Company Operations and Market Position - The company operates primarily in the micro-finance sector in Deqing County, Huzhou City, Zhejiang Province, with a significant market share in this region[12]. - The economic development in Deqing has been strong, recognized as a "strong county in technology" and a "demonstration county for financial innovation" by the Zhejiang provincial government[12]. - The company is positioned to benefit from the national policy aimed at supporting high-quality development in Zhejiang Province, which includes a series of major decision-making deployments[12]. - Deqing has been identified as a key area for green financial reform and innovation, providing better opportunities for the company's exploration of green development[12]. - The company has been recognized as the first green microfinance company pilot unit in Huzhou since April 2020, enhancing its market position[97]. - The company actively explores sustainable green credit pathways and has developed new loan products to increase market penetration[97]. Financial Performance - As of June 30, 2021, the total loan balance (excluding accrued interest) increased from RMB 2,557.7 million to RMB 2,666.6 million, representing a growth of approximately 4.3%[14]. - The total amount of loans issued by the company and three other small loan companies in Deqing reached RMB 1.79 billion, with the company accounting for about 84.2% of this total[13]. - The company's leverage ratio increased from 2.17 to 2.26, indicating a higher level of borrowing relative to its registered capital of RMB 1.18 billion[17]. - The average interest rate on loans decreased from 12.2% to 10.2% due to increased support for small and micro enterprises amid the COVID-19 pandemic[18]. - The non-performing loan ratio rose slightly from 4.8% to 4.9%, with non-performing loans increasing from RMB 123.2 million to RMB 131.1 million[23]. - The provision coverage ratio remained stable at 153%, with total provisions for impairment losses increasing from RMB 187.5 million to RMB 201.1 million[23]. - The company reported a total profit and comprehensive income of RMB 67,039 thousand for the six months ended June 30, 2021, compared to RMB 67,563 thousand in the same period of 2020[104]. - Basic and diluted earnings per share for the period were RMB 0.05, down from RMB 0.06 in the previous year[104]. Loan Portfolio and Asset Quality - The company primarily serves small and micro enterprises, with 75.4% of loan amounts being RMB 1 million or less as of June 30, 2021[18]. - The total amount of loans and advances to customers (excluding accrued interest) was RMB 2,699.7 million as of June 30, 2021, compared to RMB 2,587.7 million at the end of 2020[19]. - The company experienced a decrease in average loan interest rates due to increased competition and policy measures to support small and micro enterprises during the COVID-19 pandemic[36]. - The overdue loans as of June 30, 2021, amounted to RMB 131.2 million, representing approximately 4.9% of the total loans and advances provided[64]. - The company’s total balance of loans and advances to customers with credit impairment was RMB 131,139,000 as of June 30, 2021, slightly down from RMB 123,223,000 as of December 31, 2020, indicating a decrease of approximately 6.5%[189]. - The company’s total balance of loans and advances to customers without credit impairment was RMB 2,531,113,000 as of June 30, 2021, reflecting a stable performance compared to the previous period[189]. Operational Efficiency and Costs - Administrative expenses totaled RMB 28.9 million for the six months ended June 30, 2021, compared to RMB 24.6 million in the same period of 2020, with employee costs rising to RMB 9.8 million from RMB 8.2 million[43][46]. - The effective tax rate for the six months ended June 30, 2021, was 26.2%, slightly up from 25.5% in the previous year, with income tax expenses of RMB 23.9 million compared to RMB 23.1 million[47]. - The company employed approximately 113 employees as of June 30, 2021, down from 121 employees as of December 31, 2020[87]. Cash Flow and Liquidity - The net cash used in operating activities for the six months ended June 30, 2021, was RMB 16.1 million, with a pre-tax profit of RMB 90.9 million[55]. - The company’s cash and cash equivalents totaled RMB 11.5 million as of June 30, 2021, down from RMB 78.2 million as of December 31, 2020[59]. - The net cash used in financing activities for the six months ended June 30, 2021, was RMB 50.9 million, primarily due to the repayment of interest-bearing loans[57]. - The company plans to maintain optimal liquidity levels to support operational needs and potential business expansion[49]. Future Outlook and Strategic Initiatives - The company is focused on expanding its market presence in the micro-finance sector, particularly in areas with strong economic growth potential[12]. - The company aims to leverage the favorable financial ecosystem in Huzhou to enhance its service offerings and customer base[12]. - The company plans to enhance its market expansion strategies and product development in the upcoming quarters, focusing on technology-driven solutions[148].

