Financial Performance - The company achieved a revenue of RMB 959.27 million in 2024, representing a 20% increase compared to the previous year[18]. - Cloud subscription revenue reached RMB 653.81 million, a growth of 34%, accounting for nearly 70% of total revenue[18]. - The profit attributable to the owners of the parent company was RMB 33.46 million, an increase of 111% year-on-year[18]. - The company's gross profit for 2024 was RMB 692.05 million, compared to RMB 538.60 million in 2023[15]. - Basic earnings per share rose to RMB 10.4 in 2024, up from RMB 5.0 in 2023[15]. - Operating cash flow improved significantly to a net inflow of RMB 91.30 million, compared to a net outflow of RMB 42.05 million in the previous year[38]. - The number of new paid enterprise users for cloud services increased by 143,000 during the reporting period[38]. - The company's gross profit was RMB 692.05 million, reflecting a 28% growth from the previous year[38]. - The net profit attributable to the parent company was RMB 33.46 million, a significant increase of 111% year-on-year[50]. - Basic earnings per share rose to RMB 0.104, marking a 108% increase compared to the previous year[38]. Assets and Liabilities - Total assets as of December 31, 2024, amounted to RMB 1,694.66 million, up from RMB 1,585.58 million in 2023[15]. - Total liabilities increased to RMB 791.39 million in 2024 from RMB 715.92 million in 2023[15]. - As of the end of the reporting period, the company had cash and bank deposits of RMB 1,259.03 million, indicating a healthy financial position[38]. - The current ratio as of December 31, 2024, was 193%, down from 229% in the previous year, mainly due to the purchase of long-term time deposits and an increase in contract liabilities[69]. Market Strategy and Product Development - The company is focusing on the digital transformation of small and micro enterprises, enhancing product competitiveness through AI technology[18]. - The company aims to transition from application services to ecological platform services to promote scalable and efficient business development[18]. - The company accelerated product innovation in the "Five New" areas, enhancing the automation and intelligence of digital tax and finance services, and developed a new generation enterprise-level AI native application development platform[20]. - The company introduced an intelligent tax BaaS service for micro-enterprises, improving the efficiency and accuracy of automated accounting and tax reporting through AI technology[20]. - The company aims to expand its market share in the micro-enterprise cloud service sector, targeting to establish a leading position by 2025[22]. - The company plans to enhance its marketing strategies by leveraging AI for precise customer acquisition and improving operational efficiency, resulting in rapid growth in direct sales revenue[21]. - The company will continue to focus on the integration of AI technology in product innovation and operational processes, promoting a "customer success" principle[22]. - The company is committed to expanding its ecosystem partnerships with telecom operators, banks, and internet platforms to enhance product application value and market coverage[28]. - The company will implement a multi-channel strategy, including direct sales, distribution, and co-sales, to support the digital transformation of micro-enterprises[26]. - The company is focused on the globalization of its products, ensuring localization in finance and business aspects to expand its operational scope[25]. Leadership and Management - Yang Yuchun has been the President since January 9, 2017, and has over 25 years of experience in the software industry[81]. - Liu Junhui has served as an independent non-executive director since September 8, 2011, providing independent financial opinions[82]. - Wu Xiaoqing has been an independent non-executive director since July 26, 2022, with extensive experience in financial management in large state-owned enterprises[83]. - Cui Qiang has been an independent non-executive director since September 8, 2023, with over 20 years of experience in the enterprise service sector[84]. - Guo Xinping has been the chairman of the supervisory board since September 8, 2011, and has held various positions in finance and management[85]. - The company has seen significant leadership changes with the introduction of new senior executives focusing on R&D and channel operations[95][96]. - The company has a strong emphasis on user growth and customer success, led by Ms. Xiong Xiaoxiao since March 18, 2022[94]. - Financial oversight is managed by Ms. Gao Jin, who has been the Chief Financial Officer since May 28, 2018, ensuring strategic financial planning and budgeting[91]. - The company has a robust human resources team, with Ms. Ren Jie and Ms. Xia Yuhan serving as employee representative supervisors since April 20, 2018, and September 8, 2020, respectively[89][90]. - The company is committed to expanding its market presence and enhancing its product offerings through strategic leadership appointments[94][95]. Shareholder and Equity Structure - As of December 31, 2024, the company's share capital structure consists of 243,272,499 domestic shares (74.68%) and 82,500,000 H-shares (25.32%), totaling 325,772,499 shares[109]. - The company plans to convert 53,401,211 domestic shares (16.39% of total issued shares) into H-shares, pending regulatory approvals[109]. - The controlling shareholder, Yonyou, holds 216,458,791 domestic shares, accounting for approximately 66.44% of the company's total equity[125]. - The company has a significant ownership structure with major shareholders holding a combined total of 216,458,791 domestic shares, which is approximately 88.98% of the related equity[125]. - The total number of shares held by the company's directors, supervisors, and senior management in the company and its affiliated entities is 222,210,241 domestic shares, representing approximately 68.21% of the company's total equity[121]. Employee and Compensation Policies - The company has established a competitive, performance-oriented compensation policy based on market levels, employee performance, and contributions[141]. - The employee compensation includes basic salary, performance bonuses, and allowances, with social insurance contributions made monthly[141]. - The company has implemented long-term incentive measures, including employee stock ownership plans and cash-based long-term incentives, to attract and retain key talent[141]. - The total number of incentive shares granted under the employee stock ownership plan is capped at 15,412,716 shares, representing approximately 7.10% of the total issued share capital as of December 28, 2020[148]. - The annual allowance for independent non-executive directors is RMB 150,000 (tax inclusive), while independent supervisors receive RMB 80,000 (tax inclusive)[140]. Corporate Governance and Compliance - The board of directors includes a mix of executive and independent directors, ensuring governance and oversight[119]. - The company has confirmed compliance with non-competition agreements from January 1, 2024, to December 31, 2024[173]. - The company has not entered into any significant contracts with controlling shareholders or their subsidiaries during the reporting period[168]. - The group faces various risks and uncertainties, with corresponding response policies and potential opportunities outlined in the management discussion[107]. - The board report includes information on the group's environmental policies and performance, as well as compliance with relevant laws and regulations[107]. Capital and Investment Activities - The company has undergone a capital reduction from RMB 40.357 million to RMB 5.357 million, maintaining a 10% stake in the partnership post-reduction[178]. - The company and Beijing Yongyou Ronglian Technology Co., Ltd. agreed to increase capital in Changjietong Payment by a total of RMB 100 million, with the company contributing RMB 19.28 million, maintaining a 19.28% ownership stake[181]. - The registered capital of Changjietong Payment will increase from RMB 200 million to RMB 300 million following the capital increase[181]. - The company has raised a total of HKD 900.90 million, with a net amount of HKD 854.96 million after deducting related issuance costs[131]. - The actual usage of the raised funds includes approximately HKD 290.69 million for T+ series software product development, HKD 194.08 million for cloud platform and innovative application product R&D, and HKD 199.21 million for promoting cloud services[131].

