Revenue and Profit Performance - Total revenue for the first half of 2024 was RMB 1,738.4 million, a decrease of 9.3% compared to the same period in 2023[1] - Net profit for the first half of 2024 was RMB 120.3 million, a decrease of 60.2% compared to the same period in 2023[1] - The company's total revenue for the first half of 2024 decreased by 9.3% year-over-year to RMB 1,738.4 million, primarily due to reduced loan facilitation under credit-enhanced and pure loan facilitation models[12] - Operating profit declined by 60.4% to RMB 154.4 million, impacted by reduced loan volumes, cautious strategies in uncertain macroeconomic conditions, and increased overdue rates[25] - Net profit decreased by 60.2% to RMB 120.3 million, consistent with the decline in operating profit[26] - Total revenue for the first half of 2024 decreased to RMB 1,738,357 thousand, down 9.3% from RMB 1,917,607 thousand in the same period of 2023[46] - Operating profit for the first half of 2024 declined to RMB 154,417 thousand, down 60.3% from RMB 389,497 thousand in the same period of 2023[46] - Profit attributable to owners of the company for the first half of 2024 was RMB 120,343 thousand, down 60.2% from RMB 302,113 thousand in the same period of 2023[46] - Basic earnings per share for the first half of 2024 were RMB 0.25, down 59.7% from RMB 0.62 in the same period of 2023[47] - Basic earnings per share (EPS) for the first half of 2024 were RMB 0.25, down from RMB 0.62 in the same period of 2023, with diluted EPS also at RMB 0.25[63] Interest Income and Expenses - Interest income increased by 38.0% to RMB 1,068.3 million in the first half of 2024[1] - Net interest income increased by 38.0% to RMB 1,068.3 million, driven by higher average outstanding loan balances under the trust loan model[14] - Interest expenses rose by 10.0% to RMB 193.3 million due to increased average borrowing balances, partially offset by a decrease in the weighted average interest rate[14] - Net interest income for the first half of 2024 increased to RMB 874,986 thousand, up 46.2% from RMB 598,541 thousand in the same period of 2023[46] - Net interest income increased to RMB 874,986 thousand in the first half of 2024, up from RMB 598,541 thousand in the same period of 2023[56] Loan Facilitation and Customer Metrics - Loan facilitation service fees decreased by 15.0% to RMB 939.6 million in the first half of 2024[1] - The company's loan realization volume reached RMB 27.02 billion in the first half of 2024[4] - Repeat loan customers accounted for 89.5% of total loan volume in the first half of 2024[5] - Cumulative registered users reached 149.1 million by June 2024, a 9.8% increase compared to the same period in 2023[5] - The company's total loan facilitation volume for the first half of 2024 was RMB 27,023.1 million, with credit-enhanced loan facilitation accounting for 58.9% of the total[8] - The outstanding loan balance for online consumer products as of June 30, 2024, was RMB 26,602.9 million[6] - The average loan size for credit products during the period was approximately RMB 11,936, with an average loan term of 10.1 months[6] - The top five borrowers accounted for only 0.003% of the total loan balance as of June 30, 2024, with the largest borrower representing 0.001%[6] - Loan facilitation service fees decreased to RMB 939,624 thousand in the first half of 2024, compared to RMB 1,105,334 thousand in the first half of 2023[57] - New loan facilitation business generated an increase of RMB 1,196,504 thousand in guarantee receivables for the first half of 2024, compared to RMB 1,674,123 thousand in the same period of 2023[73] Delinquency and Risk Management - The first payment delinquency rate in Q2 2024 decreased by 29.6% compared to Q4 2023, dropping to 0.50%[7] - The delinquency rate for loans overdue by more than three months increased to 3.82% in Q2 2024, up from 2.98% in Q4 2023[9] - The delinquency rate for loans overdue by one to three months was 4.47% in Q2 2024, showing a slight improvement from 4.62% in Q1 2024[9] - The company will continue to optimize its credit solutions and enhance risk management capabilities through AI technology[11] - Credit impairment losses amounted to RMB 144,149 thousand in the first half of 2024, slightly lower than RMB 148,258 thousand in the same period of 2023[60] Business Expansion and Partnerships - The company has established long-term partnerships with 109 external funding partners as of June 2024[5] - The company launched the AI model "Golden Crow Model" in the first half of 2024, enhancing operational efficiency and customer service quality[4] - The company expanded its consumer finance business in Hong Kong through its brand "CreFIT" and partnered with China Mobile Hong Kong in May 2024[5] - The company plans to expand its business by seeking investment, cooperation, or acquisition opportunities in Hong Kong, Southeast Asia, and Europe[11] - The company acquired a 15.0% stake in Thousand Whales Technology (BVI) Limited through two transactions totaling HKD 16.0 million in 2024[44] Expenses and Cost Management - Other expenses of RMB 76.2 million were recorded, compared to other income of RMB 213.7 million in the same period last year, mainly due to increased overdue rates and guarantee losses[19] - Realization and service expenses decreased by 22.5% to RMB 626.0 million, reflecting lower customer acquisition costs due to reduced scale, partially offset by increased loan collection fees[21] - Sales and marketing expenses increased by 12.3% to RMB 24.1 million, driven by higher employee benefits and brand expenses for new business development[22] - General and administrative expenses decreased by 3.0% to RMB 162.2 million, attributed to improved operational efficiency[23] - Research and development expenses decreased by 1.9% to RMB 57.0 million, as the company streamlined processes and improved efficiency through continued investment in technology[24] - Total expenses, including realization and service expenses, sales and marketing expenses, general and administrative expenses, and R&D expenses, decreased to RMB 869,173 thousand in the first half of 2024 from RMB 1,054,345 thousand in the first half of 2023[59] Financial Position and Cash Flow - The fair value of customer loans measured at fair value through profit or loss increased by 2.0% from RMB 6,504.4 million as of December 31, 2023, to RMB 6,637.1 million as of June 30, 2024, primarily due to an increase in trust model loan disbursements[32] - Contract assets decreased by 18.0% from RMB 465.4 million as of December 31, 2023, to RMB 381.5 million as of June 30, 2024, mainly due to a 37.4% decrease in credit-enhanced and pure matching model loan disbursements[34] - Guarantee receivables decreased by 24.2% from RMB 1,317.0 million as of December 31, 2023, to RMB 998.7 million as of June 30, 2024, while guarantee liabilities decreased by 33.3% from RMB 1,533.9 million to RMB 1,023.6 million over the same period[34] - The total amount due to trust plan holders increased by 3.1% from RMB 4,999.1 million as of December 31, 2023, to RMB 5,151.8 million as of June 30, 2024, driven by increased loan disbursements through the trust loan model[36] - The company's cash and cash equivalents increased by RMB 494.2 million to RMB 1,390.6 million as of June 30, 2024, compared to RMB 896.7 million as of December 31, 2023[40] - Net cash inflow from operating activities decreased by RMB 109.0 million to RMB 469.6 million for the six months ended June 30, 2024, compared to RMB 578.6 million for the same period in 2023[40] - Net cash inflow from financing activities was RMB 11.1 million for the six months ended June 30, 2024, compared to a net cash outflow of RMB 959.4 million for the same period in 2023[41] - Cash and cash equivalents as of June 30, 2024, increased to RMB 1,390,228 thousand, up 55.1% from RMB 896,534 thousand as of December 31, 2023[49] - Total assets as of June 30, 2024, were RMB 11,741,462 thousand, down 1.6% from RMB 11,934,463 thousand as of December 31, 2023[49] - Total liabilities as of June 30, 2024, were RMB 7,498,234 thousand, down 3.4% from RMB 7,765,873 thousand as of December 31, 2023[49] - Cash and bank balances increased to RMB 1,390,228 thousand as of June 30, 2024, up from RMB 896,534 thousand as of December 31, 2023, driven by a significant increase in bank cash to RMB 1,378,720 thousand[66] - Contract assets decreased to RMB 381,500 thousand as of June 30, 2024, from RMB 465,408 thousand as of December 31, 2023, after accounting for expected credit loss provisions[70] - Guarantee receivables decreased to RMB 998,698 thousand as of June 30, 2024, from RMB 1,317,024 thousand as of December 31, 2023, with expected