Financial Performance - Zuoli Kechuang Micro-finance Company reported a total revenue of RMB 300 million for the fiscal year, representing a year-on-year increase of 15%[6] - The company’s net profit for the year was RMB 50 million, which is a 10% increase compared to the previous year[6] - For the year ended December 31, 2020, the company issued loans totaling RMB 3,699.16 million, with interest income of RMB 304.95 million and net profit of RMB 117.82 million, representing a profit attributable to equity shareholders of RMB 110.24 million[21] - Total annual profit decreased from RMB 140.8 million in 2019 to RMB 117.8 million in 2020, a decline of approximately 16.3%[60] - Net interest income decreased to RMB 255.97 million in 2020 from RMB 270.80 million in 2019[49] - Total profit for 2020 was RMB 162.07 million, down 14.1% from RMB 188.48 million in 2019[175] - Net profit attributable to shareholders for 2020 was RMB 110.24 million, a decline of 15.9% compared to RMB 131.59 million in 2019[175] Loan and Asset Management - The total loan balance (excluding accrued interest) increased from RMB 2,482.7 million as of December 31, 2019, to RMB 2,557.7 million as of December 31, 2020[27] - The total loans and advances to customers increased from RMB 2,482,713 thousand in 2019 to RMB 2,557,669 thousand in 2020, representing a growth of 3.0%[30] - The total loans and advances to customers increased to RMB 2,586.65 million in 2020 from RMB 2,520.04 million in 2019[43] - The company maintained a significant portion of guaranteed loans, which accounted for approximately 97.5% of total loans and advances as of December 31, 2020[80] - The overdue loan balance increased significantly to RMB 1,235.32 million from RMB 710.38 million, resulting in an overdue loan rate of 4.8% compared to 2.8%[47] - The total expected credit loss for loans and advances was RMB 187,537 thousand as of December 31, 2020[40] Market Expansion and Strategy - User data indicates that the total number of active borrowers increased by 20% to 15,000 users[6] - The company plans to expand its market presence by entering two new provinces in China by the end of the next fiscal year[6] - The company has set a performance guidance for the next fiscal year, targeting a revenue growth of 20%[6] - A strategic partnership with local agricultural cooperatives is expected to increase loan disbursement in rural areas by 25%[6] - The company is exploring potential acquisition opportunities to enhance its service offerings and market share[6] Risk Management and Compliance - The management emphasized a commitment to maintaining a non-performing loan ratio below 2%[6] - The impaired loan ratio increased to 4.8% as of December 31, 2020, compared to 4.3% as of December 31, 2019[43] - The provision coverage ratio improved to 152% in 2020 from 145% in 2019, indicating a stronger reserve against potential loan losses[43] - The company focused on serving clients with higher repayment capabilities, leading to a strategic adjustment in interest rates[31] - The company emphasizes compliance with regulatory policies and risk control to maintain financial order and governance[187] Green Finance Initiatives - The company was recognized as the first pilot unit for green small loans in Huzhou City, contributing to the establishment of national standards for green small loan companies[22] - The company developed a green loan information management system, which received national software copyright, enhancing its technological capabilities[22] - The company plans to further explore green business opportunities and enhance its green small loan brand in response to national carbon neutrality goals and the new development pattern[22] - The company has implemented measures to avoid lending to high-energy consumption and high-pollution enterprises, promoting green loans for eco-friendly projects[159] - The company has a commitment to low-carbon operations and has established internal regulations to conserve energy and resources[159] Operational Efficiency - Research and development efforts are focused on enhancing the digital loan application process, aiming to reduce processing time by 30%[6] - Administrative expenses totaled RMB 52.75 million in 2020, down 11.8% from RMB 59.76 million in 2019[58] - Employee costs decreased