老虎證券 (TIGR) 2020 Q1 法說會逐字稿

Ladies and gentlemen, thank you for standing by, and welcome to the UP Fintech Holding Limited First Quarter 2020 Earnings Conference Call. (Operator Instructions) I must advise you that this conference is being recorded today, Thursday, May 28, 2020. I would like to hand the conference over to your first speaker today, Mr. Clark Soucy. Thank you. Please go ahead.

女士們、先生們，感謝大家的支持，歡迎參加UP Fintech Holding Limited 2020年第一季財報電話會議。（操作員指示）我必須通知您，本次會議將於今天（2020 年 5 月 28 日，星期四）進行錄製。我想將會議交給今天的第一位發言者克拉克·蘇西先生。謝謝。請繼續。

Thank you, [Karina]. Hello, everyone, and thank you for joining us for the call today. UP Fintech Holding Limited's first quarter 2020 earnings release was distributed earlier today and is available on our IR website at ir.itiger.com as well as GlobeNewswire services. On the call today, from UP Fintech are Mr. Wu Tianhua, Chairman and Chief Executive Officer; Mr. John Zeng, Chief Financial Officer; Mr. Huang Lei, CEO of U.S. Tiger Securities; and Mr. [Kenny Jao], our Financial Controller. Mr. Wu will give an overview of our business operations and discuss corporate highlights. Mr. Zeng will then discuss our financial results. They will both be available to answer your questions during the Q&A session that follows their remarks.

謝謝你，[卡琳娜]。大家好，感謝您今天加入我們的電話會議。UP Fintech Holding Limited 的 2020 年第一季財報於今天稍早發布，可在我們的投資者關係網站 ir.itiger.com 以及 GlobeNewswire 服務上取得。今天參加電話會議的是 UP Fintech 董事長兼執行長吳天華先生；曾約翰先生，財務長；美國老虎證券執行長黃磊先生；以及我們的財務總監 [Kenny Jao] 先生。吳先生將概述我們的業務運營並討論公司亮點。然後曾先生將討論我們的財務表現。他們將在發言後的問答環節回答您的問題。

Now let me cover the safe harbor. Today's discussion contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. A number of factors could cause actual results to differ materially from those contained in any forward-looking statements. For more information about factors that could cause actual results to materially differ from those in the forward-looking statements, please refer to our Form 6-K published today, May 28, 2020, and our annual report on Form 20-F filed on April 29, 2020. We undertake no obligation to update any forward-looking statements except as required under applicable law.

現在讓我來報道安全港。今天的討論包含 1995 年美國私人證券訴訟改革法案意義內的前瞻性陳述。許多因素可能導致實際結果與任何前瞻性陳述中包含的結果有重大差異。有關可能導致實際結果與前瞻性陳述中的結果存在重大差異的因素的更多信息，請參閱我們今天（2020 年5 月28 日）發布的表格6-K 以及我們於4 月份提交的表格20- F 年報2020 年 29 日。除適用法律要求外，我們不承擔更新任何前瞻性聲明的義務。

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.

我很高興現在介紹我們的董事長兼執行長吳先生。吳先生將以中文致辭，隨後將有英文翻譯。請吳先生發言。

[Interpreted] Good evening, everyone, and thank you very much for attending the Tiger Brokers first quarter 2020 earnings conference call. In the first quarter despite the severe global impact of the pandemic, we leveraged the strength of our online model, and were able to demonstrate solid progress on multiple initiatives. Our key business metrics showed notable improvement compared to previous quarters. Total revenue was $23.2 million, a new high, and represented an increase of 136.7% on the same period last year. Thus, the first quarter of 2020 had the fastest quarterly revenue growth since our firm's IPO. Furthermore, in the first quarter, we reported our first ever GAAP net income of $3 million versus a loss of $2.9 million in the same period last year and $600,000 the past quarter. Achieving positive net income is a major milestone for our firm. It is a result of our commitment to improve efficiency and drive growth from a diverse range of business segments.

