UP Fintech Holding Ltd. (NASDAQ:TIGR) is a leading online brokerage firm that provides a range of financial services, including trading and wealth management, primarily targeting Chinese investors. The company operates in a competitive landscape alongside peers like Futu Holdings Limited (FUTU) and Qifu Technology, Inc. (QFIN), which also offer similar financial services.
In evaluating TIGR's financial performance, the Return on Invested Capital (ROIC) is a key metric. TIGR's ROIC is 2.83%, which is significantly lower than its Weighted Average Cost of Capital (WACC) of 8.80%. This results in a ROIC/WACC ratio of 0.32, indicating that TIGR is not generating sufficient returns to cover its cost of capital.
Comparatively, Futu Holdings Limited (FUTU) has a ROIC of 5.10% and a WACC of 5.54%, resulting in a ROIC/WACC ratio of 0.92. This suggests that FUTU is closer to covering its cost of capital, though still not exceeding it. Meanwhile, Qifu Technology, Inc. (QFIN) outperforms with a ROIC of 9.81% against a WACC of 5.62%, achieving a ROIC/WACC ratio of 1.75, indicating efficient capital utilization.
KE Holdings Inc. (BEKE) and Bilibili Inc. (BILI) also show varying levels of capital efficiency. BEKE has a ROIC of 1.58% and a WACC of 4.52%, resulting in a ROIC/WACC ratio of 0.35, slightly better than TIGR. BILI, with a ROIC of 4.28% and a WACC of 7.33%, achieves a ROIC/WACC ratio of 0.58, indicating better capital efficiency.
Tencent Music Entertainment Group (TME) leads the pack with a ROIC of 12.75% and a WACC of 6.77%, resulting in a ROIC/WACC ratio of 1.89. This highlights TME's superior ability to generate returns well above its cost of capital, setting a benchmark for capital efficiency in the industry.
