Summary of the Conference Call for Lianlian Technology Company Overview - Lianlian Technology is the largest independent digital payment solution provider in China, with digital payment service volume exceeding 3 trillion RMB in 2024 and over 5.9 million customers. Revenue growth is reported at 27.9%, significantly outpacing the average growth rate of the cross-border e-commerce industry at 10.8% [2][7]. Core Business and Services - The company operates as a ToB provider, facilitating cross-border trade by offering both financial services (such as payment processing, currency exchange, and trade declaration) and logistical services (including marketing and supply chain management) [3]. - Lianlian has established partnerships with major e-commerce platforms like Amazon, Shopee, and TikTok, as well as financial institutions such as City Bank and Deutsche Bank, creating a robust ecosystem [2][12]. Financial Performance - In 2024, the company reported a total payment volume (TPV) growth of 64.7% and revenue growth of 27.9%. Global payment TPV grew by 63.1%, with domestic payment TPV increasing by 64.9% [16]. - The core revenue model consists of digital payment services (90% of revenue) and value-added services (10% of revenue), with profitability achieved in the main business by 2023 [16][17]. Industry Positioning - Lianlian is recognized as the only publicly listed cross-border payment company in China, holding a market share of approximately 10% in the independent digital payment solutions sector. The competitive landscape includes major players like PingPong and Payoneer, with the top five companies controlling about 80% of the market [6][21]. Technological Advancements - The company is embracing digital technologies, integrating AI and Deepfake technology to enhance customer service and operational efficiency. It is also exploring the establishment of a digital asset exchange to improve settlement efficiency [2][8][15]. Regulatory Compliance and Risk Management - Lianlian maintains strict compliance with regulatory requirements and has a robust risk management framework, including a dedicated IT team for compliance processes [11]. Future Growth Strategies - The company plans to expand its global footprint by acquiring licenses in the Middle East and Latin America, aiming to diversify its business and mitigate geopolitical risks [15][23]. - Lianlian is also focusing on the development of stablecoin and digital asset services, which are expected to enhance settlement efficiency and profitability [19][24]. Market Trends and Projections - The cross-border e-commerce sector is projected to grow at approximately 30% in 2025, with overall revenue growth expected to exceed 20% [27]. - The trend towards online trade is driving small and micro enterprises to seek comprehensive solutions, which Lianlian aims to provide through its one-stop service model [9]. Conclusion - Lianlian Technology is positioned for significant growth in the digital payment sector, leveraging its extensive partnerships, technological innovations, and strategic global expansion plans to capitalize on the increasing demand for cross-border payment solutions.

Summary of the Conference Call for Lianlian Digital Company Overview - Lianlian Digital was established in February 2009 and is headquartered in Hangzhou, initially focusing on domestic payment services. [3] - The company became one of the first cross-border payment enterprises in 2013 and has since expanded globally, entering markets such as the UK, Ireland, Brazil, the US, and Singapore. [3] - Lianlian Digital went public on the Hong Kong Stock Exchange in March 2024, marking a significant milestone as the first stock in the cross-border payment sector. [3] Core Business and Financial Performance - The core business of Lianlian Digital is global payments, which includes both cross-border and domestic payment services. In 2024, global payments accounted for 61.4% of total revenue, which is projected to be 1.31 billion yuan. [2][5] - The company has been operating at a loss since 2020, but the losses have been narrowing, with a projected loss of 170 million yuan in 2024. Excluding stock compensation and listing expenses, the company is expected to achieve a profit of 80 million yuan. [2][6] - The compound annual growth rate (CAGR) for revenue from 2020 to 2024 is 22.3%, with a revenue growth rate of 27.9% in 2024. [6] Market Position and Competitive Landscape - Lianlian Digital holds a 9.1% market share as an independent payment provider in China, which has a higher cross-border e-commerce penetration rate than the global average. [2][10] - The company has obtained 65 global payment licenses, including