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） 董事會會議召開日期 承董事會命 佐力科創小額貸款股份有限公司 董事長 俞寅 香港，二零二五年八月五日 於本公告日期，執行董事為俞寅先生、鄭學根先生、楊晟先生及胡芳芳女士；非執行董事為潘忠敏先生；以 及獨立非執行董事為陳健民先生、趙旭強先生及楊婕女士。 * 僅供識別 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」）謹此公佈，本公司 謹訂於二零二五年八月十五日（ 星期五 ）舉行董事會會議，以（ 其中包括 ）考慮及批准本公司 及其附屬公司截至二零二五年六月三十日止六個月之未經審核綜合中期業績及其刊發，及 考慮派付中期股息（ 如有）。 ...

FF301 股份發行人及根據《上市規則》第十九B章上市的香港預託證券發行人的證券變動月報表 截至月份: 2025年7月31日 狀態: 新提交 致：香港交易及結算所有限公司 公司名稱: 佐力科創小額貸款股份有限公司 (於中華人民共和國註冊成立之股份有限公司） 呈交日期: 2025年8月1日 I. 法定/註冊股本變動 | 1. 股份分類 | 普通股 | 股份類別 | 其他類別 (請註明) | | 於香港聯交所上市 (註1) | | 否 | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | | 證券代號 (如上市) | N/A | 說明 | 內資股 | | | | | | | | | 法定/註冊股份數目 | | 面值 | | | 法定/註冊股本 | | | 上月底結存 | | | 880,000,000 RMB | | | 1 RMB | | 880,000,000 | | 增加 / 減少 (-) | | | | | | RMB | | | | 本月底結存 | | | 880,000,000 RMB | | | 1 RMB | | 880,000,0 ...

Financial Performance - For the three months ended March 31, 2025, the company reported interest income of RMB 44,103,000, a decrease of 15.5% from RMB 52,219,000 in the same period of 2024[3] - Net interest income for the same period was RMB 35,199,000, down 13.5% from RMB 40,610,000 year-on-year[3] - The company recorded a pre-tax profit of RMB 20,858,000, a significant decline of 61.3% compared to RMB 53,830,000 in the previous year[3] - The net profit attributable to the owners of the parent company was RMB 14,830,000, down 61.0% from RMB 38,062,000 in the same period last year[3] - The company reported a decrease in other net income to RMB (4,452,000) from RMB 17,876,000, reflecting a significant decline[3] - The company’s administrative expenses increased to RMB 10,293,000 from RMB 9,454,000, an increase of 8.8%[3] Assets and Liabilities - Total assets increased to RMB 2,641,886,000 as of March 31, 2025, compared to RMB 2,578,519,000 at the end of 2024, reflecting a growth of 2.5%[4] - The company's cash and cash equivalents decreased to RMB 5,032,000 from RMB 10,515,000, a decline of 52.2%[4] - The total liabilities increased to RMB 585,357,000 from RMB 537,408,000, marking an increase of 8.9%[4] - The company’s net assets rose to RMB 2,056,529,000, up from RMB 2,041,111,000, indicating a growth of 0.8%[4]