credit loss provisions of RMB 171,937 thousand[72] - Guarantee liabilities decreased to RMB 1,023,571 thousand as of June 30, 2024, from RMB 1,533,883 thousand as of December 31, 2023, with new loan facilitation business contributing RMB 1,196,504 thousand[74] - Total borrowings increased to RMB 5,691,001 thousand as of June 30, 2024, compared to RMB 5,471,888 thousand as of December 31, 2023[76] - The asset-liability ratio decreased to 63.9% as of June 30, 2024, from 65.1% as of December 31, 2023, a reduction of 1.2%[78] - The consolidated debt-to-equity ratio improved to 1.6x as of June 30, 2024, compared to 1.7x as of December 31, 2023[78] - The remaining funding for consolidated trust plans was RMB 5.62 billion as of June 30, 2024, up from RMB 5.49 billion as of December 31, 2023[79] - The company had RMB 357.9 million in cash deposits pledged as collateral for bank loans as of June 30, 2024[42] - The weighted average interest rate for borrowings and preferred notes decreased to 6.6% for trust plan holder payables as of June 30, 2024, from 8.3% as of December 31, 2023[38] - Borrowings due within 1 year increased to RMB 2,657,941 thousand as of June 30, 2024, from RMB 2,339,608 thousand as of December 31, 2023[76] - Borrowings due within 1 to 2 years decreased to RMB 3,033,060 thousand as of June 30, 2024, from RMB 3,132,280 thousand as of December 31, 2023[76] - The interest rate range for trust plan payables was 4.90%~9.00% as of June 30, 2024, down from 5.00%~10.50% as of December 31, 2023[76] Other Financial Metrics - Other income/(expenses) showed a loss of RMB 76,253 thousand in the first half of 2024, compared to a gain of RMB 213,732 thousand in the same period of 2023[58] - Other net income increased to RMB 21,686 thousand in the first half of 2024, up from RMB 7,943 thousand in the first half of 2023[60] - Income tax expense decreased to RMB 32,198 thousand in the first half of 2024, compared to RMB 85,859 thousand in the same period of 2023, with deferred tax increasing to RMB 133,555 thousand from RMB 95,412 thousand[62] - The company adopted new and revised standards effective from January 1, 2024, with no significant impact on its financial position or performance[53] - The company expects to adopt new and revised standards in the future, with no significant impact anticipated on its financial position or performance[54] Corporate Governance and Shareholder Information - The company's registered office is located at Harneys Fiduciary (Cayman) Limited, 4th Floor, Harbour Place, 103 South Church Street, P.O. Box 10240, Grand Cayman KY1-1002, Cayman Islands[50] - The company's shares have been listed on the Hong Kong Stock Exchange since June 21, 2018, with 489,459,789 shares issued as of June 30, 2024[50] - The company did not recommend an interim dividend for the period ending June 30, 2024, compared to an interim dividend of 15 HK cents per share for the same period in 2023[81][85] - The company had 843 employees as of June 30, 2024[86] - The company currently has no plans for other significant investments or capital assets[45] - The company has sufficient resources to meet foreseeable working capital needs, considering available borrowing facilities and internal resources[84]

Business Expansion and Market Strategy - The company successfully launched a new consumer finance brand "CreFIT Weixin" in Hong Kong in 2023 and agreed to acquire Banco Português de Gestão, S.A. (BPG) to expand into the Portuguese and broader European markets[9] - The company successfully obtained a money lender license in April 2023 and officially launched the Hong Kong-based consumer finance brand "CreFIT" in September 2023, with its first product "CreFIT Card Loan" receiving a high app rating of 4.6 out of 5[49] - The company has reached an agreement to acquire Banco Português de Gestão, S.A., a credit institution registered with the Bank of Portugal, and is currently undergoing standard regulatory approval processes[49] - The company is focusing on expanding its consumer lending business outside of mainland China, particularly in Hong Kong, Southeast Asia, and Europe, leveraging its AI-driven credit assessment and risk management technologies[51] - The company plans to seek investment, cooperation, or acquisition opportunities in Hong Kong, Southeast Asia, and Europe to expand its business strategy[200] Financial Performance and Metrics - Operating expenses (excluding share-based compensation) increased by 22.6% from RMB 1,679.4 million in 2022 to RMB 2,058.3 million in 2023[15] - Net interest income decreased from RMB 1,922.14 million in 2022 to RMB 1,477.30 million in 2023, while interest expenses decreased from RMB 529.16 million to RMB 327.65 million, resulting in a total net interest income of RMB 1,149.65 million in 2023[10] - Total revenue for 2023 was RMB 3,569.5 million, a 14.4% increase from RMB 3,119.3 million in 2022[26] - Loan facilitation service fees increased to RMB 2,240,958 thousand from RMB 1,564,359 thousand in the previous year[71] - The company's operating profit for the year was RMB 604,845 thousand, compared to RMB 695,120 thousand in the previous year[71] - Annual profit for the year was RMB 453,911 thousand, down from RMB 532,471 thousand in the previous year[71] - Basic earnings per share for the year were RMB 0.93, compared to RMB 1.09 in the previous year[71] - Total revenue for 2023 reached RMB 3,569.5 million, a 14.4% increase compared to RMB 3,119.3 million in 2022[182] - Interest income decreased by 23.1% to RMB 1,477.3 million in 2023 from RMB 1,922.1 million in 2022[182] - Loan facilitation service fees increased by 43.3% to RMB 2,241.0 million in 2023 from RMB 1,564.4 million in 2022[182] - Net profit for 2023 was RMB 453.9 million, a 14.8% decrease compared to RMB 532.5 million in 2022[182] - Non-IFRS adjusted net profit for 2023 was RMB 455.6 million, a 15.2% decrease compared to RMB 537.4 million in 2022[182] - Interest expenses decreased by 38.1% to RMB 327.6 million in 2023 from RMB 529.1 million in 2022[182] - Other income increased by 10.5% to RMB 178.8 million in 2023 from RMB 161.9 million in 2022[182] - Operating profit for 2023 was RMB 604.8 million, a 13.0% decrease compared to RMB 695.1 million in 2022[182] - Non-IFRS adjusted operating profit for 2023 was RMB 606.5 million, a 13.4% decrease compared to RMB 700.1 million in 2022[182] Loan Facilitation and Credit Services - The company's loan facilitation volume reached a historical high in 2023, supported by mature risk management capabilities and long-term return-driven customer acquisition strategies[14] - Total loan facilitation in 2023 reached RMB 75.25 billion, a significant increase of 44.2% compared to RMB 52.19 billion in 2022[24] - Outstanding loan balance as of December 31, 2023, exceeded RMB 34.47 billion, up 37.5% from RMB 25.07 billion at the end of 2022[24] - Loan facilitation through the loan matching model reached RMB 63.15 billion, accounting for 83.9% of the total loan facilitation, up 60.8% from RMB 39.27 billion in 2022[25] - The company established effective cooperation with 104 external funding partners by the end of 2023, including 24 national joint-stock commercial banks, consumer finance companies, and trust funds[25] - The company is transitioning to higher-quality borrowers, leveraging multi-dimensional data to improve credit risk models and enhance customer segmentation accuracy[6] - The company is committed to investing in AI-driven technology and proprietary credit risk models to optimize operations and expand credit services to meet diverse financing needs[14] - The company introduced a more comprehensive customer feature dimension to better construct target customer risk profiles[196] - The company established a partnership with a leading data company in the second half of 2023 to improve precision customer acquisition capabilities[196] Risk Management and Asset Quality - The first payment default rate rose to 0.71% in Q4 2023, while the 1-3 month delinquency rate and over 3-month delinquency rate increased to 5.07% and 2.98% respectively by the end of 2023[20] - The company continues to optimize its risk management framework, with improvements in asset quality observed in early 2024 for newly facilitated loans[20] - Credit impairment losses increased to RMB 344.6 million in 2023 from RMB 129.5 million in 2022, primarily due to increased loan volume under the credit enhancement matching model[26] - The company implemented a "disconnected direct link" for credit data to better protect customer privacy and information security[37] - The company employs different collection methods based on the stage of delinquency, ranging from automated reminders and AI