Q3 2023 Futu Holdings Ltd Earnings Call

Speaker 1: Hello, ladies and gentlemen. Welcome to FUTU Holdings third quarter 2023 conference call. At this time, all participants are in the listen only mode.

Hello, Ladies and gentlemen, welcome to <unk> Holdings third quarter 2023 conference call. At this time all participants are in a listen only mode. After management's prepared remarks, there will be a Q&A session today's conference call.

Speaker 1: After management's prepared remarks, there will be a Q&A session. Today's conference call is being recorded. If you have any objections, you may disconnect at this time. I would now like to turn the conference over to your host for today's conference call, Daniel Yuan, Chief of Staff to CEO and Head of IR at Futu. Please go ahead.

Is being recorded if you have any objections you may disconnect at this time.

I would now like to turn the conference over to your host for today's conference call Daniel Yuan Chief of staff to seal and head of IR. Please.

Please go ahead.

Speaker 2: Thanks, operator, and thank you for joining us today to discuss our third quarter 2023 earnings results. Joining me on the call today are Mr. Lee Lee, chairman and chief executive officer, author 10 chief financial officer and Robin shoe senior vice president.

Thanks, operator, and thank you for joining us today to discuss our third quarter 2023 earnings results. Joining me on the call today are Mr leaf Li Chairman and Chief Executive Officer, Arthur Chen Chief Financial Officer, and Robin Qi Senior Vice President Alpha.

Speaker 2: As a reminder, today's call may include four looking statements, which represent the company's belief regarding future events.

As a reminder, today's call may include forward looking statements, which represent the company's belief regarding future events, which by their nature are not certain and are outside of the company's control.

Speaker 2: by their nature are not certain and are outside of the company's control.

<unk> looking statements involve inherent risks and uncertainties. We caution you that a number of important factors could cause actual results to differ materially from those contained in any forward looking statements.

Speaker 2: We caution you that a number of important factors could cause actual results to differ materially from those containing any for looking.

Speaker 2: For more information about the potential risks and uncertainties, please refer to the company's filings with the SEC, including its annual report on Form 20-F.

More information about the potential risks and uncertainties. Please refer to the company's filings with the SEC, including its annual report on form 20-F.

Speaker 2: So with that, I will now turn the call over to Leif. Leif will make his comments in Chinese, and I will translate.

So with that I'll now turn the call over to leaf leaf will make his comments in Chinese and I will translate.

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Speaker 3: In the third quarter, we increased our oil production by about 650,000 tons.

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Speaker 2: Thank you all for joining today. In the third quarter, we acquired around 65,000 paying clients, a 12% sequential increase.

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Thank you all for joining today in the third quarter, we acquired around 65000 paying clients a 12% sequential increase our total paying clients reached 165, million% to 14% year over year three.

Three quarters into 2023, we have exceeded our full year guidance by acquiring over 163000 paying clients.

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Speaker 3: In August and September , we launched effective market promotion around government green and silver bonds.

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So, let's say you sound like a sensitivity again seems ingalls is aimco, who didn't buy any stock in the third quarter, Hong Kong market contribute at over 40% of new paying clients. This acceleration in client acquisition was driven by the relief rally in the first half of the quarter and successful marketing around the government's green bond in silver bond issuance.

In the second half.

Speaker 2: These two bond offerings attracted allocation-driven clients to our platform.

These two bond offerings attracted allocation driven clients to our platform.

Speaker 2: In late July , we opened the first offline store in Hong Kong to raise brand awareness, assist clients with account opening, demonstrate advanced product features, and address inquiries regarding our products and services.

In late July we opened the first offline store in Hong Kong to raise brand awareness assist clients with account opening demonstrated advanced product features and address inquiries regarding our products and services through this offline store, we managed to attract middle aged in senior clients and the lower customer acquisition costs.

Speaker 2: Through this offline store, we managed to attract middle-aged and senior clients at a lower customer acquisition cost.

Speaker 2: In fact, clients age 55 and above contribute at over 50% of paying clients acquired through the offline store in the third quarter.

In fact clients, aged 55, and a bus contribute at over 50% of paying clients acquired through the offline store in the third quarter.

Speaker 3: In Singapore, we launched a series of marketing activities around cash cloud, a cash management product.

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Speaker 3: In the end of the year, the number of asset clients increased by 35%. In the United States, with the increase in the number of asset clients and the increase in net revenue, the quality of our clients has improved. In September , we officially launched our securities business in Japan and Canada.

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Speaker 3: Currently, we provide U.S. stock trading services to Japanese customers, and U.S. and domestic stocks trading services to Canadian customers.

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Speaker 3: At the beginning of the new market industry, we will focus on the golden process of polishing and opening up, improving the ability to trade products, and constantly optimizing brand positioning and alternative marketing strategies.

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Speaker 3: Although the global stock market is weak, our quarterly asset client flow rate is still above 98%.

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Speaker 2: In Singapore, we launched successful marketing campaigns to promote our cash management product Cash Plus, thereby growing our paying clients by 35% year over year. We continue to observe improvement in client quality in the U.S. as net asset inflow of new paying clients trended higher.

We continue to observe improvement in client quality in the U S. S net asset inflow of new paying clients trended higher.

Speaker 2: In September , we officially launched our brokerage business in Japan and Canada, now offering clients access to U.S. stock trading in Japan and U.S. and Canadian stock trading in Canada.

In September we officially launched our brokerage business in Japan, and Canada, now offering clients access to U S stock trading and in Japan, and U S and Canadian stock trading in Canada.

Speaker 2: During the early innings of Market Lounge, we will remain focused on refining our account opening go-in process, expanding trading products, and honing our brand positioning and marketing methods.

During the early innings of market launch, we will remain focused on refining our account opening process expanding trading products and honing our brand positioning and marketing messages.

Speaker 2: Despite various sentiments across global equity markets, we recorded another quarter of over 98% paying client retention.

Despite bearish sentiments across global equity markets, we recorded another quarter of over 98% paying client retention rate.

Speaker 3: In Singapore, we have launched four functions in this market or from the product category, lowering the investment threshold of U.S. stocks for novice investors.

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Speaker 3: In Hong Kong and the U.S., we have optimized the power of blockchain transactions and launched a combination of blockchain transfer functions for active blockchain traders. Supporting blockchain traders to transfer their upcoming blockchain contracts at different expiration dates and executive prices has greatly increased the power of blockchain.

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Speaker 2: We continue to enrich trading product offerings across markets.

We continue to enrich training product offerings across markets.

Speaker 2: In Singapore, we launched fractional shares for U.S. stocks and ETFs to enhance accessibility for novice investors.

Singapore, we launched fractional shares for U S stocks and Etfs to enhance accessibility for novice investors.

Speaker 2: We optimize our product for active options traders by introducing multi-leg options rollover strategy in Hong Kong and the U.S.

We optimized our product for active options traders by introducing multi leg options rollover strategy in Hong Kong and the U S.

Speaker 3: This trading function gives options traders flexibility to roll contracts near aspiration to a later date at different strike prices.

This trading function gives options traders flexibility to roll contracts in your aspiration to a later date or different strike prices.

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Speaker 3: Although the market feedback has had a negative impact on the client's market value, due to the strong client entry fund, the client's total assets are still stable. It is worth mentioning that as the burden of increasing client data increases, the total assets of Singaporean clients are also increasing. This is due to the fact that the client's total assets are still stable. This is due to the fact that the client's total assets are still stable. This is due to the fact that

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Speaker 3: In the fifth quarter in a row, there has been a double-digit growth in the return on investment. Compared to the number of assets acquired in the previous quarter, the return on investment of the new assets acquired by Singapore in this quarter has increased by 20%.

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Speaker 2: Total client assets increased by 27% year-over-year to HK$468 billion.

Total client assets increased by 27% year over year to 468 billion Hong Kong dollar.

Speaker 2: while the market pullback drives the valuation of our client's stock holding.

While the market pullback drive the valuation of our clients' stock holdings total client assets remained stable quarter over quarter due to robust net outside influx, notably total client assets in Singapore achieved double digit sequential growth for the fifth consecutive quarter, which was partially driven by higher new asset quality.

Speaker 2: Total client assets remain stable quarter over quarter due to robust net asset influx.

Speaker 2: Notably, total client assets in Singapore achieved double-digit sequential growth for the fifth consecutive quarter, which was partially driven by higher new asset quality.

Speaker 2: The average asset balance of new paying clients in Singapore was 20% higher than the prior quarter.

The average asset balance of new paying clients in Singapore, with 20% higher than the prior quarter.

Speaker 3: In the case of market expansion, the transaction has become more active, pushing the total transaction volume to rebound to 1.1 trillion Hong Kong dollars in the third quarter.

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Speaker 3: 14% increase in return. 75% decrease in U.S. stock trading volume. 7-digit U.S. stock trading volume. 19% increase in U.S. stock trading volume in return. As customers' enthusiasm for ETF trading has increased.

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Speaker 3: The share price is trading at a 5% increase compared to the previous day, and the share price is trading at a 5% decrease compared to the previous day.

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Speaker 3: This is mainly due to some customers' unusual taste in Meigu Star Technology Group's stock market.

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Speaker 2: Trading volume in the third quarter rebounded as clients traded more actively amid heightened volatility. Total trading volume increased by 14% sequentially to HK$1.1 trillion, of which US stock trading constituted around 75%.

Trading volume in the third quarter rebounded S clients traded more actively in the tightened volatility.

Total trading volume increased by 14% sequentially to $1, one trillion in Hong Kong dollars of which use stock trading constitute at around 75%.

Speaker 2: Higher trading turnover of the magnificent seven stocks led U.S. stock trading volume to grow by 19% quarter over quarter. Hong Kong stock trading volume increased by 5% sequentially, mainly driven by rising trading interest and leveraged and inversed ETFs.

Higher trading turnover of the magnificent seven stocks led U S stock trading volume to grow by 19% quarter over quarter.

Hong Kong stock trading volume increased by 5% sequentially, mainly driven by ryzen trading interests and lovers and inverse Etfs.