Summary of Conference Call Records Company Overview - The conference call discusses the performance and strategies of Changjie Tong, a company focused on SaaS and AI solutions for small and micro enterprises in China. [1][2] Key Points and Arguments Financial Performance - In 2024, Changjie Tong achieved a net profit of 334.6 million, a 111% increase year-over-year, with total revenue reaching 960 million, up 20% from the previous year. [5][6] - The adjusted operating profit improved by over 90 million compared to 2023, marking a significant turnaround to profitability. [6] - The company's gross profit was 690 million, reflecting a 28% increase year-over-year, with a gross margin of 72%, up 5 percentage points. [5][6] - Subscription revenue for 2024 was 650 million, a 34% increase year-over-year, contributing to a total Annual Recurring Revenue (ARR) of 720 million, up 27%. [5][6] Business Transformation - The company successfully transitioned to a cloud subscription model, with approximately 70% of its revenue now coming from sustainable subscription income. [2][5] - Changjie Tong's ARR surpassed 100 million USD, achieving this milestone in about six years since adopting the subscription model. [3] User Growth and Retention - The company added 143,000 new paying users in 2024, bringing the total to 775,000, maintaining a leading position in the industry. [1][5] - Customer retention rate improved to 84%, indicating enhanced customer satisfaction and loyalty. [7] AI Integration and Future Strategy - Changjie Tong is embracing AI technology, planning to leverage it for further growth and efficiency in its services. [1][3] - The company aims to develop AI-driven services, particularly in intelligent tax and accounting solutions, targeting small and micro enterprises. [8][11] - By 2028, the company plans to reach 5 million paying users, driven by its AI initiatives and expansion into new markets. [25][46] Market Context - As of 2024, there are approximately 1.82 million market entities in China, with over 49 million small and micro enterprises, indicating a growing market for Changjie Tong's services. [2] - The company is positioned to capitalize on the policy benefits and increasing demand for digital financial services among small businesses. [4] Operational Insights - The average employee lifespan at Changjie Tong is 8.4 years, showing stability in the workforce. [4] - The company plans to maintain its employee count despite technological upgrades, indicating a focus on efficiency rather than downsizing. [4] Sales and Marketing Strategy - Changjie Tong is refining its sales channels, focusing on direct sales and expanding its market presence through AI-enhanced marketing strategies. [24] - The company is exploring international markets, with plans to enter regions like Hong Kong, Macau, Southeast Asia, and the Middle East starting in 2025. [24] Challenges and Considerations - The management acknowledged the need for continuous investment in AI and technology to maintain competitive advantage and support growth. [30][34] - There are ongoing discussions about potential stock buybacks and improving liquidity through full circulation of shares. [30][43] Additional Important Content - The company is developing a comprehensive AI model that integrates data analysis and automation to enhance operational efficiency for small businesses. [10][12] - Changjie Tong's intelligent tax service is designed to automate accounting processes, significantly increasing productivity and reducing costs in the accounting industry. [16][18] - The management emphasized the importance of collaboration with accounting firms to provide comprehensive services to small enterprises. [29][40] This summary encapsulates the key insights and strategic directions discussed during the conference call, highlighting Changjie Tong's robust growth trajectory and commitment to leveraging AI for future success.

Core Viewpoint - Changjie Tong has successfully transitioned into profitability, demonstrating the sustainability of its small and micro enterprise SaaS business model, while other companies are still discussing the end of the SaaS winter [1][2]. Financial Performance - In the reporting period, Changjie Tong achieved a net profit of 33.46 million yuan, a year-on-year increase of 111%. Operating cash flow improved significantly, with a net inflow of 91.3 million yuan compared to a net outflow of 42.05 million yuan in the previous year [2][5]. - The company’s total revenue for 2024 grew by 20% year-on-year, with cloud subscription revenue increasing by 34%. In contrast, competitor Kingdee's total revenue grew by 10.2% and cloud business by 13.4% [5]. Business Model Validation - The breakeven point is crucial as it validates the business model, particularly for small and micro enterprise SaaS. Changjie Tong has successfully broken the myth of profitability challenges in this sector [2][3]. - The company has leveraged high operational efficiency and continuous R&D investment to enhance customer conversion rates and improve delivery quality and efficiency [2]. Market Positioning - Changjie Tong's cloud service revenue accounted for 86% as early as 2021, and by 2024, the cloud subscription revenue share had significantly increased to nearly 70% [5]. - The company has a gross margin of 72%, compared to Kingdee's 65.1% [5]. Valuation Insights - Changjie Tong's current price-to-sales (PS) ratio is 2.3X, significantly lower than Kingdee's 6.8X and the average PS of 4.2X for the Hong Kong SaaS sector [6]. - The company holds substantial cash assets, with total assets of 1.695 billion yuan and cash assets of 1.259 billion yuan, indicating a low valuation when cash is deducted from market capitalization [7].