calls in the early stage to legal actions and third-party collections for overdue loans exceeding 90 days[149] User Growth and Customer Engagement - Cumulative registered users grew to 144.1 million in 2023, a 13.6% increase from the previous year[24] - Repeat borrowers accounted for 85.1% of the total loan volume in 2023[24] - Cumulative registered users reached 144 million in 2023, a 13.6% increase compared to 2022[196] - Repeat loan customers accounted for 85.1% of total loan volume in 2023[196] - The total number of transactions in 2023 was 6.4 million[197] - The average loan size was approximately RMB 11,748 with an average loan term of 10.0 months[197] - The top five borrowers' outstanding principal totaled RMB 1,031,518, accounting for 0.003% of the total loan balance as of December 31, 2023[197] - The largest borrower's outstanding principal was RMB 209,072, representing approximately 0.001% of the total loan balance as of December 31, 2023[197] Technology and Innovation - The company launched the new VOS (Weixin Business System) platform in the first half of 2023, significantly improving R&D efficiency through streamlined business modules and optimized system architecture[1] - The company launched an AI-powered online customer service robot, achieving a customer self-service resolution rate of 97%[33] Corporate Governance and Board Activities - The company proposed a final dividend of HK$0.10 per share for 2023, subject to shareholder approval[19] - The company held a total of four board meetings during the year, with satisfactory attendance rates, demonstrating the board's timely attention to company affairs[96] - The board retains decision-making authority on key matters, including long-term goals and strategies, expansion into new business areas, major acquisitions and disposals, and approval of interim and final results[98] - The company ensures that questions or requests from directors are promptly addressed, with all directors having access to the company secretary's advice and services[101] - The board delegates daily management, administration, and operational powers and responsibilities to the senior management team led by the CEO[117] - The audit committee reviews and monitors financial reporting procedures, financial controls, internal controls, and risk management systems, and advises the board on the appointment, reappointment, and removal of external auditors[118] - Non-executive directors, including independent non-executive directors, currently constitute a majority of the board, providing significant independence to the board's judgment and decision-making[121] - The board receives monthly management reports on the group's business and financial performance and holds regular meetings at least four times a year to review operational, financial, and business performance[123] - The company's second amended and restated articles of association stipulate that one-third of the board members must retire by rotation at each annual general meeting, with each director required to retire at least once every three years[124] - The audit committee held two meetings to review the annual financial statements for the year ended December 31, 2022, and the interim financial statements for the six months ended June 30, 2023, as well as the adequacy and effectiveness of the group's internal audit, risk management, and internal control systems[133] - The nomination committee held one meeting to review the board's structure, size, and composition, including skills, knowledge, experience, and diversity, as well as the independence of independent non-executive directors[134] - The remuneration committee held one meeting to review and recommend adjustments to directors' fees and remuneration, and to grant the CEO the authority to determine senior management remuneration[135] - The company has received annual independence confirmation from each independent non-executive director, and the board believes all independent non-executive directors meet the independence guidelines under Listing Rule 3.13[136] - Directors have completed annual training on their duties and responsibilities, including updates on Listing Rules and Securities and Futures Ordinance requirements[138] - The board is responsible for maintaining a risk management and internal control system suitable for the group's business and reviewing its effectiveness[147] - The board has received confirmation from management on the effectiveness of the risk management and internal control systems for the year[150] Financial Position and Assets - Total assets increased to RMB 11,934.46 million in 2023 from RMB 10,103.44 million in 2022, reflecting growth in the company's financial position[84] - The fair value of customer loans was RMB 6,504.42 million as of December 31, 2023, with a fair value loss of RMB 574.08 million recognized in the comprehensive income statement[80] - The company's total liabilities rose to RMB 7,765.87 million in 2023, up from RMB 6,277.70 million in 2022, driven by increased borrowings and other liabilities[84] - Cash and cash equivalents decreased to RMB 896.53 million in 2023 from RMB 1,592.37 million in 2022, indicating a reduction in liquid assets[84] - The company's accumulated losses improved to RMB (1,859.72) million in 2023 from RMB (2,313.63) million in 2022, reflecting a reduction in losses[84] - The fair value of financial investments measured at fair value through profit or loss decreased to RMB 148.70 million in 2023 from RMB 243.53 million in 2022[84] - The company's total equity increased to RMB 4,168.59 million in 2023 from RMB 3,825.74 million in 2022, driven by improved reserves and reduced accumulated losses[84] - The company's borrowings increased to RMB 5,471.89 million in 2023 from RMB 4,331.33 million in 2022, reflecting higher debt levels[84] - The company's deferred tax assets increased to RMB 522.22 million in 2023 from RMB 342.46 million in 2022, indicating higher potential tax benefits[84] - The company's restricted cash increased to RMB 652.24 million in 2023 from RMB 514.94 million in 2022, reflecting higher cash reserves held under restrictions[84] Strategic Goals and Future Plans - The company will continue to optimize its business strategy and enhance technical capabilities to meet the financial needs of high-quality customers[200] - The company's CreFIT brand aims to help Hong Kong residents repay credit card debt without damaging their credit ratings, reflecting its mission to "guard credit health"[49]

Financial Performance - Total revenue for the year ended December 31, 2023, reached RMB 3,569.5 million, a 14.4% increase from RMB 3,119.3 million in 2022[4] - The net profit for the year was RMB 453.9 million, down 14.8% from RMB 532.5 million in 2022[4] - Operating profit adjusted for non-IFRS items was RMB 606.5 million, a decrease of 13.4% from RMB 700.1 million in 2022[4] - Total revenue for the year increased by 14.4% to RMB 3,569.5 million from RMB 3,119.3 million in 2022, driven by increased loan realization in credit enhancement and pure loan matching models[27] - Operating profit decreased by 13.0% to RMB 604,845 thousand from RMB 695,120 thousand, attributed to increased operating expenses and credit impairment losses[45] - Net profit fell by 14.8% to RMB 453,911 thousand from RMB 532,471 thousand, consistent with the decline in operating profit[46] - Basic earnings per share for the year ended December 31, 2023, were RMB 0.93, down from RMB 1.09 in 2022, reflecting a decline of 14.7%[91] - The company reported a total comprehensive income of RMB 456,117 thousand for the year ended December 31, 2023, compared to RMB 533,092 thousand in 2022, representing a decrease of 14.4%[91] Revenue Sources - Loan facilitation service fees increased by 43.3% to RMB 2,241.0 million, compared to RMB 1,564.4 million in the previous year[4] - Interest income from direct and trust loan models for the year was RMB 1,477.3 million, a decrease of 23.1% from RMB 1,922.1 million in 2022, primarily due to a reduction in average outstanding loan balances[29] - Interest expenses decreased by 38.1% to RMB 327.6 million from RMB 529.1 million in 2022, attributed to a reduction in average borrowing balances and weighted average interest rates[30] - Total other income for the year ended December 31, 2023, was RMB 178,876 thousand, an increase of 10.5% compared to RMB 161,942 thousand in 2022[123] User and Market Growth - The number of registered users reached 144 million, representing a 13.6% increase from 2022[10] - The company achieved a historical high in loan realization amounting to RMB 75.2 billion, a growth of 44.2% year-on-year[9] - The total loan realization for the year 2023 was