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spk04: Ladies and gentlemen, thank you for standing by and welcome to the Up FinTech Holding Limited first quarter 2024 earnings conference call. At this time, all participants are in a listen only mode. There will be a presentation followed by a question and answer session. I must advise you that this conference is being recorded today, June the 5th, 2024. I would now like to hand the conference over to your first speaker today, Mr. Aaron Lee, the Head of Investor Relations. Thank you. Please go ahead.
spk11: Thank you, operator. Hello, everyone, and thank you for joining us for the call today. UpFintech Coding Limits' first quarter 2024 earnings release was distributed earlier today and is available on our website at ir.itigerup.com as well as Globe Newswire Services. On the call today from UpFintech, Mr. Wu Tianhua, Chairman and Chief Executive Officer. Mr. Zhuang Zeng, Chief Financial Officer, Mr. Huang Lei, CEO of US Tiger Securities, and Mr. Kenny Zhao, our Financial Controller. Mr. Wu will give an overview of our business operations and discuss corporate highlights. Mr. Zeng will then discuss our financial results. They will both be available to answer questions during the Q&A session that follows the remarks. Now let me cover the safe harbor. The statements were about to make content forward-looking statements. Within the meaning of the U.S. Private Security Education Reform Act of 1995, a number of factors could cause extra results to differ materially from those contained in any forward-looking statement. For more information about factors that could cause extra results to materially differ from those in forward-looking statements, please refer to our Form 6K furnished today, June 5, 2024, and our annual report on Form 20F filed on April 22, 2024. We undertake no obligation to update any forwarding statement except as required under applicable law. It is my pleasure to now introduce our chairman and chief executive officer, Mr. Wu. Mr. Wu will make remarks in Chinese, which will be followed by an English translation. Mr. Wu, please go ahead with your remarks.
spk15: Hello, everyone. I would like to thank everyone for attending the first quarter of Laowu International's
spk11: Hello, everyone. Thank you for joining the Tiger Brokers' 4th Quarter 2024 Earnings Conference Call.
spk15: In the first quarter, we saw a certain rebound in the market overall. The company's net income reached 7,890 million US dollars, which is the highest in the past three years. The share rose by 12.8% and rose by 19% compared to the same period last year. At the profit end, due to the improvement in the company's income structure, and hard-earned profits of the first quarter due to the hard-earned profits of the first quarter due to the hard-earned profits of the first quarter due to the hard-earned profits of the first quarter due to the hard-earned profits of the first quarter due to the hard-earned profits of the first quarter due to the hard-earned profits of the first quarter due to the hard-earned profits of the first quarter due to the hard-earned profits of the first quarter due to the hard-earned profits of the first quarter due to the hard-earned profits of the first quarter due to the hard-earned profits of the first quarter due to the hard-earned profits of the first quarter due to the hard-earned profits of the first quarter due to the hard-earned profits of the first quarter due to the hard-earned profits of the first quarter due to the hard-earned profits of the first quarter due to the hard-
spk11: In the first quarter, we saw a moderate rebound in market backdrop. Our total revenue reached $78.9 million, the highest quarter in the past three years, increased 12.8% sequentially and 19% year-over-year. On our bottom line, Benefiting from the optimization of the company's revenue structure and increase in operating efficiency, the profitable momentum was back on track. Gap net income turned positive to $12.3 million and up 55% year-over-year. Non-gap net income was $14.7 million, 13.9 times that of the previous quarter, and up 42% year-over-year. The non-gap net profit margin rebounded to nearly 20%. Going forward, We will further leverage fixed costs through the growth of user base and ARPU improvement brought by product diversification, thereby achieving healthier and more sustainable profitability.
spk15: In the first quarter, the number of new users reached 8,800. By the end of the first quarter, the total number of new users reached 93,400. Compared to the same period last year, it increased by 15%. In the second quarter, the number of new users reached more than 3.5 million. We are very happy with the goal of achieving 150,000 new entry users in the year of 2024. In terms of customer general assets, since the last quarter's 4-季度極端取得單季度進入金歷史新高之後, this year's 1-季度客戶資產進流路依然保持沉浸勢頭, 1-季度實現進入金53億美金, which mainly contributes to Singaporean users and institutional users. In the first quarter, we added 28,800 new fund accounts, and the total number of funded accounts reached 933,400 at the end of the first quarter, an increase of 15% year-over-year.
spk11: In the first two months of the second quarter, we've already acquired more than 35,000 new venture clients, and we are confident in achieving our full year guidance of acquiring at least 250,000 new venture accounts in 2024. In terms of total client assets, building from a historic high in net asset inflows in the fourth quarter of last year, the strong momentum continued in the fourth quarter of this year, with net asset inflows of US$5.3 billion. mainly contributed by Singapore users and institutional users. After neutralizing the impact from market-to-market loss, the total client assets reached US$32.9 billion at the end of the first quarter, an increase of 7% sequentially and 104% year-over-year.
spk15: The company continues to acquire high-quality users to ensure that the long-term strategic strategy has not changed. As the head office of the company, We continue to attract local high-end users to join the Tiger platform. Local new entry-level retail users have an average income of more than $14,000 in the first quarter. At the same time, we are very happy to see that new entry-level retail users from the Hong Kong market in the first quarter have an average income of more than $18,000 in the current quarter. This shows that the company has had an excellent product experience Our strategy to keep acquiring high-quality clients to ensure long-term profitability remains unchanged.
spk11: In Singapore, where our headquarters are located, our brand Advantage continues to attract high-quality organic traffic to onboard our platform. with an average net asset inflow of over US$14,000 from newly acquired retail clients in the first quarter. Also, we are glad to see the average net asset inflow of newly acquired clients from the Hong Kong market in the first quarter exceeded US$18,000, demonstrating we have gained more recognition from the local high-quality users and we are committed to grow our Hong Kong presence.
spk15: In addition to this, the gross gross profit of the first quarter is US$150, As Hong Kong stocks and Singapore stocks' self-calculation efficiency improves, the overall calculation cost accounts for 8% less than the previous year, which is a low level ahead of the industry. This means that we are ensuring that on the basis of user quality and product experience, through our own brand advantages and product advantages over the years, we will continue to reduce the cost of change in the company to improve the efficiency.
spk11: The average customer acquisition cost was around $150 in the first quarter, and with the further improvement to our Hong Kong and Singapore shares' clearing efficiency, the overall clearing fee as a percentage of commission income has dropped to a historical low of only 8%, both of which are at industry-leading low levels, indicating that we keep reducing our variable costs and improve profitable efficiency. while ensuring user quality and product experience through our brand's advantages and R&D strengths over the years.
spk15: In the first quarter, we launched a variety of localization features in different markets to better serve local users and obtain more business license plates to enhance the richness of our products. In the Singapore market, we cooperated with local holding agencies to launch Tiger's BOSS bank card in February this year, This is the first local product in Singapore that allows users to use a credit card to purchase a credit card product with a share discount. This product will connect the daily consumption of users and the acquisition of U.S. stock assets, which will naturally allow more local users to participate in U.S. stock investment. In addition, in April, the combination of local users' preferences and local trading rights and credit devices In the first quarter, we rolled out numerous localized features across different markets to better serve our users, and also gained more licenses to diversify our product offerings.
spk11: In the Singapore market, we collaborated with a local licensed partner to launch the TigerGhost debit card in February, which is the fourth debit card in Singapore that allows users to earn fractional shares rewards from their daily spending. This product connects users' everyday consumption to stock ownership and more naturally onboarding local users into US stock investing. Additionally, catering to local Singaporeans' needs and the local credit system, we launched a CashBoost account featured in April. The Tiger Brokers' CashBoost account operates on a contract trading strategy without an initial deposit required. Tiger Brokers was the first fintech broker in Singapore to offer contract facilities.