Financial Performance - Revenue for the year ended December 31, 2024, reached RMB 959,273 thousand, representing a 20% increase from RMB 800,621 thousand in 2023[3] - Gross profit increased by 28% to RMB 692,047 thousand, up from RMB 538,599 thousand in the previous year[4] - Profit attributable to equity holders of the parent company surged by 111% to RMB 33,464 thousand, compared to RMB 15,876 thousand in 2023[4] - Basic earnings per share rose to RMB 0.104, reflecting a 108% increase from RMB 0.050 in the prior year[4] - Total revenue for the year 2024 reached RMB 959,273,000, an increase of 19.8% from RMB 800,621,000 in 2023[25] - The company reported a profit attributable to equity holders of RMB 33,464,000 for the year ended December 31, 2024, compared to RMB 15,876,000 for 2023, representing a 111.5% increase[37] - The company achieved revenue of RMB 959.27 million for the year ended December 31, 2024, representing a 20% increase compared to the previous year[81] - The net profit attributable to the company's owners was RMB 33.46 million, a significant increase of 111% from RMB 15.88 million in the previous year[82] - The basic earnings per share rose to RMB 0.104, reflecting a growth of 108% year-over-year[82] Revenue Breakdown - Product sales contributed RMB 249,082,000, up from RMB 215,954,000, reflecting a growth of 15.3%[25] - Service revenue increased significantly to RMB 707,992,000 from RMB 582,607,000, marking a growth of 21.5%[25] - Revenue from procurement of goods sales was RMB 2,199,000, slightly up from RMB 2,060,000[25] - The majority of revenue, RMB 959,071,000, was generated from the mainland China market, indicating a strong domestic performance[26] - Revenue recognized at a point in time was RMB 274,683,000, down from RMB 290,183,000, while revenue recognized over time rose to RMB 684,590,000 from RMB 510,438,000[26] - Revenue from service provision recognized in the reporting period amounted to RMB 361,335,000, an increase from RMB 283,099,000 in the previous year, representing a growth of approximately 27.6%[28] Cost Management - Research and development costs decreased to RMB 210,844 thousand from RMB 247,340 thousand, indicating a focus on cost management[4] - Research and development expenses totaled RMB 210.84 million, down 15% from the previous year, contributing to a total R&D investment of RMB 228.99 million, a decrease of 7%[89] - The total tax expense for 2024 is RMB 530,000, significantly lower than RMB 5,820,000 in 2023, indicating a decrease of approximately 90.9%[32] - The company’s employee benefits expenses for 2024 total RMB 427,460,000, down from RMB 470,698,000 in 2023, reflecting a decrease of approximately 9.2%[31] - Sales and distribution expenses increased by 22% to RMB 408.01 million, driven by efforts to scale the business and enhance direct sales[90] Assets and Liabilities - Total assets as of December 31, 2024, amounted to RMB 1,716,662 thousand, compared to RMB 1,585,582 thousand in 2023[6] - Cash and bank balances increased significantly to RMB 1,259,031 thousand from RMB 1,037,565 thousand year-on-year[6] - Net assets rose to RMB 903,273 thousand, up from RMB 869,658 thousand in the previous year[7] - The current portion of contract liabilities as of December 31, 2024, is approximately RMB 455,692,000, up from RMB 402,134,000 in 2023, indicating a year-over-year increase of about 13.3%[29] - Total trade receivables amounted to RMB 62,755,000 as of December 31, 2024, down from RMB 57,967,000 in the previous year[46] - The impairment provision for trade receivables rose to RMB 3,751,000 in 2024 from RMB 1,041,000 in 2023, indicating a focus on credit risk management[45] Cash Flow - The company reported a cash flow from operations of RMB 492,559,000 for the year, down from RMB 785,789,000 in the previous year[52] - The net cash flow from operating activities for the year ended December 31, 2024, was RMB 91.30 million, a significant improvement from a net cash outflow of RMB 42.05 million in the previous year, primarily due to increased collections from cloud services and reduced payments to employees[95] - The net cash outflow from investing activities for the year ended December 31, 2024, was RMB 378.56 million, an increase of RMB 312.87 million compared to RMB 65.69 million in the previous year, mainly due to the purchase of time deposits and capital injection into an associated company[96] - The net cash outflow from financing activities for the year ended December 31, 2024, was RMB 7.88 million, primarily related to lease principal and interest payments under IFRS 16[97] Strategic Focus - The company continues to focus on the development of computer software technology and related services, with a strong emphasis on market expansion and innovation[8] - The group operates primarily in the cloud services sector, which constitutes a significant portion of its operations[22] - The company plans to enhance product competitiveness and strengthen the application of new technologies like AI to improve customer value and satisfaction[62] - The company will continue to develop a multi-channel approach, including direct sales and partnerships, to enhance market coverage and customer engagement[62] - The company aims to expand its market share in small and micro enterprise cloud services, establishing a leading position in the sector by 2025[75] Governance and Compliance - The company has fully complied with the Corporate Governance Code as per the listing rules during the reporting period[119] - The audit committee, composed of independent non-executive directors, reviewed the accounting principles and practices adopted by the group without any objections[124] - The company has implemented a competitive, performance-oriented compensation policy for its employees, including basic salary, performance bonuses, and allowances[113] - The company has adopted employee stock ownership plans and long-term incentive plans to attract and retain key talent[113]

