Q1 2025 Futu Holdings Ltd Earnings Call
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Speaker Change: Hello, Ladies and gentlemen, welcome to <unk> Holdings fiscal 2025 release conference call.
Speaker Change: At this time.
Speaker Change: Listen only mode. After management's prepared remarks, there'll be a question and answer session.
Speaker Change: Today's conference call is being recorded if you have any.
Speaker Change: You may disconnect at this time.
Speaker Change: I would now like to turn the comprehensive back to your host for today's conference call.
Speaker Change: Chief of staff to CEO here in Australia.
Speaker Change: Please go ahead.
Speaker Change: Thanks, operator, and thank you for joining us today to discuss our first quarter 2025 earnings results. Joining me on the call today are Mr Lately, Chairman and Chief Executive Officer, Arthur Chen Chief Financial Officer, and Robin shape Senior Vice President.
Speaker Change: As a reminder, today's call may include forward looking statements, which represent the company's belief regarding future events, which by their nature are not certain and are outside the company's control.
Speaker Change: Forward looking statements involve inherent risks and uncertainties. We caution you that a number of important factors could cause actual results to differ materially from those containing any forward looking statements.
Speaker Change: For more information about the potential risks and uncertainties. Please refer to the company's filings with the SEC, including its annual report.
Speaker Change: With that I will now turn the call over to Leif lethal make his comments in Chinese and I will translate.
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Speaker Change: Thank you all for joining our earnings call today, we kicked off 2025 with strong momentum, adding approximately 262000, new funded accounts in the first quarter up 48% year over year, and 22% quarter over quarter by quarter end total funded accounts stood at $2 7 million or 42% increase from.
Speaker Change: A year ago, and an 11% rise sequentially.
Speaker Change: With a third of our annual target already in the bag, we're tracking well against our guidance of 800000 net new funded accounts in 2025.
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Speaker Change: So the second quarter in a row, Hong Kong market, letting new funded accounts and that a risk on the China equities and active IPO calendar also help to acquire new clients, while reactivating previously dormant.
Speaker Change: We believe that brokers, but strong brand equity seamless user experience and superior execution capabilities are best positioned to convert market tailwind and to sustained growth.
Speaker Change: Funded account growth in the U S picked up pace as we enhance the platform experience for active traders.
Speaker Change: Alright take charge of their trading campaign in New York City after a boosted brand visibility and deepen engagement with retail investors.
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Speaker Change: So towards at the social neighborhoods or you can kind of see something like Malaysia delivered the fastest sequential growth in new funded accounts across all sub markets fueled by effective marketing campaigns and our seamless Malaysian IPO subscription experience looking ahead, we still see significant runway for market share expansion and remain committed to product.
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Speaker Change: In Japan, New funded accounts saw strong sequential growth and reached a historic high reaffirming our position as the preferred platform for U S equity trading among Japanese retail investors.
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Speaker Change: And on the products, we shipped in the first quarter. The highlight of the spiritual AI Smart investment assistant trainer features proprietary financial data and Investor community inside.
Speaker Change: This integrated solution combines AI powered search Q&A and customer support offering context aware responses tailored to retail investors.
Speaker Change: Since launch it has received overwhelmingly positive feedback for the satisfaction rate of around 90%.
Speaker Change: Demonstrated significantly higher accuracy and professionalism in answering and investment related questions than general purpose models.
Speaker Change: We plan to roll out similar AI offerings to other international markets in the second quarter to empower investors globally.
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Speaker Change: Fourth quarter advances, the Guangzhou them down parts of it being cooked in New York would pose the Bellevue the camp maid juice young in the blood Phe transfer et cetera, you can E. On the bonds that you won't do you go with you that Julien.
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Speaker Change: Jim will jump it holds them intact do you see that ratio maybe will change all your bundled copel can be caught up our systems in the first quarter. We also launched a brand new desktop version that <unk> built on the new framework compatible with Windows Narcolepsy Emmeline ex this next generation version features intuitive drag.
Speaker Change: Drop tools for building quantitative strategies and enumerates multi like option strategies that reflect client's views on the securities.
Speaker Change: <unk> invested Bernie institutional grade functionalities, and a more user friendly manner in Japan, we introduced U S. Fractional shares trading in February to enhance accessibility followed by the April launch of U S options trading to help clients better capture market movements.
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Speaker Change: Total client assets reached 830 billion, Hong Kong dollars, marking a 60% increase year over year, and a 12% increase quarter over quarter. The growth was primarily driven by record.
Speaker Change: While the rally of Hong Kong equities led by large cap Tech names drove significant now southern flat.
Speaker Change: Total client assets in Singapore rose, 11% sequentially, marking the 11th consecutive quarter of double digit growth. Thanks to robust inflow into U S equities and wealth management product.
Speaker Change: In Canada, and Australia average client assets increased for the fifth consecutive quarter, underscoring improving client quality and growing brand trust.
Speaker Change: Financing and securities lending balance closed the quarter at 53 billion Hong Kong dollars largely stable from the prior quarter as clients didn't love her in March and that market pullback.
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Speaker Change: 40% year over year, and 11% quarter over quarter U S equity trading rose, 8% sequentially to 2.25 trillion Hong Kong dollars supported by bottom question of semiconductor and technology stocks.
Speaker Change: Trading volume in Hong Kong equities advanced 21% quarter over quarter to 916 billion Hong Kong dollars lifted by a resurgence in investor sentiment and let the deep Sea Conduce rally.
Speaker Change: In the U S. We saw double digit sequential growth in both the number of options traders and the number of options contracts traded with a ladder, reaching its historic high.
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Speaker Change: Wealth management client assets reached $139 2 billion, Hong Kong dollars as of quarter end up 118% year over year, and 26% quarter over quarter, 29% of funded accounts health wealth management product a further sequential increase.
Speaker Change: Big part of the inflow was driven by money market funds as clients block to safe Haven assets amid market volatility.
Speaker Change: At the same time, we saw rising allocations into bond funds and strong demand for structured notes, especially in Singapore.
Speaker Change: In Hong Kong, Singapore, we expanded our structured product lineup with FX linked notes and Malaysia, we on boarded equity funds, while in Japan, we have rollout U S dollar denominated money market funds to better serve clients' cash management needs.
