Q3 2024 UP Fintech Holding Ltd Earnings Call
Unknown Executive: Ladies and gentlemen, thank you for standing by and welcome to the UP Fintech Holding Ltd 3rd Quarter 2024 Earnings Conference Call. At this time, all participants are in a listen-only mode. There will be a presentation followed by a question and answer session.
Okay.
Speaker Change: Ladies and gentlemen, thank you for standing by and welcome to the up Fintech holding limited third quarter 'twenty 'twenty four earnings conference call.
Speaker Change: At this time all participants are in a listen only mode. There will be a presentation followed by a question and answer session. I must advise you that this conference is being recorded today November the 12th 2024 hours.
Unknown Executive: I must advise you that this conference is being recorded today, November the 12th, 2024.
Aron Lee: I would now like to hand the conference over to your first speaker today, Mr Aron Lee, the Head of Investor Relations. Thank you. Please go ahead.
Speaker Change: Now like to hand, the conference over to your first speaker today, Mr. Aaron Lee the head of Investor Relations. Thank you. Please go ahead.
Unknown Executive: Thank you, Mayor.
Aaron Lee: Thank you Matt.
Aron Lee: Hello everyone, and thank you for joining us for the call today. UP Fintech Holding Ltd's 3rd Quarter 2024 earnings release was distributed earlier today and is available on our IR website at ir.itigerup.com, as well as Globe Newsware Services.
Speaker Change: Hello, everyone and thank you for joining us for the call today are Peter.
Peter: Claudia Limited's third quarter 2020 full earnings release, what you'll get earlier today and it's available on our IR website at IR Tiger up they'll call us that much global newswire services.
Aron Lee: On the call today from UP Fintech are Mr. Wu Tianhua, Chairman and Chief Executive Officer, Mr. Zhang Zeng, Chief Financial Officer, Mr. Huang Lei, CEO of U.S. Tegra Securities, and Mr. Kenny Zhao, our Financial Controller. Mr. Wu will give an overview of our business operations and discuss corporate highlights. Mr. Zeng will then discuss our financial results. They will both be available to answer your questions during the Q&A session that follows the remarks.
Speaker Change: On the call today from up Fintech at least totaled 10 o'clock, Chairman and Chief Executive Officer.
Speaker Change: Mr. Johnson, Chief Financial Officer, please stop on that.
Speaker Change: You have hydro securities and Mr. Kenny job, our financial controller.
Speaker Change: We certainly will give an overview of our business operations and discuss corporate highlights.
Speaker Change: Tom will then discuss our financial results then they will both be available to answer your questions. During the Q&A session that follows their remarks.
Unknown Executive: Now let me cover the safe harbor. The statements we're about to make content forward-looking statements within the meaning of the U.S. Private Security and Education Reform Act of 1995, a number of factors could cause actual results to differ materially from those contained in any forward-looking statement. For more information about factors that could cause actual results to materially differ from those in the forward working statements, please refer to our Form 6K furnished today, November 12, 2024, and our annual report on Form 20F filed on April 22, 2024. We undertake no obligation to update any forward working statement, except as required under applicable law.
Speaker Change: Now, let me cover the Safe Harbor.
Myself up to may contain forward looking statements within the meaning of the U S. Private Securities Litigation Reform Act of 90 95.
Speaker Change: A number of factors could cause actual results to differ materially from those kind of any forward looking statement.
Speaker Change: For more information about factors that could cause actual results to materially differ from those in the forward looking statement. Please report our form 6K furnished today November 2024.
Speaker Change: Our report on form 20-F filed on April 22nd 2024.
Speaker Change: Take no obligation to update any forward looking statement, except as required under applicable law.
Aron Lee: It is my pleasure to now introduce our Chairman and Chief Executive Officer, Mr. Wu. Mr. Wu will make remarks in Chinese, which will be followed by English translation.
Speaker Change: It is my pleasure to now introduce our chairman and Chief Executive Officer.
Speaker Change: Because we will make remarks in Chinese which will be followed by an English translation.
Tianhua Wu: Mr. Wu, please go ahead with your remarks.
Please go ahead with your remarks.
Tianhua Wu: Hello, everyone. Thank you for participating in the 3rd Report Conference of Tiger International in 2024. Hello everyone, thank you for attending Tiger Broker's 3rd Quarter 2024 Earnings Conference Call. In the third quarter, the company's growth in quantity and the volume of client assets, as well as the enrichment of products and the improvement of localization functions, plus the continuous performance of U.S. stocks, brought an overall increase in returns, making the company's third quarter stock, equity, and futures trading volume have increased significantly compared to the previous year. The total trading volume is $1,630 billion, and the stock trading volume is $414 billion.
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Tianhua Wu: The return has increased by 54% and 24% respectively. Therefore, the total revenue has reached $4,121 million. The return has increased by 21% and 78% respectively, which is the highest record in the past three years. The improvement of the market volume also brought an increase in face-to-face business. At the end of the third quarter, the company's total sales amounted to US$4.5 billion, and the return on investment increased by 29% and tripled. The company's interest revenue still increased by 9% and reached US$47.96 million. In the third quarter, the company's total revenue reached US$1 billion, and the return on investment increased by 16% and tripled to 44%, setting a new record.
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Tianhua Wu: At the end of the third quarter, the company's GAAP and Lung-AMP profit margins were US$17.8 million and US$2.1 million respectively, exceeding the profit margin of the first half of this year, and increased by 34% and 26% respectively. At the same time, we are also very happy to see that the company's profit margins increased by 26% and the company's revenue efficiency gradually improved. In the third quarter, driven by expanded client base, comprehensive product offerings, and active market backdrop in the US, total trading volume reached US$163 billion. Cash equity trading volume was US$41.4 billion, reflecting a quarter-over-quarter increase of 54% and 24% respectively.
