Q3 2021 UP Fintech Holding Ltd Earnings Call

November 30, 2021

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Okay.

Ladies and gentlemen, thank you for standing by and welcome to the up Fintech holding limited third quarter 2021 earnings conference call at this time.

Disappoints are in a listen only mode. There will be a presentation followed by a question and answer session. I must advise you that this conference is being recorded today Tuesday November 30th 2021.

I'd like to hand, the conference over to your first speaker today, Mr. Clark S. Susie. Thank you. Please go ahead.

Operator, Hello, everyone and thank you for joining us for the call today up Fintech holding Limited's third quarter 2021 earnings release was distributed earlier today and is available on our IR website at IR Dot I tighter dot com as well as globe Newswire services on the call today from up Fintech are Mr. Woo.

<unk>, Chairman and Chief Executive Officer, Mr. John Zeng, Chief Financial Officer, Mr. Huang Lei CEO of U S Tiger Securities and Mr. Kenny Zhao our financial controller, Mr will give an overview of our business operations and discuss corporate highlights. Mr. Zhong will then discuss our financial results.

They will both be available to answer your questions. During the Q&A session that follows their remarks now let me cover the safe Harbor statements. We are about to make contain forward looking statements within the meaning of the U S. Private Securities Litigation Reform Act of 1995, a number of factors could cause actual results to differ materially from.

Those contained in any forward looking statement for more information about factors that could cause actual results to materially differ from those in the forward looking statements. Please refer to our form 6K furnished today November 30th 2021, and our annual report on form 20-F filed on April 28.

2021, we undertake no obligation to update any forward looking statement, except as required under applicable law.

It is my pleasure to now introduce our chairman and Chief Executive Officer, Mr. Wang Mr will make remarks in Chinese which will be followed by English translation. Mr. Weil. Please go ahead with your remarks.

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I'm John Chen.

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Hello, everyone and welcome to the Tiger brokers third quarter 2021 earnings Conference call.

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Our global expansion is progressing well, we added 82900, new accounts in the third quarter of which over 80% came from outside of mainland China total new funded accounts for the first three quarters of this year number 353300.

Already surpassing our 350000 annual guidance total customer accounts at the end of the third quarter increased by 118000 and totaled $1 $7 7 million almost double year over year total funded accounts stood at 612000 triple that of the same.

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Total revenue for the third quarter was $68 million, an increase of 60% year over year.

Non-GAAP net income was $5 3 million an improvement from the loss in the second quarter total client assets were $26 billion up 88% year over year, but a drop of 14% from the second quarter of this year.

Quarter over quarter decline in total client assets is primarily due to the drop in client position values caused by subdued market conditions. The firm continued to see healthy net asset inflows from both new and existing clients.

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An important milestone for Tiger brokers is that we've obtained a Hong Kong broker dealer license last month. This license will have a big impact on Tiger's business going forward. For example, we may start acquiring users in Hong Kong, Hong Kong as a true global financial Center with.

A substantial number of high quality investors, both retail and institutional.

With the HK license, we will be able to generate more income from margin loans, Hong Kong, Ipos and commissions among others to improve revenue per user.

We may also further improve the user trading experience for Hong Kong Securities as trade execution, and clearing will be integrated into Tiger system.

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In addition to Hong Kong. The company was admitted to the Securities Association of Singapore. We also reached a notable landmark in Singapore Tiger brokers, Singapore became the first online broker to be admitted as a trading member of Singapore Exchange Securities trading Singapore exchange derivatives trading limited.

And a clearing member of the central Depository in total Tiger brokers has obtained 46 licenses and qualifications in 36 categories in Hong Kong, Singapore, New Zealand, the United States and Australia. We also decided to set up a global dual headquarters in Singapore to expedite.

Our international expansion.

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I would now like to take this opportunity to give updates on four other key business initiatives.

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Brokers presently has offices and hold the licenses pertaining to brokerage investment banking and asset management in the United States, Australia, Singapore, and New Zealand and Hong Kong as previously stated our firm is rapidly internationalize it.

And in the third quarter.

80% of our accounts came from outside mainland China Tiger.

Tiger brokers has only been executing on our internationalization strategy for a little over a year being able to acquire so many international users in such a short period of time validates our capability to compete in global markets. We remain confident in our internationalization strategy.