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Speaker Change: As of quarter end, we had 498 IPO distribution and IR clients up 16% year over year in the first quarter. We participated in several landmark Hong Kong listing as jointly manager, including those with Fox Group <unk> Holdings, where we acted as the exclusive online broker for IPO distribution.
Speaker Change: Notably in the highly anticipated niche group IPO 70000 clients contributed to over one trillion Hong Kong dollars in subscription amount.
Speaker Change: This first among all brokers and both total subscription amount and number of subscribers.
Speaker Change: We observed that these high profile ipos typically lead to higher client engagement stock trading volume and that's that inflow.
Speaker Change: What are you assuming on the vessels you talk about just how we're judging next I'd like to invite our CFO Arthur to discuss our financial performance. Thank.
Arthur: Thank you Lisa and Daniel Please allow me to walk you through our financial performance in the first quarter or the number of say a Hong Kong dollars unless otherwise noted.
Arthur: Total revenue was $4 7 billion up 81% from $2 6 billion in the first quarter of 2024.
Arthur: Brokerage Commission and handling charge income was $2 3 billion, an increase of 113% year over year, and 12% Q over Q the year over year.
Arthur: <unk> was mainly driven by higher trading volume, partially offset by the decline in blended commission rate.
Speaker Change: Year over year decline in blended commission rate was mainly driven by changes in product mix and a higher average order size for Hong Kong stock trading a Q over Q increase was mainly driven by the sequential growth in trading volume.
Speaker Change: Interest income was $2 1, billion% to 53% year over year, and 2% Q over Q.
Speaker Change: The year over increase was driven by higher interest income from securities borrowing in the lending business margin financing and the bank deposits.
Speaker Change: The increase was driven by higher logging penalty income as well as higher interest income from security borrowing and lending business, partially offset by lower interest income from bank deposits due to higher interest due to lower interest rate our client cash deposits.
Speaker Change: Other income was $314 million up 101% year over year and down 11% Q over Q. The yearly increase was primarily attributable to higher distribution service income and currency exchange income.
Speaker Change: Our total cost was 748 9 million an increase of 15, 9% from $417 million in the first quarter of 2024.
Speaker Change: Brokerage commission and handling charges expenses was $144 million of 138% year over year in the 28% Q over Q bolstered year over year <unk> increase was roughly in line with the movement of our brokerage commission and handling charge income.
Speaker Change: Interest expenses were $469 million up 50% year over year and down 9% Q over Q, but year over year increase was driven by higher interest expenses associated with our credit borrowing in the lending business and higher margin financing interest expenses. The <unk> decrease was mainly due to lower margin financing interest expense.
Speaker Change: This and the lower interest expenses associated with our securities borrowing and lending business.
Speaker Change: Processing and servicing costs were $136 million of 44% and are down 10% Q over Q.
Speaker Change: Year over year increase was largely due to higher market information data fee or in cost of market data coverage and the Q over Q decline was mainly driven by lower system usage fee as well as lower market information and data fees.
Speaker Change: As a result, our total gross profit was $3 9 billion, an increase of 86% from $2 1 billion in the fourth quarter of 2024 gross margin was 84% as compared to 81, 9% in the first quarter of 2024.
Speaker Change: Operating expenses were up 36% year over year and down 12% Q over Q2, $1 3 billion R&D expenses were $386 million up 15% year over year in the down 3% in the Q over Q the year over year increase was primarily driven by investing AI capabilities and the related technology initiatives.
Speaker Change: The Q over Q decline was mainly due to the sequential decrease in R&D headcount.
Speaker Change: Selling and marketing expenses.
Speaker Change: 459 million up 57% year over year and down 1% Q O Q. The yearly increase was roughly in line with the growth of our New fund account. The <unk> decrease was mainly due to lower acquisition costs, partially offset by a sequential increase in newfield accounts.
Speaker Change: G&A expenses were 415 billion up 38% year over year and down 28% Q over Q.
Speaker Change: Year over year increase was primarily due to increase in the general and administrative headcount to support overseas developers overseas market development and the <unk> decrease was mainly due to bonus accrual, while general and administrative personnel in the previous quarter.
Speaker Change: As a result income from operations increased to 125% year over year literally 1% Q over Q to $2 7 billion.
Speaker Change: Operating margin increased to 57, 2% from six from 46% in the first quarter of 2024, mostly due to strong topline growth and operating leverage.
Speaker Change: Net income increased by 107% year over year, and 15% Q over Q2, $2 1 billion net income margin expanded to 45, 6% in the fourth quarter as compared to 39, 9% in the same quarter of last year, our effective tax rate of fourth quarter was 18, 6%.
Speaker Change: That concludes our prepared remarks, we'd now like to open the call to questions. Operator. Please go ahead. Thank you. Thanks.
Speaker Change: As a reminder, if you'd like to ask question. Please press star one to one brand name to be announced if you'd like to cancel your request. Please press star one thank you.
Speaker Change: One moment for the first question.
Speaker Change: First question comes from Sandy one of China Renaissance. Please go ahead.
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Speaker Change: Two questions here.
Speaker Change: First the overall Hong Kong stock market Akshay greatly in April and May could you give us some color on the trading velocity trading volume and the margin financing secured lending balance on your pathway so far in second quarter.
Speaker Change: Second question is recently, we see for two ball and normal launch membership program could you, let us know what the business model the bundled program and how many paying kind have already subscribed the services in the long run.
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Speaker Change: So the new funded accounts in the second quarter, we'll probably see double digit sequential decrease sequentially, mostly due to a very high base in the first quarter, but overall, we maintained very strong client acquisition momentum in the second quarter and we are very confident to hit our 800000, new paying clients guidance.
Speaker Change: For 2025, and with a very big market volatility clients continue to trade very actively and based on the current run rate. We expect a further sequential increase and total trading volume clients also to put a lot of assets into our platform our quarter to date based on the run rate net inflow.
Speaker Change: Stay at a very high level similar to what we saw in the first quarter are coupled with the mark to market of positive impact since the second half of April due to the market rebound, we expect a further sequential lift to our total client assets. Thank you.
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Speaker Change: It's still very small thank you.
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Speaker Change: Thank you for the question so one moment for the next questions.
Speaker Change: Our next question comes from Charles Zhou from UBS. Please go ahead.
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Jacob: So first of all congratulations to the management I think it's a very strong set of results and beat the consensus and also our estimate so I have a two question. The first one could you. Please maybe just give us a lead.