money transfer licenses in all US states and an EMI license in Luxembourg, establishing a strong compliance barrier for global expansion. [2][3][17] - The payment industry in China is entering a new phase of high-quality development, with increased regulatory standards that may push weaker players out of the market, benefiting compliant and capital-strong companies like Lianlian. [7] Growth Opportunities and Strategic Initiatives - Lianlian Digital is actively exploring the virtual asset sector, having obtained a virtual asset trading platform license from the Hong Kong Securities and Futures Commission, which may open new growth avenues. [2][14] - The company is also focusing on Web3 and stablecoin applications, which could provide additional growth opportunities and reduce reliance on traditional payment systems like SWIFT. [30][31] - The expected revenue growth rates for Lianlian Digital are 22% in 2025, 25.9% in 2026, and 21.6% in 2027, driven by expansion in Southeast Asia and the EU markets. [19] Cost Management and Profitability - The company has made progress in cost control, with total sales, management, and R&D expenses accounting for 85.5% of total expenses in 2024, a decrease of 5.7 percentage points year-on-year. [9] - The gross profit margin for global payments remains stable at 72%, despite a slight decline in overall gross margin. [6][11] Risks and Challenges - The global economic slowdown could negatively impact payment businesses due to reduced trade and consumer spending. [20] - Increased competition in both domestic and international markets may lead to further declines in service fees, complicating profitability improvements. [23] - Tensions in international relations could pose challenges for overseas operations, including licensing issues. [21][22] Conclusion - Lianlian Digital is positioned as a leading independent payment provider in China, with a strong focus on compliance, technology, and strategic partnerships. The company is expected to benefit from growth in cross-border payments and virtual assets, while also facing challenges from market competition and economic conditions. [19][32]

Summary of Lianlian Digital Conference Call Company Overview - Lianlian Digital is the largest independent digital payment solution provider in China, holding 65 global payment licenses and supporting transactions in over 130 currencies, serving more than 100 e-commerce platforms globally, with a strong global layout and compliance framework as its core competitive advantage [2][3][5] Financial Performance - In 2024, Lianlian Digital's Total Payment Volume (TPV) grew by 64.7%, and revenue increased by 27.9% to 1.315 billion RMB, with global payment revenue accounting for 61.4% and a gross margin of 72%, indicating strong growth momentum and profitability [2][13] Business Model and Services - The company provides a one-stop solution for cross-border e-commerce payment services, including acquiring, collection, currency exchange, trade declaration, and subsequent logistics services [3][4] - Lianlian Digital collaborates with logistics companies like Zhongyuan Shipping to offer comprehensive fund flow and logistics services [2][8][9] Market Expansion and Strategy - The company is actively expanding its global business, focusing on the Middle East and Latin America, with plans to obtain a payment license in the Middle East by 2025 [2][12][19] - Lianlian Digital is exploring the application of Web3 technology in cross-border payments and has obtained a virtual asset exchange license in Hong Kong [2][27] Competitive Landscape - The cross-border payment industry faces significant barriers, including licensing and compliance requirements, with Lianlian Digital being the only non-U.S. company to hold payment licenses in all 50 U.S. states [6][17] - The market is highly concentrated, with major players holding approximately 80% of the market share, indicating intense competition [15][16][30] Management and Team - The management team has extensive industry experience, with the CEO and COO having significant backgrounds in technology and finance [10][11] Regulatory Environment - Recent financial facilitation policies from the Shanghai government are expected to positively impact the company by enhancing cross-border settlement efficiency and financial services [26] Future Outlook - Lianlian Digital's future strategy includes further global expansion, particularly in the Middle East and Latin America, and leveraging existing licenses for localized operations to mitigate tariff increases and geopolitical risks [12][19] - The company anticipates a slowdown in TPV growth to 30-40% in 2026, emphasizing the importance of revenue