Financial Performance - Total revenue for 2024 reached RMB 1,031,173,000, an increase of 18.8% compared to RMB 867,764,000 in 2023[9] - Gross profit for the year was RMB 717,273,000, reflecting a 36.2% increase from RMB 526,515,000 in the previous year, with a gross margin of 69.6%[9] - The company reported a net loss attributable to equity shareholders of RMB 835,381,000, a significant increase of 89.3% from RMB 441,240,000 in 2023[9] - The adjusted loss for the year (non-IFRS) was RMB 679,270,000, representing a 134.8% increase from RMB 289,272,000 in the previous year[9] - The company's revenue and earnings amounted to RMB 10.31 billion, reflecting a year-on-year growth of 19%[18] - Revenue from core enterprise cloud solutions rose by 26.7% from RMB 523.9 million in 2023 to RMB 663.7 million in 2024, driven by an increase in supply chain assets processed[38] - Revenue from financial institution cloud solutions grew by 2.4% from RMB 299.7 million in 2023 to RMB 306.9 million in 2024, despite a decrease in assets processed by e-chain cloud[38] - The company recorded losses of RMB 835.5 million and RMB 443.3 million for the years ended December 31, 2024, and 2023, respectively[61] - Adjusted losses (non-IFRS) for the year ended December 31, 2024, were RMB 679.3 million compared to RMB 289.3 million for the year ended December 31, 2023[64] Customer Metrics - The number of core enterprise customers increased by 59.3% to 962 from 604 in 2023, indicating strong customer acquisition[11] - The customer retention rate improved to 96%, up from 86% in the previous year, showcasing enhanced customer loyalty[11] - The number of core enterprise and financial institution clients increased by 51% to 1,108, with 373 new clients added in 2024[19] - The overall customer retention rate rose from 86% in 2023 to 96% in 2024[19] Supply Chain Assets - The total amount of supply chain assets processed by the company's technology solutions reached RMB 411,210.8 million, a 27.7% increase from RMB 321,977.0 million in 2023[16] - In 2024, the total supply chain assets processed by the company's technology solutions reached RMB 411.2 billion, a year-on-year increase of 28%[18] - The sustainable supply chain asset scale served by the company reached RMB 37.1 billion, a substantial year-on-year increase of 93%[23] - The multi-level circulation cloud business processed supply chain assets totaling RMB 2,073 billion in 2024, reflecting a significant year-on-year growth of 52%[25] - The ABS cloud business saw a total of RMB 542 billion in supply chain assets processed in 2024, marking a substantial year-on-year increase of 101%[26] - The cross-border cloud business processed supply chain assets totaling RMB 207 billion in 2024, achieving a year-on-year growth of 64%[27] - The company processed over RMB 50 billion in supply chain asset transactions across 14 industries for core enterprise clients and partners in 2024[31] Technological Innovations - The company is focusing on technological innovations, particularly in AI, to drive efficiency and value creation in the supply chain finance sector[17] - The company anticipates that supply chain finance will become a key driver for global industrial chain upgrades, supported by macroeconomic resilience and policy incentives[17] - The newly launched lightweight supply chain financial AI product "BeeLink AI" has been successfully deployed in multiple financial institutions[22] Operational Costs and Expenses - Research and development expenses decreased by 9.6% from RMB 365.8 million in 2023 to RMB 330.8 million in 2024, mainly due to a reduction in share-based incentives[42] - Total operating costs decreased by 8.0% from RMB 341.2 million in 2023 to RMB 313.9 million in 2024, due to optimized product structure[40] - Sales and marketing expenses increased by 8.1% from RMB 137.8 million for the year ended December 31, 2023, to RMB 149.0 million for the year ending December 31, 2024, primarily due to increased salaries and business development costs related to customer expansion[43] - Administrative expenses remained stable at RMB 207.7 million for the year ended December 31, 2023, and are projected to be RMB 208.1 million for the year ending December 31, 2024[44] - Equity incentive expenses decreased by 89.4% from RMB 78.1 million for the year ended December 31, 2023, to RMB 8.3 million for the year ending December 31, 2024, mainly due to a reduction in unvested equity incentives[45] Impairment and Losses - Impairment losses increased significantly from RMB 214.4 million for the year ended December 31, 2023, to RMB 640.3 million for the year ending December 31, 2024, primarily due to credit impairment of financial assets[47] - Major impairment losses included RMB 445.1 million from receivables related to core enterprise payments and RMB 176.5 million from supply chain assets[47] - The company recorded other net losses of RMB 58.7 million for the year ending December 31, 2024, compared to net gains of RMB 58.7 million for the year ended December 