Q2 2024 Futu Holdings Ltd Earnings Call

Speaker Change: Hello ladies and gentlemen, welcome to Futu Holdings' second quarter 2024 earnings conference call. At this time, all participants are in a listen-only mode. After management has prepared remarks, there will be a Q&A session. Today's conference call is being recorded.

Operator: for earnings conference call. At this time, all participants own a listen-only mode. After management's heard marks, help you Q&A session. The day conference call is being reported.

Operator: If you have any objections, you may disconnect at this time.

Daniel Yuan: I would now like to turn this conference over to your host for today's conference call. Daniel Yuan, Chief of Staff to CEO and Head of IR at FUJU.

Operator: Sponsored ADR Class B

Operator: 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.

Daniel Yuan: Please go ahead, sir.

Speaker Change: 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.

Speaker Change: Daniel Yuan, Chief of Staff to CEO and Head of IR at Futu. Please go ahead sir.

Daniel Yuan: Please go ahead, sir. Thanks, operator.

Operator: Today's conference call is being recorded.

Daniel Yuan: Thanks, operator, and thank you for joining us today to discuss our second quarter 2024 earnings results.

Leaf Lee: And thank you for joining us today to discuss our second quarter of 2024 earnings results. Joining me on the call today are Mr. Leaf Lee, Chairman and Chief Executive Officer; Arthur Chen, Chief Financial Officer; and Robin Xu, Senior Vice President. As a reminder, today's call may include four 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. Four looking statements involving care events and the search. We caution you that the number of important factors could call back to results to defer materially from those containing any four looking statements.

Daniel Yan: Thanks, Operator, and thank you for joining us today to discuss our second quarter 2024 earnings results. Joining me on the call today are Mr. Lei Flea, Chairman and Chief Executive Officer, Arthur Chen, Chief Financial Officer, and Robin Xu, Senior Vice President.

Operator: If you have any objections, you may disconnect at this time.

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

Daniel Yan: which by their nature are not certain and are outside of the company's control.

Daniel Yan: Forward-looking statements involving care met and uncertainty. We caution you that a number of important factors could cause actual results to differ materially from those containing any forward-looking statements.

Leaf Lee: For more information about the potential risks and the certainties, please refer to the company's filings with the SEC, including its annual report.

Daniel Yan: For more information about the potential risks and uncertainties, please refer to the company's filings with the FEC, including its annual report.

Daniel Yuan: Joining me on the call today are Mr. Lee Li, Chairman and Chief Executive Officer, Arthur Chen, Chief Financial Officer, and Robin Xu, Senior Vice President.

Leaf Lee: With that, I would now turn the call over to Leaf. Leaf will make his comments in Chinese, and I will translate. Thank you all for joining our earnings call today. In the second quarter, we acquired 155,000 paying clients, representing 168% year-over-year growth. By the end of the quarter, we crossed the 2 million paying clients milestone, translating into a 29% growth year-over-year and 8% growth quarter of the quarter. Six months into 2024, we have achieved over 80% of our four-year new paying client guidance.

Operator: I would now like to turn the conference over to your host for today's conference call, Daniel Yuan.

Leth: With that, I will now turn the call over to Leif. Leif will make his comments in Chinese, and I will translate.

Daniel Yuan: Chief of Staff to CEO and Head of IR at Futu.

Daniel Yuan: Please go ahead sir.

leaf leth: Thank you all for attending tonight's gathering. In the second quarter, we competed for 155,000 asset-holding customers, a year-on-year increase of 168%.

Speaker Change: As of this weekend, the total number of asset clients has exceeded 2 million, representing a year-on-year growth of 29% and a month-on-month growth of 8%.

Daniel Yuan: Thanks, operator.

Speaker Change: In the first half of this year, we have already achieved over 80% of our annual guidance.

Speaker Change: ju the woman jun ungen and jun yual ten cooues c right to the suncalledes to the ' al we thank you all to join our earnings call today in the second quarter we have acquired one hundred and fifty five thousand paying clients representing one hundred and sixty eight percent year over-year growth

Daniel Yuan: 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. Forward-looking statements involving hearing risks and uncertainties.

Daniel Yuan: We caution you that a number of important factors could cause actual results to differ materially from those containing any forward-looking statements.

Daniel Yuan: For more information about the potential risks and uncertainties, please refer to the company's filings with the SEC. Including its annual report.

Daniel Yuan: And thank you for joining us today to discuss our second quarter 2024 earnings results.

Speaker Change: By the end of the quarter, we crossed the 2 million paying clients milestone, translating into a 29% growth year-over-year and 8% growth quarter-over-quarter.

Daniel Yuan: Joining me on the call today are Mr. Leif Li, Chairman and Chief Executive Officer, Arthur Chen, Chief Financial Officer, and Robin Xu, Senior Vice President.

Speaker Change: Six months into 2024, we have achieved over 80% of our full-year new paying client guidance.

Leaf Lee: Given the strong year-to-day momentum, we would like to raise our guidance again to 550,000 new paying clients in 2024. New paying clients in Hong Kong and Singapore both recorded double-digit sequential growth amid market rebound, collectively contributing to over one third of paying client growth in the second quarter. In Japan, new paying clients grew by double-digit quarter of a quarter as we continue to strengthen product offerings, iterate on marketing initiatives, and increase up brand awareness. Meanwhile, Malaysia maintains strong momentum and contributes the highest number of you-paying clients among all markets to corners in the role, despite the financial deceleration.

Speaker Change: given the strong year totoday momentum we like to raise our guidance again to five hundred and fifty thousand new paining client in two thousand and twenty four services on hun lens strong off upfore that sing oes who shoed those foulas with without questington' down

Speaker Change: The two markets shared more than one-third of the group's competitive asset customers this quarter.

Speaker Change: In Japan, we continuously enhance product strength and iterate market operation activities.

Speaker Change: Enhancing brand awareness, competitive asset clients have maintained double-digit growth on a quarter-on-quarter basis. The momentum in the Malaysian market is strong. Although the quarter-on-quarter growth has slowed down, it has still contributed the most competitive asset clients for two consecutive quarters.

Speaker Change: New paying clients in Hong Kong and Singapore both recorded double-digit sequential growth amid market rebound, collectively contributing to over one-third of paying client growth in the second quarter.

Daniel Yuan: As a reminder, today's call may include four looking statements, which represent the company's belief regarding future events. 由於他們的本質,我們並不肯定,並不在公司的控制之下, 前瞻, We caution you that a number of important factors could cause actual results to differ materially from those containing any forelooking statements.

Daniel Yuan: For more information about the potential risks and uncertainties, please refer to the company's filings with the FEC, including its annual report.

Speaker Change: In Japan, new paying clients grew by double digit quarter of a quarter, as we continue to strengthen product offerings, iterate on marketing initiatives, and increase our brand awareness.

Speaker Change: Meanwhile, Malaysia maintained strong momentum and contributed the highest number of new paying clients among all markets two quarters in a row despite the financial deceleration.

Leif Li: 我現在就把電話轉交給Leif Leif會在中文上發表他的意見 然後我會轉傳給他, 感谢大家参加今天的业绩会 二季度我们竞争15.5万有资产客户 同比增长168% 截至这周末 有资产客户总数超过了两百万 同比增长29% 缓比增长8% 今年上半年我們已經完成了超過80%的全年貨客指引 据此,我们将今年竞争有资产客户数的指引再次上调至55万, 本集完結後,我們將跨越兩億付款顧客的階段, Translating into a 29% growth year-over-year and 8% growth quarter-over-quarter.

Speaker Change: Recently, we launched cryptocurrency trading in Hong Kong and Singapore, which is an important product launch for this year.

Speaker Change: Compared to some other markets we have expanded into, the penetration rate of crypto assets in the Hong Kong and Singapore markets is not high.

Speaker Change: But in recent years, as Hong Kong and Singapore have increasingly embraced the regulation of virtual assets

Speaker Change: The public's gradually increasing awareness of virtual assets, along with the emergence of more user-friendly virtual asset trading platforms, indicates that there is still significant room for growth in the penetration rate of crypto assets in these markets. We believe that the future increase in penetration rate will not be linear.

Speaker Change: The growth curve is also highly correlated with market sentiment. When we are doing product planning, rather than pursuing short-term monetization, we focus more on providing customers with a diverse range of low-correlation asset classes to help them navigate market cycles and simultaneously increase their wallet share.

Leaf Lee: One major product update is our recent launch of cryptocurrency trading in Hong Kong and Singapore. Compared to some other markets we operate in, we believe that the penetration of crypto in Hong Kong and Singapore helps much room for growth, given their supportive regulatory environment, right and awareness of virtual assets, and the emergence of more user-friendly virtual asset trading platforms. The adoption curve will not be linear and obviously highly subjective to market sentiment. But when we develop our product roadmap, we think less about short-term monetization than offering a broader portfolio of asset classes with low correlation to help our clients navigate market cycles and thus drive higher client wallet share.

Leif Li: Six months into 2024, we have achieved over 80% of our full year new paying client guidance.

Speaker Change: One major product update is our recent launch of cryptocurrency trading in Hong Kong and Singapore.

Leif Li: 在市场行情混乱之际,香港和新加坡的新客户数均取得了双位数的环比增长。 两个市场共享的本季度集团超过1%的竞争有资产客户 在日本,我们持续增强产品实力,迭代市场运营活动 提升品牌认知度 竞争有资产客户环比保持了双位数增长 马来西亚市场货客势头强劲 尽管环比增长有所放缓 但仍然连续两个季度 贡献了最多的竞争有资产客户 新来的香港和新加坡客户 都在两个季度的迅速增长中 产生市场反弹 共同帮助了 第二季度的竞争客户增长, In Japan, new paying clients grew by double digit quarter of a quarter as we continue to strengthen product offerings, iterate on marketing initiatives, and increase our brand awareness. Meanwhile, Malaysia maintained strong momentum and contributed the highest number of new paying clients among all markets two quarters in a row despite sequential deceleration.

Leif Li: 近期,我们在香港和新加坡推出了加密货币交易,是今年重要的产品升级。 和我们展业的一些其他市场相比 香港和新加坡市场的加密资产渗透率不算高 37年來隨著香港和新加坡監管更加擁抱虛擬, 大众对虚拟资产认知的逐渐提升 以及更多用户友好的虚拟资产交易平台的出现 这两个市场的加密资产渗透率还有很大的提升空间 我们认为未来渗透率的提升不会是限性的, 增长曲线也和市场情绪高度相关 但我们在做产品规划的时候 相较于追求短期货币化而言 我们更着意于向客户提供 相关性低多样化的资产类别 以帮助他们跨越市场周期 同时提高客户钱包份额, One major product update is our recent launch of cryptocurrency trading in Hong Kong and Singapore. Compared to some other markets we operate in, we believe that the penetration of crypto in Hong Kong and Singapore has much room for growth, given their supportive regulatory environment, rising awareness of virtual assets, and the emergence of more user-friendly virtual asset trading platforms.

Speaker Change: Compared to some other markets we operate in, we believe that the penetration of crypto in Hong Kong and Singapore has much room for growth, given their supportive regulatory environment, rising awareness of virtual assets, and the emergence of more user-friendly virtual asset trading platforms.

Leif Li: Adoption Curve will not be linear and obviously highly subjective to market sentiment.

Speaker Change: The adoption curve will not be linear and obviously highly subjective to market sentiment.

Leif Li: But when we develop our product roadmap, we think less about short-term monetization than offering a broader portfolio of asset classes with low correlation to help our clients navigate market cycles and thus drive higher client wallet share.

Speaker Change: But when we develop our product roadmap, we think less about short term monetization than offering a broader portfolio with asset classes with low correlation to help our clients navigate market cycles and thus drive higher client wallet share.

Speaker Change: We also have corresponding product plans in other international markets. In Japan, we are preparing to launch NISA savings accounts, mutual funds, and U.S. stock financing features. These features will be gradually made available to Japanese customers in the coming months. In Malaysia, we have recently launched currency funds denominated in Malaysian Ringgit and U.S. Dollars.

Speaker Change: In order to help clients seize investment opportunities in the Malaysian new stock market, we have also launched the Malaysian Stock IPO subscription feature. In Canada, we have just launched Cash Club.

Leaf Lee: In terms of our product roadmap for other international markets, in Japan, we are on track to launch needs of savings account, mutual funds, and US margin trading in the coming months. In Malaysia, we recently rolled out a ring-aid and USC-diminated money market fund. To help our clients capitalize on the vibrant local IPO market in Malaysia, we also launched Malaysian stock IPO subscription services.

Daniel Yuan: 我们在其他国际市场也有相应的产品规划 在日本我们正在筹备NISA储蓄账户、共同基金和美股融资功能的上线 这些功能会陆续在未来几个月内向日本客户开放 在马来西亚我们最近刚上线了马币和美元计价的货币基金, 为了帮助客户把握马来西亚新股市场中的投资机遇,我们还推出了马股IPO打清功能。在加拿大,我们刚刚上线了Cash Club。 客户的闲置资金可获得一定的收益奖励, In terms of our product roadmap for other international markets, in Japan, we are on track to launch NISA savings account, mutual funds, and U.S. margin trading in the coming months.

Speaker Change: Idle funds of the customer can earn certain rewards.

Speaker Change: In terms of our product roadmap for other international markets, in Japan, we are on track to launch NISA Savings Account, Mutual Funds, and U.S. Margin Trading in the coming months. In Malaysia, we recently rolled out Ringgit and USD Denominated Money Market Funds.

Daniel Yuan: 在馬來西亞,我們最近撥出了銀行和美國主要的貨幣市場基金, 为了帮助我们的客户投资在马来西亚的活跃地缘IPO市场上 我们还推出了马来西亚的IPO赞助服务, In Canada, we just introduced Cash Plus product that enables clients to earn a census on their idle cash.

Speaker Change: To help our clients capitalize on the vibrant local IPO market in Malaysia, we also launched a Malaysian stock IPO subscription services.

Leaf Lee: In Canada, we just introduced Cash Plus product that enabled clients to earn a little cash. Codocline assets jumped 24% over year and 12% quarter of a quarter to a record $579 billion Hong Kong dollars. The growth was fueled by the robust net asset of low across markets and the market appreciation of our client stock holdings. With net asset inflow of recording rapid sequential growth, we have succeeded our full year 2023 number only six months into the year. In the second quarter, our clients continue to take on more leverage positions amid uplifted market sentiment. As a result, market financing and securities lending balance climbed to an all-time high of $44 billion Hong Kong dollars.

Speaker Change: In Canada, we just introduced Cash Plus product that enables clients to earn incentives on their idle cash.

Daniel Yuan: 在各个市场强劲进入金和客户持仓市值提升的双重推动下, 总资产规模突破新高 同比增长24% 环比增长12% 达到5790亿港币 随着进入金规模环比快速增长 我们在6个月内就已经超越了 2023年全年的进入金规模 二季度市场情绪回升 客户增加了交易杠杆 带动两融余额提升至440亿港币 达到历史新高水平, Total client assets jumped 24% year-over-year and 12% quarter-over-quarter to a record HK$579 billion.

Speaker Change: Driven by strong entry into various markets and the increase in customer holdings' market value, the total asset scale reached a new high, growing 24% year-on-year and 12% quarter-on-quarter, reaching 579 billion HKD.

Speaker Change: With the rapid month-on-month growth in the scale of inflows, we have already surpassed the total inflow scale for the entire year of 2023 within six months. In the second quarter, market sentiment improved, and customers increased their trading leverage, driving the margin financing balance up to 44 billion HKD.

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Speaker Change: Total client assets jumped 24% year-over-year and 12% quarter-over-quarter to a record HK$579 billion. The growth was fueled by the robust net asset outflow across markets and the market appreciation of our clients' stock holdings.

Daniel Yuan: The growth was fueled by the robust net asset outflow across markets and the market appreciation of our clients' stockholdings.

Daniel Yuan: With net asset inflow recording rapid sequential growth, we have succeeded our full year 2023 number only six months into the year.

Speaker Change: With net outside inflow recording rapid sequential growth, we have succeeded our full year 2023 number only six months into the year.

Daniel Yuan: In the second quarter, our clients continue to take on more leveraged positions amid uplift market sentiment. As a result, margin financing and securities lending balance climbed to an all-time high of HK$44 billion.

Speaker Change: In the second quarter, our clients continue to take on more leveraged positions amid uplift market sentiment.

Speaker Change: As a result, margin financing and securities lending balance climbed to an all-time high of HK$44 billion.

Daniel Yuan: 在新加坡随着客户持续入金流入股市和货币机构, 客户总资产环比增长19%,连续8个季度实现了双位数的增长 马来西亚的护军资产环比提升45%,客户总资产环比翻倍 在澳大利亚,客户护军资产连续3个季度实现环比增长, Driven by robust net asset inflow into equities and money market funds, total client assets in Singapore grew by 19% quarter of a quarter, marking the eighth consecutive quarter of double-digit growth.

Speaker Change: tr in their board so the car would socially roing thegoods are the probititing

Speaker Change: Customer total assets increased by 19% quarter-on-quarter, achieving double-digit growth for 8 consecutive quarters. In Malaysia, customer guard assets increased by 45% quarter-on-quarter, with total customer assets doubling quarter-on-quarter. In Australia, customer guard assets achieved quarter-on-quarter growth for 3 consecutive quarters.

Leaf Lee: Sure, and by robust net asset inflow into equities and money market funds, Codocline assets and Singapore grew by 19% quarter of a quarter, marking the eighth consecutive quarter of double-digit growth. Average client assets in Malaysia recorded 45% sequential growth, while Codocline assets more than doubled. In Australia, average client assets realized sequential growth at three consecutive quarters. In the second quarter of a quarter of a quarter of a quarter to a record $1.5 billion, Codocline assets increased by 28% to 3,580 Hong Kong dollars. A throwing optimism continued into the second quarter for Hong Kong stocks and major US indexes, national time highs. Total trading volume through to $1.62 trillion Hong Kong dollars, a 69% year over year and 21% quarter of a quarter.

Speaker Change: Driven by robust net asset inflow into equities and money market funds, total client assets in Singapore grew by 19% quarter of a quarter, marking the eighth consecutive quarter of double-digit growth.

Daniel Yuan: Average client assets in Malaysia recorded 45% sequential growth, while total client assets more than doubled.

Speaker Change: Average client assets in Malaysia recorded 45% sequential growth, while total client assets more than doubled. In Australia, average client assets realized sequential growth for three consecutive quarters.

Daniel Yuan: In Australia, average client assets realized sequential growth for three consecutive quarters.

Daniel Yuan: 随着港股交易情绪在二季度内持续升温 美国主要股指创下历史新高 总交易量同比提升69% 环比提升21% 达到1.62万亿港币 本季度客戶延續了對港股科技股和高股息股的交易熱情, 换手率在市场情绪的明显转变中反比有所提升 因此港股交易量環比增長28% 達到3580億港元, 随着AI交易热潮持续,叠加英语股热潮卷土重来,美股交易量环比增长19%,达到1.24万亿港币,在美国市场,我们的高阶期权交易功能,加上用户友好的交易界面和丰富的投效资源,提高了我们在期权交易者中的吸引力,二季度,美国的期权交易人数同比增长约60%, 期權交易當初同比實現翻倍, 香港股市,企业利润持续为高级股市提供技术, Trading Velocity also rebounded sequentially amid a palpable shift to market sentiment.

Speaker Change: As trading sentiment in Hong Kong stocks continued to heat up in the second quarter, major U.S. stock indices reached record highs. Total trading volume increased by 69% year-on-year, with a sequential increase of 21%.

Speaker Change: reached 1.62 trillion HKD

Speaker Change: This quarter has continued the fervent trading interest in Hong Kong technology stocks and high dividend stocks.

Speaker Change: The turnover rate has inversely increased amid a significant shift in market sentiment.

Speaker Change: As a result, the trading volume of Hong Kong stocks increased by 28% month-on-month, reaching HKD 358 billion.

Speaker Change: As the AI trading boom continues, coupled with the resurgence of the secret stock craze, the trading volume per share increased by 19% month-on-month, reaching 1.24 trillion HKD.

Speaker Change: In the U.S. market, our advanced options trading features, combined with a user-friendly trading interface and abundant educational resources, have increased our appeal among options traders. In the second quarter, the number of options traders in the U.S. grew by approximately 60% year-over-year.

Speaker Change: The complete transaction achieved a 3-fold increase compared to the same period.

Speaker Change: of throwing optimism continue into the second quarter for hong kong stocks and major u s indices' nationalall time high total trading volume curred to one point six two trillion unk dollars of sixty nine percent year-over-year and twenty-one percent quarter of the quarter

Leaf Lee: For Hong Kong stock trading, client interest persisted for technology and high dividend names. Trading velocity also rebounded sequentially amid a publical shift to market sentiment. As a result, Hong Kong stock trading volume increased by 28% sequentially to $358 billion Hong Kong dollars. Boosted by the continued AI mania and resurgence of mean stocks, US stock trading volume grew by 19% quarter of a quarter to $1.24 trillion Hong dollars. In the US market, advanced options trading tools combined with user friendly interface and extensive educational resources boosted our appeal among options traders. In the second quarter, the number of options traders in the US increased by around 60% year over year, while the number of options contracts traded more than double compared to the year ago quarter.

Speaker Change: For Hong Kong stock trading, client interest persisted for technology and high dividend names. Trading velocity also rebounded sequentially amid a palpable shift in market sentiment.

Daniel Yuan: 因此,香港的股票交易量增加了28% 随后增至358亿港元, 由於不斷的AI瘋狂和不斷增加的貨幣 美國的貨幣交易量增加了19.25% 達到1.24億港幣, In the U.S. market, advanced options trading tools combined with user-friendly interface and extensive educational resources boosted our appeal among options traders.

Speaker Change: As a result, Hong Kong's stock trading volume increased by 28% sequentially to HK$358 billion.

Speaker Change: Boosted by the continued AI mania and resurgence of meme stocks, US stock trading volume grew by 19% quarter over quarter to HK$1.24 trillion.

Speaker Change: In the U.S. market, advanced options trading tools, combined with user-friendly interface and extensive educational resources, boosted our appeal among options traders.

Daniel Yuan: In the second quarter, the number of options traders in the U.S. increased by around 60% year-over-year, while the number of options contracts traded more than doubled compared to the year-ago quarter.

Speaker Change: In the second quarter, the number of options traders in the U.S. increased by around 60% year-over-year, while the number of options contracts traded more than doubled compared to the year-ago quarter.

Daniel Yuan: 财富管理业务在本季度再次取得了显著的增长,随着客户寻求多元化投资,并持续将更多资金投入货币基金和美国国债等更安全的资金。 客户总资产同比增长84%,环比增长25%,达到约800亿港币, 截至二季度末,财务管理资产占客户总资产规模的14%,有超过25%的客户持有财务管理产品 Wealth Management recorded another quarter of exceptional growth. As our clients saw diversification and continued to part more funds in safer assets like money market funds and U.S. Treasury bills, Total client assets grew by 84% year-over-year and 25% quarter-over-quarter to around HK$80 billion. Alpha Quarter End Wealth Management Assets accounted for 14% of our total client assets, and over 25% of paying clients held wealth management positions.

Speaker Change: The wealth management business has once again achieved significant growth this quarter, as clients seek diversified investments and continue to allocate more funds into safer assets such as money market funds and U.S. Treasury bonds.

Speaker Change: Customer total assets increased by 84% year-on-year and 25% quarter-on-quarter, reaching approximately 80 billion HKD.

Speaker Change: As of the end of the second quarter, wealth management assets accounted for 14% of the total customer assets, with over 25% of customers holding wealth management products.

Leaf Lee: Well, management recorded another quarter of exceptional growth. As our clients saw diversification and continued to part more funds in safer assets like money market funds in US Treasury bills. Total client assets grew by 84% year over year and 25% quarter of a quarter to around 80 billion Hong Kong dollars. Out of quarter of wealth management assets accounted for 15% of our total client assets and over 25% of paying clients helped wealth management positions. We have 461 IPO distributions in our clients of 21% year over year. We under wrote seven of the 10 largest Hong Kong IPOs and the first half of 2024.

Speaker Change: Wealth Management recorded another quarter of exceptional growth.

Speaker Change: as our clients saw diversification and continue to part more funds in safefer assets like money market funds and u s treasury bills

Speaker Change: Total client assets grew by 84% year-over-year and 25% quarter-over-quarter to around HK$80 billion.

Speaker Change: As of quarter end, wealth management assets accounted for 14% of our total client assets, and over 25% of paying clients held wealth management positions. Our corporate services have 451 IPO distributors and IR customers.

Arthur Chen: 我们的企业服务有451家IPO分销和IR客户, 同比增長21% 2024年上半年,在港股募資額前10名的IPO項目中,我們作為成交商參與了7家。 我们的客户的IPO分布率为451个亿 我们在2024年第一半的香港IPO中 减少了七个香港最大的IPO 接下来有请我们的首席财务官阿瑟介绍我们的财务表现, Thank you Li Wen and Daniel.

Speaker Change: Year-on-year growth of 21%. In the first half of 2024, among the top 10 IPO projects in terms of fundraising on the Hong Kong stock market, we participated as a dealer in 7 of them.

Speaker Change: We have 451 IPO distribution in our clients of 21% year-over-year. We underwrote 7 of the 10 largest Hong Kong IPOs in the first half of 2024.

Arthur Chen: Next, I'd like to invite our CSO authors to discuss our financial performance. Thank you, Lee Van Daniel. Please allow me to walk you through our financial performance in the second quarter. All the numbers are in Hong Kong dollars unless otherwise noted. Total revenue was 3.1 billion, of 26% from 2.5 billion in the second quarter of 2023. brokerage commission and the handling charge income was 1.4 billion of 45% year over year and 27% year over two. The increase was mainly driven by a 69% year-over-year and 21% year-over-two growth in total trading volumes. Given our per sheer pricing model for US stock trading, the blended commission rate increased from 8.1 billion to 8.5 billion.

Daniel Yuan: With that, I will now turn the call over to Lee.

Speaker Change: Next, I'd like to invite our CFO Arthur to discuss our financial performance.

Daniel Yuan: Lee will make his comments in Chinese, and I will translate.

Arthur Chen: Please allow me to walk you through our financial performance in the second quarter. All the numbers are in Hong Kong dollars unless otherwise noted.

ent anniel: Thank you Li and Daniel. Please allow me to walk you through our financial performance in the second quarter. All the numbers are in Hong Kong dollars unless otherwise noted.

Arthur Chen: Total revenue was $3.1 billion, up 26% from $2.5 billion in the second quarter of 2023.

ent anniel: totalgrreaphue wards three point one withend of twenty six percent on totwo y five d in the second quarter two thousand and twenty three

Arthur Chen: Brokerage commission and handling charge income was 1.4 billion, a 45% EOB and 27% QOQ. The increase was mainly driven by a 69% EOB and 21% QOQ growth in total trading volume.

