Q4 2024 UP Fintech Holding Ltd Earnings Call
Fintech
Speaker Change: Ladies and gentlemen, thank you for standing by and welcome to the UpFintech Holdings Limited fourth quarter and full year 2020 for earnings conference call.
Speaker Change: For more information about factors that could cause actual results could differ materially from those in the forward looking statements. Please refer to our form 6K furnished today.
Speaker Change: Ats 2025.
Speaker Change: Annual report on 20-F filed on April 22nd 'twenty 'twenty four.
Speaker Change: Undertakes no obligation to update any forward looking statement, except as required under applicable law.
Speaker Change: It is my pleasure to now introduce our chairman and CEO with coal.
Speaker Change: Thanks to all of them will make remarks in Chinese which will be followed by English translation Mr.
Speaker Change: Please go ahead with your remarks.
Speaker Change: Yeah.
John Nobile: I'm going to take away from John Nobile, with the army Austrian decent either with each vignettes about publicly.
Speaker Change: Hello, everyone. Thank you for joining the Tiger brokers fourth quarter and full year 2024 earnings conference call.
John Nobile: Thank you for Eagle.
Speaker Change: You all shortly on cocoa.
John Nobile: John.
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Speaker Change: You can contact me Cingal now puncture.
Speaker Change: I'm the senior indeed, yes home defense.
Speaker Change: These are the passenger our shirt Thompson Thomas and Joshua.
Speaker Change: In the fourth quarter, driven by expanding the client base comprehensive comprehensive product offerings and a more active market environment in the U S and Hong Kong, our financial and operating results both grew substantially.
Speaker Change: Our total revenue for the quarter was $424 1 million U S dollars.
Speaker Change: Making up 22, 8% increase quarter over quarter, and 77, 3% increase year over year.
Speaker Change: Both companies are not interest income hit a record high.
Speaker Change: Growing by 35, 8% and 16, 3%, respectively compared to the previous call.
Speaker Change: For the full year total revenue reached 391 5 million U S. Dollar a 43, 7% increase from 2023.
Speaker Change: We are also pleased to report a significant improvement in profitability, what kind of 24.
Speaker Change: We've got net income, reaching $60 7 million U S dollar.
Speaker Change: non-GAAP net income, reaching $17 5 million U S dollars.
Speaker Change: Our 86.5% and 65% of the respective from 'twenty to 'twenty three.
Speaker Change: In the fourth quarter, GAAP and non-GAAP net profit or 28 1 million U S dollar and a 35 million U S dollar respectively.
Speaker Change: Reflecting our 58 per fan and 51, 7% increase quarter over quarter.
Speaker Change: Very excited to see record highs in both revenue and profit for Q4, and the full year of 'twenty 'twenty four.
Speaker Change: Additionally, our non-GAAP net perfect market increased from 20% in the third quarter to 25% in the fourth quarter.
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Speaker Change: So let me know I'm hopeful that's just really in the course should help you would've seen of course yeah.
Speaker Change: In the fourth quarter.
Speaker Change: 59200 newly funded accounts.
Speaker Change: 17, 2% increase from the previous quarter.
Speaker Change: For the full year. The total number of newly funded accounts reached 187400, surpassing our annual target of 150000 by the end though.
Speaker Change: The end of 'twenty 'twenty four.
Speaker Change: The number of funded accounts reached 1.09 yearly.
Speaker Change: 27% year over year.
Speaker Change: Year to date, we continue to see strong paying client growth.
Speaker Change: <unk> acquired 150000, you'll find good guy in 2025.
Speaker Change: While prioritizing user quality.
Speaker Change: In terms of total client assets net inflows remained strong at 1.1 building.
Speaker Change: For the quarter.
Speaker Change: Approximately 80% coming from retail users.
Speaker Change: Although slightly impacted by mark to market losses total client assets grew by two 4% quarter over quarter, and 36, 4% year over year, reaching.
Speaker Change: Breaking $41 7 billion U S dollar.
