitled to twenty votes per share.
(b) immediately prior to the completion of the initial public offering, the authorized share capital will be
increased from US$50,000 divided into 5,000,000,000 shares of par value of US$0.00001 each, to
US$500,000 divided into 50,000,000,000 shares of par value of US$0.00001 each. of which (i)
48,700,000,000 shall be designated as Class A ordinary shares; (ii) 800,000,000 shall be designated as
Class B ordinary shares; and (iii) 500,000,000 shares of such class or classes (however designated) as
the board may determine in accordance with the post-offering amended and restated memorandum and
articles of association.
On March 8, 2019, the Company completed its IPO on the Nasdaq Global Market. In the offering, 8,625,000
ADSs (including 1,125,000 ADSs sold upon the full exercise of the underwriters’ over-allotment option), representing
69,000,000 Class A ordinary shares, were issued and sold to the public at a price of US$12.0 per ADS. Concurrently
with the IPO, 46,666,666 Class A ordinary shares were issued and sold to General Atlantic Singapore FT Pte. Ltd.
at a price per share equal to the IPO price per share. The net proceeds to the Company from the IPO and Concurrent
Private Placement, after deducting commissions and offering expenses, were approximately US$161.7 million
(HK$1,259.3 million).
Upon the completion of the IPO, all 377,931,094 issued and outstanding preferred shares were converted into
ordinary shares immediately as of the same date. Concurrently the Company completed the redesignation on a
one-for-one basis of: (i) all of 403,750,000 original ordinary shares ultimately held by the Company’s founder,
chairman of the Board of Directors and chief executive officer, Mr. Leaf Hua Li and 140,802,051 shares (including
ordinary shares resulting from the conversion and re-designation of preferred shares) held by Qiantang River
Investment Limited into Class B ordinary shares; (ii) all of remaining ordinary shares (including 237,129,043
ordinary shares resulting from the conversion and re-designation of preferred shares) into Class A ordinary shares.
The Group concluded that the adoption of dual-class share structure did not have a material impact on its consolidated
financial statements.
– IA-46 –
In respect of all matters subject to shareholders’ vote, each holder of Class A ordinary share is entitled to one
and each holder of Class B ordinary share is entitled to twenty votes.
On August 22, 2020, the Company completed a public offering, issued 76,000,000 Class A ordinary shares for
a total consideration of US$301.8 million (HK$2,339.7 million) after deducting the underwriting discounts and
commissions and offering expenses.
Each Class B ordinary share is convertible into one Class A ordinary share at any time by the holder thereof,
while Class A ordinary shares are not convertible into Class B ordinary shares under any circumstances. On December
3, 2020, 50,000,000 shares of Class B ordinary shares were converted to the same number of Class A ordinary shares.
In December, 2020, the Company entered into a securities purchase agreement with a leading global
investment firm for a private placement of pre-funded warrants (the “Offering” or the “pre-funded warrants”). The
net proceeds to the Company from the Offering were approximately HK$2,035.1 million (US$262.5 million). In the
Offering, the Company issued pre-funded warrants to purchase 53,600,000 shares of Class A ordinary shares that
were immediately exercisable and had a termination date in June 2022, at a price of US$4.89751 less a nominal
exercise price of US$0.00001 per pre-funded warrant. The pre-funded warrants were equity classified because they
were immediately exercisable, did not embody an obligation for the Company to repurchase its shares, and permitted
the holders to receive a fixed number of common shares upon exercise. In addition, such warrants did not provide
any guarantee of value or return. On June 11, 2021, the investment firm exercised these warrants.
On April 24, 2021, the Company completed a public offering, issued 87,400,000 Class A ordinary shares for
a total consideration of US$1,398 million (HK$10,856.5 million) after deducting the underwriting discounts and
During the year ended December 31, 2019, 2020 and 2021 and the six months ended June 30, 2021 and 2022,
106,295,232, 5,048,824, 5,875,592, 2,395,392 and 1,197,536 shares of Class A Ordinary Shares were issued upon
exercise of outstanding stock options, nil, nil, 929,672, nil and nil shares of Class A Ordinary Shares were issued upon
vest of outstanding restricted share units under the Group’s share-based incentive plans (Note 16).
Treasury stock
On November 3, 2021, the Group’s Board of Directors approved a share repurchase program to repurchase up
to US$300.0 million worth of its own American depositary shares (“ADSs”), representing its Class A ordinary shares,
until December 31, 2022.
On March 10, 2022, the Group’s Board of Directors approved another share repurchase program to repurchase
up to US$500.0 million worth of the ADSs, representing its Class A ordinary shares, until December 31, 2023.
As of December 31, 2021 and June 30, 2022, the Group had repurchased an aggregate of 29,462,760 and
109,041,760 Class A ordinary shares under these share repurchase programs in the open market, at an average price
of US$41.04 and US$36.70 per ADS, or US$5.13 and US$4.59 per share for a total consideration of US$151.2
million (HK$1,178.8 million) and US$500.3 million (HK$3,909.8 million), respectively.
14. RESTRICTED NET ASSETS
In accordance with the PRC laws and regulations, the Group’s PRC subsidiaries and VIEs are required to make
appropriation to certain reserve funds, namely general reserve fund, enterprise expansion fund, and staff bonus and
welfare fund, all of which are appropriated from the subsidiaries’ annual after-tax profits as reported under PRC
GAAP. The appropriation must be at least 10% of the annual after-tax profits to the general reserve fund until such
reserve fund has reached 50% of the subsidiaries’ registered capital.
The domestic companies are also required to provide discretionary surplus fund, at the discretion of the Board
of Directors, from its annual after-tax profits as reported under PRC accounting standards. The aforementioned
reserve funds can only be used for specific purposes and are not distributable as cash dividends.
Furthermore, cash transfers from the Group’s PRC subsidiaries to their parent companies outside of China are
subject to PRC government control of currency conversion. Shortages in the availability of foreign currency at the
time of requesting such conversion may temporarily delay the ability of the PRC subsidiaries and consolidated
affiliated entities to remit sufficient foreign currency to pay dividends or other payments to the Group, or otherwise
satisfy their foreign currency denominated obligations.
As a result of the PRC laws and regulations and the requirement that distributions by the PRC entity can only
be paid out of distributable profits computed in accordance with PRC accounting standards, the PRC entity is
restricted from transferring a portion of its net assets to the Group. Amounts restricted include paid-in capital and
statutory reserves of the Group’s PRC subsidiaries and VIEs. As of December 31, 2019, 2020 and 2021 and June 30,
2022, the restricted net assets of the Group’s relevant PRC entities amounted to HK$205,306 thousand, HK$229,035
thousand, HK$304,377 thousand and HK$304,377 thousand, respectively.
– IA-47 –
15. REDEEMABLE CONVERTIBLE PREFERRED SHARES
From 2014 to 2017, the Group issued several rounds of Preferred Shares to certain investors. All series of
Preferred Shares had the same par value of US$0.00001 per share. Upon the completion of the Company’s IPO in
March 2019, all of the issued and outstanding Preferred Shares were automatically converted and redesignated into
Class A or Class B Ordinary Shares on a one-for-one basis.
Prior to the automatic conversion into Class A Ordinary Shares, the Preferred Shares were entitled to certain
preferences with respect to conversion, dividend, liquidation and redemption. The holders of Preferred Shares were
entitled to vote together with the holders of ordinary shares on all matters submitted to a vote of the shareholders
of the Company on an as-if-converted basis and not as a separate class. Immediately prior to the IPO, the Preferred
Shares comprised the following:
In October 2014, the Group issued 250,000 Series A Convertible Redeemable Preferred Shares (“Series A
Preferred Shares”) for an aggregate purchase price of US$7,000 thousand and 46,875 Series A-1 Convertible
Redeemable Preferred Shares (“Series A-1 Preferred Shares”) for an aggregate purchase price of US$1,500 thousand.
In May 2015, the Group issued 176,847 Series B Convertible Redeemable Preferred Shares (“Series B
Preferred Shares”) for an aggregate purchase price of US$30,000 thousand.
All the Series A, Series A-1 and Series B Preferred Shares were issued for cash consideration and have the
same par value of US$0.005 per share at each issuance date.
After a share split effective on September 22, 2016, the number of shares of Series A, Series A-1 and Series
B Preferred Shares were proportionally split with par value of US$0.00001 per share. 125,000,000 Series A Preferred
Shares, 23,437,500 Series A-1 Preferred Shares and 88,423,500 Series B Preferred Shares were issued in the
Company’s amended Memorandum and Articles of Association.
In May 2017, the Group issued 128,844,812 Series C Convertible Redeemable Preferred Shares (“Series C
Preferred Shares”) for an aggregate purchase price of US$91,362 thousand and 12,225,282 Series C-1 Convertible
Redeemable Preferred Shares (“Series C-1 Preferred Shares”) for an aggregate purchase price of US$12,609
thousand.
Out of the total Series C Preferred Shares, i) 95,094,173 Series C Preferred Shares were issued for cash
consideration of US$67,430 thousand; ii) 5,878,794 Series C Preferred Shares were converted from the convertible
note with the principal amount of US$3,855 thousand plus accrued but unpaid interest of US$314 thousand at the
price per share of US$0.71; and iii) 27,871,845 Series C Preferred Shares were issued from the repayment of an
outstanding principal amount of US$19,274 thousand plus accrued but unpaid interest of US$490 thousand loaned
by the fellow subsidiary of the investor of Series C Preferred Shares to the Company. The total Series C-1 Preferred
Shares were issued of cash consideration.
The Series A, Series A-1, Series B, Series C and Series C-1 Preferred Shares are collectively referred to as the
“Preferred Shares”. All series of Preferred Shares have the same par value of US$0.00001 per share.
The major rights, preferences and privileges of the Preferred Shares issued by the Company are as follows:
Conversion Rights
(1) Optional Conversion
Each of the Preferred Shares is convertible, at the option of the holder, into the Company’s ordinary shares at
an initial conversion ratio of 1:1 at any time after the date of issuance of such Preferred Shares, subject to adjustments
in the event of (i) share splits and combinations, (ii) ordinary share dividends and distributions, or (iii)
reorganizations, mergers, consolidations, reclassifications, exchanges and substitutions.
(2) Automatic Conversion
Each Preferred Share shall automatically be converted into ordinary shares, at the then-effective preferred
share conversion price upon the occurrence of a QIPO.
– IA-48 –
Voting Rights
The holder of each ordinary share issued and outstanding has one vote for each ordinary share held and the
holder of each Preferred Shares has the number of votes as equals to the number of ordinary shares then issuable upon
their conversion into ordinary shares. To the extent that applicable law, Memorandum and Articles of the Company
allow any class or series of Preferred Shares to vote separately as a class or series with respect to any matters, such
Preferred Shares shall vote separately as a class or series with respect to such matters.
Redemption Rights
Redemption Condition for Preferred Shares:
The Preferred Shares are redeemable in the event of:
(i) any material breach of the transaction documents by any Group Company which involves fraud,
intentional misconduct, or gross negligence, and which results in a material adverse effect;
(ii) the failure of a QIPO to occur by the sixth anniversary of the issuance date of the Series C Preferred
Shares; or
(iii) requested by a majority holders of the Preferred Shares.
The redemption price of each Preferred Share shall be the sum of (i) the Preferred Shares issuance price, (ii)
plus interest thereon at 6% per annum on the issuance price, compounded annually; and (iii) plus any accrued but
unpaid dividends.
The Group accretes changes in the redemption value over the period from the date of issuance of the Preferred
Shares to their respective earliest redemption date using effective interest method. Changes in the redemption value
are considered to be changes in accounting estimates. The accretion will be recorded against retained earnings, or in
the absence of retained earnings, by charges against additional paid-in capital. Once additional paid-in capital has
been exhausted, additional charges should be recorded by increasing the accumulated deficit.
Dividends Rights
Each holders of the Preferred Shares shall be entitled to receive preferential dividends prior and in preference
before, any dividend on the ordinary shares. Such dividends shall be payable only when, as, and if declared by the
Board of Directors and shall be non-cumulative.
After payment of such preferential dividends on Preferred Shares during any year, any further dividends or
distribution distributed during such year shall be declared and paid ratably on the outstanding Preferred Shares (on
an as-converted basis) and the ordinary shares.
No dividends on Preferred Shares and ordinary shares have been declared since the inception through
December 31, 2018.
Liquidation Preferences
In the event of any liquidation, dissolution or winding up of the Company, either voluntary or involuntary, all
assets and funds of the Company legally available for distribution among holders of the outstanding Shares (on an
as-converted to basis) in the following order and manner:
(i) the holders of the Series C Preferred Shares and Series C-1 Preferred Shares shall be entitled to receive
for each Series C Preferred Share and Series C-1 Preferred Share held by such holder, on parity with
each other and prior and in preference to any distribution of any of the assets or funds of the Company
to the holders of any other class or series of shares by reason of their ownership of such shares, an
amount equal to 100% of the Series C issuance price and Series C-1 issuance price, plus all accrued but
unpaid dividends on such Series C Preferred Share and Series C-1 Preferred Share, as applicable
(collectively, the “Series C Preference Amount”).
– IA-49 –
(ii) if there are any assets or funds remaining after the aggregate Series C Preference Amount has been
distributed or paid in full to the applicable holders of Series C Preferred Shares and Series C-1 Preferred
Shares, the holders of the Series B Preferred Shares shall be entitled to receive for each Series B
Preferred Share held by such holder, on parity with each other and prior and in preference to any
distribution of any of the assets or funds of the Company to the holders of any other class or series of
shares by reason of their ownership of such shares, the amount equal to 100% of the Series B issuance
price, plus all accrued but unpaid dividends on such Series B Preferred Share (collectively, the “Series
B Preference Amount”). If the assets and funds thus distributed among the holders of the Series B
Preferred Shares shall be insufficient to permit the payment to such holders of the full Series B
Preference Amount, then the entire assets and funds of the Company legally available for distribution
shall be distributed ratably among the holders of the Series B Preferred Shares in proportion to the
Series B Preference Amount each such holder is otherwise entitled to receive.
(iii) if there are any assets or funds remaining after the aggregate Series C Preference Amount and Series B
Preference Amount has been distributed or paid in full to the applicable holders of Series C Preferred
Shares, Series C-1 Preferred Shares and Series B Preferred Shares, respectively, the holders of the Series
A Preferred Shares and Series A-1 Preferred Shares shall be entitled to receive for each Series A
Preferred Share and Series A-1 Preferred Share held by such holder, on parity with each other and prior
and in preference to any distribution of any of the remaining assets or funds of the Company to the
holders of Ordinary Shares by reason of their ownership of such shares, the amount equal to 100% of
the Series A issuance price or the Series A-1 issuance price, as applicable, plus all accrued but unpaid
dividends on such Series A Preferred Share and Series A-1 Preferred Share, as applicable (collectively,
the “Series A Preference Amount”). If the assets and funds thus distributed among the holders of the
Series A Preferred Shares and Series A-1 Preferred Shares shall be insufficient to permit the payment
to such holders of the full Series A Preference Amount, then the entire assets and funds of the Company
legally available for distribution shall be distributed ratably among the holders of the Series A Preferred
Shares and Series A-1 Preferred Shares in proportion to the Series A Preference Amount each such
holder is otherwise entitled to receive.
(iv) if there are any assets or funds remaining after the aggregate of the Series A Preference Amount, Series
B Preference Amount and Series C Preference Amount have been distributed or paid in full to the
applicable holders of Preferred Shares, the remaining assets and funds of the Company available for
distribution to the shareholders shall be distributed ratably among the holders of the Preferred Shares
(on an as-converted basis), together with the holders of the ordinary shares.
Accounting of the Preferred Shares
The Company classified the Preferred Shares as mezzanine equity in the consolidated balance sheets because
they were redeemable at the holders’ option any time after a certain date and were contingently redeemable upon the
occurrence of certain liquidation events outside of the Company’s control. The Preferred Shares are recorded initially
at fair value, net of issuance costs. The Group recognized accretion to the respective redemption value of the
Preferred Shares over the period starting from issuance date to the earliest redemption date.
The Group determined that the embedded conversion features and the redemption features do not require
bifurcation as they either are clearly and closely related to the Preferred Shares or do not meet the definition of a
derivative.
The Group has determined that there was no embedded beneficial conversion feature attributable to the
Preferred Shares. In making this determination, the Group compared the initial effective conversion prices of the
Preferred Shares and the fair values of the Group’s ordinary shares determined by the Group at the issuance dates.
The initial effective conversion prices were greater than the fair values of the ordinary shares to which the Preferred
Shares are convertible into at the issuance dates.
In March 2019, 237,129,043 issued and outstanding preferred shares were converted into Class A ordinary
shares and 140,802,051 issued and outstanding preferred shares were converted into Class B ordinary shares upon
the completion of the IPO.
– IA-50 –
16. SHARE-BASED COMPENSATION
Share-based compensation was recognized in operating expenses for the years ended December 31, 2019, 2020
and 2021 and the six months ended June 30, 2021 and 2022 as follows:
Six months ended

2019 2020 2021 2021 2022
(unaudited)

expenses ь ь ь ь ь ь ь ь ь ь ь 12,055 20,579 75,755 25,202 69,170
expenses ь ь ь ь ь ь ь ь ь ь ь 3,374 10,354 14,020 4,924 20,294
expenses ь ь ь ь ь ь ь ь ь ь ь 538 1,640 9,138 3,290 7,787
Total share-based
compensation expenses ь 15,967 32,573 98,913 33,416 97,251
Share Options
In October 2014, the Board of Directors of the Company approved the establishment of 2014 Share Incentive
Plan, the purpose of which is to provide an incentive for employees contributing to the Group. The 2014 Share
Incentive Plan shall be valid and effective until October 30, 2024. The maximum number of shares that may be issued
pursuant to all awards (including incentive share options) under 2014 Share Incentive Plan shall be 135,032,132
shares. Option awards are granted with an exercise price determined by the Board of Directors. Those option awards
generally vest over a period of four or five years and expire in ten years.
In December 2018, the Board of Directors of the Company approved the 2019 Share Incentive Plan, pursuant
to which the maximum number of shares of the Company available for issuance shall be a number of up to 2% of
the total number of shares issued and outstanding on September 29, 2019 as determined by the Board, plus an annual
increase on each September 30 during the term of this 2019 Share Incentive Plan commencing on September 30,
2020, by an amount determined by the Board; provided, however, that (i) the number of shares increased in each year
shall not be more than 2% of the total number of shares issued and outstanding on September 29 of the same year
and (ii) the aggregate number of shares initially reserved and subsequently increased during the term of this 2019
Share Incentive Plan shall not be more than 8% of the total number of shares issued and outstanding on September
29, 2019 immediately preceding the most recent increase.
On December 30, 2019, the Company modified the exercise price of 8,113,145 stock options granted under
2014 Share Incentive Plan to US$0.60. The incremental compensation expenses of HK$3,008 thousand (US$386
thousand) was equal to the excess of the fair value of the modified award immediately after the modification over
the fair value of the original award immediately before the modification.
the Group granted 9,791,200, 2,489,832, 1,080,000, nil and nil stock options to employees pursuant to the 2014 Share
Incentive Plan and 2019 Share Incentive Plan.
A summary of the stock option activity under the 2014 and 2019 Share Incentive Plan for the years ended
December 31, 2019, 2020 and 2021 and for the six months ended June 30, 2021 and 2022 is included in the table
below.
Weighted average
Options granted exercise price
share number per option
(US$)
Outstanding at December 31, 2018 ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 121,207,838 0.1049
– IA-51 –
Weighted average
Options granted exercise price
share number per option
(US$)
Exercised ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь (106,295,232) 0.0126

Granted ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 9,791,200 0.6500
Cancelled/forfeited ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь (985,180) 0.8402

Cancelled/forfeited ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь (2,117,298) 0.5588

Forfeited ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь (905,278) 0.6539

Outstanding at June 30, 2022ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 11,840,890 0.5627
(Unaudited)
The following table summarizes information regarding the share options outstanding as of December 31, 2019,
2020 and 2021 and June 30, 2022, and exercise prices and aggregate intrinsic value have been adjusted according to
the modification of exercise price in December 2019:
As of December 31, 2019

Weighted-
average
Weighted- remaining
average exercise Aggregate
Options exercise price contractual intrinsic
number per option life (years) value
(US$ in
(US$) thousands)
Options
Outstanding ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 23,718,626 0.5161 4.84 18,356
Exercisable ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 2,802,821 0.4061 4.84 2,459
Expected to vestь ь ь ь ь ь ь ь ь ь ь ь ь 20,915,805 0.5307 4.84 15,897
– IA-52 –

Weighted-
average
Weighted- remaining
(US$ in
(US$) thousands)
Options

Weighted-
average
Weighted- remaining
(US$ in
(US$) thousands)
Options
As of June 30, 2022

Weighted-
average
Weighted- remaining
(US$ in
(US$) thousands)
Options
The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying
awards and the fair value of the underlying stock at December 31, 2019, 2020 and 2021 and for the six months ended
June 30, 2021 and 2022.
The weighted average grant date fair value of options granted for the years ended December 31, 2019, 2020
and 2021 and the six months ended June 30, 2021 and 2022 were US$0.7345, US$1.5239, US$18.9219, nil and nil
per option, respectively.
Options exercised for the years ended December 31, 2019, 2020 and 2021 and for the six months ended
June 30, 2021 and 2022 were 106,295,232, 5,048,824, 5,875,592, 2,395,392 and 1,197,536, respectively. The total
intrinsic value of options exercised during year ended December 31, 2019, 2020 and 2021 and for the six months
ended June 30, 2022 was approximately HK$1,094 million (US$140 million), HK$140,794 thousand (US$18,147
thousand), HK$614,738 thousand (US$79,093 thousand) and HK$39,030 thousand (US$4,988 thousand).
– IA-53 –
The fair value of each option granted during the year ended December 31, 2019, 2020 and 2021 and for the
six months ended June 30, 2021 and 2022 was estimated on the date of each grant using the binomial option pricing
model with the assumptions (or ranges thereof) in the following table:
Six months ended

2019 2020 2021 2021 2022
(unaudited)
0.27%- 0.09%-
Risk-free interest rate ь ь ь 1.67% 0.36% 0.89% NA NA
Expected term
(in years) ь ь ь ь ь ь ь ь ь 5.00 5.00 5.00 NA NA
Expected dividend yield ь ь 0% 0% 0% NA NA
Expected volatility ь ь ь ь ь 45% 40% 40% NA NA
Expected forfeiture rate
(post-vesting) ь ь ь ь ь ь ь 15% 15% 15% NA NA
Risk-free interest rate is estimated based on the yield curve of US Sovereign Bond as of the option valuation
date. The expected volatility at the grant date and each option valuation date is estimated based on annualized
standard deviation of daily stock price return of comparable companies with a time horizon close to the expected
expiry of the term of the options. The Company has never declared or paid any cash dividends on its capital stock,
and the Group does not anticipate any dividend payments in the foreseeable future. Expected term is the contract life
of the options.
As of December 31, 2019, 2020 and 2021 and June 30, 2022, there was HK$100,437 thousand (US$12,894
thousand), HK$87,602 thousand (US$11,300 thousand), HK$201,948 thousand (US$25,897 thousand) and
HK$173,796 thousand (US$22,146 thousand) of unrecognized compensation expenses related to the options, adjusted
for estimated forfeitures, which is expected to be recognized over a weighted-average period of 4.44, 3.66, 3.96 and
3.53 years, respectively, and may be adjusted for future changes in estimated forfeitures.
Restricted Share Units Plan
In December 2018, the Board of Directors of the Company approved the 2019 Share Incentive Plan. The fair
value of restricted share units granted with service conditions is estimated based on the fair market value of the
underlying ordinary shares of the Company on the date of grant.
The following table summarizes activities of the Company’s restricted share units granted to employees under
the plan:
Weighted average
Shares awarded grant date fair
number value per share
(US$)
Outstanding at December 31, 2019 ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь – –

Vested ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь (929,672) 4.6827

– IA-54 –
Weighted average
Shares awarded grant date fair
number value per share
(US$)
Granted ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 48,000 5.4125

Forfeited ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь (1,152,240) 5.0585
(Unaudited)
the Group granted nil, 6,067,400, 12,105,712, nil and 48,000 restricted share units to employees pursuant to the 2019
Share Incentive Plan, respectively.
As of December 31, 2019, 2020 and 2021 and June 30, 2022, there was nil, HK$219,251 thousand (US$28,281
thousand), HK$694,749 thousand (US$89,092 thousand) and HK$599,247 thousand (US$76,359 thousand) of
unrecognized compensation expenses related to the restricted share units, adjusted for estimated forfeitures, which
is expected to be recognized over a weighted-average period of nil, 4.98, 4.64 and 4.14 years and may be adjusted
for future changes in estimated forfeitures.
17. NET INCOME PER SHARE
For the year ended December 31, 2019, the Group has determined that its all classes of convertible redeemable
preferred shares are participating securities as they participate in undistributed earnings on an as-if-converted basis.
The holders of the Preferred Shares are entitled to receive dividends on a pro rata basis, as if their shares had been
converted into ordinary shares. Accordingly, the Group uses the two-class method of computing net income per share,
for ordinary shares and preferred shares according to the participation rights in undistributed earnings. For the year
ended December 31, 2020, the Company issued pre-funded warrants to purchase 53,600,000 shares of Class A
ordinary shares with an exercise price of US$0.00001 that are included in our computation of basic earnings per
share. For the year ended December 31, 2021, the investment firm exercised these pre-funded warrants which
increased 53,599,890 shares of Class A ordinary shares, and 110 shares were retrieved as the consideration of share
purchase.
Basic net income per share and diluted net income per share have been calculated in accordance with ASC 260
on computation of earnings per share for the years ended December 31, 2019, 2020 and 2021 and for the six months
ended June 30, 2021 and 2022 as follows:
Six months ended

2019 2020 2021 2021 2022
(HK$ in thousands, except for share and (HK$ in thousands, except for
per share data) share and per share data)
(unaudited)
Basic net income per share

calculation:
Numerator:
Net income attributable to
ordinary shareholders of
the Company ь ь ь ь ь ь ь ь 143,159 1,325,523 2,810,210 1,696,190 1,213,525
– IA-55 –
Six months ended

2019 2020 2021 2021 2022
(HK$ in thousands, except for share and (HK$ in thousands, except for
per share data) share and per share data)
(unaudited)
Denominator:
Weighted average number of
ordinary shares
outstanding — basicь ь ь ь 832,790,329 1,036,865,727 1,200,912,670 1,173,661,489 1,158,972,163
attributable to ordinary
shareholders of the
Company — basic ь ь ь ь 0.17 1.28 2.34 1.45 1.05
Diluted net income per

share calculation:
Numerator:
Net income attributable to
ordinary Shareholders of
the Company ь ь ь ь ь ь ь ь 143,159 1,325,523 2,810,210 1,696,190 1,213,525
Denominator:
ordinary shares
outstanding — basicь ь ь ь 832,790,329 1,036,865,727 1,200,912,670 1,173,661,489 1,158,972,163
Dilutive effect of share
options and restricted
share units ь ь ь ь ь ь ь ь ь 85,107,097 13,277,287 18,759,838 20,919,384 10,600,352

ordinary shares
outstanding — dilutedь ь ь 917,897,426 1,050,143,014 1,219,672,508 1,194,580,873 1,169,572,515
attributable to ordinary
shareholders of the
Company — diluted ь ь ь 0.16 1.26 2.30 1.42 1.04
options to purchase ordinary shares and restricted share units that were anti-dilutive and excluded from the
calculation of diluted net income per share were 3,747,975, 4,800,584, 357,978, nil and 4,390,826 shares on a
weighted average basis, respectively.
18. COLLATERALIZED TRANSACTIONS
The Group engages in margin financing transactions with its clients. Margin loans generated from margin
lending activity are collateralized by cash and/or client-owned securities held by the Group. The Group monitors the
required margin and collateral level on a daily basis in compliance with regulatory and internal guidelines and
controls its risk exposure through risk management system. Under applicable agreements, clients are required to
deposit additional collateral or reduce holding positions, when necessary to avoid forced liquidation of their
positions.
Pursuant to the authorization obtained from margin clients, the Group further repledges the collaterals to
commercial banks or other financial institutions to obtain the funding for the margin or other businesses.
– IA-56 –
The following table summarizes the amounts of margin loans and clients’ collaterals received and repledged
by the Group as of December 31, 2019, 2020 and 2021 and June 30, 2022:
As of
2019 2020 2021 2022
(HK$ in
Margin loan extended to margin

clients (net) ь ь ь ь ь ь ь ь ь ь ь ь ь ь 4,141,962 18,424,972 29,084,958 26,702,485
Securities purchased under
agreements to resell transactions ь – – 106,203 –
Collateral received from margin
clients ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 19,503,649 89,404,131 119,745,500 119,991,002
Collateral received from brokers ь ь ь – – 144,156 –
Collateral repledged to commercial
banks and other financial
institutionsь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 9,408,908 58,255,907 20,953,603 12,830,183
The Group also engaged in securities borrowing and lending transactions which require it to deposit cash
collateral with the securities lenders and receive the cash collateral from the borrowers. The cash collateral is
generally in excess of the market value of the securities borrowed and lent. The Group monitors the market value of
securities borrowed and loaned on a daily basis, with additional collateral obtained or refunded as permitted
contractually.
The following table summarizes the amounts of market value of securities borrowed and lent and cash
collateral received and deposited as of December 31, 2019, 2020 and 2021 and June 30, 2022:
As of
2019 2020 2021 2022
(HK$ in
Securities borrowed and lent(1) ь ь ь ь 935,443 4,307,346 8,436,638 15,354,335

Cash collateral deposited with
lenders ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 1,126,300 3,645,214 3,120,123 1,045,657
Cash collateral received from
borrowers ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 1,342,738 5,067,828 9,737,786 17,733,171
(1) Borrowed securities includes securities borrowed from margin clients under authorization, in this case
no cash collateral is required.
19. BROKERAGE COMMISSION AND HANDLING CHARGE INCOME
Six months ended

2019 2020 2021 2021 2022
(unaudited)
income ь ь ь ь ь ь ь ь ь ь ь 352,625 1,531,048 3,147,610 1,702,484 1,618,637
Handling charge income ь ь 158,740 459,090 765,417 420,195 382,609
Total ь ь ь ь ь ь ь ь ь ь ь ь ь ь 511,365 1,990,138 3,913,027 2,122,679 2,001,246
– IA-57 –
20. INTEREST INCOME
Six months ended

2019 2020 2021 2021 2022
(unaudited)
Interest income from:

Margin financing ь ь ь ь ь ь 221,648 497,975 1,720,473 786,095 766,722
Securities lending ь ь ь ь ь ь 37,202 73,792 397,505 233,929 182,124
Bank deposits ь ь ь ь ь ь ь ь 187,223 208,556 197,390 88,916 196,807
Bridge loanь ь ь ь ь ь ь ь ь ь 6,172 1,078 1,872 – 48,235
IPO financing ь ь ь ь ь ь ь ь 12,658 184,226 200,567 160,000 750
Other financing ь ь ь ь ь ь ь – – 391 – 1,023
Totalь ь ь ь ь ь ь ь ь ь ь ь ь ь 464,903 965,627 2,518,198 1,268,940 1,195,661
21. OTHER INCOME
Six months ended

2019 2020 2021 2021 2022
(unaudited)
Currency exchange service

income ь ь ь ь ь ь ь ь ь ь ь ь ь 4,670 67,000 201,030 104,982 78,506
Funds distribution service
Enterprise public relations
service charge income ь ь ь ь 16,156 29,988 96,327 42,985 25,201
Market information and data
Underwriting fee income ь ь ь ь 19,579 30,797 86,880 47,770 10,905
IPO subscription service
charge income ь ь ь ь ь ь ь ь ь 26,537 159,682 169,336 136,972 3,327
Others ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 5,206 6,469 17,745 4,566 10,856
Total ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 85,287 355,057 684,095 389,842 190,821
22. BROKERAGE COMMISSION AND HANDLING CHARGE EXPENSES
Six months ended

2019 2020 2021 2021 2022
(unaudited)
Commission, handling and

settlement expenses ь ь ь 95,064 302,800 524,470 319,496 182,541
IPO subscription service
charge expenses ь ь ь ь ь 5,486 58,686 47,689 39,506 680
Totalь ь ь ь ь ь ь ь ь ь ь ь ь ь 100,550 361,486 572,159 359,002 183,221
– IA-58 –
23. INTEREST EXPENSES
Six months ended

2019 2020 2021 2021 2022
(unaudited)
Interest expenses for

margin financing
Due to banks ь ь ь ь ь ь ь 36,206 45,545 125,002 65,295 23,477
Due to other licensed
financial institutions ь 28,636 38,246 51,179 36,294 7,391
Due to other parties ь ь ь 3,930 – – – –
Interest expenses for
securities borrowed
Due to clients ь ь ь ь ь ь ь 1,298 7,984 132,034 88,818 29,524
Due to brokers ь ь ь ь ь ь 9,077 13,853 18,624 14,093 5,435
Interest expenses for IPO
financing
Due to banks ь ь ь ь ь ь ь 10,091 79,337 50,063 42,183 –
Due to other parties ь ь ь – 125 – 284 –
24. PROCESSING AND SERVICING COSTS
Six months ended

2019 2020 2021 2021 2022
(unaudited)
Cloud service fee ь ь ь ь ь ь 16,729 48,940 122,269 46,029 116,695

Market information and
data fee ь ь ь ь ь ь ь ь ь ь 54,282 68,274 70,387 31,753 38,264
Data transmission fee ь ь ь 13,890 23,072 46,289 31,083 16,969
System cost ь ь ь ь ь ь ь ь ь 4,334 4,476 12,160 3,983 11,793
SMS service fee ь ь ь ь ь ь ь 1,523 2,511 1,197 549 544
Others ь ь ь ь ь ь ь ь ь ь ь ь ь 1,158 2,105 4,701 2,627 2,534
– IA-59 –
25. NON-INTEREST COST AND EXPENSES BY NATURE
Six months ended

2019 2020 2021 2021 2022
(unaudited)
Marketing and branding ь ь 130,528 297,170 1,163,495 570,377 321,632

Employee compensation
and benefits ь ь ь ь ь ь ь ь 327,441 682,068 1,248,682 447,394 962,144
Brokerage commission and
handling charge
expenses (Note 22)ь ь ь ь 100,550 361,486 572,159 359,002 183,221
Processing and servicing
costs (Note 24) ь ь ь ь ь ь 91,916 149,378 257,003 116,024 186,799
Rental and other related
expenses ь ь ь ь ь ь ь ь ь ь 64,756 64,594 106,459 47,543 57,682
Professional services ь ь ь ь 28,757 32,988 56,872 22,786 45,897
Depreciation and
amortization ь ь ь ь ь ь ь ь 16,547 27,231 36,435 15,368 27,537
Listing expenses ь ь ь ь ь ь – – 2,825 – 2,135
Others ь ь ь ь ь ь ь ь ь ь ь ь ь 23,867 42,956 111,675 33,720 52,914
Totalь ь ь ь ь ь ь ь ь ь ь ь ь ь 784,362 1,657,871 3,555,605 1,612,214 1,839,961
26. TAXATION
Income Tax
(1) Cayman Islands
The Group was incorporated in the Cayman Islands. Under the current laws of the Cayman Islands, the
Company is not subject to tax on either income or capital gain. Additionally, the Cayman Islands does not impose
a withholding tax on payments of dividends to shareholders.
(2) The United States (“US”)
The Company’s subsidiaries incorporated in the United States are subject to statutory income tax at a rate up
to 35% for taxable income earned in the United States. On December 22, 2017, the Tax Cuts and Jobs Act (the “Tax
Act”) was enacted, significantly revising the U.S corporate income tax law. Changes include a reduction in the federal
corporate tax, changes to operating loss carry-forwards and carrybacks, and a repeal of the corporate alternative
minimum tax. This legislation resulted in a reduction of the U.S. federal corporate income tax rates from a maximum
of 35% to 21%, to which the subsidiaries incorporated in the United States are subject.
(3) Hong Kong
Starting from the financial year commencing on April 1, 2018, the two-tiered profits tax regime took effect,
under which the tax rate is 8.25% for assessable profits on the first HK$2 million and 16.5% for any assessable profits
in excess of HK$2 million. Additionally, payments of dividends by the subsidiaries incorporated in Hong Kong to
the Company are not subject to any Hong Kong withholding tax.
(4) Singapore
The Company’s subsidiaries incorporated in Singapore are subject to an income tax rate of 17% for taxable
income earned in Singapore. Singapore does not impose a withholding tax on dividends for resident companies. In
the years ended December 31, 2019, 2020 and 2021 and six months ended June 30, 2021 and 2022, we did not incur
any income tax as there was no estimated assessable profit that was subject to Singapore income tax.
– IA-60 –
(5) China
The Company’s subsidiaries, consolidated VIEs and subsidiary of the VIEs established in the PRC are subject
to statutory income tax at a rate of 25%, unless preferential tax rates were applicable.
The Enterprise Income Tax (“EIT”) Law and its implementing rules permit High and New Technology
Enterprise (“HNTE”) to enjoy a reduced 15% EIT rate. Futu Network Technology (Shenzhen) Co., Ltd., one of the
Company’s subsidiary, and Shenzhen Futu, the Group’s consolidated VIE, obtained the qualification certificate of
HNTE under the EIT Law, subject to the tax rate of 15% with a valid period of three years starting from 2019 and
2020, respectively.
According to the relevant EIT Laws jointly promulgated by the Ministry of Finance of the PRC, State Tax
Bureau of the PRC, and Ministry of Science of the PRC that became effective from 2018 onwards, enterprises
engaging in research and development activities are entitled to claim 175% of their research and development
expenses so incurred as tax deductible expenses when determining their assessable profits for that year (“Super
Deduction”).
Under the EIT Law enacted by the National People’s Congress of PRC on March 16, 2007 and its
implementation rules which became effective on January 1, 2008, dividends generated after January 1, 2008 and
payable by FIEs in the PRC to its foreign investors who are non-resident enterprises are subject to a 10% withholding
tax, unless any such foreign investor’s jurisdiction of incorporation has a tax treaty with the PRC that provides for
a different withholding arrangement. Under the taxation arrangement between the PRC and Hong Kong, a qualified
Hong Kong tax resident which is the “beneficial owner” and directly holds 25% or more of the equity interest in a
PRC resident enterprise is entitled to a reduced withholding tax rate of 5%. The Cayman Islands, where the Company
was incorporated, does not have a tax treaty with PRC.
The EIT Law includes a provision specifying that legal entities organized outside of the PRC will be
considered resident enterprises for the PRC income tax purposes if the place of effective management or control is
within the PRC. The implementation rules to the EIT Law provide that non-resident legal entities will be considered
as PRC resident enterprises if substantial and overall management and control over the manufacturing and business
operations, personnel, accounting, properties, etc., occurs within the PRC. Despite the present uncertainties resulting
from the limited PRC tax guidance on the issue, the Group does not believe that the Group’s entities organized outside
of the PRC should be treated as resident enterprises for the PRC income tax purposes. If the PRC tax authorities
subsequently determine that the Company and its subsidiary registered outside the PRC should be deemed resident
enterprises, the Company and its subsidiary registered outside the PRC will be subject to the PRC income tax, at a
rate of 25%.
Dividends paid by the Group’s wholly foreign-owned subsidiaries in China to non-PRC-resident enterprises
which do not have an establishment or place of business in the PRC, or which have such establishment or place of
business but the relevant income is not effectively connected with the establishment or place of business, will be
subject to a withholding tax rate of 10%, unless the relevant Hong Kong entity satisfies all the requirements under
the Arrangement between the Mainland of China and the Hong Kong Special Administrative Region for the
Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income and receives
approval from the relevant tax authority. The undistributed earnings that are subject to dividend tax are expected to
be indefinitely reinvested for the foreseeable future. The Group did not record any withholding tax for its PRC
earnings and considered determination of such withholding tax amount not practicable.
Composition of income tax expenses
The following table sets forth current and deferred portion of income tax expenses:
Six months ended