【解讀】大家晚上好，非常感謝大家參加老虎證券2020年第一季財報電話會議。第一季度，儘管疫情對全球造成嚴重影響，我們還是發揮了線上模式的優勢，在多項措施上取得了紮實進展。與前幾季相比，我們的關鍵業務指標顯著改善。總營收達2,320萬美元，再創新高，較去年同期成長136.7%。因此，2020年第一季是我們公司IPO以來最快的季度營收成長。此外，在第一季度，我們首次公佈了 300 萬美元的 GAAP 淨利潤，而去年同期虧損 290 萬美元，上一季虧損 60 萬美元。實現正淨利是我們公司的一個重要里程碑。這是我們致力於提高效率並推動各個業務部門成長的結果。

We are also satisfied to report that as we continue to provide more differentiated products and services, more and more clients are placing ever greater trust in our firm. In the first quarter, we added 20,900 new accounts with deposits, a 2.5x increase over the same quarter last year in terms of quarterly new account additions. Total accounts with deposits also increased 53.1% over the same quarter last year. I would also like to highlight that in the first quarter, when global markets and all asset classes evidenced extreme volatility, our risk control policy was prudent. And as of today, there was no material adverse impact to our firm in terms of P&L. In the first quarter, clients entrusted us with more of their assets. Total account balance reached a new high of $5.5 billion, an increase of 79.7% on the same period last year.

我們也很高興地報告，隨著我們不斷提供更差異化的產品和服務，越來越多的客戶對我們公司越來越信任。第一季度，我們新增存款帳戶 20,900 個，季度新增存款帳戶數比去年同期成長 2.5 倍。存款帳戶總數也比去年同期增加了 53.1%。我還想強調的是，一季度，在全球市場和各資產類別出現劇烈波動的情況下，我們的風控政策是審慎的。截至今天，我們公司的損益表並未受到重大不利影響。第一季度，客戶將更多資產委託給我們。帳戶總餘額再創新高，達55億美元，較去年同期成長79.7%。

Our clients continue to diversify their trading away from U.S.-listed Chinese ADR companies. Chinese ADRs only accounted for 25% of our U.S. equity trading volume.

我們的客戶繼續將交易多元化，遠離在美國上市的中國 ADR 公司。中國ADR僅占我們美國股票交易量的25%。

Our U.S. and Singapore offices are starting to onboard clients. I expect to see more offshore clients using our services.

我們的美國和新加坡辦事處已開始接待客戶。我希望看到更多的離岸客戶使用我們的服務。

Moving on to IPO underwriting. Most of the deals on the Street are somewhat delayed due to the pandemic, but our pipeline remains very strong. We migrated roadshows online from offline by connecting issuers and investors using videoconferencing and phone calls and achieved good results for the issuers.

繼續 IPO 承銷。由於大流行，華爾街的大多數交易都有所延遲，但我們的管道仍然非常強勁。我們將路演從線下轉向線上，透過視訊會議、電話等方式連接發行人和投資者，為發行人取得了良好的效果。

In the first quarter, we underwrote 4 U.S. IPOs, including [Quasar] Holdings and (inaudible).

第一季度，我們承銷了 4 筆美國 IPO，包括 [Quasar] Holdings 和（聽不清楚）。

Tiger's ESOP business continues to grow with good momentum. In addition to new customers ranked in the top 10 of Chinese Internet companies, we are also adding customers from traditional industries. We keep investing in our system architecture and customer service capabilities and are now able to manage complex ESOP plans for multinational firms in different jurisdictions. In the first quarter, in total, we added 8 customers. I am confident ESOP will continue to obtain growing numbers of customers.

泰格的ESOP業務持續成長，勢頭良好。除了中國網路公司前10名的新客戶外，我們還增加了來自傳統產業的客戶。我們持續投資於我們的系統架構和客戶服務能力，現在能夠為不同司法管轄區的跨國公司管理複雜的員工持股計畫。第一季度，我們總共增加了 8 位客戶。我相信 ESOP 將繼續獲得越來越多的客戶。

I would like to conclude my remarks by giving an update on our wealth management business. Near the end of the first quarter, we officially launched our Fund Mall, a new feature of our platform that allows clients to seamlessly invest in global mutual funds. The Fund Mall presently offers over 50 funds from top-tier global asset managers, including Fidelity, BlackRock, Morgan Stanley, HSBC and other notable institutions. Funds offered in the Fund Mall include fixed income funds and equity funds that span a wide range of currencies and global markets, assisting our clients to increase their portfolio diversification. In the second quarter, we plan to offer over 100 funds, as well as launch our internally developed rating system for clients to evaluate funds across a wide range of metrics, including fund income, risk, size and manager quality. This system will assist our customers to increase their knowledge about mutual funds and thus, their propensity to invest more of their assets in our Fund Mall.