Speaker 2: Margin financing and securities lending balance flipped 4% quarter over quarter as some clients unwound their bets against popular US technology.

<unk> financing and securities lending balance slipped, 4% quarter over quarter as some clients unwound their bets against popular U S technology node.

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Speaker 3: The return has increased by 19%. Thirdly, the U.S. domestic revenue has remained at a high level. The return has increased by 87%.

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Speaker 3: In Hong Kong, as the uncertainty of the macroeconomic environment increases, the risk number of high-quality customers has fallen, resulting in structuralization.

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Speaker 3: In other words, for objects, per hour level, digital products have an income rate of 52%, while in Singapore, the pay-per-hour retail products have three times the growth ü quixet y of entrepreneurial products. But the historical scale of home-clothed clothing has improved with the coming of the new year.

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Speaker 3: This promotes the growth of the total asset size of our customers, which is five times higher than the previous year. In the third quarter, we further enriched the product categories in the Singapore market and launched the Structured Bidding and Singapore Expansion.

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Speaker 2: Total client assets and wealth management grew to HK$52 billion at the quarter end, up 100% year-over-year and 19% quarter-over-quarter. In the third quarter, client assets and bonds increased by 87% sequentially as U.S. Treasury bills maintained high yields.

Total.

Total client assets in wealth management grew to 52 billion Hong Kong dollar other quarter at above 100% year over year, and 19% quarter over quarter.

In the third quarter client assets in bonds increased by 87% sequentially as U S Treasury bills maintain high yields.

Speaker 2: In Hong Kong, structured notes were met with high demands from high-net-worth clients after risk appetite abated amid macroinsurgency.

In Hong Kong structured notes were met with high demand from high net worth clients after their risk appetite a beta and then macro uncertainties Alpha result, private fund balance grew by 52% quarter over quarter.

Speaker 2: As a result, private fund balance grew by 52% quarter over quarter.

Speaker 2: In Singapore, total client assets in wealth management increased by fivefold year-over-year, driven by tripling of wealth management clients and higher average FFL.

Singapore total client assets in wealth management increased by five fold year over year, driven by tripling as wealth management clients and higher average asset balance.

Speaker 2: In the third quarter, we further expanded our product portfolio in Singapore by introducing structure notes and FGS bonds.

In the third quarter, we further expanded our product portfolio in Singapore by introducing structure notes and F. G S bonds.

Speaker 3: As of the end of Q3, we have 391 ICOs and investors.

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Speaker 3: market share increased by up to 35%. In celebration, we've partnered with various mainstream inventory and share races to achieve an impact on retail market share.

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Speaker 3: At the same time, we have participated in the IPO of all companies worth more than 100 billion Hong Kong dollars at the end of the third quarter.

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Speaker 2: We have 391 IPO distribution and IR clients at the quarter end, a 30% yield per year.

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Speaker 2: In the third quarter, we acted as joint book runners of several high-profile Hong Kong IPOs, including those of Tohukar, 4Paradigm and

Third quarter, we acted as joint book runners of several high profile, Hong Kong Ipos, including those that totaled car for paradigm and Keith. We also participated in the Hong Kong Ipos, if all companies with market capitalization over 10 billion Hong Kong dollars by the end of quarter.

Speaker 2: We also participated in the Hong Kong IPOs of all companies with market capitalization over HK$10 billion by the end of quarter.

Speaker 2: In the first three quarters, we underwrote 26 Hong Kong IPOs and ranked first among all Hong Kong brokers, according to Wind. ?????????????Arthur????????? Next, I'd like to invite our CFO Arthur to discuss our financial performance.

In the first three quarters, we underwrote 26th Hong Kong Ipos and ranked first among all Hong Kong brokers According to win.

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Next I'd like to invite our CFO Arthur to discuss our financial performance.

Speaker 4: Thank you, Dave and Daniel. Now, please allow me to walk you through our financial performance in the third quarter. All the numbers are in Hong Kong dollars unless otherwise noted.

Six of these <unk> Daniel now please allow me to walk you through our financial performance in the third quarter or the number of saying Hong Kong dollar unless otherwise noted.

Speaker 4: Total revenue was $2.7 billion, up 36% from $1.9 billion in the third quarter of 2020.

Total revenue was $2 7 billion up 36% from $1 9 billion in the third quarter of 2022.

Speaker 4: Brokerage commission and the handling charge income was $1 billion, an increase of 5% year-over-year and 6% Q2.

Brokerage Commission and handling charge income was 1 billion, an increase of 5% year over year in the 6% Q over Q.

Speaker 4: Higher contributions from direct trading lift the blended commission rate from 8.8 basis points in the third quarter last year to 9.3 basis points this quarter.

Higher contributions from the road to trading lift our blended commission rate.

Eight basis points in the third quarter last year to nine three basis points this quarter.

Speaker 4: Interest income was $1.5 billion, an increase of 71% year-over-year and 7% year-over-year. The sequential increase was mainly driven by higher interest rates on client cash deposits, partially offset by lower cash balance.

Interest income was $1 5 billion, an increase of 71% year over year in the 7% Q O Q. The sequential increase was mainly driven by higher interest rates all client cash deposits, partially offset by lower cash balance.

Speaker 4: Other income was $137 million, up 28% year-over-year, and 8% QOQ. The increase was largely due to higher fund distribution income.

Other income was 137 million up 28% year over year, and 8% Q over Q.

The increase was largely due to high up in distribution income.

Speaker 4: Our total costs were $437 million, an increase of 101% from $218 million in the third quarter of 2020.

Our total costs were $437 million increased 101% from 218 million in the third quarter of 2022.

Speaker 4: brokerage commission and the handling charge expenses were 63 million down 24% EOV and 14% QOQ. The expenses didn't move in tender with brokerage commission and the handling charge income, mainly due to cost savings from our U.S. self-clearing business.

Focus commission and handling charge expenses was 63 million down 24% year over year, 14% Q over Q. The expenses didn't move in tender with brokerage Commission and handling charge income mainly due to cost savings from our U S self clearing business.

Speaker 4: Interest expenses were $289 million, up 546% year-over-year and 31% Q-over-Q. The year-over-year and the Q-over-Q increase were both driven by higher interest expenses associated with our security lending business.

Interest expenses were $289 million up 546% year over year, and 31% Q over Q.

Year on year in the Q over Q increase were both driven by higher interest expenses associated with our securities lending business.

Speaker 4: Processing and servicing costs were $86 million, down 6% year-over-year, and 13% Q-over-Q. The year-over-year decrease was mainly due to saving from crowd service fee as a result of system optimization, and the Q-over-Q decrease was mainly due to lower system usage.

Persisting on the servicing cost what it is.

$6 million down, 6% year over year, and 13% Q over Q.

Year over year decrease was mainly due to savings from public service fee as a result of.

System optimization and the Q over Q decrease was mainly due to lower system usage.

Speaker 4: As a result, total gross profit was $2.2 billion, an increase of 28 percent from $1.7 billion in the third quarter of 2022. Gross margin was 84 percent as compared with 89 percent in the third quarter of 2022.

As a result total gross profit was $2 2 billion, an increase of 28% from $1 70 that in this third quarter of 2022 gross margin was 84% as compared with 89% in the third quarter of 2022.

Speaker 4: Operating expenses was up 17% year-over-year and a 5% QoQ to $893 million.

Operating expenses was up 17% year over year and up 5% Q over Q2 $893 million.

Speaker 4: I.D. expenses were $360 million, a 15% yield year, and are down marginally by 1% Q2.

R&D expenses were $360 million up 15% year over year and are down marginally by 1% Q over Q.

Speaker 4: The year-over-year increase was mainly due to higher R&D headcount as we continue to upgrade our infrastructure, roll out new products and features, and customize products for international markets.

The year over year increase was mainly due to higher R&D headcount as we continue to upgrade our infrastructure.

New products and features and the customized products for international markets.

Speaker 4: Selling and marketing expenses were $212 million, down 10% year-over-year, and up 21% Q-over-Q. The expenses declined year-over-year due to lower customer acquisition costs, and the Q-over-Q increase was primarily driven by accelerated paying client growth.

Selling and marketing expenses was $212 million down 10% year over year up 20%, 21% Q over Q2 expenses.

The expenses declined year over year due to lower customer acquisition costs in our Q over Q increase was primarily driven by accelerated paying client growth.

Speaker 4: General and administrative expenses were $322 million, up 52% year-over-year and 3% QoQ. The rise was primarily due to an increase in headcount for general and administrative personnel to support our international market.

General and administrative expenses were $322 million up to 52% year over year, and 3% Q over Q. The rise was primarily due to increasing head of call for general and administrative personnel to support our international markets.

Speaker 4: As a result, our net income increased by 45% year-over-year and declined by 3% Q-over-Q to $1.1 billion. Net income margin expanded to 41% from 39% in the same quarter last year, mainly due to strong revenue growth and the lower selling and marketing expenses.

As a result.

Net income increased by 45% year over year and declined by 3% in Q over Q2, $1 1 billion.

Net income margin expense of 41% from 39% in the same quarter last year, mainly due to strong revenue growth and the lower selling and marketing expenses.

Speaker 4: That concludes our prepared remarks. We'd now like to open the call to questions. Operator, please go ahead.

That concludes our prepared remarks, we'd now like to open the call to questions. Operator. Please go ahead.

Speaker 1: Thank you. If you wish to ask a question please press star 1 on your telephone and wait for your name to be announced. If you wish to cancel your request please press star 2. If you are on a speakerphone please pick up your handset to ask your question.

Thank you.

If you wish to ask a question. Please press star one on your telephone and wait for your name to be announced if you wish to cancel your request. Please press star two if you will.

On a speakerphone please pick up your handset to ask your question.

Speaker 1: The first question comes from the line of Leon Chi with Taiwan. Please go ahead.

The first question comes from the line of Neil.

<unk> with Daiwa. Please go ahead.

