Futu Holdings Limited (FUTU) Earnings Call Transcript & Summary

Hello, ladies and gentlemen. Welcome to Futu Holdings Fourth Quarter and Full Year 2024 Earnings Conference Call. [Operator Instructions] Today's conference call is being recorded. If you have any objections, you may disconnect at this time. I would now like to turn the conference over to your host for today's conference call, Daniel Yuan, Chief of Staff to CEO, Head of Strategy and IR at Futu.

Thanks, operator, and thank you for joining us today to discuss our fourth quarter and full year 2024 earnings results. Joining me on the call today are Mr. Leaf Li, Chairman and Chief Executive Officer; Arthur Chen, Chief Financial Officer; and Robin Xu, Senior Vice President. As a reminder, today's call may include forward-looking statements, which represent the company's belief regarding future events, which by their nature are not certain and are outside of the company's control. Forward-looking statements involve inherent risk and uncertainties. We caution you that a number of important factors could cause actual results to differ materially from those contained in any forward-looking statements. For more information about the potential risks and uncertainties, please refer to the company's filings with the SEC, including its annual report. With that, I will now turn the call over to Leaf. Leaf will make his comments in Chinese, and I will translate.

[Foreign Language]

[Interpreted] Thank you all for joining our earnings call today. Client acquisition accelerated across all markets amid an eventful quarter. We exceeded our full year guidance by a wide margin, adding 215,000 paying clients in the fourth quarter alone. As of year-end, total paying clients was over 2.4 million, up 41% year-over-year. Year-to-date, we've observed robust paying client growth across markets and are guiding for 800,000 in new paying clients in 2025.

[Foreign Language]

[Interpreted] In the fourth quarter, Hong Kong market was the top growth driver for new paying clients as we implemented targeted marketing initiatives to capitalize on the momentum of different asset classes. In Singapore, we maintained quality growth with more paying clients added, they are also with higher average assets. We further solidified our position as a leading one-stop investment platform in Malaysia and recorded another quarter of strong paying client growth with our increasingly localized product experience and strengthening brand equity. In Japan, new paying clients grew double digits quarter-over-quarter as our superior U.S. stock trading experience gained traction amid a bullish U.S. market backdrop.

[Foreign Language]

[Interpreted] In 2024, we delivered 209 iterations of our mobile app and desktop clients and added 7,762 new features, up 37% and 32% year-over-year, respectively. Product velocity remained high in the fourth quarter. In Japan, we launched U.S. margin trading with an increasing adoption rate and improving throughout the quarter. In the U.S., we unveiled option strategy builder on our desktop version to better help traders to navigate various options trading strategy. As we continue to refine our options trading products, in the fourth quarter, the number of options traders in the U.S. more than doubled year-over-year, while the number of options contracts trader more than tripled compared to the year ago quarter. In Hong Kong and Singapore, we established a bond trading desk to help our clients execute large and complex bond orders. For our clients in Australia and Canada, we launched recurrent investment plans for local stocks.

[Foreign Language]

[Interpreted] Although the pullback in China equity in the second half of the quarter weighed on the valuation of our clients' assets, it was more than offset by stellar net asset inflow across markets. Total client assets were HKD 743 billion, up 43% year-over-year and 7% quarter-over-quarter. Overseas markets recorded the highest quarterly net asset inflow, almost equivalent to the full year 2023 inflow. Total client assets in Singapore grew by 19% quarter-over-quarter, marking the tenth consecutive quarter of sequential growth, thanks to robust net asset inflow into U.S. equities and money market funds. U.S., Canada and Australian markets also witnessed sequential growth in average client assets for 4 consecutive quarters. As our clients took on more leveraged positions, margin financing and securities lending balance increased by 25% sequentially to a record HKD 51 billion.