Speaker Change: Brokerage commission and handling charge income was 1.4 billion, a 45% EOB and 27% QOQ. The increase was mainly driven by a 69% EOB and 21% QOQ growth in total trading volume.

Arthur Chen: Given our per share pricing model for U.S. stock trading, the blended commission rate increased from 8.1 basis points to 8.5 basis points. As a result, brokerage income grew at a faster rate than trading volume Q2.

Speaker Change: Given our per share pricing model for U.S. stock trading, the blended commission rate increased from 8.1 basis points to 8.5 basis points. As a result, brokerage income grew at a faster rate than trading volume Q over Q.

Arthur Chen: As a result, brokerage income grew at half past the rate than trading volume Q over Q. Interest income was 1.6 billion of 13% year over year and 18% Q over Q. The year over year and Q over Q increased was mainly driven by high and margin financing income due to an increase in daily average margin balance. And the higher interest income from security borrowing and the landing business. Other income was 1.6 billion of 27% year over year and 3% Q over Q. The year over year and Q over Q increased was both primary attribute votes to higher fund distribution income, while the Q over Q increased was partially offset by the decline in underwriting fee income.

Arthur Chen: Interest income was 1.6 billion of 13% year-over-year and 18% QOQ. The year-over-year and QOQ increase was mainly driven by higher margin financing income due to an increase in daily average margin balance and the higher interest income from security borrowing and lending business.

Speaker Change: Interest income was $1.6 billion of 13% year-over-year and 18% Q-over-Q. The year-over-year and Q-over-Q increase was mainly driven by higher margin financing income due to an increase in daily average margin balance and a higher interest income from security borrowing and lending business.

Arthur Chen: Other income was 161 million, up 27% year-over-year and 3% Q-over-Q. The year-over-year and Q-over-Q increase was both primarily attributable to higher fund distribution income, while the Q-over-Q increase was partially offset by the decline in underwriting fee income.

Speaker Change: Other income was $161 million of 27% year-over-year and 3% Q-over-Q. The year-over-year and Q-over-Q increase was both primarily attributable to higher fund distribution income, while the Q-over-Q increase was partially offset by the decline in underwriting fee income.

Arthur Chen: Our total cost was 574 million and increased of 53% from 375 million in the second quarter of 2003. Procage Commission and the handling charge expenses were 87 million of 58% year year and 45% QVQ. The expenses grow by our wider margins and income sequentially, mainly due to the capture fee scheme for U.S. Stock trading. Under the per share pricing model, we charge a maximum of 50 basis points of trading volume per order for U.S. Stock trading. So when applying to the more low price of U.S. stock, as was the case in the second quarter, there would be a mismatch between the growth rate of revenue and expenses.

Arthur Chen: Our total cost was $574 million, an increase of 53% from $375 million in the second quarter of 2023. Brokerage commission and the handling charge expenses were $87 million, up 58% year-over-year, and up 45% Q-over-Q.

Speaker Change: Our total cost was $574 million, an increase of 53% from $375 million in the second quarter of 2023.

Speaker Change: Brokerage Commission and Handling Charge Expenses were $87 million, up 58% year-over-year and up 45% Q-over-Q.

Arthur Chen: The expenses grew by a wider margin than income sequentially, mainly due to the cap-to-fee scheme for U.S. stock trading. Under the per-share pricing model, we charge a maximum of 50 basis points of trading volume per order for U.S. stock trading. So when clients trade a more low-priced mean stock, as was the case in the second quarter, there will be a mismatch between the growth rate of revenue and expenses.

Operator: for earnings conference call.

Operator: for earnings conference call. At this time, all participants own a listen-only mode. After management's heard marks help you Q&A session. The day conference call is being reported.

Speaker Change: The expenses grow by a wider margin than income sequentially, mainly due to the cap-to-fee scheme for U.S. stock trading. Under the per-share pricing model, we charge a maximum of 50 basis points of trading volume per order for U.S. stock trading.

Operator: At this time, all participants own a listen-only mode.

Operator: If you have any objections, you may disconnect at this time.

Operator: I would now like to turn this conference over to your host for today's conference call.

Speaker Change: So when clients trade a more low-priced mean stock, as was the case in the second quarter, there will be a mismatch between the growth rate of revenue and expenses.

Daniel Yuan: Daniel Yuan, Chief of Staff to CEO and Head of IR at FUJU. Please go ahead, sir. Thanks, operator.

Arthur Chen: Interest expenses was 378 million of 71% year over year and the 21% QVQ. The year-over-year and a QVQ increase was mainly incurred by high interest expenses associated with our security borrowing and the landing business. Processing and the service in court was 109 million of 11% year over year and a certain percent QVQ. The year-over increase was largely due to higher crop service fee, and the QVQ increase was mainly driven by higher market information and data fees. As a result, our total growth profit was 2.6 million, an increase of 21% from 2.1 billion in the second quarter of 2023.

Arthur Chen: Interest expenses were $378 million of 71% year-over-year and a 21% QOQ. The year-over-year and the QOQ increase was mainly driven by high interest expenses associated with our security borrowing and the lending business.

Speaker Change: Interest expenses were $378 million of 71% year-over-year and 21% QOQ. The year-over-year and the QOQ increase was mainly driven by high interest expenses associated with our security borrowing and the lending business.

Operator: After management's heard marks help you Q&A session.

Daniel Yuan: And thank you for joining us today to discuss our second quarter of 2024 earnings results. Joining me on the call today are Mr. Leaf Lee, Chairman and Chief Executive Officer, Arthur Chen, Chief Financial Officer, and Robin Xu, Senior Vice President. As a reminder, today's call may include four 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. Four looking statements involving care events and the search. We caution you that the number of important factors could call back to results to defer materially from those containing any four looking statements.

Operator: The day conference call is being reported.

Arthur Chen: Processing and servicing cost was $109 million, of 11% year-over-year and 13% Q-over-Q.

Speaker Change: Processing and servicing cost was $109 million of 11% year-over-year and 13% Q-over-Q. The year-over-year increase was largely due to higher crowd service fee and the Q-over-Q increase was mainly driven by higher market information and data fees.

Arthur Chen: The year-over-year increase was largely due to higher crowd service fee, and the Q-over-Q increase was mainly driven by higher market information and data.

Arthur Chen: As a result, our total gross profit was $2.6 billion, an increase of 21% from $2.1 billion in the second quarter of 2023. Gross margin was 81.6% as compared to 84.9% in the year-ago quarter. Operating expenses were up 26% year-over-year and 16% Q-over-Q to $1.1 billion.

Speaker Change: As a result, our total gross profit was $2.6 billion, an increase of 21% from $2.1 billion in the second quarter of 2023. Gross margin was 81.6%, as compared to 84.9% in the year-ago quarter.

Arthur Chen: Growth margin was 81.6% as compared to 84.9% in the year-ago quarter. Operating expenses were up 26% year over year and the 16% QVQ to 1.1 billion. Irony expenses was 374 million of 3% year over year and the 12% the QVQ. The year-over-year and the QVQ increase was mainly driven by increase in IND headphones to support our new markets. Serving in the market expenses was 338 million of 93% year over year and the 16% QVQ. The year-over-year increase was driven by the triple-digit year-over-year growth in new paying clients, partially offset by lower client acquisition costs. The QVQ increase was mainly due to the sequential increase in client acquisition costs.

Daniel Yuan: For more information about the potential risks and the certainties, please refer to the company's filings with the SEC, including its annual report.

Leaf Lee: With that, I would now turn the call over to Leaf.

Leaf Lee: Leaf will make his comments in Chinese and I will translate. Thank you all for joining our earnings call today. In the second quarter, we acquired 155,000 paying clients, representing 168% year-over-year growth. By the end of the quarter, we crossed the 2 million paying clients milestone, translating into a 29% growth year-over-year and 8% growth quarter of the quarter. Six months into 2024, we have achieved over 80% of our four-year new paying client guidance.

Speaker Change: Operating expenses were up 26% year-over-year and 16% Q-over-Q to $1.1 billion.

Arthur Chen: R&D expenses were $374 million, up 3% year-over-year, and a 12% Q-over-Q. The year-over-year and Q-over-Q increase was mainly driven by an increase in R&D headcount to support our new market.

Daniel Yuan: Thank you for attending today's conference call.

Speaker Change: R&D expenses were $374 million, up 3% year-over-year, and a 12% Q-over-Q. The year-over-year and the Q-over-Q increase was mainly driven by an increase in R&D headcount to support our new markets.

Lee Li: In the second quarter, we competed with 15.5 million asset clients, which was an increase of 168%.

Lee Li: As of the end of this quarter, the total number of asset clients exceeded 2 million, which was an increase of 29%, which was an increase of 8%.

Arthur Chen: Selling and marketing expenses were $338 million, up 93% year-over-year, and 16% QQQ. The year-over-year increase was driven by the triple-digit year-over-year growth in new paying clients, partially offset by lower client acquisition costs.

Speaker Change: Selling and marketing expenses were $338 million, up 93% year-over-year, and 16% QQ. The year-over-year increase was driven by the triple-digit year-over-year growth in new paying clients, partially offset by lower client acquisition costs.

Operator: If you have any objections, you may disconnect at this time.

Arthur Chen: The QQQ increase was mainly due to the sequential increase in client acquisition costs.

Operator: I would now like to turn this conference over to your host for today's conference call.

Speaker Change: The peer-over-peer increase was mainly due to the sequential increase in client acquisition costs.

Arthur Chen: G&A expenses were $362 million, up 16% year-over-year, and a 20% QOQ. The year-over-year and the QOQ increase was primarily due to an increase in headcount for G&A personnel.

Arthur Chen: G&E expenses was 362 million of 16% year over year and the 20% QVQ. The year-over-year and the QVQ increase was primary due to increase in head count for G&E customers. As a result, income from operating increase by 18% year over year, 24% QVQ, to 1.5 billion. Operating margin declined to 47.3% from 58.6% in the second quarter of 2023, mostly due to higher market expenses. Our net income increased by 8% year over year and the 17% QVQ to 1.2 billion. Net income margin declined to 38.6% in the second quarter of the year compared to over 1.1% in the same quarter last year.

Daniel Yuan: Daniel Yuan, Chief of Staff to CEO and Head of IR at FUJU.

Speaker Change: G&A expenses were $362 million, up 16% year-over-year, and a 20% Q-over-Q. The year-over-year and the Q-over-Q increase was primarily due to an increase in headcount for G&A personnel.

Daniel Yuan: Please go ahead, sir.

Arthur Chen: As a result, income from operation increased by 18% year-over-year and 24% QQ to 1.5 billion.

Speaker Change: That's the result.

Daniel Yuan: Thanks, operator.

Leaf Lee: Given the strong year-to-day momentum, we would like to raise our guidance again to 550,000 new paying clients in 2024. New paying clients in Hong Kong and Singapore both recorded double-digit sequential growth amid market rebound, collectively contributing to over one third of paying client growth in the second quarter. In Japan, new paying clients grew by double-digit quarter of a quarter as we continue to strengthen product offerings, iterate on marketing initiatives, and increase up brand awareness.

Speaker Change: Income from operation increased by 18% year-over-year and 24% QQ to 1.5 billion.

Arthur Chen: Operating margin declined to 47.3% from 50.6% in the second quarter of 2023, mostly due to higher marketing expenses.

Speaker Change: Operating Margin Declined to

Speaker Change: forty six forty seven point three percent and fifteen

Speaker Change: o six percent

Speaker Change: in the second quarter of two thousand twenty three mostly due to higher marketing expenses

Arthur Chen: Our net income increased by 8% year-over-year and a 17% QOQ to $1.2 billion.

Speaker Change: Owner income increased by 80% year-over-year and a 17% QOQ to $1.2 billion.

Arthur Chen: Net income margin declined to 38.6% in the second quarter as compared to 41.1% in the same quarter last year. Our effective tax rate for the quarter was 15.2%.

Speaker Change: Net income margin declined to 38.6% in the second quarter as compared to 41.1% in the same quarter last year. Our effective tax rate for the quarter was 15.2%.

Arthur Chen: Our effective tax rate for the quarter was 15.2%.

Daniel Yuan: That concludes our prepared remarks.

Arthur Chen: That concludes our prepared remarks.

Operator: We now like to open the call to questions.

Operator: We now would like to open the call to questions. Operator, please go ahead. Thank you. To ask a question during the session, you will need to press star 1, 1 on your telephone. Please wait for your name to be announced. To withdraw your question, please press star 1, 1 again.

Operator: Operator, please go ahead.

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

Operator: Thank you.

Speaker Change: thank you to ask your quest during the session you will need to press down one one on your telephone

Speaker Change: Please wait for your name to be announced. To withdraw your question, please press star 11 again. Please stand by while we compile the Q&A roster.

Operator: Please some by will become part of the Q&A roster. You will now take our first question. Please stand by.

Leaf Lee: Meanwhile, Malaysia maintains strong momentum and contributed the highest number of new paying clients among all markets, two quarters in the role, despite the financial acceleration. [inaudible] Codocline assets jumped 24% over year and 12% quarter of a quarter to a record $579 billion Hong Kong dollars. The growth was fueled by the robust net asset of low across markets and the market appreciation of our client stock holdings. With net asset inflow of recording rapid sequential growth, we have succeeded our full year 2023 number only six months into the year.

Operator: To ask a question during the session, you will need to press star 11 on your telephone.

Operator: Diolch yn fawr iawn i'ch gwneud y cyhoeddiad.

Speaker Change: We will now take our first question.

Cindy Wang: And the first question comes from the line of Cindy Wang from China Renaissance. Please go ahead; your line is not open. The first question comes from the first question.

Operator: To withdraw your question, please press star 11 again.

Speaker Change: Please stand by.

Operator: Please stand by while we compile the Q&A roster.

Speaker Change: And the first question comes from the line of Cindy Wang from China Renaissance. Please go ahead, your line is now open.

Operator: We will now take our first question.

Speaker Change: Thank you, management, for giving me the opportunity to ask the first question. Congratulations to the management team for a stellar performance in the second quarter. I have two questions. First, we have officially launched crypto services in Hong Kong and Singapore. Could you tell us about the feedback we have received from clients so far?

Speaker Change: What is your customer acquisition strategy for products?

Speaker Change: As for the second one, I would like to ask because

Speaker Change: Now that the third quarter has passed for two months, almost two months, could you give us an overview of the trends you are seeing on the platform? This includes the current trading volume, turnover rate, customer AUM, and the balance of margin financing and securities lending. I will quickly translate my question.

Cindy Wang: Thanks for taking my call. I have two questions. One question is related to crypto services. So recently, you have launched the crypto services in Hong Kong, Singapore. Could you provide some color on client feedback on crypto trading and what your client acquisition strategy? Second is basically now; it is around two months for the third quarter. So can you give us some lately trend for the third quarter, including trading volume, trading velocity, USD and margin financing and security lending balance.

Operator: Please stand by.

Operator: And the first question comes from the line of Cindy Wang from China Renaissance.

Speaker Change: Thanks for taking my call. I have two questions. One question is related to crypto services.

Operator: Please go ahead.

Operator: Your line is now open.

Speaker Change: So recently you have launched the crypto services in Hong Kong and Singapore. Could you provide some color on client feedback on crypto trading? And what's your client acquisition strategy?

Speaker Change: Second is basically now is around two months for the third quarter. So can you give us some lately trend for the third quarter including like trading volume, trading velocity, AUM, and the margin financing and security lending balance?

Cindy Wang: Thank you.

Speaker Change: Thank you.

Cindy Wang: 好的,谢谢管理层给我第一个提问的机会, 然后也恭喜管理层在第二季度的一个很亮眼的表现。 那我这边有两个问题想请问, 第一个就是,我们目前在香港和新加坡现在都已经正式launch的crypto services嘛, 那你可不可以告诉我们一下, 就是说目前所得到的这些client的一个feedback, 然后您在这个产品类的这个获客的一个策略会是什么?

Speaker Change: Thank you, Cindy. For those two questions, I'll answer the second one first. As for the first question regarding virtual assets, I'll leave it to my colleague Yaobing.

Daniel Yuan: 那第二个的话,想请教一下, 因为现在第三季度也走了两个月了, 接近两个月, 那可不可以大概跟我们说一下, 你目前看到的一个占领平台上面的一个趋势, 包含就是目前一个交易量,交易换手率, 客户的AUM以及两融的余额, 那我很快翻译一下我的问题。 谢谢您接受我的电话, 我有两个问题, 第一个问题是关于crypto services, 所以最近你已经在香港和新加坡launch了crypto services, 那你可不可以给予客户的feedback, 关于crypto trading和你的client的获得策略。 第二个就是, 现在已经差不多两个月了, 到第三季度了, 那你可不可以给予我们一些最新的趋势, 在第三季度, 包括交易量,交易速度, AUM, 以及市场资金和保险赚取平台。 谢谢。 那两个问题,我先来回答第二个问题 然后第一个有关虚拟资产的这个问题 我留给我的同事Jordan 那第三季度到目前quarter today 我们来看整个我们的客户的一个进度金 依然保持着一个非常强劲的一个势头 那刚才这个Lee跟Daniel都说到 我们整个二季度的一个客户进度金 是创了我们单季度的一个历史的一个新高 那从三季度这个表现来看 这块这个表现也是非常健康 那从整体的一个市场的这个表现 香港市场的这个表现在三季度有所回调 所以市场会有market to market的一个负面的一个影响 在这个里面 那么从客户的一个换手率 包括交易量的一个角度来看 相比二季度从目前三季度一个情况来看 都还是有一个环比的一个提升的 那么从我们看到的一个客户的一个收容的一个情况 因为在二季度的时候 会有比较多的一些客户交易低价的me stock 这个刚才在我的opening remarks有讲 对我们的一个拥挤率会有一个正面的一个帮助 那随着三季度客户交易me stock的这个占比下降以后 我感觉这个地方的一个拥挤率 会有一个恢复正常化的一个情况 那我翻译一下 for the second quarter today what we witness is still very robust client asset inflows despite there will be some negative impacts implications from the market to market loss due to the challenges that we face in Hong Kong markets and in terms of clients trading turnover velocity and also the trading volume etc we both see that these indicators remain very strong and have a sequential P&Q increase in terms of the commission rate given that we got some benefit in second quarter in line that more clients are trading these low value me stock which give us some positive uptake in terms of the take rate so such benefit will become normalized in the third quarter so far thank you very much 感谢请让我来回答一下第一个问题关于我们的加密资产业务 那我们是于今年8月1号和8月12号分别在香港和新加坡全量上线了虚拟资产的交易业务 那提供主流的虚拟资产的现货交易 截止目前我们是有不少客户激活了数字资产的一个交易账户 那但是由于产品上线时间较短 且近期虚拟资产市场出现了显著的回调 那交易和资产规模都还处于一个相对较小的阶段 那当前我们会专注在产品力提升以及做好投资者教育和运营工作 那让更多的客户了解我们可以暂时提供多样化产品品类的交易能力 好谢谢, We launched cryptocurrency trading in Hong Kong and Singapore on August 1st and August 12th, respectively.

Speaker Change: Up to the third quarter, the overall customer progress payments have maintained a very strong momentum. As Lee and Daniel mentioned earlier, our customer progress payments in the second quarter hit a record high for a single quarter in our history. Judging from the performance in the third quarter, this aspect is also very healthy. In terms of the overall market performance, the Hong Kong market showed some pullback in the third quarter, so the market will have a negative impact on the market.

Speaker Change: From the perspective of customer turnover rate and trading volume, compared to the second quarter, the current situation in the third quarter still shows a sequential improvement. As for the profit situation of our customers, in the second quarter, there were relatively more customers trading low-priced ME stocks.

Lee Li: In the first half of this year, we have completed more than 80% of our annual customer lead.

Lee Li: With this, we will increase the number of asset clients to 550,000 again this year.

Speaker Change: I just mentioned this in my opening, which is about one of our...

Speaker Change: The congestion rate will have a positive impact. As the proportion of customer transactions involving VSTOP decreases in the third quarter, I feel that the congestion rate in this area will return to normal.

Cindy Wang: The second question comes from the first question. Thank you very much. Thank you.

Daniel Yuan: And we now offer a limited number of mainstream trading pairs.

Daniel Yuan: Thank you all for joining our earnings call today. In the second quarter, we acquired 155,000 paying clients, representing 168% year-over-year growth.

Daniel Yuan: By the end of the quarter, we crossed the 2 million paying clients milestone, translating into a 29% growth year-over-year and 8% growth quarter-over-quarter.

Daniel Yuan: Six months into 2024, we have achieved over 80% of our full-year new paying client guidance. Given the strong year-to-date momentum, we would like to raise our guidance again to 550,000 new paying clients in 2024. As the market warms up, the number of new customers in Hong Kong and Singapore has increased by a double-digit rate.

Daniel Yuan: The two markets have contributed to more than one-third of this quarter's competitive asset clients.

Speaker Change: For the second quarter today, what we witnessed is

Speaker Change: Still very robust client asset inflows.

Speaker Change: Despite, you know

Speaker Change: There will be some negative impacts, implications from the market to market loss due to the challenges that we face.

Speaker Change: In Hong Kong markets and in terms of you know clients trading come over velocity and also the trading volume, etc We both seen that These indicators remain very strong and have a sequential P on Q increase

Leaf Lee: In the second quarter, our clients continue to take on more leverage positions amid uplift market sentiment. As a result, market financing and securities lending balance climbed to an all-time high of $44 billion Hong Kong dollars. [inaudible] In Australia, average client assets realized sequential growth at three consecutive quarters.

Speaker Change: In terms of the commission rate, given that...

Speaker Change: We got some benefit in the second quarter

Speaker Change: in line that, you know, a lot more clients are trading these low-value stocks.

Speaker Change: which give us some positive uptake in terms of the take rate. So such benefit will become normalized in the third quarters so far. Thank you very much.

Daniel Yuan: So far, we have a number of clients that have activated their cryptocurrency trading accounts. But because we offered the product not long ago, and because recently the cryptocurrency market experienced very significant pullback and fluctuation, the client's trading volume of cryptocurrency and client assets are both pretty small in comparison to the scale of the whole business.

Speaker Change: Thank you.

Speaker Change: OK, thanks to many people, I will answer the first question, about us.

Speaker Change: We fully launched our virtual asset trading business in Hong Kong and Singapore on August 1st and August 12th of this year, respectively, offering spot trading of mainstream virtual assets. As of now, many customers have activated their digital asset trading accounts.

Speaker Change: However, due to the short time since the product launch

Speaker Change: Recently, the virtual asset market has experienced a significant pullback. Both trading and asset scales are still at a relatively small stage. Currently, we will focus on enhancing product capabilities, as well as investor education and operational work. This will allow more customers to understand that we can temporarily provide the ability to trade a diverse range of product categories. Thank you.

Daniel Yuan: In Japan, we continue to enhance product strength, replace market operations, and improve brand awareness.

Daniel Yuan: Competitive asset clients have maintained a double-digit growth rate.

Daniel Yuan: New paying clients in Hong Kong and Singapore both recorded double-digit sequential growth amid market rebound, collectively contributing to over one-third of paying client growth in the second quarter.

Daniel Yuan: In Japan, new paying clients grew by double-digit quarter-over-quarter as we continue to strengthen product offerings, iterate on marketing initiatives, and improve brand awareness. In Japan, new paying clients grew by double-digit quarter-over-quarter as we continue to strengthen product offerings, iterate on marketing initiatives, and increase our brand awareness.

Lee Li: Meanwhile, Malaysia maintained strong momentum and contributed the highest number of new paying clients among all markets two quarters in a row despite sequential deceleration.

Daniel Yuan: 近期,我们在香港和新加坡推出了加密货币交易,是今年重要的产品上市。 和我们展业的一些其他市场相比,香港和新加坡市场的加密资产渗透率不算高。 但近年来,随着香港和新加坡监管更加拥抱虚拟资产,大众对虚拟资产认知的逐渐提升,以及更多用户友好的虚拟资产交易平台的出现,这两个市场的加密资产渗透率还有很大的提升空间。 我们认为未来渗透率的提升不会是限性的,增长曲线也和市场情绪高度相关。 但我们在做产品规划的时候,相较于追求短期货币化而言,我们更着意于向客户提供相关性低多样化的资产类别,以帮助他们跨越市场周期,同时提高客户钱包份额。 在新加坡,随着客户持续入金、流入股市和货币基金, 客户总资产环比增长19%,连续八个季度实现了双位数的增长。 在上半年,我们的客户持续拿到更多的利益质素,以增强市场的态度为主。 结果,在市场上,持有的资金和安保的资金平均增长至44亿元。 在新加坡,随着客户持续入金、流入股市和货币基金,客户总资产环比增长19%, 连续八个季度实现了双位数的增长。 马来西亚的护军资产环比提升45%,客户总资产环比翻倍。 在澳大利亚,客户护军资产连续三个季度实现环比增长。 由于持续的资金流入股市和货币基金, 新加坡的总顾客资产环比增长为19%, 连续八个季度实现了双位数的增长。 在马来西亚,客户总资产环比翻倍。 在澳大利亚,客户总资产环比翻倍。 随着港股交易情绪在二季度内持续升温, 美国主要股市创下历史新高,总交易量同比提升69%, 环比提升21%,达到1.62万亿港币。 本季度,客户延续了对港股科技股和高股息股的交易热情。 换手率也在市场情绪的明显转变中,环比有所提升。 因此,港股交易量环比增长28%,达到3580亿港币。 随着AI交易热潮持续,叠加运力股热潮卷土重来, 美股交易量环比增长19%,达到1.24万亿港币。 在美国市场,我们的高阶期权交易功能, 加上用户友好的交易界面和丰富的投效资源, 提高了我们在期权交易者中的吸引力。 二季度,美国的期权交易人数同比增长约60%, 期权交易章数同比实现翻倍。 随着港股在二季度的增长, 美国业务指数大幅提升, 交易量环比增长达到1.62亿港币, 达到每年69%和每季的21%。 对于港股交易, 客户对技术和高利润名称的充满了兴趣。 交易迅速翻倍, 随着市场情绪转变。 结果, 港股交易量环比增长28% 随着港股交易量环比增长28% 达到358亿港币。 由于持续的智能疯狂和 缩减的中价股, 美国交易量环比增长19% 每季的一半达到1.24亿港币。 在美国市场中, 提高了我们在期权交易者中的吸引力, 加上用户友好的交易界面 和廣泛的教育资源。 在第二半, 美国交易量环比增长了, 大约60%每年, 而交易量环比增长的, 提高了一倍 相比上半年。 财富管理业务在本季度再次取得了显著的增长,随着客户寻求多元化投资,并持续将更多资金投入货币基金和美国国债等更安全的资产。 客户总资产同比增长84%,缓比增长25%,达到约800亿港币。截至二季度末,财富管理资产占客户总资产规模的14%,有超过25%的客户持有财富管理产品。 我们的企业服务有451家IPO分销和IR客户,同比增长21%。2024年上半年,在港股募资额前10名的IPO项目中,我们作为成销商参与了7家。 接下来,我想邀请我们的财务官Arthur来介绍我们的财务表现。 谢谢Lee和Daniel。请允许我介绍一下我们的财务表现在上半年。 所有数据都在港币,除非其他数据。 总额利润为3.1亿元,由2.5亿元在2023年上半年增长26%。 财务项目和负责任额为1.4亿元,有45%的财务利润和27%的财务利润增长。 增长主要由69%的财务利润和21%的财务利润增长在总额利润上。 由于我们的公共价格模式和美国货币交易,财务利润增长从8.1个基点到8.5个基点。 结果,财务利润增长比财务利润增长的速度快。 利润增长为1.6亿元,有13%的财务利润和18%的财务利润增长。 财务利润增长主要由于每日平均利润平衡增长和安全贷款和投资商的财务利润增长。 财务利润增长为161亿元,有27%的财务利润和3%的财务利润增长。 而在第二个半月,货币平均利润增长和费用的增长率会出现矛盾。 Sponsored ADR Class A, R&D expenses were $374 million, up 3% year-over-year, and a 12% QOQ.