Speaker 3: Hi, thanks for taking my question. Thank you for giving me the opportunity to ask this question. I'm Leon from Daiwa. I'd like to ask the management team two questions. The first one is about our new market. Just now, the management team mentioned the two new markets in our industry, Japan and Canada. Especially in Japan, although the time is relatively short, I don't know if the management team has observed some early indicators, such as on our customer behavior, their transaction frequency, their take margin ratio, and the specific products they trade. I wonder if there are any differences in customer behavior compared to other markets. In addition, is there any difference in our customer cost? Could the management team please tell us about this? The other question is about our financial management. Of course, we also see the rapid growth of AUM. The management team just mentioned that the increase in profit may be a major factor. Of course, under the current AUM environment, we can also understand that the increase in profit is relatively high. However, if we look at it a little longer, in the entire interest rate cycle, the management team may feel that the increase in profit may be a major factor. However, if we look at it a little longer, the management team may feel that

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Speaker 5: What is the percentage of non-supply products and what is the take rate of our supply now?

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Speaker 5: Thanks Benjamin for taking my questions. This is Leon from Daiwa. My first question is regarding our new market, especially in Japan. We understand we just launched Japan in late September . I'm interested in the user behavior in terms of our Japan new client.

No you won't you won't find yourself, thanks management for taking my questions.

Also in Taiwan.

My first question is regarding our new markets, especially in Japan.

Understand we just launched a Japan in late September.

I'm interested in the use of behavior in terms of Boardwalk, Japan, new fine dust.

Speaker 5: Does management see any early indicators in terms of the trading velocities, margin lending penetration, and the specific trading products that our Japanese clients are being engaged in? Is there any significant differences in terms of these metrics for customers in Japan versus other markets?

Does management see any early indicators being some softball, the trading velocities are module 19 penetration and especially the trading products that our Japanese clients are being engaged and if there are any.

These different differences in terms of these matrix for customers in Japan versus other markets and also I'm interested to know the customer acquisition cost philosophy in Japan. So appreciate any color on the unit economic thing get patent and my second question is on wealth managed funds.

Speaker 6: And also I'm interested to know the customer acquisition cost for us in Japan. So appreciate any color on the unit economics in Japan. And my second question is on wealth management. We do appreciate the very rapid growth of our AUM in wealth management.

I appreciate the very rapid growth of our.

Speaker 5: and management introduction just now, money market fund is a major reason behind that.

Managed funds.

Management introduction just now.

Money market fund is a major reason behind that.

Speaker 6: I'm sure this is partly because of the high U.S. interest rates, but if we look at it from a cross-interest rate cycle perspective, how much proportion does management expect the non-money market fund products to contribute in our overall wealth management AUM? And also, what is our take rate on money market fund now? Thank you very much.

So.

I'm sure. This is possibly but also off with the higher U S interest rates, but if we look at it from a cross interest rate cycle perspective, how much propulsion does management expect the non money market fund products to contribute to our overall wealth management.

And also what is our take rates on money market bump now thank you very much.

Speaker 4: Thank you, Leo. Let my colleagues, Daniel, answer the first question first, and I will answer the second question.

Thank you Neil.

Let my colleagues Daniel answer the first question first and I will answer the second question. Thank you Sir.

Speaker 2: Sure. So, unfortunately, we now only offer U.S. cash equities trading to our Japanese clients, so it's, you know, we don't have margin, we don't have Japanese stock trading, so we only have data for client behavior on U.S. stock trading. And so far, the turnover of U.S. stock trading is not so different from what we've seen in other markets.

Unfortunately, we now only offer a U S cash equities trading towards Japanese clients. So as we.

We don't have margin, we don't have dropping stock trading. So we only have data for our client behavior on U S stock trading and so far the turnover of the U S stock trading a stock of different from what we've seen in other markets that.

Speaker 2: That being said, we have a very aggressive and ambitious product road map for next year, and some of the products that I mentioned that we don't support now will be rolled out in the next couple of quarters.

That being said we have a very.

Aggressive and ambitious product roadmap for next year and some of the products that I mentioned that we don't support now will be rolled out in the next couple of quarters and in terms of client acquisition cost because we are coming from a small base of clients.

Speaker 2: And in terms of client acquisition cost, because we are coming from a small base of clients, whereas we have a lot of fixed costs for setting up markets, setting up offices in Japan and hiring marketing personnel. So obviously our CAC for this quarter and next quarter in Japan will be higher than our group average.

We have a lot of fixed costs are like setting up markets like offices in Japan, and higher marketing personnel. So obviously are a CAC for this quarter and next quarter in Japan will be higher than our group average.

Speaker 2: But over time, as we increase the number of clients in Japan, the CAC will gradually come down. And so far, we have no reason to believe that the CAC in Japan will be higher than what we've seen in other markets.

But over time as we increase the number of clients.

And Japan, the CAC will gradually come down and so far we have no reason to believe that the CAC in Japan will be higher than what we've seen in other markets and just to give you some other color and updates on our Japan business.

Speaker 2: And just to give you some other colors and updates on our Japan business, we now have slightly over 400,000 users on our platform and overall users have been very active. And we observe that on average during the trading days, our DAU to user ratio was close to 20 percent, which is the highest among all the markets we are currently in. And user growth, along with paying client growth, will be our key priorities for next year.

We now have slightly over 400000 users on our platform and overall users have been very active and you deserve that on average during the trading days are two user ratio was close to 20%, which is the highest among all of the markets. We are currently in and user growth along with paying clients.

Growth will be our key priorities for next year. Thank you.

Speaker 4: Okay for second question regarding the wealth manager, I think the key for us to do this kind of business is to engage your client and focus on the long-term values of the client.

Okay. So second question regarding the wealth management I think the key for us.

For us to do this kind of business is to engage our clients and focus on the long term values of the Collins. Therefore, we do not put to emphasis on the near terms monetization, but having said that.

Speaker 4: Therefore, we do not put too much emphasis on the near-term monetization. But having said that, the take rate for these money market funds is essentially just similar to our other products, such as equity products or fixed income products.

The take rate of <unk> in the money market funds.

Essentially just similar to our other products such as high because equity products or fixed income products.

Speaker 4: I think, you know, we have already established a very comprehensive matrix in terms of the product.

I think we have already established a very comprehensive matrix in terms of the product offerings in our passion.

Speaker 4: in our Daxiang Taipu. For instance, besides the money market, then we also have the equity products.

For instance, besides the money markets and we also have to equity products fixed income products in particular as leaf mentioned in the opening remarks.

Speaker 4: fixing components, in particular as Lief mentioned in the opening remarks.

Speaker 4: We have launched free floating rate nodes, FCN products.

<unk> launched a free floating interest floating rate note SCM products.

Speaker 4: in the past two quarters and record a very strong growth.

In the past two quarters and record a very strong growth. We think that these products will further diversified our clients as allocations.

Speaker 4: We think these products will further diversify our clients' asset allocation.

Speaker 4: and help them to navigate different inches of cycles down the line.

And help them to navigate different interests of cycles down the line.

Thank you very much we'll call them also in the Daniel.

Speaker 1: Thank you. Next question comes from the line of Chiao Huang with MS. Please go ahead.

Thank you.

Next question comes from the line of <unk> Huang with <unk>. Please go ahead.

Speaker 7: Thank you for the opportunity to ask questions. I have two questions for Guan Lincheng. The first one is about IDO Cash, which has been reduced. What is the main reason for this? Do we see that some of the customers' savings have been gradually released from the IDO Cash? Also, I would like to ask about the proportion of our new customers' deposits.

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Speaker 7: The second question is for Guan Licheng. We can see that the Japanese market is also entering the age of zero capital, so starting from next quarter, starting from the beginning of next year, how can we face the competition environment, and what other ways can we use to monetize in the long term?

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Speaker 7: Will you consider developing other monetization capabilities in Japan, including asset management, asset management, trading, foreign exchange, etc.?

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Speaker 7: The first question is on EIDL cash. We saw some sequential decline in EIDL cash, so just wondering what's the reason for that and if we are seeing some of the existing clients are shifting their cash to mutual funds or other products. And also a related question is for the new inflow of client EOM, what's roughly the proportion between stocks and other investment products such as mutual funds?

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Question.

He is on the idle cash we saw some sequential decline idle cash. So just wondering what's the reason for that and if we are seeing some of the existing clients are shifting your cash to mutual funds or other products and also a related question is.

The new inflow of client AUM, what's roughly the proportion between stocks and other investment products such as mutual funds and second question is can management talk about the strategy in Japan. As we are seeing some are local brokers are offering zero commissions already so what star our competitive strategy there and.

Speaker 7: The second question is, can management talk about the strategy in Japan? As we are seeing some local brokers are offering zero commission already, so what's our competitive strategy there, and what's the thinking about future monetization? Would we be considering building more comprehensive financial offerings and the capabilities in Japan in order to improve the monetization over time?

What's the thinking about the future monetization would we be considering you know getting more comprehensive financial offerings in our capabilities in Japan in order to improve the monetization over time. Thank you.

Speaker 4: Okay, I'll answer the first question, and then the second question will be answered by my colleague, Daniel. The reason for the decline in the ratio of funds in this quarter is mainly because customers bought a lot of stocks this quarter, especially U.S. stocks, at the end of the quarter. So a small amount of funds was also reduced because of the purchase of funds. So as you just asked, the configuration of the assets that our new customers bought was about 70% in the stock market.

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Speaker 4: In terms of your first question, the idle cash decrease was primarily due to our clients shift their cash positions to more equity stocks, especially on the U.S. stock assets.

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In terms of your first question the idle cash decrease was primarily due to our clients.

Shifting cash positions to more equity.

Especially on the desktop assets.

Speaker 4: at a quarter end. And also the partial reason is because, you know, some clients allocated more on the wealth management for this during the quarter end as well. In terms of the new clients' inflows, the allocation.

At quarter end.

Also the Pasha reason is of course, some clients allocating more on the wealth management products during the quarter and as well.

In terms of the new clients.

Inflows.

The allocations.

Speaker 4: among cash, stocks, and also the wealth management. Roughly, you know, stock positions account for 70%

Among cash stock and also the wealth management Las Vegas stock positions account for 70% and the wealth management products account for 10% and the remaining belongs to the idle cash. Thank you.

Speaker 4: and the wealth management products account for 10% and the remaining belongs to the idle cash. Thank you.

