Foreign exchange risk Most of our revenues are denominated in Hong Kong dollar and U.S. dollar and a significant portion of our expenses are denominated in Renminbi. The value of your investment in the ADSs will be affected by the exchange rate between U.S. dollar and Hong Kong dollar because the value of our business is effectively denominated in Hong Kong dollars, while the ADSs are traded in U.S. dollars. 227 Table of Contents Currency risk arises from the possibility that fluctuations in foreign exchange rates will impact the financial instruments. Our Group is not exposed to significant transactional foreign currency risk since almost all of its transactions, assets and liability are denominated in Hong Kong dollars and U.S. dollars and Hong Kong dollars are pegged against U.S. dollars. The impact of foreign currency fluctuations in our earnings is included in “Others, net” in the consolidated statements of comprehensive (loss)/income. At the same time, we are exposed to translational foreign currency risk since some of our major subsidiaries have RMB as their functional currency. Therefore, RMB depreciation against Hong Kong dollars could have a material adverse impact on the foreign currency translation adjustment in the consolidated statements of comprehensive (loss)/income. As of December 31, 2023, 2024 and 2025, we had RMB-denominated net liabilities of HK$3,711.1 million, HK$6,586.9 million and HK$8,404.6 million (US$1,079.8 million), respectively. We estimate that a 10% depreciation of Renminbi against the Hong Kong dollar based on the foreign exchange rate on December 31, 2023, 2024 and 2025 would result in an increase of HK$371.1 million, HK$658.7 million and HK$840.5 million (US$108.0 million), respectively, in our pre-tax profit for the year ended December 31, 2023, 2024 and 2025, and a 10% appreciation of Renminbi against the Hong Kong dollar based on the foreign exchange rate on December 31, 2023, 2024 and 2025 would result in a decrease of HK$371.1 million, HK$658.7 million and HK$840.5 million (US$108.0 million), respectively, in our pre-tax profit for the year ended December 31, 2023, 2024 and 2025. Credit risk Cash held on behalf of clients are segregated and deposited in financial institutions as required by rules mandated by our primary regulators. These financial institutions are of sound credit ratings; therefore management believes that there is no significant credit risk related to cash held on behalf of clients. Our securities activities are transacted on either a cash or margin basis. Our credit risk is limited in that substantially all of the contracts entered into are settled directly at securities clearing organizations. In margin transactions, we extend credit to the clients, subject to various regulatory and internal margin requirements, collateralized by cash and securities in the client’s account. We monitor our clients’ collateral level and have the right to dispose the newly allotted stocks once the stocks start trading. Stock-pledged loans to enterprise pledged by shares are exposed to credit risk from counterparties who fails to repay the loans. We monitor the collateral level of stock-pledged loans in real time, and have the right to dispose of the pledged shares once the collateral level falls under the minimal level required to get the loans repaid. Bank loans are exposed to credit risk from clients who fail to repay the loans. We oversee the management of credit risk through formulating credit policies and procedures, overseeing the credit quality of the loan portfolio, ensuring an independent and objective assessment of credit risk, controlling exposure to selected industries, counterparties, countries and portfolio types, etc.. Receivables from other brokers and dealers related to unsettled transactions are recorded at the amount for which the securities were purchased, and are paid upon receipt of the securities from other brokers or dealers. In connection with its clearing activities, we are obligated to settle transactions with brokers and other financial institutions even if its clients fail to meet their obligations to us. Clients are required to complete their transactions by the settlement date, generally two business days after the trade date. If clients do not fulfill their contractual obligations, we may incur losses. We have established procedures to reduce this risk by generally requiring that clients deposit sufficient cash and/or securities into their account prior to placing an order. 228 Table of Contents Our exposure to credit risk associated with its trading and other activities is measured on an individual counterparty basis, as well as by groups of counterparties that share similar attributes. There was no revenue from clients which individually represented greater than 10% of the total revenues for the years ended December 31, 2023, 2024 and 2025, respectively. Concentrations of credit risk can be affected by changes in political, industry, or economic factors. To reduce the potential for risk concentration, credit limits are established and exposure is monitored in light of changing counterparty and market conditions. The concentration of credit risk arises when loans are concentrated with a small number of borrowers or a limited number of listed shares pledged. We made loans to third-party enterprises secured by pledged listed shares and are exposed to credit risk in the case of default by debtors and market downturn or decline in the prices of the pledged securities. As of December 31, 2024 and 2025, a single borrower accounted for 95.91% and 95.99% of our total outstanding balance of stock-pledged loans, with a majority of the collaterals comprising of listed shares in a single company, respectively. Interest rate risk Fluctuations in market interest rates may negatively affect our financial condition and results of operations. We are exposed to floating interest rate risk on cash deposit and floating rate borrowings. We use net interest simulation modeling techniques to evaluate the effect that changes in interest rates might have on pre-tax income. The model includes all interest-sensitive assets and liabilities. The simulations involve assumptions that are inherently uncertain and, as a result, cannot precisely predict the impact that changes in interest rates will have on pre-tax income. Actual results may differ from simulated results due to differences in timing and frequency of rate changes, changes in market conditions and changes in management strategy that lead to changes in the mix of interest-sensitive assets and liabilities. The simulations assume that the asset and liability structure of the consolidated balance sheets would not be changed as a result of a simulated change in interest rates. The results of the simulations based on our financial position as of December 31, 2025 indicate that a 1% (100 basis points) increase/decrease in interest rates over a 12-month period would have increased/decreased our profit before tax by approximately HK$844.1 million (US$108.5 million), depending largely on the extent and timing of possible changes in floating rates. Inflation To date, our results of operations have not been materially affected by inflation. Although we have not been materially affected by inflation in the past, we may be affected if any country or region where we have operations experiences higher rates of inflation in the future. ​