UP Fintech: Client Assets Hit Record High, Over 75% from Clients in Markets such as SG; 2023 Net Income Surged by 237%

Rhea-AI Summary

UP Fintech Holding (TIGR) reports strong financial performance with revenue of US$70 million in Q4 2023, marking a 20.9% YoY increase. Non-GAAP net income for the year totaled US$42.7 million, a 3.4x growth from 2022. The company added 47,797 new global account holders in Q4, reaching a total of 2.2 million. Total client assets grew to US$30.6 billion, with a 62.1% QoQ and 118.5% YoY increase. Singapore accounts for over 75% of total client assets. The company aims to solidify its market share in Singapore, Australia, New Zealand, and Hong Kong to become a world-leading fintech brokerage.

Positive

• Strong financial performance with a revenue of US$70 million in Q4 2023, up 20.9% YoY.
• Non-GAAP net income for the year reached US$42.7 million, a 3.4x increase from 2022.
• Added 47,797 new global account holders in Q4, totaling 2.2 million accounts.
• Total client assets grew to US$30.6 billion, with a 62.1% QoQ and 118.5% YoY increase.
• Singapore accounts for over 75% of total client assets, with a high proportion of funded clients.
• Company aims to strengthen its market presence in Singapore, Australia, New Zealand, and Hong Kong.
• Launched new offerings like trading for Bitcoin spot ETFs and received approval for virtual asset trading services in Hong Kong.
• Reported growth in wealth management business with AUM surging over 400% YoY and introduction of US Treasury trading service.

Negative

• Non-cash foreign exchange loss of over US$7 million in Q4 due to USD depreciation.
• Negative impact on non-GAAP net income in Q4 from foreign exchange loss.
• Dependence on markets outside Chinese mainland poses currency exchange risks.
• Competition in the fintech brokerage industry may pose challenges to market share growth.
• Potential regulatory changes in various markets could affect trading services and offerings.

Insights

Financial Analyst

The unaudited financial results released by UP Fintech Holding Limited exhibit a substantial year-over-year revenue growth of 20.9%, culminating in a total revenue of US$272.5 million for the year 2023. Despite the non-cash foreign exchange loss due to the depreciation of the US dollar, the non-GAAP net income has impressively increased to 3.4 times that of the previous year. This suggests a strong underlying financial performance, which is further underscored by the significant growth in new global account holders and funded accounts, indicating an expanding customer base.

The company's strategic focus on globalization has evidently paid off, with the majority of total client assets now sourced from markets outside the Chinese mainland and Hong Kong. This diversification of revenue streams may reduce geographical risk and potentially lead to more stable future earnings. The growth in total trading volume and net asset inflow from both individual and institutional clients could be indicative of UP Fintech's increasing market penetration and customer trust. However, investors should consider the scalability of such growth and the potential for increased competition in the brokerage industry which could pressure margins and market share.

Market Research Analyst

UP Fintech's strategic expansion into the Southeast Asian and institutional markets has been met with tangible success, with a notable 118.5% year-over-year increase in total client assets. The company's focus on Singapore, evidenced by the high proportion of new funded clients from the region, aligns with the city-state's reputation as a burgeoning financial hub. This regional emphasis could be a strategic move to capitalize on the growing wealth management demands in Asia-Pacific.

The introduction of new trading products, such as Bitcoin spot ETFs and obtaining a Type 1 License in Hong Kong for virtual asset trading services, reflects UP Fintech's agility in adapting to evolving market trends and regulatory landscapes. These developments could attract a broader range of investors and position the company favorably within the fintech brokerage space. However, the extension into cryptocurrencies and other virtual assets introduces new risk factors, including regulatory uncertainty and market volatility, which stakeholders should monitor closely.

Legal Expert

UP Fintech's compliance with regulatory requirements, as demonstrated by the acquisition of the Type 1 License in Hong Kong, is a critical factor for its operational legitimacy and expansion capabilities. This regulatory nod provides a gateway for the company to offer a wider array of services, particularly in the burgeoning virtual asset market. It's important to note that regulatory compliance is a dynamic and ongoing process and the company's ability to navigate this landscape will be important for sustaining its growth trajectory.

