Financial Performance - The company reported a significant increase in revenue for the fiscal year ending December 31, 2022, with a total revenue of approximately 1.2 billion, representing a year-over-year growth of 15%[22]. - For the fiscal year ending December 31, 2022, the company's operating revenue was RMB 2,900 million, reflecting a growth of 5.3% compared to 2021[180]. - The profit attributable to equity holders was RMB 490 million, down from RMB 560 million in 2021, representing a decrease of 12.5%[180]. - The total amount of new movable property loans issued reached RMB 152 million, a significant increase from RMB 36 million in the previous year[187]. - The total amount of commercial factoring business continued to grow steadily, exceeding RMB 320 million[187]. - The company achieved interest income of RMB 36.753 million from microloans, slightly down from RMB 36.962 million in the previous year[196]. User Growth and Market Expansion - User data showed an increase in active users by 20% year-over-year, reaching a total of 5 million active users by the end of 2022[22]. - Market expansion plans include entering two new international markets by Q3 2023, aiming to increase market share by 8% in these regions[22]. - The company operates in key regions including Suzhou, Chengdu, Wuhan, Hefei, Wuxi, Changsha, Nanchang, and Hong Kong, aiming for market expansion[147]. Future Projections and Strategies - The company provided a positive outlook for the next fiscal year, projecting a revenue growth of 10% to 12% based on current market trends and user acquisition strategies[22]. - New product launches are expected to contribute an additional 200 million in revenue, with a focus on expanding the product line in the fintech sector[22]. - The company plans to enhance its management level and explore new business avenues to increase profitability contributions from new businesses[182]. - The company aims to expand its supply chain management business in the consumer goods sector, which has become a new source of revenue growth[187]. Research and Development - The company is investing in new technology development, allocating 5% of its annual revenue towards R&D to enhance its service offerings and improve user experience[22]. Corporate Governance and Compliance - The company has established a new audit committee to enhance corporate governance and ensure financial transparency, comprising independent non-executive directors[16]. - The management team emphasized the importance of risk management and compliance, with a dedicated team overseeing these areas to mitigate potential financial risks[22]. - The independent non-executive directors confirmed that transactions during the reporting year were conducted under fair and reasonable terms, benefiting shareholders[118]. - The company is committed to maintaining high standards of corporate governance to protect shareholder interests and enhance corporate value[130]. Financial Management and Investments - The company is considering strategic acquisitions to bolster its market position, with a budget of up to 300 million allocated for potential mergers and acquisitions in the next year[22]. - Retained earnings will primarily be used for business development and/or acquisitions within mainland China[26]. - The total capital commitment for the proposed partnership is RMB 20,000,000, with the company's commitment being RMB 12,000,000[76]. - The management fee for the investment fund is set at 2% of the total capital commitment annually, capped at 10% of the total capital commitment over the fund's duration[137]. Shareholder Information - The board has proposed a final dividend of HKD 0.03 per share for the year ended December 31, 2022, compared to HKD 0.04 in 2021, with an estimated total payout of approximately HKD 32,710,050 based on 1,090,335,000 shares issued[26]. - The company maintains a minimum public float of 25% as required by the listing rules[140]. Operational Enhancements - The company is focused on building a young and professional workforce to enhance its operational capabilities and innovation[182]. - The company has implemented a comprehensive risk management system covering all employees, products, and processes[187]. - The company emphasizes a strategy of "intensive operation and refined management" to address customer needs and deepen business integration[182]. Loan and Client Information - The company reported a total of 554 clients in real estate mortgage loans, with the top five clients accounting for 41.11% of the total outstanding balance[189]. - The company issued 212 new microloans totaling RMB 458 million, compared to 158 loans totaling RMB 333 million in the previous year[196]. - The outstanding balance of microloans at the end of the reporting period was RMB 407 million, up from RMB 339 million in the previous year[196].

Financial Performance - External operating income for 2022 was 624,474 million, a decrease from 367,825 million in 2021, reflecting a decline of approximately 41.5%[1] - Net income for 2022 was 3,787 million, compared to 534 million in 2021, indicating a significant increase[3] - The company reported a pre-tax profit of 87,468 million for 2022, compared to 146,513 million in 2021, indicating a decrease of approximately 40.2%[10] - The company’s net income tax expense for the year ended December 31, 2022, was RMB 27,120 million, compared to RMB 45,799 million in the previous year, indicating a decrease of 40.9%[34] - The company’s net profit attributable to shareholders decreased by 53% to RMB 41,057,000, down from RMB 87,169,000 in the previous year[39] - Total comprehensive income for the year was RMB 60,348 thousand, compared to RMB 100,714 thousand in 2021, reflecting a decline of about 40%[64] Assets and Liabilities - Total assets as of December 31, 2022, were 2,985,146 million, compared to 2,836,195 million in 2021, representing an increase of about 5.3%[3] - Total liabilities as of December 31, 2022, were 873,816 million, compared to 742,461 million in 2021, indicating an increase of approximately 17.7%[3] - The total fair value of investment properties as of December 31, 2022, was RMB 203,698 million, compared to RMB 203,698 million as of December 31, 2021, showing stability in property valuation[23] - The total deferred tax assets as of December 31, 2022, amounted to RMB 92,657 million, a slight decrease from RMB 95,060 million as of December 31, 2021[25] - The company’s total liabilities decreased from RMB 51,484 million as of January 1, 2022, to RMB 60,469 million as of December 31, 2022, reflecting a net increase of RMB 3,346 million[20] Income and Expenses - Interest income from customer loans was 258,848 million in 2022, down from 269,276 million in 2021, a decline of about 3.2%[7] - The company reported a significant increase in consulting fee income, rising to 1,377 million in 2022 from 601 million in 2021, an increase of approximately 129.5%[7] - The total rental income for the year ended December 31, 2022, was RMB 3,165 million, compared to RMB 492 million in the previous year, showing significant growth[31] - Interest income for the year was RMB 258,848,000, with interest expenses amounting to RMB 31,877,000, resulting in a net interest income of RMB 226,971,000[39] Credit and Impairment - Credit impairment losses totaled 74,712 million in 2022, up from 153,849 million in 2021, showing a decrease of approximately 51.5%[1] - The company reported a credit loss of RMB 76,395 million on customer loans as of December 31, 2022, down from RMB 154,244 million in the previous year, indicating a reduction of 50.5%[30] - The company experienced a credit impairment loss of RMB 74,712,000, a decrease from RMB 153,849,000 in the previous year, indicating improved credit quality[39] Investments - As of December 31, 2022, the total value of investments accounted for using the equity method increased to RMB 26,005 million from RMB 17,475 million, reflecting a growth of 48.7%[22] - The net profit for the period from investments accounted for using the equity method was RMB 1,716 million, with dividends paid amounting to RMB 1,716 million, resulting in no net change in the investment value[22] - The group reported a loss provision of 218,257 million RMB as of December 31, 2022, reflecting the expected credit loss from loans granted[126] Cash Flow - For the year ended December 31, 2022, the net cash flow from operating activities was a cash outflow of RMB 102,492 thousand, compared to an inflow of RMB 98,459 thousand for the year ended December 31, 2021[98] - The net cash outflow from investing activities was RMB 26,188 thousand, significantly improved from RMB 75,669 thousand in the previous year[98] - Cash inflow from financing activities amounted to RMB 89,577 thousand, a decrease from RMB 108,418 thousand in the prior year[98] - The total cash and cash equivalents at the end of the year was RMB 