Document and Entity Information |
9 Months Ended |
---|---|
Sep. 30, 2022 | |
Document Information [Line Items] | |
Document Type | 6-K |
Entity Registrant Name | Futu Holdings Ltd |
Entity Central Index Key | 0001754581 |
Current Fiscal Year End Date | --12-31 |
Amendment Flag | false |
Document Period End Date | Sep. 30, 2022 |
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- Definition For the EDGAR submission types of Form 8-K: the date of the report, the date of the earliest event reported; for the EDGAR submission types of Form N-1A: the filing date; for all other submission types: the end of the reporting or transition period. The format of the date is YYYY-MM-DD. No definition available.
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- Definition A unique 10-digit SEC-issued value to identify entities that have filed disclosures with the SEC. It is commonly abbreviated as CIK. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition The exact name of the entity filing the report as specified in its charter, which is required by forms filed with the SEC. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition The total amount of loans and advances given (longer than one operating cycle). No definition available.
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- Definition Amount payable to customer by broker-dealer. Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef
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- Definition Amount of expenses incurred but not yet paid nor invoiced, and liabilities classified as other. No definition available.
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- Definition Accumulated change in equity from transactions and other events and circumstances from non-owner sources, net of tax effect, at period end. Excludes Net Income (Loss), and accumulated changes in equity from transactions resulting from investments by owners and distributions to owners. Includes foreign currency translation items, certain pension adjustments, unrealized gains and losses on certain investments in debt and equity securities, other than temporary impairment (OTTI) losses related to factors other than credit losses on available-for-sale and held-to-maturity debt securities that an entity does not intend to sell and it is not more likely than not that the entity will be required to sell before recovery of the amortized cost basis, as well as changes in the fair value of derivatives related to the effective portion of a designated cash flow hedge. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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- Definition Amount of excess of issue price over par or stated value of stock and from other transaction involving stock or stockholder. Includes, but is not limited to, additional paid-in capital (APIC) for common and preferred stock. Reference 1: http://www.xbrl.org/2003/role/exampleRef
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- Definition Sum of the carrying amounts as of the balance sheet date of all assets that are recognized. Assets are probable future economic benefits obtained or controlled by an entity as a result of past transactions or events. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
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- Definition Sum of the carrying amounts as of the balance sheet date of all assets that are expected to be realized in cash, sold, or consumed within one year (or the normal operating cycle, if longer). Assets are probable future economic benefits obtained or controlled by an entity as a result of past transactions or events. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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- Definition Sum of the carrying amounts as of the balance sheet date of all assets that are expected to be realized in cash, sold or consumed after one year or beyond the normal operating cycle, if longer. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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- Definition Carrying amount of assets sold under agreements to repurchase when the carrying amount (or market value, if higher than the carrying amount) of securities or other assets sold under repurchase agreements exceeds 10 percent of total assets. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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- Definition Amount of currency on hand as well as demand deposits with banks or financial institutions. Includes other kinds of accounts that have the general characteristics of demand deposits. Also includes short-term, highly liquid investments that are both readily convertible to known amounts of cash and so near their maturity that they present insignificant risk of changes in value because of changes in interest rates. Excludes cash and cash equivalents within disposal group and discontinued operation. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
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- Definition Cash deposited in a special reserve account for the exclusive benefit of customers pursuant to regulations other than SEC Regulations and the Commodity Exchange Act. Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef
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- Definition Amount receivable from broker-dealers from commissions for executing orders on the floor of an exchange. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
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- Definition Amount payable to broker-dealers or clearing organizations for executing or clearing trades or orders. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
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- Definition Represents the caption on the face of the balance sheet to indicate that the entity has entered into (1) purchase or supply arrangements that will require expending a portion of its resources to meet the terms thereof, and (2) is exposed to potential losses or, less frequently, gains, arising from (a) possible claims against a company's resources due to future performance under contract terms, and (b) possible losses or likely gains from uncertainties that will ultimately be resolved when one or more future events that are deemed likely to occur do occur or fail to occur. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
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- Definition Aggregate par or stated value of issued nonredeemable common stock (or common stock redeemable solely at the option of the issuer). This item includes treasury stock repurchased by the entity. Note: elements for number of nonredeemable common shares, par value and other disclosure concepts are in another section within stockholders' equity. Reference 1: http://www.xbrl.org/2003/role/exampleRef
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- Definition Amount payable to correspondent broker-dealer. No definition available.
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- Definition Carrying amount as of the balance sheet date of obligations due all related parties. Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef
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- Definition Amount of interest payable on debt, including, but not limited to, trade payables. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
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- Definition Carrying amount as of the balance sheet date of interest earned but not received. Also called accrued interest or accrued interest receivable. Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef
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- Definition Sum of the carrying amounts as of the balance sheet date of all liabilities that are recognized. Liabilities are probable future sacrifices of economic benefits arising from present obligations of an entity to transfer assets or provide services to other entities in the future. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
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- Definition Amount of liabilities and equity items, including the portion of equity attributable to noncontrolling interests, if any. Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef
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- Definition Total obligations incurred as part of normal operations that are expected to be paid during the following twelve months or within one business cycle, if longer. Reference 1: http://www.xbrl.org/2003/role/exampleRef
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- Definition Amount of obligation due after one year or beyond the normal operating cycle, if longer. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
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- Definition The total amount of investments that are intended to be held for an extended period of time (longer than one operating cycle). Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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- Definition Including the current and noncurrent portions, carrying value as of the balance sheet date of all notes and loans payable (with maturities initially due after one year or beyond the operating cycle if longer). Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
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- Definition Amortized cost, after allowance for credit loss, of financing receivable classified as current. Excludes net investment in lease. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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- Definition Present value of lessee's discounted obligation for lease payments from operating lease, classified as current. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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- Definition Present value of lessee's discounted obligation for lease payments from operating lease, classified as noncurrent. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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- Definition Amount of lessee's right to use underlying asset under operating lease. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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- Definition Amount of current assets classified as other. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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- Definition Amount of noncurrent assets classified as other. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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- Definition Amount of liabilities classified as other, due after one year or the normal operating cycle, if longer. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
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- Definition Carrying amount as of the balance sheet date of expenditures made in advance of when the economic benefit of the cost will be realized, and which will be expensed in future periods with the passage of time or when a triggering event occurs. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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- References No definition available.
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- Definition Amount of right to receive cash and securities on deposit with clearing organizations. Clearing organizations perform post trade processing and trade comparisons among numerous broker-dealers and act as settlement agents between buying and selling broker-dealers. Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef
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- Definition Amount due from customers for fees and charges arising from transactions related to the entity's brokerage activities and operations. Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef
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- Definition Amount of cash restricted as to withdrawal or usage, classified as current. Cash includes, but is not limited to, currency on hand, demand deposits with banks or financial institutions, and other accounts with general characteristics of demand deposits. Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef
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- Definition The cumulative amount of the reporting entity's undistributed earnings or deficit. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
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- Definition Amount, after the effects of master netting arrangements, of funds outstanding loaned in the form of a security resale agreement between the entity and another party for the purchase and resale of identical or substantially the same securities at a date certain for a specified price. Includes purchases of participations in pools of securities that are subject to a resale agreement, assets not subject to a master netting arrangement and not elected to be offset. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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- Definition Amount of investments including trading securities, available-for-sale securities, held-to-maturity securities, and short-term investments classified as other and current. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
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- Definition Total of all stockholders' equity (deficit) items, net of receivables from officers, directors, owners, and affiliates of the entity which are attributable to the parent. The amount of the economic entity's stockholders' equity attributable to the parent excludes the amount of stockholders' equity which is allocable to that ownership interest in subsidiary equity which is not attributable to the parent (noncontrolling interest, minority interest). This excludes temporary equity and is sometimes called permanent equity. Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef
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- Definition The amount allocated to treasury stock. Treasury stock is common and preferred shares of an entity that were issued, repurchased by the entity, and are held in its treasury. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
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UNAUDITED INTERIM CONDENSED CONSOLIDATED BALANCE SHEET (Parenthetical) $ in Thousands |
Sep. 30, 2022
HKD ($)
shares
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Jun. 30, 2022
HKD ($)
shares
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Dec. 31, 2021
HKD ($)
shares
|
---|---|---|---|
Allowances for loans and advances | $ | $ 25,913 | $ 20,142 | $ 12,258 |
Treasury stock shares | 110,839,528 | 109,041,760 | 29,462,760 |
Class A ordinary shares | |||
Ordinary shares, shares authorized | 48,700,000,000 | 48,700,000,000 | 48,700,000,000 |
Ordinary shares, shares issued | 803,555,356 | 739,142,450 | 737,944,914 |
Ordinary shares, shares outstanding | 803,555,356 | 739,142,450 | 737,944,914 |
Class B ordinary shares | |||
Ordinary shares, shares authorized | 800,000,000 | 800,000,000 | 800,000,000 |
Ordinary shares, shares issued | 430,552,051 | 494,552,051 | 494,552,051 |
Ordinary shares, shares outstanding | 430,552,051 | 494,552,051 | 494,552,051 |
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- Definition Amount of allowance for credit loss on financing receivable, classified as current. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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- Definition The maximum number of common shares permitted to be issued by an entity's charter and bylaws. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
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- Definition Total number of common shares of an entity that have been sold or granted to shareholders (includes common shares that were issued, repurchased and remain in the treasury). These shares represent capital invested by the firm's shareholders and owners, and may be all or only a portion of the number of shares authorized. Shares issued include shares outstanding and shares held in the treasury. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
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- Definition Number of common and preferred shares that were previously issued and that were repurchased by the issuing entity and held in treasury on the financial statement date. This stock has no voting rights and receives no dividends. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
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UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME - HKD ($) $ in Thousands |
6 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
Revenues | ||||
Brokerage commission and handling charge income | $ 2,001,246 | $ 2,122,679 | $ 2,959,050 | $ 3,056,091 |
Interest income | 1,195,661 | 1,268,940 | 2,076,484 | 1,900,608 |
Other income | 190,821 | 389,842 | 297,774 | 555,812 |
Total revenues | 3,387,728 | 3,781,461 | 5,333,308 | 5,512,511 |
Costs | ||||
Brokerage commission and handling charge expenses | (183,221) | (359,002) | (265,795) | (484,462) |
Interest expenses | (65,827) | (246,967) | (110,525) | (321,286) |
Processing and servicing costs | (186,799) | (116,024) | (277,642) | (183,463) |
Total costs | (435,847) | (721,993) | (653,962) | (989,211) |
Total gross profit | 2,951,881 | 3,059,468 | 4,679,346 | 4,523,300 |
Operating expenses | ||||
Research and development expenses | (574,174) | (310,787) | (887,613) | (534,692) |
Selling and marketing expenses | (507,235) | (652,036) | (742,692) | (1,055,101) |
General and administrative expenses | (388,532) | (174,365) | (600,802) | (311,147) |
Total operating expenses | (1,469,941) | (1,137,188) | (2,231,107) | (1,900,940) |
Others, net | (115,819) | (19,593) | (219,175) | (9,691) |
Income before income tax expenses and share of loss from equity method investment | 1,366,121 | 1,902,687 | 2,229,064 | 2,612,669 |
Income tax expenses | (143,198) | (206,497) | (247,572) | (301,268) |
Share of loss from equity method investment | (9,398) | (13,324) | ||
Net income | 1,213,525 | 1,696,190 | 1,968,168 | 2,311,401 |
Net income attributable to ordinary shareholders of the Company | 1,213,525 | 1,696,190 | 1,968,168 | 2,311,401 |
Other comprehensive (loss)/income, net of tax | ||||
Foreign currency translation adjustment | (18,540) | 2,954 | (126,642) | 24,084 |
Total comprehensive income | $ 1,194,985 | $ 1,699,144 | $ 1,841,526 | $ 2,335,485 |
Net income per share attributable to ordinary shareholders of the Company | ||||
Basic | $ 1.05 | $ 1.45 | $ 1.72 | $ 1.94 |
Diluted | $ 1.04 | $ 1.42 | $ 1.70 | $ 1.91 |
Weighted average number of ordinary shares used in computing net income per share | ||||
Basic | 1,158,972,163 | 1,173,661,489 | 1,147,484,439 | 1,192,527,761 |
Diluted | 1,169,572,515 | 1,194,580,873 | 1,158,401,576 | 1,212,191,974 |
ADS | ||||
Net income per share attributable to ordinary shareholders of the Company | ||||
Basic | $ 8.38 | $ 11.56 | $ 13.72 | $ 15.50 |
Diluted | $ 8.30 | $ 11.36 | $ 13.59 | $ 15.26 |
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- Definition The amount of expenses related to brokerage commission and handling charges in the period. No definition available.
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- Definition Interest expense from short term borrowings, securities loaned and other financial liabilities. No definition available.
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- Definition The amount of expense during the period paid for market information, cloud service, data transmission and etc. No definition available.
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- Definition Amount after tax of increase (decrease) in equity from transactions and other events and circumstances from net income and other comprehensive income, attributable to parent entity. Excludes changes in equity resulting from investments by owners and distributions to owners. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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- Definition The aggregate cost of goods produced and sold and services rendered during the reporting period. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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- Definition The amount of net income (loss) for the period per each share of common stock or unit outstanding during the reporting period. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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- Definition The amount of net income (loss) for the period available to each share of common stock or common unit outstanding during the reporting period and to each share or unit that would have been outstanding assuming the issuance of common shares or units for all dilutive potential common shares or units outstanding during the reporting period. Reference 1: http://www.xbrl.org/2003/role/exampleRef
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- Definition The aggregate total of expenses of managing and administering the affairs of an entity, including affiliates of the reporting entity, which are not directly or indirectly associated with the manufacture, sale or creation of a product or product line. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
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- Definition Aggregate revenue less cost of goods and services sold or operating expenses directly attributable to the revenue generation activity. Reference 1: http://www.xbrl.org/2003/role/exampleRef
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- Definition Amount of income (loss) from continuing operations before deduction of income tax expense (benefit) and income (loss) attributable to noncontrolling interest, and addition of income (loss) from equity method investments. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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- Definition Amount of income (loss) for proportionate share of equity method investee's income (loss). Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
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- Definition Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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- Definition Amount of operating interest income, including, but not limited to, amortization and accretion of premiums and discounts on securities. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
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- Definition The portion of profit or loss for the period, net of income taxes, which is attributable to the parent. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
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- Definition Amount, after deduction of tax, noncontrolling interests, dividends on preferred stock and participating securities; of income (loss) available to common shareholders. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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- References No definition available.
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- Definition Generally recurring costs associated with normal operations except for the portion of these expenses which can be clearly related to production and included in cost of sales or services. Includes selling, general and administrative expense. No definition available.
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- References No definition available.
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- Definition Amount after tax and reclassification adjustments of gain (loss) on foreign currency translation adjustments, foreign currency transactions designated and effective as economic hedges of a net investment in a foreign entity and intra-entity foreign currency transactions that are of a long-term-investment nature. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
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- References No definition available.
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- Definition Amount of revenue and income classified as other. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
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- Definition Amount of income (expense) related to nonoperating activities, classified as other. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
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- Definition The aggregate costs incurred (1) in a planned search or critical investigation aimed at discovery of new knowledge with the hope that such knowledge will be useful in developing a new product or service, a new process or technique, or in bringing about a significant improvement to an existing product or process; or (2) to translate research findings or other knowledge into a plan or design for a new product or process or for a significant improvement to an existing product or process whether intended for sale or the entity's use, during the reporting period charged to research and development projects, including the costs of developing computer software up to the point in time of achieving technological feasibility, and costs allocated in accounting for a business combination to in-process projects deemed to have no alternative future use. Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef
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- Definition Amount, excluding tax collected from customer, of revenue from satisfaction of performance obligation by transferring promised good or service to customer. Tax collected from customer is tax assessed by governmental authority that is both imposed on and concurrent with specific revenue-producing transaction, including, but not limited to, sales, use, value added and excise. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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- Definition Amount of revenue recognized from goods sold, services rendered, insurance premiums, or other activities that constitute an earning process. Includes, but is not limited to, investment and interest income before deduction of interest expense when recognized as a component of revenue, and sales and trading gain (loss). Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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- References No definition available.
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- Definition The aggregate total amount of expenses directly related to the marketing or selling of products or services. No definition available.
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- Definition The average number of shares or units issued and outstanding that are used in calculating diluted EPS or earnings per unit (EPU), determined based on the timing of issuance of shares or units in the period. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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- References No definition available.
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- Definition Number of [basic] shares or units, after adjustment for contingently issuable shares or units and other shares or units not deemed outstanding, determined by relating the portion of time within a reporting period that common shares or units have been outstanding to the total time in that period. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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- Definition Represents the information pertaining to Exercise of pre-funded warrants. No definition available.
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- Definition Represents the value of the exercise of pre-funded warrants. No definition available.
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- Definition Represents the number of shares surrendered and cancelled during the period. No definition available.
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- Definition Amount of increase to additional paid-in capital (APIC) for recognition of cost for award under share-based payment arrangement. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
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- Definition The portion of profit or loss for the period, net of income taxes, which is attributable to the parent. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
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- Definition Amount after tax and reclassification adjustments of gain (loss) on foreign currency translation adjustments, foreign currency transactions designated and effective as economic hedges of a net investment in a foreign entity and intra-entity foreign currency transactions that are of a long-term-investment nature. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
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- Definition Number of shares issued which are neither cancelled nor held in the treasury. No definition available.
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- Definition The number of shares issued during the period upon the conversion of units. An example of a convertible unit is an umbrella partnership real estate investment trust unit (UPREIT unit). Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
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- Definition Number of new stock issued during the period. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
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- Definition Number of share options (or share units) exercised during the current period. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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- Definition Value of stock issued during the period upon the conversion of units. An example of a convertible unit is an umbrella partnership real estate investment trust unit (UPREIT unit). Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
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- Definition Equity impact of the value of new stock issued during the period. Includes shares issued in an initial public offering or a secondary public offering. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
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- Definition Value of stock issued as a result of the exercise of stock options. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
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X | ||||||||||
- Definition Total of all stockholders' equity (deficit) items, net of receivables from officers, directors, owners, and affiliates of the entity which are attributable to the parent. The amount of the economic entity's stockholders' equity attributable to the parent excludes the amount of stockholders' equity which is allocable to that ownership interest in subsidiary equity which is not attributable to the parent (noncontrolling interest, minority interest). This excludes temporary equity and is sometimes called permanent equity. Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef
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X | ||||||||||
- Definition Number of previously issued common shares repurchased by the issuing entity and held in treasury. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
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X | ||||||||||
- Definition Amount allocated to previously issued common shares repurchased by the issuing entity and held in treasury. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
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X | ||||||||||
- Definition Number of shares that have been repurchased during the period and are being held in treasury. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
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X | ||||||||||
- Definition Equity impact of the cost of common and preferred stock that were repurchased during the period. Recorded using the cost method. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
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X | ||||||||||
- Definition Amount of cash paid for amounts included in operating lease liabilities. No definition available.
|
X | ||||||||||
- Definition Deferred Income Tax Expense (Benefit) Including Other Adjustments No definition available.
|
X | ||||||||||
- Definition The amount of fair value gain loss from short term investments. No definition available.
|
X | ||||||||||
- Definition Amount of increase (decrease) in accounts receivable to clients and brokers. No definition available.
|
X | ||||||||||
- Definition Amount of increase (decrease) in accounts receivable from fund management companies and fund distributors. No definition available.
|
X | ||||||||||
- Definition Amount of increase (decrease) in operating lease liabilities. No definition available.
|
X | ||||||||||
- Definition The change during the period, either increase or decrease, in amounts payable to clearing organization. No definition available.
|
X | ||||||||||
- Definition The change during the period, either increase or decrease, in amounts payable to customers and brokers. No definition available.
|
X | ||||||||||
- Definition The change during the period, either increase or decrease, in amounts payable to fund management companies and fund distributors. No definition available.
|
X | ||||||||||
- Definition The increase (decrease) during the reporting period in the total amount due to the entity related to activities and operations with clearing organization. No definition available.
|
X | ||||||||||
- Definition Represents the maturity of term deposits. No definition available.
|
X | ||||||||||
- Definition The cash outflow for acquisition, net of cash acquired. No definition available.
|
X | ||||||||||
- Definition Amount of increase (decrease) from purchase of security purchased under agreement to resell. No definition available.
|
X | ||||||||||
- References No definition available.
|
X | ||||||||||
- Definition Amount of expense for award under share-based payment arrangement. Excludes amount capitalized. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
|
X | ||||||||||
- References No definition available.
|
X | ||||||||||
- Definition Amount of currency on hand as well as demand deposits with banks or financial institutions. Includes other kinds of accounts that have the general characteristics of demand deposits. Also includes short-term, highly liquid investments that are both readily convertible to known amounts of cash and so near their maturity that they present insignificant risk of changes in value because of changes in interest rates. Excludes cash and cash equivalents within disposal group and discontinued operation. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
|
X | ||||||||||
- Definition Amount of cash and cash equivalents, and cash and cash equivalents restricted to withdrawal or usage. Excludes amount for disposal group and discontinued operations. Cash includes, but is not limited to, currency on hand, demand deposits with banks or financial institutions, and other accounts with general characteristics of demand deposits. Cash equivalents include, but are not limited to, short-term, highly liquid investments that are both readily convertible to known amounts of cash and so near their maturity that they present insignificant risk of changes in value because of changes in interest rates. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
|
X | ||||||||||
- Definition Amount of increase (decrease) in cash, cash equivalents, and cash and cash equivalents restricted to withdrawal or usage; including effect from exchange rate change. Cash includes, but is not limited to, currency on hand, demand deposits with banks or financial institutions, and other accounts with general characteristics of demand deposits. Cash equivalents include, but are not limited to, short-term, highly liquid investments that are both readily convertible to known amounts of cash and so near their maturity that they present insignificant risk of changes in value because of changes in interest rates. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
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X | ||||||||||
- Definition Cash deposited in a special reserve account for the exclusive benefit of customers pursuant to regulations other than SEC Regulations and the Commodity Exchange Act. Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef
|
X | ||||||||||
- Definition Amount of realized gain (loss) on investment in debt security measured at fair value with change in fair value recognized in other comprehensive income (available-for-sale). Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef
|
X | ||||||||||
- Definition The aggregate expense recognized in the current period that allocates the cost of tangible assets, intangible assets, or depleting assets to periods that benefit from use of the assets. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
|
X | ||||||||||
- Definition Amount of increase (decrease) from effect of exchange rate changes on cash and cash equivalents, and cash and cash equivalents restricted to withdrawal or usage; held in foreign currencies; including, but not limited to, disposal group and discontinued operations. Cash includes, but is not limited to, currency on hand, demand deposits with banks or financial institutions, and other accounts with general characteristics of demand deposits. Cash equivalents include, but are not limited to, short-term, highly liquid investments that are both readily convertible to known amounts of cash and so near their maturity that they present insignificant risk of changes in value because of changes in interest rates. Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef
|
X | ||||||||||
- Definition This item represents an other than temporary decline in value that has been recognized against an investment accounted for under the equity method of accounting. The excess of the carrying amount over the fair value of the investment represents the amount of the write down which is or was reflected in earnings. The written down value is a new cost basis with the adjusted value of the investment becoming its new carrying value subject to the equity accounting method. Evidence of a loss in value might include, but would not necessarily be limited to, absence of an ability to recover the carrying amount of the investment or inability of the investee to sustain an earnings capacity which would justify the carrying amount of the investment. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
|
X | ||||||||||
- Definition Amount before tax of foreign currency transaction realized and unrealized gain (loss) recognized in the income statement. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
|
X | ||||||||||
- Definition Amount of income (loss) for proportionate share of equity method investee's income (loss). Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
|
X | ||||||||||
- Definition The amount of cash paid during the current period to foreign, federal, state, and local authorities as taxes on income, net of any cash received during the current period as refunds for the overpayment of taxes. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
|
X | ||||||||||
- Definition The increase (decrease) during the reporting period in the obligations due for goods and services provided by the following types of related parties: a parent company and its subsidiaries, subsidiaries of a common parent, an entity and trust for the benefit of employees, such as pension and profit-sharing trusts that are managed by or under the trusteeship of the entities' management, an entity and its principal owners, management, or member of their immediate families, affiliates, or other parties with the ability to exert significant influence. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
|
X | ||||||||||
- Definition The increase (decrease) during the reporting period in the amount due from borrowers for interest payments. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
|
X | ||||||||||
- Definition The increase (decrease) during the reporting period in the aggregate amount of obligations related to services received from employees, such as accrued salaries and bonuses, payroll taxes and fringe benefits. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
|
X | ||||||||||
- Definition The increase (decrease) during the reporting period in outstanding loans including accrued interest. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
|
X | ||||||||||
- Definition The increase (decrease) during the reporting period in interest payable, which represents the amount owed to note holders, bond holders, and other parties for interest earned on loans or credit extended to the reporting entity. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
|
X | ||||||||||
- References No definition available.
|
X | ||||||||||
- References No definition available.
|
X | ||||||||||
- Definition Amount of increase (decrease) in operating assets classified as other. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
|
X | ||||||||||
- Definition Amount of increase (decrease) in operating liabilities classified as other. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
|
X | ||||||||||
- Definition The increase (decrease) during the reporting period in the liability under agreements to repurchase securities that were sold. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
|
X | ||||||||||
- Definition The increase (decrease) during the reporting period in the amount of outstanding money paid in advance for goods or services that bring economic benefits for future periods. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
|
X | ||||||||||
- Definition Amount of cash paid for interest, excluding capitalized interest, classified as operating activity. Includes, but is not limited to, payment to settle zero-coupon bond for accreted interest of debt discount and debt instrument with insignificant coupon interest rate in relation to effective interest rate of borrowing attributable to accreted interest of debt discount. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
|
X | ||||||||||
- Definition Amount of cash inflow (outflow) from financing activities, including discontinued operations. Financing activity cash flows include obtaining resources from owners and providing them with a return on, and a return of, their investment; borrowing money and repaying amounts borrowed, or settling the obligation; and obtaining and paying for other resources obtained from creditors on long-term credit. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
|
X | ||||||||||
- References No definition available.
|
X | ||||||||||
- Definition Amount of cash inflow (outflow) from investing activities, including discontinued operations. Investing activity cash flows include making and collecting loans and acquiring and disposing of debt or equity instruments and property, plant, and equipment and other productive assets. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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X | ||||||||||
- References No definition available.
|
X | ||||||||||
- Definition Amount of cash inflow (outflow) from operating activities, including discontinued operations. Operating activity cash flows include transactions, adjustments, and changes in value not defined as investing or financing activities. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
|
X | ||||||||||
- References No definition available.
|
X | ||||||||||
- Definition Amount of amortization expense for right-of-use asset from operating lease. Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef
|
X | ||||||||||
- Definition The cash outflow to reacquire common stock during the period. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
|
X | ||||||||||
- Definition The cash outflow for loan and debt issuance costs. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
|
X | ||||||||||
- Definition The cash outflow associated with the purchase of or advances to an equity method investments, which are investments in joint ventures and entities in which the entity has an equity ownership interest normally of 20 to 50 percent and exercises significant influence. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
|
X | ||||||||||
- Definition The cash outflow for purchases of and capital improvements on property, plant and equipment (capital expenditures), software, and other intangible assets. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
|
X | ||||||||||
- Definition The cash outflow for securities or other assets acquired, which qualify for treatment as an investing activity and are to be liquidated, if necessary, within the current operating cycle. Includes cash flows from securities classified as trading securities that were acquired for reasons other than sale in the short-term. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
|
X | ||||||||||
- Definition The cash inflow from the additional capital contribution to the entity. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
|
X | ||||||||||
- Definition Amount of cash inflow from short-term debt classified as other. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
|
X | ||||||||||
- Definition The cash inflow from sales of all investments, including securities and other assets, having ready marketability and intended by management to be liquidated, if necessary, within the current operating cycle. Includes cash flows from securities classified as trading securities that were acquired for reasons other than sale in the short-term. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
|
X | ||||||||||
- Definition Amount of cash inflow from exercise of option under share-based payment arrangement. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
|
X | ||||||||||
- Definition The consolidated profit or loss for the period, net of income taxes, including the portion attributable to the noncontrolling interest. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
|
X | ||||||||||
- Definition Amount of credit loss expense (reversal of expense) for financing receivable. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
|
X | ||||||||||
- Definition Amount of cash outflow for the payment of debt classified as other, maturing within one year or the operating cycle, if longer. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
|
X | ||||||||||
- Definition Amount of cash restricted as to withdrawal or usage, classified as current. Cash includes, but is not limited to, currency on hand, demand deposits with banks or financial institutions, and other accounts with general characteristics of demand deposits. Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef
|
X | ||||||||||
- References No definition available.
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GENERAL INFORMATION, ORGANIZATION AND PRINCIPAL ACTIVITIES |
6 Months Ended | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 |
Sep. 30, 2022 |
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GENERAL INFORMATION, ORGANIZATION AND PRINCIPAL ACTIVITIES | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
GENERAL INFORMATION, ORGANIZATION AND PRINCIPAL ACTIVITIES | 1. GENERAL INFORMATION, ORGANIZATION AND PRINCIPAL ACTIVITIES Futu Holdings Limited (the “Company”) is an investment holding company incorporated in the Cayman Islands with limited liability and conducts its business mainly through its subsidiaries, variable interest entities (“VIEs”) and subsidiaries of the VIEs (collectively referred to as the “Group”). The Group principally engages in online financial services including securities and derivative trades brokerage, margin financing and fund distribution services based on internally developed software and digital platform “Futubull” and “Moomoo”. The Group also provides financial information and online community services, etc. The Company completed its IPO on March 8, 2019 on the Nasdaq Global Market. Each American Depositary Shares (“ADSs”) of the Company represents eight Class A ordinary shares. As of June 30, 2022, the Company’s principal subsidiaries, consolidated VIE are as follows:
Notes:
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1. GENERAL INFORMATION, ORGANIZATION AND PRINCIPAL ACTIVITIES Futu Holdings Limited (the “Company”) is an investment holding company incorporated in the Cayman Islands with limited liability and conducts its business mainly through its subsidiaries, variable interest entities (“VIEs”) and subsidiaries of the VIEs (collectively referred to as the “Group”). The Group principally engages in online financial services including securities and derivative trades brokerage, margin financing and fund distribution services based on internally developed software and digital platform “Futubull” and “Moomoo”. The Group also provides financial information and online community services, etc. The Company completed its IPO on March 8, 2019 on the Nasdaq Global Market. Each American Depositary Shares (“ADSs”) of the Company represents eight Class A ordinary shares. As of September 30, 2022, the Company’s principal subsidiaries, consolidated VIE are as follows:
Notes: (1)These subsidiaries changed company names in June 2022.
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- References No definition available.
|
X | ||||||||||
- Definition The entire disclosure for organization, consolidation and basis of presentation of financial statements disclosure. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
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SIGNIFICANT ACCOUNTING POLICIES |
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Jun. 30, 2022 |
Sep. 30, 2022 |
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SIGNIFICANT ACCOUNTING POLICIES | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SIGNIFICANT ACCOUNTING POLICIES | 2. SIGNIFICANT ACCOUNTING POLICIES Basis of presentation The unaudited interim condensed consolidated financial statements of the Group have been prepared in accordance with the accounting principles generally accepted in the United States of America (“U.S. GAAP”). The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements. In the opinion of the Company, the accompanying unaudited interim condensed consolidated financial statements contain all adjustments, consisting of only normal recurring adjustments, necessary for a fair statement of its financial position as of June 30, 2022, its results of operations and cash flows for the six months ended June 30, 2021 and 2022. The unaudited interim condensed consolidated balance sheet as of December 31, 2021, was derived from audited financial statements as of that date, but does not contain all of the footnote disclosures required by U.S. GAAP for a complete set of financial statements. Accordingly, these financial statements should be read in conjunction with the audited consolidated financial statements and related footnotes for the year ended December 31, 2021. Significant accounting policies followed by the Group in the preparation of the accompanying consolidated financial statements are summarized below. Basis of Consolidation The consolidated financial statements include the financial statements of the Company, its subsidiaries, the VIEs and subsidiary of the VIEs for which the Company or its subsidiary is the primary beneficiary. A subsidiary is an entity in which the Company, directly or indirectly, controls more than one half of the voting power; or has the power to appoint or remove the majority of the members of the Board of Directors; or to cast a majority of votes at the meeting of directors; or has the power to govern the financial and operating policies of the investee under a statute or agreement among the shareholders or equity holders. A consolidated VIE is an entity in which the Company, or its subsidiary, through contractual arrangements, has the power to direct the activities that most significantly impact the entity’s economic performance, bears the risks of and enjoys the rewards normally associated with ownership of the entity, and therefore the Company or its subsidiary is the primary beneficiary of the entity. All transactions and balances among the Company, its subsidiaries, the VIEs and subsidiaries of the VIEs have been eliminated upon consolidation. VIE Companies 1) Contractual Agreements with VIEs The following is a summary of the contractual agreements (collectively, “Contractual Agreements”) between the Company’s PRC subsidiary, Shen Si, and the VIEs. Through the Contractual Agreements, the VIEs are effectively controlled by the Company. Shareholders’ Voting Rights Proxy Agreements. Pursuant to the Shareholders’ Voting Rights Proxy Agreements, each shareholder of VIEs irrevocably authorized Shen Si or any person(s) designated by Shen Si to exercise such shareholder’s rights in VIEs, including without limitation, the power to participate in and vote at shareholder’s meetings, the power to nominate and appoint the directors, senior management, and other shareholders’ voting right permitted by the articles of association of VIEs. The shareholders’ voting rights proxy agreements remain irrevocable and continuously valid from the date of execution until the expiration of the business term of Shen Si and can be renewed upon request by Shen Si. Business Operation Agreements. Pursuant to the Business Operation Agreements, VIEs and their shareholders undertake that without Shen Si’s prior written consent, VIEs shall not enter into any transactions that may have a material effect on VIEs’ assets, business, personnel, obligations, rights or business operations. VIEs and their shareholders shall elect directors nominated by Shen Si and such directors shall nominate officers designated by Shen Si. The business operation agreements will remain effective until the end of Shen Si’s business term, which will be extended if Shen Si’s business term is extended or as required by Shen Si. 2. SIGNIFICANT ACCOUNTING POLICIES (Continued) VIE Companies (Continued) 1) Contractual Agreements with VIEs (Continued) Equity Interest Pledge Agreements. Pursuant to the Equity Interest Pledge Agreements, each shareholder of VIEs agrees that, during the term of the Equity Interest Pledge Agreements, he or she will not dispose of the pledged equity interests or create or allow any encumbrance on the pledged equity interests without the prior written consent of Shen Si. The Equity Interest Pledge Agreements remain effective until the latter of the full payment of all secured debt under the equity interest pledge agreements and VIEs and their shareholders discharge all their obligations under the contractual arrangements. Exclusive Technology Consulting and Services Agreements. Under the Exclusive Technology Consulting and Services Agreements between Shen Si and the VIEs, Shen Si has the exclusive right to provide VIEs with technology consulting and services related to, among other things, technology research and development, technology application and implementation, maintenance of software and hardware. Without Shen Si’s written consent, VIEs shall not accept any technology consulting and services covered by these agreements from any third party. VIEs agree to pay a service fee at an amount equivalent to all of its net profit to Shen Si. Unless otherwise terminated in accordance with the terms of these agreements or otherwise agreed with Shen Si, these agreements will remain effective until the expiration of Shen Si’s business term, and will be renewed if Shen Si’s business term is extended. Exclusive Option Agreements. Pursuant to the Exclusive Option Agreements, each shareholder of VIEs has irrevocably granted Shen Si an exclusive option, to the extent permitted by PRC laws, to purchase, or have its designated person or persons to purchase, at its discretion, all or part of the shareholder’s equity interests in VIEs. Unless PRC laws and/or regulations require valuation of the equity interests, the purchase price shall be RMB1.00 or the lowest price permitted by the applicable PRC laws, whoever is higher. Each shareholder of VIEs undertakes that, without the prior written consent of Shen Si, he or she will not, among other things, (i) create any pledge or encumbrance on his or her equity interests in VIEs, (ii) transfer or otherwise dispose of his or her equity interests in VIEs, (iii) change VIEs’ registered capital, (iv) amend VIEs’ articles of association, (v) liquidate or dissolve VIEs, or (vi) distribute dividends to the shareholders of VIEs. In addition, VIEs undertake that, without the prior written consent of Shen Si, they will not, among other things, dispose of VIEs’ material assets, provide any loans to any third parties, enter into any material contract with a value of more than RMB500,000, or create any pledge or encumbrance on any of their assets, or transfer or otherwise dispose of their material assets. Unless otherwise terminated by Shen Si, these agreements will remain effective until the expiration of Shen Si’s business term, and will be renewed if Shen Si’s business term is extended. 2. SIGNIFICANT ACCOUNTING POLICIES (Continued) VIE Companies (Continued) 2) Risks in relation to the VIE structure The following table sets forth the assets, liabilities, results of operations and changes in cash and cash equivalents of the VIEs and their subsidiary taken as a whole, which were included in the Group’s consolidated financial statements with intercompany balances and transactions eliminated between the VIEs and their subsidiary:
Transactions between the VIE and other entities in the consolidated group As of December 31, 2021 and June 30, 2022, total assets include amounts due from internal companies in the consolidated group in the amount of HK $190,424 thousand and HK$211,692 thousand, respectively. Total liabilities include amounts due to the internal companies in the amount of HK$ 80,435 thousand and HK$ 91,479 thousand, respectively. For the six months ended June 30, 2021 and 2022, the VIE earned inter-company revenues in the amounts of HK$75,000 thousand and HK$131,834 thousand, respectively. In addition, for the six months ended June 30, 2021 and 2022, the repayment of advances to Group companies by the VIE are in the amount of nil and nil, and VIE proceeded from advances from Group companies in the amount of nil and HK$7,388 thousand, respectively. All of these balances and transactions have been eliminated in consolidation. 2. SIGNIFICANT ACCOUNTING POLICIES (Continued) VIE Companies (Continued) 2) Risks in relation to the VIE structure (Continued) Under the Contractual Agreements with the VIEs, the Company has the power to direct activities of the VIEs and VIEs’ subsidiaries, and can have assets transferred out of the VIEs and VIEs’ subsidiaries. Therefore, the Company considers itself the ultimate primary beneficiary of the VIEs and there is no asset of the VIEs that can only be used to settle obligations of the VIEs and VIEs’ subsidiaries, except for registered capital of the VIEs and their subsidiary amounting to RMB10 million as of December 31, 2021 and June 30, 2022, respectively. Since the VIEs are incorporated as limited liability companies under the PRC Company Law, creditors of the VIEs do not have recourse to the general credit of the Company. There is currently no contractual arrangement that would require the Company to provide additional financial support to the VIEs. However, as the Company is conducting certain businesses through its VIEs and VIEs’ subsidiary, the Company may provide such support on a discretionary basis in the future, which could expose the Company to a loss. In the opinion of the Company’s management, the contractual arrangements among its subsidiary, the VIEs and their respective Nominee Shareholders are in compliance with current PRC laws and are legally binding and enforceable. However, uncertainties in the interpretation and enforcement of the PRC laws, regulations and policies could limit the Company’s ability to enforce these contractual arrangements. As a result, the Company may be unable to consolidate the VIEs and VIEs’ subsidiaries in the consolidated financial statements. On March 15, 2019, the Foreign Investment Law was formally passed by the thirteenth National People’s Congress and it was taken effect on January 1, 2020. The Foreign Investment Law replaces the Law on Sino-Foreign Equity Joint Ventures, the Law on Sino-Foreign Cooperative Joint Ventures and the Law on Foreign-Capital Enterprises to become the legal foundation for foreign investment in the PRC. The Foreign Investment Law stipulates certain forms of foreign investment. However, the Foreign Investment Law does not explicitly stipulate contractual arrangements such as those we rely on as a form of foreign investment. Notwithstanding the above, the Foreign Investment Law stipulates that foreign investment includes “foreign investors investing through any other methods under laws, administrative regulations or provisions prescribed by the State Council.” Future laws, administrative regulations or provisions prescribed by the State Council may possibly regard Contractual Arrangements as a form of foreign investment. In the event that the State Council in the future promulgates laws and regulations that deem investments made by foreign investors through contractual arrangements as “foreign investment”, the Group’s ability to use the contractual arrangements with its VIEs and the Group’s ability to conduct business through the VIEs could be severely limited. The Company’s ability to control the VIEs also depends on the power of attorney Shen Si has to vote on all matters requiring shareholders’ approvals in the VIEs. As noted above, the Company believes these power of attorney are legally binding and enforceable but may not be as effective as direct equity ownership. In addition, if the Group’s corporate structure or the contractual arrangements with the VIEs were found to be in violation of any existing PRC laws and regulations, the PRC regulatory authorities could, within their respective jurisdictions:
2. SIGNIFICANT ACCOUNTING POLICIES (Continued) VIE Companies (Continued) 2) Risks in relation to the VIE structure (Continued)
The imposition of any of these restrictions or actions may result in a material adverse effect on the Group’s ability to conduct its business. In addition, if the imposition of any of these restrictions causes the Group to lose the right to direct the activities of the VIEs or the right to receive their economic benefits, the Group would no longer be able to consolidate the financial statements of the VIEs. In the opinion of management, the likelihood of losing the benefits in respect of the Group’s current ownership structure or the contractual arrangements with its VIEs is remote. Use of Estimates The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, related disclosures of contingent assets and liabilities at the balance sheet date, and the reported revenues, costs and expenses during the reported period in the consolidated financial statements and accompanying notes. These accounting estimates reflected in the Group’s consolidated financial statements mainly include, but are not limited to, the estimation of the expected usage and the estimated relative standalone selling price of the incentive points and coupons, the valuation and recognition of share-based compensation arrangements, depreciable lives of property and equipment, useful life of intangible assets, expected credit losses on financial instruments, assessment for impairment of long-term investments and other non-current assets, present value for expected future leasing payment, contingency reserve, provision of income tax and valuation allowance for deferred tax asset, and valuation of financial instruments measured at fair value. Actual results could differ from those estimates. Comprehensive Income and Foreign Currency Translation The Group’s operating results are reported in the consolidated statements of comprehensive income pursuant to FASB ASC Topic 220, “Comprehensive Income”. Comprehensive income consists of two components: net income and other comprehensive income (“OCI”). The Group’s OCI is comprised of gains and losses resulting from translating foreign currency financial statements of entities, of which functional currency is other than Hong Kong dollar which is the presentational currency of the Group, net of related income taxes, where applicable. Such subsidiaries’ assets and liabilities are translated into Hong Kong dollars at period-end exchange rates, and revenues and expenses are translated at average exchange rates prevailing during the period. Adjustments that result from translating amounts from a subsidiary’s functional currency to the Hong Kong dollar (as described above) are reported net of tax, where applicable, in accumulated OCI in the consolidated balance sheets. Current Expected Credit Losses Prior to January 1, 2020, the Group applied incurred loss methodology for recognizing credit losses that delays recognition until it is probable a loss has been incurred. The identified impairment loss was immaterial prior to January 1, 2020. 2. SIGNIFICANT ACCOUNTING POLICIES (Continued) Current Expected Credit Losses (Continued) On January 1, 2020, the Group adopted FASB ASC Topic 326 – “Financial Instruments – Credit Losses” (“ASC Topic 326”) which replaces the incurred loss methodology with the current expected credit loss (“CECL”) methodology. The new guidance applies to financial assets measured at amortized cost, held-to-maturity debt securities and off-balance sheet credit exposures. For on-balance sheet assets, an allowance must be recognized at the origination or purchase of in-scope assets and represents the expected credit losses over the contractual life of those assets. The Group adopted ASC Topic 326 using the modified retrospective approach for all in-scope assets. The adoption of ASC Topic 326 has no material impact on the Group’s retained earnings as of January 1, 2020. Results for reporting periods beginning after January 1, 2020 are presented under ASC Topic 326 while prior periods continue to be reported in accordance with previously applicable U.S. GAAP. The Group’s in-scope assets are primarily loans and advances that are collateralized by client securities and the collateral is required to be maintained at specified minimum levels at all times. The Group monitors margin levels and requires clients to provide additional collateral, or reduce margin positions, to meet minimum collateral requirements if the fair value of the collateral changes. The Group applies the practical expedient based on collateral maintenance provisions in estimating an allowance for credit losses for the loans and advances. In accordance with the practical expedient, when the Group reasonably expects that borrowers (or counterparties, as applicable) will replenish the collateral as required, there is no expectation of credit losses when the collateral’s fair value is greater than the amortized cost of the financial assets. If the amortized cost exceeds the fair value of collateral, then credit losses are estimated only on the unsecured portion. For the six months ended June 30, 2021 and 2022, expected credit loss expenses of HK$8,819 thousand and HK$7,849 thousand, resulting from the assessment of credit losses for the loans and advances under ASC Topic 326 at period-end were recognized in “Others, net” in the consolidated statements of comprehensive income, respectively. An allowance for credit losses on other financial assets, including receivables from clients, brokers, clearing organizations and fund management companies and fund distributors, is estimated based on the aging of these financial assets. Receivables from clients are due within the settlement period commonly adopted in the relevant market practices, which is usually within a few days from the trade date. Because these receivables involve customers who have no recent history of default, and the settlement periods are usually short, the credit risk arising from receivables from clients is considered low. In respect of the receivables from brokers, clearing organizations and fund management companies and fund distributors, the management considers that these receivables have a low risk of default and the counterparties have a strong capacity to meet their contractual obligation. As a result, the allowance for credit losses for other financial assets were immaterial for all periods presented. Cash and Cash Equivalents Cash and cash equivalents represent cash on hand, demand deposits and time deposits placed with banks or other financial institutions, which are unrestricted to withdrawal or use, and which have original maturities of three months or less. Cash Held on Behalf of Clients The Group has classified the clients’ monies as cash held on behalf of clients under the assets section in the consolidated balance sheets and recognized the corresponding accounts payables to the respective clients under the liabilities section. Term Deposit Term deposit consists of bank deposits with an original maturity of greater than three months. 2. SIGNIFICANT ACCOUNTING POLICIES (Continued) Restricted Cash The Group is required to maintain restricted cash deposits for certain property leases. These funds are restricted and have been classified as such on our consolidated balance sheets due to the nature of restriction. Short-term Investments The Group classifies certain financial assets with highly liquidity and original maturities less than twelve months as short-term investments. The Group’s short-term investments consist of money market funds and financial assets at fair value through profit or loss. The Group values its money market funds and financial assets at fair value through profit or loss using quoted prices in active markets for these investments, and accordingly, the Group classifies the valuation techniques that use these inputs as Level 1. Securities Purchased Under Agreements to Resell and Securities Sold Under Agreements to Repurchase Transactions involving purchases of securities under agreements to resell (resell agreements) and transactions involving sales of securities under agreements to repurchase (repurchase agreements) are treated as collateralized financing transactions. Under resell agreements, the Group pays cash to counterparties and receives securities as collateral. These agreements are carried at amounts at which the securities will subsequently be resold, and the interest income received by the Group is recorded as interest income in the consolidated statements of comprehensive income. Under repurchase agreements, the Group receives cash from counterparties and provides securities as collateral. These agreements are carried at amounts at which the securities will subsequently be repurchased, and the interest expense incurred by the Group is recorded as interest expenses in the consolidated statements of comprehensive income. Loans and advances Loans and advances include margin loans, IPO loans extended to clients and other advances, collateralized by securities and are carried at the amortized cost, net of an allowance for credit losses. Revenues earned from the loans and advances are included in interest income. Margin loans are extended to clients on a demand basis and are not committed facilities. Securities owned by the customers, which are not recorded in the consolidated balance sheets, are held as collateral for amounts due on the margin loans. IPO loans for subscription of new shares are normally settled within one week from the drawdown date. Once IPO stocks are allotted, the Group requires clients to repay the IPO loans. Force liquidation action would be taken if the clients fail to settle their shortfall after the IPO allotment result is announced. Other advances mainly consist of bridge loans to enterprises which pledged unlisted or listed shares they hold as collateral. Loans and advances are initially recorded net of directly attributable transaction costs and are measured at subsequent reporting dates at amortized cost. Finance charges, premiums payable on settlement or redemption and direct costs are accounted for on an accrual basis to the surplus or deficit using the effective interest method and are added to the carrying amount of the instrument to the extent that they are not settled in the period in which they arise. 2. SIGNIFICANT ACCOUNTING POLICIES (Continued) Loans and advances (Continued) The balances will be written off to the extent that there is no realistic prospect of recovery. This is generally the case when the Group determines that the debtor does not have assets or sources of income that could generate sufficient cash flows to repay the amounts subject to the write-off. Trading Receivables from and Payables to Clients Trading receivables from clients include amounts due on brokerage transactions on a trade-date basis. Trading payables to clients represent the closing cash balance to the customers, which mainly include cash deposits and amounts due on brokerage transactions on a trade date basis. Receivables from and Payables to Brokers, Clearing Organizations and Fund Management Companies and Fund Distributors Receivables from and payables to brokers, clearing organizations and fund management companies and fund distributors include receivables and payables from unsettled trades on a trade-date basis, including amounts receivable for securities, derivatives or funds trades not delivered by the Group to the purchaser by the settlement date and cash deposits, and amounts payable for securities, derivatives or funds trades not received by the Group from a seller by the settlement date. Clearing settlement fund deposited in the clearing organizations for the clearing purpose is recognized in receivables from clearing organizations. The Group borrowed margin loans from executing brokers, with the benchmark interest rate plus premium differentiated depending on the amount borrowed, and immediately lent to margin financing clients. Margin loans borrowed is recognized in the payables to brokers. The Group’s policy is to net the receivables from and payables to clearing organizations according to ASC Topic 210-20, when all of the following conditions are met:
Interest Receivable and Payable Interest receivable which is included in receivables is calculated based on the contractual interest rate of bank deposit, loans and advances, securities loaned and receivables on an accrual basis, and is recorded as interest income as earned. Interest payable which is included in payables is calculated based on the contractual interest rates of payables, borrowings, securities borrowed and securities sold under agreements to repurchase on an accrual basis, and is recorded as interest expense when incurred. Securities Borrowed and Securities Loaned Securities borrowed transactions require the Group to provide counterparties with collateral, which may be in the form of cash, or other securities. With respect to securities loaned, the Group receives collateral, which may be in the form of cash or other securities in an amount generally in excess of the fair value of the securities loaned. The Group monitors the market value of securities borrowed and loaned on a daily basis, with additional collateral obtained or refunded as permitted contractually. 2. SIGNIFICANT ACCOUNTING POLICIES (Continued) Securities Borrowed and Securities Loaned (Continued) Securities borrowed and securities loaned are recorded at the amount of the cash collateral advanced or received.Receivables and payables related to securities borrowed and securities loaned are included at receivables from and payables to brokers or clients in the consolidated balance sheets. Securities lending fees received and securities borrowing fees paid by the Group are included in interest income and interest expense, respectively, in the consolidated statements of comprehensive income. Leases In an operating lease, a lessee obtains control of only the use of the underlying asset, but not the underlying asset itself. An operating lease is recognized as a right-of-use asset with a corresponding liability at the date which the leased asset is available for use by the Group. The Group’s operating leases contain both lease components and non-lease components. Non-lease components are distinct elements of a contract that are not related to securing the use of the underlying assets, such as common area maintenance and other management costs. The Company makes an accounting policy election not to separate non-lease components to measure the lease liability and lease asset. The lease liability is initially measured at the present value of the future lease payments over the lease term. The lease terms may include options to extend or terminate the lease when it is reasonably certain that the Group will exercise that option. The lease payments are discounted using the rate implicit in the lease or, if not readily determinable, the Group’s secured incremental borrowing rate, which is based on an internally developed yield curve using interest rates of debt issued with a similar risk profile as the Group and a duration similar to the lease term. An operating lease right-of-use asset is initially measured at the value of the lease liability minus any lease incentives and initial direct costs incurred plus any prepaid rent. After commencement of the operating lease, the Group recognizes lease expenses on a straight-line basis over the lease term. The subsequent measurement of the lease liability is based on the present value of the remaining lease payments using the discount rate determined at lease commencement. The right-of-use asset is subsequently measured at cost less accumulated amortization and any impairment provision. The amortization of the right-of-use asset represents the difference between the straight-line lease expense and the accretion of interest on the lease liability each period. The interest amount is used to accrete the lease liability and to amortize the right-of-use asset. There is no amount recorded as interest expense. All of the Group’s leases are classified as operating leases and primarily consist of real estate leases for corporate offices, data centers, and other facilities. As of December 31, 2021 and June 30, 2022, the weighted-average remaining lease term on these leases is approximately three years and three years, respectively, and the weighted-average discount rate used to measure the lease liabilities was approximately 4.71% and 4.69%, respectively. For the six months ended June 30, 2021 and 2022, right-of-use assets obtained under operating leases was HK$83,265 thousand and HK$7,642 thousand, respectively. The Group’s lease agreements do not contain any residual value guarantees, restrictions or covenants. Refundable Deposit Refundable deposit is included in other assets in the consolidated balance sheets. As a clearing member firm of securities and derivatives clearing organizations in Hong Kong, Singapore and the U.S., the Group is also exposed to clearing member credit risk. These clearing organizations require member firms to deposit cash to a clearing fund. If a clearing member defaults in its obligations to the clearing organizations in an amount larger than its own margin and clearing fund deposits, the shortfall is absorbed pro rata from the deposits of the other clearing members. Many clearing organizations of which the Group is member have the authority to assess their members for additional funds if the clearing fund is depleted. A large clearing member default could result in a substantial cost if the Group is required to pay such additional funds. 2. SIGNIFICANT ACCOUNTING POLICIES (Continued) Property and Equipment, net Property and equipment, which are included in other assets in the consolidated balance sheets are stated at historical cost less accumulated depreciation and impairment, if any. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. Residual rate is determined based on the economic value of the property and equipment at the end of the estimated useful lives as a percentage of the original cost.