Moreover, the company's engagement in underwriting activities for IPOs, particularly its leading role in Hong Kong and US listings, signifies its growing presence in investment banking. However, the regulatory scrutiny associated with such activities is high and any lapses could have significant reputational and financial implications. Continuous adherence to regulatory standards and proactive risk management will be essential for maintaining the company's growth and investor confidence.

SINGAPORE and NEW YORK, March 20, 2024 /PRNewswire/ -- UP Fintech Holding Limited ("UP Fintech" or the "Company", Nasdaq: TIGR, and all its subsidiaries and consolidated entities), a leading online brokerage firm committed to redefining global investing through next-generation technologies, today announced its unaudited financial results for the fourth quarter and full year ended December 31, 2023. In the fourth quarter, the Company achieved a revenue of US$70 million. For the year ended 2023, total revenues increased 20.9% year-over-year to US$272.5 million. Due to the depreciation of the US dollar in the fourth quarter, resulting in a non-cash foreign exchange loss of over US$7 million, the non-GAAP net income for the quarter amounted to US$1.1 million. For the entire year, the non-GAAP net income totaled US$42.7 million, which is 3.4 times that of 2022.

During the fourth quarter, UP Fintech added 47,797 new global account holders, marking a 65.9% increase quarter-over-quarter and bringing the global total to 2.2 million, up 9.3% year-over-year. Funded accounts increased by 39,034, showing a growth of 58.6% quarter-over-quarter and 42.8% year-over-year, reaching a total of 904,600 accounts. In 2023, the company added 123,110 funded accounts, mainly from markets outside the Chinese mainland, surpassing annual guidance of 100,000. The Company's total trading volume reached $81.8 billion during the period. With a strong brand presence in Southeast Asia and an expanding institutional business footprint, net asset inflow from both individual and institutional clients amounted to US$8.2 billion during the quarter, maintaining robust momentum. This drove a quarter-over-quarter increase of 62.1% and a year-over-year increase of 118.5% in total client assets, reaching US$30.6 billion. The retention rate of funded clients remained consistently high at 98%.

Over 75% of Total Client Assets Came from Clients in Markets such as Singapore and the US

Singapore Accounts for the Highest Proportion of Total Funded Clients

Mr. Wu Tianhua, Founder and CEO of UP Fintech, commented, "Over the past year, our robust globalization efforts have resulted in a doubling of our global client assets, reaching a historic high. Over 75% of our total client assets now come from clients beyond the Chinese mainland and Hong Kong, including regions such as Singapore, Australia, New Zealand, and the US. Singapore's role as our group's headquarters has been further underscored: whether on a quarterly or annual basis, the proportion of new funded clients from Singapore has consistently been the highest. Currently, Singapore clients represent the largest share of our group's total funded clients, with over half of our monthly trading clients hailing from the Singapore market, making it the most active region among all markets. "

"In 2024, as the Company celebrates its tenth anniversary and fifth year since going public, we reflect on the past five years of remarkable growth. Our global funded clients and assets have surged over tenfold, with revenue nearly quadrupling and net incomes compounding at a rate of 72%. Looking ahead, we are committed to furthering our globalization strategy, solidifying our market share in Singapore, Australia, New Zealand, and Hong Kong to emerge as a world-leading fintech brokerage. On the brokerage front, we'll expand our offerings and services to better cater to the diverse wealth management needs of both individual and institutional investors. For instance, in January of this year, we introduced trading for 11 Bitcoin spot ETFs, and concurrently, received approval from the Hong Kong Securities and Futures Commission for Tiger Hong Kong's Type 1 License uplift, enabling us to offer virtual asset trading services to local professional investors, facilitating seamless one-stop asset allocation across stocks, options, futures, and cryptocurrencies. On the institutional side, leveraging our swift account opening process, multi-asset trading capabilities, rapid response times, and customizable solutions, along with our self-developed multi-management platform, we look forward to assisting more institutional clients in enhancing their operational efficiency."