2019 2020 2021 2021 2022
(unaudited)
Current income tax

Deferred income tax
benefit ь ь ь ь ь ь ь ь ь ь ь (1,572) (13,146) (21,431) (8,791) (534)
Income tax expenses ь ь ь ь 12,286 124,793 375,081 206,497 143,198
– IA-61 –
Tax Reconciliation
Reconciliation between the income tax expenses computed by applying the Hong Kong enterprise tax rate to
income before income taxes and actual provision were as follows:
Six months ended

2019 2020 2021 2021 2022
(unaudited)
Income before income tax ь ь ь ь 178,493 1,450,623 3,185,291 1,902,687 1,366,121

Tax expenses at Hong Kong
profit tax rate of 16.5% ь ь ь ь 29,451 239,353 524,907 313,943 225,245
Changes of valuation
allowance ь ь ь ь ь ь ь ь ь ь ь ь 30,172 14,348 101,653 51,486 1,300
Tax effect of permanence
differences ь ь ь ь ь ь ь ь ь ь ь ь 5,486 9,029 22,047 5,948 20,365
Effect of income tax in
jurisdictions other than
Hong Kong ь ь ь ь ь ь ь ь ь ь ь (4,143) (4,386) (32,182) (6,282) 921
Super deduction of research
and development expensesь ь ь (19,277) (29,081) (62,966) (21,597) (31,895)
Final settlement
differences ь ь ь ь ь ь ь ь ь ь ь ь (18,038) – (602) – (2,418)
Income not subject to tax(1) ь ь ь (11,365) (104,470) (177,776) (137,001) (70,320)
Income tax expenses ь ь ь ь ь ь ь 12,286 124,793 375,081 206,497 143,198
(1) This amount mainly represents tax exemption relating to the offshore income of Futu Securities. The
brokerage commission income derived from executing the clients’ orders of US listed securities was
treated as offshore-sourced and non-taxable on the basis that these transactions were executed outside
Hong Kong.
Deferred Tax Assets and Liabilities
Deferred income tax expenses reflect the net tax effects of temporary differences between the carrying amounts
of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The
components of the deferred tax assets and liabilities are as follows:
As of
2019 2020 2021 2022
(HK$ in
Deferred tax assets

Net operating loss carryforwards ь ь 42,736 64,092 158,826 156,774
Accrued expenses and others ь ь ь ь ь 12,261 22,348 50,408 52,082
Less: valuation allowance ь ь ь ь ь ь ь (53,421) (67,769) (169,422) (170,722)
Total deferred tax assets ь ь ь ь ь ь ь ь 1,576 18,671 39,812 38,134

Set-off of deferred tax liabilities
pursuant to set-off provisions ь ь ь – (1,497) (1,495) (1,648)
Net deferred tax assets ь ь ь ь ь ь ь ь ь 1,576 17,174 38,317 36,486
– IA-62 –
As of
2019 2020 2021 2022
(HK$ in
Total deferred tax liabilitiesь ь ь ь ь ь – 3,101 2,131 9,291

Set-off of deferred tax assets
pursuant to set-off provisions ь ь ь – (1,497) (1,495) (1,648)
Net deferred tax liabilities ь ь ь ь ь ь – 1,604 636 7,643
Movement of Valuation Allowance
Six months ended

2019 2020 2021 2021 2022
(unaudited)
Balance at beginning of the

year/period ь ь ь ь ь ь ь ь ь ь ь ь 23,249 53,421 67,769 67,769 169,422
Additions ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 30,188 30,935 108,347 52,234 58,939
Reversals ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь (16) (16,587) (6,694) (748) (57,639)
Balance at end of the

year/period ь ь ь ь ь ь ь ь ь ь ь ь 53,421 67,769 169,422 119,255 170,722
Valuation allowance is provided against deferred tax assets when the Group determines that it is
more-likely-than-not that the deferred tax assets will not be utilized in the future. The Group considers positive and
negative evidence to determine whether some portion or all of the deferred tax assets will be more-likely-than-not
realized. This assessment considers, among other matters, the nature, frequency and severity of recent losses and
forecasts of future profitability. These assumptions require significant judgment and the forecasts of future taxable
income are consistent with the plans and estimates the Group is using to manage the underlying businesses. The
statutory rate of 25%, 27.98%, 27.87%, 16.5%, 17% or the preferential tax rate of 15%, depending on which entity,
was applied when calculating deferred tax assets.
As of December 31, 2019, 2020 and 2021 and June 30, 2022, the Group had net operating loss carryforwards
of approximately HK$223,629 thousand and HK$315,287 thousand, HK$764,251 thousand and HK$767,940
thousand, respectively, which arose from the subsidiaries, VIEs and the VIEs’ subsidiaries established in Hong Kong,
the U.S, Singapore and PRC. As of December 31, 2019, 2020 and 2021 and June 30, 2022, of the net operating loss
carryforwards, HK$217,999 thousand and HK$315,287 thousand, HK$761,417 thousand and HK$767,940 thousand
was provided for valuation allowance against deferred tax assets in entities where it was determined it was more
likely than not that the benefits of the deferred tax assets of accrued expenses and others will not be realized. While
the remaining HK$5,630 thousand, nil, HK$2,834 thousand and nil is expected to be utilized prior to expiration
considering future taxable income for respective entities.
Uncertain Tax Position
The Group evaluates the level of authority for each uncertain tax position (including the potential application
of interest and penalties) based on the technical merits, and measures the unrecognized benefits associated with the
tax positions. The Group continues to assess the uncertain tax positions in accordance with applicable income tax
guidance and based on changes in facts and circumstances.
– IA-63 –
27. DEFINED CONTRIBUTION PLAN
Full-time employees of the Group in the PRC are entitled to welfare benefits including pension insurance,
medical insurance, unemployment insurance, maternity insurance, on-the-job injury insurance, and housing fund
plans through a PRC government-mandated defined contribution plan. Chinese labor regulations require that the
Group makes contributions to the government for these benefits based on certain percentages of the employees’
salaries, up to a maximum amount specified by the local government. The Group has no legal obligation for the
benefits beyond the contributions. Total contributions by the Group for such employee benefits were RMB32,556
thousand (HK$36,843 thousand), RMB49,778 thousand (HK$57,092 thousand), RMB110,997 thousand
(HK$134,325 thousand), RMB44,086 thousand (HK$52,996 thousand) and RMB79,876 thousand (HK$96,213
thousand) for the years ended December 31, 2019, 2020 and 2021 and for the six months ended June 30, 2021 and
2022, respectively.
For the employees in Hong Kong, the Group pays contributions to publicly or privately administered pension
insurance plans on a mandatory, contractual basis. The Group has no further payment obligations once the
contributions have been paid. The contributions are recognized as employee benefit expense when they are due.
Prepaid contributions are recognized as an asset to the extent that a cash refund or a reduction in the future payments
is available. Included in employee compensation and benefits expenses in the consolidated statements of
comprehensive income were HK$1,044 thousand, HK$1,414 thousand, HK$2,197 thousand, HK$994 thousand and
HK$1,238 thousand of plan contributions for the years ended December 31, 2019, 2020 and 2021 and for the six
months ended June 30, 2021 and 2022, respectively.
For the employees in Singapore, the Group makes monthly contributions to the mandatory social security
savings scheme which serves to meet retirement, housing and healthcare needs. The Employment Act of Singapore
requires that the Group makes contributions to the scheme based on certain percentages of the employees’ salaries,
up to a maximum amount specified by the act. The Group has no legal obligation for the scheme beyond the
contributions. Total contributions by the Group for such employee benefits were nil, SGD5 thousand (HK$31
thousand), SGD294 thousand (HK$1,702 thousand), SGD160 thousand (HK$930 thousand) and SGD275 thousand
(HK$1,577 thousand) for the years ended December 31, 2019, 2020 and 2021 and for the six months ended June 30,
2021 and 2022, respectively.
For the employees in Australia, the Group makes contributions to the mandatory social security savings scheme
which serves to meet retirement needs at least every three months. The Employment Act of Australia requires that
the Group makes contributions to the scheme based on certain percentages of the employees’ before tax income. The
Group has no legal obligation for the scheme beyond the contributions. Total contributions by the Group for such
employee benefits were nil, nil, nil, nil, and AUD$73 thousand (HK$413 thousand) for the years ended December
31, 2019, 2020, and 2021 and for the six months ended June 30, 2021 and 2022, respectively.
28. REGULATORY REQUIREMENTS
The Company’s broker-dealer and insurance-broker subsidiaries, Futu Securities, Moomoo Financial Inc., Futu
Clearing Inc., Moomoo Financial Singapore, Futu Insurance Brokers (Hong Kong) Limited and Futu Securities
(Australia) Ltd. are subject to capital requirements determined by its respective regulators.
Futu Securities, the Company’s subsidiary located in Hong Kong, was subject to the Securities and Futures
(Financial Resources) Rules and the Securities and Futures Ordinance, Futu Securities is required to maintain
minimum paid-up share capital and liquid capital.
Moomoo Financial Inc. and Futu Clearing Inc., the Company’s subsidiaries located in the United States, were
subject to the Uniform Net Capital Rule (Rule 15c3-1) under the Exchange Act, which requires the maintenance of
minimum net capital.
Moomoo Financial Singapore, the Company’s subsidiary located in Singapore, was subject to the Securities
and Futures (Financial and Margin Requirements for Holders of Capital Markets Services Licences) Regulations,
which requires the maintenance of financial resource over its total risk requirement.
Futu Insurance Brokers (Hong Kong) Limited, was subject to Insurance (Financial and Other Requirements for
Licensed Insurance Broker Companies) Rules, which requires minimum net assets.
Futu Securities (Australia) Ltd., the Company’s subsidiary located in Australia, was subject to Regulatory
Guide 166 Licensing: Financial requirements, which requires the maintenance of surplus liquid funds when licensees
hold client money or property.
– IA-64 –
The tables below summarizes the net capital, the requirement and the excess capital for the Group’s
broker-dealer subsidiaries as of December 31, 2019, 2020 and 2021 and June 30, 2022:

Net Capital/
(HK$ in thousands)
Futu Securitiesь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 1,469,200 235,481 1,233,719

Futu Clearing Inc. ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 72,908 1,947 70,961
Moomoo Financial Inc. ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 15,832 1,947 13,885

Net Capital/
(HK$ in thousands)
Futu Securitiesь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 2,453,687 1,286,263 1,167,424

Futu Clearing Inc. ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 131,415 1,938 129,477
Moomoo Financial Singaporeь ь ь ь ь ь ь ь ь ь ь ь ь 56,775 586 56,189
Futu Insurance Brokers (Hong Kong) Limited ь ь 2,034 500 1,534

Net Capital/
(HK$ in thousands)

Futu Clearing Inc. ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 3,308,395 97,565 3,210,830
Moomoo Financial Singaporeь ь ь ь ь ь ь ь ь ь ь ь ь 345,424 156,646 188,778
Futu Insurance Brokers (Hong Kong) Limited ь ь 1,718 500 1,218
As of June 30, 2022

Net Capital/
(HK$ in thousands)

Moomoo Financial Singaporeь ь ь ь ь ь ь ь ь ь ь ь ь 685,433 193,142 492,291
Futu Insurance Brokers (Hong Kong) Limited ь ь 1,498 500 998
Futu Securities (Australia) Ltd. ь ь ь ь ь ь ь ь ь ь ь 90,381 1,250 89,131
Regulatory capital requirements could restrict the operating subsidiaries from expanding their business and
declaring dividends if their net capital does not meet regulatory requirements.
As of December 31, 2019, 2020 and 2021 and June 30, 2022, all of the regulated operating subsidiaries were
in compliance with their respective regulatory capital requirements.
29. COMMITMENTS AND CONTINGENCIES
Commitments
The Group’s commitments primarily related to capital contribution obligation for certain investment funds.
Total commitments contracted but not yet reflected in the consolidated financial statements amounted to nil, nil,
US$104 million and US$74 million as of December 31, 2019, 2020 and 2021 and June 30, 2022, respectively.
– IA-65 –
Contingencies
The financial services industry is highly regulated. From time to time, the licensed companies in the financial
industry may be required to assist in and/or are subject to inquiries and/or examination by the regulatory authorities
of the jurisdiction in where they operate. As of the date of approval of the consolidated financial statements, the
Group reviews its regulatory inquiries and other legal proceedings on an ongoing basis and evaluates whether
potential regulatory fines are probable, estimable and material and for updating its contingency reserves and
disclosures accordingly. As of December 31, 2019, 2020 and 2021 and June 30, 2022, the Group did not make any
accrual for the aforementioned loss contingency.
30. RELATED PARTY BALANCES AND TRANSACTIONS
The table below sets forth major related parties of the Group and their relationships with the Group:
Name of Entity or individual Relationship with the Group
Mr. Leaf Hua Li and his spouse ь ь ь ь ь ь ь ь ь ь ь ь Principal shareholder and member of his immediate
families
Tencent Holdings Limited and its subsidiaries Principal shareholder

(“Tencent Group”) ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь
Individual directors and officers and their spouses ь Directors or officers of the Group and members of
their immediate families
(a) Cash and cash equivalent
As of
2019 2020 2021 2022
(HK$ in
Cash and cash equivalent ь ь ь ь ь ь ь 240 149 372 355
The balance represents the cash deposited by the Group in various payment channels of Tencent Group for
funding marketing campaigns, of which could be withdrawn on demand.
(b) Amounts Due to Related Parties
As of
2019 2020 2021 2022
(HK$ in
Trade in nature:
Payables to Tencent Group in
relation to ESOP management
services ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь – 70,750 1,307 264
Payables in relation to cloud
equipment and services from
Tencent Group ь ь ь ь ь ь ь ь ь ь ь ь 33,153 16,062 85,887 63,945
SMS channel services from Tencent
Groupь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 475 357 265 230
33,628 87,169 87,459 64,439
– IA-66 –
(c) Transactions with Related Parties
Six months ended

2019 2020 2021 2021 2022
(unaudited)
Equipment purchased ь ь ь ь ь 40,218 4,496 45,658 1,208 –

Softwares purchased ь ь ь ь ь ь – 508 3,869 – 1,553
Cloud service fee ь ь ь ь ь ь ь ь 16,729 48,940 114,386 46,029 92,149
SMS channel service fee ь ь ь 1,523 2,511 1,197 549 544
Advertising expenses ь ь ь ь ь 682 159 – – –
ESOP management service
income ь ь ь ь ь ь ь ь ь ь ь ь ь 550 595 640 310 345
Other services ь ь ь ь ь ь ь ь ь ь – – 135 – 314
59,702 57,209 165,885 48,096 94,905
The Group utilizes the cloud services, equipment and software provided by Tencent Group to process large
amount of complicated data in-house, which reduces the risks involved in data storage and transmission. SMS
channel services is provided by Tencent Group, including verification code, notification and marketing message
services for the Group to reach its end users. Tencent Group provides advertising services to the Group via Tencent
Group’s social media. The Group also earns revenue from Tencent Group by providing ESOP management service.
(d) Trade related transactions with Related Parties
Included in payables to clients in the consolidated balance sheets as of December 31, 2019, 2020 and 2021 and
June 30, 2022, were payables to directors and officers of HK$19,553 thousand, HK$42,019 thousand, HK$44,480
thousand and HK$47,882 thousand, respectively. Revenue earned by providing brokerage services and margin loans
to directors and officers and their spouses amounts to HK$2,211 thousand, HK$1,642 thousand, HK$1,430 thousand,
HK$952 thousand and HK$394 thousand for the years ended December 31, 2019, 2020 and 2021 and for the six
months ended June 30, 2021 and 2022, respectively.
31. NOTE TO COMPANY BALANCE SHEETS (PARENT COMPANY ONLY)
Amounts due from/to subsidiaries and VIEs and VIEs’ subsidiaries are unsecured and repayable on demand.
The disclosures on investments in subsidiaries and VIEs and VIEs’ subsidiaries, short-term investment, borrowings
and shareholders’ equity please refer to Note 1, Note 4, Note 10 and Note 13, respectively.
The subsidiaries did not pay any dividend to the Company for the years/periods presented.
The Company did not have significant capital and other commitments, or guarantees as of December 31, 2019,
2020 and 2021 and June 30, 2022.
– IA-67 –
32. DIRECTORS’ REMUNERATION
Directors’ remuneration disclosed pursuant to the Listing Rules, Section 383(1)(a), (b), (c) and (f) of the Hong
Kong Companies Ordinance and Part 2 of the Companies (Disclosure of Information about Benefits of Directors)
Regulation, is as follows:
Six months ended

2019 2020 2021 2021 2022
(unaudited)
Fees ь ь ь ь ь ь ь ь ь ь ь ь ь ь 287 350 350 175 175

Basic salaries, housing
fund, allowances and
benefits in kind ь ь ь ь ь ь 4,614 8,799 11,310 5,457 5,939
Employer’s contributions
to a retirement benefit
scheme ь ь ь ь ь ь ь ь ь ь ь 187 223 264 171 146
Discretionary bonuses ь ь ь 1,296 4,939 5,739 1,461 990
Share-based compensation
expenses ь ь ь ь ь ь ь ь ь ь – – 6 3 3
The directors received emoluments from the Group for the year ended December 31, 2019 as follows:
Basic salaries, Employer’s

housing fund, contributions Share-based
allowances and to a retirement Discretionary compensation
Fees benefits in kind benefit scheme bonuses expenses Total
(HK$ in thousands)
Executive directors
Leaf Hua Li (1) ь ь ь ь – 4,061 110 1,151 – 5,322
Nineway Jie
Zhang (2) ь ь ь ь ь ь ь – 553 77 145 – 775
Shan Lu (3) ь ь ь ь ь ь ь – – – – – –
Eric Chi Zhang(4) ь ь ь – – – – – –
Independent non-
executive directors
Vic Haixiang
Li (5) ь ь ь ь ь ь ь ь ь – – – – – –
Brenda Pui Man
Tam (6) ь ь ь ь ь ь ь ь 287 – – – – 287
287 4,614 187 1,296 – 6,384
– IA-68 –

(HK$ in thousands)
Executive directors
Leaf Hua Li (1) ь ь ь ь – 8,190 124 4,705 – 13,019
Nineway Jie
Zhang (2) ь ь ь ь ь ь ь – 609 99 234 – 942
Shan Lu (3) ь ь ь ь ь ь ь – – – – – –
Independent non-
executive directors
Vic Haixiang
Li (5) ь ь ь ь ь ь ь ь ь – – – – – –
Brenda Pui Man
Tam (6) ь ь ь ь ь ь ь ь 350 – – – – 350
350 8,799 223 4,939 – 14,311

(HK$ in thousands)
Executive directors
Leaf Hua Li (1) ь ь ь ь – 10,493 141 5,414 6 16,054
Nineway Jie
Zhang (2) ь ь ь ь ь ь ь – 817 123 325 – 1,265
Shan Lu (3) ь ь ь ь ь ь ь – – – – – –
Independent non-
executive directors
Vic Haixiang
Li (5) ь ь ь ь ь ь ь ь ь – – – – – –
Brenda Pui Man
Tam (6) ь ь ь ь ь ь ь ь 350 – – – – 350
350 11,310 264 5,739 6 17,669
– IA-69 –
The directors received emoluments from the Group for the six months ended June 30, 2021 as follows
(unaudited):

(HK$ in thousands)
Executive directors
Leaf Hua Li (1) ь ь ь ь – 5,075 90 1,353 3 6,521
Nineway Jie
Zhang (2) ь ь ь ь ь ь ь – 382 81 108 – 571
Shan Lu (3) ь ь ь ь ь ь ь – – – – – –
Independent non-
executive directors
Vic Haixiang
Li (5) ь ь ь ь ь ь ь ь ь – – – – – –
Brenda Pui Man
Tam (6) ь ь ь ь ь ь ь ь 175 – – – – 175
175 5,457 171 1,461 3 7,267
The directors received emoluments from the Group for the six months ended June 30, 2022 as follows:

(HK$ in thousands)
Executive directors
Leaf Hua Li (1) ь ь ь ь – 5,497 77 916 3 6,493
Nineway Jie
Zhang (2) ь ь ь ь ь ь ь – 442 69 74 – 585
Shan Lu (3) ь ь ь ь ь ь ь – – – – – –
Independent non-
executive directors
Vic Haixiang
Li (5) ь ь ь ь ь ь ь ь ь – – – – – –
Brenda Pui Man
Tam (6) ь ь ь ь ь ь ь ь 175 – – – – 175
175 5,939 146 990 3 7,253
(1) Leaf Hua Li was appointed as executive director of the Company on April 15, 2014.
(2) Nineway Jie Zhang was appointed as executive director of the Company on October 31, 2014.
(3) Shan Lu was appointed as executive director of the Company on October 31, 2014.
(4) Eric Chi Zhang was appointed as executive director of the Company on August 8, 2019 and resigned on
September 14, 2021.
(5) Vic Haixiang Li was appointed as non-executive director of the Company on March 7, 2019.
(6) Brenda Pui Man Tam was appointed as non-executive director of the Company on March 7, 2019.
– IA-70 –
33. FIVE HIGHEST-PAID EMPLOYEES
The five highest-paid employees during the Track Record Period included the following number of directors
and non-directors:
Six months ended

2019 2020 2021 2021 2022
(unaudited)
Directors ь ь ь ь ь ь ь ь ь ь ь 1 1 1 1 1
Non-directors ь ь ь ь ь ь ь ь 4 4 4 4 4
Totalь ь ь ь ь ь ь ь ь ь ь ь ь ь 5 5 5 5 5
Details of the remuneration for the Track Record Period of the five highest-paid employees who are
non-directors (the “Non-director Individuals”) were as follows:
Six months ended

2019 2020 2021 2021 2022
(unaudited)
Fees ь ь ь ь ь ь ь ь ь ь ь ь ь ь – – – – –
Basic salaries, housing
fund, allowances and
benefits in kind ь ь ь ь ь ь 5,900 6,869 10,076 4,268 4,653
Employer’s contributions
to a retirement benefit
scheme ь ь ь ь ь ь ь ь ь ь ь 224 160 277 141 134
Discretionary bonuses ь ь ь 1,542 6,412 4,111 2,777 783
Others ь ь ь ь ь ь ь ь ь ь ь ь ь 33 – – – 261
– IA-71 –
The number of Non-director Individuals whose remuneration fell within the following bands is as follows:

2019 2020 2021 2021 2022
(unaudited)
HK$1,500,001 to
HK$2,000,000 ь ь ь ь ь ь – – – 2 –
HK$2,000,001 to
HK$2,500,000 ь ь ь ь ь ь 2 – – 1 –
HK$3,000,001 to
HK$3,500,000 ь ь ь ь ь ь 1 1 – 1 1
HK$3,500,001 to
HK$4,000,000 ь ь ь ь ь ь – 1 – – –
HK$4,000,001 to
HK$4,500,000 ь ь ь ь ь ь 1 1 1 – 1
HK$4,500,001 to
HK$5,000,000 ь ь ь ь ь ь – – – – 1
HK$5,000,001 to
HK$5,500,000 ь ь ь ь ь ь – 1 1 – –
HK$7,500,001 to
HK$8,000,000 ь ь ь ь ь ь – – 1 – –
HK$16,500,001 to
HK$17,000,000 ь ь ь ь ь ь – – – – 1
HK$17,500,001 to
HK$18,000,000 ь ь ь ь ь ь – – 1 – –
Totalь ь ь ь ь ь ь ь ь ь ь ь ь ь 4 4 4 4 4
During the years ended December 31, 2019, 2020 and 2021 and the six months ended June 30, 2021 and 2022,
no remuneration was paid by the Group to any directors or Non-director Individuals as an inducement to join the
Group.
During the years ended December 31, 2019, 2020 and 2021 and the six months ended June 30, 2021 and 2022,
no remuneration was paid by the Group to any directors or Non-director Individuals for loss of the office.
34. DIVIDENDS
No dividend was declared by the Group during the years ended December 31, 2019, 2020 and 2021, and the
six months ended June 30, 2021 and 2022.
35. SUBSEQUENT EVENTS
In November, 2022, the Group entered into an acquisition agreement with the aim of acquiring 85% interest
of a securities company at a maximum consideration of approximately HK$18,016 thousand.
– IA-72 –
36. RECONCILIATION BETWEEN U.S. GAAP AND INTERNATIONAL FINANCIAL REPORTING

STANDARDS
The Historical Financial Information is prepared in accordance with U.S. GAAP, which differ in certain
respects from International Financial Reporting Standards (“IFRS”) issued by the International Accounting Standards
Board (“IASB”). The effects of material differences prepared under U.S. GAAP and IFRS are as follows:

2019 2020 2021 2021 2022
(unaudited)

attributable to the
Company in the
Net income attributable to the
Company in the
reported under
U.S. GAAP ь ь ь ь ь ь ь ь ь 165,664 1,325,523 2,810,210 1,696,190 1,213,525
IFRS adjustments:
Classification and
measurement of preferred
shares (Note (a)) (216,140) – – – –
Issuance costs (Note (b)) ь ь ь (26,971) – (14,336) – (4,731)
Operating leases (Note (c)) ь ь (3,204) (1,913) (2,238) (1,741) (132)
(Note (d)) ь ь ь ь ь ь ь ь ь ь ь (10,681) (19,294) (76,461) (19,489) (74,697)
Expected credit loss
(Note (e)) ь ь ь ь ь ь ь ь ь ь ь 1,533 (7,475) (2,520) (2,636) (2,651)

to the Company in the
reported under IFRS ь ь ь ь (89,799) 1,296,841 2,714,655 1,672,324 1,131,314
As of
2019 2020 2021 2022
(HK$ in
reported under U.S. GAAP ь ь ь ь ь 2,548,553 8,307,690 20,985,559 19,552,820
IFRS adjustments:
Issuance costs (Note (b)) – – (14,336) (19,067)
Operating leases (Note (c)) ь ь ь ь ь ь (4,303) (6,001) (8,454) (8,151)
Expected credit loss (Note (e)) ь ь ь ь (2,330) (9,805) (12,342) (14,958)

reported under IFRSь ь ь ь ь ь ь ь 2,541,920 8,291,884 20,950,427 19,510,644
– IA-73 –
(a) Classification and measurement of preferred shares
Under U.S. GAAP, SEC guidance provides for mezzanine-equity (temporary equity) category in addition to the
financial liability and permanent equity categories. The purpose of this “in-between” category is to indicate that a
security may not be a permanent part of equity. The Group classified the Preferred Shares as mezzanine equity in the
consolidated balance sheets and are recorded initially at fair value, net of issuance costs. The Group recognized
accretion to the respective redemption value of the Preferred Shares over the period starting from issuance date to
the earliest redemption date.
IFRS 9, “Financial instruments” has been adopted since January 1, 2018. Under IFRS, there is no concept of
mezzanine or temporary equity classification. The Group designated the Preferred Shares as financial liabilities at fair
value through profit or loss which are initially recognized and subsequently measured at fair value. Subsequent to
initial recognition, the amounts of changes in fair value of the Preferred Shares that were attributed to changes in
credit risk of the Preferred Shares were recognized in other comprehensive income, and the remaining amounts of
changes in fair value of the Preferred Shares were recognized in the profit or loss.
(b) Issuance costs
Under U.S. GAAP, specific incremental issuance costs directly attributable to a proposed or actual offering of
securities may be deferred and charged against the gross proceeds of the offering, shown in equity as a deduction
from the proceeds.
Under IFRS, such issuance costs apply a different criterion for capitalization when the listing involves both
existing shares and a concurrent issuance of new shares of the Group in the capital market, and were allocated
proportionately between the existing and new shares. As a result, the Group recorded issuance costs associated with
the listing of existing shares in the profit or loss.
(c) Operating leases
Under U.S. GAAP, for operating leases, the amortization of right-of-use assets and the interest expense
element of lease liabilities are recorded together as operating lease expenses, which results in a straight-line
recognition effect in the consolidated statements of operations and comprehensive loss.
Under IFRS, the amortization of the right-of-use asset is on a straight-line basis while the interest expense
related to the lease liabilities are measured using the effective interest rate method, which generally yields a
“front-loaded” expense with more expense recognized in earlier years of the lease.
(d) Share-based compensation
The Group granted options and restricted share units with service condition only to employees and modified
the exercise price of 8,113,145 stock options granted under 2014 Share Incentive Plan to from US$1.20 to US$0.60
straight-line method.While under IFRS, the graded vesting method must be applied, the Group should treat each
installment of the award as a separate grant, this means that each installment would be separately measured and
attributed to expense over the related vesting period, which would accelerate the expense recognition.
(e) Expected credit loss
The Group is mainly exposed to credit risk associated with loans and advances.
Under U.S. GAAP, prior to January 1, 2020, the Group applied incurred loss methodology for recognizing
credit losses. On January 1, 2020, the Group adopted FASB ASC Topic 326 and applies the practical expedient based
on collateral maintenance provisions in estimating an allowance for credit losses for the loans and advances.
– IA-74 –
Under IFRS, impairment model of financial assets is an expected loss model. The Group applies a three-stage
impairment model to calculate their impairment allowance and recognise their expected credit losses from January 1,
2018 for loans and advances. The Group considers the credit risk characteristics of loans and advances when
determining if there is significant increase in credit risk since the initial recognition. For loans and advances with
or without significant increase in credit risk, lifetime or 12-month expected credit losses are provided respectively.
The expected credit loss is the result of discounting the product of exposure at default, probabilities of default and
loss given default, based on the past history, existing market conditions as well as forward looking estimates.
III. SUBSEQUENT FINANCIAL STATEMENTS
No audited financial statements have been prepared by the Group in respect of any period
subsequent to June 30, 2022. No dividend or distribution has been declared or made by the
Group in respect of any period subsequent to June 30, 2022.
– IA-75 –
APPENDIX IB UNAUDITED INTERIM CONDENSED
CONSOLIDATED FINANCIAL INFORMATION
The following is the text of a report set out on pages IB-1 to IB-2, received from the
Hong Kong, for the purpose of incorporation in this document. The information set out below
is the unaudited interim condensed financial information of the Group for the nine months
ended September 30, 2022, and does not form part of the Accountant’s Report from the
Hong Kong, as set out in Appendix IA to this document, and is included herein for information
purpose only.
REPORT ON REVIEW OF INTERIM FINANCIAL INFORMATION TO THE BOARD

OF DIRECTORS OF FUTU HOLDINGS LIMITED
(incorporated in the Cayman Islands with limited liability)
Introduction
We have reviewed the interim financial information set out on pages IB-3 to IB-52, which
comprises the interim condensed consolidated balance sheet of Futu Holdings Limited (the
“Company”) and its subsidiaries (together, the “Group”) as at September 30, 2022 and the
interim condensed consolidated statement of comprehensive income, the interim condensed
consolidated statement of changes in shareholders’ equity and the interim condensed
consolidated statement of cash flows for the nine-month period then ended, and notes,
comprising significant accounting policies and other explanatory information. The directors of
the Company are responsible for the preparation and presentation of this interim financial
information in accordance with accounting principles generally accepted in the United States
of America (“U.S. GAAP”). Our responsibility is to express a conclusion on this interim
financial information based on our review and to report our conclusion solely to you, as a body,
in accordance with our agreed terms of engagement and for no other purpose. We do not
assume responsibility towards or accept liability to any other person for the contents of this
report.
Scope of Review
We conducted our review in accordance with International Standard on Review

Engagements 2410, “Review of Interim Financial Information Performed by the Independent
Auditor of the Entity”. A review of interim financial information consists of making inquiries,
primarily of persons responsible for financial and accounting matters, and applying analytical
and other review procedures. A review is substantially less in scope than an audit conducted
in accordance with International Standards on Auditing and consequently does not enable us
to obtain assurance that we would become aware of all significant matters that might be
identified in an audit. Accordingly, we do not express an audit opinion.
– IB-1 –
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the
interim financial information of the Group is not prepared, in all material respects, in
accordance with U.S. GAAP.
Other Matter
The comparative information for the interim condensed consolidated balance sheet is
based on the audited financial statements as at December 31, 2021. The comparative
information for the interim condensed consolidated statements of comprehensive income,
changes in shareholders’ equity and cash flows, and related explanatory notes, for the period
ended September 30, 2021 has not been audited or reviewed.
Hong Kong, December 22, 2022
– IB-2 –
FUTU HOLDINGS LIMITED

UNAUDITED INTERIM CONDENSED CONSOLIDATED BALANCE SHEET
As of As of
Note 2021 2022
HK$ HK$
ASSETS
Cash and cash equivalents ьььььььььььььььььь 4,555,096 6,865,549
Cash held on behalf of clients ььььььььььььььь 54,734,351 52,662,417
Term depositььььььььььььььььььььььььььььь – 5,450
Restricted cash ььььььььььььььььььььььььььь 2,065 1,870
Short-term investments ььььььььььььььььььььь 4 1,169,741 13,373
Securities purchased under agreements to resell ьь 106,203 22,349
Loans and advances-current (net of allowance of
HK$12,258 thousand and HK$25,913 thousand
as of December 31, 2021 and September 30,
2022, respectively) ьььььььььььььььььььььь 6 29,587,306 29,720,594
Receivables:
Clients ььььььььььььььььььььььььььььььь 469,577 271,855
Brokers ььььььььььььььььььььььььььььььь 7,893,927 5,068,471
Clearing organizationsьььььььььььььььььььь 1,961,121 1,601,026
Fund management companies and fund
distributors ьььььььььььььььььььььььььь 72,340 80,584
Interest ььььььььььььььььььььььььььььььь 50,829 146,338
Prepaid assets ьььььььььььььььььььььььььььь 18,306 25,711
Other current assets ььььььььььььььььььььььь 7 81,594 110,153
Total current assetsььььььььььььььььььььььь 100,702,456 96,595,740
Operating lease right-of-use assets ьььььььььььь 5 243,859 200,030

Long-term investments ььььььььььььььььььььь 8 23,394 245,724
Loans and advances – non-current ьььььььььььь 6 – 37,013
Other non-current assets ьььььььььььььььььььь 7 568,805 943,140
Total non-current assets ььььььььььььььььььь 836,058 1,425,907
Total assets ььььььььььььььььььььььььььььь 101,538,514 98,021,647
LIABILITIES
Amounts due to related parties ььььььььььььььь 27(b) 87,459 53,602
Payables:
Clients ььььььььььььььььььььььььььььььь 59,127,439 54,948,151
Brokers ььььььььььььььььььььььььььььььь 7,599,233 12,231,738
Clearing organizationsьььььььььььььььььььь 393,782 2,050,313
Fund management companies and fund
distributors ьььььььььььььььььььььььььь 56,690 71,143
Interest ььььььььььььььььььььььььььььььь 15,359 15,340
Borrowings ьььььььььььььььььььььььььььььь 9 6,357,405 6,547,293
Securities sold under agreements to repurchase ьь 4,467,861 –
Operating lease liabilities – current ььььььььььь 5 96,860 105,536
Accrued expenses and other current liabilities ььь 10 2,176,213 1,683,822
Total current liabilities ьььььььььььььььььььь 80,378,301 77,706,938
– IB-3 –
As of As of
Note 2021 2022
HK$ HK$
Operating lease liabilities – non-current ьььььььь 5 163,719 107,740

Other non-current liabilities ььььььььььььььььь 10 10,935 20,726
Total non-current liabilities ьььььььььььььььь 174,654 128,466
Total liabilities ьььььььььььььььььььььььььь 80,552,955 77,835,404
Commitments and Contingencies (Note 26)
48,700,000,000 and 48,700,000,000 shares
authorized as of December 31, 2021 and
September 30, 2022, respectively; 737,944,914
and 803,555,356 shares issued and outstanding
2022, respectively) ьььььььььььььььььььььь 11 58 63
800,000,000 and 800,000,000 shares authorized
2022, respectively; 494,552,051, and
430,552,051 shares issued and outstanding as of
December 31, 2021 and September 30, 2022,
respectively) ььььььььььььььььььььььььььь 11 38 33
Additional paid-in capital ььььььььььььььььььь 17,935,752 18,091,374
Treasury stock (29,462,760 and 110,839,528
shares as of December 31, 2021 and
September 30, 2022, respectively)ььььььььььь 11 (1,178,755) (3,975,219)
Accumulated other comprehensive
income/(loss)ььььььььььььььььььььььььььь 75,994 (50,648)
Retained earnings ььььььььььььььььььььььььь 4,152,472 6,120,640
Total shareholders’ equity ььььььььььььььььь 20,985,559 20,186,243
Total liabilities and shareholders’ equity ьььььь 101,538,514 98,021,647
The accompanying notes are an integral part of these unaudited interim condensed
consolidated financial statements.
– IB-4 –

UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENT OF
COMPREHENSIVE INCOME
Nine months ended
September 30,
Note 2021 2022
HK$ HK$
Revenues
Brokerage commission and handling charge income ь ь ь ь ь ь ь 16 3,056,091 2,959,050
Interest income ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 17 1,900,608 2,076,484
Other income ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 18 555,812 297,774
Total revenues ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 5,512,511 5,333,308
Costs
Brokerage commission and handling charge expenses ь ь ь ь ь ь 19,22 (484,462) (265,795)
Interest expenses ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 20 (321,286) (110,525)
Processing and servicing costs ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 21,22 (183,463) (277,642)
Total costs ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь (989,211) (653,962)
Total gross profit ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 4,523,300 4,679,346
Operating expenses
Research and development expensesь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 22 (534,692) (887,613)
Selling and marketing expensesь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 22 (1,055,101) (742,692)
General and administrative expenses ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 22 (311,147) (600,802)
Total operating expenses ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь (1,900,940) (2,231,107)
Others, net ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь (9,691) (219,175)