Summary of Conference Call Company Overview - The conference call was held by Guozheng International, focusing on Changjitong, a Hong Kong-listed company specializing in financial and commercial cloud services for small and micro enterprises in China [1][2]. Core Business Insights - Changjitong has transitioned from traditional software packages to cloud-based solutions, targeting small and micro enterprises with digital financial and commercial services [2][3]. - The company provides services that include digital tax reporting and business management tools, catering to the needs of approximately 50 million enterprises in China, with around 10 million actively operating [3][4]. Market Potential - The target market consists of 900,000 to 1 million small enterprises that employ professional accountants, with potential annual revenues ranging from 500,000 to 3 million RMB [4][5]. - The average customer lifecycle is 8.2 years, with most new users being established businesses of 3 to 5 years [5][6]. Financial Performance - For the first three quarters of 2024, total revenue reached 670 million RMB, a 24% year-over-year increase, driven by a subscription model that now accounts for over 70% of revenue [9][10]. - Gross profit margin improved to 71%, with a 36% increase in gross profit year-over-year [9][10]. - The company anticipates a shift from loss to profit in 2024, with a target of over 30 million RMB in net profit for the year [11][12]. Customer Acquisition and Retention - The average customer acquisition cost is approximately 1,700 RMB, with a retention rate of 82-83% [19][12]. - New customer growth primarily comes from new users rather than switching from competitors, with only about 5% of new customers coming from other products [20][21]. Competitive Landscape - The competitive landscape is expected to consolidate, with fewer players remaining due to economic pressures, leading to a more stable market environment [22][23]. - Traditional competitors like Kingdee and other established accounting firms continue to operate, but the market is becoming less fragmented [22][23]. Sales Strategy - The company aims to increase the direct sales channel's contribution to 20-30% of total sales, currently at 10% [24][25]. - The distribution network covers all major cities in China, with a focus on larger small enterprises for direct sales [25][26]. AI Integration - Changjitong is actively integrating AI into its products to enhance service delivery and operational efficiency, with AI expected to improve customer service response rates significantly [32][33]. - The company is exploring AI's potential for cost savings and revenue generation, particularly in automating accounting processes for small businesses [35][36]. Future Outlook - The company projects a revenue growth rate of at least 20% over the next three years, with a goal of achieving a 10% net profit margin by 2026 [32][33]. - The focus will remain on supporting small enterprises, particularly those with international business aspirations, through tailored solutions [30][31]. Conclusion - The conference highlighted Changjitong's strategic direction towards cloud services, AI integration, and a robust growth trajectory, positioning the company favorably within the small and micro enterprise sector in China [1][2][30].

Summary of the Conference Call Company Overview - The conference call was held by Changjie Tong, focusing on the company's performance and future strategies for 2024 and beyond. The company has transitioned to a cloud subscription model and is leveraging AI technology for its services [1][2]. Key Points Industry and Market Position - The company has achieved an Annual Recurring Revenue (ARR) of $100 million, with a total of 775,000 paid users, maintaining a leading position in the industry [2][3]. - As of 2024, there are 182 million market entities in China, with approximately 49 million small and micro enterprises, indicating a growing market for the company's services [3]. Financial Performance - In 2024, the company reported total revenue of 960 million yuan, a year-on-year increase of 20%. Gross profit reached 690 million yuan, up 28%, with a net profit of 33.46 million yuan, reflecting a 111% increase [5][6]. - The gross margin improved by 5 percentage points to 72% [5]. - Subscription revenue for 2024 was 650 million yuan, a 34% increase year-on-year, with an ARR of 720 million yuan, up 27% [5][6]. AI Strategy and Development - The company has embraced AI technology, planning to implement an "AI-first" strategy by 2025, focusing on AI applications in data storage, scenario-based applications, and commercialization [2][4]. - The AI strategy includes building a specialized AI model for financial and tax services, which has achieved a 98% accuracy rate in bookkeeping and tax reporting [11][14]. Business Model and Future Plans - The company is transitioning from a SaaS tool provider to a service-oriented company, offering intelligent financial and tax services (BaaS) to small and micro enterprises [8][9]. - Plans to expand the user base to 5 million paid users by 2028, leveraging AI to enhance service delivery and customer acquisition [25][46]. Operational Efficiency - The company has improved operational efficiency, achieving a 10-fold increase in productivity through AI integration, which significantly reduces costs in the accounting industry [16][17]. - The average customer lifetime value has increased to 8.4 years, indicating strong customer retention [4]. Challenges and Considerations - The company is aware of the competitive landscape and aims to maintain profitability while investing in AI and new technologies [34][35]. - There are ongoing discussions regarding potential stock buybacks and strategic investments in similar companies to enhance business synergies [30][36]. Market Potential - The small and micro enterprise market for financial services is substantial, with a potential customer base of 40 million, indicating significant growth opportunities for the company [46]. Additional Insights - The company is focused on maintaining a balance between growth and profitability, with expectations of continued revenue growth and improved profit margins in the coming years [34][35]. - The management emphasized the importance of customer engagement and retention strategies to enhance overall business performance [19][28]. This summary encapsulates the key points discussed during the conference call, highlighting the company's strategic direction, financial performance, and market opportunities.