196,805 thousand, down from RMB 234,781 thousand at the beginning of the year[98] Business Strategy and Operations - The company plans to focus on expanding its market presence and enhancing its product offerings in the upcoming fiscal year[1] - The group operates primarily through two business segments: Inclusive Finance and Ecological Finance, providing loan services mainly in China[122] - The company primarily provides lending services through mortgage and non-mortgage loans to customers in China[105] - The company aims to enhance its digital infrastructure and diversify its product offerings in the commercial factoring sector[179] Dividends - The company proposed a dividend of HKD 0.03 per share, totaling approximately HKD 32.7 million (equivalent to RMB 29.2 million) for the year ended December 31, 2022[50] - The company declared dividends amounting to RMB 37,329 thousand, compared to RMB 48,952 thousand in the previous year, indicating a reduction of about 23.5%[96] - The company distributed dividends to non-controlling interests amounting to RMB 10,200 thousand, compared to RMB 61,250 thousand in the previous year[98] Risk Management - The company emphasizes the importance of monitoring risks in its small loan business, including real estate valuation risk and credit risk[165] - The factoring business faced risks including credit risk, accounts receivable risk, and regulatory policy changes, with comprehensive internal control measures implemented to manage these risks[197][198] Market and Clientele - The company has a total of 16 clients in the factoring business, with the top five clients accounting for 60% of the year-end principal balance[196] - The supply chain management business has established partnerships with well-known companies such as ZTE Corporation and Yihai Kerry Arawana Holdings, covering various consumer goods sectors[199]

Financial Performance - Operating revenue for the six months ended June 30, 2022, was RMB 305,419,000, representing a 127% increase compared to RMB 134,754,000 in the same period of 2021[12]. - Operating expenses surged to RMB 191,717,000, a significant increase of 1,221% from RMB 14,509,000 year-on-year[12]. - Profit attributable to owners of the company reached RMB 18,149,000, marking a 23% increase from RMB 14,776,000 in the previous year[12]. - Basic earnings per share increased by 21% to RMB 0.017 from RMB 0.014[12]. - Total assets as of June 30, 2022, were RMB 2,846,077,000, showing a slight increase of 0% from RMB 2,836,195,000 at the end of 2021[12]. - The overall operating revenue for the company reached RMB 305,419, an increase from RMB 134,754 in the previous year, primarily due to a significant rise in supply chain revenue[79]. - The net profit attributable to equity holders was RMB 18,149, up from RMB 14,776 year-on-year, mainly due to a reduction in credit impairment losses[79]. Loan and Mortgage Activities - Loans granted to customers amounted to RMB 1,929,962,000, reflecting a 6% increase from RMB 1,815,077,000[12]. - Total new mortgage loans issued in the first half of 2022 amounted to RMB 263 million, a decrease of 36.5% compared to RMB 414 million in 2021[18]. - The balance of real estate mortgage loans as of June 30, 2022, was RMB 687 million, down from RMB 870 million in the previous year, representing a decline of 21%[21]. - Interest income from real estate mortgage loans was RMB 25,172 thousand, a decrease from RMB 27,729 thousand in the same period last year, reflecting a decline of 9.2%[21]. - The balance of personal goods mortgage loans reached RMB 79 million, an increase from RMB 47 million in the previous year, marking a growth of 68.1%[23]. - Interest income from personal goods mortgage loans increased to RMB 6,802 thousand, up from RMB 5,496 thousand, representing a rise of 23.7%[23]. - The balance of non-mortgage loans remained stable at RMB 375 million, with interest income dropping significantly to RMB 11,997 thousand, down from RMB 21,206 thousand, a decline of 43.5%[27]. Business Strategy and Development - The company aims to enhance its position as a leading provider of inclusive financial services in China, focusing on small loans, pawn services, and asset investments[2]. - The management strategy emphasizes value creation, refined management, and the exploration of new business areas, including financing consulting and art auction services[14][15]. - The company is committed to supporting small and micro enterprises and individuals facing financial difficulties through its diverse financial services[14]. - The company aims to expand its operations by establishing 1 to 2 new pawn shops in provincial capital cities annually, targeting a network of 10 to 12 cities by 2025[22]. - The company plans to enhance digital capabilities in its stores to improve customer satisfaction in the personal goods mortgage segment[26]. - The company plans to enhance digital construction in the small loan business and increase service efforts for technology-driven and low-carbon SMEs, fulfilling its social responsibility in promoting inclusive finance[34]. Risk Management and Credit Loss Provisions - The expected credit loss provision for loans granted to customers as of June 30, 2022, totaled RMB 678,078 thousand, representing approximately 26% of the outstanding loans before provisions[98]. - The total expected credit loss provision increased by RMB 33,597 thousand compared to the end of the previous year[98]. - The expected credit loss provision for collateralized loans was RMB 457,810 thousand as of June 30, 2022, compared to RMB 389,812 thousand at the end of the previous year[97]. - The expected credit loss provision for non-collateralized loans was RMB 220,268 thousand as of June 30, 2022, compared to RMB 254,669 thousand at the end of the previous year[97]. - The increase in expected credit loss provisions for the first and second stages was primarily due to the deterioration of some customers' operating conditions due to the COVID-19 pandemic and an increase in the loan balance compared to the end of the previous year[98]. - The group conducts due diligence on SMEs applying for refinancing funds, ensuring compliance with bank management requirements[148]. - Continuous credit risk assessments are conducted based on clients' credit records, repayment sources, and significant events affecting collateral[139]. Business Segments and Performance - The ecological finance division achieved operating revenue of RMB 194,352, a substantial increase from RMB 8,856 in the previous year, driven by significant growth in supply chain management and commercial factoring[83][84]. - The inclusive finance division reported operating revenue of RMB 105,616, a decrease from RMB 116,054, attributed to lower interest income from non-collateral loans and small loans[80][82]. - The total number of new loans issued in the small loan business increased to 111 in the first half of 2022, up from 89 in the same period of 2021, representing a growth of 24.7%[30]. - The total amount of new loans issued reached RMB 187 million in the first half of 2022, slightly up from RMB 185 million in the same period of 2021, indicating a growth of 1.1%[30]. - The total number of new loans issued in the refinancing fund business increased significantly to 312 in the first half of 2022, compared to 220 in the same period of 2021, representing a growth of 41.8%[36]. - Total amount of new loans issued in the refinancing fund business reached RMB 1,937 million in the first half of 2022, a substantial increase from RMB 1,151 million in the same period of 2021, indicating a growth of 68.3%[36]. Corporate Governance and Shareholder Information - The board is committed to maintaining high standards of corporate governance to protect shareholder interests and enhance corporate value[199]. - The corporate governance practices are based on the principles and code provisions set out in Appendix 14 of the Listing Rules[200]. - As of June 30, 2022, major shareholders include Xiaolai Investment Co., Ltd. with a 23.85% stake and Zhu Tianxiao with a 29.81% stake in the company[182]. - The board members hold a total of 4,330,000 shares, representing 0.39% of the issued shares as of June 30, 2022[177]. Operational Challenges and Future Outlook - The company will continue to monitor the impact of the pandemic on the macro economy and review the effectiveness of risk control policies[172]. - The company faces various risks in its art investment and luxury goods sales, including regulatory changes and market liquidity risks[44][47]. - The company aims to strengthen its marketing team and focus on luxury goods sales and art investment, targeting breakthroughs in both scale and quality within the year[172]. - The company has established partnerships with several prominent firms, including ZTE Corporation and New Hope Group, to expand its supply chain management operations[58].