Speaker 2: I will take your second question on our monetization strategy in Japan. And yes, as you mentioned, we have seen a couple of leading brokers in Japan gone to zero commission for Japanese stock trading. And we have reasons to believe that other brokers in Japan will probably follow suit.

And Sheila I'll take your second question on our monetization strategy in Japan, and yes. As you mentioned, we have seen a couple of leading brokers and Japan gone to zero commissions for Japanese start training and we have reasons to believe that other brokers in Japan will probably follow suit.

Speaker 2: So, well, no one's going to make money from Japanese equities trading.

So well no one's going to make money from Japanese equities trading, but U S stock trading is still quite profitable SBA in Nebraska for example charge forty-five set for U S stock trading we tend to price more aggressively the leasing companies, but we still expect to make very decent margin on U S upstream.

Speaker 2: But U.S. stock trading is still quite profitable. ESPY and Rokuten, for example, charge 45 bits for U.S. stock trading. We tend to price more aggressively than these incumbents, but we still expect to make very decent margins on U.S. stock trading.

Speaker 2: And as of the end of last year, we have seen that there are 2.3 million U.S. stock investors in Japan. That's relatively low compared to Japanese stock investors, but that has been growing pretty fast. As of the end of 2019, there were about 1 million U.S. stock investors. So over the past four years, it has more than doubled.

And at the end of last year, we have seen down there are $2 3 million and U S stock investors in Japan, that's relatively low compared to Japanese stock investors, but that has been growing pretty fast as at the end of 2019, there were about 1 million U S top investor So over the past four years and has more than doubled.

Speaker 2: And besides U.S. Stock Trading Commission, we also intend to monetize over margin financing and foreign exchange fees.

And besides U S stock trading Commission, we also intend to monetize over margin financing and foreign exchange fees.

Speaker 2: We've observed that Japanese investors really like to trade on margin. We have seen that for the industry average number like around 50% of their trades are placed with margin.

We observed that Japanese.

<unk> really like to trade a margin we have seen that for the industry.

Average number of like about 50% of their trades are placed with margin.

Speaker 2: So that's going to be a key revenue driver. And then for FX charges, we understand that in order to compensate for zero commission for Japanese stock trading, all of the brokers in Japan charge pretty hefty fees for FX.

So that's going to be a key revenue driver and then for FX charges, we understand that in order to compensate for a zero Commission for Japanese stock trading all of the brokers and in Japan charge pretty hefty fees for FX. So as the trading volume of U S stock trading on our.

Speaker 2: So, as the trading volume of U.S. stock trading on our platform grows, we also expect FX revenue to make a meaningful contribution.

Platform growth, we also expect FX revenue to make a meaningful contribution. Thank you.

Thank you very much.

Speaker 1: Thank you. Next question comes from the line of Cindy Wang with China Renaissance. Please go ahead.

Thank you next question comes from the line of Cindy Wang with China Renaissance. Please go ahead.

Speaker 8: Oh, hi. Thank you for the opportunity to speak with you. I have a few questions for you.

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Speaker 8: The first question is about the market in Japan. I'd like to know about the current COVID-19 situation. The management team said that the number of cases in Japan is about 40,000.

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Speaker 8: I don't know if you can see it, but the ratio of green energy is about how much. If we look at the green energy from the point of view of the night environment, is it gradually increasing?

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Speaker 8: And the second question is about the recent report that a company under Citrix has applied for a license for a virtual asset trading platform. Can you tell us about the process of applying for the license and what is the current work progress of this virtual asset? Can we get the function of trading as soon as we get the license?

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Speaker 8: Now, I have two questions, the first one is related to Japan market.

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Speaker 8: Can you share the color of Japan's new pain clients progress? What's the conversion rate from registered users to pain clients? And have you seen new pain clients increasing month over month?

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Speaker 8: Second question is for the, if the Fluidic subsidiary is applying for digital assets trading platform in Hong Kong, what is the progress look like, and what is your preparation work for digital assets trading platform? Would you be able to launch trading functions immediately once the license is approved? Thank you.

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Thank you.

Speaker 4: Thank you, Cindy. I will answer your second question first, and my colleague Daniel will answer your question regarding Japan.

Thank you Cindy I wont I will answer your second question first and then my colleagues Daniel will answer the question regarding Japan.

Speaker 4: Regarding the photo of Hong Kong's virtual assets, we noticed that since last year, the Hong Kong government, including the Hong Kong regulatory bodies, have been actively promoting the development of digital economy, Web3, and the development of ecological rights. They hope to turn Hong Kong into a center for international virtual assets. In the past few quarters, we have seen a trend in Hong Kong's regulatory policy dynamics, including the industry.

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Speaker 4: and we hope to continue participating in this kind of research.

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Speaker 4: We have also submitted a photo application for virtual asset trading platform operators last week according to the regulatory requirements of the Hong Kong SFC.

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Speaker 4: Pancetrate is a full-time company under Putu Group. They have submitted an application. We need about 6 to 9 months to get a full approval for the first batch. If we can get an approval for the first batch,

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Speaker 4: 40 Q that you are showing the elect big number one PI other.

Speaker 4: The scope of operation also includes the function of corresponding transactions.

Speaker 4: We echo the Web3 policies advocated by the Hong Kong government.

We echo the web three policies advocated by the Hong Kong government.

Speaker 4: who want to build up Hong Kong as a Web3 global center.

Who want to build up Hong Kong web some with three global centers in the past several quarters, we carefully study the policies and regulations issued by Hong Kong SFC tensor trade a wholly subsidiary wishing to.

Speaker 4: In the past several quarters, we carefully studied the policies and the regulations issued by the Hong Kong SFC.

Speaker 4: TensorTrade, a wholly subsidiary within Putu Group, submitted VFAP-licensed applications to Hong Kong SSE last month and we expect the whole application process may take at least six to nine months if we have the luck to get approval in principle.

Submit that VF license applications to Hong Kong SFC last month, and we expect.

The whole application process may take at least six to nine months.

If we have the luck to get approval in principle and we have not.

Speaker 4: And we have not formed a very concrete business plan afterwards, and we will continue to modify this content in the next couple of quarters, and hopefully we can give some new updates in Q2.

Form a very concrete business plans afterwards.

And we will continue to modify <unk> content in the next couple of quarters and hopefully we can give some update in that for Q2 or Q3. Thank you.

Speaker 2: Thank you, Cindy. Let me take the first question about Japan. At the moment, in the Japanese market, the conversion rate from users to open-source customers, and then from open-source customers to in-house customers is lower than in other international markets. I think there are two main reasons. The first reason is that we think there are still some friction points in the golden process of open-source customers.

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Speaker 4: In order to provide customers with the ability to open accounts as soon as possible, we have actually used some arrangements in the industry. This has a negative impact on the user experience. In the future, we will focus on optimizing the golden process of opening accounts. In the next few quarters, we will gradually replace some of the external links in the process with our own system.

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Speaker 4: Another reason why we think the conversion rate is too low is due to the lack of products. As I mentioned earlier, we have only launched the US stocks and the Chinese stocks. We expect to launch the Japanese stocks and the NISA accounts in the first quarter of next year.

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Speaker 4: Although we believe that Futu's U.S. stock trading capabilities are far ahead in the Japanese market, the Japanese stock market is still a very important trading benchmark for local investors.

Speaker 4: We hope that when we promote our products in the GDLIN market in the future, the quality will be better. So, based on our research on the current users, we understand that this is also a reason to prevent some users from logging in to our account.

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Speaker 2: and I'm going to translate for myself. So right now in Japan, the user-to-client conversion rate as well as the client-to-paying-client conversion rate are both lower than what we have observed in other international markets. And we think there are two main reasons behind it. Number one is that our account opening go to process still has a number of friction points. So far, the myth to back off is

And I'm going to translate for myself, so right now in Japan, the user to client conversion rate as well as the client to paint plant conversion rate are both lower than what we have observed in other international markets and we think there are two main reasons behind it number one is that our account opening golden process still has a number of friction.

And so far the mid to back office.

Speaker 2: in the Japan brokerage industry are still characterized by a lot of outsourced systems that have really unsatisfactory user experience.

And the Japan brokerage industry are still characterized by a lot of outsourcing tends to have really unsatisfactory user experience.

Speaker 2: And in order to start account opening soon, we leveraged some of these outsourced systems, which really have a negative impact on our users' experience and thus impacted the conversion rate from account opening to asset deposit. And in the next couple of quarters, we plan to invest into our account opening process and gradually replace these outsourced systems with our proprietary.

And in order to historic start account opening soon.

Leverage some of these outsourcing curtains.

Really have a negative impact on our users' experience and thus impacted the conversion rate from account opening to after deposits.

And next couple of quarters, we plan to invest into our account opening process and gradually replaced these outsources 10 with our proprietary system.

Speaker 2: The second reason behind this low conversion rate so far is the lack of key trading products. As mentioned earlier, we now only offer U.S. cash equities trading to Japan users. In the first quarter of next year, we plan to launch Japanese stock trading as well as NISA accounts.

And the second reason behind this low conversion rates. So far is the lack of key trading products and as mentioned earlier, we now only offer U S cash equities trading to Japan users and in the first quarter of next year, we plan to launch a Japanese stock trading as well as NESA account.

Speaker 2: Although we are really confident that FUTU's U.S. stock trading capabilities lead our Japanese peers by a very wide margin. In Japan, Japanese stock investing is still very, very popular and we understand based on our user survey that lack of Japanese equity trading is a key reason that prevents them from opening accounts with us. Thank you.

Although we are really confident that Q2's U S stock trading capabilities.

<unk>, our Japanese peers by a very wide margin in Japan, the Japanese stock investing is still very very popular and we understand based on our user survey that lack of Japanese equity trading is a key reason that prevent them from opening accounts with us. Thank you.

Mr. Wang Mr.

<unk> are you done with your question.

Speaker 9: Yes, yes, thank you so much, it's so clear.

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Okay.

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Speaker 1: A reminder to all the participants that you may press star and 1 to ask a question.

A reminder to all the participants that do my best and one to ask a question.