RMB 75,248.2 million, an increase from RMB 52,189.1 million in 2022, representing a growth of 43.9%[17] - The outstanding balance of online consumer product loans as of December 31, 2023, was RMB 34,465.6 million, a 37.5% increase from RMB 25,066.3 million in 2022[17] Partnerships and Expansion - The company has established partnerships with 104 external funding partners, including 24 national joint-stock commercial banks[13] - A new consumer finance brand "CreFIT" was successfully launched in Hong Kong in 2023[14] - The company plans to acquire Banco Português de Gestão, S.A. to expand into the Portuguese and broader European markets[14] - The company plans to optimize credit solutions and enhance technological capabilities to meet the financial needs of quality customers and expand into markets such as Hong Kong, Southeast Asia, and Europe[25] Financial Position and Cash Flow - The net cash outflow from operating activities was RMB 1,344.9 million in 2023, compared to a net inflow of RMB 3,042.9 million in 2022[78] - The net cash inflow from financing activities was RMB 580.5 million in 2023, a significant improvement from a net outflow of RMB 3,177.3 million in 2022[81] - The company’s cash and cash equivalents decreased to RMB 896.7 million by the end of 2023 from RMB 1,592.5 million at the beginning of the year[78] - The company reported a significant increase in cash inflow from investment activities, reaching RMB 70.4 million in 2023, compared to a cash outflow of RMB 176.1 million in 2022[79] Expenses and Investments - Total expenses, including realized and service fees, employee benefits, and general administrative expenses, rose to RMB 2,059,989 thousand in 2023, up 22.3% from RMB 1,684,374 thousand in 2022[125] - Research and development expenses increased by 28.8% to RMB 125,900 thousand from RMB 97,700 thousand, reflecting higher employee benefit costs related to technology investment[43] - Sales and marketing expenses increased by 49.9% to RMB 53,400 thousand from RMB 35,600 thousand, driven by business expansion efforts[41] Regulatory and Accounting Changes - The group adopted IFRS 17: Insurance Contracts starting from January 1, 2023, which requires the use of current measurement models and remeasurement of estimates for each reporting period[104] - The new accounting standards and amendments adopted include IAS 1 and IFRS Practice Statement 2, which require entities to disclose their significant accounting policies[112] - The amendments to IAS 12 clarify the accounting treatment for deferred tax assets and liabilities arising from single transactions[114] - The group has not early adopted several new standards and interpretations that are not mandatory for the reporting period ending December 31, 2023, and these are not expected to have a significant impact on current or future reporting periods[118] Shareholder Information - The company proposed a final dividend of HKD 0.10 per share, subject to shareholder approval[6] - The final dividend will be paid on or around July 10, 2024, if approved by shareholders at the annual general meeting[168] - The interim dividend for the six months ended June 30, 2023, was HKD 0.15 per share, an increase from HKD 0.10 per share for the same period in 2022[168] Employee and Governance - As of December 31, 2023, the group had a total of 856 employees, focusing on attracting and retaining talent to support business development[171] - The company has established multiple share incentive plans to provide equity-based incentives and rewards for eligible individuals[172] - The board believes the group has sufficient resources to meet foreseeable working capital needs, considering available borrowing capacity and internal resources[166] - The audit committee, consisting of three independent non-executive directors, reviewed the annual financial statements in conjunction with senior management and external auditors[177]

Financial Performance - The company recorded a net profit of RMB 302.1 million and adjusted net profit of RMB 303.5 million for the six months ended June 30, 2023, representing an increase of 47.8% and 47.4% compared to RMB 204.5 million and RMB 205.9 million for the same period in 2022 [25]. - Total revenue for the first half of 2023 reached RMB 1,917.6 million, a 21.2% increase compared to RMB 1,582.5 million in the same period of 2022 [38]. - The company reported a net profit of RMB 302.1 million, a decrease of 7.9% from RMB 328.0 million in the same period last year [38]. - The company's operating profit for the first half of 2023 was RMB 389.5 million, a decrease of 9.5% from RMB 430.4 million in the same period last year [38]. - Adjusted operating profit was RMB 390.9 million, down 9.9% from RMB 433.8 million in the same period last year, but up 46.8% from RMB 266.3 million for the six months ended December 31, 2022 [116]. - The company proposed a dividend of HKD 0.15 per share for the period, subject to shareholder approval [29]. Loan and Revenue Growth - The total loan volume facilitated during the period amounted to RMB 30.8 billion, representing 85.1% of the total loan realization, an increase of 39.7% from RMB 22.05 billion as of December 31, 2022 [31]. - The loan facilitation service fee increased by 59.6% to RMB 1,105.3 million, compared to RMB 692.4 million in the previous year [38]. - The loan realization amount reached RMB 36.2 billion, a historical high, representing a growth of 46.9% compared to RMB 24.64 billion for the same period in 2022 [52]. - The total loan amount for the first half of 2023 was RMB 362 billion, reflecting a growth of 31.4% compared to the second half of 2022 [41]. - The total amount of secured receivables was RMB 1,415,173 thousand, compared to RMB 628,229 thousand as of June 30, 2022 [17]. Risk Management and Credit Quality - The company continues to optimize its risk management framework to adapt to market and user behavior changes, ensuring a transition to higher-quality borrowers without compromising asset quality [30]. - The first payment default rate slightly increased to 0.64% in Q2 2023, while the one to three months overdue rate and three months or more overdue rate remained stable at 4.09% and 2.26% respectively [30]. - Credit impairment losses rose to RMB 148.3 million, up from RMB 68.2 million in the same period last year, primarily due to increased loan volume [32]. - The first payment overdue rate was stabilized at 0.64% for 2023, with the one to three months overdue rate at 4.09% [72]. - The three months overdue rate decreased from 2.49% in Q1 2023 to 2.26% in Q2 2023 [72]. Strategic Initiatives - The company plans to launch a localized consumer finance brand "CreFIT" in Hong Kong to diversify its business portfolio and expand its influence [24]. - The company agreed to acquire Banco Português de Gestão, S.A., a credit institution registered in Portugal, to seek new growth opportunities [24]. - The company plans to expand its business into different industries and regions, launching a localized consumer finance brand "CreFIT" in Hong Kong and acquiring BPG to enter the European market [67]. - The company is actively exploring potential business prospects for investment, collaboration, or acquisition in China and other jurisdictions [103]. Operational Efficiency and Technology - The company launched a new generation core business system (VOS) to enhance operational efficiency and improve user experience through AI-driven solutions [42]. - The company aims to enhance risk management capabilities through the development of technologies such as artificial intelligence [79]. Employee and Shareholder Information - The company had a total of 809 employees as of June 30, 2023 [161]. - The company’s directors and senior management held a total of 176,922,097 shares through controlled corporations, representing a significant portion of the issued shares [193]. - The company’s shareholding structure shows that Ma Ting-hsiung holds 39.85% of the issued shares personally and through controlled corporations [193]. Financial Position and Cash Flow - The asset-to-liability ratio decreased to approximately 59.7% from 62.1% as of December 31, 2022 [130]. - Cash outflow from financing activities was RMB 959.4 million, compared to RMB 1,469.4 million in the same period last year [134]. - The company recorded a net cash inflow from operating activities of RMB 578.6 million, down from RMB 1,424.3 million in the same period last year [133]. - The net cash inflow from investment activities was RMB 47.7 million, while the cash outflow for the same period was RMB 219.5 million, with the increase in net cash inflow primarily due to a decrease in structured deposits by RMB 190.0 million [154].