growth as a core competitive metric [32] Challenges and Risks - The company faces challenges in customer acquisition compared to e-commerce giants like Alibaba, as its customer base primarily consists of small and micro enterprises [20][21] - The stock price has been volatile due to large shareholder unlocks and market dynamics, with strategies in place to stabilize it [33] Technology and Innovation - Lianlian Digital is committed to integrating AI and Web3 technologies into its payment processes to enhance efficiency and reduce costs [12][27] Conclusion - Lianlian Digital is well-positioned in the cross-border payment industry with a robust growth trajectory, strong management, and a focus on innovation and compliance, while navigating competitive and regulatory challenges [2][6][12]

Summary of the Conference Call Records Company Overview - Lianlian Digital focuses on cross-border payments, accounting for approximately 70% of its business, providing multi-currency payment accounts for small and micro enterprises in China, facilitating global trade fund collection and domestic distribution. In 2024, the company is expected to process transaction volumes of 281.5 billion RMB, corresponding to a trade scale of approximately 560 billion RMB, serving about one-quarter of the Chinese export consumer goods cross-border e-commerce market [1][2][3]. Industry Characteristics - The cross-border payment industry requires global payment licenses, a comprehensive compliance payment system (KYC, anti-money laundering, trade authenticity verification), and strong service capabilities. Lianlian Digital is the only foreign company to obtain payment licenses in all 50 states in the U.S. and collaborates with several global settlement banks to provide efficient and secure payment services [1][4][5]. Competitive Landscape - The cross-border payment industry is characterized by a "three big, two small" structure, with Lianlian Digital, PingPong, and Payoneer each holding about 20% market share, while Airwallex and Worldfirst hold about 10% each. Notably, Airwallex's main business is not cross-border trade payments [1][7]. Revenue Sources and Growth - Lianlian Digital's domestic third-party online payment business has an annual transaction volume of 3 trillion RMB, contributing 30% of its revenue. The company collaborates with independent third-party ToB companies to provide differentiated payment solutions for approximately 3,000 large and medium-sized enterprises in China [2][13][26]. Financial Performance - In 2024, despite global economic pressures, Lianlian Digital achieved significant growth, with global transaction volume increasing by 63% and revenue by 23%. Domestic transaction volume grew by 65%, with revenue increasing by 57% [14][28]. Strategic Partnerships - The partnership with American Express for a clearing company has historically led to losses, but with recent capital increases from American Express, the company expects to achieve breakeven or profitability in the future, recovering approximately 1.6 billion RMB and enjoying investment returns [2][15]. Regulatory Compliance - Lianlian Digital holds relevant payment licenses in both China and the U.S., ensuring strong compliance. The company was one of the first to obtain a third-party online payment license in China and has completed all regulatory requirements [9][10]. Service Offerings - Lianlian Digital provides a one-stop solution that includes rapid matching of bank accounts in over 100 countries, covering 130 currencies, and connecting to over 100 global platforms for store setup. The company also offers logistics, digital marketing, and supply chain financial services through partnerships [11][12]. Market Challenges and Responses - In response to the U.S.-China trade war, Lianlian Digital has focused on real trade, supported new business developments (such as Web3 payments), and collaborated with the Ministry of Commerce to promote the digital transformation of offline trade [2][17]. Future Outlook - The company anticipates that the gap between transaction volume growth and revenue growth will narrow as historical small and medium customers grow into larger clients, leading to higher fee rates. The service trade sector is expected to maintain rapid growth, with Lianlian Digital taking a cautious approach to ensure compliance [21][25]. Conclusion - Lianlian Digital is well-positioned in the cross-border payment industry with a strong compliance framework, significant market share, and a comprehensive service offering. The company is adapting to market challenges and exploring new growth opportunities while maintaining a focus on regulatory compliance and customer service.

