Summary of Conference Call Records Company Overview - The company, 移卡, is a technology platform focused on payment solutions, leveraging AI and data analytics to meet merchants' digital needs. The company has a significant annual transaction volume of approximately 2.3 trillion yuan, with overseas transaction volume growing at five times the rate of previous years, contributing to strong profitability and cash flow [3][4][5]. Industry Insights - The cross-border payment industry is undergoing significant changes due to trade tensions and tariff policies. Companies are restructuring their trade chains to mitigate impacts, which presents more opportunities for 移卡's full network payment channels to charge fees at various stages [6][7]. - The CIPS (Cross-Border Interbank Payment System) is growing rapidly, with a projected growth rate exceeding 40% in 2024, although it is currently not expected to replace SWIFT in the short term [11]. Key Points Financial Performance - 移卡's overseas payment business has seen transaction volume increase fivefold, with strong profitability and cash flow. The revenue structure has improved, with value-added service revenue rising to over 80%, leading to an increase in overall profit margin from 18.7% in 2023 to 24% in 2024 [4][5]. - The net profit for 2024 is projected to rise sixfold to 73 million yuan, with EBITDA reaching 390 million yuan. The debt-to-asset ratio has decreased from 45% to 35.9% [4]. Market Expansion - 移卡 is actively expanding in Southeast Asia, focusing on partnerships with local service providers to meet the consumption needs of Chinese consumers in regions like Southeast Asia and Japan [3][10]. - The company plans to maintain exponential growth by expanding its presence in Southeast Asia, particularly in countries like Malaysia and Indonesia, and by offering both payment and non-payment value-added services [9][10]. AI Integration - 移卡 has fully embraced AI technology to optimize risk control and improve R&D efficiency. The introduction of AI agents has enhanced customer service and reduced costs, with net profit expected to rise significantly due to these innovations [2][14][17]. - AI technology has improved risk management capabilities, processing approximately 20 million risky transactions in 2024, and has increased coding efficiency by 30% through automation [17]. Domestic Market Dynamics - In the domestic market, despite a decrease in average transaction value due to macroeconomic conditions, transaction frequency has increased, maintaining total transaction volume. The company anticipates significant growth in GPV (Gross Payment Volume) in 2025 due to improving consumer sentiment and macroeconomic policies [12][13]. Future Outlook - 移卡's future strategies include enhancing AI applications to further improve operational efficiency and exploring new areas for AI integration to drive growth in 2025 and 2026 [18]. Additional Insights - The company is focusing on high-value clients, such as gas stations, which are less price-sensitive and have higher service quality demands, contributing to improved overall fee rates and profitability [13]. - The company is also adapting its strategies to include diverse industry coverage, such as maternal and infant products, to capture future growth opportunities [12].