We have already exceeded our 350000 annual guidance for new funded accounts in 2021, and we expect that next year, we will exceed the 1 million Mark for total funded accounts.

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With regards to corporate and institutional services, we continue to invest in scaling our investment banking and Aesop business, which augments our brokerage business.

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Aesop remains in a rapid state of expansion.

In the third quarter, we added 46, new clients of which five were a share companies and 41 work Hong Kong and U S listed companies as well as unlisted companies the scale of our Aesop business has more than doubled in the last year and the cumulative number of corporate clients added in the first three quarters.

This year was 266, 7% higher than the same period last year, our enterprise account service and the Tiger community, which corporates use to directly connect with investors and build their brands also added 53, new accounts in the third quarter on the investment banking side, we participated in.

For U S. Ipos, three of which were specs and one of it and one of which was a local American company. We're also grateful to serve X pump as an underwriter for its dual primary listing in Hong Kong.

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All new clients are having their U S cash equity trades cleared by trade up formerly known as <unk> co a self clearing broker we acquired in 2019 as of the end of the third quarter, 70% of our clients were using trade up to self clear U S cash equities.

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As previously communicated we are applying for crypto currency trading licenses in the U S. In Singapore. So we may provide local residents with crypto access I am pleased to announce U S. Tiger Securities just received approval as a money transmitter from the state of New Jersey, which enables us to provide crypto trading from New Jersey.

Residents, we look forward to obtaining more crypto licenses in the future I would now like to invite our CFO John to go over our financials.

Yeah.

Okay.

Hello, everyone.

Why on the clock.

So let me walk you through a tigress financial performance for the third quarter all numbers are U S. Dollar.

Commission for the third quarter was $33 5 million increased seven 2% year over year in Iowa as the year over year increase in trading volume, we saw slightly lower trading volume in the third quarter versus the second quarter by the way still managed to grow commission by 8% quarter over quarter.

It's more of the revenue trading such as the U S options and more volume for Hong Kong.

Take rate also increased from three <unk> in the second quarter to $3 60 in the third quarter.

Interest related income, which combines financing service fee and interest income was $20 1 million, an increase of 105% year over year, and a 5% quarter over quarter.

The year over year increase was in line with higher margin and the security lending balance.

Our quarter increase is primarily due to a more efficient self clearing margin operation given lower margin balance in the third quarter versus the second quarter.

Other revenue will mostly our underwriting revenue was $7 2 million down like 10% year over year, and 30% quarter on quarter due to a weaker IPO market, especially low Chinese ADR. This team the third quarter, the dropping underwriting revenue, partially offset the growth in commission on the interest rate.

As a result total revenue was $60 8 million in the third quarter increased 60% year over year and flat quarter over quarter.

Now on the cost.

So interest expense increased four 4% year over year to $4 2 million in lightweights user growth and increasing margin balance.

Execution and clearing expense were $9 $5 million this quarter increased lump under 45% year over year and 45% quarter over quarter.

The increase is primarily due to more custodial fees in Singapore before Tiger became SPX trading and clearing member in October we use external custodian to custodial client assets and as a custodian expense growth in line with user growth, we expect us such custodian expense to gradually go down.

We will self custodial assets in Singapore.

Employee compensation increased 71% year over year to $21 8 million as we keep adding head count in R&D self clearing to support our global expansion.

Along with headcount increased this quarter occupancy expense increased 39% year over year to $1 six 6 million.

CNA increased 30% year over year to $5 million.

Communication and data usage also increased to 116% year over year to $5 $3 million. This quarter as a result of rapid user growth.

Marketing expense was $11 2 million in the third quarter.

Up 200% year over year, but down 50, 353% quarter over quarter.

Given the choppy market backdrop in the third quarter, we scaled back our marketing to be prudent with customer acquisition costs that we say, we will see increased marketing spending and when we see the rising though.

So Larry income for third quarter was $20 5 million and adjusted for fair market value change on private CB and other non-GAAP items, our non-GAAP income for this quarter was $5 3 million.

Now I have conclude our presentation.

<unk>. Please open the line for Q&A.

Certainly.

If you wish to ask a question. Please press star one on your telephone keypad and wait for your name to be announced if you wish to cancel their request. Please press the pound or husky.