31, 2023, due to decreased interest income and government subsidies[56] - Operating losses increased from RMB 340.6 million for the year ended December 31, 2023, to RMB 669.7 million for the year ending December 31, 2024[57] Strategic Acquisitions and Growth - The company is exploring external growth strategies through strategic acquisitions to enhance market competitiveness and operational efficiency[29] - The acquisition of Bait Technology will enrich the company's product matrix and extend its solutions from supply chain financing to treasury management systems[30] - The company plans to focus on "AI + industrial finance" and strategic acquisition opportunities to create new growth curves[34] Governance and Compliance - The company has complied with relevant laws and regulations that significantly impact its business as of December 31, 2024[94] - The company has obtained appropriate directors' liability insurance since its listing date[115] - The independent auditor, KPMG, confirmed that the disclosed continuing connected transactions were conducted on normal commercial terms or more favorable terms[158] - The company has demonstrated sincere efforts to comply with applicable laws and regulations regarding its business operations, including commercial factoring and asset securitization[149][150] Shareholder Information - The board proposed a final special dividend of HKD 0.03 per share for the year ending December 31, 2024, subject to shareholder approval at the annual general meeting scheduled for June 17, 2025[112] - As of December 31, 2024, the company's distributable reserves amounted to RMB 7,975.1 million, a decrease from RMB 8,710.5 million as of December 31, 2023[116] - The company has a dual-class share structure that allows different voting rights beneficiaries to exert significant influence over company affairs, which may not align with the interests of other shareholders[184] - The company emphasizes the potential risks associated with investing in companies with different voting rights structures, urging investors to consider these risks carefully[184] Management and Experience - The company has a total of 31 years of experience in finance, internet, and technology industries, with the CEO having held senior positions at major banks[162] - The company’s president has nearly 30 years of experience in the financial industry, previously working at China Construction Bank and China Resources Bank[163] - The company’s risk management is overseen by a vice-chairwoman with nearly 40 years of experience in the financial sector, including roles at major banks[165] - The company’s board includes members with extensive backgrounds in investment and mergers, particularly from Tencent Group[168]

Investment Rating - The report maintains a "Recommended" investment rating for the company, indicating an expectation to outperform the benchmark index by 10%-20% over the next six months [4][12]. Core Insights - The company achieved a revenue of 1.0317 billion yuan in 2024, representing a year-on-year increase of 18.8%. However, it reported a net loss attributable to shareholders of 835 million yuan, with an adjusted net loss of 679 million yuan [1][11]. - The company's gross margin improved to 69.6%, up by 8.9 percentage points year-on-year, despite significant impairment losses of 640 million yuan, which increased by 199% due to rising credit risks in historical bridge supply chain assets [8][12]. - The company is focusing on AI technology to enhance its supply chain financial services, launching the LDP-GPT model and the AI Agent "蜂联 AI" to improve operational efficiency and expand service coverage [8][12]. Summary by Sections Financial Performance - In 2024, the company facilitated financing of 389.54 billion yuan in supply chain financial technology, a year-on-year increase of 26.2%. The commission rate slightly decreased to 0.25% [8][9]. - The electronic debt certificate business facilitated financing of 2,603.3 billion yuan, up 19.8% year-on-year, with a strong growth of 51.5% in multi-level circulation cloud financing [3][8]. - The asset securitization business saw a financing amount of 1,292.1 billion yuan, a 41.4% increase, driven by partnerships with leading industry players [3][8]. Business Development - The company has expanded its core enterprise customer base to 2,156, a 23% increase from the first half of 2024, with a customer retention rate of 96% [9][12]. - The cross-border cloud financing segment achieved a financing amount of 20.68 billion yuan, reflecting a 63.6% year-on-year growth, supporting small and medium-sized enterprises in digital cross-border trade financing [9][12]. Future Outlook - The company plans to strategically acquire BaiTe Technology, which is expected to be included in the consolidated financial statements in 2025, enhancing its service offerings [12]. - The adjusted earnings per share (EPS) forecast for 2025 is projected at -0.05 yuan, with expectations of gradual profitability improvement in subsequent years [11][12].