spk15: In the Hong Kong market, the first Hong Kong SSE audit that we received completed the upgrade of the No. 1 card, allowing professional investors to trade in cash or virtual assets through the Old Five Currency, and in April officially This feature was introduced in Hong Kong. It has become one of the early companies to provide virtual currency transactions to users. In the financial management business, in March, Hong Kong received the 9th rank of the Hong Kong SV approval to provide asset management services. In the future, it can provide a series of asset management services to investors, including face-to-face retail and professional investors' exclusive services and management for professional investors' collective investment plans, etc.
spk11: In Hong Kong, we updated our Type 1 license to include virtual asset dealing services for professional investors in the first quarter and officially launched this feature in April, making us one of the first mainstream online brokerage firms in Hong Kong to provide cryptocurrency trading services to professional investors. Also, we obtained a Type 9 license in March so that we can provide asset management services to investors.
spk15: Meanwhile, In terms of product features, we have also made some heavy-duty upgrades to better meet the needs of users. First, we have added the US stock trading function to facilitate users from all over the world, especially users in the Asia-Pacific region, to trade US stocks and stocks for 24 hours a day to seize market opportunities more timely. Second, we have made major upgrades in terms of期权交易, such as pre-execution and release of期权 and other functions that support期权. to avoid the potential risk of fluctuation of the price-to-value期权 and deep price-to-value期权, and to lock in the price-to-value期权's revenue in time.
spk11: Apart from those, we rolled out two major product upgrades to better meet investor needs. Firstly, we launched the overnight trading feature, which allows users, particularly in the Asia-Pacific region, to trade U.S. stocks and ETFs during local market hours and capture more market opportunities. Secondly, they've upgraded our option trading capabilities by introducing the US option early access or do not access features. This allows our clients to better mitigate potential volatility risks of the in-the-money options and the liquidity challenges of the deep in-the-money options before expiration.
spk15: The international 2B business is still developing. In the first quarter, we sold five Hong Kong and America IPO projects. Our 2B business continues to perform well. In investment banking, we enrolled five US and Hong Kong ICOs in the first quarter, including Concord Healthcare Group and Lianlian Digitech. In our ESOP business, we added 22 new clients in the first quarter,
spk11: bringing the total number of ESOP clients served to 557 by the end of the first quarter of 2024, an increase of 24% year-over-year.
spk15: Now I'd like to invite our CFO John to go over our financials. All right.
spk13: Thanks, Tianhua and Aaron.
spk05: Let me go through our financial performance for the first quarter. All numbers are in US dollar. As Tianhua mentioned earlier, we did see market sentiment improving this quarter versus last quarter. Commission income was $27.8 million, increased 9% year-over-year and 27% quarter-over-quarter. Interest income was $43.8 million, increased 27% year-over-year and 10% quarter-over-quarter. Please note we reclassify the interest income generated from US TBO from non-operating gain or loss to interest income in the top line. We see this revenue going forward as part of our routine business, so it should be reflected in our operating income. Together, total revenue reached 78.9 million this quarter, increase of 19% year-over-year and 13% quarter-over-quarter. Cash equity take rate was 6.3 bps this quarter, slightly decreased from 6.5 bps of last quarter. Within commission revenue, about 65% comes from cash equities, 30% from options, and the rest from futures and other products. Now switching to cost. Interest expense was 14.8 million, increased by 76% from same quarter of last year, in light with the high interest rate environment. Execution and clearing expense were 2.2 million, decreased 8% from the same period of last year, primarily due to more efficiency in self-clearing for Hong Kong and Singapore securities. We have gradually moved Hong Kong equity position to Tiger Broker Hong Kong since we onboard Hong Kong retail market. And we have seen cash equity clearing expense as percentage of commission went down from time to time during the past year. Employee compensation and benefits expense were 27.8 million. An increase of 14% year over year due to HECON increase to strengthen overseas growth and R&D. Occupancy depreciation and amortization expense decreased 12% to $2.1 million. Communication and market data expense were $8.6 million, an increase of 23% year-over-year due to the increase in user base and IT-related services. Marketing expense were $4.4 million this quarter, decreased 15% year-over-year as we keep optimizing our marketing channel and strategy. General and administrative expense were $5.7 million, an increase of 26% year-over-year due to an increase in professional service fees. Total operating costs were $50.8 million, an increase of 11% from the same quarter of last year. As a result, bottom line increased on both gap and non-gap basis. Gap-led income turned positive to $12.3 million versus a gap-led loss of $1.8 million in the previous quarter, and it increased 55% year-over-year. Long gap-led income was $14.7 million, increased 42% compared to the same quarter of last year. Now I have concluded our presentation. Operator, please open the night for Q&A.
spk04: Thank you. To ask a question, you will need to press star 1 and 1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1 and 1 again. Please stand by while we compile the Q&A queue.
spk13: We'll now go to our first question.
spk04: Our first question comes from the line of Yufan from CICC. Please go ahead with your question.
spk03: Thank you for giving me the opportunity to ask this question. I'm Fan You, an analyst in China. I have two questions I'd like to ask. First, we just saw a new entry of 2.9 million new customers in the first quarter. The management said that the total number of new customers in the second quarter is also more than 3.5 million. Combined with the previous company actually gave this year's new entry customer guidance of 150,000, this side may want to ask the management if we still continue to maintain such a new user guidance of 150,000 a year. The second question is also about this, and I also want to ask the management if we look at the second quarter to the present, the overall situation of this customer's entry, and then the progress of the customer's transaction return, etc. How about that? Let me quickly translate my question here. Thanks, management, for taking my question. This is Yoyo Fan from CICC. I have two questions here. The first one is regarding the four-year guidance. We added nearly 29,000 new funded accounts in Q1 and in April and May already acquired more than 35,000 new funded accounts. So shall we still maintain our four-year guidance? And the second question is about our business progress in Q2. How is the round rate of the asset inflow, trading velocity, and total client assets up to now?
spk13: Please standby while the speakers reconnect. Please standby while the speakers reconnect. Hi, operator, can you hear us now?
spk04: Yes, you may comment.
spk15: I would like to answer this question. The company values our operating model very much. It will not sacrifice the quality of the service for the growth of the number. So, in the first quarter, we made some related dynamic adjustments in terms of the supply channels. For example, the ROI is not very suitable, and the return cycle is not marked. So you can see that in the first quarter, the quality of our added value users has improved. In the first quarter, the added value users of Hong Kong and the Singapore market reached a level of US$18,000 and US$14,000 in the quarter's average income. In recent years, we have also seen the recovery of the overall market return brought by the U.S. stock technology stock, as well as the situation of the Hong Kong stock market continuing to grow around. As for the market environment, in the second quarter, we have also developed strategies to make appropriate adjustments and adjustments. In addition, in the second quarter, we have launched features such as the false bank card of Tiger, counter transactions, and other functions that are deeply loved by local users. Therefore, We placed great importance on our profitability model and will not compromise customer quality merely for the user number growth.
