Financial Performance - For the fiscal year ending December 31, 2024, the company reported interest income of RMB 196,354,000, a decrease of 16.9% from RMB 236,165,000 in 2023[4] - Net interest income for the same period was RMB 155,842,000, down 16.7% from RMB 187,149,000 in the previous year[4] - The net profit for the year was RMB 65,397,000, a decrease of 32.3% compared to RMB 96,636,000 in 2023[4] - Basic and diluted earnings per share were RMB 0.05, down from RMB 0.08 in the previous year, representing a decline of 37.5%[4] - The company's profit attributable to equity shareholders for the year ended December 31, 2024, was RMB 62,440,000, a decrease of 32.6% from RMB 92,650,000 in 2023[93] - The total profit and comprehensive income for the year decreased from RMB 10,666 thousand in 2023 to RMB 8,276 thousand in 2024, a decline of approximately 22.4%[120] Asset and Liability Management - Total assets decreased to RMB 2,578,519,000 from RMB 2,657,317,000, reflecting a decline of 3.0%[5] - The company's total liabilities decreased to RMB 537,408,000, down 18.0% from RMB 654,603,000 in the previous year[5] - Cash and cash equivalents decreased to RMB 10,515,000 from RMB 17,478,000, a decline of 39.8%[5] - The company’s goodwill decreased to RMB 12,604,000 from RMB 18,005,000, a reduction of 30.0%[5] - The total liabilities as of December 31, 2024, were RMB (538,255) thousand, compared to RMB (666,232) thousand in 2023, representing a decrease of about 19.22%[155] - The company's total liabilities related to lease obligations decreased from RMB 3,154 million in 2023 to RMB 1,918 million in 2024[126] Cash Flow and Financing Activities - Operating cash flow for the year ended December 31, 2024, was RMB 197,548,000, a decrease of 40% from RMB 330,362,000 in 2023[8] - Net cash generated from operating activities was RMB 160,848,000, down 43.5% from RMB 284,948,000 in the previous year[8] - Cash inflow from bank borrowings was RMB 25,000,000, a significant decrease of 66.7% from RMB 75,000,000 in 2023[8] - Total cash outflow from financing activities was RMB 167,854,000, down 40.9% from RMB 284,041,000 in the previous year[8] - The company paid dividends of RMB 23,600,000 to equity shareholders, a reduction of 50% from RMB 47,200,000 in 2023[8] Credit Risk and Loan Management - The total loans and advances to customers amounted to RMB 2,656,268 thousand as of December 31, 2024, a decrease from RMB 2,720,846 thousand in 2023, representing a decline of approximately 2.4%[195] - The total overdue loans as of December 31, 2024, reached RMB 104,956 thousand, a reduction from RMB 124,812 thousand in 2023, reflecting a decrease of approximately 15.93%[106] - The non-performing loan ratio improved to 3.9% in 2024 from 4.6% in 2023, indicating a positive trend in credit quality[200] - The provision coverage ratio increased to 185% in 2024, up from 159% in 2023, reflecting stronger risk management practices[200] - The impairment loss provision for loans was RMB 194,214 thousand in 2024, slightly lower than RMB 198,495 thousand in 2023[200] Operational Efficiency and Strategic Focus - The company plans to focus on improving operational efficiency and exploring new market opportunities in the upcoming fiscal year[4] - The company identified only one reportable segment, primarily focused on providing loan services in Zhejiang Province, China[82] - The company actively explores green loan models, focusing on sectors such as ecological agriculture and renewable energy development[191] Compliance and Accounting Standards - The company’s financial statements comply with all applicable Hong Kong Financial Reporting Standards[9] - The company has not identified any significant reclassifications of liabilities following the adoption of new accounting standards[12] - The company is continuously evaluating its tax provisions based on changes in tax laws, ensuring compliance and optimizing tax liabilities[180] Employee and Management Costs - Employee costs totaled RMB 16,415 thousand in 2024, down 6.9% from RMB 17,641 thousand in 2023[85] - The total remuneration for directors and supervisors for the year 2024 was RMB 2,930,000, compared to RMB 3,330,000 in 2023, indicating a reduction of 12.0%[90] - The highest-paid individual's total remuneration for 2024 was RMB 511,000, slightly down from RMB 521,000 in 2023[92] Investment and Asset Valuation - The fair value of investment properties as of December 31, 2024, was RMB 165 million, down from RMB 191 million in 2023[124] - The company acquired a 6% stake in Xingyao Microfinance for a total consideration of RMB 8,244 thousand, increasing its ownership from 60% to 66%[121] - The company is actively reviewing its financial assets for impairment, utilizing expected credit loss models to assess potential losses[176]

Financial Performance - For the nine months ended September 30, 2024, interest income was RMB 149,899,000, a decrease of 17% from RMB 180,392,000 in the same period of 2023[2] - Net interest income for the same period was RMB 119,628,000, down 17% from RMB 143,607,000 year-on-year[2] - The company reported a profit before tax of RMB 82,347,000, a decline of 30% compared to RMB 117,566,000 in the previous year[2] - The net profit for the nine months was RMB 60,512,000, representing a decrease of 31% from RMB 87,571,000 in the same period last year[2] Assets and Liabilities - Total assets as of September 30, 2024, were RMB 2,616,846,000, a slight decrease from RMB 2,657,317,000 at the end of 2023[3] - Total liabilities decreased to RMB 580,620,000 from RMB 654,603,000 at the end of 2023, reflecting a reduction of approximately 11%[3] - Cash and cash equivalents increased to RMB 35,675,000 from RMB 17,478,000, indicating a significant improvement in liquidity[3] - The company’s net assets rose to RMB 2,036,226,000 from RMB 2,002,714,000, showing a growth of about 2%[3] Accounting and Audit - The company maintained the same accounting policies as disclosed in the 2023 annual report, adhering to applicable new international financial reporting standards[4] - The audit committee has reviewed the unaudited consolidated results for the nine months ended September 30, 2024[4]