Daniel Yuan: The year-over-year and QOQ increase was mainly driven by an increase in R&D headcount to support our new markets.

Daniel Yuan: Selling and marketing expenses were $338 million, up 93% year-over-year, and a 16% QOQ. The, year-over-year increase was driven by the triple-digit year-over-year growth in new paying clients, partially offset by lower client acquisition costs.

Daniel Yuan: The QOQ increase was mainly due to the sequential increase in client acquisition costs.

Speaker Change: So we launched cryptocurrency trading in Hong Kong and Singapore on August the 1st and August 12th respectively and we now offer a limited number of mainstream trading pairs.

Daniel Yuan: G&A expenses were $362 million, up 16% year-over-year, and a 20% QOQ. The year-over-year and QOQ increase, was primarily due to an increase in headcount for G&A personnel.

Daniel Yuan: As a result, income from operation increased by 18% year-over-year and a 24% QOQ to $1.5 billion.

Daniel Yuan: Operating margin declined to 47.3% from 50.6% in the second quarter of 2023, mostly due to higher marketing expenses.

Daniel Yuan: Our net income increased by 8% year-over-year and a 17% QOQ to $1.2 billion.

Daniel Yuan: Net income margin declined to 38.6% in the second quarter as compared to 41.1% in the same quarter last year. Our effective tax rate for the quarter was 15.2%.

Speaker Change: So far, we have a number of clients that have activated their cryptocurrency trading accounts.

Leaf Lee: [inaudible] A throwing optimism continued into the second quarter for Hong Kong stocks and major US indexes, national time highs, total trading volume through to $1.62 trillion Hong Kong dollars, a 69% year over year and 21% quarter of a quarter. For Hong Kong stock trading, client interest persisted for technology and high dividend names. Trading velocity also rebounded sequentially amid a publical shift to market sentiment. As a result, Hong Kong stock trading volume increased by 28% sequentially to $358 billion Hong Kong dollars.

Speaker Change: But because we offered the product not long ago, and because recently the cryptocurrency market experienced very significant pullback and fluctuation,

Speaker Change: Client's Trading Volume of Cryptocurrency and Client Outsets

T.L. Huang: We will now take our next question. And the next question comes from the line of T.L. Huang from MS. Please go ahead.

Daniel Yuan: Right now, our focus is to continue to enhance our product capabilities and continue to provide industrial education and operations to further enhance our value proposition as a one-stop asset allocation platform.

Speaker Change: are both pretty small and comparison to the scale of the whole business right now our focus is to continue to enhance our product capabilities and continuees to provide us to education and operation to further enhance our about value proposition as a want stop outid allocation platform thank you

Daniel Yuan: That concludes our prepared remarks.

Daniel Yuan: Thank you.

Daniel Yuan: We now like to open the call to questions.

Operator: Thank you.

Speaker Change: i

Speaker Change: Thank you. We will now take our next question.

Operator: We will now take our next question.

Speaker Change: And the next question comes from the line of Chiyao Huang from MS. Please go ahead, your line is now open.

T.L. Huang: Your line is not open. The next question comes from the line of T.L. Huang from MS. The next question comes from the line of T.L. Huang. The next question comes from the line of T.L. Huang from MS. The next question comes from the line of T.L. Huang from MS. Thank you to you.

Operator: Operator, please go ahead.

Operator: And the next question comes from the line of Chiyao Huang from MS.

Operator: Thank you.

Operator: To ask a question during the session, you will need to press star 1, 1 on your telephone.

Speaker Change: to

Speaker Change: Thank you to the management for providing me with this opportunity. I am the CEO of Morgan Stanley . I have two questions I would like to ask. The first one is about the inflow of funds from this client. We are very pleased to see the healthy growth rate of this client's total assets both quarter-over-quarter and year-over-year. Could the management provide us with a breakdown of how much of this growth is from inflows and how much is from the market? I believe the market has also made a positive contribution. Additionally, from a regional distribution perspective, what is the approximate proportion of these inflows from different regions? That is the first question. The second question is about the progress in customer acquisition in Japan. Could you provide insights on whether the trend in the second quarter has accelerated? And what are the expectations for the third quarter?

Operator: Please wait for your name to be announced.

Leaf Lee: Boosted by the continued AI mania and resurgence of mean stocks, US stock trading volume grew by 19% quarter of a quarter to $1.24 trillion Hong dollars. In the US market, advanced options trading tools combined with user friendly interface and extensive educational resources boosted our appeal among options traders. In the second quarter, the number of options traders in the US increased by around 60% year over year, while the number of options contracts traded more than double compared to the year ago quarter.

Operator: Please go ahead.

Speaker Change: What is the current trend of cargo customers in Japan so far, and if there are any specific points raised, what are the main drivers behind them? On the other hand, I would also like to ask about the current state of technological assets in Japan. After customers enter the market, what are the characteristics of their overall asset allocation? This is my second question.

Operator: Your line is now open.

Operator: To withdraw your question, please press star 1 1 again.

Speaker Change: so got two questions one is the management provide more cut around the increasing assets how much is infl how much just mark market driven and in particular where the infllows are coming from in terms of the geographics mix into q and second question is on the japanese client acquisition do we see any acceleration trend in the second quar compared to the first quarter and how the trending three q so far right now and also what's the currently as in japan and where the kind are puttingin their money at inthank

Leaf Lee: Well, management recorded another quarter of exceptional growth. As our clients saw diversification and continued to part more funds in safer assets like money market funds in the US treasury bills. Total client assets grew by 84% year over year and 25% quarter of a quarter to around 80 billion Hong Kong dollars. Out of quarter of wealth management assets accounted for 15% of our total client assets and over 25% of paying clients helped wealth management positions. We have 461 IPO distribution in our clients of 21% year over year. We under wrote seven of the 10 largest Hong Kong IPOs and the first half of 2024.

Chiyao Huang: 好的,感谢管理层给我提供的机会,我是Morgan Stanley的Chiyao,我有两个问题想请教,第一个是关于这个客户进入金,很高兴看到这个客户的这个总资产的增速,环比和同比都非常的健康,请管理层再给我们一点breakdown,就是这里面多少是来自于这个入金,来自于这个market,相信market也是这个正面的一个贡献,然后从这个地域的分布上面来看的话,这个进入金大概从这个区域分配大概各是什么一个比例,这是第一个问题,第二个问题是想请教一下 关于日本在货客上面的一个进展,想请教二季度和二季度的这个趋势是否有所提速,那么在三季度我们目前为止看到了在日本的货客的一个趋势具体是什么样,然后如果有所提速的话,这里面有哪些主要的这个driver,那另外一方面想也想请教在日本的这种客军的资产目前是一个什么样的状态,然后客户的入金之后,他的整个资产的配置有什么样的一个特点, 第二个问题我简单翻译一下 谢谢你,我会接受你第一个问题,然后我会把第二个问题交给我的同事丹尼尔。 那么从区域来分,香港跟新加坡还是我们目前客户进入性的一个主要的来源地,这两个地方合计大概会贡献超过80%的我们二季度一个进入性的情况。 Now, in terms of the benefit from our total client assets increase in the second quarter, our total client assets increased by 12% Q over Q.

Operator: Please stand by while we compile the Q&A roster.

Leaf Lee: I will take your first question, and I will leave the second question to my colleagues, Daniel. In terms of the benefit from our total client access increase in the second quarter, our total client access increase by 12% of the queue and to break down the majority of the contribution actually comes from the client as an inflow in terms of the top of their accounts on cash or stock transfer, which accounts for the legal to high single digit contribution. And the remaining 223% belongs to the market-to-market positive benefit. And Hong Kong Singapore both sees up to key markets in terms of the contribution of new S&N flows, which roughly accounts for 80% of our total net S&N flows.

Speaker Change: Thank you, Chiyao. I will take your first question and I will leave the second question to my colleague Daniel.

Speaker Change: Regarding this, the positive impact of net inflows on the market and the total assets, in the second quarter, the quarter-on-quarter growth rate of our clients' total assets was approximately 12%. Among this, the positive contribution from net inflows of clients was close to 10%, and the remaining 2% to 3% came from other sources.

Speaker Change: che should ha mark market between me the the bunkary tial let it all tree like the shellk conion japple high sh woman mo and coaching reaching that you well the engety charli butting phone chie that have quent cho back basshould the woman urically which in

Daniel Yuan: Next, I'd like to invite our CSO authors to discuss our financial performance.

Daniel Yuan: And to break it down, majority of the contribution actually comes from the client asset inflows, in terms of the top of their accounts on cash or stock transfer, which accounts for roughly to high single digit contribution. And the remaining 2% to 3% belongs to the market to market positive benefit.

Daniel Yuan: And thank you for joining us today to discuss our second quarter of 2024 earnings results.

Arthur Chen: Thank you, Lee Van Daniel.

Daniel Yuan: Joining me on the call today are Mr.

Arthur Chen: Please allow me to walk you through our financial performance in the second quarter. All the numbers are in Hong Kong dollars unless otherwise noted. Total revenue was 3.1 billion of 26% from 2.5 billion in the second quarter of 2023, brokerage commission and the handling charge income was 1.4 billion of 45% year over year and 27% year over two. The increase was mainly driven by a 69% year over year and 21% year over two growth in total trading volumes.

Speaker Change: Now, in terms of the benefit from our total client assets increase in the second quarter,

Daniel Yuan: Leaf Lee, Chairman and Chief Executive Officer, Arthur Chen, Chief Financial Officer, and Robin Xu, Senior Vice President.

Daniel Yuan: As a reminder, today's call may include four 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 Change: Our total client assets increased by 12% Q-over-Q, and to break it down, the majority of the contribution actually comes from the client's asset inflows, in terms of the top-up their accounts on cash or stock transfer, which accounts for roughly, you know, to high single digits.

Daniel Yuan: Four looking statements involving care events and the search.

Daniel Yuan: We caution you that the number of important factors could call back to results to defer materially from those containing any four looking statements.

Daniel Yuan: And Hong Kong and Singapore, both these are two key markets in terms of the contribution of new asset inflows, which roughly accounts for 80% of our total net asset inflow.

Speaker Change: contribution and the remaining two to three percent but ans to the market to market positive benefit and the hong on the singapore both thesees up to key markets in terms of the contribution of new asset inclos which playate ac counts for eighty percent of our tohotal asset inflow thank you very much

Arthur Chen: Given our per sheer pricing model for US stock trading, the blended commission rate increased from 8.1 billion to 8.5 billion. As a result, brokerage income grew at half past the rate than trading volume Q over Q. Interest income was 1.6 billion of 13% year over year and 18% Q over Q. The year over year and Q over Q increased was mainly driven by high and margin financing income due to an increase in daily average margin balance.

Leaf Lee: Thank you very much.

Speaker Change: Regarding the situation in the Japanese market in the second quarter, overall competition in Japan saw a significant improvement in customer acquisition compared to the previous quarter. In terms of the absolute value contributed by acquired customers, both Japan and Malaysia were in the first tier in the second quarter. Therefore, we believe Japan still has very good growth.

Arthur Chen: And the higher interest income from security borrowing and the landing business. Other income was 1.6 billion of 27% year over year and 3% Q over Q. The year over year and Q over Q increased was both primary attribute votes to higher fund distribution income while the Q over Q increased was partially offset by the decline in underwriting fee income.

Speaker Change #100: This is mainly because we have optimized some key processes, and in the second quarter, we also had some effective targeted marketing activities. Additionally, the overall market conditions were quite favorable.

Speaker Change #101: By the end of the second quarter, the number of our users in Japan has approached 800,000. Therefore, our asset customers or users are still in a very good growth range. We previously provided an annual user guidance, which is to achieve 1 to 1.5 million users by the end of the year. We are still very confident in maintaining the growth rate of our users.

Arthur Chen: Our total cost was 574 million and increased of 53% from 375 million in the second quarter of 2003. Procage Commission and the handling charge expenses were 87 million of 58% year year and 45% QVQ. The expenses grow by our wider margins and income sequentially, mainly due to the capture fee scheme for U.S, stock trading. Under the per share pricing model, we charge a maximum of 50 basis points of trading volume per order for U.S, stock trading.

Speaker Change #101: Regarding the potential growth drivers in the Japanese market for the second half of this year or next year, we believe that a very important factor is the continuous introduction and iteration of product capabilities. Currently, compared to the most mainstream brokers in Japan, we still have a certain gap in financial products.

Operator: We will now take our first question.

Operator: Please stand by.

Operator: And the first question comes from the line of Cindy Wang from, China Renaissance.

Speaker Change #102: Additionally, there is also the possibility of continuous brand building and investment. Then we...

Arthur Chen: So when applying to the more low price of U.S, stock as was the case in the second quarter, there would be a mismatch between the growth rate of revenue and expenses. Interest expenses was 378 million of 71% year over year and the 21% QVQ. The year over year and a QVQ increase was mainly incurred by high interest expenses associated with our security borrowing and the landing business. Processing and the service in court was 109 million of 11% year over year and a certain percent QVQ.

Operator: Please go ahead.

Operator: Your line is now open.

Speaker Change #103: Based on current experiences in Japan, many investors now fully understand that it still takes some time for Japanese users to build trust in a new brand, especially an overseas brand.

Speaker Change #104: So we will continue to build this brand, including a major power launch at the secondary level. We also invited a celebrity spokesperson. We believe these are very important parts that can increase our brand's awareness and credibility.

Arthur Chen: The year over increase was largely due to higher crop service fee and the QVQ increase was mainly driven by higher market information and data fees. As a result, our total growth profit was 2.6 million increase of 21% from 2.1 billion in the second quarter of 2023. Growth margin was 81.6% as compared to 84.9% in the year ago quarter.

Speaker Change #105: From the perspective of military assets, the current Japanese military assets are in the range of several thousand dollars.

Speaker Change #105: Then Q1Q also shows an upward trend. From the perspective of our clients' asset allocation, the majority of our clients' investments are currently in U.S. stocks.

Speaker Change #106: Of course, the allocation in Japanese stocks is also continuously increasing. In the future, with the improvement of our Japanese stock-related product capabilities, we believe that based on the preferences of the overall market and customers, the allocation of assets in Japanese stocks, including the proportion of Japanese stock trading volume, should continue to increase.

Arthur Chen: Operating expenses were up 26% year over year and the 16% QVQ to 1.1 billion. Irony expenses was 374 million of 3% year over year and the 12% the QVQ. The year over year and the QVQ increase was mainly driven by increase in IND headphones to support our new markets. Serving in the market expenses was 338 million of 93% year over year and the 16% QVQ. The year over year increase was driven by the triple-digit year over year growth in new paying clients partially offset by lower client acquisition costs.

Leaf Lee: of Japan in terms of the cost of Japan in terms of the cost of Japan in terms of the cost of Japan in terms of Qiya Tuzhou. So overall, in the second quarter, we saw very robust net new paint clients in Japan actually recorded a very decent quarter-over-quarter growth. And in terms of the absolute number of paint clients contributed, so Japan, our Malaysia are in the first year. So we were very happy with what we saw in Japan in the second quarter. And at the quarter end, we had close to 800,000 users, which we think is also very healthy growth.

Speaker Change #107: So overall in the second quarter, we saw very robust net new paying clients in Japan actually record a very decent quarter-over-quarter growth and in terms of the absolute number of paying clients contributed So Japan or Malaysia are in the first tier. So we were very happy with what we saw in Japan

Speaker Change #107: second quarter and apple quarter end we had close to eight hundred thousand users which we think it's also very healthy growth and previously we gave the guidance of having one to one point five million users in japan by year end and we're still very confident about that guidance

Leaf Lee: And previously, we gave the guidance of having one to 1.5 million users in Japan by year-end. And we're still very confident about that guidance.

Arthur Chen: The QVQ increase was mainly due to the sequential increase in client acquisition costs. G&E expenses was 362 million of 16% year over year and the 20% QVQ. The year over year and the QVQ increase was primary due to increase in head count for G&E customers. As a result, income from operating increase by 18% year over year 24% QVQ to 1.5 billion. Operating margin declined to 47.3% from 58.6% in the second quarter of 2023, mostly due to higher market expenses.

Leaf Lee: So, in terms of driver for new paint client growth, two things. First of all, it just continues to roll out a few products. So, in comparison to some of the mainstream players in Japan, we still lack a couple of very key financial products. And as Lee mentioned in opening remarks, we have a plan to offer those products in the next couple of months. And secondly, brand buildings also important, as we've realized in a lot of investors are aware right now. Japan users usually take a bit more time to trust the brand, especially a brand from overseas.

Speaker Change #107: So in terms of driver for new paying client growth, two things. First of all, it's just a continued rollout of new products.

Speaker Change #108: so in comparison to some of the mainstreet players in in japan we still lack a couple of very key financial products and this le mentioned in opening remarks we have a plan to offer those products in the next couple of months

Daniel Yuan: Thank you very much.

Daniel Yuan: So overall, in the second quarter, we saw very robust net-use paying clients in Japan actually record a very decent quarter-over-quarter growth.

Speaker Change #108: And secondly, brand building is also important. As we've realized, and a lot of investors are aware right now, Japan users usually take a bit more time to trust a brand, especially a brand from overseas.

Daniel Yuan: And in terms of the absolute number of paying clients contributed, so Japan and Malaysia are in the first tier.

Daniel Yuan: So we were very happy with what we saw in Japan in the second quarter. And at the quarter end, we had close to 800,000 users, which we think is also a very healthy growth.

Leaf Lee: So that's why we'll continue to invest in our brand. And that's also why we did a power lounge and had a brand ambassador in the second quarter. These all contributed to a higher brand equity.

Arthur Chen: Our net income increased by 8% year over year and the 17% QVQ to 1.2 billion. Net income margin declined to 38.6% in the second quarter of year compared to over 1.1% in the same quarter last year. Our effective tax rate for the quarter was 15.2%.

Daniel Yuan: And previously, we gave the guidance of having 1 to 1.5 million users in Japan by year-end. And we're still very confident about that guidance.

Speaker Change #108: So that's why we'll continue to invest in our brand, and that's also why we did a power lounge and had a brand ambassador in the second quarter. These all contributed to a higher brand equity, and we'll continue to invest in brand building.

Leaf Lee: And we'll continue to invest in brand building. And in terms of average client assets, right now is a couple thousand US dollars. And mostly clients still allocated into US stocks. Although the percentage of assets in Japan stocks and the percentage trading volume from Japan stocks happened increasing. And we believe that as we continue to enhance our Japan stock product offering, these percentage contributions will continue to go up closer to the market level. Thank you.

Speaker Change #109: And in terms of average client assets, right now it's a couple thousand US dollars and mostly clients still allocated into US stocks.

Daniel Yuan: For more information about the potential risks and the certainties, please refer to the company's filings with the SEC, including its annual report.

Daniel Yuan: That concludes our prepared remarks.

Leaf Lee: With that, I would now turn the call over to Leaf.

Daniel Yuan: We now would like to open the call to questions.

Daniel Yuan: Leaf will make his comments in Chinese and I will translate.

Operator: Operator, please go ahead. Thank you. To ask a question during the session, you will need to press star 1, 1 on your telephone. Please wait for your name to be announced. To withdraw your question, please press star 1, 1 again. Please some by will become part of the Q&A roster.

Speaker Change #110: Although the percentage of assets in Japan stocks and the percentage of trading volume from Japan stocks have been increasing And we believe that as we continue to enhance our Japan stock product offering These percentage contribution will continue to go up closer to The market level. Thank you

Leaf Lee: Thank you all for joining our earnings call today.

Leaf Lee: In the second quarter, we acquired 155,000 paying clients, representing 168% year-over-year growth.

Daniel Yuan: So in terms of driver for new paying client growth, two things.

Daniel Yuan: First of all, it's just to continue to roll out of new products.

Operator: We will now take our next question. Please stand by.

Speaker Change #111: Thank you.

Operator: You will now take our first question. Please stand by.

Speaker Change #112: Thank you. We will now take our next question. Please stand by.

You Fan: And the next question comes from the line of your fan from CICC. Please go ahead. I've got to quadruple the first quadruple with our plans for new product offerings. I should have in the market live Japan and the Malaysia.

Speaker Change #112: and

Speaker Change #113: And the next question comes from the line of You Fan from CICC. Please go ahead, your line is now open.

Cindy Wang: And the first question comes from the line of Cindy Wang from China Renaissance. Please go ahead, your line is not open. [inaudible] Thanks for taking my call. I have two questions. One question is related to crypto services. So recently, you have launched the crypto services in Hong Kong Singapore. Could you provide some color on client feedback on crypto trading and what your client acquisition strategy. Second is basically now is around two months for the third quarter. So can you give us some lately trend for the third quarter, including trading volume, trading velocity, USD and margin financing and security lending balance. Thank you. [inaudible] Thank you very much.

Cindy Wang: Thank you for giving me the opportunity to ask my first question.

Daniel Yuan: So in comparison to some of the mainstream players in Japan, we still lack a couple of very key financial products. And as Lee mentioned in his opening remarks, we have a plan to offer those products in the next couple of months.

Speaker Change #114: Thank you to the management for giving me this opportunity to ask questions. I am Fan You, an analyst from CICC. I have two questions I would like to ask the management. Firstly, regarding the progress of the new products that was mentioned earlier, I would like to ask about the overall product launch schedule in new markets such as Japan and Malaysia. Can you provide an outlook on this, including whether we can expect to see any new products launched by the end of this year? Secondly, regarding the new round of buybacks that was announced earlier, which is not to exceed 500 million USD by the end of 2025, is there any further progress that can be disclosed at this time?

Speaker Change #115: I've got two questions here. The first question, what's our plan for new product offerings? Any product plans, especially in new markets like Japan and Malaysia? And the second question, what's our progress of the share repurchase program?

You Fan: And the second question with our progress of the Seattle Purchase Program. So, in terms of the product pipeline for Japan, as Lee mentioned earlier, a couple of very important financial products, whereas, and also, what we intend to roll out in the couple of months, include, number one, a savings account; number two, mutual funds; and thirdly, US margin financing. And from Malaysia, I think we kept a very nice pace of new product rollout. And in the third quarter of quarter to date, we've actually rolled out Malaysian stock ideal subscription services, and also the cash cost product, which is the money market product.

Cindy Wang: Congratulations on your outstanding performance in the second quarter.

Daniel Yuan: And secondly, brand building is also important.

Cindy Wang: I have two questions to ask.

Cindy Wang: First, we have officially launched crypto services in Hong Kong and Singapore.

Cindy Wang: Can you tell us about the feedback you have received so far?

Speaker Change #116: Thank you, fans. I am Daniel. First, I will talk about our new product plans for the second half of this year. Then, Arthur will introduce some information about the buyback. As for Japan, Leith actually mentioned it earlier. The main categories we are focusing on and hope to launch in the coming months include the Nissan savings account, mutual funds, and products like US margin financing, among others.

Speaker Change #117: In Malaysia, we have actually maintained a very good product launch rhythm. In the third quarter, the more important features we have launched quarter to date include IPO subscriptions for Malaysian stocks and the cash plus product for money market funds.

Speaker Change #118: Based on our experience in other markets, when the market is performing well and the IPO market is booming, IPO subscriptions are a good way to attract new customers. Additionally, products like money market funds are also a good way to increase customer assets in a high-interest-rate environment.

Speaker Change #119: After that, we will also have some other functions, such as the transfer warehouse feature like Magu, which can help us better attract existing users from other brokerages to migrate their assets to Mumu.

Cindy Wang: And what is your strategy in terms of product acquisition?

Daniel Yuan: As we've realized and a lot of investors are aware right now, Japan users usually take a bit more time to trust a brand, especially a brand from overseas.

Cindy Wang: And second, I would like to ask, since the third quarter has been almost two months, can you tell us about the trend you are seeing on your platform, including the current amount of transactions, the exchange rate, the AUM of customers, and the balance of balance?

Cindy Wang: Thanks for taking my call.

Speaker Change #120: So, in terms of the product pipeline, for Japan, as Lee mentioned earlier, a couple of very important financial products for us, and also what we intend to roll out in the next couple of months, include, number one, a savings account, number two, mutual funds, and thirdly, U.S. margin financing.

Cindy Wang: I have two questions.

Speaker Change #121: And from Malaysia, I think we've kept a very nice pace of new product rollout, and in the third quarter, quarter to date, we've actually rolled out Malaysian stock IPO subscription services, and also the Cash Plus product, which is the money market product.

You Fan: And from our experience, when the IPO market is very hot, usually IPO subscription service can be a good contributor of new client growth, and during the hybrid environment, money market products can help increase client assets. And in terms of future product pipeline in Malaysia, we plan to roll out this quarter the stock transfer from Malaysian stock, so that we can attract existing clients and other brokers in Malaysia. Thank you. Okay, I'm very grateful. Thank you.

Speaker Change #122: And from our experience, when the IPO market is very hot, usually IPO subscription service can be a good contributor of new client growth, and during a high-rate environment, money market products can help increase client assets.

Speaker Change #122: And in terms of future product pipeline in Malaysia, we plan to roll out this quarter the stock transfer of Malaysian stock so that we can attract existing clients and other brokers in Malaysia. Thank you.

Speaker Change #123: Okay, regarding the stock buyback, our previous stock buyback plan actually covers the period from 2024 to 2025. As of now, we have not yet exercised this plan.

Speaker Change #124: A buyback plan. In the coming quarters, if we have a corresponding form of buyback, we will promptly update the market, including our analysts and investors.

Speaker Change #125: Our existing share repurchase program actually will cover 2024 and also 2025. So far we have not exercised this program yet.

Speaker Change #126: we will keep you and also other analysts and investors share our shareholders on post if we exercise in a if we exercise any of them thank

Speaker Change #127: Okay, thank you very much.

Leaf Lee: [inaudible] you, thank you, thank you, thank you, thank you,[inaudible] Thank you, Chiyao.