我想透過介紹我們財富管理業務的最新情況來結束我的演講。接近第一季末，我們正式推出了基金商城，這是我們平台的一項新功能，可讓客戶無縫投資全球共同基金。基金商城目前提供超過50檔來自全球頂尖資產管理公司的基金，包括富達、貝萊德、摩根士丹利、匯豐銀行等知名機構。基金商城提供的基金包括固定收益基金和股票基金，涵蓋多種貨幣和全球市場，幫助我們的客戶增加投資組合的多元化。第二季度，我們計劃提供超過 100 檔基金，並推出內部開發的評級系統，供客戶從廣泛的指標（包括基金收入、風險、規模和經理素質）評估基金。該系統將幫助我們的客戶增加對共同基金的了解，從而提高他們在我們的基金商城投資更多資產的傾向。

Finally, I would like to comment on the progress of our share buyback program. From April 1, 2020 to May 26, 2020, we spent approximately $1.5 million to repurchase 508,000 ADS.

最後，我想談談我們的股票回購計畫的進展。從2020年4月1日到2020年5月26日，我們花了約150萬美元回購了508,000股ADS。

I would now like to invite our CFO, John, to go over our financials.

我現在想邀請我們的財務長約翰來檢查我們的財務狀況。

Thanks, Tianhua (inaudible). A solid first quarter performance as we broke even on a GAAP basis for the first time. Total revenue was USD 23.2 million, increased over 137% on a year-over-year basis. Our users were very active in the first quarter given the volatile market backdrop. Commissions increased 125% to $14.3 million. Interest related income, which combines financial service fees and interest income increased [125%] from the same quarter last year. Other revenue primarily consists of revenue from corporate services, such as IPO underwriting, grew 291% year-over-year to $2.5 million. Across the Street, IPO underwriting has slowed down due to COVID-19. Our deal pipeline remains very strong. We are optimistic more deals will get [promoted] (corrected by the company after the call) once the markets starts to stabilize. Interest expense increased 357% year-over-year to $1 million this quarter. After interest expense, net revenue was USD 22.2 million increased to 132% from same quarter last year.

謝謝，天華（聽不清楚）。第一季業績穩健，以公認會計準則 (GAAP) 計算，我們首次達到收支平衡。總收入為2,320萬美元，較去年同期成長超過137%。鑑於市場波動，我們的用戶在第一季非常活躍。佣金增加 125% 至 1,430 萬美元。利息相關收入（包括金融服務費和利息收入）較去年同期成長[125%]。其他收入主要包括 IPO 承銷等企業服務收入，年增 291% 至 250 萬美元。街對面的 IPO 承銷因 COVID-19 而放緩。我們的交易管道仍然非常強勁。我們樂觀地認為，一旦市場開始穩定，更多交易將得到[促進]（公司在電話會議後糾正）。本季利息支出年增 357% 至 100 萬美元。扣除利息支出後，淨收入為 2,220 萬美元，較去年同期成長 132%。

Now switching to expenses. Clearing expense increased 5x to $1.8 million due to increased trading volume. Salary expense increased 34% year-over-year to $10.5 million, as our headcount grew 37% in the same period. In 2020, our headcount growth will moderate, but we will keep adding key positions. Occupancy expense almost doubled to $1.2 million due to increased headcount and office space. Communication and market data expense also grew 54% year-over-year to $1.8 million as we have more users.

現在轉向支出。由於交易量增加，清算費用增加了 5 倍，達到 180 萬美元。薪資支出年增 34% 至 1,050 萬美元，同期我們的員工人數增加了 37%。2020年，我們的員工數量成長將放緩，但我們將繼續增加關鍵職位。由於員工人數和辦公空間的增加，佔用費用幾乎翻了一番，達到 120 萬美元。由於我們擁有更多用戶，通訊和市場數據費用也較去年同期成長 54% 至 180 萬美元。

In the first quarter, given the more active market sentiment, we increased our marketing spending and the total marketing expense increased 45% to $2.8 million. SG&A expense slightly increased 5% to $2.3 million primarily due to business expansion and professional services.

第一季度，鑑於市場情緒更加活躍，我們增加了行銷支出，行銷總費用增加了45%，達到280萬美元。SG&A 費用小幅成長 5%，達到 230 萬美元，主要是由於業務擴張和專業服務。

Total expense for the first quarter was $20.3 million, an increase of 45% year-over-year. Income before tax was $4.7 million. Net income was USD 3 million and non-GAAP net income was $4.2 million. Overall, we are satisfied with our progress in the first quarter. We are taking advantage of the short-term market volatility, higher user acquisition rate, and starting to see operating leverage across our business units.