Please note that there may be a short pause, while we compile the Q&A roster.

Your first question comes from the line of from TICC.

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Tony.

Thank you Sir.

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Susan.

Yes.

Okay.

So let me just quickly transfer.

What <unk> just mentioned regarding the latest regulatory.

No.

Those and others.

And you've seen in the media so basically our business model is no different that oversee broker servicing domestic meet investors. We followed the same cave IC AML procedures and regulated by the relevant securities regulators in different regions salary innovation is not our business model, but more R&D, which greensand.

Total user experience so they can be more customers.

We have always attach great importance to business compliance since our first inception, and we have come out of several rounds of self examination and all business units and the business nice with the soft pull from external experts to ensure we are in compliance.

If there will be policy coming out from the regulators Tiger as one of the leading players in the U S. She definitely will develop to devote the resources to make sure we are in compliance.

Definitely we will keep monitoring the situation and to make sure. You know we can we will be in compliance with such policies put into effect.

And then regarding the personal information protection law, so that a lot.

Went into effect on November one.

And actually before the law.

As an international brokerage.

We're already formulated.

Serious policies and procedures and personal information protection and data security with high standard in accordance with applicable laws and industry requirements.

And then besides you know we did a lot of preparation in advance before this new law with higher coffee industry experts as lawyers to self exam or the operations involving personnel information and reflect the rules under this new alloy into our current process policy center user equipment to ensure users benefits Max.

Right.

And of course, you know going forward, we will pay closer attention to the development of the.

Bye.

This new law and making sure you know we can properly address Wednesday, this new guidance from the regulators.

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So we saw some of that outflow flowing that use our small scale and allow is already back to normal.

For non Chinese users.

We keep seeing that asset inflow and actually you know since October average you know first timer deposit from our Singapore users.

Actually.

Around 5000 or above it's actually even more than the average initial deposit because of 4000 USD. We saw four new users acquired in the second and third quarter, which shows our brand surveys are still attracting high quality international users.

Yeah.

Again, thank you.

Our next question comes from Alan Kuang from Citi. Please ask your question.

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Oh funny, Yeah, Hi management. This is Julia from Citi Research. Thank you forgive me the opportunity to raise the questions I have two questions here first it's encouraging to see that the new customer number in the first nine months has already surpassed the full year guidance of $350.

And then could you also share guidance about the key regions I'll focus in terms of customer acquisition and the future growth pockets also could you give us more color in.

In terms of the fourth quarter operation of crime, including the customer question.

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Okay.

Okay. So in the third quarter, we added 80.

<unk> 2900 funded icons.

Which you know over 80% came from outside of China, which shows our international strategy is progressing very well.

Going forward, our focus right now of course will be in Singapore, and Hong Kong. So Singapore, we just obtain a self clearing depository license for SPX.

These qualifications will help us better service, Singapore local clients.

We just got licensed in Hong Kong, So Hong Kong is definitely a lot of key area, we will focus a lot.

<unk> developed developing and is devoting more resources to ramp up of our trading infrastructure in Hong Kong.

In the U S. We haven't really launched peak marketing yet.

Focus now is still on the infrastructure of self clearing we believe this will give us some more competitive advantage over our peers in the U S market and of course, you know as Tim had mentioned earlier you know, we just got the crypto trading the money transmitter license in New Jersey, we feel this could be a lot or two for us to tap into the U S market, one way or.

Officially launch our marketing in the states.

And of course outside of those areas. We are also evaluating other markets.

We went through a comprehensive analysis before into a new market.

To review its 10 competitive landscape, while the value, we can bring and what kind of <unk>, we can generate.

Based on our experienced Singapore, we are confident on our user experience R&D capability will give us an age when entering new markets and we are optimistic.

Internationalization growth outlook.

Yeah.

Great.

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Yeah.

So regarding first quarter outlook, so ran out.

We're still monitoring the market conditions to decide how much marketing we will spend on user acquisition.

When we evaluate our user acquisition strategy you know we will of course monitor the CIC monitoring the payback so as of right now given the market backdrop, we are still relatively is scaled back.

And waiting for a right opportunity too.

Two of empower marketing.

And trading volume so far is similar to third quarter total volume might be smaller than Q3, given more holidays in the fourth quarter, but higher <unk> product on a cash equity options, we see similar volume versus Q3.