from RMB 22.90 million in 2019 to RMB 18.44 million in 2020, representing a reduction of approximately 19.5%[58] - The company’s net cash from operating activities was RMB 148.84 million in 2020, compared to RMB 92.68 million in 2019, indicating a significant increase of 60.6%[64] Social Responsibility - The company actively participates in charitable and donation activities to support community welfare[187] - A total of RMB 6.25 million in loans was provided to the education system, supporting impoverished students with interest-free loans[160] - The company has a history of providing loans totaling RMB 670,000 to support entrepreneurship for disadvantaged groups[160] - The company has been involved in various subsidiaries, enhancing its operational capabilities in micro-lending[125] Management and Governance - The company has a strong management team with extensive experience in finance and operations, including Hu Fangfang as CFO and Yang as General Manager[125] - The company is committed to maintaining strong governance and oversight through its board and committees[118] - The company has established various committees, including the Audit Committee and the Nomination Committee, to ensure accountability in decision-making processes[160]

Loan Portfolio and Financial Performance - As of June 30, 2020, the total amount of loans issued by the group and three other microfinance companies in Deqing reached RMB 1.92 billion, with the group accounting for approximately 80.6% of this total[16]. - The outstanding loan balance (excluding accrued interest) for the group and the three other microfinance companies was RMB 3.3 billion as of June 30, 2020, with the group holding about 75.7% of this balance[16]. - As of June 30, 2020, the total loan amount provided to customers (excluding accrued interest) was RMB 2,497.3 million, remaining stable compared to RMB 2,482.7 million as of December 31, 2019[18]. - The total amount of loans and advances provided to customers was RMB 2,526.5 million as of June 30, 2020, slightly up from RMB 2,520.0 million as of December 31, 2019[24]. - The company's overdue loans increased to RMB 123.1 million as of June 30, 2020, accounting for approximately 4.9% of the total loans and advances, compared to 2.8% as of December 31, 2019[56]. - The total outstanding loans and advances to customers amounted to RMB 2,685,238 thousand as of June 30, 2020, with a significant portion being overdue loans of RMB 123,064 thousand[190]. Interest Rates and Income - The average loan interest rate decreased from 12.69% to 12.16% due to the impact of the COVID-19 pandemic and government support policies for small and micro enterprises[20]. - Total interest income for the six months ended June 30, 2020, was RMB 156.5 million, down from RMB 157.9 million in 2019, reflecting a decrease of about 0.9%[33]. - Net interest income for the six months ended June 30, 2020, was RMB 128.9 million, a decrease from RMB 134.2 million for the same period in 2019, representing a decline of approximately 2.4%[33]. - Interest income from loans and advances to customers was RMB 156,325 thousand for the six months ended June 30, 2020, slightly down from RMB 157,755 thousand in the same period of 2019[114]. Impairment and Credit Quality - The non-performing loan ratio increased to 4.9% as of June 30, 2020, compared to 2.8% as of December 31, 2019[24]. - The total provision for impairment losses was RMB 168,468 thousand, compared to RMB 155,461 thousand in the previous year, indicating an increase of about 8.1%[134]. - Total impairment losses for the six months ended June 30, 2020, amounted to RMB 21,570 thousand, an increase of 77.1% compared to RMB 12,204 thousand in the same period of 2019[119]. - The expected credit loss for loans with no credit impairment over the entire duration was RMB 51,280 thousand as of June 30, 2020, compared to RMB 158 thousand as of December 31, 2019[146]. Operational and Financial Position - The company primarily operates in Deqing County and Binjiang District of Hangzhou, with a significant market share derived from Deqing County[15]. - As of June 30, 2020, total assets decreased to RMB 2,494,136 thousand from RMB 2,527,413 thousand, representing a decline of approximately 1.3%[96]. - Total liabilities decreased to RMB 688,268 thousand from