Core Financial Performance - The company reported a revenue of approximately 1.031 billion RMB, representing a year-on-year growth of 19% [1] - Gross profit reached around 717 million RMB, with a significant increase of 36.2% compared to the previous year [1] - The gross margin improved from 60.7% to 69.6% due to product structure optimization and enhanced operational efficiency [1] - As of December 31, 2024, the total cash and cash equivalents, along with restricted cash, amounted to 5.072 billion RMB [1] Strategic Focus and Client Expansion - The company implemented a dual development model of "strategic focus + innovation-driven" to enhance operational quality amid macroeconomic fluctuations [1] - In 2024, the company added 373 new core enterprise and financial institution clients, increasing the total client count by 51% to 1,108 [2] - The number of new core enterprise clients grew by 59% year-on-year, totaling 358, focusing on sectors like "infrastructure + new energy + advanced manufacturing" [2] - The overall client retention rate improved from 86% in 2023 to 96% in 2024, with a retention rate of 99% in multi-level circulation cloud business [2] Product Innovation and Market Development - The company accelerated product innovation and market breakthroughs, achieving a 101% year-on-year growth in ABS cloud business transaction volume [3] - It successfully launched the first technology property asset-backed notes in the country and facilitated the issuance of the first green asset-backed special plan in the Greater Bay Area [3] - The company is advancing "de-core" business models, enabling upstream and downstream SMEs to obtain financing without core enterprise payment confirmation [3] AI Technology and Applications - The company has established a comprehensive AI technology matrix focused on the supply chain finance sector, enhancing its core technology solutions [4] - The LDP-GPT model was developed to adapt general AI capabilities to supply chain finance scenarios, leading to the launch of the first lightweight supply chain finance AI agent, "BeeLink AI" [4] - "BeeLink AI" has been successfully deployed in multiple financial institutions, showcasing the effectiveness of the company's strategy to reconstruct the production and finance value chain using AI [4] - The product won the "Best AI Technology" award from The Asian Banker in 2024, indicating significant recognition in the industry [4]

Financial Performance - The company's revenue for the year ended December 31, 2024, reached RMB 1,031.2 million, representing an 18.8% increase compared to RMB 867.8 million in 2023[4]. - The gross profit for the same period was RMB 717.3 million, a 36.2% increase from RMB 526.5 million in 2023, with a gross margin improvement from 60.7% to 69.6%[4][10]. - The adjusted net loss for 2024 was RMB 679.3 million, a significant increase of 134.8% from RMB 289.3 million in 2023[4][10]. - The company reported a net loss of RMB 835.5 million for the year ended December 31, 2024, compared to a net loss of RMB 443.3 million in 2023[36]. - The operating loss increased from RMB 340.6 million in 2023 to RMB 669.7 million in 2024[36]. - The company reported a pre-tax loss of RMB 640,297,000 for 2024, significantly higher than the RMB 214,437,000 loss in 2023, reflecting increased impairment losses[142]. - The basic loss per share for the year was RMB 0.410, compared to RMB 0.208 in 2023, indicating a deterioration in earnings per share[112]. Customer Growth and Retention - The total number of core enterprise customers increased by 59.3% to 962, while the total number of financial institution customers rose by 11.5% to 146[5][12]. - The customer retention rate improved from 86% in 2023 to 96% in 2024, indicating enhanced customer loyalty[5][12]. - The company added 373 new core enterprise and financial institution customers in 2024, marking a 51% increase in total customer count to 1,108[12]. - The company added 370 new multi-level circulation cloud customers in 2024, bringing the total customer count to 928[22]. Technology and Innovation - The company launched the industry's first lightweight supply chain financial AI product, "BeeLink AI," which won the "Best AI Technology" award from The Asian Banker in 2024[16]. - In 2024, the company achieved a significant growth of 101% year-on-year in ABS cloud business transaction scale, driven by the successful implementation of innovative accounts receivable products[13]. - The company plans to continue expanding and optimizing its supply chain financial technology solutions to serve a broader range of customers[128]. - The company has introduced new products under its business segments to enhance service offerings within the supply chain ecosystem[128]. Financial Technology Solutions - The total supply chain assets processed by the company's technology solutions reached RMB 411.2 billion, a 