Singapore Brand Expands: Regional New Funded Clients Increase by 70% QoQ

Hong Kong Customer Assets Doubled QoQ, Q4 Net Asset Inflow Beat 2023's First Three Quarters Combined 

In 2023, UP Fintech's global presence grew steadily. Benefiting from the extensive reputation built in the Singapore market, new funded client in Singapore and surrounding areas surged by 70.2% quarter-on-quarter. In Singapore, the average net asset inflow per new funded client reached over US$16,000 during the period, marking a historic high. Tiger Trade remains a top choice for Singapore residents, with approximately one in three using the platform*. Tiger Trade has also gradually become the preferred platform for more local clients to trade a diverse range of products. By offering users free SGX LV2 market data and promotional rates on US stock options, the trading volume of local Singapore stocks during the period increased by 27.8% year-over-year; US stock options trading orders increased by 7.2% quarter-over-quarter and 12.2% year-over-year. In 2023, the Company was once again honored with the "Best Retail Broker" award by the Singapore Securities Investors Association.

In addition to its robust retail operations, the Company also launched a one-stop wealth management solution for major financial advisory firms and wealth management entities in Singapore. Addressing the industry's current pain points such as complex client onboarding requirements, cumbersome account opening processes, limited trading options, and low transaction settlement efficiency, the Company introduced its next-generation Turnkey Asset Management Platform (TAMP). This platform offers flexible account structures, fully online account opening, multi-market and multi-asset trading, extensive analysis and trading tools, and diversified reporting. It is also supported by a team with rich experience in business and services. "Our commitment to combining cutting-edge technology with human expertise has positioned us as a trusted partner, fostering long-term relationships and bolstering our standing in the competitive landscape of the financial sector." said Wu Tianhua.

In the Hong Kong market, UP Fintech saw a quarter-on-quarter increase of 20.9% in funded clients and a 150.7% increase in client assets. Net asset inflows for the quarter surpassed the total for the first three quarters of 2023. During this period, the Company introduced the A-share Connect feature in Hong Kong, facilitating trading of over 2,500 eligible stocks and ETFs listed on the Shanghai and Shenzhen stock exchanges. Additionally, the Company launched the "Fixed Income" section, offering selected bond funds to assist Hong Kong clients in positioning themselves early for potential interest rate cuts. By December 2023, trading orders from the Company's Hong Kong users had surged nearly 30 times compared to the beginning of the year, with monthly US stock orders increasing almost 36 times. The industry has acknowledged the company's product and service strength, evident from awards such as the "Top Two Futures Brokers" from SGX and the "Innovative Broker" and "Broker Program Key Partner" awards from the CME.

In Australia, the Company launched CHESS sponsorship for ASX share trading, further enhancing client asset security. By Q4 2023, the number of Australian trading clients grew by 49.4% year-on-year, with US stocks and options traders increased by 65.8% and 67.6% respectively. In New Zealand, leveraging advantages such as free in-depth quotes for US stocks, extended trading hours, and rich options trading experience, local trading clients grew by 19.1% in the fourth quarter, with client assets increasing by 12.0% compared to the last quarter. Currently, the Tiger Trade app has surged to the top 20 in the financial category of local app store**.

Wealth management AUM grew by over 400% YoY

FCN introduced to meet professional investor needs

In the fourth quarter, commission income reached US$22 million and interest-related income climbed to US$43 million, marking a QoQ increase of approximately 3.7%. For the full year of 2023, the Company's commission income totaled US$92.6 million. Interest-related income amounted to US$161.5 million, with a year-over-year growth of approximately 73.5%.