spk11: So in the first quarter, we adjusted our acquisition channels and terminated partnerships with some vendors that did not meet our ROI or payback period targets. So as a result, the quality of our new user has continued to improve in the first quarter. This average net inflows of new funded clients in Hong Kong and Singapore market reaching 18,000 and 14,000 respectively. Recently, we've also seen a recovery in market activity in both US and Hong Kong market. Based on this, we've increased our customer acquisition input in the second quarter. Although the launch of the Tigerforce debit card and contract trading feature in Singapore this quarter has also been very well received by local users. So consequently, we've already onboarded over 35,000 new-founders users in April and May. We are therefore confident in meeting our four-year guidance of adding at least 150,000 new-founders users. The second question.
spk15: Looking at the situation in the second quarter from the previous two months, as mentioned earlier, there has been a significant increase in interest rates, as well as a significant improvement in the interest rate of users. At the end of the income, we also saw a further rise in the market return in April and May in the first quarter. In terms of stock exchange volume, the share price in the second quarter has also increased. As we continue to expand in the Hong Kong market, We believe that the proportion of U.S. stocks in the trading volume will also be healthier. In addition, interest-related business revenue will also remain stable in the second quarter. This year, we have also continuously launched on the labor platform, including BOSS bank cards, Contra transactions, disk drive, virtual currency transactions, and many other features that users are looking forward to. This has further improved the abundance of products, and also improved user connectivity, trading flexibility, and up value.
spk11: For the second question, for the first two months of the second quarter, as I mentioned, the number of new funded accounts has improved significantly sequentially. Our client net asset inflow has also maintained strong momentum. Building on the momentum from the first quarter, market activity has remained robust in the recent two months, and the percentage of Hong Kong cash equity trading volume has also increased in the second quarter. And we believe that the mix of Hong Kong and US trading volume will be more diversified along with the growth of our Hong Kong clientele. Interest rate income has also remained stable sequentially so far in the second quarter. We've also recently rolled out various new features on Tiger platform, including debit card, contract trading, overnight trading and crypto to further expand our product offerings, enhance the user experience and increase our pool. Thank you, operator. Please move on to the next question.
spk04: Thank you. Please stand by. Our next question comes from the line of Edmund Fock from DDS. Please go ahead. Your line is open.
spk06: I have two questions. The first question is to ask Mr. Guan to introduce more about the low distribution of new incoming customers in the first quarter. The second question is about the Hong Kong market. The company has entered the Hong Kong retail market for more than a year. I would like to ask if the current development of the company is in line with the expectations? Thank you, management. I have two questions. The first question is, what is the regional breakdown for the new fund account during the first quarter? And the same question is about the Hong Kong market. Does the company think the business development in Hong Kong meets our expectations? Also, in view of the year's competition, does the company have any plans to maintain the growth momentum? And lastly, how is Tiger's latest progress in crypto trading? Thank you.
spk15: Okay. Regarding the region distribution of entry-level users, In the first quarter, over 50% of new funded accounts came from Singapore and Southeast Asia. Around 20% came from the US market.
spk11: Over 15% were from Australia and the New Zealand region, and more than 10% were from the Hong Kong market. I'll hand back the second question to our CFO, John.
spk05: Okay, Edmond. Thank you for your question. Let me answer your second question, which is about the Hong Kong market. To put it simply, since the beginning of last year, we have been in Hong Kong for a full year. Overall, we think the development is still in line with expectations. Let me briefly explain this from these aspects. First of all, when we first opened last year, we said that the primary task was to reduce the cost of the tiger's Hong Kong stock. This has been done so far, because before the Hong Kong stock was lined up, the tiger's Hong Kong stock trading was not profitable, even losing money. So the investment in the Hong Kong stock was very limited. Now, the clearing expense of Hong Kong stocks is about 20% of our gross commission. It also helped to reduce the cost of the whole group to 8%. This point is very important to us. Because only with low cost of clearing, we can operate Hong Kong stocks. We can invest more production resources in Hong Kong stocks. At the same time, we adopt the strategy of the retail customer Hong Kong stock duty-free platform. In the future, as the transaction volume of Hong Kong stocks gradually increases, the cost of clearing will gradually decrease. And then let's talk about the product. Currently, the trading products of Tiger Hong Kong are very rich. In addition to the stock of Hong Kong, the stock of Hong Kong, the stock of Hong Kong, the stock of Hong Kong, the stock of Hong Kong, the stock of Hong Kong, the stock of Hong Kong, the stock of Hong Kong, the stock of Hong Kong, the stock of Hong Kong, the stock of Hong Kong, the stock of Hong Kong, the stock of Hong Kong, the stock of Hong Kong, the stock of Hong Kong, the stock of Hong Kong, the stock of Hong Kong, the stock of Hong Kong, the stock of Hong Kong, the stock of Hong Kong, the stock of Hong Kong, the stock of Hong Kong, the stock of Hong Kong, the stock of Hong Kong, the stock of Hong Kong, the stock of Hong Kong, the stock of Hong Kong, the stock of Hong Kong, the stock of Hong Kong, the stock of Hong Kong, the stock of Hong Kong, the stock of Hong Kong, the stock of Hong Kong, the In terms of crypto, with the uplift of our No. 1 brand, we have become the first in Hong Kong to allow PR users to trade in crypto cash. At the same time, we can also trade in the online stock of 11 Bitcoin ETFs listed in the US. Users can participate in the investment of fiat and crypto through an old app. The third point is to talk about the customers. In the past year, we have made a lot of improvements and adjustments to Hong Kong's open account entry conversion and promotion channels. The share price of Hong Kong in the Group quarter has also gradually increased from a few points to about 10%. We can see that the quality and activity of Hong Kong users is also very high. The share price of Hong Kong customers has risen more than 60% in the first quarter of 2020, which is nearly 10 times the same. In the future, we will cooperate with the market environment to increase the investment in Hong Kong at the right time. Let's talk more about the progress of the company in the field of crypto. First of all, we have upgraded the first row. We can provide SPA crypto transactions for PI users and 11 Bitcoin ETFs in the U.S. Currently, we are waiting for SFC to pay for our retail upgrade. In this way, we hope that in the near future, we can provide SPA crypto transactions for retail users in Hong Kong. At the same time, we are a subsidiary of Crypto, and our successor is also a subsidiary of SFC, VATP. So, in terms of security and compliance, we should be the first After we entered Hong Kong market a year ago, overall the progress has been in line with our expectation. First of all, when we first started, one of our priority was to reduce the clearing cost for Tiger's Hong Kong trading. So far we have achieved this goal. Before we had Hong Kong license, we have to clear Hong Kong equities through other brokers. The fee was expensive and Hong Kong stock trading was unprofitable for us. So our investment in Hong Kong market was limited. Now the clearing expense for Hong Kong equity is less than 20% of gross commission. which has helped lower the group's overall clearing fee rate to around 8%. This is very important for us as we offer zero commission and zero platform fee for local users to trade Hong Kong cash equity. With lower clearing expense, we can increase our Hong Kong trading volume and invest more ratios into product R&D. As our Hong Kong trading volume gradually increases, the clearing fee will further go down. In addition, we have a much more comprehensive product offering in Hong Kong versus before. Tech Broker Hong Kong currently supports cash equity trading for both Hong Kong and U.S. shares, U.S. option trading, loss fund trading, and wealth management products like FCN. We recently rolled out overnight trading, and we will be adding short-selling and Hong Kong equity options in the third quarter. As for crypto, with our Type 1 license uplifted, We are now one of the first fintech broker in Hong Kong, allowing clients to trade spot crypto as well as 11 US Bitcoin ETFs. And for customer acquisition over the past year, we keep optimizing our account opening process, try out different marketing strategies, and we are glad to see the contribution from Hong Kong market has steadily increased to around 10% in terms of new funded users this quarter. The quality and trading activities of our Hong Kong clients is also very good. The total client assets in Hong Kong have risen over 60% quarter over quarter, and then nearly 10 times year over year in the first quarter.