Speaker Change: Notably because of that.
Speaker Change: A Hong Kong increased by about 50 per fan called her broker.
Speaker Change: Growing six times compared to the end of 2023.
Speaker Change: Making our third largest market in terms of crime.
Speaker Change: Additionally, we are pleased to see that over the past three years dispatch, if the market cycle and investor sentiment.
<unk> strong organic growth.
Speaker Change: Total number of plenty that cough and cold Oakland assets have increased at a tiger.
Speaker Change: $17 five per fan at 34, 7% respectively.
Speaker Change: This result highlights the tremendous growth potential in the market and her and the trust of our users have placed.
Speaker Change: From time to time across different regions.
Speaker Change: Right.
Speaker Change: You'll have time at Goldman painful for them that you know what should I know you said you don't want to show when she yet that's all.
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Speaker Change: So you can wipe out the other day late Kurt did she made hi, John.
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Speaker Change: Intangible show, Yeah, Jeremy so emotionally challenging time.
Speaker Change: T J shultz from Lloyd's Ukraine could you should each on corneal wound me in particular condition shifts.
Speaker Change: <unk> seen them they'll continue to finish something Don how can you tell the theatre with all the geopolitical Banca essential towards Israel courtyard Union from for the sure.
Speaker Change: That's without a shopper needs onto Luc and Jimmy Choo that you took so long.
Speaker Change: Based on commentary that hold the Joshua.
Speaker Change: We keep optimizing product features and expanding our licensee is when you have deal for explorer.
Speaker Change: Following integra broker Hong Kong type, one licensed uplift or crypto currency platform why ex Hong Kong received a license from Hong Kong bankruptcy for type one and type of seven.
Speaker Change: This officially makes us a license to virtual Arthur trading platform in Hong Kong.
Speaker Change: Recently, we all face really upgraded our AI investment assistant Hydro GPT Tiger AI and integrated with leading a guy modal.
Speaker Change: Making us the FERC brokerage platform globally, putting carpet this technology.
Speaker Change: This upgraded boost our intelligence investment assistant experience in two dimensions.
Speaker Change: Deep logical deduction and financial data integration.
Speaker Change: Enabling it to analyze market saved more clearly and interpret investment opportunity for effectively.
Speaker Change: Empowering both retail investors and experienced professionals, who make more informed decisions and complex market conditions.
Speaker Change: Lee driving long term investment value.
Speaker Change: You said you don't know who you have to be you seem more Columbia, what scope do you see the walnuts in telling US look on me why it yourself now I'll call I'll go through some Atroscine Korea interesting that ONEOK and Cheniere wasn't going to sell a single call me why it yourself now you saw some men.
Speaker Change: Yeah.
Speaker Change: Then the Cheniere was that you saw the cohort.
Speaker Change: He will call you Didnt downtown Dubai, you send out.
Speaker Change: Our <unk> business continues to perform well in.
Speaker Change: In your investment banking business, we under wrote a total of 14 U S and Hong Kong Ipos in the fourth quarter.
Speaker Change: Including more cooking company, Pone, <unk>, Inc, and <unk>, Inc.
Speaker Change: Bringing the total number of U S and Hong Kong Ipos under eight times for the year to 44.
Speaker Change: Our ethos business, we added 16, new clients in the fourth quarter, bringing the total number of Aesop concert to 613 as of the end of 'twenty 'twenty four.
Speaker Change: Okay, you can say about y'all.
Speaker Change: We bought a house houses yet.
John Nobile: Now I'd like to invite our CFO John to go over our financials.
Speaker Change: [noise].
Speaker Change: Yeah.
Speaker Change: Uh huh.
Speaker Change: Great.
Speaker Change: Aaron Let me go through our financial performance for the fourth quarter.
Speaker Change: The numbers out of U S dollars.
Speaker Change: Total revenue or $124 million this quarter.
Speaker Change: Kris of 22, 8% quarter over quarter, and 77% year over year.
