Ladies and gentlemen, thank you for standing by and welcome to the UP Fintech Holding Limited second quarter 2021 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, Friday, September 10th, 2021. I would now like to hand the conference over to your first speaker today, Mr. Clark Soucy. Thank you. Please go ahead, sir. Thank you, operator. Hello everyone, thank you for joining us for the call today. UP Fintech Holding Limited second quarter 2021 earnings release was distributed earlier today and is available on our IR website at ir.itiger.com, as well as GlobeNewswire. 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, the CEO of US Tiger Securities, and Mr. Kenny Zhao, our Finance Controller. Mr. Wu will give an overview of our business operations and discuss corporate highlights. Mr. Zeng will discuss our financial results. They will both be available to answer your questions during the Q&A session that follows their remarks. Let me cover the safe harbor. The statements we are about to make contain 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 statement. 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 furnished today, September 10th, 2021, and our annual report on Form 20-F filed on April 28th, 2021. We undertake no obligation to update any forward-looking 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. Hello everyone, and welcome to Tiger Brokers' 2021 second quarter earnings conference call. Hello everyone, welcome to Tiger Brokers' 2021 second quarter earnings conference call. Although market sentiment was weaker in the second quarter, we still achieved substantial growth thanks to internationalization and the strength of our comprehensive product and service offerings. Total revenue in the second quarter was $60.2 million, representing 98.7% growth year-over-year. This quarter, we also increased investment in user acquisition, self-clearing and talent recruitment. We are confident such investments will bolster our market-leading position and fuel future expansion in our business. Factoring in the $13.7 million fair value change to convertible bonds we issued earlier this year, and non-GAAP loss is $4.4 million for this quarter. Total customer accounts increased by 249,000 in the second quarter to 1.649 million, which is two times the total number of accounts in the same period of last year. We added 153,000 funded accounts this quarter, 4.5 times that of the quarterly addition last year, and a 30.4% increase quarter-over-quarter. The number of total funded accounts rose to 529,000. Of the 153,000 new additions this quarter, over 60% came from offshore, exhibiting the growing momentum of our internationalization strategy. Total newly funded accounts in the first half of 2021 reached 270,000, surpassing the total number of funded accounts acquired since our platform went online in 2015 through 2020. Even with a weaker market backdrop, we still see healthy asset inflows. Total AUM reached $23.9 billion this quarter, up nearly three times year-over-year and 11.8% quarter-over-quarter. [Non-English content] I would now like to take this opportunity to provide investors with an update on three key business initiatives at our company. [Non-English content] Tiger Brokers is continually expanding our global reach and our network of subsidiaries covers the U.S., Australia, Singapore and other countries. Our subsidiaries are licensed to conduct a wide range of securities businesses, including investment banking, asset management and brokerage. Our internationalization continues to accelerate. More than 60% of newly funded accounts this quarter came from offshore markets. As of June 30th, 40% of our total funded accounts were from international users. We only started executing on our internationalization strategy just over a year ago, but our progress thus far is a testament to the value proposition of our platform in foreign markets. We see vast latent demand for our services across a wide range of countries and regions. Expect that internationalization will not only spur growth in new accounts, but also raise the ceiling for the future size of our client base. As we expand to new countries and add products and markets to our trading platform, our firm gains new experience and knowledge for engaging with regulatory bodies, enabling us to further enhance the client experience. I am pleased to report that as of today, we already have over 200,000 funded accounts in Singapore. We firmly believe internationalization will drive further growth. Although the market has been weak since the second quarter, we are confident to achieve our guidance of 350,000 new funded accounts this year. [Non-English content] 2B services. Today, our growth strategy envisions simultaneously developing our expertise in investment banking, ESOP and brokerage to augment our capabilities to meet our clients' global financial services needs. [Non-English content] The rapid expansion of our ESOP business continues to exceed our expectations. In the second quarter, we added 51 new ESOP clients for a grand total of 216 clients. We serve not only U.S. and Hong Kong-listed companies, but we also help A-share companies manage their employee options. [Non-English content] In the second quarter, we participated in 17 IPOs and follow-on offerings in the U.S. market and also served as an underwriter for 14, including Boss, Aihuishou International and Dingdong, among others. In light of the recent concerns over ADR IPOs, I would like to highlight for our investors and stakeholders that we possess extensive capabilities to act as an underwriter in Hong Kong. In the past year, we participated in many popular listings in Hong Kong, such as those of NetEase, XPeng, Bilibili, Harbour BioMed and Antengene, among others. [Non-English content] Finally, I would like to provide an update on our self-clearing capability. [Non-English content] In July of 2019, we acquired TradeUP Securities Inc., formerly Marsco, a broker-dealer with over 30 years experience in self-clearing and its own self-clearing license, because we wanted to establish the technical, operational, and compliance capability to manage our own proprietary brokerage system. I am pleased to report that as of the second quarter of 2021, more than 50% of our clients were having their U.S. cash equities self-cleared by TradeUp. We project that by the