Financial Performance - Revenue increased by 14.2% to RMB 400.533 million in the first half of 2023 compared to RMB 350.766 million in the same period of 2022[8] - Gross profit rose by 25.2% to RMB 237.010 million from RMB 189.315 million year-over-year[8] - Adjusted gross profit (non-IFRS) grew by 34.4% to RMB 255.338 million compared to RMB 189.970 million in the previous year[8] - Net loss for the period significantly increased to RMB 3.058 billion, a 1,778.2% rise from RMB 162.822 million in 2022[8] - Adjusted net loss (non-IFRS) improved by 43.5% to RMB 85.920 million from RMB 152.139 million in the prior year[8] - Net cash used in operating activities decreased by 5.9% to RMB 175.166 million from RMB 186.144 million[8] - Total revenue for the six-month period ending September 30, 2023 reached RMB 400.5 million, a 14.2% increase year-over-year[14] - Cloud-based HCM solutions generated RMB 296.5 million in revenue, a 17.1% increase year-over-year, contributing 74.0% of total revenue[14] - Beisen's gross profit margin (non-IFRS) for the six-month period ending September 30, 2023 was 63.7%, up 9.5 percentage points year-over-year[14] - Cloud-based HCM solutions gross margin (non-IFRS) increased by 3.2 percentage points to 78.1%[14] - Total revenue for the reporting period was RMB400.5 million, a year-on-year increase of 14.2%, driven by cloud-based HCM solutions which contributed RMB296.5 million, up 17.1% year-on-year, accounting for 74.0% of total revenue[40] - Revenue from professional services was RMB104.0 million, a year-on-year increase of 6.7%, accounting for 26.0% of total revenue[40] - Total revenue for the reporting period was RMB 400.5 million, a year-on-year increase of 14.2%, driven by growth in cloud-based HCM solutions subscription revenue[42][44][45] - Revenue from cloud-based HCM solutions increased by 17.1% to RMB 296.5 million, accounting for 74.0% of total revenue[42][46] - Professional services revenue grew by 6.7% to RMB 104.0 million, representing 26.0% of total revenue[42][46] - The company's net loss decreased by 43.5% year-on-year to RMB 86.0 million, primarily due to proactive cost control measures[43] - Net cash used in operating activities decreased to RMB 175.2 million from RMB 186.1 million in the same period last year[43][44] - Overall gross profit rose by 25.2% to RMB 237.0 million, and the gross margin increased from 54.0% to 59.2%[52] - Adjusted gross profit (non-IFRS) increased to RMB 255.3 million, with the adjusted gross margin rising from 54.2% to 63.7%[53] - Cloud-based HCM solutions' adjusted gross profit (non-IFRS) increased to RMB 231.7 million, with the adjusted gross margin rising from 74.9% to 78.1%[54] - Professional services turned from a gross loss of RMB 0.1 million to a gross profit of RMB 12.5 million, with the gross margin improving from -0.1% to 12.0%[54] - Adjusted gross profit (non-IFRS) for professional services increased to RMB 23.6 million, with the adjusted gross margin rising from 0.3% to 22.7%[54] - Loss before income tax increased significantly to RMB 3,056.6 million from RMB 167.1 million in the same period last year[57] - Income tax expense was RMB 1.5 million, compared to an income tax credit of RMB 4.3 million in the same period last year[57] - Loss for the period increased to RMB 3,058.1 million from RMB 162.8 million in the same period last year[57] - Adjusted gross profit and adjusted net loss are used as non-IFRS measures to facilitate comparisons of operating performance, though they may not be comparable to similarly titled measures from other companies[58][59] - Adjusted gross profit (non-IFRS measure) increased by 34.4% to RMB 255.3 million in the six months ended September 30, 2023, compared to RMB 189.97 million in the same period in 2022[62] - Adjusted net loss (non-IFRS measure) decreased by 43.5% to RMB 85.92 million in the six months ended September 30, 2023, compared to RMB 152.14 million in the same period in 2022[62] Market Position and Growth - Beisen is the only integrated cloud-based HCM solutions provider in China covering all main HCM-using scenarios of the entire employment lifecycle[11] - The company has successfully built a unified and open PaaS infrastructure, enabling comprehensive and integrated multi-function solutions[11] - The cloud-based HCM solutions market in China is still fragmented with over 500 players in 2022[11] - Beisen is well-positioned to capitalize on the growth of the cloud-based HCM solutions sector supported by China's 14th Five-Year Plan[11] - Beisen holds a 15.3% market share in China's HCM SaaS market in the first half of 2023, maintaining its leading position for seven consecutive years[12][13] - Beisen's contract value in September 2023 increased by 37.0% compared to September 2022, with a 15.9% growth in contract value for the six-month period ending September 30, 2023[14] - Beisen's annual recurring revenue (ARR) from clients engaged in at least two modules stood at 71.4% as of September 30, 2023[14] - The number of Beisen's customers exceeded 5,300 as of September 30, 2023, with a subscription revenue retention rate of 104%[15] - Core HCM integration business ARR accounted for 48.4%, a 35.1% increase year-over-year, with 300 new customers secured during the reporting period[15] - As of September 30, 2023, Beisen's customer base exceeded 5,300, with a subscription revenue retention rate of 104% during the reporting period[16] - Core HCM Cloud's ARR reached 48.4% as of September 