BEIJING – The tycoon behind China’s RoyalFlush trading app has added US$6 billion (S$8 billion) to his wealth since the nation’s stimulus blitz in September, underscoring how the volatility has been a boon for an elite few.
Mr Yi Zheng, an engineering graduate who founded the entity behind Hithink RoyalFlush Information Network in 1994, four years after China’s stock exchanges opened, is overseeing his company’s best share performance in half a decade after trading of mainland stocks surged.
While Mr Yi’s fortune is up 190 per cent since the announcements, it is not yet clear if the sweeping measures will meaningfully lift the nation’s US$10 trillion stock market after a turbulent couple of months.
The 54-year-old is now worth US$9.2 billion, according to the Bloomberg Billionaires Index.
That is largely based on his 36 per cent stake in the company, which also sells financial data.
Its shares have more than doubled in 2024 and are on track for the best year since 2019.
Volatility on China’s benchmark CSI 300 Index had spiked in the past two months, with a 30-day gauge jumping to the highest since 2015, when Asia’s largest economy experienced an epic boom and bust in stocks.
Home to the world’s second largest stock market, China has allowed trading and software entrepreneurs to accumulate vast fortunes.
East Money Information, Hithink’s biggest domestic competitor, grew more valuable than Credit Suisse in 2020 after frenzied trading in China, making founder Qi Shi a billionaire several times over.
The Swiss bank was eventually taken over by rival UBS Group. Online broker Futu Holdings, which has customers in the United States, China and Hong Kong, has created vast wealth for founder Li Hua.
That growth has also been marked by stumbles. In 2021, the legitimacy of online brokerages, which had allowed millions of Chinese investors to evade capital controls to trade shares in markets such as Hong Kong and New York, was abruptly questioned. Financial data providers like Hithink have also drawn scrutiny.
Explosive growth
In October, 6.85 million accounts were opened in China’s mainland A-share market – versus the monthly average of 1.5 million in the first nine months of 2024, according to data from HSBC Qianhai Securities.
Hithink has more than 19 million active users per week on its free trading platform, according to the company’s website. The company reported revenue of 3.6 billion yuan (S$666 million) in 2023.
“The recent stimulus has resulted in higher stock trading volume, which could boost demand for better financial information from retail investors,” said HSBC Qianhai Securities analyst Yiran Liu.
China’s stimulus, which included interest rate cuts, more cash for banks, bigger incentives to buy homes and plans to consider a stock stabilisation fund, led to the nation’s benchmark index gaining about a third to peak on Oct 8.
It has since given up some of those gains amid concerns about the economy and US President-elect Donald Trump’s tariff threats.
Hithink also generates revenue through selling funds and software. For a fee, retail investors on the RoyalFlush app can use artificial intelligence to find the right price to enter and sell stock positions.
Mr Yi was born in 1970 in Beijing, and his own success is largely tied to the development of the nation’s stock markets.
He graduated from Zhejiang University with a bachelor’s degree in electrical engineering in 1993. While still a student, he developed a securities software for Industrial and Commercial Bank of China, according to local media reports.
China’s two stock exchanges were founded in 1990. In 1994, Mr Yi co-founded Hangzhou Hexin Software Technology, now a key unit of his Hithink, and made an early win with the Longhubang, or Dragon and Tiger Ranking, which tracked futures contracts to give traders an indication of market sentiment.
In 1997, Mr Yi ventured into developing a securities trading platform, which later morphed into Hithink’s signature product. Hithink still uses Longhubang for its listings of the most active traders and stocks.
Royal Flush
The company’s Chinese name Tonghuashun translates to Royal Flush, the best hand in poker.
It first debuted in late 2009 on China’s Shenzhen Stock Exchange. Its shares have soared more than 4900 per cent since the listing.
The listed entity has since evolved to become a top financial data provider in China, with over 5,000 employees.
But there were bumps along the way. Hithink was caught in November in China’s crackdown on influencers and livestreaming platforms that offer investment advice. It was ordered to suspend its investment advisory service unit from adding new clients for three months.
The firm was also investigated by the market regulator in 2015 and fined 6.53 million yuan for selling securities trading systems to unqualified investors. BLOOMBERG