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Speaker Change: In the third quarter, driven by expanded translate comprehensive product offering and actually if market backdrop in the U S.
Speaker Change: Total trading volume reached 163 million U S. Dollar cash equity trading volume was $41 4 billion U S dollars, reflecting a quarter over quarter increase.
Speaker Change: 54% and 24% respectively.
Tianhua Wu: Commission income reached US$41.2 million, increased 21% QoQ and 78% year-over-year, the highest in the past three years. The uptick in market activity also contributed to a rise in market financing and security spending. which increased 29% quarter-over-quarter and doubled year-over-year, reaching 4.5 billion USD at the end of the third quarter. Despite the ongoing rate cut cycle, interest income increased 9% QOQ to $48 million. Our total revenue for the third quarter was all-time high of US$401 million, a quarter-over-quarter increase of 16% and a year-over-year increase of 44%. Gap and non-gap net income attributable to UP Fintech was $13.8 million USD and $20.1 million USD this quarter.
Speaker Change: Net income reached $41 2 million U S dollar increased demand for credit quarter over quarter, and a 78% year over year the highest in the past three years.
Uptick in market activity also contributed to a rise in marketing financing and securities lending.
Speaker Change: Yes.
Speaker Change: <unk> increased 9% quarter over quarter and doubled year over year, reaching $4 5 billion U S. Dollar at the end of third quarter.
Speaker Change: Despite the ongoing rate cut cycle interest income can create nitrosamine quarter over quarter to 48 million U S. Dollar.
Speaker Change: Our total revenue for the third quarter with all time high bandwidth on 1 million U S dollar a.
Quarter over quarter increase of 16% on a year over year increase of 44%.
Speaker Change: GAAP and non-GAAP net income attributable to our pretax was 38 million U S dollar and 21 million U S. Dollar this quarter both exceeded the total amount for the first half of this year and increased 44% and 26% year over year, respectively.
Tianhua Wu: Both exceeded the total amount for the first half of this year and increased 34% and 26% year-over-year risk-benefit. Also, we are glad to see our operating profit margin increased to 26% in the third quarter. Indicating ongoing improvement in the operating leverage of our business model. Three records have achieved an increase of 50,500 users. The return has increased by 3%, and the share has increased by 105%. Singapore and Southeast Asia are the main contributors. Since the end of the third quarter, the total number of new users has reached 1.03 million. This is a 19% increase from the same period last year.
Speaker Change: Also we have good accuracy, our operating profit margin increased 26% in the third quarter, indicating.
Speaker Change: Indicating ongoing improvement in the operating leverage of our business model.
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Tianhua Wu: Three quarters ago, the total number of new users was 12.8 million. So far, we have achieved a total of 150,000 new users. In terms of client total assets, this year's third quarter's retail user asset net inflow was around $11 billion. Investors' confidence has increased, plus the value of supply and demand, making the client total assets of this quarter reach $408 billion, creating a new record high, a 7% increase in return, and a 116% increase in share price. We are very happy to see that the client's company's client assets have increased in return for eight consecutive quarters, creating a new record high in four consecutive quarters.
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Tianhua Wu: What is also worth noting is that in addition to the steady rise in the Singapore market's client assets, the client assets of Hong Kong, Australia, and the United States, etc., have increased by more than 25% in return. In the third quarter, we added 50,500 new expanded accounts, representing a 3% sequential increase and a 105% increase year-over-year. Singapore and Southeast Asia region were the primary contributors. The number of funded accounts at the end of the third quarter reached 1,300,000, increased 19% year-over-year. In the first three quarters of this year, we added a total of 128,000 newly funded accounts.
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Speaker Change: In the third quarter, we added 50500 newly funded accounts, representing a 3% sequential increase and a bandwidth at a 5% increase year over year.
Speaker Change: Singapore, and South East Asia region were the primary contributors.
And then there are plenty of that kind of at the end of the third quarter reached 1 million 300 increased 19% year over year in.
In the first three quarters of this year.
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Speaker Change: 98000 newly funded accounts.
Tianhua Wu: By now, we've already achieved our annual guidance of acquiring 150,000 newly funded accounts. In terms of total client assets, retail clients' net asset inflow remained strong at $1 billion USD for this quarter. Total client assets increased by 7% QOQ and vanished at 16% year-over-year to $40.8 billion USD, setting another historic high. We are glad to see that our client assets have now risen for eight consecutive quarters and kept setting new records for the past four consecutive quarters. Notably, in addition to steady growth in plant assets from the Singapore market, we've seen over 25% quarter-over-quarter increase in plant assets from new markets like Hong Kong, Australia, New Zealand and the U.S.
Speaker Change: By now we have already achieved our annual guidance of acquiring 150000 newly funded accounts.
In terms of total asset.
Speaker Change: How can I assume that asset inflow remains strong at 1 billion U S dollar for this quarter.
Speaker Change: Okay.
Speaker Change: <unk> by 7% quarter over quarter, and our bandwidth and a 16% year over year to 40.8 billion U S. Dollar.
Speaker Change: Secondly on another historic high.
Speaker Change: But I have to say that our client assets have now recently for eight consecutive quarters.
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Tianhua Wu: In the third quarter, the company will continue to launch and upgrade product features to optimize the user's user experience. First of all, in September, we launched Hong Kong Stock and Shares and Hong Kong Stock and Shares, these two basic features. And in early October, we cooperated with Hong Kong Exchange to jointly expand Hong Kong Stock and Shares from monthly shares to weekly shares. Users can connect with the stock in daily consumption, wealth management, and stock investment, and carry out capital management activities more conveniently and efficiently. In addition, we also upgraded the page trading in October.