spk11: OK, thank you. Operator, please welcome the next question.
spk04: Thank you. Please stand by. Our next question comes from the line of Alan Chen from Citi. Please go ahead. The line is open.
spk14: Thank you for giving me this opportunity. I'm Alan, an analyst at Huaxi. First of all, I'd like to congratulate the management team for their excellent performance. I have two questions I'd like to ask. The first one is about the two new products mentioned in the call. I don't know if the management team can give us a detailed introduction. For example, is it only the existing customers who can open cards in our BOS Debit Card? Or are the customers who don't have a account here able to directly open cards and get their shares through consumption? So, it's a new channel of goods. And it's also in the contract trading function. If the client doesn't have cash but can still trade, how can we seal the deal? I don't know what impact this product will have on our customer trading and future risks and costs. I don't know if the management can analyze it for us. The second question is about the SSGain. In the last quarter, we had... I have two questions today. The first question is on the two products that launched in Singapore. Could management give us a little bit more color on the products and for the boss debit cards? Is there any restrictions as to who can apply for this debit card? And could this product be used as a customer acquisition tool for Tiger? And for the contract trading function, you mentioned that clients can trade stocks without depositing any funds into their brokerage accounts. Wondering how would Tiger manage risks if clients, let's say, make some loss in trading? but have no funds in their accounts? And on a longer term, how would this contract trading function impact Tiger's financial performance? And the second question is on FX gain. Boundary management could share how much FX gain you have booked in the first quarter. And looking forward, have you taken any actions to limit the impact of FX gain or loss on your earnings? And that's my question. Thank you.
spk15: Thank you. We have always been committed to product innovation. First of all, about the BOSS credit card of Tiger, whether it is the number of users or the increase in the number of local users, it is possible to open such a card. We cooperated with local holding institutions to launch such a credit card. In the end, it is actually to make the daily consumption of local users in Singapore and the trading environment such as stocks can work together. To be more specific, this credit card can be used to bind Apple Pay or Google Pay and other electronic wallets for daily consumption. With this card, we will be able to pay 1% of the transaction fee. We will be able to give a discount to the user's account on the Tiger platform in the form of Tesla and other popular US stocks. We believe that compared to traditional credit card rewards such as cashback or return points, the credit card rewards are better for the user's experience. First of all, there is no deadline for the credit card. More importantly, this kind of unique reward method can also stimulate the user's investment enthusiasm and interest, and improve the user's connection. We can also gradually build our own investment group through the daily consumption of bank cards, without the need for a large amount of capital investment. We are the first in Singapore to launch a credit card voucher with this function. Since the product was launched, it has been loved by local users. By the end of May, there have been nearly 7,000 local users opening cards, and the average consumption of card users has exceeded our expectations.
spk11: Hey, Alan. For the first question regarding the TigerBot debit card, this card is available for both of our existing users and incremental users to use and apply. So we launched this card with a local licensed partner. The intention behind this product was to connect users' daily spending with their stock trading activities. So specifically, the debit card allows users to link it with digital wallets like Apple Pay and Google Pay for everyday purchases. For every transaction made through this card, 1% of the transaction amount will be rewarded to the user's security account on the hacker platform in the form of fractional shares of popular US stocks like Tesla. Compared to traditional bank card reward schemes like cashback, loyalty points, or miles, we believe that fractional share rewards provide a better user experience. Firstly, there is no expiration days, a lock-up period for the fractional shares. More importantly, this unique type of reward can stimulate new users' investment motivation and increase their stickiness to our platform. It also allows them to gradually build their investment portfolio through daily bank card spending without requiring large initial capital. And we are proud to be the first fintech broker in Singapore to offer such services. Since its launch, The product has been very well received by local users. As of the end of May, nearly 7,000 local users have signed up for this card, and the average transaction frequency from the cardholders has exceeded our expectations.
spk15: Regarding counter-trading, Lao Wu is also the first local Singaporean to introduce this feature. In summary, this feature combines Singapore's excellent financial system For more experienced traders in the local area, we have launched an investment-free initial fund. By evaluating the credit of the applicant, you can get a product with a timely transaction rate. From the perspective of the user, the Conjure trading model provides a greater flexibility for mature traders. They can use it at any time to buy and sell stocks at a credit rate. No need to store any funds, so that investors can purchase stocks at a trading rate without having to use funds. If the stock price rises, investors can sell the stock and get a profit from the contract. On the contrary, if the stock price falls, investors can use the available funds to reduce the difference in the amount within 7 days. Considering the characteristics of the contract trading function, we have also implemented this function in terms of block control. Currently, our contract is only open to local users in Singapore. After opening, there will be a series of strict review procedures and measures to ensure that the customer's credit rating and our authorization amount match. In addition, if there is a loss, Regarding the contract trading feature, Tegra was the first fintech broker in Singapore to offer this service.
spk11: Leveraging Singapore's comprehensive credit system, this feature caters to most seasoned traders by providing instant access to a certain trading limit based on their credit assessment without requiring any initial capital input. From the user's perspective, contract trading grants seasoned traders the flexibility to buy stock and sell them anytime before or on the full selling date without needing to deposit funds. It also allows investors without immediate available capital in hand to purchase stock using the provided trading limit. If the stock price rises, the difference can be pocketed as the contract gain. Conversely, if the share price drops, investors can settle the difference up to seven days later using their own funds. Given the credit-based nature of the contract trading, we have applied slow risk control. For example, this feature is currently only available to Singapore users. It's a strict approval process to ensure credit rating matches the authorized limit. If losses exceeded two days after settlement day without a top-up, the limit will be automatically frozen, permitting only closing positions. Limits are also automatically reduced by counter losses until the user replenish the gap.
spk05: OK, let me answer your second question. First of all, the exchange rate loss or revenue on the old stock market table is mainly due to the company's main US dollar assets since the United States, as the US dollar has caused the exchange rate change of RMB, SGD, or BNB. In the first quarter, compared to the fourth quarter of last year, the US dollar exchange rate has risen, so it has brought in a exchange rate of more than $3 million. And then in the fourth quarter, we actually have a 7 million exchange rate loss. At present, the dollar exchange rate is relatively stable at the end of the first quarter. But what about the future trend? It's not that we can give a very clear judgment. But we also know that this exchange rate loss is an impact of non-cash. So when we judge the profitability of the group, we will still focus on operating income. This is also relatively controllable for us. So this is also the reason why we put the national debt revenue in the revenue from this stage. And QE's TBL income is about 4.7 million US dollars. Let me simply translate it. So the FX gain and losses on our P&L are mainly due to the fluctuation in the US dollar against the RMB, SIN dollar, and the New Zealand dollar. So in Q1, the appreciation of the US dollar compared to Q4 resulted in over 3 million in FX gain. So because the FX gain or loss is not something we can control, so to better assess the group's profitability and operating, we decided to move the revenue from treasury bill into our top line under interest income. We feel this can give investors a better understanding of our, you know, routine business. So in Q1, interest income from US treasury investment was about 4.7 million USD. Thank you.
spk10: Hey Mel, please move on to the next question, please.
spk04: There are no further questions at this time, so I'll hand the call back to Aaron for closing remarks.
spk11: Thank you. I'd like to thank everyone for joining our call today. I'm now closing the call on behalf of the medicine team here at Tiger. We do appreciate your participation in today's call. If you have any further questions, please reach out to our Investor Relations team. This concludes the call, and thank you very much for your time.