28% increase year-on-year[10]. - The company's supply chain financial technology solutions generated a total financing amount of RMB 389.5 billion, reflecting a 26.2% growth compared to RMB 308.6 billion in 2023[7]. - The total supply chain assets processed by the company in 2024 reached RMB 3,895 billion, representing a year-on-year increase of 26%[19]. - The company processed RMB 750 billion in supply chain assets through AMS cloud business in 2024, marking a 16% year-on-year growth despite an 18% decline in the overall market[21]. Impairment and Losses - The company's impairment losses surged from RMB 214.4 million in 2023 to RMB 640.3 million in 2024[52]. - The company recorded significant impairment losses of RMB 445.1 million related to credit-impaired financial assets, primarily from accounts receivable from core enterprises[54]. - The impairment provision for receivables from core enterprises rose significantly from RMB 154,320 thousand in 2023 to RMB 599,382 thousand in 2024, an increase of about 288%[174]. - The total credit loss provisions amounted to RMB 599,382,000, with a significant increase in Stage 2 provisions to RMB 599,271,000[176]. Cash and Assets Management - Cash and cash equivalents, along with restricted cash, totaled RMB 5,072 million as of December 31, 2024[10]. - The company’s cash flow from operations was impacted by the repayment agreements with core enterprises, which involved RMB 136,884,000 in securities to settle RMB 168,096,000 in supply chain assets[156]. - The total current financial assets measured at fair value decreased to RMB 458,442,000 in 2024 from RMB 987,741,000 in 2023, a decrease of 53.7%[159]. - The company’s total current assets, including receivables, decreased from RMB 2,268,948 thousand in 2023 to RMB 1,813,746 thousand in 2024, a decrease of about 20%[171]. Strategic Initiatives - A strategic acquisition agreement was signed with Shenzhen Bait Technology Co., Ltd., which will enhance the company's product matrix and integrate technology advantages and customer resources[30]. - The company aims to leverage breakthroughs in AI to reshape the supply chain finance landscape and create new growth curves through innovative product applications and strategic acquisitions[34]. - The company will maintain a prudent approach in selecting acquisition targets to maximize shareholder value[29]. Awards and Recognition - The company was recognized with multiple awards for its ESG performance, including a "Low Risk" rating from Sustainalytics for three consecutive years[18]. - The company successfully issued the first green asset-backed special plan in the Greater Bay Area, showcasing its commitment to innovative financing solutions[13]. Employee and Operational Metrics - The company had a total of 726 employees as of December 31, 2024, with 402 in R&D, 138 in sales and marketing, and 186 in general administration[92][93]. - Employee costs for 2024 totaled RMB 387,030,000, a decrease from RMB 417,522,000 in 2023, with R&D expenses accounting for RMB 161,625,000[139]. - The company’s employee costs included RMB 108,470,000 in administrative expenses for 2024, down from RMB 123,358,000 in 2023, showing a focus on cost management[139].

Investment Rating - The report does not provide a specific investment rating for the company [2]. Core Insights - The company, Lianyi Rong Technology (9959.HK), focuses on AI-driven supply chain financial technology solutions, aiming to optimize payment cycles and digitize workflows in supply chain finance [2]. - The company has shown significant growth, with a total supply chain asset processed amounting to 156 billion RMB in the first half of 2024, representing a year-on-year increase of 14.6% [2]. - Lianyi Rong has a strong customer base, serving 856 clients with a retention rate of 96%, and has established partnerships across various industries, including construction, real estate, and retail [2]. Company Overview - Founded in 2016 and listed on the Hong Kong Stock Exchange in 2021, Lianyi Rong is the first publicly listed supply chain financial technology SaaS company in China [2]. - The company has a market capitalization of 41.82 billion HKD and a share price of 1.83 HKD [2]. - As of the first half of 2024, the company has 726 core enterprise cloud clients and 130 financial institution cloud clients, with a total of 1750 partners [2]. Technology and Innovation - Lianyi Rong leverages AI technology, including its proprietary LDP-GPT model and AI Agent platform, to enhance supply chain finance processes, achieving over 95% automation in workflows [2]. - The company has received recognition for its AI technology, winning the "Best AI Technology" award from The Asian Banker [2]. - The integration of AI in supply chain finance is expected to transform the industry, improving risk assessment, document processing, and overall efficiency [2].