Jacob: More colors about the timeline of your crypto trading business.
Jacob: And also the implications of the past the age of the Hong Kong stable coin Spiel recently.
Jacob: To accompany the second question is about can we talk about the customer retention and also the client AUM. Following the rising recent concern over the taxation on mainland China clients Oversea investment income. Thank you.
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Speaker Change: So the crypto prices experienced some pullback since the first quarter.
Speaker Change: Affected the enthusiasm the crypto investors on our platform, but monthly trading volume and the number of crypto traders stayed on a pretty high level and since may the crypto prices rebounded and we've seen investors quickly picked up interest in crypto trading and we also saw a rebound in daily trading.
Speaker Change: Liam.
Speaker Change: We'll continue to build crypto related product capability.
Speaker Change: Only we launched the crypto deposit functionalities in Hong Kong, which made it easier for our clients to seamlessly seamlessly deposit the crypto onto <unk> platform and make it easy to switch between different asset classes. So after we lapsed. This function. We got very good feedback from the west through community and also very positive feedback from our clients.
Speaker Change: And we plan to launch crypto withdrawal of functions very soon we also allowance the crypto paper trading function in Hong Kong and we're the first regulated a crypto platform to allow for paper trading, which really helps the newly investors to familiarize themselves with the trading rules.
Speaker Change: The trading procedures, especially through end market volatility and a couple of days ago.
Speaker Change: Lounged crypto trading on a great scale basis and in most of the states in the United States and we now support over 30 mainstream crypto currency trading we will closely monitor our clients' trading behaviors to iterate on our product and we plan to.
Speaker Change: Increase the number of crypto currency.
Speaker Change: In the near future.
Speaker Change: From a long term perspective, we are very bullish about virtual assets as an asset class and for food to the take rate for crypto trading higher than cash equities, and we believe that as the regulatory landscape and the regulatory guidelines to company more clear there will be more crypto currency allowed in more function.
Speaker Change: Full out.
Speaker Change: Which will bring through two more ways to monetize this asset class and we believe that whether it's from an AUM or revenue perspective crypto has a has so much potential and we are still in the very very early innings and in terms of stable claims. We are aware of the relevant regulations being released recently and Aerostar Bank investor.
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Speaker Change: Now many countries in the world.
Speaker Change: <unk> and this common reporting system and for the countries that participated on the call remember finance system.
Speaker Change: The Crs rules apply to all of the licensed financial institutions, whether it's banks or insurance companies or brokers and there is a very clear set of rules that is executed consistently across different financial intermediaries and although the United States is not part of Crs that has its own factor system.
Speaker Change: Which established this tax information exchange mechanism with most of the mainstream countries in the world and as all of the other licensed brokers in Hong Kong without the explicit request from the Hong Kong SFC and if it's not compliant with the relevant laws and regulations at Hong Kong through to <unk>.
Speaker Change: Securities will not disclose client information and client data to any third party. So we've noticed that on the internet there have been some rumors about <unk> disclosing client data and client trading information to third parties.
Speaker Change: And we want to we want to make sure that everyone knows that the speeds are very baseless rumors and we always adhere to regulatory requirements and we want our clients to also correctly and understand and interpret these laws and regulations. So we've actually done a lot of education in this area as well and so far we have not been there.
Speaker Change: Leading to meaningful client attrition and asset outflow. Thank you.
Speaker Change: Thank you for the question one moment for the next question.
Speaker Change: Our next question comes from the line of MRC.
Speaker Change: Alright, because securities. Please go ahead.
Speaker Change: So as we go into the Q&A.
Speaker Change: Once you go through that tissue.
Speaker Change: Yes.
Speaker Change: Now with Jimmy Uruguay, Hi, Bodo, and Keith Richardson Jihad with idea.
Speaker Change: Ladies and gentlemen, Jimmi Sue. So this is going to go up so you're hypos have yosef oil condo cohorts and whether it be on.
Speaker Change: He will go into their routine cooker Italiana. So congratulations on another quarter of outstanding performance I have a question regarding hydro recently Ala Hypo dropped sharply how will this impact your net interest income. Meanwhile, with hydro floating are we seeing changes in client behavior, such as increase followed.
Speaker Change: And more allocation to many marquee fall equity asset a more active JD. Thank you.
Speaker Change: How shall I put agile vinci.
Speaker Change: As you will see us equate unsold, Kentucky open shop.
Speaker Change: So you only got Qinghai da Vinci.
Speaker Change: Colorwatch Asia.
Speaker Change: Sure sure leading the charge on our <unk>.
Speaker Change: A woman tangy registration DRAM will yield.
Bob Atlanta: Bob Atlanta, each haven't competes what youll legally antidote.
Bob Atlanta: Echostar <unk> strategic challenge so that you get.
Bob Atlanta: Chip.
Bob Atlanta: <unk> got Nicola Shaw will touch it.
Speaker Change: D. G to you got high Shoebox should that you think that you have.
Speaker Change: Chuck a couple of the issues nutrition, we've already got some jaw.
Speaker Change: Sure Todd.
Speaker Change: <unk> chawla to the chip.
Speaker Change: C to each of the Shaw <unk> you Michelle.
Speaker Change: Function of EMEA.
Speaker Change: <unk> <unk> hundred <unk> switching Dutch at a high body heavily duty of Shanghai.
Dr. Shaw: Dr. Shaw mentioned good either cohort are you get you all you had joe either bulk or co.
Dr. Shaw: Copel differential.
Speaker Change: Joey launching Vega show, though Chicago Shanxi Nico.
Speaker Change: Chiefly essentially.
Speaker Change: Meanwhile, for me on what medium gray seeking essentially in the hypothetical case, where they catch up.
Speaker Change: Who are you shipping to our tissue Shanghai Nisha IPO. So.
Speaker Change: So AT&T to you to the high bold nimble launch tissue boxes that somebody negotiating at Walmart Jedi Shashi on that one.
Speaker Change: Now, we'll finish up our last earning call actually we provide a sensitivity analysis assume every 25 basis.
Speaker Change: <unk> cut all pretax mongst pretax profit will be down 8% to 10 million Hong Kong told us roughly.
Speaker Change: Since the since the fed rate cuts last year by 50 basis point, we see the overall interest income revenues in the first quarters continue to grow on a Q on Q basis, which was mainly because the average size of our idle cash balance largely offset.