Operator: We will now take our next question.

Zoe Jones: Please stand by. And the next question comes from the line of Zoe Jones from Jeffries. Please go ahead.

Speaker Change #127: Thank you. We will now take our next question.

Speaker Change #128: Please stand by.

Speaker Change #129: And the next question comes from the line of Zhou Yijiong from Jefferies. Please go ahead, your line is now open.

Zoe Jones: Your line is not open. Thank you.

Speaker Change #130: Thank you to the management for accepting my question. I have two questions I would like to ask. The first one is about the commercialization model of our virtual currency services. Could you please explain it?

Speaker Change #131: The second question is because we saw that interest expenses in the second quarter increased by 21% quarter-on-quarter. I would like to ask about the reasons for this and the future trend. Thank you. I will translate it myself.

Zoe J: Thanks management for taking my question. I have two questions. First, what's the business model of your crypto series? And second, we have seen that interest expense is increased by 21% sequentially in Q2. Wondering what's the reason behind and how should we think about the trend going forward? Thank you.

Arthur Chen: Thanks for the interview to wondering what's the reason behind and how should we think about the trend going forward. Thank you. In terms of the interest expenses, increasing the second quarter, which I think some really associated with our clients, you know, margin financing and the stock borrowing. In particular, in terms of stock borrowing, the pricing, the implied interest rate is more rely on the market driven demand and supply situation, which is very hard to give a precise estimation and the very difficult to project. And if, just assume the status as coal, if our penetration rate above retail price to continue income in the stock borrowing universe, I think the expenses associated with such activities revenue on the top line will both further increase.

Speaker Change #133: Okay, I'll answer the second question first, which is about interest expenses. Regarding our commercial models for virtual currencies, I'll ask my colleague Daniel to provide some additional information. The increase in our interest expenses in the second quarter is mainly related to our clients' margin trading, especially the significant growth in the scale of clients' short selling. Additionally, the interest on short selling itself is influenced by changes in market supply and demand, so the corresponding interest rate levels can also experience considerable fluctuations.

Speaker Change #134: Indeed, from the market perspective you just mentioned, making a forward-looking prediction about interest rates is relatively difficult. This is because the interest rate largely depends on market trends, including the supply and demand relationship in the market for borrowing and lending securities.

Speaker Change #134: If we don't consider this factor, with the increase in our clients' margin trading penetration rate, I believe the corresponding fees, including the related interest income, will continue to show a growth trend.

Speaker Change #135: In terms of the interest expenses increase in the second quarter, which I think is mainly associated with our

Speaker Change #135: Clients, you know, margin financing and the stock borrowing, in particular, in terms of stock borrowing.

Speaker Change #136: the pricing the imped interest rate is more rely on the market relventive demand and the supply situation which is very harder to give a precise estimation and very difficult to to project

Speaker Change #137: and if just assume the status as as the status as co if our penetration rate of our retail clients to continue income in the store following universe

Speaker Change #137: I think the expenses associated with such activities' revenue on the top line will both further increase. Thank you.

Arthur Chen: Thank you. So for cryptocurrency trading, since we now only offer the trading services, the business models are very straightforward; we just charge a commission. And when we design our pricing scheme, we want to balance our market competitiveness and monetization potential. So right now in Hong Kong and we both work with an upstream provider to offer cryptocurrency trading. And under our current pricing model, taking into consideration the upstream cost, we still enjoy pretty good gross profit margin. So the net take rate of cryptocurrency trading is higher than the net take rate for Hong Kong and US stock trading.

Speaker Change #139: Regarding the crypto assets, since we currently only offer the trading function for crypto assets, our commercialization method in this area is very simple, which is to charge a commission on transactions. As for our pricing in this area,

Speaker Change #140: Currently, this information is also public. When we set the pricing, we aim to balance market competitiveness and monetization capabilities. Since our crypto assets in Hong Kong and Singapore are accessed through different upstream channels, there are some upstream costs involved. However, at our current pricing levels, we still maintain a good gross margin in both regions. The net retention rate of crypto assets in Hong Kong and Singapore is still higher than that of Hong Kong and US stocks.

Leaf Lee: I will take your first question and I will leave the second question to my colleagues, Daniel. In terms of the benefit from our total supply assets increase in the second quarter, our total supply assets increase by 12% of the Q and 2% of the Q and 2% of the Q and 2%. The contribution actually comes from the kind of asset inflows in terms of the top of their accounts on cash or stock transfer, which accounts for roughly, you know, to high single digit contribution.

Speaker Change #141: so through cryp currency ting since we now only offer a traded services the business models very straightforward we charge a commission and when we design our pricing the theme we wantedto balance our market competitiveness and monetization potential

Speaker Change #142: So right now in Hong Kong and Singapore, we both work with an upstream provider to offer cryptocurrency trading. And under our current pricing model, taking into consideration the upstream cost, we still enjoy pretty good gross profit margin.

Leaf Lee: By the end of the quarter, we crossed the 2 million paying clients milestone, translating into a 29% growth year-over-year and 8% growth quarter of the quarter.

Leaf Lee: And the remaining 2 to 3% belongs to the market to market positive benefit. And Hong Kong and Singapore both these are two key markets in terms of the contribution of new asset inflows, which roughly accounts for 80% of our total supply.

Speaker Change #142: So the net take rate of cryptocurrency trading is higher than the net take rate for Hong Kong and U.S. stock trading. Thank you.

Operator: Thank you. We will now take our next question.

Speaker Change #143: thank you

MRU: Please stand by. And the next question comes from the line of MRU from Bank of America Securities. Please go ahead.

Speaker Change #144: Thank you. We will now take our next question.

Speaker Change #144: Please stand by.

Speaker Change #146: And the next question comes from the line of Emma Xu from Bank of America Securities. Please go ahead, your line is now open.

MRU: Your line is not open. I have two questions. The first question is related to the new cryptocurrency trading, which is that we have risen to 50,000. So the next question comes from the financial level, or 10,000, 800,000 users. And the fourth question comes from the financial level, which will be a little bit slow. Then the third question comes from the cryptocurrency trading, which is still quite strong. Let's talk about the main thing, which is that the market is pushing the third level of the cryptocurrency trading, and we think the next half a year the cryptocurrency trading is going to be coming to the market.

Leaf Lee: Six months into 2024, we have achieved over 80% of our four-year new paying client guidance. Given the strong year-to-day momentum, we would like to raise our guidance again to 550,000 new paying clients in 2024. New paying clients in Hong Kong and Singapore both recorded double-digit sequential growth amid market rebound, collectively contributing to over one third of paying client growth in the second quarter.

Speaker Change #147: Well, thank you for giving me the opportunity to ask this question. Congratulations to the company for achieving very strong performance in the second quarter.

Speaker Change #148: I have two questions here. The first question is about the new customer acquisition guideline. We have raised it to 550,000, which means that in the next two quarters, we might need to acquire an average of 108,000 users. Generally speaking, the fourth quarter is seasonally slower in terms of customer acquisition. This implies that the third quarter's customer acquisition is still quite strong. Could you tell us which markets are primarily driving the customer acquisition in the third quarter, and which markets we expect to see growth in customer acquisition in the second half of the year? That's the first question. The second question is...

MRU: This is the first question. And the second question is that we see that the recent relationship with the energy of the blockchain is also increasing a lot, including the value of the blockchain. And recently, this A.I. Stock trading is also relatively large. Then we are in such a market environment, and we see that there is a lot of trading in the market. For example, more things are going to be added, or there is a lot of trading in the stock market. For example, there is a lot of investment in the stock market. A.I. stocks can now be increased a little bit, etc.

Leaf Lee: Thank you very much. In the end, we have already received 80% of the amount of the Japanese contribution. So, we are still in a very good growth period. Before, we gave a whole year of the contribution, which is 150,000 contribution in the end of the year. We are still very confident that this contribution can be achieved.

Speaker Change #149: we hand out

Speaker Change #149: Recently, the expectations for interest rate cuts have increased significantly, including the extent of the rate cuts. Additionally, the volatility of AI stocks has been quite high. In this market environment, have we observed any changes in clients' asset allocation? For example, are they investing more in bonds, or have there been any changes in their stock allocations? Previously, they might have invested more in growth AI stocks, but are they now investing more in value stocks? How will this affect our take rate, that is, our monetization rate? Similarly, regarding the interest rate cuts, how will these cuts impact our interest income, especially...

MRU: And this is what we have to look at. This is what we have to look at. The same is related to the blockchain. The blockchain will be the most powerful trading, especially the current funds of the blockchain. I know that this year may still be a little bit limited, because it has already reached 9 months. But if it is tomorrow, for example, there will be 25 B.P. stocks, which will receive a lot of profit in the next year.

Speaker Change #150: How much impact does the interest income from this client's fund restriction have? I know that the impact might still be relatively limited this year since it's already close to September . But for next year, for example, if there is a 25 basis points rate cut, how much impact will it have on next year's interest income?

MRU: So I have two questions. The first question is about the client acquisition. You just raised your four-year new-paying client target to $550,000, which means you need to acquire around $100,000 new-paying client per quarter. And usually your client acquisition is reasonably low in both quarters. That implies your first quarter client acquisition is still quite strong. So could you tell us which market are driving your client growth in third quarter? And the second question is about is that given the rising expectations of red cards and then the recent wild volatility in the AI stocks. So do you see the changes in client as the allocation, say between the stocks, the bonds, and the options, etc.

Leaf Lee: [inaudible] and on and on and on and on of Qiya Tuzhou. So overall, in the second quarter, we saw very robust net new paint clients in Japan actually recorded a very decent quarter of a quarter growth. And in terms of the absolute number of paint clients contributed, so Japan, our Malaysia are in the first year. So we were very happy with what we saw in Japan in the second quarter. And at the quarter end, we had close to 800,000 users, which we think is also very healthy growth. And previously, we gave the guidance of having one to 1.5 million users in Japan by year end. And we're still very confident about that guidance.

Speaker Change #151: So I have two questions. The first question is about the client acquisition. You just raised your four-year new paying client target to $550,000, which means you need to acquire around 108,000 new paying clients per quarter. And usually your client acquisition is seasonally low in fourth quarter. That implies your third quarter client acquisition is still quite strong. So could you tell us which markets are driving your client growth in third quarter? And the second question is that given the rising expectations of red cards

Leaf Lee: In Japan, new paying clients grew by double-digit quarter of a quarter as we continue to strengthen product offerings, iterate on marketing initiatives, and increase up brand awareness.

Speaker Change #152: send the wy volatities in the ai stocks so do you see the changes in cli ent as the allocation st between the dos the bs and the options a satural and intendse of the allocation withing the stock say wrong the a i girls dock to value stock and how well this changing behaviors takeay impact you'll take r

Leaf Lee: Meanwhile, Malaysia maintains strong momentum and contributed the highest number of new paying clients among all markets, two quarters in the role, despite the financial acceleration.

MRU: And the intent of the allocation within the stock, say from the AI growth stock to value stocks, and how will these changing behaviors impact your take rate? And correspondingly, given the rising expectation of red cards, how will it impact your interest income? I know it could probably have limited impact on your interest income this year. But what would be, say, 25 red cards' impact on your interest income next year?

Leaf Lee: [inaudible] Codocline assets jumped 24% over year and 12% quarter of a quarter to a record $579 billion Hong Kong dollars. The growth was fueled by the robust net asset of low across markets and the market appreciation of our client stock holdings.

Leaf Lee: With net asset inflow of recording rapid sequential growth, we have succeeded our full year 2023 number only six months into the year.

Leaf Lee: In the second quarter, our clients continue to take on more leverage positions amid uplift market sentiment. As a result, market financing and securities lending balance climbed to an all-time high of $44 billion Hong Kong dollars.

Speaker Change #153: And correspondingly, given the rising expectation of red cards, how will it impact your interest income? I know it could probably have limited impact on your interest income this year, but what would be, say, that 25-day red card impact on your interest income next year?

Leaf Lee: So in terms of driver for new paint client growth, two things. First of all, it just continues roll out a few products. So in comparison to some of the mainstream players in Japan, we still lack a couple of very key financial products. And as Lee mentioned in opening remarks, we have a plan to offer those products in the next couple of months. And secondly, brand buildings also important, as we've realized in a lot of investors are aware right now, Japan users usually take a bit more time to trust the brand, especially a brand from overseas.

Leaf Lee: Thank you. All right, two questions. I'll go back to the question. The first question is about the client acquisition. Just like when we talked about opening the market, we already talked about the new client acquisition of 40,000 to 50,000. The third question is about a client's situation. I think in the past 50,000 to 50,000 to 50,000, I think it's still very confident that it can be able to reach. Of course, the fourth question is a certain certain decision to consider in the past 50,000 to 50,000 to 50,000 to 50,000 to 50,000 to 50,000 to 50,000 to 50,000 to 50,000 to 50,000 to 50,000 to 50,000 to 50,000 to 50,000 to 50,000 to 50,000 to 50,000 to 50,000 to 50,000 to 50,000 to 50,000 to 50,000 to 50,000 to 50,000 to 50,000 to 50,000 to 50,000 to 50,000 to 50,000 to 50,000 to 50,000 to 50,000 to 50,000 to 50,000 to 50,000 to 50,000 to 50,000 to 50,000 to 50,000 to 50,000 to 50,000 to 50,000 to 50,000 to 50,000 to 50,000 to 50,000 to 50,000 to 50,000 to 50,000 to 50,000 to 50,000 to 50,000 to 50,000 to 50,000 to 50, to 50,000 to 50,000 to 50,000 to 50,000 to 50,000 to 50,000 to 50,000 to 50,000 to 50,000 to 50,000 to 50,000 to 50,000 to 50,000 to 50,000 to 50,000 to 50,000 to 50,000 to 50,000 to 50,000 to 50,000 to 50,000 to 50,000 to 50,000 to 50,000 to 50,000 to 50,000 to 50,000 to 50,000 to 50,000 to 50,000 to 50,000 to 50,000 to 50,000 to 50,000 to 50,000 to 50,000 to 50,000 to 50,000 to 50,000 to 50,000 to 50,000 to 50,000 to 50,000 to 50,000 to 50,000 to 50,000 to 50,000 to 50,000 to 50,000 to 50,000 to 50,000 to 50,000 to 50,000 to 50,000 to 50,000 to 50,000 to 50,000 to 50,000 to 50,000 to 50,000 to 50,000 to 50,000 to 50,000 to 50,000 to 50,000 to 50,000 to 50,000 to 50,000 to 50,000 to 50,000 to 50,000 to 50,000 to 50,000 to 50,000 to 50,000 to 50,000 In terms of the guidance for new client acquisition, as Li mentioned in the opening remarks, we have already revised our targets to 550 K new paint lines for the whole year.

Speaker Change #154: Thank you.

Cindy Wang: One question is related to crypto services.

Speaker Change #155: Okay, let me answer both questions. The first one is about the guidelines from the National Science Foundation. As Leave mentioned in the Opening Remark, we have already completed the entire year's...

Speaker Change #156: The target for new customers has been increased from 400,000 to 550,000. As of the third quarter, the customer acquisition situation is such that I am very confident we can achieve the annual target of 550,000. Of course, there will be some uncertainties in the fourth quarter, considering the election and the start of some cyclical periods.

Leaf Lee: So that's why we'll continue to invest in our brand. And that's also why we did a power lounge and had a brand ambassador in the second quarter. These all contributed to a higher brand equity. And we'll continue to invest in brand building. And in terms of average client assets, right now is a couple thousand US dollars. And mostly clients still allocated into US stocks. Although the percentage of assets in Japan stocks and the percentage trading volume from Japan stocks happened increasing. And we believe that as we continue to enhance our Japan stock product offering, these percentage contributions will continue to go up closer to the market level.

Leaf Lee: Thank you.

Operator: We will now take our next question. Please stand by.

Leaf Lee: [inaudible] In Australia, average client assets realized sequential growth at three consecutive quarters.

Speaker Change #157: From the perspective of specific markets for cargo and passengers, looking at the situation in the second quarter, Hong Kong and Singapore contributed to over 1% of our new customers for that quarter. Meanwhile, Japan and Malaysia contributed nearly 40%.

Leaf Lee: [inaudible] A throwing optimism continued into the second quarter for Hong Kong stocks and major US indexes, national time highs, total trading volume through to $1.62 trillion Hong Kong dollars, a 69% year over year and 21% quarter of a quarter.

Cindy Wang: Recently, you have launched crypto services, in Hong Kong and Singapore.

Leaf Lee: For Hong Kong stock trading, client interest persisted for technology and high dividend names.

Leaf Lee: Trading velocity also rebounded sequentially amid a publical shift to market sentiment. As a result, Hong Kong stock trading volume increased by 28% sequentially to $358 billion Hong Kong dollars.

Speaker Change #158: The proportion of each market. Based on our review of various markets for the second half of the year, I predict that the overall contribution proportion of each market in the second half of the year.

Leaf Lee: Boosted by the continued AI mania and resurgence of mean stocks, US stock trading volume grew by 19% quarter of a quarter to $1.24 trillion Hong dollars.

Cindy Wang: Could you provide some color on client feedback on crypto trading and what is your client acquisition strategy?

Speaker Change #158: Compared to the first half of the year, there won't be a particularly significant change. That's the first question. The second question is about the current interest rate environment. We have done some static calculations because the decline in interest rates may have many positive or negative impacts. If we do not consider the second derivative, such as the stimulation of customer transactions, statically speaking, for every 25 basis points decrease in market interest rates, our overall operating tax profit will have a negative impact of approximately 5 to 8 million HKD.

Leaf Lee: In the US market, advanced options trading tools combined with user friendly interface and extensive educational resources boosted our appeal among options traders.

Leaf Lee: In the second quarter, the number of options traders in the US increased by around 60% year over year, while the number of options contracts traded more than double compared to the year ago quarter.

Leaf Lee: Well, management recorded another quarter of exceptional growth.

You Fan: And the next question comes from the line of you fan from CICC. Please go ahead. I've got to quadruple the first quadruple with our plans for new product offerings.

Speaker Change #159: If we consider the second derivative, that is, if the market is affected by interest rate cuts, leading to more trading volume and easier acquisition of corresponding customers, I believe the static impact mentioned earlier will be significantly offset. Currently, from the perspective of the market on this type of transaction, I have not seen a significant change in customer asset allocation. However, what I can share is that from the perspective of our wealth management products...

You Fan: I should have in the market live Japan and the Malaysia. And the second question with our progress of the Seattle Purchase Program. So, in terms of the product pipeline, for Japan, as Lee mentioned earlier, a couple of very important financial products, whereas, and also, what we intend to roll out in the couple of months, include, number one, a savings account, number two, mutual funds, and thirdly, US margin financing. And from Malaysia, I think we kept a very nice pace of new product rollout.

Speaker Change #160: For some products in this mutual collection category, whether it's government bonds or corporate bonds, including some short-duration bond fund products, the proportion of customer allocation has significantly increased compared to the previous few quarters.

Cindy Wang: Second, basically now it is around two months for the third quarter.

Daniel Yuan: So that's why we'll continue to invest in our brand.

Speaker Change #161: In terms of the guidance for new client acquisition, as Steve mentioned in the opening remarks, we have already revised our targets.

Cindy Wang: Can you give us some latest trends for the third quarter, including trading volume, trading velocity, AUM, and margin financing and security lending balance?

Speaker Change #162: to five hundred and seteen

Leaf Lee: And in the second quarter, major contributions for the new clients acquired; example one is the Hong Kong and Singapore, which contribute over one third of our new paint lines applied in the second quarter. And combined Japan and Malaysia, which accounts for roughly 40% of the whole pie. And based on the quarter today situation, we are still very confident we can achieve the guidance we mentioned before, despite there can be some uncertainties coming arising in the US election in the fourth quarter. And we do expect contribution breakdown from these markets should be similar to what we have witnessed in the first half of this year.

Daniel Yuan: And that's also why we did a power lounge and had a brand ambassador in the second quarter. These all contributed to a higher brand equity.

Cindy Wang: Thank you.

Daniel Yuan: And we'll continue to invest in brand building.

Speaker Change #162: K New Paying Clients for the whole year.

Daniel Yuan: And in terms of average client assets, right now it's a couple thousand U.S. dollars.

Speaker Change #162: And in the second quarter, major contributions.

Speaker Change #162: for the new clients acquired

Speaker Change #164: Yes, number one is the Hong Kong and the Singapore, which contribute over one third of our new paying clients.

Speaker Change #164: Applied in the second quarter and combined Japan and Malaysia which

Speaker Change #164: accountcil routly in the forty percent

Speaker Change #165: for the whole pie and based on the quarter today situations we are still very confident we can achieve the guidance we mentioned before despite there would can be some uncertainties coming arwriting the u s election in the fourth quarters

Speaker Change #165: and we do expect our contribution gre ar fonies fonies markets should be similar to what we have wness in the first half of this year

Arthur Chen: And of course, for the second question, of course, we got some negative implications from the rate cut. We have some preliminary sensitivity, you know, estimations. Every 25 basis points rate cut, our pre-tax profit operating profit will be impact by 5 million to 8 million Hong Kong dollars. If we did not account in a positive potential fault of implications from the market trading volume increase, because of the rate height, and also the benefits from the new client acquisitions, you know, for these implications. And so far, we have not witnessed a very significant client as the allocation changes arising from your observations.

Speaker Change #166: And, of course, for the second question, of course, we got some negative implications.

Speaker Change #167: you found the rate rate cut we have some preliminary sensitivity estimations

You Fan: And in the third quarter of quarter to date, we've actually rolled out Malaysian stock ideal subscription services, and also the cash cost product, which is the money market product. And from our experience, when the IPO market is very hot, usually IPO subscription service can be a good contributor of new client growth, and during the hybrid environment, money market products can help increase client assets. And in terms of future product pipeline in Malaysia, we plan to roll out this quarter, the stock transfer from Malaysian stock, so that we can attract existing clients and other brokers in Malaysia.

You Fan: Thank you. Okay, I'm very grateful.

Speaker Change #167: every auattoic five basis point rate cut our pretax pocket operating pocket will be impact by five million to eight mill ion h home dollars if we did not account and a positive potential oti implications

Leaf Lee: As our clients saw diversification and continued to part more funds in safer assets like money market funds in the US treasury bills.

You Fan: Thank you.

Speaker Change #167: from the market trading volume increase

Speaker Change #168: because of the ray height and also the benefit from the n cclar acquisitions you for for these implications

Daniel Yuan: And mostly clients still allocated into U.S. stocks.

Daniel Yuan: Although the percentage of assets in Japan stocks and the percentage of trading volume from Japan stocks have been increasing. And we believe that as we continue to enhance our Japan stock product offering, these percentage contribution will continue to go up closer to the market level.

Leaf Lee: Total client assets grew by 84% year over year and 25% quarter of a quarter to around 80 billion Hong Kong dollars.

Operator: We will now take our next question. Please stand by.

Speaker Change #169: And so far, we have not witnessed a very significant decline as the allocation changes.

Arthur Chen: But in the wealth management universe, we do witness there will be more as the allocations by our clients on the fixed income quarter, you know, including the trade rates, and also fix sure the recent fixed income quarter, etc.

Speaker Change #170: arising from the port your observations but in the wealth manag univer we do witness there will be more as allocations by our clients on the fixing come quers including f race and are also fixed shortta orsu fixing comecompor etc

Daniel Yuan: Thank you.

Arthur Chen: Thank you.

Arthur Chen: Thank you, very helpful.

Speaker Change #170: Thank you.

Arthur Chen: Thank you.

