Q4 2022 UP Fintech Holding Ltd Earnings Call
Speaker 1: You.
Speaker 1: Four.
Speaker 2: Ladies and gentlemen, thank you for standing by and welcome to the UP FinTech Holding Limited fourth quarter 2022 earnings conference call. At this time, all participants are in a listen only mode. There will be a presentation followed by a question and answer session.
Speaker 2: I must advise you that this conference is being recorded today, March 29th, 2023. I would now like to hand the conference over to your first speaker today, Mr Aaron Lee, the head of IR. Thank you, please go ahead.
Speaker 3: Thank you, operator.
Speaker 3: Hello everyone and thank you for joining us for the call today. Upprint High Coding Limited's fourth quarter and full year 2022 earnings release was distributed earlier today and is available on our IR website at ir.ipackerup.com as well as Globe News Services.
Speaker 3: On the call today from up print tax, Mr. Wu Tianbao, Chairman and Chief Executive Officer, Mr. Jiangfeng, Chief Financial Officer, Mr. Huang Lei, CEO of US Tiger Securities, and Mr. Ken Nijiao, our Financial Controller.
Speaker 3: Mr. Wu will give an overview of our business operations and discuss corporate highlights. If the zone will then discuss our financial results, they will both be available to offer questions during the Q&A session, so please follow up very well.
Speaker 3: Well now let me cover the spray powder.
Speaker 3: The statements were about to make content for looking statements, within the meaning of the US Public Security and National Factors could cause actual results to differ materially from those containing any proofing treatment.
Speaker 3: For more information about factors, that could cause actual results from material feedback from those in the FOG or some statements, please report to our phone 6K experience today, March 29, 2023, and our annual report on phone 20F, February 28, 2022. We undertake no obligation to update any poll-looking statement.
Speaker 3: except as required under applicable law.
Speaker 3: It is my pleasure to now introduce our chairman and chief executive officer Mr. Wu. Mr. Wu will make remarks in Chinese that will be followed by English translation. Mr. Wu is so happy to know. Hello, everyone. Thank you very much for your participation. Mr. Wu, the second year of the second year of the Second Year.
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Speaker 3: 2022 was a year of its challenge. Geosolidical complex, fast with high-spatular reserves for counter-high inflation, meltdown in crypto sectors, outhand for investor confidence and flow down market activities.
Speaker 3: Under this macro backdrop, we remain committed to international growth, with the answer space in cost and efficiency.
Speaker 3: In 2022, we further solidified our market leading position in Singapore, instead of Australia and New Zealand market to expand our footprint.
Speaker 3: Officially launched retail work rates in Hong Kong and keep improving our treating efficiency with past credit, self clearing infrastructure.
Speaker 3: Total revenue for 2022 was $225 million. Now that net profit was $12.7 million for the full year.
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Speaker 3: In the fourth quarter, interest related income and adios and horizon income both increased compared to the third quarter. Total revenue was $63.9 million US dollars, increased 15.2% quarter of a quarter and 2.7% year over year.
Speaker 3: GAP and non-GAP net profits attributable to up-fintech was $1.2 million and $4.5 million. Both improved on the same quarter of last year.
Speaker 3: that will strengthen the resilience of our Bitcoin model in volatile market conditions.
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Speaker 3: In the fourth quarter, we added 25,300 new FUND data counts. And the total number of FUND data counts for the year reached 28,800 exceeding our annual guidance of FUND data counts.
Speaker 3: The total number of funded accounts end of 2022, exceeding 780,000, which was ending a growth of 16.1% compared to the end of the last year.
Speaker 3: Among the new federal counties' quarter, over 90% were for markets of foreign men and China. In terms of total clan assets, the trend of asset inflow remains strong, with net inflow exceeding $1.4 billion in the fourth quarter. After utilizing the impact from market loss.
Speaker 3: total cleanse access in this corner increased by 8.1% compared to
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Speaker 3: We are very glad to see the quality of our newly acquired customers photo-improved in the fourth quarter. Taking Singapore as an example, where we have for most client base, the average net asset inflows of newly acquired clients in Singapore was around $5,000 in the fourth quarter. Photo increased from over $11,000 in the third quarter and $9,000 in the second quarter.
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Speaker 4: You want to traffic and chassis training to strengthen your Company capacity and timetable restrictions?