Speaker Change: The rate cut implications at the same time.
Speaker Change: You mentioned the recent declines in high both which would trigger more clients trading activities in terms of velocity and consequently, we will benefit from the trading commissions on the other hand, we think the recent sharp declines by Heibel may be just a temporary partially due to.
Speaker Change: Certain mega Ipos in Hong Kong, so whether it will be sustained in such a low level. It is still way too. Thank you.
Speaker Change: Thank you for the questions.
Speaker Change: One moment for the next question.
Speaker Change: Our next question comes from Tomorrow.
Speaker Change: <unk> from Morgan Stanley. Please go ahead.
Speaker Change: Although I think one thing is I mean, what do you Wanna get away with similar slightly the Huntsville, you'll now go in <unk>.
Speaker Change: Do you guys look when you do it.
Speaker Change: Yes.
Speaker Change: The agreement.
Speaker Change: At least you take all that you guys should be indicative to Amazon can you <unk> sorry.
Speaker Change: Thanks, a lot guys.
Speaker Change: Don't you Sue likely I don't want to you why do I think I don't want you to call him back.
Speaker Change: Once you're in you're in Ohio.
Speaker Change: Well actually you why would you in Cologne Harlequin salary wages the wages, Doug one for you Sue 17, Joe.
Speaker Change: You see that.
Speaker Change: For the time being sold next year.
Speaker Change: Okay.
Speaker Change: Coincident with.
Speaker Change: So you'll notice until we all.
Speaker Change: I'll take a magnitude Ohio's heiko you wanted to add anything.
Speaker Change: Could you quantify that.
Speaker Change: Alright.
Speaker Change: I mean, that's kind of how do you guys I wonder if.
Speaker Change: You can do all that you guys.
Speaker Change: So my first question is on the Macquarie asset inflows that hit.
Speaker Change: Hitting a record high this quarter.
Speaker Change: Just wondering the mixed up inflows by different regions, especially from greater China region contribution and what's the outlook for the full year and second question is about is there any quantitative metrics that we can look at.
Speaker Change: Measured the adoption or engagement satisfaction and client stickiness.
Speaker Change: Arising from the AI tools that we have launched and what could potentially be do it could be done more in this space. Thank you.
Speaker Change: Obviously, well look we're not even what 30 of NTT argument here, which of course is Danielle that way now.
Speaker Change: Genco to each door women's soil the chico's just from the change, which Instituto industry that you've got these are challenging legal central that you should judge on Gucci.
Speaker Change: <unk>, the eco Greenville quantities and Joshua <unk> triggered by FDA.
Speaker Change: Two channel chime in.
Speaker Change: I took a catch on the ship hold <unk> Yoshida tangible timber, which can take all the eagle shipping number to the Q2.
Speaker Change: In sugar portions that took a portal to chunk of metric I should have sure youll be Yahoo, there'll be ashamed megawatt or just shy of the hotel. The Asia took a portal so as chunky churches, geoculturally, especially from a mark to market or to the enchant cheapen.
Speaker Change: John Cogan make sure the charter so trade up than the woman controlled Cheddar cheese sauce.
Speaker Change: Okay.
Speaker Change: And Josh at ICU wont couple that you guys seem routine negotiating now with.
Speaker Change: Treaty that you'll have to chew that cut.
Speaker Change: <unk> has Shanghai, Shanghai, Cushing, California got hydro together Youre concerned that Yugo Eagle you guys.
Speaker Change: Not whole tenure, which unlike congratulation sponsored <unk>.
Speaker Change: We are.
Speaker Change: Essentially if you look on the equal equal you've got you've got copper.
Speaker Change: In terms of the first quarter lesser asset asset inflows actually we see a very strong inflow momentum of course.
Speaker Change: Our seven different markets. The overall ethane low by the group increased over 50% Q on Q basis and also the.
Speaker Change: We've mentioned in the opening remark.
Speaker Change: It is our record high in a single quarter numbers.
Speaker Change: <unk>.
Speaker Change: In terms of the geographic breakdowns, Hong Kong, Singapore Steel are the majority contributor markets for the asset inflows and going forward. We are constructively positive on the overall on the full year ethane flow situation. Thank you.
Speaker Change: Shanghai.
Adam: Yes, hi, its Adam.
Speaker Change: And it's not.
Speaker Change: So Tony on your religion to Adderall Knowshon Sandler.
Ken: Sure Ken.
Ken: <unk>, 10% in China, and bullish with you halfway team with a bunch out and some will tell that column.
Ken: Cohort or you want me to.
Ken: <unk> does not quite on the eight O fish angle when we acknowledge it switching a couple of digit aware to living.
Ken: And I think while EMEA back to the new AI bosons in level, one particular standout, but you'll have the mtc.
Ken: Cocoa and uncle <unk> tissue.
Ken: And so yes, you can have that impact on that hits the Italian <unk>.
Ken: <unk> cohort that you've got routine course, Eloping heightens your California.
Ken: We've launched the political AD functions for about two months analysis has not been that long we're still.
Ken: Analyzing more data, but based on the preliminary numbers we have seen.
Ken: Our users have very good feedback of our physical function and that also leads to more engagement and activity on our platform, which also package our AI functions into our membership programs. So there's a limited number of three questions you could ask to AI and that depends on the tier of your membership and that is.
Ken: Based on the client assets and the trading behavior on our platform.
Ken: Which means that they have function has helped with net asset inflow and the trading velocity I think that's why we're trying to rollout functions to more international markets based on the initial traction we have seen.
Ken: Some clients. Thank you.
Ken: Thank you for the question.
Ken: The next question.
Speaker Change: Next question comes from you from CIC. Please go ahead.
Speaker Change: Hey, guys. Good morning, Tim Good luck in the Q&A to quit I wish John Dingell sort of vis vis your funnel, our Japan, Ohio level when T cells Alan Joyce.
Speaker Change: It was Andy that our flagship quite.
Speaker Change: We'll go to <unk>.
Sasha: Hello, Sasha easy to <unk> and <unk>.
Speaker Change: Andy Cinzano, Okay, let's get the treating physician Johan.
Speaker Change: What are you guys should have Yahoo.
Speaker Change: I'm not quite sure why you'll notice that how do you sit in the UAE.
Fabio Sandri: I wanted to ask also do anything unless you got a whole co chairman of <unk>, Mr. Fabio Sandri urgency just Eagle LNG.