Expenditures for maintenance and repairs are expensed as incurred. Intangible Assets Intangible assets which are included in other assets in the consolidated balance sheets mainly consist of computer software, licenses and other intangible assets. Finite-lived intangible assets are carried at historical cost less accumulated amortization and accumulated impairment losses, if any. Amortization of finite-lived intangible assets is calculated using the straight-line method to allocate costs over the estimated useful lives. Pursuant to topic ASC 350 Intangibles—Goodwill and Other, the useful life of an intangible asset to an entity is the period over which the asset is expected to contribute directly or indirectly to the future cash flows of that entity. If an income approach is used to measure the fair value of the license, in determining the useful life of the intangible asset for amortization purposes, the period of expected cash flows used to measure the fair value of the license should be considered. The following is a summary of estimated useful lives:
The other licenses recognised as infinite-lived intangible assets consist of an insurance broker license and a financial services license. The Group obtained an insurance broker license through acquiring a member of the Hong Kong Professional Insurance Brokers Association. The Group obtained some financial securities licenses via acquisition of subsidiaries. Such intangible assets were recognised as indefinite-lived as the cash flows were expected to continue indefinitely on the brokerage and financial service business in above regions. The Group had held a futures trading right as a clearing member firm of HKEx in order to trade futures through the trading facilities of the Stock Exchange, and has recognized it as intangible assets. As trading right has an indefinite useful life and have no foreseeable limit to the period over which the Group can use to generate net cash flows, it will not be amortised until their useful lives are determined to be finite. 2. SIGNIFICANT ACCOUNTING POLICIES (Continued) Intangible Assets (Continued) The aforementioned indefinite-lived intangible assets are carried at cost less accumulated impairment losses. The Group evaluates the remaining useful life of an indefinite-lived intangible asset that is not being amortized each reporting period to determine whether events and circumstances continue to support an indefinite useful lives. The Group will not amortize the indefinite-lived intangible assets until their useful lives are determined to be finite. An intangible asset that is not subject to amortization will be tested for impairment annually and more frequently if events or changes in circumstances indicate that it is more likely than not that the asset is impaired. Long-term investments 1)Equity method investments The Group’s long-term investments primarily consist of equity method investments and equity investments without readily determinable fair values. In accordance with ASC 323 Investment—Equity Method and Joint Ventures, the Group accounts for equity method investments over which the Group has significant influence but does not own a majority of the equity interest or otherwise controls and the investments are either common stock or in substance common stock using the equity method. For the investments in limited partnerships, the equity method of accounting for investments is generally appropriate for accounting by limited partners. According to ASC 323-30-S99-1, the investments in all limited partnerships should be accounted for pursuant to paragraph 970-323-25-6. That guidance requires the use of the equity method unless the investor’s interest “is so minor that the limited partner may have virtually no influence over partnership operating and financial policies.” Investments of more than 3 to 5 percent are generally viewed to be more than minor. The Group’s share of the investee’s profit and loss is recognized in the consolidated statements of comprehensive income of the period. The carrying amount of equity method investments is tested for impairment whenever there is an indication that the carrying amount may be impaired in accordance with the policy described in “Impairment of long-lived assets”. 2)Equity investments without readily determinable fair values In accordance with ASC 321 Investment—Equity Securities, for those equity investments without readily determinable fair values, the Group elects to record these investments at cost, less impairment, and plus or minus subsequent adjustments for observable price changes. Under this measurement alternative, changes in the carrying value of the equity investment are required to be made whenever there are observable price changes in orderly transactions for the identical or similar investment of the same issuer. Pursuant to ASC 321, for those equity investments that the Group elects to use the measurement alternative, the Group makes a qualitative assessment of whether the investment is impaired at each reporting date. If a qualitative assessment indicates that the investment is impaired, the Group estimates the investment’s fair value in accordance with the principles of ASC 820. If the fair value is less than the investment’s carrying value, the Group recognizes an impairment loss equal to the difference between the carrying value and fair value. Impairment of Long-lived Assets Long-lived assets are evaluated for impairment whenever events or changes in circumstances (such as a significant adverse change to market conditions that will impact the future use of the assets) indicate that the carrying amount may not be fully recoverable or that the useful life is shorter than the Group had originally estimated. When these events occur, the Group evaluates the impairment by comparing carrying value of the assets to an estimate of future undiscounted cash flows expected to be generated from the use of the assets and their eventual disposition. If the sum of the expected future undiscounted cash flows is less than the carrying value of the assets, the Group recognizes an impairment loss based on the excess of the carrying value of the assets over the fair value of the assets. Impairment charge recognized for the six months ended June 30, 2021 and 2022 was nil and nil, respectively. 2. SIGNIFICANT ACCOUNTING POLICIES (Continued) Treasury stock The Group accounted for those shares repurchased as treasury stock at cost of purchase, Treasury stock, and is shown separately in the shareholders' equity as the Group has not yet decided on the ultimate disposition of those shares acquired. When the Group decides to cancel the treasury stock, the difference between the original issuance price and the repurchase price is debited into additional paid-in capital. Refer to Note 11 for details. Fair Value Measurements Accounting guidance defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Group considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants would use when pricing the asset or liability. Accounting guidance establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Accounting guidance establishes three levels of inputs that may be used to measure fair value: Level 1 — Valuation techniques in which all significant inputs are unadjusted quoted prices from active markets for assets or liabilities that are identical to the assets or liabilities being measured. Level 2 — Valuation techniques in which significant inputs include quoted prices from active markets for assets or liabilities that are similar to the assets or liabilities being measured and/or quoted prices for assets or liabilities that are identical or similar to the assets or liabilities being measured from markets that are not active. Also, model-derived valuations in which all significant inputs and significant value drivers are observable in active markets are Level 2 valuation techniques. Level 3 — Valuation techniques in which one or more significant inputs or significant value drivers are unobservable. Unobservable inputs are valuation technique inputs that reflect the Group’s own assumptions about the assumptions that market participants would use in pricing an asset or liability. When available, the Group uses quoted market prices to determine the fair value of an asset or liability. If quoted market prices are not available, the Group will measure fair value using valuation techniques that use, when possible, current market-based or independently sourced market parameters, such as interest rates and currency rates. The carrying amount of cash and cash equivalents, cash held on behalf of clients, restricted cash, receivables from and payables to clients, brokers, clearing organizations and fund management companies and fund distributors, accrued interest receivable, accrued interest payable, amounts due to related parties, other financial assets and liabilities approximates fair value because of their short-term nature. Term deposit, loans and advances, borrowings, securities purchased under agreements to resell, securities sold under agreements to repurchase and operating lease liabilities are carried at amortized cost. The carrying amount of term deposit, loans and advances, borrowings and operating lease liabilities approximate their respective fair value as the interest rates applied reflect the current quoted market yield for comparable financial instruments. Short-term investments are measured at fair value. The Group’s non-financial assets, such as operating lease right-of-use assets, long-term investments, property and equipment and intangible assets, would be measured at fair value only if they were determined to be impaired. 2. SIGNIFICANT ACCOUNTING POLICIES (Continued) Revenue Recognition
Brokerage commission income earned for executing transactions is accrued on a trade-date basis. Handling charge income arise from the services such as clearing and settlement services, subscription and dividend collection handling services, etc., are accrued on a trade-date basis. Brokerage commission and handling charge income are recognised at a point in time when the service has been passed to the customer.
The Group earns interest income primarily in connection with its margin financing and securities lending services, IPO financing, bridge loan and deposits with banks, which are recorded on an accrual basis and are included in interest income in the consolidated statements of comprehensive income. Interest income is recognized as it is accrued over time using the effective interest method.
Other income consists of enterprise public relations service charge income provided to corporate clients, underwriting fee income, IPO subscription service charge income, currency exchange service income from clients, income from market data service and funds distribution service income from fund management companies, etc. Enterprise public relations service charge income is charged to corporate clients by providing platform to post their detailed stock information and latest news in Futubull app, as well as providing a lively, interactive community among their potential investors to exchange investment views, share trading experience and socialize with each other. Unearned enterprise public relations service income of which the Group had received the consideration is recorded as contract liabilities (deferred revenue). Underwriting fee income is generated from investment banking business primarily by providing equity sub-underwriting to corporate issuers. IPO subscription service charge income is derived from provision of new share subscription services in relation to IPOs in the Hong Kong capital market. Currency exchange service income is charged to the Group’s paying clients for providing currency exchange service. Market information and data income is charged to Futubull and Moomoo app users for market data service. Funds distribution service income is charged to fund management companies for providing fund products distribution service to Futu’s individual clients.The Group, as an intermediary would receive subscription fees from fund management companies as agreed in the service contracts. For enterprise public relations service charge income, funds distribution service income, market information and data income and ESOP management service income, the service revenues are recognized ratably over the term of the service contracts. For IPO subscription service charge income, underwriting fee income and currency exchange service income, the Group recognizes the revenues upon the time when the services are rendered to customers. 2. SIGNIFICANT ACCOUNTING POLICIES (Continued) Customer Loyalty Program The Group operates a customer loyalty program to its customers that offer various incentives in the form of incentive points and coupons for redemption of free or discounted goods or services. For the incentives generated from current sales transaction, the Group defers a portion of commission income with corresponding liability reflected as contract liability attributable to the incentives. The contract liability is determined by management based on the expected usage of the incentive points and coupons, and their estimated relative standalone selling price based on the related goods and services. Significant judgment was made by management in determining the expected usage and estimated relative standalone selling price of the incentive points and coupons, derived from historical trading volume, commission rates and redemption patterns, and an evaluation as to whether historical activities are representative of the expected future activities. For the incentives offered for future sales transaction, the Group nets a portion of brokerage commission income attributable to the incentives when points or coupons are actually redeemed. For the incentives not offered for future sales transaction, the Group considers them as a payment of other distinct goods that would be granted to clients. Such incentives are accounted for as selling and marketing expense with corresponding liability reflected as other liability in the consolidated balance sheet. The table below presents the deferred or netted brokerage commission income related to the customer loyalty program for the six months ended June 30, 2021 and 2022.
As of December 31, 2021 and June 30, 2022, contract liabilities recorded related to the customer loyalty program were HK$8,968 thousand and HK$7,143 thousand, respectively. The Group expects to recognize the revenue when points and coupons are actually redeemed. Historically, the revenue was usually recognized within 1-3 years from the time the contract liability was first recognized. Brokerage Commission and Handling Charge Expenses Commission expenses for executing and/or clearing transactions are accrued on a trade-date basis. The commission expenses are charged by executing brokers for securities and derivative trades in stock and derivative markets as the Group makes securities and derivative trades with these brokers as principal. Handling and settlement fee is charged by HKEx or executing brokers for clearing and settlement services, are accrued on a trade-date basis. IPO subscription service charge expenses are charged by commercial banks in connection with new share subscription services in relation to IPOs in the Hong Kong capital market. 2. SIGNIFICANT ACCOUNTING POLICIES (Continued) Interest Expenses Interest expenses primarily consist of interest expenses of borrowings from banks, other licensed financial institutions and other parties paid to fund the Group’s margin financing business, securities borrowing business and IPO financing business. Processing and Servicing Costs Processing and servicing costs consist of market information and data fee, data transmission fee, cloud service fee, system cost, and SMS service fee, etc. The nature of market information and data fee mainly represents for information and data fee paid to stock exchanges like HKEx, NASDAQ, and New York stock exchange, etc. Data transmission fee is the fee of data transmission among cloud server and data centers located in Shenzhen, PRC and Hong Kong, etc. Cloud service fee and SMS service fee mainly represent the data storage and computing service and the SMS channel service fee. The nature of system cost mainly represents for the fee to access and use the systems paid to software providers. Research and Development Expenses Research and development expenses consist of expenses related to developing transaction platform and website like Futubull app and other products, including payroll and welfare, rental expenses and other related expenses for personnel engaged in research and development activities. All research and development costs have been expensed as incurred as the costs qualifying for capitalization have been insignificant. Selling and Marketing Expenses Selling and marketing expenses consist primarily of advertising and promotion costs, payroll, rental and related expenses for personnel engaged in marketing and business development activities. Advertising and promotion costs are expensed as incurred and are included within selling and marketing expenses in the consolidated statements of comprehensive income. General and Administrative Expenses General and administrative expenses consist of payroll, rental, related expenses for employees involved in general corporate functions, including finance, legal and human resources, costs associated with use of facilities and equipment, such as depreciation expenses, rental and other general corporate related expenses. Others, net Others, net, mainly consist of non-operating income and expenses, foreign currency gains or losses, expected credit loss expenses, gain or loss from investments and impairment from long-term investments and other non-current assets for all periods presented. Foreign Currency Gains and Losses Foreign currency transactions denominated in currencies other than the functional currency are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are remeasured at the applicable rates of exchange in effect at that date. Foreign currency gain or loss resulting from the settlement of such transactions and from remeasurement at period-end is recognized in “Others, net” in the consolidated statements of comprehensive income. 2. SIGNIFICANT ACCOUNTING POLICIES (Continued) Share-Based Compensation The Company follows ASC 718 to determine whether a share option and a restricted share units should be classified and accounted for as a liability award or equity award. All share-based awards to employees and directors classified as equity awards, such as stock options and restricted share units, are measured at the grant date based on the fair value of the awards. Share-based compensation, net of estimated forfeitures, is recognized as expenses on a straight-line method over the requisite service period, which is the vesting period. Options granted generally vest over four or five years. The modification of the terms or conditions of the existing shared-based award is treated as an exchange of the original award for a new award. The incremental compensation expenses are equal to the excess of the fair value of the modified award immediately after the modification over the fair value of the original award immediately before the modification. For stock options already vested as of the modification date, the Group immediately recognized the incremental value as compensation expenses. For stock options still unvested as of the modification date, the incremental compensation expenses are recognized over the remaining service period of these stock options. The Company determined the fair value of the restricted share units with reference to the fair value of the underlying shares as of the grant date. The Company utilizes the binomial option pricing model to estimate the fair value of stock options granted, with the assistance of an independent valuation firm. Forfeitures are estimated at the time of grant and revised in subsequent periods if actual forfeitures differ from those estimates. The Group uses historical data to estimate pre-vesting options and records share-based compensation expenses only for those awards that are expected to vest. See Note 13 for further discussion on share-based compensation. Fair Value of Preferred Shares and Pre-IPO Ordinary Shares Shares of the Company, which did not have quoted market prices, were valued based on the income approach. The income approach involves applying the discounted cash flow analysis based on projected cash flow using the Group’s best estimate as of the valuation dates. Estimating future cash flow requires the Group to analyze projected revenue growth, gross margins, effective tax rates, capital expenditures and working capital requirements. In determining an appropriate discount rate, the Group considered the cost of equity and the rate of return expected by venture capitalists. The Group also applied a discount for lack of marketability given that the shares underlying the award were not publicly traded at the time of grant. Determination of estimated fair value of the Group requires complex and subjective judgments due to its limited financial and operating history, unique business risks and limited public information on companies in China similar to the Group. Option-pricing method was used to allocate enterprise value to preferred shares and pre-IPO ordinary shares. The method treats preferred shares and pre-IPO ordinary shares as call options on the enterprise’s value, with exercise prices based on the liquidation preference of the preferred shares. The strike prices of the “options” based on the characteristics of the Group’s capital structure, including number of shares of each class of pre-IPO ordinary shares, seniority levels, liquidation preferences, and conversion values for the preferred shares. The option-pricing method also involves making estimates of the anticipated timing of a potential liquidity event, such as a sale of the Group or an IPO, and estimates of the volatility of the Group’s equity securities. The anticipated timing is based on the plans of board of directors and management of the Group. Estimating the volatility of the share price of a privately held company is complex because there is no readily available market for the shares. Volatility is estimated based on annualized standard deviation of daily stock price return of comparable companies. 2. SIGNIFICANT ACCOUNTING POLICIES (Continued) Taxation
Current income taxes are provided on the basis of net income for financial reporting purposes, adjusted for income and expense items which are not assessable or deductible for income tax purposes, in accordance with the regulations of the relevant tax jurisdictions. Deferred income taxes are accounted for using an asset and liability method. Under this method, deferred income taxes are recognized for the tax consequences of temporary differences by applying enacted statutory rates applicable to future years to differences between the financial statement carrying amounts and the tax bases of existing assets and liabilities. The tax base of an asset or liability is the amount attributed to that asset or liability for tax purpose. The effect on deferred taxes of a change in tax rates is recognized in the consolidated statements of comprehensive income in the period of change. A valuation allowance is provided to reduce the amount of deferred tax assets if it is considered more likely than not that some portion of, or all of the deferred tax assets will not be realized.
The Group did not recognize any interest and penalties associated with uncertain tax positions for the six months ended June 30, 2021 and 2022, the Group continues to assess the uncertain tax positions in accordance with applicable income tax guidance and based on changes in facts and circumstances. Net income per share Basic net income per share is computed by dividing net income attributable to ordinary shareholder, considering the accretion of redemption feature and cumulative dividend related to the Company’s redeemable convertible preferred shares, and undistributed earnings allocated to redeemable convertible preferred shares by the weighted average number of ordinary shares outstanding during the period using the two-class method. Under the two-class method, net income is allocated between ordinary shares and other participating securities based on their participating rights. Net loss is not allocated to other participating securities if based on their contractual terms they are not obligated to share the losses. Diluted net income per share is calculated by dividing net income attributable to ordinary shareholder, as adjusted for the effect of dilutive ordinary equivalent shares, if any, by the weighted average number of ordinary and dilutive ordinary equivalent shares outstanding during the period. Ordinary equivalent shares consist of ordinary shares issuable upon the conversion of the redeemable convertible preferred shares, using the if-converted method, and shares issuable upon the exercise of share options and vesting of restricted share units using the treasury stock method. Ordinary equivalent shares are not included in the denominator of the diluted net income per share calculation when inclusion of such share would be anti-dilutive. Segment Reporting Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker has been identified as the Chief Executive Officer who allocates resources to and assesses the performance of the operating segments of an entity. The Group’s reporting segments are decided based on its operating segments while taking full consideration of various factors such as products and services, geographic location and regulatory environment related to administration of the management. Operating segments meeting the same qualifications are allocated as one reporting segment, providing independent disclosures. The Group engages primarily in online brokerage services and margin financing services. The Group does not distinguish between markets or segments for the purpose of internal reports. The Group does not distinguish revenues, costs and expenses between segments in its internal reporting, and reports costs and expenses by nature as a whole. Hence, the Group has only one reportable segment. 2. SIGNIFICANT ACCOUNTING POLICIES (Continued) Significant Risks and Uncertainties
Currency risk arises from the possibility that fluctuations in foreign exchange rates will impact the financial instruments. The Group is not exposed to significant transactional foreign currency risk since almost all of its transactions, assets and liability are denominated in Hong Kong dollars and U.S. dollars and Hong Kong dollars are pegged against U.S. dollars. The impact of foreign currency fluctuations in the Group’s earnings is included in “Others, net” in the consolidated statements of comprehensive income. At the same time, the Group is exposed to translational foreign currency risk since some of the Company’s major subsidiaries have RMB as their functional currency. Therefore, RMB depreciation against Hong Kong dollars could have a material adverse impact on the foreign currency translation adjustment in the consolidated statements of comprehensive income. The Group enters into currency futures contracts to manage currency exposure associated with anticipated receipts and disbursements occurring in a currency other than the functional currency of the entity. The overall impact of the currency risk of other foreign currency assets held by the Group other than U.S. dollars and Renminbi is not significant. As of December 31, 2021 and June 30, 2022, the Group had RMB-denominated net assets of HK$2,374.8 million and net assets of HK$2,378.5 million, respectively. We estimate that a 10% depreciation of RMB against the U.S. dollar based on the foreign exchange rate on December 31, 2021 and June 30, 2022, would result in a decrease of US$30.5 million and a decrease of US$30.3 million, respectively, in the Group’s pre-tax profit. We estimate that a 10% appreciation of RMB against the U.S. dollar based on the foreign exchange rate on December 31, 2021 and June 30, 2022 would result in an increase of US$30.5 million and an increase of US$30.3 million, respectively, in the Group’s pre-tax profit.
Cash held on behalf of clients are segregated and deposited in financial institutions as required by rules mandated by the Group’s primary regulators. These financial institutions are of sound credit ratings, therefore management believes that there is no significant credit risk related to cash held on behalf of clients. The Group’s securities and derivative trades activities are transacted on either a cash or margin basis. The Group’s credit risk is limited in that substantially all of the contracts entered into are settled directly at securities and derivatives clearing organizations. In margin transactions, the Group extends credit to the client, subject to various regulatory and internal margin requirements, collateralized by cash and securities in the client’s account. IPO loans are exposed to credit risk from clients who fails to repay the loans upon IPO stock allotment. The Group monitors the clients’ collateral level and has the right to dispose the newly allotted stocks once the stocks first start trading. Bridge loans to enterprise pledged by shares are exposed to credit risk from counterparties who fail to repay the loans, the Group monitors on the collateral level of bridge loans in real time, and has the right to dispose of the pledged shares once the collateral level falls under the minimal level required to get the loans repaid. Liabilities to other brokers and dealers related to unsettled transactions are recorded at the amount for which the securities were purchased, and are paid upon receipt of the securities from other brokers or dealers. 2. SIGNIFICANT ACCOUNTING POLICIES (Continued) Significant Risks and Uncertainties (Continued)
In connection with its clearing activities, the Group is obligated to settle transactions with brokers and other financial institutions even if its clients fail to meet their obligations to the Group. Clients are required to complete their transactions by the settlement date, generally two business days after the trade date. If clients do not fulfill their contractual obligations, the Group may incur losses. The Group has established procedures to reduce this risk by generally requiring that clients deposit sufficient cash and/or securities into their account prior to placing an order. For cash management purposes, the Group enters into short-term securities sold under agreements to repurchase transactions (“repos”) in addition to securities borrowing and lending arrangements, all of which may result in credit exposure in the event the counterparty to a transaction is unable to fulfill its contractual obligations. Repos are collateralized by securities with a market value in excess of the obligation under the contract. Similarly, securities lending agreements are collateralized by deposits of cash or securities. The Group attempts to minimize credit risk associated with these activities by monitoring collateral values on a daily basis and requiring additional collateral to be deposited with or returned to the Group as permitted under contractual provisions. Concentrations of Credit Risk The Group’s exposure to credit risk associated with its brokerage and other activities is measured on an individual counterparty basis, as well as by groups of counterparties that share similar attributes. There was no revenue from clients which individually represented greater than 10% of the total revenues for the six months ended June 30, 2021 and 2022, respectively. Concentrations of credit risk can be affected by changes in political, industry, or economic factors. To reduce the potential for risk concentration, credit limits are established and exposure is monitored in light of changing counterparty and market conditions. As of December 31, 2021 and June 30, 2022, the Group did not have any material concentrations of credit risk within or outside the ordinary course of business.
Fluctuations in market interest rates may negatively affect the Group’s financial condition and results of operations. The Group are exposed to floating interest rate risk on cash deposit and floating rate borrowings. We use net interest simulation modeling techniques to evaluate the effect that changes in interest rates might have on pre-tax profit or loss. The model includes all interest-sensitive assets and liabilities. The simulations involve assumptions that are inherently uncertain and, as a result, cannot precisely predict the impact that changes in interest rates will have on pre-tax profit or loss. Actual results may differ from simulated results due to differences in timing and frequency of rate changes, changes in market conditions and changes in management strategy that lead to changes in the mix of interest-sensitive assets and liabilities. The simulations assume that the asset and liability structure of the consolidated balance sheets would not be changed as a result of a simulated change in interest rates. The results of the simulations based on the Group’s financial position as of June 30, 2022 indicate that a gradual 1% (100 basis points) increase/decrease in interest rates over a 12-month period would have increased/decreased the Group’s profit before tax by approximately HK$346.8 million (US$44.3 million), depending largely on the extent and timing of possible changes in floating rates. 2. SIGNIFICANT ACCOUNTING POLICIES (Continued) Recent Accounting Pronouncements In June 2016, the FASB amended guidance related to impairment of financial instruments as part of ASU 2016-13 Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which is effective on January 1, 2020. The guidance replaces the incurred loss impairment methodology with an expected credit loss model for which the group is required to recognize an allowance based on its estimate of expected credit loss. In November 2018, FASB issued ASU No, 2018-19, Codification Improvements to Topic 326, further clarified the scope of the guidance in the amendments in ASU 2016-13. In May 2019, FASB issued ASU No.2019-05, Financial instrument—Credit Losses (Topic 326), Targeted Transition Relief, which provides an irrevocably fair value option to elect for eligible instruments. In November 2019, FASB issued ASU 2019-11 Codification Improvements to Topic 326, Financial Instruments-Credit Losses, which clarified and improved various aspects of ASU 2016-13. In March 2020, FASB issued ASU 2020-03, Codification Improvements to Financial Instruments, which improves and clarifies various financial instruments topics, including the current expected credit losses standard. As of January 1, 2020, the Group adopted ASC Topic 326 using the modified retrospective approach for all in-scope assets. The adoption of ASC Topic 326 has no impact on the Group’s retained earnings as of January 1, 2020. Results for reporting periods beginning after January 1, 2020 are presented under ASC Topic 326 while prior periods continue to be reported in accordance with previously applicable U.S. GAAP. In August 2018, the FASB issued ASU 2018-13, Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement. The amendments in this standard will remove, modify and add certain disclosures under ASC Topic 820, Fair Value Measurement, with the objective of improving disclosure effectiveness. ASU 2018-13 is effective for the Group’s fiscal year beginning January 1, 2020, with early adoption permitted. The update eliminates the requirement to disclose: (a) the amount and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy; (b) an entity’s policy for timing of transfers between levels; (c) and an entity’s valuation processes for Level 3 fair value measurements. The Group adopted ASU 2018-13 on January 1, 2020, and the adoption had no material impact on the Group’s consolidated financial statements. In December 2019, the FASB issued ASU 2019-12, Income taxes (Topic 740)-Simplifying the accounting for income taxes, which simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740, Income Taxes. The ASU will be effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. The Group adopted the ASU on January 1, 2021, which did not have a material impact on the consolidated financial statements. In March 2020, the FASB issued ASU 2020-04, Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional guidance for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting if certain criteria are met. The amendments in ASU 2020-04 provide optional expedients and exceptions for applying GAAP to contracts, hedging relationships and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. This guidance is effective immediately and the amendments may be applied prospectively through December 31, 2022. The adoption did not have a material accounting impact on the Group’s consolidated financial position or results of operations. |
2. SIGNIFICANT ACCOUNTING POLICIES Basis of presentation The unaudited interim condensed consolidated financial statements of the Group have been prepared in accordance with the accounting principles generally accepted in the United States of America (“U.S. GAAP”). The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements. In the opinion of the Company, the accompanying unaudited interim condensed consolidated financial statements contain all adjustments, consisting of only normal recurring adjustments, necessary for a fair statement of its financial position as of September 30, 2022, its results of operations and cash flows for the nine months ended September 30, 2021 and 2022. The unaudited interim condensed consolidated balance sheet as of December 31, 2021, was derived from audited financial statements as of that date, but does not contain all of the footnote disclosures required by U.S. GAAP for a complete set of financial statements. Accordingly, these financial statements should be read in conjunction with the audited consolidated financial statements and related footnotes for the year ended December 31, 2021. Significant accounting policies followed by the Group in the preparation of the accompanying consolidated financial statements are summarized below. Basis of Consolidation The consolidated financial statements include the financial statements of the Company, its subsidiaries, the VIEs and subsidiary of the VIEs for which the Company or its subsidiary is the primary beneficiary. A subsidiary is an entity in which the Company, directly or indirectly, controls more than one half of the voting power; or has the power to appoint or remove the majority of the members of the Board of Directors; or to cast a majority of votes at the meeting of directors; or has the power to govern the financial and operating policies of the investee under a statute or agreement among the shareholders or equity holders. A consolidated VIE is an entity in which the Company, or its subsidiary, through contractual arrangements, has the power to direct the activities that most significantly impact the entity’s economic performance, bears the risks of and enjoys the rewards normally associated with ownership of the entity, and therefore the Company or its subsidiary is the primary beneficiary of the entity. All transactions and balances among the Company, its subsidiaries, the VIEs and subsidiaries of the VIEs have been eliminated upon consolidation. VIE Companies 1) Contractual Agreements with VIEs The following is a summary of the contractual agreements (collectively, “Contractual Agreements”) between the Company’s PRC subsidiary, Shen Si, and the VIEs. Through the Contractual Agreements, the VIEs are effectively controlled by the Company. Shareholders’ Voting Rights Proxy Agreements. Pursuant to the Shareholders’ Voting Rights Proxy Agreements, each shareholder of VIEs irrevocably authorized Shen Si or any person(s) designated by Shen Si to exercise such shareholder’s rights in VIEs, including without limitation, the power to participate in and vote at shareholder’s meetings, the power to nominate and appoint the directors, senior management, and other shareholders’ voting right permitted by the articles of association of VIEs. The shareholders’ voting rights proxy agreements remain irrevocable and continuously valid from the date of execution until the expiration of the business term of Shen Si and can be renewed upon request by Shen Si. Business Operation Agreements. Pursuant to the Business Operation Agreements, VIEs and their shareholders undertake that without Shen Si’s prior written consent, VIEs shall not enter into any transactions that may have a material effect on VIEs’ assets, business, personnel, obligations, rights or business operations. VIEs and their shareholders shall elect directors nominated by Shen Si and such directors shall nominate officers designated by Shen Si. The business operation agreements will remain effective until the end of Shen Si’s business term, which will be extended if Shen Si’s business term is extended or as required by Shen Si. 2. SIGNIFICANT ACCOUNTING POLICIES (Continued) VIE Companies (Continued) 1) Contractual Agreements with VIEs (Continued) Equity Interest Pledge Agreements. Pursuant to the Equity Interest Pledge Agreements, each shareholder of VIEs agrees that, during the term of the Equity Interest Pledge Agreements, he or she will not dispose of the pledged equity interests or create or allow any encumbrance on the pledged equity interests without the prior written consent of Shen Si. The Equity Interest Pledge Agreements remain effective until the latter of the full payment of all secured debt under the equity interest pledge agreements and VIEs and their shareholders discharge all their obligations under the contractual arrangements. Exclusive Technology Consulting and Services Agreements. Under the Exclusive Technology Consulting and Services Agreements between Shen Si and the VIEs, Shen Si has the exclusive right to provide VIEs with technology consulting and services related to, among other things, technology research and development, technology application and implementation, maintenance of software and hardware. Without Shen Si’s written consent, VIEs shall not accept any technology consulting and services covered by these agreements from any third party. VIEs agree to pay a service fee at an amount equivalent to all of its net profit to Shen Si. Unless otherwise terminated in accordance with the terms of these agreements or otherwise agreed with Shen Si, these agreements will remain effective until the expiration of Shen Si’s business term, and will be renewed if Shen Si’s business term is extended. Exclusive Option Agreements. Pursuant to the Exclusive Option Agreements, each shareholder of VIEs has irrevocably granted Shen Si an exclusive option, to the extent permitted by PRC laws, to purchase, or have its designated person or persons to purchase, at its discretion, all or part of the shareholder’s equity interests in VIEs. Unless PRC laws and/or regulations require valuation of the equity interests, the purchase price shall be RMB1.00 or the lowest price permitted by the applicable PRC laws, whoever is higher. Each shareholder of VIEs undertakes that, without the prior written consent of Shen Si, he or she will not, among other things, (i) create any pledge or encumbrance on his or her equity interests in VIEs, (ii) transfer or otherwise dispose of his or her equity interests in VIEs, (iii) change VIEs’ registered capital, (iv) amend VIEs’ articles of association, (v) liquidate or dissolve VIEs, or (vi) distribute dividends to the shareholders of VIEs. In addition, VIEs undertake that, without the prior written consent of Shen Si, they will not, among other things, dispose of VIEs’ material assets, provide any loans to any third parties, enter into any material contract with a value of more than RMB500,000, or create any pledge or encumbrance on any of their assets, or transfer or otherwise dispose of their material assets. Unless otherwise terminated by Shen Si, these agreements will remain effective until the expiration of Shen Si’s business term, and will be renewed if Shen Si’s business term is extended. 2. SIGNIFICANT ACCOUNTING POLICIES (Continued) VIE Companies (Continued) 2) Risks in relation to the VIE structure The following table sets forth the assets, liabilities, results of operations and changes in cash and cash equivalents of the VIEs and their subsidiary taken as a whole, which were included in the Group’s consolidated financial statements with intercompany balances and transactions eliminated between the VIEs and their subsidiary:
Transactions between the VIE and other entities in the consolidated group As of December 31, 2021 and September 30, 2022, total assets include amounts due from internal companies in the consolidated group in the amount of HK$190,424 thousand and HK$216,696 thousand, respectively. Total liabilities include amounts due to the internal companies in the amount of HK$80,435 thousand and HK$87,483 thousand, respectively. For the nine months ended September 30, 2021 and 2022, the VIE earned inter-company revenues in the amounts of HK$118,000 thousand and HK$182,834 thousand, respectively. In addition, for the nine months ended September 30, 2021 and 2022, the repayment of advances to Group companies by the VIE are in the amount of nil and nil, and VIE proceeded from advances from Group companies in the amount of nil, HK$ 8,107 thousand, respectively. All of these balances and transactions have been eliminated in consolidation. Under the Contractual Agreements with the VIEs, the Company has the power to direct activities of the VIEs and VIEs’ subsidiaries, and can have assets transferred out of the VIEs and VIEs’ subsidiaries. Therefore, the Company considers itself the ultimate primary beneficiary of the VIEs and there is no asset of the VIEs that can only be used to settle obligations of the VIEs and VIEs’ subsidiaries, except for registered capital of the VIEs and their subsidiary amounting to RMB10 million as of December 31, 2021 and September 30, 2022, respectively. Since the VIEs are incorporated as limited liability companies under the PRC Company Law, creditors of the VIEs do not have recourse to the general credit of the Company. There is currently no contractual arrangement that would require the Company to provide additional financial support to the VIEs. However, as the Company is conducting certain businesses through its VIEs and VIEs’ subsidiary, the Company may provide such support on a discretionary basis in the future, which could expose the Company to a loss. 2. SIGNIFICANT ACCOUNTING POLICIES (Continued) VIE Companies (Continued) 2) Risks in relation to the VIE structure (Continued) In the opinion of the Company's management, the contractual arrangements among its subsidiary, the VIEs and their respective Nominee Shareholders are in compliance with current PRC laws and are legally binding and enforceable. However, uncertainties in the interpretation and enforcement of the PRC laws, regulations and policies could limit the Company’s ability to enforce these contractual arrangements. As a result, the Company may be unable to consolidate the VIEs and VIEs’ subsidiaries in the consolidated financial statements. On March 15, 2019, the Foreign Investment Law was formally passed by the thirteenth National People’s Congress and it was taken effect on January 1, 2020. The Foreign Investment Law replaces the Law on Sino-Foreign Equity Joint Ventures, the Law on Sino-Foreign Cooperative Joint Ventures and the Law on Foreign-Capital Enterprises to become the legal foundation for foreign investment in the PRC. The Foreign Investment Law stipulates certain forms of foreign investment. However, the Foreign Investment Law does not explicitly stipulate contractual arrangements such as those we rely on as a form of foreign investment. Notwithstanding the above, the Foreign Investment Law stipulates that foreign investment includes “foreign investors investing through any other methods under laws, administrative regulations or provisions prescribed by the State Council.” Future laws, administrative regulations or provisions prescribed by the State Council may possibly regard Contractual Arrangements as a form of foreign investment. In the event that the State Council in the future promulgates laws and regulations that deem investments made by foreign investors through contractual arrangements as “foreign investment”, the Group’s ability to use the contractual arrangements with its VIEs and the Group’s ability to conduct business through the VIEs could be severely limited. The Company’s ability to control the VIEs also depends on the power of attorney Shen Si has to vote on all matters requiring shareholders’ approvals in the VIEs. As noted above, the Company believes these power of attorney are legally binding and enforceable but may not be as effective as direct equity ownership. In addition, if the Group’s corporate structure or the contractual arrangements with the VIEs were found to be in violation of any existing PRC laws and regulations, the PRC regulatory authorities could, within their respective jurisdictions:
2. SIGNIFICANT ACCOUNTING POLICIES (Continued) VIE Companies (Continued) 2) Risks in relation to the VIE structure (Continued) The imposition of any of these restrictions or actions may result in a material adverse effect on the Group’s ability to conduct its business. In addition, if the imposition of any of these restrictions causes the Group to lose the right to direct the activities of the VIEs or the right to receive their economic benefits, the Group would no longer be able to consolidate the financial statements of the VIEs. In the opinion of management, the likelihood of losing the benefits in respect of the Group’s current ownership structure or the contractual arrangements with its VIEs is remote. Use of Estimates The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, related disclosures of contingent assets and liabilities at the balance sheet date, and the reported revenues, costs and expenses during the reported period in the consolidated financial statements and accompanying notes. These accounting estimates reflected in the Group’s consolidated financial statements mainly include, but are not limited to, the estimation of the expected usage and the estimated relative standalone selling price of the incentive points and coupons, the valuation and recognition of share-based compensation arrangements, depreciable lives of property and equipment, useful life of intangible assets, expected credit losses on financial instruments, assessment for impairment of long-term investments and other non-current assets, present value for expected future leasing payment, contingency reserve, provision of income tax and valuation allowance for deferred tax asset, and valuation of financial instruments measured at fair value. Actual results could differ from those estimates. Comprehensive Income and Foreign Currency Translation The Group’s operating results are reported in the consolidated statements of comprehensive income pursuant to FASB ASC Topic 220, “Comprehensive Income”. Comprehensive income consists of two components: net income and other comprehensive income (“OCI”). The Group’s OCI is comprised of gains and losses resulting from translating foreign currency financial statements of entities, of which functional currency is other than Hong Kong dollar which is the presentational currency of the Group, net of related income taxes, where applicable. Such subsidiaries’ assets and liabilities are translated into Hong Kong dollars at period-end exchange rates, and revenues and expenses are translated at average exchange rates prevailing during the period. Adjustments that result from translating amounts from a subsidiary’s functional currency to the Hong Kong dollar (as described above) are reported net of tax, where applicable, in accumulated OCI in the consolidated balance sheets. Current Expected Credit Losses Prior to January 1, 2020, the Group applied incurred loss methodology for recognizing credit losses that delays recognition until it is probable a loss has been incurred. The identified impairment loss was immaterial prior to January 1, 2020. On January 1, 2020, the Group adopted FASB ASC Topic 326 – “Financial Instruments – Credit Losses” (“ASC Topic 326”) which replaces the incurred loss methodology with the current expected credit loss (“CECL”) methodology. The new guidance applies to financial assets measured at amortized cost, held-to-maturity debt securities and off-balance sheet credit exposures. For on-balance sheet assets, an allowance must be recognized at the origination or purchase of in-scope assets and represents the expected credit losses over the contractual life of those assets. 2. SIGNIFICANT ACCOUNTING POLICIES (Continued) Current Expected Credit Losses (Continued) The Group adopted ASC Topic 326 using the modified retrospective approach for all in-scope assets. The adoption of ASC Topic 326 has no material impact on the Group’s retained earnings as of January 1, 2020. Results for reporting periods beginning after January 1, 2020 are presented under ASC Topic 326 while prior periods continue to be reported in accordance with previously applicable U.S. GAAP. The Group’s in-scope assets are primarily loans and advances that are collateralized by client securities and the collateral is required to be maintained at specified minimum levels at all times. The Group monitors margin levels and requires clients to provide additional collateral, or reduce margin positions, to meet minimum collateral requirements if the fair value of the collateral changes. The Group applies the practical expedient based on collateral maintenance provisions in estimating an allowance for credit losses for the loans and advances. In accordance with the practical expedient, when the Group reasonably expects that borrowers (or counterparties, as applicable) will replenish the collateral as required, there is no expectation of credit losses when the collateral’s fair value is greater than the amortized cost of the financial assets. If the amortized cost exceeds the fair value of collateral, then credit losses are estimated only on the unsecured portion. For the nine months ended September 30, 2021 and 2022, expected credit loss expenses of HK$2,815 thousand and HK$13,620 thousand, resulting from the assessment of credit losses for the loans and advances under ASC Topic 326 at period-end were recognized in “Others, net” in the consolidated statements of comprehensive income, respectively. An allowance for credit losses on other financial assets, including receivables from clients, brokers, clearing organizations and fund management companies and fund distributors, is estimated based on the aging of these financial assets. Receivables from clients are due within the settlement period commonly adopted in the relevant market practices, which is usually within a few days from the trade date. Because these receivables involve customers who have no recent history of default, and the settlement periods are usually short, the credit risk arising from receivables from clients is considered low. In respect of the receivables from brokers, clearing organizations and fund management companies and fund distributors, the management considers that these receivables have a low risk of default and the counterparties have a strong capacity to meet their contractual obligation. As a result, the allowance for credit losses for other financial assets were immaterial for all periods presented. Cash and Cash Equivalents Cash and cash equivalents represent cash on hand, demand deposits and time deposits placed with banks or other financial institutions, which are unrestricted to withdrawal or use, and which have original maturities of three months or less. Cash Held on Behalf of Clients The Group has classified the clients’ monies as cash held on behalf of clients under the assets section in the consolidated balance sheets and recognized the corresponding accounts payables to the respective clients under the liabilities section. Term Deposit Term deposit consists of bank deposits with an original maturity of greater than three months. Restricted Cash The Group is required to maintain restricted cash deposits for certain property leases. These funds are restricted and have been classified as such on our consolidated balance sheets due to the nature of restriction. 2. SIGNIFICANT ACCOUNTING POLICIES (Continued) Short-term Investments The Group classifies certain financial assets with highly liquidity and original maturities less than twelve months as short-term investments. The Group’s short-term investments consist of money market funds and financial assets at fair value through profit or loss. The Group values its money market funds and financial assets at fair value through profit or loss using quoted prices in active markets for these investments, and accordingly, the Group classifies the valuation techniques that use these inputs as Level 1. Securities Purchased Under Agreements to Resell and Securities Sold Under Agreements to Repurchase Transactions involving purchases of securities under agreements to resell (resell agreements) and transactions involving sales of securities under agreements to repurchase (repurchase agreements) are treated as collateralized financing transactions. Under resell agreements, the Group pays cash to counterparties and receives securities as collateral. These agreements are carried at amounts at which the securities will subsequently be resold, and the interest income received by the Group is recorded as interest income in the consolidated statements of comprehensive income. Under repurchase agreements, the Group receives cash from counterparties and provides securities as collateral. These agreements are carried at amounts at which the securities will subsequently be repurchased, and the interest expense incurred by the Group is recorded as interest expenses in the consolidated statements of comprehensive income. Loans and advances Loans and advances include margin loans, IPO loans extended to clients and other advances, collateralized by securities and are carried at the amortized cost, net of an allowance for credit losses. Revenues earned from the loans and advances are included in interest income. Margin loans are extended to clients on a demand basis and are not committed facilities. Securities owned by the customers, which are not recorded in the consolidated balance sheets, are held as collateral for amounts due on the margin loans. IPO loans for subscription of new shares are normally settled within one week from the drawdown date. Once IPO stocks are allotted, the Group requires clients to repay the IPO loans. Force liquidation action would be taken if the clients fail to settle their shortfall after the IPO allotment result is announced. Other advances mainly consist of bridge loans to enterprises which pledged unlisted or listed shares they hold as collateral. Loans and advances are initially recorded net of directly attributable transaction costs and are measured at subsequent reporting dates at amortized cost. Finance charges, premiums payable on settlement or redemption and direct costs are accounted for on an accrual basis to the surplus or deficit using the effective interest method and are added to the carrying amount of the instrument to the extent that they are not settled in the period in which they arise. The balances will be written off to the extent that there is no realistic prospect of recovery. This is generally the case when the Group determines that the debtor does not have assets or sources of income that could generate sufficient cash flows to repay the amounts subject to the write-off. 2. SIGNIFICANT ACCOUNTING POLICIES (Continued) Trading Receivables from and Payables to Clients Trading receivables from clients include amounts due on brokerage transactions on a trade-date basis. Trading payables to clients represent the closing cash balance to the customers, which mainly include cash deposits and amounts due on brokerage transactions on a trade date basis. Receivables from and Payables to Brokers, Clearing Organizations and Fund Management Companies and Fund Distributors Receivables from and payables to brokers, clearing organizations and fund management companies and fund distributors include receivables and payables from unsettled trades on a trade-date basis, including amounts receivable for securities, derivatives or funds trades not delivered by the Group to the purchaser by the settlement date and cash deposits, and amounts payable for securities, derivatives or funds trades not received by the Group from a seller by the settlement date. Clearing settlement fund deposited in the clearing organizations for the clearing purpose is recognized in receivables from clearing organizations. The Group borrowed margin loans from executing brokers, with the benchmark interest rate plus premium differentiated depending on the amount borrowed, and immediately lent to margin financing clients. Margin loans borrowed is recognized in the payables to brokers. The Group’s policy is to net the receivables from and payables to clearing organizations according to ASC Topic 210-20, when all of the following conditions are met:
Interest Receivable and Payable Interest receivable which is included in receivables is calculated based on the contractual interest rate of bank deposit, loans and advances, securities loaned and receivables on an accrual basis, and is recorded as interest income as earned. Interest payable which is included in payables is calculated based on the contractual interest rates of payables, borrowings, securities borrowed and securities sold under agreements to repurchase on an accrual basis, and is recorded as interest expense when incurred. Securities Borrowed and Securities Loaned Securities borrowed transactions require the Group to provide counterparties with collateral, which may be in the form of cash, or other securities. With respect to securities loaned, the Group receives collateral, which may be in the form of cash or other securities in an amount generally in excess of the fair value of the securities loaned. The Group monitors the market value of securities borrowed and loaned on a daily basis, with additional collateral obtained or refunded as permitted contractually. Securities borrowed and securities loaned are recorded at the amount of the cash collateral advanced or received. Receivables and payables related to securities borrowed and securities loaned are included at receivables from and payables to brokers or clients in the consolidated balance sheets. Securities lending fees received and securities borrowing fees paid by the Group are included in interest income and interest expense, respectively, in the consolidated statements of comprehensive income. 2. SIGNIFICANT ACCOUNTING POLICIES (Continued) Leases In an operating lease, a lessee obtains control of only the use of the underlying asset, but not the underlying asset itself. An operating lease is recognized as a right-of-use asset with a corresponding liability at the date which the leased asset is available for use by the Group. The Group’s operating leases contain both lease components and non-lease components. Non-lease components are distinct elements of a contract that are not related to securing the use of the underlying assets, such as common area maintenance and other management costs. The Company makes an accounting policy election not to separate non-lease components to measure the lease liability and lease asset. The lease liability is initially measured at the present value of the future lease payments over the lease term. The lease terms may include options to extend or terminate the lease when it is reasonably certain that the Group will exercise that option. The lease payments are discounted using the rate implicit in the lease or, if not readily determinable, the Group’s secured incremental borrowing rate, which is based on an internally developed yield curve using interest rates of debt issued with a similar risk profile as the Group and a duration similar to the lease term. An operating lease right-of-use asset is initially measured at the value of the lease liability minus any lease incentives and initial direct costs incurred plus any prepaid rent. After commencement of the operating lease, the Group recognizes lease expenses on a straight-line basis over the lease term. The subsequent measurement of the lease liability is based on the present value of the remaining lease payments using the discount rate determined at lease commencement. The right-of-use asset is subsequently measured at cost less accumulated amortization and any impairment provision. The amortization of the right-of-use asset represents the difference between the straight-line lease expense and the accretion of interest on the lease liability each period. The interest amount is used to accrete the lease liability and to amortize the right-of-use asset. There is no amount recorded as interest expense. All of the Group’s leases are classified as operating leases and primarily consist of real estate leases for corporate offices, data centers, and other facilities. As of December 31, 2021 and September 30, 2022, the weighted-average remaining lease term on these leases is approximately three years and three years, respectively, and the weighted-average discount rate used to measure the lease liabilities was approximately 4.71% and 4.65%, respectively. For the nine months ended September 30, 2021 and 2022, right-of-use assets obtained under operating leases was HK$83,265 thousand and HK$44,793 thousand, respectively. The Group’s lease agreements do not contain any residual value guarantees, restrictions or covenants. Refundable Deposit Refundable deposit is included in other assets in the consolidated balance sheets. As a clearing member firm of securities and derivatives clearing organizations in Hong Kong, Singapore and the U.S., the Group is also exposed to clearing member credit risk. These clearing organizations require member firms to deposit cash to a clearing fund. If a clearing member defaults in its obligations to the clearing organizations in an amount larger than its own margin and clearing fund deposits, the shortfall is absorbed pro rata from the deposits of the other clearing members. Many clearing organizations of which the Group is member have the authority to assess their members for additional funds if the clearing fund is depleted. A large clearing member default could result in a substantial cost if the Group is required to pay such additional funds. 2. SIGNIFICANT ACCOUNTING POLICIES (Continued) Property and Equipment, net Property and equipment, which are included in other assets in the consolidated balance sheets are stated at historical cost less accumulated depreciation and impairment, if any. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. Residual rate is determined based on the economic value of the property and equipment at the end of the estimated useful lives as a percentage of the original cost.