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Tianhua Wu: Sponsored ADR Class A In the third quarter, we continue to upgrade our product offerings on our platform to enhance user experience. In September, we officially launched Hong Kong stock options and Hong Kong short-selling features on our platform. In early November, we collaborated with Hong Kong Exchange to upgrade the Hong Kong Stock Options feature by offering weekly contracts in addition to monthly contracts to better meet investors' trading and risk management needs. Allowing them to trade based on short-term events. Additionally, TigerVault debit card is gaining more popularity since its launch in Singapore. So we upgraded the product to include Plus Zero automatic subscription and redemption feature for TigerVault, our wealth management product.
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Speaker Change: In the third quarter, we continued to upgrade our product offerings our platform can we enhance user experience.
Speaker Change: September we officially launched Hong Kong office in Hong Kong SAR features our pretzel.
Speaker Change: And in early November we collaborated with Hong Kong exchange to upgrade the Hong Kong stock option feature by offering weekly contract. In addition to a monthly contract to better meet investors trading on our rigs nitrogen needs.
Speaker Change: Allowing them to trade based on short term events.
Speaker Change: Additionally, Tiger both debit card guests gaining more popularity incentive locking in Singapore. So upgraded at the product to include people lost their automatic subscription and redemption feature for Tegra boat, our wealth management product.
Tianhua Wu: The integration allows users to manage their investment portfolios more conveniently, seamlessly bridging daily spending, wealth management, and stock investment. Moreover, in October, we enhanced our overnight trading capabilities. Unfilled night session orders will be automatically passed on to the pre-market and regular trading sessions to ensure user experience and execution quality.
Speaker Change: The integration allows users to manage their investment portfolio with more conveniently seamlessly breaching daily spending well nitrogen and stock investment.
Speaker Change: Moreover, in October we had our overnight trading capabilities, a few nice sectional odor will be automatically passed onto the pre market and regular trading session. We can show user experience and execution quality.
Tianhua Wu: 老虎国际的2B业务保持不错的发展势头,投行业务策,三季度我们成销了13个港美股IPO项目,包括新晋威武和神通科技等,其中作为智通科技和新晋威武美股IPO的独家主持销商并且成功上市 In the third quarter of this year, 18 ESOL customers were added to ESOL's business. The total number of customers has reached 597, which is 18% higher than the previous year. R2B business continues to perform well. In investment banking, we annulled 13 US and Hong Kong ITOs in the third quarter, including Nip Group and VoiceComp Group. And we serve as the exclusive lead bank for Nip Group and Xcharge US ITOs.
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Tianhua Wu: In our ESOP business, we added 18 new clients in the third quarter, bringing the total number of ESOP clients served to 597 by the end of the third quarter of 2024, increased by 18% year-over-year.
Speaker Change: Easter business, whereas 18, new clients in the third quarter, bringing the total number of youth of class three to 597 by the end of the third quarter of 2024 increased by 18% year over year.
Unknown Executive: CFO Joe will brief you on the financial details. Now I would like to invite our CFO, John, to go over our financial...
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Speaker Change: Now I would like to invite our CFO job took over our financials.
Speaker Change: Yeah.
Great. Thanks.
Zhang Zeng: Alright, thanks Tianhua and Aron. Let me go through our financial performance for the third quarter. All numbers are in US dollars. Thanks to our expanded user base and robust marketing activities. We saw healthy growth in all top 9 items this quarter. Commission income were 41.2 million, increased 21% quarter over quarter, and 78% year over year. Interest-related income were $48 million this quarter, increased 9% quarter-over-quarter and 25% year-over-year. As a result, total revenue increased 16% quarter over quarter and 44% year over year to reach an all-time high at $101 million. Cash equities take rate was 6.4 bps this quarter, slightly decreased from 6.7 bps of last quarter.
Speaker Change: It's nice to hear from Erinn, Let me go through our financial performance for the third quarter.
Speaker Change: All numbers are in U S dollar.
Speaker Change: Thanks to our expanding user base and a robust market activities.
Speaker Change: We saw healthy growth in our top line item this quarter.
Speaker Change: So you can kind of were $41 2 million.
Increased 21% quarter over quarter, and a 78% year over year.
Speaker Change: Interest related income were 48 million this quarter.
Speaker Change: Chris 9% corridor of the quarter and 25% year over year.
Speaker Change: As a result, total revenue increased 16% quarter over quarter, and 44% year over year to reach an all time high at 101 million U S. Dollar.
Speaker Change: Cash equities take rate was 6.4 bps. This quarter, it's 19 decreased from six seven last quarter.
Zhang Zeng: Within commission revenue, about 63% comes from cash equities, 30% from options, but the rest from futures and other products.
Speaker Change: We Didnt Commission revenue about 63% comes from cash equities, 30% from options, but the best from futures and the other products.
Zhang Zeng: Now on to cost. Interest expense was 15.7 million, increased 29% from the same quarter of last year, in line with the growth of margin and securities lending balance. Execution and clearing expense were 3.5 million, increased 48% from the same period of last year. Primary due to an increase in our trading volume and we keep improving our clearing efficiency. Cash equity clearing expense as a percentage of cash equity commissions is about 3.6% this quarter and remains one of the lowest in the industry. Employee compensation and benefits were $228.8 million, an increase of 11% year-over-year due to headcount increase to strengthen RCA growth and R&D.
Speaker Change: Now onto cost.
Speaker Change: Interest expense was 15 7 million increased 29% from the same quarter of last year and I believe the gross margin and securities lending balance.
Speaker Change: Execution and clearing expense were $3 5 million.
Speaker Change: Increased 48% from the same period last year.