[Foreign Language]

[Interpreted] Total trading volume jumped by 202% year-over-year and 52% quarter-over-quarter to HKD 2.89 trillion. In the fourth quarter, our clients diversified their investing to include more crypto and AI names. As a result, U.S. stock trading volume grew by 36% sequentially to a historic high of HKD 2.08 trillion. Notably, several AI-focused companies previously less familiar to our clients emerged as top trading U.S. stocks in 2024, driven by the remarkable outperformance and the rising narrative around AI's transformative potential. Hong Kong stock trading volume grew exponentially by 117% sequentially to HKD 755 billion. The renewed enthusiasm in Hong Kong Equity starting from September led to a substantial rebound in trading velocity. Clients showed a meaningful pickup of interest in many technology names as well as leverage in inverse ETFs among other things.

[Foreign Language]

[Interpreted] Total client assets and Wealth Management increased 93% year-over-year and 14% quarter-over-quarter to HKD 111 billion. Money market funds continue to hold strong appeal for our clients even with moderately lower yields in the fourth quarter and drove the bulk of the sequential growth in Wealth Management AUM. In Hong Kong and Singapore, we expanded our structured product offerings to better address the investment needs of our high net worth clients. Total client assets and wealth management accounted for 15% of total client assets, up from 12% in the same quarter last year.

[Foreign Language]

[Interpreted] We had 482 IPO distribution in IR clients, up 16% year-over-year. In 2024, we underwrote 40 Hong Kong IPOs, ranking 1st among all brokers for the third consecutive year according to wind. The new digital IPO settlement platform FINI introduced by the Hong Kong Stock Exchange eliminates multi-account subscriptions, shortens the settlement period, reduces the amount of lockup capital needed and lowers funding costs through the new prefunding model. We believe that this new system improves the retail IPO subscription experience, prompts more retail participation and favors market consolidation. We swiftly adapted our subscription process based on the new framework and achieved notable gains in market share.

[Foreign Language]

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

Thanks, Leaf and Daniel. Please allow me to walk you through our financial performance in the fourth quarter. All the numbers are in Hong Kong dollar unless otherwise noted. Total revenue was HKG 4.4 billion, up 87% from HKD 2.4 billion in the fourth quarter of 2023. We concluded a strong year with full year revenue growing to HKD 13.6 billion, up 36% year-over-year. Brokerage commission and handling charge income was HKD 2.1 billion, an increase of 128% year-over-year and 35% Q-over-Q. The year-over-year and Q-over-Q increase was both driven by higher trading volumes, partially offset by the decline in blended commission rate. We adopt per contract and per share pricing model for U.S. options and the U.S. stock trading, respectively. As a result, brokerage income will grow at a slow rate than trading volume where our clients trade high-priced stocks and options. Interest income was HKD 2 billion, up 52% year-over-year and 19% Q-over-Q, both were driven by higher interest income from our security borrowing and lending business and high interest from banking deposits. Other income was HKD 353 million, up 157% year-over-year and a 69% Q-over-Q. The year-over-year Q-over-Q increase was both primarily attributed to higher funded distribution income and the currency exchange income. Our total cost was HKD 776 million, an increase of 79% from HKD 434 million in the fourth quarter of 2023. Brokerage commission and handling charge expenses was HKD 112 million, up 90% year-over-year and 38% Q-over-Q. The Q-over-Q increase was roughly in line with the movement of our brokerage commission and handling charge income. Interest expenses were HKD 513 million, up 90% year-over-year and 24% Q-over-Q. The year-over-year increase was driven by higher interest expenses associated with our securities borrowing and the lending business. The Q-over-Q increase was mainly due to higher margin financing interest expenses as a result of higher funding costs for Hong Kong dollars. Processing and servicing costs were HKD 151 million, up 45% year-over-year and 16% Q-over-Q. The increase was largely due to higher market information and the data fee for new products as well as higher system usage fees. As a result, total gross profit was HKD 3.7 billion, an increase of 89% from HKD 1.9 billion in the fourth quarter of 2023. Gross margin was 82.5% as compared to 81.7% in the fourth quarter of 2023. Operating expenses were was 57% year-over-year and 33% Q-over-Q to HKD 1.4 billion. R&D expenses were HKD 399 million, up 10% year-over-year and 4% Q-over-Q. This increase was partially due to costs related to organizational restructuring in the fourth quarter of 2024. Selling and marketing expenses were HKD 464 million, up 154% year-over-year and 48% Q-over-Q. The year-over-year increase was due to a triple-digit year-over-year increase in net new paying clients, partially offset by lower client acquisition costs. The Q-over-Q increase was in line with the growth of our new paying clients. General and administrative expenses was HKD 576 million, up 55% year-over-year and 51% Q-over-Q. The year-over-year increase was primarily due to an increase in the general and administrative headcount and the Q-over-Q increase was mainly due to higher bonus accrued for general and administrative personnel and to a less extent, cost related to organizational restructuring. As a result, income from operations increased 117% year-over-year and 28% Q-over-Q to HKD 2.2 billion. Operating margin increased to 50% from 43.1% in the fourth quarter of 2023, mostly due to strong top line growth and operating leverage. Our net income increased by 113% year-over-year and 42% Q-over-Q to HKD 1.9 billion. Net income margin expands to 42.2% in the fourth quarter as compared to 36.9% in the same quarter last year. Our effective tax rate for the quarter was 16.1%. That concludes our prepared remarks. We'd now like to open the call to questions. Operator, please go ahead.

