Arthur Chen: Thank you. I will take your second question first and leave the first question to my colleagues, Daniel. In terms of trading velocity, you’re right. The trading velocity stungs in Hong Kong and the US in the fourth quarter. Despite the US stock performed very well in the fourth quarter, but it remains a very strong continuous uptrend for the whole quarters. So most of our clients actually use a buy-and-hold strategy to enjoy the rallies. And the implied volatility in the US markets in the fourth quarter actually went down compared with third quarters. So the trading velocities decreased — actually, based on our observations is in line with a lot of other US discount brokers’ operating matrix as well. Then in the first quarter this year so far, we have seen a very healthy pickup, not only in the US but also in Hong Kong in terms of the trading volume and also the trading velocity. Thank you.
Daniel Yuan: Thank you, Emma. This is Daniel, and I will take your question on decline quality in international markets. Actually, we have seen an improvement in average AUM, not only in Singapore, but also in our other international markets, including the US, Australia and Japan, mostly because unlike some of our other peers, I think, Futu really cares about quality growth. And net inflow of AUM is a key KPI — very important KPI for all of our marketing teams across different international regions. And in the fourth quarter, we have seen very strong AUM inflows despite weak market sentiments and in the first two months this year, as Leaf mentioned in his opening remarks, we have a higher net asset inflow in the first two months of this year than the entire fourth quarter combined.
And actually, over one-third of that net asset inflow comes from international markets. And so we’ll expect a continued upward trajectory in our client assets across international markets. And for Hong Kong, in the past couple of quarters, we continue to attract older clients, especially with our off-line store. And we have seen that these clients typically have higher average assets. But because of the large base effect, these new clients didn’t change the overall client profile much in Hong Kong. Thank you.
Operator: Thank you. Next question today is from Leon Qi from Daiwa.
Leon Qi: Thanks for taking my questions. This is Leon Qi. I want to ask two questions today. Firstly, is on our Hong Kong marketing and client acquisition strategy. We’ve just now management shared a lot of details on Singapore, but I’m interested in Hong Kong now. Given we have a increasing number of client base — paying client base now, with management’s view that going forward it will be increasingly more difficult for us to acquire new customers. Are we considering gradually shifting our focus from the number of customers into average AUM or the quality of our customers? We do appreciate the new customer guidance that management talked about just now — that Hong Kong new customers’ guidance 2024 would be similar to 2023.
Second question is on self-clearing in US stocks. May I confirm that all of our trades in US has already been self-cleared. In addition to the positive impact on our net interest income, do we see any improvements in terms of our trading execution efficiencies by using self-clearing. Wondering if we can make any comparisons with our competitors in the US, such as Interactive Brokers, et cetera. Thank you very much.
Arthur Chen: Thank you, Leon. I’ll Leaf to take the first question, and I will answer the second one.
Leaf Hua Li: The Hong Kong market is our home base, and in 2023, we continue to maintain very high penetration among the younger clients. And we also steadily improved our penetration into clients from other age groups. As of the end of Q4, our paying client penetration among the adults aged 35 to 55 in Hong Kong was over 10%. And in Hong Kong, our goal is to achieve high-quality growth, and we focus on acquiring high-quality clients and also focus on attracting net asset inflow from existing clients. That’s why during Q4 and also in the past where market sentiments were weak, we continued to see very robust net asset inflow from Hong Kong. And going forward, we’ll leverage our comprehensive product offerings and have different operational strategies for clients with different asset analysis and different investment needs. And we’ll very closely track the net asset inflow trend in Hong Kong. Thank you.
Arthur Chen: And for the second question, you’re right, we have already largely complete the US self-clearing so far. And I think actually the positive contributions from this migration will continue thanks to the increase the client access cohort and also the contribution from the new markets such as Japan and Malaysia. And in terms of the operating efficiency, definitely after the self-clearing capabilities, our service downtimes versus before has been meaningfully decreased and also the trading execution in terms of the reporting et cetera, will be more smooth. Thank you.
Operator: Thank you. [Operator Instructions]. Next question today is from Peter Zhang from JPMorgan.
Peter Zhang: My first question is about the interest income. We noticed that your interest income had been decreased sequentially in first quarter. We wish to understand what’s the fourth quarter trend for clients idle cash and Futu’s deposit rates? And also, I wish to understand what’s the trend in first quarter for clients idle cash balance. My second question is about the operating expense. I wish to understand what is Futu’s plan for the headcount increase in 2024 and what’s management’s guidance for Futu’s operating expense increase of, say, cost of income ratio trends? Thank you.
Arthur Chen: Thank you, Peter. I will take these two questions for four idle cash. Roughly idle cash account for 10% to 15% of our total client assets in the past quarter and also the similar situation happened in the first quarter so far. And the decrease of the interest revenue in the fourth quarter, as I mentioned in the in the opening remarks, is mainly due to the decrease of the average balance decrease for the security borrowing and the lending despite if you see the balance sheet date, the margin and the security lending balance was higher than that in the third quarter. Then for your second half questions, in terms of headcounts, we are looking for mid to high single-digit headcount growth. Mainly will be deployed following international market expansion and further enhance our R&D capabilities.