Income before income tax expenses and share of loss from
equity method investment ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 2,612,669 2,229,064
Income tax expenses ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 23 (301,268) (247,572)

Share of loss from equity method investment ь ь ь ь ь ь ь ь ь ь ь ь – (13,324)
Net incomeь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 2,311,401 1,968,168
Net income attributable to ordinary shareholders of

the Companyь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 2,311,401 1,968,168
Net incomeь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 2,311,401 1,968,168

Other comprehensive income/(loss), net of tax
Foreign currency translation adjustment ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 24,084 (126,642)
Total comprehensive income ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 2,335,485 1,841,526

Net income per share attributable to ordinary shareholders
of the Company 14
Basic ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 1.94 1.72
Dilutedь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 1.91 1.70
Net income per ADS

Basic ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 15.50 13.72
Dilutedь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 15.26 13.59
Weighted average number of ordinary shares used in

computing net income per share 14
Basic ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 1,192,527,761 1,147,484,439
Dilutedь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 1,212,191,974 1,158,401,576
– IB-5 –
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY
Accumulated
Class A ordinary shares Class B ordinary shares Treasury stock purchases Additional other
APPENDIX IB
Number of Number of Number of paid in comprehensive Retained

Note Shares Amount Shares Amount Shares Amount capital (loss)/income earnings Total equity
As of January 1, 2022 ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 737,944,914 58 494,552,051 38 (29,462,760) (1,178,755) 17,935,752 75,994 4,152,472 20,985,559
Profit for the period ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь – – – – – – – – 1,968,168 1,968,168
Share-based compensation ь ь ь ь ь ь ь ь ь ь ь ь ь 13 – – – – – – 148,705 – – 148,705
Shares issued upon exercise of employee
share options ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 13 1,610,448 – – – – – 6,917 – – 6,917
– IB-6 –
Surrendered and cancellation of
Class A ordinary sharesь ь ь ь ь ь ь ь ь ь ь ь ь ь (6) – – – – – – – – –
Share conversion from Class B to Class A ь ь ь ь ь 11 64,000,000 5 (64,000,000) (5) – – – – – –
Treasury share purchases ь ь ь ь ь ь ь ь ь ь ь ь ь ь 11 – – – – (81,376,768) (2,796,464) – – – (2,796,464)
Foreign currency translation adjustment,
net of tax ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь – – – – – – – (126,642) – (126,642)
Balance at September 30, 2022 ь ь ь ь ь ь ь ь ь ь 803,555,356 63 430,552,051 33 (110,839,528) (3,975,219) 18,091,374 (50,648) 6,120,640 20,186,243
UNAUDITED INTERIM CONDENSED
Class A Class B Accumulated
ordinary shares ordinary shares Treasury stock purchases Additional other
Number of Number of Number of paid in comprehensive Retained
Note Shares Amount Shares Amount Shares Amount capital (loss)/income earnings Total equity
APPENDIX IB
As of January 1, 2021 ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 590,139,760 47 494,552,051 38 – – 6,960,369 4,974 1,342,262 8,307,690

Profit for the yearь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь – – – – – – – – 2,311,401 2,311,401
Share-based compensation ь ь ь ь ь ь ь ь ь ь ь ь ь 13 – – – – – – 64,295 – – 64,295
Shares issued upon exercise of employee share
options/restricted share units (“RSUs”) ь ь ь ь ь ь 13 4,192,000 – – – – – 11,787 – – 11,787
Issuance of ordinary shares ь ь ь ь ь ь ь ь ь ь ь ь ь 11 87,400,000 7 – – – – 10,856,518 – – 10,856,525
Exercise of pre-funded warrants ь ь ь ь ь ь ь ь ь ь 11 53,599,890 4 – – – – (4) – – –
Foreign currency translation adjustment,
net of tax ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь – – – – – – – 24,084 – 24,084
– IB-7 –
Balance at September 30, 2021 ь ь ь ь ь ь ь ь ь ь 735,331,650 58 494,552,051 38 – – 17,892,965 29,058 3,653,663 21,575,782
The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.
UNAUDITED INTERIM CONDENSED

UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENT OF CASH
FLOWS
(In thousands)
Nine months ended

September 30,
Note 2021 2022
HK$ HK$
Cash flows from operating activities
Net incomeьььььььььььььььььььььььььььььь 2,311,401 1,968,168
Adjustments for:
Depreciation and amortizationьььььььььььььььь 22 24,730 41,046
Expected credit loss expenses ьььььььььььььььь 2,815 13,620
Share of loss from equity method investment ьььь – 13,324
Impairment from other non-current assets ььььььь – 62,565
Foreign exchange (gains)/losses ьььььььььььььь (85,904) 101,528
Share-based compensationььььььььььььььььььь 13 64,295 148,705
Realized gain from short-term investments ьььььь – (16,919)
Fair value losses ьььььььььььььььььььььььььь – 8,989
Deferred income tax benefit ььььььььььььььььь 23 (8,266) (11,707)
Amortisation of right-of-use assets ьььььььььььь 61,567 65,932
Changes in operating assets:
Net (increase)/decrease in securities purchased
under agreements to resell ььььььььььььььььь (10,000) 83,854
Net increase in loans and advances ьььььььььььь (12,011,505) (183,956)
from clients and brokers ьььььььььььььььььь (3,104,633) 3,023,178
Net decrease in accounts receivable from
clearing organizations ьььььььььььььььььььь 116,202 364,015
Net decrease/(increase) in accounts receivable
from fund management companies and fund
distributors ьььььььььььььььььььььььььььь 167,067 (8,244)
Net increase in interest receivableььььььььььььь (18,218) (95,509)
Net increase in prepaid assets ьььььььььььььььь (7,915) (5,469)
Net increase in other assetsьььььььььььььььььь (121,226) (464,987)
Changes in operating liabilities:
Net (decrease)/increase in amounts due to
related parties ьььььььььььььььььььььььььь (49,290) 4,567
Net increase in accounts payable to clients and
brokers ььььььььььььььььььььььььььььььь 17,468,089 453,196
Net increase in accounts payable to clearing
organizations ььььььььььььььььььььььььььь 337,671 1,656,531
Net (decrease)/increase in accounts payable to
fund management companies and fund
distributors ьььььььььььььььььььььььььььь (73,172) 14,453
Net (decrease)/increase in payroll and welfare
payable ььььььььььььььььььььььььььььььь (5,798) 161,408
Net increase/(decrease) in interest payable ьььььь 8,151 (19)
Net decrease in operating lease liabilities ььььььь (51,469) (71,875)
Net decrease in securities sold under agreements
to repurchase ььььььььььььььььььььььььььь (541,530) (4,467,861)
Net increase/(decrease) in other liabilitiesььььььь 731,721 (688,250)
Net cash generated from operating activities ььь 5,204,783 2,170,283
– IB-8 –
Nine months ended

September 30,
Note 2021 2022
HK$ HK$
Cash flows from investing activities
Purchase of property and equipment and intangible
assets ьььььььььььььььььььььььььььььььььь (57,419) (75,485)
Purchase of short-term investments ььььььььььььь – (3,377,186)
Proceeds from disposal of short-term investments ьь – 4,560,076
Acquisition of long-term investments ьььььььььььь – (235,434)
Maturity of term depositsььььььььььььььььььььь 300,000 –
Cash paid for acquisition, net of cash acquired ьььь – (102,008)
Net cash generated from investing activities ььььь 242,581 769,963
Cash flows from financing activities

Proceeds from public offering, net of issuance
costs ььььььььььььььььььььььььььььььььььь 10,856,525 –
Proceeds from exercise of employee share optionsьь 19,842 13,446
Purchase of treasury stock ьььььььььььььььььььь – (2,796,464)
Proceeds from other borrowingsьььььььььььььььь 42,974,942 55,493,584
Repayment of other borrowings ьььььььььььььььь (40,515,517) (55,296,296)
Payment of other financing expenses ьььььььььььь (348) (8,093)
Net cash generated from/(used in) financing

activities ььььььььььььььььььььььььььььььь 13,335,444 (2,593,823)
Effect of exchange rate changes on cash, cash

equivalents and restricted cash ььььььььььььь 88,578 (108,099)
Net increase in cash, cash equivalents and

restricted cashььььььььььььььььььььььььььь 18,871,386 238,324
Cash, cash equivalents and restricted cash at
beginning of the period ьььььььььььььььььььь 43,521,758 59,291,512
Cash, cash equivalents and restricted cash at end

of the period ьььььььььььььььььььььььььььь 62,393,144 59,529,836

Cash and cash equivalents ьььььььььььььььььььь 2,082,051 6,865,549
Cash held on behalf of clients ььььььььььььььььь 60,311,093 52,662,417
Restricted Cash ьььььььььььььььььььььььььььь – 1,870
Cash, cash equivalents and restricted cash at end

of the period ьььььььььььььььььььььььььььь 62,393,144 59,529,836
Supplemental disclosure
Interest paid ььььььььььььььььььььььььььььььь (313,135) (110,544)
Income tax paid ьььььььььььььььььььььььььььь (93,707) (309,296)
Cash paid for amounts included in operating lease
liabilities ььььььььььььььььььььььььььььььь (64,955) (81,343)
– IB-9 –

NOTES TO THE UNAUDITED INTERIM CONDENSED FINANCIAL INFORMATION
1. GENERAL INFORMATION, ORGANIZATION AND PRINCIPAL ACTIVITIES
Futu Holdings Limited (the “Company”) is an investment holding company incorporated in the Cayman
Islands with limited liability and conducts its business mainly through its subsidiaries, variable interest entities
(“VIEs”) and subsidiaries of the VIEs (collectively referred to as the “Group”). The Group principally engages in
online financial services including securities and derivative trades brokerage, margin financing and fund distribution
services based on internally developed software and digital platform “Futubull” and “Moomoo”. The Group also
provides financial information and online community services, etc. The Company completed its IPO on March 8,
2019 on the Nasdaq Global Market. Each American Depositary Shares (“ADSs”) represents eight of the Company’s
Class A ordinary shares.
As of September 30, 2022, the Company’s principal subsidiaries, consolidated VIE are as follows:
Date of Place of Percentage of

Incorporation/ Incorporation/ Direct or Indirect
Companies Establishment/ Establishment Economic Interest Principal Activities
Subsidiaries
Futu Securities April 17, 2012 Hong Kong 100% Financial services
International
(Hong Kong) Limited
(“Futu Securities”)ь ь ь ь
Futu Securities May 2, 2014 Hong Kong 100% Investment holding
(Hong Kong) Limited ь ь
Futu Network Technology August 17, 2015 Hong Kong 100% Research and
Limited ь ь ь ь ь ь ь ь ь ь development
and technology
services
Futu Network Technology October 14, 2015 Shenzhen, PRC 100% Research and
(Shenzhen) Co., Ltd. ь ь development
and technology
services
Shen Si Network September 15, Beijing, PRC 100% No substantial
Technology (Beijing) 2014 business
Co., Ltd. (“Shen Si”) ь ь
Moomoo Financial Inc (1) December 17, Delaware, USA 100% Financial services
(previous name: Futu 2015
Inc.) ь ь ь ь ь ь ь ь ь ь ь ь
Futu Clearing Inc. ь ь ь ь ь August 13, 2018 Delaware, USA 100% Financial services
Moomoo Financial December 17, Singapore 100% Financial services
Singapore Pte. Ltd(1) 2019
(previous name: Futu
Singapore Pte. Ltd) ь ь ь
Futu Securities (Australia) February 15, 2001 New South Wales, 100% Financial services
Ltd. ь ь ь ь ь ь ь ь ь ь ь ь ь Australia
VIE
Shenzhen Futu Network December 18, Shenzhen, PRC 100% Research and
Technology Co., Ltd.(2) 2007 development
(“Shenzhen Futu”) ь ь ь ь and technology
services
– IB-10 –
Notes:
(1) These subsidiaries changed company names in June 2022.
(2) Mr. Leaf Hua Li and Ms. Lei Li are beneficiary owners of the Company and held 85% and 15% equity interest
in Shenzhen Futu, respectively. Mr. Leaf Hua Li is the founder, chairman and chief executive officer of the
Company, and Ms. Lei Li is Mr. Leaf Hua Li’s spouse.
2. SIGNIFICANT ACCOUNTING POLICIES
Basis of presentation
The unaudited interim condensed consolidated financial statements of the Group have been prepared in
accordance with the accounting principles generally accepted in the United States of America (“U.S. GAAP”).
The unaudited interim condensed consolidated financial statements have been prepared on the same basis as
the audited consolidated financial statements. In the opinion of the Company, the accompanying unaudited interim
condensed consolidated financial statements contain all adjustments, consisting of only normal recurring
adjustments, necessary for a fair statement of its financial position as of September 30, 2022, its results of operations
and cash flows for the nine months ended September 30, 2021 and 2022. The unaudited interim condensed
consolidated balance sheet as of December 31, 2021, was derived from audited financial statements as of that date,
but does not contain all of the footnote disclosures required by U.S. GAAP for a complete set of financial statements.
Accordingly, these financial statements should be read in conjunction with the audited consolidated financial
statements and related footnotes for the year ended December 31, 2021. Significant accounting policies followed by
the Group in the preparation of the accompanying consolidated financial statements are summarized below.
The consolidated financial statements include the financial statements of the Company, its subsidiaries, the
VIEs and subsidiary of the VIEs for which the Company or its subsidiary is the primary beneficiary.
A subsidiary is an entity in which the Company, directly or indirectly, controls more than one half of the voting
power; or has the power to appoint or remove the majority of the members of the Board of Directors; or to cast a
majority of votes at the meeting of directors; or has the power to govern the financial and operating policies of the
investee under a statute or agreement among the shareholders or equity holders.
A consolidated VIE is an entity in which the Company, or its subsidiary, through contractual arrangements, has
the power to direct the activities that most significantly impact the entity’s economic performance, bears the risks
of and enjoys the rewards normally associated with ownership of the entity, and therefore the Company or its
subsidiary is the primary beneficiary of the entity. All transactions and balances among the Company, its subsidiaries,
the VIEs and subsidiaries of the VIEs have been eliminated upon consolidation.
VIE Companies
(1) Contractual Agreements with VIEs
The following is a summary of the contractual agreements (collectively, “Contractual Agreements”) between
the Company’s PRC subsidiary, Shen Si, and the VIEs. Through the Contractual Agreements, the VIEs are effectively
controlled by the Company.
Shareholders’ Voting Rights Proxy Agreements. Pursuant to the Shareholders’ Voting Rights Proxy
Agreements, each shareholder of VIEs irrevocably authorized Shen Si or any person(s) designated by Shen Si to
exercise such shareholder’s rights in VIEs, including without limitation, the power to participate in and vote at
shareholder’s meetings, the power to nominate and appoint the directors, senior management, and other shareholders’
voting right permitted by the articles of association of VIEs. The shareholders’ voting rights proxy agreements remain
irrevocable and continuously valid from the date of execution until the expiration of the business term of Shen Si and
can be renewed upon request by Shen Si.
– IB-11 –
Business Operation Agreements. Pursuant to the Business Operation Agreements, VIEs and their shareholders
undertake that without Shen Si’s prior written consent, VIEs shall not enter into any transactions that may have a
material effect on VIEs’ assets, business, personnel, obligations, rights or business operations. VIEs and their
shareholders shall elect directors nominated by Shen Si and such directors shall nominate officers designated by Shen
Si. The business operation agreements will remain effective until the end of Shen Si’s business term, which will be
extended if Shen Si’s business term is extended or as required by Shen Si.
Equity Interest Pledge Agreements. Pursuant to the Equity Interest Pledge Agreements, each shareholder of
VIEs agrees that, during the term of the Equity Interest Pledge Agreements, he or she will not dispose of the pledged
equity interests or create or allow any encumbrance on the pledged equity interests without the prior written consent
of Shen Si. The Equity Interest Pledge Agreements remain effective until the latter of the full payment of all secured
debt under the equity interest pledge agreements and VIEs and their shareholders discharge all their obligations under
the contractual arrangements.
Exclusive Technology Consulting and Services Agreements. Under the Exclusive Technology Consulting and
Services Agreements between Shen Si and the VIEs, Shen Si has the exclusive right to provide VIEs with technology
consulting and services related to, among other things, technology research and development, technology application
and implementation, maintenance of software and hardware. Without Shen Si’s written consent, VIEs shall not accept
any technology consulting and services covered by these agreements from any third party. VIEs agree to pay a service
fee at an amount equivalent to all of its net profit to Shen Si. Unless otherwise terminated in accordance with the
terms of these agreements or otherwise agreed with Shen Si, these agreements will remain effective until the
expiration of Shen Si’s business term, and will be renewed if Shen Si’s business term is extended.
Exclusive Option Agreements. Pursuant to the Exclusive Option Agreements, each shareholder of VIEs has
irrevocably granted Shen Si an exclusive option, to the extent permitted by PRC laws, to purchase, or have its
designated person or persons to purchase, at its discretion, all or part of the shareholder’s equity interests in VIEs.
Unless PRC laws and/or regulations require valuation of the equity interests, the purchase price shall be RMB1.00
or the lowest price permitted by the applicable PRC laws, whoever is higher. Each shareholder of VIEs undertakes
that, without the prior written consent of Shen Si, he or she will not, among other things, (i) create any pledge or
encumbrance on his or her equity interests in VIEs, (ii) transfer or otherwise dispose of his or her equity interests
in VIEs, (iii) change VIEs’ registered capital, (iv) amend VIEs’ articles of association, (v) liquidate or dissolve VIEs,
or (vi) distribute dividends to the shareholders of VIEs. In addition, VIEs undertake that, without the prior written
consent of Shen Si, they will not, among other things, dispose of VIEs’ material assets, provide any loans to any third
parties, enter into any material contract with a value of more than RMB500,000, or create any pledge or encumbrance
on any of their assets, or transfer or otherwise dispose of their material assets. Unless otherwise terminated by Shen
Si, these agreements will remain effective until the expiration of Shen Si’s business term, and will be renewed if Shen
Si’s business term is extended.
(2) Risks in relation to the VIE structure
The following table sets forth the assets, liabilities, results of operations and changes in cash and cash
equivalents of the VIEs and their subsidiary taken as a whole, which were included in the Group’s consolidated
financial statements with intercompany balances and transactions eliminated between the VIEs and their subsidiary:
As of As of
2021 2022
(HK$ in thousands)
Total assets ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 254,602 293,717

Total liabilities ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 176,204 168,791
Nine months ended September 30,

2021 2022
(HK$ in thousands)
Total operating revenue ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 134,812 201,216

Net income ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 24,520 48,110
– IB-12 –

2021 2022
(HK$ in thousands)
Net cash generated from operating activities ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 3,328 25,847

Net cash used in investing activities ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь (3,187) –
Net cash generated from financing activities ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь – 8,107
Net increase in cash and cash equivalents ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 141 33,954
Cash and cash equivalents at beginning of the period ь ь ь ь ь ь ь ь ь ь 3,738 2,751
Cash and cash equivalents at end of the period ь ь ь ь ь ь ь ь ь ь ь ь ь ь 3,879 36,705
Transactions between the VIE and other entities in the consolidated group
As of December 31, 2021 and September 30, 2022, total assets include amounts due from internal companies
in the consolidated group in the amount of HK$190,424 thousand and HK$216,696 thousand, respectively. Total
liabilities include amounts due to the internal companies in the amount of HK$80,435 thousand and HK$87,483
thousand, respectively. For the nine months ended September 30, 2021 and 2022, the VIE earned inter-company
revenues in the amounts of HK$118,000 thousand and HK$182,834 thousand, respectively. In addition, for the nine
months ended September 30, 2021 and 2022, the repayment of advances to Group companies by the VIE are in the
amount of nil and nil, and VIE proceeded from advances from Group companies in the amount of nil, HK$8,107
thousand, respectively. All of these balances and transactions have been eliminated in consolidation.
Under the Contractual Agreements with the VIEs, the Company has the power to direct activities of the VIEs
and VIEs’ subsidiaries, and can have assets transferred out of the VIEs and VIEs’ subsidiaries. Therefore, the
Company considers itself the ultimate primary beneficiary of the VIEs and there is no asset of the VIEs that can only
be used to settle obligations of the VIEs and VIEs’ subsidiaries, except for registered capital of the VIEs and their
subsidiary amounting to RMB10 million as of December 31, 2021 and September 30, 2022, respectively. Since the
VIEs are incorporated as limited liability companies under the PRC Company Law, creditors of the VIEs do not have
recourse to the general credit of the Company. There is currently no contractual arrangement that would require the
Company to provide additional financial support to the VIEs. However, as the Company is conducting certain
businesses through its VIEs and VIEs’ subsidiary, the Company may provide such support on a discretionary basis
in the future, which could expose the Company to a loss.
In the opinion of the Company’s management, the contractual arrangements among its subsidiary, the VIEs and
their respective Nominee Shareholders are in compliance with current PRC laws and are legally binding and
enforceable. However, uncertainties in the interpretation and enforcement of the PRC laws, regulations and policies
could limit the Company’s ability to enforce these contractual arrangements. As a result, the Company may be unable
to consolidate the VIEs and VIEs’ subsidiaries in the consolidated financial statements.
On March 15, 2019, the Foreign Investment Law was formally passed by the thirteenth National People’s
Congress and it was taken effect on January 1, 2020. The Foreign Investment Law replaces the Law on Sino-Foreign
Equity Joint Ventures, the Law on Sino-Foreign Cooperative Joint Ventures and the Law on Foreign-Capital
Enterprises to become the legal foundation for foreign investment in the PRC.
The Foreign Investment Law stipulates certain forms of foreign investment. However, the Foreign Investment
Law does not explicitly stipulate contractual arrangements such as those we rely on as a form of foreign investment.
Notwithstanding the above, the Foreign Investment Law stipulates that foreign investment includes “foreign investors
investing through any other methods under laws, administrative regulations or provisions prescribed by the State
Council.” Future laws, administrative regulations or provisions prescribed by the State Council may possibly regard
Contractual Arrangements as a form of foreign investment. In the event that the State Council in the future
promulgates laws and regulations that deem investments made by foreign investors through contractual arrangements
as “foreign investment”, the Group’s ability to use the contractual arrangements with its VIEs and the Group’s ability
to conduct business through the VIEs could be severely limited.
– IB-13 –
The Company’s ability to control the VIEs also depends on the power of attorney Shen Si has to vote on all
matters requiring shareholders’ approvals in the VIEs. As noted above, the Company believes these power of attorney
are legally binding and enforceable but may not be as effective as direct equity ownership. In addition, if the Group’s
corporate structure or the contractual arrangements with the VIEs were found to be in violation of any existing PRC
laws and regulations, the PRC regulatory authorities could, within their respective jurisdictions:
• revoke the Group’s business and operating licenses;
• require the Group to discontinue or restrict its operations;
• restrict the Group’s right to collect revenues;
• block the Group’s websites;
• require the Group to restructure its operations, re-apply for the necessary licenses or relocate the
Group’s businesses, staff and assets;
• impose additional conditions or requirements with which the Group may not be able to comply; or
• take other regulatory or enforcement actions against the Group that could be harmful to the Group’s
business.
The imposition of any of these restrictions or actions may result in a material adverse effect on the Group’s
ability to conduct its business. In addition, if the imposition of any of these restrictions causes the Group to lose the
right to direct the activities of the VIEs or the right to receive their economic benefits, the Group would no longer
be able to consolidate the financial statements of the VIEs. In the opinion of management, the likelihood of losing
the benefits in respect of the Group’s current ownership structure or the contractual arrangements with its VIEs is
remote.
Use of Estimates
The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management
to make estimates and assumptions that affect the reported amounts of assets and liabilities, related disclosures of
contingent assets and liabilities at the balance sheet date, and the reported revenues, costs and expenses during the
reported period in the consolidated financial statements and accompanying notes. These accounting estimates
reflected in the Group’s consolidated financial statements mainly include, but are not limited to, the estimation of the
expected usage and the estimated relative standalone selling price of the incentive points and coupons, the valuation
and recognition of share-based compensation arrangements, depreciable lives of property and equipment, useful life
of intangible assets, expected credit losses on financial instruments, assessment for impairment of long-term
investments and other non-current assets, present value for expected future leasing payment, contingency reserve,
provision of income tax and valuation allowance for deferred tax asset, and valuation of financial instruments
measured at fair value. Actual results could differ from those estimates.
Comprehensive Income and Foreign Currency Translation
The Group’s operating results are reported in the consolidated statements of comprehensive income pursuant
to FASB ASC Topic 220, “Comprehensive Income”. Comprehensive income consists of two components: net income
and other comprehensive income (“OCI”). The Group’s OCI is comprised of gains and losses resulting from
translating foreign currency financial statements of entities, of which functional currency is other than Hong Kong
dollar which is the presentational currency of the Group, net of related income taxes, where applicable. Such
subsidiaries’ assets and liabilities are translated into Hong Kong dollars at period-end exchange rates, and revenues
and expenses are translated at average exchange rates prevailing during the period. Adjustments that result from
translating amounts from a subsidiary’s functional currency to the Hong Kong dollar (as described above) are
reported net of tax, where applicable, in accumulated OCI in the consolidated balance sheets.
Prior to January 1, 2020, the Group applied incurred loss methodology for recognizing credit losses that delays
recognition until it is probable a loss has been incurred. The identified impairment loss was immaterial prior to
January 1, 2020.
– IB-14 –
On January 1, 2020, the Group adopted FASB ASC Topic 326 – “Financial Instruments – Credit Losses” (“ASC
Topic 326”) which replaces the incurred loss methodology with the current expected credit loss (“CECL”)
methodology. The new guidance applies to financial assets measured at amortized cost, held-to-maturity debt
securities and off-balance sheet credit exposures. For on-balance sheet assets, an allowance must be recognized at the
origination or purchase of in-scope assets and represents the expected credit losses over the contractual life of those
assets.
The Group adopted ASC Topic 326 using the modified retrospective approach for all in-scope assets. The
adoption of ASC Topic 326 has no material impact on the Group’s retained earnings as of January 1, 2020. Results
for reporting periods beginning after January 1, 2020 are presented under ASC Topic 326 while prior periods continue
to be reported in accordance with previously applicable U.S. GAAP. The Group’s in-scope assets are primarily loans
and advances that are collateralized by client securities and the collateral is required to be maintained at specified
minimum levels at all times. The Group monitors margin levels and requires clients to provide additional collateral,
or reduce margin positions, to meet minimum collateral requirements if the fair value of the collateral changes. The
Group applies the practical expedient based on collateral maintenance provisions in estimating an allowance for
credit losses for the loans and advances. In accordance with the practical expedient, when the Group reasonably
expects that borrowers (or counterparties, as applicable) will replenish the collateral as required, there is no
expectation of credit losses when the collateral’s fair value is greater than the amortized cost of the financial assets.
If the amortized cost exceeds the fair value of collateral, then credit losses are estimated only on the unsecured
portion. For the nine months ended September 30, 2021 and 2022, expected credit loss expenses of HK$2,815
thousand and HK$13,620 thousand, resulting from the assessment of credit losses for the loans and advances under
ASC Topic 326 at period-end were recognized in “Others, net” in the consolidated statements of comprehensive
income, respectively.
An allowance for credit losses on other financial assets, including receivables from clients, brokers, clearing
organizations and fund management companies and fund distributors, is estimated based on the aging of these
financial assets.
Receivables from clients are due within the settlement period commonly adopted in the relevant market
practices, which is usually within a few days from the trade date. Because these receivables involve customers who
have no recent history of default, and the settlement periods are usually short, the credit risk arising from receivables
from clients is considered low. In respect of the receivables from brokers, clearing organizations and fund
management companies and fund distributors, the management considers that these receivables have a low risk of
default and the counterparties have a strong capacity to meet their contractual obligation. As a result, the allowance
for credit losses for other financial assets were immaterial for all periods presented.
Cash and Cash Equivalents
Cash and cash equivalents represent cash on hand, demand deposits and time deposits placed with banks or
other financial institutions, which are unrestricted to withdrawal or use, and which have original maturities of three
months or less.
Cash Held on Behalf of Clients
The Group has classified the clients’ monies as cash held on behalf of clients under the assets section in the
consolidated balance sheets and recognized the corresponding accounts payables to the respective clients under the
liabilities section.
Term Deposit
Term deposit consists of bank deposits with an original maturity of greater than three months.
Restricted Cash
The Group is required to maintain restricted cash deposits for certain property leases. These funds are
restricted and have been classified as such on our consolidated balance sheets due to the nature of restriction.
– IB-15 –
Short-term Investments
The Group classifies certain financial assets with highly liquidity and original maturities less than twelve
months as short-term investments. The Group’s short-term investments consist of money market funds and financial
assets at fair value through profit or loss. The Group values its money market funds and financial assets at fair value
through profit or loss using quoted prices in active markets for these investments, and accordingly, the Group
classifies the valuation techniques that use these inputs as Level 1.
Securities Purchased Under Agreements to Resell and Securities Sold Under Agreements to Repurchase
Transactions involving purchases of securities under agreements to resell (resell agreements) and transactions
involving sales of securities under agreements to repurchase (repurchase agreements) are treated as collateralized
financing transactions.
Under resell agreements, the Group pays cash to counterparties and receives securities as collateral. These
agreements are carried at amounts at which the securities will subsequently be resold, and the interest income
received by the Group is recorded as interest income in the consolidated statements of comprehensive income.
Under repurchase agreements, the Group receives cash from counterparties and provides securities as
collateral. These agreements are carried at amounts at which the securities will subsequently be repurchased, and the
interest expense incurred by the Group is recorded as interest expenses in the consolidated statements of
comprehensive income.
Loans and advances
Loans and advances include margin loans, IPO loans extended to clients and other advances, collateralized by
securities and are carried at the amortized cost, net of an allowance for credit losses. Revenues earned from the loans
and advances are included in interest income.
Margin loans are extended to clients on a demand basis and are not committed facilities. Securities owned by
the customers, which are not recorded in the consolidated balance sheets, are held as collateral for amounts due on
the margin loans.
IPO loans for subscription of new shares are normally settled within one week from the drawdown date. Once
IPO stocks are allotted, the Group requires clients to repay the IPO loans. Force liquidation action would be taken
if the clients fail to settle their shortfall after the IPO allotment result is announced.
as collateral.
Loans and advances are initially recorded net of directly attributable transaction costs and are measured at
subsequent reporting dates at amortized cost. Finance charges, premiums payable on settlement or redemption and
direct costs are accounted for on an accrual basis to the surplus or deficit using the effective interest method and are
added to the carrying amount of the instrument to the extent that they are not settled in the period in which they arise.
The balances will be written off to the extent that there is no realistic prospect of recovery. This is generally
the case when the Group determines that the debtor does not have assets or sources of income that could generate
sufficient cash flows to repay the amounts subject to the write-off.
Trading Receivables from and Payables to Clients
Trading receivables from clients include amounts due on brokerage transactions on a trade-date basis. Trading
payables to clients represent the closing cash balance to the customers, which mainly include cash deposits and
amounts due on brokerage transactions on a trade date basis.
– IB-16 –
Receivables from and Payables to Brokers, Clearing Organizations and Fund Management Companies and
Fund Distributors
Receivables from and payables to brokers, clearing organizations and fund management companies and fund
distributors include receivables and payables from unsettled trades on a trade-date basis, including amounts
receivable for securities, derivatives or funds trades not delivered by the Group to the purchaser by the settlement
date and cash deposits, and amounts payable for securities, derivatives or funds trades not received by the Group from
a seller by the settlement date.
Clearing settlement fund deposited in the clearing organizations for the clearing purpose is recognized in
receivables from clearing organizations.
The Group borrowed margin loans from executing brokers, with the benchmark interest rate plus premium
differentiated depending on the amount borrowed, and immediately lent to margin financing clients. Margin loans
borrowed is recognized in the payables to brokers.
The Group’s policy is to net the receivables from and payables to clearing organizations according to ASC
Topic 210-20, when all of the following conditions are met:
(a) Each of two parties owes the other determinable amounts.
(b) The reporting party has the right to set off the amount owed with the amount owed by the other party.
(c) The reporting party intends to set off.
(d) The right of setoff is enforceable at law.
Interest Receivable and Payable
Interest receivable which is included in receivables is calculated based on the contractual interest rate of bank
deposit, loans and advances, securities loaned and receivables on an accrual basis, and is recorded as interest income
as earned.
Interest payable which is included in payables is calculated based on the contractual interest rates of payables,
borrowings, securities borrowed and securities sold under agreements to repurchase on an accrual basis, and is
recorded as interest expense when incurred.
Securities Borrowed and Securities Loaned
Securities borrowed transactions require the Group to provide counterparties with collateral, which may be in
the form of cash, or other securities. With respect to securities loaned, the Group receives collateral, which may be
in the form of cash or other securities in an amount generally in excess of the fair value of the securities loaned. The
Group monitors the market value of securities borrowed and loaned on a daily basis, with additional collateral
obtained or refunded as permitted contractually.
Securities borrowed and securities loaned are recorded at the amount of the cash collateral advanced or
received. Receivables and payables related to securities borrowed and securities loaned are included at receivables
from and payables to brokers or clients in the consolidated balance sheets. Securities lending fees received and
securities borrowing fees paid by the Group are included in interest income and interest expense, respectively, in the
Leases
In an operating lease, a lessee obtains control of only the use of the underlying asset, but not the underlying
asset itself. An operating lease is recognized as a right-of-use asset with a corresponding liability at the date which
the leased asset is available for use by the Group.
The Group’s operating leases contain both lease components and non-lease components. Non-lease
components are distinct elements of a contract that are not related to securing the use of the underlying assets, such
as common area maintenance and other management costs. The Company makes an accounting policy election not
to separate non-lease components to measure the lease liability and lease asset.
– IB-17 –
The lease liability is initially measured at the present value of the future lease payments over the lease term.
The lease terms may include options to extend or terminate the lease when it is reasonably certain that the Group will
exercise that option. The lease payments are discounted using the rate implicit in the lease or, if not readily
determinable, the Group’s secured incremental borrowing rate, which is based on an internally developed yield curve
using interest rates of debt issued with a similar risk profile as the Group and a duration similar to the lease term.
An operating lease right-of-use asset is initially measured at the value of the lease liability minus any lease incentives
and initial direct costs incurred plus any prepaid rent.
After commencement of the operating lease, the Group recognizes lease expenses on a straight-line basis over
the lease term. The subsequent measurement of the lease liability is based on the present value of the remaining lease
payments using the discount rate determined at lease commencement. The right-of-use asset is subsequently
measured at cost less accumulated amortization and any impairment provision. The amortization of the right-of-use
asset represents the difference between the straight-line lease expense and the accretion of interest on the lease
liability each period. The interest amount is used to accrete the lease liability and to amortize the right-of-use asset.
There is no amount recorded as interest expense.
All of the Group’s leases are classified as operating leases and primarily consist of real estate leases for
corporate offices, data centers, and other facilities. As of December 31, 2021 and September 30, 2022, the
weighted-average remaining lease term on these leases is approximately three years and three years, respectively, and
the weighted-average discount rate used to measure the lease liabilities was approximately 4.71%and 4.65%,
respectively.
For the nine months ended September 30, 2021 and 2022, right-of-use assets obtained under operating leases
was HK$83,265 thousand and HK$44,793 thousand, respectively. The Group’s lease agreements do not contain any
residual value guarantees, restrictions or covenants.
Refundable Deposit
Refundable deposit is included in other assets in the consolidated balance sheets. As a clearing member firm
of securities and derivatives clearing organizations in Hong Kong, Singapore and the U.S., the Group is also exposed
to clearing member credit risk. These clearing organizations require member firms to deposit cash to a clearing fund.
If a clearing member defaults in its obligations to the clearing organizations in an amount larger than its own margin
and clearing fund deposits, the shortfall is absorbed pro rata from the deposits of the other clearing members. Many
clearing organizations of which the Group is member have the authority to assess their members for additional funds
if the clearing fund is depleted. A large clearing member default could result in a substantial cost if the Group is
required to pay such additional funds.
Property and Equipment, net
Property and equipment, which are included in other assets in the consolidated balance sheets are stated at
historical cost less accumulated depreciation and impairment, if any. Depreciation is computed using the straight-line
method over the estimated useful lives of the assets. Residual rate is determined based on the economic value of the
property and equipment at the end of the estimated useful lives as a percentage of the original cost.
Estimated
Category useful lives Residual rate
Computers equipment ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 3-5 years 5%

Furniture and fixtures ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 3-5 years 5%
Office equipment ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 3-5 years 5%
Office building ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 30 years 5%
Vehicle ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 5 years 5%
Expenditures for maintenance and repairs are expensed as incurred.
– IB-18 –
Intangible Assets
Intangible assets which are included in other assets in the consolidated balance sheets mainly consist of
computer software, licenses and other intangible assets.
Finite-lived intangible assets are carried at historical cost less accumulated amortization and accumulated
impairment losses, if any. Amortization of finite-lived intangible assets is calculated using the straight-line method
to allocate costs over the estimated useful lives. Pursuant to topic ASC 350 Intangibles — Goodwill and Other, the
useful life of an intangible asset to an entity is the period over which the asset is expected to contribute directly or
indirectly to the future cash flows of that entity. If an income approach is used to measure the fair value of the license,
in determining the useful life of the intangible asset for amortization purposes, the period of expected cash flows used
to measure the fair value of the license should be considered. The following is a summary of estimated useful lives:
Estimated
Category useful lives
Computer software ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 5 years