[Operator Instructions] We will now take the first question from the line of Emma Xu from Bank of America Securities.

[Foreign Language] I have 2 questions. The first question is about the new paying clients. You guided 800,000 new paying clients for this year, around 100,000 more than year last. But last year, you have 2 new markets, Malaysia and Japan -- in Japan, this year, previously, you guided that you don't have new market plans. So just wondering why you are able to guide such a strong new paying client target? And the second question is about the CAC client acquisition cost. It increased moderately in the fourth quarter last year despite the very -- the active market -- in active market in general, CAC should be lower, thanks to the natural flows. So just wondering, is it due to the change of the market, the mix of the new paying client market or due to the change of the channels that lead to the increase of the CAC? And what's your target of CAC for this year?

Thanks, Emma. I will take these 2 questions. [Foreign Language] In terms of your first question regarding our new guidance for 2025, these 800k new paying clients does not include any new markets, we were entering or not in 2025. So this is all for the existing 7 markets. The reason for this very strong guidance is, # 1 is we think these 2 new markets such as Malaysia and Japan, which we add into last year still provide a very meaningful robust growth outlook in 2025. Not to mention these relatively mature markets such as Singapore and Hong Kong, we still see a very good upside in client acquisitions, thanks to partially due to the Chinese asset rating with what we witness from early days of this year. And in terms of the second question regarding the client acquisition costs, we roughly target HKD 2,500 to HKD 3,000 CAC for this year from the end of last year. And going forward, we will spend more money in some brand equities in order to enhance our long-term user loyalty in our platform. Thank you.

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

[Foreign Language] I have 2 questions here. First question, Recently, we noticed that the U.S. and the Hong Kong market overall market trading volume has a very strong quarter-over-quarter performance in first quarter, quarter-to-date. So can management give us a little bit color based on current run rate, what's the trading volume, trading velocity, net asset inflow and the margin financing, securities and lending guidance? The second question is related to the new product pipeline. So we know like Futu has a lot of like product pipeline every year. So can you give us a roughly pipeline on the equity derivatives and crypto products.