Speaker Change: Yeah Glenn.
Speaker Change: Yes, I would say from notes issued Don Merril Archambault generating without you just answered on this is Chuck.
Speaker Change: In Gaza.
I'm also focus on.
Speaker Change: Sounds good chunk, and then telecom Jerry I'll direct you to how Barclays question on the Middle East.
Speaker Change: And then when you see a whole lifestyle.
Johan: Johan <unk> from CIBC.
Speaker Change: I have two questions held the first of all it's about the customer acquisition cost.
Speaker Change: We see it.
Speaker Change: Decline much of this culture. So what's the reason behind and do you have any new guidance for the future of safety.
Speaker Change: And the second question.
We see we have announced the two entries and New Zealand markets would you. Please share more color on these markets.
Speaker Change: While this is a firewall without an eagle and CTO verbinski watching what the terms regarding lightweight.
Speaker Change: D G to award, which have good focus and then let's take the <unk> targets a check in timber compete.
Speaker Change: Since you guys into legal cookbook.
Speaker Change: We are seeing ways I put on the tariffs it sounds like you see total 20, LPL thoughtful digital too cheaply.
Speaker Change: The ore towards the time, they get tremendous Shanghai, IP IPO that you've shown to.
Speaker Change: You mentioned that <unk> was just hoping you could see advancing them to the portal to his total target lesion that wholesaler or the <unk>.
Speaker Change: Look.
Speaker Change: Woman she comes under your feet.
Speaker Change: I'm trying to relate it with Hong Kong, Shanghai, virtually the whole bunch of legal HR to the passion of the internally.
Speaker Change: The geography, Hong called Yugo, Shabaab, Colgate that generally equal or could it yourself number one <unk> is a potent literally ketonemia Huntington was always available should you don't actually Berkshire eating at home.
Speaker Change: If only I E.
Speaker Change: Cope with some time when you ship.
Speaker Change: Finally in EMEA Shuang XI choice here took a chance here that you're hitting by the hit to ensure santal sheet I apologize I took a charter.
Speaker Change: Youll Keisha.
Speaker Change: <unk> power control Chile.
Speaker Change: Hello, I'm, sorry, I should have bottom down towards the bottom downhole and the Gulfport Chico.
Speaker Change: It essentially.
Speaker Change: Finishing with one <unk> quantum day trading artist shipping pilot Jacob on the bulk of the shelf shipyard and our goal will be continue.
Speaker Change: Since our Hypersound one trend of trading.
Speaker Change: Potion of the chunky.
Speaker Change: Sure about what synergies G&A youll be hilltop Asia portal <unk> changing the <unk> timeshare Wade shorter.
Speaker Change: <unk>, which is a whole CDR.
Speaker Change: <unk> been generally good ship street will be well, Michelle Jones with either <unk> Mosquito control sticky that you got your satellite to the 2000 Pimco JV that took us which you should be able to change that to a charge off.
Speaker Change: In terms of the cut in the first quarter the average attack.
Speaker Change: We reached a royalty in.
Speaker Change: In the first quarter is around the 1800, Hong Kong dollars, which is relatively lower than our our.
Speaker Change: Our objectives in the beginning of this year, partially due to a very strong.
Speaker Change: Market market tailwind we got.
Speaker Change: Regardless in China, the China assets re rating very strong IPO markets in Hong Kong and Volatilities in the U S and in these trading windows, our marketing colleagues.
Speaker Change: Time, they catch these windows and thanks to our brand equities influence as well we've got a very good result.
Speaker Change: Going forward that we do.
Speaker Change: I expect we will continue to assess.
Speaker Change: Our client growth as our first priority at the same time, we will.
Speaker Change: Further emphasize our brand brand building.
Speaker Change: Deployments in terms of the in.
Speaker Change: In terms of the fundings.
Speaker Change: In the long run we think the further enhance our brand equity will.
Speaker Change: Let us.
Speaker Change: Become walk resilience in different <unk>.
Speaker Change: Trading investment cycles.
Speaker Change: No.
Speaker Change: Investment Llc's brand the equity.
Speaker Change: The effect in the near term it is very difficult to predict.
Speaker Change: Not to mention the overall market environment and the macro environment issue.
Speaker Change: <unk> include a lot of uncertainties. So fond of prudence angles, we will maintain our full year guidance on CAC unchanged, but we will revisit this assumption in the coming quarters. Thank you.
Olaf: Hello, Olaf with Ics the arguments you question Sheila.
Olaf: I was in.
Olaf: So it's indeed and assure you that when was that ultra <unk> shear zone DAA will the charter redemption trends just the army.
Olaf: Yes, it's a pin pad.
Speaker Change: You should know about known to essentially see commensurate in aviation.
Speaker Change: She says sugar.
Speaker Change: What are kind of essentially on their toes as you're going through what we call. The police Peugeot has shown.
Speaker Change: Sure.
Speaker Change: <unk> remains on track.
Speaker Change: Without having the only creatures.
Speaker Change: But you haven't seen him answer Tom.
Speaker Change: Sean tied to biological patch, all hooker <unk> auto Ru Natasha Heiko.
Speaker Change: When will the auto.
Speaker Change: Joe Munda T shirts.
Speaker Change: So of course it helps you.
Speaker Change: You're in EG.
Speaker Change: <unk> retention I know, you've got some known to them and I'm sure you're feeling no menu, which is essentially on the 20th Holistically about liquidity Jack Cockwell.
Speaker Change: Sure.
Speaker Change: <unk> is now the number two broker in Australia.
Speaker Change: <unk>.
Speaker Change: We've accumulated a lot of brand equity and we feel like expanding into New Zealand was a natural extension.
Speaker Change: <unk> also seen that.
Speaker Change: Australia in stocks in the U S stocks are the two most popular asset classes for Kiwi investors and we have already built very strong product capabilities for these two products in Australia.
Speaker Change: Expanding into New Zealand will not incur much investments in terms of licensing or personnel R&D and we can largely replicate it.
Speaker Change: Infrastructure in the marketing resources and the brand equity with built in Australia. So the incremental cost will be quite manageable and we think the user then business will present very favorable rois. Thank you.
Speaker Change: Thank you for the question.
Speaker Change: <unk>.
Speaker Change: One below for the next question.
Speaker Change: Yeah.