Speaker 1: Next question comes from the line of Peter Zhang with JP Morgan, please go ahead.

Next question comes from the line of Peter Shang with JP Morgan. Please go ahead.

Speaker 3: Thank you for the opportunity. I still have a follow-up question for Japan. Is there a chance for Hong Kong or Singapore users to trade Japanese stocks in the future? Is there such a consideration in our product pipeline? The second question is that the interest rate of this quarter has dropped. I would like to ask about the reasons behind this and what will be the future trend?

Just a question or two on the Q2.

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Speaker 10: OK, let me do the translation. My first question is a follow up question regarding the Japan product line. I wish to understand a going forward. Will the client in food was counting Hong Kong or Singapore market being allowed to trade Japan stock is this product in your product pipeline?

Okay. Let me do the translation. My first question is a follow up question regarding the Japan product line I wish to understand going from our wells.

Our clients in close was causing Hong Kong local market being allowed to trade Japan stock is this product.

Speaker 10: My second question is regarding the blended commission fee rate. We noticed that the blended commission fee rate declines sequentially in third quarter. We wish to understand what's the reason behind and what will be the trend going forward. Thank you.

Pipeline.

Second question is regarding the blended commission excuse me, we noticed that the blended.

Commission fee rate declined sequentially third quarter ways to understand what's the reason behind and.

We will be the trend going forward. Thank you.

Speaker 4: Okay, thank you, Peter. Let me answer your two questions. The first one is about whether the Japanese stock exchange will provide this function in other markets. Our answer is yes. And this is already in our corresponding...

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Speaker 4: I believe that this will be a very positive help for other traders outside of Japan, including their survival and for our income.

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Speaker 4: The second question is about the decline of the interest rate in the third quarter. We have explained the reason in several quarters. The main reason is that there are two types of payment packages for US stocks. One is to collect according to the percentage. The other is to collect according to the number of stocks.

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Speaker 4: Regarding two questions, number one is, for the Japan trading offering to the markets outside of Japan, our answer is definitely, it would be a yes, and it has already been in our product pipeline.

Regarding two questions number one with further for the Japan stock trading offering to.

The markets outside of Japan.

The answer is definitely it would be a yes and it has already been in our product headlines hopefully we can we can launch the U S.

Speaker 4: hopefully we can launch the Japan stock trading to our clients in Hong Kong, in Singapore, in the near future. And we do think this kind of product offering will further help to our client engagement in these markets, and also increase the client participation in our platform, and also our top line will also benefit from that.

Japan stock trading through our.

Clients in Hong Kong, Singapore in the near future and we do think this kind of product offering will further.

Helpful to our client engagement in these markets and also increased the client participations in our platform and also our top line will also be benefits.

Speaker 4: Regarding the blender commission rate fluctuation as we elaborate to the market several quarters

<unk> concepts regarding the blended commission rate fluctuation as we elaborate to the market several quarters.

Speaker 4: It is mainly due to the client's trading behaviors because our U.S. Stock Trading Commissions do have different price menus and one menu is actually not based on the percentage of the trading volume but on the number of the shares.

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It is mainly due to the clients trading behaviors, because our U S book trading commissions to have different price menus and one menu is escalate.

Based on the percentage of the trading volume.

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Speaker 4: So when people trade these big blue chips or these, you know, OTC stocks.

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Speaker 4: The combination will have implications on the blended commission rate as well. In the third quarter, the fluctuations mainly because of that. And going forward, we think, you know, the blended commission rate, if we take out this trading pattern's reasons, can maintain stable in the near future. Thank you.

A combination will happen implications on the bladder commission based as well.

The further quarter fluctuations, mainly because of that and going forward we think.

Our blended commission rate if we <unk>.

This trading patents reasons can maintain stable in the near future. Thank you.

Thanks, Sean.

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Speaker 1: Thank you. Next question comes from the line of Lee Van with Pocom International. Please go ahead.

Thank you.

Next question comes from the line of leave on Bocom International. Please go ahead.

Speaker 8: Thank you for the opportunity to ask me a question. I want to ask a question about interest income. The growth of this year's income is that the interest income contribution is relatively large. Can you explain to us, for example, how much is the contribution of financing, financing and bank deposits? And if the U.S. Federal Reserve falls next year, what impact will it have on our income growth? Let me translate.

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Speaker 8: Can you give us a breakdown of interest income and what will be the impact from Fed's rate cut next year?

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Breakdown of interest income and what will be the impact from first grade cuts next year. Thank you.

Speaker 4: Okay, let me answer the question about interest income. In the overall interest income, what is the percentage of customers' interest income?

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Speaker 4: This year's contribution is higher than the annual income of the financing circle.

Speaker 4: In the future, we think that the slowdown of the U.S. Fed will be a very slow state. At the same time, although our interest rates will be negatively affected by the U.S. Fed's slowdown, the U.S. Fed's slowdown in the same period of time will also be a slowdown in the U.S. Fed's slowdown in the same period of time.

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Speaker 4: to stimulate the overall activity of the capital market. In the past, the activity of customers in the market and the amount of transactions in the market have all increased. At a certain level, the increase in transaction revenue will make up for our shortfall.

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Speaker 4: In terms of the interest incomes, yesterday the interest revenues contributed from idle cash is much bigger than the interest income derived from the margin lending and the security lending business.

In terms of the.

The interest income.

Year to date.

Interest revenue contributed from the client idle cash.

Much bigger than the interest income derived from the margin lending and the security lending business and going forward, we do not think so.

Speaker 4: And going forward, we do not think the Fed's wake up will be very fast.

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Speaker 11: And in circumstances when the rates are cut, normally it would be helpful to the trading volumes for the whole capital markets for our clients as well. Therefore, we do think the trading revenues arising from this rate cut will largely offset the potential idle cash revenue decrease. Thank you.

And.

In circumstances.

When the rate cut normally it would be helpful to the trading volume for the whole capital markets for all our clients as well therefore, reducing.

The trading revenues arising from this way.

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Thank you.

MS Fund are you done with your question.

Yes. Thank you.

Thank you.

Speaker 1: Next question comes from the line of E-Mashu with Bofa Securities. Please go ahead.

Next question comes from the line of EMA shoe with both on Securities. Please go ahead.

Please go ahead Michelle.

Michelle.

Michelle if you have muted from your end. Please mute yourself and you can go ahead with your question.

Michelle can you go ahead with your question.

Okay.

Speaker 1: Ms. Emma Hsu, can you go ahead with your question?

Mr Shaw.

Can you go ahead with your question.

Speaker 1: Well, it seems that Emma is not here tonight, so if operator, do you have any further questions on the line? There are no more questions, so I will now hand the call back over to Mr. Yuan for closing comments. Thank you.

While it seems that now.

Here Tonight.

So operator do you have any further questions on the line.

No more questions.

I will now hand, the call back over to Mr. Yuan for closing comments. Thank you.

Speaker 2: Sure, yeah, so that concludes our call today on behalf of the food to management team. I would like to thank you for joining us today. If you have any further questions, please do not hesitate to contact me or any of our investor relations representatives. Thank you. And goodbye.

Sure.

So that concludes our call today on behalf of the <unk> management team I would like to thank you for joining US today. If you have any further questions. Please do not hesitate to contact me or any of our Investor Relations Representatives. Thank you and goodbye.

Speaker 1: Thank you. This concludes our conference for today. Thank you for participating. You may now disconnect.

Thank you. This concludes our conference for today. Thank you for participating you may now disconnect.

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Speaker 1: Hello ladies and gentlemen. Welcome to FUTU Holdings third quarter 2023 conference call. At this time, all participants are in a listen-only mode.

Hello, Ladies and gentlemen, welcome to <unk> Holdings third quarter 2023 conference call. At this time all participants are in a listen only mode. After management's prepared remarks, there will be a Q&A session. Today's conference call is being recorded.

Speaker 1: After management's prepared remarks, there will be a Q&A session. Today's conference call is being recorded. If you have any objections, you may disconnect at this time. I would now like to turn the conference over to your host for today's conference call, Daniel Yuan, Chief of Staff to CEO and Head of IR at FUTU. Please go ahead.

If you have any objections you may disconnect at this time.

I'd now like to turn the conference over to your host for today's conference call, Daniel Yuan Chief of staff to seal and head of IR at <unk>.

Please go ahead.

Speaker 2: Thanks operator and thank you for joining us today to discuss our third quarter 2023 earnings results Joining me on the call today are Mr. Lee Lee chairman and chief executive officer Arthur Chen chief financial officer and Robin Xu senior vice president

Thanks, operator, and thank you for joining us today to discuss our third quarter 2023 earnings results. Joining me on the call today are Mr leaf Li Chairman and Chief Executive Officer, Arthur Chen Chief Financial Officer, and Robin Qi Senior Vice President.

Speaker 2: As a reminder, today's call may include four looking statements, which represent the company's belief regarding future events.

As a reminder, today's call may include forward looking statements, which represent the company's belief regarding future events, which by their nature are not certain and are outside the company's control.

Forward looking statements involve inherent risks and uncertainties. We caution you that a number of important factors could cause actual results to differ materially from those containing any forward looking statements.

Speaker 2: We caution you that a number of important factors could cause actual results to differ materially from those containing any forelooking.

Speaker 2: For more information about the potential risks and uncertainties, please refer to the company's filings with the SEC, including its annual report on Form 20-F.

More information about the potential risks and uncertainties. Please refer to the company's filings with the SEC, including its annual report on form 20-F.

Speaker 2: So with that, I will now turn the call over to Leif. Leif will make his comments in Chinese, and I will translate.

So with that I will now turn the call over to leaf leaf will make his comments in Chinese and I will translate.

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Speaker 3: In the third quarter, we increased our oil production by about 650,000 tons.

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Speaker 3: The return has increased by 12%, and the total number of asset clients has reached 1.65 million, which has increased by 14%. In the first three quarters of 2023, we had more than

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Speaker 2: Thank you all for joining today. In the third quarter, we acquired around 65,000 paying clients, a 12% sequential increase.

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Thank you all for joining today in the third quarter, we acquired around 65000 paying clients a 12% sequential increase.