Licenses(1) ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 10 years
(1) The income approach was used to measure the fair value of the licenses, and the period of expected cash
flows used to measure the fair value of the licenses is considered by the Group in determining the useful
lives of the related licenses. Based on historical performance, market prospects and other
macroeconomic conditions, the Group estimates that the useful lives of the related licenses are 10 years.
The other licenses recognised as infinite-lived intangible assets consist of an insurance broker license and a
financial services license. The Group obtained an insurance broker license through acquiring a member of the Hong
Kong Professional Insurance Brokers Association. The Group obtained some financial securities licenses via
acquisition of subsidiaries. Such intangible assets were recognised as indefinite-lived as the cash flows were expected
to continue indefinitely on the brokerage and financial service business in above regions.
The Group had held a futures trading right as a clearing member firm of HKEx in order to trade futures through
the trading facilities of the Stock Exchange, and has recognized it as intangible assets. As trading right has an
indefinite useful life and have no foreseeable limit to the period over which the Group can use to generate net cash
flows, it will not be amortised until their useful lives are determined to be finite.
The aforementioned indefinite-lived intangible assets are carried at cost less accumulated impairment losses.
The Group evaluates the remaining useful life of an indefinite-lived intangible asset that is not being amortized each
reporting period to determine whether events and circumstances continue to support an indefinite useful lives. The
Group will not amortize the indefinite-lived intangible assets until their useful lives are determined to be finite. An
intangible asset that is not subject to amortization will be tested for impairment annually and more frequently if
events or changes in circumstances indicate that it is more likely than not that the asset is impaired.
Long-term investments
In accordance with ASC 323 Investment – Equity Method and Joint Ventures, the Group accounts for equity
method investments over which the Group has significant influence but does not own a majority of the equity interest
or otherwise controls and the investments are either common stock or in substance common stock using the equity
method. For the investments in limited partnerships, the equity method of accounting for investments is generally
appropriate for accounting by limited partners. According to ASC 323-30-S99-1, the investments in all limited
partnerships should be accounted for pursuant to paragraph 970-323-25-6. That guidance requires the use of the
equity method unless the investor’s interest “is so minor that the limited partner may have virtually no influence over
partnership operating and financial policies.” Investments of more than 3 to 5 percent are generally viewed to be more
than minor. The Group’s share of the investee’s profit and loss is recognized in the consolidated statements of
comprehensive income of the period.
– IB-19 –
The carrying amount of equity method investments is tested for impairment whenever there is an indication
that the carrying amount may be impaired in accordance with the policy described in “Impairment of long-lived
assets”.
In accordance with ASC 321 Investment – Equity Securities, for those equity investments without readily
determinable fair values, the Group elects to record these investments at cost, less impairment, and plus or minus
subsequent adjustments for observable price changes. Under this measurement alternative, changes in the carrying
value of the equity investment are required to be made whenever there are observable price changes in orderly
transactions for the identical or similar investment of the same issuer.
Pursuant to ASC 321, for those equity investments that the Group elects to use the measurement alternative,
the Group makes a qualitative assessment of whether the investment is impaired at each reporting date. If a qualitative
assessment indicates that the investment is impaired, the Group estimates the investment’s fair value in accordance
with the principles of ASC 820. If the fair value is less than the investment’s carrying value, the Group recognizes
an impairment loss equal to the difference between the carrying value and fair value.
Impairment of Long-lived Assets
Long-lived assets are evaluated for impairment whenever events or changes in circumstances (such as a
significant adverse change to market conditions that will impact the future use of the assets) indicate that the carrying
amount may not be fully recoverable or that the useful life is shorter than the Group had originally estimated. When
these events occur, the Group evaluates the impairment by comparing carrying value of the assets to an estimate of
future undiscounted cash flows expected to be generated from the use of the assets and their eventual disposition. If
the sum of the expected future undiscounted cash flows is less than the carrying value of the assets, the Group
recognizes an impairment loss based on the excess of the carrying value of the assets over the fair value of the assets.
Impairment charge recognized for the nine months ended September 30, 2021 and 2022 was nil and nil, respectively.
Treasury stock
The Group accounted for those shares repurchased as treasury stock at cost of purchase, Treasury stock, and
is shown separately in the shareholders’ equity as the Group has not yet decided on the ultimate disposition of those
shares acquired. When the Group decides to cancel the treasury stock, the difference between the original issuance
price and the repurchase price is debited into additional paid-in capital. Refer to Note 11 for details.
Accounting guidance defines fair value as the price that would be received from selling an asset or paid to
transfer a liability in an orderly transaction between market participants at the measurement date. When determining
the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Group
considers the principal or most advantageous market in which it would transact and it considers assumptions that
market participants would use when pricing the asset or liability.
Accounting guidance establishes a fair value hierarchy that requires an entity to maximize the use of
observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s
categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair
value measurement. Accounting guidance establishes three levels of inputs that may be used to measure fair value:
Level 1 – Valuation techniques in which all significant inputs are unadjusted quoted prices from active markets
for assets or liabilities that are identical to the assets or liabilities being measured.
Level 2 – Valuation techniques in which significant inputs include quoted prices from active markets for assets
or liabilities that are similar to the assets or liabilities being measured and/or quoted prices for assets or liabilities
that are identical or similar to the assets or liabilities being measured from markets that are not active. Also,
model-derived valuations in which all significant inputs and significant value drivers are observable in active markets
are Level 2 valuation techniques.
Level 3 – Valuation techniques in which one or more significant inputs or significant value drivers are
unobservable. Unobservable inputs are valuation technique inputs that reflect the Group’s own assumptions about the
assumptions that market participants would use in pricing an asset or liability.
– IB-20 –
When available, the Group uses quoted market prices to determine the fair value of an asset or liability. If
quoted market prices are not available, the Group will measure fair value using valuation techniques that use, when
possible, current market-based or independently sourced market parameters, such as interest rates and currency rates.
The carrying amount of cash and cash equivalents, cash held on behalf of clients, restricted cash, receivables
from and payables to clients, brokers, clearing organizations and fund management companies and fund distributors,
accrued interest receivable, accrued interest payable, amounts due to related parties, other financial assets and
liabilities approximates fair value because of their short-term nature. Term deposit, loans and advances, borrowings,
securities purchased under agreements to resell, securities sold under agreements to repurchase and operating lease
liabilities are carried at amortized cost. The carrying amount of term deposit, loans and advances, borrowings and
operating lease liabilities approximate their respective fair value as the interest rates applied reflect the current
quoted market yield for comparable financial instruments. Short-term investments are measured at fair value.
The Group’s non-financial assets, such as operating lease right-of-use assets, long-term investments, property
and equipment and intangible assets, would be measured at fair value only if they were determined to be impaired.
Revenue Recognition
(1) Brokerage commission and handling charge income
Brokerage commission income earned for executing transactions is accrued on a trade-date basis.
Handling charge income arise from the services such as clearing and settlement services, subscription and
dividend collection handling services, etc., are accrued on a trade-date basis.
Brokerage commission and handling charge income are recognised at a point in time when the service has been
passed to the customer.
(2) Interest income
The Group earns interest income primarily in connection with its margin financing and securities lending
services, IPO financing, bridge loan and deposits with banks, which are recorded on an accrual basis and are included
in interest income in the consolidated statements of comprehensive income. Interest income is recognized as it is
accrued over time using the effective interest method.
(3) Other income
Other income consists of enterprise public relations service charge income provided to corporate clients,
underwriting fee income, IPO subscription service charge income, currency exchange service income from clients,
income from market data service and funds distribution service income from fund management companies, etc.
Enterprise public relations service charge income is charged to corporate clients by providing platform to post
their detailed stock information and latest news in Futubull app, as well as providing a lively, interactive community
among their potential investors to exchange investment views, share trading experience and socialize with each other.
Unearned enterprise public relations service income of which the Group had received the consideration is recorded
as contract liabilities (deferred revenue).
Underwriting fee income is generated from investment banking business primarily by providing equity
sub-underwriting to corporate issuers.
IPO subscription service charge income is derived from provision of new share subscription services in relation
to IPOs in the Hong Kong capital market.
Currency exchange service income is charged to the Group’s paying clients for providing currency exchange
service.
Market information and data income is charged to Futubull and Moomoo app users for market data service.
– IB-21 –
Funds distribution service income is charged to fund management companies for providing fund products
distribution service to Futu’s individual clients. The Group, as an intermediary would receive subscription fees from
fund management companies as agreed in the service contracts.
For enterprise public relations service charge income, funds distribution service income, market information
and data income and ESOP management service income, the service revenues are recognized ratably over the term
of the service contracts.
For IPO subscription service charge income, underwriting fee income and currency exchange service income,
the Group recognizes the revenues upon the time when the services are rendered to customers.
Customer Loyalty Program
The Group operates a customer loyalty program to its customers that offer various incentives in the form of
incentive points and coupons for redemption of free or discounted goods or services.
For the incentives generated from current sales transaction, the Group defers a portion of commission income
with corresponding liability reflected as contract liability attributable to the incentives. The contract liability is
determined by management based on the expected usage of the incentive points and coupons, and their estimated
relative standalone selling price based on the related goods and services. Significant judgment was made by
management in determining the expected usage and estimated relative standalone selling price of the incentive points
and coupons, derived from historical trading volume, commission rates and redemption patterns, and an evaluation
as to whether historical activities are representative of the expected future activities.
For the incentives offered for future sales transaction, the Group nets a portion of brokerage commission
income attributable to the incentives when points or coupons are actually redeemed.
For the incentives not offered for future sales transaction, the Group considers them as a payment of other
distinct goods that would be granted to clients. Such incentives are accounted for as selling and marketing expense
with corresponding liability reflected as other liability in the consolidated balance sheet.
The table below presents the deferred or netted brokerage commission income related to the customer loyalty
program for the nine months ended September 30, 2021 and 2022.

2021 2022
(HK$ in thousands)
Brokerage commission income, gross ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 2,860,846 2,631,790

Less: revenue netted or deferred ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь (406,627) (243,002)
Brokerage commission income, net ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 2,454,219 2,388,788
As of December 31, 2021 and September 30, 2022, contract liabilities recorded related to the customer loyalty
program were HK$8,968 thousand and HK$6,278 thousand, respectively. The Group expects to recognize the revenue
when points and coupons are actually redeemed. Historically, the revenue was usually recognized within 1-3 years
from the time the contract liability was first recognized.
Brokerage Commission and Handling Charge Expenses
Commission expenses for executing and/or clearing transactions are accrued on a trade-date basis. The
commission expenses are charged by executing brokers for securities and derivative trades in the United States stock
and derivative markets as the Group makes securities and derivative trades with these brokers as principal.
Handling and settlement fee is charged by HKEx or executing brokers for clearing and settlement services, are
accrued on a trade-date basis.
– IB-22 –
IPO subscription service charge expenses are charged by commercial banks in connection with new share
subscription services in relation to IPOs in the Hong Kong capital market.
Interest Expenses
Interest expenses primarily consist of interest expenses of borrowings from banks, other licensed financial
institutions and other parties paid to fund the Group’s margin financing business, securities borrowing business and
IPO financing business.
Processing and Servicing Costs
Processing and servicing costs consist of market information and data fee, data transmission fee, cloud service
fee, system cost, and SMS service fee, etc. The nature of market information and data fee mainly represents for
information and data fee paid to stock exchanges like HKEx, NASDAQ, and New York stock exchange, etc. Data
transmission fee is the fee of data transmission among cloud server and data centers located in Shenzhen, PRC and
Hong Kong, etc. Cloud service fee and SMS service fee mainly represent the data storage and computing service and
the SMS channel service fee. The nature of system cost mainly represents for the fee to access and use the systems
paid to software providers.
Research and Development Expenses
Research and development expenses consist of expenses related to developing transaction platform and
website like Futubull app and other products, including payroll and welfare, rental expenses and other related
expenses for personnel engaged in research and development activities. All research and development costs have been
expensed as incurred as the costs qualifying for capitalization have been insignificant.
Selling and Marketing Expenses
Selling and marketing expenses consist primarily of advertising and promotion costs, payroll, rental and
related expenses for personnel engaged in marketing and business development activities. Advertising and promotion
costs are expensed as incurred and are included within selling and marketing expenses in the consolidated statements
of comprehensive income.
General and Administrative Expenses
General and administrative expenses consist of payroll, rental, related expenses for employees involved in
general corporate functions, including finance, legal and human resources, costs associated with use of facilities and
equipment, such as depreciation expenses, rental and other general corporate related expenses.
Others, net
Others, net, mainly consist of non-operating income and expenses, foreign currency gains or losses, expected
credit loss expenses, gain or loss from investments and impairment from long-term investments and other non-current
assets for all periods presented.
Foreign Currency Gains and Losses
Foreign currency transactions denominated in currencies other than the functional currency are translated into
the functional currency using the exchange rates prevailing at the dates of the transactions. Monetary assets and
liabilities denominated in foreign currencies at the balance sheet date are remeasured at the applicable rates of
exchange in effect at that date. Foreign currency gain or loss resulting from the settlement of such transactions and
from remeasurement at period-end is recognized in “Others, net” in the consolidated statements of comprehensive
income.
– IB-23 –
The Company follows ASC 718 to determine whether a share option and a restricted share units should be
classified and accounted for as a liability award or equity award. All share-based awards to employees and directors
classified as equity awards, such as stock options and restricted share units, are measured at the grant date based on
the fair value of the awards. Share-based compensation, net of estimated forfeitures, is recognized as expenses on a
straight-line method over the requisite service period, which is the vesting period. Options granted generally vest
over four or five years.
The modification of the terms or conditions of the existing shared-based award is treated as an exchange of
the original award for a new award. The incremental compensation expenses are equal to the excess of the fair value
of the modified award immediately after the modification over the fair value of the original award immediately before
the modification. For stock options already vested as of the modification date, the Group immediately recognized the
incremental value as compensation expenses. For stock options still unvested as of the modification date, the
incremental compensation expenses are recognized over the remaining service period of these stock options.
The Company determined the fair value of the restricted share units with reference to the fair value of the
underlying shares as of the grant date. The Company utilizes the binomial option pricing model to estimate the fair
value of stock options granted, with the assistance of an independent valuation firm.
Forfeitures are estimated at the time of grant and revised in subsequent periods if actual forfeitures differ from
those estimates. The Group uses historical data to estimate pre-vesting options and records share-based compensation
expenses only for those awards that are expected to vest. See Note 13 for further discussion on share-based
compensation.
Fair Value of Preferred Shares and Pre-IPO Ordinary Shares
Shares of the Company, which did not have quoted market prices, were valued based on the income approach.
The income approach involves applying the discounted cash flow analysis based on projected cash flow using the
Group’s best estimate as of the valuation dates. Estimating future cash flow requires the Group to analyze projected
revenue growth, gross margins, effective tax rates, capital expenditures and working capital requirements. In
determining an appropriate discount rate, the Group considered the cost of equity and the rate of return expected by
venture capitalists. The Group also applied a discount for lack of marketability given that the shares underlying the
award were not publicly traded at the time of grant. Determination of estimated fair value of the Group requires
complex and subjective judgments due to its limited financial and operating history, unique business risks and limited
public information on companies in China similar to the Group.
Option-pricing method was used to allocate enterprise value to preferred shares and pre-IPO ordinary shares.
The method treats preferred shares and pre-IPO ordinary shares as call options on the enterprise’s value, with exercise
prices based on the liquidation preference of the preferred shares. The strike prices of the “options” based on the
characteristics of the Group’s capital structure, including number of shares of each class of pre-IPO ordinary shares,
seniority levels, liquidation preferences, and conversion values for the preferred shares. The option-pricing method
also involves making estimates of the anticipated timing of a potential liquidity event, such as a sale of the Group
or an IPO, and estimates of the volatility of the Group’s equity securities. The anticipated timing is based on the plans
of board of directors and management of the Group. Estimating the volatility of the share price of a privately held
company is complex because there is no readily available market for the shares. Volatility is estimated based on
annualized standard deviation of daily stock price return of comparable companies.
Taxation
(1) Income tax
Current income taxes are provided on the basis of net income for financial reporting purposes, adjusted for
income and expense items which are not assessable or deductible for income tax purposes, in accordance with the
regulations of the relevant tax jurisdictions. Deferred income taxes are accounted for using an asset and liability
method. Under this method, deferred income taxes are recognized for the tax consequences of temporary differences
by applying enacted statutory rates applicable to future years to differences between the financial statement carrying
amounts and the tax bases of existing assets and liabilities. The tax base of an asset or liability is the amount
– IB-24 –
attributed to that asset or liability for tax purpose. The effect on deferred taxes of a change in tax rates is recognized
in the consolidated statements of comprehensive income in the period of change. A valuation allowance is provided
to reduce the amount of deferred tax assets if it is considered more likely than not that some portion of, or all of the
deferred tax assets will not be realized.
(2) Uncertain tax positions
The Group did not recognize any interest and penalties associated with uncertain tax positions for the nine
months ended September 30, 2021 and 2022, the Group continues to assess the uncertain tax positions in accordance
with applicable income tax guidance and based on changes in facts and circumstances.
Basic net income per share is computed by dividing net income attributable to ordinary shareholder,
considering the accretion of redemption feature and cumulative dividend related to the Company’s redeemable
convertible preferred shares, and undistributed earnings allocated to redeemable convertible preferred shares by the
weighted average number of ordinary shares outstanding during the period using the two-class method. Under the
two-class method, net income is allocated between ordinary shares and other participating securities based on their
participating rights. Net loss is not allocated to other participating securities if based on their contractual terms they
are not obligated to share the losses.
Diluted net income per share is calculated by dividing net income attributable to ordinary shareholder, as
adjusted for the effect of dilutive ordinary equivalent shares, if any, by the weighted average number of ordinary and
dilutive ordinary equivalent shares outstanding during the period. Ordinary equivalent shares consist of ordinary
shares issuable upon the conversion of the redeemable convertible preferred shares, using the if-converted method,
and shares issuable upon the exercise of share options and vesting of restricted share units using the treasury stock
method. Ordinary equivalent shares are not included in the denominator of the diluted net income per share
calculation when inclusion of such share would be anti-dilutive.
Segment Reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief
operating decision-maker. The chief operating decision-maker has been identified as the Chief Executive Officer who
allocates resources to and assesses the performance of the operating segments of an entity. The Group’s reporting
segments are decided based on its operating segments while taking full consideration of various factors such as
products and services, geographic location and regulatory environment related to administration of the management.
Operating segments meeting the same qualifications are allocated as one reporting segment, providing independent
disclosures.
The Group engages primarily in online brokerage services and margin financing services. The Group does not
distinguish between markets or segments for the purpose of internal reports. The Group does not distinguish
revenues, costs and expenses between segments in its internal reporting, and reports costs and expenses by nature as
a whole. Hence, the Group has only one reportable segment.
Significant Risks and Uncertainties
(1) Currency risk
Currency risk arises from the possibility that fluctuations in foreign exchange rates will impact the financial
instruments. The Group is not exposed to significant transactional foreign currency risk since almost all of its
transactions, assets and liability are denominated in Hong Kong dollars and U.S. dollars and Hong Kong dollars are
pegged against U.S. dollars. The impact of foreign currency fluctuations in the Group’s earnings is included in
“Others, net” in the consolidated statements of comprehensive income. At the same time, the Group is exposed to
translational foreign currency risk since some of the Company’s major subsidiaries have RMB as their functional
currency. Therefore, RMB depreciation against Hong Kong dollars could have a material adverse impact on the
foreign currency translation adjustment in the consolidated statements of comprehensive income. The Group enters
into currency futures contracts to manage currency exposure associated with anticipated receipts and disbursements
occurring in a currency other than the functional currency of the entity. The overall impact of the currency risk of
other foreign currency assets held by the Group other than U.S. dollars and Renminbi is not significant.
– IB-25 –
As of December 31, 2021 and September 30, 2022, the Group had RMB-denominated net assets of HK$2,374.8
million and net assets of HK$1,894.9 million, respectively. We estimate that a 10% depreciation of RMB against the
U.S. dollar based on the foreign exchange rate on December 31, 2021 and September 30, 2022, would result in a
decrease of US$30.5 million and a decrease of US$24.1 million, respectively, in the Group’s pre-tax profit. We
estimate that a 10% appreciation of RMB against the U.S. dollar based on the foreign exchange rate on December 31,
2021 and September 30, 2022 would result in an increase of US$30.5 million and an increase of US$24.1 million,
respectively, in the Group’s pre-tax profit.
(2) Credit risk
Cash held on behalf of clients are segregated and deposited in financial institutions as required by rules
mandated by the Group’s primary regulators. These financial institutions are of sound credit ratings, therefore
management believes that there is no significant credit risk related to cash held on behalf of clients.
The Group’s securities and derivative trades activities are transacted on either a cash or margin basis. The
Group’s credit risk is limited in that substantially all of the contracts entered into are settled directly at securities and
derivatives clearing organizations. In margin transactions, the Group extends credit to the client, subject to various
regulatory and internal margin requirements, collateralized by cash and securities in the client’s account. IPO loans
are exposed to credit risk from clients who fails to repay the loans upon IPO stock allotment. The Group monitors
the clients’ collateral level and has the right to dispose the newly allotted stocks once the stocks first start trading.
Bridge loans to enterprise pledged by shares are exposed to credit risk from counterparties who fail to repay the loans,
the Group monitors on the collateral level of bridge loans in real time, and has the right to dispose of the pledged
shares once the collateral level falls under the minimal level required to get the loans repaid.
Liabilities to other brokers and dealers related to unsettled transactions are recorded at the amount for which
the securities were purchased, and are paid upon receipt of the securities from other brokers or dealers.
In connection with its clearing activities, the Group is obligated to settle transactions with brokers and other
financial institutions even if its clients fail to meet their obligations to the Group. Clients are required to complete
their transactions by the settlement date, generally two business days after the trade date. If clients do not fulfill their
contractual obligations, the Group may incur losses. The Group has established procedures to reduce this risk by
generally requiring that clients deposit sufficient cash and/or securities into their account prior to placing an order.
For cash management purposes, the Group enters into short-term securities sold under agreements to
repurchase transactions (“repos”) in addition to securities borrowing and lending arrangements, all of which may
result in credit exposure in the event the counterparty to a transaction is unable to fulfill its contractual obligations.
Repos are collateralized by securities with a market value in excess of the obligation under the contract. Similarly,
securities lending agreements are collateralized by deposits of cash or securities. The Group attempts to minimize
credit risk associated with these activities by monitoring collateral values on a daily basis and requiring additional
collateral to be deposited with or returned to the Group as permitted under contractual provisions.
Concentrations of Credit Risk
The Group’s exposure to credit risk associated with its brokerage and other activities is measured on an
individual counterparty basis, as well as by groups of counterparties that share similar attributes. There was no
revenue from clients which individually represented greater than 10% of the total revenues for the nine months ended
September 30, 2021 and 2022, respectively. Concentrations of credit risk can be affected by changes in political,
industry, or economic factors. To reduce the potential for risk concentration, credit limits are established and
exposure is monitored in light of changing counterparty and market conditions. As of December 31, 2021 and
September 30, 2022, the Group did not have any material concentrations of credit risk within or outside the ordinary
course of business.
(3) Interest rate risk
Fluctuations in market interest rates may negatively affect the Group’s financial condition and results of
operations. The Group are exposed to floating interest rate risk on cash deposit and floating rate borrowings. We use
net interest simulation modeling techniques to evaluate the effect that changes in interest rates might have on pre-tax
profit or loss. The model includes all interest-sensitive assets and liabilities. The simulations involve assumptions that
are inherently uncertain and, as a result, cannot precisely predict the impact that changes in interest rates will have
on pre-tax profit or loss. Actual results may differ from simulated results due to differences in timing and frequency
of rate changes, changes in market conditions and changes in management strategy that lead to changes in the mix
of interest-sensitive assets and liabilities.
The simulations assume that the asset and liability structure of the consolidated balance sheets would not be
changed as a result of a simulated change in interest rates. The results of the simulations based on the Group’s
financial position as of September 30, 2022 indicate that a gradual 1% (100 basis points) increase/decrease in interest
rates over a 12-month period would have increased/decreased the Group’s profit before tax by approximately
HK$309.6 million (US$39.6 million), depending largely on the extent and timing of possible changes in floating
rates.
– IB-26 –
Recent Accounting Pronouncements
In June 2016, the FASB amended guidance related to impairment of financial instruments as part of ASU
2016-13 Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,
which is effective on January 1, 2020. The guidance replaces the incurred loss impairment methodology with an
expected credit loss model for which the group is required to recognize an allowance based on its estimate of
expected credit loss. In November 2018, FASB issued ASU No, 2018-19, Codification Improvements to Topic 326,
further clarified the scope of the guidance in the amendments in ASU 2016-13. In May 2019, FASB issued ASU
No.2019-05, Financial instrument – Credit Losses (Topic 326), Targeted Transition Relief, which provides an
irrevocably fair value option to elect for eligible instruments. In November 2019, FASB issued ASU 2019-11
Codification Improvements to Topic 326, Financial Instruments – Credit Losses, which clarified and improved
various aspects of ASU 2016-13. In March 2020, FASB issued ASU 2020-03, Codification Improvements to Financial
Instruments, which improves and clarifies various financial instruments topics, including the current expected credit
losses standard. As of January 1, 2020, the Group adopted ASC Topic 326 using the modified retrospective approach
for all in-scope assets. The adoption of ASC Topic 326 has no impact on the Group’s retained earnings as of January
1, 2020. Results for reporting periods beginning after January 1, 2020 are presented under ASC Topic 326 while prior
periods continue to be reported in accordance with previously applicable U.S. GAAP.
In August 2018, the FASB issued ASU 2018-13, Disclosure Framework – Changes to the Disclosure
Requirements for Fair Value Measurement. The amendments in this standard will remove, modify and add certain
disclosures under ASC Topic 820, Fair Value Measurement, with the objective of improving disclosure effectiveness.
ASU 2018-13 is effective for the Group’s fiscal year beginning January 1, 2020, with early adoption permitted. The
update eliminates the requirement to disclose: (a) the amount and reasons for transfers between Level 1 and Level
2 of the fair value hierarchy; (b) an entity’s policy for timing of transfers between levels; (c) and an entity’s valuation
processes for Level 3 fair value measurements. The Group adopted ASU 2018-13 on January 1, 2020, and the
adoption had no material impact on the Group’s consolidated financial statements.
In December 2019, the FASB issued ASU 2019-12, Income taxes (Topic 740) – Simplifying the accounting for
income taxes, which simplifies the accounting for income taxes by removing certain exceptions to the general
principles in Topic 740, Income Taxes. The ASU will be effective for fiscal years, and interim periods within those
fiscal years, beginning after December 15, 2020. The Group adopted the ASU on January 1, 2021, which did not have
a material impact on the consolidated financial statements.
In March 2020, the FASB issued ASU 2020-04, Facilitation of the Effects of Reference Rate Reform on
Financial Reporting, which provides optional guidance for a limited period of time to ease the potential burden in
accounting for (or recognizing the effects of) reference rate reform on financial reporting if certain criteria are met.
The amendments in ASU 2020-04 provide optional expedients and exceptions for applying GAAP to contracts,
hedging relationships and other transactions that reference LIBOR or another reference rate expected to be
discontinued because of reference rate reform. This guidance is effective immediately and the amendments may be
applied prospectively through December 31, 2022. The adoption did not have a material accounting impact on the
Group’s consolidated financial position or results of operations.
3. FINANCIAL ASSETS AND FINANCIAL LIABILITIES
Financial Assets and Liabilities Measured at Fair Value
The following tables set forth, by level within the fair value hierarchy, financial assets and financial liabilities
measured at fair value as of December 31, 2021 and September 30, 2022. As required by ASC Topic 820, financial
assets and financial liabilities are classified in their entirety based on the lowest level of input that is significant to
the respective fair value measurement.

(HK$ in thousands)
Short-term investments ь ь ь ь ь ь ь ь ь ь ь ь 1,169,741 – – 1,169,741

Other financial assets(1) ь ь ь ь ь ь ь ь ь ь ь ь – 598 – 598

at fair value ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 1,169,741 598 – 1,170,339
– IB-27 –
Financial Assets and Liabilities At Fair Value

as of September 30, 2022
(HK$ in thousands)
Short-term investments ь ь ь ь ь ь ь ь ь ь ь ь 13,373 – – 13,373

at fair value ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 13,373 – – 13,373
Other financial liabilities(1) ь ь ь ь ь ь ь ь ь ь 2,125 8,989 – 11,114
Total financial liabilities, measured

at fair value ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 2,125 8,989 – 11,114
(1) The Group enters into currency futures contracts to manage currency exposure associated with
anticipated receipts and disbursements occurring in a currency other than the functional currency of the
entity. The currency futures contracts are valued using broadly distributed bank and broker prices, and
are classified as Level 2 of the fair value hierarchy since inputs to their valuation can be generally
corroborated by market data. As of December 31, 2021 and September 30, 2022, the currency futures
are included in other current assets or other current liabilities.
The Group held trading liabilities and classified them as Level 1 of the fair value hierarchy since the
fair value are determined based on the quoted market price, as of September 30, 2022, the trading
liabilities are included in other current liabilities.
Transfers Between Level 1 and Level 2
Transfers of financial assets and financial liabilities at fair value to or from Levels 1 and 2 arise where the
market for a specific financial instrument has become active or inactive during the period. The fair values transferred
are ascribed as if the financial assets or financial liabilities had been transferred as of the end of the period. During
the nine months ended September 30, 2021 and 2022, there were no transfers between levels for financial assets and
liabilities, at fair value.
Financial Assets and Liabilities Not Measured at Fair Value
The following financial instruments are not measured at fair value in the Group’s consolidated balance sheets
as of December 31, 2021 and September 30, 2022, but require disclosure of their fair values: cash and cash
equivalents, cash held on behalf of clients, term deposit, restricted cash, securities purchased under resale
agreements, loans and advances, receivables, other financial assets, amounts due to related parties, payables,
borrowings, securities sold under agreements to repurchase and other financial liabilities. The estimated fair value
of such instruments at December 31, 2021 and September 30, 2022 approximates their carrying value due to their
generally short maturities. If measured at fair value in the financial statements, these financial instruments would be
classified based on the lowest level of any input that is significant to the fair value measurement.
Netting of Financial Assets and Financial Liabilities
The Group’s policy is to net the receivables from and payables to clearing organizations that meet the
offsetting requirements prescribed in ASC Topic 210-20. The following tables represents the amounts of financial
instruments that are offset in the consolidated balance sheets as of December 31, 2021 and September 30, 2022.
– IB-28 –

Gross
(HK$ in thousands)
Financial Assets

Gross
As of September 30, 2022 amount sheet sheet arrangements collateral Net amount
(HK$ in thousands)
Financial Assets
4. SHORT-TERM INVESTMENTS
The Group’s short-term investments are presented on the consolidated balance sheets as follows:
As of As of
2021 2022
(HK$ in thousands)
Money market funds ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 1,169,741 7,894

Financial assets at fair value through profit or loss ь ь ь ь ь ь ь – 5,479
Totalь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 1,169,741 13,373
For the nine months ended September 30, 2021 and 2022, the Group recorded realized gain of nil and
HK$16,919 thousand related to short-term investments in the consolidated statements of comprehensive income,
respectively.
– IB-29 –
5. LEASE
The following table presents balances reported in the consolidated balance sheets related to the Group’s leases:
As of As of
2021 2022
(HK$ in thousands)
Operating lease right-of-use assets ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 243,859 200,030

Operating lease liabilities ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 260,579 213,276
The following table presents operating lease expense reported in the consolidated statements of comprehensive
income related to the Group’s leases:

2021 2022
(HK$ in thousands)
Operating lease expense ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 77,400 87,503
The following table reconciles the undiscounted cash flows of the Group’s leases as of December 31, 2021 and
September 30, 2022 to the present value of its operating lease payments:
As of As of
2021 2022
(HK$ in thousands)
2022 ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 102,767 29,078

2026 and thereafter ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 7,455 15,908
Total undiscounted operating lease payments ь ь ь ь ь ь ь ь ь ь ь 275,542 231,140

Less: imputed interest ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь (14,963) (17,864)
Present value of operating lease liabilities ь ь ь ь ь ь ь ь ь ь ь ь ь 260,579 213,276
– IB-30 –
6. LOANS AND ADVANCES
As of As of
2021 2022
(HK$ in thousands)
Margin loans ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 29,097,216 27,788,266

IPO loans ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 34,348 22,381
Other advances ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 468,000 1,972,873
Subtotal ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 29,599,564 29,783,520
Less: Allowance for credit losses ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь (12,258) (25,913)
Totalь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 29,587,306 29,757,607
7. OTHER ASSETS
As of As of
2021 2022
(HK$ in thousands)
Current:
Staff advances ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 26,527 16,255
Deposit ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 23,032 39,601
Others ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 32,035 54,297
Totalь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 81,594 110,153
Non-current:
Refundable deposit ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 337,513 691,509
Property and equipment, net (Note a) ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 175,757 149,448
Intangible assets, net (Note b) ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 17,218 51,121
Deferred tax assets (Note 23)ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 38,317 51,062
(a) Property and equipment, net, consisted of the following:
As of As of
2021 2022
(HK$ in thousands)

Computers and equipment ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 109,989 103,709
Furniture and fixtures ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 64,507 68,890
Office equipment ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 64,822 64,168
Office building ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 28,239 33,233
Vehicle ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 635 640
Total of gross carrying amount ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 268,192 270,640
– IB-31 –
As of As of
2021 2022
(HK$ in thousands)
Less: accumulated depreciation

Computers and equipment ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь (29,852) (41,898)
Furniture and fixtures ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь (23,828) (33,502)
Office equipment ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь (35,860) (42,218)
Office building ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь (2,291) (2,966)
Vehicle ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь (604) (608)
Total of accumulated depreciation ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь (92,435) (121,192)
Property and equipment, net ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 175,757 149,448
Depreciation expenses on property and equipment which are included in research and development expenses,
selling and marketing expenses and general and administrative expenses in the consolidated statements of
comprehensive income for the nine months ended September 30, 2021 and 2022 were HK$23,239 thousand and
HK$36,926 thousand, respectively.
(b) Intangible assets, net, consisted of the following:
As of As of
2021 2022
(HK$ in thousands)

Computer software ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 15,596 23,247
License ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 4,261 27,602
Total of gross carrying amount ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 23,495 60,824
Less: accumulated amortization

Computer software ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь (5,172) (7,263)
License ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь – (793)
Others ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь (1,105) (1,647)
Total of accumulated amortization ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь (6,277) (9,703)
Intangible assets, net ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 17,218 51,121
Amortization expenses on intangible assets which are included in research and development expenses, selling
and marketing expenses and general and administrative expenses in the consolidated statements of comprehensive
income for the nine months ended September 30, 2021 and 2022 were HK$1,491 thousand and HK$4,120 thousand,
respectively.
– IB-32 –
8. LONG-TERM INVESTMENTS
As of As of
2021 2022
(HK$ in thousands)
Equity method investments(1) ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 7,798 229,970