end of this year, we will be self-clearing for over 70% of our clients. [Non-English content] Hello. Thanks, Tianhua and Clark. Let me walk through our second quarter financial performance. All numbers are in USD. Total revenue was $60.2 million this quarter, up 99% year-over-year. Commission were $31 million, up 64% year-over-year, down 41% from the first quarter of this year. The drop in commission was due to weaker market sentiment in the second quarter, as total trading volume dropped 18% quarter-over-quarter, plus the proportion of higher unit economic products, for example, cash equity, dropped from 50% of the trading volume in the first quarter to 40% of trading volume in the second quarter. The decrease in commission also resulted in a lower blended take rate of 3 bps in the second quarter versus 4.3 bps in the first quarter of this year. In reality, the fee rate remains the same for both quarters. Interest-related income, which combines financing service fee and interest income, was $19 million, an increase of 115% year-over-year and 7% quarter-over-quarter. The increase was due to higher margin and securities lending balance and gradual ramp-up in self-clearing. Other revenue was $10.2 million, up 300% year-over-year, primarily due to more equity underwriting, IRPR services, and currency exchange services. Now switching to cost. Interest expense increased 154% year-over-year to $4.8 million this quarter, in line with our user growth as increase in margin activities. Execution and clearing expense were $6.6 million this quarter, increased 131% year-over-year as we have more funded account customers and higher trading volume. Employee compensation increased 82% year-over-year to $20.6 million, as we keep adding headcounts in R&D, self-clearing to support our global growth. Along with the headcount increase, this quarter occupancy expense increased 32% year-over-year to $1.5 million. SG&A increased 84% year-over-year to $5.1 million. Marketing expense had the most uptick within OPEX, increased more than 700% year-over-year to $24 million. In the second quarter, we increased marketing offshore, mostly in Singapore, through both online and offline channel to drive brand awareness and user acquisition. We firmly believe grabbing more market share right now will help deliver better financial performance down the road. As a result of rapid user growth, communication and data usage also increased 143% year-over-year to $5 million this quarter. With the increased spending to drive growth and a fair value change of $13.7 million on the convertible bonds we issued earlier this year, our net loss for second quarter was $21.5 million. Taking out the fair value change and other non-GAAP items, our non-GAAP loss for this quarter was $4.4 million. We have concluded our presentation. Operator, please open the line for Q&A. Thanks. Certainly. Ladies and gentlemen, we will now begin the question and answer session. We have the first question, which is coming from the line of Han Pu from CICC. Please go ahead. Thanks for taking my question. This is Han from CICC. I have two questions. The first one is about the guidance of the Q3. We see the strong growth of users in Q2. Could you give us more color on the number of clients and rate for client methods and the cost of same in the coming quarter? The second question is about the clearing fee rate. We are wondering why the execution and the clearing fee rate to our commission revenue went up in Q2, while we see the continuous increase in your self-clearing. Thanks. Thank you, Han. I will answer your two questions. First is on the guidance for the third quarter. Looking at July, August data, we see higher UE products like cash equity option volume went up versus the second quarter. We feel if market stays like this then we will expect commission to have a moderate increase in the third quarter. ADR underwriting is on hold due to the current policy from China and the U.S. regulators. Short term, this could have a likely impact on our revenue, but the impact should be manageable as ADR underwriting only account for less than 10% of our revenue. We think the ADR equity offering will resume once regulators gives more clarity. In the meantime, as Tianhua mentioned earlier, we are very active in Hong Kong IPO as international underwriter, we already underwrote Bilibili, XPeng, those popular IPOs. This could offset some short-term impact from the hold in U.S. equity underwriting. In terms of customer acquisition, the big OPEX is sales and marketing. We expect the third quarter marketing expense to be or less than second quarter, as we don't offer any offline events in Singapore. We will be very opportunistic to acquire users when we see fit. In terms of AUM per users, in July and August, we still see very healthy net inflows for both months. Due to market sentiments, average AUM is down around 10%-15% by end of August versus end of June. Your second question regarding the clearing expense went up. The main reason of the increase in clearing expense is we have a lot more Singapore clients, and we offer Singapore stock trading. Based on local regulation, if the client is trading Singapore stock, the client's asset needs to be held at a SGX clearing member. Our Singapore subsidiary is not a SGX member yet, we pay third-party custodian fee for each client who open an account with us. Given we have over 200,000 Singapore clients already, we paid close to $2 million custodian fee the second quarter, which counted as our clearing expense. As you might know, our Singapore subsidiary already received AIP from SGX to become a clearing member. Once we officially become the SGX clearing member, we can greatly reduce the custodian fee. I believe we can see some reduction in custodian fee starting in the first quarter. Thanks. Thanks. That's very helpful. Thank you. Once again, ladies and gentlemen, hit star followed by one to ask a question. Please note there might be a slight pause as we collate the questions. We have the next question. This is coming from the line of Judy Zhang from Citi. Please go ahead. [Non-English content] [Non-English content] [Non-English content] [Non-English content] [Non-English content] Let me translate. On the founder clients profile, we use the users we acquired last year, say second quarter of 2020 as a cohort sample. Initial deposit