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].