S&P kept Futu at BBB- with a stable outlook, while regulatory penalties, weaker profit and mainland China business changes continue to shape broker risk and investor sentiment.
Credit Rating and Share Price Trends Diverge
On June 2, 2026, Futu Holdings announced that S&P Global Ratings had affirmed its long-term issuer credit rating atBBB-, with a stable outlook. The decision means that, even after regulatory penalties and pressure on its share price, the rating agency still believes Futu has an investment-grade credit foundation.
This conclusion differs from the equity market reaction. Finance Magnates reported on June 2, 2026 that Futu’s shares were trading around USD 103, down by about half from their late-2025 high. The market’s attention has focused on the proposed penalty, the exit from mainland China business and the decline in first-quarter profit, while the rating agency placed more emphasis on capital strength, funding conditions and growth in markets outside Hong Kong.
This type of divergence shows that credit markets and equity markets use different evaluation frameworks for the same company. Credit ratings focus more on whether a company can maintain solvency and funding stability, while equity valuation more directly reflects profit growth, regulatory uncertainty and business growth expectations.
The Rating Agency Focuses on Capital Buffers
S&P believes Futu has a strong market position in Hong Kong.
Futu’s capital strength is viewed as a key factor supporting its credit profile.
The company’s expansion outside mainland China may help cushion the impact of its gradual exit from mainland China business over the next two years.
S&P expects Futu to maintain adequate funding conditions as it expands its business scope and geographic coverage.
Regulatory Fine Weakens Short-Term Profit Performance
Futu’s first-quarter results showed that the company was still growing at the operating level. Total revenue reached HKD 5.856 billion, equivalent to USD 746.9 million, up 24.7% year on year; total trading volume reached HKD 4.15 trillion, up 29.1% year on year; and total client assets reached HKD 1.22 trillion, up 47.2% year on year.
Profit performance was affected by the provision for regulatory penalties. On May 22, 2026, Futu disclosed that the China Securities Regulatory Commission and its Shenzhen office proposed penalties totaling approximately RMB 1.85 billion against relevant Futu entities. The amount includes confiscation of approximately RMB 470 million in illegal gains and approximately RMB 1.38 billion in fines, and has already been reflected in the first-quarter unaudited financial statements.
Excluding this subsequent adjustment, Futu’s first-quarter net profit was approximately HKD 2.922 billion, and its non-GAAPadjusted net profit was approximately HKD 3.011 billion. After including the penalty, the company’s net profit fell to HKD 831 million, down 61.2% year on year.
Key Data Shows Two Different Directions
| Observation Area | 2026 Data | Direction of Change | Impact Assessment |
|---|---|---|---|
| Credit rating | BBB-, stable outlook | Affirmed on June 2, 2026 | Capital strength and overseas expansion continue to support the credit foundation |
| Net profit | HKD 831 million | Down 61.2% year on year | Provision for regulatory penalties dragged down short-term profit |
| Total trading volume | HKD 4.15 trillion | Up 29.1% year on year | Client trading activity remained at a high level |
| Client assets | HKD 1.22 trillion | Up 47.2% year on year | Asset growth provides a foundation for platform revenue |
Overseas Market Growth Becomes a Rating Support
One of the core reasons S&P affirmed the rating is Futu’s growth outside mainland China. In its first-quarter report, Futu said it added 225,000 net new paying clients in the first quarter, bringing the total number of paying clients to 3.590325 million, up 34.3% year on year. Li Hua, the company’s chief executive officer, said the growth in net new paying clients came from broad-based expansion across different markets.
Hong Kong and Singapore remain important regions for Futu’s overseas business. Futu said in its first-quarter report that net asset inflows accelerated, mainly driven by high-quality client bases in Hong Kong and Singapore. The company also disclosed that Hong Kong stock trading volume increased 22.5% quarter on quarter to HKD 1.0 trillion, supported by active trading in Chinese internet, semiconductor and newly listed artificial intelligence stocks.