Investment Rating - The report maintains a "Recommended" rating for the company, indicating an expectation to outperform the benchmark index by 10%-20% over the next six months [1][16]. Core Insights - The company has shown a steady increase in financing amounts, with a total facilitated financing of 270.84 billion yuan in Q1-Q3 2024, representing a year-on-year growth of 17.4%. The gross profit margin has significantly improved in Q3 [1]. - The company operates primarily on a SaaS service model, charging a fee based on a percentage of the facilitated financing amount, which is a key factor influencing revenue [1]. - The report highlights a comprehensive growth in customer numbers and a high customer retention rate of 96% as of Q3 2024 [1]. Summary by Sections Financing Performance - Total facilitated financing for Q1-Q3 2024 reached 2708.39 billion yuan, up 17.4% year-on-year. The breakdown includes: - Electronic debt certificate business: 1752.4 billion yuan (up 16.7% year-on-year), accounting for 65% of total financing. - Asset securitization business: 797.8 billion yuan (up 11.9% year-on-year), representing 29% of total financing. - Cross-border cloud financing: 149.1 billion yuan (up 66.8% year-on-year), accounting for 6% of total financing [1]. Customer Growth - As of Q3 2024, the company has partnered with 1917 core enterprises (up 28.8% from the beginning of the year) and 353 financial institutions (up 11.0%). The number of core enterprise customers reached 821 (up 35.9%) [1]. Financial Projections - The report projects adjusted EPS for 2024, 2025, and 2026 to be -0.12, -0.01, and 0.06 yuan respectively, with corresponding sales per share (SPS) of 0.40, 0.47, and 0.58 yuan. The target price is set at 2.07 HKD based on a 4x PS valuation for 2025 [1][2].

Investment Rating - The report assigns a "Buy" rating to the company with a target price of HKD 2.35, indicating a potential upside of 54.6% from the current price of HKD 1.52 [1][31]. Core Insights - The company is a leading provider of supply chain financial technology solutions, leveraging technological innovation to drive growth. It was established in 2016 and became the first listed Chinese supply chain financial technology company on the Hong Kong Stock Exchange in 2021 [2][31]. - The company has a robust business model focused on supply chain financial technology solutions, which includes core enterprise cloud and financial institution cloud services. The company has achieved a cumulative service asset scale of over CNY 1.3 trillion, holding the largest market share in the industry [1][6]. - The company has diversified its customer base across various industries, with a significant increase in the number of core enterprise cloud clients and partners, reaching 726 and 1,750 respectively as of mid-2024 [7][31]. Summary by Sections Company Overview - The company focuses on providing supply chain financial technology solutions using advanced technologies such as AI, blockchain, and big data. It aims to optimize payment cycles and enhance the transparency and connectivity of the supply chain financial ecosystem [2][6]. Business Model - The main solutions offered include supply chain financial technology solutions and emerging solutions, with a focus on core enterprise cloud and financial institution cloud services. The company serves a wide range of core enterprises and financial institutions, facilitating efficient supply chain financing [6][8]. Financial Performance - The company reported a total asset processing volume of CNY 1,659 billion in the first half of 2024, representing a year-on-year growth of 17%. The revenue for the same period was CNY 400 million, showing a 4% increase compared to the previous year [19][31]. - The adjusted net profit for 2023 was negative due to changes in product structure and pricing, but it is expected to improve in the coming years as the gross margin recovers [21][31]. Market Position - The company holds a 20.9% market share in the domestic supply chain financial technology solutions sector, serving over 29,000 small and micro enterprises across China [25][31]. - The report highlights the increasing demand for integrated technology solutions in the supply chain finance sector, driven by the digital transformation of core enterprises and financial institutions [25][31]. Future Outlook - The company is expected to maintain a compound annual growth rate (CAGR) of 14% from 2024 to 2026 in asset processing volume, supported by a strong cash reserve of CNY 5.1 billion as of mid-2024 [24][31]. - The acquisition of a treasury management solution provider is anticipated to broaden the company's business scope and enhance its service offerings [29][31].

