Source: Haitong International
Initiating coverage with an OP rating and TP of US$15.2/sh. UP Fintech, also known as Tiger Brokers, is an integrated online AI-enable digital financial services platform offering brokerage services, wealth management, online investor communities, and corporate services. As of end-2Q25, Tiger has over 1 million funded clients, with a significant presence in Singapore (>50%), the U.S. (12%), and a rapidly growing base in Hong Kong (6%), on our estimates. We expect the company's net profit (non-GAAP) for 2025E-27E to reach US$140mn, US$154mn, and US$184mn, respectively, representing a 37% CAGR over 24-27E and an average RoE of 18.2% between 2025-27E (vs. 12.4% in 2024). We apply a target 12-m forward PER of 19x, considering the company's expanding product suite (including crypto business), solid AUM growth, strategic focus on Hong Kong market with higher ARPU and better operating efficiency, arriving at a target price (TP) of USD 15.2/share. We initiate with the “Outperform” rating.
AI-driven online brokers with sustained profitability improvement.The company is well-positioned for growth, driven by a strategic focus on the Hong Kong market, an expanding product suite (including crypto initiatives), and continued increased trading activity in both U.S. and Hong Kong equity markets. U.S. equities account for over 80% of trading volume in 1H25. The company has experienced strong growth from 2020 to 2024, with funded clients, AUM, revenues, and net profit increasing by CAGRs of 43%, 27%, 30%, and 34%, respectively, and we expect this strong growth to continue in the coming years.
Strategically prioritizing Hong Kong with elevated ARPU. Tiger officially entered the Hong Kong market in 2023, prioritizing this region in its internationalization efforts through product diversification, ongoing R&D investments, and agile marketing strategies to enhance service offerings and customer engagement. The company aims to capitalize on Hong Kong's elevated ARPU by refining acquisition strategies, such as closing unprofitable channels in other markets with lower ARPU, to optimize overall profitability.
Expanding Crypto initiatives. Tiger seeks to expand its crypto trading offerings through license applications—progressing smoothly with its Hong Kong’s VATP license in phrase II and securing digital asset trading licenses in 14 U.S. states—while actively pursuing a crypto exchange license in Singapore and forming strategic partnerships with Web 3 investors to boost profitability through crypto trading business’s higher take-rates and trading velocity vs. equites.
Risks: 1) Market corrections; 2) Regulatory risk; 3) Intensified competitions; 4) slower-than-expected client and AUM acquisition.