Financial Performance - The company reported a total revenue of RMB 1.2 billion for the fiscal year 2024, representing a year-over-year growth of 15%[1]. - Total revenue for 2024 reached RMB 1,314,959,000, representing a year-on-year increase of 27.9%[15]. - Revenue from digital payment services amounted to RMB 1,150.6 million, reflecting a year-on-year increase of 31.6%[30]. - The adjusted net profit for the year was RMB 78,693,000, indicating a recovery trend in profitability[15]. - The company's loss for the year was RMB 166.5 million, a reduction of RMB 487.7 million compared to the previous year, representing a 74.5% decrease in losses[48]. - Adjusted EBITDA for the year was RMB (280,257,000), showing improvement from RMB (359,188,000) in 2023[15]. - The company achieved a gross profit of RMB 682,521,000, with a gross margin of 51.9%[15]. - Gross profit for the year was RMB 682.5 million, an increase of 18.2%, with a gross margin of 51.9%, down 4.2% year-over-year, primarily due to the growth of lower-margin domestic payment business[34]. User Growth and Market Expansion - User base expanded to 10 million active users, reflecting a growth rate of 25% year-over-year[1]. - Market expansion efforts include entering two new Southeast Asian countries by the end of 2025, targeting a 15% increase in user acquisition[1]. - The company plans to launch three new products in 2025, aiming to capture an additional 10% market share in the digital payment sector[1]. Investment and R&D - The company is investing RMB 200 million in R&D for new technologies, focusing on enhancing payment security and user experience[1]. - The company plans to enhance its global licensing layout and invest in emerging markets to strengthen its competitive advantage in cross-border payments[16]. - The company plans to enhance its global license layout and expand its business areas, leveraging technologies such as AI and blockchain[25]. Strategic Partnerships and Acquisitions - The company has completed the acquisition of a local fintech startup for RMB 50 million, expected to enhance its service offerings[1]. - A new strategic partnership with a major bank is expected to increase transaction volume by 30% over the next year[1]. - The company obtained 65 global payment licenses, enhancing its service capabilities in the European market[14]. Financial Position and Liquidity - The total assets increased to RMB 14,538,817,000, up from RMB 10,467,499,000 in 2023, marking a growth of 38.5%[12]. - Total liabilities rose to RMB 13,303,310,000, compared to RMB 9,873,855,000 in 2023, an increase of 34.6%[12]. - As of December 31, 2024, the company's cash and cash equivalents increased by RMB 327.0 million, totaling RMB 522.3 million[49]. - The company maintained sufficient liquidity to meet daily management and capital expenditure requirements[52]. Employee and Management Structure - The company employed a total of 1,103 employees as of December 31, 2024, with 91.30% based in China and 8.70% overseas[72]. - The workforce composition includes 34.90% in R&D, 33.00% in sales and marketing, and 32.09% in general and administrative roles[73]. - The company has established a union in China as of December 31, 2024, to represent employees in collective bargaining[74]. - The company appointed Mr. Sun Dali as President in April 2024, responsible for overall strategic planning and domestic operations management[95]. Shareholder and Equity Information - As of December 31, 2024, the total share capital of the company is RMB 1,079,060,000, divided into 1,079,060,000 shares with a par value of RMB 1.0 each, including 418,668,764 H shares and 660,391,236 unlisted shares[121]. - Major shareholder Mr. Lu Zhonglin holds 92,316,555 unlisted shares, accounting for 13.98% of the relevant shares and 8.56% of the total equity[148]. - The total number of unlisted shares issued as of December 31, 2024, is 660,391,236, while the total number of H shares is 418,668,764, leading to a total equity of 1,079,060,000 shares[145]. Risks and Challenges - The company faces significant risks related to product development and market adaptation, which could adversely affect its business and financial performance[110]. - The company has a history of net losses and may continue to incur losses in the future, impacting its financial stability[115]. Incentive Mechanisms and Employee Benefits - The company aims to enhance its incentive mechanisms to ensure the achievement of development goals[74]. - Employee benefits expenses totaled RMB 816.3 million, an increase of 21.6% from RMB 670.9 million in 2023[75]. - The company has adopted pre-IPO stock option plans and a first-phase incentive trust plan to attract and retain talent[74]. Compliance and Governance - The company confirmed compliance with legal responsibilities as per listing rules for newly appointed directors[103]. - The board consists of eight members, including five executive directors and three independent non-executive directors[78]. - The company has no disclosed interests in any competing businesses as per listing rules[102].