Financial Performance - Total revenue for the year ended December 31, 2024, was RMB 3,086,742, a decrease of 21.8% compared to RMB 3,950,585 in 2023[12] - Gross profit for 2024 was RMB 728,764, down from RMB 738,164 in 2023, reflecting a gross margin of approximately 23.6%[12] - Adjusted EBITDA for 2024 was RMB 384,483, a decline of 30.8% from RMB 556,047 in 2023[12] - Total revenue for 2024 reached RMB 3,086.7 million, a year-on-year decrease of 21.9%[20] - Profit for the year reached RMB 73.0 million, an increase of over six times compared to 2023[21] - The company's GPV decreased by 19.0% year-on-year to RMB 233.55 billion for the year ending December 31, 2024, compared to RMB 288.29 billion for the previous year[36] - Revenue for the year ending December 31, 2024, was RMB 3,086.7 million, a decline of 21.9% from RMB 3,950.6 million in the same period last year[36] - The company's net profit surged over six times to RMB 73.0 million for the year ending December 31, 2024, compared to RMB 10.1 million in the previous year, resulting in a net profit margin of 2.4%[38] - The revenue from the one-stop payment service decreased by 22.9% to RMB 2,685.9 million, primarily due to macroeconomic fluctuations affecting the average transaction amount per customer[68] Operational Efficiency - The company is focusing on profitability and operational sustainability, optimizing payment and value-added services[16] - The company reduced sales, management, and R&D expenses by 11.0%, 10.8%, and 10.5% respectively, through enhanced AI tool utilization, leading to a 20% reduction in related operational costs[38] - The company's operating costs decreased by 26.6% from RMB 3,212.4 million in 2023 to RMB 2,358.0 million in 2024, primarily due to improved bargaining power leading to reduced commission fees paid to distribution channels[72] - The gross margin for the one-stop payment service improved from 9.7% in 2023 to 14.2% in 2024, attributed to the absence of non-recurring income adjustments and reduced commission payments[76] Market Expansion - The company achieved a fivefold year-on-year growth in Gross Payment Volume (GPV) in overseas markets[18] - New e-commerce services were launched in Japan, Singapore, and Hong Kong, further integrating payment and value-added solutions[18] - The company’s overseas GPV reached over RMB 1.1 billion for the year 2024, representing a nearly fivefold increase year-on-year, showcasing strong market expansion capabilities[44] - The company plans to accelerate its globalization strategy and expand into overseas markets, leveraging its established product system and operational experience in China[56] Technology and Innovation - The company launched a series of AI-driven products aimed at reducing costs and increasing efficiency, including the Winsfor in-store business intelligence platform[17] - The company aims to enhance operational efficiency and product competitiveness through deeper AI integration in future operations[24] - The AI-driven "Y-Copilot" coding assistant improved internal code adoption rates to over 30%, enhancing project efficiency[43] - The company expanded its product offerings by launching an AI Agent solution for Southeast Asian merchants, enhancing customer service and operational efficiency[42] - The company is investing in artificial intelligence and big data analytics to ensure the competitiveness of its products and services[148] Financial Position - The total assets as of December 31, 2024, were RMB 7,705,476, a decrease from RMB 8,420,361 in 2023[13] - The company's equity attributable to shareholders was RMB 2,665,238, down from RMB 2,707,876 in 2023[13] - Total liabilities decreased from RMB 5,803.0 million as of December 31, 2023, to RMB 5,116.0 million as of December 31, 2024[96] - The debt-to-equity ratio improved from 45.3% as of December 31, 2023, to 35.9% as of December 31, 2024, primarily due to the early redemption of convertible bonds using internal cash flow[99] - Cash and cash equivalents decreased by 32.9% from RMB 887.9 million as of December 31, 2023, to RMB 595.7 million as of December 31, 2024[99] Shareholder Returns - The board approved a total of USD 10 million for share buybacks to enhance shareholder returns[59] - The company repurchased $35 million in convertible bonds and reduced financial costs by over 30% year-on-year, resulting in a net profit increase of over six times to RMB 73.0 million[55] - The board does not recommend the payment of a final dividend for the year ending December 31, 2024 (2023: nil) [160] Leadership and Governance - Liu Yingqi, the CEO, has over 25 years of experience in corporate management and information technology, previously serving as General Manager at Tencent's online payment platform[117] - The company has a strong leadership team with executives like Yao Zhijian, who has been CFO since 2011, overseeing financial and accounting matters[119] - The management team emphasizes innovation and technology as key drivers for future growth[121] - The leadership is committed to environmental, social, and governance (ESG) initiatives, with dedicated committees in place[119] Employee Incentives - The company has implemented a restricted share unit plan and stock option plan to attract and retain skilled and experienced personnel for future development and expansion[144] - The restricted share unit plan was adopted to replace the pre-IPO share incentive plan, with the aim of attracting and retaining skilled personnel for future development [172] - The performance assessment for vesting includes metrics such as work quality, efficiency, collaboration, and management skills[182] Risk Management - The company has established security systems including firewalls and intrusion detection systems to monitor and protect its IT infrastructure[151] - The company maintains a fraud prevention system that automatically monitors merchants and assesses fraud risks[156] - The company provides regular training for employees on anti-money laundering, fraud, and misconduct to enhance awareness and understanding of these issues[156]

