Industry Report on the Hong Kong, the U.S.

and Singapore
online retail securities market

December 2022

© 2022 China Insights Consultancy. All rights reserved. This document contains highly confidential information and is solely for the use of our client.
No part of it may be circulated, quoted, copied or otherwise reproduced without the written consent of China Insights Consultancy.
 CIC Introduction, Methodologies, and Assumptions

China Insights Consultancy is commissioned to conduct an analysis of the global online securities market, and to produce a report on the Hong Kong,
the U.S. and Singapore online retail securities market, at a fee of RMB830,000. The report commissioned has been prepared by China Insights
Consultancy independent of the influence of the Company or any other interested party.
China Insights Consultancy, originally established in Hong Kong, is a Shanghai-based investment consulting company whose services include
industry consulting services, commercial due diligence, strategic consulting, and so on. CIC’s consultant team has been tracking the latest market
trends in sectors such as finance and service, agriculture, chemicals, consumer goods, marketing and advertising, culture and entertainment, energy
and industry, healthcare, TMT, transportation, etc., and has the most relevant and insightful market intelligence in the mentioned 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. The
information presented in the Industry Overview Section, including certain facts, statistics and data, is derived from the industry report prepared by CIC,
which was commissioned by the Company, and from various official government publications and other publicly available publications, unless
otherwise indicated.
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 improved 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.
All statistics are reliable and based on information available as of the date of this report. Other sources of information, such as governments, industry
associations, or marketplace participants, may have provided some of the information on which data or its analysis is based. All the information about
the Company is sourced from the Company’s own audited report or management interviews. China Insights Consultancy is not responsible for
verifying the information obtained from the Company.
Unless indicated otherwise, the conversions between U.S. dollars and Renminbi were made at the rate of RMB6.3393 to US$1.00 and the
conversions between U.S. dollars and Hong Kong dollars were made at the rate of HK$7.8325 to US$1, the respective exchange rate on March 31,
2022 set forth in the H.10 statistical release of The Board of Governors of the Federal Reserve Board. Certain amounts and percentage figures
included in this industry report have been subject to rounding adjustments.

1
 Terms and Abbreviations (1/2)

Terms:
• Artificial intelligence: refers to the intelligence demonstrated by machines, unlike the natural intelligence displayed by humans and animals.
• Big data: refers to large, diverse sets of information that are too complex to be adequately processed by traditional database management tools.
• Bond: refers to an instrument of indebtedness of the bond issuer to the holders.
• Close-end fund: refers to a portfolio of pooled assets that raises a fixed amount of capital through an initial public offering and then lists shares for trade on a
stock exchange.
• Cloud computing: refers to the on-demand availability of computer system resources, especially data storage (cloud storage) and computing power, without
direct active management by the user.
• Compound Annual Growth Rate (CAGR): The term refers to the year-over-year growth rate which is calculated by taking the root of the total percentage
growth rate over a specified period of time. The formula for calculating CAGR is: (ending value / beginning value)^(1/number of years)-1.
• DAU: Daily active users are measured based on the number of devices used by users and visitors who access the platform at least once in a given trading day.
Average DAU in a given period represents the summed DAU for each trading day averaged over the number of trading days in that period.
• ETFs: exchange traded funds (ETFs) are portfolio investment products that are admitted to listing or trading on a regulated exchange.
• FPS: faster payment system refers to a payment platform that connects banks and stored-value facility operators, allowing customers to make person-to-
person transfers, top up e-wallets and shop online anytime and anywhere.
• Greater Bay Area: the Greater Bay Area comprises the two Special Administrative Regions of Hong Kong and Macao, and the nine municipalities of
Guangzhou, Shenzhen, Zhuhai, Foshan, Huizhou, Dongguan, Zhongshan, Jiangmen and Zhaoqing in Guangdong Province.
• Hedge fund: refers to a financial partnership that uses pooled funds and employs different strategies to earn active returns for its investors.
• Institutional investor: an institutional investor is a company or organization that invests money on behalf of other people.
• Investable assets: personal investable assets are defined as cash, deposits, stocks, funds, bonds, insurance and other financial products held by individuals,
as well as investment property owned by individuals excluding their primary residence.
• Investment funds: refer to collective funds managed by an investment trust company (a company established with the purpose of investing in other
companies) or a management team, including UCITS, listed unit trusts, closed-end funds, investment trusts.
• Liquidity fund: refers to a mutual fund that invests in a diversified portfolio of securities, bonds, and options with high credit ratings for short-term investment.
• MAUs: Monthly active users refer to the number of users and visitors who access the platform at least once during the calendar month.
• Mobile internet: a type of connection that does not rely on wired connections to device but uses the 4G/5G networks that the mobile phone uses to connect to
the internet.
• Mutual fund: refers to a financial vehicle made up of a pool of money collected from many investors to invest in securities like stocks, bonds, money market
instruments, and other assets.

2
 Terms and Abbreviations (2/2)

Terms:
• Online brokerage: refers to securities trading originating from transaction orders placed by the investors via the Internet and submitted directly to the brokers
and executed electronically.
• Paying clients: Paying clients are defined as clients with assets in their trading account on the online brokers' platforms.
• Private equity fund: refers to a pooled investment vehicle where the adviser pools together the money invested in the fund by all the investors and uses that
money to make investments on behalf of the fund.
• Real estate fund: refers to a type of mutual fund that primarily focuses on investing in securities offered by public real estate companies.
• Retail investor: a retail investor, also known as an individual investor, is a non-professional investor who buys and sells securities or funds that contain a basket
of securities such as mutual funds and exchange traded funds (ETFs).
• 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.
• Clients: Clients are defined as users who open one or more trading accounts with the relevant broker.
• Securities market: refers to the market where stocks, shares, bonds, derivatives and other securities products are traded. Security market is a component of
the wider financial market where securities can be bought and sold between subjects of the economy, on the basis of demand and supply.
• Securitized asset fund: refers to a type of fund composed based on financial instruments whose cash flows are derived from and secured by specific
underlying assets.
• Trading volume: trading volume is the total number of shares traded, multiplied by their respective matching prices; in this report, unless otherwise stated, it
only calculates the trades initiated by investors.
• UITs: unit investment trusts (UITs) are financial companies that buy or hold a group of securities, such as stocks or bonds, and makes them available to
investors as redeemable units.
• Venture capital: refers to a form of private equity and a type of financing that investors provide to startup companies and small businesses that are believed to
have long-term growth potential.
Abbreviations: system
• CSDC: China Securities Depository and Clearing Corporation Limited • NYSE: New York Stock Exchange
• DARTs: Daily Average Revenue Trades • SEA: Southeast Asian
• ESOP: Employee Stock Ownership Plans • SFC: Securities and Futures Commission
• FINRA: The Financial Industry Regulatory Authority • SIPC: Securities Investor Protection Corporation
• FTSE: Financial Times Stock Exchange • SGX: Singapore Exchange
• HKEX: Hong Kong Exchange • U.S (the U.S): The United States
• IPO: Initial public offering • U.K (the U.K): The United Kingdom
• NASDAQ: National Association of Securities Dealers Automated Quotation • WFE: World Federation of Exchanges
3
Table of Contents