Financial Performance - Operating revenue for 2021 was RMB 367,825,000, an increase of 41.6% compared to RMB 259,806,000 in 2020[11] - Profit attributable to equity holders was RMB 87,169,000, a significant increase from RMB 2,216,000 in 2020, representing a growth of 3,833.6%[11] - Total assets reached RMB 2,836,195,000, up from RMB 2,532,555,000 in 2020, indicating a growth of 12.0%[11] - The company reported a continuous improvement in asset quality and profitability, establishing itself as a comprehensive financial service provider[21] - The company’s future outlook is optimistic, aiming for a fruitful year ahead with a focus on value creation and innovation[21] - The company’s capital debt ratio stood at 26.18% as of December 31, 2021, indicating a policy to maintain a low capital debt ratio[111] - The company reported a net foreign exchange loss of RMB 3.30 million for the year ended December 31, 2021, a decrease from a net foreign exchange gain of RMB 18.01 million in the previous year[108] Loan and Mortgage Activities - The company granted loans to customers amounting to RMB 1,815,077,000, slightly up from RMB 1,814,211,000 in 2020[11] - In 2021, the company issued a total of 782 new real estate mortgage loans, an increase from 527 in 2020, while new consumer goods mortgage loans decreased to 693 from 856[25] - The total amount of new real estate mortgage loans issued reached RMB 619 million, up from RMB 405 million in 2020, while new consumer goods mortgage loans amounted to RMB 36 million, compared to RMB 26 million in the previous year[25] - As of December 31, 2021, the outstanding balance of real estate mortgage loans was RMB 744 million, remaining stable compared to 2020, with interest income from real estate mortgage loans increasing to RMB 65,035 thousand from RMB 60,393 thousand[28] - As of December 31, 2021, the company's collateralized loan balance for consumer goods was RMB 39 million, with interest income of RMB 4,384 thousand, a decrease compared to 2020[33] - The non-collateralized loan balance as of December 31, 2021, was RMB 386 million, with interest income of RMB 37,335 thousand, also showing a decline compared to 2020[34] - The total number of new small loans issued as of December 31, 2021, was 158, with a total amount of RMB 333 million, a decrease from 2020[36] - The small loan business had an ending balance of RMB 339 million as of December 31, 2021, with interest income of RMB 36,962 thousand, which increased compared to 2020[40] - The collateralized loans for agriculture had an ending balance of RMB 116 million as of December 31, 2021, with an annual interest rate of 9%-18%[37] - Total number of new loans granted in 2021 was 388, an increase from 370 in 2020[42] - Total amount of new loans granted in 2021 was RMB 2,252 million, a decrease from RMB 2,328 million in 2020[42] Business Expansion and Strategy - The registered capital for commercial factoring increased to RMB 170 million, reflecting strategic investment from state-owned enterprises[17] - The registered capital for Huifang Supply Chain was raised to RMB 400 million, indicating ongoing business expansion[17] - The company established a new pawn shop in Changsha, becoming the only approved pawn company in Hunan province in the past year[17] - The company aims to expand its pawn business by establishing 1-2 new pawn companies in provincial capital cities each year, targeting a network covering 10-12 cities by 2025[29] - The company’s strategy focuses on enhancing management efficiency through restructuring its business units into two main divisions: Inclusive Finance and Ecological Finance[21] - The company emphasizes a dual-driven strategy of inclusive finance and ecological finance to provide comprehensive financial services to SMEs and individuals[21] - The company aims to enhance its digital infrastructure and diversify its product offerings in the commercial factoring business to drive future growth[63] - The supply chain management business plans to develop a proprietary supply chain SaaS platform and expand into more product categories[68] - The company aims to enhance its brand position in the industry through a national strategy for its pawn business and to develop its art investment and luxury goods sales[134] Investment and Asset Management - The company established partnerships with state-owned asset management companies, enhancing its special asset investment business capabilities[72] - The equity investment business made two new investments totaling RMB 15 million in 2021, with the total investment amount at year-end also being RMB 15 million[69] - The company has established partnerships with two seasoned equity investment institutions, with an intended subscription of RMB 20 million and actual investment of RMB 15 million in 2021[69] - In 2021, the total number of new investments in special asset investment business was 9, with a total investment amount of RMB 16 million[71] - The company invested approximately RMB 155 million in the Zhonghui Financial Building project, which has a total construction area of 17,894.27 square meters, aimed at attracting financial enterprises[121] Operational Efficiency and Management - The company restructured its business divisions, merging three divisions into two, enhancing operational efficiency[17] - The company has implemented comprehensive internal control measures for loan management, including pre-loan separation and tiered approval processes[40] - The company aims to ensure asset quality stability through strict management of overdue loans and real-time monitoring of business processes and risks[40] - The company plans to continue promoting refined management to achieve revenue growth and cost reduction in the future[90] - The management team is focused on expanding the company's operations and enhancing its market presence through strategic decision-making[167] Corporate Governance and Management Team - The company has established an audit committee to assist the board in reviewing financial information and internal controls[169] - The remuneration committee is responsible for reviewing the remuneration policies and structures for directors and senior management[172] - The nomination committee evaluates the composition of the board and provides recommendations for director appointments[173] - The management team is led by Chairman Wu Min, who joined the group in January 2011 and oversees operations and decision-making on important matters[167] - The company has a diverse board with independent non-executive directors serving in various capacities across multiple listed companies[156][157] - The company has a structured approach to governance with independent directors ensuring compliance with listing rules[157] Future Outlook and Development - The company plans to propose a dividend of HKD 0.04 per share at the annual general meeting, totaling HKD 43.6 million (approximately RMB 38 million)[133] - The company will continue to seek new business development opportunities and focus on value creation, innovation, brand enhancement, and team building[134] - The future direction of the insurance agency business includes expanding market cooperation with foreign enterprises and large corporate groups[76] - The overseas financial business aims to explore opportunities in pawn and digital asset sectors once travel restrictions are lifted[82] - Future development directions include strengthening cooperation with experienced equity investment institutions and exploring dual GP cooperation models[69]

[Company Information](index=4&type=section&id=%E5%85%AC%E5%8F%B8%E8%B3%87%E6%96%99) The report provides fundamental corporate governance and operational information, including board members, committees, company secretary, registered office, principal place of business, auditor, and principal bankers - The report provides basic corporate governance and operational information, including the board of directors, committee members, company secretary, registered office, principal place of business, auditor, and principal bankers[5](index=5&type=chunk)[6](index=6&type=chunk)[7](index=7&type=chunk) [Financial Highlights](index=6&type=section&id=%E8%B2%A1%E5%8B%99%E6%91%98%E8%A6%81) The company's financial performance in the first half of 2021 showed a significant increase in profit attributable to owners despite a slight revenue decline, while total assets and net assets grew modestly Summary of Operating Results (For the six months ended June 30) | Indicator | 2021 (RMB thousands) | 2020 (RMB thousands) | Change | | :--- | :--- | :--- | :--- | | Operating Revenue | 134,754 | 138,174 | -2% | | Operating Expenses | 14,509 | 22,832 | -36% | | Profit Attributable to Owners of the Company | 14,776 | 893 | 1,555% | | Basic Earnings Per Share (RMB yuan) | 0.014 | 0.001 | 1,300% | Summary of Financial Position | Indicator | As of June 30, 2021 (RMB thousands) | As of December 31, 2020 (RMB thousands) | Change | | :--- | :--- | :--- | :--- | | Total Assets | 2,712,986 | 2,532,555 | 7% | | Loans to Customers | 1,888,767 | 1,814,211 | 4% | | Bank Balances and Cash | 417,597 | 434,080 | -4% | | Net Assets | 1,948,514 | 1,941,898 | 0% | [Management Discussion and Analysis](index=7&type=section&id=%E7%AE%A1%E7%90%86%E5%B1%A4%E8%A8%8E%E8%AB%96%E8%88%87%E5%88%86%E6%9E%90) [Business Review and Development](index=7&type=section&id=1.