Investment Rating - The report maintains a "Buy" rating for the company with a target price of 8.2 HKD, based on a 13x P/E valuation for 2025 [5]. Core Insights - The company's 2H24 performance fell short of market expectations, with total revenue of 1.5 billion HKD, a year-on-year decline of 20%, and a 11% miss compared to Bloomberg consensus [2][3]. - The payment business, which accounts for 89% of revenue, also underperformed, with a 6% revenue miss due to a larger-than-expected decline in GPV [1][2]. - The company is expected to see a recovery in its payment business in 2025, with projected revenue growth outpacing GPV growth, leading to a stabilization in profits [1][3]. Financial Performance Summary - Total revenue for 2H24 was 1.5 billion HKD, down 20% year-on-year, with a gross profit margin of 28%, up 9 percentage points year-on-year [2]. - The adjusted EBITDA for 2H24 was 220 million HKD, a 17% decline year-on-year, with an EBITDA margin of 14.7% [2][4]. - The company reported a net profit of 51 million HKD for 2H24, compared to a loss of 22 million HKD in the same period last year [2][4]. Business Segment Analysis - The one-stop payment service revenue decreased by 19% year-on-year in 2H24, while merchant solutions revenue fell by 30% due to a decline in the number of paying merchants [3]. - The overseas business showed significant progress, with a GPV of 1.1 billion HKD in 2024, nearly a fivefold increase year-on-year, driven by channel development and customer expansion [3][4]. Financial Projections - For 2025, the company anticipates a 9% year-on-year increase in payment GPV, with revenue growth slightly exceeding GPV growth [3][4]. - The adjusted net profit for 2025 is projected to be 270 million HKD, with a net profit margin of 4.5% [4][10].

Investment Rating - The report maintains a "Buy" rating for the company with a target price of HKD 8.2, reflecting a 13x price-to-earnings ratio for 2025 [5]. Core Insights - The company's 2H24 performance fell short of market expectations, with total revenue of HKD 1.5 billion, a year-on-year decline of 20%, and a 11% miss compared to Bloomberg consensus [2][3]. - The payment business, which accounts for 89% of revenue, also underperformed, with a 6% revenue miss due to a greater-than-expected decline in Gross Payment Volume (GPV) [1][2]. - The company is expected to see a recovery in its payment business in 2025, projecting a high single-digit year-on-year growth, with revenue growth outpacing GPV growth [1][3]. Financial Performance Summary - Total revenue for 2023 was HKD 3.951 billion, with a projected decline to HKD 3.087 billion in 2024, followed by a recovery to HKD 3.402 billion in 2025, representing a 10.2% year-on-year growth [4]. - The adjusted net profit for 2025 is estimated at HKD 274 million, with a net profit margin of 4.5% [4][9]. - The company achieved a gross margin of 24.4% in 2025, up from 23.6% in 2024 [4]. Business Segment Analysis - The one-stop payment service revenue decreased by 19% year-on-year in 2H24, while merchant solutions revenue fell by 30% due to a decline in the number of paying merchants [3][9]. - The overseas business showed significant progress, with a GPV of HKD 1.1 billion in 2024, nearly a fivefold increase year-on-year, driven by bank channel development and customer expansion [3][4]. Market Position and Valuation - The company’s market capitalization is approximately HKD 3.166 billion, with a circulating market value of HKD 1.766 billion [5]. - The stock has experienced a 12-month low of HKD 6.4 and a high of HKD 13.4, indicating volatility in its market performance [5].

Core Viewpoint - The performance of the company in 2024 is generally in line with market expectations, with a revenue decline of 22% year-on-year to 3.1 billion yuan, while net profit increased significantly by 6.1 times to 82.45 million yuan [1] Group 1: Financial Performance - The adjusted EBITDA for 2024 decreased by 31% year-on-year to 380 million yuan, reflecting the impact of macroeconomic conditions [1] - The company is currently trading at 8x/5x EV/EBITDA for 2025/2026 estimates, with a target price reduction of 39% to 9.5 HKD, indicating an 18% upside potential [1] - The gross payment volume (GPV) for 2024 decreased by 19% year-on-year to 2.34 trillion yuan, primarily due to macroeconomic fluctuations and a decline in average transaction amounts per customer [2] Group 2: Business Segments - The company's overseas payment transaction volume increased nearly fivefold to over 1.1 billion yuan, benefiting from its ongoing global expansion strategy [2] - The overall fee rate for the company's acquiring business slightly decreased by 0.6 basis points year-on-year to 11.5 basis points, leading to a 23% decline in overall acquiring business revenue to 2.7 billion yuan [2] - The value-added services, including merchant solutions and in-store e-commerce services, contributed 13% to total revenue, with a slight increase of 1.2 percentage points year-on-year [3] Group 3: Operational Efficiency - The company has enhanced its operational efficiency through AI deployment, reducing related operational expenses by 20% in 2024, with sales, management, and R&D expenses each decreasing by approximately 11% [4] - Financial costs decreased by over 30% year-on-year due to streamlined debt structure and cost control measures, contributing to the significant increase in net profit [4] - The gross margin for value-added services remained stable at 87.2%, supported by high product profitability and cost management [3]