1 Global online securities market

2 Hong Kong, the U.S. and Singapore online retail securities market

3 Competitive analysis

4 Hong Kong wealth management market

5 Macroeconomics development of China

4
1. Global online securities market
 Global securities market
- The market size of the global securities market in terms of trading volume expanded from
US$163.3 trillion in 2017 to US$269.6 trillion in 2021, representing a CAGR of 13.4%, and is
expected to increase to US$334.5 trillion by 2026 at a CAGR of 4.4% from 2021 to 2026

Global Securities Trading Volume by Listing Venue (1), 2017-2026E Key Analysis
CAGR(2017-2021) CAGR(2021-2026E) • The global securities market, including markets for
stocks, bonds, ETFs, derivatives and other
Hong Kong 17.4% 9.6%
securities, experienced a growth in trading volume
The U.S. 17.9% 5.4% from US$163.3 trillion in 2017 to US$269.6 trillion in
Singapore 6.0% 5.3% 2021 at a CAGR of 13.4%. The trading volume is
projected to further reach US$334.5 trillion in 2026
US$ trillion Mainland China 27.4% 7.4%
at a CAGR of 4.4%. Such growth is driven by
Others 4.6% 1.0%
334.5 multiple factors, including enterprises’ continuous
350
Total 13.4% 4.4% 8.3 fundraising demands through capital markets, the
310.7
robust increase of retail investors’ disposable
300 287.7 7.0
269.6 268.5 income and innovations in brokerage products and
265.5 5.9
5.3 4.6 services.
4.9
250 233.3 155.3 • Global retail investor base continues to grow over
4.1 138.2
122.0 the years, driven by improved financial literacy and
200 180.6 119.6 114.2 106.8 lower threshold of financial markets access.
163.3 3.4 162.1 106.5 Specifically, digitalized and user-friendly trading
2.8 0.4 0.5
2.7 0.4 0.4 applications that charge low commissions have
150 0.4 0.4
62.0 84.2 61.8 66.1 70.4 dramatically lowered the investment barriers for
71.6 0.4 49.2 53.6 57.4
retail investors. In addition, Hong Kong, the U.S.,
100 0.3 38.6
18.6 15.30.3 0.3
22.0
Singapore and a few other regions such as
Australia securities markets provide a wide range of
50 95.2 95.7 96.1 97.7 99.0 100.0 diversified investment products, thereby attracting a
79.6 77.5 83.7
65.5 large number of retail investors worldwide.
0 • However, the global securities trading volume is
2017 2018 2019 2020 2021 2022E 2023E 2024E 2025E 2026E expected to experience slight decreases in 2022
and 2023 in view of a slowdown in global economic
Distribution of trading volume by retail and institutional investors, global, 2017-2026E growth and the weakening performance of global
securities market due to the tightening financial
conditions in most regions introduced to tackle
Retail investors rising inflation and living costs, geopolitical conflicts
39.6% 47.4% 51.2% 48.8% and the lingering impact of the COVID-19 pandemic.
60.4% 52.6%
Institutional investors The global securities trading volume is expected to
increase in 2024 and afterwards in view of the
factors that global economies will recover and
2017 2021 2026E geopolitical uncertainties will be alleviated in the
Notes: (1)The calculation is based on trading volume from retail investors and institutional investors, both of which
long run.
include trading volume from market makers.
Certain amounts and percentage figures included in this industry report have been subject to rounding adjustments. Source: HKEX, NYSE, Nasdaq, SGX, SSE, SZEX, CSDC, WFE, CIC 6
Current market trends of the global securities market
- The global securities market is pointing in the direction of accelerating online penetration,
increasing retail participation, emerging demand for vibrant social communities, and diversifying
product and service portfolio

Trends Key Analysis

1
 The development of mobile technology and investors’ growing preference for online trading have advanced digital brokerage
Accelerating services which enable investors to place and submit orders to brokers online and execute securities transactions electronically.
online The outbreak of the COVID-19 pandemic has further accelerated the migration of trading activities from offline channels to online
penetration 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.

2  The number of global retail investors continues to grow over the years, driven by Comparison of Retail Participation Rate(1),
improved financial literacy and a lower barrier to access financial markets. In 2021, Hong Kong, Singapore, the U.S. and
trading volume from retail investors accounted for approximately 47.4% of the total Mainland China, 2021
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 %
Increasing securities globally and are exerting increasing influence on stock performance. For 60 53.5% 52.3%
retail 43.0%
example, U.S. retail investors’ average weekly net purchases of equities increased
participation
five-fold to over US$5.0 billion from 2019 to 2021. Notably Hong Kong, Singapore 30 16.3%
and the U.S. presented the highest retail participation globally. Securities investing 0
is particularly popular in Hong Kong, with 53.5% of the adult population owning a Hong Kong Singapore The U.S. World
securities investment account in 2021. As the chart shows, in 2021, retail investors average
in these three markets represented 53.5%, 52.3% and 43.0% of their respective level
adult population, significantly higher than the global average of 16.3%.
3
 An increasing number of young and tech-savvy retail investors actively engage in social communities. In Asia and North
Emerging America, online brokerage platforms, which typically offer social communities, have gained popularity, evidenced by an
demand for
approximately 10% annual growth in active users’ daily average time spent thereon from 2019 to 2021. Younger investors tend
vibrant social
communities to use social networks to share investment experiences, acquire market data and information and seek investment advice.

4 Diversifying
product and • Many leading market players have transformed from securities brokerage tools into one-stop financial service platforms that
service integrate online trading, margin financing and securities lending, wealth management and other value-added services.
portfolio

Note: (1)The retail participation rate refers to the number of retail investors as a percentage of the total adult population.
Source: China Insights Consultancy 7
 Global online securities market
- The market size of the global online securities market in terms of trading volume increased from
US$66.0 trillion in 2017 to US$143.5 trillion in 2021, representing a CAGR of 21.5%, and is
expected to increase to US$208.1 trillion by 2026 with a CAGR of 7.7%

