UP Fintech or higher generally known as Tiger Brokers (ticker: TIGR) have been additionally the opposite firm that was penalized along with FUTU, which I wrote about yesterday.
However I feel TIGR is definitely cleaner and simpler to make sense of. So let’s see if now we have alternative right here.
Just a few info for us to be aware of earlier than we go deeper in. All numbers in USD.
TIGR Share Construction: 1 ADS = 15 Class A Abnormal Shares
| Merchandise | Abnormal Shares | ADS Equal |
|---|---|---|
| Class A (publicly traded) | 2,652,817,547 | 176,854,503 |
| Class B (founders, not listed) | 25,000,000 | 1,666,667 |
| Whole financial shares | 2,677,817,547 | 178,521,170 |
Worth Profile earlier than and after drop
| Merchandise | Worth |
|---|---|
| Worth — pre-drop (Might 21 shut, est.) | ~$5.84 |
| Worth — post-drop (Might 22 shut) | $4.36 |
| Drop on Might 22 | −25.34% |
| 52-week excessive / low | $13.55 / $5.72 |
| Market cap pre-drop (all shares) | ~$1.042B |
| Market cap post-drop (all shares) | ~$778M |
Stability Sheet (Dec 31, 2025)
| Merchandise | Quantity |
|---|---|
| Money & money equivalents (firm’s personal) | $791,016,893 |
| Money-segregated for regulatory goal (consumer cash) | $3,401,889,322 — NOT firm money. |
| Whole money on steadiness sheet | ~$4.19B |
| Whole borrowings (convertible bonds solely) | $162,178,103 |
| Whole liabilities | $7,356,352,294 |
| Whole fairness | $865,232,265 |
| E-book worth per ADS | ~$4.85 |
| Internet money (personal money − debt) | ~$629M internet money |
Enterprise Worth
| State of affairs | Whole Market Cap | + Debt | − Corp. Money | = EV |
|---|---|---|---|---|
| Pre-drop (Might 21) | ~$1.042B | $0.162B | $0.791B | ~$413M |
| Put up-drop (Might 22) | ~$778M | $0.162B | $0.791B | ~$149M |
Keep in mind the enterprise worth however first, by this time, it’s doubtless the convertible bonds can be paid off. Of their final end result observe 9 it was acknowledged that a number of of the convertible loans will come due:
| Tranche | Unique Principal | Carrying Worth (Dec 31, 2025) | Maturity |
|---|---|---|---|
| 2021 Sequence A1 | $44.0M | $45.96M | Feb 2026 |
| 2021 Sequence A2 | $21.0M | $21.98M | Might 2026 |
| 2021 Sequence B | $90.0M | $94.24M | Apr 2026 |
| Whole | $155.0M | $162.18M |
In March and April 2026, Tiger would have repaid $100M principal + amassed curiosity of the convertible bonds.
So immediately, the remaining debt is doubtless nearer to ~$62M and firm money is ~$691M. The enterprise worth will stay unchanged since they’d take the money to pay the convertible mortgage.
Earnings & Valuation
| Metric | Worth |
|---|---|
| Income FY2025 | $612.1M |
| Internet revenue FY2025 | $170.9M |
| EPS per ADS (diluted, FY2025) | $0.927 |
| Weighted avg ADS diluted | 187,182,159 |
| P/E post-drop | ~4.7x |
| EV / Internet Earnings post-drop | ~0.87x |
| EV / Normalized FCF | ~0.88x |
| Revenue margin | 27.9% |
| ROE | 22.5% |
| Income progress FY2025 | +56.3% |
I feel if the impact shouldn’t be important, TIGR seems to be rattling low-cost. They like pricing as if the enterprise has no free money movement or their earnings is rattling risky like a building firm.
Proposed Penalty and Confiscation Quantity
We wish to see the one-time influence to TIGR relative to their financials:
| Part | RMB | USD |
|---|---|---|
| Effective | RMB 308.1M | ~USD 43M |
| Confiscation of unlawful beneficial properties | RMB 103.1M | ~USD 14.5M |
| Whole | RMB 411M | ~USD 57M |
USD 57 million is effectively inside TIGR’s FY2025 internet revenue. Their FY 2026 and FY 2027 earnings would look poor after accounting for this penalty however in a manner its not a giant deal for them.
