Investment Rating - The report maintains a "Buy-A" investment rating for the company [3][6]. Core Insights - The company reported a total revenue of 919 million yuan for 2024, a year-on-year decrease of 4.6%. However, platform technology service revenue surged by 103.6% to 347 million yuan, partially offsetting the impact of Wuxi Guojin's exit from the financial statements. The net profit attributable to shareholders reached 380 million yuan, reflecting a year-on-year increase of 41.7% [2]. - The company has seen a doubling of its platform technology service revenue, with a total of 163 funding partners linked to the platform, an increase of 24% year-on-year, and total funding partner amounts exceeding 36.6 billion yuan, up 58% year-on-year. The cumulative customer base surpassed 18,100, with over 96% being small and micro-enterprises and a retention rate exceeding 80% [2]. - The digital financial solutions revenue decreased by 28% to 522 million yuan, primarily due to Wuxi Guojin's exit in February 2024. The company is focusing on a light asset operation strategy, which is expected to optimize its business structure and enhance platform service revenue and profitability in the long term [3]. - The company is actively embracing the AI era, with cumulative R&D investment exceeding 250 million yuan and nearly 30% of its workforce dedicated to R&D. This is expected to further promote the company's platform development and industrial collaboration [3]. Financial Summary - The company forecasts earnings per share (EPS) of 0.42 yuan, 0.49 yuan, and 0.58 yuan for 2025, 2026, and 2027 respectively. A price-to-earnings (P/E) ratio of 30x for 2025 is applied, leading to a target price of 13.56 HKD over the next six months [3][9]. - The total revenue is projected to recover to 644 million yuan in 2025, with net profit expected to reach 417 million yuan [9].

Investment Rating - The report maintains a "Buy" rating for the company with a target price of 15.03 HKD, indicating an expected return of over 20% within the next six months [7]. Core Insights - The company has successfully implemented a platform-based development strategy, leading to a significant increase in platform technology service revenue, which reached 3.47 billion HKD, a year-on-year growth of 103.6% [2]. - The company's net profit for 2024 is projected to be 3.80 billion HKD, reflecting a 42% increase year-on-year, despite a decline in overall revenue due to the impact of the sale of a subsidiary [1]. - The integration of AI technology into the supply chain has positioned the company as a leader in the digital transformation of key industries such as infrastructure, pharmaceuticals, and commodities [3][4]. Summary by Sections Financial Performance - The company's total revenue for 2024 is expected to be 9.19 billion HKD, a decrease of 4.6% year-on-year, primarily due to the divestment of Wuxi Guojin Commercial Factoring Co., Ltd. [1]. - The platform technology service revenue has become a major growth driver, accounting for 37.7% of total revenue in 2024, up from 17.7% in 2023 [2]. Strategic Development - The company has established strong partnerships with local state-owned enterprises, enhancing its platform-based financial services and increasing the number of funding partners to 163, a growth of 24.4% [2]. - The company is actively exploring new markets, including e-commerce and robotics, with potential market sizes exceeding 10 trillion HKD and over 10 million potential clients [4][5]. AI and Technology Integration - The company has integrated its cloud platform with advanced AI models, enhancing its capabilities in supply chain management and decision-making processes [4]. - The company has also secured significant computational resources to support its AI initiatives, further solidifying its position in the digital ecosystem [4]. Future Projections - Revenue forecasts for FY2025 and FY2026 have been adjusted to 11.11 billion HKD and 13.46 billion HKD, respectively, with net profit projections of 4.98 billion HKD and 6.53 billion HKD [6]. - A new revenue forecast for FY2027 is introduced at 16.15 billion HKD, with a net profit of 8.36 billion HKD [6].

