Tiger Brokers Reports a Net Profit for the First Time
SINGAPORE, June 2, 2020 /PRNewswire/ -- Despite being faced with a challenging start in 2020 due to the outbreak of the COVID-19 pandemic and the accompanying global economic volatility, UP Fintech Holding Limited, known as "Tiger Brokers" (NASDAQ: TIGR), a leading online brokerage firm focusing on global Chinese investors, recently posted impressive first-quarter financial results.
In the first quarter of 2020, Tiger Brokers' total securities trading volume was $44.1 billion, up 58.3% year-over-year. The number of clients who opened an account increased by approximately 94,000 from the previous quarter and the number of accounts with deposits increased by approximately 20,900. The quarterly growth rate in funded accounts was about 2.5 times that of the same quarter last year and marked a record high for a single quarter. The company also reported total client account balance of $5.5 billion as of March 31, 2020, a 79.9% increase from a year ago.
Increased trading activities from more client accounts contributed to an increase in Tiger Brokers' revenues. Tiger Brokers' total revenues increased by 136.7% year-over-year to $23.2 million for the first quarter of 2020. Commissions increased by 124.6% year-over-year to $14.3 million. Interest and other related income (financing service fees) jumped by 128.9% to $6.41 million from a year ago. Other revenues, driven by a growing institutional businesses, increased by 291.3% to $2.51 million from the first quarter of 2019.
Due to the solid results from multiple business segments, Tiger Brokers reached profitability for the first time since its launch in 2015, with a net income attributable to Tiger Brokers of $3.03 million for the quarter, representing a milestone for the company.
Mr. Wu Tianhua, CEO of Tiger Brokers commented, "During the unprecedented market conditions caused by the pandemic, we managed to grow our user base and remain agile in our business operations; there is still strong demand in the market for our services. By constantly adding new features and investment products to our proprietary trading platform, we continue to improve our user experience and enhance user stickiness. We are also expanding our institutional business, particularly investment banking, equity underwriting, and ESOP services, all of which helped us grow our revenue streams substantially."
Tiger Brokers' growing capability to serve corporate clients is well-recognized. In 2019, Tiger Brokers' subsidiaries served as an underwriter in 12 Chinese ADR IPOs in the U.S. In the first quarter of 2020, only six Chinese companies listed on U.S. exchanges and four of them had Tiger Brokers' subsidiaries act as the underwriter for their offerings, including Phoenix Tree Holdings Ltd (DNK), Lizhi Inc (LIZI), Huize Holding Ltd (HUIZ), and Zhongchao Inc (ZCMD). It should also be noted that Tiger Brokers led U.S. IPO underwriting of Chinese companies by deal count among brokerages in the first quarter of 2020. Between the end of 2017 and the first quarter of 2020 Tiger Brokers helped 44 China-based companies go public in the U.S.
"The lockdowns enforced in many cities in the wake of the coronavirus dealt a blow to traditional in-person IPO roadshows. Tiger Brokers overcame this challenge by moving face-to-face meetings online. Our ability to organize virtual roadshows for prospective issuers demonstrates our flexibility and the strong relationships that we built with more than 500 institutional investors across North America and Asia-Pacific," said Mr. Wu.
According to Mr. Wu, the company further strengthened its market position in ESOP management services after a year of heavy investment in system architecture. Tiger Brokers now counts over 50 client firms across more than 10 industries, including Xiaomi Corp (1810) and Viomi Technology Co. (VIOT). The ESOP management system has been updated over 11 times and has over 109 specific features to address clients' diversified needs.
In addition, Tiger Brokers also saw a surge in client engagement with its wealth management business. Due to market volatility in the first quarter of 2020, some investors moved their money into relatively lower volatility investments; many of them chose "Cash Plus," an innovative cash management feature that the company launched in late 2019. In the first quarter "Cash Plus" reported an increase in assets under management of 170% and a 1000% increase in client numbers.
Besides "Cash Plus", Tiger Brokers recently launched its "Fund Mall", a brand new wealth management feature that provides a one-stop-shop for investing in global mutual funds. The Fund Mall includes over 50 well-known mutual funds managed by top-tier global asset managers with deep investment expertise and rigorous risk management capabilities.
Mr. Wu noted that the number of mutual funds in the Fund Mall will reach 100 in the second quarter of fiscal 2020. Tiger Brokers will also launch a proprietary "fund rating system" to enable clients to screen funds based on custom criteria such as return and fund size. Mr. Wu said that the company would make more specialized features available in the future to further increase clients' ability to analyze prospective investment opportunities.
Tiger Brokers' efforts to accelerate its international expansion continue in 2020. Its wholly owned Singapore subsidiary, Tiger Brokers (Singapore) Pte Ltd, received a Capital Markets Services License from the Monetary Authority of Singapore (MAS) in 2019 and has already commenced providing securities trading services to Singapore nationals. In addition, the company has offices in the U.S. and New Zealand and it expects to offer services to a wider spectrum of investors located in other countries and regions as it continues to scale internationally.
"Our proprietary technology is the backbone for our growth and enables us to provide efficient and first-rate services in a cost-effective manner. In the near future, by leveraging the best available technology, we aim to continuously deliver new solutions to offer our users a personalized investing experience and grow our company for many years to come," Mr. Wu said.
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