30, 2023, with a year-on-year growth of 35.1% and 300 new customers added during the reporting period[17] - Performance Management Cloud's ARR increased by 32.3% year-on-year as of September 30, 2023, with 169 new customers added during the reporting period[19] - E-Learning Cloud's ARR grew by 84.5% year-on-year as of September 30, 2023, with 130 new customers added during the reporting period[22] - E-Learning Cloud engaged over 5,000 employees across more than 1,000 chain stores nationwide, achieving a 90% training participation rate[22] - The number of cloud-based HCM solutions customers increased from over 4,900 to over 5,300, with a subscription revenue retention rate of 104%[47] - Core HCM Integration ARR grew by 35.1% to RMB 339.2 million, accounting for 48.4% of total ARR, with a subscription revenue retention rate of 114%[47] - Total bookings increased by 15.9% to RMB 482.2 million, compared to RMB 415.9 million in the same period last year[47] Product and Service Innovations - Beisen's Payroll Cloud 2.0 has enhanced payroll accounting, salary management, and budget control, enabling 100% online payroll processing for nearly 10,000 staff across eight schools, reducing tax filing time from one week to 40 minutes[16] - Beisen's recruitment system for a renowned automobile company automated the handling of thousands of on-campus recruitment CVs, improving efficiency by 30%[18] - Beisen launched AI-powered leadership coaching tool Mr. Sen and upgraded its AI Interview platform, collaborating with AI technology leaders like Baidu ERNIE Bot[23] - Beisen launched advanced workforce management products in September 2023, focusing on intelligent scheduling, lean work hours, and workforce analytics, particularly for large group companies with over 5,000 employees[26][29] - The company introduced the AI Family product suite, integrating generative AI and SenGPT large-scale manpower model into HCM SaaS, offering intelligent solutions across HR domains[31][34] Strategic Focus and Industry Targeting - Beisen is targeting key industries such as internet, healthcare, manufacturing, retail chains, and new energy, aiming to boost customer acquisition efficiency and market penetration[32][35] - The company is committed to enhancing client service efficiency through digital tools for meticulous working hours management and project cost settlement processes[33][36] - Beisen is expanding its ecosystem partnerships to provide seamless services across various HR-related scenarios like recruitment, business travel, training, and benefits[38] - The company remains committed to its 100% public cloud-based pure SaaS model, achieving sustainable growth and reducing losses despite economic challenges[39] Operational Efficiency and Cost Management - Cost of revenues, excluding share-based compensation, decreased by 9.7% to RMB 145.2 million, representing 36.3% of revenue[48] - Sales cost increased by 1.2% year-on-year to RMB 163.5 million, while adjusted sales cost (excluding share-based compensation) decreased by 9.7% to RMB 145.2 million, with the cost-to-revenue ratio dropping from 45.8% to 36.3%[50] - Gross profit for cloud-based HCM solutions increased by 18.5% to RMB 224.5 million, with a stable gross margin of 75.7%[51] - Selling and marketing expenses increased by 30.9% to RMB 232.3 million, while adjusted expenses (excluding share-based compensation) rose by 2.3% to RMB 178.4 million, with the expense-to-revenue ratio decreasing from 49.7% to 44.5%[54] - General and administrative expenses increased by 55.6% to RMB 100.2 million, while adjusted expenses (excluding share-based compensation) decreased by 4.0% to RMB 61.7 million, with the expense-to-revenue ratio decreasing from 18.3% to 15.4%[54] - R&D expenses increased to RMB 187.0 million, up 29.1% YoY, but decreased by 4.5% YoY to RMB 136.4 million after excluding share-based compensation, with the percentage of revenue dropping from 40.7% to 34.1%[56] - Net impairment losses on financial assets and contract assets rose to RMB 4.6 million, up from RMB 2.6 million in the same period last year, due to increased asset size[56] - Other income increased to RMB 31.3 million, up from RMB 17.3 million, driven by a RMB 9.2 million increase in government grants and a RMB 5.3 million increase in VAT refunds[56] - Other gains, net decreased to RMB 6.3 million from RMB 19.3 million, primarily due to a RMB 11.9 million decrease in net fair value gains on financial assets and a RMB 1.6 million increase in net foreign exchange losses[56] - Net finance income increased to RMB 3.7 million from RMB 1.4 million, driven by a RMB 1.7 million increase in finance income and a RMB 0.7 million decrease in lease liability interest expenses[56] - Fair value changes of redeemable convertible preferred shares resulted in a loss of RMB 2,810.8 million, compared to a loss of RMB 5.0 million in the same period last year, due to changes in the company's valuation[57] Financial Position and Liquidity - Cash and cash equivalents increased by 43.3% to RMB 585.8 million as of September 30, 2023, compared to RMB 408.7 million as of March 31, 2023[65] - The company's gearing ratio significantly decreased to 36.7% as of September 30, 2023, from 546.7% as of March 31, 2023, primarily due to the conversion of redeemable convertible preferred shares into ordinary shares[66] - Capital commitments for fixed assets and office renovations decreased by 52.3% to RMB 1.31 million as of September 30, 2023, compared