Speaker 3: We continue to invest in research and development to improve operational efficiency and to enhance future experience. Manufacturing from self-clearing capability in the US, the excuse and interior fee as percentage of growth commissions significantly decreased from 21% in 2021 to 14% in 2022. And now we expect smaller reduction in clearing expenses.
Speaker 3: as the in-progress of steps clearing Hong Kong equity in 2023. We also launched the recurring investment function for US stock and EDFs in the fourth quarter, making it more convenient for launching investors to invest periodically.
Speaker 3: In addition, such our visual launch in Hong Kong was last December , we have keep adding products to serve local investors with the most competitive package in the industry.
Speaker 4: Now we offer Hong Kong and US equities, warrants, options, marketing. We will at Tiger World are wealth management products in April .
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Speaker 3: Our two-wheel business continues to perform well. In the investment banking business, with the IPO market rebound, the under-o-17 US and Hong Kong IPO in the fourth quarter, including a total of less than a whole limited and cheaper technology.
Speaker 3: bringing the total number of US and Hong Kong IPOs under return for the year 248. According to wind data, tender brokers throughout third globally and fourth globally in terms of the deal counts and value for US IPOs under return in 2022.
Speaker 3: Additionally, in our E-FOP business, where it has 26 new clients in the fourth quarter, burdening the total number of E-FOP clients served to 419 but end up 2022, increased by 34% year-over-year. Thank you.
Speaker 3: Now I would like to invite our state to jump to go over our financials.
Speaker 3: you might or say to John you go over our financials.
Speaker 4: Thanks, Ting-Hao and Aaron. Let me go through our financial performance for the fourth quarter. All numbers are in US dollar.
Speaker 4: Total revenue was 63.9 million this quarter. I increase of 2.7% year over year. For the whole year, total revenue was 225.4 million, a decrease of 14.8% from last year due to a slow down in market activities, which drives down commission and ICO underwriting.
Speaker 4: Quarter-over-quarter basis. Total revenue increased to 15.2%, primarily due to a 23% jump in interest-related income, and a 46% increasing under revenue versus prior quarter.
Speaker 4: Cash equity take rate was 6.9 beeps this quarter, 90 better than 6.7 beeps of last quarter. Within commission revenue, about 60% comes from cash equity use, close to 30% from options and the rest from futures and other products.
Speaker 4: was 6.9 bps this quarter, slightly better than 6.7 bps of last quarter. Within commission revenue, about 60% comes from cash equities, close to 30% from options, and the rest from futures and other products. Now onto cost.
Speaker 4: Interest expense was 7.2 million increased 80% from 7.4 years as the interest expense and the security significant expense was increasing the graduates the Ray Reich.
Speaker 4: Execution and clearing expense were 4 million, decreased to 42% from the same period of last year. We expect further reduction in clearing expense as we are in progress of self-careering humankind equities.
Speaker 4: Employee compensation decreased 14% year over year to 24.5 million this quarter.
Speaker 4: as we added just the aircraft in response to challenges or rights from the market backdrop.
Speaker 4: You know is the employee compensation. GNAA expense, which was $6 million, equals 31% from the same quarter of last year. Did you want of professional service fees or current last year?
Speaker 4: Alcapacit, depression and amethystation excellence increased 12% to 2 million. Between increasing, always the office space and the rental and these poor improvements.
Speaker 4: Marketing expense were 7.4 million this quarter. Decreased the 36th person year over year. We focused on quality of new users. Don't see current market condition is suitable for major marketing. As we keep a close eye on CAC and pay back. Overall, CAC dropped 17% quarter or quarter to US R to 100 soon.
Speaker 5: and found the same quarter of last year.
Speaker 5: As a result, BUNTA-9 increased on both GAP and RUN GAP basis year over year. GAP lead income turned positive to 1.2 million versus of GAP level also 5.4 million last year.
Speaker 5: Long gap letting confeder increase to 4.5 million from a long gap breakeven in the same quarter of last year.
Speaker 5: Total long-dipity income for this whole year of 2022 was 12.7 million.
Speaker 5: Now I have conclude our presentation. Operator, please open the knife for Q&A. Thanks.
Speaker 2: Thank you. To ask a question, you will need to press star 1 and 1 on your telephone and wait for your name to be announced.
Speaker 2: To withdraw your question, please press star 1 and 1 again. Please stand by while we compile the Q&A queue.