And for Q4, and our focus these R&D. So we will spend more resources in R&D to be far infrastructure in Hong Kong, Singapore to make sure. We can play better trading experience for our users. Thank you.

Yeah.

Your next question comes from the line of Han Young Wang from 86 research. Please ask your question.

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Oh, okay.

Yeah.

Thanks management for taking my questions I have two questions.

The first the warranty was already on the spacing.

Hong Kong the company I'll turn the Hong Kong brokerage license through acquiring Ocean joins squeaky clean this quarter.

We know the competition was acquired intent in Hong Kong, So what would be the strategy for you all is that reducing Hong Kong.

And how shall we expect the incremental new users come from Hong Kong going forward.

My question is about the RP will relate to the business. So we observed that the tech IPO and starting to assume in Hong Kong This quarter.

Who are the leasing of the Chinese 80 yards deal face uncertainties. So what's your view on the development of the underwriting business. Thank you.

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Yeah.

Yes, let me translate first okay.

First of all you know.

As everybody know Hong Kong licensees were important to us so it's the Hong Kong license.

One side, we have.

You know, we can tap into the Hong Kong local residents, which we're missing upfront the Tigers user base before and on the other hand, we will be able to increase the output.

From our user base, so our plan for Hong Kong.

Basically <unk> III step first of all as you know on the institutional business no matter, it's for services to institutional investors or Aesop or Hong Kong IPO underwriting so at least the Hong Kong license will definitely being more aggressive and more active in the institutional piece of it.

My space.

The second step will be gradually too.

Moving from IV chlorine for one country acreage to our own South Korea Hong Kong.

As a lot of you know you know traditionally reuse AB two clear hung countries and as a carrier expenses very expensive <unk> for Hong Kong Potter was really low before but this will be gradually changed once we switching from IP creamy Hong Kong to our own clearly Hong Kong. The first step will be in the lunch hour retail marketing in Hong Kong.

We know we have a lot of PRC, Hong Kong, and we give them a lot of credit for what they have done a very good companies and apps by the way feel Tiger.

Has our own you know.

Competitive advantage, especially as other Hong Kong products for example, in our Hong Kong IPO subscription.

Naturally you know it will give us a chance to tap into more users. So if youll feel pretty confident we can't grab up good market share in Hong Kong.

Okay.

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When we go talk about your thought that you can capture tissue.

Okay.

So let me quickly translate cellphone financial perspective, yes, given the recent.

Sino U S relationship, we do see dropping underwriting revenue for third quarter.

We don't know when the.

The Chinese ADR IPO will resume but we do believe both sides couldn't reach an agreement and hopefully by sometime next year, we will see more Chinese ADR.

Back to the market, but in the meantime, given now we have Hong Kong license, we can be more active in hunter I belonged to rate rising to drive underwriting revenue to compensate the potential loss.

U S underwriting market.

I just want to reiterate obviously, the Tiger investment banking business. So our underwriting business is different from traditional investment bank underwriting fee of course is important but more important to us is the synergy generated by underwriting business with <unk>.

You saw in our brokerage.

Business. So we can provide more value added services to our corporate and retail clients.

You increased user stickiness in our pool so.

So in short you know.

We understand in the short term there may be some heavy four hour.

The writing business.

We're committed to you know.

Putting into ratios seem to tiger.

Underwriting business to make sure we can provide more synergy to our other business units at the probe provide more values to our corporate and retail users. Thank you.

Yeah.

Oh, so you're taking a hard once you hit your uncle's alright. Thank you very helpful.

At this point I would now like to hand, the call back to Mr. Clarke as Susie for any closing remarks.

I would like to thank everyone for joining our call today I am now closing the call on behalf of the management team here at Tiger. We do appreciate your participation in today's call. If you have any further questions. Please reach out to our Investor Relations team. This concludes the call and thank you very much for your time.

Thank you, ladies and gentlemen that does conclude our conference for today. Thank you for participating you may now all disconnect.

Yeah.

[music].

Ladies and gentlemen, thank you for standing by and welcome to the up Fintech holding limited third quarter 2021 earnings call.

<unk> call.

At this time all participants are in a listen only mode. There will be a presentation followed by a question and answer session. I must advice you that this conference is being recorded today Tuesday November 30th 2021 I would now like to hand, the conference over to your first speaker today Mr. Clarke.