Expenditures for maintenance and repairs are expensed as incurred. Intangible Assets Intangible assets which are included in other assets in the consolidated balance sheets mainly consist of computer software, licenses and other intangible assets. Finite-lived intangible assets are carried at historical cost less accumulated amortization and accumulated impairment losses, if any. Amortization of finite-lived intangible assets is calculated using the straight-line method to allocate costs over the estimated useful lives. Pursuant to topic ASC 350 Intangibles—Goodwill and Other, the useful life of an intangible asset to an entity is the period over which the asset is expected to contribute directly or indirectly to the future cash flows of that entity. If an income approach is used to measure the fair value of the license, in determining the useful life of the intangible asset for amortization purposes, the period of expected cash flows used to measure the fair value of the license should be considered. The following is a summary of estimated useful lives:
The other licenses recognised as infinite-lived intangible assets consist of an insurance broker license and a financial services license. The Group obtained an insurance broker license through acquiring a member of the Hong Kong Professional Insurance Brokers Association. The Group obtained some financial securities licenses via acquisition of subsidiaries. Such intangible assets were recognised as indefinite-lived as the cash flows were expected to continue indefinitely on the brokerage and financial service business in above regions. The Group had held a futures trading right as a clearing member firm of HKEx in order to trade futures through the trading facilities of the Stock Exchange, and has recognized it as intangible assets. As trading right has an indefinite useful life and have no foreseeable limit to the period over which the Group can use to generate net cash flows, it will not be amortised until their useful lives are determined to be finite. 2. SIGNIFICANT ACCOUNTING POLICIES (Continued) The aforementioned indefinite-lived intangible assets are carried at cost less accumulated impairment losses. The Group evaluates the remaining useful life of an indefinite-lived intangible asset that is not being amortized each reporting period to determine whether events and circumstances continue to support an indefinite useful lives. The Group will not amortize the indefinite-lived intangible assets until their useful lives are determined to be finite. An intangible asset that is not subject to amortization will be tested for impairment annually and more frequently if events or changes in circumstances indicate that it is more likely than not that the asset is impaired. Long-term investments 1)Equity method investments The Group’s long-term investments primarily consist of equity method investments and equity investments without readily determinable fair values. In accordance with ASC 323 Investment—Equity Method and Joint Ventures, the Group accounts for equity method investments over which the Group has significant influence but does not own a majority of the equity interest or otherwise controls and the investments are either common stock or in substance common stock using the equity method. For the investments in limited partnerships, the equity method of accounting for investments is generally appropriate for accounting by limited partners, According to ASC 323-30-S99-1, the investments in all limited partnerships should be accounted for pursuant to paragraph 970-323-25-6. That guidance requires the use of the equity method unless the investor’s interest “is so minor that the limited partner may have virtually no influence over partnership operating and financial policies.” Investments of more than 3 to 5 percent are generally viewed to be more than minor. The Group’s share of the investee’s profit and loss is recognized in the consolidated statements of comprehensive income of the period. The carrying amount of equity method investments is tested for impairment whenever there is an indication that the carrying amount may be impaired in accordance with the policy described in “Impairment of long-lived assets”. 2)Equity investments without readily determinable fair values In accordance with ASC 321 Investment—Equity Securities, for those equity investments without readily determinable fair values, the Group elects to record these investments at cost, less impairment, and plus or minus subsequent adjustments for observable price changes. Under this measurement alternative, changes in the carrying value of the equity investment are required to be made whenever there are observable price changes in orderly transactions for the identical or similar investment of the same issuer. Pursuant to ASC 321, for those equity investments that the Group elects to use the measurement alternative, the Group makes a qualitative assessment of whether the investment is impaired at each reporting date. If a qualitative assessment indicates that the investment is impaired, the Group estimates the investment’s fair value in accordance with the principles of ASC 820. If the fair value is less than the investment’s carrying value, the Group recognizes an impairment loss equal to the difference between the carrying value and fair value. Impairment of Long-lived Assets Long-lived assets are evaluated for impairment whenever events or changes in circumstances (such as a significant adverse change to market conditions that will impact the future use of the assets) indicate that the carrying amount may not be fully recoverable or that the useful life is shorter than the Group had originally estimated. When these events occur, the Group evaluates the impairment by comparing carrying value of the assets to an estimate of future undiscounted cash flows expected to be generated from the use of the assets and their eventual disposition. If the sum of the expected future undiscounted cash flows is less than the carrying value of the assets, the Group recognizes an impairment loss based on the excess of the carrying value of the assets over the fair value of the assets. Impairment charge recognized for the nine months ended September 30, 2021 and 2022 was nil and nil, respectively. 2. SIGNIFICANT ACCOUNTING POLICIES (Continued) Treasury stock The Group accounted for those shares repurchased as treasury stock at cost of purchase, Treasury stock, and is shown separately in the shareholders’ equity as the Group has not yet decided on the ultimate disposition of those shares acquired. When the Group decides to cancel the treasury stock, the difference between the original issuance price and the repurchase price is debited into additional paid-in capital. Refer to Note 11 for details. Fair Value Measurements Accounting guidance defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Group considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants would use when pricing the asset or liability. Accounting guidance establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Accounting guidance establishes three levels of inputs that may be used to measure fair value: Level 1 — Valuation techniques in which all significant inputs are unadjusted quoted prices from active markets for assets or liabilities that are identical to the assets or liabilities being measured. Level 2 — Valuation techniques in which significant inputs include quoted prices from active markets for assets or liabilities that are similar to the assets or liabilities being measured and/or quoted prices for assets or liabilities that are identical or similar to the assets or liabilities being measured from markets that are not active. Also, model-derived valuations in which all significant inputs and significant value drivers are observable in active markets are Level 2 valuation techniques. Level 3 — Valuation techniques in which one or more significant inputs or significant value drivers are unobservable. Unobservable inputs are valuation technique inputs that reflect the Group’s own assumptions about the assumptions that market participants would use in pricing an asset or liability. When available, the Group uses quoted market prices to determine the fair value of an asset or liability. If quoted market prices are not available, the Group will measure fair value using valuation techniques that use, when possible, current market-based or independently sourced market parameters, such as interest rates and currency rates. The carrying amount of cash and cash equivalents, cash held on behalf of clients, restricted cash, receivables from and payables to clients, brokers, clearing organizations and fund management companies and fund distributors, accrued interest receivable, accrued interest payable, amounts due to related parties, other financial assets and liabilities approximates fair value because of their short-term nature. Term deposit, loans and advances, borrowings, securities purchased under agreements to resell, securities sold under agreements to repurchase and operating lease liabilities are carried at amortized cost. The carrying amount of term deposit, loans and advances, borrowings and operating lease liabilities approximate their respective fair value as the interest rates applied reflect the current quoted market yield for comparable financial instruments. Short-term investments are measured at fair value. The Group’s non-financial assets, such as operating lease right-of-use assets, long-term investments, property and equipment and intangible assets, would be measured at fair value only if they were determined to be impaired. Revenue Recognition
Brokerage commission income earned for executing transactions is accrued on a trade-date basis. 2. SIGNIFICANT ACCOUNTING POLICIES (Continued) Revenue Recognition (Continued) Handling charge income arise from the services such as clearing and settlement services, subscription and dividend collection handling services, etc., are accrued on a trade-date basis. Brokerage commission and handling charge income are recognised at a point in time when the service has been passed to the customer.
The Group earns interest income primarily in connection with its margin financing and securities lending services, IPO financing, bridge loan and deposits with banks, which are recorded on an accrual basis and are included in interest income in the consolidated statements of comprehensive income. Interest income is recognized as it is accrued over time using the effective interest method.
Other income consists of enterprise public relations service charge income provided to corporate clients, underwriting fee income, IPO subscription service charge income, currency exchange service income from clients, income from market data service and funds distribution service income from fund management companies, etc. Enterprise public relations service charge income is charged to corporate clients by providing platform to post their detailed stock information and latest news in Futubull app, as well as providing a lively, interactive community among their potential investors to exchange investment views, share trading experience and socialize with each other. Unearned enterprise public relations service income of which the Group had received the consideration is recorded as contract liabilities (deferred revenue). Underwriting fee income is generated from investment banking business primarily by providing equity sub-underwriting to corporate issuers. IPO subscription service charge income is derived from provision of new share subscription services in relation to IPOs in the Hong Kong capital market. Currency exchange service income is charged to the Group’s paying clients for providing currency exchange service. Market information and data income is charged to Futubull and Moomoo app users for market data service. Funds distribution service income is charged to fund management companies for providing fund products distribution service to Futu’s individual clients. The Group, as an intermediary would receive subscription fees from fund management companies as agreed in the service contracts. For enterprise public relations service charge income, funds distribution service income, market information and data income and ESOP management service income, the service revenues are recognized ratably over the term of the service contracts. For IPO subscription service charge income, underwriting fee income and currency exchange service income, the Group recognizes the revenues upon the time when the services are rendered to customers. 2. SIGNIFICANT ACCOUNTING POLICIES (Continued) Customer Loyalty Program The Group operates a customer loyalty program to its customers that offer various incentives in the form of incentive points and coupons for redemption of free or discounted goods or services. For the incentives generated from current sales transaction, the Group defers a portion of commission income with corresponding liability reflected as contract liability attributable to the incentives. The contract liability is determined by management based on the expected usage of the incentive points and coupons, and their estimated relative standalone selling price based on the related goods and services. Significant judgment was made by management in determining the expected usage and estimated relative standalone selling price of the incentive points and coupons, derived from historical trading volume, commission rates and redemption patterns, and an evaluation as to whether historical activities are representative of the expected future activities. For the incentives offered for future sales transaction, the Group nets a portion of brokerage commission income attributable to the incentives when points or coupons are actually redeemed. For the incentives not offered for future sales transaction, the Group considers them as a payment of other distinct goods that would be granted to clients. Such incentives are accounted for as selling and marketing expense with corresponding liability reflected as other liability in the consolidated balance sheet. The table below presents the deferred or netted brokerage commission income related to the customer loyalty program for the nine months ended September 30, 2021 and 2022.
As of December 31, 2021 and September 30, 2022, contract liabilities recorded related to the customer loyalty program were HK$8,968 thousand and HK $6,278 thousand, respectively. The Group expects to recognize the revenue when points and coupons are actually redeemed. Historically, the revenue was usually recognized within 1-3 years from the time the contract liability was first recognized. Brokerage Commission and Handling Charge Expenses Commission expenses for executing and/or clearing transactions are accrued on a trade-date basis. The commission expenses are charged by executing brokers for securities and derivative trades in the United States stock and derivative markets as the Group makes securities and derivative trades with these brokers as principal. Handling and settlement fee is charged by HKEx or executing brokers for clearing and settlement services, are accrued on a trade-date basis. IPO subscription service charge expenses are charged by commercial banks in connection with new share subscription services in relation to IPOs in the Hong Kong capital market. 2. SIGNIFICANT ACCOUNTING POLICIES (Continued) Interest Expenses Interest expenses primarily consist of interest expenses of borrowings from banks, other licensed financial institutions and other parties paid to fund the Group’s margin financing business, securities borrowing business and IPO financing business. Processing and Servicing Costs Processing and servicing costs consist of market information and data fee, data transmission fee, cloud service fee, system cost, and SMS service fee, etc. The nature of market information and data fee mainly represents for information and data fee paid to stock exchanges like HKEx, NASDAQ, and New York stock exchange, etc. Data transmission fee is the fee of data transmission among cloud server and data centers located in Shenzhen, PRC and Hong Kong, etc. Cloud service fee and SMS service fee mainly represent the data storage and computing service and the SMS channel service fee. The nature of system cost mainly represents for the fee to access and use the systems paid to software providers. Research and Development Expenses Research and development expenses consist of expenses related to developing transaction platform and website like Futubull app and other products, including payroll and welfare, rental expenses and other related expenses for personnel engaged in research and development activities. All research and development costs have been expensed as incurred as the costs qualifying for capitalization have been insignificant. Selling and Marketing Expenses Selling and marketing expenses consist primarily of advertising and promotion costs, payroll, rental and related expenses for personnel engaged in marketing and business development activities. Advertising and promotion costs are expensed as incurred and are included within selling and marketing expenses in the consolidated statements of comprehensive income. General and Administrative Expenses General and administrative expenses consist of payroll, rental, related expenses for employees involved in general corporate functions, including finance, legal and human resources, costs associated with use of facilities and equipment, such as depreciation expenses, rental and other general corporate related expenses. Others, net Others, net, mainly consist of non-operating income and expenses, foreign currency gains or losses, expected credit loss expenses, gain or loss from investments and impairment from long-term investments and other non-current assets for all periods presented. Foreign Currency Gains and Losses Foreign currency transactions denominated in currencies other than the functional currency are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are remeasured at the applicable rates of exchange in effect at that date. Foreign currency gain or loss resulting from the settlement of such transactions and from remeasurement at period-end is recognized in “Others, net” in the consolidated statements of comprehensive income. 2. SIGNIFICANT ACCOUNTING POLICIES (Continued) Share-Based Compensation The Company follows ASC 718 to determine whether a share option and a restricted share units should be classified and accounted for as a liability award or equity award. All share-based awards to employees and directors classified as equity awards, such as stock options and restricted share units, are measured at the grant date based on the fair value of the awards. Share-based compensation, net of estimated forfeitures, is recognized as expenses on a straight-line method over the requisite service period, which is the vesting period. Options granted generally vest over four or five years. The modification of the terms or conditions of the existing shared-based award is treated as an exchange of the original award for a new award. The incremental compensation expenses are equal to the excess of the fair value of the modified award immediately after the modification over the fair value of the original award immediately before the modification. For stock options already vested as of the modification date, the Group immediately recognized the incremental value as compensation expenses. For stock options still unvested as of the modification date, the incremental compensation expenses are recognized over the remaining service period of these stock options. The Company determined the fair value of the restricted share units with reference to the fair value of the underlying shares as of the grant date. The Company utilizes the binomial option pricing model to estimate the fair value of stock options granted, with the assistance of an independent valuation firm. Forfeitures are estimated at the time of grant and revised in subsequent periods if actual forfeitures differ from those estimates. The Group uses historical data to estimate pre-vesting options and records share-based compensation expenses only for those awards that are expected to vest. See Note 13 for further discussion on share-based compensation. Fair Value of Preferred Shares and Pre-IPO Ordinary Shares Shares of the Company, which did not have quoted market prices, were valued based on the income approach. The income approach involves applying the discounted cash flow analysis based on projected cash flow using the Group’s best estimate as of the valuation dates. Estimating future cash flow requires the Group to analyze projected revenue growth, gross margins, effective tax rates, capital expenditures and working capital requirements. In determining an appropriate discount rate, the Group considered the cost of equity and the rate of return expected by venture capitalists. The Group also applied a discount for lack of marketability given that the shares underlying the award were not publicly traded at the time of grant. Determination of estimated fair value of the Group requires complex and subjective judgments due to its limited financial and operating history, unique business risks and limited public information on companies in China similar to the Group. Option-pricing method was used to allocate enterprise value to preferred shares and pre-IPO ordinary shares. The method treats preferred shares and pre-IPO ordinary shares as call options on the enterprise’s value, with exercise prices based on the liquidation preference of the preferred shares. The strike prices of the “options” based on the characteristics of the Group’s capital structure, including number of shares of each class of pre-IPO ordinary shares, seniority levels, liquidation preferences, and conversion values for the preferred shares. The option-pricing method also involves making estimates of the anticipated timing of a potential liquidity event, such as a sale of the Group or an IPO, and estimates of the volatility of the Group’s equity securities. The anticipated timing is based on the plans of board of directors and management of the Group. Estimating the volatility of the share price of a privately held company is complex because there is no readily available market for the shares. Volatility is estimated based on annualized standard deviation of daily stock price return of comparable companies. 2. SIGNIFICANT ACCOUNTING POLICIES (Continued) Taxation
Current income taxes are provided on the basis of net income for financial reporting purposes, adjusted for income and expense items which are not assessable or deductible for income tax purposes, in accordance with the regulations of the relevant tax jurisdictions. Deferred income taxes are accounted for using an asset and liability method. Under this method, deferred income taxes are recognized for the tax consequences of temporary differences by applying enacted statutory rates applicable to future years to differences between the financial statement carrying amounts and the tax bases of existing assets and liabilities. The tax base of an asset or liability is the amount attributed to that asset or liability for tax purpose. The effect on deferred taxes of a change in tax rates is recognized in the consolidated statements of comprehensive income in the period of change. A valuation allowance is provided to reduce the amount of deferred tax assets if it is considered more likely than not that some portion of, or all of the deferred tax assets will not be realized.
The Group did not recognize any interest and penalties associated with uncertain tax positions for the nine months ended September 30, 2021 and 2022, the Group continues to assess the uncertain tax positions in accordance with applicable income tax guidance and based on changes in facts and circumstances. Net income per share Basic net income per share is computed by dividing net income attributable to ordinary shareholder, considering the accretion of redemption feature and cumulative dividend related to the Company’s redeemable convertible preferred shares, and undistributed earnings allocated to redeemable convertible preferred shares by the weighted average number of ordinary shares outstanding during the period using the two-class method. Under the two-class method, net income is allocated between ordinary shares and other participating securities based on their participating rights. Net loss is not allocated to other participating securities if based on their contractual terms they are not obligated to share the losses. Diluted net income per share is calculated by dividing net income attributable to ordinary shareholder, as adjusted for the effect of dilutive ordinary equivalent shares, if any, by the weighted average number of ordinary and dilutive ordinary equivalent shares outstanding during the period. Ordinary equivalent shares consist of ordinary shares issuable upon the conversion of the redeemable convertible preferred shares, using the if-converted method, and shares issuable upon the exercise of share options and vesting of restricted share units using the treasury stock method. Ordinary equivalent shares are not included in the denominator of the diluted net income per share calculation when inclusion of such share would be anti-dilutive. Segment Reporting Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker has been identified as the Chief Executive Officer who allocates resources to and assesses the performance of the operating segments of an entity. The Group’s reporting segments are decided based on its operating segments while taking full consideration of various factors such as products and services, geographic location and regulatory environment related to administration of the management. Operating segments meeting the same qualifications are allocated as one reporting segment, providing independent disclosures. The Group engages primarily in online brokerage services and margin financing services. The Group does not distinguish between markets or segments for the purpose of internal reports. The Group does not distinguish revenues, costs and expenses between segments in its internal reporting, and reports costs and expenses by nature as a whole. Hence, the Group has only one reportable segment. 2. SIGNIFICANT ACCOUNTING POLICIES (Continued) Significant Risks and Uncertainties
Currency risk arises from the possibility that fluctuations in foreign exchange rates will impact the financial instruments. The Group is not exposed to significant transactional foreign currency risk since almost all of its transactions, assets and liability are denominated in Hong Kong dollars and U.S. dollars and Hong Kong dollars are pegged against U.S. dollars. The impact of foreign currency fluctuations in the Group’s earnings is included in “Others, net” in the consolidated statements of comprehensive income. At the same time, the Group is exposed to translational foreign currency risk since some of the Company’s major subsidiaries have RMB as their functional currency. Therefore, RMB depreciation against Hong Kong dollars could have a material adverse impact on the foreign currency translation adjustment in the consolidated statements of comprehensive income. The Group enters into currency futures contracts to manage currency exposure associated with anticipated receipts and disbursements occurring in a currency other than the functional currency of the entity. The overall impact of the currency risk of other foreign currency assets held by the Group other than U.S. dollars and Renminbi is not significant. As of December 31, 2021 and September 30, 2022, the Group had RMB-denominated net assets of HK$2,374.8 million and net assets of HK$1,894.9 million, respectively. We estimate that a 10% depreciation of RMB against the U.S. dollar based on the foreign exchange rate on December 31, 2021 and September 30, 2022, would result in a decrease of US$30.5 million and a decrease of US$24.1 million, respectively, in the Group’s pre-tax profit. We estimate that a 10% appreciation of RMB against the U.S. dollar based on the foreign exchange rate on December 31,2021 and September 30, 2022 would result in an increase of US$30.5 million and an increase of US$24.1 million, respectively, in the Group’s pre-tax profit.
Cash held on behalf of clients are segregated and deposited in financial institutions as required by rules mandated by the Group’s primary regulators. These financial institutions are of sound credit ratings, therefore management believes that there is no significant credit risk related to cash held on behalf of clients. The Group’s securities and derivative trades activities are transacted on either a cash or margin basis. The Group’s credit risk is limited in that substantially all of the contracts entered into are settled directly at securities and derivatives clearing organizations. In margin transactions, the Group extends credit to the client, subject to various regulatory and internal margin requirements, collateralized by cash and securities in the client’s account. IPO loans are exposed to credit risk from clients who fails to repay the loans upon IPO stock allotment. The Group monitors the clients’ collateral level and has the right to dispose the newly allotted stocks once the stocks first start trading. Bridge loans to enterprise pledged by shares are exposed to credit risk from counterparties who fail to repay the loans, the Group monitors on the collateral level of bridge loans in real time, and has the right to dispose of the pledged shares once the collateral level falls under the minimal level required to get the loans repaid. Liabilities to other brokers and dealers related to unsettled transactions are recorded at the amount for which the securities were purchased, and are paid upon receipt of the securities from other brokers or dealers. In connection with its clearing activities, the Group is obligated to settle transactions with brokers and other financial institutions even if its clients fail to meet their obligations to the Group. Clients are required to complete their transactions by the settlement date, generally two business days after the trade date. If clients do not fulfill their contractual obligations, the Group may incur losses. The Group has established procedures to reduce this risk by generally requiring that clients deposit sufficient cash and/or securities into their account prior to placing an order. 2. SIGNIFICANT ACCOUNTING POLICIES (Continued) Significant Risks and Uncertainties (Continued)
For cash management purposes, the Group enters into short-term securities sold under agreements to repurchase transactions (“repos”) in addition to securities borrowing and lending arrangements, all of which may result in credit exposure in the event the counterparty to a transaction is unable to fulfill its contractual obligations. Repos are collateralized by securities with a market value in excess of the obligation under the contract. Similarly, securities lending agreements are collateralized by deposits of cash or securities. The Group attempts to minimize credit risk associated with these activities by monitoring collateral values on a daily basis and requiring additional collateral to be deposited with or returned to the Group as permitted under contractual provisions. Concentrations of Credit Risk The Group’s exposure to credit risk associated with its brokerage and other activities is measured on an individual counterparty basis, as well as by groups of counterparties that share similar attributes. There was no revenue from clients which individually represented greater than 10% of the total revenues for the nine months ended September 30, 2021 and 2022, respectively. Concentrations of credit risk can be affected by changes in political, industry, or economic factors. To reduce the potential for risk concentration, credit limits are established and exposure is monitored in light of changing counterparty and market conditions. As of December 31, 2021 and September 30, 2022, the Group did not have any material concentrations of credit risk within or outside the ordinary course of business.
Fluctuations in market interest rates may negatively affect the Group’s financial condition and results of operations. The Group are exposed to floating interest rate risk on cash deposit and floating rate borrowings. We use net interest simulation modeling techniques to evaluate the effect that changes in interest rates might have on pre-tax profit or loss. The model includes all interest-sensitive assets and liabilities. The simulations involve assumptions that are inherently uncertain and, as a result, cannot precisely predict the impact that changes in interest rates will have on pre-tax profit or loss. Actual results may differ from simulated results due to differences in timing and frequency of rate changes, changes in market conditions and changes in management strategy that lead to changes in the mix of interest-sensitive assets and liabilities. The simulations assume that the asset and liability structure of the consolidated balance sheets would not be changed as a result of a simulated change in interest rates. The results of the simulations based on the Group’s financial position as of September 30, 2022 indicate that a gradual 1% (100 basis points) increase/decrease in interest rates over a 12-month period would have increased/decreased the Group’s profit before tax by approximately HK$309.6 million (US$39.6 million ), depending largely on the extent and timing of possible changes in floating rates. 2. SIGNIFICANT ACCOUNTING POLICIES (Continued) Recent Accounting Pronouncements In June 2016, the FASB amended guidance related to impairment of financial instruments as part of ASU 2016-13 Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which is effective on January 1, 2020. The guidance replaces the incurred loss impairment methodology with an expected credit loss model for which the group is required to recognize an allowance based on its estimate of expected credit loss. In November 2018, FASB issued ASU No, 2018-19, Codification Improvements to Topic 326, further clarified the scope of the guidance in the amendments in ASU 2016-13. In May 2019, FASB issued ASU No.2019-05, Financial instrument—Credit Losses (Topic 326), Targeted Transition Relief, which provides an irrevocably fair value option to elect for eligible instruments. In November 2019, FASB issued ASU 2019-11 Codification Improvements to Topic 326, Financial Instruments-Credit Losses, which clarified and improved various aspects of ASU 2016-13. In March 2020, FASB issued ASU 2020-03, Codification Improvements to Financial Instruments, which improves and clarifies various financial instruments topics, including the current expected credit losses standard. As of January 1, 2020, the Group adopted ASC Topic 326 using the modified retrospective approach for all in-scope assets. The adoption of ASC Topic 326 has no impact on the Group’s retained earnings as of January 1, 2020. Results for reporting periods beginning after January 1, 2020 are presented under ASC Topic 326 while prior periods continue to be reported in accordance with previously applicable U.S. GAAP. In August 2018, the FASB issued ASU 2018-13, Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement. The amendments in this standard will remove, modify and add certain disclosures under ASC Topic 820, Fair Value Measurement, with the objective of improving disclosure effectiveness. ASU 2018-13 is effective for the Group’s fiscal year beginning January 1, 2020, with early adoption permitted. The update eliminates the requirement to disclose: (a) the amount and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy; (b) an entity’s policy for timing of transfers between levels; (c) and an entity’s valuation processes for Level 3 fair value measurements. The Group adopted ASU 2018-13 on January 1, 2020, and the adoption had no material impact on the Group’s consolidated financial statements. In December 2019, the FASB issued ASU 2019-12, Income taxes (Topic 740)-Simplifying the accounting for income taxes, which simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740, Income Taxes. The ASU will be effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. The Group adopted the ASU on January 1, 2021, which did not have a material impact on the consolidated financial statements. In March 2020, the FASB issued ASU 2020-04, Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional guidance for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting if certain criteria are met. The amendments in ASU 2020-04 provide optional expedients and exceptions for applying GAAP to contracts, hedging relationships and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. This guidance is effective immediately and the amendments may be applied prospectively through December 31, 2022. The adoption did not have a material accounting impact on the Group’s consolidated financial position or results of operations. |
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- References No definition available.
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- Definition The entire disclosure for all significant accounting policies of the reporting entity. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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FINANCIAL ASSETS AND FINANCIAL LIABILITIES |
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FINANCIAL ASSETS AND FINANCIAL LIABILITIES | 3. FINANCIAL ASSETS AND FINANCIAL LIABILITIES Financial Assets and Liabilities Measured at Fair Value The following tables set forth, by level within the fair value hierarchy, financial assets and financial liabilities measured at fair value as of December 31, 2021 and June 30, 2022. As required by ASC Topic 820, financial assets and financial liabilities are classified in their entirety based on the lowest level of input that is significant to the respective fair value measurement.
The Group held trading liabilities and classified them as Level 1 of the fair value hierarchy since the fair value are determined based on the quoted market price, as of June 30, 2022, the trading liabilities are included in other current liabilities. Transfers Between Level 1 and Level 2 Transfers of financial assets and financial liabilities at fair value to or from Levels 1 and 2 arise where the market for a specific financial instrument has become active or inactive during the period. The fair values transferred are ascribed as if the financial assets or financial liabilities had been transferred as of the end of the period. During the six months ended June 30, 2021 and 2022, there were no transfers between levels for financial assets and liabilities, at fair value. 3. FINANCIAL ASSETS AND FINANCIAL LIABILITIES (Continued) Financial Assets and Liabilities Not Measured at Fair Value The following financial instruments are not measured at fair value in the Group’s consolidated balance sheets as of December 31, 2021 and June 30, 2022, but require disclosure of their fair values: cash and cash equivalents, cash held on behalf of clients, term deposit, restricted cash, securities purchased under resale agreements, loans and advances, receivables, other financial assets, amounts due to related parties, payables, borrowings, securities sold under agreements to repurchase and other financial liabilities. The estimated fair value of such instruments at December 31, 2021 and June 30, 2022 approximates their carrying value due to their generally short maturities. If measured at fair value in the financial statements, these financial instruments would be classified based on the lowest level of any input that is significant to the fair value measurement. Netting of Financial Assets and Financial Liabilities The Group's policy is to net the receivables from and payables to clearing organizations that meet the offsetting requirements prescribed in ASC Topic 210-20. The following tables represents the amounts of financial instruments that are offset in the consolidated balance sheets as of December 31, 2021 and June 30, 2022.
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3. FINANCIAL ASSETS AND FINANCIAL LIABILITIES Financial Assets and Liabilities Measured at Fair Value The following tables set forth, by level within the fair value hierarchy, financial assets and financial liabilities measured at fair value as of December 31, 2021 and September 30, 2022. As required by ASC Topic 820, financial assets and financial liabilities are classified in their entirety based on the lowest level of input that is significant to the respective fair value measurement.
The Group held trading liabilities and classified them as Level 1 of the fair value hierarchy since the fair value are determined based on the quoted market price, as of September 30, 2022, the trading liabilities are included in other current liabilities. Transfers Between Level 1 and Level 2 Transfers of financial assets and financial liabilities at fair value to or from Levels 1 and 2 arise where the market for a specific financial instrument has become active or inactive during the period. The fair values transferred are ascribed as if the financial assets or financial liabilities had been transferred as of the end of the period. During the nine months ended September 30, 2021 and 2022, there were no transfers between levels for financial assets and liabilities, at fair value. 3. FINANCIAL ASSETS AND FINANCIAL LIABILITIES (Continued) Financial Assets and Liabilities Not Measured at Fair Value The following financial instruments are not measured at fair value in the Group’s consolidated balance sheets as of December 31, 2021 and September 30, 2022, but require disclosure of their fair values: cash and cash equivalents, cash held on behalf of clients, term deposit, restricted cash, securities purchased under resale agreements, loans and advances, receivables, other financial assets, amounts due to related parties, payables, borrowings, securities sold under agreements to repurchase and other financial liabilities. The estimated fair value of such instruments at December 31, 2021 and September 30, 2022 approximates their carrying value due to their generally short maturities. If measured at fair value in the financial statements, these financial instruments would be classified based on the lowest level of any input that is significant to the fair value measurement. Netting of Financial Assets and Financial Liabilities The Group’s policy is to net the receivables from and payables to clearing organizations that meet the offsetting requirements prescribed in ASC Topic 210-20. The following tables represents the amounts of financial instruments that are offset in the consolidated balance sheets as of December 31, 2021 and September 30, 2022.
Financial Assets and Liabilities Measured at Fair Value
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- References No definition available.
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- Definition The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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SHORT-TERM INVESTMENTS |
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Jun. 30, 2022 |
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SHORT-TERM INVESTMENTS | 4. SHORT-TERM INVESTMENTS The Group’s short-term investments are presented on the consolidated balance sheets as follows:
For the six months ended June 30, 2021 and 2022, the Group recorded realized gain of nil and HK$12,491 thousand related to short-term investments in the consolidated statements of comprehensive income, respectively. |
4. SHORT-TERM INVESTMENTS The Group’s short-term investments are presented on the consolidated balance sheets as follows:
For the nine months ended September 30, 2021 and 2022, the Group recorded realized gain of nil and HK$16,919 thousand related to short-term investments in the consolidated statements of comprehensive income, respectively. |
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- Definition The entire disclosure of the components of cash, cash equivalents, and short-term investments. Short-term investments may include current marketable securities. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
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- References No definition available.
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Jun. 30, 2022 |
Sep. 30, 2022 |
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LEASE | 5. LEASE The following table presents balances reported in the consolidated balance sheets related to the Group’s leases:
The following table presents operating lease expense reported in the consolidated statements of comprehensive income related to the Group’s leases:
The following table reconciles the undiscounted cash flows of the Group’s leases as of December 31, 2021 and June 30, 2022 to the present value of its operating lease payments:
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5. LEASE The following table presents balances reported in the consolidated balance sheets related to the Group’s leases:
The following table presents operating lease expense reported in the consolidated statements of comprehensive income related to the Group’s leases:
The following table reconciles the undiscounted cash flows of the Group’s leases as of December 31, 2021 and September 30, 2022 to the present value of its operating lease payments:
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- References No definition available.
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- Definition The entire disclosure for operating leases of lessee. Includes, but is not limited to, description of operating lease and maturity analysis of operating lease liability. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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LOANS AND ADVANCES |
6 Months Ended | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 |
Sep. 30, 2022 |
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LOANS AND ADVANCES | 6. LOANS AND ADVANCES
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6. LOANS AND ADVANCES
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- Definition The entire disclosure for notes receivable. No definition available.
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- References No definition available.
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OTHER ASSETS |
6 Months Ended | 9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 |
Sep. 30, 2022 |
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OTHER ASSETS | 7. OTHER ASSETS
(a)Property and equipment, net, consisted of the following:
Depreciation expenses on property and equipment which are included in research and development expenses, selling and marketing expenses and general and administrative expenses in the consolidated statements of comprehensive income for the six months ended June 30, 2021 and 2022 were HK$14,459 thousand and HK$25,213 thousand, respectively. 7. OTHER ASSETS (Continued) (b)Intangible assets, net, consisted of the following:
Amortization expenses on intangible assets which are included in research and development expenses, selling and marketing expenses and general and administrative expenses in the consolidated statements of comprehensive income for the six months ended June 30, 2021 and 2022 were HK$909 thousand and HK$2,324 thousand, respectively. |
7. OTHER ASSETS
(a)Property and equipment, net, consisted of the following:
7. OTHER ASSETS (Continued) Depreciation expenses on property and equipment which are included in research and development expenses, selling and marketing expenses and general and administrative expenses in the consolidated statements of comprehensive income for the nine months ended September 30, 2021 and 2022 were HK$23,239 thousand and HK$36,926 thousand, respectively. (b)Intangible assets, net, consisted of the following:
Amortization expenses on intangible assets which are included in research and development expenses, selling and marketing expenses and general and administrative expenses in the consolidated statements of comprehensive income for the nine months ended September 30, 2021 and 2022 were HK$1,491 thousand and HK$4,120 thousand, respectively. |
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- References No definition available.
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- Definition The entire disclosure for other assets. This disclosure includes other current assets and other noncurrent assets. No definition available.
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LONG-TERM INVESTMENTS |
6 Months Ended | 9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 |
Sep. 30, 2022 |
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LONG-TERM INVESTMENTS | 8. LONG-TERM INVESTMENTS The Group’s long-term investments primarily consist of equity method investments and equity investments without readily determinable fair values.
As of December 31, 2021 and June 30, 2022, the Group’s investments accounted for under the equity method totaled HK$7,798 thousand and HK$233,834 thousand, respectively. The Group applies the equity method of accounting to account for its equity method investments over which it has significant influence but does not own a majority equity interest or otherwise control. In January 2019, the Group invested in a private company by acquiring 20% ordinary equity interest with a total consideration of HK$6,709 thousand. The Group accounts for this as an equity method investment. For the years ended December 31, 2019 and 2020, loss on investment recognized were HK$543 thousand and HK$278 thousand, respectively.Based on the Group’s assessment on the recoverable amounts of the equity method investment, as of December 31, 2021 and June 30, 2022, the impairment provision on the equity method investment was HK$5,888 thousand, and HK$5,888thousand, respectively. 8. LONG-TERM INVESTMENTS (Continued)
In December 2021, the Group invested in a private equity fund by acquiring approximately 10% ordinary equity interest with a total consideration of HK$7,798 thousand. The Group accounts for this as an equity method investment. Based on the Group’s assessment on the recoverable amounts of this equity method investment, as of December 31, 2021 and June 30, 2022, no impairment provision on the equity method investment was recognized. In June 2022, the Group invested in a private equity fund by acquiring approximately 16% ordinary equity interest with a total consideration of HK$235,434 thousand. The Group accounts for this as an equity method investment. For the period ended June 30, 2022, loss on investment recognized were HK$9,398 thousand. Based on the Group’s assessment on the recoverable amounts of this equity method investment, as of June 30, 2022, no impairment provision on the equity method investment was recognized.
As of December 31, 2021 and June 30, 2022, the Group’s equity investments without readily determinable fair values totaled HK$15,596 thousand and HK$15,754 thousand, respectively. In December 2021, the Group invested in a private equity fund by acquiring 2.75 % ordinary equity interest with a total consideration of HK$15,596 thousand. Equity securities without determinable fair values of the Group represent investments in privately held companies with no readily determinable fair value. The Group elected measurement alternative and recorded these investments at cost, less impairment, adjusted for subsequent observable price changes. As of December 31, 2021 and June 30, 2022, no impairment provision on the equity investments without readily determinable fair values were recognized. |
8. LONG-TERM INVESTMENTS The Group’s long-term investments primarily consist of equity method investments and equity investments without readily determinable fair values.
As of December 31, 2021 and September 30, 2022, the Group’s investments accounted for under the equity method totaled HK$7,798 thousand and HK$229,970 thousand, respectively. The Group applies the equity method of accounting to account for its equity method investments over which it has significant influence but does not own a majority equity interest or otherwise control. In January 2019, the Group invested in a private company by acquiring 20% ordinary equity interest with a total consideration of HK$6,709 thousand. The Group accounts for this as an equity method investment. For the years ended December 31, 2019 and 2020, loss on investment recognized were HK$543 thousand and HK$278 thousand, respectively.Based on the Group’s assessment on the recoverable amounts of the equity method investment, as of December 31, 2021 and September 30, 2022, the impairment provision on the equity method investment was HK$5,888 thousand and HK$5,888 thousand, respectively. 8. LONG-TERM INVESTMENTS (Continued)
In December 2021, the Group invested in a private equity fund by acquiring approximately 10% ordinary equity interest with a total consideration of HK$7,798 thousand. The Group accounts for this as an equity method investment. Based on the Group’s assessment on the recoverable amounts of this equity method investment, as of December 31, 2021 and September 30, 2022, no impairment provision on the equity method investment was recognized. In June 2022, the Group invested in a private equity fund by acquiring approximately 16% ordinary equity interest with a total consideration of HK$235,434 thousand. The Group accounts for this as an equity method investment. For the period ended September 30, 2022, loss on investment recognized were HK$13,324 thousand. Based on the Group’s assessment on the recoverable amounts of this equity method investment, as of September 30, 2022, no impairment provision on the equity method investment was recognized.
As of December 31, 2021 and September 30, 2022, the Group’s equity investments without readily determinable fair values totaled HK$15,596 thousand and HK$15,754 thousand, respectively. In December 2021, the Group invested in a private equity fund by acquiring 2.75% ordinary equity interest with a total consideration of HK$15,596 thousand. Equity securities without determinable fair values of the Group represent investments in privately held companies with no readily determinable fair value. The Group elected measurement alternative and recorded these investments at cost, less impairment, adjusted for subsequent observable price changes. As of December 31, 2021 and September 30, 2022, no impairment provision on the equity investments without readily determinable fair values were recognized. |
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- Definition The entire disclosure on long term investments. No definition available.
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X | ||||||||||
- References No definition available.
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BORROWINGS |
6 Months Ended | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 |
Sep. 30, 2022 |
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BORROWINGS | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
BORROWINGS | 9. BORROWINGS The Group’s borrowings are presented on the consolidated balance sheets as follows:
The Group obtained borrowings mainly to support its margin financing business in Hong Kong securities market. Those borrowings bear weighted average interest rates of 1.15% and 1.75% as of December 31, 2021 and June 30, 2022, respectively.
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9. BORROWINGS
The Group obtained borrowings mainly to support its margin financing business in Hong Kong securities market. Those borrowings bear weighted average interest rates of 1.15% and 3.43% as of December 31, 2021 and September 30, 2022, respectively.
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X | ||||||||||
- References No definition available.
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X | ||||||||||
- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
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ACCRUED EXPENSES AND OTHER LIABILITIES |
6 Months Ended | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 |
Sep. 30, 2022 |
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ACCRUED EXPENSES AND OTHER LIABILITIES | 10. ACCRUED EXPENSES AND OTHER LIABILITIES
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10. ACCRUED EXPENSES AND OTHER LIABILITIES
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- References No definition available.
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- Definition The entire disclosure for accounts payable and accrued liabilities at the end of the reporting period. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
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ORDINARY SHARES AND TREASURY STOCK |
6 Months Ended | 9 Months Ended |
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Jun. 30, 2022 |
Sep. 30, 2022 |
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ORDINARY SHARES AND TREASURY STOCK | ||
ORDINARY SHARES AND TREASURY STOCK | 11. ORDINARY SHARES AND TREASURY STOCK Ordinary shares The Company’s original Memorandum and articles of association authorized the Company to issue 807,500 ordinary shares with a par value of US$0.0050 per share. After a share split effective on September 22, 2016, the Company’s amended Memorandum and articles of association authorized the Company to issue 403,750,000 ordinary shares with a par value of US$0.00001 per share. Each ordinary share is entitled to one vote. Immediately prior to the completion of the initial public offering on March 8, 2019, the Company was approved by the board of directors of the Company to adopt a dual class share structure, consisting of 48,700,000,000 Class A ordinary shares with a par value of US$0.00001 each, 800,000,000 Class B ordinary shares with a par value of US$0.00001 each and 500,000,000 shares undesignated with a par value of US$0.00001 each. In respect of all matters subject to shareholders’ vote, each holder of Class A ordinary share is entitled to one and each holder of Class B ordinary share is entitled to twenty votes. In December, 2020, the Company entered into a securities purchase agreement with a leading global investment firm for a private placement of pre-funded warrants (the “Offering” or the “pre-funded warrants”). The net proceeds to the Company from the Offering were approximately HK$2,035.1 million (US$262.5 million). In the Offering, the Company issued pre-funded warrants to purchase 53,600,000 shares of Class A ordinary shares that were immediately exercisable and had a termination date in June 2022, at a price of US$4.89751 less a nominal exercise price of US$0.00001 per pre-funded warrant. The pre-funded warrants were equity classified because they were immediately exercisable, did not embody an obligation for the Company to repurchase its shares, and permitted the holders to receive a fixed number of common shares upon exercise. In addition, such warrants did not provide any guarantee of value or return. On June 11, 2021, the investment firm exercised these Pre-Funded warrants which increased 53,599,890 shares of Class A ordinary shares, and 110 shares were retrieved as the consideration of share purchase. On April 24, 2021, the Company completed a public offering, issued 87,400,000 Class A ordinary shares for a total consideration of US$1,398 million (HK$10,856.5 million) after deducting the underwriting discounts and commissions and offering expenses. 11. ORDINARY SHARES AND TREASURY STOCK (Continued) Ordinary shares (Continued) During the six months ended June 30, 2021 and 2022, 2,395,392 and 1,197,536 shares of Class A Ordinary Shares were issued upon exercise of outstanding stock options, nil and nil shares of Class A Ordinary Shares were issued upon vest of outstanding restricted share units under the Group’s share-based incentive plans (Note 13). Treasury stock On November 3, 2021, the Group’s Board of Directors approved a share repurchase program to repurchase up to US$300.0 million worth of its own American depositary shares (“ADSs”), representing its Class A ordinary shares, until December 31, 2022. On March 10, 2022, the Group’s Board of Directors approved another share repurchase program to repurchase up to US$500.0 million worth of its own ADSs, representing its Class A ordinary shares, until December 31, 2023. As of December 31, 2021 and June 30, 2022, the Group had repurchased an aggregate of 29,462,760 and 109,041,760 Class A ordinary shares under these share repurchase programs in the open market, at an average price of US$41.04 and US$36.70 per ADS, or US$5.13 and US$4.59 per share for a total consideration of US$151.2 million (HK$1,178.8 million) and US$500.3 million(HK$3,909.8 million), respectively. |
11. ORDINARY SHARES AND TREASURY STOCK Ordinary shares The Company’s original Memorandum and articles of association authorized the Company to issue 807,500 ordinary shares with a par value of US$0.0050 per share. After a share split effective on September 22, 2016, the Company’s amended Memorandum and articles of association authorized the Company to issue 403,750,000 ordinary shares with a par value of US$0.00001 per share. Each ordinary share is entitled to one vote. Immediately prior to the completion of the initial public offering on March 8, 2019, the Company was approved by the board of directors of the Company to adopt a dual class share structure, consisting of 48,700,000,000 Class A ordinary shares with a par value of US$0.00001 each, 800,000,000 Class B ordinary shares with a par value of US$0.00001 each and 500,000,000 shares undesignated with a par value of US$0.00001 each. In respect of all matters subject to shareholders’ vote, each holder of Class A ordinary share is entitled to one and each holder of Class B ordinary share is entitled to twenty votes. In December, 2020, the Company entered into a securities purchase agreement with a leading global investment firm for a private placement of Pre-Funded warrants (the “Offering” or the “Pre-Funded Warrants”). The net proceeds to the Company from the Offering were approximately US$262.5 million (HK $2,035 million). In the Offering, the Company issued Pre-Funded warrants to purchase 53,600,000 shares of Class A ordinary shares that were immediately exercisable and had a termination date in June 2022, at a price of US$4.89751 less a nominal exercise price of US$0.00001 per Pre-Funded warrant. The Pre-Funded Warrants were equity classified because they were immediately exercisable, did not embody an obligation for the Company to repurchase its shares, and permitted the holders to receive a fixed number of common shares upon exercise. In addition, such warrants did not provide any guarantee of value or return. On June 11, 2021, the investment firm exercised these Pre-Funded warrants which increased 53,599,890 shares of Class A ordinary shares, and 110 shares were retrieved as the consideration of share purchase. On April 24, 2021, the Company completed a public offering, issued 87,400,000 Class A ordinary shares for a total consideration of US$1,398 million (HK$10,856.5 million) after deducting the underwriting discounts and commissions and offering expenses. 11. ORDINARY SHARES AND TREASURY STOCK (Continued) Ordinary shares (Continued) Each Class B ordinary share is convertible into one Class A ordinary share at any time by the holder thereof, while Class A ordinary shares are not convertible into Class B ordinary shares under any circumstances. On August 16, 2022, 64,000,000 shares of Class B ordinary shares were converted to the same number of Class A ordinary shares. During the nine months ended September 30, 2021 and 2022, 4,192,000 and 1,475,848 shares of Class A Ordinary Shares were issued upon exercise of outstanding stock options, nil and 134,700 shares of Class A Ordinary Shares were issued upon vest of outstanding restricted share units under the Group’s share-based incentive plans (Note 13). Treasury stock On November 3, 2021, the Group’s Board of Directors approved a share repurchase program to repurchase up to US$300.0 million worth of its own American depositary shares (“ADSs”), representing its Class A ordinary shares, until December 31, 2022. On March 10, 2022, the Group’s Board of Directors approved another share repurchase program to repurchase up to US$500.0 million worth of its own ADSs, representing its Class A ordinary shares, until December 31, 2023. As of December 31, 2021 and September 30, 2022, the Group had repurchased an aggregate of 29,462,760 and 110,839,528 Class A ordinary shares under these share repurchase programs in the open market, at an average price of US$41.04 and US$36.74 per ADS, or US$5.13 and US$4.59 per share for a total consideration of US$151.2 million (HK$1,178.8 million) and US$508.7 million(HK$3,975.2 million), respectively. |
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- References No definition available.
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- Definition The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
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RESTRICTED NET ASSETS |
6 Months Ended | 9 Months Ended |
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Jun. 30, 2022 |
Sep. 30, 2022 |
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RESTRICTED NET ASSETS | ||
RESTRICTED NET ASSETS | 12. RESTRICTED NET ASSETS In accordance with the PRC laws and regulations, the Group’s PRC subsidiaries and VIEs are required to make appropriation to certain reserve funds, namely general reserve fund, enterprise expansion fund, and staff bonus and welfare fund, all of which are appropriated from the subsidiaries’ annual after-tax profits as reported under PRC GAAP. The appropriation must be at least 10% of the annual after-tax profits to the general reserve fund until such reserve fund has reached 50% of the subsidiaries’ registered capital. The domestic companies are also required to provide discretionary surplus fund, at the discretion of the Board of Directors, from its annual after-tax profits as reported under PRC accounting standards. The aforementioned reserve funds can only be used for specific purposes and are not distributable as cash dividends. Furthermore, cash transfers from the Group’s PRC subsidiaries to their parent companies outside of China are subject to PRC government control of currency conversion. Shortages in the availability of foreign currency at the time of requesting such conversion may temporarily delay the ability of the PRC subsidiaries and consolidated affiliated entities to remit sufficient foreign currency to pay dividends or other payments to the Group, or otherwise satisfy their foreign currency denominated obligations. As a result of the PRC laws and regulations and the requirement that distributions by the PRC entity can only be paid out of distributable profits computed in accordance with PRC accounting standards, the PRC entity is restricted from transferring a portion of its net assets to the Group. Amounts restricted include paid-in capital and statutory reserves of the Group’s PRC subsidiaries and VIEs. As of December 31, 2021 and June 30, 2022, the restricted net assets of the Group’s relevant PRC entities amounted to HK$304,377 thousand and HK$304,377 thousand, respectively. |
12. RESTRICTED NET ASSETS In accordance with the PRC laws and regulations, the Group’s PRC subsidiaries and VIEs are required to make appropriation to certain reserve funds, namely general reserve fund, enterprise expansion fund, and staff bonus and welfare fund, all of which are appropriated from the subsidiaries’ annual after-tax profits as reported under PRC GAAP. The appropriation must be at least 10% of the annual after-tax profits to the general reserve fund until such reserve fund has reached 50% of the subsidiaries’ registered capital. The domestic companies are also required to provide discretionary surplus fund, at the discretion of the Board of Directors, from its annual after-tax profits as reported under PRC accounting standards. The aforementioned reserve funds can only be used for specific purposes and are not distributable as cash dividends. Furthermore, cash transfers from the Group’s PRC subsidiaries to their parent companies outside of China are subject to PRC government control of currency conversion. Shortages in the availability of foreign currency at the time of requesting such conversion may temporarily delay the ability of the PRC subsidiaries and consolidated affiliated entities to remit sufficient foreign currency to pay dividends or other payments to the Group, or otherwise satisfy their foreign currency denominated obligations. As a result of the PRC laws and regulations and the requirement that distributions by the PRC entity can only be paid out of distributable profits computed in accordance with PRC accounting standards, the PRC entity is restricted from transferring a portion of its net assets to the Group. Amounts restricted include paid-in capital and statutory reserves of the Group’s PRC subsidiaries and VIEs. As of December 31, 2021 and September 30, 2022, the restricted net assets of the Group’s relevant PRC entities amounted to HK$304,377 thousand and HK$304,377 thousand, respectively. |
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- Definition The entire disclosure for assets that are restricted in their use, generally by contractual agreements or regulatory requirements. This would include, but not limited to, a description of the restricted assets and the terms of the restriction. No definition available.
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- References No definition available.
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SHARE-BASED COMPENSATION |
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Jun. 30, 2022 |
Sep. 30, 2022 |
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SHARE-BASED COMPENSATION | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SHARE-BASED COMPENSATION | 13. SHARE-BASED COMPENSATION Share-based compensation was recognized in operating expenses for the six months ended June 30, 2021 and 2022 as follows:
Share Options In October 2014, the Board of Directors of the Company approved the establishment of 2014 Share Incentive Plan, the purpose of which is to provide an incentive for employees contributing to the Group. The 2014 Share Incentive Plan shall be valid and effective until October 30, 2024. The maximum number of shares that may be issued pursuant to all awards (including incentive share options) under 2014 Share Incentive Plan shall be 135,032,132 shares. Option awards are granted with an exercise price determined by the Board of Directors. Those option awards generally vest over a period of four or five years and expire in ten years. In December 2018, the Board of Directors of the Company approved the 2019 Share Incentive Plan, pursuant to which the maximum number of shares of the Company available for issuance shall be a number of up to 2% of the total number of shares issued and outstanding on September 29, 2019 as determined by the Board, plus an annual increase on each September 30 during the term of this 2019 Share Incentive Plan commencing on September 30, 2020, by an amount determined by the Board; provided, however, that (i) the number of shares increased in each year shall not be more than 2% of the total number of shares issued and outstanding on September 29 of the same year and (ii) the aggregate number of shares initially reserved and subsequently increased during the term of this 2019 Share Incentive Plan shall not be more than 8% of the total number of shares issued and outstanding on September 29, 2019 immediately preceding the most recent increase. On December 30, 2019, the Company modified the exercise price of 8,113,145 stock options granted under 2014 Share Incentive Plan to US$0.60. The incremental compensation expenses of HK$3,008 thousand (US$386 thousand) was equal to the excess of the fair value of the modified award immediately after the modification over the fair value of the original award immediately before the modification. For the six months ended June 30, 2021 and 2022, the Group granted nil and nil stock options to employees pursuant to the 2014 Share Incentive Plan and 2019 Share Incentive Plan. A summary of the stock option activity under the 2014 and 2019 Share Incentive Plan for the six months ended June 30, 2021 and 2022 is included in the table below.