among that group is around $6,000-$7,000. One year later, by end of second quarter this year, average client asset is around $30,000. Since second quarter of last year, each quarter this cohort group has net asset inflow, which means they are keeping deposit money into their account, and AUM growth is not only due to equity value appreciation. [Non-English content] Okay. If we look at new customer we acquired this quarter, second quarter of 2021, their average initial deposit is around $5,000, slightly below the initial deposit of the second quarter of 2020 clients. We don't think this is due to a deterioration of client quality. We feel it's more due to the less attractive market backdrop. We feel similar to the clients we acquired last year, after several quarters, they will keep depositing money to trade on Tiger platform. [Non-English content] On customer acquisition costs and payback, we still use the second quarter 2020 as a cohort sample. Back then, customer acquisition cost was about $130. Back then market was more active. If we only count net commission, excluding interest, the payback was around two quarters for that cohort group. Look at newly acquired users in the second quarter of this year, due to more competition, the customer acquisition cost went up to around $160 per person. Net commission also dropped due to a weaker market drop. Still, we feel it's still going to be attractive for us to acquire those users, even though the payback increased to four to six quarters. Because our users are relatively young, as long as we can get them payback in a relatively short period, there will still a lot of upside for us to monetize. Thank you, Judy. We have the next question. This is coming from the line of Eric Lu from China Renaissance. Please go ahead. [Non-English content] Thanks management for giving me the opportunity to ask questions. My first question is, we saw the trading volume decreased quarter over quarter in second quarter, but the net interest income and margin financing balance both increased, especially the margin financing balance. Can I ask the rationale behind this? For the second question, we noted our number of new paying clients acquired from Mainland China was more than our competitor. Can I ask what's our current customer acquisition strategy in Mainland China and the cost of it? Thanks. Sure. Thanks, Eric. I will answer your two questions. The first one was on the net interest income. The main reason of the net interest income increase while the trading volume came down is we're starting to then probe our self-clearing capability. Given we have more and more trading volume and assets under our own clearing firm, we're starting to use some of our clients' idle cash, which gives us cheaper funding and also gives us more flexibility in terms of the cap we can lend to each customer. Also becoming a self-clearing firm enables us to become a direct counterparty for securities lending business, which is pretty lucrative on the Street. We can generate more interest without sharing with other intermediaries. That's the main reason our net interest income increased in the second quarter while the trading volume came down. Of course, the margin balance, if you look at our balance sheet, also increased versus the first quarter. The $1 billion margin balance on our balance sheet includes Hong Kong IPOs. Take out Hong Kong IPO, which is not that profitable for us, for the Hong Kong IPO margin business. Taking out that part, our margin on balance is about $450 million, while in the first quarter it was about $400 million. Those two are the main reasons why net interest income went up in the second quarter. In terms of the customer acquisition for onshore customers. In the second quarter, we have been actually working with more channels or intermediaries to target Chinese investors who already have assets offshore. This is so far showing good results. Of course, our ESOP is also a pretty good user acquisition tool for us to tap into those Chinese users. In terms of customer acquisition cost, it is pretty much in line with our previous customer acquisition cost for Chinese users. The major increase of our customer acquisition cost actually came from Singapore, as we mentioned earlier. Thank you. Thank you. Do you have the next question? This is coming from the line of Ya Zheng from TH Capital. Please go ahead. Hi, management. Thank you for taking my question. This is Bella from TH Capital. I have one question. I was hoping management could shed some light on the trading asset distribution, given the previous experience and regulations on Chinese ADRs in terms of your customer transaction behavior. Do you see any shift to Hong Kong securities? Can we think this intensive competition was partly due to some kind of transaction habit shift? That's my question. Thanks. Sorry, you were a little bit breaking up. You mean the trading volume shifting to Hong Kong, and do we see now a more strong competition from the existing players? Yes, exactly. If you look at all the Chinese ADRs coming back to Hong Kong, we think this will likely be a trend. As we mentioned earlier, we have been very active in Hong Kong as an international underwriter for Chinese ADR secondary listing in Hong Kong. We think that part, we feel pretty confident we can keep getting more corporate clients and also use these opportunities to acquire more retail clients. In terms of trading capabilities, traditionally, our strength was in the U.S. market. Recently, we have developed a lot more resources to develop our Hong Kong trading capabilities. For example, the Hong Kong Level 2 data, I think we are one of the few firms to offer it for free. The Hong Kong options, we are one of the first firms to offer to investors. We think the trading, no matter it's from the primary market or the secondary market, we are much more capable versus where we were one or two years ago. I think the trend, we will still benefit once we develop more resources into the Hong Kong trading capability and R&D. Okay. Very clear. Thanks. Thank you. We have no further questions at this moment. I would like to hand the conference back to our host for any ending remarks. I'd like to thank everyone for joining our call today. I am now closing the call on behalf of the management 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.