S. Susie. Thank you. Please go ahead.

Thank you operator, Hello, everyone and thank you for joining us for the call today up Fintech holding limited third quarter 2021 earnings release was distributed earlier today and is available on our IR website at IR Dot I Tiger Dot com as well as globe Newswire services on the call today from up Fintech are Mr.

<unk>, Chairman and Chief Executive Officer, Mr. John Zeng, Chief Financial Officer, Mr. Huang Lei CEO of U S Tiger Securities and Mr. Kenny job, our financial controller, Mr who will give an overview of our business operations and discuss corporate highlights. Mr. Zhong will then discuss our financial results.

They will both be available to answer your questions. During the Q&A session that follows their remarks.

Now let me cover the Safe Harbor statements. We are about to make contain forward looking statements within the meaning of the U S. Private Securities Litigation Reform Act of 1995.

A number of factors could cause actual results to differ materially from those contained in any forward looking statement for more information about factors that could cause actual results to materially differ from those in the forward looking statements. Please refer to our form 6K furnished today November 30th 2021.

And our annual report on form 20-F filed on April 28, 2021, we undertake no obligation to update any forward looking statements, except as required under applicable law.

It is my pleasure to now introduce our chairman and Chief Executive Officer, Mr. Mitch.

Mr. <unk> will make remarks in Chinese which will be followed by English translation. Mr. Wherley. Please go ahead with your remarks.

But it all up front.

I'm John Carney.

Our Union Defense CFO, Hello, how quick.

Hello, everyone and welcome to the Tiger brokers third quarter 2021 earnings Conference call.

So even though we've had a project.

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You'll see that our great channel integrating somebody.

Our global expansion is progressing well, we added 82900, new accounts in the third quarter of which over 80% came from outside mainland China.

Total new funded accounts for the first three quarters of this year number 353300 already surpassing our 350000 annual guidance total customer accounts at the end of the third quarter increased by 118000 and totaled $1 707 million almost double.

Year over year total funded accounts stood at 612000 triple that of the same period of last year.

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Total revenue for the third quarter was $68 million, an increase of 60% year over year.

The quarter over quarter decline in total client assets is primarily due to the drop in client position values caused by subdued market conditions. The firm continued to see healthy net asset inflows from both new and existing clients.

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And then once you shouldn't want me on core Gung would tell you that you see someone else yet.

A substantial number of high quality investors, both retail and institutional.

With the HK license, we will be able to generate more income from margin loans, Hong Kong, Ipos and commissions among others to improve revenue per user.

We may also further improve the user trading experience for Hong Kong Securities as trade execution, and clearing will be integrated into Tiger system.

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<unk> digital.

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Hi, Dan how to shop.

And a clearing member of the central Depository and.

In total Tiger brokers has obtained 46 licenses and qualifications in 36 categories in Hong Kong, Singapore, New Zealand, the United States and Australia. We also decided to set up a global dual headquarters in Singapore to expedite our international expansion.

Could I ask them, what got us thinking about that.

I would now like to take this opportunity to give updates on four other key business initiatives.

Pete could you have Hangzhou Tianjin melting Gen she'll make work, although yeah Singapore.

Shandong and Guizhou <unk> total income.

Hi, John.

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Well I think what you'll have a patent licensing teenage CK, one financial shutting the central Washington will be all <unk>, so including the issue then cobalt you bought back a bit.

Tiger brokers presently has offices in holds licenses pertaining to brokerage investment banking and asset management in the United States, Australia, Singapore, and New Zealand and Hong Kong as previously stated our firm is rapidly internationalize it and in the third quarter.

80% of our accounts came from outside mainland China Tiger.

We have already exceeded our 350000 annual guidance for new funded accounts in 2021, and we expect that next year, we will exceed the 1 million Mark for total funded accounts.

Yeah sure John.

Oh really things in turnkey away closing co home you saw hook or do you want <unk> I'll tell you.

With regards to corporate and institutional services, we continue to invest in scaling our investment banking and Aesop business, which augments our brokerage business.

It's all.

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Hey, Phil.

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Aesop remains in a rapid state of expansion in the third quarter. We added 46, new clients of which five were a share companies and 41 work Hong Kong and U S listed companies as well as unlisted companies the scale of our Aesop business has more than doubled in the last year and the <unk>.