Lee Li: 谢谢叶老师, 从三季度的表现来看 这块的表现也是非常健康, 那从整体的一个市场的表现 香港市场的这个表现, 在三季度有所回调 所以市场会有Mark to market的一个负面的一个影响, 在这个里面 那么从客户的一个换手率, 包括交易量的一个角度来看 相比二季度, 从目前三季度的一个情况来看 都还是有一个环比的一个提升的, 那么从我们看到的一个客户的一个收益的一个情况 因为在二季度的时候, 会有比较多的一些客户交易低价的me stock 这个刚才在我的opening remarks有讲, 对我们的一个佣金率会有一个正面的一个帮助 那随着三季度客户交易me stock的这个占比下降以后, 我感觉这个地方的一个佣金率 会有一个恢复正常化的一个情况, 那我翻译一下 对于今天二季度的情况来看, 我们所见到的是 仍然是一个非常强劲的客户资产影响, 尽管会有一些负面的影响 从市场上的影响, 由于我们在香港市场面对的挑战 那在客户交易的一个角度来看, 速度和交易量等等 我们都看到了, 这些指标仍然非常强大 并且会有一个迅速的增长, 对于佣金率来看 由于我们在二季度的情况下, 得到了一些利益 这意味着, 更多的客户在交易这些低价佣金 这对我们来说是一个很好的提升, 对于佣金率来说 所以这些利益会变得正常化, 在目前的三季度 非常感谢, 感谢 感谢起来, 我来回答一下第一个问题 关于我们的加密资产业务, 我们是于今年8月1号和8月12号 分别在香港和新加坡全量上线了, 虚拟资产的交易业务 提供主流的虚拟资产的现货交易, 截止目前 我们是有不少客户激活了, 数字资产的一个交易账户 但是由于产品上线时间较短, 且近期虚拟资产市场出现了显著的回调 那交易和资产规模都还处于一个相对较小的阶段, 那当前我们会专注在产品力提升 以及做好投资者教育和运营工作, 那让更多的客户了解 我们可以暂时提供多样化产品, 品类的交易能力 好 谢谢, 我们于8月1号在香港和新加坡 举行互联网交易, 互联网交易于8月1号和8月12号 我们现在提供限量的互联网交易, 目前我们有许多客户 已经启动了他们的虚拟资产交易账号, 但由于我们不久前提供了产品 而且因为最近虚拟资产市场, 出现了非常大的回调和波动 所以客户的交易量, 虚拟资产和客户资产 相比整个行业的质量, 都相当小 目前我们的目标是, 继续提升产品的能力 并继续提供产业教育和运营, 以增强产品价值的提供 作为一站的资产交易平台, 谢谢 您好,我们现在接下来的问题。 接下来的问题是来自MS的Chiyao Huang。请您先说一下您的电话号码。 好的,感谢管理层给我提供的机会。我是Morgan Stanley的Chiyao。 我有两个问题想请教。第一个是关于客户进入金。 很高兴看到客户的总资产的增速、缓比和同比都非常的健康。 请管理层再给我们一点breakdown,就是这里面多少是来自于入金,来自于market。 相信market也是正面的一个贡献。然后从地域的分布上面来看的话, 进入金大概从区域分配大概各是什么一个比例。这是第一个问题。 第二个问题是想请教关于日本在货客上面的一个进展。 想请教二季度和二季度的这个趋势是否有所提速。 那么在三季度我们目前为止看到了在日本的货客的一个趋势具体是什么样。 然后如果有所提速的话,这里面有哪些主要的这个driver。 那另外一方面想也想请教在日本的这种客军的资产目前是一个什么样的状态。 然后客户的入金之后,他的整个资产的配置有什么样的一个特点。 这是我的第二个问题。我简单翻译一下。 所以我有两个问题。 第一个是在QQ上的客户资产增长上, 管理能力能够提供更多的色彩。 客户资产增长的影响力有多大,市场上的影响力有多大。 特别是在QQ上的地域分布上影响力是从哪里来的。 第二个问题是在日本的客户资产上, 我们看到了二季度的增速趋势, 我们看到了三季度的趋势。 第三个问题是在日本的客户资产上, 我们看到了三季度的增速趋势, 我们看到了三季度的增速趋势。 谢谢,齐尧。 我先回答你的第一个问题, 然后我会把第二个问题交给我的同事丹尼尔。 有关进入竞争市场正面影响的一个对总资产的一个影响, 我们整个二季度我们的客户总资产的环比的上浮大概在12%左右, 其中客户进入竞争的正面的一个贡献大概会接近10%, 剩下大概2%到3%左右是来自于市场的正面的一个帮助在这里。 那么从区域来分, 香港跟新加坡还是我们目前客户进入竞争的一个主要的来源地, 这两个地方合计大概会贡献超过80%的我们二季度的一个进入竞争的一个情况。 那么在我们二季度的客户总资产的利润方面来看, 我们的客户总资产的利润增加了12%。 我们要分析一下, 大部分的贡献其实是来自于客户的资产影响, 大部分是来自于客户的资金或股票交易, 这大概是来自于一个数字的贡献, 剩下的2%到3%是来自于市场的正面的一个帮助。 香港和新加坡, 这两个是两个关键的市场, 来自于新产品的贡献影响, 大概是来自于我们整体的产品影响的80%。 非常感谢。 关于二季度日本市场的情况, 整体日本二季度竞争有资产客户环比还是有一个很不错的提升 从有资产客户的绝对值得贡献来看, 二季度日本和马来其实都属于第一梯队 所以我们觉得日本还是有非常不错的增长, 主要还是因为我们可能一部分黄金流程优化 还有在二季度也有不错的一些精准的营销活动, 包括整体市场的行情也是比较有利的 截止二季度末我们日本用户的数量已经接近80万了, 所以我们有资产客户和用户都还是在一个很不错的增长区间 我们之前给过一个全年的关于用户的指引, 就是在年底获得100到150万的用户 我们还是非常有信心保持用户的增速的, 关于之后的下半年或者明年的在日本市场增长的driver 我们觉得一个很重要的还是产品能力持续的上新和迭代, 目前跟日本最主流的这些券商相比 我们在金融产品上还是有一定的gap的, 之前Leaf在opening remark的时候也有提到了 其实我们未来几个月会有比较多的产品力的补给, 另外还有一点就是可能持续的品牌的建设和投入 我们以目前在日本的经历, 包括很多投资人现在也很充分的理解 就是日本的用户在对一个新品牌, 尤其是海外品牌的信任度的培养上面还是需要一些时间的 我们持续会对这个品牌去做建设, 包括我们二十度也做了一个大型的power launch 包括请了明星的代言人, 我们觉得这些都是能增加我们品牌的知名度和信任度 非常重要的一部分, 客军资产来看的话 目前日本的客军资产在几千美金的数量级, 然后Q1Q也是有一个提升的态势的 从客户的资产配置来看, 目前我们客户最主要的配置还是在美股 当然日股的这一块的配置也是在不断的提升, 未来随着我们日股相关的产品力的提升 我们相信根据整个市场大盘的客户的偏好, 在日股资产的配置 包括日股交易量的这些占比, 应该会有持续的一些提升 整体来看,在Q2期间, 我们看到日本的非常强劲的Net New Paying Client 实际上在Q2期间, 我们看到日本的Net New Paying Client 在Q2期间, 我们看到日本的非常强劲的Net New Paying Client 在Q2期间, 我们看到日本的非常强劲的Net New Paying Client 在Q2期间, 我们看到日本的非常强劲的Net New Paying Client 在Q2期间, 我们看到日本的非常强劲的Net New Paying Client 在Q2期间, 我们看到日股相关的产品力提升 我们相信根据整体来看, 在Q2期间 我们看到日本的非常强劲的Net New Paying Client, 在Q2期间 我们看到日股相关的产品力提升, 我们相信根据整体体现 有8,000多个使用者, 这也是非常健康的成长 过去, 我们未来几周就会向大家 提供一些非常重要的金融产品, 我们将在明天正式讲到 我们将在未来几周, 提供一些非常重要的金融产品 第二, 产品建设也是重大的 我们意识到, 很多投资者都明白 日本使用者通常会花多点时间, 相信一家品牌 特别是来自海外的品牌, 所以我们会继续投资到业内 我们认为, 我们会继续提升 日本品牌的产品供应, 我们相信 日本品牌的产品供应, 会越来越好 我们会继续投资到, 产品建设 我们会继续投资到, 产品建设 我们会继续投资到, 产品建设 我们会继续投资到, 产品建设 我们会继续投资到, 产品建设 谢谢, 我们现在接受下一个问题 请稍等, 下一个问题来自CICC的You Fan 请稍等,您的电话已关机, 好的,感谢管理层给我这个提问的机会 我是中金公司的分析师樊优, 我这边的话有两个问题想要请教一下管理层 首先第一个也是刚刚其实有提到, 关于这个新产品的进展 就是想请教一下咱们后续, 包括像在日本、马来西亚这些新市场上 整体的一个产品新的上线节奏怎么去展望, 包括像到今年年底前 是否会看到一些新的后续产品上线, 然后第二个问题是想请教 咱们之前其实是有宣布新一轮的回购, 在二五年末前不超过五亿美金 想请教一下现在是否有更多的进展, 可以去做一个披露 我这边来快速翻译一下, 谢谢樊优,我是Daniel 然后我先来讲一下, 我们今年下半年的新产品的规划 然后一会儿Arthur会介绍一下, 这个回购的一些情况 那在日本这一块, 刚才Leith其实也提到了 那我们比较主要的几个品类, 也是在未来几个月 我们希望上线的品类, 包括这个Nissan储蓄的账户 包括这个共同基金, 然后像这个US的这个Margin Financing 等等的一些产品, 那在马来西亚 我们其实保持了一个很不错的, 一个产品上线的一个节奏 然后我们三季度, 其实Quarter to Date上线的比较重要的功能 包括像马股IPO的打新, 然后包括像这个货币基金 这个Cash Plus的产品, 那根据我们在其他市场的经验 在市场比较好的时候, 在IPO市场比较火爆的时候 这个IPO产品是一个, IPO认购是一个不错的 一个拉新的一个方式, 然后包括这个像 这个货币基金的产品, 在高期的背景下 也是一个不错的, 提升这个客户资产的方式 那之后我们也会有一些, 其他的一些功能 比如说像马股的这些转仓, 会可以帮助我们更好地 吸引其他这个全商的一些, 存量的用户 把资产迁移到幕后吧, So in terms of the product pipeline for Japan as Lee mentioned earlier a couple of very important financial products for us and also what we intend to roll out in the next couple of months include number one a savings account number two neutral funds and thirdly US margin financing And for Malaysia, I think we kept a very nice pace of new product rollout And in the third quarter, of quarter to date we've actually rolled out Malaysian stock IPO subscription services, and also the cash plus product which is the money market product And from our experience, when the IPO market is very hot usually IPO subscription service can be a good contributor of new client growth and during a hybrid environment money market products can help increase client assets And in terms of future product pipeline, in Malaysia we plan to roll out this quarter the stock transfer of Malaysian stock so that we can attract existing clients and other brokers in Malaysia Thank you, 好的,有关股票回购,我们之前的股票回购的这个计划实际是覆盖2024年到2025年,那截止到目前为止,我们还没有去行驶我们这个回购的一个计划,那在未来几个季度里面,如果我们有相应的一个回购行驶的话,我们也会及时跟市场,包括跟我们的分析师跟投资者来做相应的更新。 好的,非常感谢。 谢谢。我们现在接受下一个问题。请稍等。 下一个问题来自Jeffries的Zhou Yijong。请稍等,您的电话已关机。 感谢管理层接受我的提问。我这边有两个问题想请教一下。第一个是想请教一下我们虚拟货币服务的这个商业化模式是怎么样的。然后第二个问题是因为我们看到二季度的利息支出环比增长了21%,然后想请教一下这个原因和之后的趋势。谢谢。 那么另外呢,这个融券的这个利息本身受到这个市场的一个供需的,就是供需的一个状况的一个变化。所以这个相应的一个利息的一个利率的一个水平也会有一个比较大的一个波动。那么确实从市场的这个,您刚才讲到的从前瞻性的一个预测来说,能给到这样的一个利率预测相对来说是比较困难的。 那如果不考虑这个因素的话,随着我们的客户的一个融券的一个渗透率的一个占比的一个提升,我相信这一块相应的费用,包括相应的一个利息收入都会有一个继续继续增长的一个一个趋势在这个里面。 这是一个非常精确的估计,也非常难估计。 假设我们的购物产品的融资收入在互联网上继续增长,我认为这些费用与上线的行业收入会有一定的影响。 谢谢。 关于加密资产这一块,因为我们目前只提供了加密资产的交易功能,所以我们这块商业化的方式很简单,就是收取交易的佣金。 那我们在这块的定价,目前也是Public Information,那我们在定价的时候也是希望能够平衡在市场上的竞争力,然后以及一些货币化的能力吧。 那因为我们香港和新加坡目前这个加密资产都是通过分别一个上游去接入的,所以这一块也有一些上游的成本,但是整体在我们目前的这个定价的水平下,我们两地都还是有不错的这个毛利率,那香港和新加坡的加密资产的净收容率都还是高于港美股证股的净收容率的。 所以现在在香港和新加坡,我们两地都在与上游提供加密资产的服务,那在我们目前的定价计划下,考虑到上游的价格,我们仍然享受了不错的增值利润。所以加密资产的净收容率是比香港和美国的货币交易的净收容率还要高。谢谢。 谢谢。 我们现在接受下一个问题。请稍等。 下一个问题来自美国货币保险公司的Emma Zhu。请稍等,您的电话已关机。 谢谢您的提问。 So I have two questions.

Operator: Thank you.

Operator: We will now take our next question. Please stand by.

Speaker Change #172: Thank you. Very helpful.

Operator: We will now take our next question.

Speaker Change #172: Thank you.

Charles Jo: And the next question comes from the line of Charles Jo from UBS. Please go ahead. Your line is now open. Hello, everyone. Good evening, everyone. First of all, I wish the company to have a relatively strong experience. I don't think it's just that the profit and profit of the company is very high.

Emma Xu: The first question is about the client acquisition.

Speaker Change #173: We will now take our next question. Please stand by.

Emma Xu: You just raised your four-year new paying client target to $550,000, which means you need to acquire around 108,000 new paying clients per quarter.

Emma Xu: And usually your client acquisition is seasonally low in fourth quarter. That implies your third quarter client acquisition is still quite strong.

Emma Xu: So could you tell us which markets are driving your client growth in third quarter?

Operator: Please stand by.

Speaker Change #174: And the next question comes from the line of Charles Zhu from UBS. Please go ahead, your line is now open.

Operator: Ac mae'r cwestiynau nesaf ddod o'r rhan o You Fan o CICC.

Speaker Change #174: i

Speaker Change #175: Good evening, everyone in the management team. First of all,

Speaker Change #176: Congratulations to the company for achieving strong performance. I believe not only the revenue side but also the profit side has exceeded market expectations. I have a question regarding customer acquisition costs. We have noticed that the revenue side is very impressive, and at the same time, customer acquisition costs have been well controlled. I would like to ask if the company has any updates on customer acquisition costs for 2024.

Charles Jo: I have a question about the cost of goods. We注意 that the cost of goods is very high. The cost of goods is also very high. If you want to ask about the future, the company will have a relatively high cost of goods in 2024. According to the acquisition cost of a guidance, if we don't believe it, we can see that there is still a relatively high upside.

Operator: Diolch yn fawr, eich rhan eich ddim yn agor.

Speaker Change #177: If we don't update, we still see a relatively high upside at present. What is our overall strategy for cargo and passenger in the second half of the year, and what are our current plans in the core market? This is the first question.

Charles Jo: In the end of the 30-year contract, what is our plan in the core market now? This is the first question.

Zoe Jones: And the next question comes from the line of Zoe Jones from Jeffries. Please go ahead.

Emma Xu: And the second question is about – is that given the rising expectations of red cards, and then the recent wild volatilities in the AI stocks, so do you see the changes in client asset allocation, say, between the stocks, the bonds, and the options, et cetera?

Emma Xu: And in terms of the allocation within the stock, say, from the AI growth stock to value stock, and how will these changing behaviors impact your take rate?

Charles Jo: The second question is to ask about the interest income in this area. We understand that there are three parts. Including the Idol Cash interest income, the two-year-old income, the IPO financing income, can you give us two or three of these three parts?

Zoe Jones: Your line is not open. Thank you. Thanks for the interview to wondering what's the reason behind and how should we think about the trend going forward. Thank you. In terms of the interest expenses, increasing the second quarter, which I think some really associated with our clients, you know, margin financing and the stock borrowing. In particular, in terms of stock borrowing, the pricing, the implied interest rate is more rely on the market driven demand and supply situation, which is very hard to give a precise estimation and the very difficult to project.

Speaker Change #177: The second question is about interest income. We understand that it mainly consists of three parts: idle cash interest income, margin trading income, and IPO financing income. Could you break down these three components for the second quarter for us?

Emma Xu: And correspondingly, given the rising expectation of red cards, how will it impact your interest income?

Charles Jo: So first of all, congratulations to the management team. I think it's a very strong set of results and also about the consensus. So my question is regarding to the client acquisition cost because I think this is very well managed. So do we have any so do we have any updates for the 2024 for the four year guidance and if you don't have any new guidance or any updates we believe they're you know there's also a decent you know huge upside from here as well.

You Fan: 好的,感谢管理层给我这个提问的机会。 我是中金公司的分析师樊悠。 我这边的话有两个问题想要请教一下管理层。 首先第一个也是刚刚其实有提到关于这个新产品的进展, 就是想请教一下咱们后续,包括像在日本,马来西亚这些新市场上 整体的一个产品新的这个上线节奏怎么去展望, 包括像到今年年底前是否会看到一些这个新的后续产品上线。 然后第二个问题是想请教一下咱们之前其实是有宣布新一轮的回购, 在二五年末前这个不超过五亿美金, 想请教一下现在是否有更多的进展可以去做一个披露。 我這邊來快速翻譯一下 谢谢,大家好,我是Daniel,我先来讲一下我们今年下半年的新产品的规划, 然后一会儿Arthur会介绍一下这个回购的一些情况。 那在日本这一块,刚才Lee其实也提到了,那我们比较主要的几个品类, 也是在未来几个月我们希望上线的品类,包括这个Nissa储蓄的账户, 包括这个共同基金,然后像这个US的这个Margin Financing等等的一些产品。 那在马来西亚我们其实保持了一个很不错的一个产品上线的一个节奏, 然后我们三季度其实Quarter to Date上线的比较重要的功能, 包括像马股IPO的打新,然后包括像这个货币基金这个Cash Plus的产品。 那根据我们在其他市场的经验,在市场比较好的时候,在IPO市场比较火爆的时候, 这个IPO认购是一个不错的一个拉新的一个方式, 然后包括这个像货币基金的产品在高息的背景下也是一个不错的提升客户资产的方式。 那之后我们也会有一些其他的一些功能,比如说像马股的这些转仓, 会可以帮助我们更好的吸引其他这个券商的一些存量的用户把资产迁移到穆姆吧。 So in terms of the product pipeline for Japan, as Li mentioned earlier, a couple of very important financial products for us and also what we intend to roll out in the next couple of months include, number one, a savings account, number two, neutral funds, and thirdly, U.S. margin financing.

Speaker Change #178: So first of all, congratulations to the management team. I think it's a very strong set of results and also above the consensus. So my question is regarding to the client acquisition costs.

Speaker Change #179: because i think this is very well managed so do we having so do we have any updates for the two thousand and twenty four for the full year guidance and ifyou don't have any new guidance for any any updates we believe know there is also a decent

Arthur Chen: So could you please also share your marketing and also client acquisition strategy in several of the key markets in the second half.

Speaker Change #180: huge upside from here as well so could you please also share your marketing and also client acquisition strategy in several of the key markets in the second half

Arthur Chen: My second question is related to the interest income. Our understanding there are three major components: idle cash interest income, modern financing stock lending interest income, as well as the IPO financing income. So could you please just help us to split the interest income of, you know, from these three components for the second quarter. Thank you. Okay, thank you. So so for your two questions, number one is about the CAC guidance and any updates. You know, in the second quarter, our CAC is around $2,200, which have 30% QLQ increase versus Q1, which has a very relatively very low base because of the significant contribution of new clients acquired in Malaysia.

Speaker Change #181: My second question is related to the interest income. Our understanding, there are three major components, idle cash interest income, margins financing and stock lending interest income, as well as the IPO financing income. So could you please explain those three major components? Thank you. Thank you.

Speaker Change #182: Just help us to split the interest income of you know from these three components for the second quarter. Thank you

Speaker Change #183: Okay, thank you Charles. I will answer both questions. One is about customer acquisition cost. In the second quarter, our average customer acquisition cost was around 2200 HKD. Although this is an increase of about 30% compared to 1700 HKD in the first quarter, there were some special reasons for the first quarter. In the first quarter, because we had a significant number of existing users before entering Malaysia, the conversion rate was relatively faster.

Daniel Yuan: And for Malaysia, I think we kept a very nice pace of new product rollout.

Speaker Change #183: Although HKD 2200 in the second quarter is a significant improvement compared to the first quarter, it is still a notable decrease compared to the CAC guidance of HKD 2500 to 3000 we provided to the market at the beginning of the year. As of now, the customer acquisition cost level for the entire third quarter is...

Leaf Lee: Out of quarter of wealth management assets accounted for 15% of our total client assets and over 25% of paying clients helped wealth management positions.

Zoe Jones: And if, just assume the status as coal, if our penetration rate above retail price to continue income in the stock borrowing universe, I think the expenses associated with such activities revenue on the top line will both further increase. Thank you.

Speaker Change #183: It is still maintained at a relatively good level. As of now, it is still below the range of 2500 to 3000 HKD that we set at the beginning of the year. Although we have not adjusted the guidance of 2500 to 3000 HKD that we provided at the beginning of the year, based on the current situation, I am cautiously optimistic about our annual goods cost. I hope that this target can be at the lower end of this range, or even lower than the given range.

Leaf Lee: We have 461 IPO distribution in our clients of 21% year over year.

Leaf Lee: We under wrote seven of the 10 largest Hong Kong IPOs and the first half of 2024.

Emma Xu: I know it could probably have limited impact on your interest income this year, but what would be, say, the 25-day red card impact on your interest income next year?

Emma Xu: Thank you.

Speaker Change #184: Regarding the second point you mentioned about interest income, the Hong Kong IPO market has faced significant challenges this year. This includes the number and amount of Chinese concept stocks' IPOs in the United States, which are not particularly large. So, in the three proportions you mentioned earlier, the third proportion of interest income is basically negligible given the current situation this year. Therefore, looking at the front-end interest income, it mainly comes from the interest income of our financing business and the interest income from our IDO Cash, with the overall proportion being roughly the same.

Arthur Chen: Next, I'd like to invite our CSO authors to discuss our financial performance.

Speaker Change #185: Of course, the proportion of idle cash might still be slightly higher than the income from the interest on the financing rate.

Daniel Yuan: Okay.

Arthur Chen: Thank you, Lee Van Daniel.

Leaf Lee: So for cryptocurrency trading, since we now only offer the trading services, the business models very straightforward, just we charge a commission. And when we design our pricing scheme, we want to balance our market competitiveness and monetization potential. So right now in Hong Kong and we both work with an upstream provider to offer cryptocurrency trading. And under our current pricing model, taking into consideration the upstream cost, we still enjoy pretty good gross profit margin. So the net take rate of cryptocurrency trading is higher than the net take rate for Hong Kong and US stock trading. Thank you.

Speaker Change #186: For your two questions, number one is about the CAC guidance, any updates?

Speaker Change #187: In the second quarter, our CAG is around HK$2,200.

Arthur Chen: Please allow me to walk you through our financial performance in the second quarter. All the numbers are in Hong Kong dollars unless otherwise noted. Total revenue was 3.1 billion of 26% from 2.5 billion in the second quarter of 2023, brokerage commission and the handling charge income was 1.4 billion of 45% year over year and 27% year over two. The increase was mainly driven by a 69% year over year and 21% year over two growth in total trading volumes.

Operator: We will now take our next question. Please stand by.

Speaker Change #186: which have 30% QOQ increase

Speaker Change #187: versus

Speaker Change #188: Q1, which has a very, relatively very low base because of the significant contribution of new clients acquired in Malaysia.

Arthur Chen: We think the situation will just be normalized in the second quarter, and for the third quarter, for today I think in terms of CAC, we still maintain it's in a relatively low level, which is below our guidance range $2,500 to $3,000 for the whole year. On relative speaking, I will become more constructive in terms of the CAC guidance based on the current runway. I think it will be very likely located in the low end of our range or even lower than this range for the whole year.

Arthur Chen: Given our per sheer pricing model for US stock trading, the blended commission rate increased from 8.1 billion to 8.5 billion.

Speaker Change #189: we think the situation just you not be normalized in the second quarter and for the third quarter quarter today i think in terms of cap we still maintain it's in a relatively low levels which is

Arthur Chen: As a result, brokerage income grew at half past the rate than trading volume Q over Q.

Speaker Change #189: below our guidance range two thousand and five hundred to swreeze down the hongkong dollars for the whole year on relative speaking will become more constructive inchance of the cap guidance

Arthur Chen: Interest income was 1.6 billion of 13% year over year and 18% Q over Q. The year over year and Q over Q increased was mainly driven by high and margin financing income due to an increase in daily average margin balance. And the higher interest income from security borrowing and the landing business.

Arthur Chen: Other income was 1.6 billion of 27% year over year and 3% Q over Q. The year over year and Q over Q increased was both primary attribute votes to higher fund distribution income while the Q over Q increased was partially offset by the decline in underwriting fee income.

Arthur Chen: Our total cost was 574 million and increased of 53% from 375 million in the second quarter of 2003.

MRU: And the next question comes from the line of MRU from Bank of America Securities. Please go ahead.

Speaker Change #189: Based on the current run rate, I think it will be very likely located in the low end of our range or even lower than this range for the whole year.

MRU: Your line is not open. I have two questions. The first question is related to the new cryptocurrency trading, which is that we have risen to 50,000. So the next question comes from the financial level, or 10,000, 800,000 users. And the fourth question comes from the financial level, which will be a little bit slow. Then the third question comes from the cryptocurrency trading, which is still quite strong. Let's talk about the main thing, which is that the market is pushing the third level of the cryptocurrency trading, and we think the next half a year the cryptocurrency trading is going to be coming to the market.

Arthur Chen: Then the breakdowns of the interest income because of the market trend is in Hong Kong and the US. The interest income derived from the IPO financing, both in Hong Kong and in the US, is not material. And clients' idle cash and also the margin financing almost contribute equally in terms of the interest income breakdown. Despite my feeling, my feeling is the interest income from idle cash will slightly higher than the second part. Thank you very much. Okay, that's very helpful. Thank you.

Speaker Change #190: then the breakdown the interest income because of the market channea is in hong ong and in the u s

Arthur Chen: Procage Commission and the handling charge expenses were 87 million of 58% year year and 45% QVQ.

Speaker Change #190: The interest income deriving from the IPO financing, both in Hong Kong and in...

Arthur Chen: The expenses grow by our wider margins and income sequentially, mainly due to the capture fee scheme for U.S, stock trading. Under the per share pricing model, we charge a maximum of 50 basis points of trading volume per order for U.S, stock trading. So when applying to the more low price of U.S, stock as was the case in the second quarter, there would be a mismatch between the growth rate of revenue and expenses.

Speaker Change #191: in the u s is not a material and client idle cash and also the margin financing almost conttoable equala in terms of the interest income breade on despite i feeling my feeleding is you know

Arthur Chen: Interest expenses was 378 million of 71% year over year and the 21% QVQ. The year over year and a QVQ increase was mainly incurred by high interest expenses associated with our security borrowing and the landing business.

MRU: This is the first question. And the second question is that we see that the recent relationship with the energy of the blockchain is also increasing a lot, including the value of the blockchain. And recently, this A.I, stock trading is also relatively large. Then we are in such a market environment, and we see that there is a lot of trading in the market. For example, more things are going to be added, or there is a lot of trading in the stock market. For example, there is a lot of investment in the stock market. A.I, stocks can now be increased a little bit, etc. And this is what we have to look at.

Arthur Chen: Processing and the service in court was 109 million of 11% year over year and a certain percent QVQ. The year over increase was largely due to higher crop service fee and the QVQ increase was mainly driven by higher market information and data fees.

Daniel Yuan: I'll answer both questions.

Peter Zhang: We will now take our next question. Please stand by. And the next question comes from the line of Peter Zhang from JP Morgan. Please go ahead. Your line is open. Let me do the translation. Many thanks to management for giving me the big opportunity to ask questions. It's a Peter from JP Morgan. I have two questions.

Speaker Change #192: Okay, that's very helpful. Thank you.

Speaker Change #193: Thank you. We will now take our next question. Please stand by.

Daniel Yuan: And in the third quarter, quarter to date, we've actually rolled out Malaysian stock IPO subscription services and also the cash plus product, which is the money market product.

Daniel Yuan: And from our experience, when the IPO market is very hot, usually IPO subscription service can be a good contributor of new client growth.

Speaker Change #194: And the next question comes from the line of Peter Zhang from JP Morgan. Please go ahead your line is now open.

Daniel Yuan: The first one is about the client guidance.

Daniel Yuan: And during a hybrid environment, money market products can help increase client assets.

Speaker Change #195: Thank you very much to the management for giving me the opportunity to ask questions. I am Peter from JPMorgan. I have two questions. The first question is, I would like to ask the management to give us an update on the latest developments in the Malaysian business, such as the situation of new client deposits this quarter and the assets under management.

MRU: This is what we have to look at. The same is related to the blockchain. The blockchain will be the most powerful trading, especially the current funds of the blockchain. I know that this year may still be a little bit limited, because it has already reached 9 months. But if it is tomorrow, for example, there will be 25 B.P, stocks, which will receive a lot of profit in the next year.

Speaker Change #195: Customer profile, customer transaction turnover rate, and future prospects of the business in Malaysia

Speaker Change #195: Then my second question is about Tianxin Bank. We, Futu, invested in Tianxin Bank in June . I would like to ask about the reasons behind this investment and what the future holds.

