On June 2, Futu Holdings declined 5.04% in regular trading, trading at $98.485/share, with trading volume of $208 million. The stock continues to face selling pressure following the China Securities Regulatory Commission's record RMB 18.5 billion penalty and a disappointing Q1 earnings report.

The CSRC determined that Futu operated unlicensed cross-border securities business in mainland China, imposing confiscation of RMB 4.7 billion in illegal gains plus RMB 13.8 billion in fines, totaling approximately RMB 18.5 billion ($271 million). Founder and CEO Li Hua also faces a personal fine of RMB 1.25 million. Q1 results released on May 28 showed revenue of HK$5.86 billion, up 24.7% year-over-year, but net profit collapsed 61.2% to HK$831 million after the full one-time provision. Excluding the penalty, adjusted net profit would have grown 35.8% to HK$3.01 billion.

Management stated the full-year client acquisition target of 800,000 remains unaffected, with mainland clients now representing only 13% of funded accounts. Goldman Sachs recently downgraded the stock from Buy to Neutral with a target price cut to $102.13 from $210.47, while the company's planned secondary listing in Hong Kong has been postponed.

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