Global Online Securities Trading Volume(1) by Listing Venue, 2017-2026E Key Analysis
CAGR(2017-2021) CAGR(2021-2026E)
Hong Kong 22.2% 12.1% • Driven by investors’ rising
The U.S. 27.5% 8.9% preference for digital investment
channels, the global online
US$ trillion Singapore 12.4% 10.2%
securities market demonstrated
Mainland China 30.9% 11.7%
250 strong growth in the past five
Others 10.6% 2.1% years. The trading volume of the
208.1
200 21.5% 7.7% 186.3 6.1 global online securities market
Total 166.2 4.9 grew rapidly at a CAGR of 21.5%
143.5 144.9 147.6 4.0 from US$66.0 trillion in 2017 to
150 3.0 3.3 105.5
117.2 3.4 90.7 US$143.5 trillion in 2021. The
2.5 77.2
69.0 66.9 65.1 global online securities market will
100 77.4 0.3
66.0 73.2 56.5 0.2 0.3 continue to experience robust
2.0 1.7 0.2 0.2 0.2 48.8
1.5 34.9 39.3 44.0 growth due to the expansion of
50 26.1 37.3 33.3 0.2 28.1 31.2
0.1 0.1 8.8 0.1 24.6 global capital markets, growing
9.6 12.7
33.5 42.8 43.5 44.2 45.4 46.5 47.5 acceptance of online financial
28.7 29.2 25.5
0 services and products and
2017 2018 2019 2020 2021 2022E 2023E 2024E 2025E 2026E
Global securities technology upgrades of online
online trading 40.4% 42.8% 45.2% 50.2% 53.2% 54.0% 55.6% 57.8% 60.0% 62.2% brokers. The trading volume of the
penetration rate(2) global online securities market is
Global Online Securities Trading Volume(1) by End Investor Type, 2017-2026E projected to increase at a CAGR
CAGR(2017-2021) CAGR(2021-2026E) of 7.7% from 2021 to 2026 and
reach US$208.1 trillion in 2026.
Retail investor 25.4% 8.0%
The online securities trading
US$ trillion Institutional investor 16.8% 7.4% penetration rate is estimated to
250 208.1 reach 62.2% globally in 2026,
Total 21.5% 7.7% 186.3
200
144.9 147.6
166.2 while retail investors’ contribution
143.5
150 117.2 123.2 to global online securities trading
97.9 110.1
100 66.0 77.4 73.2 84.0 85.1 86.8 is expected to grow from 58.6% in
68.5
50 34.0 41.0 40.3 84.9 2021 to 59.2% in 2026.
48.7 59.5 59.8 60.9 68.3 76.3
0 31.9 36.3 32.9
2017 2018 2019 2020 2021 2022E 2023E 2024E 2025E 2026E
Retail investor
participation rate(3) 51.6% 53.0% 55.1% 58.5% 58.6% 58.7% 58.8% 58.9% 59.1% 59.2%

Notes: (1) The calculation is based on trading volume from retail investors and institutional investors, both of which include trading volume from market makers.
(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.
(3) 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. Source: HKEX, NYSE, Nasdaq, SGX, SSE, SZEX, CSDC, WFE, CIC 8
2. Hong Kong, the U.S. and Singapore online retail
securities market
Market drivers for Hong Kong, the U.S. and Singapore online retail securities
markets
-The increase of online retail securities’ trading volume in Hong Kong, the U.S. and Singapore were
driven by growing retail investor base, integrated online services and abundant investment opportunities

Market drivers for Hong Kong, the U.S. and Singapore online retail securities markets

• 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
Growing retail investor
securities markets. From 2017 to 2021, each of these three countries and regions has experienced a
base 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.

• 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
Integrated online services 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.

 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
Abundant investment of innovative companies with weighted voting rights, pre-revenue biotech companies, and the
opportunities 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.

10
 Market size of the Hong Kong online retail securities market (1/2)
-Ranked as the fifth largest online securities market by trading volume in 2021, Hong Kong was among
the fastest-growing online retail securities markets from 2017 to 2021, with a CAGR of 18.2%

Hong Kong Online Retail Securities Trading Volume(1) by Citizenship of Retail Investors, 2017-2026E

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

US$ billion Investors from Hong Kong 15.8% 10.8%

Investors from the U.S. 24.8% 18.5%
5,000
Investors from Singapore 37.4% 21.5%
4,500 Investors from Mainland China 19.7% 13.6%
4,000 Investors from other countries and regions 22.5% 15.0%
Total 18.2% 12.7%
3,500

3,000
2,488.5
2,500
2,025.6
2,000
1,648.9 1,351.7
1,500 1,367.1 1,328.6 1,130.7
1,220.3
1,047.2 946.0
1,000 892.4 810.0 147.2
701.1 26.0 751.7 784.3 145.7
45.4 26.5 668.5 31.5 63.1 723.1 57.3 63.5
85.4 77.8
112.5 106.8
535.7 619.6
500 450.9 15.4 26.9 478.4 15.6 30.4 55.1 49.1 55.3 497.9
327.6 111.3 292.6 98.2 318.0 107.5 400.1
159.4 198.7 181.5 49.7 270.2 46.7 177.7 224.3
0 49.4 85.7 139.7
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
penetration rate(3)
55.4% 59.2% 60.9% 60.5% 65.1% 65.5% 67.1% 68.7% 70.3% 72.8%

• Driven by the 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.
*Note: (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.
Source: HKEX, WFE, China Insights Consultancy 11
 Market size of the Hong Kong online retail securities market (2/2)
-The number of online retail investors in the Hong Kong securities market has grown 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 at a CAGR of
9.7% in 2026

Retail Investors in Hong Kong Online Retail Securities Market by Citizenship of Investors, 2017-2026E

CAGR CAGR
(2017-2021) (2021-2026E)
Investors from Hong Kong 15.8% 4.3%
Million Investors from the U.S. 25.4% 11.0%
18 Investors from Singapore 42.1% 19.3%
Investors from Mainland China 59.2% 10.7%
Investors from other countries and regions 13.2% 7.5%
15
Total 31.4% 9.7% 13.7
12.5
12 11.3 3.5
10.2 3.3
9.2 3.2 0.9
9 8.6
3.0 0.8
2.1
7.2 2.9 0.7 1.8
2.8
0.7 1.6
6 2.5 0.6 1.3
4.7 0.5
0.9 1.1
3.7 0.4
1.8 0.5 6.6
2.9 5.9
3 4.6 5.2
1.8 0.3 4.0 4.1
1.6 0.4 3.3
0.2 0.3 0.3 1.8
0.2 1.0
0.6 0.5 0.6 0.6 0.7 0.7
0 0.3 0.3 0.3 0.4 0.5
2017 2018 2019 2020 2021 2022E 2023E 2024E 2025E 2026E

• 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.

Source: HKEX, WFE, China Insights Consultancy 12

 Market size of the U.S. online retail securities market (1/2)
-Ranked as the first largest online securities market by trading volume in 2021, the U.S. securities
market was among the fast-growing online retail securities markets from 2017 to 2021, with a CAGR of
32.9%

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 42.4% 17.0%
US$ trillion
Investors from the U.S. 31.1% 8.7%
50 Investors from Singapore 64.0% 23.6% 47.2
0.6
45 Investors from Mainland China 48.6% 15.3%
40.2
Investors from other countries and regions 40.8% 12.4%
40 0.5
Total 32.9% 9.7% 33.9
35
29.8 0.4
28.8 28.3
30 0.3 0.3 0.3 36.8
24.5
25 0.2 31.6
20 26.9
24.2 23.2 22.6
15 13.2
0.1 11.5 20.1
9.6 0.1
10 0.1 1.5 0.4
11.2 9.5 1.2 0.3
5 8.2 0.1 0.7 0.2 0.7 0.2 0.8 1.0 0.2
0.6 0.1 5.4 6.6 7.9
0.02 1.7 0.2 0.03 1.5 0.3 0.04 3.5 4.4 4.4 4.4
0 1.1 0.1
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%

• 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.
*Note: (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 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.
Source: NYSE, Nasdaq, WFE, China Insights Consultancy 13
 Market size of the U.S. online retail securities market (2/2)
-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 by Citizenship of Investors, 2017-2026E