The larger difficulty is how winding down the Mainland Chinese language account completely inside 2 years would have an effect on present valuation.
Why TIGR Might have Much less Uncertainty In comparison with FUTU
FUTU’s major difficulty is that we can’t see a transparent income segmentation by nation. They both group their income or accounts by HK Entity and others.
On this manner, we can’t clearly think about how a lot of their HK Entity is precisely account holders with a Mainland China domicile. If that’s the case, then it’s a wrestle for us to guage if we’re overpaying at present value.
In distinction, TIGR is cleaner:
| Metric | Worth |
|---|---|
| Mainland China VIE income (2025) | ~0.6% of whole income |
| Mainland China consumer belongings (Q3 2025 20-F) | <15% of whole consumer belongings |
| Mainland China consumer belongings (post-enforcement disclosure by TIGR) | ~10% of whole consumer belongings (~USD 6.1B of USD 60.8B) |
| New accounts from mainland China (latest quarters) | Basically zero — not within the new account pipeline |
It’s doubtless that belongings straight drive income. Curiosity revenue scales with belongings underneath custody, margin revenue scales with borrowing balances, and fee quantity correlates with portfolio dimension.
So given this we all know doubtless how a lot belongings can be wound down.
TIGR’s Previous Income Development
I feel provided that a lot of the prices are doubtless mounted, except for COGS, we might be able to calculate the income influence and in addition the influence doubtlessly to FY 2026 and FY 2027 earnings if this 10% of belongings are closed off.
However first, we wish to evaluation how the income has been to have a sure gauge of what income progress we wish to put into our mannequin.
Right here is TIGR’s Income Development (and in addition their earnings development:
| FY | Whole Income | YoY | Internet Earnings (attr.) | Key Context |
|---|---|---|---|---|
| 2016 | $5.5M | — | ($10.8M) | Pre-IPO |
| 2017 | $16.9M | +209% | ($7.9M) | Pre-IPO |
| 2018 | $33.6M | +98% | ($43.2M) | Pre-IPO; $34M SBC cost |
| 2019 | $58.7M | +75% | ($6.6M) | IPO: March 2019 |
| 2020 | $138.5M | +136% | $19.2M | First worthwhile 12 months; COVID buying and selling growth |
| 2021 | $264.5M | +91% | $14.7M | Singapore growth; fee peak; retail frenzy |
| 2022 | $225.4M | −15% | ($2.3M) | Market down 12 months; CSRC banned new China accounts Dec 2022 |
| 2023 | $272.5M | +21% | $32.6M | Curiosity revenue turns into dominant (55% of income) |
| 2024 | $391.5M | +44% | $60.7M | HK growth; commissions recuperate |
| 2025 | $612.1M | +56% | $170.9M | File 12 months; all markets rising; HK belongings 3x YoY |
FY2019→FY2025 CAGR (since IPO): Income +48% / 12 months; Internet revenue (from first worthwhile 12 months FY2020) +44% / 12 months.
We will group the income progress into 3 phases:
- Part 1 (Pre-IPO to 2021): Commissions have been 56–77% of income. Development got here from including mainland Chinese language + Singapore accounts buying and selling US and HK equities. Curiosity revenue was negligible (near-zero fee setting).
- Part 2 (2022–2023): Commissions collapsed as retail market volumes dried up (−26.5% YoY in 2022). Rising rates of interest saved the P&L — curiosity revenue surged from $70M to $149M, reaching 55% of income by 2023. This masked the structural harm from the CSRC new-account ban.
- Part 3 (2024–2025): Fee restoration (+72% from trough) mixed with continued curiosity revenue progress and a surge in wealth administration/different income (+163% in 2025). HK market tripling in consumer belongings.
If we glance long run, TIGR like FUTU can develop their fee and payment income remarkably. As seen in 2022, income also can decline as markets take a flip for the more serious. If the concept are this stuff evens out over time with markets going up greater than happening then we must be fairly good progress charges.
A Sensitivity Evaluation over the FY 26, and FY 27 Valuation
We will attempt to assume that the non-China income to be 90% of FY 2025 income. That will likely be ~$551 million.