This growth structure has direct significance for the rating. As long as overseas markets can continue to contribute clients, assets and trading volume, the impact of Futu’s gradual exit from mainland China-related business may be diversified. For the share price, however, the market still needs to see whether overseas growth can steadily cover the revenue gap caused by regulatory adjustments.
Three Implications of Futu’s Overseas Expansion
Revenue sources become more diversified, reducing dependence on trading activity from mainland China clients.
Growth in client assets in Hong Kong and Singapore may help expand the scale of the platform’s wealth management and financing businesses.
Operating in more regions also means higher compliance, technology and customer service investment.
Regulatory Boundaries for Cross-Border Brokers Are Being Redefined
The penalty facing Futu is not an isolated case. Reuters reported on May 22, 2026 that Chinese regulators had announced a crackdown on illegal cross-border securities activities, naming Futu, Tiger Brokers and Longbridge Securities. Regulators said the relevant platforms were suspected of soliciting business in mainland China without licenses and would be required to exit the relevant illegal activities during a two-year transition period.
Under this arrangement, relevant clients can only sell existing positions and withdraw funds, and cannot make new investments. The Hong Kong Securities and Futures Commission has also imposed stricter requirements on some brokers’ account reviews and source-of-funds checks.
For online brokers such as Futu, regulatory changes will affect client onboarding, deposits, new trading activity and cross-border service processes. The platform previously relied on digital trading tools to attract users. It now also needs to prove to the market that its international business growth can continue within clearer compliance boundaries.
Risk Is Shifting From a One-Off Fine to Business Structure
A one-off penalty directly affects the income statement, but the long-term impact depends on client migration and changes in trading permissions.
The gradual exit from mainland China business will test the ability of markets such as Hong Kong and Singapore to absorb growth.
The share price decline reflects investors’ cautious expectations for profit recovery and the final regulatory outcome.
The stable rating suggests that capital and funding conditions are still viewed as relatively resilient.
An Investment-Grade Rating Does Not Mean Risk Has Disappeared
S&P’s affirmation of Futu’s BBB- rating helps show that the company’s short-term credit foundation has not deteriorated immediately because of the regulatory penalty. However, an investment-grade rating does not mean operating risk has disappeared, nor does it mean equity valuation will recover at the same pace. Rating agencies focus on debt repayment capacity, while investors also assess profit resilience, client growth quality and policy uncertainty.
Futu disclosed in its first-quarter report that on November 18, 2025, its board of directors approved anADSrepurchase program of up to USD 800 million. As of May 27, 2026, the company had repurchased approximately USD 418 million of ADSs. A repurchase may signal management’s confidence in the company’s value, but it cannot replace the final resolution of regulatory issues.
Over the next few quarters, Futu’s key variables will focus on three areas: first, the final penalty decision by the China Securities Regulatory Commission; second, the transition arrangement for mainland China-related accounts and business; and third, whether overseas markets can continue to grow in terms of new paying clients, client assets and trading volume.
Indicators the Market Will Watch Next
Whether the final penalty amount is consistent with the prior notice.
Whether overall trading volume can continue to grow after the proportion of mainland China clients declines.
Whether overseas client assets and wealth management assets can continue to expand.
Whether earnings per share and market confidence improve after the repurchase program is executed.
Questions About Cross-Border Broker Ratings
Why did Futu’s share price fall while its rating remained stable?
The share price mainly reflects profit, regulatory and growth expectations, while credit ratings focus more on capital strength, funding conditions and solvency. The two use different evaluation perspectives.
Why does S&P place importance on Futu’s overseas growth?
Because Futu will gradually exit mainland China-related business over the next two years, growth in markets such as Hong Kong and Singapore may help cushion the impact of this change on the overall business.
Did all of Futu’s first-quarter operating data weaken?
No. Futu’s first-quarter revenue, trading volume, client assets and paying clients all increased year on year. The main pressure came from the proposed penalty provision, which caused net profit to decline.
Does an investment-grade rating mean Futu has no regulatory risk?
No. An investment-grade rating means the credit foundation is still recognized, but regulatory penalties, business exits and client trading restrictions may still affect the company’s subsequent performance.
