4Q23 results slightly beat led by crypto boom
- 4Q23 net profit at US$30m, beating consensus forecast of US$12m net losses, as crypto revenue almost doubled q-o-q
- The boom in crypto and equity market had led to a strong q-o-q recovery in monthly active user to 10.9m as if 4Q23 (3Q23: 10.3m)
- Jan 2024 business metrics suggested sustained business momentum; Maintain HOLD with TP slightly lifted to US$12 to reflect the heightened crypto trading volume
Profit beat, MAU recovery. 4Q23 net revenues edged up by 1% q-o-q to US$471m, 3% above consensus, as crypto trading revenue saw a strong rebound and almost doubled q-o-q to US$43m (3Q23: US$23m). Adjusted opex was up 3% q-o-q, came in better than earlier guidance. As such, net profit increased both y-o-y / q-o-q to US$30m, reversing from previous net losses (4Q22: -US$166m / 3Q23: -US$85m). Monthly active users recovered to 10.9m (3Q23: 10.3m), ending the consecutive downtrend since Mar 2023. Net deposits also rebounded to US$4.6b, equivalent to 21% annualised growth. The increasing Gold subscribers adoption rose to 1.42m (3Q23: 1.33m), or 6.1% of total customer base.
Crypto boom could continue, while overseas expansion the key ahead. The Robinhood platform continued to attract inflows with monthly net deposits of US$3.8b recorded during Jan 2024, substantially above Dec 2023’s US$2.2b or 2023 monthly average of US$1.4b. Trading activities also remained strong especially on crypto, with monthly trading volume of 5.9b being well above the 2023 monthly average US$3.3b. While the relatively strong crypto trading activities could sustain as Bitcoin ETF approval structurally raised investors’ interest, key profit drivers ahead would still be around its overseas expansion. We remain neutral over its entry into UK equity trading and EU crypto trading, which are still at early stage and have not contributed meaningfully yet. Maintain HOLD with TP slightly lifted to US$12 to reflect the heightened crypto trading volume.