Definitions [Definitions](index=2&type=section&id=%E9%87%8B%E7%BE%A9) Company Information [Company Information](index=4&type=section&id=%E5%85%AC%E5%8F%B8%E8%B3%87%E6%96%99) Management Discussion and Analysis [Industry Overview and Business Overview](index=7&type=section&id=%E8%A1%8C%E6%A5%AD%E6%A6%82%E8%A7%88%E8%88%87%E6%A5%AD%E5%8B%99%E6%A6%82%E8%A7%88) The company is Zhejiang Province's largest licensed micro-lending company by registered capital, focusing on Deqing County, Huzhou, and Binjiang District, Hangzhou, serving "San Nong", SMEs, and online retailers, with 1,199 clients as of June 30, 2024 - The company is Zhejiang Province's largest licensed micro-lending company by registered capital and Huzhou's first and only green micro-lending company, specializing in financing services for "San Nong", small and medium-sized enterprises, micro-enterprises, and online retailers[9](index=9&type=chunk) Deqing County Market Share (As of June 30, 2024) | Indicator | Group's Share | | :--- | :--- | | Total Cumulative Loans Disbursed | 79.2% | | Loan Balance | 88.1% | Core Business Data | Indicator | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Registered Capital | RMB 1.18 billion | RMB 1.18 billion | | Total Loans and Advances (excluding accrued interest) | RMB 2.635 billion | RMB 2.701 billion | | Leverage Ratio | 2.23 | 2.29 | [Loan Portfolio Analysis](index=8&type=section&id=%E8%B2%B8%E6%AC%BE%E7%B5%84%E5%90%88%E5%88%86%E6%9E%90) As of June 30, 2024, the company's total loan balance (excluding accrued interest) was RMB 2.635 billion, slightly down from 2023 year-end, with guaranteed loans at 97.8%; asset quality improved as impaired and overdue loan ratios decreased from 4.6% to 3.9%, and provision coverage rose from 159% to 181% Loans and Advances by Guarantee Type (excluding accrued interest) | Loan Type | June 30, 2024 (RMB in thousands) | Percentage | December 31, 2023 (RMB in thousands) | Percentage | | :--- | :--- | :--- | :--- | :--- | | Credit Loans | 29,157 | 1.1% | 27,919 | 1.0% | | Guaranteed Loans | 2,577,143 | 97.8% | 2,644,055 | 97.9% | | Mortgage Loans | 8,491 | 0.3% | 8,392 | 0.3% | | Pledged Loans | 20,196 | 0.8% | 20,528 | 0.8% | | **Subtotal** | **2,634,987** | **100.0%** | **2,700,894** | **100.0%** | Asset Quality Indicators | Indicator | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Impaired Loan Ratio | 3.9% | 4.6% | | Provision Coverage Ratio | 181% | 159% | | Impairment Loss Provision Ratio | 7.1% | 7.3% | | Overdue Loan Ratio | 3.9% | 4.6% | - Impaired loan balance decreased from **RMB 124.5 million** at year-end 2023 to **RMB 104.6 million**; overdue loan balance decreased from **RMB 124.8 million** to **RMB 104.9 million**[16](index=16&type=chunk)[17](index=17&type=chunk) [Financial Performance Analysis](index=10&type=section&id=%E8%B2%A1%E5%8B%99%E6%A5%AD%E7%B8%BE%E5%88%86%E6%9E%90) In H1 2024, net interest income decreased by 16.2% to RMB 81.43 million due to lower average loan rates (8.8% to 7.6%) and reduced loan scale; profit and total comprehensive income fell 20.6% to RMB 46.63 million, while administrative expenses decreased 17.8% to RMB 21.80 million, reflecting cost control Net Interest Income Composition (For the six months ended June 30) | Item (RMB in thousands) | 2024 | 2023 | | :--- | :--- | :--- | | Total Interest Income | 102,616 | 122,463 | | Total Interest and Commission Expenses | (21,185) | (25,257) | | **Net Interest Income** | **81,431** | **97,206** | - The average loan interest rate decreased from **8.8%** in the same period last year to **7.6%**, primarily due to policy responses and industry competition, leading to reduced interest income[20](index=20&type=chunk) - Other net income turned from a loss of **RMB 13.8 million** in the same period last year to an income of **RMB 17.4 million**, mainly due to an increase of **RMB 13.3 million** in government subsidies and an increase of **RMB 17.9 million** in exchange gains[21](index=21&type=chunk) Profit for the Period and Administrative Expenses (For the six months ended June 30) | Item (RMB in thousands) | 2024 | 2023 | YoY Change | | :--- | :--- | :--- | :--- | | Profit and Total Comprehensive Income for the Period | 46,626 | 58,753 | -20.6% | | Total Administrative Expenses | 21,802 | 26,524 | -17.8% | [Liquidity and Capital Resources](index=13&type=section&id=%E6%B5%81%E5%8B%95%E6%80%A7%E8%88%87%E8%B3%87%E6%9C%AC%E8%B3%87%E6%BA%90) The company relies on equity, interest-bearing borrowings, and operating cash flow, with borrowings decreasing to RMB 522 million as of June 30, 2024, and net operating cash flow at RMB 96.7 million, while the asset-liability ratio improved from 29.6% to 25.3%, indicating reduced leverage and a more stable financial structure Condensed Cash Flow Statement (For the six months ended June 30, RMB in thousands) | Activity | 2024 | 2023 | | :--- | :--- | :--- | | Net Cash Generated from Operating Activities | 96,685 | 265,928 | | Net Cash Generated from Investing Activities | 58 | (18) | | Net Cash Used in Financing Activities | (89,466) | (166,513) | Interest-Bearing Borrowings and Asset-Liability Ratio | Indicator | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Interest-Bearing Borrowings Balance | RMB 522 million | RMB 594 million | | Asset-Liability Ratio | 25.3% | 29.6% | - The decrease in the asset-liability ratio was primarily due to a **RMB 71.6 million** reduction in interest-bearing borrowings and a **RMB 7.3 million** increase in cash and cash equivalents[39](index=39&type=chunk) [Related Party Transactions and Other