Speaker 2: Our total paying clients reached $1.65 million, a 14% yield per year.

Our total paying clients reached 165 million up 14% year over year three.

Speaker 2: Three quarters into 2023, we have exceeded our full year guidance by acquiring over 163,000 paying clients.

Three quarters into 2023, we have exceeded our full year guidance by acquiring over 163000 paying clients.

Speaker 3: In the third quarter, the Hong Kong market contributed more than 40% of its competitors' assets to us. In July , the stock market experienced a short rebound, which stimulated the customer's interest in the market.

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Speaker 3: In August and September , we launched around government green and silver bonds and carried out effective market promotion.

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Speaker 3: which has helped us attract a lot of customers who are interested in asset allocation.

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Speaker 3: Our first physical store in Hong Kong is officially open. Our staff will assist our customers in opening the store.

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Speaker 3: and answer questions about our products.

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Speaker 2: In the third quarter, Hong Kong market contributed over 40% of new paying clients.

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<unk> expense in the third quarter, Hong Kong market contributed over 40% of new paying clients. This acceleration in client acquisition was driven by the relief rally in the first half of the quarter and successful marketing around the government's green bond in silver bond issuances in the.

Speaker 2: This acceleration in client acquisition was driven by the relief rally in the first half of the quarter and successful marketing around the government's green bond and silver bond issuances in the second half.

Speaker 2: These two bond offerings attracted allocation-driven clients to our platform.

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These two bond offerings attracted allocation driven clients to our platform.

Speaker 2: In late July , we opened the first offline store in Hong Kong to raise brand awareness, assist clients with account opening, demonstrate advanced product features, and address inquiries regarding our products and services.

In late July we opened the first offline store in Hong Kong to raise brand awareness to assist clients with account opening demonstrated advanced product features and address inquiries regarding our products and services.

Speaker 2: Through this offline store, we managed to attract middle-aged and senior clients at a lower customer acquisition cost.

Through this offline store, we managed to attract middle aged in senior clients and lower customer acquisition costs.

Speaker 2: In fact, clients aged 55 and above contribute at over 50% of paying clients acquired through the offline store in the third quarter.

In fact clients, aged 55 and above us contribute at over 50% of paying clients acquired through the offline store, Inc. Third quarter.

Speaker 3: In Singapore, we launched a series of marketing activities around cash class, a cash management product.

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Speaker 3: We have achieved good results. In the end of the quarter, the number of asset clients increased by 35%. In the U.S., with the addition of asset clients, net investment has increased. Client quality has been further improved. In September , we officially launched our securities business in Japan and Canada.

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Speaker 3: Currently, we provide US stock trading services for Japanese customers and US stock and China stock trading services for Canadian customers.

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Speaker 3: In the early stages of the new market industry, we will focus on the golden process of polishing and opening up, improving the ability to trade products, and constantly optimizing brand positioning and alternative marketing strategies.

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Speaker 3: Although the global stock market is weak, our quarterly asset client flow rate is still above 98%.

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Singapore will allow us to successful marketing campaigns to promote our cash management product cash plus thereby growing our paying clients by 35% year over year.

We continue to observe improvement in client quality in the U S. S net asset inflow of new paying clients trended higher.

In September we officially launched our brokerage business in Japan, and Canada, now offering clients access to use stock trading and in Japan, and U S and Canadian stock trading in Canada.

During the early innings of Mark allowance, we will remain focused on refining our account opening golden process, expanding trading products and honing our brand positioning and marketing messages.

Speaker 2: Despite bearish sentiments across global equity markets, we recorded another quarter of over 98% paying client retention.

<unk> bearish sentiments across global equity markets, we recorded another quarter of over 98% paying client retention rate.

Speaker 3: In Singapore, we have launched a four-step function to lower the investment threshold of U.S. stocks for novice investors in this market or in the category of trading products.

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Speaker 2: We continue to enrich trading product offerings across markets.

We continue to enrich training product offerings across markets in Singapore, We launched fractional shares for U S stocks and Etfs to enhance accessibility for novice investors.

Speaker 2: We optimized our product for active options traders by introducing multi-leg options rollover strategy in Hong Kong and the U.S.

We optimized our product per active options traders by introducing multi leg options rollover strategy in Hong Kong and the U S.

Speaker 4: This trading function gives options traders flexibility to roll contract near aspiration to a later date at different strike prices.

This trading function gives options traders flexibility to roll contracts in your aspiration to a later date at different strike prices.

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Speaker 3: Although the market recovery has had a negative impact on customers' quality of life, thanks to a strong customer base, the customer total assets are still stable. It is worth mentioning that as the burden of increasing customer quality increases, the total assets of Singaporean customers are also increasing. This is due to the fact that the total assets of Singaporean customers are still stable. This is due to the fact that the total assets of Singaporean customers

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Speaker 3: In the fifth quarter in a row, there has been a double-digit growth in the return on investment. Compared to the number of assets acquired in the last quarter, in this quarter, the return on investment of new assets acquired in Singapore has increased by 20%.

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Speaker 2: Total client assets increased by 27% year-over-year to HK$468 billion.

Total client assets increased by 27% year over year to 468 billion Hong Kong dollar, while the market pullback drag the valuation of our clients' stockholdings total client assets remained stable quarter over quarter due to robust net asset inflow, notably total client assets in Singapore achieved double digit.

Speaker 2: Well, the market pullback dragged the valuation of our client stock holding.

Speaker 2: Total client assets remain stable quarter of a quarter due to robust net asset influx.

Speaker 2: Notably, total client assets in Singapore achieved double-digit sequential growth for the fifth consecutive quarter, which was partially driven by higher new asset quality.

<unk> sequential growth for the fifth consecutive quarter, which is partially driven by higher new asset quality.

Speaker 2: The average offset balance of new paying clients in Singapore was 20% higher than the prior quarter.

The average asset balance of new paying clients in Singapore was 20% higher than the prior quarter.

Speaker 3: In the case of market activity, the transaction is more active and the total transaction volume is 1.1 trillion Hong Kong dollars.

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Speaker 3: 14% increase in return. 75% increase in U.S. stock trading volume. 7-digit U.S. stock trading volume. 19% increase in U.S. stock trading volume in return. As customers' enthusiasm for ETF trading has increased.

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Speaker 3: The share price is trading at a 5% increase compared to the previous day, and the share price is trading at a 5% decrease compared to the previous day.

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Speaker 2: Trading volume in the third quarter rebounded as clients traded more actively amidst heightened volatility. Total trading volume increased by 14% sequentially to HK$1.1 trillion, of which U.S. stock trading constituted around 75%.

Trading volume in the third quarter rebounded as clients traded more actively in this heightened volatility.

Total trading volume increased by 14% sequentially to $1 one trillion in Hong Kong.

Which use stock trading constitute at around 75%.

Speaker 2: Higher trading turnover of the magnificent seven stocks led U.S. stock trading volume to grow by 19% quarter over quarter. Hong Kong stock trading volume increased by 5% sequentially, mainly driven by rising trading interest and leveraged and inversed ETFs.

Higher trading turnover of the magnificent seven stocks led U S stock trading volume to grow by 19% quarter over quarter.

Hong Kong stock trading volume increased by 5% sequentially, mainly driven by ryzen trading interest and leverage that inverse Etfs.

Speaker 2: Margin financing and securities lending balance flipped 4% quarter over quarter as some clients unwound their bets against popular U.S. technology.

<unk> financing and securities lending balance slipped, 4% quarter over quarter as some clients unwound their bets against popular U S technology nodes.

Speaker 3: Not to mention the staff management of new mass production of 521 jobs

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Speaker 3: In the third quarter, the U.S. state-owned equity rate remained at a high level, leading to 87% increase in the return on investment of customers. In Hong Kong, as the uncertainty of the macroeconomic environment increased, the risk number of high-quality customers declined, resulting in a structural setback.

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Speaker 3: Under such products, the production volume of property increases by 52 percent. The unemployment rate of cars managed by the United States and China has increased threefold. The standard growth rate of car Mans defeated by the United States and China is Wu Jin four times. It is said to have improved over ten Ontarious relation

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Speaker 3: This boosts the total asset size of financial management customers and increases the share price at the same time. In the third quarter, we further enriched the product category of the Singapore market and launched Structured Bidding and Singapore Stock Exchange.

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Speaker 2: Total client assets and wealth management grew to HK$52 billion at the quarter end, up 100% year-over-year and 19% quarter-over-quarter. In the third quarter, client assets and bonds increased by 87% sequentially as U.S. Treasury bills maintained high yields.

Client assets in wealth management grew to 52 billion, Hong Kong dollars quarter out of a 100% year over year and 19% quarter over quarter in the third quarter client assets in bonds increased by 87% sequentially as U S Treasury Bill maintain high yields.

Speaker 2: In Hong Kong, structured notes were met with high demands from high-net-worth clients after risk appetite abated amid macro-uncertainty.

In Hong Kong structured notes were met with high demand from high net worth clients after risk appetite a beta and then macro uncertainties Alpha result, private loan balance grew by 52% quarter over quarter.

Speaker 2: As a result, private loan balance grew by 52% quarter over quarter.

Speaker 2: In Singapore, total client assets in wealth management increased by fivefold year-over-year, driven by tripling of wealth management clients and higher average asset balance.

Singapore total client assets in wealth management increased by five fold year over year, driven by tripling as wealth management clients and higher average asset balance.

In the third quarter, we further expanded our product portfolio in Singapore by introducing structure notes in fts bonds.

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We have 391, IPO distribution and IR clients as of quarter end up 30% year over year.

In the third quarter, we acted as joint book runners of several high profile, Hong Kong Ipos, including those that totaled car for paradigm and Keith. We also participated in the Hong Kong Ipos, if all companies with market capitalization over 10 billion Hong Kong dollars by the end of quarter.

And the first three quarters, we underwrote 26, Hong Kong Ipos and ranked first among all Hong Kong brokers According to wind.

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So we'll go through it.

Next I'd like to invite our CFO Arthur to discuss our financial performance.

Sympathies and Daniel now please allow me to walk you through our financial performance in the third quarter. All the numbers are you comfortable that unless otherwise noted.