Financial Performance - Total revenue for the six months ended June 30, 2024, was RMB 413,111,000, representing a 5.6% increase from RMB 391,031,000 in 2023[5] - Gross profit for the same period was RMB 292,889,000, with a gross margin of 70.9%, up from 60.8% in 2023, indicating a 10.1 percentage point increase[5] - The company reported an adjusted loss of RMB 204,118,000 for the period, with an adjusted loss rate of 49.4%, compared to 22.1% in the previous year, marking a significant increase[5] - The company reported a net loss of RMB 241.5 million for the six months ended June 30, 2024, compared to a net loss of RMB 171.7 million for the same period in 2023[24] - The operating loss for the six months ended June 30, 2024, was RMB 186.5 million, compared to RMB 144.4 million for the same period in 2023[24] - The company reported a loss of RMB 240,801 for the six months ended June 30, 2024, compared to a loss of RMB 170,298 for the same period in 2023[88] Customer Metrics - The number of core enterprise partners increased to 1,750, a 17.6% rise from 1,488 in the previous year[6] - The number of core enterprise customers grew by 20.2% to 726, compared to 604 in 2023[6] - Customer retention rate improved to 96%, up from 86% in the previous year, reflecting a 10 percentage point increase[6] - The number of core enterprise and financial institution clients reached 856, a 16% increase from 2023, with a client retention rate rising from 86% to 96%[12] Supply Chain Assets - Total supply chain assets processed by the company's technology solutions reached RMB 165,860.2 million, a 16.8% increase from RMB 141,955.2 million in 2023[9] - In the first half of 2024, the total supply chain assets processed by the company's technology solutions reached RMB 165.9 billion, a year-on-year increase of 16.8%[11] - The company's supply chain financial technology solutions processed a total of RMB 156 billion in supply chain assets in the first half of 2024, a year-on-year increase of 14.6%[15] - The total amount of supply chain assets decreased to RMB 372,833,000 as of June 30, 2024, from RMB 780,990,000 at the end of 2023[123] Revenue Segmentation - Revenue from the core enterprise cloud increased by 28.7% from RMB 231.1 million to RMB 297.4 million during the same period, driven by an increase in the number of supply chain assets processed[26] - Revenue from the financial institution cloud decreased by 33.5% from RMB 132.5 million to RMB 88.2 million, primarily due to a decline in the securitization market and the termination of several experimental products[26] - The emerging solutions segment generated RMB 9,898.5 million, a 67.7% increase from RMB 5,901.5 million in 2023[9] Research and Development - The company’s R&D personnel reached 536, accounting for 59% of total employees, and successfully developed the first AI-based supply chain document review platform, "AI Agent"[13] - Research and development expenses for the six months ended June 30, 2024, were RMB 177.7 million, compared to RMB 188.9 million in the previous year[24] - Research and development expenses included in employee costs were RMB 94,700,000, down from RMB 111,886,000, representing a 15.4% decrease[104] Financial Position - Cash and cash equivalents increased from RMB 4,719.2 million on December 31, 2023, to RMB 4,923.1 million as of June 30, 2024, an increase of RMB 203.9 million[49] - The company's borrowings amounted to RMB 2,705 million as of June 30, 2024, compared to RMB 340 million on December 31, 2023[51] - The equity-to-debt ratio as of June 30, 2024, was 4.3%, up from 1.4% on December 31, 2023[53] - The total liabilities decreased to RMB 75,530 as of June 30, 2024, from RMB 80,758 as of December 31, 2023, indicating a reduction of 6.9%[87] Governance and Compliance - The audit committee has reviewed the unaudited interim results for the six months ending June 30, 2024, and discussed accounting policies and internal controls with senior management and auditors[60] - The company has established a corporate governance committee to ensure operations align with shareholder interests and compliance with listing rules[61] - The corporate governance committee confirmed that adequate measures are in place to manage potential conflicts of interest between different voting rights beneficiaries and shareholders[62] Shareholder Information - The company has a total of 267,626,789 Class A shares and 2,017,357,159 Class B shares issued as of June 30, 2024[67] - Major shareholder Cabnetvic owns 221,212,025 Class A shares, representing 82.66% of the total[69] - The company repurchased a total of 139,544,000 Class B shares during the reporting period, at a total cost of HKD 274,215,405[75] Impairment and Credit Risk - Significant impairment losses were primarily due to increased credit risk associated with financial assets, including RMB 106.3 million from receivables related to core enterprises and RMB 40.7 million from supply chain assets[35] - The company anticipates longer repayment periods and lower