Speaker Change #196: Let me do the translation. Many thanks for management giving me the opportunity to ask the questions. This is Peter from JPMorgan. I have two questions. My first question is on Malaysia business. I wish management could give us more details on the progress of the Malaysia business.

Daniel Yuan: As Dave mentioned in the opening remark, we've already increased the target of 400,000 to 550,000 new paying clients per year.

Daniel Yuan: And as of now, in the third quarter client acquisition, I think we still have a lot of confidence in our target of 550,000 new paying clients per year. Of course, there will be some uncertainty in the fourth quarter, considering the general election, including some early start of the cycle.

Daniel Yuan: In terms of the specific market for client acquisition, in terms of the second quarter, Hong Kong and Singapore probably contributed more than one-third of our new paying clients this quarter.

You Fan: I have two questions. The first question is about the client acquisition. You just raised your four-year new-paying client target to $550,000, which means you need to acquire around $108,000 new-paying client per quarter, and usually your client acquisition is reasonably low in both quarter. That implies your first quarter client acquisition is still personal. So could you tell us which market are driving your client growth in third quarter? And the second question is about is that given the rising expectations of red cards and then the recent wild volatility in the AI stocks.

Peter Zhang: My first question is on Malaysia basis, which management could give us more details on the progress of the Malaysia basis. For example, the client asset inflow, average client asset, client profile, and trading conglomerate and what's the outlook of the Malaysia basis and my second question is about the air stop bank. I understand that food to invest 40% shares into the Air Stop Bank in June. We wish to understand what the rationale behind this investment and going forward was food strategy to cooperate with this virtual bank in Hong Kong. Thank you. Thank you, Peter. There are two questions.

Daniel Yuan: Then Japan and Malaysia, these two places, contributed about 40% or so.

Daniel Yuan: In terms of the overall market for the second half of the year, I predict that there won't be much of a change compared to the first half of the year.

Arthur Chen: As a result, our total growth profit was 2.6 million increase of 21% from 2.1 billion in the second quarter of 2023.

Daniel Yuan: That's the first question.

Speaker Change #197: For example, the clients.

Speaker Change #197: Net Asset Inflow, Average Client Asset

Speaker Change #199: contsufile and

Speaker Change #200: trading come over and what's the outlook of the Malaysia business and my second question is about the

Speaker Change #201: Airstar Bank. I understand that Futu invests 40% shares into the Airstar Bank in June . We wish to understand what the rationale behind this investment and going forward what's Futu's strategy to cooperate with this virtual bank in Hong Kong. Thank you.

You Fan: So do you see the changes in client as the allocation, say between the stocks, the bonds and the options, etc. And the intent of the allocation within the stocks, say from the AI growth stocks to value stocks, and how will these changing behaviors impact your take rate? And correspondingly, given the rising expectation of red cards, how will it impact your interest income? I know it could probably have limited impact on your interest income this year. But what would be, say, 25-year red cards impact on your interest income next year?

Leaf Lee: I will answer your second question. Your first question is about the future. I will ask the same question.

Speaker Change #202: Regarding your two questions, I will first answer your second question about Tianjin Bank. For your first question about Malaysia, I will ask my colleague Robin to answer it later. As for why Futu wants to invest in Tianjin Bank, I think our initial intention to participate in the banking business cooperation mainly comes from some of our customers' needs. Over the past decade or so, as we expanded our business in Hong Kong, we received a lot of feedback from our users and customers. They mentioned some issues related to banking entry and exit, hoping that we could use our technological capabilities to help alleviate some of the burdens related to banking entry and exit.

You Fan: Thank you. Okay, two questions.

Leaf Lee: I will answer it later. Why do you want to go to the Investment World Bank? I think we want to go to the bank of the industry, which is one of the main things. It may be the most important thing for us. In the past few years, in Hong Kong, we have received a lot of feedback from our users and customers. In the future, we have received a lot of feedback from our customers. We hope that we can use the energy of our customers to improve our business in Hong Kong. We hope that we can improve our business in Hong Kong.

Daniel Yuan: The second question is about the current interest rate environment. We've done some static calculations, because the decline in interest rates may have a lot of positive or negative impacts.

Daniel Yuan: If we don't take into account the second half of the year, for example, the stimulus to the client's trading volume, in terms of static, the market interest rate drops by 25 points every year.

Arthur Chen: Growth margin was 81.6% as compared to 84.9% in the year ago quarter.

Leaf Lee: I will answer the first question. The first question is about the purchase order. Like just now, when opening the market, we have talked about the total growth of a target of 40,000,000 to 55,000.

Arthur Chen: Operating expenses were up 26% year over year and the 16% QVQ to 1.1 billion.

Speaker Change #202: Overall, the banking industry in Hong Kong can be optimized and improved. This is a very important initial intention for us to undertake this task. Secondly, from the perspective of our business strategy, we indeed feel that many of the banking business scenarios align with Futu's current business scenarios, including some potential existing ones.

Arthur Chen: Irony expenses was 374 million of 3% year over year and the 12% the QVQ. The year over year and the QVQ increase was mainly driven by increase in IND headphones to support our new markets.

Arthur Chen: Serving in the market expenses was 338 million of 93% year over year and the 16% QVQ.

Leaf Lee: In the end, in the third quarter of the purchase order, I think the total of 55,000, I think is still very confident that we can[inaudible] In terms of the guidance for new client acquisition, as Li mentioned in the opening remarks, we have already revised our targets to 550 K new paint lines for the whole year. And in the second quarter, major contributions for the new clients acquired, example one is the Hong Kong and Singapore, which contribute over one third of our new paint lines applied in the second quarter.

Speaker Change #202: Some potential synergies, for example, our clients' wealth management business in this area.

Leaf Lee: In the future, we have received a lot of feedback from our customers. Thank you.

Speaker Change #202: So from the perspective of future development strategy, because our entire project has just completed its second phase.

Speaker Change #203: At present, from a medium to short-term perspective, I hope to contribute more to Tianjin Bank by leveraging our capabilities, mainly in the area of our technological expertise.

Speaker Change #204: So in the short term, we will

Speaker Change #203: Focus on output, including working together with the bank's existing shareholders and the bank's management team.

Speaker Change #203: We hope to make significant improvements to the products of Tianxin Bank, especially in some areas of IT infrastructure, in order to lay a solid foundation for the future products of Tianxin Bank.

Speaker Change #203: not

Speaker Change #205: i see the pey we see the key motivations or that the reason for we to consider to do this investment number one is we continue about a lot of the quest or you know suggestion from our users and the client

Daniel Yuan: Our overall operating tax profit will be around 5 million to 8 million Hong Kong dollars.

Speaker Change #206: In the past several years in Hong Kong, given more and more Hong Kongites met a lot of pain points in terms of the fund transfer to the brokerage accounts.

Speaker Change #206: and the secondary of course we do think in our insurance of our

Speaker Change #207: Future Threatened Directions, there will be a lot of synergy and also same scenarios.

Speaker Change #208: between the brokerage business, wealth management business in Futu, and also the retail banking business and also high net worth wealth management business normally provided by the bank.

Daniel Yuan: This is a negative impact.

Daniel Yuan: If we take into account the second half of the year, I predict that if the market is affected by the decline, more transactions will be made, and it will be easier to get clients.

Daniel Yuan: I believe that the positive impact mentioned earlier will have a significant proportion and will be offset.

Daniel Yuan: In terms of the current market for this transaction, I haven't seen a significant change in the asset configuration of the client.

Daniel Yuan: But what I can share is that in terms of our financial management products, whether it's national debt or corporate debt, including some short-term debt-related products, the current customer configuration is significantly improved compared to previous quarters.

Daniel Yuan: In terms of the guidance for new client acquisition, as Steve mentioned in the opening remarks, we have already revised our targets to 550k new paying clients for the whole year.

Daniel Yuan: And in the second quarter, major contributions for the new clients acquired is, number one, the Hong Kong and the Singapore, which contribute over one third of our new paying clients acquired in the second quarter.

Daniel Yuan: And combined, Japan and Malaysia, which accounts for roughly 40 percent for the whole pie.

Daniel Yuan: And based on the quarter to date situations, we are still very confident we can achieve the guidance we mentioned before, despite there can be some uncertainties coming arising in the U.S. election in the fourth quarter.

Daniel Yuan: And we do expect contribution breakdown from these markets should be similar to what we have witnessed in the first half of this year.

Daniel Yuan: And of course, for the second question, of course, we got some negative implications from the rate cut.

Daniel Yuan: We have some preliminary sensitivity estimation. Every 25 basis point rate cut, our pre-tax operating profit will be impacted by 5 million to 8 million Hong Kong dollars.

Speaker Change #209: So far, the deal was just completed in the second quarter. We work, strive very, you know, strive very hard and work very closely with the local management of Airstar Bank, alongside with, you know, Xiaomi and other shareholders.

Daniel Yuan: If we did not account for any potential positive implications from the market trading volume increase, because of the rate hike and also the benefit from the new client acquisitions for these implications.

Daniel Yuan: And so far, we have not witnessed a very significant client asset allocation changes arising from your observations.

Daniel Yuan: But in the wealth management universe, we do witness there will be more asset allocations by our clients on the fixed income quarter, including the trade raise and also fixed short duration fixed income quarter, etc.

Daniel Yuan: Thank you.

Daniel Yuan: Thank you.

Daniel Yuan: Very helpful.

Alestar: L-STAR to align our long-term strategy.

Daniel Yuan: Thank you.

Operator: We will now take our next question.

Operator: Please stand by.

Speaker Change #209: up

Speaker Change #211: Having said that, I think the near-term focus will be more on the product itself, especially, you know, how to, you know, contribute our R&D capabilities and technology capabilities.

Speaker Change #211: to further foster and enhance the infrastructure of Airstar Bank's products. Thank you.

Operator: And the next question comes from the line of Charles Zhou from UBS.

Arthur Chen: The year over year increase was driven by the triple-digit year over year growth in new paying clients partially offset by lower client acquisition costs.

Operator: Thank you so much for coming back to the next question.

Speaker Change #212: Thank you for the question. Next, I will answer some questions about Malaysia. First, regarding our user profile, considering our positioning as a one-stop trading platform for Malaysian and U.S. stocks in Malaysia, most of the customers we have acquired in Malaysia currently have a certain level of investment experience.

Leaf Lee: First of all, we have to consider that in Ma Lanxia, Ma Gu and Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Ma Gu, Ma Gu, Ma Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma Gu, Ma, Ma Ma Gu, Ma Gu, Ma Gu, Ma Gu So, in terms of the second quarter plan I was issued in the third quarter according to day trend.

Arthur Chen: The QVQ increase was mainly due to the sequential increase in client acquisition costs.

Leaf Lee: And combined Japan and Malaysia, which accounts for roughly 40% for the whole pie. And based on the quarter today situation, we are still very confident we can achieve the guidance we mentioned before, despite there can be some uncertainties coming arising in the US election in the fourth quarter. And we do expect contribution breakdown from these markets should be similar to what we have witnessed in the first half of this year.

Arthur Chen: G&E expenses was 362 million of 16% year over year and the 20% QVQ. The year over year and the QVQ increase was primary due to increase in head count for G&E customers.

Speaker Change #213: Then, it is mainly young Chinese men with relatively high incomes. Additionally, the turnover rate of Malaysian customers is significantly higher than the group's average turnover rate. Based on our APU and CAC data for the second quarter, the current payback period in Malaysia is significantly better than the unit economic model when Singapore first started its business. As of the end of Q2.

Operator: Please go ahead.

Operator: Your line is now open.

Operator: If not, we can see that there is still a relatively high upside.

Operator: What is the overall strategy for the second half of the acquisition and what is our current plan in the core market?

Arthur Chen: As a result, income from operating increase by 18% year over year 24% QVQ to 1.5 billion.

Operator: This is the first question.

Operator: The second question is to ask about the interest income.

Operator: We understand that there are three main parts, including idle cash interest income, dual business income, and IPO finance income.

Arthur Chen: Operating margin declined to 47.3% from 58.6% in the second quarter of 2023, mostly due to higher market expenses.

Arthur Chen: And of course, for the second question, of course, we got some negative implications from the rate cut. We have some preliminary sensitivity, you know, estimations, every 25 basis points, rate cut, our pre-tax profit operating profit will be impact by 5 million to 8 million Hong Kong dollars. If we did not account in a positive potential fault of implications from the market trading volume increase, because of the rate height, and also the benefits from the new client acquisitions, you know, for these implications.

Speaker Change #214: The cumulative net inflow of funds from clients with assets in various categories in Malaysia has been increasing every month.

Arthur Chen: Our net income increased by 8% year over year and the 17% QVQ to 1.2 billion.

Speaker Change #215: At the end of the second quarter, the asset scale of clients with assets in Malaysia increased by 45% quarter-on-quarter. Currently, the client assets in Malaysia are still rapidly increasing. We also believe that the economic model of Malaysian clients will continue to be optimized.

Joshri: telling my joshri

Operator: Can you tell us about these three parts of the second quarter?

Speaker Change #217: There is one more question about our Q3 growth trend. First of all, in the second quarter, the number of financial asset customers in Malaysia is

Operator: Sponsored ADR Class A, Sponsored ADR Class A Sponsored ADR Class A 好的 谢谢Charles, 那两个问题我都来回答一下 一个有关货客成本, 那整个二季度我们的平均货客成本 大约在2200港币左右, 虽然相比一季度1700港币 是晚比有一个30%左右的一个上升, 但一季度有一些特殊的一些原因 那整个一季度因为我们在马来西亚, 进入马来西亚之前 有比较多的一些存量的一些用户, 所以它的相对的一个 转化的一个速度会比较快一些, 那虽然2200港币在二季度 相比一季度是有比较明显的提升的, 但整体相比我们在年初的时候 给到市场2500到3000港币, 这样的我们的一个CAC的一个指引的话 还是有一个显著的一个下降, 那从目前来看整个三季度 我们的一个货客的一个成本的一个水平, 还是保持在一个比较良好的一个水平 从目前来看还是低于, 这个年初我们设定的2500到3000港币左右 这样的一个区间在这个里面, 虽然我们现在没有去调整 我们这个年初给的这个, 2500到3000左右这样的一个 区间的一个指引, 但从目前的这个情况来看 我对于我们全年的一个货的成本, 保持一个谨慎的一个乐观 那从希望这个目标能够在, 这个区间的低端 甚至可能要比这个, 给出的这个区间来得更低一些 那有关第二个, 这个您讲到的利息收入 因为这个香港的这个, 香港的IPO的这个市场 今年是有比较大的一个挑战, 包括在美国那边的IPO 中概股的一些IPO的一个数量, 跟金额都不是特别大 所以您刚才讲到的这个, 三块的这个比例里面 第三块的这个比例在, 利息收入的这个占比 基本是从目前今年的情况来看, 基本是可以忽略不计的 那么从利息收入, 就是前端的这个利息收入来看 基本就是从我们的, 融资业务的这一块的一个 这个利息的一个收入, 跟我们的这个就是 IDO Cash的这个利率收入的, 一个权重占比是 基本差不多是一个50 50, 当然IDO Cash的一个占比 稍微可能还是会比, 这个融资的这个利率来的 融资利息的一个收入来的, 会稍微会更高一些 For your two questions, number one is about the CAC guidance, any update.

Speaker Change #218: The quarter-on-quarter QE has declined, mainly due to the high base in the first quarter. The impact of converting existing users into asset-holding customers was concentrated in the first quarter. Excluding this special situation, the overall performance in Malaysia for the second quarter...

Arthur Chen: And so far, we have not witnessed a very significant client as the allocation changes arising from your observations. But in the wealth management universe, we do witness there will be more as the allocations by our clients on the fixed income quarter, you know, including the trade rates, and also fix sure the recent fixed income quarter, etc.

Operator: In the second, quarter, our CAC is around HK$2,200, which has a 30% Q-over-Q increase versus Q1, which has a relatively low base because of the significant contribution of new clients acquired in Malaysia.

Operator: We think the situation will just be normalized in the second quarter.

Speaker Change #219: The trend of cargo and passenger transport is still maintaining a leading position, with the second quarter still contributing the most to the market of asset-heavy customers.

Speaker Change #219: Additionally, the ability to maintain a steady momentum in customer acquisition is mainly due to the spillover effect of our brand influence in Singapore and our leading product strength in the one-stop Malaysian stock market. Furthermore, the market performance of U.S. and Malaysian stocks in the second quarter also contributed to the accumulation of customers.

You Fan: Thank you. Thank you, very helpful. Thank you.

Operator: We will now take our next question. Please stand by.

Charles Jo: And the next question comes from the line of Charles Jo from UBS. Please go ahead.

Charles Jo: Your line is now open. Hello, everyone. Good evening, everyone. First of all, I wish the company to have a relatively strong experience. I don't think it's just that the profit and profit of the company is very high. I have a question about the cost of goods. We注意 that the cost of goods is very high. The cost of goods is also very high. If you want to ask about the future, the company will have a relatively high cost of goods in 2024.

Speaker Change #219: In the second quarter, we completed important product capabilities, including the addition of major stocks in the Malaysian market, as well as the introduction of US stock tracking and fractional shares. Additionally, since the third quarter, we have launched money market funds and the ability to transfer positions in Malaysian stocks to further enhance our product offerings.

Arthur Chen: Net income margin declined to 38.6% in the second quarter of year compared to over 1.1% in the same quarter last year. Our effective tax rate for the quarter was 15.2%.

Daniel Yuan: That concludes our prepared remarks.

Operator: And for the third quarter, for today, I think in terms of CAC, we still maintain it's in a relatively low level, which is below our guidance range, HK$2,500 to HK$3,000 for the whole year. Relatively speaking, I think it will become more constructive in terms of the CAC guidance based on the current run rate.

Daniel Yuan: We now would like to open the call to questions.

Operator: I think it will be very likely located in the low end of our range or even lower than this range for the whole year.

Operator: Then the breakdown of the interest income, because of the market challenges in Hong Kong and in the U.S., the interest income deriving from the ITO financing, both in Hong Kong and in the U.S., is not material.

Operator: And clients' EIDL cash and also the margin financing almost contribute equally in terms of the interest, income breakdown, despite my feeling is the interest income from EIDL cash was slightly higher than the second part.

Operator: Operator, please go ahead.

Operator: Thank you very much.

Operator: Okay, that's very helpful.

Operator: Thank you.

Operator: To ask a question during the session, you will need to press star 1, 1 on your telephone.

Operator: Please wait for your name to be announced.

Speaker Change #220: For a tier-3 route, we expect the customer acquisition speed in Malaysia to maintain a relatively stable trend quarter-on-quarter.

Operator: Thank you.

Operator: Thank you.

Operator: We will now take our next question.

Charles Jo: According to the acquisition cost of a guidance, if we don't believe it, we can see that there is still a relatively high upside. In the end of the 30-year contract, what is our plan in the core market now?

Operator: Please stand by.

Speaker Change #221: how is it

Speaker Change #222: So in terms of our client profile, given our value proposition as a one-stop trading platform for Malaysian and U.S. stocks,

Operator: To withdraw your question, please press star 1, 1 again.

Charles Jo: This is the first question. The second question is to ask about the interest income in this area. We understand that there are three parts. Including the Idol Cash interest income, the two-year-old income, the IPO financing income, can you give us two or three of these three parts? So first of all, congratulations to the management team. I think it's a very strong set of results and also about the consensus. So my question is regarding to the client acquisition cost because I think this is very well managed.

Speaker Change #223: So far, the clients we have attracted have some level of investment experience, and most of them are young Asian males and have a higher income level than the country's average number.

Speaker Change #224: and also we've seen that the training turnover of our malaysian cplents are meaningfully higher than the group verage so given the rpu in tax numbers we have seen in the second quarter we think the payback period is malaysia it's better than when we first launched in singapore

Operator: Please some by will become part of the Q&A roster.

Operator: You will now take our first question.

Operator: Please stand by.

Cindy Wang: And the first question comes from the line of Cindy Wang from China Renaissance.

Charles Jo: So do we have any so do we have any updates for the 2024 for the four year guidance and if you don't have any new guidance or any updates we believe they're you know there's also a decent you know huge upside from here as well. So could you please also share your marketing and also client acquisition strategy in several of the key markets in the second half.

Speaker Change #224: at at the end of the second quarter across our different coort malaysiia that the flow average client assets all we're ting not months over a months

Speaker Change #224: and average plan assets was actually a forty-five percent q on q and as our average point thod m mallsiiaa continuue to increase we believe the unit economics will continue to improve

Cindy Wang: Please go ahead, your line is not open.

Cindy Wang: [inaudible] Thanks for taking my call.

Arthur Chen: My second question is related to the interest income. Our understanding there are three major components, idle cash interest income, modern financing stock lending interest income as well as the IPO financing income. So could you please just help us to split the interest income of you know from these three components for the second quarter. Thank you.

Cindy Wang: I have two questions.

Speaker Change #224: So, in terms of the second quarter client acquisition and the third quarter, quarter-to-date trend,

Leaf Lee: So the second quarter menu plan was down a bit sequentially, mostly because of a high base in the first quarter. That's when we were able to convert a large number of our existing users into paying clients. But apart from that, the second quarter growth was very steady, Q and Q. And we believe the strong momentum is partially due to the spill over of our grant equity accumulated in Singapore, and also because there are leading product capabilities as a one-stop platform for Malaysian US stocks. And also the strong market sentiment in the second quarter also helps with client acquisition.

Speaker Change #224: so the second quarter menu pain clients was down a bit sequentially mostly because of a high base in the first quarter that's when we were able to convert a large number of our existing users in jappaining clients but apart from that the second quarter of growth was very steady q on q

Cindy Wang: One question is related to crypto services.

Speaker Change #224: And we believe the strong momentum is partially due to the spillover of our grant equity accumulated in Singapore and also because they are leading product capabilities as a one-stop platform for Malaysian US stocks.

Speaker Change #224: and also the strong market sentiment

Leaf Lee: And the second quarter we launched Malaysian stock IPO subscription, and also automatic investment schemes for US stocks and fractional shares for US stocks. And the third quarter according to date, we launched money market funds, and also stock transfer for Malaysian stocks. And the third quarter we expect a steady quarter-over-quarter, you paying clients growth in Malaysia. Thank you.

Speaker Change #224: in the second quarter also helped with client acquisition.

Speaker Change #224: In the second quarter, we launched Malaysian stock IPO subscription and also automatic investment schemes for U.S. stocks and fractional shares for U.S. stocks. And for the third quarter, according to date, we launched money market funds and also stock transfer from Malaysian stocks.

Daniel Yuan: And in terms of future product pipeline in Malaysia, we plan to roll out this quarter the stock transfer from Malaysian stocks, so that we can attract existing clients and other brokers in Malaysia.

Daniel Yuan: Thank you.

Speaker Change #224: and the third quarter we expect a steady quarter of the quarter you pain lines growth in malaysia thank you

Operator: We will now take our next question.

Hushen: Please start by. And the next question comes from the line of Hushen from CLSA. Please go ahead; your line is now open. What is the share of trading and media in trading, total US trading volume? How did this single factor influence the commission rate in the second quarter? How big was the influence of mid-cap stock trading? What is the good indicator to track the change in US stock trading commission rate change?

Speaker Change #225: Thank you. We will now take our next question. Please stand by.

hsh: And the next question comes from the line of Hu Shen from CLSA. Please go ahead, your line is now open.

Arthur Chen: 好的,有关股票回购,我们之前的股票回购的这个计划实际是覆盖2024年到2025年,那截止到目前为止,我们还没有去行驶我们这个回购的一个计划,那在未来几个季度里面,如果我们有相应的一个回购行驶的话,我们也会及时跟市场,包括跟我们的分析师跟投资者来做相应的更新。 我们之前的股票回购计划实际是覆盖2024年到2025年,那截止到目前为止,我们还没有去行驶我们这个回购的一个计划,我们也会及时跟我们的分析师跟投资者来做相应的更新。 好的,非常感谢, Thank you.

Speaker Change #227: The management has given me the opportunity to ask this question. I would like to know the proportion of NVIDIA in the US stock trading volume in the second quarter and whether this factor can be isolated to see its impact on our commission rate. Also, can we isolate the impact of trading market capitalization on the commission rate? I am looking for a good indicator that can effectively track the changes in our US stock trading commission rate. Additionally, I have two small questions: What is the approximate distribution fee rate for selling treasury bonds at low or very low rates? And when will the management consider a dividend plan? Let me briefly translate: What is the proportion and commission rate of NVIDIA in the US stock trading volume in the second quarter? What is the impact of this factor on our commission rate? What is the commission rate for the US stock trading volume in the second quarter?

Arthur Chen: We will now take our next question.

Cindy Wang: So recently, you have launched the crypto services in Hong Kong Singapore.

Arthur Chen: Okay, thank you. So So For your two questions, number one is about the CAC guidance and any updates. You know, in the second quarter our CAC is around $2,200, which have 30% QLQ increase versus Q1, which has a very relatively very low base because of the significant contribution of new clients acquired in Malaysia. We think the situation will just be normalized in the second quarter, and for the third quarter, for today I think in terms of CAC, we still maintain it's in a relatively low level, which is below our guidance range $2,500 to $3,000 for the whole year.

Speaker Change #227: influence from mid-cap stock trading? What is a good indicator to track the change in U.S. Stock Trading Commission rate change? And what is the fee rate in the distribution of funds, firm funds, and non-market funds? And what could be a good timing for considering issuing dividends?

Hushen: And what is the free rate in the distribution of funds, and what could be the time for considering issuing dividends?

Hushen: Thank you. In terms of first questions, Navi, the roughly accounts for our 20 to 30% of our clients' US operating volumes in the second quarters. And for your second question, so far we do not have any concrete dividend policy. The key reason is we think still there will be a huge growth potential areas which we can further deploy our capitals. And we are very confident these investments will generate more high return, which is higher than our course of the capital. And in terms of the economics of these fund distribution, our trading, etc., which I think to some extent related to some confidentiality commercial arrangements.

Speaker Change #228: Okay, let me answer these two questions. First of all, I personally do not encourage everyone to track a particular stock to make such predictions because there are many other factors that may affect the accuracy of these predictions.

Cindy Wang: Could you provide some color on client feedback on crypto trading and what your client acquisition strategy.

Speaker Change #229: That in itself is not the most important purpose for us to engage in this commercial activity.

Speaker Change #229: However, from what we can see in our second phase, Nvidia's stock trading indeed accounts for a relatively large proportion of our overall clients' U.S. stock trading, roughly in the range of about 20% to 30%.

Cindy Wang: Second is basically now is around two months for the third quarter.

Speaker Change #229: As for the statistics related to Mistalk, we haven't actually conducted them, but I believe the proportion won't be particularly large.

Speaker Change #229: Regarding your second question, the company currently has no plans for a dividend distribution. Furthermore, I think...

Cindy Wang: So can you give us some lately trend for the third quarter, including trading volume, trading velocity, USD and margin financing and security lending balance.