spk04: This concludes today's conference call. Thank you for participating. You may now disconnect. Speakers, please stand by. Thank you.
spk09: Bye. Thank you.
spk04: Ladies and gentlemen, thank you for standing by and welcome to the Up FinTech Holding Limited first quarter 2024 earnings conference call. At this time, all participants are in a listen-only mode. There will be a presentation followed by a question and answer session. I must advise you that this conference is being recorded today, June the 5th, 2024. I would now like to hand the conference over to your first speaker today, Mr. Aaron Lee, the Head of Investor Relations. Thank you. Please go ahead.
spk11: Thank you, operator. Hello, everyone, and thank you for joining us for the call today. UpFintech Coding Limited's first quarter 2024 earnings release was distributed earlier today and is available on our website at ir.itigerup.com, as well as global news services. On the call today from UpFintech, Mr. Wu Tianhua, Chairman and Chief Executive Officer. Mr. Zhuang Zeng, Chief Financial Officer, Mr. Huang Lei, CEO of US Tiger Securities, and Mr. Kenny Zhao, our Financial Controller. Mr. Wu will give an overview of our business operations and discuss corporate highlights. Mr. Zeng will then discuss our financial results. They will both be available to answer questions during the Q&A session that follows the remarks. Now let me cover the safe harbor. The statements were about to make content forward-looking statements. Within the meaning of the U.S. Private Securities Education Reform Act of 1995, a number of factors could cause extra results to differ materially from those contained in any forward-looking statement. For more information about factors that could cause extra results to materially differ from those in forward-looking statements, please refer to our Form 6-K furnished today, June 5, 2024, and our annual report on Form 20-F filed on April 22, 2024. We undertake no obligation to update any forwarding statement, except as required under applicable law. It is my pleasure to now introduce our Chairman and Chief Executive Officer, Mr. Wu. Mr. Wu will make remarks in Chinese, which will be followed by an English translation. Mr. Wu, please go ahead with your remarks.
spk15: Hello, everyone. I would like to thank all of you for attending the first quarter of Laowu International's
spk11: Hello, everyone. Thank you for joining the Tiger Brokers' 4th Quarter 2024 Earnings Conference Call.
spk15: In the first quarter, we saw a certain rebound in the market. The company's net profit reached 7,890 million US dollars, the highest in the past three years. The net profit rose by 12.8% and rose by 19% compared to the same period last year. At the profit end, the advantage of the company's income structure and efforts to stabilize the stock market have continued to increase rapidly. GAM's net profit is US$1,230 million, which is the same as the loss-to-profit profit, which is 55% higher than the loss-to-profit profit. GAM's net profit is US$1,470 million, which is 13.9 times higher than the loss-to-profit profit in the previous quarter, which is 42% higher than the loss-to-profit profit. GAM's net profit rate has risen to nearly 20%. In the first quarter, we saw a moderate rebound in market backdrop. Our total revenue reached $78.9 million, the highest quarter in the past three years, increased 12.8% sequentially and 19% year-over-year. On our bottom line,
spk11: Benefiting from the optimization of the company's revenue structure and increase in operating efficiency, the profitable momentum was back on track. Gap net income turned positive to $12.3 million and up 55% year-over-year. Non-gap net income was $14.7 million, 13.9 times that of the previous quarter, and up 42% year-over-year. The non-gap net profit margin rebounded to nearly 20%. Going forward, We will further leverage fixed costs through the growth of user base and ARPU improvement brought by product diversification, thereby achieving healthier and more sustainable profitability.
spk15: In the first quarter, the number of new users reached 8,800. Even at the end of the first quarter, the number of new users reached 93,400. Compared to the same period last year, it increased by 15%. In the second quarter, the number of new users reached more than 3.5 million. We are very happy with the goal of achieving 150,000 new income users in the whole year of 2024. In terms of customer general nature, since the end of the fourth quarter last year, single-segment income has been historically high, and this year's first quarter, customer asset inflows have remained stable. The first quarter achieved an income of $5.3 billion, which mainly contributed to Singaporean users and institutional users. In the first quarter, we added 28,800 new fund accounts, and the total number of funded accounts reached 933,400 at the end of the first quarter, an increase of 15% year-over-year.
spk11: In the first two months of the second quarter, we've already acquired more than 35,000 new founded clients, and we are confident in achieving our full year guidance of acquiring at least 250,000 new founded accounts in 2024. In terms of total client assets, building from a historic high in net asset inflows in the fourth quarter of last year, the strong momentum continued in the fourth quarter of this year, with net asset inflows of 5.3 billion US dollars. mainly contributed by Singapore users and institutional users. After neutralizing the impact from market-to-market loss, the total client assets reached US$32.9 billion at the end of the first quarter, an increase of 7% sequentially and 104% year-over-year.
spk15: The company continues to acquire high-quality users to ensure that the long-term strategic strategy has not changed. The Chinese market, as the headquarter of the company, We continue to attract high-end users to join the Tiger platform with local brand advantages. Local new entry-level retail users have an average income of more than $14,000 in the first quarter. At the same time, we are very happy to see that new entry-level retail users from the Hong Kong market in the first quarter have an average income of more than $18,000 in the current quarter. This shows that the company has been in the Hong Kong retail market for more than a year with excellent product experience. Our strategy to keep acquiring high-quality clients to ensure long-term profitability remains unchanged.
spk11: In Singapore, where our headquarters are located, our broad advantage continues to attract high-quality organic traffic to onboard our platform. with an average net asset inflow of over US$14,000 from newly acquired retail clients in the first quarter. Also, we are glad to see the average net asset inflow of newly acquired clients from the Hong Kong market in the first quarter exceeded US$18,000, demonstrating we have gained more recognition from the local high-quality users and we are committed to grow our Hong Kong presence.
spk15: In addition to this, the gross gross profit of the first quarter is US$150, Although Hong Kong stock and Singapore stock have improved their self-calculation efficiency, the overall calculation cost accounts for 8% less than the past year, which is a low level of the industry. This means that we are ensuring the quality of the users and the product experience. Based on our own long-term brand and industry advantages, we continue to reduce the cost of change in the company to improve business efficiency.
spk11: The average customer acquisition cost was around $150 in the first quarter, and with the further improvement to our Hong Kong and Singapore shares' clearing efficiency, the overall clearing fee as a percentage of commission income has dropped to a historical low of only 8%, both of which are at industry-leading low levels, indicating that we keep reducing our variable costs and improve profitable efficiencies. while ensuring user quality and product experience through our brand's advantages and R&D strengths over the years.
spk15: As you can see, Laohu International has launched a variety of localization features in different markets to better serve local users, and has obtained more business license plates to enhance the richness of our products. In the Singapore market, we cooperated with local holding agencies to launch Laohu's BOSS bank card in February this year, This is the first local product in Singapore that allows users to get a credit card to get a credit card to get a credit card to get a credit card to get a credit card to get a credit card to get a credit card to get a credit card to get a credit card to get a credit card to get a credit card to get a credit card to get a credit card to get a credit card to get a credit card to get a credit card to get a credit card to get a credit card to get a credit card to get a credit card to get a credit card to get a credit card to get a credit card to get a credit card to get a credit card to get a credit card to get a credit card to get a credit card to get a credit card to get a credit card to get a credit card to get a credit card to get a credit card to get a credit card to get a credit card to get a credit card to get a credit card to get a credit card to get a credit card to get a credit card to get a credit card to get a credit card to get a In the first quarter, we rolled out numerous localized features across different markets to better serve our users, and also gained more licenses to diversify our product offerings.