Total revenue was $2 7 billion up 36% from $1 9 billion in the third quarter of 2022.

Brokerage Commission and handling charge income was 1 billion, an increase of 5% year over year and 6% Q over Q.

Higher contributions from derivative trading lift our blended commission rate.

Eight basis points in the third quarter last year to nine three basis points this quarter.

Interest income was one 5 billion, an increase of 71% year over year in the 7% Q over Q. The sequential increase was mainly driven by higher interest rates, our client cash deposits, partially offset by lower cash balance.

Other income was 137 million up 28% year over year in the 8% Q over Q. The increase was largely due to high up in distribution income.

Our total costs were $437 million, an increase of 101% from 218 million in the third quarter of 2022.

Focused commission and handling charge expenses were $63 million down 24% year over year.

14% Q over Q the expenses didn't move in tender with brokerage Commission and handling charge income mainly due to cost savings from our U S sales clearing business.

Interest expenses were 289 million up 546% year over year in the 31% Q over Q the year on year in the Q over Q increase.

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Consistently on the servicing cost what it is.

$6 million down, 6% year over year, and 13% Q over Q.

Year over year decrease was mainly due to savings from prompt service fee as a result.

System optimization and the Q over Q decrease was mainly due to lower system usage.

As a result total gross profit was $2 2 billion, an increase of 28% from $1 7 billion. In this third quarter of 2022 gross margin was 84% as compared with 89% in the third quarter of 2022.

Operating expenses was up 17% year over year, and 5% Q over Q2 $893 million.

R&D expenses were $360 million up 15% year over year and down marginally by 1% Q over Q.

The year over year increase was mainly due to higher R&D headcount as we continue to upgrade our infrastructure roll out new products and features and the customized products for international markets.

Selling and marketing expenses was $212 million down 10% year over year up 20%, 21% Q over Q the expenses.

The expenses decline year over year due to lower customer acquisition costs in our Q over Q increase was primarily driven by accelerated paying client growth.

General and administrative expenses were $322 million up to 50.

2% year over year, and 3% Q over Q. The rise was primarily due to increasing head of call for general and administrative personnel to support our international market.

As a result, our net income increased by 45% year over year and declined by 3% in Q over Q2, $1 1 billion net income margin expense of 41% from 39% in the same quarter last year, mainly due to strong revenue growth and lower selling and marketing expenses.

That concludes our prepared remarks, we'd now like to open the call to questions. Operator. Please go ahead.

Thank you.

You wish to ask a question. Please press star one on your telephone and wait for your name to be announced if you just took entity could request. Please press star two.

On a speakerphone please pick up your handset to ask your question.

The first question comes from the line of Leon Qi.

Please go ahead.

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Thanks management for taking my questions does it the alcohol <unk>. My first question is regarding our new markets, especially in Japan.

We understand we just launched Japan in late September.

I'm interested in the user behavior in terms of Boardwalk, Japan, new clients.

Does management see any early indicators in terms of the.

The trading velocities are margin and adding penetration and respected trading products that our Japanese clients are being engaged in if there are.

Any significant differences in terms of these matrix for customers in Japan versus other markets and also I'm interested to know the customer acquisition costs philosophy in Japan. So appreciate any color on the unit economics and get patent and my second question is on wealth management.

We do appreciate the very rapid growth of our managed funds and.

Management introduction just now.

Money market fund is that maybe a reason behind that so.

So.

I'm sure. This is partly because of the high you guys interest rates, but if we look at it from a cross interest rate cycle perspective, how much proportion does management expect the now money market fund products to contribute to our overall wealth management.

And also what is our take rates on money market pulp now thank you very much.

Thank you Neil.

Let my colleagues Daniel answer the first question first and I will answer the second question. Thank you Sir.

Unfortunately, we now only offer U S cash equities trading toy Japanese clients. So.

We don't have margin, we don't have to ethane stock trading. So we only have data for our client behavior on U S stock trading and so far the turnover of the U S stock trading as sort of different from what we've seen in other markets.

That being said we have a very.

We have an ambitious product roadmap for next year and some of the products that I mentioned that we don't support now will be rolled out in the next couple of quarters and in terms of client acquisition cost because we are coming from a small base of clients, whereas we have a lot of fixed costs are like setting up markets like offices in Japan and higher.

Marketing personnel. So obviously our attack for this quarter and next quarter in Japan will be higher than our group average.

But over time as we increase the number of clients and.

In Japan, the CAC will gradually come down and so far we have no reason to believe that the CAC in Japan will be higher than what we've seen in other markets and just to give you some other color and updates on our Japan business.

We now have a slightly over 400000 users on our platform and overall users have been very active and observe that on average during the trading days.

Two user ratio was close to 20%, which is the highest among all of the markets. We are currently in.

User growth along with paying client growth will be our key priorities for next year. Thank you.

Okay. So second question regarding the wealth management I think the key for us.

For us to do this kind of business is to engage your cline and focus on the long term values of the clients. Therefore, we do not put to emphasis on the near term monetization, but having said that the.

The take rate of <unk> in the money market funds.

Essentially just similar to our other products such as high because equity products or fixed income products.

I think we have already established a very comprehensive matrix in terms of the product offerings in our passion.

For instance, besides the money markets and we also have to equity products fixed income products in particular as leaf mentioned in the opening remarks.

We have launched free floating interest floating rate note SDN product.

In the past two quarters and record a very strong growth. We think these products will further diversified our clients as allocations and help them to navigate different interest the cycles down the line.

Thank you very much we'll call them also and Daniel.

Thank you.

Next question comes from the line of <unk> Huang with MSP. Please go ahead.

Alright, guys you got anything you want to you unless you have <unk> and <unk> that you guys are going to take a minute.

Anything that you don't take idle cash.

We also have Jason Windsor Charterer and he says okay first of all <unk> sustained nitrogen sandiego cash functional Asia holdings.

Thank you for your attention.

Welcome to Johnson.

So I'm assuming that you guys.

And then she can be trying that.

Okay, but did you guys see your gross amount of BD.

Are you going to go into your <unk> guidance.

Hi, Jacob.

Youre welcome.

So as we can into the good evening.

So yes.

Okay, Susan I'm, calling in for <unk>.

The whole machine in their demand.

But I think that's clearly in there John that you guys could you talk to your kind of Giga <unk>.

Do you monetize that John's question on the home I only see IP.

Well, Paul we call do you guys have been so high that shipyard ECS you don't monetize it let me talk with you guys because I'm glad you're with US as your trading what's the why don't I just hear something on that.

Yeah, I'll go into teaching our tenant.

Question is on the idle cash we saw some sequential decline idle cash. So just wondering what's the reason for that and if we are seeing some of the existing clients are shifting their cash to mutual funds or other products and also a related question is for.

For the new inflow of client AUM, what's roughly the proportion between stocks and other investment products such as mutual funds and second question is.

Can management talk about the strategy in Japan, as we are seeing some local brokers the offerings. They were commissioned already so what are our competitive strategy, there and what's the thinking about the future monetization would we be considering.

Getting more comprehensive financial offerings and the capabilities in Japan in order to improve the monetization over time. Thank you.

Although look without the eagle's <unk> been here with us and we should Daniel equity.

Welcome to the Chico's essentially switching champion charter time, we've gotten each Washington related coastal type integration macro that would be tough boarder U shaped recovery.

The issue with it.

So thats, even more than that Michigan Michel analysis, the gene that you shouldn't get gourmet kitchen.

Tien Chau Cheng.

<unk> seen that Yokokohji, neither took a 600 to the page entitled Cabinetry with hungry appetite Ashish.

Have we got any that you would tell me that would have been just ship machines.

Okay.

Josh It's what you should pay today.

Sure.

In terms of your first question the idle cash decrease was primarily due to our clients.

<unk> cash position to more equity.

Stocks, especially on the on the U S stocks.

Yes.

At quarter end and.

Also the partial reason is of course.

Some clients allocating more on the wealth management products during the quarter and as well.

In terms of the new clients.

Inflows.

The allocations.

Among cash stock and also the wealth management Las Vegas stock positions account for 70% and the wealth management products account for 10% and our remaining belongs to the idle cash. Thank you.

And Sheila I'll take your second question on our monetization strategy in Japan, and yes. As you mentioned, we have seen a couple of leading brokers and Japan gone to zero commissions for Japanese stock training and we have reasons to believe that other brokers in Japan will probably follow suit.

So well no one's going to make money from Japanese equities trading, but U S stock trading is still quite profitable Sps in Novartis and for example charge 45 sets for U S stock trading we tend to price more aggressively than these incumbents, but we still expect to make very decent margin on U S upstream.

And at the end of last year, we have seen that there are $2 3 million in the U S stock investors in Japan.

Relatively low compared to Japanese stock investors, but that has been growing pretty fast as at the end of 2019, there were about 1 million U S. Saar conductor so over the past four years and has more than doubled.

Despite U S stock trading Commission, we also.

<unk> monetize over margin financing and foreign exchange fee.

We observed that Japanese investors really like to trade a margin that we have seen that.

For the industry.

Average number of like about 50% of their trades are placed with margin.

So that's going to be a key revenue driver and then for FX charges, we understand that in order to compensate for a zero Commission for Japanese stock trading all of the brokers and <unk>.

Japan charged pretty hefty fees for FX, so as the trading volume of U S stock trading on our platform growth. We also expect FX revenue to make a meaningful contribution. Thank you.

Thank you very much.

Thank you next question comes from the line of Cindy Wang with China Renaissance. Please go ahead.

Oh sure.

Thank you Omar.

Thank you Mister car wash equipment, Steve Seim.

I'll go with that.

Possibly.

Montgomery from Shlomo Rosenbaum.

You talked about.

Well have to watch it upfront.

I'll make sure that you talk about that.

Now I will turn quicker.

Tom.

From a possible with some of our traditional console smartphone you have a wonderful day.

Martha Sanchez from Brian Klein, Thank you Melissa.

Can you talk about such forward Joseph with with some follow ups.

While we can talk about the pipeline.