Speaker 2: Our first question comes from the line of Cindy Wang from China Renaissance. Please go ahead your line is open.
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Speaker 2: So I this is Cindy from China Renaissance. So I have two questions. First question is regarding to the new funded account account. So in both quarter tiger brokers added to our 27,000 new funding accounts.
Speaker 2: and it actually increased sequentially. So could you provide a regional breakdown of new funding accounts in fourth quarter? The second question is related to the Hong Kong retail market. Things you're entering to the Hong Kong retail market is being a quarter. So can you share a...
Speaker 4: Thank you for watching.
Speaker 4: Thank you for your attention.
Speaker 4: Please like, share, and subscribe to our channel.
Speaker 3: Okay, regarding the fourth question, in the fourth quarter, around 90% of the newly funded accounts were from outside of China, with around 55% coming from Singapore, nearly 20% from Australia and New Zealand, and 16% from the United States.
Speaker 3: Let's already stop accepting new Antroclies, please now see a 13 notice on 30th December .
Speaker 3: Currently, only serve existing on-shore clients and will follow the regulatory guidance when more detailed policies are in place.
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Speaker 4: In the first period of this year, we have always been full of different responsibilities. We want to??? the?ó. Next up, we on the report on Chinese-??????????????? be ??ingakes of global argue, now weger a trust in public opinion On the field, we are also concerned about more quiéns in senior political ???? and Looking into the field of qué derive from history
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Speaker 4: We will use a lot of battery power to sell different items. Apart from pre-interazonary for how good and offer premium items.
Speaker 4: We will see you in the next video.
Speaker 4: Thank you for your attention.
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Speaker 3: Okay, regarding a second question about Hong Kong launching progress.
Speaker 3: Give a Hong Kong retail is a new market for us. There's been testing different marketing strategies in the fourth quarter. For example, for offline marketing, we've owned branding at our customers' official newspapers. We've had a tiny new year greeting at our customers. We host this customer panel with Steve Euthert.
Speaker 3: to solicit feedback. For online marketing we have several promotion packages for new users.
Speaker 3: So overall, Hong Kong Marketing strategy is in line with our global strategy, which is balance EEC with ROI. We will keep fine-tuning our Hong Kong Marketing strategy to meet this objective. On the product side, in addition to cash equity, options, warrants, we will add TigerWolt, which is our wealth management product from the second quarter.
Speaker 3: Our goal is to provide users this diverse web product while enjoying the most competitive price and friendly user experience.
Speaker 3: I think our price is very competitive for Hong Kong investors. Currently, we charge zero commission and zero platform fee to treat Hong Kong equities and world.
Speaker 3: Although it only launched for one quarter, global investors took notice and we were awarded the best equity trading platform by local newspapers.
Speaker 3: We expect the number of Hong Kong-funded accounts will gradually increase this year.
Speaker 6: Thank you. We'll now move on to our next question.
Speaker 6: Thank you. We'll now move on to our next question. Please stand by.
Speaker 6: Our next question comes from the line of Han Bu from CICC. Please go ahead your line is open.
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Speaker 4: Fighting The health of the health system is very high. It is also very high. The old man is in the health of the health system. There is no open wound. There is no drinking water. So the health of the health system is not affected by the health of the health system. The old man is in the overseas, but it is a business.
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Speaker 3: Regarding the recent high-profile incidents involving Silicon Valley Bank, firstly I want to assure you that Tiger Brokers has no account of funds with SBB, and therefore this incident has no impact on our operations.
Speaker 3: Besides, they are operating as licensed broker overseas and collaborating with Los overseas flags, as our custodian and settlement banks, such as SDG's LeAsia, DDS and Citibank, etc.
Speaker 3: Since the incident occurred, we've been closely monitoring our operational data. During the two weeks, from March 9th to March 24th, our client total access remained stable with a slight increase. And overall, we still see the trend of net asset inflows.
Speaker 3: We take our responsibility as broker seriously and will be evaluating the risk of our current partner events carefully in the next of the recent events.
Speaker 3: We will go to great lengths to fulfill our responsibilities and obligations as brokers and to ensure the safety of our client side.
Speaker 4: Thank you.
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Speaker 4: Thank you for your attention.
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Speaker 3: Regarding the second question, Tiger Brokers has always placed high emphasis on complying with global regulations and requirements. Recently, on December 30th of last year, the CSRC released the announcement.