Speaker Change: Both commission income and net interest income increase on a quarter over quarter and year over year basis.
Speaker Change: Full year total revenue was 391 5 million increased 44% compared to last year.
Speaker Change: Both quarterly and full year top line reached an all time high our operating history.
Cash equities take rate was 6.9 bps this quarter increased from $6 four bps last quarter as trading volumes were less concentrated in high value names.
Speaker Change: We Didnt Commission revenue about 70% comes from cash equities, 30% from options at the rest comes from futures and the other products.
Speaker Change: Now on cost.
Speaker Change: Interest expense was $16 7 million increased by 5% from the same quarter of last year due to the increase in marching financing and securities lending activities.
Speaker Change: Execution and clearing expense were $6 1 million increased 172% from the same quarter of last year, primarily due to an increase in our trading volume.
Speaker Change: Employee compensation and benefits expense were $37 2 million.
Speaker Change: Increase of 41% year over year due to an increase of global head counts.
Speaker Change: Occupancy depreciation and amortization expense slightly decreased 2% to $2 1 million.
Speaker Change: Communication and market data expenses were $11 8 million, an increase of 33% year over year due to the increase in user base and the I T related services.
Speaker Change: Marketing expenses were $9 5 million this quarter increased 64% year over year, as we increased marketing spending under a more favorable market backdrop.
Speaker Change: General and administrative expenses were $6 4 million a decrease of 12% year over year due to a decrease in poultry rational service fees.
Speaker Change: Total operating costs were $73 1 million, an increase of 39% from the same quarter of last year.
Speaker Change: As a result in the fourth quarter GAAP net income was $28 1 million non-GAAP net income was $30 5 million increased 58%, 52% quarter over quarter respectively.
Speaker Change: For the full year of 2024 total GAAP net income was $60 7 million.
Speaker Change: And the non-GAAP net income was $17 5 million also an all time high and they increased 87% and 65% respectively compared to last years.
Speaker Change: So I have to conclude our presentation.
Speaker Change: Eric Please open the line for Q&A. Thanks.
Speaker Change: We will now begin the question and answer session.
Speaker Change: If you ask a question. Please 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 roster.
Speaker Change: We will now take our first question from the line of Cindy Wang from China Renaissance. Please ask your question Cindy.
Anthony: Hi, guys, just Anthony <unk> with Sidoti.
Speaker Change: You Betcha now with <unk> and Jaguar anytime he does.
Dan Knotts: Okay got it already hold me asking Danielle <unk> Wang Dan Knotts.
Speaker Change: No margin Gianluca.
Speaker Change: We are shipping now.
Speaker Change: Allison your cities on a woman teenager, J Jones with Atlas balance sheet, Shanda now called <unk> guidance unchanged Pushout Nashville woman in Belgium.
Speaker Change: Jay the Audi Helen.
Speaker Change: Sure.
Speaker Change: <unk> now they are the ones you don't.
Speaker Change: Hi, Nathan Jones sure Amit Hi, Thank you Shannon DCT towards elections and Jumbo Shaw.
Speaker Change: Chagas is huh.
Speaker Change: You got a coupon.
Speaker Change: I'm kind of how would I want to thank.
Speaker Change: For taking my question and congrats for the grid.
Speaker Change: Fourth quarter results. So my question is first one in 295, you are targeting to acquire 150000, you'll funding clients, which is <unk> of 'twenty 'twenty four guidance. However, no firm date kind you acquire in Tony's any fall was much higher than the guidance. So how do we raise too.
Speaker Change: Our guidance of <unk> 75, and the contribution from each market.
Speaker Change: The second question is could you give us Neil fond declines a breakdown by reaching out in first quarter. Thank you.
Speaker Change: Oh, well ask with Eisai.
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Speaker Change: I'd be chew right, where we are the contents Chicago that's alive.
Speaker Change: It's a bolt on or genomic can you just share with me away to a Shandong who make what extra ounces sold.