CAGR CAGR
(2017-2021) (2021-2026E)
Investors from Hong Kong 30.0% 13.5%
Million Investors from the U.S. 9.4% 3.6%
Investors from Singapore 35.5% 16.3%
220
Investors from Mainland China 56.2% 9.8%
200 Investors from other countries and regions 15.7% 8.9%
Total 12.2% 5.5%
180
165.5
157.6 3.0
160 150.3 2.7
143.0 2.4
140 135.7 2.1
126.5 1.8
1.6
120 110.4
1.3 105.9
100 102.3
90.4 98.7
85.2 0.8 95.3
79.9 0.7 91.9
80 0.6 88.7
80.0
60
67.0 2.2
64.5 1.9 9.9
61.9 1.7 8.8
1.2 1.4 7.7
40 6.5 7.0
1.1
6.2
5.6 0.7 44.5
20 1.7 0.4 3.2 0.5 37.2 39.8 41.9
1.0 0.3 29.0 34.3
16.2 17.8 18.9 22.8
0
2017 2018 2019 2020 2021 2022E 2023E 2024E 2025E 2026E

Source: NYSE, Nasdaq, WFE, China Insights Consultancy 14

 Market size of the Singapore online retail securities market (1/2)
- Besides Southeast Asian countries, including Singapore, Indonesia, Malaysia and Thailand, constitute
a blue ocean market opportunity for online retail brokers

Singapore Online Retail Securities Trading Volume(1) by Citizenship of Retail Investors, 2017-2026E

US$ billion CAGR(2017-2021) CAGR(2021-2026E)

Investors from Hong Kong 21.3% 11.7%
160
Investors from the U.S. 16.7% 10.8%
140 Investors from Singapore 14.3% 10.4%
Investors from Mainland China 15.8% 10.6%
120 Investors from other countries and regions 12.7% 8.0% 109.9
Total 14.9% 10.3% 97.8 9.2
100
86.8 8.1 11.3
77.0 7.1 10.0
80 72.0
67.4 6.2 8.9
5.7 7.8
56.6 5.3 7.3
60 6.8
4.4 66.4
41.9 40.1 5.7 59.0
38.6 52.4
40 4.1 2.9 46.4
3.7 2.5 4.0 3.0 40.5 43.3
34.0
20 23.7 25.4 24.0
8.2 9.3 10.6
5.4 6.4 6.7 7.2
3.5 4.3 4.5 8.4 8.9 9.3 10.3 11.3 12.3
0 5.2 5.2 4.5 7.1
2017 2018 2019 2020 2021 2022E 2023E 2024E 2025E 2026E
Overall retail
35.5% 36.0% 36.5% 35.8% 35.1% 35.3% 35.5% 35.7% 35.9% 36.1%
participation rate(2)
Overall online
36.9% 39.5% 41.5% 43.5% 46.5% 49.4% 51.7% 53.9% 56.1% 58.4%
penetration rate(3)
• 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 me asured 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.
*Note: (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 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. Source: SGX, WFE, China Insights Consultancy 15
 Market size of the Singapore online retail securities market (2/2)
-The number of online retail investors participating in the Singapore 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 by Citizenship of Investors, 2017-2026E

CAGR CAGR
(2017-2021) (2021-2026E)
Million Investors from Hong Kong 21.9% 11.3%
Investors from the U.S. 21.5% 10.9%
8
Investors from Singapore 11.7% 10.7%
Investors from Mainland China 32.2% 8.0%
7
Investors from other countries and regions 22.3% 11.3%
6.2
Total 18.0% 10.6%
6 5.7 0.4
5.1 0.4 0.8
5 4.6 0.4 0.7
4.2 0.3 0.6
4 3.7 0.3 0.6
0.2 0.5 2.6
3.2 2.4
0.2 0.5
3 2.1
2.5 0.4 1.9
2.2 0.1 1.7
1.9 0.1 0.3 1.6
2 0.2 0.1 0.3 1.4 0.7
0.6
0.6
1 1.2 0.5
1.1 0.5
1.0 0.5
1 0.4
0.3 1.4 1.6 1.7
0.2 0.2 1.0 1.1 1.3
0.6 0.8
0.4 0.5
0
2017 2018 2019 2020 2021 2022E 2023E 2024E 2025E 2026E

• The number of retail investors 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%. 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.

Source: SGX, WFE, China Insights Consultancy 16

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

Market opportunities in other Southeast Asia market

• Southeast Asia has some of the fastest-growing mobile internet markets in the world. In Indonesia, Malaysia and Thailand, adult users
Development 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 mul tiple
factors, including a high population growth rate, a large smartphone user base and the rapid development of telecom infrastructure. As
of mobile a result, the weighted average penetration rate measured by number of mobile internet users out of the total population in Indonesia,
internet Malaysia and Thailand increased from 46.7% in 2017 to 58.0% in 2021, and is expected to reach 67.5% in 2026.

 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
Improving
three-year strategic plan (2020-2022) to enhance the digitalization of domestic financial system and the development of open
access to infrastructure for financial services sector. Furthermore, the Financial Services Authority of Indonesia launched Master Plan for the
financial Indonesian Financial Services Sector (2021-2025) in 2021 to promote the digitalization of financial products and business operations..
services
 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  In 2021, households in Indonesia, Malaysia and Thailand allocated only 38.4% of their wealth to financial assets, significantly lower
securities than the global average of 60.6%. As the penetration of mobile internet and accessibility to financial services rise, these countries are
brokerage due expected to follow the same path observed in other Asian countries and regions and experience a structural shift in investment from
to increasing properties and pensions to stocks, mutual funds and other liquid assets. Online brokers are expected to win the majority of these new
financial asset retail investors and assets, primarily due to their ability to offer intuitive user interface, seamless trading experience and low
allocation. commission fees.

Source: China Insights Consultancy 17

3. Competitive analysis
Competitive landscape overview in the online securities market
- 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.

Definition and categorization of brokers in the online securities market

Major types of User Level of Commission

Features
brokers experience technology rate

Online brokers typically present the following features:

• operating securities brokerage business substantially online;
• adopting asset-light business models typically with
Online technological capabilities enabling frequent product iterations
brokers 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
Traditional • having generally long operating history with established
brokers
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.

Level: low to high The type that the Group belongs to

Source: : Company filings and annual reports, China Insights Consultancy 19
Ranking of top five brokers in Hong Kong retail securities brokerage market
- 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.

Top Five Brokers in Hong Kong Retail Securities Brokerage Market by Trading Volume (1), 2021
Total online retail
Total retail securities Market share in terms of
securities trading
trading volume(5) on total retail trading (5) on the Hong
Ranking Broker Type volume
the Hong Kong Stock volume(5) on the Hong
Kong Stock Exchange
Exchange (US$ billion)Kong Stock Exchange（%）
(US$ billion)
1 The Group Online broker 283.2 10.7% 283.2
2 Company A Traditional broker 127.0 4.8% 105.0
3 Company B Online broker 110.0 4.1% 110.0
4 Company C Traditional broker 95.0 3.6% 76.0
5 Company D 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

Operating Indicators Comparison of Top Five Brokers in Hong Kong Retail Securities Brokerage Market, 2021

Retention rate(3) of paying

Total number of clients Total number of paying Number of MAU(2) in
Broker clients in the fourth quarter
(million) clients (million) December 2021
of 2021 (%)

The Group 2.8 1.2 2.2 97%

Company A 1.2 0.4 0.4 83%
Company B 1.7 N/A(4) N/A(4 N/A(4
Company C 0.8 0.3 0.3 85%
Company D 1.8 0.7 0.5 89%
Notes:
(1) Rounding adjustments have been applied to certain amounts of securities trading volume.
(2) MAUs (monthly active users) refer to the number of users and visitors who access the platform at least once during the calendar month.
(3) 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.
(4) It is not meaningful for comparison purposes as the company’s publicly available data only includes aggregate figures from both its institutional and retail clients.