%20%E6%A5%AD%E5%8B%99%E5%9B%9E%E9%A1%A7%E8%88%87%E7%99%BC%E5%B1%95) During the reporting period, the company's business operations showed a strong recovery, with significant growth in the Inclusive Finance segment, continuous innovation in Technology Finance, and a shift towards self-operated business in Insurance Agency, alongside new ventures in art, distressed asset, and equity investments - The company's overall operating strategy focuses on comprehensive marketing and robust risk control, showing business recovery amidst an improving macroeconomic environment, and actively expanding into new areas such as art, distressed asset, and equity investments[12](index=12&type=chunk) [Inclusive Finance Business Segment](index=7&type=section&id=1.1%20%E6%99%AE%E6%83%A0%E9%87%91%E8%9E%8D%E4%BA%8B%E6%A5%AD%E9%83%A8) The Inclusive Finance Business Segment, a core business, provides mortgage and non-mortgage loans to SMEs and individuals through platforms like Wuzhong Pawn, Dongshan Microcredit, and Huifang Rongtong, achieving significant growth in real estate mortgage loans and Dongshan Microcredit business due to improved pandemic conditions and tighter credit policies Wuzhong Pawn Loan Granting Status (For the six months ended June 30) | Item | 2021 (RMB millions) | 2020 (RMB millions) | | :--- | :--- | :--- | | **New Mortgage Loans** | | | | Real Estate Mortgage Loan Amount | 396 | 149 | | Personal Property Mortgage Loan Amount | 33 | 25 | | Number of Real Estate Mortgage Loans | 447 | 169 | | Number of Personal Property Mortgage Loans | 1,478 | 1,747 | | **New Non-Mortgage Loans** | | | | Total Amount | 328 | 401 | | Total Number of Loans | 23 | 39 | Huifang Rongtong Re-lending Fund New Loan Status (For the six months ended June 30) | Item | 2021 (RMB millions) | 2020 (RMB millions) | | :--- | :--- | :--- | | Total Amount of New Loans Granted | 1,151 | 1,243 | | Total Number of New Loans Granted | 220 | 182 | | Period-end Balance | 60 | 103 | Dongshan Microcredit New Loan Status (For the six months ended June 30) | Item | 2021 (RMB millions) | 2020 (RMB millions) | | :--- | :--- | :--- | | Total Amount of New Loans Granted | 185 | 126 | | Total Number of New Loans Granted | 89 | 59 | | Period-end Balance | 362 | 375 | [Technology Finance Business Segment](index=10&type=section&id=1.2%20%E7%A7%91%E6%8A%80%E9%87%91%E8%9E%8D%E4%BA%8B%E6%A5%AD%E9%83%A8) The Technology Finance Business Segment, a strategic emerging business, focuses on commercial factoring, supply chain management, and Hong Kong money lending, with commercial factoring new business volume decreasing year-on-year due to reliance on bank financing, and Hong Kong loan balance at RMB 22 million Commercial Factoring Business Operations (For the six months ended June 30) | Item | 2021 (RMB millions) | 2020 (RMB millions) | | :--- | :--- | :--- | | Total Number of New Accounts Receivable Factoring Businesses | 5 | 8 | | Total Amount of New Accounts Receivable Factoring Businesses | 27 | 86 | - Hong Kong operations continued to hold a money lender's license, with an outstanding loan balance of **RMB 22 million** as of June 30, 2021[29](index=29&type=chunk) [Insurance Agency Business Segment](index=11&type=section&id=1.3%20%E4%BF%9D%E9%9A%AA%E4%BB%A3%E7%90%86%E4%BA%8B%E6%A5%AD%E9%83%A8) The Insurance Agency Business Segment, under Huifang Anda, expands into co-insurance, government and state-owned platforms, and foreign enterprises, covering property, credit guarantee, liability, and personal insurance - The Insurance Agency Business Segment, guided by principles of 'credibility, responsibility, professionalism, and compliance,' actively integrates government and insurance company resources to act as an agent for various insurance businesses[31](index=31&type=chunk) [Financial Review](index=11&type=section&id=2.%20%E8%B2%A1%E5%8B%99%E5%9B%9E%E9%A1%A7) In the first half of 2021, the company's operating revenue slightly decreased by 2% to RMB 135 million, while profit attributable to equity holders surged by 1,555% to RMB 14.78 million, with the Inclusive Finance segment being the primary profit driver and Technology Finance turning profitable Overall Financial Data (For the six months ended June 30) | Indicator | 2021 (RMB thousands) | 2020 (RMB thousands) | | :--- | :--- | :--- | | Operating Revenue | 134,754 | 138,174 | | Net Operating Income | 68,816 | 29,324 | | Administrative Expenses | 31,395 | 28,776 | | Income Tax Expense | 12,083 | 7,488 | | Profit Attributable to Equity Holders | 14,776 | 893 | | Basic Earnings Per Share (RMB yuan) | 0.014 | 0.001 | Pre-tax Profit/(Loss) by Business Segment (For the six months ended June 30) | Business Segment | 2021 (RMB thousands) | 2020 (RMB thousands) | | :--- | :--- | :--- | | Inclusive Finance Business Segment | 46,303 | 26,625 | | Technology Finance Business Segment | 1,632 | (616) | | Insurance Agency Business Segment | (1,323) | (1,498) | | Headquarters and Others | (11,465) | (12,705) | [Credit Risk](index=13&type=section&id=3.%20%E4%BF%A1%E7%94%A8%E9%A2%A8%E9%9A%AA) As of June 30, 2021, the company's total gross book value of loans to customers was RMB 2.545 billion, with impairment provisions totaling RMB 656 million, a provision coverage ratio of approximately 25.79%, and a significant decrease in new litigation-involved loan balances, indicating strengthened risk control Credit Risk Exposure of Loans to Customers (As of June 30, 2021) | Expected Credit Loss Stage | Gross Book Value (RMB thousands) | Loss Allowance (RMB thousands) | Carrying Value (RMB thousands) | | :--- | :--- | :--- | :--- | | Stage 1 (12-month ECL) | 1,388,873 | (30,391) | 1,358,482 | | Stage 2 (Lifetime ECL) | 30,811 | (6,742) | 24,069 | | Stage 3 (Lifetime ECL) | 1,125,477 | (619,261) | 506,216 | | **Total** | **2,545,161** | **(656,394)** | **1,888,767** | - As of June 30, 2021, the Group's total impairment provisions increased by **RMB 52.72 million** from the end of last year, reaching **RMB 656 million**[48](index=48&type=chunk) New Litigation-Involved Loans (For the six months ended June 30) | Item | 2021 (RMB thousands) | 2020 (RMB thousands) | | :--- | :--- | :--- | | New Litigation-Involved Mortgage Loan Balance | 13,080 | 38,494 | | New Litigation-Involved Non-Mortgage Loan Balance | 0 | 21,591 | [Borrowings](index=16&type=section&id=4.%20%E5%80%9F%E6%AC%BE) As of June 30, 2021, the Group's total borrowings increased to RMB 675 million from RMB 510 million at the end of 2020, with non-current bank borrowings primarily for headquarters building construction, and a capital gearing ratio (net debt/equity) of 34.66% Borrowing Structure | Item | June 30, 2021 (RMB thousands) | December 31, 2020 (RMB thousands) | | :--- | :--- | :--- | | **Non-current** | | | | Bank Borrowings | 95,380 | 50,380 | | **Current** | | | | Bank Borrowings | 568,380 | 436,489 | | Microcredit Company Borrowings | 3,000 | 23,500 | | Other Company Borrowings | 8,500 | — | | **Total** | **675,260** | **510,369** | - The Group's capital gearing ratio is **34.66%**, with a policy to maintain a low capital gearing ratio[55](index=55&type=chunk) [Capital Expenditure](index=17&type=section&id=5.%20%E8%B3%87%E6%9C%AC%E9%96%8B%E6%94%AF) For the six months ended June 30, 2021, the company's capital expenditure significantly increased to RMB 18.23 million, primarily for property, plant and equipment, intangible assets, and construction in progress, compared to RMB 2.34 million in the prior period - Capital expenditure during the reporting period was **RMB 18.23 million**, a significant year-on-year increase from **RMB 2.34 million** in the prior period[57](index=57&type=chunk) [Foreign Exchange Exposure](index=17&type=section&id=6.%20%E5%A4%96%E5%8C%AF%E9%A2%A8%E9%9A%AA%E6%9B%9D%E5%8F%A3) During the reporting period, the Group recorded a net exchange loss of RMB 2.75 million, compared to a net exchange gain of RMB 11.36 million in the prior period, but does not face significant foreign exchange risk or engage in hedging due to primary transactions being in RMB - For the six months ended June 30, 2021, the Group recorded a net exchange loss of **RMB 2.751 million**, compared to a net exchange gain of **RMB 11.357 million** in the prior period[58](index=58&type=chunk) [Pledged Assets](index=17&type=section&id=7.%20%E6%8A%B5%E6%8A%BC%E8%B3%87%E7%94%A2) As of June 30, 2021, the Group had assets valued at RMB 462 million pledged or mortgaged for bank borrowings, including land use rights, structured deposits, and time deposits - To obtain bank borrowings, the Group pledged land use rights valued at **RMB 34.2 million**, and pledged structured deposits valued at **RMB 140 million** and time deposits valued at **RMB 287 million**[59](index=59&type=chunk) [Significant Investments, Acquisitions and Disposals](index=18&type=section&id=8.%20%E9%87%8D%E5%A4%A7%E6%8A%95%E8%B3%87%E3%80%81%E6%94%B6%E8%B3%BC%E5%8F%8A%E5%87%BA%E5%94%AE) To achieve diversified development, the Group established three new companies during the reporting period, focusing on art investment, distressed asset investment, and equity investment, to explore new growth opportunities - Established Nanjing Yiling with a registered capital of **RMB 55 million** and a 55% stake, to expand into the art finance market[63](index=63&type=chunk) - Established Suzhou Cibei with a registered capital of **RMB 50 million** and a committed capital contribution of **RMB 45 million**, to venture into distressed asset investment and disposal[64](index=64&type=chunk) - Established Huifang Rongcui with a registered capital of **RMB 100 million** and a committed capital contribution of **RMB 90 million**, to conduct direct equity investments and FOF investments, seizing opportunities in new energy, intelligent manufacturing, and healthcare industries[65](index=65&type=chunk) [Contingent Liabilities, Contractual Commitments, Cash Utilization Analysis](index=19&type=section&id=9.