A couple of quick one emotionally silicon can you sort of put all those assumptions.

Joe.

<unk> is just one data point.

Welcome to the Hudson Global.

So shlomo mop up a whole bunch of Coca Cola Samsung comes from Manuel Palomo phone follow that.

Yes.

Non small cell kits.

With my question.

Armstrong.

Also relative to coupon model.

Michelle.

Follow up to Paul.

Qualcomm.

Congressional gold from Chantal.

Charles <unk> with Cowen.

At this time.

Increasing month over month.

Second question.

Bob.

With that.

Subsequently with Macquarie and Paul did you fall off Thats taken Qualcomm in Hong Kong further proposals.

Wow.

Thank you all type of restaurant Blacksburg, Virginia office trading platform.

<unk> launched trading function.

One last one.

Thank you.

Thank you Cindy I wont I will answer the second question first and then my colleagues Daniel will answer the question regarding Japan.

Glen Nickle chunk of another significant metric.

Well inventory dollars poultry anchises, Shanghai Jones with Barco channel on the Timberland, Chico <unk> opportunity with offenders and hydro in the budget.

She won't by Shanghai, <unk> Chongqing, the mosaic, what you Chico keep holding in well.

A chunk of the Kimco Tim Cook.

Oklahoma near the attrition changing shingles.

Being Q1 negotiation timing challenge.

Hi, Tobey.

Remember each our SFC.

It's either to the timberland ultra when we issue we Shouldnt go John.

John.

She nutrition hygiene and each other.

They are changing.

<unk> sure pool to champion the injections.

To conclude number hygiene each other China essentially the major chunk good that you're increasingly get people <unk> should yet I thought you're going to envision that people Google at Goldman.

Sure.

<unk> Pedro Pushy Corp, we will go to John Yes.

So what you see that you guys trying to hit the numbers homepage holder kina funding should bohai in China, because I tell you the yocum.

We echo the web three policies advocated by the Hong Kong government.

Who want to build up Hong Kong website.

Three global centers in the past several quarters, we carefully study the policies and regulations issued by Hong Kong SFC.

Tensor trade a wholly subsidiary to wishing to.

Submit that VF AP license applications to Hong Kong last month, and we expect.

The whole application process may take at least six to nine months.

If we have the luck to get approval in principle.

We have not.

Form a very concrete business plans afterwards.

And we will continue to modify these content in the next couple of quarters and hopefully we can give some update in that for Q2 or Q3. Thank you.

It's Andy I'll take the Eagle and <unk> now I will tell you. This is how women so long ago with our careful cohort telephone casual cohort cohort.

So our view on that topic, what is <unk> <unk>.

Well the tangled up again by D range. It can unfold the castle digital accounting that will touch all of them trade at high show is a friction point.

David Jones drill holes as you should see that push out <unk> today, you say why are all these people.

Now when the way they think quietly a cocoa tea <unk> only thing that's happened in a lead tissue tightening Italia pushing Lisa.

<unk> is out there now.

<unk> have been within the Eagle hunting that which are now holds that chart you can see.

And it sounds like they will tend to only sales like all the key that way, we'll see analyst at Stifel.

Hello.

So I think that our audio pin dealing the English Patricia one correlation on the ECA tissue, but now we're more than just Sean sale in April.

Now you see me and easy to shop.

All you need such off within ALLETE, Alan <unk> footwear that you can make without controlling.

Controlling <unk> agenda.

We can tell you that eco ship that diesel is a phase <unk> trial that you can tell you that <unk> now just say well Joe designation I'll table play it should be dealt with China. So you can show on Monday, which Aon, who these Italians on media to be sure. It's lack of Copel.

Joe carefully routinely getting back.

And I'm going to translate for myself, so right now in Japan, the user to client conversion rate as well as the client to paint plant conversion rate are both lower than where we have observed in other international markets and we think there are two main reasons behind it number one is that our account opening golden process still has a number of friction.

<unk>.

So far the mid to back office.

And the Japan brokerage industry are still characterized by a lot of outsource tends to have really unsatisfactory user experience.

And in order to historic start account opening soon.

Leverage some of these outsourcing curtains, which really have a negative impact on our users' experience and.

Thus impacted the conversion rate from account opening to after deposits.

And our next couple of quarters, we plan to invest into our account opening process and gradually replaced these outsources 10 with our proprietary system.

And the second reason behind this low conversion rates. So far is the lack of key trading products and as mentioned earlier, we now only offer U S cash equities trading to Japan users and in the first quarter of next year, we plan to launch a Japanese stock trading as well as NESA account.

Although we are really confident that Q2's U S stock trading capabilities.

<unk>, our Japanese peers by a very wide margin in Japan, the Japanese stock investing is still very very popular and we understand based on our user survey that lack of Japanese equity trading is a key reason that prevent them from opening accounts with us. Thank you.

Mr. Huang you must.

Ms Fang you've done with your question.

Oh, yes, yes.

Okay.

Thank you. Thank you.

A reminder to all the participants that do my breasts and wanted to ask a question.

Next question comes from the line of Peter Shang with JP Morgan. Please go ahead.

Just a question or 202.

So you mentioned bill.

Hello.

Thanks Scott.

Yes.

Shlomo Suncal Quadrella standup, whether youll need to tell you here.

Element a holdup.

Military.

Okay government issued a dose retail the key to <unk>.

Nichol.

You said it can be also a shot.

And therefore, the E&P with either tissue.

Okay.

<unk>. My first question is a follow up question regarding the.

Japan product line I wish to understand <unk> pharma world.

Our clients in force was causing Hong Kong local market being allowed your trade Japan stock this product.

Pipeline.

My second question is regarding the blended commercial team you will notice that the bad debt.

Fee rate declined sequentially third quarter LOE ways to understand what's the reason that you have.

And what will be the trend going forward. Thank you.

Well this is a piece of work with us.

That liquidity to negotiate Gwen chip.

<unk> undertook with Joey quickly took on the page I appreciate it.

Now we're not anticipating.

That's shown there.

<unk> your question on which I think just the T.

You can buy that should have the <unk>, which are bulk will come into the Houston in Q2.

Sure.

Patient two meaning the boundaries.

Dr. Glenn Glenn you just wonder.

Central to the AT&T with <unk>.

Shelf lumpy that yourself with EHR.

<unk> <unk> two other than you should have been.

Industrial meat, which are you that you'll shortly.

The Alco portfolio will be at all time equal machines out by <unk>.

Sure.

Now so what you saw in the Coke with dynamic, but people would tell you that compelled them into Joey.

If you could tell that.

You've got the deep position or you think whether you go you'll see in <unk>.

So each of the key to the sugar Jupiter one be the shelf with essentially yes English.

Right.

Number one with.

Women with the merchant fee Cheng Cheng.

Similarly in gene therapy.

Hi, Shabaab chic of each other when they get home.

Regarding two questions number one for the quarter.

The Japan trade.

Trading offering to them.

The markets outside of Japan, our answer is definitely it would be a yes and it has already been in our corridor pipelines hopefully we can we can launch.

The Japan stock trading to our.

Clients in Hong Kong, Singapore in the near future and we do think this kind of product offering we're further.

Helpful to our client engagement in these markets and also increased the client participations in our platform and also our top line will also be benefits.

Rising from that rig.

Got it.

Blended commission rate fluctuation as we elaborate to the market several quarters.

It is mainly due to the clients trading behaviors, because our U S stock trading commissions to have different.

Price menus, and one menu, it's really not.

Based on the percentage of the trading volume.

The adult.

The number of the shares.

When people trade.

Big Blue chips, all seasonal OTC stocks.

The combination will happen implications on the blended commission rates as well in the third quarter, the fluctuations mainly because of that and going forward we think.

And the commission rate if we.

Takeout.

Trading patents reasons can maintain stable in the near future. Thank you.

Okay.

Hey, Sean.

Sure.

Thank you.

Next question comes from the line of leave on Bocom International. Please go ahead.

Yeah.

I think I forgot what you want that to quant. Thanks, Glen you lose control over them.

And so that does not sure. Okay. Thank you for your question.

Got that.

I'm going to shake out mechanically exactly.

Hum.

Uh huh.

From kind of from Shandong from me I should go shop.

Yes, Andrew Thanks for the last quite a chunk of that comes from Wuxi.

Oh hi.

Okay.

Breakdown of interest income and what will be impact from fed rate cut next year. Thank you.

Although when we show that eventual equity manager, Jonathan, particularly surely bancorp relationships to the niche or the chunky concentrating in the Jewish MBT <unk> timber Felicia that you've got a <unk> number one launching.

While major chunk or the median treat gd gets weaker pushes that would be helpful.

Number posted in the same mid <unk>, which is the.

Wholesale in that niche, we show value to me and the eshop essentially at the end with attrition chief legal and contract.

So I'm sure that you get to the channel.

Yes.

So when you actually kind of teacher and she does rotation Copa <unk>.

Both the EBIT.

You got a chunk of the assumption.

Sheldon shoulders that negotiation.

Linda cope with efficient niche of the shutdown.

In terms of the.

Interest income.

Year to date.

Interest revenue contributed from new client idle cash.

Much bigger than the interest income derived from the margin lending and the security lending business and going forward, we do not think so.

Fabrice rake hub will be battery.

We will be very fast and.

In circumstances.

When the rates are cut normally it would be helpful to the trading volume for the whole capital markets for our clients as well therefore, reducing.

The trading revenues arising from this way.

<unk> largely offset the potential idle cash revenue decrease.

Thank you.

MS Fund are you done with your question.

Yes. Thank you.

Your next question comes from the line of EMA shoe with both on Securities. Please go ahead.

Mr. Hu can it go ahead with your question.

While it seems that it's.

Here Tonight.

So if operator do you have any further questions on the line.

No more questions.

I will now hand, the call back over to Mr. Yuan for closing comments. Thank you.

Sure Yeah. So that concludes our call today on behalf of the <unk> management team I would like to thank you for joining US today. If you have any further questions. Please do not hesitate to contact me or any of our Investor Relations Representatives. Thank you and goodbye.

Thank you. This concludes our conference for today. Thank you for participating you may now disconnect.