Equity investments without readily determinable
fair values(2) ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 15,596 15,754
Total ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 23,394 245,724
As of December 31, 2021 and September 30, 2022, the Group’s investments accounted for under the equity
method totaled HK$7,798 thousand and HK$229,970 thousand, respectively. The Group applies the equity method
of accounting to account for its equity method investments over which it has significant influence but does not own
a majority equity interest or otherwise control.
In January 2019, the Group invested in a private company by acquiring 20% ordinary equity interest with a
total consideration of HK$6,709 thousand. The Group accounts for this as an equity method investment. For the years
ended December 31, 2019 and 2020, loss on investment recognized were HK$543 thousand and HK$278 thousand,
respectively.Based on the Group’s assessment on the recoverable amounts of the equity method investment, as of
December 31, 2021 and September 30, 2022, the impairment provision on the equity method investment was
HK$5,888 thousand and HK$5,888 thousand, respectively.
In December 2021, the Group invested in a private equity fund by acquiring approximately 10% ordinary
equity interest with a total consideration of HK$7,798 thousand. The Group accounts for this as an equity method
investment. Based on the Group’s assessment on the recoverable amounts of this equity method investment, as of
December 31, 2021 and September 30, 2022, no impairment provision on the equity method investment was
recognized.
In June 2022, the Group invested in a private equity fund by acquiring approximately 16% ordinary equity
interest with a total consideration of HK$235,434 thousand. The Group accounts for this as an equity method
investment. For the period ended September 30, 2022, loss on investment recognized were HK$13,324 thousand.
Based on the Group’s assessment on the recoverable amounts of this equity method investment, as of September 30,
2022, no impairment provision on the equity method investment was recognized.
As of December 31, 2021 and September 30, 2022, the Group’s equity investments without readily
determinable fair values totaled HK$15,596 thousand and HK$15,754 thousand, respectively. In December 2021, the
Group invested in a private equity fund by acquiring 2.75 % ordinary equity interest with a total consideration of
HK$15,596 thousand. Equity securities without determinable fair values of the Group represent investments in
privately held companies with no readily determinable fair value. The Group elected measurement alternative and
recorded these investments at cost, less impairment, adjusted for subsequent observable price changes. As of
December 31, 2021 and September 30, 2022, no impairment provision on the equity investments without readily
determinable fair values were recognized.
– IB-33 –
9. BORROWINGS
As of As of
2021 2022
(HK$ in thousands)
Borrowings from banks(1) ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 6,357,405 6,547,293
The Group obtained borrowings mainly to support its margin financing business in Hong Kong securities
market. Those borrowings bear weighted average interest rates of 1.15% and 3.43% as of December 31, 2021 and
September 30, 2022, respectively.
(1) The Group has unused borrowing facilities of HK$14,695,095 thousand and HK$15,748,479 thousand
from banks as of December 31, 2021 and September 30, 2022, respectively, which are uncommitted.
These bank borrowings were pledged by margin clients’ shares as the primary source of credit risk
mitigation of the lenders, and beared floating interest rates based on various benchmarks including Hong
Kong Prime Rate, Hong Kong Interbank Offered Rate IBOR”), CNH HIBOR, etc.
10. ACCRUED EXPENSES AND OTHER LIABILITIES
As of As of
2021 2022
(HK$ in thousands)
Current:
Accrued payroll and welfare expenses ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 531,409 692,817
Tax payables ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 494,744 423,669
Payables to corporate clients in relation to ESOP
management services(1) ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 870,283 265,647
Accrued advertising and promotion feeь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 152,305 120,409
Temporary payables in relation to fund distribution servicesь ь 48,240 68,003
Stamp duty, trading levy and trading fee payables ь ь ь ь ь ь ь ь 19,447 31,625
Accrued professional fee ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 22,066 16,540
Accrued market information and data fee ь ь ь ь ь ь ь ь ь ь ь ь ь 12,832 6,457
Refund from depositary bank – currentь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 2,773 2,791
Contract liabilities – current ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 3,058 1,323
Non-current:
Contract liabilities – non-current ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 5,910 4,955
Refund from depositary bank – non-current ь ь ь ь ь ь ь ь ь ь ь ь 4,389 2,325
Deferred tax liabilities (Note 23) ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 636 13,446
(1) Payables to corporate clients in relation to ESOP management services mainly consist of exercise
payment of share options and related withholding tax. These payables are usually expected to be settled
within one year.
– IB-34 –
11. ORDINARY SHARES AND TREASURY STOCK
Ordinary shares
The Company’s original Memorandum and articles of association authorized the Company to issue 807,500
ordinary shares with a par value of US$0.0050 per share. After a share split effective on September 22, 2016, the
Company’s amended Memorandum and articles of association authorized the Company to issue 403,750,000 ordinary
shares with a par value of US$0.00001 per share. Each ordinary share is entitled to one vote. Immediately prior to
the completion of the initial public offering on March 8, 2019, the Company was approved by the board of directors
of the Company to adopt a dual class share structure, consisting of 48,700,000,000 Class A ordinary shares with a
par value of US$0.00001 each, 800,000,000 Class B ordinary shares with a par value of US$0.00001 each and
500,000,000 shares undesignated with a par value of US$0.00001 each. In respect of all matters subject to
shareholders’ vote, each holder of Class A ordinary share is entitled to one and each holder of Class B ordinary share
is entitled to twenty votes.
In December, 2020, the Company entered into a securities purchase agreement with a leading global
investment firm for a private placement of Pre-Funded warrants (the “Offering” or the “Pre-Funded Warrants”). The
net proceeds to the Company from the Offering were approximately US$262.5 million (HK$2,035 million). In the
Offering, the Company issued Pre-Funded warrants to purchase 53,600,000 shares of Class A ordinary shares that
were immediately exercisable and had a termination date in June 2022, at a price of US$4.89751 less a nominal
exercise price of US$0.00001 per Pre-Funded warrant. The Pre-Funded Warrants were equity classified because they
were immediately exercisable, did not embody an obligation for the Company to repurchase its shares, and permitted
the holders to receive a fixed number of common shares upon exercise. In addition, such warrants did not provide
any guarantee of value or return. On June 11, 2021, the investment firm exercised these Pre-Funded warrants which
purchase.
On April 24, 2021, the Company completed a public offering, issued 87,400,000 Class A ordinary shares for
a total consideration of US$1,398 million (HK$10,856.5 million) after deducting the underwriting discounts and
Each Class B ordinary share is convertible into one Class A ordinary share at any time by the holder thereof,
while Class A ordinary shares are not convertible into Class B ordinary shares under any circumstances. On August
16, 2022, 64,000,000 shares of Class B ordinary shares were converted to the same number of Class A ordinary
shares.
During the nine months ended September 30, 2021 and 2022, 4,192,000 and 1,475,848 shares of Class A
Ordinary Shares were issued upon exercise of outstanding stock options, nil and 134,700 shares of Class A Ordinary
Shares were issued upon vest of outstanding restricted share units under the Group’s share-based incentive plans
(Note 13).
Treasury stock
On November 3, 2021, the Group’s Board of Directors approved a share repurchase program to repurchase up
to US$300.0 million worth of its own American depositary shares (“ADSs”), representing its Class A ordinary shares,
until December 31, 2022.
On March 10, 2022, the Group’s Board of Directors approved another share repurchase program to repurchase
up to US$500.0 million worth of the ADSs, representing its Class A ordinary shares, until December 31, 2023.
As of December 31, 2021 and September 30, 2022, the Group had repurchased an aggregate of 29,462,760 and
110,839,528 Class A ordinary shares under these share repurchase programs in the open market, at an average price
of US$41.04 and US$36.74 per ADS, or US$5.13 and US$4.59 per share for a total consideration of US$151.2
million (HK$1,178.8 million) and US$508.7 million (HK$3,975.2 million), respectively.
– IB-35 –
12. RESTRICTED NET ASSETS
In accordance with the PRC laws and regulations, the Group’s PRC subsidiaries and VIEs are required to make
appropriation to certain reserve funds, namely general reserve fund, enterprise expansion fund, and staff bonus and
welfare fund, all of which are appropriated from the subsidiaries’ annual after-tax profits as reported under PRC
GAAP. The appropriation must be at least 10% of the annual after-tax profits to the general reserve fund until such
reserve fund has reached 50% of the subsidiaries’ registered capital.
The domestic companies are also required to provide discretionary surplus fund, at the discretion of the Board
of Directors, from its annual after-tax profits as reported under PRC accounting standards. The aforementioned
reserve funds can only be used for specific purposes and are not distributable as cash dividends.
Furthermore, cash transfers from the Group’s PRC subsidiaries to their parent companies outside of China are
subject to PRC government control of currency conversion. Shortages in the availability of foreign currency at the
time of requesting such conversion may temporarily delay the ability of the PRC subsidiaries and consolidated
affiliated entities to remit sufficient foreign currency to pay dividends or other payments to the Group, or otherwise
satisfy their foreign currency denominated obligations.
As a result of the PRC laws and regulations and the requirement that distributions by the PRC entity can only
be paid out of distributable profits computed in accordance with PRC accounting standards, the PRC entity is
restricted from transferring a portion of its net assets to the Group. Amounts restricted include paid-in capital and
statutory reserves of the Group’s PRC subsidiaries and VIEs. As of December 31, 2021 and September 30, 2022, the
restricted net assets of the Group’s relevant PRC entities amounted to HK$304,377 thousand and HK$304,377
thousand, respectively.
13. SHARE-BASED COMPENSATION
Share-based compensation was recognized in operating expenses for the nine months ended September 30,
2021 and 2022 as follows:

2021 2022
(HK$ in thousands)
Research and development expenses ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 49,290 106,395

General and administrative expenses ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 8,913 30,694
Selling and marketing expenses ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 6,092 11,616
Total share-based compensation expenses ь ь ь ь ь ь ь ь ь ь ь ь ь 64,295 148,705
Share Options
In October 2014, the Board of Directors of the Company approved the establishment of 2014 Share Incentive
Plan, the purpose of which is to provide an incentive for employees contributing to the Group. The 2014 Share
Incentive Plan shall be valid and effective until October 30, 2024. The maximum number of shares that may be issued
pursuant to all awards (including incentive share options) under 2014 Share Incentive Plan shall be 135,032,132
shares. Option awards are granted with an exercise price determined by the Board of Directors. Those option awards
generally vest over a period of four or five years and expire in ten years.
In December 2018, the Board of Directors of the Company approved the 2019 Share Incentive Plan, pursuant
to which the maximum number of shares of the Company available for issuance shall be a number of up to 2% of
the total number of shares issued and outstanding on September 29, 2019 as determined by the Board, plus an annual
increase on each September 30 during the term of this 2019 Share Incentive Plan commencing on September 30,
2020, by an amount determined by the Board; provided, however, that (i) the number of shares increased in each year
shall not be more than 2% of the total number of shares issued and outstanding on September 29 of the same year
and (ii) the aggregate number of shares initially reserved and subsequently increased during the term of this 2019
Share Incentive Plan shall not be more than 8% of the total number of shares issued and outstanding on September
29, 2019 immediately preceding the most recent increase.
– IB-36 –
On December 30, 2019, the Company modified the exercise price of 8,113,145 stock options granted under
2014 Share Incentive Plan to US$0.60. The incremental compensation expenses of HK$3,008 thousand (US$386
thousand) was equal to the excess of the fair value of the modified award immediately after the modification over
the fair value of the original award immediately before the modification.
For the nine months ended September 30, 2021 and 2022, the Group granted 1,080,000 and nil stock options
to employees pursuant to the 2014 Share Incentive Plan and 2019 Share Incentive Plan.
A summary of the stock option activity under the 2014 and 2019 Share Incentive Plan for the nine months
ended September 30, 2021 and 2022 is included in the table below.
Weighted average
Options granted exercise price per
share number option
(US$)
Outstanding at December 31, 2021 ь ь ь ь ь ь ь ь ь ь ь ь ь 13,341,466 0.5703
Exercised ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь (1,475,848) 0.5996

Forfeited ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь (347,136) 0.6368
Outstanding at September 30, 2022 ь ь ь ь ь ь ь ь ь ь ь ь ь 11,518,482 0.5645

Exercised ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь (4,192,000) 0.3619
Granted ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 1,080,000 0.0444
The following table summarizes information regarding the share options outstanding as of December 31, 2021
and September 30, 2022, and exercise prices and aggregate intrinsic value have been adjusted according to the
modification of exercise price in December 2019:

Weighted-
average
Weighted- remaining
Options exercise price contractual life intrinsic
number per option (years) value
(US$ in
(US$) thousands)
Options
Outstanding ь ь ь ь ь ь ь ь ь ь ь ь ь ь 13,341,466 0.5703 3.42 165,157

Exercisable ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 2,825,014 0.5729 2.85 34,964
Expected to vestь ь ь ь ь ь ь ь ь ь ь ь 10,516,452 0.5696 3.57 130,193
– IB-37 –
As of September 30, 2022

Weighted-
average
Weighted- remaining
Options exercise price contractual life intrinsic
number per option (years) value
(US$ in
(US$) thousands)
Options
Outstanding ь ь ь ь ь ь ь ь ь ь ь ь ь ь 11,518,482 0.5645 2.76 51,515
Exercisable ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 1,653,781 0.4808 2.51 7,535
Expected to vestь ь ь ь ь ь ь ь ь ь ь ь 9,864,701 0.5786 2.80 43,980
The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying
awards and the fair value of the underlying stock at December 31, 2021 and September 30, 2022.
The weighted average grant date fair value of options granted for the nine months ended September 30, 2021
and 2022 were US$18.9219 and nil per option, respectively.
Options exercised for the nine months ended September 30, 2021 and 2022 were 4,192,000 and 1,475,848,
respectively. The total intrinsic value of options exercised for the nine months ended September 30, 2021 and 2022
was approximately HK$543,551 thousand (US$69,986 thousand) and HK$49,305 thousand (US$6,295 thousand).
The fair value of each option granted for the nine months ended September 30, 2021 and 2022 was estimated
on the date of each grant using the binomial option pricing model with the assumptions (or ranges thereof) in the
following table:

2021 2022
Risk-free interest rate ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 0.09%-0.89% NA

Expected term (in years) ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 5.00 NA
Expected dividend yield ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 0% NA
Expected volatility ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 40% NA
Expected forfeiture rate (post-vesting) ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 15% NA
Risk-free interest rate is estimated based on the yield curve of US Sovereign Bond as of the option valuation
date. The expected volatility at the grant date and each option valuation date is estimated based on annualized
standard deviation of daily stock price return of comparable companies with a time horizon close to the expected
expiry of the term of the options. The Company has never declared or paid any cash dividends on its capital stock,
and the Group does not anticipate any dividend payments in the foreseeable future. Expected term is the contract life
of the options.
As of December 31, 2021 and September 30, 2022, there was HK$201,948 thousand (US$25,897 thousand) and
HK$160,054 thousand (US$20,389 thousand) of unrecognized compensation expenses related to the options, adjusted
for estimated forfeitures, which is expected to be recognized over a weighted-average period of 3.96 and 3.31 years,
respectively, and may be adjusted for future changes in estimated forfeitures.
– IB-38 –
Restricted Share Units Plan
In December 2018, the Board of Directors of the Company approved the 2019 Share Incentive Plan. The fair
value of restricted share units granted with service conditions is estimated based on the fair market value of the
underlying ordinary shares of the Company on the date of grant.
The following table summarizes activities of the Company’s restricted share units granted to employees under
the plan for the nine months ended September 30, 2021 and 2022:
Weighted-average
Shares awarded grant date fair value
number per share
(US$)
Vested ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь (134,600) 20.1363

Granted ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 2,827,320 5.4125
Forfeited ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь (1,355,240) 5.3584
Granted ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 837,072 20.1363

For the nine months ended September 30, 2021 and 2022, the Group granted 837,072 and 2,827,320 restricted
share units to employees pursuant to the 2019 Share Incentive Plan, respectively.
As of December 31, 2021 and September 30, 2022, there was HK$694,749 thousand (US$89,092 thousand) and
HK$670,477 thousand (US$85,412 thousand) of unrecognized compensation expenses related to the restricted share
units, adjusted for estimated forfeitures, which is expected to be recognized over a weighted-average period of 4.64,
and 3.26 years and may be adjusted for future changes in estimated forfeitures.
14. NET INCOME PER SHARE
For the year ended December 31, 2019, the Group has determined that its all classes of convertible redeemable
preferred shares are participating securities as they participate in undistributed earnings on an as-if-converted basis.
The holders of the Preferred Shares are entitled to receive dividends on a pro rata basis, as if their shares had been
converted into ordinary shares. Accordingly, the Group uses the two-class method of computing net income per share,
for ordinary shares and preferred shares according to the participation rights in undistributed earnings. For the year
ended December 31, 2020, the Company issued pre-funded warrants to purchase 53,600,000 shares of Class A
ordinary shares with an exercise price of US$0.00001 that are included in our computation of basic earnings per
share. For the year ended December 31, 2021, the investment firm exercised these pre-funded warrants which
purchase.
– IB-39 –
Basic net income per share and diluted net income per share have been calculated in accordance with ASC 260
on computation of earnings per share for the nine months ended September 30, 2021 and 2022 as follows:

2021 2022
(HK$ in thousands, except for share and
per share data)
Basic net income per share calculation:

Numerator:
Net income attributable to ordinary shareholders
of the Company ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 2,311,401 1,968,168
Denominator:
outstanding – basic ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 1,192,527,761 1,147,484,439
of the Company – basic ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 1.94 1.72
Diluted net income per share calculation:

Numerator:
Net income attributable to ordinary Shareholders
of the Company ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 2,311,401 1,968,168
Denominator:
outstanding – basic ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 1,192,527,761 1,147,484,439
Dilutive effect of share options and restricted share units ь ь ь 19,664,213 10,917,137
outstanding – diluted ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 1,212,191,974 1,158,401,576
of the Company – dilutedь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 1.91 1.70
For the nine months ended September 30, 2021 and 2022, options to purchase ordinary shares and restricted
share units that were anti-dilutive and excluded from the calculation of diluted net income per share were nil and
4,975,271 shares on a weighted average basis, respectively.
15. COLLATERALIZED TRANSACTIONS
The Group engages in margin financing transactions with its clients. Margin loans generated from margin
lending activity are collateralized by cash and/or client-owned securities held by the Group. The Group monitors the
required margin and collateral level on a daily basis in compliance with regulatory and internal guidelines and
controls its risk exposure through risk management system. Under applicable agreements, clients are required to
deposit additional collateral or reduce holding positions, when necessary to avoid forced liquidation of their
positions.
Pursuant to the authorization obtained from margin clients, the Group further repledges the collaterals to
commercial banks or other financial institutions to obtain the funding for the margin or other businesses.
– IB-40 –
The following table summarizes the amounts of margin loans and clients’ collaterals received and repledged
by the Group as of December 31, 2021 and September 30, 2022:
As of As of
2021 2022
(HK$ in thousands)
Margin loan extended to margin clients (net) ь ь ь ь ь ь ь ь ь ь ь 29,084,958 27,762,353

Securities purchased under agreements to resell
transactions ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 106,203 22,349
Collateral received from margin clients ь ь ь ь ь ь ь ь ь ь ь ь ь ь 119,745,500 105,695,849
Collateral received from brokers ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 144,156 29,207
Collateral repledged to commercial banks and other
financial institutions ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 20,953,603 13,099,509
The Group also engaged in securities borrowing and lending transactions which require it to deposit cash
collateral with the securities lenders and receive the cash collateral from the borrowers. The cash collateral is
generally in excess of the market value of the securities borrowed and lent. The Group monitors the market value of
securities borrowed and loaned on a daily basis, with additional collateral obtained or refunded as permitted
contractually.
The following table summarizes the amounts of market value of securities borrowed and lent and cash
collateral received and deposited as of December 31, 2021 and September 30, 2022:
As of As of
2021 2022
(HK$ in thousands)
Securities borrowed and lent(1) ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 8,436,638 13,878,468

Cash collateral deposited with lenders ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 3,120,123 1,144,340
Cash collateral received from borrowers ь ь ь ь ь ь ь ь ь ь ь ь ь ь 9,737,786 14,676,066
(1) Borrowed securities includes securities borrowed from margin clients under authorization, in this case
no cash collateral is required.
16. BROKERAGE COMMISSION AND HANDLING CHARGE INCOME

2021 2022
(HK$ in thousands)
Brokerage commission income ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 2,454,219 2,388,788

Handling charge income ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 601,872 570,262
– IB-41 –
17. INTEREST INCOME

2021 2022
(HK$ in thousands)
Interest income from:

Margin financing ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 1,254,098 1,193,838
Bank deposits ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 143,669 496,066
Securities lending ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 307,435 292,095
Bridge loan ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь – 91,503
IPO financing ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 195,406 1,870
Other financing ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь – 1,112
18. OTHER INCOME

2021 2022
(HK$ in thousands)
Currency exchange service income ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 154,433 111,277

Funds distribution service income ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 48,771 61,661
Enterprise public relations service charge income ь ь ь ь ь ь ь ь 76,809 33,979
Market information and data income ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 34,148 31,989
Underwriting fee income ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 68,216 19,932
Trust service income ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 2,918 5,448
IPO subscription service charge income ь ь ь ь ь ь ь ь ь ь ь ь ь ь 163,331 5,318
19. BROKERAGE COMMISSION AND HANDLING CHARGE EXPENSES

2021 2022
(HK$ in thousands)
Commission, handling and settlement expensesь ь ь ь ь ь ь ь ь ь 437,923 264,950

IPO subscription service charge expenses ь ь ь ь ь ь ь ь ь ь ь ь ь 46,539 845
– IB-42 –
20. INTEREST EXPENSES

2021 2022
(HK$ in thousands)
Interest expenses for margin financing

Due to banks ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 97,358 48,369
Due to other licensed financial institutions ь ь ь ь ь ь ь ь ь ь ь 49,131 9,233
Interest expenses for securities borrowed
Due to clients ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 110,186 42,325
Due to brokers ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 15,207 10,598
Interest expenses for IPO financing
Due to banks ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 49,404 –
21. PROCESSING AND SERVICING COSTS

2021 2022
(HK$ in thousands)
Cloud service fee ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 75,575 168,555

Market information and data fee ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 50,257 56,229
Data transmission fee ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 42,638 28,393
System cost ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 9,709 19,715
SMS service fee ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 905 823
22. NON-INTEREST COST AND EXPENSES BY NATURE

2021 2022
(HK$ in thousands)
Employee compensation and benefits ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 785,177 1,497,752

Marketing and branding ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 908,983 459,784
Processing and servicing costs (Note 21)ь ь ь ь ь ь ь ь ь ь ь ь ь ь 183,463 277,642
charge expenses (Note 19) ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 484,462 265,795
Rental and other related expenses ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 77,400 87,503
Professional services ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 38,420 57,743
Depreciation and amortization ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 24,730 41,046
Listing expenses ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь – 2,135
– IB-43 –
23. TAXATION
Income Tax
(1) Cayman Islands
The Group was incorporated in the Cayman Islands. Under the current laws of the Cayman Islands, the
Company is not subject to tax on either income or capital gain. Additionally, the Cayman Islands does not impose
a withholding tax on payments of dividends to shareholders.
(2) The United States (“US”)
The Company’s subsidiaries incorporated in the United States are subject to statutory income tax at a rate up
to 35% for taxable income earned in the United States. On December 22, 2017, the Tax Cuts and Jobs Act (the “Tax
Act”) was enacted, significantly revising the U.S corporate income tax law. Changes include a reduction in the federal
corporate tax, changes to operating loss carry-forwards and carrybacks, and a repeal of the corporate alternative
minimum tax. This legislation resulted in a reduction of the U.S. federal corporate income tax rates from a maximum
of 35% to 21%, to which the subsidiaries incorporated in the United States are subject.
(3) Hong Kong
Starting from the financial year commencing on April 1, 2018, the two-tiered profits tax regime took effect,
under which the tax rate is 8.25% for assessable profits on the first HK$2 million and 16.5% for any assessable profits
in excess of HK$2 million. Additionally, payments of dividends by the subsidiaries incorporated in Hong Kong to
the Company are not subject to any Hong Kong withholding tax.
(4) Singapore
The Company’s subsidiaries incorporated in Singapore are subject to an income tax rate of 17% for taxable
income earned in Singapore. Singapore does not impose a withholding tax on dividends for resident companies. For
the nine months ended September 30, 2021 and 2022, we did not incur any income tax as there was no estimated
assessable profit that was subject to Singapore income tax.
(5) China
The Company’s subsidiaries, consolidated VIEs and subsidiary of the VIEs established in the PRC are subject
to statutory income tax at a rate of 25%, unless preferential tax rates were applicable.
The Enterprise Income Tax (“EIT”) Law and its implementing rules permit High and New Technology
Enterprise (“HNTE”) to enjoy a reduced 15% EIT rate. Futu Network Technology (Shenzhen) Co., Ltd., one of the
Company’s subsidiary, and Shenzhen Futu, the Group’s consolidated VIE, obtained the qualification certificate of
HNTE under the EIT Law, subject to the tax rate of 15% with a valid period of three years starting from 2019 and
2020, respectively.
According to the relevant EIT Laws jointly promulgated by the Ministry of Finance of the PRC, State Tax
Bureau of the PRC, and Ministry of Science of the PRC that became effective from 2018 onwards, enterprises
engaging in research and development activities are entitled to claim 175% of their research and development
expenses so incurred as tax deductible expenses when determining their assessable profits for that year (“Super
Deduction”).
Under the EIT Law enacted by the National People’s Congress of PRC on March 16, 2007 and its
implementation rules which became effective on January 1, 2008, dividends generated after January 1, 2008 and
payable by FIEs in the PRC to its foreign investors who are non-resident enterprises are subject to a 10% withholding
tax, unless any such foreign investor’s jurisdiction of incorporation has a tax treaty with the PRC that provides for
a different withholding arrangement. Under the taxation arrangement between the PRC and Hong Kong, a qualified
Hong Kong tax resident which is the “beneficial owner” and directly holds 25% or more of the equity interest in a
PRC resident enterprise is entitled to a reduced withholding tax rate of 5%. The Cayman Islands, where the Company
was incorporated, does not have a tax treaty with PRC.
– IB-44 –
The EIT Law includes a provision specifying that legal entities organized outside of the PRC will be
considered resident enterprises for the PRC income tax purposes if the place of effective management or control is
within the PRC. The implementation rules to the EIT Law provide that non-resident legal entities will be considered
as PRC resident enterprises if substantial and overall management and control over the manufacturing and business
operations, personnel, accounting, properties, etc., occurs within the PRC. Despite the present uncertainties resulting
from the limited PRC tax guidance on the issue, the Group does not believe that the Group’s entities organized outside
of the PRC should be treated as resident enterprises for the PRC income tax purposes. If the PRC tax authorities
subsequently determine that the Company and its subsidiary registered outside the PRC should be deemed resident
enterprises, the Company and its subsidiary registered outside the PRC will be subject to the PRC income tax, at a
rate of 25%.
Dividends paid by the Group’s wholly foreign-owned subsidiaries in China to non-PRC-resident enterprises
which do not have an establishment or place of business in the PRC, or which have such establishment or place of
business but the relevant income is not effectively connected with the establishment or place of business, will be
subject to a withholding tax rate of 10%, unless the relevant Hong Kong entity satisfies all the requirements under
the Arrangement between the Mainland of China and the Hong Kong Special Administrative Region for the
Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income and receives
approval from the relevant tax authority. The undistributed earnings that are subject to dividend tax are expected to
be indefinitely reinvested for the foreseeable future. The Group did not record any withholding tax for its PRC
earnings and considered determination of such withholding tax amount not practicable.
Composition of income tax expenses
The following table sets forth current and deferred portion of income tax expenses:

2021 2022
(HK$ in thousands)
Current income tax expenses ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 309,534 259,279

Deferred income tax benefit ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь (8,266) (11,707)
Income tax expenses ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 301,268 247,572
Tax Reconciliation
Reconciliation between the income tax expenses computed by applying the Hong Kong enterprise tax rate to
income before income taxes and actual provision were as follows:

2021 2022
(HK$ in thousands)
Income before income tax ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 2,612,670 2,229,064

Tax expenses at Hong Kong profit tax rate of 16.5% ь ь ь ь ь ь 431,091 367,631
Changes of valuation allowance ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 91,776 (31,771)
Tax effect of permanence differences ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 9,908 36,881
Effect of income tax jurisdictions other than Hong Kongь ь ь ь (14,548) 27,665
Super deduction of research and development expensesь ь ь ь ь (37,407) (61,940)
Final settlement differences ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь – (3,614)
Income not subject to tax(1) ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь (179,552) (87,280)
Income tax expenses ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 301,268 247,572
– IB-45 –
(1) This amount mainly represents tax exemption relating to the offshore income of Futu Securities. The
brokerage commission income derived from executing the clients’ orders of US listed securities was
treated as offshore-sourced and non-taxable on the basis that these transactions were executed outside
Hong Kong.
Deferred Tax Assets and Liabilities
Deferred income tax expenses reflect the net tax effects of temporary differences between the carrying amounts
of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The
components of the deferred tax assets and liabilities are as follows:
As of As of
2021 2022
(HK$ in thousands)
Deferred tax assets

Net operating loss carryforwards ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 158,826 124,678
Accrued expenses and others ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 50,408 65,011
Less: valuation allowance ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь (169,422) (137,651)
Total deferred tax assets ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 39,812 52,038

Set-off of deferred tax liabilities pursuant to
set-off provisionsь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь (1,495) (976)
Net deferred tax assets ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 38,317 51,062
Total deferred tax liabilitiesь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 2,131 14,422

Set-off of deferred tax assets pursuant to set-off provisions ь ь (1,495) (976)
Net deferred tax liabilities ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 636 13,446
Movement of Valuation Allowance

2021 2022
(HK$ in thousands)
Balance at beginning of the period ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 67,768 169,422

Additions ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 92,445 89,878
Reversals ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь (669) (121,649)
Balance at end of the period ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 159,544 137,651
Valuation allowance is provided against deferred tax assets when the Group determines that it is
more-likely-than-not that the deferred tax assets will not be utilized in the future. The Group considers positive and
negative evidence to determine whether some portion or all of the deferred tax assets will be more-likely-than-not
realized. This assessment considers, among other matters, the nature, frequency and severity of recent losses and
forecasts of future profitability. These assumptions require significant judgment and the forecasts of future taxable
income are consistent with the plans and estimates the Group is using to manage the underlying businesses. The
statutory rate of 25%, 27.98%, 27.87%, 16.5%, 17% or the preferential tax rate of 15%, depending on which entity,
was applied when calculating deferred tax assets.
– IB-46 –
As of December 31, 2021 and September 30, 2022, the Group had net operating loss carryforwards of
approximately HK$764,251 thousand and HK$711,365 thousand, respectively, which arose from the subsidiaries,
VIEs and the VIEs’ subsidiaries established in Hong Kong, the U.S, Singapore and PRC. As of December 31, 2021
and September 30, 2022, of the net operating loss carryforwards, HK$761,417 thousand and HK$711,365 thousand
was provided for valuation allowance against deferred tax assets in entities where it was determined it was more
likely than not that the benefits of the deferred tax assets of accrued expenses and others will not be realized. While
the remaining HK$2,834 thousand and nil is expected to be utilized prior to expiration considering future taxable
income for respective entities.
Uncertain Tax Position
The Group evaluates the level of authority for each uncertain tax position (including the potential application
of interest and penalties) based on the technical merits, and measures the unrecognized benefits associated with the
tax positions. The Group continues to assess the uncertain tax positions in accordance with applicable income tax
guidance and based on changes in facts and circumstances.
24. DEFINED CONTRIBUTION PLAN
Full-time employees of the Group in the PRC are entitled to welfare benefits including pension insurance,
medical insurance, unemployment insurance, maternity insurance, on-the-job injury insurance, and housing fund
plans through a PRC government-mandated defined contribution plan. Chinese labor regulations require that the
Group makes contributions to the government for these benefits based on certain percentages of the employees’
salaries, up to a maximum amount specified by the local government. The Group has no legal obligation for the
benefits beyond the contributions. Total contributions by the Group for such employee benefits were RMB76,379
thousand (HK$91,713 thousand) and RMB122,913 thousand (HK$145,474 thousand) for the nine months ended
September 30, 2021 and 2022, respectively.
For the employees in Hong Kong, the Group pays contributions to publicly or privately administered pension
insurance plans on a mandatory, contractual basis. The Group has no further payment obligations once the
contributions have been paid. The contributions are recognized as employee benefit expense when they are due.
Prepaid contributions are recognized as an asset to the extent that a cash refund or a reduction in the future payments
is available. Included in employee compensation and benefits expenses in the consolidated statements of
comprehensive income were HK$1,585 thousand and HK$1,900 thousand of plan contributions for the nine months
ended September 30, 2021 and 2022, respectively.
For the employees in Singapore, the Group makes monthly contributions to the mandatory social security
savings scheme which serves to meet retirement, housing and healthcare needs. The Employment Act of Singapore
requires that the Group makes contributions to the scheme based on certain percentages of the employees’ salaries,
up to a maximum amount specified by the act. The Group has no legal obligation for the scheme beyond the
contributions. Total contributions by the Group for such employee benefits were SGD207 thousand (HK$1,205
thousand) and SGD406 thousand (HK$2,310 thousand) for the nine months ended September 30, 2021 and 2022,
respectively.
For the employees in Australia, the Group makes contributions to the mandatory social security savings scheme
which serves to meet retirement needs at least every three months. The Employment Act of Australia requires that
the Group makes contributions to the scheme based on certain percentages of the employees’ before tax income. The
Group has no legal obligation for the scheme beyond the contributions. Total contributions by the Group for such
employee benefits were nil and AUD$133 thousand (HK$739 thousand) for the nine months ended September 30,
2021 and 2022, respectively.
– IB-47 –
25. REGULATORY REQUIREMENTS
The Company’s broker-dealer and insurance-broker subsidiaries, Futu Securities, Moomoo Financial Inc., Futu
Clearing Inc., Moomoo Financial Singapore Pte. Ltd., Futu Insurance Brokers (Hong Kong) Limited and Futu
Securities (Australia) Ltd. are subject to capital requirements determined by its respective regulators.
Futu Securities, the Company’s subsidiary located in Hong Kong, was subject to the Securities and Futures
(Financial Resources) Rules and the Securities and Futures Ordinance, Futu Securities is required to maintain
minimum paid-up share capital and liquid capital.
Moomoo Financial Inc. and Futu Clearing Inc., the Company’s subsidiaries located in the United States, were
subject to the Uniform Net Capital Rule (Rule 15c3-1) under the Exchange Act, which requires the maintenance of
minimum net capital.
Moomoo Financial Singapore Pte. Ltd., the Company’s subsidiary located in Singapore, was subject to the
Securities and Futures (Financial and Margin Requirements for Holders of Capital Markets Services Licences)
Regulations, which requires the maintenance of financial resource over its total risk requirement.
Futu Insurance Brokers (Hong Kong) Limited, was subject to Insurance (Financial and Other Requirements for
Licensed Insurance Broker Companies) Rules, which requires minimum net assets.
Futu Securities (Australia) Ltd., the Company’s subsidiary located in Australia, was subject to Regulatory
Guide 166 Licensing: Financial requirements, which requires the maintenance of surplus liquid funds when licensees
hold client money or property.
The tables below summaries the net capital, the requirement and the excess capital for the Group’s
broker-dealer subsidiaries as of December 31, 2021 and September 30, 2022:

Net Capital/
(HK$ in thousands)
Futu Securities ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 6,666,092 1,631,080 5,035,012

Moomoo Financial Inc.ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 149,871 22,560 127,311
Moomoo Financial Singapore Pte. Ltd. ь ь ь ь ь ь 345,424 156,646 188,778
Futu Insurance Brokers (Hong Kong) Limitedь ь 1,718 500 1,218
As of September 30, 2022

Net Capital/
(HK$ in thousands)
Futu Securities ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 5,044,921 1,572,427 3,472,494

Moomoo Financial Inc.ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 71,076 22,245 48,831
Moomoo Financial Singapore Pte. Ltd. ь ь ь ь ь ь 685,144 170,813 514,331
Futu Insurance Brokers (Hong Kong) Limitedь ь 1,399 500 899
Futu Securities (Australia) Ltd.ь ь ь ь ь ь ь ь ь ь ь 60,951 1,214 59,737
Regulatory capital requirements could restrict the operating subsidiaries from expanding their business and
declaring dividends if their net capital does not meet regulatory requirements.
As of December 31, 2021 and September 30, 2022, all of the regulated operating subsidiaries were in
compliance with their respective regulatory capital requirements.
– IB-48 –
26. COMMITMENTS AND CONTINGENCIES
Commitments
The Group’s commitments primarily related to capital contribution obligation for certain investment funds.
Total commitments contracted but not yet reflected in the consolidated financial statements amounted to US$104
million and US$74 million as of December 31, 2021 and September 30, 2022, respectively.
Contingencies
The financial services industry is highly regulated. From time to time, the licensed companies in the financial
industry may be required to assist in and/or are subject to inquiries and/or examination by the regulatory authorities
of the jurisdiction in where they operate. As of the date of approval of the consolidated financial statements, the
Group reviews its regulatory inquiries and other legal proceedings on an ongoing basis and evaluates whether
potential regulatory fines are probable, estimable and material and for updating its contingency reserves and
disclosures accordingly. As of December 31, 2021 and September 30, 2022, the Group did not make any accrual for
the aforementioned loss contingency.
27. RELATED PARTY BALANCES AND TRANSACTIONS
The table below sets forth major related parties of the Group and their relationships with the Group:
Name of Entity or individual Relationship with the Group
Mr. Leaf Hua Li and his spouse ь ь ь ь ь ь ь ь ь ь ь ь Principal shareholder and member of his immediate
families
Tencent Holdings Limited and its subsidiaries Principal shareholder
(“Tencent Group”) ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь
Individual directors and officers and Directors or officers of the Group and members of
their spouses ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь their immediate families
(a) Cash and cash equivalent
As of As of
2021 2022
(HK$ in thousands)
Cash and cash equivalent ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 372 346
The balance represents the cash deposited by the Group in various payment channels of Tencent Group for
funding marketing campaigns, of which could be withdrawn on demand.
(b) Amounts Due to Related Parties
As of As of
2021 2022
(HK$ in thousands)
Payables to Tencent Group in relation to ESOP management

services ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 1,307 313
Payables in relation to cloud equipment and services from
Tencent Group ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 85,887 53,080
SMS channel services from Tencent Group ь ь ь ь ь ь ь ь ь ь ь ь 265 209
– IB-49 –
(c) Transactions with Related Parties

2021 2022
(HK$ in thousands)
Cloud service fee ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 75,575 132,952

Softwares purchased ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 1,524 1,468
SMS channel service fee ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 905 823
ESOP management service income ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 475 510
Other services ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 108 309
Equipment purchasedь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 6,529 –
The Group utilizes the cloud services, equipment and software provided by Tencent Group to process large
amount of complicated data in-house, which reduces the risks involved in data storage and transmission. SMS
channel services is provided by Tencent Group, including verification code, notification and marketing message
services for the Group to reach its end users. Tencent Group provides advertising services to the Group via Tencent
Group’s social media. The Group also earns revenue from Tencent Group by providing ESOP management service.
(d) Trade related transactions with Related Parties
Included in payables to clients in the consolidated balance sheets as of December 31, 2021 and September 30,
2022, were payables to directors and officers of HK$44,480 thousand and HK$29,322 thousand, respectively.
Revenue earned by providing brokerage services and margin loans to directors and officers and their spouses amounts
to HK$1,255 thousand and HK$528 thousand for the nine months ended September 30, 2021 and 2022, respectively.
28. DIVIDENDS
No dividend was declared by the Group during the nine months ended September 30, 2021 and 2022.
29. SUBSEQUENT EVENTS
In November, 2022, the Group entered into an acquisition agreement with the aim of acquiring 85% interest
of a securities company at a maximum consideration of approximately HK$18,016 thousand.
30. RECONCILIATION BETWEEN U.S. GAAP AND INTERNATIONAL FINANCIAL REPORTING

STANDARDS
The unaudited interim condensed financial information is prepared in accordance with U.S. GAAP, which
differ in certain respects from International Financial Reporting Standards (“IFRS”) issued by the International
Accounting Standards Board (“IASB”). The effects of material differences prepared under U.S. GAAP and IFRS are
as follows:

2021 2022
(HK$ in thousands)
Reconciliation of net income attributable to the Company

in the consolidated statements of comprehensive income
Net income attributable to the Company in the consolidated
statements of comprehensive income as reported under
U.S. GAAP ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 2,311,401 1,968,168
IFRS adjustments:
Issuance costs (Note (a)) ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь – (5,195)
– IB-50 –

2021 2022
(HK$ in thousands)
Operating leases (Note (b)) ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь (1,664) (196)

Share-based compensation (Note (c)) ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь (49,247) (106,549)
Expected credit loss (Note (d)) ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь (1,313) 683
Net income attributable to the Company in

the consolidated statements of comprehensive income as
reported under IFRS ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь 2,259,177 1,856,911
As of As of
2021 2022
(HK$ in thousands)
Reconciliation of total shareholders’ equity in

the consolidated balance sheets
Total shareholders’ equity as reported under U.S. GAAP ь ь ь ь 20,985,559 20,186,243
IFRS adjustments:
Issuance costs (Note (a)) ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь (14,336) (19,531)
Operating leases (Note (b)) ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь (8,454) (7,869)
Expected credit loss (Note (d)) ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь ь (12,342) (11,624)
Total shareholders’ equity as reported under IFRS ь ь ь ь ь ь ь ь 20,950,427 20,147,219
(a) Issuance costs
Under U.S. GAAP, specific incremental issuance costs directly attributable to a proposed or actual offering of
securities may be deferred and charged against the gross proceeds of the offering, shown in equity as a deduction
from the proceeds.
Under IFRS, such issuance costs apply a different criterion for capitalization when the listing involves both
existing shares and a concurrent issuance of new shares of the Group in the capital market, and were allocated
proportionately between the existing and new shares. As a result, the Group recorded issuance costs associated with
the listing of existing shares in the profit or loss.
(b) Operating leases
Under U.S. GAAP, for operating leases, the amortization of right-of-use assets and the interest expense
element of lease liabilities are recorded together as operating lease expenses, which results in a straight-line
recognition effect in the consolidated statements of operations and comprehensive loss.
Under IFRS, the amortization of the right-of-use asset is on a straight-line basis while the interest expense
related to the lease liabilities are measured using the effective interest rate method, which generally yields a
“front-loaded” expense with more expense recognized in earlier years of the lease.
(c) Share-based compensation
The Group granted options and restricted share units with service condition only to employees and modified
the exercise price of 8,113,145 stock options granted under 2014 Share Incentive Plan to from US$1.20 to US$0.60
– IB-51 –
straight-line method. While under IFRS, the graded vesting method must be applied, the Group should treat each
installment of the award as a separate grant, this means that each installment would be separately measured and
attributed to expense over the related vesting period, which would accelerate the expense recognition.
(d) Expected credit loss
The Group is mainly exposed to credit risk associated with loans and advances.
Under U.S. GAAP, prior to January 1, 2020, the Group applied incurred loss methodology for recognizing
credit losses. On January 1, 2020, the Group adopted FASB ASC Topic 326 and applies the practical expedient based
on collateral maintenance provisions in estimating an allowance for credit losses for the loans and advances.
Under IFRS, impairment model of financial assets is an expected loss model. The Group applies a three-stage
impairment model to calculate their impairment allowance and recognise their expected credit losses from January
1, 2018 for loans and advances. The Group considers the credit risk characteristics of loans and advances when
determining if there is significant increase in credit risk since the initial recognition. For loans and advances with
or without significant increase in credit risk, lifetime or 12-month expected credit losses are provided respectively.
The expected credit loss is the result of discounting the product of exposure at default, probabilities of default and
loss given default, based on the past history, existing market conditions as well as forward looking estimates.
– IB-52 –
APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION
The information set out in this Appendix does not form part of the Accountant’s Report
from PricewaterhouseCoopers, Certified Public Accountants, Hong Kong, the reporting
accountant of the Company, and the Unaudited Interim Condensed Consolidated Financial
Information, as set out in Appendix IA and IB to this listing document, respectively, and is
included herein for illustrative purposes only. The unaudited pro forma financial information
should be read in conjunction with the section headed “Financial Information” of this listing
document and the Accountant’s Report and Unaudited Interim Condensed Consolidated
Financial Information set out in Appendix IA and IB to this listing document.
A. UNAUDITED PRO FORMA STATEMENT OF ADJUSTED NET TANGIBLE