Speaker Change: The next question comes from Peter Chang from Jpmorgan. Please go ahead.
Speaker Change: Hum.
Speaker Change: Cool.
Speaker Change: Youre going to see a foothold.
Speaker Change: Now what is.
Speaker Change: Youll go up and you go through <unk>.
Speaker Change: Let's see to the right.
Speaker Change: The effective tax rate or sort of shadow shadow or myself.
Speaker Change: Sure.
Speaker Change: <unk> hundred <unk> sure it either shaping Doug I assure you.
Speaker Change: And why are you could you assure yourself to.
Speaker Change: <unk> sour to assure but Andy a commission fee rate would either sushi and we will mail Guangzhou Dol alrighty to drill your cash.
Speaker Change: You also see wealth creation.
Speaker Change: You also have to unfortunately does that money go.
Speaker Change: Thank you.
Speaker Change: Do you wait either tissue now finally.
Speaker Change: Thanks for giving me the opportunity to ask questions is it Peter travel from Jpmorgan I have two questions, let's say, it's about the impact of tax.
Speaker Change: Tax rate, we noticed that.
Speaker Change: That that tax repair copying first quarter to 18% well wondering whats the reason behind and what's the.
Speaker Change: Medium to long term effective tax rate level for full tool going forward second question is about.
Speaker Change: Blended commission fee rate, we noticed that your first quarter, but at the commission fee rates stabilize and pick up slightly.
Speaker Change: We used to understand.
Speaker Change: And what will be the trend going forward. Thank you.
Speaker Change: Although pizza.
Speaker Change: Well look we got to that <unk>, particularly your <unk> shares traded at Appalachia, and if I can just ship out to help pay for that.
Speaker Change: Youll be negotiated so you don't want to wait to consider you need education continue with Asia.
Speaker Change: Shifting to the niche on the inkjet chicken tax credit, Jim Baiter, and Bush and whatnot. So you took off we saw tranches, but just wonder your shelf review that your assumption then with the R&R Tricia.
Speaker Change: CJR essential qinghaosu should the strong tissue that's associated with the Cheetah.
Speaker Change: Hey, good I had thought that you would rather you attrition naturally when you took the attitude of puts some glitches.
Speaker Change: But <unk>, just really chunky leach at <unk>.
Speaker Change: Well you should say, we light because you could imagine what my Chung chief of the charter of the fact that it's a liquid.
Speaker Change: You could buy congestion sweet spot, so youll challenging negotiation.
Speaker Change: In terms of the effective tax rate in the first quarters.
Speaker Change: This quarter, our tax rate is around 18, 6%.
Speaker Change: There are two reasons behind that one yes.
Speaker Change: As more and more our overseas.
Speaker Change: Markets start to generate a profit.
Speaker Change: The historical accumulated tax credit has been fully utilized.
Speaker Change: <unk>.
Speaker Change: Consequently, enhance our overall group tax the effective tax rate secondly.
Speaker Change: After the implementation of pillar II by OECD in different markets and different countries. Our overall tax rate will be impacted to some extent as well. So I do expect our overall tax rate will maintain 17% to 18%.
Speaker Change: The coming quarters.
Speaker Change: Your argument TCE of Guangzhou.
Speaker Change: I'll tell you the up on tier two that you got from Toyota into a chunky Shanghai to shield yourself with a T cell to a high single agent is a shareholder.
Speaker Change: Chicken Kokoda Sean.
Speaker Change: PMA product mix that you see a change.
Speaker Change: While hotel. So you don't want me or controlled Hh Huntington Lady check on a leash on us yet.
Speaker Change: Tricia <unk>.
Speaker Change: Sure, but shouldn't you touching on about what may be you could check.
Speaker Change: <unk> fleet with the what you call high should sandwich negotiating should clearly bought Chico Bettina.
Speaker Change: For the second question regarding <unk>.
Speaker Change: Our blended blended commission rates or changes actually.
Speaker Change: Slightly uptick.
Speaker Change: On a Q on Q basis in terms of the.
Speaker Change: Blended commission rate.
Speaker Change: Reason behind that is mainly due to the product mix change there is more clients trading.
Speaker Change: Certain derivatives such as here in the U S options et cetera going forward as we were launching more new products for instance, the crypto trading et cetera, I do is I do expect that our overall blended commission rate will maintain stable. Thank you.
Speaker Change: Thank you for the questions one moment to the next question.
Allan Wong: Our next question comes from Allan Wong from Citi. Please go ahead.
Speaker Change: Fair enough.
Speaker Change: Okay.
Speaker Change: When she hunting to always have towards the English language, you guys sound like Chicago.
Speaker Change: Anyway, good luck guys.
Speaker Change: Sure.
Speaker Change: Yes, yes for sure. It sounds like you guys would incorporate what you felt that a whole lot easier.
Speaker Change: Do you guys have that once you're in a couple of Shaw totally neutral.
Speaker Change: While about alcohol because again, its all that kind of how we like to just ask a quito operational team will be out Youll Colonsay, Kenya more subdued industrial not so perhaps a whole kind of consider what kind of sounds like youre still.
Speaker Change: Oh is that call. It does seem that the infill gradually here.
Speaker Change: Yeah.
Speaker Change: So those were obviously Occidental day to day.
Speaker Change: Sure.
Speaker Change: Brown something incremental.
Speaker Change: Or should I look at the top of that kind of <unk> with Jpmorgan <unk> <unk>.
Speaker Change: Yes, Felicia and Jake Bartlett.
Speaker Change: Each of those old idle cash balance tissue and Johnson <unk>.
Speaker Change: You also have some easy two leases totaling in stock I should say.
Speaker Change: Akshay <unk> idle.
Speaker Change: <unk> done it.
Speaker Change: Sure you got either idled Cassia, Thank you guys.
Speaker Change: Okay.
Speaker Change: Hi.
Speaker Change: Thanks management for giving me and it has to ask a question Lisa Allen Citibank. My first question is on Hong Kong markets fill fulfill previously had some noncash I'll talk it all about 40% in Hong Kong that basically implies about 1 million paying customers in Hong Kong.
Speaker Change: Our <unk> numbers, our paint in customer numbers.
Speaker Change: Already are approaching close to around 900, okay. Okay.
Speaker Change: Okay, Okay and given.