[Foreign Language] So first of all, I give some color on the quarter-to-date operating matrices. We've seen this year, there was a lot of trading opportunities for both the Hong Kong and U.S. stock market. Our retail investors continue to be very highly engaged. And year-to-date, based on the current run rate, we forecast higher net new paying clients as compared to the fourth quarter last year. We've also seen higher net asset inflows, which coupled with the appreciation of China equities have led to a very meaningful sequential increase in total client assets. And based on this current run rate, we also forecast our total trading volume to further increase on top of the high base last quarter. We've seen that the clients remain highly engaged and very high risk tolerance year-to-date. And regarding our product plan, so this year for all of our overseas markets, we have a very rich product pipeline in order to satisfy the client demand for different risk rewards. In Japan, for example, we'll continue to catch up with our product trade capabilities around Japanese equities and at the same time, continue to optimize and extend our leadership in U.S. trading. In Malaysia, we also will have a number of product innovations and iterations based on local clients' needs. In the U.S., we plan to roll out crypto trading in the next couple of months. And in terms of wealth management, we plan to continue to expand our wealth management offerings, including offering more structured notes for our retail and high net worth clients. Thank you.

[Operator Instructions] We will now take the next question from the line of Chiyao Huang from Morgan Stanley.

[Foreign Language] So, basically 2 questions. One is the what -- basically, what areas of the business that management think have the most potential to integrate AI models like Deep Seek and what kind of efficiency gains? And how should that strengthen the product offerings and services? And the second question is on crypto offerings. And just wondering, is there any update on the licensing process or what can be done to accelerate the client penetration or investor education and the marketing side on the crypto business in Hong Kong and Singapore. So -- and then what will be most differentiated offering from Futu's crypto offers compared to peers?

Thank you, Chiyao. Leaf will answer your first question, and my colleague, Robin will answer your second question regarding Crypto.

[Foreign Language]

[Interpreted] So in the past couple of years, we've made a number of explorations in AI, based on different usage scenarios. And we think corporate AI capabilities both is for internal operations and for client-facing capabilities, and we are also doing local deployment of Deep Seek. So internally, we've found that AI help us to meaningfully lift our efficiency in terms of the market use and data generation, filtering of content in our social community and the designing and the graphics, et cetera. And in terms of client-facing user experiences. So in Hong Kong, we've launched a new synthesis function for individual stocks, twice a day in the morning and at night. We also have an automatic interpretation of the corporate announcement and analysis of the financial results. These are all based on the AI model, which we believe help our clients to quickly understand market dynamics and reduce the time needed for them to make investment decisions. And we are also doing a lot of study and research in terms of how better to incorporate AI to empower more applications for retail investors. And we believe that if we use AI to help with decision-making, that puts a much higher requirement in terms of the timeliness and the accuracy of the information generated. So the unpredictable quality of the responses will actually increase the investment thresholds for the retail investors and prolong the time needed for them to make effective investment decisions, thereby lowering their investment experiences. And we hope to make a lot of thorough preparations and to make sure that the information we generate through AI in different usage scenarios are highly accurate. And at the same time, we need to do very prudent assessment and very comprehensive testing to make sure that we strike the right balance between user experience, compliance and technological innovation, so as to maximize our investors' benefits and also to protect their needs. Thank you.

We will now take the next question from the line of Charles Zhou from UBS.

[Foreign Language] So I have 2 questions. The first one, we understand the company plans to develop Wealth Management business in both Hong Kong and also Singapore. So what is your expectation for the total addressable market size? And also how does the Futu differentiate from its competitors in other -- I mean, say, for example, private banks or insurance companies? And can you maybe talk about your competitive advantage from product distribution, et cetera? And do you think the business will be scalable? My second question is following the strong trading volume in Q4 last year, U.S. stock corrected sharply over the past month. How did it impact your trading volume in Q1 and if the sales momentum continue in the U.S. to persist, the client AUM will decline. Will this also affect overall our trading volume in the rest of this year in 2025?

[Foreign Language] In terms of the trading volumes, despite we saw some setback in the U.S. stock market in the first quarter so far, but actually, the market setbacks create more volatilities, which inspire more clients trading to bottom fish, the markets in the U.S. stock market. And then in the meantime, the trading volumes in Hong Kong made a huge spike due to China assets rating and a lot of DeepSeek related scene. So on a collective basis, we -- as Daniel mentioned before, in the first quarter, so far, we see the overall trading volumes remain very robust. Now I hand over to Robin.