ASSETS
The following unaudited pro forma adjusted net tangible assets attributable to
shareholders of the Company prepared in accordance with Rule 4.29 of the Listing Rules are
set out below for the purpose of illustrating the effect of the Listing on the unaudited
consolidated net tangible assets attributable to shareholders of the Company as at September
30, 2022 as if the Listing had taken place on that date.
The unaudited pro forma adjusted net tangible assets attributable to shareholders of the
Company has been prepared for illustrative purposes only and because of its hypothetical
nature, it may not give a true picture of the consolidated net tangible assets attributable to
shareholders of the Company as at September 30, 2022 or at any future dates following the
completion of the Listing. The unaudited pro forma adjusted net tangible assets attributable to
shareholders of the Company are based on the unaudited consolidated net tangible assets
attributable to the shareholders of the Company as at September 30, 2022, as shown in the
Unaudited Interim Condensed Consolidated Financial Information of the Group, the text of
which is set out in Appendix IB to this listing document, and adjusted as described below.
Unaudited Unaudited pro
consolidated net Unaudited pro forma adjusted
tangible assets forma adjusted net tangible assets
attributable to net tangible assets attributable to
shareholders of the Estimated attributable to shareholders of
Company as at listing shareholders of the Company
September 30, 2022(1) expenses(2) the Company per Share
HK$’000 HK$’000 HK$’000 HK$(3)
Based on
1,123,267,879
Shares(3) ь ь ь ь ь ь ь 20,135,122 (88,888) 20,046,234 17.85
Notes:
(1) The unaudited consolidated net tangible assets attributable to shareholders of the Company as at
September 30, 2022 has been extracted from the Unaudited Interim Condensed Consolidated Financial
Information of the Group as set out in Appendix IB to this listing document which is based on the
unaudited consolidated net assets attributable to shareholders of the Company as at September 30, 2022
of approximately HK$20,186.2 million with adjustment for intangible assets as at September 30, 2022
of approximately HK$51.1 million.
(2) The estimated listing expenses in an aggregate amount of approximately HK$88.9 million (excluding
listing expenses of approximately HK$5.0 million which have been accounted for in the consolidated
statements of comprehensive income of the Group prior to September 30, 2022) mainly include
professional fees to the Joint Sponsors, legal advisers, the legal advisers to the Joint Sponsors and the
Reporting Accountant.
(3) The unaudited pro forma adjusted net tangible assets attributable to shareholders of the Company per
Share is arrived at after the adjustments referred to in the preceding paragraphs and on the basis that
1,123,267,879 Shares were in issue (for the purpose of this unaudited pro forma financial information
excluding 110,839,528 Shares which are regarded as treasury stock under the share repurchase program
of the Company) assuming that the Listing had been completed on September 30, 2022 but does not take
into account any Shares which may be issued upon the exercise of options granted under the Share
Incentive Plans or any Shares which may be issued or repurchased by the Company.
(4) No adjustment has been made to reflect any trading result or other transactions of the Group entered into
subsequent to September 30, 2022.
– II-1 –
B. REPORT FROM THE REPORTING ACCOUNTANT ON UNAUDITED PRO

FORMA FINANCIAL INFORMATION
The following is the text of a report received from PricewaterhouseCoopers, Certified

Public Accountants, Hong Kong, for the purpose of incorporation in this listing document.
INDEPENDENT REPORTING ACCOUNTANT’S ASSURANCE REPORT ON THE

COMPILATION OF UNAUDITED PRO FORMA FINANCIAL INFORMATION
To the Directors of Futu Holdings Limited
We have completed our assurance engagement to report on the compilation of unaudited

pro forma financial information of Futu Holdings Limited (the “Company”) and its subsidiaries
(collectively the “Group”) by the directors of the Company (the “Directors”) for illustrative
purposes only. The unaudited pro forma financial information consists of the unaudited pro
forma statement of adjusted consolidated net tangible assets of the Group as at September 30,
2022, and related notes (the “Unaudited Pro Forma Financial Information”) as set out on page
II-1 of the Company’s listing document dated December 22, 2022, in connection with the
proposed listing of the shares of the Company (the “Listing Document”). The applicable
criteria on the basis of which the Directors have compiled the Unaudited Pro Forma Financial
Information are described on page II-1 of the Listing Document.
The Unaudited Pro Forma Financial Information has been compiled by the Directors to
illustrate the impact of the proposed listing on the Group’s financial position as at September
30, 2022 as if the proposed listing had taken place at September 30, 2022. As part of this
process, information about the Group’s financial position has been extracted by the Directors
from the Group’s financial information for the period ended September 30, 2022, on which a
review report has been published.
Directors’ Responsibility for the Unaudited Pro Forma Financial Information
The Directors are responsible for compiling the Unaudited Pro Forma Financial
Information in accordance with paragraph 4.29 of the Rules Governing the Listing of Securities
on The Stock Exchange of Hong Kong Limited (the “Listing Rules”) and with reference to
Accounting Guideline 7, Preparation of Pro Forma Financial Information for Inclusion in
Investment Circulars (“AG 7”) issued by the Hong Kong Institute of Certified Public
Accountants (“HKICPA”).
– II-2 –
Our Independence and Quality Control
We have complied with the independence and other ethical requirements of the Code of
Ethics for Professional Accountants issued by the HKICPA, which is founded on fundamental
principles of integrity, objectivity, professional competence and due care, confidentiality and
professional behaviour.
Our firm applies Hong Kong Standard on Quality Control 1 issued by the HKICPA and
accordingly maintains a comprehensive system of quality control including documented
policies and procedures regarding compliance with ethical requirements, professional
standards and applicable legal and regulatory requirements.
Reporting Accountant’s Responsibilities
Our responsibility is to express an opinion, as required by paragraph 4.29(7) of the

Listing Rules, on the Unaudited Pro Forma Financial Information and to report our opinion to
you. We do not accept any responsibility for any reports previously given by us on any
financial information used in the compilation of the Unaudited Pro Forma Financial
Information beyond that owed to those to whom those reports were addressed by us at the dates
of their issue.
We conducted our engagement in accordance with Hong Kong Standard on Assurance

Engagements 3420, Assurance Engagements to Report on the Compilation of Pro Forma
Financial Information Included in a Prospectus, issued by the HKICPA. This standard requires
that the reporting accountant plans and performs procedures to obtain reasonable assurance
about whether the Directors have compiled the Unaudited Pro Forma Financial Information in
accordance with paragraph 4.29 of the Listing Rules and with reference to AG 7 issued by the
HKICPA.
For purposes of this engagement, we are not responsible for updating or reissuing any
reports or opinions on any historical financial information used in compiling the Unaudited Pro
Forma Financial Information, nor have we, in the course of this engagement, performed an
audit or review of the financial information used in compiling the Unaudited Pro Forma
Financial Information.
The purpose of unaudited pro forma financial information included in a prospectus is

solely to illustrate the impact of a significant event or transaction on unadjusted financial
information of the entity as if the event had occurred or the transaction had been undertaken
at an earlier date selected for purposes of the illustration. Accordingly, we do not provide any
assurance that the actual outcome of the proposed listing at September 30, 2022 would have
been as presented.
– II-3 –
A reasonable assurance engagement to report on whether the unaudited pro forma

financial information has been properly compiled on the basis of the applicable criteria
involves performing procedures to assess whether the applicable criteria used by the directors
in the compilation of the unaudited pro forma financial information provide a reasonable basis
for presenting the significant effects directly attributable to the event or transaction, and to
obtain sufficient appropriate evidence about whether:
• The related pro forma adjustments give appropriate effect to those criteria; and
• The unaudited pro forma financial information reflects the proper application of
those adjustments to the unadjusted financial information.
The procedures selected depend on the reporting accountant’s judgment, having regard to
the reporting accountant’s understanding of the nature of the company, the event or transaction
in respect of which the unaudited pro forma financial information has been compiled, and other
relevant engagement circumstances.
The engagement also involves evaluating the overall presentation of the unaudited pro
forma financial information.
We believe that the evidence we have obtained is sufficient and appropriate to provide a
basis for our opinion.
Our work has not been carried out in accordance with auditing standards or other
standards and practices generally accepted in the United States of America or auditing
standards of the Public Company Accounting Oversight Board (United States) or standards and
practices of any professional body in any other overseas jurisdiction and accordingly should
not be relied upon as if it had been carried out in accordance with those standards and practices.
Opinion
In our opinion:
(a) the Unaudited Pro Forma Financial Information has been properly compiled by the
Directors on the basis stated;
(b) such basis is consistent with the accounting policies of the Group; and
(c) the adjustments are appropriate for the purposes of the Unaudited Pro Forma
Financial Information as disclosed pursuant to paragraph 4.29(1) of the Listing
Rules.
Hong Kong, December 22, 2022
– II-4 –
APPENDIX III SUMMARY OF THE CONSTITUTION OF THE
COMPANY AND CAYMAN COMPANIES ACT
SUMMARY OF THE CONSTITUTION OF THE COMPANY
1 Memorandum of Association
The Memorandum of Association of the Company was conditionally adopted by a special

resolution passed on December 28, 2018 and became effective on March 12, 2019 and states,
inter alia, that the liability of the members of the Company is limited, that the objects for which
the Company is established are unrestricted, and that the Company shall have full power and
authority to carry out any object not prohibited by the Companies Act or any other law of the
Cayman Islands.
The Memorandum of Association is available on display on the websites specified in

Appendix V in the section headed “Documents available on display”.
2 Articles of Association
The Articles of Association of the Company were conditionally adopted by a special

resolution passed on December 28, 2018 and became effective on March 12, 2019 and include
provisions to the effect set out below.
Notwithstanding the current provisions of the Articles, the Company undertakes to

comply with (a) the applicable articles requirements under Chapter 8A of, and Appendix 3 to,
the Listing Rules that are not currently met by the Articles and (b) the requirement that where
a general meeting is postponed by the directors, the specific date, time and place of the
postponed meeting must be specified, before the Articles are formally amended in a general
meeting to be convened on or before June 30, 2023 such that immediately upon the Listing, the
Company will be subject to, and will fully comply with, such articles requirements as if they
have already been incorporated into the existing Articles upon the Listing (save for certain
specified exceptions). For further details, please see the section headed “Waivers —
Requirements relating to the Articles of Association of the Company.”
2.1 Ordinary Shares
The Company’s ordinary shares are divided into Class A ordinary shares and Class
B ordinary shares. Holders of Class A ordinary shares and Class B ordinary shares have
the same rights except for voting and conversion rights. Ordinary shares are issued in
registered form. Shareholders who are non-residents of the Cayman Islands may freely
hold and vote their shares.
Each Class B ordinary share is convertible into one Class A ordinary share at any
time at the option of the holder thereof. In no event shall Class A ordinary shares be
convertible into Class B ordinary shares.
Upon any sale, transfer, assignment or disposition of any Class B ordinary share by
a shareholder to any person who is not an Affiliate of such shareholder, such Class B
ordinary share shall be automatically and immediately converted into one Class A
ordinary share.
– III-1 –
2.2 Dividends
The holders of ordinary shares are entitled to such dividends as may be declared by
the Board of Directors. In addition, shareholders may by ordinary resolution declare a
dividend, but no dividend may exceed the amount recommended by the directors. Under
Cayman Islands law, dividends may be declared and paid only out of funds legally
available therefor, namely out of either profit or the Company’s share premium account,
and provided further that a dividend may not be paid if this would result in the Company
being unable to pay its debts as they fall due in the ordinary course of business.
Dividends received by each Class B ordinary share and Class A ordinary share in any
dividend distribution shall be the same.
Any dividend unclaimed after a period of six years from the date of declaration of
such dividend may be forfeited by the Board of Directors and, if so forfeited, shall revert
to the Company.
2.3 Voting Rights
Holders of Class A ordinary shares and Class B ordinary shares vote together as a
single class on all matters submitted to a vote of the shareholders, except as may
otherwise be required by law or provided for in the Memorandum and Articles of
Association. In respect of matters requiring shareholders’ vote, on a show of hands, each
shareholder is entitled to one vote and on a poll, each Class A ordinary share is entitled
to one vote, and each Class B ordinary share is entitled to twenty votes. Voting at any
shareholders’ meeting is by show of hands unless a poll is demanded. A poll may be
demanded by the chairman of such meeting or any shareholder present in person or by
proxy at such meeting.
An ordinary resolution to be passed by the shareholders requires the affirmative vote

of a simple majority of the votes cast by those shareholders entitled to vote who are
present in person or by proxy at a general meeting. Holders of the ordinary shares may,
among other things, divide or consolidate their shares by ordinary resolution. A special
resolution requires the affirmative vote of not less than two-thirds of the votes cast by
those shareholders entitled to vote who are present in person or by proxy at a general
meeting. A special resolution will be required for important matters such as a change of
name or making changes to the Memorandum and Articles of Association. Both ordinary
resolutions and special resolutions may also be passed by a unanimous written resolution
signed by all the shareholders of the Company, as permitted by the Companies Act and
the Memorandum and Articles of Association.
– III-2 –
2.4 Transfer of Shares
Any of the shareholders may transfer all or any of his or her ordinary shares by an
instrument of transfer in writing and in the usual or common form or any other form
approved by the Board of Directors.
However, the Board of Directors may, in its absolute discretion, decline to register
any transfer of any ordinary share which is not fully paid up or on which the Company
has a lien. The Board of Directors may also decline to register any transfer of any
ordinary share unless:
(a) the instrument of transfer is lodged with the Company, accompanied by the
certificate for the ordinary shares to which it relates and such other evidence
as the Board of Directors may reasonably require to show the right of the
transferor to make the transfer;
(b) the instrument of transfer is in respect of only one class of shares;
(c) the instrument of transfer is properly stamped, if required;
(d) in the case of a transfer to joint holders, the transfer is not to more than four
joint holders; or
(e) a fee of such maximum sum as the Designated Stock Exchange (as defined in
the Articles of Association) may determine to be payable, or such lesser sum
as the Board of Directors may from time to time require, is paid to the
Company in respect thereof.
If the directors refuse to register a transfer they are required, within three calendar
months after the date on which the instrument of transfer was lodged with the Company,
to send to each of the transferor and the transferee notice of such refusal.
2.5 Liquidation
On a winding up of the Company, if the assets available for distribution among the
shareholders shall be more than sufficient to repay the whole of the share capital at the
commencement of the winding up, the surplus will be distributed among the shareholders
in proportion to the par value of the shares held by them at the commencement of the
winding up, subject to a deduction from those shares in respect of which there are monies
due, of all monies payable to the Company for unpaid calls or otherwise. If the assets
available for distribution are insufficient to repay the whole of the share capital, such
assets will be distributed so that the losses shall be borne by the shareholders in
proportion to the par value of the shares held by them.
– III-3 –
2.6 Redemption, Repurchase and Surrender of Shares
The Company may issue shares on terms that such shares are subject to redemption,
at the option of the Company or at the option of the holder thereof, on such terms and in
such manner as may be determined, before the issue of such shares, by the Board of
Directors or by a special resolution of the shareholders. The Company may also
repurchase any of the Company’s shares provided that the manner and terms of such
purchase have been approved by the Board of Directors or by ordinary resolution of the
shareholders, or are otherwise authorized by the Memorandum and Articles of
Association. Under the Companies Act, the redemption or repurchase of any share may
be paid out of the Company’s profits or out of the proceeds of a fresh issue of shares made
for the purpose of such redemption or repurchase, or out of capital (including share
premium account and capital redemption reserve) if the Company can, immediately
following such payment, pay its debts as they fall due in the ordinary course of business.
In addition, under the Companies Act no share may be redeemed or repurchased (a) unless
it is fully paid up, (b) if such redemption or repurchase would result in there being no
shares outstanding, or (c) if the Company has commenced liquidation. In addition, the
Company may accept the surrender of any fully paid share for no consideration.
2.7 Variation of Rights of Shares
The rights attaching to any class of shares may, subject to any rights or restrictions
for the time being attached to any class, be materially adversely varied with the consent
in writing of the holders of two-thirds of the issued shares of that class, or with the
sanction of a special resolution passed at a separate meeting of the holders of the shares
of that class.
2.8 General Meetings of Shareholders
Shareholders’ general meetings may be held in such place within or outside the
Cayman Islands as the Board of Directors considers appropriate.
As a Cayman Islands exempted company, the Company is not obliged by the

Companies Act to call shareholders’ annual general meetings. The Memorandum and
Articles of Association provide that we may in each year hold a general meeting as our
annual general meeting.
Shareholders’ annual general meetings and any other general meetings of the
shareholders may be convened by a majority of the Directors or the chairman of the Board
of Directors. At least ten calendar days’ notice must be given for any shareholders’
meeting to those persons whose names appear as members in the Company’s register of
members on the date the notice is given (or on any other date determined by the directors
to be the record date for such meeting) and who are entitled to vote at the meeting.
– III-4 –
Cayman Islands law provides shareholders with only limited rights to requisition a
general meeting, and does not provide shareholders with any right to put any proposal
before a general meeting. However, these rights may be provided in a company’s articles
of association. The Memorandum and Articles of Association allow one or more
shareholders holding shares which carry in aggregate not less than one-third of all votes
attaching to all issued and outstanding shares of the Company that carry the right to vote
at general meetings, to requisition an extraordinary general meeting, in which case the
directors are obliged to call such meeting and to put the resolutions so requisitioned to a
vote at such meeting; however, the Memorandum and Articles of Association do not
provide the shareholders with any right to put any proposals before annual general
meetings or extraordinary general meetings not called by such shareholders.
2.9 Appointment and Removal of Directors
The Articles of Association provide that unless otherwise determined by the

Company in general meeting, the number of Directors shall not be less than three, the
exact number of Directors to be determined from time to time by the Board of Directors.
The Company may by ordinary resolution appoint any person to be a Director or

remove any Director. In addition, the Board may, by the affirmative vote of a simple
majority of the remaining Directors present and voting at a Board meeting, appoint any
person as a Director to fill a casual vacancy on the Board or as an addition to the existing
Board. An appointment of a Director may be on terms that the Director shall
automatically retire from office (unless he has sooner vacated office) at the next or a
subsequent annual general meeting or upon any specified event or after any specified
period in a written agreement between the Company and the Director, if any; but no such
term shall be implied in the absence of express provision. Each Director whose term of
office expired shall be eligible for re-election at a meeting of the Shareholders or
re-appointment by the Board of Directors.
Notwithstanding the foregoing, for as long as Image Frame Investment (HK)

Limited and Qiantang River Investment Limited (together, the “Tencent Investors”)
together hold at least 91,671,323 shares of the Company (as may be adjusted by share
splits, recapitalization, reorganization, consolidation or other similar transaction), the
Tencent Investors shall have the right to appoint one (1) director to the Board (the
“Tencent Director”) by sending a joint notice to the Company’s registered office. Subject
to vacation of office as described below, the Tencent Director may only be removed as
directed or approved by both Tencent Investors, and any vacancies created by the
resignation, removal or death of the Tencent Director shall be filled by appointment by
the Tencent Investors as aforesaid. The term of the Tencent Director shall automatically
end once the Tencent Investors together hold less than 91,671,323 shares of the Company
(as may be adjusted by share splits, recapitalization, reorganization, consolidation or
other similar transaction). The foregoing provisions of the Articles of Association may not
be amended without the prior written consent of the Tencent Investors.
– III-5 –
The notice of any meeting at which a resolution to remove a Director shall be

proposed or voted upon must contain a statement of the intention to remove that Director
and such notice must be served on that Director not less than ten calendar days before the
meeting. Such Director is entitled to attend the meeting and be heard on the motion for
his removal.
There is no shareholding qualification for Directors nor is there any specific age
limit for Directors.
The office of a Director shall be vacated if the Director:
(a) becomes bankrupt or makes any arrangement or composition with his creditors;
(b) dies or is found to be or becomes of unsound mind;
(c) resigns his office by notice in writing to the Company;
(d) without special leave of absence from the Board, he is absent from meetings
of the Board for three consecutive meetings, and the Board resolves that his
office be vacated; or
(e) is removed from office pursuant to any other provision of the Articles.
2.10 Proceedings of the Board
The quorum necessary for the transaction of the business of the Directors may be
fixed by the Directors and unless so fixed shall be a majority of the then existing
Directors.
The Directors may meet together (whether within or outside the Cayman Islands) for
the despatch of business, adjourn and otherwise regulate their meetings and proceedings
as they think fit. Questions arising at any meeting shall be decided by a majority of votes.
In the case of an equality of votes, the chairman of the meeting shall have a second or
casting vote.
2.11 Changes in Share Capital
The Company may by ordinary resolution:
(a) increase the share capital by such sum, to be divided into shares of such classes
and amount, as the resolution shall prescribe;
(b) increase its share capital by new shares of such amount as it thinks expedient;
– III-6 –
(c) consolidate and divide all or any of its share capital into shares of a larger
amount than its existing shares;
(d) subdivide its existing shares, or any of them, into shares of an amount smaller
than that fixed by the Memorandum, provided that in the subdivision the
proportion between the amount paid and the amount, if any, unpaid on each
reduced share shall be the same as it was in case of the share from which the
reduced share is derived; and
(e) cancel any shares that, at the date of the passing of the resolution, have not
been taken or agreed to be taken by any person and diminish the amount of its
share capital by the amount of the shares so cancelled.
2.12 Directors’ Power to Issue Shares
Subject to the provisions, if any, in the Memorandum and Articles of Association

and to any direction that may be given by the Company in a general meeting, the Directors
may in their absolute discretion and without approval of the shareholders, issue shares,
grant rights over existing shares or issue other securities in one or more series as they
deem necessary and appropriate and determine designations, powers, preferences,
privileges and other rights, including dividend rights, conversion rights, terms of
redemption and liquidation preferences, any or all of which may be greater than the
powers and rights associated with the shares held by existing shareholders, at such times
and on such other terms as they think proper.
2.13 Directors Borrowing Powers
The Board may exercise all the powers of the Company to issue debentures,
debenture stock and other such securities whenever money is borrowed or as security for
any debt, liability or obligation of the Company or of any third party.
2.14 Disclosure of Interest in Contracts with the Company or any of our Subsidiaries
A Director who is in any way, whether directly or indirectly, interested in a contract

or transaction or proposed contract or transaction with the Company shall declare the
nature of his interest at a meeting of the Directors. A general notice given to the Directors
by any Director to the effect that he is a member of any specified company or firm and
is to be regarded as interested in any contract or transaction which may thereafter be made
with that company or firm shall be deemed a sufficient declaration of interest in regard
to any contract so made or transaction so consummated.
– III-7 –
A Director may vote in respect of any contract or transaction or proposed contract

or transaction notwithstanding that he may be interested therein and if he does so his vote
shall be counted and he may be counted in the quorum at any meeting of the Directors
at which any such contract or transaction or proposed contract or transaction shall come
before the meeting for consideration.
2.15 Remuneration of Directors
The remuneration of the Directors may be determined by the Directors or by

ordinary resolution.
The Directors shall be entitled to be paid their travelling, hotel and other expenses
properly incurred by them in going to, attending and returning from meetings of the
Directors, or committee of the Directors, or general meetings of the Company, or
otherwise in connection with the business of the Company, or to receive such fixed
allowance in respect thereof as may be determined by the Directors from time to time, or
a combination partly of one such method and partly the other.
2.16 Restriction on Ownership of Securities
There are no provisions in the Articles of Association relating to restrictions on

ownership of the Company’s shares or securities.
SUMMARY OF CAYMAN ISLANDS COMPANY LAW AND TAXATION
1 Introduction
The Companies Act is derived, to a large extent, from the older Companies Acts of
England, although there are significant differences between the Companies Act and the current
Companies Act of England. Set out below is a summary of certain provisions of the Companies
Act, although this does not purport to contain all applicable qualifications and exceptions or
to be a complete review of all matters of corporate law and taxation which may differ from
equivalent provisions in jurisdictions with which interested parties may be more familiar.
2 Incorporation
The Company was incorporated in the Cayman Islands as an exempted company with
limited liability on April 15, 2014 under the Companies Act. As such, its operations must be
conducted mainly outside the Cayman Islands. The Company is required to file an annual
return each year with the Registrar of Companies of the Cayman Islands and pay a fee which
is based on the size of its authorised share capital.
– III-8 –
3 Share Capital
The Companies Act permits a company to issue ordinary shares, preference shares,
redeemable shares or any combination thereof.
The Companies Act provides that where a company issues shares at a premium, whether
for cash or otherwise, a sum equal to the aggregate amount of the value of the premia on those
shares shall be transferred to an account called the “share premium account”. At the option of
a company, these provisions may not apply to premia on shares of that company allotted
pursuant to any arrangement in consideration of the acquisition or cancellation of shares in any
other company and issued at a premium. The Companies Act provides that the share premium
account may be applied by a company, subject to the provisions, if any, of its memorandum and
articles of association, in such manner as the company may from time to time determine
including, but without limitation:
(a) paying distributions or dividends to members;
(b) paying up unissued shares of the company to be issued to members as fully paid
bonus shares;
(c) in the redemption and repurchase of shares (subject to the provisions of section 37
of the Companies Act);
(d) writing-off the preliminary expenses of the company;
(e) writing-off the expenses of, or the commission paid or discount allowed on, any
issue of shares or debentures of the company; and
(f) providing for the premium payable on redemption or purchase of any shares or
debentures of the company.
No distribution or dividend may be paid to members out of the share premium account
unless immediately following the date on which the distribution or dividend is proposed to be
paid the company will be able to pay its debts as they fall due in the ordinary course of
business.
The Companies Act provides that, subject to confirmation by the Grand Court of the
Cayman Islands, a company limited by shares or a company limited by guarantee and having
a share capital may, if so authorised by its articles of association, by special resolution reduce
its share capital in any way.
– III-9 –
Subject to the detailed provisions of the Companies Act, a company limited by shares or
a company limited by guarantee and having a share capital may, if so authorised by its articles
of association, issue shares which are to be redeemed or are liable to be redeemed at the option
of the company or a shareholder. In addition, such a company may, if authorised to do so by
its articles of association, purchase its own shares, including any redeemable shares. The
manner of such a purchase must be authorised either by the articles of association or by an
ordinary resolution of the company. The articles of association may provide that the manner of
purchase may be determined by the directors of the company. At no time may a company
redeem or purchase its shares unless they are fully paid. A company may not redeem or
purchase any of its shares if, as a result of the redemption or purchase, there would no longer
be any member of the company holding shares. A payment out of capital by a company for the
redemption or purchase of its own shares is not lawful unless immediately following the date
on which the payment is proposed to be made, the company shall be able to pay its debts as
they fall due in the ordinary course of business.
There is no statutory restriction in the Cayman Islands on the provision of financial

assistance by a company for the purchase of, or subscription for, its own or its holding
company’s shares. Accordingly, a company may provide financial assistance if the directors of
the company consider, in discharging their duties of care and to act in good faith, for a proper
purpose and in the interests of the company, that such assistance can properly be given. Such
assistance should be on an arm’s-length basis.
4 Dividends and Distributions
With the exception of section 34 of the Companies Act, there are no statutory provisions
relating to the payment of dividends. Based upon English case law which is likely to be
persuasive in the Cayman Islands in this area, dividends may be paid only out of profits. In
addition, section 34 of the Companies Act permits, subject to a solvency test and the
provisions, if any, of the company’s memorandum and articles of association, the payment of
dividends and distributions out of the share premium account (see paragraph 3 above for
details).
5 Shareholders’ Suits
The Cayman Islands courts can be expected to follow English case law precedents. The
rule in Foss v. Harbottle (and the exceptions thereto which permit a minority shareholder to
commence a class action against or derivative actions in the name of the company to challenge
(a) an act which is ultra vires the company or illegal, (b) an act which constitutes a fraud
against the minority where the wrongdoers are themselves in control of the company, and (c)
an action which requires a resolution with a qualified (or special) majority which has not been
obtained) has been applied and followed by the courts in the Cayman Islands.
– III-10 –
6 Protection of Minorities
In the case of a company (not being a bank) having a share capital divided into shares,
the Grand Court of the Cayman Islands may, on the application of members holding not less
than one-fifth of the shares of the company in issue, appoint an inspector to examine into the
affairs of the company and to report thereon in such manner as the Grand Court shall direct.
Any shareholder of a company may petition the Grand Court of the Cayman Islands which
may make a winding up order if the court is of the opinion that it is just and equitable that the
company should be wound up.
Claims against a company by its shareholders must, as a general rule, be based on the
general laws of contract or tort applicable in the Cayman Islands or their individual rights as
shareholders as established by the company’s memorandum and articles of association.
The English common law rule that the majority will not be permitted to commit a fraud
on the minority has been applied and followed by the courts of the Cayman Islands.
7 Disposal of Assets
The Companies Act contains no specific restrictions on the powers of directors to dispose
of assets of a company. As a matter of general law, in the exercise of those powers, the directors
must discharge their duties of care and to act in good faith, for a proper purpose and in the
interests of the company.
8 Accounting and Auditing Requirements
The Companies Act requires that a company shall cause to be kept proper books of
account with respect to:
(a) all sums of money received and expended by the company and the matters in respect
of which the receipt and expenditure takes place;
(b) all sales and purchases of goods by the company; and
(c) the assets and liabilities of the company.
Proper books of account shall not be deemed to be kept if there are not kept such books
as are necessary to give a true and fair view of the state of the company’s affairs and to explain
its transactions.
– III-11 –
9 Register of Members
An exempted company may, subject to the provisions of its articles of association,

maintain its principal register of members and any branch registers at such locations, whether
within or without the Cayman Islands, as its directors may from time to time think fit. There
is no requirement under the Companies Act for an exempted company to make any returns of
members to the Registrar of Companies of the Cayman Islands. The names and addresses of the
members are, accordingly, not a matter of public record and are not available for public
inspection.
10 Inspection of Books and Records
Members of a company will have no general right under the Companies Act to inspect or
obtain copies of the register of members or corporate records of the company. They will,
however, have such rights as may be set out in the company’s articles of association.
11 Special Resolutions
The Companies Act provides that a resolution is a special resolution when it has been
passed by a majority of at least two-thirds of such members as, being entitled to do so, vote
in person or, where proxies are allowed, by proxy at a general meeting of which notice
specifying the intention to propose the resolution as a special resolution has been duly given,
except that a company may in its articles of association specify that the required majority shall
be a number greater than two-thirds, and may additionally so provide that such majority (being
not less than two-thirds) may differ as between matters required to be approved by a special
resolution. Written resolutions signed by all the members entitled to vote for the time being of
the company may take effect as special resolutions if this is authorised by the articles of
association of the company.
12 Subsidiary Owning Shares in Parent
The Companies Act does not prohibit a Cayman Islands company acquiring and holding
shares in its parent company provided its objects so permit. The directors of any subsidiary
making such acquisition must discharge their duties of care and to act in good faith, for a
proper purpose and in the interests of the subsidiary.
13 Mergers and Consolidations
The Companies Act permits mergers and consolidations between Cayman Islands
companies and between Cayman Islands companies and non-Cayman Islands companies. For
these purposes, (a) “merger” means the merging of two or more constituent companies and the
vesting of their undertaking, property and liabilities in one of such companies as the surviving
company, and (b) “consolidation” means the combination of two or more constituent
companies into a consolidated company and the vesting of the undertaking, property and
– III-12 –
liabilities of such companies to the consolidated company. In order to effect such a merger or
consolidation, the directors of each constituent company must approve a written plan of merger
or consolidation, which must then be authorised by (a) a special resolution of each constituent
company and (b) such other authorisation, if any, as may be specified in such constituent
company’s articles of association. The written plan of merger or consolidation must be filed
with the Registrar of Companies of the Cayman Islands together with a declaration as to the
solvency of the consolidated or surviving company, a list of the assets and liabilities of each
constituent company and an undertaking that a copy of the certificate of merger or
consolidation will be given to the members and creditors of each constituent company and that
notification of the merger or consolidation will be published in the Cayman Islands Gazette.
Dissenting shareholders have the right to be paid the fair value of their shares (which, if not
agreed between the parties, will be determined by the Cayman Islands court) if they follow the
required procedures, subject to certain exceptions. Court approval is not required for a merger
or consolidation which is effected in compliance with these statutory procedures.
14 Reconstructions
There are statutory provisions which facilitate reconstructions and amalgamations

approved by (a) 75% in value of shareholders, or (b) a majority in number representing 75%
in value of creditors, depending on the circumstances, as are present at a meeting called for
such purpose and thereafter sanctioned by the Grand Court of the Cayman Islands. Whilst a
dissenting shareholder would have the right to express to the Grand Court his view that the
transaction for which approval is sought would not provide the shareholders with a fair value
for their shares, the Grand Court is unlikely to disapprove the transaction on that ground alone
in the absence of evidence of fraud or bad faith on behalf of management and if the transaction
were approved and consummated the dissenting shareholder would have no rights comparable
to the appraisal rights (i.e. the right to receive payment in cash for the judicially determined
value of his shares) ordinarily available, for example, to dissenting shareholders of United
States corporations.
15 Take-overs
Where an offer is made by a company for the shares of another company and, within four
months of the offer, the holders of not less than 90% of the shares which are the subject of the
offer accept, the offeror may at any time within two months after the expiration of the said four
months, by notice require the dissenting shareholders to transfer their shares on the terms of
the offer. A dissenting shareholder may apply to the Grand Court of the Cayman Islands within
one month of the notice objecting to the transfer. The burden is on the dissenting shareholder
to show that the Grand Court should exercise its discretion, which it will be unlikely to do
unless there is evidence of fraud or bad faith or collusion as between the offeror and the holders
of the shares who have accepted the offer as a means of unfairly forcing out minority
shareholders.
– III-13 –
16 Indemnification
Cayman Islands law does not limit the extent to which a company’s articles of association
may provide for indemnification of officers and directors, except to the extent any such
provision may be held by the Cayman Islands courts to be contrary to public policy (e.g. for
purporting to provide indemnification against the consequences of committing a crime).
17 Restructuring
A company may present a petition to the Grand Court of the Cayman Islands for the
appointment of a restructuring officer on the grounds that the company:
(a) is or is likely to become unable to pay its debts; and
(b) intends to present a compromise or arrangement to its creditors (or classes thereof)
either pursuant to the Companies Act, the law of a foreign country or by way of a
consensual restructuring.
The Grand Court may, among other things, make an order appointing a restructuring
officer upon hearing of such petition, with such powers and to carry out such functions as the
court may order. At any time (i) after the presentation of a petition for the appointment of a
restructuring officer but before an order for the appointment of a restructuring officer has been
made, and (ii) when an order for the appointment of a restructuring officer is made, until such
order has been discharged, no suit, action or other proceedings (other than criminal
proceedings) shall be proceeded with or commenced against the company, no resolution to
wind up the company shall be passed, and no winding up petition may be presented against the
company, except with the leave of the court. However, notwithstanding the presentation of a
petition for the appointment of a restructuring officer or the appointment of a restructuring
officer, a creditor who has security over the whole or part of the assets of the company is
entitled to enforce the security without the leave of the court and without reference to the
restructuring officer appointed.
18 Liquidation
A company may be placed in liquidation compulsorily by an order of the court, or

voluntarily (a) by a special resolution of its members if the company is solvent, or (b) by an
ordinary resolution of its members if the company is insolvent. The liquidator’s duties are to
collect the assets of the company (including the amount (if any) due from the contributories
(shareholders)), settle the list of creditors and discharge the company’s liability to them,
rateably if insufficient assets exist to discharge the liabilities in full, and to settle the list of
contributories and divide the surplus assets (if any) amongst them in accordance with the rights
attaching to the shares.
– III-14 –
19 Stamp Duty on Transfers
No stamp duty is payable in the Cayman Islands on transfers of shares of Cayman Islands
companies except those which hold interests in land in the Cayman Islands.
20 Taxation
Pursuant to section 6 of the Tax Concessions Act (As Revised) of the Cayman Islands, the
Company may obtain an undertaking from the Financial Secretary of the Cayman Islands:
(a) that no law which is enacted in the Cayman Islands imposing any tax to be levied
on profits, income, gains or appreciations shall apply to the Company or its
operations; and
(b) in addition, that no tax to be levied on profits, income, gains or appreciations or

which is in the nature of estate duty or inheritance tax shall be payable:
(i) on or in respect of the shares, debentures or other obligations of the Company;