Matters](index=17&type=section&id=%E9%97%9C%E8%81%AF%E6%96%B9%E4%BA%A4%E6%98%93%E8%88%87%E5%85%B6%E4%BB%96%E4%BA%8B%E9%A0%85) During the period, Executive Director Mr. Yu Yin and other related parties guaranteed RMB 25 million of the company's interest-bearing borrowings, and the company paid related expenses for leased properties from Zuoli Holdings, with no significant investments, acquisitions, asset pledges, or off-balance sheet arrangements - Executive Director Mr. Yu Yin and other related parties provided guarantees for the company's **RMB 25 million** interest-bearing borrowings[40](index=40&type=chunk) - The company leased properties from related party Zuoli Holdings and paid for utilities and business expenses[41](index=41&type=chunk) - There were no significant investments, acquisitions, asset pledges, off-balance sheet arrangements, or contingent liabilities during the reporting period[45](index=45&type=chunk)[43](index=43&type=chunk)[46](index=46&type=chunk) [Outlook](index=19&type=section&id=%E5%89%8D%E6%99%AF) The company will leverage policy opportunities in Zhejiang's common prosperity zone and Huzhou's green finance pilot zone to deepen green credit, developing more green loan products through international cooperation to serve "San Nong" and low-carbon SMEs, aiming for market consolidation and sustainable development - The company will leverage the policy advantages of Zhejiang Province's common prosperity demonstration zone and Huzhou City's national green finance reform and innovation pilot zone to explore a sustainable path for green credit[47](index=47&type=chunk) - The company has officially become Huzhou City's first green micro-lending company and is cooperating with international institutions like DEG and GCPF to introduce green lending concepts and technologies to develop more green products[47](index=47&type=chunk) Independent Auditor's Report [Review Conclusion](index=20&type=section&id=%E5%AF%A9%E9%96%B1%E7%B5%90%E8%AB%96) KPMG reviewed the company's interim financial report as of June 30, 2024, concluding no matters suggesting it was not prepared in all material respects according to Hong Kong Accounting Standard 34 Interim Financial Reporting - The scope of the review is significantly smaller than an audit conducted in accordance with Hong Kong Auditing Standards, thus the auditor does not express an audit opinion[49](index=49&type=chunk) - The conclusion is that no matters were found that would lead to a belief that the interim financial report was not prepared in all material respects in accordance with Hong Kong Accounting Standard 34 Interim Financial Reporting[50](index=50&type=chunk) Consolidated Financial Statements [Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=21&type=section&id=%E7%B6%9C%E5%90%88%E6%90%8D%E7%9B%8A%E5%8F%8A%E5%85%B6%E4%BB%96%E5%85%A8%E9%9D%A2%E6%94%B6%E7%9B%8A%E8%A1%A8) For the six months ended June 30, 2024, the company recorded net interest income of RMB 81.43 million, down 16.2% YoY, with profit and total comprehensive income at RMB 46.63 million, down 20.6% YoY, and basic and diluted earnings per share of RMB 0.04 Consolidated Statement of Profit or Loss Summary (For the six months ended June 30) | Item (RMB in thousands) | 2024 | 2023 | | :--- | :--- | :--- | | Net Interest Income | 81,431 | 97,206 | | Profit Before Tax | 64,509 | 79,640 | | **Profit and Total Comprehensive Income for the Period** | **46,626** | **58,753** | | Profit Attributable to Equity Holders of the Company | 44,940 | 56,053 | | Basic Earnings Per Share (RMB) | 0.04 | 0.05 | [Consolidated Statement of Financial Position](index=22&type=section&id=%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81%E8%A1%A8) As of June 30, 2024, total assets were RMB 2.609 billion, slightly down from RMB 2.657 billion at year-end 2023, with total liabilities at RMB 586 million, net assets at RMB 2.022 billion, and net loans and advances to customers at RMB 2.471 billion Consolidated Statement of Financial Position Summary (RMB in thousands) | Item | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Loans and Advances to Customers | 2,470,995 | 2,522,351 | | **Total Assets** | **2,608,539** | **2,657,317** | | Interest-Bearing Borrowings | 521,961 | 593,519 | | **Total Liabilities** | **586,199** | **654,603** | | **Total Equity** | **2,022,340** | **2,002,714** | [Consolidated Statement of Changes in Equity](index=23&type=section&id=%E7%B6%9C%E5%90%88%E6%AC%8A%E7%9B%8A%E8%AE%8A%E5%8B%95%E8%A1%A8) As of June 30, 2024, total equity increased to RMB 2.022 billion from RMB 2.003 billion at year-start, driven by RMB 46.63 million profit for the period, partially offset by RMB 27 million in dividends paid Summary of Changes in Equity (For the six months ended June 30, 2024, RMB in thousands) | Item | Amount | | :--- | :--- | | Total Equity at Beginning of Period (January 1, 2024) | 2,002,714 | | Profit and Total Comprehensive Income for the Period | 46,626 | | Dividends Approved for Prior Year | (27,000) | | **Total Equity at End of Period (June 30, 2024)** | **2,022,340** | [Condensed Consolidated Cash Flow Statement](index=24&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E7%8F%BE%E9%87%91%E6%B5%81%E9%87%8F%E8%A1%A8) In H1 2024, net cash from operating activities was RMB 96.69 million, while financing activities used RMB 89.47 million, primarily for loan repayments, resulting in cash and cash equivalents increasing by RMB 7.28 million to RMB 24.76 million at period-end Consolidated Cash Flow Statement Summary (For the six months ended June 30, RMB in thousands) | Item | 2024 | 2023 | | :--- | :--- | :--- | | Net Cash from Operating Activities | 96,685 | 265,928 | | Net Cash from/(used in) Investing Activities | 58 | (18) | | Net Cash Used in Financing Activities | (89,466) | (166,513) | | **Net Increase in Cash and Cash Equivalents** | **7,277** | **99,397** | | Cash and Cash Equivalents at Beginning of