You can see that now will meet with you Chris Champlain G shutdowns.
Speaker Change: And Yahoo shopping in the total.
Speaker Change: Okay I'll translate for the first part I'm sorry.
Speaker Change: So in 2025, our focus on customer acquisition will prioritize quality and ROI, we plan to expand our efforts to acquire high net worth user base, rather than just puts it in user number growth.
Therefore, we are taking out a target of 150000, you'll find a user maintaining the same level as in the 'twenty 'twenty four.
Speaker Change: However, we do expect to see the improvement a customer quality metrics such as average grant us as our pool for this New York in 2025.
Speaker Change: Regarding the regional mix, we anticipated that the overall situation, but we're pretty much in line with the actual breakdown into in 'twenty, four with greater China region being the primary contributor and in 2025, while ensuring the quality of new users, we have higher expectations for growth in Hong Kong and the U S market in the world.
Speaker Change: Consider increasing our marketing inputs, if the market conditions are favorable.
Speaker Change: <unk> got two unions that breakdown do you see those ads.
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Speaker Change: Judy you want them in.
Speaker Change: Moshe Doyle shouldn't actually I'll caution you up what you're doing at issue.
Speaker Change: Sure. It's all that should see doesn't Archie admissions or that he should have now so you kind of talked about in June July August 19 megawatt Sheila.
Speaker Change: Well in the Q4 about 60% up from you plenty of users came from Singapore, and Southeast Asia about 25% were from greater China area, well around 10% from Australia I didn't use it in market and the remaining five came from the U S market.
Speaker Change: Thank you.
Operator: And operator brief Mclaughlin our next question.
We will now take our next question from the line of <unk> <unk> from Bank of America Securities. Please ask your question Emma.
Speaker Change: Hey, Good luck just a few minutes. He will go he calls it should allow Teton County that you know with Jennie O C O that Glenn here, Steve Tusa Belge cool single deal that doesn't John how should we go quiet that's helpful that T. J Ross you somebody that you know home and now she can do shake celebrated B L.
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Speaker Change: Let me tell us who can AT&T leg ulcers have Bordeaux, Georgia, where they found out no. Okay got.
Speaker Change: Got it.
Speaker Change: So the first question is that your compensation expenses.
Speaker Change: And more than anticipated and why there has been a notable increase is that just takes away sequentially and a second question as well on the first quarter run rate for your AUC the pace of the pay.
Speaker Change: Of new clients and trading volume.
Speaker Change: And what's your thoughts on rates and volatility in the U S market.
Speaker Change: On your business.
Speaker Change: Yeah.
Speaker Change: Hello, I'm, a lot more sand and I believe that you're going to see the whole watching T O hopefully that yard when she like whey they need somebody to acquire that attrition is where I've seen me honestly I'm only you know all the facts out there.
Speaker Change: Suddenly it was one of the chairs around with.
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Speaker Change: Oh tax rate, just as homecare, Santa Cecilia person he sent out you'll see the actual person.
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Speaker Change: And I found that you've been noticed and I thought she holds her and I realize now closer to this as a whole your push I'll talk to the U S T bounce.
Speaker Change: C J S and answer them a quarter until the day right.
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Speaker Change: So the rising labor cost is mainly due to a.
We added actuaries employee incentive at the end of the year, which increased our year end bonus accrual.
Speaker Change: The effective tax rate increased from 14 per se in the third quarter to 25% in the fourth quarter.
Speaker Change: Primarily due to the increase in traffic coming from the U S market, where tax rates relatively higher.
Speaker Change: A couple of reasons first the market was very active in the first quarter, which benefited the margin financing and securities lending activities and actually increased our U local interest income quarter over quarter.
Speaker Change: The reason these relate to U S treasury bonds for calculating tax the E. Com front keep ours is only realized awesome after maturity.
Speaker Change: So in Q4, we had several T bonds matured contributing to the increase in profit from the U S.
Speaker Change: Yeah.
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Speaker Change: Hello, J J.
