Emma Zhu

Emma Zhu inquired about Futu's sensitivity to a Fed rate cut and the notable quarter-over-quarter and year-over-year increases in R&D and G&A costs. She asked for the company's target or plan for investments in crypto and AI capabilities, which were cited as primary drivers for R&D, and for G&A staff increases.

Answer

CFO Arthur Chen explained that a 25 basis point Fed rate cut would negatively impact monthly pre-tax profit by approximately HKD 7 million, though positive factors like increased trading velocity and client asset inflows could partially offset this. Regarding expenses, he noted G&A increases were due to front-loading costs for new market preparations and crypto system investments for license applications. R&D increases were driven by crypto and AI investments, with plans to optimize AI capabilities for client agents and internal operating efficiency.

Emma Zhu asked about the sensitivity of Futu's financials to a Fed rate cut and sought clarification on the notable quarter-over-quarter and year-over-year increases in R&D and G&A expenses, specifically regarding investment plans for Crypto, AI capabilities, and general administrative headcount.

Answer

CFO Arthur Chen explained that a 25 basis points Fed rate cut would negatively impact monthly pre-tax profit by approximately HKD 7 million, though this could be partially offset by increased trading velocity and client asset inflows. He attributed the G&A expense increase to front-loading costs for new market preparations and investments in Crypto systems for license applications. R&D expenses were driven by optimizing AI capabilities for client agents and internal process streamlining.