RMB 781,108 thousand, reflecting a reduction of approximately 11.9%[96]. - The company's equity attributable to shareholders increased to RMB 1,702,076 thousand from RMB 1,636,968 thousand, marking an increase of about 4%[100]. Cash Flow and Financing Activities - The net cash generated from operating activities for the six months ended June 30, 2020, was RMB 129.8 million, reflecting a pre-tax profit of RMB 90.7 million after adjustments for non-cash and non-operating items[47]. - The net cash used in financing activities for the six months ended June 30, 2020, was RMB 160.2 million, primarily due to the repayment of interest-bearing loans amounting to RMB 239.8 million[51]. - Cash and cash equivalents totaled RMB 24.2 million as of June 30, 2020, down from RMB 55.3 million as of December 31, 2019, indicating a decrease of approximately 56.2%[52]. Risk Management and Regulatory Environment - The company faces credit risk primarily from its microfinance business, with mechanisms in place for pre-loan assessment, credit approval, and post-loan monitoring[183]. - The company has established a risk management policy to address liquidity and interest rate risks in its operations[181]. - The establishment of the China Microfinance Company Association is expected to benefit the microfinance industry through improved regulatory support[84]. Employee and Administrative Expenses - The company employed approximately 120 employees as of June 30, 2020, down from 128 employees as of December 31, 2019[75]. - Administrative expenses totaled RMB 24.6 million in 2020, down from RMB 27.2 million in 2019, reflecting a decrease of about 9.5%[40]. Dividends and Capital Management - The company did not declare any dividends for the six months ending June 30, 2020, compared to RMB 147.5 million (RMB 0.125 per share) for the same period in 2019[171]. - The company approved a cash dividend of RMB 20 million for the six months ending June 30, 2020, attributed to the fiscal year ending December 31, 2019[172]. - The company actively manages its capital structure to balance high shareholder returns with acceptable levels of borrowing and good capital condition[178].

Financial Performance - Zuoli Kechuang Micro-finance Company Limited reported a revenue of RMB 4,326,250 (approximately HKD 4,975,187.5) from the transfer of creditor rights[12]. - For the year ended December 31, 2019, the company achieved a loan scale of RMB 4,131.84 million and interest income of RMB 320.35 million, with a net profit of RMB 140.79 million[39]. - The company's profit attributable to equity shareholders was RMB 131.59 million in 2019, compared to RMB 136.97 million in 2018, reflecting a slight decrease[39]. - Net interest income for the year ended December 31, 2019, was RMB 270.8 million, down from RMB 294.1 million in 2018[72]. - Annual profit for the years ended December 31, 2018, and 2019 was RMB 142.9 million and RMB 140.8 million, respectively[83]. - Total profit for 2019 was CNY 18,848,000, a slight decline from CNY 19,121,000 in 2018, indicating a decrease of about 1.4%[196]. - Net profit attributable to shareholders for 2019 was CNY 13,159,000, compared to CNY 13,697,000 in 2018, reflecting a decrease of approximately 3.9%[196]. - The non-performing loan ratio increased to 4.25% in 2019 from 3.02% in 2018, indicating a deterioration in asset quality[196]. Asset and Liability Management - The total assets of the company increased from RMB 2,427.47 million in 2018 to RMB 2,527.41 million in 2019, while total liabilities rose from RMB 674.45 million to RMB 781.11 million during the same period[37]. - The asset-liability ratio increased to 40.4% as of December 31, 2019, up from 32.6% in 2018, primarily due to an increase in interest-bearing borrowings[116]. - The balance of interest-bearing borrowings increased from RMB 580.1 million as of December 31, 2018, to RMB 716.0 million as of December 31, 2019[87]. - Total liabilities rose to CNY 78,111,000 in 2019, compared to CNY 67,445,000 in 2018, representing an increase of approximately 15.8%[196]. Loan Portfolio and Risk Management - The total loan balance (excluding accrued interest) increased from RMB 2,396.4 million at the end of 2018 to RMB 2,482.7 million at the end of 2019, indicating a growing demand for financing[46]. - The total amount of