Summary of the Conference Call Company Overview - The conference call is regarding the Q3 performance of Changjie Tong, a company undergoing a cloud transformation with a focus on subscription-based revenue models [1][2]. Key Points Financial Performance - For the first three quarters of the year, the total revenue reached 670 million, representing a year-on-year growth of 24% [3]. - Subscription business revenue has increased to approximately 70% of total revenue, indicating a significant shift towards a subscription model [2][3]. - Gross profit for the first three quarters was 480 million, up 36% year-on-year, with a gross margin of 71% [4]. - The company reported a reduction in losses by 81% compared to the same period last year, with losses narrowing to less than 30 million [4][5]. - The company expects to achieve a profit of approximately 70-80 million more than last year, excluding non-recurring items [5][6]. Operational Efficiency - Operating expenses (OPEX) as a percentage of revenue have been decreasing, with a notable drop from 98% in Q3 2022 to 79% in 2023 [6]. - The company has reduced its workforce by 40 employees, leading to an increase in revenue per employee, which is now 76,000 per month [8]. - The company aims for an annual revenue per employee to exceed 1 million in 2024 [8]. Market Position and Competition - The main competitors include Kingdee and other traditional tax reporting companies, with a focus on small and micro enterprises [12][13]. - The company emphasizes a SaaS model, contrasting with competitors who may engage in aggressive pricing strategies [13][14]. - The management is confident in maintaining a competitive edge through customer success and subscription retention strategies [13][14]. Industry Trends and Government Policies - Recent government measures aimed at stimulating the economy are expected to positively impact small and medium enterprises, which could benefit the company [15][16]. - The company is involved in government projects that provide subsidies to small businesses, enhancing their market opportunities [16][18]. Future Outlook - The company anticipates a strong Q4, traditionally a peak season, and is optimistic about achieving its annual profit targets [5][6]. - The management has set a long-term goal of maintaining a compound annual growth rate (CAGR) of over 20% for total revenue and over 25% for subscription revenue over the next three years [9][22]. - The company is focusing on integrating AI into its products to enhance user experience and operational efficiency [27][28]. Challenges and Risks - The company acknowledges the competitive pricing strategies of rivals and is preparing to counteract these tactics without compromising its pricing integrity [14][15]. - There are concerns regarding the impact of macroeconomic factors and regulatory changes on future growth [39]. Additional Insights - The company has been actively addressing issues related to software piracy and is taking legal action against offenders [41][42]. - The management is exploring opportunities for a potential return to the A-share market, contingent on favorable market conditions [40]. This summary encapsulates the key points discussed during the conference call, highlighting the company's financial performance, operational strategies, market positioning, and future outlook.

Financial Performance - Revenue increased by 21% to RMB 452.883 million compared to RMB 375.573 million in the same period last year[19] - Gross profit rose by 33% to RMB 327.125 million from RMB 245.244 million year-on-year[19] - The company reported a net loss of RMB 9.879 million, compared to a net profit of RMB 18.135 million in the same period last year[19] - Basic loss per share was RMB 0.031, compared to earnings per share of RMB 0.057 in the previous year[19] - Revenue for the reporting period reached RMB 452.88 million, a 21% year-over-year increase, with cloud subscription revenue accounting for RMB 307.85 million, a 35% increase, representing 68% of total revenue[22] - Gross profit for the reporting period was RMB 327.13 million, a 33% year-over-year increase[22] - Revenue for the six months ended June 30, 2024, was RMB 452.88 million, a 21% increase year-over-year[41][43] - Gross profit increased by 33% to RMB 327.13 million, with gross margin rising by 7 percentage points to 72%[46] - The company recorded a net loss of RMB 9.88 million, compared to a net profit of RMB 18.14 million in the same period last year[41][43] - Revenue for the six months ended June 30, 2024, was RMB 452.883 million, compared to RMB 375.573 million in the same period in 2023, representing a 20.6% increase[100] - Gross profit for the six months ended June 30, 2024, was RMB 327.125 million, up from RMB 245.244 million in the same period in 2023, reflecting a 33.4% increase[100] - The company reported a net loss of RMB 9.879 million for the six months ended June 30, 2024, compared to a net profit of RMB 18.135 million in the same period in 2023[100] - Net loss for the six months ended June 30, 2024, was RMB 9,879 thousand, compared to a net profit of RMB 18,135 thousand in the same period of 2023[103] - Total comprehensive loss for the six months ended June 30, 2024, was RMB 9,867 thousand, compared to a total comprehensive income of RMB 18,218 thousand in the same period of 2023[104] - Basic and diluted loss per share attributable to ordinary equity holders was RMB 0.031 in 2024, compared to a profit of RMB 0.057 in 2023[144] Assets and Liabilities - Total assets grew by 5% to RMB 1.659 billion as of June 30, 2024, compared to RMB 1.586 billion at the end of 2023[19] - Total liabilities increased by 12% to RMB 799.303 million from RMB 715.924 million at the end of 2023[19] - The company's cash and bank balances stood at RMB 1,234.56 million at the end of the reporting period, maintaining a healthy and stable financial position[23] - Total non-current assets increased to RMB 631,540 thousand as of June 30, 2024, from RMB 318,776 thousand as of December 31, 2023[105] - Total current assets decreased to RMB 1,027,613 thousand as of June 30, 2024, from RMB 1,266,806 thousand as of December 31, 2023[105] - Total current liabilities increased to RMB 618,690 thousand as of June 30, 2024, from RMB 552,792 thousand as of December 31, 2023[105] - Net