Financial Performance - Total revenue for the six months ended June 30, 2023, was RMB 1,917.6 million, representing a 21.2% increase from RMB 1,582.5 million in the same period of 2022[20] - The net profit for the six months ended June 30, 2023, was RMB 302.1 million, a decrease of 7.9% from RMB 328.0 million in the same period of 2022[20] - Operating profit for the six months ended June 30, 2023, was RMB 389.5 million, a decrease of 9.5% compared to RMB 430.4 million for the same period in 2022[101] - Non-IFRS adjusted net profit for the six months ended June 30, 2023, was RMB 303.5 million, down 8.4% from RMB 331.5 million for the same period in 2022[84] - Basic earnings per share for the period were RMB 0.62, compared to RMB 0.67 for the same period in 2022, reflecting a decline of about 7.5%[128] Revenue Sources - Loan facilitation service fees increased by 59.6% to RMB 1,105.3 million compared to RMB 692.4 million in the previous year[20] - The total interest income decreased by 31.2% to RMB 774.2 million from RMB 1,124.7 million in the same period of 2022[20] - The company reported a significant increase in other income, which rose by 182.6% to RMB 213.7 million compared to RMB 75.6 million in the previous year[20] Loan and Customer Metrics - The company achieved a loan volume of RMB 36.2 billion in the first half of 2023, a growth of 31.4% compared to the second half of 2022[34] - In the first half of 2023, repeat customers contributed 82.1% of the total loan amount[36] - The total loan origination volume for the first half of 2023 was RMB 36,198.1 million, a 31.4% increase from RMB 27,547.4 million in the same period of 2022[39] Risk Management and Strategy - The company has implemented a proactive risk management strategy, enhancing risk identification capabilities through upgraded risk models[22] - The company has focused on optimizing its business strategies and models to adapt to the evolving market and user behaviors[22] - The company aims to continuously develop technologies such as artificial intelligence to enhance risk management capabilities and ensure compliance with regulatory standards[71] Dividends and Shareholder Returns - The company plans to distribute an interim dividend of HKD 0.15 per share, up from HKD 0.10 per share in the previous year[21] Expenses and Cost Management - General and administrative expenses rose by 7.4% to RMB 167.2 million for the six months ended June 30, 2023, from RMB 155.7 million for the same period in 2022[56] - Research and development expenses increased by 24.1% to RMB 58.1 million for the six months ended June 30, 2023, compared to RMB 46.8 million for the same period in 2022[81] - Sales and marketing expenses increased by 29.8% to RMB 21.4 million for the six months ended June 30, 2023, compared to RMB 16.5 million for the same period in 2022[106] Cash Flow and Liquidity - Cash and cash equivalents at the end of the period were RMB 1,261.3 million, down from RMB 1,843.1 million as of June 30, 2022[94] - The net cash inflow from investing activities for the six months ended June 30, 2023, was RMB 47.7 million, a significant improvement from a net cash outflow of RMB 219.5 million for the same period in 2022[96] - Cash inflow from operating activities decreased by RMB 1,040.1 million to RMB 578.6 million for the six months ended June 30, 2023, compared to RMB 1,618.7 million for the same period in 2022[122] Acquisitions and Market Expansion - The company agreed to acquire Banco Português de Gestão, S.A. to enter the Portuguese and European markets[37] - The company launched a localized consumer finance brand "CreFIT" in Hong Kong in the first half of 2023[37] Asset and Liability Management - The company's total assets amounted to RMB 10,128,082 thousand, a slight increase from RMB 10,103,436 thousand as of December 31, 2022[153] - Total liabilities decreased to RMB 6,043,927 thousand from RMB 6,277,695 thousand, representing a reduction of about 3.7%[153] - The company's equity increased to RMB 4,084,155 thousand from RMB 3,825,741 thousand, marking an increase of approximately 6.8%[153] Other Financial Metrics - The first payment overdue rate was stabilized at 0.64% for 2023, with a three-month overdue rate of 2.26% as of Q2 2023[41] - The fair value of customer loans decreased by 10.8% to RMB 4,668.0 million as of June 30, 2023, compared to RMB 5,230.5 million as of December 31, 2022[114] - The total amount of overdue loans was RMB 59,957 thousand as of June 30, 2023, down from RMB 76,646 thousand at the end of 2022, showing a reduction of about 21.8%[178]

Financial Performance - The company reported a net profit of RMB 532.5 million and an adjusted net profit of RMB 537.4 million, representing a decrease of 54.8% and 55.7% compared to RMB 1,179.3 million and RMB 1,212.6 million in 2021 respectively[21]. - Total revenue for 2022 was RMB 3,119.3 million, down 9.8% from RMB 3,458.2 million in 2021[25]. - Interest income decreased by 2.5% to RMB 1,922.1 million, while interest expenses fell by 10.6% to RMB 529.1 million[25]. - The company experienced a significant increase in loan facilitation service fees, which rose by 1.6% to RMB 1,564.4 million[25]. - Operating profit for the year ended December 31, 2022, decreased by 54.1% to RMB 695.1 million from RMB 1,513.6 million for the year ended December 31, 2021[99]. - The total revenue for the year ended December 31, 2022, decreased by 9.8% to RMB 3,119.3 million from RMB 3,458.2 million for the year ended December 31, 2021[92]. - The net cash inflow from operating activities for the year was RMB 3,042.9 million, a significant increase compared to a net cash outflow of RMB 1,017.9 million in the previous year[134]. - The total revenue for the year was RMB 5,230,471 thousand, down from RMB 7,322,034 thousand in the previous year, reflecting a decline in overall business activity[127]. Loan Performance - The company achieved a historical high in loan realization volume for 2022, with a total loan volume of RMB 316.7 billion, accounting for 60.7% of total loan realizations[19]. - The company transitioned to a pure loan matching model, resulting in a loan volume of RMB 76.0 billion in 2022, a 440.1% increase from RMB 14.1 billion in 2021, representing 14.6% of total loan realizations[19]. - The company reported a fair value loss on customer loans of RMB 571.9 million in 2022, up from RMB 378.9 million in 2021[20]. - Credit impairment losses increased to RMB 129.5 million in 2022 from RMB 45.7 million in 2021, primarily due to the increase in loan volume under the credit enhancement and pure loan matching models[20]. - The company focused on high-quality borrowers, with repeat customers contributing 84.0% of the loan volume, while new customers contributed the remaining 16.0%[17]. - The total loan volume reached RMB 52.19 billion, a significant increase of 28.2% compared to RMB 40.71 billion in 2021[41]. - As of December 31, 2022, the outstanding loan balance exceeded RMB 25.07 billion, up 60.3% from RMB 15.64 billion at the end of 2021[41]. - The first payment overdue rate was approximately 