to RMB 2.75 million as of March 31, 2023[74] - The company recorded a one-time fair value change of RMB 2.81 billion due to the conversion of redeemable convertible preferred shares into ordinary shares after the completion of the Global Offering[63][68] - The company's functional currency is USD, and it is primarily exposed to changes in HKD/RMB and USD/RMB exchange rates[76] - The company entered into foreign currency forwards for financial assets denominated in foreign currency that do not satisfy hedge accounting requirements[77] - The company had unutilized banking facilities of RMB 40.0 million as of September 30, 2023[65] - The company did not have any material contingent liabilities as of September 30, 2023[67][72] - The company's maximum exposure to credit risk is represented by the carrying amounts of cash and cash equivalents, restricted cash, term deposits, trade receivables, and other receivables[80][84] - The company manages credit risk by transacting only with state-owned financial institutions in China or reputable banks and financial institutions with high credit quality in China, Hong Kong, and the United States[81][85] - The company's trade receivables and contract assets are subject to ongoing credit evaluations, with the main exposure being the carrying value of these assets at each reporting date[83] - The company's other receivables are assessed for recoverability based on historical settlement records and past experience, with impairment measured as twelve-month expected credit losses[83] - The company aims to maintain sufficient cash and cash equivalents to meet liquidity requirements and regularly monitors liquidity risk[86][87] - As of 30 September 2023, the company did not recognize any redeemable convertible preferred shares, as all such shares were automatically converted to ordinary shares after the completion of the Global Offering on 13 April 2023[88] - The company did not pledge any assets as of 30 September 2023[89] - The company's wealth management products had an aggregated outstanding principal amount of RMB993.5 million as of 30 September 2023, representing 53.2% of the company's total assets[91] - The outstanding principal amount of wealth management products subscribed from Bank of China was RMB694.0 million, with a fair value of RMB701.4 million, accounting for 37.6% of the company's total assets as of 30 September 2023[91] - The expected return rate for the wealth management products from Bank of China ranged from 1.1% to 3.5%[91] - No assets were pledged as of September 30, 2023[92] - The total unredeemed principal amount of wealth management products was RMB 993.5 million, accounting for 53.2% of the company's total assets[92] - The unredeemed principal amount of wealth management products from Bank of China was RMB 694.0 million, with a fair value of RMB 701.4 million, representing 37.6% of the company's total assets[92] - The expected return rate of Bank of China's wealth management products ranged from 1.1% to 3.5%[92] Human Resources and Employee Management - The company had 1,901 employees as of September 30, 2023, a decrease from 2,295 employees in the same period last year[98] - Total staff costs for the reporting period were RMB 582.3 million[98] - The company did not have plans for material investments and capital assets as of September 30, 2023[97] - No material acquisitions, disposals of subsidiaries, associates, or joint ventures occurred during the reporting period[95] Corporate Governance and Compliance - The company complied with all code provisions of the Corporate Governance Code since its listing date[104] - No incidents of non-compliance with the Model Code by employees were noted since the listing date[105] - The company's public float complies with the requirements of Rule 8.08 of the Listing Rules as of the report date[119] - The interim financial information for the six months ended 30 September 2023 was reviewed by PricewaterhouseCoopers in accordance with International Standard on Review Engagement 2410[113] Shareholder and Equity Information - Mr. Wang holds a long position of 81,054,370 shares, representing 11.33% of the total shareholding[134] - Mr. Ji holds a long position of 80,644,370 shares, representing 11.27% of the total shareholding[134] - Ms. Liu holds a long position of 1,112,160 shares, representing 0.16% of the total shareholding[134] - Total issued shares as of 30 September 2023 are 715,297,060[134] - Zhaosen Holding Limited is deemed to be interested in 81,054,370 shares, with Mr. Wang, Ark Trust (Singapore) Ltd., Sen Talent Holdings Limited, and Huisen Holding Limited having indirect interests[135] - Mr. Wang was granted 1,500,000 options under the Pre-IPO Share Option Plan on 1 March 2023, and directly held 4,200 shares as of 30 September 2023[136] - Ms. Zhou Dan, Mr. Wang's spouse, was granted 783,410 options on 1 January 2019, all exercised, and 1,277,160 options on 1 March 2023, which were not vested[136] - Weisen Holding Limited owns 80,644,370 shares, with Mr. Ji, Ark Trust (Singapore) Ltd., Sen Platform Holdings Limited, and Guosen Holding Limited deemed to have interests in these shares[136] - Ms. Liu was granted 2,843,150 options, including 1,730,990 exercised options and 1,