13. SHARE-BASED COMPENSATION (Continued) Share Options (Continued) The following table summarizes information regarding the share options outstanding as of December 31, 2021 and June 30, 2022, and exercise prices and aggregate intrinsic value have been adjusted according to the modification of exercise price in December 2019:
The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the fair value of the underlying stock at December 31, 2021 and for the six months ended June 30, 2021 and 2022. The weighted average grant date fair value of options granted for the six months ended June 30, 2021 and 2022 were nil and nil per option, respectively. Options exercised for the six months ended June 30, 2021 and 2022 were 2,395,392 and 1,197,536, respectively. The total intrinsic value of options exercised as of December 31, 2021 and June 30, 2022 was approximately HK$614,738 thousand (US$79,093 thousand) and HK$39,030 thousand (US$4,988 thousand). As of December 31, 2021 and June 30, 2022, there was HK$201,948 thousand (US$25,897 thousand) and HK$173,796 thousand (US$22,146 thousand) of unrecognized compensation expenses related to the options, adjusted for estimated forfeitures, which is expected to be recognized over a weighted-average period of 3.96 and 3.53 years, respectively, and may be adjusted for future changes in estimated forfeitures. 13. SHARE-BASED COMPENSATION (Continued) Restricted Share Units Plan In December 2018, the Board of Directors of the Company approved the 2019 Share Incentive Plan. The fair value of restricted share units granted with service conditions is estimated based on the fair market value of the underlying ordinary shares of the Company on the date of grant. The following table summarizes activities of the Company’s restricted share units granted to employees under the plan:
For the six months ended June 30, 2021 and 2022, the Group granted nil and 48,000 restricted share units to employees pursuant to the 2019 Share Incentive Plan, respectively. As of December 31, 2021 and June 30, 2022, there was HK$694,749 thousand (US$89,092 thousand) and HK$599,247 thousand (US$76,359 thousand) of unrecognized compensation expenses related to the restricted share units, adjusted for estimated forfeitures, which is expected to be recognized over a weighted-average period of 4.64 and 4.14 years and may be adjusted for future changes in estimated forfeitures. |
13. SHARE-BASED COMPENSATION Share-based compensation was recognized in operating expenses for the nine months ended September 30, 2021 and 2022 as follows:
Share Options In October 2014, the Board of Directors of the Company approved the establishment of 2014 Share Incentive Plan, the purpose of which is to provide an incentive for employees contributing to the Group. The 2014 Share Incentive Plan shall be valid and effective until October 30, 2024. The maximum number of shares that may be issued pursuant to all awards (including incentive share options) under 2014 Share Incentive Plan shall be 135,032,132 shares. Option awards are granted with an exercise price determined by the Board of Directors. Those option awards generally vest over a period of four or five years and expire in ten years. In December 2018, the Board of Directors of the Company approved the 2019 Share Incentive Plan, pursuant to which the maximum number of shares of the Company available for issuance shall be a number of up to 2% of the total number of shares issued and outstanding on September 29, 2019 as determined by the Board, plus an annual increase on each September 30 during the term of this 2019 Share Incentive Plan commencing on September 30, 2020, by an amount determined by the Board; provided, however, that (i) the number of shares increased in each year shall not be more than 2% of the total number of shares issued and outstanding on September 29 of the same year and (ii) the aggregate number of shares initially reserved and subsequently increased during the term of this 2019 Share Incentive Plan shall not be more than 8% of the total number of shares issued and outstanding on September 29, 2019 immediately preceding the most recent increase. On December 30, 2019, the Company modified the exercise price of 8,113,145 stock options granted under 2014 Share Incentive Plan to US$0.60. The incremental compensation expenses of HK$3,008 thousand (US$386 thousand) was equal to the excess of the fair value of the modified award immediately after the modification over the fair value of the original award immediately before the modification. For the nine months ended September 30, 2021 and 2022, the Group granted 1,080,000 and nil stock options to employees pursuant to the 2014 Share Incentive Plan and 2019 Share Incentive Plan. 13. SHARE-BASED COMPENSATION (Continued) Share Options (Continued) A summary of the stock option activity under the 2014 and 2019 Share Incentive Plan for the nine months ended September 30, 2021 and 2022 is included in the table below.
The following table summarizes information regarding the share options outstanding as of December 31, 2021 and September 30, 2022, and exercise prices and aggregate intrinsic value have been adjusted according to the modification of exercise price in December 2019:
The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the fair value of the underlying stock at December 31, 2021 and September 30, 2022. 13. SHARE-BASED COMPENSATION (Continued) Share Options (Continued) The weighted average grant date fair value of options granted for the nine months ended September 30, 2021 and 2022 were US$18.9219 and nil per option, respectively. Options exercised for the nine months ended September 30, 2021 and 2022 were 4,192,000 and 1,475,848, respectively. The total intrinsic value of options exercised for the nine months ended September 30, 2021 and 2022 was approximately HK$543,551 thousand (US$69,986 thousand) and HK$49,305 thousand (US$6,295 thousand). The fair value of each option granted for the nine months ended September 30, 2021 and 2022 was estimated on the date of each grant using the binomial option pricing model with the assumptions (or ranges thereof) in the following table:
Risk-free interest rate is estimated based on the yield curve of US Sovereign Bond as of the option valuation date. The expected volatility at the grant date and each option valuation date is estimated based on annualized standard deviation of daily stock price return of comparable companies with a time horizon close to the expected expiry of the term of the options. The Company has never declared or paid any cash dividends on its capital stock, and the Group does not anticipate any dividend payments in the foreseeable future. Expected term is the contract life of the options. As of December 31, 2021 and September 30, 2022, there was HK$201,948 thousand (US$25,897 thousand) and HK$160,054 thousand (US$20,389 thousand) of unrecognized compensation expenses related to the options, adjusted for estimated forfeitures, which is expected to be recognized over a weighted-average period of 3.96 and 3.31 years, respectively, and may be adjusted for future changes in estimated forfeitures. Restricted Share Units Plan In December 2018, the Board of Directors of the Company approved the 2019 Share Incentive Plan. The fair value of restricted share units granted with service conditions is estimated based on the fair market value of the underlying ordinary shares of the Company on the date of grant. 13. SHARE-BASED COMPENSATION (Continued) Restricted Share Units Plan (Continued) The following table summarizes activities of the Company’s restricted share units granted to employees under the plan for the nine months ended September 30, 2021 and 2022:
For the nine months ended September 30, 2021 and 2022, the Group granted 837,072 and 2,827,320 restricted share units to employees pursuant to the 2019 Share Incentive Plan, respectively. As of December 31, 2021 and September 30, 2022, there was HK$694,749 thousand (US$89,092 thousand) and HK$670,477 thousand (US$85,412 thousand) of unrecognized compensation expenses related to the restricted share units, adjusted for estimated forfeitures, which is expected to be recognized over a weighted-average period of 4.64, and 3.26 years and may be adjusted for future changes in estimated forfeitures. |
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- Definition The entire disclosure for share-based payment arrangement. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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- References No definition available.
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NET INCOME PER SHARE |
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Jun. 30, 2022 |
Sep. 30, 2022 |
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NET INCOME PER SHARE | 14. NET INCOME PER SHARE For the year ended December 31, 2019, the Group has determined that its all classes of convertible redeemable preferred shares are participating securities as they participate in undistributed earnings on an as-if-converted basis. The holders of the Preferred Shares are entitled to receive dividends on a pro rata basis, as if their shares had been converted into ordinary shares. Accordingly, the Group uses the two-class method of computing net income per share, for ordinary shares and preferred shares according to the participation rights in undistributed earnings. For the year ended December 31, 2020, the Company issued pre-funded warrants to purchase 53,600,000 shares of Class A ordinary shares with an exercise price of US$0.00001 that are included in our computation of basic earnings per share. For the year ended December 31, 2021, the investment firm exercised these pre-funded warrants which increased 53,599,890 shares of Class A ordinary shares, and 110 shares were retrieved as the consideration of share purchase. Basic net income per share and diluted net income per share have been calculated in accordance with ASC 260 on computation of earnings per share for the six months ended June 30, 2021 and 2022 as follows:
For the six months ended June 30, 2021 and 2022, options to purchase ordinary shares and restricted share units that were anti-dilutive and excluded from the calculation of diluted net income per share were nil and 4,390,826 shares on a weighted average basis, respectively. |
14. NET INCOME PER SHARE For the year ended December 31, 2019, the Group has determined that its all classes of convertible redeemable preferred shares are participating securities as they participate in undistributed earnings on an as-if-converted basis. The holders of the Preferred Shares are entitled to receive dividends on a pro rata basis, as if their shares had been converted into ordinary shares. Accordingly, the Group uses the two-class method of computing net income per share, for ordinary shares and preferred shares according to the participation rights in undistributed earnings. For the year ended December 31, 2020, the Company issued pre-funded warrants to purchase 53,600,000 shares of Class A ordinary shares with an exercise price of US$0.00001 that are included in our computation of basic earnings per share. For the year ended December 31, 2021, the investment firm exercised these pre-funded warrants which increased 53,599,890 shares of Class A ordinary shares, and 110 shares were retrieved as the consideration of share purchase. 14. NET INCOME PER SHARE (Continued) Basic net income per share and diluted net income per share have been calculated in accordance with ASC 260 on computation of earnings per share for the nine months ended September 30, 2021 and 2022 as follows:
For the nine months ended September 30, 2021 and 2022, options to purchase ordinary shares and restricted share units that were anti-dilutive and excluded from the calculation of diluted net income per share were nil and 4,975,271 shares on a weighted average basis, respectively. |
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- References No definition available.
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- Definition The entire disclosure for earnings per share. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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COLLATERALIZED TRANSACTIONS |
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Jun. 30, 2022 |
Sep. 30, 2022 |
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COLLATERALIZED TRANSACTIONS | 15. COLLATERALIZED TRANSACTIONS The Group engages in margin financing transactions with its clients. Margin loans generated from margin lending activity are collateralized by cash and/or client-owned securities held by the Group. The Group monitors the required margin and collateral level on a daily basis in compliance with regulatory and internal guidelines and controls its risk exposure through risk management system. Under applicable agreements, clients are required to deposit additional collateral or reduce holding positions, when necessary to avoid forced liquidation of their positions. Pursuant to the authorization obtained from margin clients, the Group further repledges the collaterals to commercial banks or other financial institutions to obtain the funding for the margin or other businesses. The following table summarizes the amounts of margin loans and clients’ collaterals received and repledged by the Group as of December 31, 2021 and June 30, 2022:
The Group also engaged in securities borrowing and lending transactions which require it to deposit cash collateral with the securities lenders and receive the cash collateral from the borrowers. The cash collateral is generally in excess of the market value of the securities borrowed and lent. The Group monitors the market value of securities borrowed and loaned on a daily basis, with additional collateral obtained or refunded as permitted contractually. The following table summarizes the amounts of market value of securities borrowed and lent and cash collateral received and deposited as of December 31, 2021 and June 30, 2022:
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15. COLLATERALIZED TRANSACTIONS The Group engages in margin financing transactions with its clients. Margin loans generated from margin lending activity are collateralized by cash and/or client-owned securities held by the Group. The Group monitors the required margin and collateral level on a daily basis in compliance with regulatory and internal guidelines and controls its risk exposure through risk management system. Under applicable agreements, clients are required to deposit additional collateral or reduce holding positions, when necessary to avoid forced liquidation of their positions. Pursuant to the authorization obtained from margin clients, the Group further repledges the collaterals to commercial banks or other financial institutions to obtain the funding for the margin or other businesses. The following table summarizes the amounts of margin loans and clients’ collaterals received and repledged by the Group as of December 31, 2021 and September 30, 2022:
The Group also engaged in securities borrowing and lending transactions which require it to deposit cash collateral with the securities lenders and receive the cash collateral from the borrowers. The cash collateral is generally in excess of the market value of the securities borrowed and lent. The Group monitors the market value of securities borrowed and loaned on a daily basis, with additional collateral obtained or refunded as permitted contractually. The following table summarizes the amounts of market value of securities borrowed and lent and cash collateral received and deposited as of December 31, 2021 and September 30, 2022:
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- Definition The entire disclosure of collateralized transactions. No definition available.
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- References No definition available.
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BROKERAGE COMMISSION AND HANDLING CHARGE INCOME |
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Jun. 30, 2022 |
Sep. 30, 2022 |
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BROKERAGE COMMISSION AND HANDLING CHARGE INCOME | 16. BROKERAGE COMMISSION AND HANDLING CHARGE INCOME
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16. BROKERAGE COMMISSION AND HANDLING CHARGE INCOME
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X | ||||||||||
- References No definition available.
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X | ||||||||||
- Definition The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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INTEREST INCOME |
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Jun. 30, 2022 |
Sep. 30, 2022 |
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INTEREST INCOME | 17. INTEREST INCOME
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17. INTEREST INCOME
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X | ||||||||||
- Definition The entire disclosure of interest income. No definition available.
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X | ||||||||||
- References No definition available.
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OTHER INCOME |
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Jun. 30, 2022 |
Sep. 30, 2022 |
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OTHER INCOME | 18. OTHER INCOME
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18. OTHER INCOME
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X | ||||||||||
- Definition The entire disclosure of other income. No definition available.
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X | ||||||||||
- References No definition available.
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BROKERAGE COMMISSION AND HANDLING CHARGE EXPENSES |
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Jun. 30, 2022 |
Sep. 30, 2022 |
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BROKERAGE COMMISSION AND HANDLING CHARGE EXPENSES | 19. BROKERAGE COMMISSION AND HANDLING CHARGE EXPENSES
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19. BROKERAGE COMMISSION AND HANDLING CHARGE EXPENSES
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X | ||||||||||
- References No definition available.
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- Definition The entire disclosure pertains to brokerage commission and handling charge expenses. No definition available.
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INTEREST EXPENSES |
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INTEREST EXPENSES | 20. INTEREST EXPENSES
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20. INTEREST EXPENSES
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X | ||||||||||
- Definition The entire disclosure for interest expense. No definition available.
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X | ||||||||||
- References No definition available.
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PROCESSING AND SERVICING COSTS |
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PROCESSING AND SERVICING COSTS | 21. PROCESSING AND SERVICING COSTS
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21. PROCESSING AND SERVICING COSTS
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X | ||||||||||
- References No definition available.
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- Definition The entire disclosure for processing and Servicing costs. No definition available.
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NON-INTEREST COST AND EXPENSES BY NATURE |
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NON-INTEREST COST AND EXPENSES BY NATURE | 22. NON-INTEREST COST AND EXPENSES BY NATURE
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22. NON-INTEREST COST AND EXPENSES BY NATURE
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X | ||||||||||
- Definition The entire disclosure of non interest expense. No definition available.
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X | ||||||||||
- References No definition available.
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TAXATION |
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Jun. 30, 2022 |
Sep. 30, 2022 |
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TAXATION | 23. TAXATION Income Tax
The Group was incorporated in the Cayman Islands. Under the current laws of the Cayman Islands, the Company is not subject to tax on either income or capital gain. Additionally, the Cayman Islands does not impose a withholding tax on payments of dividends to shareholders.
The Company’s subsidiaries incorporated in the United States are subject to statutory income tax at a rate up to 35% for taxable income earned in the United States. On December 22, 2017, the Tax Cuts and Jobs Act (the “Tax Act”) was enacted, significantly revising the U.S corporate income tax law. Changes include a reduction in the federal corporate tax, changes to operating loss carry-forwards and carrybacks, and a repeal of the corporate alternative minimum tax. This legislation resulted in a reduction of the U.S. federal corporate income tax rates from a maximum of 35% to 21%, to which the subsidiaries incorporated in the United States are subject.
Starting from the financial year commencing on April 1, 2018, the two-tiered profits tax regime took effect, under which the tax rate is 8.25% for assessable profits on the first HK$2 million and 16.5% for any assessable profits in excess of HK$2 million. Additionally, payments of dividends by the subsidiaries incorporated in Hong Kong to the Company are not subject to any Hong Kong withholding tax.
The Company’s subsidiaries incorporated in Singapore are subject to an income tax rate of 17% for taxable income earned in Singapore. Singapore does not impose a withholding tax on dividends for resident companies. For the six months ended June 30, 2021 and 2022, we did not incur any income tax as there was no estimated assessable profit that was subject to Singapore income tax.
The Company’s subsidiaries, consolidated VIEs and subsidiary of the VIEs established in the PRC are subject to statutory income tax at a rate of 25%, unless preferential tax rates were applicable. The Enterprise Income Tax (“EIT”) Law and its implementing rules permit High and New Technology Enterprise (“HNTE”) to enjoy a reduced 15% EIT rate. Futu Network Technology (Shenzhen) Co., Ltd., one of the Company’s subsidiary, and Shenzhen Futu, the Group’s consolidated VIE, obtained the qualification certificate of HNTE under the EIT Law, subject to the tax rate of 15% with a valid period of three years starting from 2019 and 2020, respectively. According to the relevant EIT Laws jointly promulgated by the Ministry of Finance of the PRC, State Tax Bureau of the PRC, and Ministry of Science of the PRC that became effective from 2018 onwards, enterprises engaging in research and development activities are entitled to claim 175% of their research and development expenses so incurred as tax deductible expenses when determining their assessable profits for that year (“Super Deduction”). 23. TAXATION (Continued) Income Tax (Continued)
Under the EIT Law enacted by the National People’s Congress of PRC on March 16, 2007 and its implementation rules which became effective on January 1, 2008, dividends generated after January 1, 2008 and payable by FIEs in the PRC to its foreign investors who are non-resident enterprises are subject to a 10% withholding tax, unless any such foreign investor’s jurisdiction of incorporation has a tax treaty with the PRC that provides for a different withholding arrangement. Under the taxation arrangement between the PRC and Hong Kong, a qualified Hong Kong tax resident which is the “beneficial owner” and directly holds 25% or more of the equity interest in a PRC resident enterprise is entitled to a reduced withholding tax rate of 5%. The Cayman Islands, where the Company was incorporated, does not have a tax treaty with PRC. The EIT Law includes a provision specifying that legal entities organized outside of the PRC will be considered resident enterprises for the PRC income tax purposes if the place of effective management or control is within the PRC. The implementation rules to the EIT Law provide that non-resident legal entities will be considered as PRC resident enterprises if substantial and overall management and control over the manufacturing and business operations, personnel, accounting, properties, etc., occurs within the PRC. Despite the present uncertainties resulting from the limited PRC tax guidance on the issue, the Group does not believe that the Group’s entities organized outside of the PRC should be treated as resident enterprises for the PRC income tax purposes. If the PRC tax authorities subsequently determine that the Company and its subsidiary registered outside the PRC should be deemed resident enterprises, the Company and its subsidiary registered outside the PRC will be subject to the PRC income tax, at a rate of 25%. Dividends paid by the Group’s wholly foreign-owned subsidiaries in China to non-PRC-resident enterprises which do not have an establishment or place of business in the PRC, or which have such establishment or place of business but the relevant income is not effectively connected with the establishment or place of business, will be subject to a withholding tax rate of 10%, unless the relevant Hong Kong entity satisfies all the requirements under the Arrangement between the Mainland of China and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income and receives approval from the relevant tax authority. The undistributed earnings that are subject to dividend tax are expected to be indefinitely reinvested for the foreseeable future. The Group did not record any withholding tax for its PRC earnings and considered determination of such withholding tax amount not practicable. Composition of income tax expenses The following table sets forth current and deferred portion of income tax expenses:
23. TAXATION (Continued) Tax Reconciliation Reconciliation between the income tax expenses computed by applying the Hong Kong enterprise tax rate to income before income taxes and actual provision were as follows:
Deferred Tax Assets and Liabilities Deferred income tax expenses reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The components of the deferred tax assets and liabilities are as follows:
23. TAXATION (Continued) Movement of Valuation Allowance
Valuation allowance is provided against deferred tax assets when the Group determines that it is more-likely-than-not that the deferred tax assets will not be utilized in the future. The Group considers positive and negative evidence to determine whether some portion or all of the deferred tax assets will be more-likely-than-not realized. This assessment considers, among other matters, the nature, frequency and severity of recent losses and forecasts of future profitability. These assumptions require significant judgment and the forecasts of future taxable income are consistent with the plans and estimates the Group is using to manage the underlying businesses. The statutory rate of 25%, 27.98%, 27.87%, 16.5%, 17% or the preferential tax rate of 15%, depending on which entity, was applied when calculating deferred tax assets. As of December 31, 2021 and June 30, 2022, the Group had net operating loss carryforwards of HK$764,251 thousand and HK$767,940 thousand, respectively, which arose from the subsidiaries, VIEs and the VIEs’ subsidiaries established in Hong Kong, the U.S, Singapore and PRC. As of December 31, 2021 and June 30, 2022, of the net operating loss carryforwards, HK$761,417 thousand and HK$767,940 thousand was provided for valuation allowance against deferred tax assets in entities where it was determined it was more likely than not that the benefits of the deferred tax assets of accrued expenses and others will not be realized. While the remaining HK$2,834 thousand and nil is expected to be utilized prior to expiration considering future taxable income for respective entities. Uncertain Tax Position The Group evaluates the level of authority for each uncertain tax position (including the potential application of interest and penalties) based on the technical merits, and measures the unrecognized benefits associated with the tax positions. The Group continues to assess the uncertain tax positions in accordance with applicable income tax guidance and based on changes in facts and circumstances. |
23. TAXATION Income Tax
The Group was incorporated in the Cayman Islands. Under the current laws of the Cayman Islands, the Company is not subject to tax on either income or capital gain. Additionally, the Cayman Islands does not impose a withholding tax on payments of dividends to shareholders.
The Company’s subsidiaries incorporated in the United States are subject to statutory income tax at a rate up to 35% for taxable income earned in the United States. On December 22, 2017, the Tax Cuts and Jobs Act (the “Tax Act”) was enacted, significantly revising the U.S corporate income tax law. Changes include a reduction in the federal corporate tax, changes to operating loss carry-forwards and carrybacks, and a repeal of the corporate alternative minimum tax. This legislation resulted in a reduction of the U.S. federal corporate income tax rates from a maximum of 35% to 21%, to which the subsidiaries incorporated in the United States are subject. 23. TAXATION (Continued) Income Tax (Continued)
Starting from the financial year commencing on April 1, 2018, the two-tiered profits tax regime took effect, under which the tax rate is 8.25% for assessable profits on the first HK$2 million and 16.5% for any assessable profits in excess of HK$2 million. Additionally, payments of dividends by the subsidiaries incorporated in Hong Kong to the Company are not subject to any Hong Kong withholding tax.
The Company’s subsidiaries incorporated in Singapore are subject to an income tax rate of 17% for taxable income earned in Singapore. Singapore does not impose a withholding tax on dividends for resident companies. For the nine months ended September 30, 2021 and 2022, we did not incur any income tax as there was no estimated assessable profit that was subject to Singapore income tax.
The Company’s subsidiaries, consolidated VIEs and subsidiary of the VIEs established in the PRC are subject to statutory income tax at a rate of 25%, unless preferential tax rates were applicable. The Enterprise Income Tax (“EIT”) Law and its implementing rules permit High and New Technology Enterprise (“HNTE”) to enjoy a reduced 15% EIT rate. Futu Network Technology (Shenzhen) Co., Ltd., one of the Company’s subsidiary, and Shenzhen Futu, the Group’s consolidated VIE, obtained the qualification certificate of HNTE under the EIT Law, subject to the tax rate of 15% with a valid period of three years starting from 2019 and 2020, respectively. According to the relevant EIT Laws jointly promulgated by the Ministry of Finance of the PRC, State Tax Bureau of the PRC, and Ministry of Science of the PRC that became effective from 2018 onwards, enterprises engaging in research and development activities are entitled to claim 175% of their research and development expenses so incurred as tax deductible expenses when determining their assessable profits for that year (“Super Deduction”). Under the EIT Law enacted by the National People’s Congress of PRC on March 16, 2007 and its implementation rules which became effective on January 1, 2008, dividends generated after January 1, 2008 and payable by FIEs in the PRC to its foreign investors who are non-resident enterprises are subject to a 10% withholding tax, unless any such foreign investor’s jurisdiction of incorporation has a tax treaty with the PRC that provides for a different withholding arrangement. Under the taxation arrangement between the PRC and Hong Kong, a qualified Hong Kong tax resident which is the “beneficial owner” and directly holds 25% or more of the equity interest in a PRC resident enterprise is entitled to a reduced withholding tax rate of 5%. The Cayman Islands, where the Company was incorporated, does not have a tax treaty with PRC. The EIT Law includes a provision specifying that legal entities organized outside of the PRC will be considered resident enterprises for the PRC income tax purposes if the place of effective management or control is within the PRC. The implementation rules to the EIT Law provide that non-resident legal entities will be considered as PRC resident enterprises if substantial and overall management and control over the manufacturing and business operations, personnel, accounting, properties, etc., occurs within the PRC. Despite the present uncertainties resulting from the limited PRC tax guidance on the issue, the Group does not believe that the Group’s entities organized outside of the PRC should be treated as resident enterprises for the PRC income tax purposes. If the PRC tax authorities subsequently determine that the Company and its subsidiary registered outside the PRC should be deemed resident enterprises, the Company and its subsidiary registered outside the PRC will be subject to the PRC income tax, at a rate of 25%. 23. TAXATION (Continued) Income Tax (Continued) Dividends paid by the Group’s wholly foreign-owned subsidiaries in China to non-PRC-resident enterprises which do not have an establishment or place of business in the PRC, or which have such establishment or place of business but the relevant income is not effectively connected with the establishment or place of business, will be subject to a withholding tax rate of 10%, unless the relevant Hong Kong entity satisfies all the requirements under the Arrangement between the Mainland of China and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income and receives approval from the relevant tax authority. The undistributed earnings that are subject to dividend tax are expected to be indefinitely reinvested for the foreseeable future. The Group did not record any withholding tax for its PRC earnings and considered determination of such withholding tax amount not practicable. Composition of income tax expenses The following table sets forth current and deferred portion of income tax expenses:
Tax Reconciliation Reconciliation between the income tax expenses computed by applying the Hong Kong enterprise tax rate to income before income taxes and actual provision were as follows:
23. TAXATION (Continued) Deferred Tax Assets and Liabilities Deferred income tax expenses reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The components of the deferred tax assets and liabilities are as follows:
Movement of Valuation Allowance
Valuation allowance is provided against deferred tax assets when the Group determines that it is more-likely-than-not that the deferred tax assets will not be utilized in the future. The Group considers positive and negative evidence to determine whether some portion or all of the deferred tax assets will be more-likely-than-not realized. This assessment considers, among other matters, the nature, frequency and severity of recent losses and forecasts of future profitability. These assumptions require significant judgment and the forecasts of future taxable income are consistent with the plans and estimates the Group is using to manage the underlying businesses. The statutory rate of 25%, 27.98%, 27.87%, 16.5%, 17% or the preferential tax rate of 15%, depending on which entity, was applied when calculating deferred tax assets. As of December 31, 2021 and September 30, 2022, the Group had net operating loss carryforwards of approximately HK$764,251 thousand and HK$711,365 thousand, respectively, which arose from the subsidiaries, VIEs and the VIEs’ subsidiaries established in Hong Kong, the U.S, Singapore and PRC. As of December 31, 2021 and September 30, 2022, of the net operating loss carryforwards, HK$761,417 thousand and HK$711,365 thousand was provided for valuation allowance against deferred tax assets in entities where it was determined it was more likely than not that the benefits of the deferred tax assets of accrued expenses and others will not be realized. While the remaining HK$2,834 thousand and nil is expected to be utilized prior to expiration considering future taxable income for respective entities. 23. TAXATION (Continued) Uncertain Tax Position The Group evaluates the level of authority for each uncertain tax position (including the potential application of interest and penalties) based on the technical merits, and measures the unrecognized benefits associated with the tax positions. The Group continues to assess the uncertain tax positions in accordance with applicable income tax guidance and based on changes in facts and circumstances. |
X | ||||||||||
- References No definition available.
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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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DEFINED CONTRIBUTION PLAN |
6 Months Ended | 9 Months Ended |
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Jun. 30, 2022 |
Sep. 30, 2022 |
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DEFINED CONTRIBUTION PLAN | 24. DEFINED CONTRIBUTION PLAN Full-time employees of the Group in the PRC are entitled to welfare benefits including pension insurance, medical insurance, unemployment insurance, maternity insurance, on-the-job injury insurance, and housing fund plans through a PRC government-mandated defined contribution plan. Chinese labor regulations require that the Group makes contributions to the government for these benefits based on certain percentages of the employees’ salaries, up to a maximum amount specified by the local government. The Group has no legal obligation for the benefits beyond the contributions. Total contributions by the Group for such employee benefits were RMB44,086 thousand (HK$52,996 thousand) and RMB79,876 thousand (HK$96,213 thousand) for the six months ended June 30, 2021 and 2022, respectively. For the employees in Hong Kong, the Group pays contributions to publicly or privately administered pension insurance plans on a mandatory, contractual basis. The Group has no further payment obligations once the contributions have been paid. The contributions are recognized as employee benefit expense when they are due. Prepaid contributions are recognized as an asset to the extent that a cash refund or a reduction in the future payments is available. Included in employee compensation and benefits expenses in the consolidated statements of comprehensive income were HK$994 thousand and HK$1,238 thousand of plan contributions for the six months ended June 30, 2021 and 2022, respectively. 24. DEFINED CONTRIBUTION PLAN (Continued) For the employees in Singapore, the Group makes monthly contributions to the mandatory social security savings scheme which serves to meet retirement, housing and healthcare needs. The Employment Act of Singapore requires that the Group makes contributions to the scheme based on certain percentages of the employees’ salaries, up to a maximum amount specified by the act. The Group has no legal obligation for the scheme beyond the contributions. Total contributions by the Group for such employee benefits were SGD160 thousand (HK$930 thousand) and SGD275 thousand (HK$1,577 thousand) for the six months ended June 30, 2021 and 2022, respectively. For the employees in Australia, the Group makes contributions to the mandatory social security savings scheme which serves to meet retirement needs at least every three months. The Employment Act of Australia requires that the Group makes contributions to the scheme based on certain percentages of the employees’ before tax income. The Group has no legal obligation for the scheme beyond the contributions. Total contributions by the Group for such employee benefits were nil, and AUD$73 thousand (HK$413 thousand) for the six months ended June 30, 2021 and 2022, respectively. |
24. DEFINED CONTRIBUTION PLAN Full-time employees of the Group in the PRC are entitled to welfare benefits including pension insurance, medical insurance, unemployment insurance, maternity insurance, on-the-job injury insurance, and housing fund plans through a PRC government-mandated defined contribution plan. Chinese labor regulations require that the Group makes contributions to the government for these benefits based on certain percentages of the employees’ salaries, up to a maximum amount specified by the local government. The Group has no legal obligation for the benefits beyond the contributions. Total contributions by the Group for such employee benefits were RMB76,379 thousand (HK$91,713 thousand) and RMB122,913 thousand (HK$145,474 thousand) for the nine months ended September 30, 2021 and 2022, respectively. For the employees in Hong Kong, the Group pays contributions to publicly or privately administered pension insurance plans on a mandatory, contractual basis. The Group has no further payment obligations once the contributions have been paid. The contributions are recognized as employee benefit expense when they are due. Prepaid contributions are recognized as an asset to the extent that a cash refund or a reduction in the future payments is available. Included in employee compensation and benefits expenses in the consolidated statements of comprehensive income were HK$1,585 thousand and HK$1,900 thousand of plan contributions for the nine months ended September 30, 2021 and 2022, respectively. For the employees in Singapore, the Group makes monthly contributions to the mandatory social security savings scheme which serves to meet retirement, housing and healthcare needs. The Employment Act of Singapore requires that the Group makes contributions to the scheme based on certain percentages of the employees’ salaries, up to a maximum amount specified by the act. The Group has no legal obligation for the scheme beyond the contributions. Total contributions by the Group for such employee benefits were SGD207 thousand (HK$1,205 thousand) and SGD406 thousand (HK$2,310 thousand) for the nine months ended September 30, 2021 and 2022, respectively. For the employees in Australia, the Group makes contributions to the mandatory social security savings scheme which serves to meet retirement needs at least every three months. The Employment Act of Australia requires that the Group makes contributions to the scheme based on certain percentages of the employees’ before tax income. The Group has no legal obligation for the scheme beyond the contributions. Total contributions by the Group for such employee benefits were nil and AUD$133 thousand (HK$739 thousand) for the nine months ended September 30, 2021 and 2022, respectively. |
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- References No definition available.
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- Definition The entire disclosure for retirement benefits. Reference 1: http://www.xbrl.org/2003/role/exampleRef
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REGULATORY REQUIREMENTS |
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REGULATORY REQUIREMENTS | 25. REGULATORY REQUIREMENTS The Company’s broker-dealer and insurance-broker subsidiaries, Futu Securities, Moomoo Financial Inc., Futu Clearing Inc., Moomoo Financial Singapore pte Ltd., Futu Insurance Brokers (Hong Kong) Limited and Futu Securities (Australia) Ltd. are subject to capital requirements determined by its respective regulators. Futu Securities, the Company’s subsidiary located in Hong Kong, was subject to the Securities and Futures (Financial Resources) Rules and the Securities and Futures Ordinance, Futu Securities is required to maintain minimum paid-up share capital and liquid capital. Moomoo Financial Inc. and Futu Clearing Inc., the Company’s subsidiaries located in the United States, were subject to the Uniform Net Capital Rule (Rule 15c3-1) under the Exchange Act, which requires the maintenance of minimum net capital. Moomoo Financial Singapore pte Ltd., the Company’s subsidiary located in Singapore, was subject to the Securities and Futures (Financial and Margin Requirements for Holders of Capital Markets Services Licences) Regulations, which requires the maintenance of financial resource over its total risk requirement. Futu Insurance Brokers (Hong Kong) Limited, was subject to Insurance (Financial and Other Requirements for Licensed Insurance Broker Companies) Rules, which requires minimum net assets. Futu Securities (Australia) Ltd., the Company's subsidiary located in Australia, was subject to Regulatory Guide 166 Licensing: Financial requirements, which requires the maintenance of surplus liquid funds when licensees hold client money or property. 25. REGULATORY REQUIREMENTS (Continued) The tables below summarizes the net capital, the requirement and the excess capital for the Group’s broker-dealer subsidiaries as of December 31, 2021 and June 30, 2022:
Regulatory capital requirements could restrict the operating subsidiaries from expanding their business and declaring dividends if their net capital does not meet regulatory requirements. As of December 31, 2021 and June 30, 2022, all of the regulated operating subsidiaries were in compliance with their respective regulatory capital requirements. |
25. REGULATORY REQUIREMENTS The Company’s broker-dealer and insurance-broker subsidiaries, Futu Securities, Moomoo Financial Inc., Futu Clearing Inc., Moomoo Financial Singapore pte Ltd., Futu Insurance Brokers (Hong Kong) Limited and Futu Securities (Australia) Ltd. are subject to capital requirements determined by its respective regulators. Futu Securities, the Company’s subsidiary located in Hong Kong, was subject to the Securities and Futures (Financial Resources) Rules and the Securities and Futures Ordinance, Futu Securities is required to maintain minimum paid-up share capital and liquid capital. Moomoo Financial Inc. and Futu clearing Inc., the Company’s subsidiaries located in the United States, were subject to the Uniform Net Capital Rule (Rule 15c3-1) under the Exchange Act, which requires the maintenance of minimum net capital. 25. REGULATORY REQUIREMENTS (Continued) Moomoo Financial Singapore Pte Ltd., the Company’s subsidiary located in Singapore, was subject to the Securities and Futures (Financial and Margin Requirements for Holders of Capital Markets Services Licences) Regulations, which requires the maintenance of financial resource over its total risk requirement. Futu Insurance Brokers (Hong Kong) Limited, was subject to Insurance (Financial and Other Requirements for Licensed Insurance Broker Companies) Rules, which requires minimum net assets. Futu Securities (Australia) Ltd., the Company's subsidiary located in Australia, was subject to Regulatory Guide 166 Licensing: Financial requirements, which requires the maintenance of surplus liquid funds when licensees hold client money or property. The tables below summaries the net capital, the requirement and the excess capital for the Group’s broker-dealer subsidiaries as of December 31, 2021 and September 30, 2022:
Regulatory capital requirements could restrict the operating subsidiaries from expanding their business and declaring dividends if their net capital does not meet regulatory requirements. As of December 31, 2021 and September 30, 2022, all of the regulated operating subsidiaries were in compliance with their respective regulatory capital requirements. |
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- References No definition available.
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- Definition The entire disclosure for regulatory requirements. No definition available.
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COMMITMENTS AND CONTINGENCIES |
6 Months Ended | 9 Months Ended |
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Jun. 30, 2022 |
Sep. 30, 2022 |
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COMMITMENTS AND CONTINGENCIES | ||
COMMITMENTS AND CONTINGENCIES | 26. COMMITMENTS AND CONTINGENCIES Commitments The Group’s commitments primarily related to capital contribution obligation for certain investment funds. Total commitments contracted but not yet reflected in the consolidated financial statements amounted to US$104 million and US$74 million as of December 31, 2021 and June 30,2022, respectively. Contingencies The financial services industry is highly regulated. From time to time, the licensed companies in the financial industry may be required to assist in and/or are subject to inquiries and/or examination by the regulatory authorities of the jurisdiction in where they operate. As of the date of approval of the consolidated financial statements, the Group reviews its regulatory inquiries and other legal proceedings on an ongoing basis and evaluates whether potential regulatory fines are probable, estimable and material and for updating its contingency reserves and disclosures accordingly. As of December 31, 2021 and June 30, 2022, the Group did not make any accrual for the aforementioned loss contingency. |
26. COMMITMENTS AND CONTINGENCIES Commitments The Group’s commitments primarily related to capital contribution obligation for certain investment funds. Total commitments contracted but not yet reflected in the consolidated financial statements amounted to US$104 million and US$74 million as of December 31, 2021 and September 30, 2022, respectively. Contingencies The financial services industry is highly regulated. From time to time, the licensed companies in the financial industry may be required to assist in and/or are subject to inquiries and/or examination by the regulatory authorities of the jurisdiction in where they operate. As of the date of approval of the consolidated financial statements, the Group reviews its regulatory inquiries and other legal proceedings on an ongoing basis and evaluates whether potential regulatory fines are probable, estimable and material and for updating its contingency reserves and disclosures accordingly. As of December 31, 2021 and September 30, 2022, the Group did not make any accrual for the aforementioned loss contingency. |
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- References No definition available.
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- Definition The entire disclosure for commitments and contingencies. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
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RELATED PARTY BALANCES AND TRANSACTIONS |
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Jun. 30, 2022 |
Sep. 30, 2022 |
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RELATED PARTY BALANCES AND TRANSACTIONS | 27. RELATED PARTY BALANCES AND TRANSACTIONS The table below sets forth major related parties of the Group and their relationships with the Group:
(a) Cash and cash equivalent
The balance represents the cash deposited by the Group in various payment channels of Tencent Group for funding marketing campaigns, of which could be withdrawn on demand. (b) Amounts Due to Related Parties
27. RELATED PARTY BALANCES AND TRANSACTIONS (Continued) (c) Transactions with Related Parties
The Group utilizes the cloud services, equipment and software provided by Tencent Group to process large amount of complicated data in-house, which reduces the risks involved in data storage and transmission. SMS channel services is provided by Tencent Group, including verification code, notification and marketing message services for the Group to reach its end users. Tencent Group provides advertising services to the Group via Tencent Group’s social media. The Group also earns revenue from Tencent Group by providing ESOP management service. (d) Trade related transactions with Related Parties Included in payables to clients in the consolidated balance sheets as of December 31, 2021 and June 30, 2022, were payables to directors and officers of HK$44,480 thousand and HK$47,882 thousand, respectively. Revenue earned by providing brokerage services and margin loans to directors and officers and their spouses amounts to HK$952 thousand and HK$394 thousand for the six months ended June 30, 2021 and 2022, respectively. |
27. RELATED PARTY BALANCES AND TRANSACTIONS The table below sets forth major related parties of the Group and their relationships with the Group:
(a) Cash and cash equivalent
The balance represents the cash deposited by the Group in various payment channels of Tencent Group for funding marketing campaigns, of which could be withdrawn on demand. (b) Amounts Due to Related Parties
27. RELATED PARTY BALANCES AND TRANSACTIONS (Continued) (c) Transactions with Related Parties
The Group utilizes the cloud services, equipment and software provided by Tencent Group to process large amount of complicated data in-house, which reduces the risks involved in data storage and transmission. SMS channel services is provided by Tencent Group, including verification code, notification and marketing message services for the Group to reach its end users. Tencent Group provides advertising services to the Group via Tencent Group’s social media. The Group also earns revenue from Tencent Group by providing ESOP management service. (d) Trade related transactions with Related Parties Included in payables to clients in the consolidated balance sheets as of December 31, 2021 and September 30, 2022, were payables to directors and officers of HK$44,480 thousand and HK$29,322 thousand, respectively. Revenue earned by providing brokerage services and margin loans to directors and officers and their spouses amounts to HK$1,255 thousand and HK$528 thousand for the nine months ended September 30, 2021 and 2022, respectively. |
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- References No definition available.
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- Definition The entire disclosure for related party transactions. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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DIVIDENDS |
6 Months Ended | 9 Months Ended |
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Jun. 30, 2022 |
Sep. 30, 2022 |
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DIVIDENDS | ||
DIVIDENDS | 28. DIVIDENDS No dividend was declared by the Group during the six months ended June 30, 2021 and 2022. |
28. DIVIDENDS No dividend was declared by the Group during the nine months ended September 30, 2021 and 2022. |
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- Definition The entire disclosure for dividends. No definition available.
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- References No definition available.
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SUBSEQUENT EVENTS |
6 Months Ended | 9 Months Ended |
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Jun. 30, 2022 |
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SUBSEQUENT EVENTS | ||
SUBSEQUENT EVENTS | 29. SUBSEQUENT EVENTS In November, 2022, the Group entered into an acquisition agreement with the aim of acquiring 85% interest of a securities company in a maximum consideration of approximately HK$18,016 thousand. |
29. SUBSEQUENT EVENTS In November, 2022, the Group entered into an acquisition agreement with the aim of acquiring 85% interest of a securities company in a maximum consideration of approximately HK$18,016 thousand. |
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- References No definition available.