0.43% in Q4 2022, indicating a low level within the industry[42]. - The one to three months overdue rate and the three months or more overdue rate at the end of 2022 were 3.53% and 1.77%, respectively[42]. Strategic Initiatives - The company is actively expanding into overseas consumer lending markets, particularly in Hong Kong, Southeast Asia, and Europe, and is applying for a lending license in Hong Kong[13]. - The company upgraded its Real-Time Acquisition (RTA) model to enhance the identification and marketing of target customers, particularly high-quality customer segments from various channels[12]. - The company aims to continuously improve its ability to provide customized credit products and services to target customers, focusing on a seamless customer experience[12]. - The company plans to expand into other markets, including Southeast Asia and Europe, focusing on consumer finance and investment opportunities[49]. - A strategic partnership was established with Lianlian International to develop cross-border supply chain finance, supported by the acquisition of a licensed factoring company[44]. - The company aims to seek investment or cooperation opportunities in Hong Kong, Southeast Asia, and Europe to expand and diversify its business[90]. Technology and Innovation - The company is committed to leveraging AI-driven technology and proprietary credit risk models to enhance operational efficiency and manage asset quality[33]. - The company plans to enhance its technology capabilities, including continuous research and development in artificial intelligence to improve risk management[91]. - The company is focused on improving user experience through optimized products and services, which has led to a substantial increase in new borrowers in the second half of 2022[27]. Governance and Management - The company has a strong management team with extensive experience in private equity and financial technology sectors[172]. - The company has adopted the corporate governance code as per the listing rules and has complied with applicable provisions[179]. - The board meets at least four times a year to review the group's operational, financial, and business performance, including interim and annual financial results[182]. - The company has a diverse board with independent non-executive directors providing independent judgment and opinions[187]. - The company has a risk management expert as the Chief Risk Officer with over ten years of experience in consumer lending risk management[199]. - The Chief Technology Officer has prior experience as Vice President of Technology at another financial services company[200].

Financial Performance - Total revenue for the year ended December 31, 2022, decreased by 9.8% to RMB 3,119.3 million from RMB 3,458.2 million in 2021[7]. - Interest income for the year was RMB 1,922.1 million, down 2.5% from RMB 1,971.8 million in the previous year[7]. - Net profit for the year fell by 54.8% to RMB 532.5 million compared to RMB 1,179.3 million in 2021[7]. - The adjusted net profit under non-IFRS was RMB 537.4 million, a decrease of 55.7% from RMB 1,212.6 million in the previous year[7]. - Operating profit decreased by 54.1% to RMB 695.1 million from RMB 1,513.6 million for the year ended December 31, 2021, attributed to a strategic shift in the loan portfolio[41]. - The company reported a profit attributable to owners of the company of RMB 532,466 thousand for 2022, down 54.9% from RMB 1,179,275 thousand in 2021[133]. - Basic earnings per share for the year were RMB 1.09, down from RMB 2.42 in the previous year, reflecting a decrease of approximately 55.0%[118]. User and Customer Metrics - The number of registered users increased to 126.8 million by the end of the year, contributing to 84.0% of the loan volume from repeat customers[5]. - The company reported a significant increase in loan facilitation service fees, which rose by 1.6% to RMB 1,564.4 million[7]. - Total revenue from loan facilitation service fees for 2022 was RMB 1,564,359 thousand, an increase of 1.6% from RMB 1,539,952 thousand in 2021[129]. Business Strategy and Development - The company successfully adjusted its business strategy to overcome challenges posed by COVID-19 measures, enhancing operational resilience[4]. - The company plans to continue optimizing and broadening its credit solutions to improve customer service and brand loyalty[18]. - The company aims to seek investment or partnership opportunities in complementary industries in regions such as Hong Kong, Southeast Asia, and Europe to expand and diversify its business[28]. - The company will continue to review potential business prospects and make appropriate investments when opportunities arise[28]. Financial Position and Assets - The total assets as of December 31, 2022, were RMB 10,103.4 million, down from RMB 11,276.9 million in 2021, representing a decline of approximately 10.4%[120]. - The total liabilities decreased to RMB 6,277.7 million from RMB 7,883.2 million, a reduction of about 20.3%[120]. - The total amount of customer loans measured at fair value decreased by 28.6% to RMB 5,230.5 million as of December 31, 2022, from RMB 7,322.0 million as of December 31, 2021[50]. - The year-end balance of guaranteed receivables increased to RMB 787,396 thousand from RMB 325,331 thousand in the previous year, indicating growth in new business[53]. Cash Flow and Financing - Cash inflow from operating activities for the year ended December 31, 2022, was RMB 3,042,945 thousand, compared to an outflow of RMB 1,017,949 thousand for the previous year[58]. - The net cash outflow from financing activities for the year was RMB 3,177.3 million, compared to a net cash inflow of RMB 1,545.6 million for the year ended December 31, 2021[112]. - The company’s cash and cash equivalents as of December 31, 2022, were RMB 1,592,365,000, compared to RMB 1,907,940,000 as of December 31, 2021[190]. Expenses and Provisions - Research and development expenses increased by 20.8% to RMB 97.7 million from RMB 80.9 million for the year ended December 31, 2021, due to increased employee benefits related to enhanced technical capabilities[41]. - The expected credit loss provision for the year was RMB (80,580) thousand, compared to RMB (4,814) thousand in 2021, indicating a significant increase in provisions[141]. - The company’s total expenses for loan realization and service fees increased to RMB (1,123,097) thousand in 2022 from RMB (1,006,387) thousand in 2021, representing a rise of 11.6%[130]. Regulatory and Compliance - The company aims to ensure compliance with regulatory standards for sustainable development[19]. - The company has consolidated several structured entities primarily related to trust plans, assessing the ability to act as an agent or principal[200]. Shareholder Returns - The proposed final dividend for the year is HKD 0.10 per share, pending shareholder approval, compared to HKD 0.15 per share for the previous year[182]. - The company plans to distribute the proposed final dividend on or around July 12, 2023, if approved by shareholders[182].