Financial Performance - Revenue for the six months ended September 30, 2023, was RMB 400.5 million, an increase of 14.2% compared to RMB 350.8 million for the same period in 2022[2] - Gross profit for the same period was RMB 237.0 million, representing a 25.2% increase from RMB 189.3 million year-on-year[2] - Adjusted gross profit (non-IFRS measure) was RMB 255.3 million, up 34.4% from RMB 190.0 million in the previous year[2] - The net loss for the period was RMB (3,058.1) million, a significant increase of 1,778.2% compared to RMB (162.8) million in the prior year[2] - The adjusted net loss (non-IFRS measure) was RMB (85.9) million, a decrease of 43.5% from RMB (152.1) million year-on-year[2] - Revenue from customer contracts for the six months ended September 30, 2023, was RMB 400,533 thousand, an increase of 14.2% compared to RMB 350,766 thousand in 2022[19] - Gross profit for the same period was RMB 237,010 thousand, up 25.2% from RMB 189,315 thousand in 2022[19] - The company reported a net loss of RMB 3,058.1 million for the reporting period, compared to a net loss of RMB 162.8 million in the same period last year[64] Revenue Breakdown - Revenue from cloud HCM solutions was RMB 296.5 million, reflecting a 17.1% increase from RMB 253.3 million in the same period last year[5] - Cloud HCM solutions accounted for 74.0% of total revenue, up from 72.2% in the previous year[5] - Professional services revenue increased to RMB 104,057 thousand, a rise of 6.4% compared to RMB 97,498 thousand in the previous year[33] - Revenue from professional services was RMB 104.0 million, a 6.7% increase year-over-year, making up 26.0% of total revenue[64] Customer Metrics - The company achieved a contract value growth of 37.0% year-on-year in September 2023, with a six-month signed contract value growth of 15.9% compared to the previous year[5] - The number of customers exceeded 5,300, with a subscription revenue retention rate of 104% during the reporting period[7] - The ARR for Core HCM reached 48.4%, growing by 35.1% year-over-year, with 300 new customers added during the reporting period[7] - The number of cloud HCM solution customers grew from over 4,900 to over 5,300 during the reporting period, with a subscription revenue retention rate of 104%[66] Expenses and Losses - Operating loss increased to RMB 249,467 thousand in 2023 from RMB 163,491 thousand in 2022, reflecting a higher expenditure in R&D and administrative expenses[19] - R&D expenses rose to RMB 186,966 thousand, a 29.1% increase from RMB 144,858 thousand in the previous year[19] - Employee benefit expenses rose to RMB 582,254 thousand, an increase of 31.8% from RMB 441,716 thousand in the previous year[37] - The total expenses for the six months ended September 30, 2023, amounted to RMB 682,963 thousand, compared to RMB 548,184 thousand in the same period of 2022, reflecting a growth of 24.5%[37] Market Position and Strategy - The company maintained a market share of 15.3% in the HCM SaaS market for the first half of 2023, ranking first in the industry[4] - The business strategy for the second half of fiscal year 2024 focuses on developing new products based on a "PaaS + integrated" approach to strengthen the integrated HCM SaaS offering[13] - The company is committed to deepening its focus on central and state-owned enterprises, enhancing market penetration in sectors like healthcare and renewable energy[16] - The company plans to expand its market presence in Southeast Asia, targeting a 15% market share by the end of fiscal year 2024[114] Product Development and Innovation - The company launched a comprehensive upgrade of its core product, enhancing capabilities in payroll management and human resource budgeting[7] - The company introduced a new interview management system to improve recruitment quality, leveraging over 20 years of talent management research[8] - The company launched new products to enhance talent management capabilities for state-owned enterprises, including evaluation plans and online assessment tools[11] - The company is investing RMB 50 million in R&D for AI and AIGC technologies to enhance its service offerings[116] Financial Position and Assets - Total assets as of September 30, 2023, were RMB 1,865,860 thousand, slightly down from RMB 1,870,778 thousand as of March 31, 2023[21] - Cash and cash equivalents increased to RMB 585,814 thousand from RMB 408,709 thousand, indicating improved liquidity[21] - The company's equity attributable to owners was RMB 1,181,745 thousand, a recovery from a deficit of RMB 8,356,629 thousand[22] - The company's debt-to-asset ratio improved to 36.7% as of September 30, 2023, from 546.7% as of March 31, 2023[90] Shareholder Information - The company reported a basic loss per share of RMB 4.64 for the six months ended September 30, 2023, compared to RMB 0.76 for the same period in 2022, reflecting a significant increase in losses[42] - The board has approved a share buyback program of up to RMB 30 million to enhance shareholder value[118] - The company will not declare any interim dividends for the six months ending September 30, 2023[106] Future Outlook - The company has set a revenue guidance of RMB 600 million for the fiscal year 2024, reflecting a growth target of 20%[114] - New product launches are expected to contribute an additional RMB 100 million in revenue for the fiscal year 2024[114] - A strategic acquisition of a local competitor is anticipated to be completed by Q1 2024, expected to increase market share by 10%[114]