[Foreign Language]

[Interpreted] So I'll first translate about the crypto updates, and then Robin also touched on Wealth Management. So in the fourth quarter, the crypto market had a huge boom, which lifted our client's trading interest and sentiments. We've seen that in November and December, the crypto trading volume on our platform grew exponentially, which is almost 5x of what we saw in October. And our daily trading volume surpassed USD 35 million. And we've also seen a similar growth rate in terms of our number of crypto traders on our platform. So in the first quarter, we've seen that the crypto prices experienced some pullback. And at the same time, there's a lot of trading opportunities in the Hong Kong and U.S. stock market. So we've seen a subsiding interest in crypto trading on our platform, but the trading volume and the crypto traders are still at a relatively high level. Right now in Hong Kong, we offer 4 trading pairs to our retail investors, and we offer 6 trading pairs in Singapore. And in the future, we plan to allow more kind of mainstream trading pairs. And at the same time, I think will enhance our management of the capital efficiency and also the liquidity and the security and also kind of lower the cost of our clients moving funds in and out, which we believe will help with client conversion and with further penetration of crypto trading. We believe in Hong Kong and Singapore, most of their retail investors are still in the very early stage of building up awareness of those asset class. And we think there's a lot of further room for penetration. And we hope to leverage more investor education materials, a seamless fund deposit experience to assuage our clients' concerns towards this relatively new asset class. And as the regulatory framework is more clear in these 2 markets, Futu has one of the earliest retail play players in this space will enjoy the early mover advantage in building up our user mind share, especially in terms of compliant operations, which will help us gain advantage as the crypto asset class becomes more mainstream in these 2 markets. And as we mentioned earlier, we are also planning to roll out crypto trading in U.S. this year, and we are expecting a higher penetration of crypto among our U.S. client base compared to what we have seen in Hong Kong and Singapore so far. And as regards to our vAPP license, so we got a conditional approval from SFC. And we are working on our product development. We don't have a very specific time line for our official launch yet, and we look forward to giving more color down the road. And then about the Wealth Management. So this year, we've entered into a rate cut cycle. But we still believe money market funds yield will continue to be attractive to our clients in the foreseeable future. And at the same time, we have provided very seamless automatic subscription of redemption functions for our money market funds, which really maximizes our clients' capital efficiency, so as to help them to seize the trading opportunities in the market and at the same time, earn yields on their idle cash. And we -- typically, we expect an outperformance of fixed income-related assets during a rate cut cycle, and we have built a comprehensive set of products in the space, in Hong Kong and Singapore, which we believe will help our clients navigate these different investment cycles to achieve long-term capital appreciation. And at the same time, as mentioned earlier, we intend to further enrich our Wealth Management product offerings, including more structured notes for both our retail and high net worth clients, and we are optimistic about the AUM growth for our Wealth Management. And to have some additional color to what Robin just said about Wealth Management, I think there are some of our key competitive advantages in this space is, number one, we really offer our clients -- is seamless experience to navigate across different asset classes on our platform, whether it's Equities or Wealth Management or crypto, et cetera. So I think that is one of our key competitive advantage. We don't just lead our competitors in just 1 specific asset class, but it is a very seamless once-off experience for clients to very easily switch between asset classes and to cross navigate different cycles. And number two, I think we adopt a platform model, which is a key advantage for our high net worth clients, Wealth Management business, through example like in terms of structured products, we onboard structured offerings from a number of different private banks and our clients can compare these returns and the performances and pick the best asset class on our platform as opposed to maybe some other institutions will prefer to sell to their clients, their own proprietary products. So this platform model really gives our clients access to a variety of different assets and us as an intermediary is very neutral and just make sure that we will be able to provide our clients with the most attractive investment opportunity. Thank you.

