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Summary of Conference Call Records Company Overview - The company, 移卡, is a technology platform focused on payment solutions, leveraging AI and data analytics to meet merchants' digital needs. The company has a significant annual transaction volume of approximately 2.3 trillion yuan, with overseas transaction volume growing at five times the rate of previous years, contributing to strong profitability and cash flow [3][4][5]. Industry Insights - The cross-border payment industry is undergoing significant changes due to trade tensions and tariff policies. Companies are restructuring their trade chains to mitigate impacts, which presents more opportunities for 移卡's full network payment channels to charge fees at various stages [6][7]. - The CIPS (Cross-Border Interbank Payment System) is growing rapidly, with a projected growth rate exceeding 40% in 2024, although it is currently not expected to replace SWIFT in the short term [11]. Key Points Financial Performance - 移卡's overseas payment business has seen transaction volume increase fivefold, with strong profitability and cash flow. The revenue structure has improved, with value-added service revenue rising to over 80%, leading to an increase in overall profit margin from 18.7% in 2023 to 24% in 2024 [4][5]. - The net profit for 2024 is projected to rise sixfold to 73 million yuan, with EBITDA reaching 390 million yuan. The debt-to-asset ratio has decreased from 45% to 35.9% [4]. Market Expansion - 移卡 is actively expanding in Southeast Asia, focusing on partnerships with local service providers to meet the consumption needs of Chinese consumers in regions like Southeast Asia and Japan [3][10]. - The company plans to maintain exponential growth by expanding its presence in Southeast Asia, particularly in countries like Malaysia and Indonesia, and by offering both payment and non-payment value-added services [9][10]. AI Integration - 移卡 has fully embraced AI technology to optimize risk control and improve R&D efficiency. The introduction of AI agents has enhanced customer service and reduced costs, with net profit expected to rise significantly due to these innovations [2][14][17]. - AI technology has improved risk management capabilities, processing approximately 20 million risky transactions in 2024, and has increased coding efficiency by 30% through automation [17]. Domestic Market Dynamics - In the domestic market, despite a decrease in average transaction value due to macroeconomic conditions, transaction frequency has increased, maintaining total transaction volume. The company anticipates significant growth in GPV (Gross Payment Volume) in 2025 due to improving consumer sentiment and macroeconomic policies [12][13]. Future Outlook - 移卡's future strategies include enhancing AI applications to further improve operational efficiency and exploring new areas for AI integration to drive growth in 2025 and 2026 [18]. Additional Insights - The company is focusing on high-value clients, such as gas stations, which are less price-sensitive and have higher service quality demands, contributing to improved overall fee rates and profitability [13]. - The company is also adapting its strategies to include diverse industry coverage, such as maternal and infant products, to capture future growth opportunities [12].

Financial Performance - Total revenue for the year ended December 31, 2024, was RMB 3,086,742, a decrease of 21.8% compared to RMB 3,950,585 in 2023[12] - Gross profit for 2024 was RMB 728,764, down from RMB 738,164 in 2023, reflecting a gross margin of approximately 23.6%[12] - Adjusted EBITDA for 2024 was RMB 384,483, a decline of 30.8% from RMB 556,047 in 2023[12] - Total revenue for 2024 reached RMB 3,086.7 million, a year-on-year decrease of 21.9%[20] - Profit for the year reached RMB 73.0 million, an increase of over six times compared to 2023[21] - The company's GPV decreased by 19.0% year-on-year to RMB 233.55 billion for the year ending December 31, 2024, compared to RMB 288.29 billion for the previous year[36] - Revenue for the year ending December 31, 2024, was RMB 3,086.7 million, a decline of 21.9% from RMB 3,950.6 million in the same period last year[36] - The company's net profit surged over six times to RMB 73.0 million for the year ending December 31, 2024, compared to RMB 10.1 million in the previous year, resulting in a net profit margin of 2.4%[38] - The revenue from the one-stop payment service decreased by 22.9% to RMB 2,685.9 million, primarily due to macroeconomic fluctuations affecting the average transaction amount per customer[68] Operational Efficiency - The company is focusing on profitability and operational sustainability, optimizing payment and value-added services[16] - The company reduced sales, management, and R&D expenses by 11.0%, 10.8%, and 10.5% respectively, through enhanced AI tool utilization, leading to a 20% reduction in related operational costs[38] - The company's operating costs decreased by 26.6% from RMB 3,212.4 million in 2023 to RMB 2,358.0 million in 2024, primarily due to improved bargaining power leading to reduced commission fees paid to distribution channels[72] - The gross margin for the one-stop payment service improved from 9.7% in 2023 to 14.2% in 2024, attributed to the absence of non-recurring income adjustments and reduced commission payments[76] Market Expansion - The company achieved a fivefold year-on-year growth in Gross Payment Volume (GPV) in overseas markets[18] - New e-commerce services were launched in Japan, Singapore, and Hong Kong, further integrating