Speaker Change: It seemed.
Speaker Change: So for me and that you found yourself now maybe it was just under Alexander Peter onboard Tom.
Speaker Change: So what changed under your emotional icon now ongoing children's ego and quick way too. So you shouldn't you shouldn't see the Shandong, whose idea now sit on the board since he should it. So you really didn't say yeah sure.
Speaker Change: You are truly tisha wanted to telling younger not all of them and say now who can I found that Alex showed you the economics down to shirt. So.
Speaker Change: So you said you had a chance and Joel will in Chicago.
Speaker Change: Maybe we can go with it as you can tell we know drink all your opinion canyon coaching and decent utilization.
Speaker Change: Okay.
Speaker Change: So year to date, we have seen a solid sequential increase in total client asset thanks, primarily to a strong net inflows.
Speaker Change: Specifically net asset inflows year to date has already exceeded the number in the second half of 'twenty 'twenty four.
Speaker Change: Well there have been some up and down in the U S stock market.
Speaker Change: We're still looking at a mark to market gain in general.
Speaker Change: The number of new users.
Speaker Change: It's growing rapidly keeping up the momentum, but I noticed in the second half of 'twenty 'twenty four.
Speaker Change: In terms of trading volume.
Speaker Change: It has been quite active in both Hong Kong and the U S market. This year, so far so the trading volume for Hong Kong stocks have already exceeded what we saw in the fourth quarter of last year.
Speaker Change: Dave has balanced out the impact of the reason what activity in the U S market.
Speaker Change: So overall.
Speaker Change: Overall trading volume has remained steady workplace the fourth call her of last year.
Speaker Change: Recently in March the U S stock market has gone.
Speaker Change: Peter is somewhat activity due to the various factors like parent geopolitical issues and uncertainty fed rate cuts from our perspective, as a broker dealer where value more velocity, we believe that somewhat activity triggered by economic or political events headline news actually drive trading volume.
Speaker Change: In the first three weeks of March the average daily trading volume our platform for both Hong Kong and U S. Cash equity has been higher than what we saw in the first two months of this year and in the Q4 last year.
Emma: Thank you Emma.
Speaker Change: Operator, please move onto the next question.
Speaker Change: Thank you. Your next question comes from the line of fun from the ICC. Please ask your question you.
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John Nobile: Hi, John.
Speaker Change: I hope I'll call due at Zama.
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Vincent Chao: Passenger city Vincent Chao.
Vincent Chao: He didn't at least it does show that sounds would see Africa, all of which can be found on itunes with Oh sorry.
Vincent Chao: Now, let me see foods and Joe I'll, let you do the call you fill dunson don't Behold now would you be.
Vincent Chao: Yeah.
Speaker Change: This is the oil sands from CIC and I have two questions. The first of all is a bounce crypto or things. We have gained a V. A T P lessons on how wells and losses contribute to our growth in the sector.
Vincent Chao: Also would you please give more color on our clinical development in the Hong Kong market in Q4.
Vincent Chao: And the set of a question is about the interest income.
Vincent Chao: See the micro finance and the security lending balance remains flat in Q4.
Vincent Chao: Given the rate cut cycle. The interest income Q on Q grew at double digit pace and the way faster than the interest expense sales pace. So.
Vincent Chao: At the conference this inconsistent trends.
Vincent Chao: Yeah.
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Speaker Change: And I took enquiries you won't see a solar array of lumpy it sounds similar payments, even you'll see something.
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Speaker Change: And then finally Uh huh. So in terms of are we a TPU we got that.
Speaker Change: Uh Huh SFC type one type seven license before Chinese area.
Speaker Change: This officially make us a license to virtual assets trading platform in Hong Kong, which those license we cannot equally well first spot trading and custody services for major critical currencies like be calling on Easter as well as cocainize the assay.
Speaker Change: By integrating our crypto surveys with our broker dealer entity, we can create an ecosystem combining web two and web three assets.