A number of corporate clients added in the first three quarters of this year was 266, 7% higher than the same period last year, our enterprise account service and the Tiger community, which corporates used to directly connect with investors and build their brands also added 53, new accounts in the third.

Quarter on the investment banking side, we participated in four U S. Ipos three of which were specs and one of itch and one of which was a local American company. We're also grateful to serve ex PON as an underwriter for its dual primary listing in Hong Kong.

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<unk>.

All new clients are having their U S cash equity trades cleared by trade up formerly known as <unk> co a self clearing broker we acquired in 2019.

As of the end of the third quarter, 70% of our clients were using trade up to self clear U S cash equities.

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I realize quite elegant daughter sort of way you can put around loyalty.

Residents, we look forward to obtaining more crypto licenses in the future I would now like to invite our CFO John to go over our financials.

[laughter].

Okay.

Hello, everyone.

Well I on the clock.

So let me walk you through a tigress financial performance for the third quarter all numbers are U S. Dollar.

Commission for the third quarter was $33 5 million increased 72% year over year in Iowa as the year over year increase in trading volume, we saw slightly lower trading volume in the third quarter versus the second quarter by the way still managed to grow commission by 8% quarter over quarter.

It's more of the revenue trading such as the U S options and more volume for Hong Kong.

Take rate also increased price right because in the second quarter to $3 6 billion in the third quarter.

Interest related income, which combines financing service fee and interest income was $20 1 million, an increase of 105% year over year and 5% quarter over quarter.

The year over year increase was in Iowa is higher margin and securities lending balanced the quarter over quarter increase is primarily due to a more efficient self clearing margin operation given lower margin balance in the third quarter versus the second quarter.

Other revenue will mostly our underwriting revenue was $7 2 million down like 10% year over year, and 30% quarter on quarter due to a weaker IPO market, especially in the Chinese ADR. This team the third quarter, the dropping underwriting revenue, partially offset of gross income ACN and interest related to <unk>.

As a result total revenue was $60 8 million in the third quarter increased 60% year over year and flat quarter over quarter.

Now on the cost.

So interest expense increased four 4% year over year to $4 2 million in Iowa is user growth and increasing margin balance.

Execution and clearing expense were $95 million this quarter increased lump under 45% year over a year and a 45% quarter over quarter.

The increase is primarily due to more custodial fees in Singapore before Tiger became a S. T X trading and clearing member in October we use external custodian to custody client assets and as a custodian expense growth in line with user growth, we expect such custodian expense to gradually build out as.

We will self custodial assets in Singapore.

Employee compensation increased 71% year over year to $21 8 million as we keep adding head count in R&D self clearing to support our global expansion.

Along with headcount increased this quarter occupancy expense increased 39% year over year to $1 six 6 million.

SG&A increased 30% year over year to $5 million.

Communications and data usage also increased to 116% year over year to $5 3 million in this quarter as a result of rapid user growth.

Marketing expense was $11 2 million in the third quarter.

Up 200% year over year, but down 50, 353% quarter over quarter.

Given the choppy market backdrop in the third quarter, we scaled back our marketing to be put in with customer acquisition costs that we say, we will see increased marketing spending and when we see the rising though.

So let income for third quarter was $20 5 million and adjust for fair market value change on private CB and the other non-GAAP items, our non-GAAP income for this quarter was $5 3 million.

Lai have conclude our presentation.

<unk>. Please open the line for Q&A.

Certainly.

If you wish to ask a question. Please press star one on your telephone keypad and wait for your name to be announced if you wish to cancel their request. Please press the pound or husky.

Please note that there may be a short pause, while we compile the Q&A roster.

Your first question comes from the line of pad two from TICC. Please ask your question.

Uh huh.

Okay.

Thank you ladies and gentlemen.

What do you think we're not going to talk to you.

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Richard.

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Sure.

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Susan.

Yes.

Okay.

So let me just quickly translate.

What I just mentioned regarding the latest regulatory you.

You know.

Those and other state and you'll see the in the media. So basically our business model you know, it's no different than that oversee broker servicing domestic REIT investors. We followed the same cave IC AML procedures and regulated by the relevant securities regulators in different regions salary innovation is not our business model.