payment and value-added solutions[18] - The company’s overseas GPV reached over RMB 1.1 billion for the year 2024, representing a nearly fivefold increase year-on-year, showcasing strong market expansion capabilities[44] - The company plans to accelerate its globalization strategy and expand into overseas markets, leveraging its established product system and operational experience in China[56] Technology and Innovation - The company launched a series of AI-driven products aimed at reducing costs and increasing efficiency, including the Winsfor in-store business intelligence platform[17] - The company aims to enhance operational efficiency and product competitiveness through deeper AI integration in future operations[24] - The AI-driven "Y-Copilot" coding assistant improved internal code adoption rates to over 30%, enhancing project efficiency[43] - The company expanded its product offerings by launching an AI Agent solution for Southeast Asian merchants, enhancing customer service and operational efficiency[42] - The company is investing in artificial intelligence and big data analytics to ensure the competitiveness of its products and services[148] Financial Position - The total assets as of December 31, 2024, were RMB 7,705,476, a decrease from RMB 8,420,361 in 2023[13] - The company's equity attributable to shareholders was RMB 2,665,238, down from RMB 2,707,876 in 2023[13] - Total liabilities decreased from RMB 5,803.0 million as of December 31, 2023, to RMB 5,116.0 million as of December 31, 2024[96] - The debt-to-equity ratio improved from 45.3% as of December 31, 2023, to 35.9% as of December 31, 2024, primarily due to the early redemption of convertible bonds using internal cash flow[99] - Cash and cash equivalents decreased by 32.9% from RMB 887.9 million as of December 31, 2023, to RMB 595.7 million as of December 31, 2024[99] Shareholder Returns - The board approved a total of USD 10 million for share buybacks to enhance shareholder returns[59] - The company repurchased $35 million in convertible bonds and reduced financial costs by over 30% year-on-year, resulting in a net profit increase of over six times to RMB 73.0 million[55] - The board does not recommend the payment of a final dividend for the year ending December 31, 2024 (2023: nil) [160] Leadership and Governance - Liu Yingqi, the CEO, has over 25 years of experience in corporate management and information technology, previously serving as General Manager at Tencent's online payment platform[117] - The company has a strong leadership team with executives like Yao Zhijian, who has been CFO since 2011, overseeing financial and accounting matters[119] - The management team emphasizes innovation and technology as key drivers for future growth[121] - The leadership is committed to environmental, social, and governance (ESG) initiatives, with dedicated committees in place[119] Employee Incentives - The company has implemented a restricted share unit plan and stock option plan to attract and retain skilled and experienced personnel for future development and expansion[144] - The restricted share unit plan was adopted to replace the pre-IPO share incentive plan, with the aim of attracting and retaining skilled personnel for future development [172] - The performance assessment for vesting includes metrics such as work quality, efficiency, collaboration, and management skills[182] Risk Management - The company has established security systems including firewalls and intrusion detection systems to monitor and protect its IT infrastructure[151] - The company maintains a fraud prevention system that automatically monitors merchants and assesses fraud risks[156] - The company provides regular training for employees on anti-money laundering, fraud, and misconduct to enhance awareness and understanding of these issues[156]

Investment Rating - The report maintains a "Buy" rating for the company with a target price of 8.2 HKD, based on a 13x P/E valuation for 2025 [5]. Core Insights - The company's 2H24 performance fell short of market expectations, with total revenue of 1.5 billion HKD, a year-on-year decline of 20%, and a 11% miss compared to Bloomberg consensus [2][3]. - The payment business, which accounts for 89% of revenue, also underperformed, with a 6% revenue miss due to a larger-than-expected decline in GPV [1][2]. - The company is expected to see a recovery in its payment business in 2025, with projected revenue growth outpacing GPV growth, leading to a stabilization in profits [1][3]. Financial Performance Summary - Total revenue for 2H24 was 1.5 billion HKD, down 20% year-on-year, with a gross profit margin of 28%, up 9 percentage points year-on-year [2]. - The adjusted EBITDA for 2H24 was 220 million HKD, a 17% decline year-on-year, with an EBITDA margin of 14.7% [2][4]. - The company reported a net profit of 51 million HKD for 2H24, compared to a loss of 22 million HKD in the same period last year [2][4]. Business Segment Analysis - The one-stop payment service revenue decreased by 19% year-on-year in 2H24, while merchant solutions revenue fell by 30% due to a decline in the number of paying merchants [3]. - The overseas business showed significant progress, with a GPV of 1.1 billion HKD in 2024, nearly a fivefold increase year-on-year, driven by channel development and customer expansion [3][4]. Financial Projections - For 2025, the company anticipates a 9% year-on-year increase in payment GPV, with revenue growth slightly exceeding GPV growth [3][4]. - The adjusted net profit for 2025 is projected to be 270 million HKD, with a net profit margin of 4.5% [4][10].