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- Definition The entire disclosure for significant events or transactions that occurred after the balance sheet date through the date the financial statements were issued or the date the financial statements were available to be issued. Examples include: the sale of a capital stock issue, purchase of a business, settlement of litigation, catastrophic loss, significant foreign exchange rate changes, loans to insiders or affiliates, and transactions not in the ordinary course of business. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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SIGNIFICANT ACCOUNTING POLICIES (Policies) |
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SIGNIFICANT ACCOUNTING POLICIES | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basis of presentation | Basis of presentation The unaudited interim condensed consolidated financial statements of the Group have been prepared in accordance with the accounting principles generally accepted in the United States of America (“U.S. GAAP”). The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements. In the opinion of the Company, the accompanying unaudited interim condensed consolidated financial statements contain all adjustments, consisting of only normal recurring adjustments, necessary for a fair statement of its financial position as of June 30, 2022, its results of operations and cash flows for the six months ended June 30, 2021 and 2022. The unaudited interim condensed consolidated balance sheet as of December 31, 2021, was derived from audited financial statements as of that date, but does not contain all of the footnote disclosures required by U.S. GAAP for a complete set of financial statements. Accordingly, these financial statements should be read in conjunction with the audited consolidated financial statements and related footnotes for the year ended December 31, 2021. Significant accounting policies followed by the Group in the preparation of the accompanying consolidated financial statements are summarized below. |
Basis of presentation The unaudited interim condensed consolidated financial statements of the Group have been prepared in accordance with the accounting principles generally accepted in the United States of America (“U.S. GAAP”). The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements. In the opinion of the Company, the accompanying unaudited interim condensed consolidated financial statements contain all adjustments, consisting of only normal recurring adjustments, necessary for a fair statement of its financial position as of September 30, 2022, its results of operations and cash flows for the nine months ended September 30, 2021 and 2022. The unaudited interim condensed consolidated balance sheet as of December 31, 2021, was derived from audited financial statements as of that date, but does not contain all of the footnote disclosures required by U.S. GAAP for a complete set of financial statements. Accordingly, these financial statements should be read in conjunction with the audited consolidated financial statements and related footnotes for the year ended December 31, 2021. Significant accounting policies followed by the Group in the preparation of the accompanying consolidated financial statements are summarized below. |
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Basis of Consolidation | Basis of Consolidation The consolidated financial statements include the financial statements of the Company, its subsidiaries, the VIEs and subsidiary of the VIEs for which the Company or its subsidiary is the primary beneficiary. A subsidiary is an entity in which the Company, directly or indirectly, controls more than one half of the voting power; or has the power to appoint or remove the majority of the members of the Board of Directors; or to cast a majority of votes at the meeting of directors; or has the power to govern the financial and operating policies of the investee under a statute or agreement among the shareholders or equity holders. A consolidated VIE is an entity in which the Company, or its subsidiary, through contractual arrangements, has the power to direct the activities that most significantly impact the entity’s economic performance, bears the risks of and enjoys the rewards normally associated with ownership of the entity, and therefore the Company or its subsidiary is the primary beneficiary of the entity. All transactions and balances among the Company, its subsidiaries, the VIEs and subsidiaries of the VIEs have been eliminated upon consolidation. |
Basis of Consolidation The consolidated financial statements include the financial statements of the Company, its subsidiaries, the VIEs and subsidiary of the VIEs for which the Company or its subsidiary is the primary beneficiary. A subsidiary is an entity in which the Company, directly or indirectly, controls more than one half of the voting power; or has the power to appoint or remove the majority of the members of the Board of Directors; or to cast a majority of votes at the meeting of directors; or has the power to govern the financial and operating policies of the investee under a statute or agreement among the shareholders or equity holders. A consolidated VIE is an entity in which the Company, or its subsidiary, through contractual arrangements, has the power to direct the activities that most significantly impact the entity’s economic performance, bears the risks of and enjoys the rewards normally associated with ownership of the entity, and therefore the Company or its subsidiary is the primary beneficiary of the entity. All transactions and balances among the Company, its subsidiaries, the VIEs and subsidiaries of the VIEs have been eliminated upon consolidation. |
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VIE Companies | VIE Companies 1) Contractual Agreements with VIEs The following is a summary of the contractual agreements (collectively, “Contractual Agreements”) between the Company’s PRC subsidiary, Shen Si, and the VIEs. Through the Contractual Agreements, the VIEs are effectively controlled by the Company. Shareholders’ Voting Rights Proxy Agreements. Pursuant to the Shareholders’ Voting Rights Proxy Agreements, each shareholder of VIEs irrevocably authorized Shen Si or any person(s) designated by Shen Si to exercise such shareholder’s rights in VIEs, including without limitation, the power to participate in and vote at shareholder’s meetings, the power to nominate and appoint the directors, senior management, and other shareholders’ voting right permitted by the articles of association of VIEs. The shareholders’ voting rights proxy agreements remain irrevocable and continuously valid from the date of execution until the expiration of the business term of Shen Si and can be renewed upon request by Shen Si. Business Operation Agreements. Pursuant to the Business Operation Agreements, VIEs and their shareholders undertake that without Shen Si’s prior written consent, VIEs shall not enter into any transactions that may have a material effect on VIEs’ assets, business, personnel, obligations, rights or business operations. VIEs and their shareholders shall elect directors nominated by Shen Si and such directors shall nominate officers designated by Shen Si. The business operation agreements will remain effective until the end of Shen Si’s business term, which will be extended if Shen Si’s business term is extended or as required by Shen Si. Equity Interest Pledge Agreements. Pursuant to the Equity Interest Pledge Agreements, each shareholder of VIEs agrees that, during the term of the Equity Interest Pledge Agreements, he or she will not dispose of the pledged equity interests or create or allow any encumbrance on the pledged equity interests without the prior written consent of Shen Si. The Equity Interest Pledge Agreements remain effective until the latter of the full payment of all secured debt under the equity interest pledge agreements and VIEs and their shareholders discharge all their obligations under the contractual arrangements. Exclusive Technology Consulting and Services Agreements. Under the Exclusive Technology Consulting and Services Agreements between Shen Si and the VIEs, Shen Si has the exclusive right to provide VIEs with technology consulting and services related to, among other things, technology research and development, technology application and implementation, maintenance of software and hardware. Without Shen Si’s written consent, VIEs shall not accept any technology consulting and services covered by these agreements from any third party. VIEs agree to pay a service fee at an amount equivalent to all of its net profit to Shen Si. Unless otherwise terminated in accordance with the terms of these agreements or otherwise agreed with Shen Si, these agreements will remain effective until the expiration of Shen Si’s business term, and will be renewed if Shen Si’s business term is extended. Exclusive Option Agreements. Pursuant to the Exclusive Option Agreements, each shareholder of VIEs has irrevocably granted Shen Si an exclusive option, to the extent permitted by PRC laws, to purchase, or have its designated person or persons to purchase, at its discretion, all or part of the shareholder’s equity interests in VIEs. Unless PRC laws and/or regulations require valuation of the equity interests, the purchase price shall be RMB1.00 or the lowest price permitted by the applicable PRC laws, whoever is higher. Each shareholder of VIEs undertakes that, without the prior written consent of Shen Si, he or she will not, among other things, (i) create any pledge or encumbrance on his or her equity interests in VIEs, (ii) transfer or otherwise dispose of his or her equity interests in VIEs, (iii) change VIEs’ registered capital, (iv) amend VIEs’ articles of association, (v) liquidate or dissolve VIEs, or (vi) distribute dividends to the shareholders of VIEs. In addition, VIEs undertake that, without the prior written consent of Shen Si, they will not, among other things, dispose of VIEs’ material assets, provide any loans to any third parties, enter into any material contract with a value of more than RMB500,000, or create any pledge or encumbrance on any of their assets, or transfer or otherwise dispose of their material assets. Unless otherwise terminated by Shen Si, these agreements will remain effective until the expiration of Shen Si’s business term, and will be renewed if Shen Si’s business term is extended. Under the Contractual Agreements with the VIEs, the Company has the power to direct activities of the VIEs and VIEs’ subsidiaries, and can have assets transferred out of the VIEs and VIEs’ subsidiaries. Therefore, the Company considers itself the ultimate primary beneficiary of the VIEs and there is no asset of the VIEs that can only be used to settle obligations of the VIEs and VIEs’ subsidiaries, except for registered capital of the VIEs and their subsidiary amounting to RMB10 million as of December 31, 2021 and June 30, 2022, respectively. Since the VIEs are incorporated as limited liability companies under the PRC Company Law, creditors of the VIEs do not have recourse to the general credit of the Company. There is currently no contractual arrangement that would require the Company to provide additional financial support to the VIEs. However, as the Company is conducting certain businesses through its VIEs and VIEs’ subsidiary, the Company may provide such support on a discretionary basis in the future, which could expose the Company to a loss. In the opinion of the Company’s management, the contractual arrangements among its subsidiary, the VIEs and their respective Nominee Shareholders are in compliance with current PRC laws and are legally binding and enforceable. However, uncertainties in the interpretation and enforcement of the PRC laws, regulations and policies could limit the Company’s ability to enforce these contractual arrangements. As a result, the Company may be unable to consolidate the VIEs and VIEs’ subsidiaries in the consolidated financial statements. On March 15, 2019, the Foreign Investment Law was formally passed by the thirteenth National People’s Congress and it was taken effect on January 1, 2020. The Foreign Investment Law replaces the Law on Sino-Foreign Equity Joint Ventures, the Law on Sino-Foreign Cooperative Joint Ventures and the Law on Foreign-Capital Enterprises to become the legal foundation for foreign investment in the PRC. The Foreign Investment Law stipulates certain forms of foreign investment. However, the Foreign Investment Law does not explicitly stipulate contractual arrangements such as those we rely on as a form of foreign investment. Notwithstanding the above, the Foreign Investment Law stipulates that foreign investment includes “foreign investors investing through any other methods under laws, administrative regulations or provisions prescribed by the State Council.” Future laws, administrative regulations or provisions prescribed by the State Council may possibly regard Contractual Arrangements as a form of foreign investment. In the event that the State Council in the future promulgates laws and regulations that deem investments made by foreign investors through contractual arrangements as “foreign investment”, the Group’s ability to use the contractual arrangements with its VIEs and the Group’s ability to conduct business through the VIEs could be severely limited. The Company’s ability to control the VIEs also depends on the power of attorney Shen Si has to vote on all matters requiring shareholders’ approvals in the VIEs. As noted above, the Company believes these power of attorney are legally binding and enforceable but may not be as effective as direct equity ownership. In addition, if the Group’s corporate structure or the contractual arrangements with the VIEs were found to be in violation of any existing PRC laws and regulations, the PRC regulatory authorities could, within their respective jurisdictions:
VIE Companies (Continued) 2) Risks in relation to the VIE structure (Continued)
The imposition of any of these restrictions or actions may result in a material adverse effect on the Group’s ability to conduct its business. In addition, if the imposition of any of these restrictions causes the Group to lose the right to direct the activities of the VIEs or the right to receive their economic benefits, the Group would no longer be able to consolidate the financial statements of the VIEs. In the opinion of management, the likelihood of losing the benefits in respect of the Group’s current ownership structure or the contractual arrangements with its VIEs is remote. |
VIE Companies 1) Contractual Agreements with VIEs The following is a summary of the contractual agreements (collectively, “Contractual Agreements”) between the Company’s PRC subsidiary, Shen Si, and the VIEs. Through the Contractual Agreements, the VIEs are effectively controlled by the Company. Shareholders’ Voting Rights Proxy Agreements. Pursuant to the Shareholders’ Voting Rights Proxy Agreements, each shareholder of VIEs irrevocably authorized Shen Si or any person(s) designated by Shen Si to exercise such shareholder’s rights in VIEs, including without limitation, the power to participate in and vote at shareholder’s meetings, the power to nominate and appoint the directors, senior management, and other shareholders’ voting right permitted by the articles of association of VIEs. The shareholders’ voting rights proxy agreements remain irrevocable and continuously valid from the date of execution until the expiration of the business term of Shen Si and can be renewed upon request by Shen Si. Business Operation Agreements. Pursuant to the Business Operation Agreements, VIEs and their shareholders undertake that without Shen Si’s prior written consent, VIEs shall not enter into any transactions that may have a material effect on VIEs’ assets, business, personnel, obligations, rights or business operations. VIEs and their shareholders shall elect directors nominated by Shen Si and such directors shall nominate officers designated by Shen Si. The business operation agreements will remain effective until the end of Shen Si’s business term, which will be extended if Shen Si’s business term is extended or as required by Shen Si. VIE Companies (Continued) 1) Contractual Agreements with VIEs (Continued) Equity Interest Pledge Agreements. Pursuant to the Equity Interest Pledge Agreements, each shareholder of VIEs agrees that, during the term of the Equity Interest Pledge Agreements, he or she will not dispose of the pledged equity interests or create or allow any encumbrance on the pledged equity interests without the prior written consent of Shen Si. The Equity Interest Pledge Agreements remain effective until the latter of the full payment of all secured debt under the equity interest pledge agreements and VIEs and their shareholders discharge all their obligations under the contractual arrangements. Exclusive Technology Consulting and Services Agreements. Under the Exclusive Technology Consulting and Services Agreements between Shen Si and the VIEs, Shen Si has the exclusive right to provide VIEs with technology consulting and services related to, among other things, technology research and development, technology application and implementation, maintenance of software and hardware. Without Shen Si’s written consent, VIEs shall not accept any technology consulting and services covered by these agreements from any third party. VIEs agree to pay a service fee at an amount equivalent to all of its net profit to Shen Si. Unless otherwise terminated in accordance with the terms of these agreements or otherwise agreed with Shen Si, these agreements will remain effective until the expiration of Shen Si’s business term, and will be renewed if Shen Si’s business term is extended. Exclusive Option Agreements. Pursuant to the Exclusive Option Agreements, each shareholder of VIEs has irrevocably granted Shen Si an exclusive option, to the extent permitted by PRC laws, to purchase, or have its designated person or persons to purchase, at its discretion, all or part of the shareholder’s equity interests in VIEs. Unless PRC laws and/or regulations require valuation of the equity interests, the purchase price shall be RMB1.00 or the lowest price permitted by the applicable PRC laws, whoever is higher. Each shareholder of VIEs undertakes that, without the prior written consent of Shen Si, he or she will not, among other things, (i) create any pledge or encumbrance on his or her equity interests in VIEs, (ii) transfer or otherwise dispose of his or her equity interests in VIEs, (iii) change VIEs’ registered capital, (iv) amend VIEs’ articles of association, (v) liquidate or dissolve VIEs, or (vi) distribute dividends to the shareholders of VIEs. In addition, VIEs undertake that, without the prior written consent of Shen Si, they will not, among other things, dispose of VIEs’ material assets, provide any loans to any third parties, enter into any material contract with a value of more than RMB500,000, or create any pledge or encumbrance on any of their assets, or transfer or otherwise dispose of their material assets. Unless otherwise terminated by Shen Si, these agreements will remain effective until the expiration of Shen Si’s business term, and will be renewed if Shen Si’s business term is extended. VIE Companies (Continued) 2) Risks in relation to the VIE structure The following table sets forth the assets, liabilities, results of operations and changes in cash and cash equivalents of the VIEs and their subsidiary taken as a whole, which were included in the Group’s consolidated financial statements with intercompany balances and transactions eliminated between the VIEs and their subsidiary:
Transactions between the VIE and other entities in the consolidated group As of December 31, 2021 and September 30, 2022, total assets include amounts due from internal companies in the consolidated group in the amount of HK$190,424 thousand and HK$216,696 thousand, respectively. Total liabilities include amounts due to the internal companies in the amount of HK$80,435 thousand and HK$87,483 thousand, respectively. For the nine months ended September 30, 2021 and 2022, the VIE earned inter-company revenues in the amounts of HK$118,000 thousand and HK$182,834 thousand, respectively. In addition, for the nine months ended September 30, 2021 and 2022, the repayment of advances to Group companies by the VIE are in the amount of nil and nil, and VIE proceeded from advances from Group companies in the amount of nil, HK$ 8,107 thousand, respectively. All of these balances and transactions have been eliminated in consolidation. Under the Contractual Agreements with the VIEs, the Company has the power to direct activities of the VIEs and VIEs’ subsidiaries, and can have assets transferred out of the VIEs and VIEs’ subsidiaries. Therefore, the Company considers itself the ultimate primary beneficiary of the VIEs and there is no asset of the VIEs that can only be used to settle obligations of the VIEs and VIEs’ subsidiaries, except for registered capital of the VIEs and their subsidiary amounting to RMB10 million as of December 31, 2021 and September 30, 2022, respectively. Since the VIEs are incorporated as limited liability companies under the PRC Company Law, creditors of the VIEs do not have recourse to the general credit of the Company. There is currently no contractual arrangement that would require the Company to provide additional financial support to the VIEs. However, as the Company is conducting certain businesses through its VIEs and VIEs’ subsidiary, the Company may provide such support on a discretionary basis in the future, which could expose the Company to a loss. VIE Companies (Continued) 2) Risks in relation to the VIE structure (Continued) In the opinion of the Company's management, the contractual arrangements among its subsidiary, the VIEs and their respective Nominee Shareholders are in compliance with current PRC laws and are legally binding and enforceable. However, uncertainties in the interpretation and enforcement of the PRC laws, regulations and policies could limit the Company’s ability to enforce these contractual arrangements. As a result, the Company may be unable to consolidate the VIEs and VIEs’ subsidiaries in the consolidated financial statements. On March 15, 2019, the Foreign Investment Law was formally passed by the thirteenth National People’s Congress and it was taken effect on January 1, 2020. The Foreign Investment Law replaces the Law on Sino-Foreign Equity Joint Ventures, the Law on Sino-Foreign Cooperative Joint Ventures and the Law on Foreign-Capital Enterprises to become the legal foundation for foreign investment in the PRC. The Foreign Investment Law stipulates certain forms of foreign investment. However, the Foreign Investment Law does not explicitly stipulate contractual arrangements such as those we rely on as a form of foreign investment. Notwithstanding the above, the Foreign Investment Law stipulates that foreign investment includes “foreign investors investing through any other methods under laws, administrative regulations or provisions prescribed by the State Council.” Future laws, administrative regulations or provisions prescribed by the State Council may possibly regard Contractual Arrangements as a form of foreign investment. In the event that the State Council in the future promulgates laws and regulations that deem investments made by foreign investors through contractual arrangements as “foreign investment”, the Group’s ability to use the contractual arrangements with its VIEs and the Group’s ability to conduct business through the VIEs could be severely limited. The Company’s ability to control the VIEs also depends on the power of attorney Shen Si has to vote on all matters requiring shareholders’ approvals in the VIEs. As noted above, the Company believes these power of attorney are legally binding and enforceable but may not be as effective as direct equity ownership. In addition, if the Group’s corporate structure or the contractual arrangements with the VIEs were found to be in violation of any existing PRC laws and regulations, the PRC regulatory authorities could, within their respective jurisdictions:
VIE Companies (Continued) 2) Risks in relation to the VIE structure (Continued) The imposition of any of these restrictions or actions may result in a material adverse effect on the Group’s ability to conduct its business. In addition, if the imposition of any of these restrictions causes the Group to lose the right to direct the activities of the VIEs or the right to receive their economic benefits, the Group would no longer be able to consolidate the financial statements of the VIEs. In the opinion of management, the likelihood of losing the benefits in respect of the Group’s current ownership structure or the contractual arrangements with its VIEs is remote. |
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Use of Estimates | Use of Estimates The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, related disclosures of contingent assets and liabilities at the balance sheet date, and the reported revenues, costs and expenses during the reported period in the consolidated financial statements and accompanying notes. These accounting estimates reflected in the Group’s consolidated financial statements mainly include, but are not limited to, the estimation of the expected usage and the estimated relative standalone selling price of the incentive points and coupons, the valuation and recognition of share-based compensation arrangements, depreciable lives of property and equipment, useful life of intangible assets, expected credit losses on financial instruments, assessment for impairment of long-term investments and other non-current assets, present value for expected future leasing payment, contingency reserve, provision of income tax and valuation allowance for deferred tax asset, and valuation of financial instruments measured at fair value. Actual results could differ from those estimates. |
Use of Estimates The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, related disclosures of contingent assets and liabilities at the balance sheet date, and the reported revenues, costs and expenses during the reported period in the consolidated financial statements and accompanying notes. These accounting estimates reflected in the Group’s consolidated financial statements mainly include, but are not limited to, the estimation of the expected usage and the estimated relative standalone selling price of the incentive points and coupons, the valuation and recognition of share-based compensation arrangements, depreciable lives of property and equipment, useful life of intangible assets, expected credit losses on financial instruments, assessment for impairment of long-term investments and other non-current assets, present value for expected future leasing payment, contingency reserve, provision of income tax and valuation allowance for deferred tax asset, and valuation of financial instruments measured at fair value. Actual results could differ from those estimates. |
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Comprehensive Income and Foreign Currency Translation | Comprehensive Income and Foreign Currency Translation The Group’s operating results are reported in the consolidated statements of comprehensive income pursuant to FASB ASC Topic 220, “Comprehensive Income”. Comprehensive income consists of two components: net income and other comprehensive income (“OCI”). The Group’s OCI is comprised of gains and losses resulting from translating foreign currency financial statements of entities, of which functional currency is other than Hong Kong dollar which is the presentational currency of the Group, net of related income taxes, where applicable. Such subsidiaries’ assets and liabilities are translated into Hong Kong dollars at period-end exchange rates, and revenues and expenses are translated at average exchange rates prevailing during the period. Adjustments that result from translating amounts from a subsidiary’s functional currency to the Hong Kong dollar (as described above) are reported net of tax, where applicable, in accumulated OCI in the consolidated balance sheets. |
Comprehensive Income and Foreign Currency Translation The Group’s operating results are reported in the consolidated statements of comprehensive income pursuant to FASB ASC Topic 220, “Comprehensive Income”. Comprehensive income consists of two components: net income and other comprehensive income (“OCI”). The Group’s OCI is comprised of gains and losses resulting from translating foreign currency financial statements of entities, of which functional currency is other than Hong Kong dollar which is the presentational currency of the Group, net of related income taxes, where applicable. Such subsidiaries’ assets and liabilities are translated into Hong Kong dollars at period-end exchange rates, and revenues and expenses are translated at average exchange rates prevailing during the period. Adjustments that result from translating amounts from a subsidiary’s functional currency to the Hong Kong dollar (as described above) are reported net of tax, where applicable, in accumulated OCI in the consolidated balance sheets. |
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Current Expected Credit Losses | Current Expected Credit Losses Prior to January 1, 2020, the Group applied incurred loss methodology for recognizing credit losses that delays recognition until it is probable a loss has been incurred. The identified impairment loss was immaterial prior to January 1, 2020. On January 1, 2020, the Group adopted FASB ASC Topic 326 – “Financial Instruments – Credit Losses” (“ASC Topic 326”) which replaces the incurred loss methodology with the current expected credit loss (“CECL”) methodology. The new guidance applies to financial assets measured at amortized cost, held-to-maturity debt securities and off-balance sheet credit exposures. For on-balance sheet assets, an allowance must be recognized at the origination or purchase of in-scope assets and represents the expected credit losses over the contractual life of those assets. The Group adopted ASC Topic 326 using the modified retrospective approach for all in-scope assets. The adoption of ASC Topic 326 has no material impact on the Group’s retained earnings as of January 1, 2020. Results for reporting periods beginning after January 1, 2020 are presented under ASC Topic 326 while prior periods continue to be reported in accordance with previously applicable U.S. GAAP. The Group’s in-scope assets are primarily loans and advances that are collateralized by client securities and the collateral is required to be maintained at specified minimum levels at all times. The Group monitors margin levels and requires clients to provide additional collateral, or reduce margin positions, to meet minimum collateral requirements if the fair value of the collateral changes. The Group applies the practical expedient based on collateral maintenance provisions in estimating an allowance for credit losses for the loans and advances. In accordance with the practical expedient, when the Group reasonably expects that borrowers (or counterparties, as applicable) will replenish the collateral as required, there is no expectation of credit losses when the collateral’s fair value is greater than the amortized cost of the financial assets. If the amortized cost exceeds the fair value of collateral, then credit losses are estimated only on the unsecured portion. For the six months ended June 30, 2021 and 2022, expected credit loss expenses of HK$8,819 thousand and HK$7,849 thousand, resulting from the assessment of credit losses for the loans and advances under ASC Topic 326 at period-end were recognized in “Others, net” in the consolidated statements of comprehensive income, respectively. An allowance for credit losses on other financial assets, including receivables from clients, brokers, clearing organizations and fund management companies and fund distributors, is estimated based on the aging of these financial assets. Receivables from clients are due within the settlement period commonly adopted in the relevant market practices, which is usually within a few days from the trade date. Because these receivables involve customers who have no recent history of default, and the settlement periods are usually short, the credit risk arising from receivables from clients is considered low. In respect of the receivables from brokers, clearing organizations and fund management companies and fund distributors, the management considers that these receivables have a low risk of default and the counterparties have a strong capacity to meet their contractual obligation. As a result, the allowance for credit losses for other financial assets were immaterial for all periods presented. |
Current Expected Credit Losses Prior to January 1, 2020, the Group applied incurred loss methodology for recognizing credit losses that delays recognition until it is probable a loss has been incurred. The identified impairment loss was immaterial prior to January 1, 2020. On January 1, 2020, the Group adopted FASB ASC Topic 326 – “Financial Instruments – Credit Losses” (“ASC Topic 326”) which replaces the incurred loss methodology with the current expected credit loss (“CECL”) methodology. The new guidance applies to financial assets measured at amortized cost, held-to-maturity debt securities and off-balance sheet credit exposures. For on-balance sheet assets, an allowance must be recognized at the origination or purchase of in-scope assets and represents the expected credit losses over the contractual life of those assets. Current Expected Credit Losses (Continued) The Group adopted ASC Topic 326 using the modified retrospective approach for all in-scope assets. The adoption of ASC Topic 326 has no material impact on the Group’s retained earnings as of January 1, 2020. Results for reporting periods beginning after January 1, 2020 are presented under ASC Topic 326 while prior periods continue to be reported in accordance with previously applicable U.S. GAAP. The Group’s in-scope assets are primarily loans and advances that are collateralized by client securities and the collateral is required to be maintained at specified minimum levels at all times. The Group monitors margin levels and requires clients to provide additional collateral, or reduce margin positions, to meet minimum collateral requirements if the fair value of the collateral changes. The Group applies the practical expedient based on collateral maintenance provisions in estimating an allowance for credit losses for the loans and advances. In accordance with the practical expedient, when the Group reasonably expects that borrowers (or counterparties, as applicable) will replenish the collateral as required, there is no expectation of credit losses when the collateral’s fair value is greater than the amortized cost of the financial assets. If the amortized cost exceeds the fair value of collateral, then credit losses are estimated only on the unsecured portion. For the nine months ended September 30, 2021 and 2022, expected credit loss expenses of HK$2,815 thousand and HK$13,620 thousand, resulting from the assessment of credit losses for the loans and advances under ASC Topic 326 at period-end were recognized in “Others, net” in the consolidated statements of comprehensive income, respectively. An allowance for credit losses on other financial assets, including receivables from clients, brokers, clearing organizations and fund management companies and fund distributors, is estimated based on the aging of these financial assets. Receivables from clients are due within the settlement period commonly adopted in the relevant market practices, which is usually within a few days from the trade date. Because these receivables involve customers who have no recent history of default, and the settlement periods are usually short, the credit risk arising from receivables from clients is considered low. In respect of the receivables from brokers, clearing organizations and fund management companies and fund distributors, the management considers that these receivables have a low risk of default and the counterparties have a strong capacity to meet their contractual obligation. As a result, the allowance for credit losses for other financial assets were immaterial for all periods presented. |
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Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents represent cash on hand, demand deposits and time deposits placed with banks or other financial institutions, which are unrestricted to withdrawal or use, and which have original maturities of three months or less. |
Cash and Cash Equivalents Cash and cash equivalents represent cash on hand, demand deposits and time deposits placed with banks or other financial institutions, which are unrestricted to withdrawal or use, and which have original maturities of three months or less. |
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Cash Held on Behalf of Clients | Cash Held on Behalf of Clients The Group has classified the clients’ monies as cash held on behalf of clients under the assets section in the consolidated balance sheets and recognized the corresponding accounts payables to the respective clients under the liabilities section. |
Cash Held on Behalf of Clients The Group has classified the clients’ monies as cash held on behalf of clients under the assets section in the consolidated balance sheets and recognized the corresponding accounts payables to the respective clients under the liabilities section. |
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Term Deposits | Term Deposit Term deposit consists of bank deposits with an original maturity of greater than three months. |
Term Deposit Term deposit consists of bank deposits with an original maturity of greater than three months. |
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Restricted Cash | Restricted Cash The Group is required to maintain restricted cash deposits for certain property leases. These funds are restricted and have been classified as such on our consolidated balance sheets due to the nature of restriction. |
Restricted Cash The Group is required to maintain restricted cash deposits for certain property leases. These funds are restricted and have been classified as such on our consolidated balance sheets due to the nature of restriction. |
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Short-term Investments | Short-term Investments The Group classifies certain financial assets with highly liquidity and original maturities less than twelve months as short-term investments. The Group’s short-term investments consist of money market funds and financial assets at fair value through profit or loss. The Group values its money market funds and financial assets at fair value through profit or loss using quoted prices in active markets for these investments, and accordingly, the Group classifies the valuation techniques that use these inputs as Level 1. |
Short-term Investments The Group classifies certain financial assets with highly liquidity and original maturities less than twelve months as short-term investments. The Group’s short-term investments consist of money market funds and financial assets at fair value through profit or loss. The Group values its money market funds and financial assets at fair value through profit or loss using quoted prices in active markets for these investments, and accordingly, the Group classifies the valuation techniques that use these inputs as Level 1. |
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Securities Purchased Under Agreements to Resell and Securities Sold Under Agreements to Repurchase | Securities Purchased Under Agreements to Resell and Securities Sold Under Agreements to Repurchase Transactions involving purchases of securities under agreements to resell (resell agreements) and transactions involving sales of securities under agreements to repurchase (repurchase agreements) are treated as collateralized financing transactions. Under resell agreements, the Group pays cash to counterparties and receives securities as collateral. These agreements are carried at amounts at which the securities will subsequently be resold, and the interest income received by the Group is recorded as interest income in the consolidated statements of comprehensive income. Under repurchase agreements, the Group receives cash from counterparties and provides securities as collateral. These agreements are carried at amounts at which the securities will subsequently be repurchased, and the interest expense incurred by the Group is recorded as interest expenses in the consolidated statements of comprehensive income. |
Securities Purchased Under Agreements to Resell and Securities Sold Under Agreements to Repurchase Transactions involving purchases of securities under agreements to resell (resell agreements) and transactions involving sales of securities under agreements to repurchase (repurchase agreements) are treated as collateralized financing transactions. Under resell agreements, the Group pays cash to counterparties and receives securities as collateral. These agreements are carried at amounts at which the securities will subsequently be resold, and the interest income received by the Group is recorded as interest income in the consolidated statements of comprehensive income. Under repurchase agreements, the Group receives cash from counterparties and provides securities as collateral. These agreements are carried at amounts at which the securities will subsequently be repurchased, and the interest expense incurred by the Group is recorded as interest expenses in the consolidated statements of comprehensive income. |
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Loans and advances | Loans and advances Loans and advances include margin loans, IPO loans extended to clients and other advances, collateralized by securities and are carried at the amortized cost, net of an allowance for credit losses. Revenues earned from the loans and advances are included in interest income. Margin loans are extended to clients on a demand basis and are not committed facilities. Securities owned by the customers, which are not recorded in the consolidated balance sheets, are held as collateral for amounts due on the margin loans. IPO loans for subscription of new shares are normally settled within one week from the drawdown date. Once IPO stocks are allotted, the Group requires clients to repay the IPO loans. Force liquidation action would be taken if the clients fail to settle their shortfall after the IPO allotment result is announced. Other advances mainly consist of bridge loans to enterprises which pledged unlisted or listed shares they hold as collateral. Loans and advances are initially recorded net of directly attributable transaction costs and are measured at subsequent reporting dates at amortized cost. Finance charges, premiums payable on settlement or redemption and direct costs are accounted for on an accrual basis to the surplus or deficit using the effective interest method and are added to the carrying amount of the instrument to the extent that they are not settled in the period in which they arise. The balances will be written off to the extent that there is no realistic prospect of recovery. This is generally the case when the Group determines that the debtor does not have assets or sources of income that could generate sufficient cash flows to repay the amounts subject to the write-off. |
Loans and advances Loans and advances include margin loans, IPO loans extended to clients and other advances, collateralized by securities and are carried at the amortized cost, net of an allowance for credit losses. Revenues earned from the loans and advances are included in interest income. Margin loans are extended to clients on a demand basis and are not committed facilities. Securities owned by the customers, which are not recorded in the consolidated balance sheets, are held as collateral for amounts due on the margin loans. IPO loans for subscription of new shares are normally settled within one week from the drawdown date. Once IPO stocks are allotted, the Group requires clients to repay the IPO loans. Force liquidation action would be taken if the clients fail to settle their shortfall after the IPO allotment result is announced. Other advances mainly consist of bridge loans to enterprises which pledged unlisted or listed shares they hold as collateral. Loans and advances are initially recorded net of directly attributable transaction costs and are measured at subsequent reporting dates at amortized cost. Finance charges, premiums payable on settlement or redemption and direct costs are accounted for on an accrual basis to the surplus or deficit using the effective interest method and are added to the carrying amount of the instrument to the extent that they are not settled in the period in which they arise. The balances will be written off to the extent that there is no realistic prospect of recovery. This is generally the case when the Group determines that the debtor does not have assets or sources of income that could generate sufficient cash flows to repay the amounts subject to the write-off. |
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Trading Receivables from and Payables to Clients | Trading Receivables from and Payables to Clients Trading receivables from clients include amounts due on brokerage transactions on a trade-date basis. Trading payables to clients represent the closing cash balance to the customers, which mainly include cash deposits and amounts due on brokerage transactions on a trade date basis. |
Trading Receivables from and Payables to Clients Trading receivables from clients include amounts due on brokerage transactions on a trade-date basis. Trading payables to clients represent the closing cash balance to the customers, which mainly include cash deposits and amounts due on brokerage transactions on a trade date basis. |
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Receivables from and Payables to Brokers, Clearing Organizations and Fund Management Companies and Fund Distributors | Receivables from and Payables to Brokers, Clearing Organizations and Fund Management Companies and Fund Distributors Receivables from and payables to brokers, clearing organizations and fund management companies and fund distributors include receivables and payables from unsettled trades on a trade-date basis, including amounts receivable for securities, derivatives or funds trades not delivered by the Group to the purchaser by the settlement date and cash deposits, and amounts payable for securities, derivatives or funds trades not received by the Group from a seller by the settlement date. Clearing settlement fund deposited in the clearing organizations for the clearing purpose is recognized in receivables from clearing organizations. The Group borrowed margin loans from executing brokers, with the benchmark interest rate plus premium differentiated depending on the amount borrowed, and immediately lent to margin financing clients. Margin loans borrowed is recognized in the payables to brokers. The Group’s policy is to net the receivables from and payables to clearing organizations according to ASC Topic 210-20, when all of the following conditions are met:
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Receivables from and Payables to Brokers, Clearing Organizations and Fund Management Companies and Fund Distributors Receivables from and payables to brokers, clearing organizations and fund management companies and fund distributors include receivables and payables from unsettled trades on a trade-date basis, including amounts receivable for securities, derivatives or funds trades not delivered by the Group to the purchaser by the settlement date and cash deposits, and amounts payable for securities, derivatives or funds trades not received by the Group from a seller by the settlement date. Clearing settlement fund deposited in the clearing organizations for the clearing purpose is recognized in receivables from clearing organizations. The Group borrowed margin loans from executing brokers, with the benchmark interest rate plus premium differentiated depending on the amount borrowed, and immediately lent to margin financing clients. Margin loans borrowed is recognized in the payables to brokers. The Group’s policy is to net the receivables from and payables to clearing organizations according to ASC Topic 210-20, when all of the following conditions are met:
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Interest Receivable and Payable | Interest Receivable and Payable Interest receivable which is included in receivables is calculated based on the contractual interest rate of bank deposit, loans and advances, securities loaned and receivables on an accrual basis, and is recorded as interest income as earned. Interest payable which is included in payables is calculated based on the contractual interest rates of payables, borrowings, securities borrowed and securities sold under agreements to repurchase on an accrual basis, and is recorded as interest expense when incurred. |
Interest Receivable and Payable Interest receivable which is included in receivables is calculated based on the contractual interest rate of bank deposit, loans and advances, securities loaned and receivables on an accrual basis, and is recorded as interest income as earned. Interest payable which is included in payables is calculated based on the contractual interest rates of payables, borrowings, securities borrowed and securities sold under agreements to repurchase on an accrual basis, and is recorded as interest expense when incurred. |
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Securities Borrowed and Securities Loaned | Securities Borrowed and Securities Loaned Securities borrowed transactions require the Group to provide counterparties with collateral, which may be in the form of cash, or other securities. With respect to securities loaned, the Group receives collateral, which may be in the form of cash or other securities in an amount generally in excess of the fair value of the securities loaned. The Group monitors the market value of securities borrowed and loaned on a daily basis, with additional collateral obtained or refunded as permitted contractually. Securities borrowed and securities loaned are recorded at the amount of the cash collateral advanced or received.Receivables and payables related to securities borrowed and securities loaned are included at receivables from and payables to brokers or clients in the consolidated balance sheets. Securities lending fees received and securities borrowing fees paid by the Group are included in interest income and interest expense, respectively, in the consolidated statements of comprehensive income. |
Securities Borrowed and Securities Loaned Securities borrowed transactions require the Group to provide counterparties with collateral, which may be in the form of cash, or other securities. With respect to securities loaned, the Group receives collateral, which may be in the form of cash or other securities in an amount generally in excess of the fair value of the securities loaned. The Group monitors the market value of securities borrowed and loaned on a daily basis, with additional collateral obtained or refunded as permitted contractually. Securities borrowed and securities loaned are recorded at the amount of the cash collateral advanced or received. Receivables and payables related to securities borrowed and securities loaned are included at receivables from and payables to brokers or clients in the consolidated balance sheets. Securities lending fees received and securities borrowing fees paid by the Group are included in interest income and interest expense, respectively, in the consolidated statements of comprehensive income. |
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Leases | Leases In an operating lease, a lessee obtains control of only the use of the underlying asset, but not the underlying asset itself. An operating lease is recognized as a right-of-use asset with a corresponding liability at the date which the leased asset is available for use by the Group. The Group’s operating leases contain both lease components and non-lease components. Non-lease components are distinct elements of a contract that are not related to securing the use of the underlying assets, such as common area maintenance and other management costs. The Company makes an accounting policy election not to separate non-lease components to measure the lease liability and lease asset. The lease liability is initially measured at the present value of the future lease payments over the lease term. The lease terms may include options to extend or terminate the lease when it is reasonably certain that the Group will exercise that option. The lease payments are discounted using the rate implicit in the lease or, if not readily determinable, the Group’s secured incremental borrowing rate, which is based on an internally developed yield curve using interest rates of debt issued with a similar risk profile as the Group and a duration similar to the lease term. An operating lease right-of-use asset is initially measured at the value of the lease liability minus any lease incentives and initial direct costs incurred plus any prepaid rent. After commencement of the operating lease, the Group recognizes lease expenses on a straight-line basis over the lease term. The subsequent measurement of the lease liability is based on the present value of the remaining lease payments using the discount rate determined at lease commencement. The right-of-use asset is subsequently measured at cost less accumulated amortization and any impairment provision. The amortization of the right-of-use asset represents the difference between the straight-line lease expense and the accretion of interest on the lease liability each period. The interest amount is used to accrete the lease liability and to amortize the right-of-use asset. There is no amount recorded as interest expense. All of the Group’s leases are classified as operating leases and primarily consist of real estate leases for corporate offices, data centers, and other facilities. As of December 31, 2021 and June 30, 2022, the weighted-average remaining lease term on these leases is approximately three years and three years, respectively, and the weighted-average discount rate used to measure the lease liabilities was approximately 4.71% and 4.69%, respectively. For the six months ended June 30, 2021 and 2022, right-of-use assets obtained under operating leases was HK$83,265 thousand and HK$7,642 thousand, respectively. The Group’s lease agreements do not contain any residual value guarantees, restrictions or covenants. |
Leases In an operating lease, a lessee obtains control of only the use of the underlying asset, but not the underlying asset itself. An operating lease is recognized as a right-of-use asset with a corresponding liability at the date which the leased asset is available for use by the Group. The Group’s operating leases contain both lease components and non-lease components. Non-lease components are distinct elements of a contract that are not related to securing the use of the underlying assets, such as common area maintenance and other management costs. The Company makes an accounting policy election not to separate non-lease components to measure the lease liability and lease asset. The lease liability is initially measured at the present value of the future lease payments over the lease term. The lease terms may include options to extend or terminate the lease when it is reasonably certain that the Group will exercise that option. The lease payments are discounted using the rate implicit in the lease or, if not readily determinable, the Group’s secured incremental borrowing rate, which is based on an internally developed yield curve using interest rates of debt issued with a similar risk profile as the Group and a duration similar to the lease term. An operating lease right-of-use asset is initially measured at the value of the lease liability minus any lease incentives and initial direct costs incurred plus any prepaid rent. After commencement of the operating lease, the Group recognizes lease expenses on a straight-line basis over the lease term. The subsequent measurement of the lease liability is based on the present value of the remaining lease payments using the discount rate determined at lease commencement. The right-of-use asset is subsequently measured at cost less accumulated amortization and any impairment provision. The amortization of the right-of-use asset represents the difference between the straight-line lease expense and the accretion of interest on the lease liability each period. The interest amount is used to accrete the lease liability and to amortize the right-of-use asset. There is no amount recorded as interest expense. All of the Group’s leases are classified as operating leases and primarily consist of real estate leases for corporate offices, data centers, and other facilities. As of December 31, 2021 and September 30, 2022, the weighted-average remaining lease term on these leases is approximately three years and three years, respectively, and the weighted-average discount rate used to measure the lease liabilities was approximately 4.71% and 4.65%, respectively. For the nine months ended September 30, 2021 and 2022, right-of-use assets obtained under operating leases was HK$83,265 thousand and HK$44,793 thousand, respectively. The Group’s lease agreements do not contain any residual value guarantees, restrictions or covenants. |
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Refundable Deposit | Refundable Deposit Refundable deposit is included in other assets in the consolidated balance sheets. As a clearing member firm of securities and derivatives clearing organizations in Hong Kong, Singapore and the U.S., the Group is also exposed to clearing member credit risk. These clearing organizations require member firms to deposit cash to a clearing fund. If a clearing member defaults in its obligations to the clearing organizations in an amount larger than its own margin and clearing fund deposits, the shortfall is absorbed pro rata from the deposits of the other clearing members. Many clearing organizations of which the Group is member have the authority to assess their members for additional funds if the clearing fund is depleted. A large clearing member default could result in a substantial cost if the Group is required to pay such additional funds. |
Refundable Deposit Refundable deposit is included in other assets in the consolidated balance sheets. As a clearing member firm of securities and derivatives clearing organizations in Hong Kong, Singapore and the U.S., the Group is also exposed to clearing member credit risk. These clearing organizations require member firms to deposit cash to a clearing fund. If a clearing member defaults in its obligations to the clearing organizations in an amount larger than its own margin and clearing fund deposits, the shortfall is absorbed pro rata from the deposits of the other clearing members. Many clearing organizations of which the Group is member have the authority to assess their members for additional funds if the clearing fund is depleted. A large clearing member default could result in a substantial cost if the Group is required to pay such additional funds. |
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Property and Equipment, net | Property and Equipment, net Property and equipment, which are included in other assets in the consolidated balance sheets are stated at historical cost less accumulated depreciation and impairment, if any. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. Residual rate is determined based on the economic value of the property and equipment at the end of the estimated useful lives as a percentage of the original cost.
Expenditures for maintenance and repairs are expensed as incurred. |
Property and Equipment, net Property and equipment, which are included in other assets in the consolidated balance sheets are stated at historical cost less accumulated depreciation and impairment, if any. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. Residual rate is determined based on the economic value of the property and equipment at the end of the estimated useful lives as a percentage of the original cost.
Expenditures for maintenance and repairs are expensed as incurred. |
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Intangible Assets | Intangible Assets Intangible assets which are included in other assets in the consolidated balance sheets mainly consist of computer software, licenses and other intangible assets. Finite-lived intangible assets are carried at historical cost less accumulated amortization and accumulated impairment losses, if any. Amortization of finite-lived intangible assets is calculated using the straight-line method to allocate costs over the estimated useful lives. Pursuant to topic ASC 350 Intangibles—Goodwill and Other, the useful life of an intangible asset to an entity is the period over which the asset is expected to contribute directly or indirectly to the future cash flows of that entity. If an income approach is used to measure the fair value of the license, in determining the useful life of the intangible asset for amortization purposes, the period of expected cash flows used to measure the fair value of the license should be considered. The following is a summary of estimated useful lives:
The other licenses recognised as infinite-lived intangible assets consist of an insurance broker license and a financial services license. The Group obtained an insurance broker license through acquiring a member of the Hong Kong Professional Insurance Brokers Association. The Group obtained some financial securities licenses via acquisition of subsidiaries. Such intangible assets were recognised as indefinite-lived as the cash flows were expected to continue indefinitely on the brokerage and financial service business in above regions. The Group had held a futures trading right as a clearing member firm of HKEx in order to trade futures through the trading facilities of the Stock Exchange, and has recognized it as intangible assets. As trading right has an indefinite useful life and have no foreseeable limit to the period over which the Group can use to generate net cash flows, it will not be amortised until their useful lives are determined to be finite. The aforementioned indefinite-lived intangible assets are carried at cost less accumulated impairment losses. The Group evaluates the remaining useful life of an indefinite-lived intangible asset that is not being amortized each reporting period to determine whether events and circumstances continue to support an indefinite useful lives. The Group will not amortize the indefinite-lived intangible assets until their useful lives are determined to be finite. An intangible asset that is not subject to amortization will be tested for impairment annually and more frequently if events or changes in circumstances indicate that it is more likely than not that the asset is impaired. |
Intangible Assets Intangible assets which are included in other assets in the consolidated balance sheets mainly consist of computer software, licenses and other intangible assets. Finite-lived intangible assets are carried at historical cost less accumulated amortization and accumulated impairment losses, if any. Amortization of finite-lived intangible assets is calculated using the straight-line method to allocate costs over the estimated useful lives. Pursuant to topic ASC 350 Intangibles—Goodwill and Other, the useful life of an intangible asset to an entity is the period over which the asset is expected to contribute directly or indirectly to the future cash flows of that entity. If an income approach is used to measure the fair value of the license, in determining the useful life of the intangible asset for amortization purposes, the period of expected cash flows used to measure the fair value of the license should be considered. The following is a summary of estimated useful lives:
The other licenses recognised as infinite-lived intangible assets consist of an insurance broker license and a financial services license. The Group obtained an insurance broker license through acquiring a member of the Hong Kong Professional Insurance Brokers Association. The Group obtained some financial securities licenses via acquisition of subsidiaries. Such intangible assets were recognised as indefinite-lived as the cash flows were expected to continue indefinitely on the brokerage and financial service business in above regions. The Group had held a futures trading right as a clearing member firm of HKEx in order to trade futures through the trading facilities of the Stock Exchange, and has recognized it as intangible assets. As trading right has an indefinite useful life and have no foreseeable limit to the period over which the Group can use to generate net cash flows, it will not be amortised until their useful lives are determined to be finite. 2. SIGNIFICANT ACCOUNTING POLICIES (Continued) The aforementioned indefinite-lived intangible assets are carried at cost less accumulated impairment losses. The Group evaluates the remaining useful life of an indefinite-lived intangible asset that is not being amortized each reporting period to determine whether events and circumstances continue to support an indefinite useful lives. The Group will not amortize the indefinite-lived intangible assets until their useful lives are determined to be finite. An intangible asset that is not subject to amortization will be tested for impairment annually and more frequently if events or changes in circumstances indicate that it is more likely than not that the asset is impaired. |
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Long-term investments | Long-term investments 1)Equity method investments The Group’s long-term investments primarily consist of equity method investments and equity investments without readily determinable fair values. In accordance with ASC 323 Investment—Equity Method and Joint Ventures, the Group accounts for equity method investments over which the Group has significant influence but does not own a majority of the equity interest or otherwise controls and the investments are either common stock or in substance common stock using the equity method. For the investments in limited partnerships, the equity method of accounting for investments is generally appropriate for accounting by limited partners. According to ASC 323-30-S99-1, the investments in all limited partnerships should be accounted for pursuant to paragraph 970-323-25-6. That guidance requires the use of the equity method unless the investor’s interest “is so minor that the limited partner may have virtually no influence over partnership operating and financial policies.” Investments of more than 3 to 5 percent are generally viewed to be more than minor. The Group’s share of the investee’s profit and loss is recognized in the consolidated statements of comprehensive income of the period. The carrying amount of equity method investments is tested for impairment whenever there is an indication that the carrying amount may be impaired in accordance with the policy described in “Impairment of long-lived assets”. 2)Equity investments without readily determinable fair values In accordance with ASC 321 Investment—Equity Securities, for those equity investments without readily determinable fair values, the Group elects to record these investments at cost, less impairment, and plus or minus subsequent adjustments for observable price changes. Under this measurement alternative, changes in the carrying value of the equity investment are required to be made whenever there are observable price changes in orderly transactions for the identical or similar investment of the same issuer. Pursuant to ASC 321, for those equity investments that the Group elects to use the measurement alternative, the Group makes a qualitative assessment of whether the investment is impaired at each reporting date. If a qualitative assessment indicates that the investment is impaired, the Group estimates the investment’s fair value in accordance with the principles of ASC 820. If the fair value is less than the investment’s carrying value, the Group recognizes an impairment loss equal to the difference between the carrying value and fair value. |
Long-term investments 1)Equity method investments The Group’s long-term investments primarily consist of equity method investments and equity investments without readily determinable fair values. In accordance with ASC 323 Investment—Equity Method and Joint Ventures, the Group accounts for equity method investments over which the Group has significant influence but does not own a majority of the equity interest or otherwise controls and the investments are either common stock or in substance common stock using the equity method. For the investments in limited partnerships, the equity method of accounting for investments is generally appropriate for accounting by limited partners, According to ASC 323-30-S99-1, the investments in all limited partnerships should be accounted for pursuant to paragraph 970-323-25-6. That guidance requires the use of the equity method unless the investor’s interest “is so minor that the limited partner may have virtually no influence over partnership operating and financial policies.” Investments of more than 3 to 5 percent are generally viewed to be more than minor. The Group’s share of the investee’s profit and loss is recognized in the consolidated statements of comprehensive income of the period. The carrying amount of equity method investments is tested for impairment whenever there is an indication that the carrying amount may be impaired in accordance with the policy described in “Impairment of long-lived assets”. 2)Equity investments without readily determinable fair values In accordance with ASC 321 Investment—Equity Securities, for those equity investments without readily determinable fair values, the Group elects to record these investments at cost, less impairment, and plus or minus subsequent adjustments for observable price changes. Under this measurement alternative, changes in the carrying value of the equity investment are required to be made whenever there are observable price changes in orderly transactions for the identical or similar investment of the same issuer. Pursuant to ASC 321, for those equity investments that the Group elects to use the measurement alternative, the Group makes a qualitative assessment of whether the investment is impaired at each reporting date. If a qualitative assessment indicates that the investment is impaired, the Group estimates the investment’s fair value in accordance with the principles of ASC 820. If the fair value is less than the investment’s carrying value, the Group recognizes an impairment loss equal to the difference between the carrying value and fair value. |
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Impairment of Long-lived Assets | Impairment of Long-lived Assets Long-lived assets are evaluated for impairment whenever events or changes in circumstances (such as a significant adverse change to market conditions that will impact the future use of the assets) indicate that the carrying amount may not be fully recoverable or that the useful life is shorter than the Group had originally estimated. When these events occur, the Group evaluates the impairment by comparing carrying value of the assets to an estimate of future undiscounted cash flows expected to be generated from the use of the assets and their eventual disposition. If the sum of the expected future undiscounted cash flows is less than the carrying value of the assets, the Group recognizes an impairment loss based on the excess of the carrying value of the assets over the fair value of the assets. Impairment charge recognized for the six months ended June 30, 2021 and 2022 was nil and nil, respectively. |
Impairment of Long-lived Assets Long-lived assets are evaluated for impairment whenever events or changes in circumstances (such as a significant adverse change to market conditions that will impact the future use of the assets) indicate that the carrying amount may not be fully recoverable or that the useful life is shorter than the Group had originally estimated. When these events occur, the Group evaluates the impairment by comparing carrying value of the assets to an estimate of future undiscounted cash flows expected to be generated from the use of the assets and their eventual disposition. If the sum of the expected future undiscounted cash flows is less than the carrying value of the assets, the Group recognizes an impairment loss based on the excess of the carrying value of the assets over the fair value of the assets. Impairment charge recognized for the nine months ended September 30, 2021 and 2022 was nil and nil, respectively. |
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Treasury stock | Treasury stock The Group accounted for those shares repurchased as treasury stock at cost of purchase, Treasury stock, and is shown separately in the shareholders' equity as the Group has not yet decided on the ultimate disposition of those shares acquired. When the Group decides to cancel the treasury stock, the difference between the original issuance price and the repurchase price is debited into additional paid-in capital. Refer to Note 11 for details. |
Treasury stock The Group accounted for those shares repurchased as treasury stock at cost of purchase, Treasury stock, and is shown separately in the shareholders’ equity as the Group has not yet decided on the ultimate disposition of those shares acquired. When the Group decides to cancel the treasury stock, the difference between the original issuance price and the repurchase price is debited into additional paid-in capital. Refer to Note 11 for details. |
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Fair Value Measurements | Fair Value Measurements Accounting guidance defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Group considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants would use when pricing the asset or liability. Accounting guidance establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Accounting guidance establishes three levels of inputs that may be used to measure fair value: Level 1 — Valuation techniques in which all significant inputs are unadjusted quoted prices from active markets for assets or liabilities that are identical to the assets or liabilities being measured. Level 2 — Valuation techniques in which significant inputs include quoted prices from active markets for assets or liabilities that are similar to the assets or liabilities being measured and/or quoted prices for assets or liabilities that are identical or similar to the assets or liabilities being measured from markets that are not active. Also, model-derived valuations in which all significant inputs and significant value drivers are observable in active markets are Level 2 valuation techniques. Level 3 — Valuation techniques in which one or more significant inputs or significant value drivers are unobservable. Unobservable inputs are valuation technique inputs that reflect the Group’s own assumptions about the assumptions that market participants would use in pricing an asset or liability. When available, the Group uses quoted market prices to determine the fair value of an asset or liability. If quoted market prices are not available, the Group will measure fair value using valuation techniques that use, when possible, current market-based or independently sourced market parameters, such as interest rates and currency rates. The carrying amount of cash and cash equivalents, cash held on behalf of clients, restricted cash, receivables from and payables to clients, brokers, clearing organizations and fund management companies and fund distributors, accrued interest receivable, accrued interest payable, amounts due to related parties, other financial assets and liabilities approximates fair value because of their short-term nature. Term deposit, loans and advances, borrowings, securities purchased under agreements to resell, securities sold under agreements to repurchase and operating lease liabilities are carried at amortized cost. The carrying amount of term deposit, loans and advances, borrowings and operating lease liabilities approximate their respective fair value as the interest rates applied reflect the current quoted market yield for comparable financial instruments. Short-term investments are measured at fair value. The Group’s non-financial assets, such as operating lease right-of-use assets, long-term investments, property and equipment and intangible assets, would be measured at fair value only if they were determined to be impaired. |
Fair Value Measurements Accounting guidance defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Group considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants would use when pricing the asset or liability. Accounting guidance establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Accounting guidance establishes three levels of inputs that may be used to measure fair value: Level 1 — Valuation techniques in which all significant inputs are unadjusted quoted prices from active markets for assets or liabilities that are identical to the assets or liabilities being measured. Level 2 — Valuation techniques in which significant inputs include quoted prices from active markets for assets or liabilities that are similar to the assets or liabilities being measured and/or quoted prices for assets or liabilities that are identical or similar to the assets or liabilities being measured from markets that are not active. Also, model-derived valuations in which all significant inputs and significant value drivers are observable in active markets are Level 2 valuation techniques. Level 3 — Valuation techniques in which one or more significant inputs or significant value drivers are unobservable. Unobservable inputs are valuation technique inputs that reflect the Group’s own assumptions about the assumptions that market participants would use in pricing an asset or liability. When available, the Group uses quoted market prices to determine the fair value of an asset or liability. If quoted market prices are not available, the Group will measure fair value using valuation techniques that use, when possible, current market-based or independently sourced market parameters, such as interest rates and currency rates. The carrying amount of cash and cash equivalents, cash held on behalf of clients, restricted cash, receivables from and payables to clients, brokers, clearing organizations and fund management companies and fund distributors, accrued interest receivable, accrued interest payable, amounts due to related parties, other financial assets and liabilities approximates fair value because of their short-term nature. Term deposit, loans and advances, borrowings, securities purchased under agreements to resell, securities sold under agreements to repurchase and operating lease liabilities are carried at amortized cost. The carrying amount of term deposit, loans and advances, borrowings and operating lease liabilities approximate their respective fair value as the interest rates applied reflect the current quoted market yield for comparable financial instruments. Short-term investments are measured at fair value. The Group’s non-financial assets, such as operating lease right-of-use assets, long-term investments, property and equipment and intangible assets, would be measured at fair value only if they were determined to be impaired. |
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Revenue Recognition | Revenue Recognition
Brokerage commission income earned for executing transactions is accrued on a trade-date basis. Handling charge income arise from the services such as clearing and settlement services, subscription and dividend collection handling services, etc., are accrued on a trade-date basis. Brokerage commission and handling charge income are recognised at a point in time when the service has been passed to the customer.
The Group earns interest income primarily in connection with its margin financing and securities lending services, IPO financing, bridge loan and deposits with banks, which are recorded on an accrual basis and are included in interest income in the consolidated statements of comprehensive income. Interest income is recognized as it is accrued over time using the effective interest method.
Other income consists of enterprise public relations service charge income provided to corporate clients, underwriting fee income, IPO subscription service charge income, currency exchange service income from clients, income from market data service and funds distribution service income from fund management companies, etc. Enterprise public relations service charge income is charged to corporate clients by providing platform to post their detailed stock information and latest news in Futubull app, as well as providing a lively, interactive community among their potential investors to exchange investment views, share trading experience and socialize with each other. Unearned enterprise public relations service income of which the Group had received the consideration is recorded as contract liabilities (deferred revenue). Underwriting fee income is generated from investment banking business primarily by providing equity sub-underwriting to corporate issuers. IPO subscription service charge income is derived from provision of new share subscription services in relation to IPOs in the Hong Kong capital market. Currency exchange service income is charged to the Group’s paying clients for providing currency exchange service. Market information and data income is charged to Futubull and Moomoo app users for market data service. Funds distribution service income is charged to fund management companies for providing fund products distribution service to Futu’s individual clients.The Group, as an intermediary would receive subscription fees from fund management companies as agreed in the service contracts. For enterprise public relations service charge income, funds distribution service income, market information and data income and ESOP management service income, the service revenues are recognized ratably over the term of the service contracts. For IPO subscription service charge income, underwriting fee income and currency exchange service income, the Group recognizes the revenues upon the time when the services are rendered to customers. |
Revenue Recognition
Brokerage commission income earned for executing transactions is accrued on a trade-date basis. 2. SIGNIFICANT ACCOUNTING POLICIES (Continued) Revenue Recognition (Continued) Handling charge income arise from the services such as clearing and settlement services, subscription and dividend collection handling services, etc., are accrued on a trade-date basis. Brokerage commission and handling charge income are recognised at a point in time when the service has been passed to the customer.
The Group earns interest income primarily in connection with its margin financing and securities lending services, IPO financing, bridge loan and deposits with banks, which are recorded on an accrual basis and are included in interest income in the consolidated statements of comprehensive income. Interest income is recognized as it is accrued over time using the effective interest method.
Other income consists of enterprise public relations service charge income provided to corporate clients, underwriting fee income, IPO subscription service charge income, currency exchange service income from clients, income from market data service and funds distribution service income from fund management companies, etc. Enterprise public relations service charge income is charged to corporate clients by providing platform to post their detailed stock information and latest news in Futubull app, as well as providing a lively, interactive community among their potential investors to exchange investment views, share trading experience and socialize with each other. Unearned enterprise public relations service income of which the Group had received the consideration is recorded as contract liabilities (deferred revenue). Underwriting fee income is generated from investment banking business primarily by providing equity sub-underwriting to corporate issuers. IPO subscription service charge income is derived from provision of new share subscription services in relation to IPOs in the Hong Kong capital market. Currency exchange service income is charged to the Group’s paying clients for providing currency exchange service. Market information and data income is charged to Futubull and Moomoo app users for market data service. Funds distribution service income is charged to fund management companies for providing fund products distribution service to Futu’s individual clients. The Group, as an intermediary would receive subscription fees from fund management companies as agreed in the service contracts. For enterprise public relations service charge income, funds distribution service income, market information and data income and ESOP management service income, the service revenues are recognized ratably over the term of the service contracts. For IPO subscription service charge income, underwriting fee income and currency exchange service income, the Group recognizes the revenues upon the time when the services are rendered to customers. |
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Customer Loyalty Program | Customer Loyalty Program The Group operates a customer loyalty program to its customers that offer various incentives in the form of incentive points and coupons for redemption of free or discounted goods or services. For the incentives generated from current sales transaction, the Group defers a portion of commission income with corresponding liability reflected as contract liability attributable to the incentives. The contract liability is determined by management based on the expected usage of the incentive points and coupons, and their estimated relative standalone selling price based on the related goods and services. Significant judgment was made by management in determining the expected usage and estimated relative standalone selling price of the incentive points and coupons, derived from historical trading volume, commission rates and redemption patterns, and an evaluation as to whether historical activities are representative of the expected future activities. For the incentives offered for future sales transaction, the Group nets a portion of brokerage commission income attributable to the incentives when points or coupons are actually redeemed. For the incentives not offered for future sales transaction, the Group considers them as a payment of other distinct goods that would be granted to clients. Such incentives are accounted for as selling and marketing expense with corresponding liability reflected as other liability in the consolidated balance sheet. The table below presents the deferred or netted brokerage commission income related to the customer loyalty program for the six months ended June 30, 2021 and 2022.
As of December 31, 2021 and June 30, 2022, contract liabilities recorded related to the customer loyalty program were HK$8,968 thousand and HK$7,143 thousand, respectively. The Group expects to recognize the revenue when points and coupons are actually redeemed. Historically, the revenue was usually recognized within 1-3 years from the time the contract liability was first recognized. |
Customer Loyalty Program The Group operates a customer loyalty program to its customers that offer various incentives in the form of incentive points and coupons for redemption of free or discounted goods or services. For the incentives generated from current sales transaction, the Group defers a portion of commission income with corresponding liability reflected as contract liability attributable to the incentives. The contract liability is determined by management based on the expected usage of the incentive points and coupons, and their estimated relative standalone selling price based on the related goods and services. Significant judgment was made by management in determining the expected usage and estimated relative standalone selling price of the incentive points and coupons, derived from historical trading volume, commission rates and redemption patterns, and an evaluation as to whether historical activities are representative of the expected future activities. For the incentives offered for future sales transaction, the Group nets a portion of brokerage commission income attributable to the incentives when points or coupons are actually redeemed. For the incentives not offered for future sales transaction, the Group considers them as a payment of other distinct goods that would be granted to clients. Such incentives are accounted for as selling and marketing expense with corresponding liability reflected as other liability in the consolidated balance sheet. The table below presents the deferred or netted brokerage commission income related to the customer loyalty program for the nine months ended September 30, 2021 and 2022.