loans and advances net of impairment losses was RMB 2,364,579 thousand as of December 31, 2019[60]. - The impaired loan ratio increased to 4.3% as of December 31, 2019, compared to 3.0% on December 31, 2018[64]. - The total amount of impaired loans rose from RMB 72.4 million to RMB 107.2 million, primarily due to an increase in loan balances and deteriorating operating conditions for certain borrowers[68]. - The overdue loan balance decreased to RMB 71.0 million as of December 31, 2019, from RMB 76.1 million a year earlier, with the overdue loan ratio improving to 2.8% from 3.2%[70]. Market Strategy and Expansion - The company is focused on expanding its market presence in rural areas, targeting clients involved in agricultural businesses[5]. - The company plans to deepen innovative product design and optimize customer quality to ensure stable and orderly development in the future[39]. - The company aims to provide flexible financing solutions through rapid and comprehensive loan assessment and approval processes[46]. - The company plans to focus on serving customers with higher repayment capabilities, which may lead to lower interest rates for these clients[50]. - The company anticipates benefiting from regulatory support for microfinance companies in China, as highlighted by recent government discussions on financing issues for private enterprises[138]. - The company plans to leverage its capital base and innovate loan products to increase market penetration and strengthen competitive advantages in the Deqing County market[140]. Governance and Management - The company is led by Executive Director and Chairman Yu Yin, who is responsible for daily management and overall corporate strategy[145]. - The company has a strong management team with extensive experience in finance and operations, including CFO Hu Fangfang, who has a background in financial management and auditing[154]. - The company is focused on maintaining a strong governance structure with experienced directors overseeing its operations[145]. - The company has a diverse board with members possessing expertise in finance, law, and management, enhancing its governance structure[164]. - The independent non-executive directors contribute to the audit and remuneration committees, ensuring compliance and accountability[165]. Social Responsibility and Compliance - The company has been recognized for its efforts in social responsibility, including donations and support for vulnerable groups[181]. - The company is committed to green finance, issuing loans to support environmental initiatives and developing eco-friendly loan products for new energy and ecological agriculture[180]. - The company emphasizes compliance with regulations and has established various committees, including an audit committee and a loan review committee, to ensure accountability and protect shareholder interests[181]. - The company actively responds to national policies supporting agriculture and rural development, addressing financing challenges faced by local SMEs[180].

Loan Portfolio and Financial Performance - As of June 30, 2019, the total amount of loans issued by the group and three other microfinance companies in Deqing reached RMB 2.715 billion, with the group accounting for approximately 76.76% of this total[45]. - The group's loan balance (excluding accrued interest) as of June 30, 2019, was approximately RMB 2.438 billion, representing about 68.88% of the total loan balance of RMB 3.638 billion for the group and the three other microfinance companies[45]. - The total amount of loans and advances provided to customers (excluding accrued interest) was RMB 2,506,480 thousand as of June 30, 2019, compared to RMB 2,396,383 thousand as of December 31, 2018, indicating an increase of 4.6%[47]. - The average loan balance increased from RMB 2,350.0 million as of June 30, 2018, to RMB 2,506.5 million as of June 30, 2019, reflecting a growth of approximately 6.7%[74]. - The company primarily serves small and micro enterprises in Huzhou and Hangzhou, focusing on agricultural, industrial, and service sectors[51]. - The company maintained a strong demand for financing from its customer base, contributing to the growth in loan portfolio size[46]. - The total amount of loans and advances to customers increased slightly to RMB 