Conclusions from analyzing Moomooo's financial data

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Disassembling moomoo's financial statements, the amount of information in it is very huge.

We will look at the real situation of moomoo from the financial data.

1. Starting from the income statement. We can see that the quality of moomoo's new customers is very good

In the entire Hong Kong and US stock markets, the trading volume of the Nasdaq Composite Index and the S&P 500 Index in 2024Q1 is basically the same as that in 2023Q1. At the same time, the trading volume of the Hong Kong stock market has declined by nearly 15%~20%, and the trading volume of the entire Hong Kong stock market has declined by about 12%, but moomoo can guarantee the positive growth of operating income. In 2024Q1, moomoo's total revenue was HK$2.593 billion (about US$331 million), which was basically the same as the same period last year, and there was no significant decline in synchronization with the market. This shows that the quality of moomoo's customers is relatively high. In the context of a year-on-year decline in market trading volume, it can withstand the decline in brokerage income, especially brokerage commissions and handling fees. The income is HK$1.0821 billion (an increase of 0.3% from 2023Q1), which is still good.

2. The expense rate is still well controlled, especially the timing of sales expenses is well chosen.

In the case of observing the expense rate, we can see that the growth rate of customers is far higher than the growth rate of sales expenses. In 2024Q1, the net increase in the number of customers with assets was 177,000, a year-on-year increase of 330.8%, but the sales expenses only increased from HK$1.412 billion to HK$2.926 billion, an increase of only 107.22%. Compared with the net increase in the number of customers with assets, the growth rate of sales expenses is lower than the growth rate of the net increase in customers, indicating that Moomoo can grasp it well under certain actual conditions. The key nodes know when to invest resources to achieve growth, otherwise the growth rate of sales expenses will exceed the growth rate of customers.

Then we can see from the other two of the three expenses that both R&D expenses and general expenses have declined year-on-year. Overall, Moomoo's internal control is very good,

It shows that Moomoo's entire cost and expense sides are very well controlled, and it also shows that this company itself has a strong ability to control expenses, and is not a company that only knows how to achieve growth by increasing expenses.

3. Split the cost items in the income statement, and the financing cost has risen too fast

In addition, we can also see from the details of the financial report why the entire cost side of this financial report has increased, mainly due to the increase in interest on financing, with interest expenses of HK$312.8 million (US$40 million), an increase of 139.1% from the first quarter of 2023. The main reason for the increase is the increase in expenses related to securities lending business. We can see that interest expenses have increased significantly year-on-year, which is related to the overall financing environment.

However, as the clearing and settlement can be completed, it can also be seen that the cost of the entire clearing and settlement is declining, with brokerage commissions and handling fees of HK$60.3 million (US$7.7 million), a decrease of 16.5% from the first quarter of 2023. Brokerage expenses did not change in sync with brokerage income, mainly due to the cost savings of moomoo's US self-clearing business. It has well suppressed the increase in financing costs.

Moreover, we compare the cost increase with the revenue side, and we can see that in the past year-on-year 2023Q1, the market environment has not improved significantly, and even in the context of a significant decline in the Hong Kong stock market, the entire transaction commission can still be growing, which shows that the quality of new customers in the past is relatively high, which can well resist cyclical changes, and also proves that investing in moomoo can "resist cyclical attributes with growth".

4. Are there any problems reflected in this financial report?

I personally think that the biggest doubt is when the other markets can run out and have strong hematopoietic ability.

But we can see that other markets, except the US market, have only started to invest in recent times, so we give moomoo more time, and he should be able to do better, because in the process of internationalization, we are constantly accumulating experience and summarizing rules, so we can predict that the speed of internationalization will be accompanied by cyclical changes in the market in the future, but the overall will become smoother and smoother.

5. What conclusion can we draw after reading this financial report?

The conclusion is that moomoo's costs can be well controlled. In Q1 2024, the net increase in the number of customers with assets was 177,000, a year-on-year increase of 330.8%, and sales expenses increased by 107.22%. Compared with the growth rate of the net increase in the number of customers with assets, the growth rate of sales expenses is slower. The current timing of the launch is relatively correct, which can show that moomoo's market decision-makers have found a better node to invest in sales expenses to promote the company's long-term development.

If we combine the progress of moomoo in multiple markets disclosed in public data, we can find that: moomoo's current strategy only requires him to constantly summarize experience and apply it in multiple new markets, and he will most likely do better and better.