Loan Performance - The loan realization amount reached RMB 24.64 billion, marking a historical high for the company, with a growth of 9.4% compared to the same period in 2021 and 35.5% compared to the previous six months[9]. - The outstanding loan balance exceeded RMB 20.49 billion, representing a 31.1% increase from RMB 15.64 billion as of December 31, 2021[9]. - The company achieved a loan total of RMB 14.35 billion through credit enhancement loan matching, accounting for 58.2% of total loan realizations[11]. - The repeat loan volume accounted for 89.2% of the loan realization amount, demonstrating improved customer loyalty and retention[11]. - The total loan volume achieved during the period was RMB 24,641.7 million, with a significant increase in trust loans, which accounted for 27.4% of the total[31]. - The average loan size was approximately RMB 11,581, with an average loan term of about 10.2 months[29]. Asset Quality - The first payment overdue rate reached a record low of 0.23% in Q2 2022, down from 0.43% in Q4 2021, indicating improved asset quality[10]. - The overdue rates for one to three months and over three months improved to 2.07% and 2.06%, respectively, at the end of the period[10]. - The overdue rate for first payments reached a new low of approximately 0.25%, while the one to three months overdue rate decreased to 2.07% from 4.01% in Q4 2021[35]. - The company has enhanced its credit risk model by incorporating new multidimensional data and advanced algorithms, improving customer assessment efficiency[10]. - The company’s agile response to the COVID-19 pandemic allowed for rapid optimization of risk policies, mitigating impacts on asset quality[28]. Financial Performance - Total revenue for the period was RMB 1,582.5 million, a decrease of 15.8% compared to RMB 1,880.0 million in the same period last year[21]. - Net profit for the period was RMB 328.0 million, down 57.8% from RMB 777.6 million in the same period last year[21]. - The company recorded a fair value loss on customer loans of RMB 303.6 million, compared to RMB 129.2 million in the same period last year[21]. - Operating expenses increased by 11.4% to RMB 778.6 million, compared to RMB 698.8 million in the same period last year[15]. - The company’s interest income rose by 36.3% to RMB 1,124.7 million, compared to RMB 825.0 million in the same period last year[21]. - Operating profit for the period was RMB 430.4 million, a decrease of 57.3% compared to RMB 1,008.8 million in the same period last year[69]. - Non-IFRS adjusted operating profit was RMB 433.8 million, a decrease of 58.1% from RMB 1,036.2 million in the same period last year[71]. - The fair value of customer loans measured at fair value through profit or loss decreased by 11.9% to RMB 6,451.4 million as of June 30, 2022, from RMB 7,322.0 million as of December 31, 2021[76]. Customer Engagement and Strategy - The company actively adjusted its credit model to attract and retain high-quality customers, ensuring operational efficiency and customer experience[8]. - The company aims to enhance operational efficiency and improve customer engagement through optimized online applications and application processes[24]. - The contribution of repeat customers accounted for 89.2% of the loan volume during the period[24]. - The company expanded its customer acquisition channels by collaborating with partners like OPPO, Xiaomi, and China Telecom, focusing on high-quality customer identification[27]. - The company’s strategy has shifted towards higher quality borrowers, reflecting a proactive adjustment in risk management[24]. Regulatory and Market Environment - The company anticipates ongoing challenges in the second half of 2022 due to the evolving regulatory environment and macroeconomic risks[17]. - The company emphasizes compliance with laws and regulations as a priority for sustainable business development[43]. Shareholder and Corporate Governance - The company proposed an interim dividend of HKD 0.10 per share, totaling approximately HKD 49.0 million, subject to shareholder approval[103]. - The audit committee reviewed the interim report with the senior management of the company[162]. - The company’s interim financial information was prepared in accordance with International Accounting Standard 34[166]. - No significant issues were found that would indicate the interim financial information was not prepared in accordance with the relevant standards[167]. Cash Flow and Debt Management - The company's net cash inflow from operating activities for the six months ended June 30, 2022, was RMB 1,618.7 million, while cash outflow was RMB 1,666.8 million, primarily due to a decrease in loan realizations through the trust loan model by RMB 920.0 million[94]. - The net cash outflow from financing activities was RMB 1,469.4 million, compared to a net cash inflow of RMB 1,849.1 million in the previous period, with cash outflow from borrowings and trust plans amounting to RMB 1,133.9 million[95]. - The company repurchased $29,032,000 of its 2022 senior notes, reducing the outstanding principal amount to $54,440,000, which is 64.0% of the original principal[158]. - The company’s total debt to equity ratio was approximately 1.8 times as of June 30, 2022, down from 2.2 times on December 31, 2021[89]. Employee Incentives and Share Options - The company has adopted three pre-IPO share option plans to incentivize key employees and directors[118]. - The pre-IPO share option plans aim to enhance operational efficiency and align the interests of employees with those of shareholders[118]. - The company has implemented the first and second share incentive plans, allowing for a total of 74,280,087 shares to be granted as rewards[129]. - During the period, a total of 200,000 shares were granted under the first share incentive plan[129].