As of December 31, 2021 and September 30, 2022, contract liabilities recorded related to the customer loyalty program were HK$8,968 thousand and HK $6,278 thousand, respectively. The Group expects to recognize the revenue when points and coupons are actually redeemed. Historically, the revenue was usually recognized within 1-3 years from the time the contract liability was first recognized. |
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Brokerage Commission and Handling Charge Expenses | Brokerage Commission and Handling Charge Expenses Commission expenses for executing and/or clearing transactions are accrued on a trade-date basis. The commission expenses are charged by executing brokers for securities and derivative trades in stock and derivative markets as the Group makes securities and derivative trades with these brokers as principal. Handling and settlement fee is charged by HKEx or executing brokers for clearing and settlement services, are accrued on a trade-date basis. IPO subscription service charge expenses are charged by commercial banks in connection with new share subscription services in relation to IPOs in the Hong Kong capital market. |
Brokerage Commission and Handling Charge Expenses Commission expenses for executing and/or clearing transactions are accrued on a trade-date basis. The commission expenses are charged by executing brokers for securities and derivative trades in the United States stock and derivative markets as the Group makes securities and derivative trades with these brokers as principal. Handling and settlement fee is charged by HKEx or executing brokers for clearing and settlement services, are accrued on a trade-date basis. IPO subscription service charge expenses are charged by commercial banks in connection with new share subscription services in relation to IPOs in the Hong Kong capital market. |
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Interest Expenses | Interest Expenses Interest expenses primarily consist of interest expenses of borrowings from banks, other licensed financial institutions and other parties paid to fund the Group’s margin financing business, securities borrowing business and IPO financing business. |
Interest Expenses Interest expenses primarily consist of interest expenses of borrowings from banks, other licensed financial institutions and other parties paid to fund the Group’s margin financing business, securities borrowing business and IPO financing business. |
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Processing and Servicing Costs | Processing and Servicing Costs Processing and servicing costs consist of market information and data fee, data transmission fee, cloud service fee, system cost, and SMS service fee, etc. The nature of market information and data fee mainly represents for information and data fee paid to stock exchanges like HKEx, NASDAQ, and New York stock exchange, etc. Data transmission fee is the fee of data transmission among cloud server and data centers located in Shenzhen, PRC and Hong Kong, etc. Cloud service fee and SMS service fee mainly represent the data storage and computing service and the SMS channel service fee. The nature of system cost mainly represents for the fee to access and use the systems paid to software providers. |
Processing and Servicing Costs Processing and servicing costs consist of market information and data fee, data transmission fee, cloud service fee, system cost, and SMS service fee, etc. The nature of market information and data fee mainly represents for information and data fee paid to stock exchanges like HKEx, NASDAQ, and New York stock exchange, etc. Data transmission fee is the fee of data transmission among cloud server and data centers located in Shenzhen, PRC and Hong Kong, etc. Cloud service fee and SMS service fee mainly represent the data storage and computing service and the SMS channel service fee. The nature of system cost mainly represents for the fee to access and use the systems paid to software providers. |
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Research and Development Expenses | Research and Development Expenses Research and development expenses consist of expenses related to developing transaction platform and website like Futubull app and other products, including payroll and welfare, rental expenses and other related expenses for personnel engaged in research and development activities. All research and development costs have been expensed as incurred as the costs qualifying for capitalization have been insignificant. |
Research and Development Expenses Research and development expenses consist of expenses related to developing transaction platform and website like Futubull app and other products, including payroll and welfare, rental expenses and other related expenses for personnel engaged in research and development activities. All research and development costs have been expensed as incurred as the costs qualifying for capitalization have been insignificant. |
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Selling and Marketing Expenses | Selling and Marketing Expenses Selling and marketing expenses consist primarily of advertising and promotion costs, payroll, rental and related expenses for personnel engaged in marketing and business development activities. Advertising and promotion costs are expensed as incurred and are included within selling and marketing expenses in the consolidated statements of comprehensive income. |
Selling and Marketing Expenses Selling and marketing expenses consist primarily of advertising and promotion costs, payroll, rental and related expenses for personnel engaged in marketing and business development activities. Advertising and promotion costs are expensed as incurred and are included within selling and marketing expenses in the consolidated statements of comprehensive income. |
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General and Administrative Expenses | General and Administrative Expenses General and administrative expenses consist of payroll, rental, related expenses for employees involved in general corporate functions, including finance, legal and human resources, costs associated with use of facilities and equipment, such as depreciation expenses, rental and other general corporate related expenses. |
General and Administrative Expenses General and administrative expenses consist of payroll, rental, related expenses for employees involved in general corporate functions, including finance, legal and human resources, costs associated with use of facilities and equipment, such as depreciation expenses, rental and other general corporate related expenses. |
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Others, net | Others, net Others, net, mainly consist of non-operating income and expenses, foreign currency gains or losses, expected credit loss expenses, gain or loss from investments and impairment from long-term investments and other non-current assets for all periods presented. |
Others, net Others, net, mainly consist of non-operating income and expenses, foreign currency gains or losses, expected credit loss expenses, gain or loss from investments and impairment from long-term investments and other non-current assets for all periods presented. |
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Foreign Currency Gains and Losses | Foreign Currency Gains and Losses Foreign currency transactions denominated in currencies other than the functional currency are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are remeasured at the applicable rates of exchange in effect at that date. Foreign currency gain or loss resulting from the settlement of such transactions and from remeasurement at period-end is recognized in “Others, net” in the consolidated statements of comprehensive income. |
Foreign Currency Gains and Losses Foreign currency transactions denominated in currencies other than the functional currency are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are remeasured at the applicable rates of exchange in effect at that date. Foreign currency gain or loss resulting from the settlement of such transactions and from remeasurement at period-end is recognized in “Others, net” in the consolidated statements of comprehensive income. |
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Share-Based Compensation | Share-Based Compensation The Company follows ASC 718 to determine whether a share option and a restricted share units should be classified and accounted for as a liability award or equity award. All share-based awards to employees and directors classified as equity awards, such as stock options and restricted share units, are measured at the grant date based on the fair value of the awards. Share-based compensation, net of estimated forfeitures, is recognized as expenses on a straight-line method over the requisite service period, which is the vesting period. Options granted generally vest over four or five years. The modification of the terms or conditions of the existing shared-based award is treated as an exchange of the original award for a new award. The incremental compensation expenses are equal to the excess of the fair value of the modified award immediately after the modification over the fair value of the original award immediately before the modification. For stock options already vested as of the modification date, the Group immediately recognized the incremental value as compensation expenses. For stock options still unvested as of the modification date, the incremental compensation expenses are recognized over the remaining service period of these stock options. The Company determined the fair value of the restricted share units with reference to the fair value of the underlying shares as of the grant date. The Company utilizes the binomial option pricing model to estimate the fair value of stock options granted, with the assistance of an independent valuation firm. Forfeitures are estimated at the time of grant and revised in subsequent periods if actual forfeitures differ from those estimates. The Group uses historical data to estimate pre-vesting options and records share-based compensation expenses only for those awards that are expected to vest. See Note 13 for further discussion on share-based compensation. |
Share-Based Compensation The Company follows ASC 718 to determine whether a share option and a restricted share units should be classified and accounted for as a liability award or equity award. All share-based awards to employees and directors classified as equity awards, such as stock options and restricted share units, are measured at the grant date based on the fair value of the awards. Share-based compensation, net of estimated forfeitures, is recognized as expenses on a straight-line method over the requisite service period, which is the vesting period. Options granted generally vest over four or five years. The modification of the terms or conditions of the existing shared-based award is treated as an exchange of the original award for a new award. The incremental compensation expenses are equal to the excess of the fair value of the modified award immediately after the modification over the fair value of the original award immediately before the modification. For stock options already vested as of the modification date, the Group immediately recognized the incremental value as compensation expenses. For stock options still unvested as of the modification date, the incremental compensation expenses are recognized over the remaining service period of these stock options. The Company determined the fair value of the restricted share units with reference to the fair value of the underlying shares as of the grant date. The Company utilizes the binomial option pricing model to estimate the fair value of stock options granted, with the assistance of an independent valuation firm. Forfeitures are estimated at the time of grant and revised in subsequent periods if actual forfeitures differ from those estimates. The Group uses historical data to estimate pre-vesting options and records share-based compensation expenses only for those awards that are expected to vest. See Note 13 for further discussion on share-based compensation. |
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Fair Value of Preferred Shares and Pre-IPO Ordinary Shares | Fair Value of Preferred Shares and Pre-IPO Ordinary Shares Shares of the Company, which did not have quoted market prices, were valued based on the income approach. The income approach involves applying the discounted cash flow analysis based on projected cash flow using the Group’s best estimate as of the valuation dates. Estimating future cash flow requires the Group to analyze projected revenue growth, gross margins, effective tax rates, capital expenditures and working capital requirements. In determining an appropriate discount rate, the Group considered the cost of equity and the rate of return expected by venture capitalists. The Group also applied a discount for lack of marketability given that the shares underlying the award were not publicly traded at the time of grant. Determination of estimated fair value of the Group requires complex and subjective judgments due to its limited financial and operating history, unique business risks and limited public information on companies in China similar to the Group. Option-pricing method was used to allocate enterprise value to preferred shares and pre-IPO ordinary shares. The method treats preferred shares and pre-IPO ordinary shares as call options on the enterprise’s value, with exercise prices based on the liquidation preference of the preferred shares. The strike prices of the “options” based on the characteristics of the Group’s capital structure, including number of shares of each class of pre-IPO ordinary shares, seniority levels, liquidation preferences, and conversion values for the preferred shares. The option-pricing method also involves making estimates of the anticipated timing of a potential liquidity event, such as a sale of the Group or an IPO, and estimates of the volatility of the Group’s equity securities. The anticipated timing is based on the plans of board of directors and management of the Group. Estimating the volatility of the share price of a privately held company is complex because there is no readily available market for the shares. Volatility is estimated based on annualized standard deviation of daily stock price return of comparable companies. |
Fair Value of Preferred Shares and Pre-IPO Ordinary Shares Shares of the Company, which did not have quoted market prices, were valued based on the income approach. The income approach involves applying the discounted cash flow analysis based on projected cash flow using the Group’s best estimate as of the valuation dates. Estimating future cash flow requires the Group to analyze projected revenue growth, gross margins, effective tax rates, capital expenditures and working capital requirements. In determining an appropriate discount rate, the Group considered the cost of equity and the rate of return expected by venture capitalists. The Group also applied a discount for lack of marketability given that the shares underlying the award were not publicly traded at the time of grant. Determination of estimated fair value of the Group requires complex and subjective judgments due to its limited financial and operating history, unique business risks and limited public information on companies in China similar to the Group. Option-pricing method was used to allocate enterprise value to preferred shares and pre-IPO ordinary shares. The method treats preferred shares and pre-IPO ordinary shares as call options on the enterprise’s value, with exercise prices based on the liquidation preference of the preferred shares. The strike prices of the “options” based on the characteristics of the Group’s capital structure, including number of shares of each class of pre-IPO ordinary shares, seniority levels, liquidation preferences, and conversion values for the preferred shares. The option-pricing method also involves making estimates of the anticipated timing of a potential liquidity event, such as a sale of the Group or an IPO, and estimates of the volatility of the Group’s equity securities. The anticipated timing is based on the plans of board of directors and management of the Group. Estimating the volatility of the share price of a privately held company is complex because there is no readily available market for the shares. Volatility is estimated based on annualized standard deviation of daily stock price return of comparable companies. |
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Taxation | Taxation
Current income taxes are provided on the basis of net income for financial reporting purposes, adjusted for income and expense items which are not assessable or deductible for income tax purposes, in accordance with the regulations of the relevant tax jurisdictions. Deferred income taxes are accounted for using an asset and liability method. Under this method, deferred income taxes are recognized for the tax consequences of temporary differences by applying enacted statutory rates applicable to future years to differences between the financial statement carrying amounts and the tax bases of existing assets and liabilities. The tax base of an asset or liability is the amount attributed to that asset or liability for tax purpose. The effect on deferred taxes of a change in tax rates is recognized in the consolidated statements of comprehensive income in the period of change. A valuation allowance is provided to reduce the amount of deferred tax assets if it is considered more likely than not that some portion of, or all of the deferred tax assets will not be realized.
The Group did not recognize any interest and penalties associated with uncertain tax positions for the six months ended June 30, 2021 and 2022, the Group continues to assess the uncertain tax positions in accordance with applicable income tax guidance and based on changes in facts and circumstances. |
Taxation
Current income taxes are provided on the basis of net income for financial reporting purposes, adjusted for income and expense items which are not assessable or deductible for income tax purposes, in accordance with the regulations of the relevant tax jurisdictions. Deferred income taxes are accounted for using an asset and liability method. Under this method, deferred income taxes are recognized for the tax consequences of temporary differences by applying enacted statutory rates applicable to future years to differences between the financial statement carrying amounts and the tax bases of existing assets and liabilities. The tax base of an asset or liability is the amount attributed to that asset or liability for tax purpose. The effect on deferred taxes of a change in tax rates is recognized in the consolidated statements of comprehensive income in the period of change. A valuation allowance is provided to reduce the amount of deferred tax assets if it is considered more likely than not that some portion of, or all of the deferred tax assets will not be realized.
The Group did not recognize any interest and penalties associated with uncertain tax positions for the nine months ended September 30, 2021 and 2022, the Group continues to assess the uncertain tax positions in accordance with applicable income tax guidance and based on changes in facts and circumstances. |
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Net income per share | Net income per share Basic net income per share is computed by dividing net income attributable to ordinary shareholder, considering the accretion of redemption feature and cumulative dividend related to the Company’s redeemable convertible preferred shares, and undistributed earnings allocated to redeemable convertible preferred shares by the weighted average number of ordinary shares outstanding during the period using the two-class method. Under the two-class method, net income is allocated between ordinary shares and other participating securities based on their participating rights. Net loss is not allocated to other participating securities if based on their contractual terms they are not obligated to share the losses. Diluted net income per share is calculated by dividing net income attributable to ordinary shareholder, as adjusted for the effect of dilutive ordinary equivalent shares, if any, by the weighted average number of ordinary and dilutive ordinary equivalent shares outstanding during the period. Ordinary equivalent shares consist of ordinary shares issuable upon the conversion of the redeemable convertible preferred shares, using the if-converted method, and shares issuable upon the exercise of share options and vesting of restricted share units using the treasury stock method. Ordinary equivalent shares are not included in the denominator of the diluted net income per share calculation when inclusion of such share would be anti-dilutive. |
Net income per share Basic net income per share is computed by dividing net income attributable to ordinary shareholder, considering the accretion of redemption feature and cumulative dividend related to the Company’s redeemable convertible preferred shares, and undistributed earnings allocated to redeemable convertible preferred shares by the weighted average number of ordinary shares outstanding during the period using the two-class method. Under the two-class method, net income is allocated between ordinary shares and other participating securities based on their participating rights. Net loss is not allocated to other participating securities if based on their contractual terms they are not obligated to share the losses. Diluted net income per share is calculated by dividing net income attributable to ordinary shareholder, as adjusted for the effect of dilutive ordinary equivalent shares, if any, by the weighted average number of ordinary and dilutive ordinary equivalent shares outstanding during the period. Ordinary equivalent shares consist of ordinary shares issuable upon the conversion of the redeemable convertible preferred shares, using the if-converted method, and shares issuable upon the exercise of share options and vesting of restricted share units using the treasury stock method. Ordinary equivalent shares are not included in the denominator of the diluted net income per share calculation when inclusion of such share would be anti-dilutive. |
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Segment Reporting | Segment Reporting Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker has been identified as the Chief Executive Officer who allocates resources to and assesses the performance of the operating segments of an entity. The Group’s reporting segments are decided based on its operating segments while taking full consideration of various factors such as products and services, geographic location and regulatory environment related to administration of the management. Operating segments meeting the same qualifications are allocated as one reporting segment, providing independent disclosures. The Group engages primarily in online brokerage services and margin financing services. The Group does not distinguish between markets or segments for the purpose of internal reports. The Group does not distinguish revenues, costs and expenses between segments in its internal reporting, and reports costs and expenses by nature as a whole. Hence, the Group has only one reportable segment. |
Segment Reporting Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker has been identified as the Chief Executive Officer who allocates resources to and assesses the performance of the operating segments of an entity. The Group’s reporting segments are decided based on its operating segments while taking full consideration of various factors such as products and services, geographic location and regulatory environment related to administration of the management. Operating segments meeting the same qualifications are allocated as one reporting segment, providing independent disclosures. The Group engages primarily in online brokerage services and margin financing services. The Group does not distinguish between markets or segments for the purpose of internal reports. The Group does not distinguish revenues, costs and expenses between segments in its internal reporting, and reports costs and expenses by nature as a whole. Hence, the Group has only one reportable segment. |
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Significant Risks and Uncertainties | Significant Risks and Uncertainties
Currency risk arises from the possibility that fluctuations in foreign exchange rates will impact the financial instruments. The Group is not exposed to significant transactional foreign currency risk since almost all of its transactions, assets and liability are denominated in Hong Kong dollars and U.S. dollars and Hong Kong dollars are pegged against U.S. dollars. The impact of foreign currency fluctuations in the Group’s earnings is included in “Others, net” in the consolidated statements of comprehensive income. At the same time, the Group is exposed to translational foreign currency risk since some of the Company’s major subsidiaries have RMB as their functional currency. Therefore, RMB depreciation against Hong Kong dollars could have a material adverse impact on the foreign currency translation adjustment in the consolidated statements of comprehensive income. The Group enters into currency futures contracts to manage currency exposure associated with anticipated receipts and disbursements occurring in a currency other than the functional currency of the entity. The overall impact of the currency risk of other foreign currency assets held by the Group other than U.S. dollars and Renminbi is not significant. As of December 31, 2021 and June 30, 2022, the Group had RMB-denominated net assets of HK$2,374.8 million and net assets of HK$2,378.5 million, respectively. We estimate that a 10% depreciation of RMB against the U.S. dollar based on the foreign exchange rate on December 31, 2021 and June 30, 2022, would result in a decrease of US$30.5 million and a decrease of US$30.3 million, respectively, in the Group’s pre-tax profit. We estimate that a 10% appreciation of RMB against the U.S. dollar based on the foreign exchange rate on December 31, 2021 and June 30, 2022 would result in an increase of US$30.5 million and an increase of US$30.3 million, respectively, in the Group’s pre-tax profit.
Cash held on behalf of clients are segregated and deposited in financial institutions as required by rules mandated by the Group’s primary regulators. These financial institutions are of sound credit ratings, therefore management believes that there is no significant credit risk related to cash held on behalf of clients. The Group’s securities and derivative trades activities are transacted on either a cash or margin basis. The Group’s credit risk is limited in that substantially all of the contracts entered into are settled directly at securities and derivatives clearing organizations. In margin transactions, the Group extends credit to the client, subject to various regulatory and internal margin requirements, collateralized by cash and securities in the client’s account. IPO loans are exposed to credit risk from clients who fails to repay the loans upon IPO stock allotment. The Group monitors the clients’ collateral level and has the right to dispose the newly allotted stocks once the stocks first start trading. Bridge loans to enterprise pledged by shares are exposed to credit risk from counterparties who fail to repay the loans, the Group monitors on the collateral level of bridge loans in real time, and has the right to dispose of the pledged shares once the collateral level falls under the minimal level required to get the loans repaid. Liabilities to other brokers and dealers related to unsettled transactions are recorded at the amount for which the securities were purchased, and are paid upon receipt of the securities from other brokers or dealers. Significant Risks and Uncertainties (Continued)
In connection with its clearing activities, the Group is obligated to settle transactions with brokers and other financial institutions even if its clients fail to meet their obligations to the Group. Clients are required to complete their transactions by the settlement date, generally two business days after the trade date. If clients do not fulfill their contractual obligations, the Group may incur losses. The Group has established procedures to reduce this risk by generally requiring that clients deposit sufficient cash and/or securities into their account prior to placing an order. For cash management purposes, the Group enters into short-term securities sold under agreements to repurchase transactions (“repos”) in addition to securities borrowing and lending arrangements, all of which may result in credit exposure in the event the counterparty to a transaction is unable to fulfill its contractual obligations. Repos are collateralized by securities with a market value in excess of the obligation under the contract. Similarly, securities lending agreements are collateralized by deposits of cash or securities. The Group attempts to minimize credit risk associated with these activities by monitoring collateral values on a daily basis and requiring additional collateral to be deposited with or returned to the Group as permitted under contractual provisions. Concentrations of Credit Risk The Group’s exposure to credit risk associated with its brokerage and other activities is measured on an individual counterparty basis, as well as by groups of counterparties that share similar attributes. There was no revenue from clients which individually represented greater than 10% of the total revenues for the six months ended June 30, 2021 and 2022, respectively. Concentrations of credit risk can be affected by changes in political, industry, or economic factors. To reduce the potential for risk concentration, credit limits are established and exposure is monitored in light of changing counterparty and market conditions. As of December 31, 2021 and June 30, 2022, the Group did not have any material concentrations of credit risk within or outside the ordinary course of business.
Fluctuations in market interest rates may negatively affect the Group’s financial condition and results of operations. The Group are exposed to floating interest rate risk on cash deposit and floating rate borrowings. We use net interest simulation modeling techniques to evaluate the effect that changes in interest rates might have on pre-tax profit or loss. The model includes all interest-sensitive assets and liabilities. The simulations involve assumptions that are inherently uncertain and, as a result, cannot precisely predict the impact that changes in interest rates will have on pre-tax profit or loss. Actual results may differ from simulated results due to differences in timing and frequency of rate changes, changes in market conditions and changes in management strategy that lead to changes in the mix of interest-sensitive assets and liabilities. The simulations assume that the asset and liability structure of the consolidated balance sheets would not be changed as a result of a simulated change in interest rates. The results of the simulations based on the Group’s financial position as of June 30, 2022 indicate that a gradual 1% (100 basis points) increase/decrease in interest rates over a 12-month period would have increased/decreased the Group’s profit before tax by approximately HK$346.8 million (US$44.3 million), depending largely on the extent and timing of possible changes in floating rates. |
Significant Risks and Uncertainties
Currency risk arises from the possibility that fluctuations in foreign exchange rates will impact the financial instruments. The Group is not exposed to significant transactional foreign currency risk since almost all of its transactions, assets and liability are denominated in Hong Kong dollars and U.S. dollars and Hong Kong dollars are pegged against U.S. dollars. The impact of foreign currency fluctuations in the Group’s earnings is included in “Others, net” in the consolidated statements of comprehensive income. At the same time, the Group is exposed to translational foreign currency risk since some of the Company’s major subsidiaries have RMB as their functional currency. Therefore, RMB depreciation against Hong Kong dollars could have a material adverse impact on the foreign currency translation adjustment in the consolidated statements of comprehensive income. The Group enters into currency futures contracts to manage currency exposure associated with anticipated receipts and disbursements occurring in a currency other than the functional currency of the entity. The overall impact of the currency risk of other foreign currency assets held by the Group other than U.S. dollars and Renminbi is not significant. As of December 31, 2021 and September 30, 2022, the Group had RMB-denominated net assets of HK$2,374.8 million and net assets of HK$1,894.9 million, respectively. We estimate that a 10% depreciation of RMB against the U.S. dollar based on the foreign exchange rate on December 31, 2021 and September 30, 2022, would result in a decrease of US$30.5 million and a decrease of US$24.1 million, respectively, in the Group’s pre-tax profit. We estimate that a 10% appreciation of RMB against the U.S. dollar based on the foreign exchange rate on December 31,2021 and September 30, 2022 would result in an increase of US$30.5 million and an increase of US$24.1 million, respectively, in the Group’s pre-tax profit.
Cash held on behalf of clients are segregated and deposited in financial institutions as required by rules mandated by the Group’s primary regulators. These financial institutions are of sound credit ratings, therefore management believes that there is no significant credit risk related to cash held on behalf of clients. The Group’s securities and derivative trades activities are transacted on either a cash or margin basis. The Group’s credit risk is limited in that substantially all of the contracts entered into are settled directly at securities and derivatives clearing organizations. In margin transactions, the Group extends credit to the client, subject to various regulatory and internal margin requirements, collateralized by cash and securities in the client’s account. IPO loans are exposed to credit risk from clients who fails to repay the loans upon IPO stock allotment. The Group monitors the clients’ collateral level and has the right to dispose the newly allotted stocks once the stocks first start trading. Bridge loans to enterprise pledged by shares are exposed to credit risk from counterparties who fail to repay the loans, the Group monitors on the collateral level of bridge loans in real time, and has the right to dispose of the pledged shares once the collateral level falls under the minimal level required to get the loans repaid. Liabilities to other brokers and dealers related to unsettled transactions are recorded at the amount for which the securities were purchased, and are paid upon receipt of the securities from other brokers or dealers. In connection with its clearing activities, the Group is obligated to settle transactions with brokers and other financial institutions even if its clients fail to meet their obligations to the Group. Clients are required to complete their transactions by the settlement date, generally two business days after the trade date. If clients do not fulfill their contractual obligations, the Group may incur losses. The Group has established procedures to reduce this risk by generally requiring that clients deposit sufficient cash and/or securities into their account prior to placing an order. Significant Risks and Uncertainties (Continued)
For cash management purposes, the Group enters into short-term securities sold under agreements to repurchase transactions (“repos”) in addition to securities borrowing and lending arrangements, all of which may result in credit exposure in the event the counterparty to a transaction is unable to fulfill its contractual obligations. Repos are collateralized by securities with a market value in excess of the obligation under the contract. Similarly, securities lending agreements are collateralized by deposits of cash or securities. The Group attempts to minimize credit risk associated with these activities by monitoring collateral values on a daily basis and requiring additional collateral to be deposited with or returned to the Group as permitted under contractual provisions. Concentrations of Credit Risk The Group’s exposure to credit risk associated with its brokerage and other activities is measured on an individual counterparty basis, as well as by groups of counterparties that share similar attributes. There was no revenue from clients which individually represented greater than 10% of the total revenues for the nine months ended September 30, 2021 and 2022, respectively. Concentrations of credit risk can be affected by changes in political, industry, or economic factors. To reduce the potential for risk concentration, credit limits are established and exposure is monitored in light of changing counterparty and market conditions. As of December 31, 2021 and September 30, 2022, the Group did not have any material concentrations of credit risk within or outside the ordinary course of business.
Fluctuations in market interest rates may negatively affect the Group’s financial condition and results of operations. The Group are exposed to floating interest rate risk on cash deposit and floating rate borrowings. We use net interest simulation modeling techniques to evaluate the effect that changes in interest rates might have on pre-tax profit or loss. The model includes all interest-sensitive assets and liabilities. The simulations involve assumptions that are inherently uncertain and, as a result, cannot precisely predict the impact that changes in interest rates will have on pre-tax profit or loss. Actual results may differ from simulated results due to differences in timing and frequency of rate changes, changes in market conditions and changes in management strategy that lead to changes in the mix of interest-sensitive assets and liabilities. The simulations assume that the asset and liability structure of the consolidated balance sheets would not be changed as a result of a simulated change in interest rates. The results of the simulations based on the Group’s financial position as of September 30, 2022 indicate that a gradual 1% (100 basis points) increase/decrease in interest rates over a 12-month period would have increased/decreased the Group’s profit before tax by approximately HK$309.6 million (US$39.6 million ), depending largely on the extent and timing of possible changes in floating rates. |
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Recent Accounting Pronouncements | Recent Accounting Pronouncements In June 2016, the FASB amended guidance related to impairment of financial instruments as part of ASU 2016-13 Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which is effective on January 1, 2020. The guidance replaces the incurred loss impairment methodology with an expected credit loss model for which the group is required to recognize an allowance based on its estimate of expected credit loss. In November 2018, FASB issued ASU No, 2018-19, Codification Improvements to Topic 326, further clarified the scope of the guidance in the amendments in ASU 2016-13. In May 2019, FASB issued ASU No.2019-05, Financial instrument—Credit Losses (Topic 326), Targeted Transition Relief, which provides an irrevocably fair value option to elect for eligible instruments. In November 2019, FASB issued ASU 2019-11 Codification Improvements to Topic 326, Financial Instruments-Credit Losses, which clarified and improved various aspects of ASU 2016-13. In March 2020, FASB issued ASU 2020-03, Codification Improvements to Financial Instruments, which improves and clarifies various financial instruments topics, including the current expected credit losses standard. As of January 1, 2020, the Group adopted ASC Topic 326 using the modified retrospective approach for all in-scope assets. The adoption of ASC Topic 326 has no impact on the Group’s retained earnings as of January 1, 2020. Results for reporting periods beginning after January 1, 2020 are presented under ASC Topic 326 while prior periods continue to be reported in accordance with previously applicable U.S. GAAP. In August 2018, the FASB issued ASU 2018-13, Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement. The amendments in this standard will remove, modify and add certain disclosures under ASC Topic 820, Fair Value Measurement, with the objective of improving disclosure effectiveness. ASU 2018-13 is effective for the Group’s fiscal year beginning January 1, 2020, with early adoption permitted. The update eliminates the requirement to disclose: (a) the amount and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy; (b) an entity’s policy for timing of transfers between levels; (c) and an entity’s valuation processes for Level 3 fair value measurements. The Group adopted ASU 2018-13 on January 1, 2020, and the adoption had no material impact on the Group’s consolidated financial statements. In December 2019, the FASB issued ASU 2019-12, Income taxes (Topic 740)-Simplifying the accounting for income taxes, which simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740, Income Taxes. The ASU will be effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. The Group adopted the ASU on January 1, 2021, which did not have a material impact on the consolidated financial statements. In March 2020, the FASB issued ASU 2020-04, Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional guidance for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting if certain criteria are met. The amendments in ASU 2020-04 provide optional expedients and exceptions for applying GAAP to contracts, hedging relationships and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. This guidance is effective immediately and the amendments may be applied prospectively through December 31, 2022. The adoption did not have a material accounting impact on the Group’s consolidated financial position or results of operations. |
Recent Accounting Pronouncements In June 2016, the FASB amended guidance related to impairment of financial instruments as part of ASU 2016-13 Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which is effective on January 1, 2020. The guidance replaces the incurred loss impairment methodology with an expected credit loss model for which the group is required to recognize an allowance based on its estimate of expected credit loss. In November 2018, FASB issued ASU No, 2018-19, Codification Improvements to Topic 326, further clarified the scope of the guidance in the amendments in ASU 2016-13. In May 2019, FASB issued ASU No.2019-05, Financial instrument—Credit Losses (Topic 326), Targeted Transition Relief, which provides an irrevocably fair value option to elect for eligible instruments. In November 2019, FASB issued ASU 2019-11 Codification Improvements to Topic 326, Financial Instruments-Credit Losses, which clarified and improved various aspects of ASU 2016-13. In March 2020, FASB issued ASU 2020-03, Codification Improvements to Financial Instruments, which improves and clarifies various financial instruments topics, including the current expected credit losses standard. As of January 1, 2020, the Group adopted ASC Topic 326 using the modified retrospective approach for all in-scope assets. The adoption of ASC Topic 326 has no impact on the Group’s retained earnings as of January 1, 2020. Results for reporting periods beginning after January 1, 2020 are presented under ASC Topic 326 while prior periods continue to be reported in accordance with previously applicable U.S. GAAP. In August 2018, the FASB issued ASU 2018-13, Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement. The amendments in this standard will remove, modify and add certain disclosures under ASC Topic 820, Fair Value Measurement, with the objective of improving disclosure effectiveness. ASU 2018-13 is effective for the Group’s fiscal year beginning January 1, 2020, with early adoption permitted. The update eliminates the requirement to disclose: (a) the amount and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy; (b) an entity’s policy for timing of transfers between levels; (c) and an entity’s valuation processes for Level 3 fair value measurements. The Group adopted ASU 2018-13 on January 1, 2020, and the adoption had no material impact on the Group’s consolidated financial statements. In December 2019, the FASB issued ASU 2019-12, Income taxes (Topic 740)-Simplifying the accounting for income taxes, which simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740, Income Taxes. The ASU will be effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. The Group adopted the ASU on January 1, 2021, which did not have a material impact on the consolidated financial statements. In March 2020, the FASB issued ASU 2020-04, Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional guidance for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting if certain criteria are met. The amendments in ASU 2020-04 provide optional expedients and exceptions for applying GAAP to contracts, hedging relationships and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. This guidance is effective immediately and the amendments may be applied prospectively through December 31, 2022. The adoption did not have a material accounting impact on the Group’s consolidated financial position or results of operations. |
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- Definition Disclosure of accounting policy for cash held on behalf of clients. No definition available.
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- Definition Disclosure of accounting policy for commission and handling charges. No definition available.
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- Definition Disclosure of accounting policy for comprehensive income and foreign currency translation. No definition available.
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- Definition Disclosure of accounting policy for customer loyalty program, No definition available.
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- Definition Disclosure of accounting policy for determining the fair value of preferred shares and ordinary shares. No definition available.
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- Definition Disclosure of accounting policy for interest receivable and payable. No definition available.
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- Definition Disclosure of accounting policy for Long-term investments. No definition available.
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- Definition Disclosure of accounting policy for others, net, mainly consist of non-operating income and expenses, foreign currency gains or losses, other impairment for all periods presented. No definition available.
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- Definition Disclosure of accounting policy for processing and servicing costs. No definition available.
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- Definition Disclosure of accounting policy for receivables from and payables to brokers, clearing organization and fund management companies and fund distributors. No definition available.
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- Definition Disclosure of accounting policy for refundable deposits. No definition available.
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- Definition Disclosure of accounting policy for restricted cash. No definition available.
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- Definition Disclosure of accounting policy for securities sold under agreements to repurchase. No definition available.
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- Definition Disclosure of accounting policy for short-term investments. No definition available.
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- Definition Disclosure of accounting policy for term deposit. No definition available.
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- Definition Disclosure of accounting policy for trading receivables from and payables to clients. No definition available.
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- Definition Disclosure of accounting policy for treasury stock. No definition available.
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- References No definition available.
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- Definition Disclosure of accounting policy for advertising cost. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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- Definition Disclosure of accounting policy for basis of accounting, or basis of presentation, used to prepare the financial statements (for example, US Generally Accepted Accounting Principles, Other Comprehensive Basis of Accounting, IFRS). No definition available.
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- Definition Disclosure of accounting policy for cash and cash equivalents, including the policy for determining which items are treated as cash equivalents. Other information that may be disclosed includes (1) the nature of any restrictions on the entity's use of its cash and cash equivalents, (2) whether the entity's cash and cash equivalents are insured or expose the entity to credit risk, (3) the classification of any negative balance accounts (overdrafts), and (4) the carrying basis of cash equivalents (for example, at cost) and whether the carrying amount of cash equivalents approximates fair value. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
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- Definition Disclosure of accounting policy for credit risk. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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- Definition Disclosure of accounting policy regarding (1) the principles it follows in consolidating or combining the separate financial statements, including the principles followed in determining the inclusion or exclusion of subsidiaries or other entities in the consolidated or combined financial statements and (2) its treatment of interests (for example, common stock, a partnership interest or other means of exerting influence) in other entities, for example consolidation or use of the equity or cost methods of accounting. The accounting policy may also address the accounting treatment for intercompany accounts and transactions, noncontrolling interest, and the income statement treatment in consolidation for issuances of stock by a subsidiary. Reference 1: http://www.xbrl.org/2003/role/exampleRef
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- Definition Disclosure of accounting policy for consolidation to describe the significant judgments and assumptions made in determining whether a variable interest held by the entity requires the variable interest entity to be consolidated and (or) disclose information about its involvement with the variable interest entity; the methodology used by the entity for determining whether or not it is the primary beneficiary of the variable interest entity; and the significant factors considered and judgments made in determining that the power to direct the activities that significantly impact the economic performance of the variable interest entity are shared (as defined). Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
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- Definition Disclosure of accounting policy for credit loss on financial instrument measured at amortized cost basis, net investment in lease, off-balance sheet credit exposure, and available-for-sale debt security. Includes, but is not limited to, methodology used to estimate allowance for credit loss, how writeoff of uncollectible amount is recognized, and determination of past due status and nonaccrual status. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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- Definition Disclosure of accounting policy for computing basic and diluted earnings or loss per share for each class of common stock and participating security. Addresses all significant policy factors, including any antidilutive items that have been excluded from the computation and takes into account stock dividends, splits and reverse splits that occur after the balance sheet date of the latest reporting period but before the issuance of the financial statements. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
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- Definition Disclosure of accounting policy for fair value measurements of financial and non-financial assets, liabilities and instruments classified in shareholders' equity. Disclosures include, but are not limited to, how an entity that manages a group of financial assets and liabilities on the basis of its net exposure measures the fair value of those assets and liabilities. No definition available.
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- Definition Disclosure of accounting policy for financing receivable. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
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- Definition Disclosure of accounting policy for recognizing and measuring the impairment of long-lived assets. An entity also may disclose its accounting policy for long-lived assets to be sold. This policy excludes goodwill and intangible assets. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
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- Definition Disclosure of accounting policy for income taxes, which may include its accounting policies for recognizing and measuring deferred tax assets and liabilities and related valuation allowances, recognizing investment tax credits, operating loss carryforwards, tax credit carryforwards, and other carryforwards, methodologies for determining its effective income tax rate and the characterization of interest and penalties in the financial statements. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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- Definition Disclosure of accounting policy for finite-lived intangible assets. This accounting policy also might address: (1) the amortization method used; (2) the useful lives of such assets; and (3) how the entity assesses and measures impairment of such assets. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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- Definition Disclosure of accounting policy for recognizing interest expense, including the method of amortizing debt issuance costs. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
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- Definition Disclosure of accounting policy for leasing arrangement entered into by lessee. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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- Definition Disclosure of accounting policy pertaining to new accounting pronouncements that may impact the entity's financial reporting. Includes, but is not limited to, quantification of the expected or actual impact. No definition available.
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- Definition Disclosure of accounting policy for long-lived, physical asset used in normal conduct of business and not intended for resale. Includes, but is not limited to, work of art, historical treasure, and similar asset classified as collections. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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- Definition Disclosure of accounting policy for costs it has incurred (1) in a planned search or critical investigation aimed at discovery of new knowledge with the hope that such knowledge will be useful in developing a new product or service, a new process or technique, or in bringing about a significant improvement to an existing product or process; or (2) to translate research findings or other knowledge into a plan or design for a new product or process or for a significant improvement to an existing product or process. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
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- Definition Disclosure of accounting policy for revenue from contract with customer. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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- Definition Disclosure of accounting policy for securities borrowed or loaned by the entity. Disclosure may include a description of the business purposes for the transactions, how the transactions are recognized in the financial statements, the types of securities involved in the transactions, the method for monitoring the market value of the securities, the entity's practice and policies associated with cash deposits and collateral for the transactions, and the classification of fees and interest associated with the transactions. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
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- Definition Disclosure of accounting policy for segment reporting. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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- Definition Disclosure of accounting policy for inclusion of significant items in the selling, general and administrative (or similar) expense report caption. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
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- Definition Disclosure of accounting policy for award under share-based payment arrangement. Includes, but is not limited to, methodology and assumption used in measuring cost. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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- Definition Disclosure of accounting policy for the use of estimates in the preparation of financial statements in conformity with generally accepted accounting principles. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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GENERAL INFORMATION, ORGANIZATION AND PRINCIPAL ACTIVITIES (Tables) |
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Jun. 30, 2022 |
Sep. 30, 2022 |
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GENERAL INFORMATION, ORGANIZATION AND PRINCIPAL ACTIVITIES | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of principal subsidiaries, consolidated VIE and subsidiary of VIE | As of June 30, 2022, the Company’s principal subsidiaries, consolidated VIE are as follows:
Notes:
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Notes: (1)These subsidiaries changed company names in June 2022.
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- Definition The tabular disclosure of company's principal subsidiaries, consolidated VIE and subsidiary of VIE . No definition available.
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- References No definition available.
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SIGNIFICANT ACCOUNTING POLICIES (Tables) |
6 Months Ended | 9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 |
Sep. 30, 2022 |
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SIGNIFICANT ACCOUNTING POLICIES | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of consolidated financial statements with intercompany balances and transactions eliminated between the VIE and its subsidiary |
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Schedule of property and equipment at the end of the estimated useful lives |
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Summary of estimated useful lives |
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Schedule of brokerage commission income related to the customer loyalty program |
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- Definition Tabular disclosure of brokerage commission income related to incentive program. No definition available.
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- Definition Tabular disclosure of the useful life of finite lived intangible assets. No definition available.
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- Definition Tabular disclosure of the useful life of long-lived, physical assets that are used in the normal conduct of business to produce goods and services and not intended for resale. No definition available.
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- References No definition available.
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- Definition Tabular disclosure of the significant judgments and assumptions made in determining whether a variable interest (as defined) held by the entity requires the variable interest entity (VIE) (as defined) to be consolidated and (or) disclose information about its involvement with the VIE, individually or in aggregate (as applicable); the nature of restrictions, if any, on the consolidated VIE's assets and on the settlement of its liabilities reported by an entity in its statement of financial position, including the carrying amounts of such assets and liabilities; the nature of, and changes in, the risks associated with involvement in the VIE; how involvement with the VIE affects the entity's financial position, financial performance, and cash flows; the lack of recourse if creditors (or beneficial interest holders) of the consolidated VIE have no recourse to the general credit of the primary beneficiary (if applicable); the terms of arrangements, giving consideration to both explicit arrangements and implicit variable interests, if any, that could require the entity to provide financial support to the VIE, including events or circumstances that could expose the entity to a loss; the methodology used by the entity for determining whether or not it is the primary beneficiary of the variable interest entity; the significant factors considered and judgments made in determining that the power to direct the activities of a VIE that most significantly impact the VIE's economic performance are shared (as defined); the carrying amounts and classification of assets and liabilities of the VIE included in the statement of financial position; the entity's maximum exposure to loss, if any, as a result of its involvement with the VIE, including how the maximum exposure is determined and significant sources of the entity's exposure to the VIE; a comparison of the carrying amounts of the assets and liabilities and the entity's maximum exposure to loss; information about any liquidity arrangements, guarantees, and (or) other commitments by third parties that may affect the fair value or risk of the entity's variable interest in the VIE; whether or not the entity has provided financial support or other support (explicitly or implicitly) to the VIE that it was not previously contractually required to provide or whether the entity intends to provide that support, including the type and amount of the support and the primary reasons for providing the support; and supplemental information the entity determines necessary to provide. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
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FINANCIAL ASSETS AND FINANCIAL LIABILITIES (Tables) |
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Jun. 30, 2022 |
Sep. 30, 2022 |
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FINANCIAL ASSETS AND FINANCIAL LIABILITIES | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of financial assets and liabilities measured at fair value |
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Schedule of amounts of financial instruments that are not offset in the consolidated balance sheets, but could be netted against cash or financial instruments with specific counterparties under master netting agreements |
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Financial Assets and Liabilities Measured at Fair Value
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- Definition Tabular disclosure of the netting of financial assets and financial liabilities. No definition available.
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- References No definition available.
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- Definition Tabular disclosure of assets and liabilities, including [financial] instruments measured at fair value that are classified in stockholders' equity, if any, that are measured at fair value on a recurring basis. The disclosures contemplated herein include the fair value measurements at the reporting date by the level within the fair value hierarchy in which the fair value measurements in their entirety fall, segregating fair value measurements using quoted prices in active markets for identical assets (Level 1), significant other observable inputs (Level 2), and significant unobservable inputs (Level 3). Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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SHORT-TERM INVESTMENTS (Tables) |
6 Months Ended | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 |
Sep. 30, 2022 |
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SHORT-TERM INVESTMENTS | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of short-term investments | The Group’s short-term investments are presented on the consolidated balance sheets as follows:
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- Definition Tabular disclosure of the components of cash, cash equivalents, and investments. No definition available.
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- References No definition available.
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LEASE (Tables) |
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Jun. 30, 2022 |
Sep. 30, 2022 |
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LEASE | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of balances reported in the consolidated balance sheet related to the leases |
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Summary of operating lease cost reported in the consolidated statements of comprehensive (loss)/income |
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Summary of undiscounted cash flows of leases to present value of operating lease payments |
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- Definition The tabular information of supplemental balance sheet information related to leases. No definition available.
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- Definition Tabular disclosure of lessee's lease cost. Includes, but is not limited to, interest expense for finance lease, amortization of right-of-use asset for finance lease, operating lease cost, short-term lease cost, variable lease cost and sublease income. Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef
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- References No definition available.
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- Definition Tabular disclosure of undiscounted cash flows of lessee's operating lease liability. Includes, but is not limited to, reconciliation of undiscounted cash flows to operating lease liability recognized in statement of financial position. Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef
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LOANS AND ADVANCES (Tables) |
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Jun. 30, 2022 |
Sep. 30, 2022 |
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LOANS AND ADVANCES | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of loans and advances |
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- Definition Tabular disclosure of the various types of loans and advances. No definition available.
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- References No definition available.
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OTHER ASSETS (Tables) |
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Jun. 30, 2022 |
Sep. 30, 2022 |
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OTHER ASSETS | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of other assets |
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Schedule of property and equipment |
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Schedule of Intangible assets |
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X | ||||||||||
- References No definition available.
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X | ||||||||||
- Definition Tabular disclosure of physical assets used in the normal conduct of business and not intended for resale. Includes, but is not limited to, balances by class of assets, depreciation and depletion expense and method used, including composite depreciation, and accumulated deprecation. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
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- Definition Tabular disclosure of assets, excluding financial assets and goodwill, lacking physical substance with a finite life, by either major class or business segment. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
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X | ||||||||||
- Definition Tabular disclosure of the carrying amounts of other assets. This disclosure includes other current assets and other noncurrent assets. No definition available.
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LONG-TERM INVESTMENTS (Tables) |
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Jun. 30, 2022 |
Sep. 30, 2022 |
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LONG-TERM INVESTMENTS | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Long term Investments |
As of December 31, 2021 and June 30, 2022, the Group’s investments accounted for under the equity method totaled HK$7,798 thousand and HK$233,834 thousand, respectively. The Group applies the equity method of accounting to account for its equity method investments over which it has significant influence but does not own a majority equity interest or otherwise control. In January 2019, the Group invested in a private company by acquiring 20% ordinary equity interest with a total consideration of HK$6,709 thousand. The Group accounts for this as an equity method investment. For the years ended December 31, 2019 and 2020, loss on investment recognized were HK$543 thousand and HK$278 thousand, respectively.Based on the Group’s assessment on the recoverable amounts of the equity method investment, as of December 31, 2021 and June 30, 2022, the impairment provision on the equity method investment was HK$5,888 thousand, and HK$5,888thousand, respectively. |
As of December 31, 2021 and September 30, 2022, the Group’s investments accounted for under the equity method totaled HK$7,798 thousand and HK$229,970 thousand, respectively. The Group applies the equity method of accounting to account for its equity method investments over which it has significant influence but does not own a majority equity interest or otherwise control. In January 2019, the Group invested in a private company by acquiring 20% ordinary equity interest with a total consideration of HK$6,709 thousand. The Group accounts for this as an equity method investment. For the years ended December 31, 2019 and 2020, loss on investment recognized were HK$543 thousand and HK$278 thousand, respectively.Based on the Group’s assessment on the recoverable amounts of the equity method investment, as of December 31, 2021 and September 30, 2022, the impairment provision on the equity method investment was HK$5,888 thousand and HK$5,888 thousand, respectively. In December 2021, the Group invested in a private equity fund by acquiring approximately 10% ordinary equity interest with a total consideration of HK$7,798 thousand. The Group accounts for this as an equity method investment. Based on the Group’s assessment on the recoverable amounts of this equity method investment, as of December 31, 2021 and September 30, 2022, no impairment provision on the equity method investment was recognized. In June 2022, the Group invested in a private equity fund by acquiring approximately 16% ordinary equity interest with a total consideration of HK$235,434 thousand. The Group accounts for this as an equity method investment. For the period ended September 30, 2022, loss on investment recognized were HK$13,324 thousand. Based on the Group’s assessment on the recoverable amounts of this equity method investment, as of September 30, 2022, no impairment provision on the equity method investment was recognized.
As of December 31, 2021 and September 30, 2022, the Group’s equity investments without readily determinable fair values totaled HK$15,596 thousand and HK$15,754 thousand, respectively. In December 2021, the Group invested in a private equity fund by acquiring 2.75% ordinary equity interest with a total consideration of HK$15,596 thousand. Equity securities without determinable fair values of the Group represent investments in privately held companies with no readily determinable fair value. The Group elected measurement alternative and recorded these investments at cost, less impairment, adjusted for subsequent observable price changes. As of December 31, 2021 and September 30, 2022, no impairment provision on the equity investments without readily determinable fair values were recognized. |
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- Definition The tabular disclosure on long term investments. No definition available.
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BORROWINGS (Tables) |
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Jun. 30, 2022 |
Sep. 30, 2022 |
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BORROWINGS | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of borrowings |
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- Definition Tabular disclosure of short-term debt arrangements (having initial terms of repayment within one year or the normal operating cycle, if longer) including: (1) description of the short-term debt arrangement; (2) identification of the lender or type of lender; (3) repayment terms; (4) weighted average interest rate; (5) carrying amount of funds borrowed under the specified short-term debt arrangement as of the balance sheet date; (6) description of the refinancing of a short-term obligation when that obligation is excluded from current liabilities in the balance sheet; and (7) amount of a short-term obligation that has been excluded from current liabilities in the balance sheet because of a refinancing of the obligation. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
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ACCRUED EXPENSES AND OTHER LIABILITIES (Tables) |
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Jun. 30, 2022 |
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Schedule of accrued expenses and other liabilities |
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- Definition Tabular disclosure of the components of accrued liabilities. No definition available.
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SHARE-BASED COMPENSATION (Tables) |
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Schedule of Share-based compensation recognized in operating expenses |
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Schedule of the stock option activity under the 2014 and 2019 Share Incentive Plan |
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Schedule of share options outstanding |
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Schedule of fair value of options granted using the binomial option pricing model |
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Schedule of activities of the restricted share units granted to employees under the plan |
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- Definition Tabular disclosure of allocation of amount expensed and capitalized for award under share-based payment arrangement to statement of income or comprehensive income and statement of financial position. Includes, but is not limited to, corresponding line item in financial statement. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
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- Definition Tabular disclosure of the total intrinsic value of options exercised (or share units converted), share-based liabilities paid, and the total fair value of shares vested during the year. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
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- Definition Tabular disclosure for stock option plans. Includes, but is not limited to, outstanding awards at beginning and end of year, grants, exercises, forfeitures, and weighted-average grant date fair value. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
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- Definition Tabular disclosure of the significant assumptions used during the year to estimate the fair value of stock options, including, but not limited to: (a) expected term of share options and similar instruments, (b) expected volatility of the entity's shares, (c) expected dividends, (d) risk-free rate(s), and (e) discount for post-vesting restrictions. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
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- Definition Disclosure of the number and weighted-average grant date fair value for restricted stock and restricted stock units that were outstanding at the beginning and end of the year, and the number of restricted stock and restricted stock units that were granted, vested, or forfeited during the year. No definition available.
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NET INCOME PER SHARE (Tables) |
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Jun. 30, 2022 |
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COLLATERALIZED TRANSACTIONS (Tables) |
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Schedule of margin loans and client's collateral received and repledged |
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BROKERAGE COMMISSION AND HANDLING CHARGE INCOME (Tables) |
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Jun. 30, 2022 |
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INTEREST INCOME (Tables) |
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OTHER INCOME (Tables) |
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BROKERAGE COMMISSION AND HANDLING CHARGE EXPENSES (Tables) |
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INTEREST EXPENSES (Tables) |
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Jun. 30, 2022 |
Sep. 30, 2022 |
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INTEREST EXPENSES | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of interest expenses |
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- Definition Tabular disclosure of interest expenses for margin financing and IPO financing. No definition available.
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- References No definition available.
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PROCESSING AND SERVICING COSTS (Tables) |
6 Months Ended | 9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 |
Sep. 30, 2022 |
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PROCESSING AND SERVICING COSTS | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of processing and servicing costs |
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- References No definition available.
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- Definition Tabular disclosure of processing and servicing costs. No definition available.
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NON-INTEREST COST AND EXPENSES BY NATURE (Tables) |
6 Months Ended | 9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 |
Sep. 30, 2022 |
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NON-INTEREST COST AND EXPENSES BY NATURE | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of non-interest cost and expenses by nature |
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- Definition The tabular disclosure of non interest expense. No definition available.
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- References No definition available.
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TAXATION (Tables) |
6 Months Ended | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 |
Sep. 30, 2022 |
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TAXATION | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of current and deferred portion of income tax expenses |
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Schedule of reconciliation between the income tax (benefit)/expenses computed by applying the Hong Kong enterprise tax rate to income before income taxes and actual provision |
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Schedule of components of the deferred tax assets and liabilities |
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Schedule of movement of valuation allowance |
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- References No definition available.