2,506.5 million as of June 30, 2019, primarily due to the expansion of the company's business scale[107]. Interest Rates and Income - The average interest rate on loans decreased from 14.91% in the first half of 2018 to 12.69% in the first half of 2019, reflecting a strategic focus on clients with higher repayment capabilities[51]. - For the six months ended June 30, 2019, interest income was RMB 157,945,000, a decrease of 9.1% from RMB 174,148,000 in the same period of 2018[169]. - Net interest income for the six months ended June 30, 2019, was RMB 134.2 million, a decrease from RMB 150.8 million for the same period in 2018, representing a decline of approximately 11.0%[79]. Loan Quality and Impairment - The ratio of impaired loans was 2.9% as of June 30, 2019, slightly improved from 3.0% as of December 31, 2018[58]. - The total overdue loans amounted to RMB 77.1 million as of June 30, 2019, which is 3.1% of the total loan balance, compared to RMB 76.1 million or 3.2% as of December 31, 2018[68]. - The coverage ratio for impairment losses was 178% as of June 30, 2019, down from 184% as of December 31, 2018[58]. - Impairment losses decreased from RMB 15.0 million in the first half of 2018 to RMB 12.2 million in the first half of 2019, a reduction of about 18.7%[81]. Expenses and Profitability - Administrative expenses totaled RMB 27.2 million for the six months ended June 30, 2019, down from RMB 36.4 million in the same period of 2018, representing a decrease of approximately 25.3%[83]. - The company's profit for the period was RMB 81.7 million for the six months ended June 30, 2019, compared to RMB 83.2 million for the same period in 2018, a decline of about 1.8%[90]. - The company reported a profit before tax of RMB 109,158,000, down 2.2% from RMB 111,405,000 in the previous year[169]. - Total comprehensive income for the period was RMB 81,721,000, compared to RMB 83,246,000 in the same period of 2018, reflecting a decrease of 1.8%[169]. Capital and Equity - The total registered capital remained stable at RMB 1,180 million for both June 30, 2019, and December 31, 2018[47]. - The total equity attributable to equity shareholders of the company was RMB 1,582,821 thousand, down from RMB 1,652,881 thousand, a decrease of approximately 4.23%[176]. - The company's reserve decreased to RMB 402,821 thousand from RMB 472,881 thousand, indicating a reduction of approximately 14.77%[176]. - The company’s non-controlling interests increased to RMB 104,417 thousand from RMB 100,136 thousand, reflecting a growth of about 4.3%[176]. Cash Flow and Financing Activities - For the six months ended June 30, 2019, the net cash used in operating activities was RMB 254 million, with a pre-tax profit of RMB 1,092 million[96]. - The net cash used in investing activities for the six months ended June 30, 2019, was RMB 12 million, mainly due to equipment purchases of RMB 18 million[97]. - The net cash used in financing activities was RMB 64 million, primarily due to the repayment of interest-bearing borrowings of RMB 5,200 million[98]. - Cash and cash equivalents decreased from RMB 417.7 million as of December 31, 2018, to RMB 87 million as of June 30, 2019[99]. Market Environment and Strategic Plans - The company anticipates continued economic stability in Deqing, which is expected to provide a favorable market environment for growth[155]. - The company plans to leverage its capital base to innovate loan products and expand business channels to increase market penetration[155]. - The acquisition of Xingyao Microfinance in Hangzhou has expanded the company's offline business scope, enhancing its competitive advantage in a high-tech industry area[156]. - The establishment of the China Microfinance Company Association is expected to benefit the microfinance industry in terms of regulation and recognition[155]. Assets and Liabilities - Total assets increased to RMB 2,513,649 thousand as of June 30, 2019, up from RMB 2,427,471 thousand at the end of 2018, representing a growth of approximately 3.55%[176]. - The company reported a total liability of RMB 826,411 thousand, an increase from RMB 674,454 thousand, indicating a rise of about 22.5%[176]. - The total amount of other assets increased from RMB 1,838 million as of December 31, 2018, to RMB 3,354 million as of June 30, 2019[115].