The mainland China income will wind down individually. this works out to be 50% of ~$61 million. In FY 2027, there will likely be zero mainland China income contribution. The quantity of diluted ADS shares to be the identical.
We’ll use the reference value per share of $4.36.
Income construct:
- FY2026 whole = Non-China × (1 + g%) + $30.6M
- FY2027 whole = Non-China × (1 + g%)² + $0
But on the identical time, we will likely be utilizing FY2025 variable and stuck value assumptions. I can at all times assume mounted internet margins however in simulations, mounted internet margin will make the valuations extra pessimistic than optimistic. It is because there are some operation leverage concerned.
FY2026 (Mainland wind-down to $30.6M + penalty 12 months)
We’re doing income take a look at for income progress from 10% to 40%. All of those income progress charges decrease than a number of the previous income progress charges.
| Non-China income progress | Income | YoY vs FY2025 | NI pre-penalty | NI post-penalty | NI margin | EPS | P/E at $4.36 |
|---|---|---|---|---|---|---|---|
| 0% | $581.5M | −4.7% | $149.1M | $92.1M | 15.8% | $0.49 | 8.9x |
| 10% | $636.6M | +4.0% | $188.0M | $131.0M | 20.6% | $0.70 | 6.2x |
| 15% | $664.1M | +8.5% | $207.5M | $150.5M | 22.7% | $0.80 | 5.5x |
| 20% | $691.7M | +13.0% | $226.8M | $169.8M | 24.5% | $0.91 | 4.8x |
| 25% | $719.2M | +17.5% | $246.4M | $189.4M | 26.3% | $1.01 | 4.3x |
| 30% | $746.8M | +22.0% | $265.9M | $208.9M | 28.0% | $1.12 | 3.9x |
| 40% | $801.9M | +31.0% | $304.8M | $247.8M | 30.9% | $1.32 | 3.3x |
FY 2026 will embody the one time penalty.
FY2027 (Mainland totally exited + no penalty + $310 million mounted prices)
Right here’s how FY2027 valuation will seem like:
| Non-China income progress | Income | YoY vs FY2026 | NI | NI margin | EPS | P/E at $4.36 |
|---|---|---|---|---|---|---|
| 0% | $550.9M | −5.3% | $134.1M | 24.3% | $0.72 | 6.1x |
| 10% | $666.6M | +4.7% | $215.8M | 32.4% | $1.15 | 3.8x |
| 15% | $728.4M | +9.7% | $259.6M | 35.6% | $1.39 | 3.1x |
| 20% | $793.3M | +14.7% | $305.4M | 38.5% | $1.63 | 2.7x |
| 25% | $860.8M | +19.7% | $353.1M | 41.0% | $1.89 | 2.3x |
| 30% | $931.0M | +24.7% | $402.8M | 43.3% | $2.15 | 2.0x |
| 40% | $1,079.8M | +34.6% | $508.0M | 47.0% | $2.71 | 1.6x |
Rattling the PE is actually like Singapore building firms with risky order ebook enterprise. We’re evaluating this in opposition to:
- HOOD: 35x
- IBKR: 35x
- UOB Kayhian: 15x
- Schwab: 18x
- iFAST: 24x
FY2027 Enterprise Worth / Internet Earnings — Up to date for Money Construct from FY2026
I determine to do one thing extra: A variation of enterprise worth divide by EBIT when issues stabilize in FY2027. It’s a harsh measure to contemplate taking out the money and contemplating the debt. In TIGR’s case since they’ve a lot money, their Enterprise Worth immediately finally ends up decrease.
We think about:
- All convertible bonds mature by Might 2026 (debt turns into $0, money reduces by $62 million)
- We think about 50% of FY2026 post-penalty internet revenue amassed as money in FY 2027.
The result’s the next:
| Non-China progress | FY2026 NI (post-pen) | 50% money add | EV at FY2027 | FY2027 NI | EV/NI FY2027 |
|---|---|---|---|---|---|
| 0% | $92.1M | $46.1M | $102.9M | $134.1M | 0.77x |
| 10% | $131.0M | $65.5M | $83.5M | $215.8M | 0.39x |
| 15% | $150.5M | $75.3M | $73.7M | $259.6M | 0.28x |
| 20% | $169.8M | $84.9M | $64.1M | $305.4M | 0.21x |
| 25% | $189.4M | $94.7M | $54.3M | $353.1M | 0.15x |
| 30% | $208.9M | $104.5M | $44.5M | $402.8M | 0.11x |
| 40% | $247.8M | $123.9M | $25.1M | $508.0M | 0.05x |
I don’t find out about you however that appears like some absurdly low numbers.