Primarily due to an increase in our trading volume and we keep improving our clearing efficiency Kashi equity clearing expense as a percentage of cash equity commissions is about three 6% this quarter and remains one of the lowest in the industry.
Speaker Change: Employee compensation and benefits were $28 8 million.
Speaker Change: An increase of 11% year over year.
Speaker Change: Your head count increase to strengthen or see a growth in the R&D.
Zhang Zeng: Occupancy depreciation and amortization expense slightly decreased 3% to 2.2 million. Communication and market data expense were 9.7 million, an increase of 28% year over year due to the increase in user base and IT related services. Marketing expense increased 59% year over year to $8.2 million this quarter. which the market backdrop was supportive for more customer acquisition and branding campaigns while maintaining our right target. General and Administrative expenses were $6.9 million, an increase of 27% year-over-year due to more professional service fees and general expenses incurred alongside with our business expansion. Total operating costs were $59.3 million, an increase of 22% from the same quarter of last year.
Speaker Change: Occupancy depreciation and amortization expense decreased 3% to $2 2 million.
Speaker Change: Communication and market data expenses were $9 7 million, an increase of 28% year over year due to the increase in user base and related services.
Speaker Change: Marketing expense increased 59% year over year to $8 2 billion this quarter.
Speaker Change: With the market backdrop was supportive for more customer acquisition and branding campaigns, while maintaining alright pockets.
Speaker Change: General and administrative expenses were $6 9 million, an increase of 27% year over year due to more professional service fees and the general expense incurred alongside with our business expansion.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: Total operating costs were $59 3 million.
Speaker Change: Increase of 22% from the same quarter of last year.
Zhang Zeng: Our total, our bottom line increased quarter over quarter and year over year on a gap, on a long gap basis. GAAP net income was $17.8 million, increased 585% quarter over quarter, and 34% year over year. Well, long gap net income were $20.1 million, increased 287% quarter over quarter, and 26% year over year.
Speaker Change: Our top or bottom line increase quarter over quarter, and a year over year on a GAAP and non-GAAP basis GAAP.
Speaker Change: GAAP net income were 17, 8 million increase of 585% quarter over quarter and 34% year over year.
Speaker Change: Well locked out net income were $21 million increased to 287% quarter over quarter, and a 26% year over year.
Zhang Zeng: Now I have concluded our presentation.
Speaker Change: No I have concluded our presentation operator, please open the line for Q&A.
Unknown Executive: Operator, please open the night for q&a. Thank Thank you. To ask a question, you will need to press star 1 and 1 on your telephone and wait for your name to be announced.
Speaker Change: Thank you.
Speaker Change: Ask a question you will need to press star one and one on your telephone and wait for your name to be announced to withdraw. Your question. Please press star one and one again, please standby, while we compile the Q&A queue.
Unknown Executive: To withdraw your question, please press star 1 and 1 again. Please stand by while we compile the Q&A queue.
Cindy Wang: Our first question comes from the line of Cindy Wang from China Renaissance. Please go ahead, your line is open. Okay, thank you for the opportunity to ask me this question, and congratulations to Manager Chen for a brilliant performance in the 3rd quarter. I have two questions for Manager Chen.
Yeah.
Speaker Change: Our first question comes from the line of Cindy Wang from China Renaissance. Please go ahead. Your line is open.
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Cindy Wang: The first is, can you help us distinguish the new customers from all regions in the 3rd quarter? The second question is, I see that our commission revenue has increased significantly, but the blended take rate and cash equity take rate have decreased. Can you tell us the main reasons for this? Also, I see that INUIDA is making a guesswork here. Does this have a positive impact on our cash equity take rate? Can you tell us about the current trend of take rate in the 4th quarter? I will quickly translate my question. Thanks for taking my call, my questions, and I have two questions here.
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Speaker Change: Thanks for taking my call.
Speaker Change: I have two questions here first one is great.
Cindy Wang: First one is, please give us the breakdown of the regional mix of newly funded accounts. And the second question is, the commission income up quarter of quarter nicely in third quarter, the blended take rate and cash equity take rate both down sequentially. What is the reason behind it? Does NDDS stocks have a big impact to your take rate? And what is the Q4 trend? Thank you.
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Speaker Change: Thank you.
Tianhua Wu: I will answer the first question, and Judy will answer the second one. In the third quarter, about 60% of the new users are from Singapore and Southeast Asia. The market share from the Australian market and the Hong Kong market is about 15%. The market share from the US market is about 5%. Thank you. In the third quarter, about 60% of our newly funded users came from Singapore and Southeast Asia, about 15% each from Australia, New Zealand region and Hong Kong market. More than 5% were from the US market. Thank you.
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Speaker Change: In the third quarter about 60% of our newly funded user came from Singapore and Southeast Asia.
Speaker Change: About 15% each from Australia, and Youll see that accretion and Hong Kong market.
Speaker Change: 5% were from the U S market.
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Tianhua Wu: Okay, Cindy, let me answer your second question. Simply put, the decline of the take rate is mainly due to the increase in trading volume. First of all, the decline of the blended take rate is due to the increase in the number of futures transactions. Because the number of futures transactions is based on private capital to record the trading volume. So it will have a big impact on the blended take rate. This is also why our stock trading volume has increased by 24% compared to before. But the overall trading volume has increased by 54%. At the same time, the decline of the blended take rate is also affected by several other reasons.
Speaker Change: Oh, that's native Cindy will obviously, then either tier one keeper Joe agenda as soon as the takeaway that just might be able to start down that to us even in trading volume its industrial inkjet muscles in a blender mega blended take rate is <unk> made sure it's already down to Ginger Yeah sure Julien.
Speaker Change: The EBIT as you can treat involved.
