The broker also added a record low number of clients, as China cracked down on data privacy violations
UP Fintech Delves Into Wealth Management
Up Fintech Holding (TIGR: Nasdaq) (Chinese: 老虎证券) announced on March 18 a net loss of USD 5.38 million in the fourth quarter of 2021, down 163.32% over the same period of the previous year, according to its unaudited financial results.
The company, which helps mainland Chinese individuals invest in overseas stock markets such as in the US and Hong Kong, posted a revenue of USD 62.19 million in the fourth quarter, up 31.67% year on year.
Its commission revenue for the fourth quarter was USD 29.86 million, registering a year-on-year increase of 18% but a month-on-month decrease of 11%.
Meanwhile, the company’s transactions in the fourth quarter reached USD 85.9 billion, down USD 7.7 billion from the same period in 2020. Its total client assets of the fourth quarter hit USD 17.1 billion, compared to USD 20.6 billion at the end of the previous quarter.
“The decrease in client assets was mainly because of floating losses generated by some institutional investors’ dwindling holdings of ADRs or Hong Kong stocks over a market slide,” said CEO Wu Tianhua during a performance concall.
Data showed the company hosted 61,000 new deposit customers in the fourth quarter, of which more than 90% were from regions outside China. In the first three quarters, the figures were 117,000, 153,000, 83,000, of which customers from out of China represented over 50%, 60% and 80%, respectively.
The performance shift in customer acquisition came as China’s new personal data privacy law took effect on November 1, 2021. State media People’s Daily had criticized online brokerages, including Futu (FUTU: Nasdaq) (Chinese: 富途控股), for potential violations of data privacy rules.
In the fourth quarter, Up Fintech recorded an interest-related revenue of USD 22.55 million, up 70% year on year, and booked a revenue of USD 9.78 million from other businesses, such as investment banking and employee stock option plan, up 12% over 2020.
The broker’s total revenue in 2021 reached USD 260 million, up 91% year on year, while its net profit hit USD 14.69 million, down 8.55% over 2020.
The first quarter had the best performance of all quarters, after which the year-over-year growth rate of operating income declined, and losses were incurred in the second and fourth quarters.