spk11: In the Singapore market, we collaborated with a local licensed partner to launch the TigerGhost debit card in February, which is the fourth debit card in Singapore that allows users to earn fractional shares rewards from their daily spending. This product connects users' everyday consumption to stock ownership and more naturally onboarding local users into US stock investing. Additionally, catering to local Singaporeans' needs and the local credit system, we launched a CashBoost account featured in April. The Tiger Brokers CashBoost account operates on counter-trading strategies without an initial deposit required. Tiger Brokers was the first fintech broker in Singapore to offer counter-facilities.
spk15: In the Hong Kong market, the first Hong Kong SSE review that we received completed the upgrade of the No. 1 card, allowing professional investors to trade in cash or virtual assets through the Old Five Currency, and in April officially in Hong Kong. It has become one of the early companies in the Internet industry to provide virtual currency transactions to users. In the Taiwan Management Business Strategy, LaoWu Hong Kong received the 9th rank of the Hong Kong SV approval to provide asset management services in March. In the future, it can provide a series of asset management services to investors, including face-to-face retail and professional investors' exclusive services and management for professional investors' collective investment plans, etc.
spk11: In Hong Kong, we uplifted our Type 1 license to include virtual asset dealing services for professional investors in the first quarter and officially launched this feature in April, making us one of the first mainstream online brokerage firms in Hong Kong to provide cryptocurrency trading services to professional investors. Also, we obtained a Type 9 license in March so that we can provide asset management services to investors.
spk15: In terms of product features, we have also made several major upgrades to better meet the needs of users. First, we have uploaded the US share price trading function to facilitate users from all over the world, especially users in the Asia-Pacific region, to trade 24 hours a day, and to seize market opportunities in a timely manner. Second, we have made major upgrades in terms of期权交易, such as all-in-one support期权提前行权和放弃行权等功能. to avoid the potential risk of fluctuation of the price-to-price and the risk of deep price-to-price volatility, and to lock in the price-to-price profit in time.
spk11: Apart from those, we rolled out two major product upgrades to better meet investor needs. Firstly, we launched the overnight trading feature, which allows users, particularly in the Asia-Pacific region, to trade U.S. stocks and ETFs during local market hours and capture more market opportunities. Secondly, they've upgraded our option trading capabilities by introducing the US option early access or do not access features. This allows our clients to better mitigate potential volatility risks of the in-the-money options and the liquidity challenges of a deep in-the-money option before expiration.
spk15: Now we're going to be able to keep the development going. In the first quarter, we sold five Hong Kong and US IPO projects. Our 2B business continues to perform well. In investment banking, we enrolled five US and Hong Kong ICOs in the first quarter, including Concord Healthcare Group and Lianlian Digitech.
spk11: In our ESOP business, We added 22 new clients in the first quarter, bringing the total number of ESOP clients served to 557 at the end of the first quarter of 2024, an increase of 24% year-over-year.
spk15: Now I'd like to invite our CFO, John, to go over our financials.
spk13: All right. Thanks, Tianhua and Aaron.
spk05: Let me go through our financial performance for the first quarter. All numbers are in US dollar. As Tianhua mentioned earlier, we did see market sentiment improving this quarter versus last quarter. Commission income was $27.8 million, increased 9% year over year and 27% quarter over quarter. Interest income was $43.8 million. increased 27% year-over-year and 10% quarter-over-quarter. Please note we reclassified interest income generated from US TBO from non-operating gain or loss to interest income in the top line. We see this revenue going forward as part of our routine business, so it should be reflected in our operating income. Together, total revenue reached 78.9 million this quarter, increase of 19% year-over-year and 13% quarter-over-quarter. Cash equity take rate was 6.3 bps this quarter, slightly decreased from 6.5 bps of last quarter. Within commission revenue, about 65% comes from cash equities, 30% from options, and the rest from futures and other products. Now switching to cost. Interest expense was 14.8 million, increased by 76% from same quarter of last year, in light with the high interest rate environment. Execution and clearing expense were 2.2 million, decreased 8% from the same period of last year, primarily due to more efficiency in self-clearing for Hong Kong and Singapore securities. We have gradually moved Hong Kong equity position to Tiger Broker Hong Kong since we onboard Hong Kong retail market. And we have seen cash equity clearing expense as percentage of commission went down from time to time during the past year. Employee compensation and benefits expense were 27.8 million. An increase of 14% year over year due to HECON increase to strengthen overseas growth and R&D. Occupancy depreciation and amortization expense decreased 12% to $2.1 million. Communication and market data expense were $8.6 million, an increase of 23% year-over-year due to the increase in user base and IT-related services. Marketing expense were $4.4 million this quarter, decreased 15% year-over-year as we keep optimizing our marketing channel and strategy. General and administrative expense were $5.7 million, an increase of 26% year-over-year due to an increase in professional service fees. Total operating costs were $50.8 million, an increase of 11% from the same quarter of last year. As a result, bottom line increased on both GAAP and non-GAAP basis. Gap-led income turned positive to $12.3 million versus a gap-led loss of $1.8 million in the previous quarter, and it increased 55% year-over-year. Long-gap-led income was $14.7 million, increased 42% compared to the same quarter of last year. Now I have concluded our presentation. Operator, please open the night for Q&A.
spk04: Thank you. To ask a question, you will need to press star 1 and 1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1 and 1 again. Please stand by while we compile the Q&A queue.
spk13: We'll now go to our first question.
spk04: Our first question comes from the line of Yufan from CICC. Please go ahead with your question.
spk03: Okay, thank you for giving me the opportunity to ask this question. I'm Fan You, an analyst in China. I have two questions for you. First of all, we just saw that the first quarter achieved 2.9 million new customers. The management said that in the second quarter, the total number of new customers in the first two months is also more than 3.5 million. In combination with the previous company actually gave this year's new entry customer guidance of 150,000, this side may want to ask the management if we still continue to maintain such a new user guidance of 150,000 a year. The second question is also about this, and I also want to ask the management if we look at the second quarter to the present, the overall situation of this customer's entry, and then the progress of the customer's transaction return, etc. How about that? Let me quickly translate my question here. Thanks, management, for taking my question. This is from CICC. I have two questions to help. The first one is regarding the four-year guidance. We added nearly 29,000 new funded accounts in Q1, and in April and May already acquired more than 35,000 new funded accounts. So shall we still maintain our four-year guidance? And the second question is about our business progress in Q2. How is the round rate of the asset inflow, trading velocity, and total client assets up to now?
spk13: Please standby while the speakers reconnect. Please standby while the speakers reconnect. Hi operator, can you hear us now?
spk04: Yes, you may commence.
spk15: I would like to answer this question. The company values our operating model very much. It will not sacrifice the quality of the customer for the growth of the number. So, in the first quarter, we made some related dynamic adjustments in terms of the supply channels. For example, the ROI is not suitable, and the return cycle is not marked. So you can see that in the first quarter, the quality of our increased users has improved. In the first quarter, the number of increased users in Hong Kong and the Singapore market reached a level of 180,000 and 140,000 US dollars. In recent years, we have seen the recovery of the overall market return of U.S. stock and technology stocks, as well as the continuous growth of the Hong Kong stock market. In terms of the market environment, in the second quarter, we have studied the strategy and made appropriate adjustments. In addition, in the second quarter, we have launched features such as false bank cards and counter transactions in Singapore, which are deeply appreciated by local users. Therefore, We placed great importance on our profitability model and will not compromise customer quality merely for the user number growth.