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Tianhua Wu: One is that Nasdaq's overall rise in Q3 is a trend. So it leads to an increase in the average share price which leads to a certain volume increase. So the decline of the take rate. In addition, in addition to the last week of the third quarter, the performance of the medium-term stocks is relatively flat. Then the proportion of the overall trading volume has dropped to about 10%. Then the proportion of the Magnificent Seven in the United States has increased further. So it leads to an increase in the average trading volume. Although Hong Kong stocks have risen in the last few weeks of the third quarter, our trading volume has also increased.
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Tianhua Wu: But Hong Kong stocks are currently free of platform fees. So there is not much help for the take rate. It is more from the perspective of customer and user experience to consider the price of Hong Kong stocks.
Speaker Change: Eats take.
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Speaker Change: I called out to our accomplishments with you Jeff.
Tianhua Wu: 英伟达的拆股对我们的Tikray是有一些正面的影响,但不是很大,肯定不是一股拆十股以后对应十倍的这种帮助,主要的原因就是说英伟达是在六月上旬完成的拆股,那个时候英伟达的交易量已经大幅的高于四月和五月,所以说在二季度的时候,该支股票的平均成交价格已经在400美金以下,而不是1000美金左右的水平,然后三季度的平均交易价格在120美金左右。 所以说从价格来看,环比只有三倍多的影响。 Another reason is tax. Before INUIDA disbanded, because the stock price was high, many users would use tax to trade INUIDA. Our tax charge is 1% 1% of the trading volume. Therefore, to a certain extent, it would increase the take rate of the stock. After disbanding, the trading volume traded by tax has decreased.
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Tianhua Wu: The reason for this is that the price of Q3 and Q2 has doubled Even if the stock is demolished, it is still a high-priced stock If you look at the price of each stock, the take rate after demolishing the stock is only about 2% Our overall stock take rate is 6-7%, so it won't have a big impact Let me translate it for you. So first of all, the decline in Bloomdata is largely due to an increase in future trading volume. Since futures are counted based on nominal value instead of contract value, so the trading volume will amplify in the third quarter.
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Speaker Change: So first of all the declining blended take rate is largely due to an increase in futures trading volume.
Speaker Change: Since future content based on nominal value instead of contract value. So the trading volume will amplify this.
Tianhua Wu: That's why we saw a 24% increase in stock trading volume while total trading volume jumped to 54%. There are several reasons for the drop in cash equity take rate. Number one is that the Nasdaq has a general upward trend Q3, which pushed average stock price higher, so lower the take rate. And also, the second reason is the ADR, in the third quarter, accounted for only 10% of the trading volume, while the major US stock, especially MacGyver 7, increased a lot, which further raised the average trading price and lowered the take rate. And also, even though in Hong Kong, our trading volume has gone up a lot during the end of third quarter, but in Hong Kong, we offer zero commission, zero platform fee.
Speaker Change: In the third quarter, that's why we saw a 24% increase in stock trading volume, while total trading volume jumped 454%.
Speaker Change: There are several reasons for the dropping cash equity take rate number wise.
Speaker Change: The NASDAQ how about a general upward trend in Q3, which pushed average stock price higher so doors that take rate.
Speaker Change: And also the second reason is my.
Speaker Change: In the third.
Speaker Change: Third quarter Okay.
If only 10% of the trading volume, while the major U S stock, especially in Mexico from 17 increased a lot, which further raises the average trading price and the door to the take rate.
Speaker Change: And also.
Speaker Change: Even though Hong Kong. They are trading volume has gone up a lot during the third quarter by Hong Kong, We offer Zero Commission they were platform fee.
Tianhua Wu: So the Hong Kong trading volume increase didn't really help much with the help much on the take. In regards to NVIDIA's stock, it does help to take a little bit, but the impact isn't that huge. Several reasons. First of all, NVIDIA completed stock in early June, and the trading value for NVIDIA in June was much higher than in April and May. By second quarter, the average trading price was already below $400 on our platform, not the $1000 level. In Q3, the average price was about $120. In terms of price, the impact is only a bit over three times.
Speaker Change: So the Hong Kong trading volume increases didn't help.
Speaker Change: March was to help much on the take rate.
Speaker Change: In regards to our media stocks way.
Speaker Change: It does helps particularly a little bit the impact isn't that huge.
Speaker Change: Several reasons first of all it's night.
Speaker Change: And with your company's stock in early June at the trading volume for <unk> in June was much higher than in April and May.
Speaker Change: Our second quarter.
Speaker Change: Its trading price was already below $400 or platform.
Speaker Change: What are the level in Q3, the average price was about 120, so in terms of price in pays only upbeat over three times.
Tianhua Wu: Another factor is fractional share. Before the split, a lot of users trade NVIDIA through fractional shares. We charge 1% on trading volume for fractional shares. So this helped the pay grade. After the split, the trading volume through fractional shares dropped. So putting all this together, NVIDIA's take rate in Q3 was only about double what it was in Q2. It's still a high price name even after SPADE. If we look at our US stock pricing, the post-SPADE take rate for NVIDIA is only about 2 bps, while our overall cash equity take rate is between 6 to 7 bps.
Speaker Change: Another factor is fractional share before the spin.
Speaker Change: A lot of users.
Speaker Change: Trade and media to fractional shares they charge a one person on trading volume for fractional shares.
Speaker Change: So this helps the take rate after the split the trading volume through infection of shares drop.
Speaker Change: So putting all this together and really articulate in Q3 was only about double what it was in a second.
Speaker Change: Second quarter.
Speaker Change: It's still a high price.
Speaker Change: Even after space. If you look at our U S drug pricing the postpaid takeaway for <unk> is only about two bps well, our overall cash equity takeaways.
