Tiger Brokers’ parent UP Fintech swings into Q1 loss of US$26.9 million on penalty from China probe

[SINGAPORE] Digital brokerage Tiger Brokers’ parent company UP Fintech on Tuesday (Jun 2) reported a net loss of US$26.9 million for the first quarter ended Mar 31, reversing from a net profit of US$30.4 million a year earlier.

This comes amid a crackdown by the Chinese government on illegal funds and securities activities.

Nasdaq-listed UP Fintech had on May 22 disclosed that its subsidiaries were found by the China Securities Regulatory Commission Beijing Bureau to have “conducted unlicensed cross-border securities business and illegal activities relating to the fund and futures business in mainland China”.

The bureau imposed administrative penalties totalling about 308.1 million yuan (S$58.2 million) and the confiscation of about 103.1 million yuan in illegal income.

Two other companies targeted under the probe were Longbridge Securities and Futu, the parent company of Moomoo.

UP Fintech said that the penalty and confiscation of funds were reflected in its Q1 financial results.

Chairman and CEO Wu Tianhua said that the group “sincerely accepts” the penalty, adding that it would not have a “material adverse impact on our business operations or long-term development”.

UP Fintech also announced a share buyback programme of up to US$50 million, to be implemented over a year until Jun 1, 2027. It expects to fund the repurchases out of its existing cash balance.

The group’s revenue increased 26.3 per cent to US$154.9 million in Q1, from US$122.6 million for the previous corresponding period. Its operating margin remained “healthy” at 34.8 per cent.

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UP Fintech added 28,900 funded accounts in Q1. This brought its total to 1.28 million, marking a 11.3 per cent year-on-year increase. A “great majority” of new funded accounts came from Singapore and Hong Kong, the group said.

Total trading volume rose 49 per cent to US$323.9 billion in Q1; total client assets rose 28.4 per cent to US$58.9 billion.

Trading activity in Singapore “remained robust”, with total trading volume increasing 140.5 per cent year on year in Q1. Total trading orders also grew 28.9 per cent from a year earlier, marking the ninth consecutive quarter of growth.