Financial Performance - Interest income for 2024 decreased to RMB 196,354,000, down 16.9% from RMB 236,165,000 in 2023[15] - Profit before tax for 2024 was RMB 91,604,000, a decline of 30.1% compared to RMB 131,091,000 in 2023[15] - The annual profit attributable to equity shareholders for 2024 was RMB 62,440,000, a decrease of 32.6% from RMB 92,650,000 in 2023[15] - Net interest income for 2024 was RMB 155,842 thousand, down 16.7% from RMB 187,149 thousand in 2023[35] - Total annual profit and comprehensive income for the years ending December 31, 2023, and 2024, were RMB 96.6 million and RMB 65.4 million, respectively[44] - Total assets as of December 31, 2024, were RMB 2,578,519,000, a decrease of 3.0% from RMB 2,657,317,000 in 2023[15] - Total liabilities for 2024 decreased to RMB 537,408,000, down 18.0% from RMB 654,603,000 in 2023[15] - Total equity increased to RMB 2,041,111,000 in 2024, up 1.9% from RMB 2,002,714,000 in 2023[15] Loan and Asset Management - The company's total loan balance (excluding accrued interest) decreased from RMB 2,700.9 million as of December 31, 2023, to RMB 2,640.5 million as of December 31, 2024[24] - The total loans and advances to customers amounted to RMB 2,656,268 thousand as of December 31, 2024, a decrease of 2.4% from RMB 2,720,846 thousand as of December 31, 2023[27] - The non-performing loan ratio improved to 3.9% in 2024 from 4.6% in 2023, indicating better loan quality[31] - The total overdue loans decreased to RMB 104,956 thousand in 2024 from RMB 124,812 thousand in 2023, reflecting a reduction of 15.9%[33] - The overdue loan rate decreased to 4.0% in 2024 from 4.6% in 2023, showing an improvement in loan management[31] - The total amount of loans with credit impairment was RMB 384,215 thousand as of December 31, 2024, compared to RMB 127,715 thousand in 2023[30] Strategic Focus and Development - The company plans to focus on market expansion and new product development in the upcoming fiscal year[14] - The management highlighted ongoing research and development efforts aimed at enhancing service offerings[14] - The company is exploring potential mergers and acquisitions to strengthen its market position[14] - Future guidance indicates a cautious outlook due to market conditions, with a focus on cost management and operational efficiency[14] - The company aims to enhance its internal capabilities and institutional framework to align with business development while continuing its green development strategy[18] Green Development and Sustainability - The company established an ESG Sustainable Development Committee under the board to support its sustainable development strategy[18] - The company aims to focus on green sustainable development and enhance its service to small and micro enterprises and the agricultural sector[116] - The company is committed to green development, responding to national carbon neutrality goals, and expanding green loan products[170] - The company has implemented a green loan information management system, which is the first of its kind in the country to receive national software copyright certification[139] - The company has engaged international investors and consultants to enhance its green loan capabilities and ESG training for board members and employees[140] Employee Management and Corporate Governance - The company employed 77 employees as of December 31, 2024, down from 86 employees as of December 31, 2023, reflecting a decrease of about 10.5% in workforce size[69] - The employee turnover rate for contract employees decreased to 10.47% in 2024 from 18.09% in 2023, reflecting improved employee retention[121] - The company maintained a strict adherence to labor laws, ensuring no instances of child labor or forced labor as of December 31, 2024[150] - The company provides financing solutions to clients in agriculture, small and micro enterprises, and online retailers, with a focus on green loans for ecological industries[181] - The company has a policy against commercial bribery, requiring all employees to sign a declaration against it when issuing loans[169] Customer Relations and Market Position - The company is positioned to benefit from supportive policies in Zhejiang Province aimed at achieving common prosperity and enhancing economic development[76] - The company has established partnerships with DEG and GCPF to enhance its green loan offerings, aiming to better serve green loan customers[79] - The company actively collects customer feedback through various channels to improve service quality[162] - The company has no major disputes with customers, reflecting strong customer relationships[187] - Interest income from the top five customers accounted for less than 30% of the company's total annual interest income as of December 31, 2024[188]