%20%E6%88%96%E7%84%B6%E8%B2%A0%E5%82%B5%E3%80%81%E5%90%88%E7%B4%84%E8%B2%AC%E4%BB%BB%E3%80%81%E7%8F%BE%E9%87%91%E4%BD%BF%E7%94%A8%E5%88%86%E6%9E%90) As of the end of the reporting period, the Group had no significant contingent liabilities, with total capital commitments of RMB 180 million primarily for the China Huirong headquarters building construction and capital injections into new subsidiaries, and net cash outflow from operating activities of RMB 107 million mainly due to increased loans to customers Capital Commitments (As of June 30, 2021) | Item | Unaudited (RMB thousands) | | :--- | :--- | | China Huirong Headquarters Building | 44,534 | | Huifang Rongcui | 90,000 | | Suzhou Cibei | 34,870 | | Nanjing Yiling | 10,250 | | **Total** | **179,654** | Cash Flow Summary (For the six months ended June 30) | Item | 2021 (RMB thousands) | 2020 (RMB thousands) | | :--- | :--- | :--- | | Net Cash (Outflow)/Inflow from Operating Activities | (107,104) | 425,679 | | Net Cash Outflow from Investing Activities | (28,360) | (2,336) | | Net Cash Inflow/(Outflow) from Financing Activities | 122,664 | (523,010) | | Net Decrease in Cash and Cash Equivalents | (12,800) | (99,667) | [Human Resources and Employee Benefits](index=20&type=section&id=10.%20%E4%BA%BA%E5%8A%9B%E8%B3%87%E6%BA%90%E8%88%87%E5%83%B1%E5%93%A1%E7%A6%8F%E5%88%A9) As of June 30, 2021, the Group had 138 full-time employees, a decrease of 2 from the beginning of the year, reflecting ongoing human resource optimization, with total staff costs and benefits amounting to RMB 17.75 million, an increase of RMB 0.835 million year-on-year - As of June 30, 2021, the Group had **138** full-time employees, a decrease from **140** at the end of 2020[75](index=75&type=chunk) - For the six months ended June 30, 2021, staff costs and benefits amounted to **RMB 17,753 thousand**, an increase of **RMB 835 thousand** year-on-year[75](index=75&type=chunk) [Future Plans for Significant Investments](index=20&type=section&id=11.%20%E9%87%8D%E5%A4%A7%E6%8A%95%E8%B3%87%E4%B9%8B%E6%9C%AA%E4%BE%86%E8%A8%88%E5%8A%83) Beyond disclosed capital commitments, the Group currently has no other significant investment or capital asset acquisition plans but will continue to seek new business development opportunities - The Group will continue to seek new business development opportunities, but currently has no other significant investment plans beyond the disclosed capital commitments[76](index=76&type=chunk) [Events After Reporting Period](index=21&type=section&id=12.%20%E5%A0%B1%E5%91%8A%E6%9C%9F%E5%BE%8C%E4%BA%8B%E9%A0%85) Subsequent to the reporting period, Huida Factoring completed a capital increase, introducing Suzhou Wuzhong Urban Construction Investment Development Co., Ltd. as a new shareholder, reducing the company's stake to 52.94%, and the Group injected RMB 9 million into the newly established Huifang Rongcui for equity investment - On July 2, 2021, Huida Factoring completed a capital increase, introducing a new state-owned shareholder, reducing the Company's shareholding from **60.00%** to **52.94%**[78](index=78&type=chunk) - On July 26, 2021, the Group injected **RMB 9.0 million** into Huifang Rongcui to commence equity investment business[79](index=79&type=chunk) [Future Outlook](index=21&type=section&id=%E6%9C%AA%E4%BE%86%E5%B1%95%E6%9C%9B) The company will continue to deepen the development of its business segments, with Inclusive Finance focusing on small, diversified loans and national brand expansion, Technology Finance leveraging state-owned participation for financing, Insurance Agency exploring new co-insurance models, and headquarters advancing refined management, aiming for headquarters building completion, and fostering new investment businesses - Inclusive Finance: Adhere to the principles of small, diversified, and short-term loans, promoting national brand expansion for pawn businesses Technology Finance: Centered on commercial factoring within supply chain scenarios, leveraging state-owned participation advantages to secure bank financing Insurance Agency: Explore new co-insurance cooperation models and increase the proportion of self-operated business Headquarters and Others: Advance the construction of the headquarters building and cultivate emerging businesses such as art, distressed asset, and equity investments[81](index=81&type=chunk)[82](index=82&type=chunk) [Other Information](index=22&type=section&id=%E5%85%B6%E4%BB%96%E8%B3%87%E6%96%99) [Directors' and Chief Executive's Interests in Shares and Share Options](index=22&type=section&id=%E8%91%A3%E4%BA%8B%E5%8F%8A%E6%9C%80%E9%AB%98%E8%A1%8C%E6%94%BF%E4%BA%BA%E5%93%A1%E6%96%BC%E8%82%A1%E4%BB%BD%E3%80%81%E7%9B%B8%E9%97%9C%E8%82%A1%E4%BB%BD%E5%8F%8A%E5%82%B5%E5%88%B8%E4%B9%8B%E6%AC%8A%E7%9B%8A%E5%8F%8A%E6%B7%A1%E5%80%89) This section details the interests of the company's directors and chief executive in the shares, underlying shares, and debentures of the company and its associated corporations as of June 30, 2021, including directly held ordinary shares and interests through share option schemes - Disclosed the number of ordinary shares and share options held by several directors, including Mr. Wu Min and Mr. Zhang Changsong[86](index=86&type=chunk) [Major Shareholders' Shareholding Status](index=24&type=section&id=%E4%B8%BB%E8%A6%81%E8%82%A1%E6%9D%B1%E6%8C%81%E8%82%A1%E6%83%85%E6%B3%81) As of June 30, 2021, the report lists major shareholders holding 5% or more interest in the company, including Xiaolai Investment Limited (23.90%), Baoxiang Investment Limited (7.77%), Miracle Capital Limited (6.57%), and their ultimate beneficial owners Major Shareholders' Shareholding Percentage (As of June 30, 2021) | Shareholder Name/Ultimate Controller | Shareholding Percentage | | :--- | :--- | | Xiaolai Investment Limited (Zhu Tianxiao) | 23.90% | | Xilai Investment Limited (Zhu Tianxiao) | 5.98% | | Baoxiang Investment Limited (Zhang Xiangrong) | 7.77% | | Miracle Capital Limited (Ge Jian) | 6.57% | | Nanfang Dayang Investment Limited (Chen Yannan) | 5.98% | [Share Option Scheme](index=25&type=section&id=%E8%B3%BC%E8%82%A1%E6%AC%8A%E8%A8%88%E5%8A%83) The company adopted a 10-year share option scheme in 2014, with 50 million options granted as of June 30, 2021, of which 26.25 million remain unexercised, representing approximately 2.41% of issued share capital, with an exercise price of HKD 0.62 per share and expiring by September 12, 2021 - As of June 30, 2021, **26,249,000** share options remained unexercised under the share option scheme[101](index=101&type=chunk)[115](index=115&type=chunk) - The exercise price for granted share options is **HKD 0.62** per share, exercisable before September 12, 2021[113](index=113&type=chunk) [Corporate Governance Practices](index=28&type=section&id=%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB%E5%B8%B8%E8%A6%8F) During the reporting period, the company consistently complied with the Corporate Governance Code, with the only deviation being the combined roles of Chairman and Chief Executive Officer held by Mr. Wu Min, a structure the Board deems effective for strategy execution - The company deviated from the Corporate Governance Code's requirement for separate roles of Chairman and Chief Executive Officer, with Mr. Wu Min holding both positions[126](index=126&type=chunk) [Dividends](index=29&type=section&id=%E8%82%A1%E6%81%AF) The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2021 - The Board does not recommend the payment of an interim dividend for 2021[131](index=131&type=chunk) [Interim Financial Information](index=30&type=section&id=%E4%B8%AD%E6%9C%9F%E8%B2%A1%E5%8B%99%E8%B3%87%E6%96%99) [Review Report on Interim Financial Information](index=30&type=section&id=%E4%B8%AD%E6%9C%9F%E8%B2%A1%E5%8B%99%E8%B3%87%E6%96%99%E7%9A%84%E5%AF%A9%E9%96%B1%E5%A0%B1%E5%91%8A) PricewaterhouseCoopers, the company's auditor, reviewed the interim financial information in accordance with Hong Kong Standard on Review Engagements 2410, finding no matters that would lead them to believe the interim financial information was not prepared in all material respects in accordance with Hong Kong Accounting Standard 34 - The auditor, PricewaterhouseCoopers, issued an unqualified review report on the interim financial information[135](index=135&type=chunk) [Interim Condensed Consolidated Statement of Comprehensive Income](index=31&type=section&id=%E4%B8%AD%E6%9C%9F%E7%B0%A1%E6%98%8E%E5%90%88%E4%BD%B5%E7%B6%9C%E5%90%88%E6%94%B6%E7%9B%8A%E8%A1%A8) For the six months ended June 30, 2021, the company recorded operating revenue of RMB 135 million, profit for the period of RMB 23.06 million, with RMB 14.78 million attributable to owners of the company, and basic earnings per share of RMB 0.014 Key Items from Interim Condensed Consolidated Statement of Comprehensive Income (For the six months ended June 30) | Item | 2021 (RMB thousands) | 2020 (RMB thousands) | | :--- | :--- | :--- | | Operating Revenue | 134,754 | 138,174 | | Net Operating Income | 68,816 | 29,324 | | Profit Before Income Tax | 35,147 | 12,270 | | Profit for the Period | 23,064 | 4,782 | | Profit Attributable to Owners of the Company | 14,776 | 893 | [Interim Condensed Consolidated Statement of Financial Position](index=32&type=section&id=%E4%B8%AD%E6%9C%9F%E7%B0%A1%E6%98%8E%E5%90%88%E4%BD%B5%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81%E8%A1%A8) As of June 30, 2021, the company's total assets were RMB 2.713 billion, total liabilities RMB 764 million, and total equity RMB 1.949 billion, with net loans to customers, a core asset, at RMB 