Period | 17,478 | 16,595 | | **Cash and Cash Equivalents at End of Period** | **24,755** | **116,010** | Notes to the Unaudited Interim Financial Report [Note 10 - Loans and Advances to Customers](index=31&type=section&id=%E9%99%84%E8%A8%BB10%20-%20%E5%90%91%E5%AE%A2%E6%88%B6%E6%8F%90%E4%BE%9B%E7%9A%84%E8%B2%B8%E6%AC%BE%E5%8F%8A%E5%A2%8A%E6%AC%BE) As of June 30, 2024, total loans and advances to customers were RMB 2.661 billion (net RMB 2.471 billion), primarily retail (57%) and corporate (42%) loans, with guaranteed loans at 97.8%, and total overdue loans decreased to RMB 105 million from RMB 125 million at year-start Loans and Advances by Nature and Guarantee Type (RMB in thousands) | Item | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Corporate Loans | 1,107,386 | 1,146,973 | | Retail Loans | 1,500,932 | 1,526,958 | | Guaranteed Loans | 2,577,143 | 2,644,055 | | **Total Loans and Advances** | **2,660,517** | **2,720,846** | | Less: Impairment Loss Provisions | (189,522) | (198,495) | | **Net Loans and Advances** | **2,470,995** | **2,522,351** | Overdue Loan Analysis (RMB in thousands) | Item | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Total Overdue Loans | 104,939 | 124,812 | [Note 14 - Interest-Bearing Borrowings](index=40&type=section&id=%E9%99%84%E8%A8%BB14%20-%20%E8%A8%88%E6%81%AF%E5%80%9F%E6%AC%BE) As of June 30, 2024, total interest-bearing borrowings were RMB 522 million, down from RMB 594 million at year-end 2023, mainly from Eurozone borrowings (RMB 497 million) and bank borrowings (RMB 25.03 million) Interest-Bearing Borrowings Composition (RMB in thousands) | Item | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Bank Borrowings | 25,028 | 25,015 | | Borrowings from Third Parties | — | 41,248 | | Borrowings from Eurozone | 496,933 | 527,256 | | **Total** | **521,961** | **593,519** | [Note 17 - Capital, Reserves and Dividends](index=42&type=section&id=%E9%99%84%E8%A8%BB17%20-%20%E8%B3%87%E6%9C%AC%E3%80%81%E5%84%B2%E5%82%99%E5%8F%8A%E8%82%A1%E6%81%AF) During the period, the company approved a final dividend of RMB 0.02 per share for FY2023, totaling RMB 23.6 million, with share capital maintained at 1.18 billion shares, and is required to appropriate statutory surplus and general risk reserves per regulations - Approved a final dividend of **RMB 0.02 per share** for 2023, totaling **RMB 23.6 million**[93](index=93&type=chunk) - The company's share capital consists of **1,180,000,000 ordinary shares** with a par value of **RMB 1** each[94](index=94&type=chunk) [Note 18 - Financial Risk Management](index=44&type=section&id=%E9%99%84%E8%A8%BB18%20-%20%E8%B2%A1%E5%8B%99%E9%A2%A8%E9%9A%AA%E7%AE%A1%E7%90%86) The company faces primary financial risks including credit risk, liquidity risk, and interest rate risk, with a comprehensive credit risk management mechanism covering pre-lending, in-lending, and post-lending stages, liquidity risk managed by monitoring cash reserves, limited interest rate risk from fixed-rate loans and borrowings, and currency risk primarily from Euro-denominated borrowings - Credit risk primarily arises from micro-lending business, and the company has established a risk management mechanism covering pre-lending assessment, credit approval, and post-lending monitoring[101](index=101&type=chunk) - The loan portfolio bears a certain degree of geographical concentration risk as the business primarily operates in Zhejiang Province[104](index=104&type=chunk) - Currency risk primarily arises from Euro-denominated interest-bearing borrowings, with an exposure of **RMB 136 million** as of June 30, 2024[111](index=111&type=chunk)[113](index=113&type=chunk) [Note 20 - Significant Related Party Transactions](index=50&type=section&id=%E9%99%84%E8%A8%BB20%20-%20%E9%87%8D%E5%A4%A7%E9%97%9C%E8%81%AF%E6%96%B9%E4%BA%A4%E6%98%93) During the reporting period, the company's significant related party transactions included guarantees provided by the Chairman of the Board and other related parties for the company's total RMB 25 million bank borrowings, and payments to related party Zuoli Holdings Group Co Ltd for leased property related expenses Guarantee Balances with Related Parties (RMB in thousands) | Guarantee Type | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Bank Borrowing Guarantees Obtained | 25,000 | 25,000 | | Third-Party Borrowing Guarantees Obtained | — | 41,110 | Other Information [Corporate Governance and Compliance](index=53&type=section&id=%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB%E8%88%87%E5%90%88%E8%A6%8F) The company maintains high corporate governance standards, fully complying with the Hong Kong Listing Rules' Corporate Governance Code and the Model Code for Securities Transactions by Directors of Listed Issuers during the period, with public float meeting the minimum 25% requirement - The company has fully complied with the Corporate Governance Code for the six months ended June 30, 2024[125](index=125&type=chunk) - Directors and supervisors confirmed full compliance with the Model Code for Securities Transactions by Directors of Listed Issuers[127](index=127&type=chunk) [Shareholders' Equity and Dividends](index=53&type=section&id=%E8%82%A1%E6%9D%B1%E6%AC%8A%E7%9B%8A%E8%88%87%E8%82%A1%E6%81%AF) As of June 30, 2024, issued share capital was 1.18 billion shares, with controlling shareholder Puhua Energy and concerted parties controlling approximately 37.58% of shares, and the Board decided not to declare any interim dividend for 2024 - Controlling shareholder Puhua Energy and its concerted parties jointly control approximately **37.58%** of the company's total issued shares[129](index=129&type=chunk) - The Board decided not to declare any interim dividend for the six months ended June 30, 2024[133](index=133&type=chunk) - Controlling shareholder Puhua Energy has pledged **293,130,000 domestic shares** (representing **24.84%** of total share capital) as collateral for financing[135](index=135&type=chunk)