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- Definition Tabular disclosure of the components of income tax expense attributable to continuing operations for each year presented including, but not limited to: current tax expense (benefit), deferred tax expense (benefit), investment tax credits, government grants, the benefits of operating loss carryforwards, tax expense that results from allocating certain tax benefits either directly to contributed capital or to reduce goodwill or other noncurrent intangible assets of an acquired entity, adjustments of a deferred tax liability or asset for enacted changes in tax laws or rates or a change in the tax status of the entity, and adjustments of the beginning-of-the-year balances of a valuation allowance because of a change in circumstances that causes a change in judgment about the realizability of the related deferred tax asset in future years. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
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- Definition Tabular disclosure of the components of net deferred tax asset or liability recognized in an entity's statement of financial position, including the following: the total of all deferred tax liabilities, the total of all deferred tax assets, the total valuation allowance recognized for deferred tax assets. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
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- Definition Tabular disclosure of the reconciliation using percentage or dollar amounts of the reported amount of income tax expense attributable to continuing operations for the year to the amount of income tax expense that would result from applying domestic federal statutory tax rates to pretax income from continuing operations. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
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- Definition Tabular disclosure of valuation allowances to reduce deferred tax assets to net realizable value, including identification of the deferred tax asset more likely than not will not be fully realized and the corresponding amount of the valuation allowance. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
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REGULATORY REQUIREMENTS (Tables) |
6 Months Ended | 9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 |
Sep. 30, 2022 |
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REGULATORY REQUIREMENTS | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of the net capital, the requirement and the excess capital for the Group's broker-dealer subsidiaries |
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- References No definition available.
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- Definition Tabular disclosure of net capital requirement for broker-dealer under Securities and Exchange Commission (SEC) regulation. Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef
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RELATED PARTY BALANCES AND TRANSACTIONS (Tables) |
6 Months Ended | 9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 |
Sep. 30, 2022 |
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RELATED PARTY BALANCES AND TRANSACTIONS | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of related party balances and transactions |
(a) Cash and cash equivalent
The balance represents the cash deposited by the Group in various payment channels of Tencent Group for funding marketing campaigns, of which could be withdrawn on demand. (b) Amounts Due to Related Parties
(c) Transactions with Related Parties
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(a) Cash and cash equivalent
The balance represents the cash deposited by the Group in various payment channels of Tencent Group for funding marketing campaigns, of which could be withdrawn on demand. (b) Amounts Due to Related Parties
(c) Transactions with Related Parties
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X | ||||||||||
- References No definition available.
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X | ||||||||||
- Definition Tabular disclosure of related party transactions. Examples of related party transactions include, but are not limited to, transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners and (d) affiliates. No definition available.
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- Definition Line items represent principal activities and organization in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table. No definition available.
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- Definition The percentage of ownership of common stock or equity participation in the investee accounted for under the equity method of accounting. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
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- Definition The parent entity's interest in net assets of the subsidiary, expressed as a percentage. No definition available.
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- Definition Percentage of the Variable Interest Entity's (VIE) voting interest owned by (or beneficial interest in) the reporting entity (directly or indirectly). Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
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SIGNIFICANT ACCOUNTING POLICIES - Exclusive Option Agreement (Details) - CNY (¥) |
6 Months Ended | 9 Months Ended |
---|---|---|
Jun. 30, 2022 |
Sep. 30, 2022 |
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SIGNIFICANT ACCOUNTING POLICIES | ||
Purchase price for equity interests in shenzhen futu under exclusive option agreement | ¥ 1.00 | ¥ 1.00 |
Threshold of shenzhen futu disposes of shenzhen futu's material assets without prior written consent of shen si | ¥ 500,000,000 | ¥ 500,000 |
X | ||||||||||
- Definition Amount represents the material contract of value of assets under exclusive option agreement. No definition available.
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X | ||||||||||
- Definition Amount represents the purchase price of exclusive option agreement. No definition available.
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X | ||||||||||
- References No definition available.
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SIGNIFICANT ACCOUNTING POLICIES - VIE Companies (Details) - HKD ($) $ in Thousands |
6 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
Dec. 31, 2021 |
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SIGNIFICANT ACCOUNTING POLICIES | |||||
Total assets | $ 109,758,280 | $ 98,021,647 | $ 101,538,514 | ||
Total liabilities | 90,205,460 | 77,835,404 | 80,552,955 | ||
Total operating revenue | 3,387,728 | $ 3,781,461 | 5,333,308 | $ 5,512,511 | |
Net income | 1,213,525 | 1,696,190 | 1,968,168 | 2,311,401 | |
Net cash generated from operating activities | 14,118,089 | (14,351,728) | 2,170,283 | 5,204,783 | |
Net cash generated from/(used in) investing activities | 786,121 | 271,378 | 769,963 | 242,581 | |
Net cash generated from financing activities | (4,720,133) | 34,721,267 | (2,593,823) | 13,335,444 | |
Net increase in cash and cash equivalents | 10,273,295 | 20,671,537 | 238,324 | 18,871,386 | |
Cash and cash equivalents at beginning of the period | 59,291,512 | 43,521,758 | 59,291,512 | 43,521,758 | |
Cash and cash equivalents at end of the period | 69,564,807 | 64,193,295 | 59,529,836 | 62,393,144 | |
VIEs and its subsidiary | |||||
SIGNIFICANT ACCOUNTING POLICIES | |||||
Total assets | 296,738 | 293,717 | 254,602 | ||
Total liabilities | 179,039 | 168,791 | $ 176,204 | ||
Total operating revenue | 144,398 | 86,930 | 201,216 | 134,812 | |
Net income | 37,236 | 22,456 | 48,110 | 24,520 | |
Net cash generated from operating activities | 26,055 | (3,204) | 25,847 | 3,328 | |
Net cash generated from/(used in) investing activities | (3,187) | ||||
Net cash generated from financing activities | 7,388 | 8,107 | |||
Net increase in cash and cash equivalents | 33,443 | (3,204) | 33,954 | 141 | |
Cash and cash equivalents at beginning of the period | 2,751 | 3,738 | 2,751 | 3,738 | |
Cash and cash equivalents at end of the period | $ 36,194 | $ 534 | $ 36,705 | $ 3,879 |
X | ||||||||||
- Definition Sum of the carrying amounts as of the balance sheet date of all assets that are recognized. Assets are probable future economic benefits obtained or controlled by an entity as a result of past transactions or events. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
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X | ||||||||||
- Definition Amount of cash and cash equivalents, and cash and cash equivalents restricted to withdrawal or usage. Excludes amount for disposal group and discontinued operations. Cash includes, but is not limited to, currency on hand, demand deposits with banks or financial institutions, and other accounts with general characteristics of demand deposits. Cash equivalents include, but are not limited to, short-term, highly liquid investments that are both readily convertible to known amounts of cash and so near their maturity that they present insignificant risk of changes in value because of changes in interest rates. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
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X | ||||||||||
- Definition Amount of increase (decrease) in cash, cash equivalents, and cash and cash equivalents restricted to withdrawal or usage; including effect from exchange rate change. Cash includes, but is not limited to, currency on hand, demand deposits with banks or financial institutions, and other accounts with general characteristics of demand deposits. Cash equivalents include, but are not limited to, short-term, highly liquid investments that are both readily convertible to known amounts of cash and so near their maturity that they present insignificant risk of changes in value because of changes in interest rates. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
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X | ||||||||||
- Definition Sum of the carrying amounts as of the balance sheet date of all liabilities that are recognized. Liabilities are probable future sacrifices of economic benefits arising from present obligations of an entity to transfer assets or provide services to other entities in the future. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
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X | ||||||||||
- Definition Amount of cash inflow (outflow) from financing activities, including discontinued operations. Financing activity cash flows include obtaining resources from owners and providing them with a return on, and a return of, their investment; borrowing money and repaying amounts borrowed, or settling the obligation; and obtaining and paying for other resources obtained from creditors on long-term credit. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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X | ||||||||||
- Definition Amount of cash inflow (outflow) from investing activities, including discontinued operations. Investing activity cash flows include making and collecting loans and acquiring and disposing of debt or equity instruments and property, plant, and equipment and other productive assets. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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X | ||||||||||
- Definition Amount of cash inflow (outflow) from operating activities, including discontinued operations. Operating activity cash flows include transactions, adjustments, and changes in value not defined as investing or financing activities. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
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X | ||||||||||
- Definition The portion of profit or loss for the period, net of income taxes, which is attributable to the parent. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
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X | ||||||||||
- Definition Amount of revenue recognized from goods sold, services rendered, insurance premiums, or other activities that constitute an earning process. Includes, but is not limited to, investment and interest income before deduction of interest expense when recognized as a component of revenue, and sales and trading gain (loss). Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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X | ||||||||||
- Definition Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table. No definition available.
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X | ||||||||||
- Details
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SIGNIFICANT ACCOUNTING POLICIES - Transactions between the VIE and other entities in the consolidated group (Details) - VIEs and its subsidiary $ in Thousands, ¥ in Millions |
6 Months Ended | 9 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2022
HKD ($)
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Jun. 30, 2021
HKD ($)
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Sep. 30, 2022
HKD ($)
|
Sep. 30, 2021
HKD ($)
|
Sep. 30, 2022
CNY (¥)
|
Jun. 30, 2022
CNY (¥)
|
Dec. 31, 2021
HKD ($)
|
Dec. 31, 2021
CNY (¥)
|
Jun. 30, 2021
CNY (¥)
|
Dec. 31, 2020
CNY (¥)
|
Dec. 31, 2019
CNY (¥)
|
|
SIGNIFICANT ACCOUNTING POLICIES | |||||||||||
Due from internal companies | $ 211,692 | $ 216,696 | $ 190,424 | ||||||||
Due to internal companies | 91,479 | 87,483 | $ 80,435 | ||||||||
Revenues earned | 131,834 | $ 75,000 | 182,834 | $ 118,000 | |||||||
Repayment of advances | 0 | 0 | 0 | 0 | |||||||
VIE proceeded from advances from Group companies | $ 7,388 | $ 0 | $ 8,107 | $ 0 | |||||||
Registered capital | ¥ | ¥ 10 | ¥ 10 | ¥ 10 | ¥ 10 | ¥ 10 | ¥ 10 |
X | ||||||||||
- Definition The amount of variable interest entity proceeds from advances from entities. No definition available.
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X | ||||||||||
- Definition Amount of total capital as defined by regulatory framework. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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X | ||||||||||
- Definition For an unclassified balance sheet, amount of receivables due from an entity that is affiliated with the reporting entity by means of direct or indirect ownership. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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X | ||||||||||
- Definition Amount of payable due to an entity that is affiliated with the reporting entity by means of direct or indirect ownership. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
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X | ||||||||||
- Definition The cash inflow from a loan, supported by a promissory note, granted to related parties where one party can exercise control or significant influence over another party; including affiliates, owners or officers and their immediate families, pension trusts, and so forth. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
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X | ||||||||||
- Definition Amount of revenue, fees and commissions earned from transactions between (a) a parent company and its subsidiaries; (b) subsidiaries of a common parent; (c) an entity and trusts for the benefit of employees, for example, but not limited to, pension and profit-sharing trusts that are managed by or under the trusteeship of the entity's management; (d) an entity and its principal, owners, management, or members of their immediate families; and (e) affiliates. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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- Definition Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table. No definition available.
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X | ||||||||||
- Details
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SIGNIFICANT ACCOUNTING POLICIES - Current Expected Credit Losses (Details) - HKD ($) $ in Thousands |
6 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
SIGNIFICANT ACCOUNTING POLICIES | ||||
Expected credit loss expenses | $ 7,849 | $ 8,819 | $ 13,620 | $ 2,815 |
X | ||||||||||
- References No definition available.
|
X | ||||||||||
- Definition Amount of credit loss expense (reversal of expense) for financing receivable. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
|
SIGNIFICANT ACCOUNTING POLICIES - Leases (Details) - HKD ($) $ in Thousands |
6 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
Dec. 31, 2021 |
|
SIGNIFICANT ACCOUNTING POLICIES | |||||
Weighted-average remaining lease term | 3 years | 3 years | 3 years | ||
Weighted-average discount rate | 4.69% | 4.65% | 4.71% | ||
Right-of-use assets obtained under operating leases | $ 7,642 | $ 83,265 | $ 44,793 | $ 83,265 |
X | ||||||||||
- Definition Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table. No definition available.
|
X | ||||||||||
- Definition Weighted average discount rate for operating lease calculated at point in time. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
|
X | ||||||||||
- Definition Weighted average remaining lease term for operating lease, in 'PnYnMnDTnHnMnS' format, for example, 'P1Y5M13D' represents reported fact of one year, five months, and thirteen days. Reference 1: http://www.xbrl.org/2003/role/exampleRef
|
X | ||||||||||
- Definition Amount of increase in right-of-use asset obtained in exchange for operating lease liability. Reference 1: http://www.xbrl.org/2003/role/exampleRef
|
X | ||||||||||
- Definition Describes the periods of time over which an entity anticipates to receive utility from its property, plant and equipment (that is, the periods of time over which an entity allocates the initial cost of its property, plant and equipment). Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
|
X | ||||||||||
- Definition Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table. No definition available.
|
X | ||||||||||
- Definition Stated as a percentage, the estimated or actual value of the asset at the end of its useful life or when it is no longer serviceable (cannot be used for its original purpose) divided by its [historical] capitalized cost. No definition available.
|
X | ||||||||||
- Details
|
X | ||||||||||
- Details
|
X | ||||||||||
- Details
|
X | ||||||||||
- Details
|
X | ||||||||||
- Details
|
X | ||||||||||
- Details
|
X | ||||||||||
- Details
|
SIGNIFICANT ACCOUNTING POLICIES - Intangible Assets (Details) |
6 Months Ended | 9 Months Ended |
---|---|---|
Jun. 30, 2022 |
Sep. 30, 2022 |
|
Computer software | ||
SIGNIFICANT ACCOUNTING POLICIES | ||
Estimated useful lives | 5 years | 5 years |
License | ||
SIGNIFICANT ACCOUNTING POLICIES | ||
Estimated useful lives | 10 years | 10 years |
X | ||||||||||
- Definition Useful life of finite-lived intangible assets, in 'PnYnMnDTnHnMnS' format, for example, 'P1Y5M13D' represents the reported fact of one year, five months, and thirteen days. No definition available.
|
X | ||||||||||
- Definition Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table. No definition available.
|
X | ||||||||||
- Details
|
X | ||||||||||
- Details
|
SIGNIFICANT ACCOUNTING POLICIES - Impairment of Long-lived Assets (Details) - HKD ($) $ in Thousands |
6 Months Ended | 9 Months Ended | 12 Months Ended | |
---|---|---|---|---|
Jun. 30, 2022 |
Sep. 30, 2022 |
Sep. 30, 2021 |
Dec. 31, 2019 |
|
SIGNIFICANT ACCOUNTING POLICIES | ||||
Impairment charge | $ 0 | $ 0 | $ 0 | $ 0 |
X | ||||||||||
- References No definition available.
|
X | ||||||||||
- Definition Amount of write-down of assets recognized in the income statement. Includes, but is not limited to, losses from tangible assets, intangible assets and goodwill. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
|
SIGNIFICANT ACCOUNTING POLICIES - Customer loyalty program (Details) - HKD ($) $ in Thousands |
6 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
Dec. 31, 2021 |
|
SIGNIFICANT ACCOUNTING POLICIES | |||||
Brokerage commission income, gross | $ 2,631,790 | $ 2,860,846 | |||
Less: revenue netted or deferred | (243,002) | (406,627) | |||
Brokerage commission income, net | 2,388,788 | $ 2,454,219 | |||
Customers loyalty program | |||||
SIGNIFICANT ACCOUNTING POLICIES | |||||
Brokerage commission income, gross | $ 1,798,892 | $ 1,982,242 | |||
Less: revenue netted or deferred | (180,255) | (279,758) | |||
Brokerage commission income, net | 1,618,637 | $ 1,702,484 | |||
Contract liabilities | $ 7,143 | $ 6,278 | $ 8,968 |
X | ||||||||||
- Definition Amount of deferred revenue related to brokerage commission revenue. No definition available.
|
X | ||||||||||
- Definition Amount of gross commission revenue from buying and selling securities on behalf of customers. No definition available.
|
X | ||||||||||
- Definition Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table. No definition available.
|
X | ||||||||||
- Definition Amount of commission revenue from buying and selling securities on behalf of customers. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
|
X | ||||||||||
- Definition Amount of obligation to transfer good or service to customer for which consideration has been received or is receivable. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
|
X | ||||||||||
- Details
|
SIGNIFICANT ACCOUNTING POLICIES - Share-Based Compensation (Details) - Share-Based Payment Arrangement, Option |
1 Months Ended | 6 Months Ended | 9 Months Ended |
---|---|---|---|
Oct. 31, 2014 |
Jun. 30, 2022 |
Sep. 30, 2022 |
|
Minimum | |||
SIGNIFICANT ACCOUNTING POLICIES | |||
Options vesting period | 4 years | 4 years | 4 years |
Maximum | |||
SIGNIFICANT ACCOUNTING POLICIES | |||
Options vesting period | 5 years | 5 years | 5 years |
X | ||||||||||
- Definition Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table. No definition available.
|
X | ||||||||||
- Definition Period over which grantee's right to exercise award under share-based payment arrangement is no longer contingent on satisfaction of service or performance condition, in 'PnYnMnDTnHnMnS' format, for example, 'P1Y5M13D' represents reported fact of one year, five months, and thirteen days. Includes, but is not limited to, combination of market, performance or service condition. Reference 1: http://www.xbrl.org/2003/role/exampleRef
|
X | ||||||||||
- Details
|
X | ||||||||||
- Details
|
X | ||||||||||
- Details
|
SIGNIFICANT ACCOUNTING POLICIES - Taxation (Details) - HKD ($) |
6 Months Ended | 9 Months Ended | 12 Months Ended | |||
---|---|---|---|---|---|---|
Jun. 30, 2022 |
Sep. 30, 2022 |
Sep. 30, 2021 |
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Uncertain tax positions | ||||||
Interest and penalties associated with uncertain tax positions | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 |
X | ||||||||||
- References No definition available.
|
X | ||||||||||
- Definition Amount of expense for interest on an underpayment of income taxes and penalties related to a tax position claimed or expected to be claimed in the tax return. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
|
SIGNIFICANT ACCOUNTING POLICIES - Segment Reporting (Details) - segment |
6 Months Ended | 9 Months Ended |
---|---|---|
Jun. 30, 2022 |
Sep. 30, 2022 |
|
Segment Reporting | ||
Number of reportable segments | 1 | 1 |
X | ||||||||||
- Definition Number of segments reported by the entity. A reportable segment is a component of an entity for which there is an accounting requirement to report separate financial information on that component in the entity's financial statements. Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef
|
X | ||||||||||
- References No definition available.
|
SIGNIFICANT ACCOUNTING POLICIES - Significant Risks and Uncertainties (Details) $ in Millions, $ in Millions |
6 Months Ended | 9 Months Ended | 12 Months Ended | |||||
---|---|---|---|---|---|---|---|---|
Jun. 30, 2022
HKD ($)
|
Jun. 30, 2022
USD ($)
|
Sep. 30, 2022
HKD ($)
|
Sep. 30, 2022
USD ($)
|
Dec. 31, 2021
USD ($)
|
Dec. 31, 2021
HKD ($)
|
Dec. 31, 2020 |
Dec. 31, 2019 |
|
SIGNIFICANT ACCOUNTING POLICIES | ||||||||
Gradual increase in basis | 1.00% | 1.00% | ||||||
pre-tax income | $ 309.6 | $ 39.6 | ||||||
Gradual decrease in basis | 1.00% | 1.00% | ||||||
Pre-tax loss | $ 346.8 | $ 44.3 | ||||||
China, Yuan Renminbi | ||||||||
SIGNIFICANT ACCOUNTING POLICIES | ||||||||
Net assets | $ (2,378.5) | $ (1,894.9) | $ (2,374.8) | |||||
Estimated depreciation of renminbi against the U.S. dollar (as a percent) | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | |||
Appreciation in pre tax income | 30.3 | 24.1 | $ 30.5 | |||||
Estimated appreciation of renminbi against the U.S. dollar (as a percent) | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | |||
Depreciation in pre tax income | 30.3 | $ 24.1 | $ 30.5 | |||||
Hong Kong, Dollars | ||||||||
SIGNIFICANT ACCOUNTING POLICIES | ||||||||
pre-tax income | $ 346.8 | |||||||
United States of America, Dollars | ||||||||
SIGNIFICANT ACCOUNTING POLICIES | ||||||||
pre-tax income | $ 44.3 |
X | ||||||||||
- Definition The decrease in a pre-tax profit as a result of an increase in a designated risk component that was reasonably possible at the end of the reporting period. Excludes defined benefit plan obligations. No definition available.
|
X | ||||||||||
- Definition The percentage points reduced to the reference rate to compute the variable rate on the interest rate derivative. No definition available.
|
X | ||||||||||
- Definition The increase in a pre-tax profit as a result of an decrease in a designated risk component that was reasonably possible at the end of the reporting period. Excludes defined benefit plan obligations. No definition available.
|
X | ||||||||||
- Definition The reasonably possible percentage of the decrease in the designated risk component used to determine the value of the financial instrument. Excludes defined benefit plan obligations. No definition available.
|
X | ||||||||||
- Definition The reasonably possible percentage of the increase in the designated risk component used to determine the value of the financial instrument. Excludes defined benefit plan obligations. No definition available.
|
X | ||||||||||
- Definition Amount of net assets (liabilities). Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
|
X | ||||||||||
- Definition Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table. No definition available.
|
X | ||||||||||
- Definition The percentage points added to the reference rate to compute the variable rate on the interest rate derivative. No definition available.
|
X | ||||||||||
- Definition Aggregate gain on all derivative instruments recognized in earnings during the period, before tax effects. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
|
X | ||||||||||
- Definition Aggregate loss on all derivative instruments charged against earnings during the period, before tax effects. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
|
X | ||||||||||
- Details
|
X | ||||||||||
- Details
|
X | ||||||||||
- Details
|
X | ||||||||||
- Definition Fair value portion of probable future economic benefits obtained or controlled by an entity as a result of past transactions or events. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
|
X | ||||||||||
- Definition Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table. No definition available.
|
X | ||||||||||
- Definition Fair value of financial obligations, including, but not limited to, debt instruments, derivative liabilities, federal funds purchased and sold under agreements to repurchase, securities loaned or sold under agreements to repurchase, financial instruments sold not yet purchased, guarantees, line of credit, loans and notes payable, servicing liability, and trading liabilities. No definition available.
|
X | ||||||||||
- Definition Fair value portion of investment securities, including, but not limited to, marketable securities, derivative financial instruments, and investments accounted for under the equity method. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
|
X | ||||||||||
- Definition Fair value portion of other assets. No definition available.
|
X | ||||||||||
- Definition Fair value portion of other liabilities. No definition available.
|
X | ||||||||||
- Details
|
X | ||||||||||
- Details
|
FINANCIAL ASSETS AND FINANCIAL LIABILITIES - Transfers Between Level 1 and Level 2 (Details) - HKD ($) $ in Thousands |
Sep. 30, 2022 |
Jun. 30, 2022 |
Dec. 31, 2021 |
Sep. 30, 2021 |
Jun. 30, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
---|---|---|---|---|---|---|---|
FINANCIAL ASSETS AND FINANCIAL LIABILITIES | |||||||
Fair value asset transferred from level 1 to level 2 | $ 0 | $ 0 | |||||
Fair value asset transferred from level 2 to level 1 | 0 | 0 | |||||
Fair value liabilities transferred from level 1 to level 2 | 0 | $ 0 | $ 0 | 0 | $ 0 | $ 0 | $ 0 |
Fair value liabilities transferred from level 2 to level 1 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 |
X | ||||||||||
- Definition Amount of transfers of assets measured on a recurring basis out of Level 1 of the fair value hierarchy into Level 2. No definition available.
|
X | ||||||||||
- Definition Amount of transfers of assets measured on a recurring basis out of Level 2 of the fair value hierarchy into Level 1. No definition available.
|
X | ||||||||||
- Definition Amount of transfers of liabilities measured on a recurring basis out of Level 1 of the fair value hierarchy into Level 2. No definition available.
|
X | ||||||||||
- Definition Amount of transfers of liabilities measured on a recurring basis out of Level 2 of the fair value hierarchy into Level 1. No definition available.
|
X | ||||||||||
- References No definition available.
|
X | ||||||||||
- Definition Amount of obligation to return cash collateral under master netting arrangements offset against derivative assets. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
|
X | ||||||||||
- References No definition available.
|
X | ||||||||||
- Definition Fair value, after effects of master netting arrangements, deduction of assets not subject to a master netting arrangement and elected not to be offset, of financial asset or other contract with one or more underlyings, notional amount or payment provision or both, and the contract can be net settled by means outside the contract or delivery of an asset, offset against an obligation to return collateral. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
|
X | ||||||||||
- Definition Indicates line item in statement of financial position that includes derivative asset. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
|
X | ||||||||||
- Definition Fair value, after the effects of master netting arrangements, of a financial asset or other contract with one or more underlyings, notional amount or payment provision or both, and the contract can be net settled by means outside the contract or delivery of an asset. Includes assets not subject to a master netting arrangement and not elected to be offset. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
|
X | ||||||||||
- References No definition available.
|
X | ||||||||||
- Definition Fair value, before effects of master netting arrangements, of a financial asset or other contract with one or more underlyings, notional amount or payment provision or both, and the contract can be net settled by means outside the contract or delivery of an asset. Includes assets elected not to be offset. Excludes assets not subject to a master netting arrangement. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
|
X | ||||||||||
- Details
|
FINANCIAL ASSETS AND FINANCIAL LIABILITIES - Netting of Financial Liabilities (Details) - HKD ($) $ in Thousands |
Sep. 30, 2022 |
Jun. 30, 2022 |
Dec. 31, 2021 |
---|---|---|---|
Effects of offsetting on the balance sheet | |||
Gross amounts | $ 6,028,751 | ||
Gross amounts set off in the balance sheet | (5,634,969) | ||
Net amounts presented in the balance sheet | $ 393,782 | ||
Derivative Liability, Statement of Financial Position [Extensible Enumeration] | Commissions Payable to Broker-Dealers and Clearing Organizations | ||
Related amounts not offset | |||
Net amount | $ 393,782 | ||
Amounts due to clearing organizations | |||
Effects of offsetting on the balance sheet | |||
Gross amounts | $ 6,191,263 | $ 10,301,182 | 6,028,751 |
Gross amounts set off in the balance sheet | (4,140,950) | (8,941,436) | (5,634,969) |
Net amounts presented in the balance sheet | $ 2,050,313 | $ 1,359,746 | $ 393,782 |
Derivative Liability, Statement of Financial Position [Extensible Enumeration] | Commissions Payable to Broker-Dealers and Clearing Organizations | Commissions Payable to Broker-Dealers and Clearing Organizations | Commissions Payable to Broker-Dealers and Clearing Organizations |
Related amounts not offset | |||
Net amount | $ 2,050,313 | $ 1,359,746 | $ 393,782 |
X | ||||||||||
- Definition Fair value, before effects of master netting arrangements, of a financial liability or contract with one or more underlyings, notional amount or payment provision or both, and the contract can be net settled by means outside the contract or delivery of an asset. Includes liabilities elected not to be offset. Excludes liabilities not subject to a master netting arrangement. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
|
X | ||||||||||
- Definition Fair value, after the effects of master netting arrangements, of a financial liability or contract with one or more underlyings, notional amount or payment provision or both, and the contract can be net settled by means outside the contract or delivery of an asset. Includes liabilities not subject to a master netting arrangement and not elected to be offset. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
|
X | ||||||||||
- References No definition available.
|
X | ||||||||||
- Definition Amount of right to receive cash collateral under master netting arrangements offset against derivative liabilities. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
|
X | ||||||||||
- References No definition available.
|
X | ||||||||||
- Definition Fair value, after effects of master netting arrangements, deduction of liabilities not subject to a master netting arrangement and elected not to be offset, of financial liability or contract with one or more underlyings, notional amount or payment provision or both, and the contract can be net settled by means outside the contract or delivery of an asset, offset against the right to receive collateral. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
|
X | ||||||||||
- Definition Indicates line item in statement of financial position that includes derivative liability. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
|
X | ||||||||||
- Details
|
SHORT-TERM INVESTMENTS (Details) - HKD ($) $ in Thousands |
Sep. 30, 2022 |
Jun. 30, 2022 |
Dec. 31, 2021 |
---|---|---|---|
SHORT-TERM INVESTMENTS | |||
Short-term investments | $ 13,373 | $ 17,501 | $ 1,169,741 |
Money market funds | |||
SHORT-TERM INVESTMENTS | |||
Short-term investments | 7,894 | $ 1,169,741 | |
Financial assets at fair value through profit or loss | |||
SHORT-TERM INVESTMENTS | |||
Short-term investments | $ 5,479 | $ 17,501 |
X | ||||||||||
- Definition Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table. No definition available.
|
X | ||||||||||
- Definition Amount of investments including trading securities, available-for-sale securities, held-to-maturity securities, and short-term investments classified as other and current. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
|
X | ||||||||||
- Details
|
X | ||||||||||
- Details
|
SHORT-TERM INVESTMENTS - Additional information (Details) - HKD ($) $ in Thousands |
6 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
SHORT-TERM INVESTMENTS | ||||
Realized gain from short-term investments | $ 12,491 | $ 0 | $ 16,919 | $ 0 |
X | ||||||||||
- Definition Amount of realized gain (loss) on investment in debt security measured at fair value with change in fair value recognized in other comprehensive income (available-for-sale). Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef
|
X | ||||||||||
- References No definition available.
|
LEASE - Balances reported in the consolidated balance sheets (Details) - HKD ($) $ in Thousands |
Sep. 30, 2022 |
Jun. 30, 2022 |
Dec. 31, 2021 |
---|---|---|---|
Balances reported in the consolidated balance sheets related to the leases | |||
Operating lease right-of-use assets | $ 200,030 | $ 212,529 | $ 243,859 |
Operating lease liabilities | $ 213,276 | $ 227,745 | $ 260,579 |
X | ||||||||||
- References No definition available.
|
X | ||||||||||
- Definition Present value of lessee's discounted obligation for lease payments from operating lease. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
|
X | ||||||||||
- Definition Amount of lessee's right to use underlying asset under operating lease. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
|
LEASE - Operating lease expense reported in the consolidated statements (Details) - HKD ($) $ in Thousands |
6 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
Operating lease expense | ||||
Operating lease expense | $ 57,682 | $ 47,543 | $ 87,503 | $ 77,400 |
X | ||||||||||
- References No definition available.
|
X | ||||||||||
- Definition Amount of single lease cost, calculated by allocation of remaining cost of lease over remaining lease term. Includes, but is not limited to, single lease cost, after impairment of right-of-use asset, calculated by amortization of remaining right-of-use asset and accretion of lease liability. Reference 1: http://www.xbrl.org/2003/role/exampleRef
|
LEASE - Undiscounted cash flows of the Group's leases (Details) - HKD ($) $ in Thousands |
Sep. 30, 2022 |
Jun. 30, 2022 |
Dec. 31, 2021 |
---|---|---|---|
Undiscounted cash flows of the leases to the present value of its operating lease payments | |||
Remainder of 2022 | $ 29,078 | ||
2022/2023 | 101,988 | $ 54,101 | $ 102,767 |
2023/2024 | 47,020 | 100,453 | 96,326 |
2024/2025 | 37,146 | 42,159 | 38,306 |
2025 | 33,622 | 30,688 | |
2026 and thereafter | 14,403 | 7,455 | |
2026 and thereafter | 7,455 | ||
2026 and thereafter | 15,908 | ||
Total undiscounted operating lease payments | 231,140 | 244,738 | 275,542 |
Less: imputed interest | (17,864) | (16,993) | (14,963) |
Present value of operating lease liabilities | $ 213,276 | $ 227,745 | $ 260,579 |
X | ||||||||||
- Definition Amount of lessee's undiscounted obligation for lease payments for operating lease, due after ourth fiscal year following latest fiscal year. No definition available.
|
X | ||||||||||
- Definition Amount of lessee's undiscounted obligation for lease payments for operating lease, due after third fiscal year following latest fiscal year. No definition available.
|
X | ||||||||||
- Definition Amount of lessee's undiscounted obligation for lease payment for operating lease to be paid in fifth fiscal year following current fiscal year and there after. Excludes interim and annual periods when interim periods are reported from current statement of financial position date (rolling approach). No definition available.
|
X | ||||||||||
- Definition Amount of lessee's undiscounted obligation for lease payment for operating lease. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
|
X | ||||||||||
- Definition Amount of lessee's undiscounted obligation for lease payment for operating lease to be paid in next fiscal year following current fiscal year. Excludes interim and annual periods when interim periods are reported from current statement of financial position date (rolling approach). Reference 1: http://www.xbrl.org/2003/role/disclosureRef
|
X | ||||||||||
- Definition Amount of lessee's undiscounted obligation for lease payment for operating lease to be paid in fourth fiscal year following current fiscal year. Excludes interim and annual periods when interim periods are reported from current statement of financial position date (rolling approach). Reference 1: http://www.xbrl.org/2003/role/disclosureRef
|
X | ||||||||||
- Definition Amount of lessee's undiscounted obligation for lease payment for operating lease to be paid in third fiscal year following current fiscal year. Excludes interim and annual periods when interim periods are reported from current statement of financial position date (rolling approach). Reference 1: http://www.xbrl.org/2003/role/disclosureRef
|
X | ||||||||||
- Definition Amount of lessee's undiscounted obligation for lease payment for operating lease to be paid in second fiscal year following current fiscal year. Excludes interim and annual periods when interim periods are reported from current statement of financial position date (rolling approach). Reference 1: http://www.xbrl.org/2003/role/disclosureRef
|
X | ||||||||||
- Definition Amount of lessee's undiscounted obligation for lease payment for operating lease having initial or remaining lease term in excess of one year to be paid in remainder of current fiscal year. Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef
|
X | ||||||||||
- Definition Amount of lessee's undiscounted obligation for lease payments in excess of discounted obligation for lease payments for operating lease. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
|
X | ||||||||||
- References No definition available.
|
X | ||||||||||
- Definition Present value of lessee's discounted obligation for lease payments from operating lease. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
|
LOANS AND ADVANCES (Details) - HKD ($) $ in Thousands |
Sep. 30, 2022 |
Jun. 30, 2022 |
Dec. 31, 2021 |
---|---|---|---|
Loans And Advances | |||
Subtotal | $ 29,783,520 | $ 28,850,068 | $ 29,599,564 |
Less: Allowance for credit losses | (25,913) | (20,142) | (12,258) |
Total | 29,757,607 | 28,829,926 | 29,587,306 |
Margin loans | |||
Loans And Advances | |||
Subtotal | 27,788,266 | 26,722,627 | 29,097,216 |
IPO loans | |||
Loans And Advances | |||
Subtotal | 22,381 | 178,584 | 34,348 |
Other advances | |||
Loans And Advances | |||
Subtotal | $ 1,972,873 | $ 1,948,857 | $ 468,000 |
X | ||||||||||
- Definition Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table. No definition available.
|
X | ||||||||||
- Definition Amount of allowance for credit loss on financing receivable. Excludes allowance for financing receivable covered under loss sharing agreement. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
|
X | ||||||||||
- Definition Amortized cost, before allowance for credit loss, of financing receivable. Excludes financing receivable covered under loss sharing agreement and net investment in lease. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
|
X | ||||||||||
- Definition Amortized cost, after allowance for credit loss, of financing receivable. Excludes financing receivable covered under loss sharing agreement and net investment in lease. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
|
X | ||||||||||
- Details
|
X | ||||||||||
- Details
|
X | ||||||||||
- Details
|
OTHER ASSETS (Details) - HKD ($) $ in Thousands |
Sep. 30, 2022 |
Jun. 30, 2022 |
Dec. 31, 2021 |
---|---|---|---|
Current: | |||
Staff advances | $ 16,255 | $ 17,854 | $ 26,527 |
Deposit | 39,601 | 40,523 | 23,032 |
Others | 54,297 | 50,363 | 32,035 |
Total | 110,153 | 108,740 | 81,594 |
Non-current: | |||
Refundable deposit | 691,509 | 779,453 | 337,513 |
Property and equipment, net (Note a) | 149,448 | 160,107 | 175,757 |
Intangible assets, net (Note b) | 51,121 | 52,805 | 17,218 |
Deferred tax assets (Note 23) | 51,062 | 36,486 | 38,317 |
Others | 31,283 | ||
Total | $ 943,140 | $ 1,060,134 | $ 568,805 |
X | ||||||||||
- Definition The amount of deposit that the Company expects to return after a specified period of time. No definition available.
|
X | ||||||||||
- Definition The amount of advance given to staff. No definition available.
|
X | ||||||||||
- References No definition available.
|
X | ||||||||||
- References No definition available.
|
X | ||||||||||
- Definition Amount after allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards. Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef
|
X | ||||||||||
- Definition The carrying amount of the asset transferred to a third party to serve as a deposit, which typically serves as security against failure by the transferor to perform under terms of an agreement. Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef
|
X | ||||||||||
- Definition Amount after amortization of assets, excluding financial assets and goodwill, lacking physical substance with a finite life. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
|
X | ||||||||||
- Definition Amount of current assets classified as other. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
|
X | ||||||||||
- Definition Amount of other miscellaneous assets. No definition available.
|
X | ||||||||||
- Definition Amount of other miscellaneous assets expected to be realized or consumed after one year or normal operating cycle, if longer. No definition available.
|
X | ||||||||||
- Definition Amount of noncurrent assets classified as other. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
|
X | ||||||||||
- Definition Amount after accumulated depreciation, depletion and amortization of physical assets used in the normal conduct of business to produce goods and services and not intended for resale. Examples include, but are not limited to, land, buildings, machinery and equipment, office equipment, and furniture and fixtures. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
|
X | ||||||||||
- Definition Amount of accumulated depreciation, depletion and amortization for physical assets used in the normal conduct of business to produce goods and services. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
|
X | ||||||||||
- Definition The amount of expense recognized in the current period that reflects the allocation of the cost of tangible assets over the assets' useful lives. Includes production and non-production related depreciation. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
|
X | ||||||||||
- Definition Amount before accumulated depreciation, depletion and amortization of physical assets used in the normal conduct of business and not intended for resale. Examples include, but are not limited to, land, buildings, machinery and equipment, office equipment, and furniture and fixtures. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
|
X | ||||||||||
- Definition Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table. No definition available.
|
X | ||||||||||
- Definition Amount after accumulated depreciation, depletion and amortization of physical assets used in the normal conduct of business to produce goods and services and not intended for resale. Examples include, but are not limited to, land, buildings, machinery and equipment, office equipment, and furniture and fixtures. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
|
X | ||||||||||
- Details
|
X | ||||||||||
- Details
|
X | ||||||||||
- Details
|
X | ||||||||||
- Details
|
X | ||||||||||
- Details
|
OTHER ASSETS - Intangible assets, net (Details) - HKD ($) $ in Thousands |
6 Months Ended | 9 Months Ended | 12 Months Ended | ||
---|---|---|---|---|---|
Jun. 30, 2022 |
Sep. 30, 2022 |
Sep. 30, 2021 |
Dec. 31, 2019 |
Dec. 31, 2021 |
|
OTHER ASSETS | |||||
Total of gross carrying amount | $ 60,932 | $ 60,824 | $ 23,495 | ||
Total of accumulated amortization | (8,127) | (9,703) | (6,277) | ||
Intangible assets, net | 52,805 | 51,121 | 17,218 | ||
Amortization expense on intangible assets | 2,324 | 4,120 | $ 1,491 | $ 909 | |
Computer software | |||||
OTHER ASSETS | |||||
Total of gross carrying amount | 21,381 | 23,247 | 15,596 | ||
Total of accumulated amortization | (6,442) | (7,263) | (5,172) | ||
License | |||||
OTHER ASSETS | |||||
Total of gross carrying amount | 29,060 | 27,602 | 4,261 | ||
Total of accumulated amortization | (209) | (793) | |||
Others | |||||
OTHER ASSETS | |||||
Total of gross carrying amount | 10,491 | 9,975 | 3,638 | ||
Total of accumulated amortization | $ (1,476) | $ (1,647) | $ (1,105) |
X | ||||||||||
- Definition The aggregate expense charged against earnings to allocate the cost of intangible assets (nonphysical assets not used in production) in a systematic and rational manner to the periods expected to benefit from such assets. As a noncash expense, this element is added back to net income when calculating cash provided by or used in operations using the indirect method. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
|
X | ||||||||||
- Definition Accumulated amount of amortization of assets, excluding financial assets and goodwill, lacking physical substance with a finite life. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
|
X | ||||||||||
- Definition Amount before amortization of assets, excluding financial assets and goodwill, lacking physical substance with a finite life. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
|
X | ||||||||||
- Definition Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table. No definition available.
|
X | ||||||||||
- Definition Amount after amortization of assets, excluding financial assets and goodwill, lacking physical substance with a finite life. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
|
X | ||||||||||
- Details
|
X | ||||||||||
- Details
|
X | ||||||||||
- Details
|
LONG-TERM INVESTMENTS - Equity method investments and equity investments (Details) - HKD ($) $ in Thousands |
Sep. 30, 2022 |
Jun. 30, 2022 |
Dec. 31, 2021 |
Jan. 31, 2019 |
---|---|---|---|---|
LONG-TERM INVESTMENTS | ||||
Equity method investments | $ 229,970 | $ 233,834 | $ 7,798 | $ 6,709 |
Equity investments without readily determinable fair values | 15,754 | 15,754 | 15,596 | |
Total | $ 245,724 | $ 249,588 | $ 23,394 |
X | ||||||||||
- Definition This item represents the carrying amount on the entity's balance sheet of its investment in common stock of an equity method investee. This is not an indicator of the fair value of the investment, rather it is the initial cost adjusted for the entity's share of earnings and losses of the investee, adjusted for any distributions (dividends) and other than temporary impairment (OTTI) losses recognized. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
|
X | ||||||||||
- Definition Amount of investment in equity security without readily determinable fair value. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
|
X | ||||||||||
- Definition The total amount of investments that are intended to be held for an extended period of time (longer than one operating cycle). Reference 1: http://www.xbrl.org/2003/role/disclosureRef
|
X | ||||||||||
- References No definition available.
|
X | ||||||||||
- Definition Difference between amount at which an investment accounted for under the equity method of accounting is carried (reported) on the balance sheet and amount of underlying equity in net assets the reporting Entity has in the investee. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
|
X | ||||||||||
- Definition The percentage of ownership of common stock or equity participation in the investee accounted for under the equity method of accounting. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
|
X | ||||||||||
- Definition This item represents the carrying amount on the entity's balance sheet of its investment in common stock of an equity method investee. This is not an indicator of the fair value of the investment, rather it is the initial cost adjusted for the entity's share of earnings and losses of the investee, adjusted for any distributions (dividends) and other than temporary impairment (OTTI) losses recognized. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
|
X | ||||||||||
- Definition Amount of investment in equity security without readily determinable fair value. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
|
X | ||||||||||
- Definition Amount of cumulative impairment loss on investment in equity security without readily determinable fair value. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
|
X | ||||||||||
- Definition Amount of income (loss) for proportionate share of equity method investee's income (loss). Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
|
X | ||||||||||
- Definition Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table. No definition available.
|
X | ||||||||||
- Details
|
X | ||||||||||
- Details
|
BORROWINGS (Details) - HKD ($) $ in Thousands |
Sep. 30, 2022 |
Jun. 30, 2022 |
Dec. 31, 2021 |
---|---|---|---|
BORROWINGS | |||
Borrowings from banks | $ 6,547,293 | $ 4,353,919 | $ 6,357,405 |
Banks | |||
BORROWINGS | |||
Borrowings from banks | $ 6,547,293 | $ 4,353,919 | $ 6,357,405 |
X | ||||||||||
- Definition Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table. No definition available.
|
X | ||||||||||
- Definition Including the current and noncurrent portions, carrying value as of the balance sheet date of all notes and loans payable (with maturities initially due after one year or beyond the operating cycle if longer). Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
|
X | ||||||||||
- Details
|
BORROWINGS - Additional Information (Details) - HKD ($) $ in Thousands |
Sep. 30, 2022 |
Jun. 30, 2022 |
Dec. 31, 2021 |
---|---|---|---|
BORROWINGS | |||
Borrowings weighted average interest rate | 3.43% | 1.75% | 1.15% |
Banks | |||
BORROWINGS | |||
Unused borrowing facilities | $ 15,748,479 | $ 17,955,662 | $ 14,695,095 |
X | ||||||||||
- Definition Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table. No definition available.
|
X | ||||||||||
- Definition Weighted average interest rate of debt outstanding. No definition available.
|
X | ||||||||||
- Definition Amount of borrowing capacity currently available under the credit facility (current borrowing capacity less the amount of borrowings outstanding). Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
|
X | ||||||||||
- Details
|
X | ||||||||||
- Definition Carrying value as of the balance sheet date of obligations incurred and payable, pertaining to accrued market information and data fee. No definition available.
|
X | ||||||||||
- Definition Represents the amount payables to corporate clients in relation to ESOP management services as of balance sheet date. No definition available.
|
X | ||||||||||
- Definition Carrying value as of the balance sheet date of obligations incurred and payable, pertaining to stamp duty, trading levy and trading fee payables. No definition available.
|
X | ||||||||||
- Definition Represents the amount payable to fund distribution services as of balance sheet date. No definition available.
|
X | ||||||||||
- Definition Carrying value as of the balance sheet date of obligations incurred through that date and payable for advertising of the entity's goods and services. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
|
X | ||||||||||
- Definition Amount of expenses incurred but not yet paid nor invoiced, and liabilities classified as other. No definition available.
|
X | ||||||||||
- Definition Carrying value as of the balance sheet date of obligations incurred through that date and payable for professional fees, such as for legal and accounting services received. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
|
X | ||||||||||
- Definition Amount of obligation to transfer good or service to customer for which consideration has been received or is receivable, classified as current. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
|
X | ||||||||||
- Definition Amount of obligation to transfer good or service to customer for which consideration has been received or is receivable, classified as noncurrent. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
|
X | ||||||||||
- Definition Current regulatory liabilities generally represent obligations to make refunds to customers for various reasons including overpayment. No definition available.
|
X | ||||||||||
- Definition Noncurrent regulatory liabilities generally represent obligations to make refunds to customers for various reasons including overpayment. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
|
X | ||||||||||
- Definition Amount, after deferred tax asset, of deferred tax liability attributable to taxable differences without jurisdictional netting. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
|
X | ||||||||||
- Definition Total of the carrying values as of the balance sheet date of obligations incurred through that date and payable for obligations related to services received from employees, such as accrued salaries and bonuses, payroll taxes and fringe benefits. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
|
X | ||||||||||
- References No definition available.
|
X | ||||||||||
- References No definition available.
|
X | ||||||||||
- Definition Amount of liabilities classified as other, due within one year or the normal operating cycle, if longer. Reference 1: http://www.xbrl.org/2003/role/exampleRef
|
X | ||||||||||
- Definition Amount of liabilities classified as other, due after one year or the normal operating cycle, if longer. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
|
X | ||||||||||
- Definition Carrying value as of the balance sheet date of obligations incurred and payable for statutory income, sales, use, payroll, excise, real, property and other taxes. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
|
X | ||||||||||
- Definition The number of common shares undesignated with a par value of US$0.00001. No definition available.
|
X | ||||||||||
- Definition Number of votes entitled per share. No definition available.
|
X | ||||||||||
- Definition The number of shares cancelled. No definition available.
|
X | ||||||||||
- Definition Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table. No definition available.
|
X | ||||||||||
- Definition Exercise price per share or per unit of warrants or rights outstanding. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
|
X | ||||||||||
- Definition Number of securities into which the class of warrant or right may be converted. For example, but not limited to, 500,000 warrants may be converted into 1,000,000 shares. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
|
X | ||||||||||
- Definition Face amount or stated value per share of common stock. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
|
X | ||||||||||
- Definition The maximum number of common shares permitted to be issued by an entity's charter and bylaws. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
|
X | ||||||||||
- Definition The cash inflow from the additional capital contribution to the entity. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
|
X | ||||||||||
- Definition The cash inflow associated with the amount received from entity's raising of capital via private rather than public placement. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
|
X | ||||||||||
- Definition Per share or per unit amount of equity securities issued. No definition available.
|
X | ||||||||||
- Definition Number of shares issued during the period as a result of the conversion of convertible securities. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
|
X | ||||||||||
- Definition Number of new stock issued during the period. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
|
X | ||||||||||
- Definition Number of shares issued during the period related to Restricted Stock Awards, net of any shares forfeited. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
|
X | ||||||||||
- Definition Number of share options (or share units) exercised during the current period. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
|
X | ||||||||||
- Definition Equity impact of the value of stock that has been repurchased during the period and has not been retired and is not held in treasury. Some state laws may mandate the circumstances under which an entity may acquire its own stock and prescribe the accounting treatment therefore. This element is used when state law does not recognize treasury stock. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
|
X | ||||||||||
- Definition Total cost of shares repurchased divided by the total number of shares repurchased. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
|
X | ||||||||||
- Definition Number of shares that have been repurchased during the period and are being held in treasury. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
|
X | ||||||||||
- Definition Equity impact of the cost of common and preferred stock that were repurchased during the period. Recorded using the cost method. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
|
X | ||||||||||
- Details
|
X | ||||||||||
- Details
|
X | ||||||||||
- Details
|
X | ||||||||||
- Details
|
X | ||||||||||
- Details
|
X | ||||||||||
- Details
|
X | ||||||||||
- Details
|
RESTRICTED NET ASSETS (Details) - HKD ($) $ in Thousands |
6 Months Ended | 9 Months Ended | |
---|---|---|---|
Jun. 30, 2022 |
Sep. 30, 2022 |
Dec. 31, 2021 |
|
RESTRICTED NET ASSETS | |||
Required percentage of after-tax-profit under PRC GAAP to be set aside as a general reserve fund | 10.00% | 10.00% | |
Required registered capital ratio to de-force compulsory net profit allocation to general reserve fund | 50.00% | 50.00% | |
Restricted net assets | $ 304,377 | $ 304,377 | $ 304,377 |
X | ||||||||||
- Definition Represents the ratio of the general reserve fund to statutory registered capital after which mandatory contributions to the general reserve fund are no longer required. No definition available.
|
X | ||||||||||
- Definition The required percentage of the after-tax-profit to be set aside as general reserve fund under PRC law. No definition available.
|
X | ||||||||||
- Definition Amount of restricted net assets of consolidated and unconsolidated subsidiaries as of the end of the most recently completed fiscal year. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
|
X | ||||||||||
- References No definition available.
|
SHARE-BASED COMPENSATION - Share-based compensation expenses (Details) - HKD ($) $ in Thousands |
6 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
SHARE-BASED COMPENSATION | ||||
Total share-based compensation expenses | $ 97,251 | $ 33,416 | $ 148,705 | $ 64,295 |
Research and development expenses | ||||
SHARE-BASED COMPENSATION | ||||
Total share-based compensation expenses | 69,170 | 25,202 | 106,395 | 49,290 |
General and administrative expenses | ||||
SHARE-BASED COMPENSATION | ||||
Total share-based compensation expenses | 20,294 | 4,924 | 30,694 | 8,913 |
Selling and marketing expenses | ||||
SHARE-BASED COMPENSATION | ||||
Total share-based compensation expenses | $ 7,787 | $ 3,290 | $ 11,616 | $ 6,092 |
X | ||||||||||
- Definition Amount of expense for award under share-based payment arrangement. Excludes amount capitalized. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
|
X | ||||||||||
- Definition Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table. No definition available.
|
X | ||||||||||
- Details
|
X | ||||||||||
- Details
|
X | ||||||||||
- Details
|
X | ||||||||||
- Definition The maximum percentage of aggregate number of shares initially reserved and subsequently increased available for issuance under the share-based compensation arrangement. No definition available.
|
X | ||||||||||
- Definition The maximum percentage of total number of shares issued and outstanding available for issuance under the share-based compensation arrangement. No definition available.
|
X | ||||||||||
- Definition The maximum percentage of annual additional shares available for issuance under the share-based compensation arrangement. No definition available.
|
X | ||||||||||
- Definition Modification of award under share-based payment arrangement of weighted average per share amount at which grantees can acquire shares of common stock by exercise of options. No definition available.
|
X | ||||||||||
- Definition Modification of award under share-based payment arrangement of gross number of share options (or share units) granted during the period. No definition available.
|
X | ||||||||||
- Definition Period over which grantee's right to exercise award under share-based payment arrangement is no longer contingent on satisfaction of service or performance condition, in 'PnYnMnDTnHnMnS' format, for example, 'P1Y5M13D' represents reported fact of one year, five months, and thirteen days. Includes, but is not limited to, combination of market, performance or service condition. Reference 1: http://www.xbrl.org/2003/role/exampleRef
|
X | ||||||||||
- Definition Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table. No definition available.