Tianhua Wu: So it's not going to have a major impact on our overall cash equity take rate.
Speaker Change: It's not going to have a major impact on our overall cash equity.
Speaker Change: Yeah.
Unknown Executive: Thanks.
Unknown Executive: May I please move on to the next question, please?
Speaker Change: Now please move on to the next question. Please.
Speaker Change: Okay.
Okay.
Emma Xu: Our next question comes from the line of Emma Xu from Bank of America Securities. Please go ahead, your line is open. Thank you for giving me the opportunity to ask this question. First of all, congratulations to the company for reaching the full-year guidance in advance. The market market in October is also quite good.
Our next question comes from the line of <unk> <unk> from Bank of America Securities. Please go ahead. Your line is open.
Speaker Change: Yeah.
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Emma Xu: So I would like to ask the company to share the recent operating situation since October, such as customer assets, transaction volume, income, profit, etc. The second question I would like to ask is, in general, the increase in the company's income is greater than the increase in profit. If we do not consider the decline in the second quarter, how should we think about the improvement of operating efficiency and operating leverage? So congratulations on achieving the guidance ahead of schedule. The market conditions have been favorable since October. So could you please share the brand rate for AUM, trading volume, revenue and profit, etc.
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Speaker Change: So that gives you a ruble mill currently I do do that.
Jason: Yes, Jason.
Jason: No.
Jason: My pleasure.
Jason: Yes.
Jason: Thank you Shannon.
Jason: Okay great.
Jason: Regulations all achieving.
Jason: And then the guidance ahead of you.
Jason: Market conditions have been admirable October or so could you please share that Brian ratable as well.
Jason: And trading volume revenue and profit.
Speaker Change: And profit.
Emma Xu: since October? And on a quarter-over-quarter basis, the gross rate of your revenue exceeds that of profits without regard to the impairment losses of around $13.2 million in the second quarter. So how do you view the improvement in the operating efficiency and leverage? Thank you.
Speaker Change: October NOI quarter over quarter basis, now barrels, maybe there'll be a revenue exceed <unk> process without regard to the impairment losses of around <unk>.
Speaker Change: Second point $2 million in the second quarter. So how do you view any improvement in the operating efficiency and leverage.
Tianhua Wu: I'll answer the first question first. In terms of customer development, the entire company is still in a state of financial crisis in October, mainly due to the financial contribution from retail investors. The number of new users has also continued to grow rapidly for three quarters, so far, we have completed 150,000 new users a year in advance. In terms of financial performance, the trading volume and commission performance in October were relatively strong, which is the highest single month in the company's history, and it also exceeds the average monthly trading volume and commission per year for the first half of this year.
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Tianhua Wu: Since November has just passed less than half, we cannot accurately see the financial data, but the current trading volume in November is still very good. For example, on October 6, the US election day, our platform's order volume increased by about 50% compared to the average value in October. The trading volume in the US has also increased significantly. The first quarter of the first quarter, the remaining half a month, the decision-making after the US election, and the influence of the US-LinkedIn interest rate decision, there is uncertainty. But overall, we are very satisfied with the performance of the fourth quarter so far.
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Tianhua Wu: Okay, I'll translate. In terms of our client assets, we continue to see net inflow in October, primarily driven by the contribution from our retail investors. The number of newly funded accounts has also maintained the rapid growth trend, as we saw in the third quarter, leading us to, you know, hit our annual guidance so far of 150,000 newly funded users by now. Looking at our financials, October was a standout month for us, with trading volume and commission performance reaching the highest level in our history. Both trading volume and commissions for October more than doubled the average monthly performance for the first half of this year.
Speaker Change: Neither.
Okay I'll translate.
Speaker Change: In terms of our class I assess the continue to see net inflow in October primarily driven by the contribution from our retail investors.
The number of newly funded accounts has also maintained a rapid growth trends as we saw in the third quarter, allowing us to hit.
Speaker Change: Our annual guidance so far.
Speaker Change: 50000 newly suddenly the users by now.
Speaker Change: Looking at our financials October with.
Speaker Change: As they stand out and buy spot with trading volume on our recent performance, reaching the highest level in your history.
Speaker Change: Trading volume and commission for October more than double the average monthly performance for those for half of this year.
Tianhua Wu: Although we are not yet half through November yet, the trading volume is looking solid so far. For instance, on November 6th, which was the U.S. election day, order volume on our platform increased by about 50% compared to the October daily average. Particularly for U.S. stocks, which saw even more significant growth. Looking ahead to the remainder of Q4, there are some uncertainties related to the post-election initiatives and Federal Reserve's interest with decisions. But overall, we are quite satisfied with how the Q4 has been shaped up.
Speaker Change: Although we are not yet half through November yet the trading volume is looking solid so far.
Speaker Change: For instance on November six which was the U S election day, our volume on our platform increased by about 50% compared to the <unk>.
Speaker Change: Daily average.
Speaker Change: Particularly for US talk we saw even more significant growth.
Speaker Change: Looking ahead to the remainder of Q4, there are some uncertainties related to the <unk>.
Speaker Change: The luxury initiative and federal reserve interest rate decisions, but overall, we are quite satisfied with how the Q4 has been shaping up so far.
Zhang Zeng: Emma, let me answer your second question. Sponsored ADR Class A Sponsored ADR Class A So in the third quarter, Fed rate cuts led to a depreciation of the U.S. dollar. As a result, our subsidiaries that don't use U.S. dollar as their base currency, like Singapore, New Zealand, and mainland China, sold their dollar-denominated assets and lost its value, which resulted in foreign exchange losses. For the entire group, the foreign exchange loss in the third quarter was around 5.1 million. If we look at our operating profit, it was roughly $26 million in the third quarter. In the second quarter, after excluding 13% point two million one off impairment.