1.889 billion Key Items from Interim Condensed Consolidated Statement of Financial Position | Item | As of June 30, 2021 (RMB thousands) | As of December 31, 2020 (RMB thousands) | | :--- | :--- | :--- | | **Assets** | | | | Loans to Customers | 1,888,767 | 1,814,211 | | Total Assets | 2,712,986 | 2,532,555 | | **Equity and Liabilities** | | | | Total Liabilities | 764,472 | 590,657 | | Total Equity | 1,948,514 | 1,941,898 | | Total Equity and Liabilities | 2,712,986 | 2,532,555 | [Interim Condensed Consolidated Statement of Cash Flows](index=36&type=section&id=%E4%B8%AD%E6%9C%9F%E7%B0%A1%E6%98%8E%E5%90%88%E4%BD%B5%E7%8F%BE%E9%87%91%E6%B5%81%E9%87%8F%E8%A1%A8) For the six months ended June 30, 2021, operating activities resulted in a net cash outflow of RMB 107 million, primarily due to increased loans to customers; investing activities had a net outflow of RMB 28.36 million; and financing activities generated a net inflow of RMB 123 million, with cash and cash equivalents at period-end totaling RMB 90.88 million Summary of Interim Condensed Consolidated Statement of Cash Flows (For the six months ended June 30) | Item | 2021 (RMB thousands) | 2020 (RMB thousands) | | :--- | :--- | :--- | | Net Cash (Outflow)/Inflow from Operating Activities | (107,104) | 425,679 | | Net Cash Outflow from Investing Activities | (28,360) | (2,336) | | Net Cash Inflow/(Outflow) from Financing Activities | 122,664 | (523,010) | | Cash and Cash Equivalents at Period-end | 90,883 | 81,098 | [Notes to Interim Condensed Consolidated Financial Information](index=37&type=section&id=%E4%B8%AD%E6%9C%9F%E7%B0%A1%E6%98%8E%E5%90%88%E4%BD%B5%E8%B2%A1%E5%8B%99%E4%BF%A1%E6%81%AF%E9%99%84%E8%A8%BB) The financial notes detail the basis of financial statement preparation, significant accounting policies, financial risk management, segment information, and specifics of each statement item, including credit risk exposure, fair value hierarchy of financial instruments, detailed performance of business segments, loan portfolio details and provisions, borrowing structure, and related party transactions - Notes provide detailed disclosure of the Group's three main operating segments: Inclusive Finance Business Segment, Technology Finance Business Segment, and Insurance Agency Business Segment, along with their respective revenue, profit, asset, and liability information[198](index=198&type=chunk)[199](index=199&type=chunk)[200](index=200&type=chunk) - Note 28 details the classification of loans to customers (mortgage/non-mortgage), aging analysis, overdue status, and changes in expected credit loss provisions, which are central to understanding the company's asset quality[264](index=264&type=chunk)[274](index=274&type=chunk)[277](index=277&type=chunk) - Notes 34 and 37 disclose the company's borrowing details and significant related party transactions, including guarantees from related parties, which are crucial for assessing the company's financing capabilities and potential risks[313](index=313&type=chunk)[323](index=323&type=chunk) [Definitions](index=83&type=section&id=%E9%87%8B%E7%BE%A9) This section provides clear definitions for specific terms used throughout the report, such as 'the Company,' 'the Group,' 'the Board,' 'Listing Rules,' and abbreviations for various subsidiaries - This section provides clear definitions for specific terms used in the report, such as 'the Company,' 'the Group,' 'the Board,' 'Listing Rules,' and abbreviations for various subsidiaries[331](index=331&type=chunk)

Financial Performance - Operating revenue for 2020 was RMB 259.8 million, a decrease of 24.6% from RMB 344.1 million in 2019[8] - Profit attributable to equity holders was RMB 2.2 million, down 95.6% from RMB 50.4 million in 2019[8] - Total assets decreased to RMB 2.53 billion from RMB 3.00 billion in 2019, a decline of 15.6%[8] - Cash and cash equivalents dropped to RMB 434.1 million from RMB 1.05 billion in 2019, a decrease of 58.6%[8] - Total liabilities decreased to RMB 590.7 million from RMB 1.05 billion in 2019, a decline of 43.8%[8] - The company reported a pre-tax loss of RMB 45,458,000 for 2020, compared to a loss of RMB 8,083,000 in 2019[50] - The company’s total assets as of December 31, 2020, were RMB 1,941,898 thousand, slightly down from RMB 1,948,444 thousand in 2019[45] - The net asset value remained relatively stable, with a slight decrease from RMB 1,948,444 thousand in 2019 to RMB 1,941,898 thousand in 2020[45] - Operating costs increased significantly to RMB 21,504,000 in 2020 from RMB 7,253,000 in 2019, indicating a rise of approximately 196.5%[50] - The total impairment provision for loans as of December 31, 2020, was RMB 603,670,000, which accounted for about 24.97% of the total loans granted[56] Loan Activity - Loans granted to customers increased to RMB 1.81 billion from RMB 1.70 billion in 2019, an increase of 6.4%[8] - In 2020, the total amount of new real estate mortgage loans granted was RMB 405 million, an increase from RMB 329 million in 2019, with the number of loans rising from 386 to 527[25] - The total amount of new non-mortgage loans granted was RMB 784 million in 2020, down from RMB 922 million in 2019, with the number of loans increasing from 47 to 65[25] - The total amount of new loans granted by the Huifang Rongtong fund was RMB 2,328 million in 2020, a slight decrease from RMB 2,620 million in 2019, while the number of loans increased from 253 to 370[30] - The total amount of new loans granted by Dongshan Microfinance was RMB 341 million in 2020, significantly down from RMB 941 million in 2019, with the number of loans decreasing from 623 to 159[34] - New mortgage loans added in 2020 amounted to RMB 19,384,000, a significant decrease from RMB 132,385,000 in 2019[58] - Dongshan Small Loan issued new loans totaling RMB 341 million in 2020, a decrease from RMB 941 million in 2019, attributed to tightened regulatory policies[35] - The number of new loans issued by Dongshan Small Loan fell to 159 in 2020 from 623 in 2019, reflecting a significant decline in lending activity[35] Strategic Initiatives - The company plans to enhance its market competitiveness and expand its national strategy in 2021[17] - The registered capital for commercial factoring increased to RMB 100 million following the introduction of state-owned strategic investment[16] - The company aims to optimize human resources and reduce administrative and interest expenses significantly compared to 2019[16] - The company is focusing on expanding into art pawn, special asset management, and equity investment sectors[17] - The company aims to enhance its position as a leading provider of inclusive financial services in China, focusing on small and medium-sized enterprises and individuals[24] - The company has established strategic partnerships with over 30 banks to enhance its lending capabilities and service offerings[30] - The company is actively seeking alternative products to replace the halted lending business due to regulatory changes[35] - The company plans to continue promoting refined management to achieve revenue growth and cost reduction in the future[50] Human Resources and Management - The workforce decreased to 140 full-time employees, down from 161 in the previous year, with employee compensation and benefits expenses amounting to approximately RMB 28,416 thousand[78] - The management team emphasized the importance of risk management, with a new framework being introduced to mitigate potential financial risks[87] - The company has established an Audit Committee to assist the Board in reviewing financial reporting, risk management, and internal controls[104] - The Compensation Committee is responsible for reviewing the remuneration policies for directors and senior management, ensuring transparency in the compensation process[105] - The Nomination Committee evaluates the composition of the Board and provides recommendations for the appointment of directors[106] Future Outlook - The company provided a positive outlook for the next fiscal year, projecting a revenue growth of 10% to 12%[86] - New product launches are expected to contribute an additional $50 million in revenue over the next year[86] - The company is investing in technology development, with a budget allocation of $10 million for R&D in the upcoming year[86] - Market expansion plans include entering two new regions, aiming for a 5% market share within the first year[86] - The company is considering strategic acquisitions to enhance its service offerings, with a target of identifying at least three potential candidates by Q3[86] - A new marketing strategy is being implemented, focusing on digital channels, which is expected to increase customer engagement by 30%[86] - The company aims to reduce operational costs by 8% through efficiency improvements in the supply chain[86] Shareholder Information - Major shareholders include 膀来投资有限公司 with 260,000,000 shares (23.90%) and 喜来投资有限公司 with 65,000,000 shares (5.98%)[159] - The company reported a total of 1,087,769,000 shares issued as of December 31, 2020[156] - The company’s major shareholders are primarily controlled by朱天晓, who has a beneficial interest in 325,000,000 shares (29.88%)[159] - The company has a stock option plan with various directors holding options totaling 6,000,000 shares[150] - The share option plan allows for the issuance of options to any employee or director of the group, regardless of their employment status[166] - The largest customer accounted for 11.2% of the total interest income from customer loans for the year ended December 31, 2020, while the top five customers collectively represented 27.0% of the total interest income from customer loans[185] Compliance and Governance - The company has disclosed no interests held by directors in the company's shares as defined under the Securities and Futures Ordinance[98] - The company has maintained compliance with the listing rules regarding the disclosure of directors' interests[98] - The company confirmed compliance with the disclosure requirements under Chapter 14A of the Listing Rules regarding related party transactions[199] - The company did not enter into any arrangements allowing directors to acquire securities of the company for the year ended December 31, 2020[193] - There were no significant contracts entered into between the company and its controlling shareholders for the year ended December 31, 2020[194] - The company has established a compensation committee to review its compensation policies based on overall performance and market comparisons[187]