Financial Performance - Revenue for the fiscal year ending March 31, 2023, was RMB 750.9 million, a year-on-year increase of 10.5%[10] - Net loss for the fiscal year ending March 31, 2023, was RMB 2,599.0 million, a year-on-year increase of 36.2%[10] - Adjusted net loss for the fiscal year ending March 31, 2023, was RMB 300.6 million, a year-on-year increase of 83.7%[10] - Total revenue for the reporting period was RMB 750.9 million, a year-on-year increase of 10.5%[32] - The company's financial performance remained strong despite external challenges, with total revenue and gross profit showing positive growth[31] - The company reported a pre-tax loss of RMB 1,921.6 million in FY2022 and RMB 2,604.9 million in the reporting period[59] - The company recorded a tax credit of RMB 5.9 million in the reporting period and RMB 12.8 million in FY2022[60] - The adjusted net loss (non-IFRS measure) was RMB 300.6 million in the reporting period, an increase of 83.7% compared to RMB 163.6 million in FY2022[63] - Cash and cash equivalents increased to RMB 408.7 million as of March 31, 2023, from RMB 288.7 million as of March 31, 2022[66] - The company's asset-liability ratio increased to 546.7% as of March 31, 2023, from 359.5% as of March 31, 2022, with redeemable convertible preferred shares accounting for 92.0% of total liabilities[67] - The company has no significant contingent liabilities as of March 31, 2023[69] - Capital commitments for fixed assets and office renovations decreased by 74.7% to RMB 2.8 million as of March 31, 2023, from RMB 10.9 million as of March 31, 2022[70] - The fair value change of redeemable convertible preferred shares was RMB 1,638.2 million in FY2022 and RMB 2,241.4 million in the reporting period, driven by changes in the company's valuation[58] Revenue Breakdown - Revenue from cloud HCM solutions for the fiscal year ending March 31, 2023, was RMB 537.3 million, a year-on-year increase of 15.9%, accounting for 71.5% of total revenue[11] - Revenue from professional services for the fiscal year ending March 31, 2023, was RMB 213.7 million, a year-on-year decrease of 1.2%, accounting for 28.5% of total revenue[11] - Cloud HCM solution revenue increased by 15.9% to RMB 537.259 million, representing 71.5% of total revenue[33] - Professional services revenue reached RMB 213.7 million, accounting for 28.5% of total revenue[27] - Cloud HCM solution subscription revenue increased by 15.9% from RMB 463.5 million in FY2022 to RMB 537.3 million in the reporting period, driven by new customer acquisition and increased subscriptions from existing customers[35] - Professional services revenue decreased by 1.2% from RMB 216.2 million in FY2022 to RMB 213.7 million in the reporting period, primarily due to the sale of Beisen Career in September 2021[36] Customer Metrics - The company's customer base exceeded 5,100, with a revenue retention rate of 106% for existing customers[14] - Core HCM added approximately 500 new customers, with a cumulative customer base exceeding 1,400, a renewal rate of 95%, and a revenue retention rate of 116%[14] - Total number of customers exceeded 5,100 as of March 31, 2023, with a focus on serving medium and large enterprises, demonstrating strong resilience and risk resistance[15] - Customer renewal rate for software products reached the highest level in the past five years as of March 31, 2023[15] - ARR (Annual Recurring Revenue) from customers using 2 or more modules accounted for 68.6% of total ARR as of March 31, 2023[15] - Revenue retention rate for Core HCM product line customers was 116% during the reporting period[16] - The number of Cloud HCM solution customers grew from over 4,780 as of March 31, 2022, to over 5,119 as of March 31, 2023, with a subscription revenue retention rate of 106%[35] - Annual Recurring Revenue (ARR) for Cloud HCM solutions increased from RMB 581.8 million as of March 31, 2022, to RMB 649.9 million as of March 31, 2023[35] - Core HCM integrated solution ARR grew by 37% from RMB 215.8 million as of March 31, 2022, to RMB 296.1 million as of March 31, 2023, accounting for 46% of total ARR[35] - The company added approximately 500 Core HCM integrated customers during the reporting period, bringing the total to over 1,400, with a subscription revenue retention rate of 116%[35] R&D and Innovation - R&D investment for the fiscal year ending March 31, 2023, was RMB 303.3 million, a year-on-year increase of 17.4%[12] - R&D expenses increased by 17.4% from RMB 258.4 million in 2022 to RMB 303.3 million in 2023, mainly due to a RMB 44.5 million increase in employee benefits as a result of higher headcount and average salaries for R&D staff[50] - Focus on integrating generative AI with HR SaaS as a key initiative for the 2024 fiscal year[19] - The company is integrating generative AI technology into its cloud HCM solutions to revolutionize HR practices[28] - The company has developed a generative AI-powered personal leadership coaching product (Mr.Sen) to address talent development and leadership challenges, expected to create a high competitive barrier[20] - The company plans to develop over 200 ecosystem partners, empower 1,000+ enterprises with custom capabilities, and enable 10,000+ HR users with digital capabilities through its PaaS platform[20] Market Position and Competitive Landscape - The company ranked first in IDC's China HCM SaaS market share for the seventh consecutive year[14] - The company holds a 12.9% market share in China's HCM SaaS market in 2022, ranking first for seven consecutive years[22] - The company is the only integrated cloud HCM solution provider in China with a unified open PaaS infrastructure, covering