Summary of the Conference Call for Lianlian Digital Technology Co., Ltd. Company Overview - **Company**: Lianlian Digital Technology Co., Ltd. - **Industry**: Cross-border payment services - **Milestone**: Successfully listed on the Hong Kong Stock Exchange in 2024, becoming the first Chinese cross-border payment stock, reflecting recognition from capital markets and regulatory bodies for the company's long-term value and compliance [3][4] Key Financial Highlights - **Total Payment Volume (TPV)**: - 2024 TPV reached RMB 3.30 trillion, a year-on-year increase of 64.7% [3][4] - Global payment business TPV grew by 63.1% to RMB 281.5 billion [3][4] - Domestic payment TPV increased by 64.9% to RMB 300 billion [3][4] - **Revenue**: - Total revenue for 2024 was RMB 13.15 billion, up 27.9% year-on-year [3][4] - Global payment revenue was RMB 8.08 billion, a 23.1% increase [3][6] - Domestic payment revenue reached RMB 3.43 billion, growing by 57.1% [3][6] - Value-added services revenue was RMB 1.46 billion, up 9.5% [3][6] - **Profitability**: - Adjusted profit improved from a loss of RMB 4.03 billion to a profit of RMB 78.7 million [3][4] - Gross profit for the year was RMB 6.8 billion, an increase of 18.2% [6] Strategic Initiatives - **Global Licensing Strategy**: - As of December 31, 2024, the company held 65 payment licenses, including a virtual asset trading platform license from Hong Kong SFC and an EMI license from Luxembourg, enhancing compliance and market coverage [3][5] - **Technological Innovation**: - Focus on AI and blockchain to improve payment and settlement efficiency, reduce customer fund transit time and costs, and integrate digital currencies with fiat currencies [3][5][21] - **Investment in Core Business**: - Sale of part of the stake in Unicom for RMB 1.6 billion to strengthen working capital and core business development [3][11] Future Outlook - **2025 Plans**: - Continue global expansion and enhance AI technology applications in compliance and risk control [3][7] - Anticipate revenue growth exceeding 20% for 2025 [3][7] - **Market Positioning**: - Cautious approach towards the U.S. market due to trade uncertainties, while maintaining strong growth in other regions [3][17] - Focus on B2B and service trade sectors, with expectations of stable growth in domestic business [3][23] Additional Insights - **Cost Management**: - General and administrative expenses increased by 16.7% to RMB 561 million, while R&D expenses rose by 19% to RMB 319 million, reflecting ongoing investment in technology [8][9] - **Tax Strategy**: - Deferred tax assets expected to optimize future tax burdens, with a focus on employee stock option expenses [18][20] - **Competitive Advantage**: - Extensive licensing and compliance capabilities create a significant barrier to entry, positioning the company favorably in the evolving digital asset landscape [22][24] Conclusion Lianlian Digital Technology Co., Ltd. has demonstrated strong financial performance and strategic growth initiatives in the cross-border payment industry, with a focus on technological innovation and global expansion. The company is well-positioned to navigate future challenges and capitalize on emerging opportunities in the market.