Financial Performance - The company reported a total revenue of RMB 1.2 billion for the fiscal year ending December 31, 2022, representing a 15% increase compared to the previous year[47]. - The company projects a revenue growth of 20% for the next fiscal year, aiming for RMB 1.44 billion[47]. - Interest income from loans and advances increased from RMB 313.5 million in 2017 to RMB 336.8 million in 2018, representing a growth of 7.3%[79]. - The total interest income rose to RMB 337.5 million in 2018 from RMB 314.3 million in 2017, marking an increase of 7.4%[79]. - Net interest income increased from RMB 270.8 million in 2017 to RMB 294.1 million in 2018, reflecting a growth of 8.6%[81]. - Other net income surged from RMB 5.3 million in 2017 to RMB 13.4 million in 2018, primarily due to government grants received amounting to RMB 13.2 million[82]. - The company reported a total of RMB 2,415,251 thousand in loans and advances to customers, including accrued interest, as of December 31, 2018[69]. Client Growth and Market Expansion - User data indicates a growth in active clients to 500,000, up from 400,000 in the prior year, marking a 25% increase[47]. - The company is expanding its market presence in rural areas, targeting a 30% increase in client acquisition in these regions[47]. - New product launches are expected to contribute an additional RMB 200 million in revenue, with a focus on digital lending solutions[47]. - The company plans to leverage its capital base to innovate loan products and expand its market penetration in Deqing, which is recognized for its economic stability and growth potential[150]. Operational and Strategic Initiatives - A strategic acquisition of a fintech startup is anticipated to enhance technological capabilities and improve service offerings[47]. - The company plans to implement a new customer relationship management system to improve client engagement and retention[47]. - The company aims to deepen innovative product design and explore market depth to provide efficient financing services[52]. - The company completed a business restructuring with its non-wholly owned subsidiary, Jin Hui Micro-lending, to enhance its micro-lending business platform[52]. - The company plans to continue expanding its business and meeting operational funding needs through bank borrowings[78]. Financial Health and Ratios - The company’s total assets reached RMB 2,427,471 million, while total liabilities were RMB 674,454 million as of the latest reporting period[49]. - The impaired loan ratio increased to 3.0% in 2018 from 1.5% in 2017, with impaired loan balance rising to RMB 72,362 thousand from RMB 32,931 thousand[71]. - The overdue loans totalled RMB 76,138 thousand as of December 31, 2018, compared to RMB 34,533 thousand as of December 31, 2017, representing an increase in overdue loan ratio from 1.61% to 3.18%[77]. - The provision coverage ratio decreased to 184% in 2018 from 275% in 2017, indicating a reduction in the level of provisions relative to impaired loans[71]. - The weighted average return on equity decreased from 10.3% in 2017 to 8.6% in 2018, a decline of 17%[124]. - The average asset return also fell from 7.3% in 2017 to 6.2% in 2018, a decrease of 15%[124]. - The debt-to-asset ratio slightly decreased from 32.6% in 2017 to 32.2% in 2018[126]. Expenses and Costs - Research and development expenses increased by 10% to RMB 100 million, focusing on innovative lending technologies[47]. - Administrative expenses totaled RMB 68.8 million in 2018, up from RMB 49.4 million in 2017, representing a growth of 39.2%[86]. - Employee costs increased from RMB 18.1 million in 2017 to RMB 24.1 million in 2018, a rise of 33.1%[87]. - The company's interest-bearing borrowings balance was approximately RMB 580.1 million as of December 31, 2018, compared to RMB 532.5 million in 2017, reflecting an increase of 8.9%[91]. Governance and Management - The report covers the financial data for the year 2018, spanning from January 1 to December 31, 2018, and includes audited financial statements by KPMG[196]. - The board has approved the proposal to elect Hu Fangfang as an executive director, effective from the date of the annual general meeting until the end of the second board term[184]. - The report emphasizes the importance of internal auditing and financial monitoring for the company's subsidiaries[183]. - The company has appointed several experienced executives with backgrounds in banking and finance to its management team[165]. - The company has been actively involved in training and development for its management team to ensure compliance and governance[161]. Sustainability and Community Engagement - The management highlighted a commitment to sustainable practices, aiming for a 50% reduction in operational carbon footprint by 2025[47]. - The company has been recognized for its contributions to the local economy and community through various awards[161]. - The company has a commitment to transparency, with the report being available in both printed and electronic formats on its website[199].