Arthur Chen: On relative speaking, I will become more constructive in terms of the CAC guidance based on the current runway. I think it will be very likely located in the low end of our range or even lower than this range for the whole year.

Speaker Change #230: We feel that we can deploy some of our funds in areas that offer higher returns on investment for our investors, whether it is in some of our existing businesses or other areas.

Cindy Wang: Thank you.

Arthur Chen: Then the breakdowns of the interest income because of the market trend is in Hong Kong and the US. The interest income derived from the IPO financing, both in Hong Kong and in the US is not material. And clients idle cash and also the margin financing almost contribute equally in terms of the interest income breakdown. Despite my feeling, my feeling is the interest income from idle cash will slightly higher than the second part. Thank you very much.

Speaker Change #231: Entered these new markets

Speaker Change #231: The potential for future development is still very, very large. Regarding funds or government bonds, some of the products we distribute, the fees involved may be subject to some commercial confidentiality reasons. Overall, what I can say is that the distribution of fees in this area may be in line with industry standards in the market.

Arthur Chen: Okay, that's very helpful. Thank you.

Operator: We will now take our next question. Please stand by.

Operator: And the next question comes, from the line of Peter Zhang from JP Morgan.

Speaker Change #232: There is no significant difference in the situation.

Speaker Change #233: In terms of first questions, Navida roughly accounts for 20% to 30% of our clients' U.S. stock trading volumes in the second quarters.

Operator: Please go ahead.

Operator: Your line is now open.

Leaf Lee: [inaudible] Thank you very much.

Speaker Change #234: and for your second questions so far we do not have any concre a dividend policy the key reason is we think still huge go' potential areas which we can further deploy our capitalals

Leaf Lee: [inaudible] you, thank you, thank you, thank you, thank you,[inaudible] Thank you, Chiyao.

Leaf Lee: I will take your first question and I will leave the second question to my colleagues, Daniel.

Peter Zhang: And the next question comes from the line of Peter Zhang from JP Morgan. Please go ahead. Your line is open.

Speaker Change #234: and that we are very confident sees know investment we are generated more high written which then which is highire than our cost of the capital

Speaker Change #235: and the insurance of the economics obiousies fm distribution or trvery trading etce which i think

Speaker Change #236: To some extent, related to some confidentiality, you know, commercial arrangements.

Hushen: But the only thing I can but the thing I can share is arrangement is very typical, similar to the industry distribution model.

Speaker Change #237: But the only thing I can, but the thing I can share is the arrangement is very typical similar to the industry, you know, distribution, distribution model. Thank you.

Hushen: Thank you.

Operator: Thank you very much for giving me the opportunity to ask questions.

Operator: I am Peter from JP Morgan.

Peter Zhang: Let me do the translation. Many thanks for management giving me the big opportunity to ask questions. It's a Peter from JP Morgan. I have two questions. My first question is on Malaysia basis, which management could give us more details on the progress of the Malaysia basis. For example, the client asset inflow, average client asset, client profile, and trading conglomerate and what's the outlook of the Malaysia basis and my second question is about the air stop bank.

Speaker Change #238: be come ise yet

Daniel Yuan: Due to time constraints, I would now hand back to Daniel Huang for any closing remarks. Please go ahead.

Operator: Please stand by.

Operator: And the next question comes from the line of Zhou Yijiong from Jefferies.

Operator: Please go ahead.

Speaker Change #239: Thank you.

Operator: Your line is now open.

Speaker Change #239: Due to time constraints, I would now hand back to Daniel Yuan for any closing remarks. Please go ahead.

Daniel Yuan: That concludes our call today. On behalf of the FUSU 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 for any of our observations.

Leaf Lee: In terms of the benefit from our total supply assets increase in the second quarter, our total supply assets increase by 12% of the Q and 2% of the Q and 2% of the Q and 2%.

Zhou Yijiong: 感谢管理层接受我的提问 我这边有两个问题想请教一下 第一个是想请教一下 我们虚拟货币服务的 这个商业化模式是怎么样的 然后第二个问题是 因为我们看到二季度的 利息支出环比增长了21% 然后想请教一下 这个原因和之后的趋势 谢谢 我自己翻译一下 谢谢曼芝曼 接受我的问题 我有两个问题 第一个是 您的虚拟货币系统的 业务模式是什么 第二个 我们看到了 利润成本增加了21% 在Q2中 想请教一下 利润的背后是什么 以及我们应该如何思考 未来的趋势 谢谢, 好的,那謝謝諸位,那兩個問題我先回答第二個,就是有關利息支出這裡的,有關虛擬貨幣我們的一些商業化模式的一些思考,我請我的同事Daniel來做相應的一個補充,那整個我們的一個利息支出在二季度的一個增加,主要還是跟我們的客戶的融資融券,特別是客戶的一個融券的這個規模是有一個比較大的一個增強的一個關係的,那麼另外呢,這個融券的這個利息本身是 受到這個市場的一個供需的,就是供需的一個狀況的一個變化,所以這個相應的一個利息的一個利率的一個水平也會有一個比較大的一個波動,那麼卻是從市場的這個您剛才講到的,從前瞻性的一個預測來說,能給到這樣的一個利率預測相對來說是比較困難的,因為這個這個當中的一個利率更取決於市場的一個走勢,包括在市場當中,這個借券,包括融錢, 這兩方的一個供這個供需的一個關係在這個裡面。 如果不考虑这个因素的话,随着我们的客户的一个融券的一个渗透率的一个占比的一个提升,我相信这一块相应的费用,包括相应的一个利息收入,都会有一个继续继续增长的一个一个趋势在这里。 In terms of the interest expenses increase in the second quarter, which I think is mainly associated with our clients, you know, margin financing and the stock borrowing, in particular, in terms of stock borrowing, the pricing, the implied interest rate is more reliant on the market demand and the supply situation, which is very hard to give a precise estimation and very difficult to project.

Arthur Chen: And if, just assume the status, as the status as quo, if our penetration rate of our retail clients to continue income in the stock borrowing universe, I think the expenses associated with such activities revenue on the top line will both further increase.

Operator: I have two questions.

Arthur Chen: Thank you.

Operator: The first question is that I would like to ask Managing Director, Chen to introduce the latest developments in Malaysian business to us. For example, the current situation of new recruitment in this quarter, asset protection, client portrayal, client exchange exchange rate, and the future prospects of Malaysian business.

Arthur Chen: 關於加密資產這一塊,因為我們目前只提供了加密資產的交易功能,所以我們這一塊商業化的方式很簡單,就是收取交易的佣金,那我們在這一塊的定價, 目前也是公開資訊,我們在定價的時候也是希望能夠平衡在市場上的競爭力,然後以及一些貨幣化的能力吧,那因為我們香港和新加坡目前這個加密資產都是通過分別一個上游去接入的,所以這一塊也有一些上游的成本,但是整體在我們目前的這個定價的水平下,我們兩地都還是有不錯的這個毛利率,那香港和新加坡的加密資產的淨收容率都還是高於港美股證股的淨收容率。 So for cryptocurrency trading, since we now only offer the trading services, the business model is pretty straightforward.

Daniel Onean: That concludes our call today. On behalf of the Futu 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 adjustment relations representatives.

Operator: My second question is about Tianxin Bank.

Arthur Chen: It's just we charge a commission.

Daniel Yuan: And in terms of the allocation within the stock, say, from the AI growth stock to value stock, and how will these changing behaviors impact your take rate?

Operator: We invested in Tianxin Bank in June.

Arthur Chen: And when we design our pricing scheme, we want to balance our market competitiveness and monetization.

Daniel Yuan: And correspondingly, given the rising expectation of red cards, how will it impact your interest income?

Operator: I would like to ask about the reasons behind this investment and what strategies and business, prospects are there in the future.

Operator: Thank you.

Arthur Chen: So right now in Hong Kong and Singapore, we both work with an upstream provider to offer cryptocurrency trading. And under our current pricing model, taking into consideration the upstream cost, we still enjoy pretty good gross profit margin.

Daniel Yuan: Thank you.

Daniel Yuan: I know it could probably have limited impact on your interest income this year, but what would be, say, the 25-day red card impact on your interest income next year?

Operator: Let me do the translation.

Operator: 好的,谢谢Peter。有关你两个问题,我先来回答你第二个有关天津银行的问题。您的第一个问题有关马来西亚的,我请我的这个同事Robin之后来解答。 那有关富途为什么要去投资天津银行,我觉得我们最初希望我们去参与到银行这个业务的一些合作的一个主要的一个出发点,可能是来自于我们的一些客户的一些需求。 那从过去十几年,我们在香港的一个业务的一个拓展,我们也收到非常多我们的一些用户跟客户的一些反馈,那提到一些这个银行相关的一些出入境方面的一些碰点,希望我们能够用我们的一些科技的一些能力,去对银行整体的香港的银行行业能够去做一些优化,能够去做一些相应的一些改善。 这个是我觉得是我们希望去做这些这件事情的一个非常重要的一个初衷,那么第二,从我们的一个业务战略的一个角度来看,确实我们也感觉银行的非常多的一些业务的一些场景,跟富途现在的一些业务场景是是契合的,包括可能会有一些存在的潜在的一些协同效应,比如说我们的客户的我们的大项财富财富管理的这个这个业务在这个里面,那么从未来的一个发展的一个角度来看,那么第二,从我们的一个业务战略的一个角度来看,确实我们也感觉银行的非常多的一些业务的一些场景,跟富途现在的一些业务场景是是契 合的一个这个战略来说,因为整个我们这个项目在二级都刚刚完成,目前我觉得从这个中短期的一个目标来看,更多的是希望怎么能够去贡献给天津银行去贡献我们的能力啊,主要可能是在我们的一些科技的一些能力啊,所以短期来看,我我们会侧重输出,包括跟银行现有的股东银行的管理层一起能够去对这个天津银行的产品的一些贡献的一些能力的一些贡献的一些能力,所以短期来看,我我们会侧重输出,包括跟银行现有的股东银行的管理层一起能够去对这个天津银, 特别是IT的一些基础架构的一些领域去做一个比较大的一个改造啊,希望能够把我们整个未来天津银行的这个产品的一个基础啊,能够能够做扎实,呃,那呃, Given more and more Hong Kong clients met a lot of pain points in terms of the fund transfer to the brokerage accounts.

Arthur Chen: So the net take rate of cryptocurrency trading is higher than the net take rate for Hong Kong and US stock trading.

Daniel Yuan: In terms of the guidance for new client acquisition, as Steve mentioned in the opening remarks, we have already revised our targets to 550k new paying clients for the whole year.

Daniel Yuan: Thank you.

Operator: Many thanks for giving me the opportunity to ask questions.

Operator: And secondly, of course, we do think, you know, in terms of our future strategy directions, there will be a lot of synergy and also same scenarios between the brokerage business, wealth management business, and also the retail banking business.

Arthur Chen: Thank you.

Daniel Yuan: And in the second quarter, major contributions for the new clients acquired is, number one, is the Hong Kong and the Singapore, which contributes over one third of our new paying clients acquired in the second quarter. And combined, Japan and Malaysia, which accounts for roughly 40% for the whole pie.

Operator: This is Peter from JP Morgan.

Operator: And also, you know, high net worth, you know, wealth management business normally provided by the bank.

Arthur Chen: Thank you.

Daniel Yuan: And based on the quarter to date situations, we are still very confident we can achieve the guidance we mentioned before, despite there can be some uncertainties coming arising the US election in the fourth quarters.

Operator: I have two questions.

Operator: So far, the deal was just complete in the second quarter.

Arthur Chen: Thank you.

Daniel Yuan: And we do expect contribution breakdown from these markets should be similar to what we have witnessed in the first half of this year.

Operator: Thank you and goodbye.

Operator: Thank you.

Daniel Yuan: Thank you.

Operator: My first question is on Malaysian business.

Operator: We work, strive very, you know, strive very hard and work very closely with the local management of Airstar Bank alongside with, you know, Xiaomi and other shareholders of Airstar to align our long term strategy.

Operator: We will now take our next question.

Daniel Yuan: And of course, for the second question, of course, we got some negative implications, you know, from the rate cut.

Operator: 马来西亚的投资经验, 马来西亚客户的换手率显著高于集团平均的换手率 按照我们二季度的APU和CAC的数据来测算, 马来西亚当下的回本周期 要明显优于新加坡刚开始展业时的单位的经济模型, 截止到Q2末 马来西亚的各科号的有资产客户的累计, 净入金、护军资产每个月都有所提升 马来西亚二季度末有资产客户的护军资产, 规模环比提升了45% 当前马来西亚的客户资产还在快速提升, 我们也相信 马来西亚的客户的经济模型会不断得到优化, 另外就是 还有一个问题是我们Q3的一个增长趋势, 首先是二季度马来西亚的竞争有资产客户数量 环比Q1时有所下降, 这主要原因是由于一季度的基数较高 然后存量用户转化成有资产客户的影响, 在一季度得到了集中释放 剔除这个特殊情况, 二季度马来西亚的整体货客趋势还是保持着稳健 依旧是二季度贡献最多的有资产客户的市场, 另外就是能够保持稳健的货客势头 主要得益于我们在新加坡的一个品牌影响力的外溢, 以及我们在一战式的这个马股的领先的产品力 那此外美股和马股在二季度的行情, 也对货客进展是有有所加持 那二季度我们补充一些重要的产品能力, 包括马股大新 包括美股定投和美股的碎碎股, 那另外就是三季度至今 我们也已经上线了货币基金, 包括马股的转仓能力 那进一步完善我们的, 三季度的话我们预计马来西亚的货客速度 完毕会有一个保持相对稳定的这样的一个趋势, 好 谢谢 所以我们对于我们的客户领域, 由于我们的价值提供是一站的交易平台 对于我们的马来西亚和美国股市来说, 在二季度结束之后 在我们不同的马来西亚团队中, 我们的收入回报期 我们的客户资产, 每个月都在上涨 我们的客户资产, 其实是45%的上涨 我们的客户资产, 在马来西亚继续上涨 我们相信, 我们的产业经济会继续提高 Sponsored ADR Class B, Sponsored ADR Class C Sponsored ADR Class D Sponsored ADR Class E, [inaudible] Sponsored ADR Class, 我来回答这两个问题 首先我个人并不鼓励大家, 就是去就是追踪某一个股票 来去做这样的一些预测, 因为会有会有非常多的 其他的一些因素, 可能会影响到这个预测的一个准确性 那本身这个也不是我们去, 做这个商业实质的一个最重要的 最重要的一个目的, 那这个但从我们二季度能够看 二季度能够看到的, 我们回答的这个股票交易 确实对于我们整体的客户的, 每股的一个交易里面 占的这个比例相对是比较大的, 大致会在一个20%到30%左右 的这样的一个区间在这个里面, 那有关Mistalk的这个统计 我们实际是没有做过的, 但我我相信这个占比不会 就是说这个占比不会特别大, 那有关您的这个第二个问题 目前公司还没有一个, 这个分红的一个计划的一个考虑 更多的我想我们感觉, 就是说我们的一些资金 可以deploy在一些, 对于投资者投资回报率 更高的一些领域, 无论是我们的一些 现有的一些业务, 包括我们进入的这些新的市场 未来的一个发展的一个潜力, 我觉得还是非常非常大的 那有关基金或者说国债, 这一些我们的代销的一些产品 因为这个费率可能涉及到, 一些商业保密的一些原因 在这个里面, 那整体我能讲的是 这方面的一些费率的一些分配, 可能跟市场的行业的 一个行规的一个情况, 没有特别大的一个差异, In terms of first questions, Navida roughly accounts for 20% to 30% of our clients' U.S, stock trading volumes in the second quarters.

Daniel Yuan: Very helpful.

Operator: I wish Manjuan could give us more details on the progress of the Malaysian business. For example, the clients' net asset inflow, average client assets, client portfolio, and, client trading turnover, and what's the outlook of the Malaysian business.

Operator: Having said that, I think the near term focus will be more on the product itself, especially, you know, how to, you know, contribute our R&D capabilities and technology capabilities to further foster an enhanced infrastructure of the commercial of Airstar Bank's products.

Operator: Please stand by.

Daniel Yuan: We have some, you know, preliminary sensitivity, you know, estimations.

Operator: And for your second question, so far we do not have any concrete dividend policy.

Operator: Thank you, We will now take our next question.

Operator: My second question is about Airstar Bank.

Operator: And the next question comes in the line of Emma Xu from Bank of America Securities.

Daniel Yuan: Every, you know, 25 basis point rate cut, our pre-tax profit, operating profit will be impacted by 5 million to 8 million Hong Kong dollars.

Operator: The key reason is we think still there are huge growth potential areas which we can further deploy our capitals.

Operator: Please stand by.

Operator: I understand that Futu invests 40% shares, into Airstar Bank in June.

Operator: Ladies and gentlemen, this concludes today's conference call. Thank you for participating.

Operator: Please go ahead.

Daniel Yuan: If we did not account any potential positive implications from the market trading volume increase because of the rate height and also the benefit from the new client acquisitions, you know, for these implications.

Operator: Ladies and gentlemen, this concludes today's conference call.

Operator: And we are very confident these investments will generate more high return, which is higher than our cost of the capital.

Operator: And the next question comes from the line of Charles Zhu from UBS.

Operator: We wish to understand what's the rationale behind this investment and going forward, what's Futu's strategy to cooperate with this virtual bank in Hong Kong?

Emma Xu: Your line is now open.

Daniel Yuan: And so far, we have not witnessed a very, you know, significant client asset allocation changes arising from your observations.

Operator: And in terms of the economics of these fund distribution, treasury trading, etc., which I, think to some extent is related to some confidentiality, commercial arrangements.

Speaker Change #241: Thank you and goodbye.

Operator: Please go ahead, your line is now open.

Daniel Yuan: 谢谢给我这个提问的机会,恭喜公司那个二季度取得了非常强劲的业绩,那我这边有两个问题,第一个问题是关于这个新的货客指引,就是我们提升到了55万,那就意味着接下来两个季度可能平均获得10.8万这样的一个用户,而且一般而言四季度是季节性,从季节性来说,货客会偏慢一点,那就代表可能三季度目前来说,货客还是挺强劲的,那可不可以给我们讲一下,就是说, 主要是哪些市场在推动着三季度的货客,然后我们觉得下半年货客增长主要来自于哪些市场,这是第一个问题,然后第二个问题就是我们看到最近关于这个利率的降息的预期也提升了很多,包括降息的幅度,还有最近这个AI的股票波动性也比较大,那我们在这样的市场环境下有没有看到客户在资产大类资产的配置上有什么变化, 比如说更多的去投了一些债券,或者这个股票的这个配置上有没有什么变化,比如说以前是更多的投成长AI的股票,现在能多投一些价值股等等,然后这个对我们的这个take rate,就是对我们的变现化率会有哪些影响,同样就是关于这个降息的话,降息会对我们的这个利息收入,尤其是这个客户闲置资金的这块利息收入有多大的影响, 我知道就是说今年可能影响还是比较有限,因为也已经临近这个九月份了,但是明年的话,就比如说假设有25个BP的降息,对明年的利息收入会有多大的影响。 So, I have two questions.

Daniel Yuan: But in the wealth management universe, we do witness there will be more asset allocations by our clients on the fixed income quarters, you know, including the trade rates and also fixed short duration fixed income quarters, etc.

Operator: But the thing I can share is the arrangement is very typical, similar, to the industry distribution model.

Operator: Thank you for participating.

Daniel Yuan: Thank you and goodbye.

Charles Zhu: 好的各位管理层晚上好 首先 出货公司取得了比较强劲的业绩 我想不仅是收入端也有利润端 都是超越市场的预期 我有一个问题是关于货客成本 我们注意到收入端是非常亮眼 同时这个货客成本也是得到了比较好的控制 想问一下之后的话 就是公司有没有更新2024年 有关于这个货客成本 就是 Client Acquisition Cost的一个guidance 如果不更新的话 我们也看到目前还是有比较高的一个 upside 下半年的货客总体的战略 以及在核心市场 我们现在的计划是怎么样的 这是第一个问题 第二个问题就是想问一下 关于interest income这里面 我们理解是有三个部分主要 包括这个idle cash interest income 两融业务收入 IPO financing income 能不能就二季度的这三块 给我们大概拆解一下是怎么样, So first of all, congratulations to the management team.

Daniel Yuan: The first question is about the client acquisition.

Operator: Thank you.

Operator: You may now disconnect.

Operator: Ladies and gentlemen, this concludes today's conference call.

Daniel Yuan: I think it's a very strong set of results and also above the consensus.

Operator: You may now disconnect.

Daniel Yuan: You just raised your four-year new paying client target to $550,000, which means you need to acquire around 108,000 new paying clients per quarter.

Operator: Thank you.

Speaker Change #242: Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.

Operator: Thank you for participating.

Daniel Yuan: So my question is regarded to the client acquisition costs, because I think this is very well managed.

Daniel Yuan: And usually, your client acquisition is seasonally low in fourth quarter. That implies your third quarter client acquisition is still quite strong.

Daniel Yuan: Due to time constraints, I would now hand back to Daniel Yuan for any closing remarks.

Daniel Yuan: So do we have any updates for the 2024 for the full year guidance?

Daniel Yuan: So, could you tell us which markets are driving your client growth in third quarter?

Daniel Yuan: Please go ahead.

Daniel Yuan: And if you don't have any new guidance or any updates, we believe there's also a decent, huge upside from here as well.

Daniel Yuan: And the second question is about – is that given the rising expectations of red cards and then the recent wild volatilities in the AI stocks, so do you see the changes in client asset allocation, say, between the stocks, the bonds and the options, et cetera?

Daniel Yuan: That concludes our call today.

Daniel Yuan: So could you please also share your marketing and also client acquisition strategy in several of the key markets in the second half?

Daniel Yuan: On behalf of the Futu management team, I would like to thank you for joining us today.

Daniel Yuan: My second question is related to the interest income.

Daniel Yuan: If you have any further questions, please do not hesitate to contact me or any of our adjusted relations representatives.

Daniel Yuan: Our understanding there are three major components, idle cash interest income, margin financing and stock lending interest income, as well as the IPO financing income.

Daniel Yuan: Thank you and goodbye.

Daniel Yuan: So could you please just help us to split the interest income from these three components for the second quarter?

Daniel Yuan: Thank you.

Daniel Yuan: 两个问题我都来回答一下 一个有关货客成本 整个二季度我们的平均货客成本 大约在2200港币左右 虽然相比一季度1700港币 是晚比有一个30%左右的上升 但一季度有一些特殊的原因 整个一季度因为我们在进入马来西亚之前 有比较多的一些存量的用户 所以它的相对的转发速度会比较快一些 虽然2200港币在二季度相比一季度 是有比较明显的提升的 但整体相比我们在年初的时候 给到市场2500到3000港币 这样的我们的一个CAC的一个指引的话 还是有一个显著的一个下降 从目前来看整个三季度 我们的一个货客的一个成本的水平 还是保持在一个比较良好的水平 从目前来看还是低于 这个年初我们设定的2500到3000港币左右 这样的一个区间在这个里面 虽然我们现在没有去调整 我们这个年初给的这个2500到3000左右 这样的一个区间的一个指引 但从目前的这个情况来看 我对于我们全年的一个货客成本 保持一个谨慎的一个乐观 那从希望这个目标能够在这个区间的低端 甚至可能要比给出的这个区间来得更低一些 那有关第二个您讲到的利息收入 因为香港的IPO的这个市场 今年是有比较大的一个挑战 包括在美国那边的IPO 中概股的一些IPO的一个数量跟金额都不是特别大 所以您刚才讲到的这个三块的这个比例里面 第三块的这个比例在利息收入的这个占比 基本是从目前今年的情况来看 基本是可以忽略不计的 那么从利息收入 就是前端的这个利息收入来看 基本就是从我们的融资业务的这一块的 一个这个利息的一个收入 跟我们的这个就是IDO Cash的这个利率收入的 一个权重占比是基本差不多是一个50% 当然IDO Cash的一个占比稍微可能还是会比 这个融资的这个利率来的 融资利息的一个收入来的 会稍微会更高一些, For your two questions, number one is about the CAC guidance and any updates.

Daniel Yuan: You know, in the second quarter, our CAC is around the 2,200 Hong Kong dollars, which have 30% Q-over-Q increase versus Q1, which has a very relative, a very low base because of the significant contribution of new clients acquired in Malaysia.

Peter Zhang: I understand that food to invest 40% shares into the air stop bank in June. We wish to understand what the rationale behind this investment and going forward was food strategy to cooperate with this virtual bank in Hong Kong. Thank you. Thank you, Peter.

Daniel Yuan: We think the situation just to be normalized in the second quarter.

Daniel Yuan: And for the third quarter for today, I think in terms of CAC, we still maintain it's in a relatively low level, which is below our guidance range, 2,500 to 3,000 Hong Kong dollars for the whole year.

Daniel Yuan: On relative speaking, I would become more constructive in terms of this CAC guidance based on the current run rate.

Daniel Yuan: I think it will be very likely located in the low end of our range or even lower than this range for the whole year.

Daniel Yuan: Then the breakdown of the interest income because of the market challenges in Hong Kong and in the U.S., the interest income deriving from the IPO financing, both in Hong Kong and in the U.S., is not material.

Daniel Yuan: And clients' EIDL cash and also the margin financing almost contribute equally in terms of the interest income breakdown.

Daniel Yuan: My feeling is the interest income from EIDL cash was slightly higher than the second part.

Daniel Yuan: Thank you very much.

Peter Zhang: There are two questions.

Daniel Yuan: Okay, that's very helpful.

Daniel Yuan: Thank you.

Operator: Thank you.

Operator: We will now take our next question.

Operator: Please stand by.

Operator: And the next question comes from the line of Peter Zhang from J.P. Morgan.

Operator: Please go ahead.

Operator: Your line is now open.