Financial Performance - VCREDIT Holdings achieved record profitability in 2021 despite challenges from COVID-19 and macroeconomic conditions[11]. - The net profit for the year ended December 31, 2021, was RMB 1.18 billion, a substantial improvement from a net loss of RMB 870 million in 2020[23]. - Total revenue increased by 34.4% to RMB 3.46 billion in 2021, up from RMB 2.57 billion in 2020, primarily due to a threefold increase in loan facilitation service fees[23]. - The company recorded a net profit of RMB 1,179.3 million for the year, compared to a net loss of RMB 869.6 million for the year ended December 31, 2020, representing a significant turnaround[81]. - The adjusted operating profit margin under non-IFRS reached 44.7%, compared to -38.0% in the previous year, showcasing a substantial improvement in profitability[88]. - The adjusted net profit margin under non-IFRS was 35.1%, compared to -30.9% in the previous year, indicating a strong recovery in profitability metrics[88]. Dividend and Shareholder Returns - The company declared its first cash dividend to shareholders, indicating strong liquidity and profitability[11]. - The company proposed a total annual dividend of HKD 0.35 per share, reflecting confidence in profitability and liquidity[20]. Loan and Revenue Growth - In 2021, the total loan volume reached RMB 40.71 billion, a significant increase of 32.3% compared to RMB 30.77 billion in 2020[20]. - The total loan balance granted to customers as of December 31, 2021, was RMB 15,637.0 million, an increase from RMB 14,065.4 million in 2020, representing a growth of 11.2%[42]. - Loan facilitation service fees rose by 115.9% to RMB 1,540.0 million, up from RMB 713.3 million in the previous year[32]. - The total amount of customer loans measured at fair value increased by 81.8% to RMB 7,322.0 million as of December 31, 2021, driven by growth in trust loan and direct loan models[93]. Risk Management and Compliance - VCREDIT's risk management is supported by a comprehensive database and advanced risk management engine, allowing for tailored credit products[11]. - The company is committed to strict compliance with regulatory requirements and has adjusted its risk management procedures in response to changing regulations[16]. - The company is focusing on improving risk management capabilities through evolving technology and artificial intelligence[57]. - The company will ensure operations within applicable regulatory frameworks to achieve business sustainability[57]. Customer Acquisition and Market Strategy - VCREDIT's customer acquisition strategy utilizes big data modeling and advanced technology to optimize customer identification and enhance brand awareness[11]. - The company aims to improve asset quality by shifting its target customer base towards higher quality clients[11]. - The company aims to optimize its business model and strategies to provide better loan facilitation and post-loan management services, contributing to economic recovery and growth[25]. - The company plans to optimize business strategies and enhance technology to meet the financial needs of high-quality customers and maintain competitiveness in the changing macro environment[54]. Corporate Governance and Leadership - The board includes key executives such as Mr. Ma Ting-hung as Executive Director and Chairman, and Mr. Liao Shih-hung as Executive Director and CEO[123]. - The company has a strong board with members experienced in private equity and financial services, including Mr. Chen Derek, who joined in December 2021[134]. - The company emphasizes strategic growth and operational excellence through its board members' extensive experience in various sectors[132]. - The board is committed to adopting good corporate governance practices and has complied with the corporate governance code as per the Hong Kong Stock Exchange[145]. Operational Efficiency and Technology - The company is focused on enhancing operational efficiency through AI-driven big data acquisition models to improve customer experience and retention[36]. - The company is committed to ongoing development in financial technology and private equity investments[134]. - The internal audit department, supervised by the audit committee, conducts independent audits to assess the effectiveness of risk management and internal controls[194]. Financial Position and Cash Flow - The cash and cash equivalents at the end of the year increased to RMB 1,908.1 million from RMB 1,501.8 million in 2020[114]. - The net cash inflow from financing activities was RMB 1,545.6 million in 2021, compared to a net cash outflow of RMB 5,913.4 million in 2020[115]. - The expected credit loss provision increased to RMB 53.2 million from RMB 47.7 million, reflecting a cautious approach to credit risk management[99].

Financial Performance - The company achieved a net profit of RMB 777.6 million for the six months ended June 30, 2021, a significant turnaround from a net loss of RMB 1,081.2 million in the same period last year, representing a 267.4% increase[26]. - Total revenue increased by 56.2% to RMB 1,880.0 million, compared to RMB 1,203.8 million in the same period last year[27]. - Operating profit for the period was RMB 1,008,756 thousand, compared to an operating loss of RMB 1,339,063 thousand in the same period last year[178]. - The company reported a profit attributable to owners of the company of RMB 777,633 thousand, a turnaround from a loss of RMB 1,081,240 thousand in the prior year[180]. - The company experienced a total comprehensive income of RMB 775,874 thousand for the period, compared to a loss of RMB 1,076,876 thousand in the prior year[180]. - The non-IFRS adjusted operating profit was RMB 1,036.2 million, a substantial increase of 220.9% from RMB 322.9 million for the six months ended December 31, 2020, and a turnaround from a loss of RMB 1,299.9 million for the six months ended June 30, 2020[80]. - The non-IFRS adjusted net profit was RMB 805.0 million, compared to a net loss of RMB 1,042.0 million for the six months ended June 30, 2020[81]. Loan and Financing Activities - Total loan realizations reached RMB 22.5 billion, a substantial increase of 69.2% compared to RMB 13.3 billion for the same period in 2020[23]. - Loans facilitated through partnerships with licensed financial institutions amounted to RMB 14.4 billion, a 75.8% increase from RMB 8.2 billion in the same period last year[25]. - The total loan volume achieved during the period was RMB 22,525.7 million, with a year-on-year increase of 29.1% compared to RMB 17,459.6 million in the same period last year[44]. - The average loan size increased by 17.0% to RMB 13,091 from RMB 11,192 in the previous year[23]. - The company has established a stable financing structure supported by 64 external licensed financing partners, enhancing its capital flexibility[25]. - The company recorded a guarantee income of RMB 293.9 million, compared to a guarantee loss of RMB 421.5 million in the previous year[26]. Risk Management and Credit Quality - The company successfully transformed its credit policy and risk models, focusing on higher-quality borrowers, resulting in a one to three-month overdue rate of 2.06% and a three-month overdue rate of 1.40%[23]. - The fair value loss on loans to customers decreased by 92.8% to RMB 129.2 million from RMB 1,800.1 million in the same period last year[26]. - The company has improved overdue rates and asset quality indicators, significantly better than pre-COVID-19 levels[37]. - The first payment overdue rate remained stable at approximately 0.4%, while the one to three months overdue rate decreased from 2.50% in Q4 2020 to 2.06% in Q2 2021[48]. - The three months overdue rate also reached a historical low, dropping from 2.86% in Q4 2020 to 1.40% in Q2 2021[48]. - The company implemented a new generation of multi-source scoring cards to enhance risk management capabilities[48]. Operational Efficiency and Strategy - The company’s proactive adjustments to its business strategy and credit models have allowed it to effectively respond to challenges posed by the COVID-19 pandemic[21]. - The company is focusing on optimizing its model and strategies to enhance loan facilitation and post-loan management services[29]. - The company plans to explore more business opportunities with existing institutional partners, including providing comprehensive fintech solutions[25]. - The company aims to enhance risk-centered technological capabilities through continuous research and development[56]. - The company is continuously optimizing its customer lifecycle valuation model to improve marketing decisions[48]. Shareholder and Corporate Governance - The company proposed an interim dividend of HKD 0.10 per share and a special dividend of HKD 0.10 per share, pending shareholder approval[27]. - The company has complied with the corporate governance code principles as per the Hong Kong Stock Exchange listing rules[120]. - The board currently has two independent non-executive directors, which is below the required minimum of three[123]. - The company is in the process of identifying suitable candidates to fill the vacancy left by the resignation of an independent non-executive director[124]. Employee and Share Incentive Plans - The group has implemented multiple share incentive plans to provide equity-based incentives and rewards for eligible personnel[127]. - The company adopted the first share incentive plan on January 11, 2019, allowing for a maximum of 24,974,369 shares to be granted[142]. - The company aims to retain and incentivize eligible participants through the Post-IPO Stock Option Plan[140]. - The company has established a specific plan for eligible employees participating in the Hong Kong Mandatory Provident Fund scheme, with contributions based on a percentage of salaries[119]. Cash Flow and Financial Position - The net cash outflow from operating activities for the six months ended June 30, 2021, was RMB 1,666.8 million, compared to a net cash inflow of RMB 3,818.1 million for the same period in 2020[105]. - The cash inflow from financing activities for the six months ended June 30, 2021, was RMB 1,849.1 million, compared to a cash outflow of RMB 4,170.3 million for the same period in 2020[108]. - Total assets as of June 30, 2021, amounted to RMB 11,324,715 thousand, up from RMB 8,337,194 thousand at the end of 2020, reflecting a growth of 35.0%[182]. - Total liabilities increased to RMB 8,237,148 thousand, compared to RMB 6,050,850 thousand at the end of 2020, marking a rise of 36.2%[182]. - Cash and cash equivalents stood at RMB 1,650,715 thousand, an increase from RMB 1,501,830 thousand at the end of 2020[182].