all major HCM scenarios across the employee lifecycle[22] - The company's Core HCM and performance management solutions ranked first in market share in 2022, and its recruitment management solution ranked first in the second half of 2022[22] - The company offers a comprehensive suite of cloud-native HCM solutions covering the entire employee lifecycle, with weekly software updates to adapt to technological changes[24] - The company's HCM solutions include Recruitment Cloud, Assessment Cloud, Core HR Solutions, Performance Cloud, Succession Cloud, Learning Cloud, and HR Data Analytics Solutions[25] Strategic Priorities and Future Plans - Strategic priorities for 2024 include upgrading the service system and expanding into state-owned enterprises[19] - The company plans to increase investment in state-owned enterprises (SOEs) and aims to establish industry leadership in selected SOE businesses within three years[20] - The company is focusing on expanding its customer base by targeting mature and emerging companies across various industry verticals[28] - The company is committed to leveraging cutting-edge technology to empower enterprises in their HR digitalization efforts[30] - The company raised a net amount of approximately HKD 155.0 million from its global offering, with specific allocations for upgrading cloud HCM solutions (15%), enhancing core HCM features (15%), and upgrading other HCM solutions (5%)[101] - 20% of the net proceeds (HKD 31.0 million) are allocated for upgrading PaaS infrastructure, and 10% (HKD 15.5 million) for expanding the R&D team to improve efficiency[101] - 7% of the net proceeds (HKD 10.9 million) are designated for expanding the sales team nationwide, with HKD 0.5 million already utilized[101] - 10% of the net proceeds (HKD 15.5 million) are allocated for improving customer success and service capabilities, with HKD 0.1 million already utilized[101] - The company plans to fully utilize the remaining net proceeds by December 31, 2028, with specific timelines for each allocated project[101] Customer Satisfaction and Retention - NPS (Net Promoter Score) currently stands at 31.3%, indicating strong customer satisfaction and potential for renewals and upsells[19] - The Net Promoter Score (NPS) reported in March 2023 was 31.3[27] - Manufacturing industry accounted for 27% of ARR, while retail chains accounted for 16% during the reporting period[16] Financial Risk Management - Foreign exchange risk: The company's foreign currency assets and liabilities mainly consist of USD-denominated cash and cash equivalents in Chinese entities and RMB-denominated intercompany loans. A 5% appreciation/depreciation of USD/RMB would result in a net foreign exchange gain/loss of approximately RMB 20,000 for Chinese subsidiaries and RMB 482,000 for non-Chinese subsidiaries[72] - Credit risk management: The company manages credit risk by transacting only with high-quality financial institutions in China, Hong Kong, and the United States, with minimal expected credit losses[74] - Trade receivables risk: The company has policies to grant credit terms to counterparties with suitable credit records and conducts regular assessments of receivables' collectability[75] - Liquidity management: The company maintains sufficient cash and cash equivalents to meet liquidity needs and regularly monitors liquidity risk[76] - Contractual cash flows: As of March 31, 2023, the company's total contractual cash flows for trade payables, other payables, and lease liabilities amounted to RMB 96,626 thousand[77] Corporate Governance and Leadership - The company's executive directors include Mr. Wang Zhaohui, who has nearly 20 years of experience in the HCM industry and enterprise management[84][85] - Mr. Ji Weiguo, another executive director, has nearly 20 years of experience in the HCM industry and is responsible for overall strategic planning and R&D[86][87] - Ms. Liu Xianna, the CFO, has extensive experience in financial management and holds multiple professional qualifications in accounting and finance[88] - The company's board of directors consists of six members, including three executive directors and three independent non-executive directors[192] - The company's Chairman and CEO roles are held by Mr. Wang Zhaohui and Mr. Ji Weiguo respectively, with clearly defined responsibilities[195] - The board has met the requirement of appointing at least three independent non-executive directors, with one-third of the board being independent non-executive directors, and one having appropriate professional qualifications or accounting/financial management expertise[196] - The company has mechanisms in place to ensure the board receives independent opinions, including annual reviews of board composition and the independence of independent non-executive directors[197] - Executive directors have service contracts with the company for an initial term of three years starting from March 30, 2023, which can be terminated with at least three months' written notice[198] - Independent non-executive directors have appointment letters with the company for an initial fixed term of three years starting from March 30, 2023, which will continue thereafter until terminated with at least two months' written notice[198] - The Board of Directors is responsible for leading and controlling the company, overseeing the implementation of strategies, and ensuring robust internal control and risk management systems[199] - Independent Non-Executive