Financial Performance - Operating revenue for the six months ended June 30, 2020, was RMB 138,174,000, a decrease of 23% compared to RMB 178,659,000 in 2019[10]. - Profit attributable to owners of the company for the same period was RMB 893,000, down 97% from RMB 31,141,000 in 2019[10]. - Total operating revenue for the first half of 2020 was RMB 138,174 thousand, a decrease of 22.7% compared to RMB 178,659 thousand in 2019[35]. - The net profit for the six months ended June 30, 2020, was RMB 4,782,000, a significant decline of 87.8% compared to RMB 39,208,000 in the previous year[154]. - The total comprehensive income for the period was RMB 4,782,000, down from RMB 39,208,000 in the prior year[154]. - The company did not recommend the payment of an interim dividend for the six months ended June 30, 2020[145]. Assets and Liabilities - Total assets as of June 30, 2020, were RMB 2,525,818,000, a decrease of 16% from RMB 3,001,631,000 at the end of 2019[10]. - Total liabilities were RMB 588,910 thousand, down from RMB 1,053,187 thousand, showing a reduction of approximately 44%[158]. - The total equity as of June 30, 2020, was RMB 1,936,908 thousand, compared to RMB 1,948,444 thousand as of December 31, 2019, a decrease of approximately 1%[158]. - The equity attributable to owners of the company was RMB 1,779,248 thousand, slightly down from RMB 1,793,103 thousand, a decrease of about 1%[161]. Loans and Credit Management - Loans granted to customers increased by 6% to RMB 1,803,589,000 from RMB 1,703,704,000 in 2019[10]. - The total amount of new loans issued by Huifang Rongtong was RMB 1,243 million, a decrease from RMB 1,339 million in the previous year, while the number of new loans increased to 182 from 106[19]. - The total amount of new loans issued by Dongshan Microfinance was RMB 126 million, a significant decrease from RMB 451 million in the previous year, attributed to tightened regulatory policies[23]. - The impairment provision for loans as of June 30, 2020, was RMB 564,338 thousand, accounting for about 23.83% of the total loans granted before provisions, which is an increase of RMB 98,294 thousand compared to the end of the previous year[56]. - The expected credit loss for the period was RMB 79,097,000, an increase of 26.3% from RMB 62,639,000 in the previous year[154]. Operational Efficiency - The company reported a significant reduction in operating expenses, which were RMB 22,832,000, down 46% from RMB 41,968,000 in 2019[10]. - The management is confident that adhering to its existing development strategy will create sustainable value for shareholders[12]. - The company has focused on cost control and budget management in response to the challenges posed by the COVID-19 pandemic[12]. - Administrative expenses decreased to RMB 28,776 thousand from RMB 36,563 thousand in 2019, reflecting cost control measures[35]. Business Development and Strategy - The company aims to enhance its position as a leading provider of inclusive financial services in China, with operations covering Suzhou, Hong Kong, Chengdu, Wuxi, and Hefei[13]. - The company plans to continue exploring new business development opportunities and will focus on expanding its influence and recognition in the microfinance sector[86]. - The company aims to enhance its financing capabilities and service depth in commercial factoring while establishing a supply chain data platform in the fast-moving consumer goods sector[86]. - The company is actively seeking alternative products to replace the discontinued small loan business due to regulatory changes[24]. Shareholder Information - Major shareholder 膀　陈投資有限公司 holds 260,000,000 shares, accounting for 23.90% of the total shares[105]. - Major shareholder 朱天曉 has a beneficial interest in 325,000,000 shares, representing 29.88% of the total shares[105]. - Major shareholder 喜來投資有限公司 owns 65,000,000 shares, which is 5.98% of the total shares[105]. - Major shareholder 奇蹟資本有限公司 holds 71,500,000 shares, accounting for 6.57% of the total shares[105]. - The company has a significant ownership structure with multiple shareholders holding over 5% of the shares, indicating a concentrated ownership[105]. Cash Flow and Financing - Net cash inflow from operating activities for the six months ended June 30, 2020, was RMB 425,679 thousand, primarily due to the lifting of restrictions on domestic equity investments[79]. - Net cash outflow from financing activities was RMB 523,010 thousand, mainly due to the repayment of bank loans to reduce financial costs[80]. - The company received RMB 851,554 thousand from borrowings, a decrease from RMB 1,251,343 thousand in the previous year[171]. - The company repaid borrowings amounting to RMB 1,357,267 thousand, compared to RMB 1,041,540 thousand in the same period of 2019[171]. Compliance and Governance - The company has complied with the corporate governance code principles and rules, except for the separation of the roles of chairman and CEO[137]. - All directors confirmed compliance with the standard code of conduct for securities trading during the six-month period ending June 30, 2020[138]. - The company’s independent auditor did not find any issues that would lead them to believe the interim financial information was not prepared in accordance with the relevant accounting standards[151].

Financial Performance - Operating revenue for 2019 was RMB 344,134,000, an increase of 4.4% from RMB 330,229,000 in 2018[24] - Profit attributable to equity holders was RMB 50,429,000, a decrease of 17.2% from RMB 60,996,000 in 2018[24] - Total assets reached RMB 3,001,631,000, up from RMB 2,800,226,000 in 2018, representing a growth of 7.2%[24] - The company reported operating revenue of RMB 344,134 thousand for the year ended December 31, 2019, an increase from RMB 330,229 thousand in 2018, representing a growth of approximately 2.73%[65] - The net profit attributable to equity holders was RMB 50,429 thousand, down from RMB 60,996 thousand in the previous year, indicating a decrease of about 17.2%[65] - The company reported a significant increase in revenue, achieving a total of $1.5 billion, representing a 20% year-over-year growth[135] - The company provided an optimistic outlook for the next quarter, projecting a revenue increase of 25% to $1.875 billion[135] Assets and Liabilities - Bank deposits and cash on hand increased to RMB 1,047,858,000 from RMB 810,138,000, a rise of 29.2%[24] - Loans granted to customers decreased to RMB 1,703,704,000 from RMB 1,738,283,000, a decline of 2.0%[24] - Total liabilities increased to RMB 1,053,187,000 from RMB 903,198,000, reflecting a growth of 16.6%[24] - Net assets amounted to RMB 1,948,444,000, an increase from RMB 1,897,028,000 in 2018, showing a growth of 2.7%[24] - The total equity as of December 31, 2019, was RMB 1,948.4 million, an increase of RMB 51.4 million or 2.7% from December 31, 2018[95] - The capital-to-debt ratio as of December 31, 2019, was 29.5%, compared to 27.4% in 2018[96] Loan Activities - The total amount of new mortgage loans granted in 2019 was RMB 329 million for real estate and RMB 66 million for movable property, showing a decrease of 17.4% and 35.8% respectively compared to 2018[45] - The total amount of new non-mortgage loans granted in 2019 was RMB 922 million, which is a slight increase of 1% from RMB 913 million in 2018[45] - The total amount of new loans granted by the Huifangrongtong fund in 2019 was RMB 2,620 million, representing a 18.6% increase from RMB 2,210 million in 2018[50] - The total number of new loans granted by the Dongshan Microfinance in 2019 was 623, down from 962 in 2018, while the total loan amount decreased to RMB 941 million from RMB 1,067 million[53] - The total loan balance for newly added litigated loans as of December 31, 2019, was RMB 167,959 thousand, with a litigated loan balance accounting for 28.1% of the total loan balance[87] - The company’s total loan balance for mortgage loans was RMB 263,784 thousand and for non-mortgage loans was RMB 202,260 thousand as of December 31, 2019[86] Business Strategy and Development - The company is focusing on diversified financial services for SMEs and individuals, leveraging fintech and big data[34] - In 2020, the company aims to enhance market competitiveness and explore opportunities in emerging financial sectors[35] - The company established four major business divisions in 2019, focusing on inclusive finance, technology finance, online lending intermediary, and insurance agency[40] - The company aims to become a leading provider of inclusive financial services in China, with operations expanding to key cities including Suzhou, Chengdu, Wuhan, and Hefei[44] - The company