During this period, the Company continued to improve the options trading experience by introducing multi-leg orders on nine major US stock index options. This helps investors capitalize on potential profit opportunities resulting from market fluctuations. Additionally, the company rolled out the options rolling feature, allowing investors to close existing options positions and open new ones with a single order. This enables professional options traders to adjust their strategies and manage risks more effectively. Since its full launch in the fourth quarter, multi-leg options trades have increased sixfold compared to the previous quarter.

"Trade Feed," formerly known as "Trading Sparks," has undergone continuous updates, now allowing users to share multi-leg options trades while displaying the current trading profit and loss ratio. By the fourth quarter, the number of users subscribing to track other sharers' trading feed surged by 282.4% compared to the previous quarter, with over 100 trading sharers joining. Furthermore, the daily average number of shared posts soared by 191.1% quarter-over-quarter, contributing to a vibrant and active Tiger community. Additionally, TigerGPT has launched a news summary feature during the period, enabling users to summarize and analyze the full text of articles with a single click, including identifying trading opportunities and risks, thus enhancing reading efficiency. As of Q4, TigerGPT has engaged in nearly 200,000 conversations with users.

The wealth management business continues its rapid growth trajectory. In the fourth quarter, the wealth business's assets under management (AUM) surged by 25.3% compared to the previous quarter, with a year-on-year growth of 420.9%. Additionally, the number of clients increased by 16.9% quarter-over-quarter and 163.9% year-over-year.

During the quarter, the Company launched its US Treasury trading service, providing over 360 different types and maturities of US Treasury products. The minimum investment threshold was reduced to $1,000, coupled with highly competitive trading fees, were well-received by clients. Furthermore, fixed coupon notes (FCNs) were introduced to further meet the asset allocation needs of professional investors. Simultaneously, the wealth management interface within the Tiger Trade app underwent a redesign, with the revamped "Wealth" center now offering comprehensive displays of the company's wealth management products across different asset classes. This enhancement enables retail investors, institutions, and high-net-worth clients to efficiently select investments according to their investment goals and risk preferences. Service penetration keeps rising, with 1 in 4 new funded clients in Q4 opting for Tiger's wealth management services. Tiger Vault has also become a popular choice for managing idle funds among Hong Kong clients, seeing a 28.8% quarter-over-quarter growth in user numbers and a 61.2% increase in AUM.

Over 500 ESOP clients served

Leading underwriting business with 150+ HK and U.S. IPOs

During the reporting period, UP Fintech's other revenues, encompassing services such as investment banking and Employee Stock Ownership Plan (ESOP), amounted to US$4.9 million. In 2023, other revenues were US$18.4 million in total.

In the investment banking segment, the Company underwrote eight Hong Kong IPOs and one U.S. IPO. In 2023, the Company participated in underwriting five of the top ten companies in terms of funds raised in Hong Kong IPOs. Additionally, among the pre-filed US-listed companies in 2023, it acted as the lead underwriter for four companies, securing the top spot in terms of quantity***. Since venturing into investment banking, the Company has participated in underwriting over 150 companies for listings in Hong Kong and the US, leading the industry in both quantity and recognition.

On the ESOP front, the Company's brand UponeShare added 30 new corporate clients in the quarter, a 15.4% year-over-year increase and an 11.1% increase from the previous quarter. In 2023, UponeShare added 116 new corporate clients, bringing the total number of serviced corporate clients to 535. With a high level of customer satisfaction, annual customer repurchase orders exceeded 30%. Leveraging industry-leading digital technology, UponeShare follows a "consulting + SaaS" service model to provide end-to-end equity incentive services, catering to both listed and non-listed companies (A-shares, Hong Kong shares, US shares) with its self-developed system, thereby empowering enterprises to enhance their equity management efficiency comprehensively.

In the enterprise account segment, the company's total number of clients has increased to 420, with over 15% of clients having a market value exceeding HK$10 billion. Currently, Tiger Enterprise Account offers full lifecycle IR and PR services tailored to the diverse communication needs of enterprises across various industries.