Source: Company filings and annual reports, China Insights Consultancy 20

Business indicators comparison of top ten brokers in Hong Kong retail securities
brokerage market (1/2)
-The Group is 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 to offer completely online-based account
opening services

Top Ten Brokers in Hong Kong Retail Securities Brokerage Market by Trading Volume (5), as of June 30, 2022

Total retail securities trading volume(5) on the Release dates of online-based account
Ranking Broker
Hong Kong Stock Exchange (US$ billion), 2021 opening services
1 The Group 283.2 July 2018
2 Company A(1) 127.0 December 2020
3 Company B(2) 110.0 N/A(11)
4 Company C(3) 95.0 January 2021
5 Company D(4) 63.0 December 2018
6 Company E(6) 60.0 July 2020
7 Company F(7) 58.0 November 2018
8 Company G(8) 46.0 February 2019
9 Company H(9) 37.0 December 2018
10 Company I(10) 26.0 May 2020
Others 1751.8
Total 2,657.0
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.
(6) It is an online broker focusing on Chinese investors for overseas investments, providing various financial services including securities brokerage, and wealth
management.
(7) It is a Hong Kong-based broker with a rapidly expanding network across the globe, whose parent company is a mainland broker. It provides comprehensive financial
services including wealth management, corporate finance, asset management, global markets and investments;
(8) It is a broker with a long history and providing comprehensive and professional brokerage services of securities and futures, margin financing and wealth management.
(9) It is a Hong Kong-based broker and a wholly owned subsidiary of a mainland broker. It provides cross border financial services and solutions across primary and
secondary market, covering various countries and regions including Hong Kong and the United States ；
(10) It is an online broker whose parent company is a popular online broker in Mainland China, providing various services including securities brokerage, margin financing,
and wealth management;
(11) It is not meaningful for comparison purposes as the publicly available information of Company B.
Source: Company filings and annual reports, China Insights Consultancy 21
 Business indicators comparison of top ten brokers in Hong Kong retail securities
brokerage market (2/2)
-The Group retained around 98% of its paying client base on a quarterly basis, one of the highest retention rates among
online securities brokers in Hong Kong; the Group provided 153 application upgrades and incorporated 5,689 new
product features for the Group’s users in 2021, the most in the Hong Kong retail securities brokerage market
Operating, business and technical indicators comparison among the top ten brokers in Hong Kong retail securities brokerage
market as of June 30, 2022
The Group Company A Company B Company C Company D Company E Company F Company G Company H Company I
Operating
Quarterly retention
rate(1) of paying clients Around 98% 86% N/A(2) 88% 91% 83% 88% 88% 81% 81%
from 2019 to 2022H1
Application upgrades
153 ~40 ~50 ~20 ~130 ~30 ~80 ~20 ~40 ~50
in 2021
New product features
5,689 ~1,300 ~2,400 ~400 ~2,600 ~1,500 ~5,100 ~1,100 ~800 ~2,200
in 2021
Business
ESOP January 2018 N/A N/A N/A August 2018 N/A N/A N/A N/A N/A
Technical
SLA Over 99.9% >95% N/A >95% 99.9% >99% 99.9% >95% 99.9% >95%
1-2 days， 1-2 days, the 1-2 days, the 1-2 days, the
Account opening time the fastest 5-10 days 1-3 days 3-5 days fastest 1-3 days 1-2 days fastest 1-2 days fastest
3minutes 3minutes 3minutes 10minutes
bank-to-brokerage A few A few A few A few
1-3 days 1-3 days 1-3 days 1-3 days 1-2 days 1-2 days
fund transfers time seconds seconds seconds seconds
Transactions per
Less than Less than Less than Less than Less than Less than Less than
second as of June 30, 1,004 N/A N/A
1,000 1,000 1,000 1,000 1,000 1,000 1,000
2022

• The Group was the first online securities broker in Hong Kong to offer ESOP solution services to corporate clients.
• The Group is 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. As of June 30, 2022, the Group was capable of processing 1,004 Hong Kong listed securities
trades per second, highest among securities brokers in the Hong Kong retail securities brokerage market. The Group invest significantly to ensure platform
stability, and achieved over 99.9% of service availability rate on the Group’s platform in 2020 and 2021, the highest among securities brokers in Hong Kong.
• As a publicly listed company, the Group is perceived as a strong debtor by market and has 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.
Notes:
(1) 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.
(2) 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.
Source: Company filings and annual reports, China Insights Consultancy 22
Business indicators comparison of top five brokers in Hong Kong online retail
securities brokerage market (1/2)
- The Group ranked first among top five brokers in Hong Kong retail online securities brokerage market in terms of
total retail securities trading volume on the Hong Kong Stock Exchange, and it can offer premier user experience as
demonstrated by its market pioneer position to firstly offered real-time data and many new product features for clients
Top Five Brokers in Hong Kong Retail Online Securities Brokerage Market by Trading Volume (1), as of June 30, 2022
Firstly offering
Total online retail Automatic option for clients
investment Firstly launching to automatically
securities trading Average
function of idle Firstly offering proprietary grey subscribe for
volume(1) on the client assets
Ranking Broker Type cash in accounts real-time market trading and redeem
Hong Kong Stock as of June 30,
to money market market data services for money
Exchange in 2021 2022 (HK$)
funds to earn Hong Kong IPOs market funds
(US$ billion) interest based on their
cash positions
1 The Group Online broker 283.2 310,000 √ √ √ √
2 Company B Online broker 110.0 N/A(2) × × × ×
3 Company D Online broker 63.0 159,900 × × × ×

4 Company E Online broker 60.0 Under 100,000 × × × ×

5 Company I Online broker 26.0 N/A(2) × × × ×

Others 1,371.8
Total 1,914.0
Notes:
(1) Rounding adjustments have been applied to certain amounts of securities trading volume.
(2) 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.
• Average paying client assets of over HK$310,000 on the Group’s platform as of June 30, 2022, the latter being the highest average retail client
asset level among online securities brokers in Hong Kong.
• The Group’s 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.
• The Group 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.
• The Group is a market pioneer as the first online securities broker in Hong Kong to launch many new product features, 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.
Source: Company filings and annual reports, China Insights Consultancy 23
Business indicators comparison of top five brokers in Hong Kong online retail
securities brokerage market (2/2)
- With diversified product portfolio and satisfying user experience, the Group platform has become the go-to choice
for retail investors and attracted a vast base of high-quality customers

Operating, business and technical indicators comparison among the top five brokers in Hong Kong retail
online securities brokerage market (1), as of June 30, 2022
% of coverage
Number of Firstly obtained
in the number Quarterly
ESOP Time to offer “BBB-” credit Firstly obtained a
of Chinese retention rate of
solutions ESOP solution rating from S&P standalone
Ranking Broker Type new economy paying clients
clients services to Global Ratingsin investment grade
companies from 2019 to
，as of June corporate clients the Asia-Pacific issuer rating
listed overseas 2022H1
30, 2022 region
since 2018
1 The Group Online broker 519 >40% January 2018 Around 98% √ √