current assets decreased to RMB 408,923 thousand as of June 30, 2024, from RMB 714,014 thousand as of December 31, 2023[105] - Total equity decreased to RMB 859,850 thousand as of June 30, 2024, from RMB 869,658 thousand as of December 31, 2023[107] - Cash and bank balances increased significantly to RMB 454,230 thousand as of June 30, 2024, from RMB 150,712 thousand as of December 31, 2023[105] - Cash and bank balances totaled RMB 1,234,557 thousand as of June 30, 2024, up from RMB 1,037,565 thousand as of December 31, 2023, with current portion at RMB 780,327 thousand[176] - As of June 30, 2024, the company had fixed deposits totaling RMB 450,000,000 with accrued interest of RMB 4,230,000, compared to RMB 150,000,000 and RMB 712,000 respectively as of December 31, 2023[179] Cash Flow - Net cash flow from operating activities turned positive, reaching RMB 49.33 million[23] - Net cash used in investing activities was RMB 344.34 million, primarily due to higher purchases of fixed deposits and wealth management products[56] - Operating cash flow for the six months ended June 30, 2024, was RMB 49,326 thousand, compared to a negative RMB 28,046 thousand in the same period in 2023[112] - Net cash used in investing activities for the six months ended June 30, 2024, was RMB 344,341 thousand, primarily due to the purchase of intangible assets and financial investments[115] - Net cash used in financing activities for the six months ended June 30, 2024, was RMB 4,195 thousand, mainly from lease payments[115] - Cash and cash equivalents decreased by RMB 299,210 thousand to RMB 486,590 thousand as of June 30, 2024, compared to RMB 785,789 thousand at the beginning of the period[115] Digital Transformation and AI Technology - The company highlighted the positive impact of China's GDP growth of 5.0% in the first half of 2024 on its business environment[20] - The company emphasized the importance of AI technology in driving digital transformation and enhancing competitiveness in the enterprise sector[20] - The company noted the nationwide adoption of electronic tax invoices and the promotion of a unified electronic tax bureau, which provides a strong technical foundation for its digital services[20] - The company identified the growing trend of small and micro enterprises embracing digitalization to improve financial and tax management, aligning with regulatory requirements and market competition[20] - The company's AI-native application development platform has enhanced developer efficiency and capabilities, integrating cloud-native, prompt engineering, and AI Agent technologies[27] - Continued focus on AI technology application in product innovation and company operations[35] - Enhanced product competitiveness through AI and big data integration[37] - Promoted intelligent decision-making development through deep integration of big data and AI[37] Cloud Services and Subscription Business - Cloud subscription revenue reached RMB 307.85 million, accounting for 68% of total revenue, with a 35% year-over-year growth[44] - Cloud subscription contract liabilities at the end of the reporting period were RMB 644.96 million, a 21% increase compared to the end of the previous year[22] - The company added 73,000 new paying enterprise users for its cloud services, a 29% year-over-year increase, with the total number of paying enterprise users reaching 706,000 by the end of the reporting period[23] - Cloud subscription business and cost optimization contributed to a significant reduction in losses, with adjusted net loss narrowing to RMB 0.06 million[43] Expenses and Costs - Sales and service provision costs decreased by 4% to RMB 125.76 million, driven by reductions in contract operation and maintenance costs[45] - Other income and net gains decreased by 83% to RMB 17.61 million, primarily due to the absence of gains from the sale of tax training products and services[47] - R&D investment totaled RMB 113.84 million, a 11% decrease year-over-year, with R&D costs dropping by 20% to RMB 102.49 million[49] - Sales and distribution expenses increased by 37% to RMB 216.82 million, driven by business scale expansion and increased direct sales investment[50] - Management expenses decreased by 13% to RMB 35.23 million, primarily due to reduced labor costs[51] - Research and development costs decreased to RMB 102.490 million in the first half of 2024, down from RMB 127.750 million in the same period in 2023, a 19.8% reduction[100] - Sales and distribution expenses increased to RMB 216.820 million in the first half of 2024, up from RMB 158.717 million in the same period in 2023, a 36.6% rise[100] - Employee benefit expenses, including salaries and wages, decreased to RMB 189.859 million in 2024 from RMB 226.78 million in 2023, indicating cost optimization[137] - Employee compensation and benefits decreased to RMB 28.98 million from RMB 74.88 million in the same period last year[55] Market Expansion and Strategic Partnerships - The company plans to deepen precision marketing strategies and expand market coverage in the tax and finance sector[39] - Strategic partnerships with telecom operators, banks, and internet platforms will be strengthened to drive business scalability[39] - Strengthened channel layout and coverage in county-level markets[38] - Successfully selected as a service provider for 13 digital transformation pilot cities[31] - Won multiple awards including "2023 Best Service Provider for Small and Micro Enterprises Digital Transformation" and "2024 Leading Enterprise in Small and Micro Enterprises Financial and Tax Application SaaS"[32] Employee and Shareholder Information - Total number of employees decreased by 8% to 1,026 compared to the end of the previous year[34] - The company approved an employee stock ownership plan (ESOP) on December 28, 2020, and revised the plan on May 21, 2024, to attract and retain key personnel[72] - A total of 15,412,716 shares were granted to 158 participants under the ESOP, representing approximately 7.10% of the company's total issued share capital as of December 28, 2020[73] - The granted shares will be unlocked in three batches: 40% after two years, 30% after three years, and 30% after four years from the grant date[73] - The company completed a capital increase in October 2021, resulting in the granted shares increasing