Futu's Comeback Fueled By Overseas Growth

The online brokerage gained significant traction in its new markets in the fourth quarter, just three years after hitting a regulatory brick wall in its original home China market image credit: Bamboo Works Key Takeaways: Online brokerage Futu's revenue jumped 45% year-on-year, and its net profit surged 80% in the fourth quarter of 2025 The company's overseas moomoo brand accounts for 55% of total funded accounts, with Malaysia becoming a major growth driver just three years after Futu entered the market Many Chinese companies aspire to be global players, even though few manage to make that transition despite valiant efforts. Futu Holdings Ltd. (NASDAQ:FUTU) is clearly an outlier from the much larger group of companies whose global dreams failed to take off. The online broker's overseas success, highlighted in its latest quarterly report, is all the more remarkable given its global drive was largely the result of a brief existential crisis sparked by a regulatory nightmare in its home China market. Futu's latest blockbuster results, delivered last Thursday for the fourth quarter of last year, capped a year of retail trading frenzy that led its client base to swell and its own stock to take off. The company's revenue jumped 45.3% year-on-year to HK$6.44 billion ($827 million), smashing past analysts' estimates. Its net profit jumped by an even more impressive 80% to HK$3.4 billion. For the whole of 2025, the online broker's revenue rose 68% to HK$22.8 billion, while its net profit more than doubled to HK$11.3 billion. Futu is roaring back just three years after a crackdown by the China Securities Regulatory Commission (CSRC) threw its future into doubt. At the end of 2022, the regulator barred Futu, along with rival UP Fintech (NASDAQ:TIGR), from registering new user accounts in China. Both companies specialize in cross-border trading, initially focusing on U.S. and Hong Kong-listed stocks. But the regulator said both were operating illegally by allowing their Mainland customers to make cross-border trades without a required brokerage license. The ban wasn't completely unexpected due to earlier signals from the regulator, and Futu had already started expanding overseas before the bombshell hit. Still, the episode was a huge blow to the company as it relied heavily on its China business at that time. Its primary growth engine instantly stalled, and its planned Hong Kong secondary listing was also put on ice. Flourishing in Asia Fast forward three years to today, and the company's financial performance suggests that while it has lost the Mainland China market, it's flourishing elsewhere in Asia. Details that Futu management provided on its earnings call show how the international shift has quickly gained traction and now accounts for the majority of the company's business. Reflecting that shift, Futu has moved its home to Hong Kong, which has its own financial system and stock market separate from the Mainland, shifting from its original headquarters across the border in the boomtown of Shenzhen. Clients for its overseas moomoo brand now account for 55% of its total funded accounts. Futu is doing particularly well in Malaysia, in addition to its main market of Hong Kong, CFO Arthur Chen said on the earnings call. Those two markets accounted for more than 50% of Futu's new customer additions in the fourth quarter, with the rest coming from its other markets including Singapore and Japan. Futu only entered Malaysia in 2023, later than its other Asian markets, showing that it can easily export and rapidly scale its formula of combining slick technology with social trading features. The geographic diversification has significantly reduced regulatory risks in China for Futu. And the expansion of the company's customer base and offerings has also made it less vulnerable to a prolonged slump in Chinese stocks that only started to ease last year. Total trading volume on Fufu's platform hit a record HK$3.98 trillion in the fourth quarter, up 38% year-on-year, even though Hong Kong stock turnover decreased. U.S. stocks accounted for the bulk of that figure, as investors dived into companies related to AI. Yet American depositary shares (ADS) of Chinese companies made up less than 10% of the company's U.S. stock trading volume, Chen said, showing Futu continues to shed its China roots. Wealth management services are becoming another big growth driver for Futu, with customer assets for that business expanding fast. To attract new clients in overseas markets, the company has been rolling out localized products, like Shariah-compliant gold tracker funds in Malaysia and domestic equity funds in Singapore. In addition to Hong Kong, Malaysia and Singapore, Futu currently offers service outside China in Japan, the U.S., Canada, Australia and New Zealand. But it isn't stopping there, and may expand into at least one more new market in Asia, Chen said on the call. Hong Kong IPO dominance Hong Kong, where one in every two adults uses Futu's products, remains a core market for the company. It's especially formidable in the IPO segment, accounting for nearly half of total subscriptions from local retail investors in 2025. Futu said it also provided investment banking services for more than half of the companies that went public in Hong Kong during the year. The company also owns Hong Kong virtual lender Airstar Bank, an asset that can create a range of synergies. For example, the bank has launched mutual funds and insurance products within Futu's app, with more wealth management offerings planned. Futu management envisions Airstar's long-term revenue coming primarily from fee-based wealth management services, rather than traditional lending, a model that fits neatly with the company's strengths. Still, Hong Kong is a hyper-competitive, mature market, so it makes sense for Futu to continue looking for growth elsewhere as well. That overseas expansion ambition contains many hurdles, from the need to win necessary licenses to competition with established local players. And while Futu trumpets its success in certain markets like Hong Kong, Malaysia and Singapore, it's notably silent on many of the others, suggesting it hasn't made much inroads in many of those. But Futu's relatively quick growth overseas suggests it has discovered a strong formula for success that's relatively easy to replicate across markets. Futu shares have gained about 28% in the past year to trade at a price-to-earnings (P/E) ratio of 14.6, well above 8.9 for UP Fintech, whose stock has lost 8% over that time. While UP Fintech initially focused on Singapore, Futu appears to be beating it to other new markets outside Greater China, something investors clearly appreciate. Now, the question is whether Futu can sustain its current momentum by balancing entry into new markets with growth in existing ones, all while operating profitably. That's always a big challenge for any expanding company, but Futu's achievements so far look rather promising. To subscribe to Bamboo Works weekly free newsletter, click here Benzinga Disclaimer: This article is from an unpaid external contributor. It does not represent Benzinga’s reporting and has not been edited for content or accuracy.