第一季總支出為 2,030 萬美元，年增 45%。稅前收入為 470 萬美元。淨利潤為 300 萬美元，非 GAAP 淨利潤為 420 萬美元。總體而言，我們對第一季的進展感到滿意。我們正在利用短期市場波動、更高的用戶獲取率，並開始看到我們各業務部門的營運槓桿。

That being said, a prolonged volatile market caused by COVID-19 could have adverse impact on our business and financials. We are closely monitoring the situation and make adjustments when necessary. This concludes our prepared remarks. Now we can open for questions.

話雖如此，COVID-19 造成的市場長期波動可能會對我們的業務和財務產生不利影響。我們正在密切關注事態發展，並在必要時做出調整。我們準備好的演講到此結束。現在我們可以開始提問了。

(Operator Instructions) Your first question comes from the line of Sherry Zhang from Citi.

（操作員說明） 您的第一個問題來自花旗銀行的Sherry 張。

I have 2 questions here. The first one is about our lending business. So I'd like to know why the margin financing balance was down quarter-over-quarter in the first quarter. And is it mainly due to client unwinding their positions or because like the company has tightened leverage ratio? And why the interest income is down more than the margin finance balance? Is there any pricing pressure? And second question is about funds market. Could management share what is current client AUM and fee structure, i.e., what is the subscription fees? And how much do you -- how much management fee are you able to share from the managers? And what is the typical settlement period for the funds? And do you have any target on the AUM and revenue contribution for 2020?

我這裡有兩個問題。第一個是關於我們的貸款業務。所以我想知道為什麼第一季保證金融資餘額環比下降。主要是因為客戶平倉還是因為公司收緊了槓桿？為什麼利息收入的下降幅度大於保證金融資餘額？是否有定價壓力？第二個問題是關於基金市場的。管理階層能否分享一下目前的客戶資產管理規模和費用結構，即訂閱費是多少？你能從經理身上分得多少管理費？資金的典型結算週期是多少？2020年的AUM和收入貢獻有什麼目標嗎？

Sherry, thanks. Let me answer your first question in regards to margin and Tianhua will answer your second question. So the margin balance was down year-over-year because like during the market downturns, people tends to hold on cash. Okay. So not it's not that many users are taking our margins. So that's why the total margin balance was down. So during the meantime, yes, we did -- we do have a very prudent risk control policies. For certain starts, we do increase maintenance margins. So that's why you see some of those margin -- like the margin policy will get tighter. The market starts to get back to normal, we will see -- we are seeing more people taking our margin to start trading the securities. So to answer your question, yes, the balance was down was due to, most likely, the market downturn and will also have a tighter margin policies for certain stocks.

雪莉，謝謝。讓我回答你關於保證金的第一個問題，天華將回答你的第二個問題。因此，保證金餘額同比下降，因為就像市場低迷期間一樣，人們傾向於持有現金。好的。所以並不是很多用戶都在拿走我們的利潤。這就是總保證金餘額下降的原因。所以在此期間，是的，我們確實有非常審慎的風險控制政策。對於某些啟動，我們確實會增加維持利潤。這就是為什麼你會看到一些保證金——比如保證金政策會變得更緊。我們將會看到，市場開始恢復正常，我們會看到越來越多的人利用我們的保證金開始交易證券。因此，回答你的問題，是的，餘額下降很可能是由於市場低迷，並且某些股票的保證金政策也會收緊。

[Interpreted] Yes. Just to answer your question, let me translate. We just started to fund more by end of first quarter. So right now, we don't have much data to share. In terms of your question on how we split the management fee with fund companies. We don't really disclose that data, but we will give you some trends once we have more data to share.

[解釋] 是的。為了回答你的問題，我來翻譯一下。我們在第一季末剛開始提供更多資金。所以現在我們沒有太多數據可以分享。關於你提到的我們與基金公司如何分攤管理費的問題。我們並沒有真正透露這些數據，但一旦我們有更多數據可供分享，我們將為您提供一些趨勢。

(Operator Instructions) There are no further questions at this time. I would like to hand the conference back to Mr. Clark Soucy. Please continue.

（操作員說明） 目前沒有其他問題。我想把會議交還給克拉克·蘇西先生。請繼續。

I would like to thank everyone for joining our call today. I am now closing the call on behalf of the management team here at UP Fintech. 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.

我要感謝大家今天加入我們的電話會議。現在我代表 UP Fintech 的管理團隊結束這通通話。我們非常感謝您參加今天的電話會議。如果您還有任何疑問，請聯絡我們的投資者關係團隊。通話到此結束，非常感謝您抽出寶貴的時間。

Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may all disconnect.

女士們、先生們，今天的電話會議到此結束。感謝您的參與。你們都可以斷開連線。