Core Insights - The company reported a revenue of 3.087 billion yuan for the year 2024, representing a year-on-year decline of 21.9, while profit increased to 73 million yuan, showing a growth of over 6 times [1] - The overall gross margin improved from 18.7% in 2023 to 23.6% in 2024, attributed to the application of artificial intelligence across its three main business lines [1] - The contribution of value-added services to total revenue increased from 11.8% in 2023 to 13.0% in 2024, indicating an optimization in revenue composition [1] Revenue and Profit - The revenue from merchant solutions reached 340 million yuan in 2024, down 6.4% year-on-year, with a gross margin of 87.2% [2] - The gross margin for in-store e-commerce services rose to 81.3% [2] - The overseas business continued to grow rapidly, with a total transaction volume exceeding 1.1 billion yuan, marking a nearly 5-fold increase year-on-year [2] Cost Control and Efficiency - The company achieved a reduction in sales, administrative, and R&D expenses by 11%, 10.8%, and 10.5% respectively, due to the broader application of artificial intelligence [1] - Overall operational expenses were reduced by 20%, contributing to improved cost efficiency [2] Payment Business Performance - The gross payment volume (GPV) for the payment business reached 2.34 trillion yuan, reflecting a year-on-year decline of 19% [1] - The peak daily transaction count approached 60 million transactions [1] - The gross margin for the second half of the year increased by 212.1% to 289.8 million yuan, achieving a margin of 21.6% [1]

Core Insights - The company achieved a revenue of 3.087 billion RMB in 2024, with a profit of 73 million RMB, representing over a sixfold increase compared to the previous year [1] - The overall gross margin improved from 18.7% in 2023 to 23.6% in 2024, indicating enhanced operational efficiency [1][3] Group 1: Financial Performance - The company's revenue composition has been optimized, with value-added services contributing 13.0% to total revenue in 2024, up from 11.8% in 2023 [3] - Payment gross profit increased from 92.9 million RMB in the first half of 2024 to 290 million RMB in the second half, maintaining market leadership [3] Group 2: Business Operations - The company’s core business, one-stop payment services, remains industry-leading, with a total payment volume (GPV) of 23.4 trillion RMB in 2024 and peak daily transaction counts reaching nearly 60 million [2] - The company has seen a significant reduction in sales, administrative, and R&D expenses by 11.0%, 10.8%, and 10.5% respectively, due to the extensive application of artificial intelligence [2] Group 3: International Expansion - The overseas business experienced rapid growth, with transaction volume exceeding 1.1 billion RMB, a nearly fivefold increase year-on-year [4] - The company has expanded its international partnerships with major payment networks and banks, enhancing its global payment network coverage and service quality [4] Group 4: AI Integration - The company is leveraging artificial intelligence across various business lines, with AI Agent products being developed for retail, tourism, and entertainment sectors to meet diverse client needs [5] - AI applications have penetrated the company's business processes, achieving significant cost reduction and efficiency improvements [5]

Core Viewpoint - The company reported a decline in revenue for 2024, but significant growth in profit, indicating a shift towards improved profitability despite lower transaction volumes [1][2]. Financial Performance - Total revenue for 2024 was 3.087 billion RMB, a year-on-year decrease of 21.9% [1]. - Net profit reached 73 million RMB, an increase of over 600% compared to the previous year [1]. - Gross profit margin improved from 18.7% in 2023 to 23.6% in 2024 [2]. Business Operations - The company's GPV (Gross Payment Volume) for 2024 was 2.34 trillion RMB, down 19% from 2.88 trillion RMB in the previous year [1]. - The decline in GPV and revenue was attributed to economic fluctuations and a high base effect from the previous year [1]. - The company operates three main business lines: one-stop payment services, in-store e-commerce services, and merchant solutions [2]. Growth Areas - The one-stop payment service remains the core revenue driver, although it experienced a decline [2]. - International business continued to grow rapidly, with transaction volume exceeding 1.1 billion RMB, a nearly fivefold increase year-on-year [2]. - The contribution of value-added services to total revenue increased from 11.8% in 2023 to 13.0% in 2024 [2]. Cost Management - Sales, administrative, and R&D expenses decreased by 11.0%, 10.8%, and 10.5% respectively, with a 20% reduction in related operational costs [3]. - The company attributed these reductions to the widespread application of artificial intelligence across various business lines [3]. Technological Advancements - The AI Lab established in 2017 has been instrumental in deploying AI technologies to enhance operational efficiency and risk management [4]. - The company has developed tools like "Y-Copilot" to improve internal coding practices and "Xiao Ka Assistant" for enhancing customer service and content creation [4]. - Future plans include extending non-payment applications and value-added products to support diversified and international business growth [4].