Speaker 3: That further clarified our regulations for China domestic investors to participate in cross-border securities activities. Well, this announcement resulted in a short-term decline in stock price. As entrepreneurs, we take this as a milestone in cross-border securities regulation that will facilitate industry development in an orderly manner.
Speaker 3: and prevent bad money from being sold. In response to this update, Tiger Brokers have asked effectively to fully cooperate with CSRC. We have stopped accepting new clients from China immediately at midnight of December 30.
Speaker 3: As a matter of fact, in 2022, around 90% of our new plan declines came from the overseas market, so this policy update will not have material impact on our business.
Speaker 3: In addition, we have completed onsite inspection in collaboration with the Beijing Security Seculator Control synthesizer.
Speaker 3: and are currently awaiting photo guidance from the regulator.
Speaker 3: On February 16th, in a press conference, the CSRC mentioned that the relevant brokers help fully and accurately understand the regulatory requirements and comply rapidly. And we stated the key requirement is to prohibit the increment of funds.
Speaker 3: domestic investors, while allowing existing investors to continue trading through their original overseas accounts.
Speaker 3: We will speak to this policy until further guidance from the regulator. Thank you.
Speaker 6: Thank you. We'll now move on to our next question. Please stand by. Our next question comes from the line of Brandy Wang from Citi. Please go ahead. Your line is open.
Speaker 2: Thank you, management, for taking my question. I have two questions here. First, we saw an income tax in fourth quarter increased a lot by around 38% quarter of quarter, which driving the effective tax rates over 65%. Any reason behind this?
Speaker 2: And my second question is regarding the business outlook. As the market sentiment was weak in 2022, what's management's preview and guidance for 2023? And do we observe any business recovery lately? Thank you.
Okay, so let me answer the first question regarding tax rate.
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Okay, so in terms of the tax rate.
The last portion of the 2.3 million, which is about 2 million, was due to unrealized foreign exchange losses. This was caused by the continued operation of the US dollar in 2022, which resulted in non-cash foreign exchange loss for our subsidiaries in Singapore and New Zealand. According to local tax regulation, those losses cannot be deducted as expense before tax. We cannot 1939 house of 3 billion movie hatch worked as an Pelosi. We may not myself have that at the IPCC share, but 3 billion chance that we would completely lose this power rate was $apeshifting andas Dresyl Smith said we were carrying on an
we have to add them back as a tax basis, which raises all the current contacts of about two million in the consolidated P&L in the fourth quarter. Of course, those expenses are allowed to be reversed with the depletion of the US dollar in the future and vice versa. Thank you. I can't find you. Go for the next question.
I hope you will enjoy this video. If you have any questions, please leave them in the comments section. If you have any questions, please leave them in the comments section. Thank you for watching. Please subscribe to my channel. Please like and share this video. I will see you in the next video. Thank you for watching.
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Okay, so we got our second question about the preview and guidance of the coming year. With the challenging and uncertain market of 2022, we still achieved a non-tax profit of $12.7 million for the year, gained over 100,000 new financial accounts, and saw net inflows exceed $7 billion.
These results demonstrate the trust they have earned from users globally, the profitability of our business model and the effectiveness of our fan-tuned operations.
As we all know that the online brokerage industry has a very strong beta effect and gave a relatively recent entry into the market of Australia, New Zealand and Hong Kong. With this uncertainty being said, our target is to acquire at least 100,000 new funded accounts this year in 2023.
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In 2023, Tiger Focus will continue to deepen our internationalization strategy and focus on improving the operating efficiency of our existing markets.
After launch in Singapore, they've achieved profitability in less than two years. However, relying solely on Singapore for growth is an unhealthy business model in the long run. Therefore, whether it's Australia, New Zealand, or Hong Kong, we will further enhance the user experience, product diversity, and self-clearing efficiency, hoping that it will become another successful market just like Singapore.
This enables us to better leverage our fixed costs and better navigate the market turbulence, allowing the company to continue to develop while maintaining stable profitability. Thank you.
Thank you. That was the last question. As there are no further questions at this time, I'll hand the call back to you for closing remarks.
I would like to thank everyone for joining the call today. I'm now closing the call on behalf of the Microsoft team here at TIGER. We do appreciate your participation in today's talk. 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.
and thank you very much for your time. Thank you.
for your time. Thank you.
This concludes today's conference call. Thank you for participating. You may now disconnect. All speakers, please stand by.
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