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, down 32.3% from RMB 96,636,000 in 2023[4] - Basic and diluted earnings per share were RMB 0.05, compared to RMB 0.08 in the previous year, indicating a decline of 37.5%[4] - The company reported a pre-tax profit of RMB 91,604 thousand for 2024, down 30.1% from RMB 131,091 thousand in 2023[86] - 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 from RMB 654,603,000, a reduction of 18.0%[5] - Cash and cash equivalents decreased to RMB 10,515,000 from RMB 17,478,000, a drop of 39.8%[5] - The company’s goodwill decreased to RMB 12,604,000 from RMB 18,005,000, a decline of 30.0%[5] - The company’s total equity increased slightly to RMB 2,041,111,000 from RMB 2,002,714,000, an increase of 1.9%[5] - The total liabilities from financing activities as of December 31, 2024, were RMB 490,134,000, a decrease from RMB 596,457,000 at the beginning of the year[98] 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 used in financing activities amounted to RMB 167,854,000, a reduction of 40.9% from RMB 284,041,000 in 2023[8] - The company received RMB 25,000,000 from bank borrowings, a significant decrease of 66.7% compared to RMB 75,000,000 in the previous year[8] - The company paid dividends to equity shareholders amounting to RMB 23,600,000, down 50% from RMB 47,200,000 in 2023[8] Credit and Impairment Management - The company employs an expected credit loss model to measure impairment losses on loans and advances provided to customers[148] - The total expected credit loss provisions amounted to RMB 194,214 thousand, a decrease from RMB 198,495 thousand as of December 31, 2023, reflecting a reduction of approximately 1.4%[111] - The total amount of impaired loans decreased to RMB 104,744 thousand in 2024 from RMB 124,485 thousand in 2023, a reduction of approximately 15.8%[200] - The overdue loan balance decreased to RMB 104,956 thousand in 2024 from RMB 124,812 thousand in 2023, indicating improved collection efforts[200] - The provision for impairment losses totaled RMB 194,214 thousand in 2024, compared to RMB 198,495 thousand in 2023, reflecting a decrease in risk provisions[198] Operational Highlights - The company did not engage in any significant new product or technology development during the reporting period[9] - There were no major market expansions or acquisitions reported in the financial statements[9] - The company has only one reportable segment, primarily providing loan services in Zhejiang Province, China[82] - The company is the largest licensed micro-lending company in Zhejiang province, focusing on green lending practices[188] Employee and Management Costs - Employee costs for 2024 totaled RMB 16,415 thousand, down 6.9% from RMB 17,641 thousand in 2023[85] - Total remuneration for directors and supervisors for the year 2024 amounted to RMB 2,930,000, compared to RMB 3,330,000 in 2023, indicating a decrease of 12%[90] - The total remuneration for key management personnel decreased from RMB 3,330 thousand in 2023 to RMB 2,930 thousand in 2024, reflecting a reduction of approximately 12%[171] Taxation and Reserves - The provision for current income tax for 2024 was RMB 26,908 thousand, a decrease of 28% from RMB 37,312 thousand in 2023[86] - The total amount of tax provision for the year in China decreased from RMB 37,312 million in 2023 to RMB 26,908 million in 2024[129] - The company plans to allocate RMB 1.4 million (10% of net profit) to statutory surplus reserves for the year ending December 31, 2024[138] - The general risk reserve will see a reversal of RMB 1.1 million from the general risk reserve to retained earnings[138] Financial Instruments and Fair Value - Financial assets and liabilities are recognized in the financial position statement when the group becomes a party to the financial instrument contract[34] - The group measures financial instruments initially at fair value plus directly attributable transaction costs, except for those measured at fair value through profit or loss[34] - Fair value measurement is based on active market quotes if available; otherwise, valuation techniques are used[49] - The fair value of financial instruments measured at fair value is not applicable as the company has no financial instruments measured at fair value as of the reporting dates[168] Market and Economic Conditions - The average interest rate on loans decreased from 8.7% in 2023 to 7.4% in 2024, a decline of approximately 14.9%[192] - The company faces currency risk primarily from interest-bearing borrowings denominated in euros, with a reported exposure of RMB (124,527) thousand in 2024, down from RMB (195,802) thousand in 2023[163] - The after-tax profit impact from a 100 basis point increase in the euro exchange rate is estimated at RMB (934) thousand for 2024, compared to RMB (1,469) thousand for 2023[165]

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]