2 Company B Online broker N/A N/A - N/A(2) × ×

3 Company D Online broker 364 >30% August 2018 91% × ×

4 Company E Online broker Under 30 <5% N/A 88% × ×

5 Company I Online broker 0 0 - 81% × ×

Others
Total

Notes:
(1) Rounding adjustments have been applied to certain amounts of securities trading volume.
(2) 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.
• The Group was the first online securities broker in Hong Kong to offer ESOP solution services to corporate clients.
• As of June 30, 2022, the Group had 519 ESOP solutions clients, covering the largest number of China’s new economy companies listed
overseas since 2018.
• During the Track Record Period, on average the Group retained around 98% of the Group’s paying client base on a quarterly basis, one of the
highest retention rates among online securities brokers in Hong Kong.
• The Group 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.
• The Group was 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).
Source: Company filings and annual reports, China Insights Consultancy 24
Business indicators comparison for the Group
- After ten years of rapid growth, the Group is now a market leader in Hong Kong in the retail
securities brokerage industry.

Ranking of the online social investing communities, Hong Kong, 2021

Ranking Name of online social investing community Average MAU (million)

1 The Group ~0.45

2 Company J ~0.03
3 Company I <0.02
4 Company D <0.01
5 Company E <0.01

Ranking of the online forums, Hong Kong, 2021

Ranking Name of online forum Average MAU (million)

1 Company K ~0.49
2 The Group ~0.45
3 Company J ~0.03
4 Company D <0.01

• 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.
• 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.
• NiuNiu Community on Futubull was one of the first investor communities that Tesla joined.

Source: Company filings and annual reports, China Insights Consultancy 25

Key success factors of online brokers
- Strong brand recognition ,the abilities to enhance trading efficiency, provide comprehensive value-
added services, and foster substantially-growing user bases in a cost-effective manner are required for
online brokers to stand out among the intense market competition.

Key success factors Key analysis

• Online brokers with strong brand images tend to be perceived by retail investors as more trustworthy and
Strong brand
having superior fund security and system stability. Thus, they are better-positioned to attract and retain
recognition
customers.

Advanced • Market leaders are usually equipped with advanced technology, solid infrastructure and strong research and
technological development capabilities to handle sudden trading volume surge, maintain system and data security, and
capabilities release new functionalities and upgrade product offerings in a timely manner.

• Leading online brokers are committed to innovation and superior user experience. For example, leading online
Superior user brokers can complete the account-opening process within five to ten minutes which may take one business day
experience for other players. They can also provide users with a seamless trading experience by executing trades on an
almost real-time basis.

• Retail investors tend to favor social networks to exchange investment ideas and share market information.
Vibrant social
Online brokers with interactive social platforms typically enjoy higher client engagement and retention rates,
community
and thus bear better monetization potential.

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

Efficient user
• Leading online brokers usually implement innovative marketing strategies to capture user mindshare and
acquisition
efficiently acquire users at relatively low cost.
approaches

Source: China Insights Consultancy 26

4. Hong Kong wealth management market
Market size of Hong Kong wealth management market
- The market size of the wealth management market in Hong Kong grew to US$1.7 trillion in 2021 and
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

Key Analysis
Under Management (1), 2017-2026E

CAGR (2017-2021E) CAGR (2021E-2026E) • With increasing wealth accumulation and

growing understanding of financial markets,
Public fund 10.1% 9.7% retail investors ranging from the mass affluent
Private fund 10.5% 9.3% to the ultra-high-net-worth demand more
US$ trillion diversified investment products, from stocks
Total 10.2% 9.6%
and ETFs to derivatives. Many retail investors
Forecast have become aware of investment
3.0 opportunities outside of their home countries,
2.8 especially in the U.S. and Hong Kong markets.
2.7
2.5 • Specifically, the offshore investment market
for Chinese investors is growing rapidly,
2.4 2.3 driven by the expanding population of global
2.1 Chinese communities, the increasing
2.1 investable assets per capita, and growing
1.9 appetite for equities and fund products.
1.8 1.7 1.9
1.6 • As a competitive asset and wealth
1.8 management center and a preferred place of
1.5 1.6
1.3 fund domicile, Hong Kong witnessed rapid
1.2 1.4 expansion of its wealth management market
1.2 1.1 1.3
1.2 from US$1.2 trillion in 2017 to US$1.7 trillion
1.2 in 2021 at a CAGR of 10.2%. This market is
0.9 1.0 expected to reach US$2.8 trillion in 2026 at a
0.8 0.7 CAGR of 9.6%.
0.6
• Driven by (i) comprehensive investment
0.7 0.8 product suites (ii) development of Greater Bay
0.3 0.6 0.6 0.7
0.5 0.5 Area Initiatives, and (iii) infrastructure upgrade
0.3 0.4 0.4
to facilitate access to wealth management
0.0 products, the Hong Kong wealth management
2017 2018 2019 2020 2021 2022E 2023E 2024E 2025E 2026E market is projected to reach US$2.8 trillion in
2026 with a CAGR of 9.6%.
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.

Source: SFC, China Insights Consultancy 28

Market drivers of the Hong Kong wealth management market
- The Hong Kong wealth management market is mainly being driven by comprehensive investment product
suites, development of Greater Bay Area Initiatives, and infrastructure upgrade to facilitate access to
wealth management products

Drivers Description

• 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,
Comprehensive
including those from the Asia-Pacific region, the U.S., Canada, Europe and other countries and regions. In 2021,
investment product
Hong Kong wealth management market offered 2,839 authorized collective investment schemes, including public
suites
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.

• 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 reallocating their offshore assets from real estate to
equities and funds for greater asset diversification. In response to such market dynamics, the Hong Kong
Development of Monetary Authority (“HKMA”), the Monetary Authority of Macao (“AMCM”) and the People’s Bank of China
Greater Bay Area (“PBOC”) officially launched the Cross-boundary Wealth Management Connect (“WMC”) Pilot Scheme in the
Initiatives 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.

• Investors continue to seek investment opportunities beyond traditional products such as bank deposits, which
Infrastructure upgrade
enables them to allocate their investments toward asset classes with a variety of risk and return profile. The
to facilitate access to
optimization of financial infrastructure facilitates this trend. For example, the launch of the Fast Payment System
wealth management
realizes instant money transfer and gives investors easier access to wealth management products in the Hong
products Kong market.

Source: China Insights Consultancy 29

5. Macroeconomics development of China
Survey analysis regarding complaints and recommendation
- According to a survey conducted by CIC in August 2021 covering 1,000 users, 92%
of respondents are willing to recommend the Group to other people.

Q15: How likely would you recommend Futu to others? Futubull Moomoo
n=799 n=197

(On a scale of 0 to 10，10 represents very likely, and 0 represents not likely at all)

0.5% 3.6%
10 4.3%
9 0.8% 10.4% 2.5%
6.8% 23.0% 1.3%
1.1%
8 0.5%
0.4%
7 1.0% 1.5%
6 1.0%
16.0% 0.5%
5 0.5% 93.4%
4
3 16.1% 78.3%
2
1
0
30.0%

Key analysis
• According to a survey conducted by CIC in August 2021 covering 1,000 users, 92% of respondents are willing to recommend
the Group to other people (with a score of 6 and above).

