Growth Dragons Weekly: Futu Shrugs Off Its Fine, PDD’s Cash Is Half Its Market Cap, MiniMax Wants to 6x Its ARR

What happened in China this week:
• PDD Down 9% This Week On Results. Cash Is Now Half Its Market Cap
• MiniMax Aims To 6x Its Recurring Revenue By Year End.

On paper, Futu Holdings had a strong start to 2026. Record trading volume, rapid client growth, aggressive overseas expansion.

The company added 225,000 net new funded accounts in Q1, bringing the total to 3.59 million, up 34% year-on-year. Trading volume hit a record HKD4.15 trillion. Revenue rose 25% to HKD5.9 billion.

Strong numbers, sure. But completely overshadowed by China’s meted out punishment.

But First, Let’s Understand the History

China’s latest crackdown on unauthorized cross-border securities trading has revived old fears about regulatory risk in China. Before we react in fear, though, it helps to understand how Futu got here, because none of this is an accident.

The company was registered in Hong Kong and aggressively marketed its services to mainland citizens, without holding the onshore securities licenses China requires. They knew Beijing wouldn’t grant one for cross-border trading. So they set up shop in places like Hong Kong, New Zealand, and the U.S., securing legitimate brokerage licenses in those offshore jurisdictions instead.

China runs strict capital controls. Citizens can only exchange USD50,000 a year, and explicitly cannot use it for direct overseas stock investments. Futu and similar brokers turned a blind eye to how the money got offshore. They simply provided the access once the funds were already there.

Why take that risk? Because China is a massive market, and one Futu’s founder understood natively. So they made a calculated bet. Launch first, ask for forgiveness later.

And the warnings came.

The first shots were fired around 2022, at the peak of China’s broad regulatory crackdown on tech. The China Securities Regulatory Commission (CSRC) signaled trouble by declaring that cross-border brokerages operating without domestic licenses were acting illegally.

By 2023, the authorities went further, pulling the apps from mainland app stores and barring new accounts. But Futu and its peers kept servicing existing mainland accounts, letting them continue trading overseas.

The grace period was always going to end. It just took until now.

Futu and its peers got big. Big enough that the capital flowing offshore became significant enough for the authorities to stamp it out for good.

Regulators classified all revenue from those existing mainland accounts as “illegal gains.” Futu was hit with penalties totaling roughly RMB1.85 billion. Mainland users were put on a strict two-year countdown. They can only sell assets and withdraw funds. No new buying allowed.

So How Much Does This Actually Hurt?

Less than the panic suggests.

Mainland Chinese clients represent around 13% of funded accounts, 17% of client assets, and roughly 20% of total revenue. Losing a fifth of revenue stings.

But it won’t all disappear. Futu can still facilitate A-share trading for Chinese clients if it secures a domestic license. And crucially, the company saw this coming and pivoted early to international expansion, building large, legally compliant user bases in Hong Kong, Singapore, the United States, Australia, and Malaysia. The growth momentum in those markets has been strong.

Futu also booked the full RMB1.85 billion penalty in Q1, which sent net income plunging 61% year-on-year. Ugly headline number, but it’s a one-off.

Think about it this way. This is a clean-up Futu always knew was coming, and it’s now prepared to pay for it. The profits the business generates can more than cover the bill. In exchange, it legitimizes the whole operation in China once and for all.

Futu reiterated its full-year guidance of 800,000 net new funded accounts and stressed that its bank credit lines remain intact. In the U.S., it received approval to launch prediction market trading products, opening up a fresh revenue stream just as the China door closes.

The Robinhood of the East

A word of caution if you are thinking to pick up the stock after the price got punished. Futu is ultimately in a cyclical, competitive industry. Brokers are everywhere, and trading volume ebbs and flows with the ups and downs of the market. The margins are lucrative, but these aren’t steady growth stocks. They’re volatile by nature.

Still, Futu is considered the leading modern broker from China. It captured real market share across multiple jurisdictions and built genuine traction outside China before it was forced to.

Probably the one most apt to be called the Robinhood of the East.

#2 PDD Down 9% This Week On Results. Cash Is Now Half Its Market Cap…Read more by Dr Wealth