to 23,119,074 shares[73] - The first batch of 40% of the granted shares was unlocked on December 28, 2022, and the second batch of 30% was unlocked on December 28, 2023[75] - The company implemented a long-term incentive bonus plan on December 28, 2020, to motivate key personnel and support business transformation[76] - The long-term incentive bonus plan includes 158 participants, with bonuses paid in three batches after meeting performance conditions[77] - The first batch of bonuses under the long-term incentive plan was approved on December 28, 2022, and the second batch on December 28, 2023[77] - Wang Wenjing holds 222,210,241 domestic shares (L) of the company, representing 68.21% of the total share capital and 91.34% of the domestic share capital[79] - Wang Wenjing holds 1,421,079,511 shares (L) of Youyou, representing 41.57% of the total share capital[79] - Wu Zhengping holds 1,867,450 shares (L) of Youyou, representing 0.05% of the total share capital[79] - Guo Xinping holds 128,080,000 shares (L) of Youyou, representing 3.75% of the total share capital[79] - Zhang Peilin holds 1,629,589 shares (L) of Youyou, representing 0.05% of the total share capital[79] - Youyou directly and indirectly holds 216,458,791 domestic shares (L) of the company, representing 66.44% of the total share capital and 88.98% of the domestic share capital[83] - UBS Group AG holds 15,026,887 H shares (L) of the company, representing 4.61% of the total share capital and 18.21% of the H share capital[83] - Gaocheng Fund I, L.P. holds 8,250,000 H shares (L) of the company, representing 2.53% of the total share capital and 10.00% of the H share capital[83] - Gaocheng Holdings GP, Ltd holds 8,250,000 H shares (L) of the company, representing 2.53% of the total share capital and 10.00% of the H share capital[83] - Tsing Young Holding Limited holds 8,250,000 H shares (L) of the company, representing 2.53% of the total share capital and 10.00% of the H share capital[83] - Gaocheng Fund I, L.P. held 8,250,000 H-shares as of June 30, 2024, representing approximately 2.53% of the company's total share capital[84] - The company's total issued shares as of June 30, 2024, were 325,772,499, consisting of 243,272,499 domestic shares and 82,500,000 H-shares[84] - The company's employee stock ownership plan allows for the issuance of up to 15,412,716 domestic shares, representing approximately 7.10% of the total issued share capital as of the date of the board's proposal[190] - The first batch of incentive shares under the employee stock ownership plan was unlocked on December 28, 2022, with 40% of the total 22,474,074 domestic shares unlocked[190] - The second batch of incentive shares was unlocked on December 28, 2023, with 30% of the total 21,979,074 domestic shares unlocked[193] - Employee stock ownership plan (ESOP) target incentive shares decreased by 27,000 shares due to unmet vesting conditions, compared to 247,500 shares in the same period last year[194] - The fair value of granted shares was RMB 2,247,000, with total share-based payment expenses of RMB 59,000 for the six months ended June 30, 2024, down from RMB 149,049 in the same period last year[195] Other Financial Information - The company's total funds raised from its H-share listing amounted to HKD 900.90 million, with a net amount of HKD 854.96 million after deducting issuance expenses[85] - As of June 30, 2024, the company had unused funds of HKD 80.83 million allocated for acquisitions related to its business strategy, which are planned to be utilized by December 31, 2025[87] - The company did not recommend an interim dividend for the six months ended June 30, 2024, consistent with the same period in 2023[93] - Exchange differences on translation of foreign operations for the six months ended June 30, 2024, were RMB 12 thousand, compared to RMB 83 thousand in the same period of 2023[110] - Share-based payment expenses for the six months ended June 30, 2024, were RMB 59 thousand, compared to RMB 149 thousand in the same period of 2023[110] - The company's contract liabilities increased by RMB 111,032 thousand during the six months ended June 30, 2024, compared to an increase of RMB 61,685 thousand in the same period in 2023[112] - The company's pre-tax loss for the six months ended June 30, 2024, was RMB 11,927 thousand, compared to a pre-tax profit of RMB 22,693 thousand in the same period in 2023[112] - The company's fair value loss for the six months ended June 30, 2024, was RMB 8,670 thousand, compared to a fair value gain of RMB 32,955 thousand in the same period in 2023[112] - The company's interest income for the six months ended June 30, 2024, was RMB 12,578 thousand, compared to RMB 12,911 thousand in the same period in 2023[112] - The company's depreciation of property, plant, and equipment for the six months ended June 30, 2024, was RMB 1,575 thousand, compared to RMB 1,997 thousand in the same period in 2023[112] - The company's amortization of intangible assets for the six months ended June 30, 2024, was RMB 135 thousand, compared to RMB 3,857 thousand in the same period in 2023[112] - Changjie Yunhui's paid-up capital as of June 30, 2024, was RMB 10,000,000[120] - Changjie Yunzhi's paid-up capital as of June 30, 2024, was RMB 1,000,000[120] - Total customer contract revenue for the six months ended June 30, 2024, was RMB 452,883 thousand, a 20.6% increase from RMB 375,573 thousand in the same period in 2023[133] - Product sales revenue for the six months ended June 30, 2024, was RMB 118,791 thousand, a 20.3% increase from RMB 98,740 thousand in the same period in 2023[133] - Service revenue for the six months ended June 30, 2024, was RMB 333,305 thousand, a 20.9% increase from RMB 275,708 thousand in the same period in 2023[133] - Revenue recognized over time for services was RMB 322,342 thousand for the six months ended June 30, 2024, a 35.7% increase from RMB 237,619 thousand in the same period in 2023[133] - The company recognized a trade receivables impairment loss of RMB 244,000 for customer contracts in the six months ended June 30, 2024[133] - Other income for the six months ended June 30, 2024, totaled RMB 25,258 thousand, compared to RMB 24,968 thousand in the same period in 2023[135] - VAT refunds for the six months ended June 30, 2024, were RMB 12,430 thousand, a 12.