Financial Performance - For the six months ended June 30, 2024, the company reported interest income of RMB 102,616,000, a decrease of 16.2% from RMB 122,463,000 in the same period of 2023[3]. - Net interest income for the same period was RMB 81,431,000, down 16.2% from RMB 97,206,000 year-on-year[3]. - The company recorded other net income of RMB 17,408,000, compared to a loss of RMB 13,834,000 in the previous year, indicating a significant improvement[3]. - Total profit and comprehensive income for the period was RMB 46,626,000, a decrease of 20.6% from RMB 58,753,000 in the prior year[3]. - Basic and diluted earnings per share were RMB 0.04, down from RMB 0.05 in the same period last year[3]. - The company's net profit for the six months ended June 30, 2024, was approximately RMB 44.9 million, compared to RMB 56.1 million for the same period in 2023, reflecting a decrease of about 20.1%[23]. - The company's net profit and total comprehensive income for the six months ended June 30, 2023, was RMB 58.8 million, compared to RMB 46.6 million for the six months ended June 30, 2024, reflecting a decline of approximately 20.0%[91]. Assets and Liabilities - As of June 30, 2024, total assets amounted to RMB 2,608,539,000, a decrease from RMB 2,657,317,000 at the end of 2023[4]. - Total liabilities decreased to RMB 586,199,000 from RMB 654,603,000 at the end of 2023, reflecting a reduction of 10.4%[4]. - The company's net assets increased to RMB 2,022,340,000 from RMB 2,002,714,000, showing a slight growth of 1%[4]. - The total amount of loans and advances to customers as of June 30, 2024, was RMB 2,660,517 thousand, a decrease of 2.2% from RMB 2,720,846 thousand as of December 31, 2023[26]. - The total liabilities and other payables decreased by RMB 4.6 million from RMB 23,290 thousand as of December 31, 2023, to RMB 18,678 thousand as of June 30, 2024[101]. - The current tax payable was RMB 34.9 million as of December 31, 2023, and decreased to RMB 16.3 million as of June 30, 2024[102]. Cash Flow - The net cash generated from operating activities for the six months ended June 30, 2024, was RMB 96.7 million, reflecting a pre-tax profit of RMB 64.5 million[92]. - Cash and cash equivalents rose to RMB 24,755,000 from RMB 17,478,000, indicating a significant increase of 41.7%[4]. - The net cash used in financing activities for the six months ended June 30, 2024, was RMB 89.5 million, primarily due to interest payments and loan repayments[93]. - The company’s cash flow from operating activities showed a decrease in cash and cash equivalents, indicating potential liquidity challenges moving forward[25]. Loans and Advances - The total outstanding loans and advances to customers amounted to RMB 2,470,995 thousand as of June 30, 2024, compared to RMB 2,522,351 thousand as of December 31, 2023[59]. - The overdue loans totalled RMB 124,812 thousand as of June 30, 2024, which includes RMB 76,713 thousand overdue for more than one year[28]. - The retail loans segment accounted for 57% of the total loans and advances to customers, amounting to RMB 1,500,932 thousand as of June 30, 2024, compared to RMB 1,526,958 thousand as of December 31, 2023[27]. - The majority of loans provided were guaranteed loans, accounting for approximately 97.9% and 97.8% of total loans and advances as of December 31, 2023, and June 30, 2024, respectively[99]. - The company has maintained a high percentage of loans under RMB 1 million, with 76.3% of loans falling within this range as of June 30, 2024[79]. Impairment and Credit Loss - The provision for impairment losses on loans was RMB (189,522) thousand as of June 30, 2024, compared to RMB (198,495) thousand as of December 31, 2023, showing a reduction of about 4.4%[26]. - The impairment loss provision for loans amounted to RMB 189.522 million as of June 30, 2024, reflecting the company's risk management strategy[80]. - The company's impaired loan balance decreased from RMB 124.5 million to RMB 104.6 million, representing a reduction of approximately 18.9%[83]. - The overdue loan balance decreased from RMB 124.8 million to RMB 104.9 million, reflecting a decline of about 16%[84]. - The impairment loan ratio improved from 4.6% to 3.9%, indicating enhanced loan portfolio quality[81]. Dividends and Shareholder Returns - The company approved dividends amounting to RMB 47,200 thousand for the previous fiscal year[8]. - The approved cash dividend for the fiscal year 2023 is RMB 23.6 million, equating to RMB 0.02 per share, down from RMB 47.2 million (RMB 0.04 per share) for the previous fiscal year[43]. - The board has decided not to declare any interim dividend for the six months ending June 30, 2024, consistent with the previous year[121]. Strategic Initiatives - The company aims to explore sustainable green credit pathways and has been recognized as the first green microfinance company in Huzhou since April 2020, participating in the formulation of local standards for green microfinance[116]. - The company has positioned itself as a green micro-lending company, focusing on financing for ecological agriculture, renewable energy, and energy-saving projects[77]. - The company has partnered with DEG and GCPF to gain international support for developing more green loan products[116]. Risk Management - The group faces credit risk primarily from its micro-lending and treasury operations, with policies in place to manage these risks effectively[51]. - The credit risk primarily arises from the microloan business, with mechanisms established for pre-loan assessment, credit approval, and post-loan monitoring[52]. - The company does not generally obtain collateral from customers for loans[55]. - The company faces geographical concentration risk as it primarily operates in Zhejiang Province, which may be affected by economic fluctuations[54].