Investment Rating - The report maintains a "Buy" rating for the company with a target price of 15.03 HKD, indicating an expected return of over 20% within the next six months [7]. Core Insights - The company has successfully implemented a platform-based development strategy, leading to a significant increase in platform technology service revenue, which reached 3.47 billion HKD, a year-on-year growth of 103.6% [2]. - The company's net profit for 2024 is projected to be 3.80 billion HKD, reflecting a 42% increase year-on-year, despite the impact of the divestment of Wuxi Guojin Commercial Factoring Co., Ltd [1]. - The integration of AI technology into the supply chain has positioned the company as a leader in the AI + industrial supply chain sector, with a focus on infrastructure, pharmaceuticals, and bulk commodities [3][4]. Summary by Sections Financial Performance - For 2024, the company expects total revenue of 9.19 billion HKD, a decrease of 4.6% year-on-year, primarily due to the divestment impact, which is offset by growth in platform technology services [1]. - The platform technology services now account for 37.7% of total revenue, up from 17.7% in 2023 [2]. Strategic Developments - The company has established strong partnerships with local state-owned enterprises, enhancing its platform-based financial services and increasing the number of funding partners to 163, a growth of 24.4% [2]. - The company is actively exploring new markets, including e-commerce and robotics, with potential market sizes exceeding 10 trillion HKD [4][5]. AI and Technology Integration - The company has integrated its cloud platform with DeepSeek AI, enhancing its capabilities in supply chain management and decision support [4]. - The company has also secured computational resources from Wuxi Economic Development Zone, which will support its AI initiatives [4]. Future Projections - Revenue forecasts for FY2025 and FY2026 have been adjusted to 11.11 billion HKD and 13.46 billion HKD, respectively, with net profit projections of 4.98 billion HKD and 6.53 billion HKD [6]. - A new revenue forecast for FY2027 is set at 16.15 billion HKD, with a net profit of 8.36 billion HKD [6].

Investment Rating - The investment rating for the company is "Buy" with a target price of 15.03 HKD, indicating an expected return of over 20% within the next six months [7][16]. Core Insights - The company has successfully implemented a platform-based development strategy, leading to a significant increase in platform technology service revenue, which reached 3.47 billion HKD, a year-on-year growth of 103.6% [2]. - The company has transformed into an AI-driven digital technology firm focused on the industrial supply chain, achieving a net profit of 3.80 billion HKD in 2024, a 42% increase year-on-year [1][3]. - The integration of AI technology into the supply chain has enhanced customer acquisition and risk control capabilities, with the number of funding partners increasing by 24.4% to 163 [2][6]. Summary by Sections Financial Performance - In 2024, the company's revenue was 9.19 billion HKD, a decrease of 4.6% year-on-year, primarily due to the impact of the sale of Wuxi Guojin Commercial Factoring Co., Ltd. However, the platform technology service business significantly offset this decline [1]. - The projected revenue for FY2025 is adjusted to 11.11 billion HKD, with a net profit forecast of 4.98 billion HKD, reflecting continued growth expectations [6]. Business Strategy - The company has established strong partnerships with local state-owned enterprises, enhancing its platform-based financial services and expanding its supply chain finance capabilities [2]. - The company is actively exploring new markets, including e-commerce and robotics, with potential market sizes exceeding 10 trillion HKD [4][5]. Technological Advancements - The integration of the company's 盛易通云 platform with DeepSeek AI models aims to optimize AI capabilities for supply chain management and decision-making processes [4]. - The company has secured computational resources from Wuxi Economic Development Zone, enabling further development of AI applications in various industries [4]. Market Position - The company has maintained a leading position in key sectors such as infrastructure, pharmaceuticals, and commodities, while also expanding into emerging industries [3][4].