Core Insights - The company, Yika Co., Ltd., reported a significant increase in revenue and profit for the fiscal year 2024, with total revenue reaching 3.087 billion RMB and a profit of 73 million RMB, marking a growth of over six times compared to the previous year [1] - The overall gross profit margin improved from 18.7% in 2023 to 23.6% in 2024, indicating enhanced operational efficiency [1] Group 1: Financial Performance - Total revenue for 2024 was 3.087 billion RMB, with a gross profit margin increase to 23.6% from 18.7% in 2023 [1] - The profit for the year was 73 million RMB, representing a growth of over 600% year-on-year [1] - In the second half of 2024, gross profit rose by 42.7% to 429 million RMB [1] Group 2: Business Segments - The core business of one-stop payment services generated a GPV of 23.4 trillion RMB, with revenue of 2.686 billion RMB and peak daily transaction volume reaching nearly 60 million transactions [1] - The gross profit margin for payment services in the second half of 2024 increased to 21.6%, leading to a rise in payment gross profit from 92.9 million RMB in the first half to 290 million RMB in the second half [1] - The contribution of value-added services, including merchant solutions and in-store e-commerce, increased from 11.8% in 2023 to 13.0% in 2024, with higher gross margins compared to payment services [1] Group 3: Merchant Solutions and E-commerce - The gross profit margin for merchant solutions remained stable at approximately 87.2%, with annual revenue of 340 million RMB [2] - The company utilized AI algorithms for precise advertising targeting and dynamic creative generation, significantly enhancing conversion rates and achieving industry-leading marketing services [2] - The in-store e-commerce business saw a strategic upgrade, resulting in a doubling of average revenue and profit contributions from merchants, with pre-revenue accounting for about 50% of in-store e-commerce revenue [2] Group 4: Operational Strategy - The company focused on refined operations and extensive AI applications, including tools for automated scene-based store construction, AI content creation, and live streaming planning, which greatly improved operational efficiency [2] - By gradually phasing out less profitable clients and concentrating on large clients, the company enhanced its full-service marketing capabilities and attracted well-known brands in key consumer sectors, leading to a continuous increase in store numbers [2]

Investment Rating - The investment rating for the company is "Buy" with a target price of HKD 9.90 [6][7]. Core Insights - The company's performance in 2024 was impacted by a decline in payment transaction volume (GPV), which fell by 19% year-on-year, leading to a net profit of RMB 0.82 billion, significantly below expectations [1][2]. - Despite the challenges, the company has seen rapid growth in its overseas business, with transaction volume increasing nearly fivefold in 2024 [1][2]. - The company is expected to return to growth in its core payment business in 2025, driven by an improving consumer sentiment and its leading position in the QR code payment sector [1][2]. Summary by Sections Financial Performance - In 2024, the company reported total revenue of RMB 3.09 billion and a net profit of RMB 0.82 billion, with a significant non-recurring expense related to transaction fee adjustments [1][5]. - The adjusted payment fee rate for 2024 was 11.9 bps, down 1.4 bps year-on-year, while the adjusted gross margin for payment services was 17% [2][4]. Business Segments - The merchant solutions segment saw a revenue decline of 6% in 2024, with a gross margin of 87% [3]. - The in-store business is nearing breakeven, with a gross margin improvement from 80.3% in 2023 to 81.3% in 2024 [3]. Profit Forecast and Valuation - The profit forecasts for 2025, 2026, and 2027 have been revised down to RMB 2.1 billion, RMB 2.4 billion, and RMB 3.3 billion respectively, reflecting a significant reduction of 53% and 60% [4][17]. - The company is valued using a sum-of-the-parts (SOTP) approach, with expected multiples of 16.3x PE for payment services, 5.1x PS for merchant solutions, and 2.5x PS for in-store e-commerce [4][12].