or
(ii) by way of the withholding in whole or in part of any relevant payment as

defined in section 6(3) of the Tax Concessions Act (As Revised).
The Cayman Islands currently levy no taxes on individuals or corporations based upon
profits, income, gains or appreciations and there is no taxation in the nature of inheritance tax
or estate duty. There are no other taxes likely to be material to the Company levied by the
Government of the Cayman Islands save certain stamp duties which may be applicable, from
time to time, on certain instruments executed in or brought within the jurisdiction of the
Cayman Islands. The Cayman Islands are not party to any double tax treaties that are applicable
to any payments made by or to the Company.
21 Exchange Control
There are no exchange control regulations or currency restrictions in the Cayman Islands.
22 General
Maples and Calder (Hong Kong) LLP, the Company’s legal advisor on Cayman Islands
law, have sent to the Company a letter of advice summarising aspects of Cayman Islands
company law. This letter, together with a copy of the Companies Act, is available on display
as referred to in the section headed “Documents available on display” in Appendix V. Any
person wishing to have a detailed summary of Cayman Islands company law or advice on the
differences between it and the laws of any jurisdiction with which he/she is more familiar is
recommended to seek independent legal advice.
– III-15 –
APPENDIX IV STATUTORY AND GENERAL INFORMATION
A. FURTHER INFORMATION ABOUT OUR GROUP
1. Incorporation
Our Company was incorporated under the laws of the Cayman Islands as an exempted
company with limited liability on April 15, 2014. Our registered office address is at the offices
of Maples Corporate Services Limited, PO Box 309, Ugland House, Grand Cayman KY1-1104,
Cayman Islands. Accordingly, our Company’s corporate structure and Memorandum and
Articles of Association are subject to the relevant laws of the Cayman Islands. A summary of
our Memorandum and Articles of Association is set out in Appendix III to this document.
Our head office and principal place of business in Hong Kong is at 11/F, Bangkok Bank
Building, No. 18 Bonham Strand West, Sheung Wan, Hong Kong. We were registered as a
non-Hong Kong company under Part 16 of the Companies Ordinance on October 28, 2021 with
the Registrar of Companies in Hong Kong. Ms. Lam Wing Chi has been appointed as the
authorized representative of our Company for the acceptance of service of process in Hong
Kong. The address for service of process is 5/F, Manulife Place, 348 Kwun Tong Road,
Kowloon, Hong Kong.
2. Changes in share capital of our Company
Our Company was incorporated with an authorized share capital of US$50,000.00 divided
into 10,000,000 shares of a par value of US$0.005 each.
Upon our incorporation, our Company issued one Ordinary Share to Nominees Services
Ltd., which subsequently transferred the share to Mr. Li, our founder, chairman of the Board,
executive Director and chief executive officer, for a consideration of US$0.005. On the same
date, our Company further issued 807,499 Ordinary Shares to Mr. Li for an aggregate
consideration of US$4,037.495.
On October 31, 2014, our Company issued 178,571 Series A Preferred Shares to Qiantang
River Investment Limited for an aggregate consideration of US$5.0 million, 71,429 Series A
Preferred Shares to Matrix Partners China III Hong Kong Limited for an aggregate
consideration of US$2.0 million and 46,875 Series A-1 Preferred Shares to Sequoia Capital CV
IV Holdco, Ltd. for an aggregate consideration of US$1.5 million.
On May 27, 2015, our Company issued 160,715 Series B Preferred Shares to Qiantang
River Investment Limited for an aggregate consideration of approximately US$27.3 million,
9,740 Series B Preferred Shares to Matrix Partners China III Hong Kong Limited for an
aggregate consideration of approximately US$1.7 million and 6,392 Series B Preferred Shares
to Sequoia Capital CV IV Holdco, Ltd. for an aggregate consideration of approximately
US$1.1 million.
– IV-1 –
On September 22, 2016, our Company effected a 1 to 500 share split whereby all of our
807,500 Ordinary Shares, par value US$0.005 each, that were issued and outstanding at the
time were converted into 403,750,000 ordinary shares, par value US$0.00001 each; all of our
250,000 Series A Preferred Shares, par value US$0.005 each, that were issued and outstanding
at the time were converted into 125,000,000 Series A Preferred Shares, par value US$0.00001
each; all of our 46,875 Series A-1 Preferred Shares, par value US$0.005 each, that were issued
and outstanding at the time were converted into 23,437,500 Series A-1 Preferred Shares, par
value US$0.00001 each; all of our 176,847 Series B Preferred Shares, par value US$0.005
each, that were issued and outstanding at the time were converted into 88,423,500 Series B
Preferred Shares, par value US$0.00001 each. As a result of the share split, the number of our
total authorized shares at that time was increased from 10,000,000 to 5,000,000,000 on
September 22, 2016. The number of our authorized Ordinary Shares was increased from
9,526,278 to 4,763,139,000, the number of our authorized Series A Preferred Shares was
increased from 250,000 to 125,000,000, the number of our authorized Series A-1 Preferred
Shares was increased from 46,875 to 23,437,500 and the number of our authorized Series B
Preferred Shares was increased from 176,847 to 88,423,500. The share split has been
retroactively reflected for all periods presented herein.
On May 22, 2017, our Company issued 128,844,812 Series C Preferred Shares to Image
Frame Investment (HK) Limited for an aggregate consideration of US$91.4 million, 7,381,311
Series C-1 Preferred Shares to Matrix Partners China III Hong Kong Limited for an aggregate
consideration of US$7.6 million and 4,843,971 Series C-1 Preferred Shares to SCC Venture VI
Holdco, Ltd. for an aggregate consideration of US$5.0 million.
On November 24, 2017, Image Frame Investment (HK) Limited transferred 28,205,205
Series C Preferred Shares to TPP Follow-on I Holding A Limited for an aggregate consideration
of US$20.0 million and 29,615,465 Series C Preferred Shares to TPP Opportunity I Holding A
Limited for an aggregate consideration of US$21.0 million.
On March 8, 2019, our Company issued a total of 115,666,666 Class A Ordinary Shares
pursuant to our initial public offering on the Nasdaq and the concurrent private placement.
Immediately prior to the completion of this offering, our authorized share capital was changed
into US$500,000.00 divided into 50,000,000,000 shares, comprising of (i) 48,700,000,000
Class A Ordinary Shares of a par value of US$0.00001 each, (ii) 800,000,000 Class B Ordinary
Shares of a par value of US$0.00001 each, and (iii) 500,000,000 shares of a par value of
US$0.00001 each of such class or classes (however designated) as the Bord may determine in
accordance with our Memorandum and Articles of Association. For details, please see “History
and Corporate Structure — Listing on the Nasdaq.”
– IV-2 –
The following sets out the changes in the Company’s issued share capital during the two
years immediately preceding the date of this document:
(a) On December 8, 2020, our Company entered into a securities purchase agreement
with a leading global investment firm for a private placement of 53,600,000 Class
A Ordinary Shares in the form of prepaid warrants to a leading global investment
firm at a price of US$4.89751 less a nominal exercise price of US$0.00001 per
Pre-Funded Warrant. Such Pre-Funded Warrants were immediately exercisable and
had a termination date in June 2022. On June 11, 2021, the Pre-Funded Warrants
were exercised in full and 53,599,890 Class A Ordinary Shares have been issued
upon full exercise of such Pre-Funded Warrants.
(b) On April 24, 2021, our Company completed our follow-up offering on Nasdaq where
we issued and sold a total of 87,400,000 Class A Ordinary Shares represented by
ADSs at a public offering price of US$130.00 per ADS.
(c) During the two years immediately preceding the date of this document, our
Company issued 9,832,752 Class A Ordinary Shares to settle certain vested options
granted and vested RSUs under our Share Incentive Plans.
Save as disclosed above, there has been no alteration in the share capital of our Company
during the two years immediately preceding the date of this document.
3. Changes in the share capital of our major subsidiaries and Consolidated Affiliated
Entities
A summary of the corporate information and the particulars of our principal subsidiaries
and Consolidated Affiliated Entities are set out in note 1 to the Accountant’s Report as set out
in Appendix I to this document.
The following sets out the changes in the share capital of our major subsidiaries and
Consolidated Affiliated Entities during the two years immediately preceding the date of this
document. For details of our major subsidiaries and Consolidated Affiliated Entities, please
refer to the section headed “History and Corporate Structure — Our Major Subsidiaries and
Consolidated Affiliated Entities.”
Futu International Hong Kong
• On January 8, 2021, the issued share capital of Futu International Hong Kong was
increased from HKD3,050,000,000 to HKD4,050,000,000.
– IV-3 –
Moomoo Financial Singapore
• On April 5, 2021, the issued share capital of Moomoo Financial Singapore was
increased from SGD10,000,000.00 to SGD20,000,000.00.
• On April 30, 2021, the issued share capital of Moomoo Financial Singapore was
• On June 29, 2021, the issued share capital of Moomoo Financial Singapore was
• On September 8, 2021, the issued share capital of Moomoo Financial Singapore was
• On December 15, 2021, the issued share capital of Moomoo Financial Singapore
was increased from SGD100,000,000.00 to SGD120,000,000.00.
• On May 4, 2022, the issued share capital of Moomoo Financial Singapore was
Futu Australia
• On March 8, 2022, the issued share capital of Futu Australia was increased from
AUD4,360,020 to AUD6,660,020.
• On March 9, 2022, the issued share capital of Futu Australia was increased from
AUD6,660,020 to AUD16,660,020.
Moomoo Financial Inc.
• On August 19, 2021, the issued share capital of Moomoo Financial Inc. was
decreased from USD23,209,998.1 to USD22,209,998.1.
• On December 23, 2021, the issued share capital of Moomoo Financial Inc. was
increased from USD22,209,998.1 to USD24,209,998.1.
• On December 30, 2021, the issued share capital of Moomoo Financial Inc. was
increased from USD24,209,998.1 to USD28,209,998.1.
– IV-4 –
Futu Clearing Inc.
• On April 14, 2021, the issued share capital of Futu Clearing Inc. was increased from
USD20,199,999.9 to USD30,199,999.9.
• On April 29, 2021, the issued share capital of Futu Clearing Inc. was increased from
USD30,199,999.9 to USD430,199,999.9.
• On July 1, 2022, the issued share capital of Futu Clearing Inc. was increased from
USD430,199,999.9 to USD480,199,999.9.
Save as disclosed above, there has been no alteration in the share capital of any major
subsidiary or Consolidated Affiliated Entity of our Company within the two years immediately
preceding the date of this document.
B. FURTHER INFORMATION ABOUT OUR BUSINESS
1. Summary of Material Contracts
The following contracts (not being contracts entered into in the ordinary course of
business) have been entered into by members of our Group within the two years preceding the
date of this document and are or may be material:
(a) a termination agreement dated September 30, 2021 entered into among Shensi
Beijing, Shenzhen Futu, Mr. Leaf Hua Li (李華) and Ms. Lei Li (李鐳), pursuant to
which the parties agreed to terminate the second amended and restated exclusive
technical consultation and service agreement dated September 28, 2018, the second
amended and restated business operation agreement dated September 28, 2018; the
second amended and restated equity pledge agreements dated September 28, 2018;
the second amended and restated shareholder voting rights proxy agreement dated
September 28, 2018; the second amended and restated exclusive option agreement
dated September 28, 2018; the spouse consent letter signed by Mr. Leaf Hua Li (李
華), the spouse of Ms. Lei Li (李鐳), and the spouse consent letter signed by Ms. Lei
Li (李鐳), the spouse of Mr. Leaf Hua Li (李華);
(b) an exclusive business cooperation agreement dated September 30, 2021 entered into
between Shensi Beijing and Shenzhen Futu, pursuant to which Shensi Beijing agreed
to be engaged as the exclusive provider of technical support, consulting services and
other services to Shenzhen Futu in return for service fees;
(c) an exclusive option agreement dated September 30, 2021 entered into among Shensi
Beijing, Shenzhen Futu and Mr. Leaf Hua Li (李華), pursuant to which Mr. Leaf Hua
Li (李華) irrevocably granted Shensi Beijing an exclusive option to purchase all or
part of his equity interests in Shenzhen Futu at the lowest price permitted under the
laws and regulations of the PRC at the time of exercise;
– IV-5 –
(d) an exclusive option agreement dated September 30, 2021 entered into among Shensi
Beijing, Shenzhen Futu and Ms. Lei Li (李鐳), pursuant to which Ms. Lei Li (李鐳)
irrevocably granted Shensi Beijing an exclusive option to purchase all or part of her
equity interests in Shenzhen Futu at the lowest price permitted under the laws and
regulations of the PRC at the time of exercise;
(e) an equity pledge agreement dated September 30, 2021 entered into among Shensi
Beijing, Shenzhen Futu and Mr. Leaf Hua Li (李華), pursuant to which Mr. Leaf Hua
Li (李華) agreed to pledge all of his equity interests in Shenzhen Futu in favor of
Shensi Beijing;
(f) an equity pledge agreement dated September 30, 2021 entered into among Shensi
Beijing, Shenzhen Futu and Ms. Lei Li (李鐳), pursuant to which Ms. Lei Li (李鐳)
agreed to pledge all of her equity interests in Shenzhen Futu in favor of Shensi
Beijing;
(g) a power of attorney agreement dated September 30, 2021 executed by Mr. Leaf Hua
Li (李華) in favor of Shensi Beijing, pursuant to which Mr. Leaf Hua Li (李華),
among other things, irrevocably authorized Shensi Beijing or its designated
person(s) to exercise all of his rights as a shareholder of Shenzhen Futu;
(h) a power of attorney agreement dated September 30, 2021 executed by Ms. Lei Li (李
鐳) in favor of Shensi Beijing, pursuant to which Ms. Lei Li (李鐳), among other
things, irrevocably authorized Shensi Beijing or its designated person(s) to exercise
all of her rights as a shareholder of Shenzhen Futu;
(i) a termination agreement dated September 30, 2021 entered into among Shensi
Beijing, Hainan Futu, Mr. Leaf Hua Li (李華) and Ms. Lei Li (李鐳), pursuant to
which the parties agreed to terminate the exclusive technical consultation and
service agreement dated September 28, 2018, the business operation agreement
dated September 28, 2018, the exclusive option agreement dated September 28,
2018, the equity pledge agreements dated September 28, 2018; the shareholder
voting rights proxy agreement dated September 28, 2018, the spouse consent letter
signed by Mr. Leaf Hua Li (李華), the spouse of Ms. Lei Li (李鐳), and the spouse
consent letter signed by Ms. Lei Li (李鐳), the spouse of Mr. Leaf Hua Li (李華);
(j) an exclusive business cooperation agreement dated September 30, 2021 entered into
between Shensi Beijing and Hainan Futu, pursuant to which Shensi Beijing agreed
to be engaged as the exclusive provider of technical support, consulting services and
other services to Hainan Futu in return for service fees;
– IV-6 –
(k) an exclusive option agreement dated September 30, 2021 entered into among Shensi
Beijing, Hainan Futu and Mr. Leaf Hua Li (李華), pursuant to which Mr. Leaf Hua
Li (李華) irrevocably granted Shensi Beijing an exclusive option to purchase all or
part of his equity interests in Hainan Futu at the lowest price permitted under the
laws and regulations of the PRC at the time of exercise;
(l) an exclusive option agreement dated September 30, 2021 entered into among Shensi
Beijing, Hainan Futu and Ms. Lei Li (李鐳), pursuant to which Ms. Lei Li (李鐳)
irrevocably granted Shensi Beijing an exclusive option to purchase all or part of her
equity interests in Hainan Futu at the lowest price permitted under the laws and
regulations of the PRC at the time of exercise;
(m) an equity pledge agreement dated September 30, 2021 entered into among Shensi
Beijing, Hainan Futu and Mr. Leaf Hua Li (李華), pursuant to which Mr. Leaf Hua
Li (李華) agreed to pledge all of his equity interests in Hainan Futu in favor of
Shensi Beijing;
(n) an equity pledge agreement dated September 30, 2021 entered into among Shensi
Beijing, Hainan Futu and Ms. Lei Li (李鐳), pursuant to which Ms. Lei Li (李鐳)
agreed to pledge all of her equity interests in Hainan Futu in favor of Shensi Beijing;
(o) a power of attorney agreement dated September 30, 2021 executed by Mr. Leaf Hua
Li (李華) in favor of Shensi Beijing, pursuant to which Mr. Leaf Hua Li (李華),
among other things, irrevocably authorized Shensi Beijing or its designated
person(s) to exercise all of his rights as a shareholder of Hainan Futu;
(p) a power of attorney agreement dated September 30, 2021 executed by Ms. Lei Li (李
鐳) in favor of Shensi Beijing, pursuant to which Ms. Lei Li (李鐳), among other
things, irrevocably authorized Shensi Beijing or its designated person(s) to exercise
all of her rights as a shareholder of Hainan Futu; and
(q) a sponsor agreement relating to the Listing dated December 22, 2022 entered into
among the Company, Goldman Sachs (Asia) L.L.C. and UBS Securities Hong Kong
Limited, relating to the engagement of the Joint Sponsors by the Company in
connection with the Introduction.
2. Intellectual Property Rights
Save as disclosed below, as of the Latest Practicable Date, there were no other
trademarks, service marks, patents, intellectual property rights, or industrial property rights
which are or may be material in relation to our business.
– IV-7 –
(a) Trademarks
As at the Latest Practicable Date, we had registered the following trademarks that
we consider to be or may be material to our business:
Registered Place of Registered

No. Trademark Owner registration Class Number Expiry Date
1. Shenzhen The PRC 9 13912550 January 20, 2027

Futu
2. Shenzhen The PRC 9 13913472 March 6, 2025
Futu
Futu
4. Shenzhen The PRC 36 13912631 April 13, 2025
Futu
5. Shenzhen The PRC 36 13913525 February 27,
Futu 2025
Futu 2025
Futu
Futu
Futu
10. Shenzhen The PRC 9 17352963 September 13,
Futu 2026
Futu 2026
Futu 2026
Futu 2026
Futu 2026
Futu 2026
Futu 2026
Futu 2026
– IV-8 –


Futu 2026
Futu
20. Shenzhen The PRC 36 18044801 November 20,
Futu 2026
Futu 2026
Futu
Futu
Futu
Futu
Futu 2027
Futu
Futu
Futu 2027
Futu 2027
Futu
Futu 2027
Futu
Futu
35. Shenzhen The PRC 38 23379223 June 13, 2028
Futu
Futu
Futu
– IV-9 –


Futu
Futu
40. Shenzhen The PRC 9 25551228A September 13,
Futu 2028
Futu 2028
Futu 2028
Futu 2028

Futu 2028

Futu 2028

Futu 2028
Futu 2028
Futu 2028
Futu 2028
Futu 2028
51. Shenzhen The PRC 9 26543368 October 6, 2028
Futu
Futu 2028
Futu
Futu 2028
55. Shenzhen The PRC 36 26543341 February 6, 2030
Futu
Futu 2028
– IV-10 –


Futu 2028
Futu 2028
Futu 2028
Futu 2028
Futu 2028
Futu 2028
Futu 2028
Futu 2028
Futu 2028
Futu 2028
67. Shenzhen The PRC 42 26543341 February 6, 2030
Futu
Futu
Futu 2029

Futu
Futu
Futu
Futu
Futu
Futu
– IV-11 –


Futu
Futu
Futu
Futu
Futu
Futu
Futu
Futu
84. Shenzhen The PRC 35 30676330 May 6, 2030
Futu
Futu
Futu
Futu 2029
Futu 2029
Futu 2029
Futu 2029
Futu 2029
Futu
Futu
Futu
Futu
– IV-12 –


Futu
Futu
Futu
Futu
Futu
Futu
102. Shenzhen The PRC 42 37904378 December 27,
Futu 2029
Futu
Futu
Futu 2030
Futu
Futu

Futu
Futu 2030
Futu

Futu

Futu
Futu
– IV-13 –


Futu
Futu
Futu
Futu
118. Shenzhen The PRC 9 44113546 October 13,
Futu 2030
119. Shenzhen The PRC 36 44114797 October 13,
Futu 2030
Futu
Futu 2030
Futu 2030
Futu 2030
Futu
Futu 2030
Futu
Futu
Futu
Futu
Futu
131. Shenzhen The HK 9, 36, 42 302873818 January 20, 2024
Futu
Futu
Futu
– IV-14 –

134. Shenzhen The HK 9, 36, 42 303138471 September 17,

Futu 2024
135. Shenzhen The HK 9, 36, 42 303138462 September 17,
Futu 2024
136. Shenzhen The HK 9, 35, 36, 42 303436821 June 9, 2025
Futu
137. Shenzhen The HK 9, 36, 42 303479798 July 21, 2025
Futu
Futu
Futu
140. Shenzhen The HK 36, 42 303568726 October 18,
Futu 2025
141. Shenzhen The HK 9, 36, 42 303803599 June 12, 2026
Futu
142. Shenzhen The HK 9, 36, 38, 42 303803625 June 12, 2026
Futu
143. Shenzhen The HK 9, 12, 25, 28 303840714 July 17, 2026
Futu
Futu
Futu
Futu
147. Shenzhen The HK 9, 36, 42 303949930 November 1,
Futu 2026
148. Shenzhen The HK 9, 36, 42 304242870 August 15, 2027
Futu
Futu
Futu
151. Shenzhen The HK 9, 36, 42 304297429 October 10,
Futu 2027
Futu 2027
Futu 2027
– IV-15 –


Futu 2027
Futu 2027
Futu 2027
Futu 2027
Futu 2027
Futu 2027
Futu 2027
Futu 2027
Futu 2027
Futu 2027
164. Shenzhen The HK 9 304678309 September 23,
Futu 2028
Futu 2028
Futu 2028
Futu 2028
Futu 2028
Futu 2028
Futu 2028
Futu 2028
Futu 2028
Futu 2028
– IV-16 –


Futu 2028
Futu 2028
Futu 2028
177. Shenzhen The HK 35 304864843 March 20, 2029
Futu
Futu
Futu
Futu
Futu
182. Shenzhen The HK 9, 16, 35, 36, 304899098 April 22, 2029
Futu 42
183. Shenzhen The HK 9, 35, 36, 42 304910463 April 29, 2029
Futu
184. Shenzhen The HK 9, 35, 36, 42 304910454 April 29, 2029
Futu
185. Shenzhen The HK 9, 35, 36, 41, 304918942 May 8, 2029
Futu 42
Futu 42
Futu 42
Futu 42
Futu 42
Futu 2029
Futu 2029
Futu
193. Shenzhen The HK 35, 36 305261373 April 29, 2030
Futu
– IV-17 –

194. Shenzhen The HK 35 305265784 May 6, 2030

Futu
Futu
Futu
197. Shenzhen The HK 41 305311638 June 22, 2030
Futu
198. Shenzhen The HK 41 305509062 January 17, 2031
Futu
199. Shenzhen The HK 9, 42 305624307 May 12, 2031
Futu
Futu
Futu
202. Shenzhen The HK 38, 41 305673745 June 29, 2031
Futu
Futu
204. Shenzhen The HK 9, 35, 38, 41, 305673763 June 29, 2031
Futu 42
Futu
Futu
Futu
Futu
Futu
Futu
Futu
Futu
Futu
– IV-18 –


Futu
215. Shenzhen The US 9, 36, 42 5371410 January 2, 2028
Futu
Futu
Futu
218. Shenzhen The US 42 6108527 July 21, 2030
Futu
219. Shenzhen The US 41 6075711 June 9, 2030
Futu
Futu
Futu
Futu
Futu
Futu
225. Shenzhen The US 9 6201187 November 17,
Futu 2030
226. Shenzhen The US 36 6190595 November 3,
Futu 2030
227. Shenzhen The US 9 6365634 May 25, 2031
Futu
Futu
Futu
Futu

Futu
232. Shenzhen The US 35 6421245 July 13, 2031
Futu
233. Shenzhen The US 9 6620506 January 17, 2032
Futu
– IV-19 –

234. Shenzhen Singapore 9 40202018183S September 1,

Futu 2030
235. Shenzhen Singapore 35 40202018182R September 1,
Futu 2030
236. Shenzhen Singapore 36 40202018194X September 1,
Futu 2030
237. Shenzhen Singapore 35 40202018191R September 1,
Futu 2030
238. Shenzhen Singapore 9 40202018190T September 1,
Futu 2030
239. Shenzhen Singapore 35 40202018184P September 1,
Futu 2030
240. Shenzhen Singapore 36 40202018186U September 1,
Futu 2030
241. Shenzhen Singapore 36 40202018189X September 1,
Futu 2030
242. Shenzhen Singapore 9 40202018187Y September 1,
Futu 2030
243. Shenzhen Singapore 35 40202018188W September 1,
Futu 2030
244. Shenzhen Singapore 36 40202018193V September 1,
Futu 2030
245. Shenzhen Singapore 35 40202018185T September 1,
Futu 2030
246. Shenzhen Singapore 9 40202018192P September 1,
Futu 2030
247. Shenzhen Singapore 36 40202022137X October 23,
Futu 2030
248. Shenzhen Singapore 9 40202022134Q October 23,
Futu 2030
249. Shenzhen Singapore 35 40202022136T October 23,
Futu 2030
250. Shenzhen Singapore 9 40202022135U October 23,
Futu 2030
251. Shenzhen Singapore 35 40202022138V October 23,
Futu 2030
252. Shenzhen Singapore 36 40202022139S October 23,
Futu 2030
253. Shenzhen Singapore 9 40202103271W February 8, 2031
Futu
– IV-20 –

254. Shenzhen Singapore 9 40202112864Q May 30, 2031

Futu
255. Shenzhen Singapore 35 40202112865U May 30, 2031
Futu
256. Shenzhen Singapore 36 40202112867X May 30, 2031
Futu
257. Shenzhen Singapore 38 40202112868V May 30, 2031
Futu
258. Shenzhen Singapore 41 40202112870Q May 30, 2031
Futu
259. Shenzhen Singapore 42 40202112871W May 30, 2031
Futu
260. Shenzhen Singapore 9 40202112872U May 30, 2031
Futu
261. Shenzhen Singapore 35 40202112873P May 30, 2031
Futu
262. Shenzhen Singapore 36 40202112874Y May 30, 2031
Futu
263. Shenzhen Singapore 38 40202112875X May 30, 2031
Futu
264. Shenzhen Singapore 41 40202112876S May 30, 2031
Futu
265. Shenzhen Singapore 42 40202112878R May 30, 2031
Futu
266. Shenzhen Australia 9 2208507 September 6,
Futu 2031
Futu 2031
Futu 2031
Futu 2031
270 Shenzhen Australia 41 2208513 September 6,
Futu 2031
Futu 2031
– IV-21 –
(b) Patents
As of the Latest Practicable Date, we had owned the following patents which we
consider to be or may be material in relation to our Group’s business:
Registration/ Date of
application Type of registration/
No. Patent name Patent Owner number application application
1. 用於客戶端的操作方式 Shenzhen Futu 2014103501098 Invention Patent July 23, 2014

的推送方法和通訊系
統
2. 客戶端的布局設定與服 Futu Network 2014103632107 Invention Patent July 29, 2014
務器同步存儲的方法 Technology
及其系統 (Shenzhen)
Co., Ltd.
3. 一種基於視頻識別的身 Shenzhen Futu 2014105957565 Invention Patent October 30, 2014
份認證方法及其系統
4. 基於客戶端的多種類型 Shenzhen Futu 2014104892582 Invention Patent September 24, 2014
標籤頁顯示方法及其
系統
5. 基於Canvas和 Shenzhen Futu 2016101692687 Invention Patent March 23, 2016
WebWorker的像素差
逐幀動畫的實現方法
6. 一種向畫布添加二維界 Shenzhen Futu 2017113952849 Invention Patent December 21, 2017
面組件時的建議位置
生成方法
7. 一種用於移動終端的直 Shenzhen Futu 2018100546358 Invention Patent January 19, 2018
播視頻浮窗播放方法
8. 帶股票應用界面的電腦 Shenzhen Futu 2014305519773 Design Patent December 25, 2014
9. 帶股票應用界面的電腦 Shenzhen Futu 2016305255276 Design Patent October 26, 2016
10. 帶圖形用戶界面的電腦 Shenzhen Futu 2017303768671 Design Patent August 16, 2017
(證券軟件自定義界
面)
11. 帶圖形用戶界面的電腦 Shenzhen Futu 2017304256577 Design Patent September 8, 2017
(證券軟件截屏及編
輯)
12. 帶圖形用戶界面的手機 Shenzhen Futu 2017305505026 Design Patent November 9, 2017
(個股行情快照卡片編
輯界面)
(指數條插件)
14. 帶股票應用界面的電腦 Shenzhen Futu 2017305772972 Design Patent November 22, 2017
(更新)
– IV-22 –
(美股期權鏈)
(富途種子)
(牛牛動態刷新加載)
18. 帶股票應用界面的手機 Shenzhen Futu 2017306782420 Design Patent December 28, 2017
(盤前盤後分時圖)
19. 帶股票應用界面的手機 Shenzhen Futu 2018300029598 Design Patent January 4, 2018
(股票成交統計)
(聚合排序)
(滬深港通行情頁)
22. 帶圖形用戶界面的手機 Shenzhen Futu 2018300147698 Design Patent January 12, 2018
(美股盤前盤後價)
23. 帶圖形用戶界面的電腦 Shenzhen Futu 2018300878886 Design Patent March 9, 2018
(證券軟件開通子賬
戶)
(證券軟件的賬戶管
理)
25. 帶圖形用戶界面的手機 Shenzhen Futu 201830088147X Design Patent March 9, 2018
(自選股票列表標識及
快捷操作)
(證券軟件授權賬戶)
27. 帶圖形用戶界面的手機 Shenzhen Futu 2018301819283 Design Patent April 27, 2018
(港股ADR行情)
28. 帶圖形用戶界面的手機 Shenzhen Futu 2018302090694 Design Patent May 9, 2018
(美股盤前盤後數據)
29. 帶圖形用戶界面的手機 Shenzhen Futu 201830209082X Design Patent May 9, 2018
(交易下單頁)
30. 手機的圖形用戶界面(牛 Shenzhen Futu 2018302241976 Design Patent May 16, 2018
牛圈個人主頁)
牛圈通知)
牛圈帖子)
– IV-23 –
牛圈動態)
34. 帶圖形用戶界面的電腦 Shenzhen Futu 2018303381663 Design Patent June 28, 2018
(大市成交統計)
(證券軟件自選列表)
(滬深港通熱點)
(證券軟件氣泡圖)
(牛熊證街貨分布)
39. 帶圖形用戶界面的手機 Shenzhen Futu 2018304067279 Design Patent July 26, 2018
(發表工具欄)
(股票報價條圖標)
(模塊排序)
(淨買入賣出經紀商)
43. 帶圖形用戶界面的手機 Shenzhen Futu 2018305002290 Design Patent September 6, 2018
(多類型股票K線圖)
(股票走勢圖多副圖)
(成交統計逐筆成交)
(交易數量快捷選擇)
(輪證大市成交統計)
48. 帶圖形用戶界面的電腦 Shenzhen Futu 201930151844X Design Patent April 4, 2019
49. 用於手機的圖形用戶界 Shenzhen Futu 2019301518473 Design Patent April 4, 2019
面(股票形態解讀)
50. 用於電腦的圖形用戶界 Shenzhen Futu 2019301518488 Design Patent April 4, 2019
面
面(智能盯盤)
面(股票指標解讀)
– IV-24 –

面
面
55. 用於設備的圖形用戶界 Shenzhen Futu 2019301898190 Design Patent April 23, 2019
面(技術指標解讀)
面(籌碼分布)
面(智能盯盤)
面(股票提醒)
59. 用於手機的圖形用戶界 Shenzhen Futu 2019302280481 Design Patent May 10, 2019
面(卡券中心)
(到價提醒)
(走勢圖籌碼分布)
62. 帶圖形用戶界面的手機 Shenzhen Futu 2019304178539 Design Patent August 2, 2019
(籌碼分布)
63. 用於電腦顯示器的圖形 Shenzhen Futu 2019304178558 Design Patent August 2, 2019
用戶界面
64. 用於設備的圖形用戶界 Shenzhen Futu 2019304178666 Design Patent August 2, 2019
面(輿情指數)
65. 用於手機的圖形用戶界 Shenzhen Futu 2019304178670 Design Patent August 2, 2019
面(深度擺盤)
66. 帶有反映用戶交易行為 Shenzhen Futu 2019304391578 Design Patent August 13, 2019
圖形用戶界面的手機
67. 帶股票篩選動態圖形用 Shenzhen Futu 2019304395583 Design Patent August 13, 2019
戶界面的電腦
(條件交易)
(批量導入自選股)
70. 帶資訊展示圖形用戶界 Shenzhen Futu 2019305455844 Design Patent October 8, 2019
面的手機
71. 帶圖形用戶界面的手機 Shenzhen Futu 2019305983718 Design Patent October 31, 2019
(成交統計)
– IV-25 –
72. 帶有討論展示股票信息 Shenzhen Futu 2019306067808 Design Patent November 5, 2019

圖形用戶界面的顯示
屏幕面板
73. 帶公司估值動態圖形用 Shenzhen Futu 2019306219139 Design Patent November 12, 2019
戶界面的顯示屏幕面
板
74. 帶股票分析動態圖形用 Shenzhen Futu 2019306363924 Design Patent November 19, 2019
板
75. 帶畫線管理動態圖形用 Shenzhen Futu 2019306476119 Design Patent November 22, 2019
板
76. 帶圖表管理動態圖形用 Shenzhen Futu 2019307205398 Design Patent December 23, 2019
板
77. 帶交易記錄動態圖形用 Shenzhen Futu 2019307211825 Design Patent December 23, 2019
板
78. 帶估值分析動態圖形用 Shenzhen Futu 2020300017174 Design Patent January 2, 2020
板
79. 帶期貨交易動態圖形用 Shenzhen Futu 2020300313017 Design Patent January 16, 2020
板
80. 帶多股同列顯示動態圖 Shenzhen Futu 2020300494027 Design Patent February 11, 2020
形用戶界面的顯示面
板
81. 帶直播間查看圖形用戶 Shenzhen Futu 202030168802X Design Patent April 22, 2020
界面的顯示屏幕面板
82. 帶預約和提問圖形用戶 Shenzhen Futu 2020301757176 Design Patent April 24, 2020
界面的顯示屏幕面板
83. 顯示屏幕面板的交易統 Shenzhen Futu 2020301975378 Design Patent May 6, 2020
計圖形用戶界面
84. 顯示屏幕面板的盈虧判 Shenzhen Futu 202030197540X Design Patent May 6, 2020
斷圖形用戶界面
85. 顯示屏幕面板的持倉統 Shenzhen Futu 2020301981595 Design Patent May 6, 2020
計圖形用戶界面
86. 顯示屏幕面板的期貨下 Shenzhen Futu 2020302347342 Design Patent May 20, 2020
單圖形用戶界面
– IV-26 –
87. 顯示屏幕面板的社交窗 Shenzhen Futu 2020302424194 Design Patent May 22, 2020
口圖形用戶界面
88. 顯示屏幕面板的榜單排 Shenzhen Futu 2020302434020 Design Patent May 22, 2020
行圖形用戶界面
89. 顯示屏幕面板的期權查 Shenzhen Futu 2020303280744 Design Patent June 23, 2020
看圖形用戶界面
90. 顯示屏幕面板的自選列 Shenzhen Futu 2020303324047 Design Patent June 24, 2020
表操作圖形用戶界面
91. 顯示屏幕面板的證券信 Shenzhen Futu 2020303360946 Design Patent June 28, 2020
息查看圖形用戶界面
92. 顯示屏幕面板的行情對 Shenzhen Futu 202030336523X Design Patent June 28, 2020
比圖形用戶界面
93. 顯示屏幕面板的Tick圖 Shenzhen Futu 2020304916259 Design Patent August 25, 2020
查看圖形用戶界面
94. 帶筆記生成圖形用戶界 Shenzhen Futu 2020306796209 Design Patent November 10, 2020
面的顯示屏幕面板
95. 帶行情查看圖形用戶界 Shenzhen Futu 2020307220899 Design Patent November 26, 2020
96. 帶資訊播報圖形用戶界 Shenzhen Futu 2020307220969 Design Patent November 26, 2020
97. 一種基於視頻識別的身 Shenzhen Futu 15107862.3 Invention Patent November 24, 2014
份認證方法及其系統 (Hong Kong)
98. 基於Canvas和 Shenzhen Futu 16110076.8 Invention Patent August 24, 2016
WebWorker的像素差 (Hong Kong)
逐幀動畫的實現方法
99. 提醒任務的觸發方法、 Shenzhen Futu 2019113116827 Invention Patent December 18, 2019
系統、終端設備及存
儲介質
100. 一種用於股票交易系統 Shenzhen Futu 2018108360395 Invention Patent July 26, 2018
的財報信息展示方法
101. 一種社區內容智能排序 Shenzhen Futu 2018100880279 Invention Patent January 30, 2018
估算方法
102. 一種用於可變寬度軟件 Shenzhen Futu 2018100535781 Invention Patent January 19, 2018
界面的按鈕控件自適
應布設方法
103. 一種基於股票走勢的客 Shenzhen Futu 2018100316534 Invention Patent January 12, 2018
戶平台
104. 一種用於社區內容熱度 Shenzhen Futu 2018100897500 Invention Patent January 30, 2018
排序的估算方法
– IV-27 –
105. 一種基於人體生物特徵 Shenzhen Futu 2018108982641 Invention Patent August 8, 2018

信息進行身份認證的
交易方法
106. 截屏圖片的獲取方法、 Shenzhen Futu 2019111513920 Invention Patent November 21, 2019
裝置、終端設備及存
儲介質
107. 一種IM消息傳輸方法及 Shenzhen Futu 2019111146847 Invention Patent November 14, 2019
終端
108. 一種圖表的參考圖編輯 Shenzhen Futu 2020102090120 Invention Patent March 23, 2020
方法、設備和計算機
可讀存儲介質
109. 目標對象消息發送裝置 Shenzhen Futu 2020102540391 Invention Patent April 1, 2020
及方法
(c) Copyrights
As at the Latest Practicable Date, we had registered the following copyrights which
we consider to be or may be material in relation to our Group’s business:
Registration/ Date of initial

application publication/
No. Copyright Owner number application
1. ь 富途牛牛_港股美股實時行情與交易一體 Shenzhen Futu 2014SR166250 November 2, 2014

化的股票行情交易軟件
2. ь 富途牛牛_港股美股實時行情與交易的股 Shenzhen Futu 2017SR612984 November 8, 2017
票行情交易軟件(Android版)
3. ь 富途牛牛_港股美股實時行情與交易的股 Shenzhen Futu 2017SR615640 November 9, 2017
票行情交易軟件(IOS版)
4. ь 交易賬戶開戶軟件V1.0 Futu Network 2019SR0790982 July 30, 2019
Technology
(Shenzhen) Co., Ltd.
(“Futu Network”)
5. ь 富途交易密碼保護軟件(Android)V1.0 Futu Network 2019SR0790653 July 30, 2019
6. ь ESOP企業員工激勵系統V1.0 Futu Network 2019SR0790662 July 30, 2019
7. ь 賬戶風險狀態系統V1.0 Futu Network 2019SR0791388 July 30, 2019
8. ь 開戶見證軟件(Android)V1.0 Futu Network 2019SR0791355 July 30, 2019
9. ь 理財產品購買軟件V1.0 Futu Network 2019SR0791351 July 30, 2019
10. 碎股交易系統V1.0 Futu Network 2019SR0791586 July 30, 2019
11. 富途交易密碼保護軟件(iOS)V1.0 Futu Network 2019SR0790701 July 30, 2019
– IV-28 –
Registration/ Date of initial

application publication/
No. Copyright Owner number application
12. ESOP數據管理系統V1.0 Futu Network 2019SR0846881 August 14, 2019