spk11: So in the first quarter, we adjusted our acquisition channels and terminated partnerships with some vendors that did not meet our ROI or payback period target. So as a result, the quality of our new user has continued to improve in the first quarter. This average net inflows of new funded clients in Hong Kong and Singapore market reaching 18,000 and 14,000 respectively. Recently, we've also seen a recovery in market activity in both US and Hong Kong market. Based on this, we've increased our customer acquisition input in the second quarter. Also, the launch of the Tigerforce debit card and contract trading feature in Singapore this quarter has also been very well received by local users. So consequently, we've already onboarded over 35,000 new-founders users in April and May. We are therefore confident in meeting our full-year guidance of adding at least 150,000 new-founders users. The second question.
spk15: From the situation of the first two months of the second quarter, we can see that in addition to the significant change in the interest rate, the interest rate of users has also maintained a strong trend. At the end of the income, we also see that the market return in April and May has increased further on the first quarter's basis. In terms of stock exchange, the share price has also increased in the second quarter. As we continue to expand in the Hong Kong market, We believe that the ratio between US and Hong Kong stocks will also be healthier. In addition, interest-related business profits will also remain stable in the second quarter. This year, we have continuously launched on the labor platform, including BOSS bank cards, Contra transactions, disk, virtual currency transactions, and other features that users are looking forward to. We have further improved the richness of the product, and also improved the user connection, transaction activity, and up value.
spk11: For the second question, for the first two months of the second quarter, as I mentioned, the number of new funded accounts has improved significantly sequentially. Our client net asset inflow has also maintained strong momentum. Building on the momentum from the first quarter, market activity has remained robust in the recent two months, and the percentage of Hong Kong cash equity trading volume has also increased in the second quarter. And we believe that the mix of Hong Kong and US trading volume will be more diversified along with the growth of our Hong Kong clientele. Interest rate income has also remained stable sequentially so far in the second quarter. We've also recently rolled out various new features on Tiger platform, including debit card, contract trading, overnight trading, and crypto to further expand our product offerings, enhance the user experience, and increase our pool. Thank you, operator. Please move on to the next question.
spk04: Thank you. Please stand by. Our next question comes from the line of Edmund Fock from CVS. Please go ahead. Your line is open.
spk06: I have two questions. The first question is to ask Mr. Guan to introduce more about the low distribution of new incoming customers in the first quarter. The second question is about the Hong Kong market. The company has entered the Hong Kong retail market more than a year ago. I would like to ask if the current development of the company is in line with expectations. Thank you, management. I have two questions. The first question is, what is the regional breakdown for the new fund account during the first quarter? And the same question is about the Hong Kong market. Does the company think the business development in Hong Kong meets our expectations? Also, in view of the year's competition, does the company have any plans to maintain the growth momentum? And lastly, how is Tiger's latest progress in crypto trading? Thank you.
spk15: Okay. Regarding the regional distribution of entry-level users, In the first quarter, over 50% of new funded accounts came from Singapore and Southeast Asia. Around 20% came from the US market.
spk11: Over 15% were from Australia and the New Zealand region, and more than 10% were from the Hong Kong market. I'll hand back the second question to our speaker, John.
spk05: Okay, Edmond. Thank you for your question. Let me answer your second question, which is about the Hong Kong market. To put it simply, since the beginning of last year, we have been in Hong Kong for a full year. Overall, we think the development is still in line with expectations. Let me briefly explain from these aspects. First of all, when we first started our business last year, we said that the primary task was to reduce the cost of the old share of the Hong Kong stock. This has been done so far. Because before the Hong Kong stock was listed, the Hong Kong stock trade of the old stock was not profitable, even losing money. So our investment in the Hong Kong stock was very limited. Now, the clearing expense of Hong Kong stocks is about 20% of our gross commission. It also helped to reduce the cost of the whole group to 8%. This point is very important to us. Because only with low cost of clearing, we can operate Hong Kong stocks. We can invest more industrial resources in Hong Kong stocks. At the same time, we adopt the strategy of the retail customer Hong Kong stock free-of-use platform. In the future, as the exchange volume of Hong Kong stocks gradually increases, the cost of clearing will gradually decrease. And then let's talk about the product. Currently, Tiger Hong Kong's trading products have been very rich. In addition to the stock of Hong Kong, the stock of Hong Kong, the stock of Hong Kong, the stock of Hong Kong, the stock of Hong Kong, the stock of Hong Kong, the stock of Hong Kong, the stock of Hong Kong, the stock of Hong Kong, the stock of Hong Kong, the stock of Hong Kong, the stock of Hong Kong, the stock of Hong Kong, the stock of Hong Kong, In terms of crypto, with the uplift of our No. 1 brand, we have become the first in Hong Kong to allow PR users to trade in crypto cash. At the same time, we can also trade in the online stock of 11 Bitcoin ETFs listed in the US. Users can participate in the investment of fiat and crypto through an old-school app. The third point is to talk about the customers. In the past year, we have made a lot of improvements and adjustments to Hong Kong's open account routing transformation and promotion channels. The share price of Hong Kong in the Group quarter is also gradually increasing from a few points to about 10%. We can see that the quality of the Hong Kong users and their trading activity is also very high. The share price of Hong Kong customers in the first quarter of 2020 rose more than 60% and tripled nearly 10 times. In the future, we will cooperate with the market environment to increase the investment in Hong Kong at the right time. Let's talk more about the progress of the company in the crypto field. First of all, we have upgraded the first row. We can provide SPA crypto transactions for PI users and 11 Bitcoin ETFs in the U.S. Currently, we are waiting for SFC to pay for our retail upgrade. In this way, we hope that in the near future, we can provide SPA crypto transactions for retail users in Hong Kong. At the same time, in terms of crypto, we are a subsidiary of SPA. Then, the exchange that we connect with is also a subsidiary of SFC, VATP. So, in terms of security and compliance, we should be the first After we entered the Hong Kong market a year ago, overall the progress has been in line with our expectations. First of all, when we first started, one of our priority was to reduce the clearing cost for Tiger's Hong Kong trading. So far we have achieved this goal. Before we had Hong Kong license, we have to clear Hong Kong equities through other brokers. The fee was expensive and Hong Kong stock trading was unprofitable for us. So our investment in Hong Kong market was limited. Now the clearing expense for Hong Kong equity is less than 20% of gross commission. which has helped lower the group's overall clearing fee rate to around 8%. This is very important for us as we offer zero commission and zero platform fee for local users to trade Hong Kong cash equity. With lower clearing expense, we can increase our Hong Kong trading volume and invest more ratios into product R&D. As our Hong Kong trading volume gradually increases, the clearing fee will further go down. In addition, we have a much more comprehensive product offering in Hong Kong versus before. Tech Broker Hong Kong currently supports cash equity trading for both Hong Kong and U.S. shares, U.S. option trading, loss-bound trading, and wealth management products like FCN. We recently rolled out overnight trading, and we will be adding short-selling and Hong Kong equity options in the third quarter. As for crypto, with our Type 1 license uplifted, We are now one of the first fintech broker in Hong Kong, allowing clients to trade spot crypto as well as 11 US Bitcoin ETFs. And for customer acquisition over the past year, we keep optimizing our account opening process, try out different marketing strategies, and we are glad to see the contribution from Hong Kong market has steadily increased to around 10% in terms of new funded users this quarter. The quality and trading activities of our Hong Kong clients is also very good. The total client assets in Hong Kong have risen over 60% quarter over quarter, and then nearly 10 times year over year in the first quarter.