Customer and Partner Growth - The total number of cumulative platform customers exceeded 18,100, representing an increase of approximately 18.3% compared to over 15,300 as of December 31, 2023[3]. - The number of funding partners increased by 24.4% to 163, with a total funding limit exceeding RMB 36.6 billion, a significant increase of approximately 57.8% from over RMB 23.2 billion as of December 31, 2023[3]. Financial Performance - Net profit increased by approximately 36.9% to RMB 390.9 million from RMB 285.5 million for the year ended December 31, 2023[5]. - The company's main business revenue and income were approximately RMB 919.4 million, a slight decrease of about 4.6% year-on-year[5]. - The total revenue for the year ended December 31, 2024, decreased by 4.6% to RMB 919.4 million from RMB 963.5 million in 2023, primarily due to the impact of the sale of Wuxi Guojin Commercial Factoring Co., Ltd. in February 2024[19]. - The net profit for the year increased by 36.9% to RMB 390.9 million, compared to RMB 285.5 million in 2023[18]. - Adjusted net profit increased by 17.7% year-on-year to RMB 343.3 million, compared to RMB 291.6 million in the previous year[30]. Revenue Breakdown - Platform technology service revenue was RMB 346.6 million, a substantial increase of approximately 103.6% compared to RMB 170.2 million for the year ended December 31, 2023[3]. - Digital financial solutions revenue fell by 27.8% year-on-year to RMB 521.9 million, mainly due to the sale of Wuxi Guojin and a shift towards a light asset operation strategy[22]. - The revenue from supply chain asset refinancing decreased by 27.8% year-on-year to RMB 50.9 million, down from RMB 70.5 million in the same period last year[23]. - Other income increased by 208.4% year-on-year to RMB 72.9 million, compared to RMB 23.6 million in the previous year, primarily due to gains from revaluation of previously held interests in associates and increased fair value gains on other financial assets[24]. Strategic Initiatives - The company has established strategic partnerships in the cross-border e-commerce sector, aiming to unlock nearly RMB 100 billion in business scale through collaboration with Sinbada[10]. - The company is actively expanding into new industries, including e-commerce and robotics, with a potential market size exceeding RMB 10 trillion and over 10 million potential customers[9]. - The company plans to enhance operational efficiency by at least 50% by 2025 through AI-driven data analysis and processing capabilities[16]. - The company has signed a strategic cooperation framework agreement with Wuxi Economic Development Zone to establish a digital ecosystem hub in East China[17]. Research and Development - Research and development investment exceeded RMB 250 million, with R&D personnel accounting for nearly 30% of the workforce[8]. - Continued investment in R&D focusing on data, models, and computing power to support the growth of small and medium-sized enterprises[73]. Shareholder Returns - The company proposed a dividend of RMB 0.347 per ordinary share, compared to HKD 0.269 per share for the year ended December 31, 2023[3]. - The board proposed a final dividend of RMB 0.347 per ordinary share for the year ended December 31, 2024, compared to HKD 0.269 per share for the year ended December 31, 2023[52]. Asset Management - The total amount of supply chain assets processed by the platform reached approximately RMB 249 billion, an increase of about 29.0% from RMB 193 billion as of December 31, 2023[3]. - The average daily balance of proprietary supply chain assets decreased by 27.2% to RMB 5,778.9 million, primarily due to the classification of Wuxi Guojin as held for sale[33]. - The total value of supply chain assets as of December 31, 2024, was secured by trade receivables, with RMB 217.1 million backed by commercial acceptance bills received from customers[34]. Financial Position - The group's total liabilities were RMB 15,883,238,000, with current liabilities at RMB 6,684,916,000[93]. - The group's leverage ratio as of December 31, 2024, was 1.58, improved from 1.91 as of December 31, 2023[51]. - The company’s total assets decreased to RMB 7,513,121 thousand in 2024 from RMB 9,617,336 thousand in 2023, a decline of about 21.8%[100]. Compliance and Governance - The company has maintained compliance with applicable regulations as confirmed by the board[80]. - The company has adhered to corporate governance codes since its listing on July 6, 2017, and continues to comply as of December 31, 2024[91]. Acquisitions and Investments - The company acquired 100% equity of Mingfeng Holdings Limited in July 2024, aiming to expand its supply chain financing and investment business[155]. - The total consideration for the acquisition of Mingfeng is RMB 789,796,000, which includes cash of RMB 300,000,000 and contingent consideration of RMB 489,796,000[156].