recovery amounts due to deteriorating operating conditions of core enterprise clients, leading to increased credit risk[36] - The impairment provision for receivables increased to RMB (261,452,000) as of June 30, 2024, compared to RMB (157,662,000) on December 31, 2023, reflecting a significant rise in credit risk[134] Future Outlook - The company plans to focus on sustainable growth and enhance shareholder returns while embracing technological advancements, particularly in artificial intelligence[23] - The company expects to achieve higher growth in the second half of 2024 by optimizing its cross-border and international business models[27] - The company plans to continue expanding its supply chain financial technology solutions, which are expected to drive future revenue growth[135]

Investment Rating - The investment rating for the company is "Buy" with a target price of HKD 2.00, representing a potential upside of 49.3% from the recent closing price of HKD 1.34 [3]. Core Insights - The company reported a 16.8% year-on-year growth in asset processing scale to HKD 165.86 billion in 1H2024, with core enterprise cloud processing assets increasing by 39.9% to HKD 123.7 billion [1]. - Total revenue for the first half of the year was HKD 413 million, reflecting a 5.6% increase, while gross margin improved significantly from 60.8% to 70.9% [1][2]. - The company is actively pursuing diversification through the acquisition of Shenzhen Bait Technology Co., aiming to enhance its service offerings to clients [2]. Financial Performance - The total asset processing volume for supply chain financial technology solutions reached HKD 156 billion, a 14.6% increase year-on-year, with notable growth in multi-polar circulation cloud processing assets, which surged by 56.9% [2]. - The company recorded an increase in asset impairment losses by 127.2% to HKD 162 million, attributed to cautious measures in light of economic pressures and challenges in the real estate sector [2]. - The company has a strong cash position with net cash reserves exceeding HKD 5.086 billion, and it has initiated a share buyback program of up to USD 100 million to enhance shareholder returns [2]. Market Position - The company is positioned to benefit from its diversified business model and strong cash reserves, which provide a buffer against macroeconomic challenges [2][3]. - The current valuation is considered safe, with a projected net cash value of HKD 2.43 per share, indicating potential for future growth [2].

Investment Rating - Maintains an "Overweight" rating with a target price adjustment to HKD 2.20, corresponding to 5x PS for 2024 [3] Core Views - Revenue growth and gross margin improvement driven by quality and diversified customer acquisition [3] - Acquisition of Baite Technology to enhance services for core enterprise and financial institution clients [3] - Continuous share buybacks demonstrate confidence in the company's future [3] Financial Performance - 2024 H1 revenue reached RMB 413 million, a year-on-year increase of 5.6% [3] - Gross margin improved from 60.8% in 2023 to 70.9% in 2024 H1 [3] - Adjusted net loss of RMB 204 million in 2024 H1, with impairment losses of RMB 162 million due to the real estate sector's pressure [3] - Core enterprise cloud supply chain financing scale increased by 40% to RMB 123.7 billion, driving core enterprise cloud revenue to RMB 230 million, up 29% year-on-year [3] Customer and Market Expansion - Number of core enterprise and financial institution clients increased by 16% to 856 in 2024 H1 [3] - Further coverage expansion in state-owned enterprises among core clients [3] Strategic Initiatives - Proposed acquisition of Baite Technology to enter the treasury management market, offering comprehensive solutions from internal group treasury management systems to supply chain financing systems [3] - Approved a share buyback plan of up to USD 100 million in March 2024, with HKD 278 million repurchased in H1 2024 [3] Financial Forecasts - Revenue forecasts for 2024-2026 adjusted to RMB 918 million, RMB 1.049 billion, and RMB 1.149 billion, respectively [3] - Earnings per share forecasted at RMB 0.40, RMB 0.46, and RMB 0.50 for 2024-2026 [3] Market Data - Current stock price: HKD 1.53 [4] - 52-week price range: HKD 1.09 to HKD 2.17 [4] - Current market capitalization: HKD 3,496,025 thousand [4] Historical Financial Summary - Revenue growth rates: 47.0% in 2020, 16.5% in 2021, -22.9% in 2022, -6.1% in 2023, and projected 5.8% in 2024, 14.2% in 2025, and 9.6% in 2026 [5] - Gross profit: RMB 630.378 million in 2020, RMB 927.250 million in 2021, RMB 774.535 million in 2022, RMB 526.515 million in 2023, and projected RMB 642.495 million in 2024, RMB 734.004 million in 2025, and RMB 804.166 million in 2026 [5] - Adjusted net profit: RMB 192.482 million in 2020, RMB 289.440 million in 2021, RMB 196.015 million in 2022, RMB -286.267 million in 2023, and projected RMB -292.720 million in 2024, RMB 58.931 million in 2025, and RMB 111.256 million in 2026 [5]