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Speaker Change: So in the third quarter fed rate cuts mid to a depreciation of the U S. Dollar as a result, our subsidiaries that don't use us daughter answer based currencies.
Speaker Change: You can see it up on our Mexican Gabor, and you've seen that in mainland China our.
Speaker Change: So is there a dollar denominated asset value, which resulted in foreign exchange losses for the entire group the foreign exchange loss.
Speaker Change: Third quarter was around 541 million while of course, you know those Nate.
Speaker Change: FX loss was noncash and nonoperating impacts.
Speaker Change: If we look at our operating profit it was roughly 26 million in the third quarter in the second quarter after excluding a 13.
Speaker Change: Point 2 million one off impairment.
Zhang Zeng: The operating income was about 18 million. This means we saw about a 45% growth quarter quarter, which is significantly fast higher than the 16% growth we saw in the in the top line. This indicates our overall operating average has improved. The reason we were able to achieve this aside from our business model is that we have been very prudent with our fixed costs. Both labor and GMA expense have remained relatively stable. While variable costs like clearing and customer acquisition costs may rise with increased market activities. But both of our clearing fee and the average CAC remains at the industry leading low levels.
Speaker Change: The operating income was about 80 million. This means we saw about a 45% growth quarter over quarter, which is significantly higher than the 16% growth we saw in the in the top line.
Speaker Change: Cdk's, our overall operating leverage has improved.
Speaker Change: The reason we were able to achieve this aside from our business model is that we have been very prudent with our fixed cost both labor and G&A expense have been met.
Speaker Change: Relatively stable.
Speaker Change: It was very very close now clearing and customer acquisition costs may rise waist increased marketing activities.
But both of our clearing fees and the average CIC remains.
Speaker Change: As the industry, leading low levels. Thanks.
Unknown Executive: Thanks.
Unknown Executive: Thanks, operator. Let's move on to the next question, please.
Speaker Change: Thanks, operator, let's move on to the next question. Please.
You Fan: Thank you. Our next question comes from the line of You Fan from CICC. Please go ahead, your line is open. Okay, thank you for giving me the opportunity to ask this question. Congratulations to the company for achieving a very good performance in the third quarter. I have two questions to ask. The first one is that we have seen a lot of sales in the Hong Kong stock market since October. So I would like to ask about the current progress in the Hong Kong stock market retail business. Including the Hong Kong stock market in this round, what is the current performance of the Hong Kong stock market, including customers and trading volume?
Speaker Change: Thank you.
Speaker Change: Our next question comes from the line of your son from CIBC. Please go ahead. Your line is open.
Speaker Change: Thanks Aldo.
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You Fan: The second question is about the wealth management business. I would also like to ask the management team to help share the latest developments in the wealth management business, including whether it is possible to share some data related to the scale of AUM, and the current wealth management client number. I will quickly translate this. I have two questions here. The first one is about the Hong Kong market. We see the market velocity has rebounded since October. So would you please share more data on our current business progress in Hong Kong market? What's the impact on our customer acquisition and trading volume in Hong Kong market?
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Speaker Change: I have two questions. The first one is about the Hong Kong market, we see the market velocity rebounded as things October. So would you. Please share more color on our current business progress in Hong Kong market.
Speaker Change: What's the impact on our Hudson It acquisition and trading volume in Hong Kong market.
You Fan: And the second question is about the wealth management business. How is it going on? And can you share more data such as AUM and the number of the wealth management clients? Thank you. Thank you, Fan You.
And the second question is about the wealth management business.
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Tianhua Wu: Let me answer your first question about Hong Kong. We are quite satisfied with the development and strategy of Hong Kong. Since the 1st of September, the sentiment of the Hong Kong stock market has been clearly shown from our operating figures. Specifically, the company has completed the guidance of 150,000 new users a year. Among the 150,000 new users, there are about 20,000 people from Hong Kong, which accounts for nearly 15%. This is a great improvement compared to the first year we entered Hong Kong. At the same time, the quality of Hong Kong customers is high, and we also value the quality of our customers.
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Tianhua Wu: Hong Kong retail users' customer base assets have surpassed that of Singapore, and have become the highest region outside mainland China. In the 3rd quarter, the average income of new users reached $20,000. Hong Kong's AUC, which is the size of its assets, has risen by more than 30%. At the same time, many of these clients are high-asset, high-risk users. Rpool, a third-generation retail user, is the highest in all regions of the group, which is almost twice as high as the users in our Singapore region. At the same time, the volume of Hong Kong stocks in October has increased significantly.
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Tianhua Wu: In absolute terms, the trading volume of Hong Kong stocks in October has exceeded the trading volume of Hong Kong stocks in the 3rd quarter. This is on our platform. At the same time, we have further improved the trading function of Hong Kong stocks in Hong Kong. Hong Kong officially launched Hong Kong stock futures and Hong Kong stock short-term trading in the 3rd quarter. At the same time, we also increased the weekly futures on the basis of the monthly futures in November. This is to further meet the trading needs of Hong Kong users.
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Tianhua Wu: 那我简单的翻译一下吧 Let me simply translate it 我们对香港的发展非常满意 We are quite satisfied with our ongoing development in Hong Kong Since the end of September, we have seen a large improvement in market sentiment based on our operating data. Number one is my You know, currently, we already made our annual guidance of 150,000 funded users, of which about 15%, over 20,000 came from Hong Kong. This is a significant increase compared to our first year in the Hong Kong market. And also the quality of our Hong Kong customer is very high. The average client asset in Hong Kong has now surpassed the Singapore, making it the highest amount reaching among international markets we entered.
Speaker Change: Okay, and then the phase I, but we are quite satisfied with our ongoing develop development Hong Kong.