Financial Performance - For the three months ended March 31, 2024, the company reported interest income of RMB 52,219,000, a decrease of 14.5% from RMB 61,342,000 in the same period of 2023[4] - Net interest income for the same period was RMB 40,610,000, down 16.0% from RMB 48,413,000 year-on-year[4] - The company achieved a profit before tax of RMB 53,830,000, representing a significant increase of 56.6% compared to RMB 34,413,000 in the previous year[4] - The net profit for the period was RMB 38,775,000, an increase of 57.3% from RMB 24,651,000 in the same quarter of 2023[4] - The company reported an increase in other net income to RMB 17,876,000, compared to a loss of RMB 1,675,000 in the same period last year[4] - The company’s administrative expenses decreased to RMB 9,454,000 from RMB 13,637,000, reflecting improved cost management[4] Assets and Liabilities - The total assets of the company as of March 31, 2024, were RMB 2,695,599,000, up from RMB 2,657,317,000 at the end of 2023[6] - Cash and cash equivalents increased to RMB 42,441,000 from RMB 17,478,000, indicating a substantial growth in liquidity[6] - The company's total liabilities slightly decreased to RMB 654,110,000 from RMB 654,603,000[6] - The net assets of the company rose to RMB 2,041,489,000, compared to RMB 2,002,714,000 at the end of the previous year[6]

Financing Solutions - The company provided financing solutions to clients in agriculture, small and micro enterprises, and online retailers, focusing on short-term financing needs[4] - In 2023, the company issued loans totaling RMB 3,085.36 million, with interest income of RMB 236.17 million and a net profit of RMB 96.64 million, maintaining stable operational performance[182] - Approximately 76.6% of the company's loan agreements as of December 31, 2023, had a maximum loan amount of RMB 1 million, indicating a focus on small and micro enterprises[189] Corporate Governance - The company has fully complied with the corporate governance code throughout the year ending December 31, 2023[40] - The company’s board consists of four executive directors, one non-executive director, and three independent non-executive directors, ensuring a diverse governance structure[40] - The supervisory board has been monitoring the legality and reasonableness of the company's operations and management, confirming compliance with applicable laws and regulations[36] - The company has established a three-year term for all independent non-executive directors to provide independent and objective opinions to the board[47] - The audit committee consists of three independent non-executive directors, ensuring appropriate professional qualifications and experience[49] - The board has reviewed its corporate governance policies and practices, including compliance with legal and regulatory requirements[112] - The independent non-executive directors have confirmed their independence in accordance with the listing rules[134] Risk Management - The company’s major risks and uncertainties were discussed, emphasizing the importance of strict loan approval systems and daily tracking management[5][8] - The company has established a sound risk management and internal control system to effectively manage operational risks[68] - The board has reviewed the effectiveness of the risk management and internal control systems, which are deemed effective and adequate as of December 31, 2023[123] - The company has established comprehensive policies and procedures for operational, financial, and risk management to ensure asset protection and reliable financial reporting[96] Financial Performance - The company's total assets as of December 31, 2023, were RMB 2,657.32 million, while total liabilities were RMB 654.60 million, resulting in total equity of RMB 2,002.71 million[196] - Total liabilities decreased from RMB 826.12 million in 2022 to RMB 654.60 million in 2023, indicating improved financial stability[196] - Interest income decreased from RMB 250.46 million in 2022 to RMB 236.17 million in 2023, reflecting a decline in revenue[196] Green Development - The company actively explores green loan models, issuing loans to green industries such as ecological agriculture and renewable energy[4] - The company plans to continue its green development strategy and aims to become a leading local financial organization in sustainable finance[183] - The company was recognized as an outstanding unit in the construction of the National Green Finance Reform and Innovation Pilot Zone in Huzhou in March 2023[181] - As of December 31, 2023, the company's green loan balance reached approximately RMB 681 million, accounting for about 25.2% of the total loan balance, an increase of approximately 5 percentage points compared to the previous year[198] - The company has successfully established an Environmental and Social Management System (ESMS) to assess and manage clients' environmental and social risks[198] - The company is actively transforming towards a green and sustainable development model, strengthening its green credit business based on inclusive finance[198] Shareholder Information - The company plans to present a resolution at the annual general meeting to reappoint KPMG as its auditor[15] - The company has maintained the required public float under the listing rules as of December 31, 2023[126] - The board has proposed a final dividend of RMB 0.02 per share for the year ending December 31, 2023[148] - Non-resident individual shareholders will not have personal income tax withheld on dividends distributed by the company, as approved by the Zhejiang Provincial Department of Commerce[149] - The company is required to withhold corporate income tax at a rate of 10% on dividends distributed to non-resident corporate shareholders[158] Internal Controls and Compliance - The company has established a rigorous internal structure to prevent misuse of insider information and avoid conflicts of interest[123] - The company has a robust internal audit function to analyze and independently assess the adequacy and effectiveness of its systems[123] - All directors confirmed compliance with the relevant standards of the code of conduct for securities trading during the fiscal year[121] - The company has not entered into any significant contracts with the controlling shareholder or its subsidiaries during the reporting period[56] - The company has not entered into any stock-linked agreements during the year ending December 31, 2023[129] - There were no management contracts established for the overall or any significant part of the company's business during the fiscal year ending December 31, 2023[102] Remuneration and Compensation - The remuneration policy aims to maintain a fair and competitive compensation scheme based on market levels and the performance of the group[50] - The remuneration range for senior management includes one individual earning between RMB 250,001 and RMB 500,000[51] - The company maintained appropriate liability insurance for directors and senior officers throughout the fiscal year[98] Board Meetings and Attendance - The company held a shareholders' meeting on June 29, 2023, with full attendance from all directors[114] - The board has delegated daily operational responsibilities to the executive directors while regularly reviewing the appropriateness of this delegation[73] - The board consists of experienced members, with the chairman and CEO being in their positions since April 28, 2014[133]