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

[Foreign Language] This is You Fan from CICC and the 2 questions. The first one is regarding the AUM breakdown in 4Q. So how much is from the client net asset inflow and how much from market-to-market impact? And what's the original breakdown of the client assets? And the second question, we see the active Hong Kong IPO subscription recently. So what's the impact on our income statement and what's the contribution to our new paying clients and the net asset inflow?

[Foreign Language] In terms of the net asset inflow breakdowns in the fourth quarter. As we mentioned before, the market to market implications in the fourth quarter actually was a negative number. So the client asset inflow, the number is much larger than the movement of the balance between 2 quarters. And among the 24% of the asset inflow actually come from Great China areas. This number 1 year ago was just 20%, we see it is a very good indicator for our overseas markets, continuous engagement for clients. Then the second question, the direct revenues from Hong Kong IPO is just contributed low single digits of our total revenue, given that we are further diversifying our revenue stream in the past 4 to 5 years. And also due to the new mechanisms in Hong Kong, such as FINI, the settlement duration, the leverage financing duration were both shortened. So, on one side, it is a negative to all the brokers' direct commission and the interest income. But on the other hand, it further engaged the clients to the markets to enhance the market liquidity and there's more interest in terms of the retail clients' participate in this market. So on a net-net basis, it is still very positive to our business.

We will now take the next question from the line of JPMorgan. Peter Zhang -- please go ahead from JPMorgan.

[Foreign Language] This is Peter Zhang from JPMorgan. And I have 2 questions. First is about the operating expense, and we noticed that from a sequential perspective, the G&A expense increased by over 50% Q-on-Q in fourth quarter, while R&D expense only moderately picked up by 4%. So we wish to understand what's the drivers behind this diverging trend for the 2 different operating expense in fourth quarter? And what will be your outlook for 2025 in terms of your headcount growth and your R&D and G&A expense growth into 2025? And my second question is about other income. We noticed that the other income grew by 69% Q-on-Q to a record quarterly high in fourth quarter. We wish to understand what's the drivers behind this increase? And what's the outlook into 2025?

[Foreign Language] For 2 questions. Number one is regarding the G&A Q-on-Q expenses increase mainly due to 3 reasons. Number one is our year-end bonus equipment, especially for the overseas market management. Secondly is due to some one-off professional expenses relating to some new license applications and new market feasibility studies. The third is due to some one-off organizational restructuring. Looking forward to 2025, we expect the number of our headcount will continue to increase in mid -- low to middle single digit versus the situation in 2024. Then for second question regarding the breakdown of the key drivers of the other income mainly comes from 2 facts. Number one is revenues derived from the Wealth Management, including the funds distribution and also more fees from the structured products like structured nodes and the T-bills, et cetera. The other is relating to FX exchange fees. This is partially due to very divergent market performance between the U.S. market and the Hong Kong market in fourth quarter. So we saw more clients trying to switch their assets between these 2 markets. Thank you.

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

[Foreign Language] I have 2 questions. First, we have seen the blended trading commission rate declined both year-over-year and sequentially in Q4. However, the trading volume contribution from [ HP ] stock actually increased in Q4. So excluding the structural impact, what's the reason for the commission rate decline? And then my second question is about capital return. We had USD 500 million share buyback program, which is effective period of December this year. May I ask how much is the remaining quarter? And what's your capital return in this year? Also, do we have any consideration of regular dividends?

[Foreign Language] In terms of the blended commission rate, the Q-over-Q decrease was mainly due to the product mix change. In the fourth quarter, more clients trading these high-value nominal values U.S. stocks and also high nominal value U.S. options, which and -- which made the blended take rates have some Q-on-Q decrease. And in the fourth quarter, so far, we saw our take rate remains very stable. Then the second question regarding the shareholder returns. So far, we have not utilized our share repurchase program, which would be expired at the end of 2025. We still think these new market, new business lines were still in a fast growth stage. There will be a huge room for us to deploy the capital for this new business and the new markets, which we think in the long run will enhance our competitive edge in the markets and also our profitability. Having said that, we -- as we mentioned in our third quarter, we do concur part of our shareholders is very focusing or care about cash dividends. And we will revisit and evaluate our dividend payout policies when 2025 year full year complete and we'll consider the relative measures to provide a reward to thank our long-term shareholders. Thank you.