Speaker Change: Given the pace of audio paying customer acquisition in Hong Kong. So far so I think our long term goal of multichannel Filippo, saying probably within reach within the next couple of quarters. So against this backdrop wondering if management could share your updated view on the Hong Kong markets, especially considering that recent changes in the competitive landscape.
Speaker Change: With potential competition for anchor of and probably quote.
Speaker Change: If we look beyond the 40% market share how much additional headroom do we see to further increase market share in Hong Kong.
Speaker Change: The second question is on interest income.
Speaker Change: We see that cash balance has grown very notably during the first quarter wonder.
Speaker Change: Wondering if management could help us break down the interest income.
Speaker Change: How much of that is coming from idle cash how much update you at all about your finances, because the lending et cetera.
Speaker Change: Well this is it.
Speaker Change: Ellen will actually help with adherence to the <unk> with some of the <unk>.
Speaker Change: So Daniel that we thought.
Speaker Change: Chunky nature idle cash Tirewoman <unk> holding in Idaho.
Speaker Change: Idle cash retention or TV show Tiger and Dr. Chuck on the dish has already been thought that that was essentially without Andrew Fisher.
Speaker Change: On the <unk>.
Speaker Change: <unk> you're looking at.
Speaker Change: And Tito the agility to woman chunk chunk watching political issue with <unk> quite what you look to <unk>.
Speaker Change: I should feature on challenging the ego Corporately its engine couple that to the routine Columbia Eco.
Speaker Change: <unk> wishes chancellorship itself Wattenberg, well Neil for Dolby as you cope with Shanghai.
Speaker Change: So the hedging that you it should come down to the BD chunky churn you can share your thoughts in shoulder to the membership.
Speaker Change: Two other big venue.
Speaker Change: In terms of for the second question regarding the idle cash roughly the idle cash.
Speaker Change: <unk> had the income account for 35% to 40% of our total interest income for this quarter, the very strong robust increase.
Speaker Change: In the revenue arising from idle cash partially due to two reasons number one yes, we got a very strong net asset inflows from.
Speaker Change: Existing clients not to mentioned a lot of new clients, we acquired in the fourth quarter. Secondly is due to the market was quite volatile in the fourth quarter. So in our observation a lot of clients actually.
Speaker Change: Partially making clients to increase their cash position in the lower their stock positions, So which is we got some benefit.
Speaker Change: Horizon funds as well.
Speaker Change: Okay.
Speaker Change: I was just telling <unk> cohort shortly.
Speaker Change: It's here shortly can impact on HEICO for the jugular shortly.
Speaker Change: Now, let's make sure Jonathan and we will balance short term until you sound company shall chalet Nobel So you'd say that vessels, Louisiana, Apple chic apples to apples comparison.
Speaker Change: Well, then political chew that let's see those are actually Anthony the originated over two years I'm not sure of distinguishes us from Sandler O'neill.
Speaker Change: Sure.
Speaker Change: That tissue.
Speaker Change: It shows how did you guys see clients out the agenda to the hotel and challenged shield.
Speaker Change: Tissue tissue should help them with look whats your attitude towards you guys announced you got some challenges.
Speaker Change: Seeing none.
Speaker Change: She thought our toggle and <unk> <unk>.
Speaker Change: While digital will launch its own cocoa sugar hydrous on cohort.
Speaker Change: Jacob.
Friedhelm: Friedhelm pad.
Speaker Change: Attending.
Speaker Change: So I'm just I'm not sure yet.
Speaker Change: As you can see that <unk> enjoying your door, assuming the Shanghai will continue with what you guys end up <unk> now called <unk>.
Speaker Change: Two of them, which each issue that they're attempting to do with trying to inculcate that EMEA way out the door the way whichever Ila, which arent you should MPLX tissue, but it seemed to me that you know most of you hopefully chancellor not women's at Tinder, It's only at Ulta to towards the <unk> channel have dual targeting the things Johan <unk>.
Speaker Change: <unk> <unk> <unk> <unk> <unk> <unk> bulk with you Shouldnt you should help them.
Speaker Change: From developing higher should genome can actually join Gallagher was into China now.
Speaker Change: <unk> Wuxi to retool their shell <unk> <unk> based oncology decision without looking at enhancing free Hong Kong. So you won't do they don't always asking that you changed out well known people <unk> been called to question. The Tcf <unk> now so you don't want to put on it.
Speaker Change: According to cope with that you can achieve that.
Speaker Change: According to <unk>, which inquiry.
Speaker Change: Biological quarter Nicole.
Speaker Change: Is that within the <unk> now women <unk> change on the jets her hometown sure do it without the wound should titrate the emerging Lakota I should hopefully you'll find that we are on the <unk>.
Speaker Change: Also on the dock waiting no shipyard in South Dakota, our highest helpful. Cereal, we'll continue sounds thats whats oncological intelligent wholesale litre engine.
Speaker Change: <unk> <unk> and <unk>.
Speaker Change: So in terms of our Hong Kong market share the absolute number.
Speaker Change: Our funded accounts, you mentioned applies to our greater China business, while the market share at target you mentioned was about our Hong Kong local business. So these two numbers are not apple to Apple comparisons.
Speaker Change: Past two quarters, we have seen the Hong Kong market contribute at the highest number of paying clients.
Speaker Change: All of our southern markets, which is which gives us confidence that as the leading broker in Hong Kong will be able to gain outsized benefits from favorable market conditions, and we think that our Hong Kong business has huge runway for growth both in terms of client numbers and client assets and the Hong Kong market has.
Speaker Change: <unk> never been short of competition and in the past few years, there have been number of our peers a very notable peers entering into Hong Kong.
Speaker Change: <unk>, how the outside market environment changes, we've always been doing product innovation and product iteration, and we believe that our product capabilities.
Speaker Change: Very strong barrier to entry for our business and we in each and every market. We enter into we built very customized experience very innovative product features and coupled with our superior user experience and very competitive pricing strategy, we continue to gain user mindshare and Hong Kong and take market.
Speaker Change: Sure and on top of that we think brand is.
Speaker Change: One of the most important intangible assets, our financial services platform and building our brand takes time and Fujitsu has built a considerable level of trust with our clients and we've seen very very high client stickiness on our platform. It is consistently above 90, 899% on a quarterly basis.
Speaker Change: So if there is a newcomer that cannot provide highly differentiated products and service. We don't think it can sway the client choices and as we continue to build our brand we.