But a more R&D, which brings unparalleled user experience so they can be more customers.

We have always attach great importance to business compliance since our first inception, and we have come out of several rounds of self examination of our business units and the business nice with the SAP wholesale external experts to ensure we are in compliance.

If there will be policy coming out from the regulators Tiger as one of the leading players in the industry definitely will develop the great devote the resources to make sure. We're in compliance and we definitely will keep monitoring the situation and to make sure. You know we can we were being compassionate such policies put into effect.

And then regarding the personal information protection law. So there are a lot when.

Went into effect on November 1st and actually before the law.

Wei as our international brokerage.

We're already formulated and implemented a series of policies and procedures and personal information protection and data security with a high standard.

<unk> uptake of the lowest in the industry requirements.

And then besides you know we did a lot of preparation you headwinds before this new law with higher coffee industrial experts at the lawyers to self exam or the operations involving personal information and reflect the rules under this new alloy into our current process policy center user equipment to ensure users benefits Matt.

Tonight.

And of course, you know going forward, we will pay closer attention to the development of the light.

Hi.

This new law and making sure you know, we can't possibly added to us whether it's new guidance from the regulators.

And.

Regarding just as sort of you can see here with GT the Asia.

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She's the highway you don't put the time that you that you called out some good young who are doing searches have been in Shanghai, if we'd been shelf.

So we saw some of that outflow flowing the dose our small scale and the law is already back to normal.

For non Chinese users Ah, we keep seeing that asset inflows and actually you know since October. It's the average you know first timer deposit for our Singapore users are actually.

Around 5000 or above it's actually even more than the average initial deposit because of 4000 USD. We saw four new users acquired in the second and third quarter, which shows our Grand surveys are still attracting high quality international users. Thank.

Thank you.

Yeah.

Thanks.

Your next question comes from Alan Kuang from Citi. Please ask your question.

Right now what have you.

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Well you can't find niche high management. This is Julia from Citi Research. Thank you forgive me me the opportunity to raise the questions I have two questions here first it's encouraging to see that the Nielsen customer number in the first nine months has already surpassed the full year guidance of 350000.

Could you also share a guidance about the key weekends off okay. So in terms of customer acquisition and the future growth pockets also could you give us more color in terms of the fourth quarter operation of crime, including the customer also.

Thank you.

Okay.

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Okay.

Okay. So in the third quarter, we added 980.

<unk> 2900 funded outcomes of which you know over 80% came from outside of China, which shows our international strategy is progressing very well.

Going forward you know our focus right now of course, we'll be seeing a play out of Hong Kong. So Singapore, we just obtain a self clearing depository license for SPX.

These qualifications will help us better service, Singapore local clients.

We just got licensed in Hong Kong, So Hong Kong is definitely a lot of care area, we will focus a lot of ways.

Develop developing allies devoting more ratios to ramp of our trading infrastructure in Hong Kong.

In the U S. We haven't really launch a big marketing yet our focus now is still on the infrastructure of self clearing we believe this will give us some more competitive advantage over our peers in the U S market and of course, you know as Tim had mentioned earlier you know, we just got the crypto trading the money transmitter license in New Jersey, we feel this.

Will it be a lot or two for us.

Tapping into the U S market when we officially launched our marketing in the states.

And of course outside of those areas. We are also evaluating other markets a waiver through a comprehensive analysis before into a new market.

We will review its 10 competitive landscape what value, we can bring and what kind of you eat we can't generate.

Based on our experienced Singapore, we are confident on our user experience R&D capability will give us an age when entering new markets and we're optimistic.

Nationalization growth outlook.

Well there is certainly to the remaining 200 down long.

And then a choice either so CNI John is our user acquisition. So you called out what message is this your high school you guys send agents in there John.

And two of them, which are nice analysts just how much you can quantify it for sure it could be that favorable so its almost its own call cut out a bunch of Hawker center and payback of things that you see that ensures a dialogue.

Got phases, how how the windows 10, as a whole all of which had us spending two O clock.

Now I'll tell you the analysts and calling out just which ones should we understand that ICL objects intellectual consented to kind of capital. Okay. Thank you.

Our children and our talent and he tells you now have essentially two really solid idea.

<unk> and icon to Sanjay you EPS I'll call as Huntington's Watson will make with China, you guys, who can essentially those capital projects.