13. 開戶見證軟件(iOS)V1.0 Futu Network 2019SR0855416 August 16, 2019
14. moomoo證券交易軟件 Shenzhen Futu 2019SR1275212 December 4, 2019
15. 富途A股通軟件 Shenzhen Futu 2020SR0200520 March 2, 2020
16. 富途牛牛美股LV2深度擺盤軟件系統 Shenzhen Futu 2020SR0214975 March 5, 2020
17. ESOP在線簽署系統 Shenzhen Futu 2020SR0250081 March 13, 2020
18. 企業信息展示與自助投訴軟件 Shenzhen Futu 2020SR0638632 June 17, 2020
19. 富途安逸ESOP長期激勵員工端窗口期查 Shenzhen Futu 2020SR0638640 June 17, 2020
詢軟件
20. 富途暗盤交易系統 Shenzhen Futu 2020SR0735014 July 7, 2020
21. 期貨波動率分析軟件 Futu Network 2020SR0735024 July 7, 2020
22. 富途安逸ESOP權限管理系統 Futu Network 2020SR0735204 July 7, 2020
23. 富途牛牛社交個性化推薦軟件 Futu Network 2020SR1079615 September 10, 2020
24. 象象形象2D系列 Shenzhen Futu 國作登字-2021- January 19, 2021
F-01242383
25. 象象形象 Shenzhen Futu 國作登字-2021- January 19, 2021
F-01242384
(d) Domain names
As at the Latest Practicable Date, we owned the following domain names which we
consider to be or may be material to our business:
Expiry date
No. Domain name Registered owner (dd/mm/yyyy)
1. futuholdings.com Futu Holdings Limited November 25, 2027

2. futuhk.com Futu Securities International March 1, 2027
(Hong Kong) Limited
3. moomoo.com Futu Holdings Limited November 30, 2027
4. fututrade.com Moomoo Financial Inc. May 2, 2028
5. futusg.com Moomoo Financial Singapore May 24, 2027
6. futuie.com Futu Network Technology Limited May 3, 2029
7. futuniuniu.com Shenzhen Futu December 5, 2027
8. futunn.com Shenzhen Futu December 5, 2027
– IV-29 –
C. FURTHER INFORMATION ABOUT OUR DIRECTORS
1. Particulars of Directors’ Service Contracts and Appointment Letters
(a) Executive Directors
Each of our executive Directors has entered into a service contract with our
Company for a term of three years.
(b) Non-executive Directors
Each of our non-executive Directors has entered into a letter of appointment with
our Company for a term of three years.
(c) Independent Non-executive Directors
Each of our independent non-executive Directors has entered into a letter of

appointment with our Company for a term of three years.
Except as aforesaid, none of our Directors has or is proposed to have a service

contract with any member of our Group other than contracts expiring or determinable by
the employer within one year without the payment of compensation (other than statutory
compensation).
2. Remuneration of Directors
For details of the Directors’ remuneration, see “Directors and Senior Management —
Directors’ Remuneration.“
3. Disclosure of Interests
(a) Interests and short positions of our Directors in the share capital of our Company
and its associated corporations following completion of the Introduction
Immediately following completion of the Introduction (assuming no further Shares

are issued under the Share Incentive Plans between the Latest Practicable Date and the
Listing Date), the interests and/or short positions (as applicable) of our Directors and
chief executives in the Shares, underlying Shares and debentures of our Company and its
associated corporations, within the meaning of Part XV of the SFO, which will have to
be notified to our Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part
XV of the SFO (including interests and/or short positions (as applicable) which he/she is
taken or deemed to have under such provisions of the SFO), or which will be required,
pursuant to section 352 of the SFO, tobe recorded in the register referred to therein, or
– IV-30 –
which will be required to be notified to our Company and the Stock Exchange pursuant
to the Model Code for Securities Transactions by Directors of Listed Companies
contained in the Listing Rules, will be as follows:
Interest in Shares and Underlying Shares of our Company
Approximate
percentage of
interest in each
class of Shares
of our Company
immediately
Name of director/ Number and class after the
chief executive Nature of interest of securities Introduction (1)
Mr. Li (2) ььььььььььь Interest in controlled 164,000,000 Class 18.76%

corporations/founder A Ordinary
of a discretionary Shares (2)
trust/beneficiary of
a trust
Beneficial interest 86,568 Class A 0.01%
Ordinary Shares
Interest in controlled 239,750,000 100.00%
corporations/founder Class B
of a discretionary Ordinary
trust/beneficiary of Shares (2)
a trust
Nineway Jie Zhang ьь Interest in controlled 3,336,000 Class A 0.38%
corporations/founder Ordinary
of a discretionary Shares (3)
trust/beneficiary of
a trust
Shan Lu ььььььььььь Beneficial interest 1,442,720 Class A 0.17%
Ordinary Shares
Yijiang Wang ььььььь Beneficial interest 760 Class A 0.00%
Ordinary Shares
Notes:
(1) The calculations are made assuming no further Shares are issued under the Share Incentive Plans
between the Latest Practicable Date and the Listing Date. This table also excludes Class A Ordinary
Shares issued to our depositary bank (as of the Latest Practicable Date) for bulk issuance of ADS
reserved for future issuance upon the exercise or vesting of awards granted under the Share Incentive
Plans.
– IV-31 –
(2) 202,812,500 Class B Ordinary Shares and 100,000,000 Class A Ordinary Shares (of which 50,000,000
Class A Ordinary Shares are in the form of ADSs) are held by Lera Ultimate Limited, a BVI business
company, and 36,937,500 Class B Ordinary Shares and 64,000,000 Class A Ordinary Shares are held by
Lera Infinity Limited, a BVI business company. Lera Ultimate Limited is ultimately owned by Lera
Direction Plus Trust and Lera Infinity Limited is ultimately owned by Lera Target Trust. Lera Direction
Plus Trust and Lera Target Trust were established by Mr. Li (as the settlor) for the benefit of Mr. Li and
his family. Mr. Li has the sole power to direct the retention or disposal of, and the exercise of any voting
and other rights attached to the shares held by Lera Ultimate Limited and Lera Infinity Limited in our
Company. Mr. Li is deemed to be interested in the Shares held by Lera Ultimate Limited and Lera
Infinity Limited.
(3) 3,336,000 Class A Ordinary Shares are held by Diamond Orbit Investments Limited, a BVI business
company ultimately owned by Nineway Family Trust. Mr. Nineway Jie Zhang (“Mr. Zhang”) is the
settlor of Nineway Family Trust. Nineway Family Trust was established by Mr. Zhang (as the settlor)
for the benefit of Mr. Zhang and his family. Mr. Zhang has the power to direct the retention or disposal
of, and the exercise of any voting and other rights attached to the shares held by Diamond Orbit
Investments Limited in our Company. Mr. Zhang is deemed to be interested in the Shares held by
Diamond Orbit Investments Limited.
(b) Interests and short positions discloseable under Divisions 2 and 3 of Part XV of
the SFO
For information on the persons who will, immediately following the completion of
the Introduction and taking no account of any Shares which may be issued pursuant to the
exercise of the options granted under the Share Incentive Plans between the Latest
Practicable Date and the Listing Date, having or be deemed or taken to have beneficial
interests or short position in our Shares or underlying Shares which would fall to be
disclosed to our Company under the provisions of 2 and 3 of Part XV of the SFO, or
directly or indirectly be interested in 10% or more of the nominal value of any class of
share capital carrying rights to vote in all circumstances at general meetings of any other
member of our Group, please see the section headed “Substantial Shareholders.”
4. Disclaimers
Save as disclosed in this document:
(a) none of the Directors or the experts named in the section headed “— E. Other
Information — 4. Consents of Experts” below has any direct or indirect interest in
the promotion of, or in any assets which have been, within the two years
immediately preceding the date of this document, acquired or disposed of by or
leased to any member of the Group, or are proposed to be acquired or disposed of
by or leased to any member of the Group;
(b) no commissions, discounts, brokerages or other special terms have been granted in
connection with the issue or sale of any Shares in or debentures of the Company
within the two years ended on the date of this document;
– IV-32 –
(c) none of the Directors is materially interested in any contract or arrangement

subsisting at the date of this document which is significant in relation to the business
of the Group taken as a whole;
(d) taking no account of any Shares which may be allotted and issued pursuant to the
Share Incentive Plans, so far as is known to any Director or chief executive of the
Company, no other person (other than a Director or chief executive of the Company)
will, immediately following completion of the Introduction, have interests or short
positions in the Shares and underlying Shares which would fall to be disclosed to the
Company and the Stock Exchange under the provisions of Divisions 2 and 3 of Part
XV of the SFO or (not being a member of the Group), be interested, directly or
indirectly, in 10% or more of the nominal value of any class of share capital carrying
rights to vote in all circumstances at general meetings of any member of the Group;
and
(e) none of the Directors or chief executive of the Company has any interests or short
positions in the Shares, underlying Shares or debentures of the Company or its
associated corporations (within the meaning of Part XV of the SFO) which will have
to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and
8 of Part XV of the SFO (including interests and short positions which he is taken
or deemed to have under such provisions of the SFO) or which will be required,
pursuant to section 352 of the SFO, to be entered into the register referred to therein,
or will be required, pursuant to the Model Code for Securities Transaction by
Directors of Listed Issuers, to be notified to the Company and the Stock Exchange
once the Shares are listed thereon.
D. SHARE INCENTIVE PLANS
1. 2014 Plan
Summary
The Company will not issue any options under the 2014 Plan, which was approved
by the Board in October 2014 and amended and reinstated on November 30, 2018, until
the 2014 Plan is amended to comply with Chapter 17 of the Listing Rules. The Board is
permitted to make the necessary amendments to the 2014 Plan under the terms of such
plan to comply with Chapter 17 of the Listing Rules and, have approved such amendments
to take effect immediately upon the Listing. The principal terms of the 2014 Plan, as
amended, are as described below.
We have applied to the Stock Exchange for, a waiver from strict compliance with the
disclosure requirements under Rule 17.02(1)(b) of the Listing Rules and paragraph 27 of
Appendix 1A to the Listing Rules. See “Waivers — Waiver in relation to the 2014 Plan
and 2019 Plan” in this document for more information. We have also applied to the Stock
Exchange for a waiver from strict compliance with Note (1) to Rule 17.03(9) of the
– IV-33 –
Listing Rules, so that the Company may, after the Listing, continue to grant options with
exercise prices based on the market price of the ADSs as traded on the Nasdaq instead of
the closing price of the Class A Ordinary Shares as stated in the Stock Exchange’s daily
quotation sheet. See “Waivers — Exercise price of options to be granted pursuant to the
2014 Plan and the 2019 Plan after the Listing” in this document for more information.
(a) Purpose
The purpose of the 2014 Plan is to attract and retain the best available personnel,
provide additional incentives to employees, directors and consultants and promote the
success of our business.
(b) Who may join
We may grant awards to, among others, our officers, employees, directors and
consultants of our company.
(c) Maximum number of Class A Ordinary Shares
The maximum number of Ordinary Shares that may be delivered pursuant to Awards
granted under the 2014 Plan will not exceed 135,032,132 shares in the aggregate. As of
the Latest Practicable Date, the Company may issue awards representing a maximum
number of 15,204,212 underlying Class A Ordinary Shares under the 2014 Plan,
comprising (i) 10,386,058 underlying Class A Ordinary Shares of outstanding options
granted but not yet exercised; and (ii) 4,818,154 underlying Class A Ordinary Shares
which may be further issued under the 2014 Plan.
(d) Administration
Our Board or a committee of one or more members appointed by our Board or

another committee within its delegated authority by our Board will administer the 2014
Plan. Subject to the terms of the 2014 Plan and in the case of the committee, the specific
duties delegated by our Board to the committee, the plan administrator has the authority
to determine the participants to receive awards, the type and number of awards to be
granted to each participant, and the terms and conditions of each award, among others.
(e) Type of Awards
The 2014 Plan permits the awards of options approved by the plan administrator.
– IV-34 –
(f) Award agreement
Awards granted under the 2014 Plan are evidenced by an award agreement that sets
forth terms, conditions and limitations for each award, which may include the term of the
award, the provisions applicable in the event that the grantee’s employment or service
terminates, and our authority to unilaterally or bilaterally amend, modify, suspend, cancel
or rescind the award.
(g) Vesting schedule
In general, the plan administrator determines the vesting schedule, which is

specified in the relevant award agreement.
(h) Exercise of options
The plan administrator determines the exercise price for each award, which is stated
in the award agreement. The vested portion of option will expire if not exercised prior to
the time as the plan administrator determines at the time of its grant. However, the
maximum exercisable term is ten years from the date of a grant.
(i) Transfer restrictions
Awards may not be transferred in any manner by the participant other than in
accordance with the exceptions provided in the 2014 Plan, such as transfers by will or the
laws of descent and distribution, or as provided in the relevant award agreement or
otherwise determined by the plan administrator.
(j) Termination and amendment
Unless terminated earlier, the 2014 Plan has a term of ten years. In general, the plan
administrator determines the vesting schedule, which is specified in the relevant award
agreement.
Outstanding options granted
For the detailed information regarding outstanding options granted under the 2014
Plan, please see the sub-section headed “— Outstanding options and RSUs granted under
the 2014 Plan and the 2019 Plan” below.
– IV-35 –
2. The 2019 Plan
Summary
The Company will not issue any options under the 2019 Plan, which was approved
by the Board in December 2018, until the 2019 Plan is amended to comply with Chapter
17 of the Listing Rules. The Board is permitted to make the necessary amendments to the
2019 Plan under the terms of such plan to comply with Chapter 17 of the Listing Rules
and have approved such amendments to take effect immediately upon the Listing. The
principal terms of the 2019 Plan, as amended, are as described below.
We have applied to the Stock Exchange and the SFC, respectively for, a waiver from
strict compliance with the disclosure requirements under Rule 17.02(1)(b) of the Listing
Rules and paragraph 27 of Appendix 1A to the Listing Rules. See “Waivers — Waiver in
relation to the 2014 Plan and 2019 Plan” in this document for more information. We have
also applied to the Stock Exchange for a waiver from strict compliance with Note (1) to
Rule 17.03(9) of the Listing Rules, so that the Company may, after the Listing, continue
to grant options with exercise prices based on the market price of the ADSs as traded on
the Nasdaq instead of the closing price of the Class A Ordinary Shares as stated in the
Stock Exchange’s daily quotation sheet. See the sub-section headed “Waivers — Exercise
price of options to be granted pursuant to the 2014 Plan and the 2019 Plan after the
Listing” in this document for more information.
(a) Purpose
The purpose of the 2019 Plan is to attract and retain the best available personnel,
provide additional incentives to employees, directors and consultants and promote the
success of our business.
(b) Who may join
We may grant awards to our employees, directors and consultants of our company.
However, we may grant options that are intended to qualify as incentive share options
only to our employees and employees of our parent companies and subsidiaries.
(c) Maximum number of Class A Ordinary Shares
The 2019 Plan contained an “evergreen” feature which provided that the aggregate
number of Shares which may be issued pursuant to all awards is a number of up to 2%
of the total number of shares issued and outstanding on September 29, 2019 as determined
by the Board, plus an annual increase on each September 30 during the term of the 2019
Plan commencing on September 30, 2020, by an amount determined by the Board;
provided, however, that (i) the total number of Shares increased in each year shall not be
more than 2% of the total number of shares issued and outstanding on September 29 of
the same year and (ii) the aggregate number of shares initially reserved and subsequently
– IV-36 –
increased during the term of the 2019 Plan shall not be more than 8% of the total number
of shares issued and outstanding on September 29 immediately preceding the most recent
increase (the “Evergreen Feature”). The Board approved the amendment of the relevant
term of the 2019 Plan on December 21, 2022 such that the Evergreen Feature is removed
with effect from the Listing.
The Board further approved that, upon the removal of the Evergreen Feature, the
maximum aggregate number of Shares which may be issued pursuant to all awards
(including options) under the 2019 Plan shall be 86,662,357 Class A Ordinary Shares,
which was initially reserved and subsequently increased by the Board in accordance with
the Evergreen Feature with reference to approximately 2% of the number of issued and
outstanding Shares as of September 29, 2019, 2020, 2021 and 2022, respectively, and
represented approximately 7.78% of the issued share capital of the Company as of the
date of Listing (assuming no further Shares are issued under the Share Incentive Plans
between the Latest Practicable Date and the Listing Date). Notwithstanding such
maximum aggregate cap, the total number of Shares which may be issued in respect of
all awards and options that may be granted under the 2019 Plan and any other share option
or award scheme involving the issue or grant of options or award over Class A Ordinary
Shares shall not in aggregate exceed 10% of the issued share capital of the Company as
of the date of Listing, unless otherwise permitted by the applicable laws (including the
Listing Rules) or the Company obtains the approval of its shareholders to refresh such
scheme mandate limit in accordance with the relevant terms of the 2019 Plan. Based on
the above and assuming no further Shares are issued under the Share Incentive Plans
between the Latest Practicable Date and the Listing Date, 85,560,949 Class A Ordinary
Shares may be further issued under the 2019 Plan.
(d) Administration
Our Board or a committee designated by the Board will act as the plan administrator.
The plan administrator will determine the participants who are to receive awards, the type
or types of awards to be granted, the number of awards to be granted, and the terms and
conditions of each award grant.
(e) Type of Awards
The 2019 Plan permits the awards of options, restricted shares, restricted share units
(“RSU”), or any other type of awards that the committee decides.
(f) Award agreement
Awards granted under the 2019 Plan are evidenced by an award agreement that sets
forth terms, conditions and limitations for each award, which may include the term of the
award, the provisions applicable in the event that the grantee’s employment or service
terminates, and our authority to unilaterally or bilaterally amend, modify, suspend, cancel
or rescind the award.
– IV-37 –
(g) Vesting Schedule
In general, the plan administrator determines the vesting schedule, which is

specified in the relevant award agreement.
(h) Transfer Restrictions
Awards may not be transferred in any manner by the recipient other than in
accordance with the exceptions provided in the 2019 Plan, such as transfers by will or the
laws of descent and distribution.
(i) Amendment and termination
Unless terminated earlier, the 2019 Plan has a term of ten years. Our Board has the
authority to amend, modify or terminate the 2019 Plan. However, unless the Company
decides to follow home country practice, shareholders’ approval for amendment of the
2019 Plan is required (i) to the extent necessary and desirable to comply with applicable
laws and regulations; or (ii) the number of Shares available under the Plan is increased
(other than any adjustment permitted under the terms of the 2019 Plan).
Outstanding options and RSUs granted
For the detailed information regarding outstanding options and RSUs granted under
the 2019 Plan, please see the sub-section headed “— Outstanding options and RSUs
granted under the 2014 Plan and the 2019 Plan” below.
3. Outstanding options and RSUs granted under the 2014 Plan and the 2019 Plan
2014 Plan
As of the Latest Practicable Date, the number of underlying Shares pursuant to the
outstanding options granted under the 2014 Plan amounted to 10,386,058 Class A
Ordinary Shares, representing approximately 0.93% of the total number of Shares in issue
immediately after completion of the Introduction (assuming no further Shares are issued
under the Share Incentive Plans between the Latest Practicable Date and the Listing
Date). Of the 10,386,058 options, 1,987,918 have vested and 8,398,140 remain unvested
as of the Latest Practicable Date. As at the Latest Practicable Date, we had conditionally
granted options to 241 participants under the 2014 Plan. All the options under the 2014
Plan were granted between July 1, 2015 and July 1, 2021 (both days inclusive). The
exercise price of all the options granted under the 2014 Plan is in the range of nil to
US$1.5 per Class A Ordinary Share.
– IV-38 –
2019 Plan
As of the Latest Practicable Date, there is no outstanding options granted under the
2019 Plan.
As of the Latest Practicable Date, the number of underlying Shares pursuant to the
outstanding RSUs granted under the 2019 Plan amounted to 18,158,160 Class A Ordinary
Shares, representing approximately 1.63% of the total number of Shares in issue
immediately after completion of the Introduction (assuming no further Shares are issued
under the Share Incentive Plans between the Latest Practicable Date and the Listing
Date). Of the outstanding RSUs amounted to 18,158,160 Class A Ordinary Shares, none
of them has vested and 18,158,160 remain unvested as of the Latest Practicable Date. The
RSUs were granted to 866 participants on between October 5, 2020 and August 1, 2022
(both days inclusive).
As of the Latest Practicable Date, no restricted share has been granted under the
2019 Plan.
Assuming full vesting and exercise of all outstanding options and RSUs (as the case
may be) granted under the 2014 Plan and 2019 Plan, the shareholding of our Shareholders
immediately following completion of the Introduction (assuming no further Shares are
issued under the Share Incentive Plans between the Latest Practicable Date and the
Listing Date) will be diluted by approximately 2.5%. The dilution effect on our earnings
per Share for the six months ended June 30, 2022 would be approximately 2.4%.
Upon the Listing, the Company may grant further awards representing a total of
72,220,943 Class A Ordinary Shares pursuant to the 2014 Plan and the 2019 Plan.
Assuming full issue of all Shares reserved but not yet issued under the 2014 Plan and
2019 Plan, the shareholding of our Shareholders immediately following completion of the
Introduction (assuming no further Shares are issued under the Share Incentive Plans
between the Latest Practicable Date and the Listing Date) will be diluted by
approximately 6.1%. The dilution effect on our earnings per Share for the six months
ended June 30, 2022 would be approximately 5.9%.
– IV-39 –
In compliance with Rule 17.03 of the Listing Rules, among the Company’s total
issued capital of 1,114,054,359 Shares immediately following the Introduction (assuming
no further Shares are issued under the Share Incentive Plans between the Latest
Practicable Date and the Listing Date), only up to 111,405,435, representing
approximately 10% of the issued share capital of the Company immediately after
completion of the Introduction, may be issued in respect of all options and awards to be
granted under the 2014 Plan, the 2019 Plan and any other schemes of the Company (if
any).
Below is a list of the grantee of the outstanding options under the 2014 Plan and the
2019 Plan who is the connected person of the Company. Other than the connected person
of the Company listed below, none of the grantees under the 2014 Plan and the 2019 Plan
is a connected person of the Company.
Approximate % Approximate %
Exercise Number of of issued shares of voting rights
price per Class A immediately immediately
Share Class A Ordinary after completion after completion
Date of Expiry Vesting Incentive Ordinary Share of the of the
(3)
Name Role Address grant date period Plans Share outstanding Introduction(1) Introduction(2)
(US$)
Mr. Arthur Yu Chief Financial 11/F, Bangkok Bank November 8, October 30, 5 years 2014 0.3 1,000,000 0.09 0.03
Chen ь ь ь Officer Building, No. 18 2018 2024 Plan
Bonham Strand
West, Sheung Wan,
Hong Kong
Total: ь ь ь One grantee 1,000,000 0.09% 0.03%
– IV-40 –
The table below shows the details of the outstanding options granted to other
grantees (who are not connected persons of the Company) under the 2014 Plan and the
2019 Plan:
Category by Exercise Number of Approximate % of Approximate % of

number of price per Class A issued shares voting rights
underlying Class A Ordinary immediately after immediately after
Class A Number of Vesting Ordinary Share completion of the completion of the
Ordinary Shares grantees Date of Grant Expiry Date period(3) Share outstanding Introduction(1) Introduction(2)
(US$)
1 to 100,000ь ь ь 233 July 1, 2017 to November 30, 2024 4-5 years 0~1.5 6,698,602 0.60% 0.20%
July 1, 2021 to
(both days June 30, 2031
inclusive) (both days
inclusive)
100,000 to 5 July 1, 2017 to November 30, 2024 4-5 years 0~1.5 999,456 0.09% 0.03%
500,000ь ь ь ь July 1, 2021 to
inclusive)
500,000 to 2 July 1, 2017 to November 30, 2024 4-5 years 0~1.5 1,688,000 0.15% 0.05%
1,000,000 ь ь ь July 1, 2021 to
inclusive)
Total: ь ь ь ь ь 240 9,386,058 0.84% 0.29%
Notes:
(1) The calculation is made assuming no further Shares are issued under the Share Incentive Plans between
the Latest Practicable Date and the Listing Date.
(2) The calculation is made assuming that no further Shares are issued under the Share Incentive Plans
between the Latest Practicable Date and the Listing Date, no Class B Ordinary Shares are converted into
Class A Ordinary Shares. The percentage takes into account the weighted voting rights of the Class B
Ordinary Shares, which carry ten votes per share in relation to resolutions at the general meetings of the
Company upon the Listing, except for resolutions with respect to the Reserved Matters for which each
Share entitles each Shareholder to one vote per share.
(3) The exercise period of the options granted shall commence from the date on which the relevant options
become vested and ended on the expiry date, subject to the terms of the relevant Share Incentive Plan
and the share option award agreement signed by the grantee.
– IV-41 –
As at the Latest Practicable Date, RSUs granted to 866 grantees to subscribe for
18,158,160 Class A Ordinary Shares were outstanding, representing approximately 1.63%
of our Company’s total issued share capital immediately after completion of the
Introduction (assuming no further Shares are issued under the Share Incentive Plans
between the Latest Practicable Date and the Listing Date) for which the grantees include
five Directors or connected persons of the Company (with respect to 766,080 underlying
Class A Ordinary Shares) and 861 other employees of our Group (with respect to an
aggregate of 17,392,080 underlying Class A Ordinary Shares).
Save as disclosed herein, no awards have been granted to any Directors, connected
persons of our Company and other employees of our Group or their affiliates or other
eligible persons pursuant to the 2019 Plan.
The table below shows the details of the outstanding RSUs granted to Directors and
other grantee (who is not a Director or connected person of the Company) under the 2019
Plan:
Approximate Approximate
% of issued % of voting
shares rights
Number of immediately immediately
Class A after after
Category by number Ordinary completion completion
of underlying Class A Number of Vesting Share of the of the
Ordinary Shares grantees Date of Grant period outstanding Introduction Introduction(2)
(1)
1 to 20,000 ь ь ь ь ь ь 575 October 5, 2020 to 4 to 5,638,920 0.51% 0.17%

August 1, 2022 5 years
(both days inclusive)
20,000 to 100,000 ь ь ь 276 October 5, 2020 to 5 years 9,610,992 0.86% 0.29%
August 1, 2022
100,000 to 450,000 ь ь 15 October 5, 2020 to 5 years 2,908,248 0.26% 0.09%
August 1, 2022
Total: ь ь ь ь ь ь ь ь ь 866 18,158,160 1.63% 0.55%
Notes:
(1) The calculation is made assuming no further Shares are issued under the Share Incentive Plans between
the Latest Practicable Date and the Listing Date.
(2) The calculation is made assuming that no further Shares are issued under the Share Incentive Plans
between the Latest Practicable Date and the Listing Date, no Class B Ordinary Shares are converted into
Class A Ordinary Shares. The percentage takes into account the weighted voting rights of the Class B
Ordinary Shares, which carry ten (10) votes per share in relation to resolutions at the general meetings
of the Company upon Listing, except for resolutions with respect to the Reserved Matters for which each
Share entitles each Shareholder to one vote per share.
– IV-42 –
E. OTHER INFORMATION
1. Estate Duty
Our Directors have been advised that no material liability for estate duty is likely to fall
on our Company or any of our subsidiaries.
2. Litigation
Save as disclosed in this document and so far as our Directors are aware, no litigation or
claim of material importance is pending or threatened against any member of our Group.
3. Joint Sponsors
The Joint Sponsors have made an application on our behalf to the Listing Committee for
the listing of, and permission to deal in, (i) the Class A Ordinary Shares in issue; (ii) the Class
A Ordinary Shares which may be issued pursuant to the Share Incentive Plans; and (iii) the
Class A Ordinary Shares that are issuable upon conversion of the Class B Ordinary Shares on
the Main Board of the Stock Exchange.
The Joint Sponsors satisfy the independence criteria applicable to sponsors set out in Rule
3A.07 of the Listing Rules. Each Joint Sponsor will receive a fee of US$1,500,000 for acting
as the sponsor for the Listing.
4. Consents of Experts
The following experts have each given and have not withdrawn their respective written
consents to the issue of this document with copies of their reports, letters, opinions or
summaries of opinions (as the case may be) and the references to their names included herein
in the form and context in which they are respectively included.
Name Qualification
Goldman Sachs (Asia) L.L.C. ььь A licensed corporation to conduct type 1 (dealing
in securities), type 4 (advising on securities), type
5 (advising on futures contracts), type 6 (advising
on corporate finance), and type 9 (asset
management) of the regulated activities as defined
under the SFO
– IV-43 –
Name Qualification
UBS Securities Hong Kong A licensed corporation under the SFO to conduct
Limited ььььььььььььььььььь Type 1 (dealing in securities), Type 2 (dealing in
futures contracts), Type 6 (advising on corporate
finance) and Type 7 (providing automated trading
services) regulated activities as defined under the
SFO
Han Kun Law Offices and Legal advisor to Company as to PRC law
CM Law Firm ььььььььььььь
Maples and Calder (Hong Kong) Legal advisor to Company as to Cayman Islands
LLP ьььььььььььььььььььььь law
PricewaterhouseCoopers ььььььь Certified Public Accountant under the Professional

Accountants Ordinance (Chapter 50 of the Laws of
Hong Kong)
Registered Public Interest Entity Auditor under the

Accounting and Financial Reporting Council
Ordinance (Chapter 588 of the Laws of Hong
Kong)
China Insights Industry Industry consultant

Consultancy Limited ьььььььь
As of the Latest Practicable Date, none of the experts named above had any shareholding
interest in our Company or any of our subsidiaries and Consolidated Affiliated Entities or the
right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe
for securities in any member of our Group.
5. Bilingual Document
The English language and Chinese language versions of this document are being
published separately in reliance upon the exemption provided by section 4 of the Companies
(Exemption of Companies and Prospectuses from Compliance with Provisions) Notice
(Chapter 32L of the Laws of Hong Kong).
6. Preliminary Expenses
The Company did not incur any material preliminary expenses.
– IV-44 –
7. Other Disclaimers
(a) Save as disclosed in this document, within the two years immediately preceding the
date of this document:
(i) no share or loan capital or debenture of our Company or any of our subsidiaries
has been issued or agreed to be issued or is proposed to be issued for cash or
shares as fully or partly paid otherwise than in cash;
(ii) no commissions, discounts, brokerages or other special terms have been

granted, have been paid or are payable in connection with the issue or sale of
any share or loan capital of our Company or any of its subsidiaries by our
Company for subscribing or agreeing to subscribe, or procuring or agreeing to
procure subscriptions, for any shares in or debentures of our Company or any
of our subsidiaries; and
(iii) taking no account of any Shares which may be allotted and issued pursuant to
the Share Incentive Plans, so far as is known to any Director or chief executive
of the Company, no other person (other than a Director or chief executive of
the Company) will, immediately following completion of the Introduction
(without taking into account any outstanding options under the Share Incentive
Plans), have interests or short positions in the Shares and underlying Shares
which would fall to be disclosed to the Company and the Stock Exchange
under the provisions of Divisions 2 and 3 of Part XV of the SFO or (not being
a member of the Group), be interested, directly or indirectly, in 10% or more
of the nominal value of any class of share capital carrying rights to vote in all
circumstances at general meetings of any member of the Group.
(b) Save as disclosed in this document:
(i) we do not have any promoter and no cash, securities or other benefit has been
paid, allotted or given nor are any proposed to be paid, allotted or given to any
promoters in connection with the Listing and the related transactions described
in this document;
(ii) there are no founder, management or deferred shares nor any debentures in our
Company or any of our subsidiaries;
(iii) no share or loan capital or debenture of our Company or any of our subsidiaries
is under option or is agreed conditionally or unconditionally to be put under
option;
– IV-45 –
(iv) none of the Directors or the experts named in the part headed “— Other
information — Consents of experts” above has any direct or indirect interest
in the promotion of, or in any assets which have been, within the two years
immediately preceding the date of this document, acquired or disposed of by
or leased to any member of the Group, or are proposed to be acquired or
disposed of by or leased to any member of the Group;
(v) there is no arrangement under which future dividends are waived or agreed to
be waived;
(vi) our Company has no outstanding convertible debt securities or debentures;
(vii) we do not have any issued and outstanding, authorized or otherwise created but
unissued debt securities or term loans;
(viii) there are no contracts for hire or hire purchase of plant to or by us for a period
of over one year which are substantial in relation to our business;
(ix) there has not been any interruption in the business of our Group which may
have or has had a significant effect on the financial position in the last 12
months preceding the date of this document; and
(x) none of the Directors are materially interested in any contract or arrangement
subsisting at the date of this document which is significant in relation to the
business of the Group.
– IV-46 –
APPENDIX V DOCUMENTS AVAILABLE ON DISPLAY
DOCUMENTS AVAILABLE ON DISPLAY
Copies of the following documents will be available on display on the website of the
Stock Exchange at www.hkexnews.hk and our website at ir.futuholdings.com during a period
of 14 days from the date of this document:
(a) the Memorandum and the Articles;
(b) the Accountant’s Report and the report on the unaudited pro forma financial
information of our Group from PricewaterhouseCoopers, the texts of which are set
out in Appendices IA and II;
(c) the audited consolidated financial statements of our Company for the three years
ended December 31, 2019, 2020 and 2021;
(d) the report on the unaudited interim condensed consolidated financial information for
the nine-month period ended September 30, 2022 from PricewaterhouseCoopers, the
text of which is set out in Appendix IB;
(e) the PRC legal opinions issued by Han Kun Law Offices and CM Law Firm, our legal
advisors as to PRC law, in respect of certain general corporate matters and property
interests in the PRC of our Group;
(f) the letter of advice prepared by Maples and Calder (Hong Kong) LLP, our legal
advisor on Cayman Islands law, summarizing the constitution of the Company and
certain aspects of the Cayman Islands law referred to in Appendix III;
(g) the Cayman Companies Act;
(h) the industry report issued by China Insights Industry Consultancy Limited, the
summary of which is set forth in the section headed “Industry Overview”;
(i) the written consents referred to under the section headed “Statutory and General
Information — E. Other Information — 4. Consents of Experts” in Appendix IV;
(j) the material contracts referred to in “Statutory and General Information — B.

Further Information about Our Business — 1. Summary of Material Contracts” in
Appendix IV;
(k) the service contracts and the letters of appointment with our Directors referred to in
“Statutory and General Information — C. Further Information about our Directors
— 1. Particulars of Directors’ service contracts and appointment letters” in
Appendix IV; and
(l) the terms of the Share Incentive Plans.
– V-1 –
APPENDIX V DOCUMENTS AVAILABLE ON DISPLAY
DOCUMENT AVAILABLE FOR INSPECTION
A copy of a full list of Grantees under the Share Incentive Plans, containing all details as
required under the Listing Rules, will be available for inspection at the Company’s principal
place of business in Hong Kong at 11/F, Bangkok Bank Building, No. 18 Bonham Strand West,
Sheung Wan, Hong Kong during normal business hours up to and including the date which is
14 days from the date of this document.
– V-2 –

Futu Prospectus

Uploaded by

Copyright:

Available Formats

Futu Prospectus

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Futu Prospectus

Uploaded by

Copyright:

Available Formats

IMPORTANT

Futu Holdings Limited

LISTING BY WAY OF INTRODUCTION

Stock Code: 3588

Sole Financial Advisor

December 22, 2022

Commencement of investor education activities as

• dissemination of electronic copies of this listing

Daily announcement released on the respective

Dealings in the Class A Ordinary Shares on the

IMPORTANT NOTICE TO INVESTORS

Glossary of Technical Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

Information about this Document and the Introduction . . . . . . . . . . . . . . . . . . . . 172

Directors and Parties Involved in the Introduction . . . . . . . . . . . . . . . . . . . . . . . . 180

Corporate Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 184

Industry Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 187

History and Corporate Structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 284

Contractual Arrangements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 365

Connected Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 389

Directors and Senior Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 402

Relationship with Our Controlling Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . 417

Substantial Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 421

Share Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 425

Financial Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 435

Future Plans and Prospects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 505

Market Arrangements to Facilitate Dealings in Hong Kong . . . . . . . . . . . . . . . . . 506

Appendix IA Accountant’s Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IA-1

Appendix IB Unaudited Interim Condensed Consolidated Financial

Appendix II Unaudited Pro Forma Financial Information . . . . . . . . . . . . . . II-1

Appendix III Summary of the Constitution of the Company and

Appendix IV Statutory and General Information . . . . . . . . . . . . . . . . . . . . . IV-1

Appendix V Documents Available on Display . . . . . . . . . . . . . . . . . . . . . . . V-1

We are a leading one-stop financial technology platform transforming the investing

A securities brokerage service provider at inception, we are now an all-rounded online

We have developed a proprietary and highly automated technology infrastructure

• Integrated cross-market platform. We have developed an easy-to-use and highly

• Security and stability. Our platform features an automated multi-level protection

• Agility and scalability. Our platform is built on a cloud-based distributed

• Big data and AI capabilities. We have established an intelligent risk control

As a result of our relentless focus on technology development and product innovation, we

516.7 1.0 1.0

Dec-19 Dec-20 Dec-21 Jun-22 Dec-19 Dec-20 Dec-21 Jun-22

Trading Volume2 and DARTs Total Client Assets

2019 2020 2021 1H22 Dec-19 Dec-20 Dec-21 Jun-22

KEY OPERATING DATA

Users ьььььььььььььььььььь 7,513,887 11,916,648 17,374,296 18,649,821

• Increasing retail investor participation and online penetration

• Growing demand for diversified investment products

• Social community driving user engagement

OUR PLATFORM AND SERVICES

We operate a leading technology-driven online securities brokerage and wealth

WEIGHTED VOTING RIGHTS AND OUR CONTROLLING SHAREHOLDERS

Prospective investors are advised to be aware of the potential risks of investing in

Service fees Technical and consulting services

Our VIEs and their subsidiaries

Shenzhen Futu Hainan Futu

100% 100% 100%

Beijing Futu Hainan Caixuetang Beijing Shensi Consulting

SUMMARY OF HISTORICAL FINANCIAL INFORMATION

Selected items from the Consolidated Statements of Comprehensive Income