is committed to exploring business models in consumer finance and supply chain finance while maintaining traditional accounts receivable factoring operations[121] Risk Management and Compliance - The company emphasizes risk control in its inclusive finance division, which includes mortgage and non-mortgage loan products aimed at small and medium enterprises[44] - The Technology Finance Division is focused on developing a robust big data risk control system to enhance market competitiveness and is seeking to introduce state-owned capital into technology factoring business[121] - The company is focused on risk management and compliance in its financial services, ensuring sustainable growth and regulatory adherence[122] - The company has established compliance procedures to ensure adherence to laws and regulations affecting its operations[171] Management and Governance - The management team consists of nine directors, including two executive directors, four non-executive directors, and three independent non-executive directors[125] - The Chief Financial Officer has over 20 years of auditing and accounting experience, enhancing the company's financial management capabilities[127] - The company emphasizes the importance of strategic investments and overall management in its operations, led by experienced executives[128] - The company has established an Audit Committee to assist the board in reviewing financial information, risk management, and internal controls[154] - The Compensation Committee is responsible for reviewing the remuneration policies for directors and senior management, ensuring transparency in the compensation process[155] - The Nomination Committee evaluates the composition of the board and provides recommendations for director appointments[156] Employee and Operational Metrics - As of December 31, 2019, the company had 161 full-time employees, a decrease of 7 from the previous year, with total employee compensation and benefits expenses of approximately RMB 38,851 thousand[114] - The company’s administrative expenses were reduced to RMB 70,300 thousand in 2019 from RMB 73,721 thousand in 2018, showing effective cost control measures[65] Future Outlook and Investments - The company plans to propose a dividend of HKD 0.0130 per share, totaling HKD 14.1 million (approximately RMB 12.7 million) for the year ended December 31, 2019[116] - The company is investing in new technology development, allocating $50 million towards R&D initiatives[135] - Market expansion plans include entering three new international markets by the end of the year, targeting a 10% increase in global market share[135] - The company is considering strategic acquisitions to enhance its product offerings, with a budget of $300 million earmarked for potential deals[135] Environmental and Regulatory Compliance - The group is committed to complying with environmental laws and regulations, ensuring adherence to relevant legal requirements[171] - The company has no significant investment or capital asset acquisition plans beyond those disclosed in the report, but will continue to seek new business development opportunities[115]

Financial Performance - Interest income for the six months ended June 30, 2019, was RMB 153,083,000, representing a 20% increase from RMB 127,947,000 in the same period of 2018[11]. - Net interest income rose to RMB 127,146,000, a 28% increase compared to RMB 99,163,000 in the previous year[11]. - Profit attributable to owners of the company reached RMB 31,141,000, marking a 23% increase from RMB 25,339,000 in 2018[11]. - Total assets as of June 30, 2019, amounted to RMB 3,132,212,000, a 12% increase from RMB 2,800,226,000 at the end of 2018[11]. - Cash and bank deposits increased by 26% to RMB 1,001,846,000 from RMB 797,964,000 in 2018[11]. - The net profit attributable to equity holders for the same period was RMB 31,141 thousand, up from RMB 25,339 thousand in 2018, reflecting a year-on-year increase of about 22.1%[35]. - The total equity attributable to equity holders of the company was RMB 1,773,812 thousand as of June 30, 2019, compared to RMB 1,709,938 thousand at the end of 2018, an increase of 3.7%[149]. - The total comprehensive income for the period was RMB 39,208 thousand, compared to RMB 31,690 thousand for the same period in 2018, indicating an increase of 23.5%[149]. Loan and Business Operations - Loans granted to customers totaled RMB 1,815,020,000, reflecting a 4% increase from RMB 1,738,283,000 in the previous year[11]. - New mortgage loans granted in the first half of 2019 totaled RMB 192 million for real estate and RMB 23 million for consumer goods, with a total of 190 and 1,530 loans granted respectively[17]. - The company issued new loans totaling RMB 1,339 million in the first half of 2019, compared to RMB 751 million in the same period of 2018, representing an increase of 78.2%[22]. - The total amount of new loans issued by Dongshan Microfinance reached RMB 451 million in the first half of 2019, up from RMB 434 million in the same period of 2018[25]. - The company established four major business divisions: Inclusive Finance, Technology Finance, Online Lending Intermediary, and Insurance Agency[15]. - The Inclusive Finance division focuses on small and micro-enterprises, with operations expanding to over ten cities including Suzhou, Nanjing, and Hong Kong[16]. - The company aims to enhance its position as a leading provider of inclusive financial services in China[16]. Segment Performance - The inclusive revenue from the Inclusive Finance Division reached RMB 128,567 thousand, with a pre-tax profit of RMB 29,834 thousand, indicating a strong performance in this core business segment[39]. - The Technology Finance Division generated revenue of RMB 1,266 thousand, with a pre-tax profit of RMB 1,625 thousand, despite being newly established and incurring significant R&D expenses[40]. - The Online Lending Intermediary Division reported revenue of RMB 7,077 thousand and a pre-tax profit of RMB 2,161 thousand, although it faced regulatory challenges leading to a reduction in business scale[43]. - The Insurance Agency Division achieved revenue of RMB 684 thousand and a pre-tax profit of RMB 97 thousand, with ongoing expansion of strategic partnerships with insurance companies[44]. Financial Position and Liabilities - The total liabilities increased to RMB 1,220,459 thousand as of June 30, 2019, compared to RMB 903,198 thousand as of December 31, 2018, representing a growth of 35.2%[146]. - Current liabilities totaled RMB 1,214,271 thousand, up from RMB 903,198 thousand, indicating a significant increase of 34.4%[146]. - As of June 30, 2019, the company had a total impairment provision of RMB 394,915 thousand, accounting for approximately 18% of the outstanding loans granted to customers[47]. - The company reported new litigation loans totaling RMB 30,434 thousand for mortgage loans and RMB 9,849 thousand for non-mortgage loans, with litigation loans accounting for 25.6% of the total loans granted[51]. Cash Flow and Financing Activities - The net cash outflow from operating activities was RMB 132,527 thousand for the six months ended June 30, 2019, primarily due to an increase in loan issuance[70]. - The net cash inflow from financing activities was RMB 182,349 thousand during the same period, mainly driven by increased credit financing to support business development[71]. - Bank borrowings amounted to RMB 987,615 thousand as of June 30, 2019, up from RMB 766,286 thousand on December 31, 2018, representing a growth of 29.0%[56]. Employee and Administrative Expenses - The company had 182 full-time employees, an increase of 14 from 168 as of December 31, 2018[76]. - Employee compensation and benefits for the six months ended June 30, 2019, amounted to RMB 20,874,000, an increase of RMB 2,079,000 compared to the same period last year[76]. - The company’s administrative expenses for the first half of 2019 were RMB 36,563 thousand, slightly up from RMB 35,693 thousand in the previous year[35]. Corporate Governance and Shareholder Information - The company has complied with the corporate governance code principles and provisions, except for the separation of the roles of chairman and CEO[125]. - Major shareholder Xiaolai Investment Limited holds 260,000,000 shares, representing 23.92% of the total issued shares[98]. - Major shareholder Zhu Tianxiao has control over 325,000,000 shares through related entities, accounting for 29.90% of the total issued shares[98]. - The company has granted a total of 50,000,000 stock options under its stock option plan, with 11,550,000 options exercised as of June 30, 2019[105]. New Business Developments - The company acquired Sichuan Aomeishu Technology Co., Ltd. on March 8, 2019, to expand its lending business capabilities[62]. - The company established Lianqietong (Shanghai) Technology Co., Ltd. with an investment of RMB 24,955 thousand to develop supply chain financial technology services[63]. - The company aims to expand its lending business and enhance cooperation with banks and local governments to meet customer demand[84].

CHINA HUIRONG FINANCIAL HOLDINGS LIMITED 中國匯融金融控股有限公司 （於開曼群島註冊成立的有限公司） 股份代號：1290 匯 融 finner 我 們 立 志 成 為 中 國 領 先 的 綜 合 性 金融服務供應商。 | --- | --- | |--------------------------------------------------------------------------------------|-------| | | | | 我們正努力為我們的客戶提供抵押貸款、信用貸 款、網絡借貸中介等多種金融服務,以及開展投 | | I 75 合併財務報表及獨立核數師報告 I I D 目 錄 公司資料 02 財務摘要 03 80 合併綜合收益表 主席致辭 04 81 合併財務狀況表 管理層討論與分析 06 83 合併股東權益變動表 董事及高級管理層 26 85 合併現金流量表 董事會報告 33 86 合併財務報表附註 企業管治報告 53 172 釋義 風險管理與內部監控報告 65 176 詞彙 環境、社會及管治報告 70 環境・社會及管治報告 70 中國匯融 ...