Source: China Insights Consultancy 31

China’s economy has grown steadily contributed by stabilized final consumption
and increasing net export

Nominal GDP breakdown by category, China, 2017-2026E Number of private enterprises, China, 2017-2021

Final consumption Capital formation Net export Millions Private enterprises

Forecast
50
44.6
13.1% 40.1
40
55.1% 55.3% 55.9% 54.4% 55.3% 55.3% 55.4% 55.4% 55.4% 55.4% 35.2
31.4
30 27.3

20

43.2% 44.0% 43.1% 41.8% 41.3% 40.8% 40.2% 39.8% 39.2%

43.2% 10

1.7% 0.7% 0.9% 2.5% 2.9% 3.4% 3.8% 4.4% 4.8% 5.4% 0
2017 2018 2019 2020 2021
2017 2018 2019 2020 2021 2022E 2023E 2024E 2025E 2026E

• Final consumption, capital formation, and net exports are the three traditional components of GDP. Final consumption refers to the combined total for
private consumption and government spending, which caters to daily needs both on an individual and collective level. Capital formation refers to
investments in most tangible assets, rather than investments in financial assets such as stocks and securities. Net exports refer to the number of exports
after deducting the number of imports. Together, these three components have driven China’s rapid economic growth. China’s economic growth can
largely be attributed to capital formation and net exports in the past, with five-year CAGR of 1.0% and 14.3% from 2017to 2021. With the stabilized final
consumption and increasing net export, China’s nominal GDP will grow steadily in the next five years, with the share of final consumption to be 55.4% and
that of net export to be 5.4% in 2026.
• As a result of continued economic growth, the number of private enterprises has also continued increasing, with the total number having increased from
27.3 million in 2017 to 44.6 million in 2021, representing a CAGR of 13.1%. Moreover, it is worth noting that the sector for private enterprises has
continued expanding as a proportion of all enterprises in China, with this sector having accounted for 92.1% of total number of enterprises in 2021,
increasing from an 89.9% in 2017.
Source: NBS, Ministry of Commerce, China Insights Consultancy 32
Nominal GDP and real GDP growth rates in China
- China’s economy has continued to experience robust growth over the past years. Even during the
outbreak of COVID-19 in 2020, China’s GDP still maintained a positive growth trend, with the economy
meanwhile expected to expand at a CAGR of 5.2% looking forward during the period from 2021 and 2026.

Nominal GDP and real GDP growth rates, China, 2017-2026E

RMB trillion CAGR (2017-2021) CAGR (2021-2026E) %

180 Nominal GDP (LHS) 8.4% 5.2% 14
Real GDP growth rate (RHS) 12.8

150 147.5 12
11.1 140.6
133.8
10.5 127.2
120.8
120 114.3 10
99.1 101.4
91.6
90 82.9 8
8.2

60 6
5.7
5.3 5.2 5.1
30 4.9 4
2.3

0 2
2017 2018 2019 2020 2021 2022E 2023E 2024E 2025E 2026E
Analysis
• China’s economy has experienced significant growth over the past several years, with its nominal GDP increasing from RMB82.9 trillion
in 2017 to RMB114.3 trillion in 2021. China’s nominal GDP is moreover expected to continue growing to reach RMB147.5 trillion by 2026.
• China’s economy has been transitioning from a planned economy to a more market-oriented economy and is shifting from a state-led
investment model to a consumption-driven model, a shift which is reflected in a rising contribution from the tertiary sector and
decreasing contributions from the primary and secondary sectors.
• With growing consumption demand and with government promises to continue its opening-up policy, China’s economy is expected to
grow at a stable and sustainable pace over the long run.
Source: IMF, China Insights Consultancy 33
Per capita nominal GDP in China
- China boasts a continuously expanding economy and a stable population growth rate, with its per capita
nominal GDP rising from RMB59.6 thousand in 2017 to RMB81.0 thousand in 2021. Furthermore, China’s
per capita nominal GDP is expected to increase steadily to reach RMB113.4 thousand by 2026 at a
CAGR of 8.0% during the period from 2021 to 2026.
Per capita nominal GDP, China, 2017-2026E

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

Per capita nominal GDP 7.9% 8.0%
125 119.1
111.0
103.1
100 95.6
88.5
81.0
75 70.8 72.0
65.6
59.6

50

25

0
2017 2018 2019 2020 2021 2022E 2023E 2024E 2025E 2026E
Analysis
• Along with China’s continuously expanding economy and relatively stable population growth rate, per capita nominal GDP in China has
also continued climbing at a relatively higher pace in comparison with other countries. Per capita nominal GDP grew from RMB59.6
thousand in 2017 to reach RMB81.0 thousand in 2021 as projected, representing a CAGR of 7.9%. It is anticipated that China’s per
capita nominal GDP will reach RMB113.4 thousand by 2026, representing a CAGR of 8.0% during the period from 2021 to 2026.
• China’s per capita nominal GDP is also likely to maintain a steady growth trend in the future along with the continued rapid growth of the
overall economy. It is expected that by 2026, China’s per capita nominal GDP will rank first among the BRICS (Brazil, Russia, India,
China, and South Africa) countries.

Source: IMF, China Insights Consultancy 34

Nominal GDP and real GDP growth rates in China
- China’s economy has continued to experience robust growth over the past years. Even during the
outbreak of COVID-19 in 2020, China’s GDP still maintained a positive growth trend, with the economy
meanwhile expected to expand at a CAGR of 5.2% looking forward during the period from 2021 and 2026.

Nominal GDP and real GDP growth rates, China, 2017-2026E

RMB trillion CAGR (2017-2021) CAGR (2021-2026E) %

180 Nominal GDP (LHS) 8.4% 5.2% 14
Real GDP growth rate (RHS) 12.8

150 147.5 12
11.1 140.6
133.8
10.5 127.2
120.8
120 114.3 10
99.1 101.4
91.6
90 82.9 8
8.2

60 6
5.7
5.3 5.2 5.1
30 4.9 4
2.3

0 2
2017 2018 2019 2020 2021 2022E 2023E 2024E 2025E 2026E
Analysis
• China’s economy has experienced significant growth over the past several years, with its nominal GDP increasing from RMB82.9 trillion
in 2017 to RMB114.3 trillion in 2021. China’s nominal GDP is moreover expected to continue growing to reach RMB147.5 trillion by 2026.
• China’s economy has been transitioning from a planned economy to a more market-oriented economy and is shifting from a state-led
investment model to a consumption-driven model, a shift which is reflected in a rising contribution from the tertiary sector and
decreasing contributions from the primary and secondary sectors.
• With growing consumption demand and with government promises to continue its opening-up policy, China’s economy is expected to
grow at a stable and sustainable pace over the long run.
Source: IMF, China Insights Consultancy 35
 Global and China’s R&D Expenditure
- With local government support and investment in innovation and technology, R&D expenditure in China
experienced rapid growth. It is estimated that China’s R&D expenditure will reach RMB4,320 billion in 2026,
accounting for approximately 2.6% of GDP