Speaker Change: Our goal is to become the bridge between traditional finance and crypto currency.
Speaker Change: So I'll say, our Hong Kong business is my client assay have continued to grow increasing nearly 50% quarter over quarter and about six times year over year.
Speaker Change: Hong Kong market has been quite active since the fourth quarter. So the trading volume of Hong Kong shares has increased from 10%.
Speaker Change: Our total trading volume to about 15%.
Speaker Change: Commission income from Hong Kong shares has increased by over 160% quarter over quarter.
Speaker Change: Carabobo Hong Kong has achieved breakeven in the fourth quarter, our cents to a significant rise in post commissioning of interest income we see interest income doubling from the previous quarter. Looking ahead, we will keep investing in Hong Kong to drive the growth.
Speaker Change: In terms of customer acquisition, we continue to focus on attracting high quality users and maintaining a strong all right in the fourth quarter annuity funded users kind of average net asset inflow of over 30000 in U S. Dollar the highest among all markets.
Speaker Change: Average kind of assay Hong Kong is around.
Speaker Change: 20th on the U S. Dollar also the highest some of our oversea markets.
Speaker Change: Profile Hong Kong user is also double if the group average.
Speaker Change: Not only that everyone's is going it's just.
Speaker Change: Margin financing balance.
Speaker Change: Nick.
Speaker Change: Christine Congress took us into June.
Speaker Change: What comes into young Li of <unk> 16, the census, she's only mixed nuts acute fashion that you shook IBM.
Speaker Change: Shall I answer her T shirts, or they do reach out to him on that same beta assumption, sometimes that sounds susannah mature they say it depends on two tranches she's had a temporary shutdown.
Speaker Change: Yeah lets you can launch out on this is total yields just off with assumptions.
Speaker Change: Meanwhile are closer to the DC solar Hungary is something that I've been just so that was really all a terrestrial.
Speaker Change: So actually it was how much leeway do you guys see.
Speaker Change: Okay.
Speaker Change: I think also on the DB, social and I'd say for instance is in front of me and I'll put a lot of pizza hut.
Speaker Change: Personally I always at Huntington Beach, California.
Speaker Change: Our board all show how to borrow a lot.
Speaker Change: Yeah, well conscious luxury showing that they also he said not simply from the new news about those.
Speaker Change: And also how you all you should have all come in with physical marching trading to the Greenway Youll show to you soon.
Speaker Change: Now I'll, just say that Fannie shot okay.
Speaker Change: So although the margin financing balance has a whole remain flat quarter on quarter, but there was a notable shift in the mix in the fourth quarter high yield Sigma and such as Marciano, how to borrow securities lending.
Speaker Change: We're showing an increase in bonus compared to the previous quarter, but the balance for lower Yo visits <unk> Treasury management.
Speaker Change: They expand our quarter over quarter decrease this shift.
Speaker Change: <unk> contributed to a higher return on our bottom line.
Speaker Change: In addition, an interest income rose by 16% quarter over quarter significantly outpacing the increase in interest expense for a few reasons.
Speaker Change: Number one as we negotiate better return with local banks.
That helps increase our idle cash interest.
Speaker Change: The Sacramento and as the market has been active and volatile.
Speaker Change: Increasing domain securities lending market also in increased marketing activities for U S and hung country. Thanks.
Speaker Change: Okay.
Speaker Change: Let's proceed.
Speaker Change: I'm showing no further questions I'd now like to turn the conference back to Aaron for closing comments.
Aaron: Thank you I'd like to thank everyone for joining our call today are now closing the call on behalf of the microphone team here 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 better time. Thank you.
Thank you. Thank you.
Aaron: Thank you very much for your participation in today's conference. This does conclude the program you may now disconnect.
Aaron: Yeah.
Aaron: Okay.
Aaron: [music].
Aaron: Okay.
Aaron: Okay.
Aaron: [music].
Aaron: Okay.
Aaron: Okay.
Aaron: Okay.
Aaron: [music].