Financial Performance - Revenue for the six months ended June 30, 2024, was RMB 452.88 million, representing a 21% increase from RMB 375.57 million in the same period of 2023[1] - Gross profit for the same period was RMB 327.13 million, a 33% increase compared to RMB 245.24 million in 2023[1] - The company reported a loss attributable to equity holders of RMB 9.88 million, compared to a profit of RMB 18.14 million in the previous year[2] - Basic loss per share was RMB (0.031), down from earnings of RMB 0.057 per share in the prior year[1] - The group recorded a significant reduction in loss, with a loss of RMB 0.06 million after excluding non-operating factors, compared to a loss of RMB 56.61 million in the same period last year[2] - The company reported a net loss of RMB 9,879,000 for the six months ended June 30, 2024, compared to a profit of RMB 18,135,000 for the same period in 2023[26] - The group achieved a revenue of RMB 452.88 million, representing a 21% year-on-year growth, with cloud subscription revenue reaching RMB 307.85 million, up 35% year-on-year, accounting for 68% of total revenue[46] - The group recorded a gross profit of RMB 327.13 million, a 33% increase year-on-year, while the net loss attributable to the parent company was RMB 9.88 million, compared to a profit of RMB 18.14 million in the same period last year[46] Research and Development - Research and development costs decreased to RMB 102.49 million from RMB 127.75 million year-on-year[3] - Research and development costs were RMB 102,490,000 for the six months ended June 30, 2024, down from RMB 127,750,000 in the previous year, reflecting a reduction of approximately 19.8%[22] - Total R&D investment for the six months ended June 30, 2024, was RMB 113.84 million, a decrease of 11% year-on-year, with R&D costs at RMB 102.49 million, down 20% from the previous year[69] Assets and Liabilities - Total current assets decreased to RMB 1,027.61 million from RMB 1,266.81 million as of December 31, 2023[5] - Total liabilities increased to RMB 618.69 million from RMB 552.79 million in the previous year[5] - The company's total equity attributable to equity holders was RMB 859.85 million, slightly down from RMB 869.66 million at the end of the previous year[6] - Trade receivables as of June 30, 2024, amounted to RMB 65,373 thousand, an increase from RMB 57,967 thousand as of December 31, 2023[30] - The aging analysis of trade receivables shows that amounts overdue for 0 to 90 days decreased to RMB 40,717 thousand from RMB 45,886 thousand[31] - Prepayments increased to RMB 165,409 thousand as of June 30, 2024, compared to RMB 146,807 thousand as of December 31, 2023[33] - The total amount of other receivables and other assets was RMB 256,899 thousand as of June 30, 2024, up from RMB 234,357 thousand as of December 31, 2023[33] Cash Flow and Financial Position - The cash flow from operating activities turned positive, reaching RMB 49.33 million, with cash and bank balances at RMB 1,234.56 million, indicating a healthy financial position[46] - The company's cash and bank balances include a current portion of RMB 780,327,000 as of June 30, 2024, compared to RMB 886,853,000 as of December 31, 2023[37] - The group’s cash and bank balances as of June 30, 2024, were RMB 1,234.56 million, an increase from RMB 1,037.57 million as of December 31, 2023[76] - The current ratio as of June 30, 2024, was 166%, down from 229% as of December 31, 2023, primarily due to the purchase of long-term deposits[77] Operational Highlights - The company operates primarily in the cloud services sector, which constitutes a significant portion of its operations[15] - The number of new paid enterprise users for cloud services increased by 73,000, a 29% growth compared to the same period last year, bringing the total to 706,000[47] - The group launched a new financial and tax open platform, enhancing integration with mainstream SaaS products, thereby improving customer satisfaction and operational efficiency[48] - The group is focusing on the integration of AI technology in its products, particularly in the areas of smart tax and business solutions, to enhance automation and efficiency for micro-enterprises[48] - The group is expanding its market coverage by strengthening channel distribution in county-level markets and enhancing the density and breadth of coverage in key regions[46] - The group aims to improve the overall operational efficiency of the industry chain by enhancing upstream and downstream collaboration capabilities[50] - The group is committed to developing industry-specific solutions in sectors such as electronic, mechanical, and food processing, to support the digital transformation of micro-manufacturing enterprises[50] Corporate Governance and Compliance - The financial statements were prepared in accordance with International Financial Reporting Standards, ensuring compliance and transparency[11] - The company has adopted new accounting standards, but these did not materially impact its financial position or performance[13] - The company has fully complied with the corporate governance code as per the listing rules during the reporting period[88] - The audit committee reviewed the unaudited interim results announcement and report for the six months ended June 30, 2024, confirming compliance with applicable accounting standards[90] Dividends and Shareholder Returns - The company did not declare an interim dividend for the six months ended June 30, 2024[1] - The board of directors did not recommend any interim dividend for the six months ended June 30, 2024[87] Employee and Organizational Changes - The total number of employees decreased by 8% to 1,026, with ongoing efforts to optimize organizational structure and enhance team efficiency[57]

Key Points 1. Event Details - **Industry/Company**: Investment banking, financial services - **Event**: Anxin International 2024 Mid-Year Investment Strategy Conference and Public Company Exchange Meeting - **Host**: Tina Wang, Analyst at Anxin International TMP - **Organizer**: Lu Ye Zhong - **Document ID**: [1] 2. Conference Overview - The conference aims to discuss investment strategies and public company analysis. - It is an opportunity for investors to gain insights into market trends and potential investment opportunities. - **Document ID**: [1]