R&D expenditure in absolute value and as

percentage of GDP, China, 2017-2026E R&D expenditure (% of GDP), global, 2017-2026E

RMB billion %
4,500 4,320 3.5 100%

4,000 99%
3.0
3,500 2.6% 98%
2.5%
2.4% 2.5
3,000 2.2% 2.2% 2,786
2.1%
2,500 2,443 2.0 5%
2,214
1,968 4%
2,000 1,761 1.5
1,500 3%
1.0
1,000 2%
0.5 2.3% 2.6% 2.6% 2.7%
500 1% 2.2% 2.2%

0 0.0 0%
2017 2018 2019 2020 2021 2026E 2017 2018 2019 2020 2021 2026E

• China’s R&D expenditure increased from RMB1,761 billion in 2017 to RMB2,786 in 2021. As in 2021, the total R&D expenditure
as percentage of GDP was approximately 2.5%, an increase of nearly 0.4% as compared to 2017. Meanwhile, global R&D expenditure as
percentage of GDP grew from 2.2% to 2.6%. This steady increase was mainly due to national government’s policy and capital support in terms of
science and technology, as well as the development of high-tech companies in China.
• With more and more technological development and innovation together with the positive influence of Internet giants, R&D investment is expected to
keep growing. It is estimated that China’s R&D expenditure will reach RMB4,320 billion in 2026, accounting for approximately 2.6% of GDP.

Note: The expenditure Includes both capital and current expenditures in the following four sectors: business enterprise, government, higher education and private
non-profit. R&D covers basic research, applied research, and experimental development.

Source: NBS, OECD, China Insights Consultancy 36

 Population and urbanization rates in China
- China is the most populous country in the world, and its population growth is expected to slow down
in the future. With the steady development of China’s economy, the country’s urbanization rate rose
continuously and is projected to increase even further in the future.

Population and urbanization rates, China, 2017-2026E

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

2,000 Population (LHS) 0.4% 0.3% 150
Urbanization (RHS)

1,500 1,390.1 1,395.4 1,400.1 1,411.8 1,412.6 1,418.5 1,421.9 1,425.2 1,428.6 1,431.9
100

1,000 64.7 65.0

60.6 63.9
58.5 59.6
65.4 65.7 66.0 66.3
50
500

0 0
2017 2018 2019 2020 2021 2022E 2023E 2024E 2025E 2026E
Analysis
• China currently has the world’s largest population, which is projected to continue growing in the future. Moreover, China’s population
now accounts for approximately 20% of the world’s population. Since the one-child policy was introduced in 1979, China’s population
growth rate has undergone a continuous decline. China’s total population reached 1,412.6 million in 2021, representing a CAGR of
around 0.4% between 2017 and 2021.
• With the full implementation of the two-child and three-child policies, the country’s total population is expected to continue growing to
reach 1,431.9 million people by 2026, representing a CAGR of approximately 0.3% between 2021 and 2026.
• The urbanization rate increased from 58.5% in 2017 to 64.7% in 2021,with this rate moreover projected to rise to 66.3% by 2026.
Source: NBS, China Insights Consultancy 37
China’s average annual salary in the private sector has grown rapidly over the
years, with this increase forecasted to continue along with sustained economic
development in the country

Per capita disposable income of urban households, China, 2017-2026E Analysis

RMB CAGR (2017-2021): 6.8% • With China’s economy now transitioning,
CAGR (2021-2026E): 7.6% personal expenditures are playing an
Forecast 68,383
70,000 63,671 increasingly important role in the economy.
59,229 Per capita disposable income of urban
60,000 55,046
51,110 households in China increased from
50,000 47,412
42,359 43,834 RMB36,396 in 2017 to RMB47,412 in 2021,
39,251
40,000 36,396 representing a CAGR of 6.8%. This number is
30,000 further expected to reach RMB68,383 by
20,000
2026, representing a CAGR of 7.6% from
2021.
10,000
• The private sector includes private companies,
0 corporations, limited liability companies,
2017 2018 2019 2020 2021 2022E 2023E 2024E 2025E 2026E
partnerships, and enterprises for profit in
other forms. The average annual salary in the
private sector increased from RMB45,787 in
Average annual salary in the private sector, China, 2017-2026E 2017 to RMB62,345 in 2021, registering a
RMB CAGR (2017-2021): 8.0% CAGR of 8.0%. Based on an optimistic
CAGR (2021-2026E): 7.8% outlook for continued economic development
Forecast in China, the growth rate of the average
100,000 90,605 annual salary is expected to beat inflation,
84,200
80,000
78,191 which will stimulate employment accordingly
72,558
67,283 and create a virtuous circle. According to this
62,345
60,000 57,727 forecast, the average annual salary will
53,604
49,587
45,787 continue growing at CAGR of 7.8% during the
40,000 period from 2021 to 2026.
• The fast growth in salaries can be attributed
20,000
to the rapid development of China’s economy,
0
which has in turn drastically improved
2017 2018 2019 2020 2021 2022E 2023E 2024E 2025E 2026E people’s incomes and living standards in
recent years.

Source: NBS, China Insights Consultancy 38

 Number of Internet Users and Internet Penetration Rate in China
- With increasing investment in telecommunication infrastructure, the number of internet users in China
exceeded 1,000 million as of the end of 2021. Meanwhile, mobile internet users as percentage of total
internet users reached approximately 99.8% as of 2021

Number of internet users and internet penetration rate, China,

Number of mobile internet users, China, 2017-2026E
2017-2026E
Million CAGR % Million CAGR %
2017-21 2021-26E 2017-21 2021-26E
Internet user 7.5% 4.0% Mobile internet user 8.1% 4.1%
86.8
1,400 81.2 83.7 90
75.8
78.5 97.5 98.6 99.2 99.7 99.7 99.8 99.8 99.8 99.8 99.8
73.0 80 1,400 100
1,200 70.1
70 90
61.0 1,200
1,000 59.4 80
55.5 60
1,000 70
800 50
800 60
600 1,233.9 1,258.6 40 50
1,136.9 1,185.6
989.0 1,032.0
1,087.8 600 1,183.41,232.01,256.0 40
30 1,029.01,085.11,134.4
854.0 986.0
400 772.0 828.5 847.0 30
20
400 752.7 817.0
20
200 200
10 10
0 0 0 0
2017 2018 2019 2020 2021 2022E 2023E 2024E 2025E 2026E 2017 2018 2019 2020 2021 2022E2023E2024E 2025E2026E

Internet penetration rate (RHS) Mobile internet users as percentage of total internet users (RHS)
Number of internet users (LHS) Number of mobile internet users (LHS)

• According to China Internet Network Information Center (CNNIC), the total number of internet users in China has reached 1,032 million
people as of 2021, growing from 772.0 million people in 2017, with a CAGR of 7.5%, and it is expected to further increase to 1,258.6
million people in 2026.
• During the same period, the internet penetration rate increased from 55.5% in 2017 to 73.0% in 2021. With the increase of Internet
penetration, the requirements of users for services quality have gradually increased. It is expected that the internet penetration will
reach 86.8% in 2026.
• Also, China’s mobile internet users has reached 1,029 million people in 2021, making up 99.7% of total internet users in 2021.

Source: NBS, CNNIC, China Insights Consultancy 39

Thanks！