We will now take the next question from the line of Hanyang Wang from 86Research.

[Foreign Language] This is Hanyang from 86Research. I have one single question regarding on the derivatives trading. So what is the approximately the percentage of derivatives in the total trading volume in the fourth quarter? And considering the increase in market volatility recently, do you see an increase in the proportion of derivatives trading on our platform in Q1?

[Foreign Language] In terms of the derivative commissions, it's roughly accounts for 1/3 of our total trading commissions in the fourth quarter, slightly down to our historical high in the past. And in the first quarter so far, we do not witness any material change for this ratio. Thank you.

We will now take the next question from the line of Alan Chen from Citi.

[Foreign Language] This is Alan from Citibank. Can management give us some breakdown of the interest income in terms of idle cash interest income versus margin financing, liquidity and lending income. As management increase share, what's the prevailing interest rate on Futu's clients' idle cash, what was the idle cash yield in 4Q '24? And since September last year, we have already seen the Fed cutting the Fed rate by 100 basis points. I'm wondering how much of that 100 basis points Fed rate cut has already been reflected into the client's idle cash interest rate?

[Foreign Language] Now in terms of the breakdown of the interest income, roughly 40% to 45% interest income was derived from the idle cash deposits and the remaining belongs to the margin financing and the security lending, et cetera. And the impact for the rate cut, if we use the fourth quarter end client assets numbers to make our projections. Every 25 basis cut by the Fed Rate, our pretax profit -- monthly pretax profit will be negatively impacted by HKD 8 billion to HKD 10 million. Thank you.

We will now take the last question from the line of Zihan Wang from Goldman Sachs.

[Foreign Language] My first question is, do we have a regional breakdown of the new paying client growth in 4Q? And for 2025, what proportion of 800,000 new paying client is expected to be from new markets and what proportion from mature markets? And my second question is, do we have a guidance for AUM client growth in 2025? Will it be diluted as paying client growth is very fast and majority of them may be from a new market? And in the long run, what levels do we expect the AUM per client to reach in each region?

[Foreign Language] In terms of the breakdown of the new client acquisition, geographic locations for these mature markets like Hong Kong and Singapore, which on a collective basis, contributed roughly 40% to 45% of our total new paying clients acquired in the fourth quarter. And the remaining countries in Asia alongside Australia contribute roughly 40% as well. Then the remaining 20% belongs to the North America.

[Foreign Language]

[Interpreted] Let me briefly translate. So first of all, I just want to comment on net asset inflow. In 2024, we saw a very meaningful step-up in net asset inflow in comparison to 2023. And we foresee a similar very robust net asset inflow in 2025 as well. And as you understand like average client assets are, first of all, impacted by our new client mix between different markets and also impacted by mark-to-market trends. And both of these factors are less within our control than net asset inflows. So it's very hard to predict how average client assets was going to trend for 2025. And in terms of average client assets in different markets, well, some markets will structurally have high average client assets. For example, Hong Kong and Singapore, like these clients will have higher investable income and therefore, we'll have more capital that they can deploy on Futu's platform. But at the same time, what we find super encouraging is that in the fourth quarter, all of our markets experienced very meaningful Q-on-Q growth in average client assets. And we expect this trend to continue because as we onboard more products, and there's a lot of cross-selling opportunity, and we think there's ample opportunity for our existing clients to put more assets onto our platform. At the same time, as our product capabilities get enhanced and as our brand equity gets enhanced, we're able to attract more high-quality clients, including high net worth clients in many of these markets.

Thank you. I would now like to turn the conference back to Daniel Yuan for closing remarks.

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

This concludes today's conference call. Thank you for participating. You may now disconnect.