Directors ensure high levels of regulatory reporting and provide effective independent judgments on corporate actions and operations[199] - Directors have full and timely access to all relevant company information and can seek independent professional advice when necessary, with costs borne by the company[199] - The Board retains decision-making authority on key matters including policy, strategy, budget, internal control, risk management, major transactions, financial data, and significant operational issues[199] - Management is delegated the responsibility for executing Board decisions and coordinating daily operations[199] - The company has arranged appropriate Directors' and Officers' Liability Insurance, with coverage reviewed annually[199] - Newly appointed Directors receive comprehensive induction training to ensure understanding of the company's business, operations, and regulatory requirements[200] - Induction training is supplemented by regular meetings with senior management to stay informed about the group's business, governance policies, and regulatory environment[200] Shareholder and Ownership Structure - The company's total issued shares as of the report date are 715,297,060 shares[118] - Wang Chaohui holds a beneficial interest of 11.33% in the company's shares through a trust, with additional interests held by controlled corporations and his spouse[117][118] - Ji Weiguo holds a beneficial interest of 11.27% in the company's shares through a trust[117] - Liu Xianna holds a beneficial interest of 0.16% in the company's shares[117] - Zhaosen Holding Limited holds an 11.33% beneficial interest in the company's shares[125] - Ark Trust (Singapore) Ltd. holds a 22.61% interest in the company's shares through controlled entities[125] - Ms. Zhou Dan holds an 11.44% interest as a trust beneficiary and an additional 4.50% beneficial interest[125] - Max Woods Limited holds an 8.95% beneficial interest in the company's shares[125] - Left Lingye holds a 14.85% interest in the company's shares through controlled entities[125] - Shanghai Zhexuan Investment holds 64,039,900 shares, representing 8.95% of the total shares[126] - Genesis Capital I LP holds 56,509,000 shares, representing 7.90% of the total shares[126] - SCGC Holding Company Limited holds 54,619,630 shares, representing 7.64% of the total shares[126] - SVF II Bandicoot (DE) LLC holds 41,041,130 shares, representing 5.74% of the total shares[126] - Matrix Partners China V, L.P. holds 32,892,050 shares, representing 4.60% of the total shares[126] - Matrix Partners China V-A, L.P. holds 3,420,660 shares, representing 0.48% of the total shares[126] - Matrix China Management V, L.P. holds 36,312,710 shares, representing 5.08% of the total shares[126] - Zhaosen Holding Limited holds 81,054,370 shares, with Wang and related entities having interests[127] - Weisen Holding Limited holds 80,644,370 shares, with Ji and related entities having interests[128] - Max Woods Limited holds 64,039,900 shares, with Sequoia entities and Zhou Kui having interests[129] - SCGC Holding Company Limited is wholly owned by Innovation Capital (Hong Kong) Limited, which in turn is wholly owned by Shenzhen Capital Group Co., Ltd. (Shenzhen Capital). Both entities are deemed to have interests in 54,619,630 shares held by SCGC[130] - SVF II Bandicoot (DE) LLC is ultimately controlled by SoftBank Group Corp., which is deemed to have interests in 41,041,130 shares held by SVF Bandicoot[130] - Matrix China V GP GP, Ltd. and Matrix China Management V, L.P. are deemed to have interests in 36,312,710 shares held by Matrix V and Matrix V-A[131] Employee and Workforce Metrics - The company has 2,085 employees as of March 31, 2023, compared to 2,105 employees in the previous year[82] - The company's workforce as of March 31, 2023, consisted of 982 male employees and 1,103 female employees, representing 47.1% and 52.9% of the total workforce respectively[193] - The company aims to increase the proportion of female employees at all levels over time, ultimately achieving gender parity[193] - The group's total employee costs for the year ended March 31, 2023, amounted to approximately RMB 940.1 million, including wages, salaries, bonuses, pension costs, and other benefits[151] - As of March 31, 2023, the company had 2,085 employees, a slight decrease from 2,105 employees in the previous year[151] Share Options and Equity Plans - The company has adopted a pre-IPO share option plan and a restricted share unit plan, with amendments made in 2020 and 2021[152] - The maximum number of shares that can be issued under the Pre-IPO Share Option Plan is 79,728,830 shares, adjusted for dividends, stock splits, or similar transactions[155] - As of the report date, the company has granted 79,725,600 shares under the Pre-IPO Share Option Plan, representing approximately 11.15% of the company's issued share capital[155] - 23,761,790 shares were exercised before the listing date, and 55,821,310 shares remain unexercised as of March 31, 2023[163] - The Pre-IPO Share Option Plan has a remaining term of approximately six years and one month as of the report date[161] - The total number of new shares that can be issued under the Share Option Plan is 54,050,060 shares, representing approximately 7.56% of the total issued shares as of the annual report date[163] - 36,775,600 stock options were granted to other employees of the group between January 1, 2009, and March 1, 2023[165] - 699,550 stock options granted to one employee were exercised before the IPO without a vesting schedule[165] - The Restricted Share Unit Plan was conditionally adopted on December 31, 2021, and further amended on March 23, 2023, effective from the listing date[166] - The Restricted Share Unit Plan aims to align the interests of eligible individuals with the group's interests through share ownership, dividends, and other distributions[168] - Awards under the Restricted Share Unit Plan grant selected participants a conditional right to receive award shares upon vesting or cash equivalent to the sale value of the award shares if deemed impractical by the board[169] - The