Financial Performance - Total revenue for the year ended December 31, 2024, was RMB 1,314,959,000, representing a 27.9% increase compared to RMB 1,028,256,000 in 2023[2] - Gross profit for the same period was RMB 682,521,000, an increase of 18.2% from RMB 577,532,000 in 2023[2] - The net loss for the year decreased significantly to RMB 166,538,000, a 74.5% improvement from RMB 654,215,000 in 2023[2] - Adjusted EBITDA for the year was RMB (280,257,000), showing a 22.0% improvement from RMB (359,188,000) in the previous year[2] - The company reported a basic loss per share of RMB (0.16) for 2024, improved from RMB (0.65) in 2023[4] - The company reported a total comprehensive loss of RMB 161,406 thousand for 2024, compared to a loss of RMB 660,585 thousand in 2023[10] - The net loss attributable to equity holders for the year ended December 31, 2024, was RMB 168,219,000, a significant improvement from a net loss of RMB 656,064,000 in 2023, representing a reduction of approximately 74.4%[28] - The basic loss per share for 2024 was RMB 0.16, compared to RMB 0.65 in 2023, indicating a 75.4% improvement[28] Revenue Breakdown - Digital payment services revenue was RMB 1,150,632 thousand, up 31.5% from RMB 874,212 thousand in the previous year[20] - Global payment revenue reached RMB 807,772,000, a 23% increase from RMB 655,962,000 in the previous year[22] - Domestic payment revenue increased to RMB 342,860,000, up 57% from RMB 218,250,000 year-over-year[22] - The total payment volume (TPV) for digital payment services in 2024 was RMB 3.3 trillion, an increase of 64.7% compared to the previous year, with a cumulative customer base of 5.9 million[50] - The digital payment service revenue amounted to RMB 1,150.6 million, reflecting a year-on-year growth of 31.6%[65] - The global payment business generated a revenue of RMB 807.8 million, up 23.1% year-on-year, with TPV reaching RMB 281.5 billion, a growth of 63.1%[57] - The domestic payment business achieved a TPV of RMB 3.0 trillion, with revenue of RMB 342.9 million, marking a significant year-on-year growth of 57.1%[58] Expenses and Costs - Employee benefits expenses rose to RMB 816,275,000 in 2024, up 21% from RMB 670,937,000 in 2023[23] - The company incurred total operating expenses of RMB 1,760,643,000 in 2024, an increase from RMB 1,391,341,000 in 2023, reflecting a 27% rise[23] - Sales and marketing expenses for the year were RMB 248.3 million, an increase of RMB 56.5 million or 29.4%, driven by business expansion and increased promotional activities[71] - General and administrative expenses for the year were RMB 560.9 million, an increase of RMB 80.4 million or 16.7%, with adjusted expenses of RMB 380.9 million, up 29.6%[73] - Research and development expenses for the year were RMB 319.1 million, an increase of RMB 50.9 million or 19.0%, reflecting ongoing investments in technological innovation[75] Assets and Liabilities - Total assets increased to RMB 14,538,817,000 in 2024, up from RMB 10,467,499,000 in 2023[2] - Total liabilities rose to RMB 13,303,310,000, compared to RMB 9,873,855,000 in 2023[2] - The equity attributable to the company's shareholders increased to RMB 1,228,336,000 from RMB 589,301,000 in 2023[2] - The company's total liabilities increased significantly, with borrowings amounting to RMB 997,089 thousand in 2024, compared to RMB 586,449 thousand in 2023[11] - As of December 31, 2024, the company's debt-to-equity ratio was approximately 38.8%[100] Cash Flow and Financing - Net cash flow from operating activities for 2024 was RMB (111,058) thousand, compared to RMB 94,649 thousand in 2023, indicating a significant decline[11] - Cash and cash equivalents at the end of 2024 increased to RMB 522,250 thousand, up from RMB 189,840 thousand at the end of 2023[11] - The company had a net cash inflow from financing activities of RMB 569.1 million, mainly from proceeds of RMB 560.1 million from a global offering[88] - Customer funds and restricted cash amounted to RMB 12,606.9 million, an increase of RMB 3,423.0 million compared to the previous year, driven by growth in TPV and revenue[91] Strategic Initiatives and Future Plans - The company plans to strengthen its competitive advantage in cross-border payments and compliance financial services while expanding its global business footprint in 2025[51] - The company aims to integrate Web2 and Web3 technologies to enhance transaction transparency and security, reducing global payment costs[51] - The company will continue to embrace artificial intelligence (AI) to optimize external products and improve operational efficiency and user experience[51] - The company plans to further solidify its global licensing layout and expand its business regions, leveraging AI and blockchain technologies to enhance service capabilities[60] Corporate Governance and Compliance - The audit committee, composed of three independent non-executive directors, confirmed compliance with applicable accounting principles and standards for the fiscal year ending December 31, 2024[117] - The company has maintained high standards of corporate governance, ensuring a balance of power and authority within the board[112] - The company is subject to the corporate governance code as outlined in the listing rules[123] Employee and Training Initiatives - The company has implemented a rigorous recruitment process, including campus recruitment and online hiring, to attract and retain qualified personnel[108] - The company has established a training platform for employee development, offering both internal and external training programs[108]