Investment Rating - The report maintains a "Buy" rating for the company with a target price of 13.42 HKD, representing a potential upside of over 20% from the current price of 8.1 HKD [6][5]. Core Insights - The company is expected to achieve a net profit of 371 million CNY in 2024, reflecting a year-on-year increase of approximately 30%, indicating the success of its new platform-based development strategy [1]. - The revenue from platform technology services has significantly increased, accounting for about 40% of total revenue in 2024, up from 18% in 2023, showcasing the effectiveness of the company's platformization strategy [2]. - The company has established strong partnerships with over 138 funding partners, marking a growth of 13.1%, and is poised for rapid replication of its successful joint venture model with state-owned enterprises [2]. - The company anticipates deep cooperation with over 10 core state-owned enterprises across various industries, including infrastructure and healthcare, with a projected 180% year-on-year increase in daily average balance of platform services [3]. - The company is expanding its business into new sectors, such as e-commerce supply chain services, while maintaining rapid growth in its existing operations, which is expected to create new revenue streams [4]. Summary by Sections Financial Performance - The company forecasts revenue for FY2024 to be adjusted to 941 million CNY, with net profit estimates revised to 347 million CNY, reflecting strong growth expectations [5]. Market Position - The company is well-positioned in the supply chain technology sector, with robust customer acquisition and risk management capabilities, which are expected to drive future growth [5]. Strategic Development - The company is focusing on enhancing its service capabilities to support the real economy, particularly in inclusive finance, and aims to expand its service scale and supply chain asset size [3][4].

Summary of the Conference Call Company Overview - The company operates in the supply chain finance sector as a technology platform, having assisted over 17,000 small and micro enterprises in obtaining financial services exceeding 210 billion RMB [1][2]. - The company aims to enhance supply chain efficiency and reduce financial costs through a digital ecosystem tailored for small and medium enterprises [2]. Core Business Model - The company started as a factoring company in 2013 and has evolved into a supply chain platform, focusing on breaking the limitations of traditional on-balance sheet funding [3][4]. - The current business model integrates technology to provide more accessible financial services to small and micro enterprises, with a focus on three major industries: infrastructure, pharmaceuticals, and energy [4][5]. Financial Performance - The company reported a supply chain asset balance of 23.9 billion RMB, with a year-on-year increase of 70% [19]. - The platform's technology service revenue is expected to reach 50% by 2025, with a current mid-year share of 35% [7][19]. - The company maintains a low bad debt ratio of less than 1% over the past ten years, with a commitment to a 90% dividend payout ratio for the next three years [19][20]. Strategic Partnerships and Growth - The company has established partnerships with several state-owned enterprises and financial institutions, enhancing its funding capabilities [2][17]. - The company is expanding into e-commerce and renewable energy sectors, collaborating with platforms like Douyin and Pinduoduo [17][28]. Risk Management - The company employs a differentiated risk control logic, focusing on the authenticity and reasonableness of accounts receivable, which allows it to serve clients who may not qualify for traditional bank loans [9][12]. - The risk control framework includes continuous monitoring and validation of data from various sources, ensuring a robust assessment of financial assets [12][13]. Future Outlook - The company anticipates steady growth in supply chain asset management, with a focus on maintaining high-quality assets while expanding its funding sources [26][29]. - The management has set a conservative growth estimate of over 10% annually for the next few years, with a focus on enhancing the quality of supply chain assets [29]. Key Takeaways - The company is positioned as a leading player in the supply chain finance sector, leveraging technology to provide innovative financial solutions [20]. - The commitment to high dividend payouts and a strong growth trajectory makes the company an attractive investment opportunity [20][31]. - The strategic partnerships and expansion into new markets are expected to drive future growth and stability [17][19].