Financial Performance - For the fiscal year ending March 31, 2023, total revenue was RMB 750.9 million, representing a year-over-year increase of 10.5%[4] - The net loss for the same period was RMB 2,599.0 million, an increase of 36.2% compared to the previous year[4] - Adjusted net loss for the fiscal year was RMB 300.6 million, reflecting an increase of 83.7% year-over-year[4] - Gross profit for the same period was RMB 415,564 thousand, compared to RMB 400,511 thousand in 2022, indicating a slight increase of about 3.8%[18] - The net loss attributable to equity holders for the year was RMB 2,598,992 thousand, which is an increase from RMB 1,908,772 thousand in 2022, reflecting a rise in losses of approximately 36.1%[20] - Basic and diluted loss per share for the year was RMB 12.16, compared to RMB 8.92 in 2022, indicating a worsening of the loss per share by approximately 36.5%[20] - The total revenue for the reporting period was RMB 750.9 million, representing a year-on-year increase of 10.5% from RMB 679.6 million in the same period of 2022[63] - The total loss for the year was RMB 2,598,992 thousand, which represents a 36.2% increase from RMB 1,908,772 thousand in the previous year[90] Revenue Breakdown - Revenue from cloud HCM solutions reached RMB 537.3 million, up 15.9% year-over-year, accounting for 71.5% of total revenue[5] - Revenue from professional services was RMB 213.7 million, a decrease of 1.2% year-over-year, making up 28.5% of total revenue[5] - Subscription revenue from the cloud HCM solution increased by 15.9% to RMB 537.3 million, up from RMB 463.5 million in the previous fiscal year[66] - Professional services revenue decreased by 1.2% to RMB 213.7 million from RMB 216.2 million in the previous fiscal year[67] - Annual recurring revenue (ARR) for the Core HCM integrated solution increased by 37% from RMB 215.8 million to RMB 296.1 million[66] Customer and Market Position - The company maintained a market share of 12.9% in the Chinese HCM SaaS market for 2022, ranking first for seven consecutive years[7] - The customer base includes over 5,100 companies, with more than 70% of the Fortune China 500 as clients as of March 31, 2023[13] - The number of cloud HCM solution customers grew from over 4,780 as of March 31, 2022, to over 5,119 as of March 31, 2023[66] - The company reported a Net Promoter Score (NPS) of 31.3 from the latest customer survey conducted in March 2023, indicating customer loyalty[14] Research and Development - R&D investment for the fiscal year was RMB 303.3 million, representing a year-over-year increase of 17.4%[5] - The company is integrating generative AI technology into its cloud HCM solutions to transform HR practices[15] - The company is developing new HCM solutions to strengthen its position as a market leader[15] - Research and development expenses increased by 17.4% from RMB 258.4 million in fiscal year 2022 to RMB 303.3 million in the reporting period, driven by an increase in employee benefits[77] Operational and Financial Management - The company is focusing on expanding its customer base by targeting mature and emerging companies across various industry verticals[16] - The company is committed to continuous innovation and enhancement of its products to provide exceptional value to clients[15] - The company plans to continue investing in operational and product support teams to enhance customer service and experience, supporting ongoing business growth[71] - The company has established policies to ensure that trade receivables are granted to counterparties with appropriate credit records, with ongoing assessments of credit risk[102] Cash Flow and Liquidity - For the fiscal year ending March 31, 2023, the group reported a net cash outflow from operating activities of approximately RMB 151,867,000[25] - Cash and cash equivalents as of March 31, 2023, amounted to RMB 408.7 million, up from RMB 288.7 million as of March 31, 2022[93] - The company plans to manage liquidity risks by maintaining sufficient cash levels to mitigate cash flow volatility[92] - The company maintains sufficient cash and cash equivalents to meet liquidity needs, with regular monitoring of liquidity risk[103] Corporate Governance and Future Outlook - The company has adopted the corporate governance code as a basis for its governance practices since its listing date[112] - The environmental, social, and governance report will be included in the annual report for the year ending March 31, 2023, expected to be published by the end of July 2023[114] - The company expresses gratitude to shareholders, management, employees, business partners, and customers for their support and contributions[122] - The outlook for the cloud HCM solutions sector is optimistic, driven by the Chinese government's support for digital economy initiatives[7]