*Based on the 2023 Singapore resident population

**Data as of 2/22/2024, sourced from app.diandian.

***Data derived from publicly available and trackable projects.

About UP Fintech

UP Fintech Holding Limited (Nasdaq: TIGR), also known as Tiger Brokers, is a leading online brokerage firm with a focus on redefining global investing with technologies for the next generation.

Founded in 2014, the Company relentlessly offers a superior user experience in pursuit of becoming a world-leading online brokerage, to let everyone enjoy efficient and smart investing. Currently, we offer a multitude of quality financial products and services across brokerage, employee stock ownership plan (ESOP) management, investment banking, wealth management, investor community, and investor education.

 UP Fintech strives to elevate financial technology R&D to a new level. While we inherit the best traditions from the financial sector and blend them with the best minds in tech, we develop our own technology infrastructure — an aggregation that enables multi-currency trading of various products across markets, guaranteeing our reliable, secure, and scalable services are accessible to all with low latency.

In March 2019, UP Fintech was listed on Nasdaq under the ticker TIGR. As of now, we serve over 10 million users and more than 2 million account holders worldwide on our flagship platform "Tiger Trade", own 77 licenses and qualifications in different markets, and have over 1,000 employees on the team in Singapore, New Zealand, the US, Hong Kong SAR, Australia, and Mainland China.

 For more information about UP Fintech as a Company, please visit itigerup.com.

 For media inquiries, please contact press@itiger.com

Safe Harbor Statement

This announcement contains forward−looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward−looking statements can be identified by terminology such as "may," "might," "aim," "likely to," "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates" and similar statements or expressions. Among other statements, the business outlook and quotations from management in this announcement, as well as the Company's strategic and operational plans, and expectations regarding growth, expansion of its business lines and customer acquisition, and the Company's plans for future financing of its business, contain forward−looking statements. The Company may also make written or oral forward−looking statements in its periodic reports to the U.S. Securities and Exchange Commission ("SEC") on Forms 20−F and 6−K, in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties, including the earnings conference call. Statements that are not historical facts, including statements about the Company's beliefs and expectations, are forward−looking statements. Forward−looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward−looking statement, including but not limited to the following: the cooperation with Interactive Brokers LLC and Xiaomi Corporation and its affiliates; the Company's ability to effectively implement its growth strategies; trends and competition in global financial markets; changes in the Company's revenues and certain cost or expense accounting policies; and governmental policies and regulations affecting the Company's industry and general economic conditions in China, Singapore and other countries. Further information regarding these and other risks is included in the Company's filings with the SEC, including the Company's annual report on Form 20-F filed with the SEC on April 26, 2023. All information provided in this press release and in the attachments is as of the date of this press release, and the Company undertakes no obligation to update any forward-looking statement, except as required under applicable law. Further information regarding these and other risks is included in the Company's filings with the SEC.

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SOURCE UP Fintech Holding Limited

FAQ

What was UP Fintech's revenue in Q4 2023?

UP Fintech reported a revenue of US$70 million in Q4 2023.

How much did the non-GAAP net income total for the year 2023?

The non-GAAP net income for 2023 totaled US$42.7 million, representing a 3.4 times increase from 2022.

How many new global account holders did UP Fintech add in Q4?

UP Fintech added 47,797 new global account holders in Q4, bringing the total to 2.2 million.

What is the total client assets of UP Fintech as of Q4 2023?

The total client assets of UP Fintech reached US$30.6 billion in Q4 2023.

Which market accounts for over 75% of UP Fintech's total client assets?

Singapore accounts for over 75% of UP Fintech's total client assets.

What are UP Fintech's plans for market expansion?

UP Fintech aims to solidify its market share in Singapore, Australia, New Zealand, and Hong Kong to become a world-leading fintech brokerage.

What new offerings did UP Fintech launch recently?

UP Fintech introduced trading for Bitcoin spot ETFs and received approval for virtual asset trading services in Hong Kong.

How has UP Fintech's wealth management business performed?

UP Fintech reported growth in its wealth management business with assets under management surging over 400% YoY and the introduction of a US Treasury trading service.