Peter Zhang: 非常感谢管理层给我提问的机会,我是摩根大通的Peter,我有两个问题,第一个问题,我是想请管理层再给我们介绍一下马来西亚业务最新的进展,比如说客户的在这个季度新入金的情况,互捐资产,客户画像,然后客户的交易换手率,以及马来西亚业务未来的展望。 然后我的第二个问题是关于天心银行,我们富途在六月份的时候投资了天心银行,我想请教一下这笔投资背后的原因,以及未来有什么策略以及业务的展望。 我希望管理层可以给我们更多的细节,比如说客户的在这个季度新入金的情况,以及未来有什么策略以及业务未来的展望。 然后我的第二个问题是关于天心银行,我明白富途投资了40%的股份在六月份的天心银行,我想请教一下这笔投资背后的原因,以及未来有什么策略以及业务未来的展望。 好的,谢谢Peter,有关你两个问题,我先来回答你第二个有关天津银行的问题,您的第一个问题有关马来西亚的,我请我的这个同事Robin之后来解答,那有关Futu为什么要去投资天津银行,我觉得我们最初希望我们去参与到银行这个业务的一些合作的一个主要的一个出发点,可能是来自于我们的一些客户的一些需求,那从过去十几年我们在香港的一个业务的一个拓展,我们也收到非常多我们的一些客户的一些需求,那从过去十几年我们在香港的一个业务的一个拓展,我们也收到非常多我们的一些客户的一些需求,那从过去十几年我们在香港的 [inaudible] 包括可能会有一些存在的潜在的一些协同效应,比如说我们的客户的我们的大项财富财富管理的这个这个业务在这个里面,那么从未来的一个发展的一个这个战略来说,因为整个我们这个项目在二季度刚刚完成,目前我觉得从这个中短期的一个目标来看,更多的是希望怎么能够去贡献给天津银行去贡献我们的能力,主要可能是在我们的一些客户的一些需求,比如说我们的客户的我们的大项财富财富管理的这个这个业务在这个里面,那么从未来的一个发展的一个这个战略来说,因为整个我们这个项目在二季度刚刚完成,目前我觉得从这个中 短期来看,我们会侧重输出,包括跟银行现有的股东银行的管理层一起能够去对这个天津银行的产品,特别是IT的一些基础架构的一些领域去做一个比较大的一个改造,希望能够把我们整个未来天津银行的这个产品的一个基础能够能够做扎实, Now, I think the key, we think the key motivations or the reason for we to consider to do this investment, number one is we continue to get a lot of requests or suggestions from our users and the clients in the past several years in Hong Kong, given more and more Hong Kong clients met a lot of pain points in terms of the fund transfer to the brokerage accounts.

Daniel Yuan: And secondly, of course, we do think in terms of our future strategy directions, there will be a lot of synergy and also same scenarios between the brokerage business, wealth management business in Futu, and also the retail banking business, and also high net worth wealth management business normally provided by the bank.

Daniel Yuan: So far, the deal was just complete in the second quarter.

Daniel Yuan: We work, strive very hard and work very closely with the local management of Airstar Bank, alongside with Xiaomi and other shareholders of Airstar to align our long term strategy.

Leaf Lee: I will answer your second question.

Daniel Yuan: Having said that, I think the near term focus will be more on the product itself, especially how to contribute our R&D capabilities and technology capabilities to further foster an enhanced infrastructure of the commercial of Airstar Bank's products.

Daniel Yuan: Thank you.

Daniel Yuan: 接下来我来回答一下马来西亚的一些问题 首先是我们的用户画像 考虑到我们在马来西亚是一站式的马股和美股的交易平台这样的一个定位 目前马来西亚获得的客户大部分是具有一定投资经验 然后以年轻的华人男性为主 且收入是偏高的 另外就是马来西亚客户的换手率显著高于集团平均的换手率 按照我们二季度的APU和CAC的数据来测算 马来西亚当下的回本周期 要明显优于新加坡刚开始展业时的单位的经济模型 截止到Q2末 马来西亚的各科号的有资产客户的累计净入金 护军资产每个月都有所提升 马来西亚二季度末有资产客户的护军资产规模环比提升了45% 当前马来西亚的客户资产还在快速提升 我们也相信马来西亚的客户的经济模型会不断得到优化, 本期视频就先说到这里,感谢支持,欢迎订阅,转发,打赏支持明镜与点点栏目 还有一个问题是我们的Q3的一个增长趋势吧 那首先是二季度马来西亚的竞争有资产客户数量是缓比Q1时有所下降 那这主要原因是由于一季度的基数较高 然后存量用户转化成有资产客户的影响在一季度得到了集中释放 那剔除这个特殊情况 二季度马来西亚的整体货客趋势还是保持着无限 那依旧是二季度贡献最多的有资产客户的市场, 另外就是能够保持稳健的货客势头,主要得益于我们在新加坡的一个品牌影响力的外溢,以及我们在一战式的这个马虎的领先的产品力,那此外美股和马虎在二季度的行情也对货客进展是有有所加持。 那二季度我們補齊重要的產品能力 包括馬股大新 包括美股盯頭和美股的碎碎股 那另外就是三季度至今 我們也已經上線了貨幣基金 包括馬股的轉倉能力 那進一步完善我們的, 三级路的话 我们预计马来西亚的货客速度完毕 会有一个保持相对稳定的趋势 谢谢, So in terms of our client profiles, given our value proposition as a one-stop trading platform for Malaysian and U.S. stocks, so far the clients we have attracted have some level of investment experience, and most of them are young Asian males and have a higher income level than the country that we're, And also we've seen that the trading turnover of our Malaysian clients are meaningfully higher than the group average. So given the ARPU and CAC numbers we have seen in the second quarter, we think the payback period of Malaysia is better than when we first launched in Singapore.

Daniel Yuan: As at the end of the second quarter, across our different cohorts in Malaysia, net asset inflow, average client assets, all were trending up month over month. And average client assets was actually up 45% queue on queue. And as our average client assets in Malaysia continue to increase, we believe the unit economics will continue to improve.

Leaf Lee: The contribution actually comes from the kind of asset inflows in terms of the top of their accounts on cash or stock transfer, which accounts for roughly, you know, to high single digit contribution.

Daniel Yuan: So in terms of the second quarter client acquisition and the third quarter quarter-to-date trend, so the second quarter menu paying clients was down a bit sequentially mostly because of a high base in the first quarter. That's when we were able to convert a large number of our existing users into paying clients.

Leaf Lee: And the remaining 2 to 3% belongs to the market to market positive benefit.

Daniel Yuan: But apart from that, the second quarter growth was very steady, Q1Q.

Daniel Yuan: And we believe the strong momentum is partially due to the spillover of our grant equity accumulated in Singapore and also because they're leading product capabilities as a one-stop platform for Malaysian US stocks.

Daniel Yuan: And also the strong market sentiment in the second quarter also helped with client acquisition.

Leaf Lee: Your first question is about the future. I will ask my colleague to answer it later. [inaudible] the the the the[inaudible] of the top of the top So, in terms of the second quarter plan I was issued in the third quarter according to day trend. So, the second quarter menu plan was down a bit sequentially, mostly because of a high base in the first quarter. That's when we were able to convert a large number of our existing users into paying clients.

Daniel Yuan: In the second quarter, we launched Malaysian stock IPO subscription and also automatic investment schemes for US stocks and fractional shares for US stocks.

Daniel Yuan: And for the third quarter quarter-to-date, we launched money market funds and also stock transfer Malaysian stocks.

Daniel Yuan: And for the third quarter, we expect a steady quarter-to-quarter new paying clients growth in Malaysia.

Daniel Yuan: Thank you.

Daniel Yuan: Thank you.

Operator: We will now take our next question.

Operator: Please stand by.

Operator: And the next question comes from the line of Hu Shen from CLSA.

Operator: Please go ahead, your line is now open.

Hu Shen: 管理层给我这个提问的机会 我想问一下NVIDIA在二季度美股 成交量里面的占比 然后这一项因素对我们的佣金率 能不能拆除单独的影响 还有能不能拆除一个交易 mecap对佣金率的影响 就是想找一个现在比较好的指标 可以有效的跟踪我们美股 呃交易佣金率的变化 然后还有两个小问题 一个是呃销售国债 债低和货低的代销费率大概是多少 呃以及管理层什么时候会考虑 分红计划吗 呃我简单翻译一下 what is the share of trading and NVIDIA in trading a total US trading uh volume how did this single factor influence the commission rate in second quarter how big was the uh influence from mid cap stock trading what is the good indicator to track the change in uh US stock trading commission rate change and what is the fee rate in the distribution of funds funds and money market funds uh and what could be a good timing for considering uh issuing dividends thanks, 好的,我來回答這兩個問題 首先我個人並不鼓勵大家去追蹤某一個股票來去做這樣的預見預測 因為會有非常多的其他的一些因素可能會影響到這個預測的一個準確性 那本身這個也不是我們去做這個商業實質的一個最重要的一個目的 但從我們二期度能夠看到的英偉達的股票交易 確實對於我們整體的客戶的美股的一個交易裡面佔的比例相對是比較大的 大致會在一個20%到30%左右的這樣的一個區間在這個裡面 那有關Mistalk的這個統計我們實際是沒有做過的 但我相信這個佔比不會特別大 那有關您的這個第二個問題 目前公司還沒有一個這個分紅的一個計劃的一個考慮 更多的我想我們感覺就是說我們的一些資金 可以deploy在一些對於投資者投資回報率更高的一些領域 無論是我們的一些現有的一些業務 包括我們進入的這些新的市場 未來的一個發展的一個潛力 我覺得還是非常非常大的 那有關基金或者說國債這一些我們代銷的一些產品 因為這個費率可能涉及到一些商業保密的一些原因在這個裡面 那整體我能講的是這方面的一些費率的一些分配 可能跟市場的行業的一個行規的一個情況沒有特別大的一個差異, In terms of first questions, Navida roughly accounts for 20% to 30% of our clients' U.S. stock trading volumes in the second quarters.

Daniel Yuan: And for your second question, so far we do not have any concrete dividend policy.

Daniel Yuan: The key reason is we think still there are huge growth potential areas which we can further deploy our capitals.

Daniel Yuan: And we are very confident these investments will generate more high return, which is higher than our cost of back-end.

Daniel Yuan: And in terms of the, you know, economics of these, you know, fund distribution or treasury trading, etc, which I think, to some extent related to some confidentiality, you know, commercial arrangement.

Daniel Yuan: But the only thing I can, but the thing I can share is arrangement is very typical, similar to the industry, you know, distribution model.

Daniel Yuan: Thank you.

Daniel Yuan: 非常感謝, Thank you, Due to time constraints, I would now hand back to Daniel Yuan for any closing remarks.

Daniel Yuan: Please go ahead.

Daniel Yuan: That concludes our call today.

Daniel Yuan: On behalf of the Futu management team, I would like to thank you for joining us today.

Daniel Yuan: If you have any further questions, please do not hesitate to contact me or any of our adjustment relations.

Leaf Lee: But apart from that, the second quarter growth was very steady, Q and Q. And we believe the strong momentum is partially due to the spillover of our brand equity accumulated in Singapore and also because there are leading product capabilities as a one-stop platform for Malaysian US stocks. And also the strong market sentiment in the second quarter also helps with client acquisition. And the second quarter we launched Malaysian stock IPO subscription and also automatic investment schemes for US stocks and for the third quarter quarter to date we launched money market funds and also stock transfer of Malaysian stocks. And the third quarter we expect a steady quarter of a quarter of your paying clients growth in Malaysia.

Leaf Lee: And Hong Kong and Singapore both these are two key markets in terms of the contribution of new asset inflows, which roughly accounts for 80% of our total supply.

Leaf Lee: Thank you.

Leaf Lee: Thank you very much.

Operator: We will now take our next question. Please stand by.

Leaf Lee: In the end, we have already received 80% of the amount of the Japanese contribution.

Leaf Lee: So, we are still in a very good growth period.

Hushan: And the next question comes from the line of hush and from CLSA. Please go ahead. The line is open. [inaudible] The line is open. The line is open.

Leaf Lee: In terms of first questions, Navi, the roughly accounts for our 20 to 30% of our clients US operating volumes in the second quarters. And for your second questions, so far we do not have any concrete dividend policy. The key reason is we think still there will be a huge growth potential areas which we can further deploy our capitals. And we are very confident these investments will generate more high return which is higher than our course of the capital.

Leaf Lee: Before, we gave a whole year of the contribution, which is 150,000 contribution in the end of the year. We are still very confident that this contribution can be achieved.

Leaf Lee: [inaudible] and on and on and on and on of Qiya Tuzhou.

Leaf Lee: So overall, in the second quarter, we saw very robust net new paint clients in Japan actually recorded a very decent quarter of a quarter growth.

Leaf Lee: And in terms of the absolute number of paint clients contributed, so Japan, our Malaysia are in the first year.

Leaf Lee: And in terms of the economics of these fund distribution, our trading, etc., which I think to some extent related to some confidentiality commercial arrangements. But the only thing I can but the thing I can share is arrangement is very typical similar to the industry distribution model.

Leaf Lee: So we were very happy with what we saw in Japan in the second quarter. And at the quarter end, we had close to 800,000 users, which we think is also very healthy growth. And previously, we gave the guidance of having one to 1.5 million users in Japan by year end. And we're still very confident about that guidance.

Leaf Lee: Thank you.

Leaf Lee: So in terms of driver for new paint client growth, two things.

Leaf Lee: First of all, it just continues roll out a few products.

Daniel Yuan: Due to time constraints, I would now hand back to Daniel Huang for any closing remarks. Please go ahead.

Leaf Lee: So in comparison to some of the mainstream players in Japan, we still lack a couple of very key financial products. And as Lee mentioned in opening remarks, we have a plan to offer those products in the next couple of months.

Leaf Lee: And secondly, brand buildings also important, as we've realized in a lot of investors are aware right now, Japan users usually take a bit more time to trust the brand, especially a brand from overseas.

Daniel Yuan: That concludes our call today. On behalf of the FUSU 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 for any of our observations.

Leaf Lee: So that's why we'll continue to invest in our brand.

Operator: Thank you and goodbye.

Leaf Lee: And that's also why we did a power lounge and had a brand ambassador in the second quarter. These all contributed to a higher brand equity.

Operator: Ladies and gentlemen, this concludes today's conference call.

Leaf Lee: And we'll continue to invest in brand building.

Operator: Thank you for participating.

Leaf Lee: And in terms of average client assets, right now is a couple thousand US dollars.

Leaf Lee: And mostly clients still allocated into US stocks.

Leaf Lee: Although the percentage of assets in Japan stocks and the percentage trading volume from Japan stocks happened increasing. And we believe that as we continue to enhance our Japan stock product offering, these percentage contributions will continue to go up closer to the market level.

Leaf Lee: Thank you.

Operator: We will now take our next question.

Operator: Please stand by.

You Fan: And the next question comes from the line of you fan from CICC.

You Fan: Please go ahead.

You Fan: I've got to quadruple the first quadruple with our plans for new product offerings.

You Fan: I should have in the market live Japan and the Malaysia.

You Fan: And the second question with our progress of the Seattle Purchase Program.

You Fan: So, in terms of the product pipeline, for Japan, as Lee mentioned earlier, a couple of very important financial products, whereas, and also, what we intend to roll out in the couple of months, include, number one, a savings account, number two, mutual funds, and thirdly, US margin financing.

You Fan: And from Malaysia, I think we kept a very nice pace of new product rollout.

You Fan: And in the third quarter of quarter to date, we've actually rolled out Malaysian stock ideal subscription services, and also the cash cost product, which is the money market product.

You Fan: And from our experience, when the IPO market is very hot, usually IPO subscription service can be a good contributor of new client growth, and during the hybrid environment, money market products can help increase client assets.

You Fan: And in terms of future product pipeline in Malaysia, we plan to roll out this quarter, the stock transfer from Malaysian stock, so that we can attract existing clients and other brokers in Malaysia.

You Fan: Thank you.

You Fan: Okay, I'm very grateful.

You Fan: Thank you.

Operator: We will now take our next question.

Operator: Please stand by.

Zoe Jones: And the next question comes from the line of Zoe Jones from Jeffries.

Zoe Jones: Please go ahead.

Zoe Jones: Your line is not open.

Zoe Jones: Thank you.

Zoe Jones: Thanks for the interview to wondering what's the reason behind and how should we think about the trend going forward.

Zoe Jones: Thank you.

Arthur Chen: In terms of the interest expenses, increasing the second quarter, which I think some really associated with our clients, you know, margin financing and the stock borrowing.

Arthur Chen: In particular, in terms of stock borrowing, the pricing, the implied interest rate is more rely on the market driven demand and supply situation, which is very hard to give a precise estimation and the very difficult to project.

Arthur Chen: And if, just assume the status as coal, if our penetration rate above retail price to continue income in the stock borrowing universe, I think the expenses associated with such activities revenue on the top line will both further increase.

Arthur Chen: Thank you.

Arthur Chen: So for cryptocurrency trading, since we now only offer the trading services, the business models very straightforward, just we charge a commission.

Arthur Chen: And when we design our pricing scheme, we want to balance our market competitiveness and monetization potential.

Arthur Chen: So right now in Hong Kong and we both work with an upstream provider to offer cryptocurrency trading. And under our current pricing model, taking into consideration the upstream cost, we still enjoy pretty good gross profit margin. So the net take rate of cryptocurrency trading is higher than the net take rate for Hong Kong and US stock trading.

Arthur Chen: Thank you.

Operator: We will now take our next question.

Operator: Please stand by.

MRU: And the next question comes from the line of MRU from Bank of America Securities.

MRU: Please go ahead.

MRU: Your line is not open.

MRU: I have two questions.

MRU: The first question is related to the new cryptocurrency trading, which is that we have risen to 50,000.

MRU: So the next question comes from the financial level, or 10,000, 800,000 users.

MRU: And the fourth question comes from the financial level, which will be a little bit slow.

MRU: Then the third question comes from the cryptocurrency trading, which is still quite strong.

MRU: Let's talk about the main thing, which is that the market is pushing the third level of the cryptocurrency trading, and we think the next half a year the cryptocurrency trading is going to be coming to the market.

MRU: This is the first question.

MRU: And the second question is that we see that the recent relationship with the energy of the blockchain is also increasing a lot, including the value of the blockchain.

MRU: And recently, this A.I, stock trading is also relatively large.

MRU: Then we are in such a market environment, and we see that there is a lot of trading in the market.

MRU: For example, more things are going to be added, or there is a lot of trading in the stock market.

MRU: For example, there is a lot of investment in the stock market.

MRU: A.I, stocks can now be increased a little bit, etc.

MRU: And this is what we have to look at.

MRU: This is what we have to look at.

MRU: The same is related to the blockchain.

MRU: The blockchain will be the most powerful trading, especially the current funds of the blockchain.

MRU: I know that this year may still be a little bit limited, because it has already reached 9 months.

MRU: But if it is tomorrow, for example, there will be 25 B.P, stocks, which will receive a lot of profit in the next year.

MRU: I have two questions.

MRU: The first question is about the client acquisition.

MRU: You just raised your four-year new-paying client target to $550,000, which means you need to acquire around $108,000 new-paying client per quarter, and usually your client acquisition is reasonably low in both quarter.

MRU: That implies your first quarter client acquisition is still personal.

MRU: So could you tell us which market are driving your client growth in third quarter?

MRU: And the second question is about is that given the rising expectations of red cards and then the recent wild volatility in the AI stocks.

MRU: So do you see the changes in client as the allocation, say between the stocks, the bonds and the options, etc.

MRU: And the intent of the allocation within the stocks, say from the AI growth stocks to value stocks, and how will these changing behaviors impact your take rate?

MRU: And correspondingly, given the rising expectation of red cards, how will it impact your interest income?

MRU: I know it could probably have limited impact on your interest income this year.

MRU: But what would be, say, 25-year red cards impact on your interest income next year?

MRU: Thank you.

MRU: Okay, two questions.

MRU: I will answer the first question.

MRU: The first question is about the purchase order.

MRU: Like just now, when opening the market, we have talked about the total growth of a target of 40,000,000 to 55,000.

MRU: In the end, in the third quarter of the purchase order, I think the total of 55,000, I think is still very confident that we can[inaudible] In terms of the guidance for new client acquisition, as Li mentioned in the opening remarks, we have already revised our targets to 550 K new paint lines for the whole year.

MRU: And in the second quarter, major contributions for the new clients acquired, example one is the Hong Kong and Singapore, which contribute over one third of our new paint lines applied in the second quarter.

MRU: And combined Japan and Malaysia, which accounts for roughly 40% for the whole pie.

MRU: And based on the quarter today situation, we are still very confident we can achieve the guidance we mentioned before, despite there can be some uncertainties coming arising in the US election in the fourth quarter.

MRU: And we do expect contribution breakdown from these markets should be similar to what we have witnessed in the first half of this year.

MRU: And of course, for the second question, of course, we got some negative implications from the rate cut.

MRU: We have some preliminary sensitivity, you know, estimations, every 25 basis points, rate cut, our pre-tax profit operating profit will be impact by 5 million to 8 million Hong Kong dollars.

MRU: If we did not account in a positive potential fault of implications from the market trading volume increase, because of the rate height, and also the benefits from the new client acquisitions, you know, for these implications.

MRU: And so far, we have not witnessed a very significant client as the allocation changes arising from your observations.

MRU: But in the wealth management universe, we do witness there will be more as the allocations by our clients on the fixed income quarter, you know, including the trade rates, and also fix sure the recent fixed income quarter, etc.

MRU: Thank you.

MRU: Thank you, very helpful.

MRU: Thank you.

Operator: We will now take our next question.

Operator: Please stand by.

Charles Jo: And the next question comes from the line of Charles Jo from UBS.

Charles Jo: Please go ahead.

Charles Jo: Your line is now open.

Charles Jo: Hello, everyone.

Charles Jo: Good evening, everyone.

Charles Jo: First of all, I wish the company to have a relatively strong experience.

Charles Jo: I don't think it's just that the profit and profit of the company is very high.

Charles Jo: I have a question about the cost of goods.

Charles Jo: We注意 that the cost of goods is very high.

Charles Jo: The cost of goods is also very high.

Charles Jo: If you want to ask about the future, the company will have a relatively high cost of goods in 2024.

Charles Jo: According to the acquisition cost of a guidance, if we don't believe it, we can see that there is still a relatively high upside.

Charles Jo: In the end of the 30-year contract, what is our plan in the core market now?

Charles Jo: This is the first question.

Charles Jo: The second question is to ask about the interest income in this area.

Charles Jo: We understand that there are three parts.

Charles Jo: Including the Idol Cash interest income, the two-year-old income, the IPO financing income, can you give us two or three of these three parts?

Charles Jo: So first of all, congratulations to the management team.

Charles Jo: I think it's a very strong set of results and also about the consensus.

Charles Jo: So my question is regarding to the client acquisition cost because I think this is very well managed.

Charles Jo: So do we have any so do we have any updates for the 2024 for the four year guidance and if you don't have any new guidance or any updates we believe they're you know there's also a decent you know huge upside from here as well.

Charles Jo: So could you please also share your marketing and also client acquisition strategy in several of the key markets in the second half.

Charles Jo: My second question is related to the interest income.

Charles Jo: Our understanding there are three major components, idle cash interest income, modern financing stock lending interest income as well as the IPO financing income.

Charles Jo: So could you please just help us to split the interest income of you know from these three components for the second quarter.

Charles Jo: Thank you.

Charles Jo: Okay, thank you.

Arthur Chen: So So For your two questions, number one is about the CAC guidance and any updates.

Arthur Chen: You know, in the second quarter our CAC is around $2,200, which have 30% QLQ increase versus Q1, which has a very relatively very low base because of the significant contribution of new clients acquired in Malaysia.

Arthur Chen: We think the situation will just be normalized in the second quarter, and for the third quarter, for today I think in terms of CAC, we still maintain it's in a relatively low level, which is below our guidance range $2,500 to $3,000 for the whole year.

Arthur Chen: On relative speaking, I will become more constructive in terms of the CAC guidance based on the current runway.

Arthur Chen: I think it will be very likely located in the low end of our range or even lower than this range for the whole year.

Arthur Chen: Then the breakdowns of the interest income because of the market trend is in Hong Kong and the US.

Arthur Chen: The interest income derived from the IPO financing, both in Hong Kong and in the US is not material.

Arthur Chen: And clients idle cash and also the margin financing almost contribute equally in terms of the interest income breakdown.

Arthur Chen: Despite my feeling, my feeling is the interest income from idle cash will slightly higher than the second part.

Arthur Chen: Thank you very much.

Arthur Chen: Okay, that's very helpful.

Arthur Chen: Thank you.

Operator: We will now take our next question.

Operator: Please stand by.

Peter Zhang: And the next question comes from the line of Peter Zhang from JP Morgan.

Peter Zhang: Please go ahead.

Peter Zhang: Your line is open.

Peter Zhang: Let me do the translation.

Peter Zhang: Many thanks for management giving me the big opportunity to ask questions.

Peter Zhang: It's a Peter from JP Morgan.

Peter Zhang: I have two questions.

Peter Zhang: My first question is on Malaysia basis, which management could give us more details on the progress of the Malaysia basis.

Peter Zhang: For example, the client asset inflow, average client asset, client profile, and trading conglomerate and what's the outlook of the Malaysia basis and my second question is about the air stop bank.

Peter Zhang: I understand that food to invest 40% shares into the air stop bank in June.

Peter Zhang: We wish to understand what the rationale behind this investment and going forward was food strategy to cooperate with this virtual bank in Hong Kong.

Peter Zhang: Thank you.

Operator: Thank you, Peter.

Operator: There are two questions.

Operator: I will answer your second question.

Operator: Your first question is about the future.

Operator: I will ask my colleague to answer it later.

Operator: [inaudible] the the the the[inaudible] of the top of the top So, in terms of the second quarter plan I was issued in the third quarter according to day trend.

Operator: So, the second quarter menu plan was down a bit sequentially, mostly because of a high base in the first quarter. That's when we were able to convert a large number of our existing users into paying clients.

Operator: But apart from that, the second quarter growth was very steady, Q and Q.

Operator: And we believe the strong momentum is partially due to the spillover of our brand equity accumulated in Singapore and also because there are leading product capabilities as a one-stop platform for Malaysian US stocks.

Operator: And also the strong market sentiment in the second quarter also helps with client acquisition.

Operator: And the second quarter we launched Malaysian stock IPO subscription and also automatic investment schemes for US stocks and for the third quarter quarter to date we launched money market funds and also stock transfer of Malaysian stocks.

Operator: And the third quarter we expect a steady quarter of a quarter of your paying clients growth in Malaysia.

Operator: Thank you.

Operator: We will now take our next question.

Operator: Please stand by.

Hushan: And the next question comes from the line of hush and from CLSA.

Hushan: Please go ahead.

Hushan: The line is open.

Hushan: [inaudible] The line is open.

Hushan: The line is open.

Hushan: In terms of first questions, Navi, the roughly accounts for our 20 to 30% of our clients US operating volumes in the second quarters.

Hushan: And for your second questions, so far we do not have any concrete dividend policy.

Hushan: The key reason is we think still there will be a huge growth potential areas which we can further deploy our capitals.

Hushan: And we are very confident these investments will generate more high return which is higher than our course of the capital.

Hushan: And in terms of the economics of these fund distribution, our trading, etc., which I think to some extent related to some confidentiality commercial arrangements.

Hushan: But the only thing I can but the thing I can share is arrangement is very typical similar to the industry distribution model.

Hushan: Thank you.

Daniel Yuan: Due to time constraints, I would now hand back to Daniel Huang for any closing remarks.

Daniel Yuan: Please go ahead.

Daniel Yuan: That concludes our call today.

Daniel Yuan: On behalf of the FUSU Management team, I would like to thank you for joining us today.

Daniel Yuan: If you have any further questions, please do not hesitate to contact me for any of our observations.

Daniel Yuan: Thank you and goodbye.

Operator: Ladies and gentlemen, this concludes today's conference call.

Thank you for participating.