Futu Holdings Ltd., a Chinese online broker backed by Tencent Holdings Ltd., has abruptly postponed its Hong Kong listing less than a day before its scheduled debut on Friday.
Futu, which operates like Robinhood Markets Inc. in the US for clients mainly in Hong Kong and China, said it was “clarifying certain matters” with the Hong Kong Stock Exchange in a Thursday filing, without elaborating. The HKEX declined to comment.
Futu was the latest US-listed Chinese firm to make the bid to dual list its shares in Hong Kong to reach a wider investor base and hedge against the risks of getting kicked off New York exchanges. Although such a threat appeared to ease earlier this month, regulatory headwinds still exist.
Futu and its main rival Up Fintech Holding Ltd. have been operating in a grey area for their mainland China businesses, allowing millions of local investors to evade capital controls to trade shares in markets such as Hong Kong and New York. A senior central bank official has questioned the legitimacy of online trading firms, calling their services “illegal” at least twice since last 2021.
The last-minute delay “raises red flags” and “could be of concern to investors and tarnish its profile among retail clients in its largest market,” Bloomberg Intelligence analyst Sharnie Wong wrote in a report Friday.
Tencent is Futu’s second biggest shareholder after billionaire founder Leaf Li, himself a former senior executive at the internet platform company. Shares of Futu rose 1.3% on Thursday in US trading to close at US$58.91 ($79.33), extending this year’s gain to 36%.