Financial Performance - As of June 30, 2024, the platform has accumulated over 16,700 clients, with a supply chain asset scale of approximately 216 billion yuan, representing a year-on-year growth of about 22.8% and 22.0% respectively[10]. - The adjusted net profit for the first half of 2024 reached 1.166 billion yuan, with digital financial solutions revenue of approximately 275 million yuan, and an average daily supply chain asset balance of about 20.429 billion yuan, reflecting a year-on-year increase of approximately 61.7%[10]. - The group's main business revenue decreased by 11.9% year-on-year to RMB 436.1 million for the six months ended June 30, 2024, down from RMB 494.8 million in the same period last year[14]. - Net profit for the first half of 2024 was RMB 165.1 million, a decrease of RMB 21.9 million or 11.7% from RMB 187.0 million in the same period of 2023[21]. - Adjusted net profit decreased by 11.8% to RMB 166.0 million in the first half of 2024 from RMB 188.3 million in the same period of 2023[22]. - The company reported a significant increase in investments in associates, rising to RMB 1,352,130 thousand from RMB 582,968 thousand, which is an increase of 132.9%[98]. - The company reported a total comprehensive income of RMB 194,712,000 for the six months ended June 30, 2024, compared to RMB 181,089,000 for the same period in 2023, indicating an increase of about 7.5%[102]. Revenue Breakdown - Revenue from platform technology services was approximately 154 million yuan, a year-on-year increase of about 82.9%, accounting for 35.3% of total revenue[10]. - Revenue from platform technology services increased significantly by 82.9% year-on-year to approximately RMB 153.8 million, driven by the expansion of inclusive matching services[16]. - Revenue from digital financial solutions decreased by 22.5% year-on-year to RMB 275.0 million, primarily due to the classification of Wuxi Guojin as a joint venture in February 2024[17]. - Revenue from the sale of supply chain assets dropped by 87.0% year-on-year to RMB 7.2 million, attributed to a decrease in the amount of sold supply chain assets[18]. - Other income increased by 331.7% year-on-year to RMB 27.2 million, mainly due to gains from fair value adjustments of financial assets and liabilities[19]. Expenses and Costs - Total operating expenses rose by 5.5% year-on-year to RMB 108.2 million, primarily due to an increase in employee costs by RMB 8.7 million[20]. - Employee costs amounted to RMB 69.1 million, reflecting a 14.3% increase compared to RMB 60.5 million in the previous year[20]. - The company’s financing costs decreased to RMB 185.4 million from RMB 200.0 million, a reduction of 7.9%[96]. - The company incurred a net cash outflow from investing activities of RMB 199,871,000 for the six months ended June 30, 2024, a slight improvement from RMB 217,709,000 in the same period of 2023[104]. Assets and Liabilities - As of June 30, 2024, the group's cash and cash equivalents amounted to RMB 741.1 million, up from RMB 658.2 million as of December 31, 2023[39]. - The total value of supply chain assets measured at fair value was RMB 5,720.3 million, a decrease of 28.9% year-on-year[26]. - Borrowings, including related party loans, amounted to RMB 5,874.8 million, a decrease of 10.6% year-on-year[30]. - The company's total liabilities amounted to RMB 364,505,000, an increase from RMB 294,752,000 as of December 31, 2023, representing a growth of approximately 23.6%[169]. - The company's total borrowings as of June 30, 2024, were RMB 3,039,825,000, a significant decrease from RMB 6,219,986,000 as of December 31, 2023, representing a decline of approximately 51.1%[177]. Strategic Initiatives - The company continues to focus on strategic partnerships with core enterprises to enhance its supply chain technology platform, targeting key industries such as infrastructure, pharmaceuticals, and commodities[38]. - The company plans to strengthen its presence in emerging industries such as cross-border e-commerce and energy storage, while deepening collaborations with core enterprises in these sectors[38]. - The company aims to maintain its industry-leading position by leveraging technology and investing in research and development to enhance risk control and drive sustainable growth[38]. - The company actively supports the national credit system construction and has received recognition for its data quality work from the People's Bank of China[12]. Shareholder and Equity Information - The company did not recommend any interim dividend for the period ending June 30, 2024, consistent with the previous period[40]. - The company successfully issued a total of 63,068,000 new shares at a price of HKD 8.80 per share, raising approximately HKD 550.8 million (equivalent to about RMB 456.2 million)[40]. - The company has diluted its indirect equity interest in Wuxi Guojin from 80% to 49% due to a capital increase agreement with Wuxi Taihu New City Asset Management Co., amounting to RMB 569.4 million[48]. - The company has a total of 444,500 unissued treasury shares as of June 30, 2024, compared to 225,000 shares as of December 31, 2023[181]. Research and Development - Research and development investment totaled approximately 223 million yuan, with 68 national invention patents and software copyrights held[10]. - The company is committed to investing in key strategic areas, particularly in industrial digitalization and digital finance, to strengthen its platform technology services[49]. - Research and development costs for the period were RMB 8,458,000, up from RMB 7,211,000 in 2023, marking an increase of about 17.3%[128]. Compliance and Governance - The independent auditor, Deloitte, confirmed that the financial statements were prepared in accordance with applicable accounting standards and regulations[95]. - The company has complied with the corporate governance code since its listing date and continues to uphold high standards of corporate governance[89]. - The company is actively participating in mandatory provident fund schemes in both Hong Kong and Singapore, ensuring compliance with local regulations[52].