Financial Performance - For the year ended December 31, 2023, the company reported interest income of RMB 236,165,000, a decrease of 5.2% from RMB 250,458,000 in 2022[4] - Net interest income for the same period was RMB 187,149,000, down 5.6% from RMB 198,335,000 in the previous year[4] - The company recorded a total profit and comprehensive income of RMB 96,636,000, slightly down from RMB 96,696,000 in 2022, representing a decrease of 0.06%[4] - Basic and diluted earnings per share remained stable at RMB 0.08 for both 2023 and 2022[4] - The total other net income for 2023 was a loss of RMB 12,677,000, compared to a gain of RMB 9,930,000 in 2022, reflecting a significant decline[85] - The company reported a government subsidy of RMB 24,100,000 in 2022, which was not present in 2023, indicating a loss of this income source[85] - The company’s total comprehensive income for the year rose to RMB 10,666,000 in 2023 from RMB 7,817,000 in 2022, an increase of approximately 36.5%[123] Assets and Liabilities - Total assets decreased to RMB 2,657,317,000 in 2023 from RMB 2,787,638,000 in 2022, reflecting a decline of 4.7%[5] - Total liabilities decreased significantly to RMB 654,603,000 in 2023 from RMB 826,116,000 in 2022, a reduction of 20.8%[5] - The company's net assets increased to RMB 2,002,714,000 in 2023, up from RMB 1,961,522,000 in 2022, indicating a growth of 2.1%[5] - The total liabilities as of December 31, 2023, were RMB 666,232 thousand, a decrease from RMB 841,877 thousand as of December 31, 2022[161] - The net assets decreased to RMB 1,305,312 thousand in 2023 from RMB 1,364,597 thousand in 2022, reflecting a decline of approximately 4.3%[25] Cash Flow - Operating cash flow for the year ended December 31, 2023, was RMB 330,362 thousand, a significant increase from RMB 38,508 thousand in 2022, resulting in a net cash inflow from operating activities of RMB 284,948 thousand compared to a net outflow of RMB 5,463 thousand in the previous year[8] - Cash generated from investment activities was RMB 96 thousand, recovering from a cash outflow of RMB 26 thousand in 2022, with proceeds from the sale of fixed assets amounting to RMB 124 thousand[8] - The total cash and cash equivalents increased by RMB 1,003 thousand, ending the year at RMB 17,478 thousand, compared to RMB 16,595 thousand at the beginning of the year[8] - Cash and cash equivalents rose to RMB 17,478,000 in 2023 from RMB 16,595,000 in 2022, an increase of 5.3%[5] - The company reported a significant increase in operating cash flow, indicating improved operational efficiency and profitability[8] Dividends and Shareholder Returns - The company has maintained a stable dividend policy, with past dividends approved amounting to RMB 47,200,000 for the year[6] - The company paid dividends to equity shareholders amounting to RMB 47,200 thousand, a decrease from RMB 59,000 thousand in 2022[8] - A cash dividend of RMB 0.04 per share was approved, totaling RMB 47.2 million, for the fiscal year ending December 31, 2023[138] Credit Risk and Loan Management - The company has established mechanisms to cover credit risks in its micro-lending business, including pre-loan assessments and post-loan monitoring[151] - The company’s credit risk management includes classifying loans into categories based on risk levels, such as normal, watch, substandard, doubtful, and loss[151] - The expected credit loss for loans without credit impairment was RMB 2,468,646 thousand for 2023, down from RMB 2,638,388 thousand in 2022, a decline of about 6.4%[113][114] - The expected credit loss for loans with credit impairment totaled RMB 124,485 thousand as of December 31, 2023, compared to RMB 134,342 thousand in 2022, a decrease of approximately 7.3%[113][114] - The impairment losses for loans and advances to customers were RMB 9,500,000 in 2023, a significant recovery from a loss of RMB 22,254,000 in 2022[85] Accounting Policies and Compliance - The company did not recognize any significant impact from the adoption of new accounting standards during the current reporting period[12] - The company has maintained compliance with all applicable Hong Kong Financial Reporting Standards, ensuring transparency and accuracy in financial reporting[9] - The company has not applied any new standards or interpretations that are not yet effective, ensuring consistency in accounting practices[12] - The company is actively reviewing its accounting policies and estimates, particularly regarding impairment of financial assets and long-term assets, to ensure accurate financial reporting[183][184] Market Position and Strategy - The company plans to continue focusing on micro-finance services and exploring new market opportunities to enhance growth[3] - The company maintained its status as the largest licensed micro-lending company in Zhejiang province based on registered capital as of December 31, 2023[199] - The company is actively exploring green lending models, focusing on ecological agriculture, new energy development, and other green industries[199] Employee and Management Compensation - Employee costs totaled RMB 17,641,000 in 2023, down from RMB 19,349,000 in 2022, which is a reduction of approximately 8.8%[86] - The total remuneration for the five highest-paid individuals was RMB 521,000 in 2023, up from RMB 508,000 in 2022, an increase of approximately 2.6%[92] - The total remuneration for key management personnel was RMB 3,330 thousand in 2023, up from RMB 3,260 thousand in 2022[177] Loans and Advances - As of December 31, 2023, total loans and advances to customers amounted to RMB 2,720,846 thousand, a decrease from RMB 2,863,756 thousand in 2022, reflecting a reduction of approximately 5%[103] - The net amount of loans and advances to customers after impairment losses was RMB 2,522,351 thousand in 2023, down from RMB 2,654,305 thousand in 2022, indicating a decline of about 5%[103] - The total overdue loans as of December 31, 2023, reached RMB 124,812 thousand, compared to RMB 133,586 thousand in 2022, showing a decrease of approximately 6.5%[107] - The total amount of loans issued by the company reached approximately RMB 30.7 billion as of December 31, 2023, down from RMB 33.9 billion in 2022, a decrease of about 8.9%[197] Taxation - Current tax expenses include estimated taxes payable or receivable for the current year and adjustments for prior years[62] - The income tax expense for the year was RMB 34,455,000, down from RMB 35,899,000 in 2022, representing a decrease of about 4.0%[87] - The deferred tax assets increased to RMB 61,671 million as of December 31, 2023, up from RMB 58,814 million in 2022, marking a rise of 3.0%[135]

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告之內容概不負責，對其準確性或完整性亦不 發表任何聲明，並表明不會就因本公告全部或任何部份內容而產生或因倚賴該等內容而引致之任何損失承擔 任何責任。 佐 力 科 創 小 額 貸 款 股 份 有 限 公 司 (Zuoli Kechuang Micro-finance Company Limited)* （於中華人民共和國註冊成立的股份有限公司） （股份代號：6866） 截至二零二三年九月三十日止九個月 未經審核綜合業績 佐力科創小額貸款股份有限公司（「本公司」）董事（「董事」）會（「董事會」）欣然公佈，本公司 及其附屬公司（「本集團」）截至二零二三年九月三十日止九個月根據香港財務報告準則編製 的未經審核業績以及同期比較數據。本公告乃根據香港聯合交易所有限公司（「聯交所」）證 券上市規則第13.09(2)(a)條及內幕消息條文（定義見聯交所證券上市規則）作出。 ...