TIGR’s Money Historical past
After I see this sort of factor, I attempt to do some due diligence if the revenue does translate to money. In a manner, the money ought to improve all else equal.
The next desk reveals the web revenue, money + perm deposits. debt, internet money and alter in internet money. This doesn’t embody the client-segregated regulatory money:
| FY | NI | Money | Time period Deposits | Money + TD | Debt (conv. bonds) | Internet Money | ΔNet Money |
|---|---|---|---|---|---|---|---|
| FY2019 | ($6.6M) | $59.4M | $65.6M | $125.0M | — | $125.0M | IPO 12 months |
| FY2020 | +$19.2M | $79.7M | $18.7M | $98.4M | — | $98.4M | −$26.6M |
| FY2021 | +$14.7M | $269.1M | $3.0M | $272.1M | $148.8M | $123.3M | +$24.9M |
| FY2022 | ($2.3M) | $277.7M | $0.9M | $278.6M | $154.3M | $124.3M | +$1.0M |
| FY2023 | +$32.6M | $322.6M | $5.1M | $327.7M | $156.9M | $170.8M | +$46.5M |
| FY2024 | +$60.7M | $393.6M | $2.5M | $396.0M | $159.5M | $236.5M | +$65.7M |
| FY2025 | +$170.9M | $791.0M | $2.1M | $793.1M | $162.2M | $630.9M | +$394.4M |
Should you observe, the FY2022–FY2024 internet revenue converts properly to money. The FY2025 money is odd as a result of it elevated by double.
It is because Tiger raised $107.8M gross in a share difficulty at $6.25 in October 2024. This $107.8M flows into the FY2024 steadiness sheet. Internet proceeds ~$100M after charges.
Really that is the odd factor that they increase that a lot money… when they don’t have to.
They aren’t shopping for again shares however elevating money, undecided for what motive.
Epilogue
I feel apart for the questionable determination over elevating money, a lot of the quantity checks out.
The factor is there are sufficient folks trapped in Tiger, most likely manner longer than FUTU ever was. And that’s one thing that it is best to take observe.
I feel you possibly can perceive how odd that is:
- There are earnings.
- The steadiness sheet is clear.
Why aren’t the share value shifting? What’s it ready for? What are the catalysts?
If what I say is right ultimately 2 years later, are you saying that at lower than 1 occasions EV/NI, it’s going to nonetheless stay at this value?
It’s a good query that we are going to revisit later.
If you wish to commerce these shares I discussed, you possibly can open an account with Interactive Brokers. Interactive Brokers is the main low-cost and environment friendly dealer I exploit and belief to speculate & commerce my holdings in Singapore, america, London Inventory Alternate and Hong Kong Inventory Alternate. They can help you commerce shares, ETFs, choices, futures, foreign exchange, bonds and funds worldwide from a single built-in account.
You possibly can learn extra about my ideas about Interactive Brokers in this Interactive Brokers Deep Dive Sequence, beginning with tips on how to create & fund your Interactive Brokers account simply.
Kyith is the Proprietor and Sole Author behind Funding Moats. Readers tune in to Funding Moats to study and construct stronger, firmer wealth foundations, tips on how to have a Passive funding technique, know extra about investing in REITs and the nuts and bolts of Energetic Investing.
Readers additionally observe Kyith to learn to plan effectively for Monetary Safety and Monetary Independence.
Kyith labored as an IT operations engineer from 2004 to 2019. At the moment, he works as a Senior Options Specialist in Payment-only Wealth Advisory Agency Providend. All opinions on Funding Moats are his personal and doesn’t signify the views of Providend.
You possibly can view Kyith’s present portfolio right here, which makes use of his Free Google Inventory Portfolio Tracker.
His funding dealer of selection is Interactive Brokers, which permits him to put money into securities from completely different exchanges everywhere in the world, at very low fee charges, with out custodian charges, close to spot foreign money charges.
You possibly can learn extra about Kyith right here.