Speaker Change: Since the end of September we haven't seen a large improvement in market sentiment based on our operating data.
Speaker Change: Number of ISI.
Speaker Change: Currently I have already met our annual guidance of 150000 users Aqua Chipotle.
Speaker Change: 15% or 20000 came from Hong Kong.
Speaker Change: This is a significant increase compared to our first year in the Hong Kong market.
Speaker Change: And also the quality of our Hong Kong customer is very high the average client assets in Hong Kong has now surpassed the Singapore, making it the highest amount reaching among international markets. When we entered.
Tianhua Wu: In the third quarter, the average net asset inflow for newly acquired user in Hong Kong is about $20,000. And the total client asset in Hong Kong market increased by over 30% quarter over quarter. Thanks to the high average client asset and high velocity, the R pool for retail users in Hong Kong was the highest across all regions in the third quarter. Double Data of the Retail Users in Singapore In October, we saw a significant increase in Hong Kong trading value. The trading value for October already exceeded the total trading volume of the third quarter. And also to enhance our trading capability in Hong Kong, we officially launched the Hong Kong stock option and short selling in the third quarter.
Speaker Change: In the third quarter as our average net asset inflow for newly acquired to using Hong Kong is about 20000 U S dollar and as a total client assets in Hong Kong market increased by over 30% quarter over quarter.
Thanks to the higher average client assay on our high velocity, the our pool for retail users in Hong Kong was the highest across our ratings in that.
In the third quarter.
Speaker Change: Double that of the retail user and Singapore.
Speaker Change: In October we saw a significant increase in Hong Kong trading volume.
Speaker Change: The trading value for Cobra already exceeded the total trading volume of the third quarter.
Speaker Change: And also it will enhance our trading capability.
Speaker Change: Capability in Hong Kong.
Speaker Change: Officially launched the Hong Kong stock option short selling in the third quarter.
Tianhua Wu: Additionally, in November, we upgraded the Hong Kong stock option feature by offering weekly contract in addition to monthly contract.
Speaker Change: Additionally in November we upgraded the Hong Kong stock option feature by offering weekly contract.
Tianhua Wu: Thanks. In terms of the development of our financial services, we are generally satisfied with the increase in the number of financial services and the abundance of current products. We have funds to jointly manage some of the idle funds for products such as stocks, U.S. bonds, and other stable earnings. We are also facing high-level users, institutions, and EM partners, such as FCN, which is a free-to-use product, and DPM, which is a full-fledged EM service. Our customers are also increasing in the depth of their asset transactions.
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Tianhua Wu: In the future, we will continue to develop our financial services to enhance the co-operative effect between business and consulting. In terms of speed, The AUM of financial services has increased by more than 40% in the third quarter.
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Tianhua Wu: Sponsored ADR Class A Okay, so regarding the second question about the wealth management, overall we are quite satisfied with the growth pace of our wealth management business and the current diversity of our product offerings. We offer stable US products like money market funds and US treasury bonds for investors to manage their adult cash, as well as fixed coupon notes and services like the EAM platform and DPM discretionary accounts for the advanced users, institutions, and family office, etc. In the future, we will continue to develop our wealth management business and enhance the synergy with our current brokerage business.
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Speaker Change: Okay. So regarding your second question about the wealth management.
Speaker Change: Overall, we are quite satisfied with the growth pace of our wealth management business and current diversity of our product offerings, we offer stable yet products like money market funds and U S treasury bonds for investors to manage their idle cash.
Speaker Change: Fixed coupon notes and services like the AD platform and TPM discretionary accounts for advanced users infusions and family office et cetera.
Speaker Change: In the future we will continue to develop our wealth management business and he has a synergy with our current brokerage business.
Tianhua Wu: If we look at numbers, in Q3, our Wealth Management AUM increased over 40% QoQ and doubled year-over-year, exceeding $1 billion. Among newly funded users in Q3, around 30% of them started using our Wealth Management services. Additionally, in the Hong Kong market, the Wealth Management business saw even more significant growth, with the number of clients increasing by nearly 50% QoQ, and AUM doubled QoQ.
Speaker Change: If we look at numbers in Q3, our west of wealth management.
Speaker Change: Increased over 40% quarter over quarter and doubled year over year exceeding 1 billion U S dollar.
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Speaker Change: Additionally, in the Hong Kong market, the wealth management business, so even more significant growth with the number of client increased by nearly 50% quarter over quarter and AUM doubled quarter over quarter.
Unknown Executive: Thank you.
Unknown Executive: Operator, please move on to the next question. Thank you.
Speaker Change: Operator, please move onto the next question.
Speaker Change: Okay.
Thank you.
Aron Lee: There are no further questions at this time so I'll hand the call back to Aron for closing remarks.
Speaker Change: There are no further questions at this time, so I'll hand, the call back to Alan for closing remarks.
Aron Lee: Thanks, Mel.
Aron Lee: I'd like to thank everyone for joining our call today. I'm now closing the call on behalf of the management team here at Tiger. We do appreciate your participation in today's call. If you have any further questions, please reach out to our investor relations team. This concludes the call and thank you very much for your time. Bye-bye.
Alan: Thanks, Matt.
Alan: I'd like to thank everyone for joining our call today and now closing the call on behalf of the management team here at Tiger. We do appreciate your participation in today's call. If you have any further questions. Please reach out to our Investor Relations team. This concludes the call and thank you very much bye bye.
Unknown Executive: This concludes today's conference call. Thank you for participating. You may now disconnect.
Speaker Change: Thank you. This concludes today's conference call. Thank you for participating you may now disconnect speakers. Please standby.
Unknown Executive: Speakers, please stand by.
Speaker Change: Okay.
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