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Tencent-backed online brokerage Futu looks to cash in on Hong Kong IPO boom with plans to expand margin financing

  • The Nasdaq-listed online brokerage has completed a follow-on sale of 9.5 million American depositary shares, its first since listing in March 2019
  • Priced at US$33 per share, the online brokerage raises US$313.5 million

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Retail investors have had more time on their hands to punt on stocks since the pandemic started, giving a boost to online trading brokerages like Futu Holdings. Photo: EPA
Georgina Lee
Nasdaq-listed online brokerage platform Futu Holdings  on Wednesday raised US$313.5 million from its first follow-on offering since its 2019 listing, which the company plans to use to expand its margin financing business.
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The new American depositary receipts were priced at US$33 each, which represents a 6.8 per cent discount to its closing price of US$35.4 on Tuesday, according to people familiar with the transaction. The offer of 9.5 million ADS has come amid strong performance of its share price, which has more than tripled year-to-date. It reached an all-time high on US$40.3 on August 5.

An overallotment option of up to 1.425 million ADS has been granted to the joint bookrunners – Goldman Sachs, Credit Suisse, Haitong International and UBS – to cover additional demand from investors. One ADS represents eight class A shares.

The investment banks were not immediately available for comment. Senior management at Futu were also not immediately available for comment.

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Futu is backed by social media giant Tencent Holdings, which owns about 33 per cent stake in the company. The brokerage, which charges zero commission and offers online trading of Hong Kong, Chinese and US stocks, has in recent years been aggressively expanding its business in Hong Kong under Futu Securities. It vies with rival platforms, such as Huatai Securities and SoFi Hong Kong that do not charge commission.
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Futu Securities, which already runs one of mainland China’s biggest mobile stock-trading apps, enables mainland Chinese people to buy and sell Hong Kong and US-listed shares using money they already have parked in overseas banks.
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