spk11: OK, thank you. Operator, please welcome the next question.
spk04: Thank you. Please stand by. Our next question comes from the line of Alan Chen from Citi. Please go ahead. The line is open.
spk14: Thank you for giving me the opportunity to ask this question. I'm Alan, an analyst at Huaxi. First of all, I'd like to congratulate the management team for their excellent performance. I have two questions I'd like to ask you today. The first one is about the two new products that we mentioned on the call. I don't know if the management team can give us a detailed introduction. For example, is it only the existing customers that can open a card in our BOS Debit Card? Or are the customers who don't have a account here able to directly open a card and get their shares through consumption? So, this is a new channel of goods, right? And it's also in the function of contract trading. If the client doesn't have cash, but can trade, how can we control this? I don't know what impact this product will have on our customer trading and future risks and costs. I don't know if the management can analyze this for us. The second question is about the SX game. In the last quarter, we had I have two questions today. The first question is on the two products that launched in Singapore. Could management give us a little bit more color on the products and for the both debit cards? Is there any restrictions as to who can apply for this debit card? And could this product be used as a customer acquisition tool for Tiger? And for the contract trading function, you mentioned that clients can trade stocks without depositing any funds into their brokerage accounts. Wondering how would Tiger manage risks if clients, let's say, make some loss in trading but have no funds in their accounts? And on a longer term, how would this contract trading function impact Tiger's financial performance? And the second question is on FX gain. Boundary management could share how much FX gain you have booked in the first quarter. And looking forward, have you taken any actions to limit the impact of FX gain or loss on your earnings? And that's my question. Thank you.
spk15: Thank you. We have always been committed to product innovation. First of all, about Tiger's BOSS credit card, whether it is the number of users or the increase in the number of local users, it can open the card slot. We cooperated with local holding institutions to launch this kind of credit card. The original purpose is to make the daily consumption of local Singaporean users and the trading scene of stocks can be connected. To be more specific, this credit card can be used to bind Apple Pay or Google Pay and other e-wallets for daily consumption. With this card, you can make up to 1% of the total amount of transactions. We will use the form of Tesla and other popular U.S. stocks to reward users on the Tiger platform's stock account. We believe that compared to traditional credit card rewards such as cash return or return points, the credit card rewards are better for the user's experience. First of all, there is no deadline for the credit card. More importantly, this kind of unique reward method can also stimulate the user's investment enthusiasm and interest, and improve the user's connection. We can also use the daily consumption of credit cards to gradually build our own investment group without the need for a large amount of capital investment. We are the first to launch a credit card voucher with this function locally in Singapore. Since the product was launched, it has been loved by local users. By the end of May, there have been nearly 7,000 local users opening cards, and the average consumption of other users has exceeded our expectations.
spk11: Hey, Alan. For the first question regarding the TigerBoost debit card, this card is available for both of our existing users and incremental users to use and apply. So we launched this card with a local licensed partner. The intention behind this product was to connect users' daily spending with their stock trading activities. So specifically, the debit card allows users to link it with digital wallets like Apple Pay and Google Pay for everyday purchases. For every transaction made through this card, 1% of the transaction amount will be rewarded to the user's security account on the hacker platform in the form of fractional shares of popular US stocks like Tesla. Compared to traditional bank card reward schemes like cashback, loyalty points, or miles, we believe that fractional share rewards provide a better user experience. Firstly, there is no expiration days or lock-up period for the fractional shares. More importantly, this unique type of reward can stimulate new users' investment motivation and increase their stickiness to our platform. It also allows them to gradually build their investment portfolio through daily bank card spending without requiring large initial capital. And we are proud to be the first fintech broker in Singapore to offer such services. Since its launch, The product has been very well received by local users. As of the end of May, nearly 7,000 local users have signed up for this card, and the average transaction frequency from the cardholders has exceeded our expectations.
spk15: Regarding counter-trading, Lao Wu is also the first local Singaporean to introduce this feature. In summary, this feature combines the Singapore's excellent financial system For more experienced traders in the local area, we have launched a free-of-charge initial capital investment. By evaluating the credit of the applicant, you can get a product with a timely transaction rate. From the perspective of the user, the Conjure trading model provides a greater flexibility for mature traders. They can use Conjure to buy and sell stocks at a credit rate. There is no need to store any funds, so that investors can buy stocks at a trading rate without having to use funds. If the stock price rises, investors can sell the stock and get a profit from the contract. On the contrary, if the stock price falls, investors can use the available funds within seven days to clear the gap. Considering the characteristics of the counter-trade function, we have also implemented this function in terms of block control. Currently, our counter-trade is only open to local Singaporeans. After opening, there will be a series of rigorous audit procedures and measures to ensure that the customer's credit rating and our authorization amount match. In addition, if there is a loss, Regarding the contract trading feature, Tegra was the first fintech broker in Singapore to offer this service.
spk11: Leveraging Singapore's comprehensive credit system, this feature caters to most seasoned traders by providing instant access to a certain trading limit based on their credit assessment without requiring any initial capital input. From the user's perspective, contract trading grants seasoned traders the flexibility to buy stock and sell them anytime before or on the full selling date without needing to deposit funds. It also allows investors without immediate available capital in hand to purchase stock using the provided trading limit. If the stock price rises, the difference can be pocketed as the contract gain. Conversely, if the share price drops, investors can settle the difference up to seven days later using their own funds. Given the credit-based nature of the contract trading, we have applied slow risk control. For example, this feature is currently only available to Singapore users. It's a strict approval process to ensure credit rating matches the authorized limit. If losses exceeded two days after settlement day without a top-up, the limit will be automatically frozen, permitting only closing positions. Limits are also automatically reduced by counter losses until the user replenish the gap.
spk05: OK, let me answer your second question. First of all, the exchange rate loss or revenue on the old stock profit chart is mainly due to the company's US dollar assets since the beginning of the United States, as the US dollar has caused the exchange rate change of RMB, SGD, or NBD. In the first quarter, compared to the fourth quarter of last year, the US dollar exchange rate has risen, so it has brought in a exchange rate of more than $3 million. And then in the fourth quarter, we actually had a loss of $7 million. At present, the dollar exchange rate is relatively stable at the end of the first quarter. But what about the future trend? It's not something we can give a very clear judgment on. But we also know that the loss of the exchange rate is an impact of non-cash. So when we judge the profitability of the group, we will still focus on operating income. This is also relatively controllable for us. So this is also the reason why we put the national debt revenue from this stage into the revenue of the interest bank. And Q1's TBL income is about 4.7 million US dollars. Let me simply translate it. So the FX gain and losses on our P&L are mainly due to the fluctuation in the US dollar against the RMB, SIN dollar, and the New Zealand dollar. So in Q1, the appreciation of the US dollar compared to Q4 resulted in over 3 million in FX gain. So because the FS gain or loss is not something we can control. So to better assess the group's profitability and operating, we decided to move the revenue from treasury bill into our top line under interest income. We feel this can give the investor a better understanding of our routine business. So in Q1, interest income from US treasury investment was about 4.7 million USD. Thank you.
spk10: Hey, Mel, please move on to the next question, please.
spk04: There are no further questions at this time, so I'll hand the call back to Aaron for closing remarks.
spk11: Thank you. I'd like to thank everyone for joining our call today. I'm now closing the call on behalf of the medicine team here at Tiger. We do appreciate your participation in today's call. If you have any further questions, please reach out to our Investor Relations team. This concludes the call, and thank you very much for your time.
spk04: This concludes today's conference call. Thank you for participating. You may now disconnect.
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