Speaker Change: <unk> also seen.
Speaker Change: And higher number of high net worth clients in Hong Kong, which contribute to a very high.
Speaker Change: Net asset inflow quarter over quarter, and we've also seen that when our clients choose a broker that decision is usually multi dimensional whether it's applying a zero commission strategy or just to direct traffic from from other platforms. We don't think either one is going to achieve very desirable effects.
Speaker Change: The users.
Speaker Change: <unk> choose the platforms. There are compliant that have high brand recognition and have the strongest or round it capabilities.
Speaker Change: <unk>.
Speaker Change: Thank you for the questions.
Speaker Change: Question comes from Zoe Zhou from Jefferies. Please go ahead.
Speaker Change: Hey, guys. Good morning, transactional I Wonder if you want some consequences to that.
Andy Giggled: Andy I will take it.
Speaker Change: We will not go on he sounds it sounds that also cancel Guangdong kindergarten all why do you think it's either Archie for white backgrounds with luxury companies.
Speaker Change: The cash element of your actions in China in Shanghai, Tokyo, Greene, Washington beyond that again I'm only.
Speaker Change: Can you just answer that.
Speaker Change: Can you speak to your question Jeff.
Sam: No. Thank you. Thank you Sam.
Speaker Change: Hi, Thanks management for taking my questions and congratulations on your results I have two questions. Firstly I have a follow up question.
Speaker Change: Hi management mentioned that air products will be launched in overseas market in Q2, So I'm wondering what's your <unk> strategy and investment in scale and my second question is about the ATP occupancy. This year an update on that business is broken into with yoga ETP license. Thank you.
Speaker Change: Hello. This is only what simply die in charge of the ATP each of the Petrobras <unk>.
Speaker Change: <unk> hundred <unk> to the public holiday shipments you're watching what the tone should then you're right.
Speaker Change: <unk> peso, Colombian should utilities, who may or <unk> or the <unk> number which in one of the highest should say showing that you have the ETP the GOP pseudotsuga synching package or the <unk>.
Speaker Change: Duncan.
Speaker Change: It's a trend.
Speaker Change: <unk> should be a shorter list.
Speaker Change: How they each year.
Speaker Change: On the issue with January has shown that so which engine.
Speaker Change: When she doesn't change so if I'm going to each year properties. Upon the ECA validation Zhejiang wish it was a huge engine silicone hydrogel ICA showing these issues yet.
Speaker Change: Again, Charlotte boxers immediate.
Speaker Change: What you'll find me a woman youll see that you could change that profile.
Speaker Change: <unk> licensed.
Speaker Change: There is no any.
Speaker Change: The update in the first quarters, despite that we got.
Speaker Change: The short list by Hong Kong, SFC, <unk> license alongside with a kebab.
Speaker Change: Now we are still in the process of phase II. There are still a lot of validation needs to be conducted by the third party <unk>.
Speaker Change: <unk> independent consultant and Theres a lot of.
Speaker Change: Process testing work needs to be complete in order to.
Speaker Change: Get to final approval form SFC, we will keep you posted for this any progress. Thank you.
Speaker Change: And the woman to add something to China, and therefore Tuesday at <unk> to add onto that when we are faced Hanmi Tin Atlanta, which is they added <unk> <unk>.
Speaker Change: That should lead to go get that but I think.
Speaker Change: The AI.
Speaker Change: Affiliate that watermark equal ventures, it enables <unk> to sell it that way if I'm in tissue paper come toward the GTH has been going on now for our digital cohort.
Speaker Change: With that to the T cells and tissues in the AI is in Portland.
Speaker Change: We're here with a financier of bulk horn Dave.
Speaker Change: Our core capital with the TCA transaction, let them down on though is increasingly using AI to each other in salvage therapy show that that they could have with the farmer will ensure that the European patent here for Ya towards your actual <unk> entre.
Shaw: As usual it sounds ethology that both of them now have them <unk>, Apple, which is in 'twenty that hopefully that you can put it that way I'll take that one needs in back half of it is in the whole normalization with that I shall Dan shots at Shaw.
Speaker Change: Sure.
Speaker Change: Algo trading debenture at Chipotle.
Speaker Change: Halfway halfway without the Michigan that you hold your total gyro Nuno ash on the window now.
Speaker Change: Chicago.
Speaker Change: Pass a bunch on the to hit reality tasha to searches and ICF parameter.
Speaker Change: And I say, a condition that enhancing clients' outweighed by the <unk> to the existing <unk> algo trading the gcs Tcs algorithm.
Speaker Change: Particularly curious sure sounds Dealogic a couple of digital fulfillment around common core should only see a couple of pieces halfway assumed all the ACF with Algoma. So with that we are attempting to a total of mankind.
Speaker Change: Welcome to the Chico's chassis.
Speaker Change: In terms of our AI strategy through two houses assembled our own AI team, we're closely monitoring the industry developments and keeping up with innovation. So the AI is applied in two ways a two to one <unk>.
Speaker Change: Internally, we use that to increase operating efficiency and we also leverage AI to develop new products and features for our clients and in terms of operation efficiency, we've already leveraged AI in a number of scenarios, including customer services.
Speaker Change: Account opening documentation verify I'd verification processes, and we've seen AI bring intangible uplift to our operating efficiency and in terms of our client facing features we think that for active traders a key benefit of AI would be to lower the investment investment thresholds and helped.
Speaker Change: Them more efficiently gather information to make informed investment decisions.
Speaker Change: For example.
Speaker Change: <unk> also training very soon.
Speaker Change: So before algo trading this almost exclusively for the sophisticated institutional investors and now for our retail clients by telling AI. The stock you were interested in the <unk>.
Speaker Change: Parameters, you want to monitor and what kind of conditions will trigger trade their AI can generate an algo trading function for our clients, which we think significantly lower their barrier. So were bound that goal and we will continue to innovate to bring more AI powered future. Thank you.
Daniel Loeb: Thank you for the questions, we've gotten I would like to hand, the call back to Mr. Daniel <unk> for closing.
Daniel Loeb: That concludes our call today on behalf of <unk> management team I would like to thank you for joining us today.
Speaker Change: Any further questions. Please do not hesitate to contact me or any of our Investor Relations representative Thank you and goodbye.
Daniel Loeb: That concludes today's call.
Speaker Change: This call. Thank you for your participation you may now disconnect.
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