Investment Rating - The report maintains a "Buy-A" investment rating for the company [2] Core Views - The company reported a main business revenue of 436 million yuan for the first half of 2024, a year-on-year decrease of 12%, while platform technology service revenue surged by 83% to 154 million yuan, accounting for 35% of total revenue [1] - Strategic cooperation with Taihu New City Group is expected to accelerate the company's transformation, despite a 22% decline in digital financial solutions revenue to 275 million yuan due to changes in ownership structure [1] - The company is optimistic about leveraging fintech to enhance its service capabilities for the real economy, which is anticipated to drive continued business growth [1] Summary by Sections Financial Performance - In H1 2024, the company achieved a net profit of 166 million yuan, down 12% year-on-year, with earnings per share of 0.16 yuan, a decrease of 11% [1] - The total processed supply chain asset scale reached approximately 216 billion yuan, reflecting a year-on-year increase of 22% [1] Strategic Developments - The partnership with Taihu New City Group led to a reduction in the company's stake in Wuxi Guojin from 80% to 49%, resulting in a short-term decline in operating revenue, total assets, and net assets [1] - The strategic cooperation aims to enhance platform service revenue and optimize the company's business structure, improving return on equity [1] Future Outlook - The report projects earnings per share (EPS) for 2024, 2025, and 2026 to be 0.30 yuan, 0.36 yuan, and 0.43 yuan respectively, with a target price of 7.32 HKD based on a price-to-book ratio of 1.6x for 2024 [1][2]

Investment Rating - The report assigns a "Buy" rating for the company with a target price of HKD 6.93 and a current price of HKD 5.66 [1] Core Viewpoints - The company is a leading supply chain technology platform, focusing on inclusive finance and digital finance, serving key industries such as infrastructure, pharmaceuticals, and bulk commodities [2] - The company has achieved a non-performing loan ratio of 0% and an overdue ratio of 0.03% in 2023, demonstrating strong risk control capabilities [2] - The company's platform strategy, driven by technology, has significantly enhanced its ability to connect capital providers with asset providers, leading to robust growth in digital finance and platform services [3] Business Model and Strategy - The company operates a "1+N" model, where "1" represents large state-owned enterprises and listed companies, and "N" represents small and medium-sized enterprise (SME) suppliers [66] - The company has established partnerships with over 138 capital providers as of H1 2024, a 200% increase from 2020 [69] - The company has invested over RMB 200 million in R&D, with significant capitalisation of R&D costs, indicating efficient conversion of R&D into technological achievements [38] Financial Performance - The company's total revenue grew by 24% YoY in 2023, with digital finance solutions and platform technology services contributing RMB 723 million and RMB 170 million, respectively [34] - The company's adjusted net profit CAGR from 2021 to 2023 was 13.54%, with an adjusted net profit margin consistently above 30% [33] - The company's supply chain assets and platform matching daily balances reached RMB 13.911 billion and RMB 5.97 billion in 2023, representing YoY growth of 58% and 200%, respectively [34] Industry and Market Potential - The supply chain finance market in China reached RMB 36.9 trillion in 2022, with a CAGR of 16.8% from 2018 to 2022, and is expected to grow to over RMB 60 trillion by 2027 [61] - The commercial factoring market in China grew by 20.5% YoY in 2023, reaching RMB 2.7 trillion, and is expected to exceed RMB 3 trillion by 2025 [50] - The accounts receivable of large-scale industrial enterprises in China increased from RMB 17.40 trillion in 2019 to RMB 23.72 trillion in 2023, with a CAGR of 8.05% [51] Competitive Advantages - The company has formed strategic partnerships with state-owned enterprises, including Wuxi Traffic Industry Group and Xiamen Xiangyu Group, enhancing its credibility and access to capital [63] - The company's technology-driven platform has enabled it to efficiently match capital with assets, reducing operational costs and improving risk control [20] - The company's focus on R&D and technology application has resulted in 68 national invention patents and software copyrights, further strengthening its competitive position [2]