On May 26, Futu Holdings rose 5.33% in pre-market trading, trading at $94.3/share with trading volume of $14.665 million, partially recovering from last Friday's 27.5% plunge triggered by China's regulatory crackdown.

The rebound comes as the market digests the China Securities Regulatory Commission's proposed penalty of approximately 1.85 billion RMB against Futu's mainland entities for conducting unauthorized securities, public fund sales, and futures businesses without required licenses. The CSRC, acting in coordination with eight government departments, also proposed a personal fine of 1.25 million RMB against founder and CEO Li Hua.

Futu disclosed that it has been actively implementing rectification measures and that mainland clients with assets accounted for only 13% of total clients by the end of Q1. The company emphasized that overseas funded accounts continue to grow steadily as it expands internationally. JP Morgan slashed its target price from $300 to $87 and downgraded the stock to neutral. A two-year transition period has been set for existing mainland users to wind down positions.

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