Yi Zheng, the billionaire behind China’s RoyalFlush trading app, has seen his wealth increase by $6 billion since the country’s stimulus measures were announced in September. This surge highlights how recent market volatility has benefited a select group of individuals in the financial sector.
Zheng, an engineering graduate who founded Hithink RoyalFlush Information Network Co. in 1994, oversees the company’s best share performance in five years, driven by a significant uptick in mainland stock trading. His fortune has skyrocketed by 190% since the stimulus announcements, bringing his net worth to $9.2 billion, according to the Bloomberg Billionaires Index. This wealth is largely attributed to his 36% stake in the company, which also provides financial data services. The company’s shares have doubled this year, positioning it for its best performance since 2019.
Market Volatility and Growth in Trading Activity
The volatility of China’s benchmark CSI 300 Index has surged in recent months, with a 30-day gauge reaching its highest level since 2015, a period marked by significant market fluctuations. As the world’s second-largest stock market, China has enabled trading and software entrepreneurs to amass considerable fortunes. For instance, East Money Information Co., Hithink’s main domestic competitor, became more valuable than Credit Suisse in 2020, making its founder, Qi Shi, a billionaire multiple times over.
Despite the growth, the sector has faced challenges. In 2021, the legitimacy of online brokerages, which allowed millions of Chinese investors to bypass capital controls to trade in markets like Hong Kong and New York, came under scrutiny. Financial data providers, including Hithink, have also faced increased regulatory attention.
Explosive Growth in User Accounts
In October, 6.85 million new accounts were opened in China’s mainland A-share market, a significant increase compared to the monthly average of 1.5 million in the first nine months of 2024, according to HSBC Qianhai Securities. Hithink boasts over 19 million active users weekly on its free trading platform, with reported revenue of 3.6 billion yuan ($495 million) in 2023.
“The recent stimulus has resulted in higher stock trading volume, which could boost demand for better financial information from retail investors,” noted Yiran Liu, an analyst at HSBC Qianhai Securities.
China’s stimulus measures, which included interest rate cuts, increased cash for banks, and incentives for home purchases, led to a significant rise in the nation’s benchmark index, which gained about a third before experiencing some pullback amid economic concerns and geopolitical tensions.
Innovative Trading Solutions and Historical Context
Hithink generates additional revenue through the sale of funds and software. The RoyalFlush app offers retail investors AI tools to optimize their stock trading strategies. Yi Zheng’s journey began in 1970 in Beijing, where he developed a securities software for the Industrial & Commercial Bank of China while still a student at Zhejiang University.
Since the establishment of China’s two stock exchanges in 1990, Yi co-founded Hangzhou Hexin Software Technology Ltd. in 1994, achieving early success with the Longhubang, a tool that tracked futures contracts to gauge market sentiment. The RoyalFlush app, which translates to “Royal Flush” in English, debuted on the Shenzhen Stock Exchange in late 2009 and has seen its shares soar over 4900% since its listing.
Despite its success, Hithink has faced regulatory challenges, including a recent suspension of its investment advisory service unit from adding new clients for three months due to a crackdown on influencers and livestreaming platforms offering investment advice. The firm was also fined in 2015 for selling trading systems to unqualified investors.