Financial Performance - For the six months ended June 30, 2023, interest income was RMB 122,463,000, slightly up from RMB 121,412,000 in the same period of 2022[16] - Net interest income for the same period was RMB 97,206,000, compared to RMB 97,944,000 in 2022, indicating a decrease of approximately 0.75%[16] - The total profit and comprehensive income for the period was RMB 58,753,000, an increase from RMB 57,804,000 in the previous year, representing a growth of about 1.64%[16] - Basic and diluted earnings per share remained stable at RMB 0.05 for both 2023 and 2022[16] - The company’s net interest income for the six months ended June 30, 2023, was RMB 97.2 million, slightly down from RMB 97.9 million for the same period in 2022[120] - The total profit and comprehensive income for the six months ended June 30, 2023, was RMB 58.8 million, compared to RMB 57.8 million for the same period in 2022[121] Assets and Liabilities - Total assets as of June 30, 2023, amounted to RMB 2,691,985 thousand, a decrease of 3.43% from RMB 2,787,638 thousand as of December 31, 2022[20] - Total liabilities decreased to RMB 727,154 thousand, down 12% from RMB 826,116 thousand at the end of 2022[20] - The company’s interest-bearing borrowings decreased to RMB 641,540 thousand, down 15.6% from RMB 759,932 thousand[20] - The company maintained a stable capital base with total equity remaining consistent at RMB 1,964,831 thousand as of June 30, 2023[20] - The leverage ratio as of June 30, 2023, was 2.22, down from 2.41 as of December 31, 2022, indicating improved capital efficiency[130] - The company's asset-liability ratio decreased to 27.5% as of June 30, 2023, from 39.2% as of December 31, 2022, due to a reduction in interest-bearing borrowings and an increase in cash and cash equivalents[190] Cash Flow and Liquidity - Net cash generated from operating activities for the six months ended June 30, 2023, was RMB 265.9 million, reflecting a pre-tax profit of RMB 79.6 million[146] - The net cash used in financing activities was RMB 166.5 million, primarily for interest payments on borrowings of RMB 306.8 million and lease payments of RMB 1.5 million[147] - Total cash and cash equivalents increased from RMB 16.6 million on December 31, 2022, to RMB 116.0 million on June 30, 2023[147] - The company plans to monitor cash flow and maintain optimal liquidity levels to support operational capital needs and business expansion[144] Loan Portfolio and Credit Quality - As of June 30, 2023, the total loans and advances to customers, net of impairment losses, amounted to RMB 2,462,603,000[56] - The total overdue loans exceeding one year reached RMB 74,679,000, contributing to a total overdue amount of RMB 117,995,000[52] - The expected credit loss for the entire duration as of June 30, 2023, was RMB 183,607 thousand, compared to RMB 209,451 thousand at the end of 2022, indicating a reduction of 12.3%[47] - The impairment loss provision decreased from RMB 209,451,000 to RMB 183,607,000, indicating improved asset quality[63] - The overdue loan balance as of June 30, 2023, was RMB 118.0 million, representing 4.5% of the total loan balance, compared to 4.7% as of December 31, 2022[115] - The company’s cash management strategy includes retaining sufficient cash for operational needs and using excess cash for customer loans[167] Strategic Initiatives and Market Position - The company has been recognized as the first green micro-lending company in Huzhou, having passed the pilot acceptance in May 2023[7] - The company is actively exploring sustainable green credit pathways and has developed new loan products to enhance market penetration and competitive advantage[5] - Collaborations with DEG and GCPF have been established to bring international green loan concepts and technical support to the company[6] - The company plans to continue expanding its market presence through strategic acquisitions and increasing its stake in existing subsidiaries[67] - The company is actively exploring opportunities for market expansion and innovation in financial services, particularly in green finance[94] - The company has positioned itself to benefit from the national policy encouraging support for small and micro enterprises, which has led to a decrease in average loan interest rates across the industry[97] Employee and Operational Metrics - The company employed approximately 95 employees as of June 30, 2023, compared to 94 employees as of December 31, 2022[181] - The company's administrative expenses decreased from RMB 26.9 million for the six months ended June 30, 2022, to RMB 26.5 million for the same period in 2023[120] - The company reported a decrease in employee costs payable to RMB 2,787,000 as of June 30, 2023, down from RMB 5,375,000 as of December 31, 2022[175] Regulatory and Compliance - The company has no significant impact from the new accounting standards related to insurance contracts, as it does not engage in such contracts[24] - The company had no off-balance-sheet arrangements as of June 30, 2023[195] - There were no significant investments made by the company during the six months ended June 30, 2023[182] - The company did not acquire or sell any subsidiaries, associates, or joint ventures during the six months ended June 30, 2023[183]

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告之內容概不負責，對其準確性或完整性亦不 發表任何聲明，並明確表示概不就因本公告全部或任何部分內容而產生或因倚賴該等內容而引致之任何損失 承擔任何責任。 佐 力 科 創 小 額 貸 款 股 份 有 限 公 司 (Zuoli Kechuang Micro-finance Company Limited*) （於中華人民共和國註冊成立的股份有限公司） （股份代號：6866） 截至二零二三年六月三十日止六個月 中期業績公告 佐力科創小額貸款股份有限公司（「本公司」）董事（「董事」）會（「董事會」）欣然公佈，本公司 及其附屬公司（「本集團」）截至二零二三年六月三十日止六個月根據香港會計師公會頒佈之 香港財務報告準則編製的未經審核業績（「中期業績」）以及同期比較數據。董事會及本公司 審計委員會（「審計委員會」）已審閱並確認中期業績。 ...