Yogurts out Amazon job.

Consciousness, when I kind of addressed all of them, which has not only sounds like say someplace else I've seen that Bush's anti Italia Halle within its only in the houses that you. If I told you that doesn't hold Hyatt about well modality, they don't feel consulting which yet.

So regarding first quarter outlook. So right now you know.

We're still monitoring the market conditions to decide how much marketing we will spend on user acquisition.

When we evaluate our user acquisition strategy you know we will of course monitor the CIC monitoring the payback so as of right now given the market backdrop, we are still relativity is scaled back.

And waiting for the right opportunity to.

Two of manpower marketing.

Trading volume so far is similar to third quarter total volume might be smaller than Q3, given more holidays in the fourth quarter, but a higher <unk> product our cash equity options, we see similar volume versus Q3.

Your next question comes from the line of <unk> Wang from 86 research. Please ask your question.

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Our teacher or we can not only help with the ones.

Thanks management for taking my questions I have two questions.

The first one was already on the existing spacing in Hong Kong The company all kinds of Hong Kong broker license through acquiring Ocean George Who's using it.

With her.

We know the competition was acquired in testing of Hong Kong, So what would be the strategy for your user acquisition of Hong Kong and how shall we expect the incremental new users come from Hong Kong going forward.

Second question is about the IPO, where they see the goodness. So we observed that the tech ipos that he will assume in Hong Kong this quarter.

Why are the leasing of the Chinese ADR is still face uncertainties. So what's your view on the development of the underwriting business. Thank you.

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Now Kelvin.

Yeah, Let me let me translate first okay. So.

So first of all you know.

As everybody know Hong Kong licensees were important to us so it's the Hong Kong license on the one side we have a.

We can tap into the Hong Kong local residents, which we're missing out front the Tigers user base before and on the other hand, we will be able to increase the output from our user base. So our plan for Hong Kong based.

Basically <unk> III step first of all as you know on the institutional business no matter its four servings to institutional investors or aesop or Hong Kong IPO underwriting service to Hong Kong license will definitely being more aggressive and more active in the institutional piece.

Nah space, the second step will be gradually too.

Moving from IV clearing for Hong Kong Securities to our own self clearing Hong Kong.

As a lot of you know you know traditionally regions AB two clear home countries and as a carrier expenses very expensive. So our U E for Hong Kong power that was really low before but this will be gradually change telling me and all of us.

Switching from IP creamy Hong Kong onto our own clearly Hong Kong. The first step will be the launch of our retail marketing in Hong Kong.

We know we have a lot of shares in Hong Kong, and we give them a lot of credit for what they have done a very good companies that apps by the way feel you know Tiger you know has our own you know competitive advantage, especially as other Hong Kong for example, in our Hong Kong IPO subscription.

Naturally you know will give us such has to tap into more users. So we feel pretty confident we can grab a good market share in Hong Kong.

But as long as well.

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Okay.

So let me quickly translate cellphone financial perspective, yes, given the recent.

Sino U S relationship, we do see dropping underwriting revenue for third quarter.

We don't know when.

The Chinese ADR IPO will resume but we do believe you know both sides couldn't reach an agreement and hopefully by sometime next year, we will see more Chinese ADR back.

Back to the market, but in the meantime, given now we have Hong Kong license, we can be more active in Hong Kong IPO underwriting writing to drive underwriting revenue to compensate the potential loss from the U S underwriting market.

I just want to reiterate how we see the Tiger and investment banking business. So all of our underwriting business is different from traditional investment bank underwriting fee of course is important but more important to us is the synergy generated by underwriting business place yourself in a brokerage.

Business. So we can provide more value added service to our corporate and retail clients and.

Increased user stickiness in our pool.

So in short.

We understand the short term there might be some heavy for our underwriting basis, but we are committed to you know.

Putting into ratios into Tiger.

Underwriting pieces to make sure you know we can provide more synergy to our other business units and provide more values to our corporate and retail users. Thank you.

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I was just taking a hard once you hit your uncle's alright.

Alright, Thank you very clear and helpful.

At this point I would now like to hand, the call back to Mr. Clarke as Susie for any closing remarks.

Thank you, ladies and gentlemen that does conclude our conference for today. Thank you for participating you may now all disconnect.

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