|
X | ||||||||||
- Definition Number of shares authorized for issuance under share-based payment arrangement. Reference 1: http://www.xbrl.org/2003/role/exampleRef
|
X | ||||||||||
- Definition The number of shares under options that were cancelled during the reporting period as a result of occurrence of a terminating event specified in contractual agreements pertaining to the stock option plan. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
|
X | ||||||||||
- Definition Gross number of share options (or share units) granted during the period. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
|
X | ||||||||||
- Definition Number of options outstanding, including both vested and non-vested options. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
|
X | ||||||||||
- Definition A roll forward is a reconciliation of a concept from the beginning of a period to the end of a period. No definition available.
|
X | ||||||||||
- Definition Weighted average price at which grantees can acquire the shares reserved for issuance under the stock option plan. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
|
X | ||||||||||
- References No definition available.
|
X | ||||||||||
- Definition An excess of the fair value of the modified award over the fair value of the award immediately before the modification. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
|
X | ||||||||||
- Definition Weighted average price at which option holders acquired shares when converting their stock options into shares. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
|
X | ||||||||||
- Definition Weighted average price at which grantees could have acquired the underlying shares with respect to stock options that were terminated. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
|
X | ||||||||||
- Definition Weighted average per share amount at which grantees can acquire shares of common stock by exercise of options. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
|
X | ||||||||||
- Definition Period from grant date that an equity-based award expires, in 'PnYnMnDTnHnMnS' format, for example, 'P1Y5M13D' represents the reported fact of one year, five months, and thirteen days. Reference 1: http://www.xbrl.org/2003/role/exampleRef
|
X | ||||||||||
- Definition Number of share options (or share units) exercised during the current period. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
|
X | ||||||||||
- Details
|
X | ||||||||||
- Details
|
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X | ||||||||||
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- Details
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SHARE-BASED COMPENSATION - Share Options Granted (Details) - Share Options $ / shares in Units, $ in Thousands, $ in Thousands |
6 Months Ended | 9 Months Ended | 12 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2022
HKD ($)
shares
|
Jun. 30, 2022
USD ($)
$ / shares
shares
|
Jun. 30, 2021
$ / shares
shares
|
Sep. 30, 2022
HKD ($)
shares
|
Sep. 30, 2022
USD ($)
$ / shares
shares
|
Sep. 30, 2021
HKD ($)
shares
|
Sep. 30, 2021
USD ($)
$ / shares
shares
|
Dec. 31, 2021
HKD ($)
|
Dec. 31, 2021
USD ($)
$ / shares
shares
|
|
SHARE-BASED COMPENSATION | |||||||||
Outstanding (in shares) | shares | 11,840,890 | 11,518,482 | 13,341,466 | ||||||
Exercisable (in shares) | shares | 1,654,999 | 1,653,781 | 2,825,014 | ||||||
Expected to vest (in shares) | shares | 10,185,891 | 9,864,701 | 10,516,452 | ||||||
Outstanding (in dollars per share) | $ / shares | $ 0.5627 | $ 0.5645 | $ 0.5703 | ||||||
Exercisable (in dollars per share) | $ / shares | 0.5198 | 0.4808 | 0.5729 | ||||||
Expected to vest (in dollars per share) | $ / shares | $ 0.5697 | $ 0.5786 | $ 0.5696 | ||||||
Outstanding (in years) | 3 years | 3 years | 2 years 9 months 3 days | 2 years 9 months 3 days | 3 years 5 months 1 day | 3 years 5 months 1 day | |||
Exercisable (in years) | 2 years 4 months 9 days | 2 years 4 months 9 days | 2 years 6 months 3 days | 2 years 6 months 3 days | 2 years 10 months 6 days | 2 years 10 months 6 days | |||
Expected to vest (in years) | 3 years 1 month 6 days | 3 years 1 month 6 days | 2 years 9 months 18 days | 2 years 9 months 18 days | 3 years 6 months 25 days | 3 years 6 months 25 days | |||
Outstanding (in dollars) | $ | $ 64,020 | $ 51,515 | $ 165,157 | ||||||
Exercisable (in dollars) | $ | 9,019 | 7,535 | 34,964 | ||||||
Expected to vest (in dollars) | $ | $ 55,001 | $ 43,980 | 130,193 | ||||||
Weighted average grant date fair value | $ / shares | $ 0 | $ 0 | $ 0 | $ 18.9219 | |||||
Options exercised (in shares) | shares | 1,197,536 | 1,197,536 | 2,395,392 | 1,475,848 | 1,475,848 | 4,192,000 | 4,192,000 | ||
Intrinsic value of options exercised | $ 39,030 | $ 4,988 | $ 49,305 | $ 6,295 | $ 543,551 | $ 69,986 | $ 614,738 | $ 79,093 |
X | ||||||||||
- Definition Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table. No definition available.
|
X | ||||||||||
- Definition The number of shares into which fully or partially vested stock options outstanding as of the balance sheet date can be currently converted under the option plan. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
|
X | ||||||||||
- Definition The weighted-average price as of the balance sheet date at which grantees can acquire the shares reserved for issuance on vested portions of options outstanding and currently exercisable under the stock option plan. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
|
X | ||||||||||
- Definition Amount of accumulated difference between fair value of underlying shares on dates of exercise and exercise price on options exercised (or share units converted) into shares. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
|
X | ||||||||||
- Definition The weighted average grant-date fair value of options granted during the reporting period as calculated by applying the disclosed option pricing methodology. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
|
X | ||||||||||
- Definition Amount by which the current fair value of the underlying stock exceeds the exercise price of options outstanding. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
|
X | ||||||||||
- Definition Number of options outstanding, including both vested and non-vested options. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
|
X | ||||||||||
- Definition Weighted average price at which grantees can acquire the shares reserved for issuance under the stock option plan. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
|
X | ||||||||||
- Definition Amount by which current fair value of underlying stock exceeds exercise price of fully vested and expected to vest options outstanding. Includes, but is not limited to, unvested options for which requisite service period has not been rendered but that are expected to vest based on achievement of performance condition, if forfeitures are recognized when they occur. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
|
X | ||||||||||
- Definition Number of fully vested and expected to vest options outstanding that can be converted into shares under option plan. Includes, but is not limited to, unvested options for which requisite service period has not been rendered but that are expected to vest based on achievement of performance condition, if forfeitures are recognized when they occur. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
|
X | ||||||||||
- Definition Weighted-average exercise price, at which grantee can acquire shares reserved for issuance, for fully vested and expected to vest options outstanding. Includes, but is not limited to, unvested options for which requisite service period has not been rendered but that are expected to vest based on achievement of performance condition, if forfeitures are recognized when they occur. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
|
X | ||||||||||
- Definition Amount of difference between fair value of the underlying shares reserved for issuance and exercise price of vested portions of options outstanding and currently exercisable. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
|
X | ||||||||||
- Definition Weighted average remaining contractual term for vested portions of options outstanding and currently exercisable or convertible, in 'PnYnMnDTnHnMnS' format, for example, 'P1Y5M13D' represents the reported fact of one year, five months, and thirteen days. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
|
X | ||||||||||
- Definition Weighted average remaining contractual term for option awards outstanding, in 'PnYnMnDTnHnMnS' format, for example, 'P1Y5M13D' represents the reported fact of one year, five months, and thirteen days. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
|
X | ||||||||||
- Definition Weighted average remaining contractual term for fully vested and expected to vest options outstanding, in 'PnYnMnDTnHnMnS' format, for example, 'P1Y5M13D' represents reported fact of one year, five months, and thirteen days. Includes, but is not limited to, unvested options for which requisite service period has not been rendered but that are expected to vest based on achievement of performance condition, if forfeitures are recognized when they occur. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
|
X | ||||||||||
- Definition Number of share options (or share units) exercised during the current period. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
|
X | ||||||||||
- Details
|
X | ||||||||||
- Definition The estimated forfeiture rate of the underlying shares over the option's term. No definition available.
|
X | ||||||||||
- Definition Weighted-average period over which cost not yet recognized is expected to be recognized for award under share-based payment arrangement, in 'PnYnMnDTnHnMnS' format, for example, 'P1Y5M13D' represents reported fact of one year, five months, and thirteen days. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
|
X | ||||||||||
- Definition Amount of cost to be recognized for option under share-based payment arrangement. Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef
|
X | ||||||||||
- References No definition available.
|
X | ||||||||||
- Definition The estimated dividend rate (a percentage of the share price) to be paid (expected dividends) to holders of the underlying shares over the option's term. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
|
X | ||||||||||
- Definition The estimated measure of the percentage by which a share price is expected to fluctuate during a period. Volatility also may be defined as a probability-weighted measure of the dispersion of returns about the mean. The volatility of a share price is the standard deviation of the continuously compounded rates of return on the share over a specified period. That is the same as the standard deviation of the differences in the natural logarithms of the stock prices plus dividends, if any, over the period. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
|
X | ||||||||||
- Definition The risk-free interest rate assumption that is used in valuing an option on its own shares. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
|
X | ||||||||||
- Definition Expected term of award under share-based payment arrangement, in 'PnYnMnDTnHnMnS' format, for example, 'P1Y5M13D' represents reported fact of one year, five months, and thirteen days. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
|
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X | ||||||||||
- Details
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X | ||||||||||
- Details
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X | ||||||||||
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SHARE-BASED COMPENSATION - Restricted Shares Plan (Details) - Restricted shares $ / shares in Units, $ in Thousands, $ in Thousands |
6 Months Ended | 9 Months Ended | 12 Months Ended | |||||
---|---|---|---|---|---|---|---|---|
Jun. 30, 2022
HKD ($)
$ / shares
shares
|
Jun. 30, 2021
$ / shares
shares
|
Sep. 30, 2022
HKD ($)
$ / shares
shares
|
Sep. 30, 2021
$ / shares
shares
|
Dec. 31, 2021
HKD ($)
$ / shares
shares
|
Sep. 30, 2022
USD ($)
|
Jun. 30, 2022
USD ($)
|
Dec. 31, 2021
USD ($)
|
|
Shares awarded number | ||||||||
Outstanding at beginning | shares | 16,961,864 | 6,067,400 | 16,961,864 | 6,067,400 | 6,067,400 | |||
Granted | shares | 2,827,320 | 837,072 | ||||||
Vested | shares | (134,600) | |||||||
Forfeited | shares | (1,355,240) | (231,680) | ||||||
Outstanding at end | shares | 18,299,344 | 6,672,792 | 16,961,864 | |||||
Weighted-average grant date fair value per share | ||||||||
Outstanding at beginning | $ / shares | $ 5.6793 | $ 4.6827 | $ 5.6793 | $ 4.6827 | $ 4.6827 | |||
Granted | $ / shares | 5.4125 | 20.1363 | ||||||
Vested | $ / shares | 20.1363 | |||||||
Forfeited | $ / shares | 5.3584 | 4.7350 | ||||||
Outstanding at end | $ / shares | $ 5.5555 | $ 6.6195 | $ 5.6793 | |||||
Unrecognized compensation expenses related to the restricted shares | $ 599,247 | $ 670,477 | $ 694,749 | $ 85,412 | $ 76,359 | $ 89,092 | ||
Unrecognized compensation expenses related to the restricted shares expected to be recognized over a weighted-average period | 4 years 1 month 20 days | 3 years 3 months 3 days | 4 years 7 months 20 days | |||||
2019 Share Incentive Plan | ||||||||
Shares awarded number | ||||||||
Outstanding at beginning | shares | 16,961,864 | 6,067,400 | 16,961,864 | 6,067,400 | 6,067,400 | |||
Granted | shares | 48,000 | 0 | 2,827,320 | 837,072 | ||||
Forfeited | shares | (1,152,240) | (171,200) | ||||||
Outstanding at end | shares | 15,857,624 | 5,896,200 | 16,961,864 | |||||
Weighted-average grant date fair value per share | ||||||||
Outstanding at beginning | $ / shares | $ 5.6793 | $ 4.6827 | $ 5.6793 | $ 4.6827 | $ 4.6827 | |||
Granted | $ / shares | 5.4125 | |||||||
Forfeited | $ / shares | 5.0585 | 4.7350 | ||||||
Outstanding at end | $ / shares | $ 5.7236 | $ 4.6812 | $ 5.6793 |
X | ||||||||||
- Definition Weighted-average period over which cost not yet recognized is expected to be recognized for award under share-based payment arrangement, in 'PnYnMnDTnHnMnS' format, for example, 'P1Y5M13D' represents reported fact of one year, five months, and thirteen days. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
|
X | ||||||||||
- Definition Amount of cost to be recognized for nonvested award under share-based payment arrangement. Excludes share and unit options. Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef
|
X | ||||||||||
- Definition The number of equity-based payment instruments, excluding stock (or unit) options, that were forfeited during the reporting period. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
|
X | ||||||||||
- Definition Weighted average fair value as of the grant date of equity-based award plans other than stock (unit) option plans that were not exercised or put into effect as a result of the occurrence of a terminating event. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
|
X | ||||||||||
- Definition The number of grants made during the period on other than stock (or unit) option plans (for example, phantom stock or unit plan, stock or unit appreciation rights plan, performance target plan). Reference 1: http://www.xbrl.org/2003/role/disclosureRef
|
X | ||||||||||
- Definition The weighted average fair value at grant date for nonvested equity-based awards issued during the period on other than stock (or unit) option plans (for example, phantom stock or unit plan, stock or unit appreciation rights plan, performance target plan). Reference 1: http://www.xbrl.org/2003/role/disclosureRef
|
X | ||||||||||
- Definition The number of non-vested equity-based payment instruments, excluding stock (or unit) options, that validly exist and are outstanding as of the balance sheet date. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
|
X | ||||||||||
- Definition A roll forward is a reconciliation of a concept from the beginning of a period to the end of a period. No definition available.
|
X | ||||||||||
- Definition Per share or unit weighted-average fair value of nonvested award under share-based payment arrangement. Excludes share and unit options. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
|
X | ||||||||||
- References No definition available.
|
X | ||||||||||
- Definition The number of equity-based payment instruments, excluding stock (or unit) options, that vested during the reporting period. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
|
X | ||||||||||
- Definition The weighted average fair value as of grant date pertaining to an equity-based award plan other than a stock (or unit) option plan for which the grantee gained the right during the reporting period, by satisfying service and performance requirements, to receive or retain shares or units, other instruments, or cash in accordance with the terms of the arrangement. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
|
X | ||||||||||
- Details
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X | ||||||||||
- Details
|
NET INCOME PER SHARE (Details) - Pre Funded Warrants [Member] - Class A Ordinary Shares [Member] - $ / shares |
Dec. 31, 2021 |
Jun. 11, 2021 |
Dec. 31, 2020 |
---|---|---|---|
NET INCOME PER SHARE | |||
Warrants to purchase shares of ordinary shares | 53,599,890 | 53,599,890 | 53,600,000 |
Warrants exercise price | $ 0.00001 | ||
Shares cancelled | 110 | 110 |
X | ||||||||||
- Definition The number of shares cancelled. No definition available.
|
X | ||||||||||
- Definition Exercise price per share or per unit of warrants or rights outstanding. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
|
X | ||||||||||
- Definition Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table. No definition available.
|
X | ||||||||||
- Definition Number of securities into which the class of warrant or right may be converted. For example, but not limited to, 500,000 warrants may be converted into 1,000,000 shares. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
|
X | ||||||||||
- Details
|
X | ||||||||||
- Details
|
X | ||||||||||
- Definition The amount of net income (loss) for the period per each share of common stock or unit outstanding during the reporting period. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
|
X | ||||||||||
- Definition The amount of net income (loss) for the period available to each share of common stock or common unit outstanding during the reporting period and to each share or unit that would have been outstanding assuming the issuance of common shares or units for all dilutive potential common shares or units outstanding during the reporting period. Reference 1: http://www.xbrl.org/2003/role/exampleRef
|
X | ||||||||||
- Definition Additional shares included in the calculation of diluted EPS as a result of the potentially dilutive effect of share based payment arrangements using the treasury stock method. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
|
X | ||||||||||
- Definition Amount, after deduction of tax, noncontrolling interests, dividends on preferred stock and participating securities; of income (loss) available to common shareholders. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
|
X | ||||||||||
- References No definition available.
|
X | ||||||||||
- Definition Amount, after deduction of tax, noncontrolling interests, dividends on preferred stock and participating securities, and addition from assumption of issuance of common shares for dilutive potential common shares; of income (loss) available to common shareholders. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
|
X | ||||||||||
- References No definition available.
|
X | ||||||||||
- Definition The average number of shares or units issued and outstanding that are used in calculating diluted EPS or earnings per unit (EPU), determined based on the timing of issuance of shares or units in the period. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
|
X | ||||||||||
- References No definition available.
|
X | ||||||||||
- Definition Number of [basic] shares or units, after adjustment for contingently issuable shares or units and other shares or units not deemed outstanding, determined by relating the portion of time within a reporting period that common shares or units have been outstanding to the total time in that period. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
|
X | ||||||||||
- References No definition available.
|
X | ||||||||||
- Details
|
NET INCOME PER SHARE - Antidilutive securities (Details) - shares |
6 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
Share-Based Payment Arrangement, Option [Member] | ||||
NET INCOME PER SHARE | ||||
Anti-dilutive shares excluded from the calculation of diluted net income per share | 4,390,826 | 0 | 4,975,271 | 0 |
X | ||||||||||
- Definition Securities (including those issuable pursuant to contingent stock agreements) that could potentially dilute basic earnings per share (EPS) or earnings per unit (EPU) in the future that were not included in the computation of diluted EPS or EPU because to do so would increase EPS or EPU amounts or decrease loss per share or unit amounts for the period presented. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
|
X | ||||||||||
- Definition Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table. No definition available.
|
X | ||||||||||
- Details
|
COLLATERALIZED TRANSACTIONS (Details) - HKD ($) $ in Thousands |
Sep. 30, 2022 |
Jun. 30, 2022 |
Dec. 31, 2021 |
---|---|---|---|
COLLATERALIZED TRANSACTIONS | |||
Margin loan extended to margin clients (net) | $ 27,762,353 | $ 26,702,485 | $ 29,084,958 |
Securities purchased under agreements to resell transactions | 22,349 | 106,203 | |
Collateral received from margin clients | 105,695,849 | 119,991,002 | 119,745,500 |
Collateral received from brokers | 29,207 | 144,156 | |
Collateral repledged to commercial banks and other financial institutions | 13,099,509 | 12,830,183 | 20,953,603 |
Securities borrowed and lent | 13,878,468 | 15,354,335 | 8,436,638 |
Cash collateral deposited with lenders | 1,144,340 | 1,045,657 | 3,120,123 |
Cash collateral received from borrowers | $ 14,676,066 | $ 17,733,171 | $ 9,737,786 |
X | ||||||||||
- Definition Amount, after the effects of master netting arrangements, of securities borrowed and loaned from /to entities in exchange for collateral. Includes assets/liabilities not subject to a master netting arrangement and not elected to be offset. No definition available.
|
X | ||||||||||
- Definition Amount, after allowance for credit loss, of accounts and financing receivable. Includes, but is not limited to, notes and loan receivable. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
|
X | ||||||||||
- Definition Carrying amount as of the balance sheet date of cash collateral held for borrowed securities, for which the cash is restricted as to withdrawal or usage. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
|
X | ||||||||||
- Definition Amount receivable from correspondent broker-dealer. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
|
X | ||||||||||
- Definition Fair value of collateral permitted, by contact or custom, to be sold or re-pledged. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
|
X | ||||||||||
- Definition Fair value of the collateral, or portion thereof, that has been re-pledged, delivered, or otherwise used. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
|
X | ||||||||||
- Definition Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table. No definition available.
|
X | ||||||||||
- Definition Amount, after the effects of master netting arrangements, of funds outstanding loaned in the form of a security resale agreement between the entity and another party for the purchase and resale of identical or substantially the same securities at a date certain for a specified price. Includes purchases of participations in pools of securities that are subject to a resale agreement, assets not subject to a master netting arrangement and not elected to be offset. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
|
X | ||||||||||
- Definition The carrying value as of the balance sheet date of the assets received as collateral against securities loaned to other broker-dealers. Borrowers of securities generally are required to provide collateral to the lenders of securities, commonly cash but sometimes other securities or standby letters of credit, with a value slightly higher than that of the securities borrowed. In instances where the entity is permitted to sell or re-pledge these securities, the entity reports the fair value of the collateral received and the related obligation to return the collateral as a liability. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
|
BROKERAGE COMMISSION AND HANDLING CHARGE INCOME (Details) - HKD ($) $ in Thousands |
6 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
BROKERAGE COMMISSION AND HANDLING CHARGE INCOME | ||||
Total | $ 2,001,246 | $ 2,122,679 | $ 2,959,050 | $ 3,056,091 |
Brokerage commission income | ||||
BROKERAGE COMMISSION AND HANDLING CHARGE INCOME | ||||
Total | 1,618,637 | 1,702,484 | 2,388,788 | 2,454,219 |
Handling charge income | ||||
BROKERAGE COMMISSION AND HANDLING CHARGE INCOME | ||||
Total | $ 382,609 | $ 420,195 | $ 570,262 | $ 601,872 |
X | ||||||||||
- Definition Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table. No definition available.
|
X | ||||||||||
- Definition Amount, excluding tax collected from customer, of revenue from satisfaction of performance obligation by transferring promised good or service to customer. Tax collected from customer is tax assessed by governmental authority that is both imposed on and concurrent with specific revenue-producing transaction, including, but not limited to, sales, use, value added and excise. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
|
X | ||||||||||
- Details
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X | ||||||||||
- Details
|
INTEREST INCOME (Details) - HKD ($) $ in Thousands |
6 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
INTEREST INCOME | ||||
Margin financing | $ 766,722 | $ 786,095 | $ 1,193,838 | $ 1,254,098 |
Bank deposits | 196,807 | 88,916 | 496,066 | 143,669 |
Securities lending | 182,124 | 233,929 | 292,095 | 307,435 |
Bridge loan | 48,235 | 91,503 | ||
IPO financing | 750 | 160,000 | 1,870 | 195,406 |
Other financing | 1,023 | 1,112 | ||
Total | $ 1,195,661 | $ 1,268,940 | $ 2,076,484 | $ 1,900,608 |
X | ||||||||||
- Definition Amount of interest income on bridge loan. No definition available.
|
X | ||||||||||
- Definition The amount of interest income from IPO financing. No definition available.
|
X | ||||||||||
- Definition Amount of interest income from margin financing business. No definition available.
|
X | ||||||||||
- Definition Amount of interest income on securities lending. No definition available.
|
X | ||||||||||
- References No definition available.
|
X | ||||||||||
- Definition Amount of interest and fee income from loans classified as other. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
|
X | ||||||||||
- Definition Interest income derived from funds deposited with both domestic and foreign financial institutions including funds in money market and other accounts. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
|
X | ||||||||||
- Definition Amount of operating interest income, including, but not limited to, amortization and accretion of premiums and discounts on securities. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
|
OTHER INCOME (Details) - HKD ($) $ in Thousands |
6 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
OTHER INCOME | ||||
Currency exchange service income | $ 78,506 | $ 104,982 | $ 111,277 | $ 154,433 |
Funds distribution service income | 39,529 | 28,595 | 61,661 | 48,771 |
Enterprise public relations service charge income | 25,201 | 42,985 | 33,979 | 76,809 |
Market information and data income | 22,497 | 23,972 | 31,989 | 34,148 |
Underwriting fee income | 10,905 | 47,770 | 19,932 | 68,216 |
Trust service income | 5,448 | 2,918 | ||
IPO subscription service charge income | 3,327 | 136,972 | 5,318 | 163,331 |
Others | 10,856 | 4,566 | 28,170 | 7,186 |
Total | $ 190,821 | $ 389,842 | $ 297,774 | $ 555,812 |
X | ||||||||||
- Definition The amount of Currency exchange service income. No definition available.
|
X | ||||||||||
- Definition Amount of revenue from funds distribution service. No definition available.
|
X | ||||||||||
- Definition The amount of IPO subscription service charge income. No definition available.
|
X | ||||||||||
- Definition The amount of miscellaneous income. No definition available.
|
X | ||||||||||
- Definition The amount of enterprise public relations service charge income. No definition available.
|
X | ||||||||||
- Definition Represents the amount of income from trust service. No definition available.
|
X | ||||||||||
- Definition Amount of revenue from market data services, including, but not limited to, information about current quotes and most recent prices for a specific security. No definition available.
|
X | ||||||||||
- Definition Amount of revenue and income classified as other. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
|
X | ||||||||||
- References No definition available.
|
X | ||||||||||
- Definition The difference between the price paid by the public and the contract price less the related expenses. A broker-dealer may underwrite a security offering by contracting to buy the issue either at a fixed price or a price based on selling the offering on a best-effort basis. No definition available.
|
BROKERAGE COMMISSION AND HANDLING CHARGE EXPENSES (Details) - HKD ($) $ in Thousands |
6 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
BROKERAGE COMMISSION AND HANDLING CHARGE EXPENSES | ||||
Total | $ 183,221 | $ 359,002 | $ 265,795 | $ 484,462 |
Commission, handling and settlement expenses | ||||
BROKERAGE COMMISSION AND HANDLING CHARGE EXPENSES | ||||
Total | 182,541 | 319,496 | 264,950 | 437,923 |
IPO subscription service charge expenses | ||||
BROKERAGE COMMISSION AND HANDLING CHARGE EXPENSES | ||||
Total | $ 680 | $ 39,506 | $ 845 | $ 46,539 |
X | ||||||||||
- Definition The amount of expenses related to brokerage commission and handling charges in the period. No definition available.
|
X | ||||||||||
- Definition Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table. No definition available.
|
X | ||||||||||
- Details
|
X | ||||||||||
- Details
|
INTEREST EXPENSES (Details) - HKD ($) $ in Thousands |
6 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
INTEREST EXPENSES | ||||
Interest expenses for margin financing - Due to banks | $ 23,477 | $ 65,295 | $ 48,369 | $ 97,358 |
Interest expenses for margin financing - Due to other licensed financial institutions | 7,391 | 36,294 | 9,233 | 49,131 |
Interest expenses for securities borrowed - Due to clients | 29,524 | 88,818 | 42,325 | 110,186 |
Interest expenses for securities borrowed - Due to brokers | 5,435 | 14,093 | 10,598 | 15,207 |
Interest expenses for IPO financing - Due to banks | 42,183 | 49,404 | ||
Total | $ 65,827 | 246,967 | $ 110,525 | $ 321,286 |
Interest expenses for IPO financing - Due to other parties | $ 284 |
X | ||||||||||
- Definition The amount of interest expense from borrowing from banks for margin business. No definition available.
|
X | ||||||||||
- Definition The amount of interest expense from borrowing from banks for IPO financing services. No definition available.
|
X | ||||||||||
- Definition The amount of interest expense from borrowing from other parties for IPO financing services. No definition available.
|
X | ||||||||||
- Definition The amount of interest expense from borrowing from other licensed financial institutions for margin business. No definition available.
|
X | ||||||||||
- Definition The amount of interest expenses on borrowings from brokers for securities borrowed. No definition available.
|
X | ||||||||||
- Definition The amount of interest expenses on borrowings from clients for securities borrowed. No definition available.
|
X | ||||||||||
- Definition Amount of the cost of borrowed funds accounted for as interest expense. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
|
X | ||||||||||
- References No definition available.
|
PROCESSING AND SERVICING COSTS (Details) - HKD ($) $ in Thousands |
6 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
PROCESSING AND SERVICING COSTS | ||||
Cloud service fee | $ 116,695 | $ 46,029 | $ 168,555 | $ 75,575 |
Market information and data fee | 38,264 | 31,753 | 56,229 | 50,257 |
Data transmission fee | 16,969 | 31,083 | 28,393 | 42,638 |
System cost | 11,793 | 3,983 | 19,715 | 9,709 |
SMS service fee | 544 | 549 | 823 | 905 |
Others | 2,534 | 2,627 | 3,927 | 4,379 |
Total | $ 186,799 | $ 116,024 | $ 277,642 | $ 183,463 |
X | ||||||||||
- Definition The amount of expense in the period for cloud service fee. No definition available.
|
X | ||||||||||
- Definition The amount of expense in the period for data transmission fee. No definition available.
|
X | ||||||||||
- Definition The amount of expense in the period for market information and data fee. No definition available.
|
X | ||||||||||
- Definition The cost related to other processing and servicing. No definition available.
|
X | ||||||||||
- Definition The amount of expense during the period paid for market information, cloud service, data transmission and etc. No definition available.
|
X | ||||||||||
- Definition n/a. No definition available.
|
X | ||||||||||
- Definition The amount of expense in the period for SMS service fee. No definition available.
|
X | ||||||||||
- Definition The amount of expense in the period for system costs. No definition available.
|
NON-INTEREST COST AND EXPENSES BY NATURE (Details) - HKD ($) $ in Thousands |
6 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
NON-INTEREST COST AND EXPENSES BY NATURE | ||||
Employee compensation and benefits | $ 962,144 | $ 447,394 | $ 1,497,752 | $ 785,177 |
Marketing and branding | 321,632 | 570,377 | 459,784 | 908,983 |
Processing and servicing costs | 186,799 | 116,024 | 277,642 | 183,463 |
Brokerage commission and handling charge expenses | 183,221 | 359,002 | 265,795 | 484,462 |
Rental and other related expenses | 57,682 | 47,543 | 87,503 | 77,400 |
Professional services | 45,897 | 22,786 | 57,743 | 38,420 |
Depreciation and amortization | 27,537 | 15,368 | 41,046 | 24,730 |
Listing expenses | 2,135 | 2,135 | ||
Others | 52,914 | 33,720 | 85,144 | 66,230 |
Total | $ 1,839,961 | $ 1,612,214 | $ 2,774,544 | $ 2,568,865 |
X | ||||||||||
- Definition The amount of expenses related to brokerage commission and handling charges in the period. No definition available.
|
X | ||||||||||
- Definition The amount of expense during the period paid for listing. No definition available.
|
X | ||||||||||
- Definition The amount of expense during the period paid for market information, cloud service, data transmission and etc. No definition available.
|
X | ||||||||||
- Definition The aggregate net amount of depreciation, amortization, and accretion recognized during an accounting period. As a noncash item, the net amount is added back to net income when calculating cash provided by or used in operations using the indirect method. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
|
X | ||||||||||
- Definition Amount of expense for employee benefit and equity-based compensation. No definition available.
|
X | ||||||||||
- Definition Expenditures for planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services. Costs of public relations and corporate promotions are typically considered to be marketing costs. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
|
X | ||||||||||
- Definition Total aggregate amount of all noninterest expense. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
|
X | ||||||||||
- References No definition available.
|
X | ||||||||||
- Definition Amount of single lease cost, calculated by allocation of remaining cost of lease over remaining lease term. Includes, but is not limited to, single lease cost, after impairment of right-of-use asset, calculated by amortization of remaining right-of-use asset and accretion of lease liability. Reference 1: http://www.xbrl.org/2003/role/exampleRef
|
X | ||||||||||
- Definition Amount of noninterest expense classified as other. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
|
X | ||||||||||
- Definition A fee charged for services from professionals such as doctors, lawyers and accountants. The term is often expanded to include other professions, for example, pharmacists charging to maintain a medicinal profile of a client or customer. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
|
X | ||||||||||
- Definition Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table. No definition available.
|
X | ||||||||||
- Definition Percentage of preferential tax rate applicable to the company. No definition available.
|
X | ||||||||||
- Definition The period during which the preferential tax rate is valid, in 'PnYnMnDTnHnMnS' format, for example, 'P1Y5M13D' represents the reported fact of one year, five months, and thirteen days. No definition available.
|
X | ||||||||||
- Definition The percentage of reduced withholding tax rate applicable to beneficial owner. No definition available.
|
X | ||||||||||
- Definition Percentage of research and development expenses that can be claimed as super deduction by the company. No definition available.
|
X | ||||||||||
- Definition The percentage of withholding tax rate. No definition available.
|
X | ||||||||||
- Definition Percentage of domestic federal statutory tax rate applicable to pretax income (loss). Reference 1: http://www.xbrl.org/2003/role/disclosureRef
|
X | ||||||||||
- Details
|
X | ||||||||||
- Details
|
X | ||||||||||
- Details
|
X | ||||||||||
- Details
|
X | ||||||||||
- Details
|
X | ||||||||||
- Details
|
X | ||||||||||
- Details
|
TAXATION - Composition of income tax expenses (Details) - HKD ($) $ in Thousands |
6 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
TAXATION | ||||
Current income tax expenses | $ 143,732 | $ 215,288 | $ 259,279 | $ 309,534 |
Deferred income tax benefit | (534) | (8,791) | (11,707) | (8,266) |
Income tax expenses | $ 143,198 | $ 206,497 | $ 247,572 | $ 301,268 |
X | ||||||||||
- Definition Amount of current income tax expense (benefit) pertaining to taxable income (loss) from continuing operations. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
|
X | ||||||||||
- Definition Amount of deferred income tax expense (benefit) pertaining to income (loss) from continuing operations. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
|
X | ||||||||||
- References No definition available.
|
X | ||||||||||
- Definition Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
|
TAXATION - Tax Reconciliation (Details) - HKD ($) $ in Thousands |
6 Months Ended | 9 Months Ended | 12 Months Ended | ||
---|---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
Dec. 31, 2021 |
|
TAXATION | |||||
Income before income tax | $ 1,366,121 | $ 1,902,687 | $ 2,229,064 | $ 2,612,670 | |
Tax expenses at Hong Kong profit tax rate of 16.5% | 225,245 | 313,943 | 367,631 | 431,091 | |
Changes of valuation allowance | 1,300 | 51,486 | (31,771) | 91,776 | |
Tax effect of permanence differences | 20,365 | 5,948 | 36,881 | 9,908 | |
Effect of income tax jurisdictions other than Hong Kong | 921 | (6,282) | 27,665 | (14,548) | |
Super deduction of research and development expenses | (31,895) | (21,597) | (61,940) | (37,407) | |
Final settlement differences | (2,418) | (3,614) | |||
Income not subject to tax | (70,320) | (137,001) | (87,280) | (179,552) | |
Income tax expenses | $ 143,198 | $ 206,497 | $ 247,572 | $ 301,268 | |
Hong Kong | |||||
TAXATION | |||||
Hong Kong profit tax rate (as a percent) | 16.50% | 16.50% | 16.50% |
X | ||||||||||
- Definition Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table. No definition available.
|
X | ||||||||||
- Definition Amount of the difference between reported income tax expense (benefit) and expected income tax expense (benefit) computed by applying the domestic federal statutory income tax rates to pretax income (loss) from continuing operations attributable to permanent differences. No definition available.
|
X | ||||||||||
- Definition Amount of the difference between reported income tax expense (benefit) and expected income tax expense (benefit) computed by applying the domestic federal statutory income tax rates to pretax income (loss) from continuing operations attributable to super deduction of research and development expenses. No definition available.
|
X | ||||||||||
- Definition Percentage of domestic federal statutory tax rate applicable to pretax income (loss). Reference 1: http://www.xbrl.org/2003/role/disclosureRef
|
X | ||||||||||
- Definition Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
|
X | ||||||||||
- Definition Amount of the difference between reported income tax expense (benefit) and expected income tax expense (benefit) computed by applying the domestic federal statutory income tax rates to pretax income (loss) from continuing operations attributable to increase (decrease) in the valuation allowance for deferred tax assets. Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef
|
X | ||||||||||
- Definition Amount of the difference between reported income tax expense (benefit) and expected income tax expense (benefit) computed by applying the domestic federal statutory income tax rates to pretax income (loss) from continuing operations attributable to foreign income tax expense (benefit). Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef
|
X | ||||||||||
- Definition The amount of income tax expense or benefit for the period computed by applying the domestic federal statutory tax rates to pretax income from continuing operations. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
|
X | ||||||||||
- Definition Amount of the difference between reported income tax expense (benefit) and expected income tax expense (benefit) computed by applying the domestic federal statutory income tax rates to pretax income (loss) from continuing operations attributable to income (loss) exempt from income taxes. Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef
|
X | ||||||||||
- Definition Amount of the difference between reported income tax expense (benefit) and expected income tax expense (benefit) computed by applying the domestic federal statutory income tax rates to pretax income (loss) from continuing operations attributable to income tax settlements. Including, but not limited to, domestic tax settlement, foreign tax settlement, state and local tax settlement, and other tax settlements. Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef
|
X | ||||||||||
- Definition The net result for the period of deducting operating expenses from operating revenues. Reference 1: http://www.xbrl.org/2003/role/exampleRef
|
X | ||||||||||
- Details
|
TAXATION - Components of the deferred tax assets (Details) - HKD ($) $ in Thousands |
Sep. 30, 2022 |
Jun. 30, 2022 |
Dec. 31, 2021 |
Sep. 30, 2021 |
Jun. 30, 2021 |
Dec. 31, 2020 |
---|---|---|---|---|---|---|
Deferred tax assets | ||||||
Net operating loss carryforwards | $ 124,678 | $ 156,774 | $ 158,826 | |||
Accrued expenses and others | 65,011 | 52,082 | 50,408 | |||
Less: valuation allowance | (137,651) | (170,722) | (169,422) | $ (159,544) | $ (119,255) | $ (67,768) |
Total deferred tax assets | 52,038 | 38,134 | 39,812 | |||
Set-off of deferred tax liabilities pursuant to set-off provisions | (976) | (1,648) | (1,495) | |||
Net deferred tax assets | 51,062 | 36,486 | 38,317 | |||
Total deferred tax liabilities | 14,422 | 9,291 | 2,131 | |||
Set-off of deferred tax assets pursuant to set-off provisions | (976) | (1,648) | (1,495) | |||
Net deferred tax liabilities | $ 13,446 | $ 7,643 | $ 636 |
X | ||||||||||
- Definition Amount, including set off of deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, without jurisdictional netting. No definition available.
|
X | ||||||||||
- Definition Amount of set off of deferred tax liability for which it is more likely than not that a tax benefit will not be realized. No definition available.
|
X | ||||||||||
- Definition Amount, before set off of deferred tax asset, of deferred tax liability attributable to taxable differences without jurisdictional netting. No definition available.
|
X | ||||||||||
- Definition Amount of setoff of deferred tax assets attributable to deductible temporary differences and carryforwards. No definition available.
|
X | ||||||||||
- References No definition available.
|
X | ||||||||||
- Definition Amount after allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards. Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef
|
X | ||||||||||
- Definition Amount before allocation of valuation allowances of deferred tax asset attributable to deductible operating loss carryforwards. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
|
X | ||||||||||
- Definition Amount before allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences from accrued liabilities. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
|
X | ||||||||||
- Definition Amount of deferred tax assets for which it is more likely than not that a tax benefit will not be realized. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
|
X | ||||||||||
- Definition Amount, after deferred tax asset, of deferred tax liability attributable to taxable differences without jurisdictional netting. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
|
TAXATION - Movement of Valuation Allowance (Details) - HKD ($) $ in Thousands |
6 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
Movement of Valuation Allowance | ||||
Balance at beginning of the period | $ 169,422 | $ 67,768 | $ 169,422 | $ 67,768 |
Additions | 58,939 | 52,234 | 89,878 | 92,445 |
Reversals | (57,639) | (748) | (121,649) | (669) |
Balance at end of the period | $ 170,722 | $ 119,255 | $ 137,651 | $ 159,544 |
X | ||||||||||
- Definition A roll forward is a reconciliation of a concept from the beginning of a period to the end of a period. No definition available.
|
X | ||||||||||
- Definition Amount of valuation allowance, deferred tax asset, additions. No definition available.
|
X | ||||||||||
- Definition Amount of valuation allowance, deferred tax asset, reversals. No definition available.
|
X | ||||||||||
- Definition Amount of deferred tax assets for which it is more likely than not that a tax benefit will not be realized. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
|
TAXATION - Net operating loss carry forwards (Details) - HKD ($) $ in Thousands |
9 Months Ended | 12 Months Ended | |
---|---|---|---|
Sep. 30, 2022 |
Dec. 31, 2021 |
Jun. 30, 2022 |
|
TAXATION | |||
Statutory rate 1 (as percent) | 25.00% | 25.00% | |
Statutory rate 2 (as percent) | 27.98% | 27.98% | |
Statutory rate 3 (as percent) | 27.87% | 27.87% | |
Statutory rate 4 (as percent) | 16.50% | 16.50% | |
Statutory rate 5 (as percent) | 17.00% | 17.00% | |
Net operating loss carryforwards | $ 711,365 | $ 764,251 | $ 767,940 |
Net operating loss carryforwards, provided for valuation allowance | 711,365 | 761,417 | 767,940 |
Net operating loss carryforwards, expected to be utilized prior to expiration | $ 0 | $ 2,834 | $ 0 |
China | |||
TAXATION | |||
Preferential tax rate (as a percent) | 15.00% | 15.00% |
X | ||||||||||
- Definition Percentage of fifth domestic federal statutory tax rate applicable to pretax income (loss). No definition available.
|
X | ||||||||||
- Definition Percentage of fourth domestic federal statutory tax rate applicable to pretax income (loss). No definition available.
|
X | ||||||||||
- Definition Percentage of first domestic federal statutory tax rate applicable to pretax income (loss). No definition available.
|
X | ||||||||||
- Definition Percentage of third domestic federal statutory tax rate applicable to pretax income (loss). No definition available.
|
X | ||||||||||
- Definition Percentage of second domestic federal statutory tax rate applicable to pretax income (loss). No definition available.
|
X | ||||||||||
- Definition Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table. No definition available.
|
X | ||||||||||
- Definition Amount of operating loss carryforwards, expected to be utilized prior to expiration. No definition available.
|
X | ||||||||||
- Definition Percentage of preferential tax rate applicable to the company. No definition available.
|
X | ||||||||||
- Definition Amount of operating loss carryforward, before tax effects, available to reduce future taxable income under enacted tax laws. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
|
X | ||||||||||
- Definition The portion of the valuation allowance pertaining to the deferred tax asset representing potential future taxable deductions from net operating loss carryforwards for which it is more likely than not that a tax benefit will not be realized. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
|
X | ||||||||||
- Details
|
DEFINED CONTRIBUTION PLAN (Details) ¥ in Thousands, $ in Thousands, $ in Thousands, $ in Thousands |
6 Months Ended | 9 Months Ended | ||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2022
SGD ($)
|
Jun. 30, 2022
HKD ($)
|
Jun. 30, 2022
CNY (¥)
|
Jun. 30, 2022
AUD ($)
|
Jun. 30, 2021
SGD ($)
|
Jun. 30, 2021
HKD ($)
|
Jun. 30, 2021
CNY (¥)
|
Jun. 30, 2021
AUD ($)
|
Sep. 30, 2022
SGD ($)
|
Sep. 30, 2022
HKD ($)
|
Sep. 30, 2022
CNY (¥)
|
Sep. 30, 2022
AUD ($)
|
Sep. 30, 2021
SGD ($)
|
Sep. 30, 2021
HKD ($)
|
Sep. 30, 2021
CNY (¥)
|
Sep. 30, 2021
AUD ($)
|
|
DEFINED CONTRIBUTION PLAN | ||||||||||||||||
Employee compensation and benefits expenses | $ 962,144 | $ 447,394 | $ 1,497,752 | $ 785,177 | ||||||||||||
China | ||||||||||||||||
DEFINED CONTRIBUTION PLAN | ||||||||||||||||
Total contributions | ¥ 79,876 | ¥ 44,086 | 145,474 | ¥ 122,913 | 91,713 | ¥ 76,379 | ||||||||||
Hong Kong | ||||||||||||||||
DEFINED CONTRIBUTION PLAN | ||||||||||||||||
Total contributions | 96,213 | 52,996 | ||||||||||||||
Employee compensation and benefits expenses | 1,238 | 994 | 1,900 | 1,585 | ||||||||||||
Singapore | ||||||||||||||||
DEFINED CONTRIBUTION PLAN | ||||||||||||||||
Total contributions | $ 275 | 1,577 | $ 160 | $ 930 | $ 406 | 2,310 | $ 207 | 1,205 | ||||||||
Australia | ||||||||||||||||
DEFINED CONTRIBUTION PLAN | ||||||||||||||||
Total contributions | $ 413 | $ 73 | $ 0 | $ 739 | $ 133 | $ 0 | $ 0 |
X | ||||||||||
- Definition Amount of cost for defined contribution plan. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
|
X | ||||||||||
- Definition Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table. No definition available.
|
X | ||||||||||
- Definition Amount of expense for employee benefit and equity-based compensation. No definition available.
|
X | ||||||||||
- Details
|
X | ||||||||||
- Details
|
X | ||||||||||
- Details
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X | ||||||||||
- Details
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X | ||||||||||
- Definition Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table. No definition available.
|
X | ||||||||||
- Definition Amount of net capital in excess of minimum required net capital, calculated under Aggregate Indebtedness Standard. Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef
|
X | ||||||||||
- Definition Minimum amount of net capital required to be maintained by broker-dealer subsidiary to engage in security transaction, calculated under Aggregate Indebtedness Standard. Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef
|
X | ||||||||||
- Definition Amount of net capital of broker-dealer. Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef
|
X | ||||||||||
- Details
|
X | ||||||||||
- Details
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- Details
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- Details
|
X | ||||||||||
- Details
|
X | ||||||||||
- Details
|
COMMITMENTS AND CONTINGENCIES (Details) $ in Thousands, $ in Thousands |
6 Months Ended | 9 Months Ended | 12 Months Ended | |||||
---|---|---|---|---|---|---|---|---|
Jun. 30, 2022
USD ($)
|
Sep. 30, 2022
USD ($)
|
Dec. 31, 2021
USD ($)
|
Sep. 30, 2022
HKD ($)
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Dec. 31, 2021
HKD ($)
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Dec. 31, 2021
USD ($)
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Dec. 31, 2020
USD ($)
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Dec. 31, 2019
USD ($)
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COMMITMENTS AND CONTINGENCIES | ||||||||
Total investment commitments | $ 74,000 | $ 74,000 | $ 104,000 | |||||
Accrual for the aforementioned loss contingency | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 |
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- References No definition available.
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- Definition Amount of loss contingency liability expected to be resolved after one year or beyond the normal operating cycle, if longer. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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- Definition Purchases during the period with related party, software purchased. No definition available.
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- Definition Amount of currency on hand as well as demand deposits with banks or financial institutions. Includes other kinds of accounts that have the general characteristics of demand deposits. Also includes short-term, highly liquid investments that are both readily convertible to known amounts of cash and so near their maturity that they present insignificant risk of changes in value because of changes in interest rates. Excludes cash and cash equivalents within disposal group and discontinued operation. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
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- Definition Carrying amount as of the balance sheet date of obligations due all related parties. Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef
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- Definition Amount of transactions with related party during the financial reporting period. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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- Definition Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table. No definition available.
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- Definition Purchases during the period (excluding transactions that are eliminated in consolidated or combined financial statements) with related party. No definition available.
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- Definition Amount of revenue, fees and commissions earned from transactions between (a) a parent company and its subsidiaries; (b) subsidiaries of a common parent; (c) an entity and trusts for the benefit of employees, for example, but not limited to, pension and profit-sharing trusts that are managed by or under the trusteeship of the entity's management; (d) an entity and its principal, owners, management, or members of their immediate families; and (e) affiliates. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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RELATED PARTY BALANCES AND TRANSACTIONS - Additional Information (Details) - HKD ($) $ in Thousands |
6 Months Ended | 9 Months Ended | |||
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Jun. 30, 2022 |
Jun. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
Dec. 31, 2021 |
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Payables to clients | |||||
RELATED PARTY BALANCES AND TRANSACTIONS | |||||
Payables to directors and officers | $ 47,882 | $ 29,322 | $ 44,480 | ||
Directors and officers and their spouses | Brokerage Services and Margin Loans | |||||
RELATED PARTY BALANCES AND TRANSACTIONS | |||||
Revenues earned | $ 394 | $ 952 | $ 528 | $ 1,255 |
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- Definition Amounts due to recorded owners or owners with a beneficial interest of more than 10 percent of the voting interests or officers of the company. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
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- Definition Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table. No definition available.
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- Definition Amount of revenue, fees and commissions earned from transactions between (a) a parent company and its subsidiaries; (b) subsidiaries of a common parent; (c) an entity and trusts for the benefit of employees, for example, but not limited to, pension and profit-sharing trusts that are managed by or under the trusteeship of the entity's management; (d) an entity and its principal, owners, management, or members of their immediate families; and (e) affiliates. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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DIVIDENDS (Details) - HKD ($) $ in Thousands |
Sep. 30, 2022 |
Jun. 30, 2022 |
Dec. 31, 2021 |
Sep. 30, 2021 |
Jun. 30, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
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DIVIDENDS | |||||||
Dividend declared | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 |
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- References No definition available.
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- Definition Carrying value as of the balance sheet date of dividends declared but unpaid on equity securities issued by the entity and outstanding. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
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SUBSEQUENT EVENTS (Details) - Subsequent event - Acquisition agreement $ in Thousands |
1 Months Ended |
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Nov. 30, 2022
HKD ($)
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SUBSEQUENT EVENTS | |
Percentage of interest in securities company | 85.00% |
Maximum | |
SUBSEQUENT EVENTS | |
Agreement of a securities company in a maximum consideration | $ 18,016 |
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- Definition Percentage of interest acquired in securities company. No definition available.
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- Definition Amount of consideration transferred, consisting of acquisition-date fair value of assets transferred by the acquirer, liabilities incurred by the acquirer, and equity interest issued by the acquirer. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
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- Definition Detail information of subsequent event by type. User is expected to use existing line items from elsewhere in the taxonomy as the primary line items for this disclosure, which is further associated with dimension and member elements pertaining to a subsequent event. No definition available.
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RECONCILIATION BETWEEN U.S. GAAP AND INTERNATIONAL FINANCIAL REPORTING STANDARDS - Reconciliation of net income in the consolidated statements of comprehensive income (Details) - HKD ($) $ in Thousands |
6 Months Ended | 9 Months Ended | ||
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Jun. 30, 2022 |
Jun. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
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Reconciliation of net income attributable to the Company in the consolidated statements of comprehensive income | ||||
Net income | $ 1,213,525 | $ 1,696,190 | $ 1,968,168 | $ 2,311,401 |
Operating lease expense | 57,682 | 47,543 | 87,503 | 77,400 |
Share-based compensation | $ 97,251 | $ 33,416 | $ 148,705 | $ 64,295 |
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- Definition Amount of expense for award under share-based payment arrangement. Excludes amount capitalized. Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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- Definition The portion of profit or loss for the period, net of income taxes, which is attributable to the parent. Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
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- Definition Amount of single lease cost, calculated by allocation of remaining cost of lease over remaining lease term. Includes, but is not limited to, single lease cost, after impairment of right-of-use asset, calculated by amortization of remaining right-of-use asset and accretion of lease liability. Reference 1: http://www.xbrl.org/2003/role/exampleRef
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RECONCILIATION BETWEEN U.S. GAAP AND INTERNATIONAL FINANCIAL REPORTING STANDARDS - Reconciliation of total shareholders' equity in the consolidated balance sheets (Details) - HKD ($) $ in Thousands |
Sep. 30, 2022 |
Jun. 30, 2022 |
Dec. 31, 2021 |
Sep. 30, 2021 |
Jun. 30, 2021 |
Dec. 31, 2020 |
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Reconciliation of total shareholders' equity in the consolidated balance sheets | ||||||
Total shareholders' equity | $ 20,186,243 | $ 19,552,820 | $ 20,985,559 | $ 21,575,782 | $ 20,904,897 | $ 8,307,690 |
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- Definition Total of all stockholders' equity (deficit) items, net of receivables from officers, directors, owners, and affiliates of the entity which are attributable to the parent. The amount of the economic entity's stockholders' equity attributable to the parent excludes the amount of stockholders' equity which is allocable to that ownership interest in subsidiary equity which is not attributable to the parent (noncontrolling interest, minority interest). This excludes temporary equity and is sometimes called permanent equity. Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef
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RECONCILIATION BETWEEN U.S. GAAP AND INTERNATIONAL FINANCIAL REPORTING STANDARDS (Details) - Share Options - 2014 Share Incentive Plan - $ / shares |
Dec. 31, 2019 |
Dec. 30, 2019 |
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RECONCILIATION BETWEEN U.S. GAAP AND INTERNATIONAL FINANCIAL REPORTING STANDARD | ||
Modification of exercise price of number of stock options granted | 8,113,145 | 8,113,145 |
Modified of exercise price of stock options granted | $ 0.60 | $ 0.60 |
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- Definition Modification of award under share-based payment arrangement of weighted average per share amount at which grantees can acquire shares of common stock by exercise of options. No definition available.
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- Definition Modification of award under share-based payment arrangement of gross number of share options (or share units) granted during the period. No definition available.
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- Definition Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table. No definition available.
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