Core Insights - The company reported a revenue of 3.087 billion yuan for the year 2024, representing a year-on-year decline of 21.9, while profit increased to 73 million yuan, showing a growth of over 6 times [1] - The overall gross margin improved from 18.7% in 2023 to 23.6% in 2024, attributed to the application of artificial intelligence across its three main business lines [1] - The contribution of value-added services to total revenue increased from 11.8% in 2023 to 13.0% in 2024, indicating an optimization in revenue composition [1] Revenue and Profit - The revenue from merchant solutions reached 340 million yuan in 2024, down 6.4% year-on-year, with a gross margin of 87.2% [2] - The gross margin for in-store e-commerce services rose to 81.3% [2] - The overseas business continued to grow rapidly, with a total transaction volume exceeding 1.1 billion yuan, marking a nearly 5-fold increase year-on-year [2] Cost Control and Efficiency - The company achieved a reduction in sales, administrative, and R&D expenses by 11%, 10.8%, and 10.5% respectively, due to the broader application of artificial intelligence [1] - Overall operational expenses were reduced by 20%, contributing to improved cost efficiency [2] Payment Business Performance - The gross payment volume (GPV) for the payment business reached 2.34 trillion yuan, reflecting a year-on-year decline of 19% [1] - The peak daily transaction count approached 60 million transactions [1] - The gross margin for the second half of the year increased by 212.1% to 289.8 million yuan, achieving a margin of 21.6% [1]

Core Insights - The company achieved a revenue of 3.087 billion RMB in 2024, with a profit of 73 million RMB, representing over a sixfold increase compared to the previous year [1] - The overall gross margin improved from 18.7% in 2023 to 23.6% in 2024, indicating enhanced operational efficiency [1][3] Group 1: Financial Performance - The company's revenue composition has been optimized, with value-added services contributing 13.0% to total revenue in 2024, up from 11.8% in 2023 [3] - Payment gross profit increased from 92.9 million RMB in the first half of 2024 to 290 million RMB in the second half, maintaining market leadership [3] Group 2: Business Operations - The company’s core business, one-stop payment services, remains industry-leading, with a total payment volume (GPV) of 23.4 trillion RMB in 2024 and peak daily transaction counts reaching nearly 60 million [2] - The company has seen a significant reduction in sales, administrative, and R&D expenses by 11.0%, 10.8%, and 10.5% respectively, due to the extensive application of artificial intelligence [2] Group 3: International Expansion - The overseas business experienced rapid growth, with transaction volume exceeding 1.1 billion RMB, a nearly fivefold increase year-on-year [4] - The company has expanded its international partnerships with major payment networks and banks, enhancing its global payment network coverage and service quality [4] Group 4: AI Integration - The company is leveraging artificial intelligence across various business lines, with AI Agent products being developed for retail, tourism, and entertainment sectors to meet diverse client needs [5] - AI applications have penetrated the company's business processes, achieving significant cost reduction and efficiency improvements [5]

Core Viewpoint - The company reported a decline in revenue for 2024, but significant growth in profit, indicating a shift towards improved profitability despite lower transaction volumes [1][2]. Financial Performance - Total revenue for 2024 was 3.087 billion RMB, a year-on-year decrease of 21.9% [1]. - Net profit reached 73 million RMB, an increase of over 600% compared to the previous year [1]. - Gross profit margin improved from 18.7% in 2023 to 23.6% in 2024 [2]. Business Operations - The company's GPV (Gross Payment Volume) for 2024 was 2.34 trillion RMB, down 19% from 2.88 trillion RMB in the previous year [1]. - The decline in GPV and revenue was attributed to economic fluctuations and a high base effect from the previous year [1]. - The company operates three main business lines: one-stop payment services, in-store e-commerce services, and merchant solutions [2]. Growth Areas - The one-stop payment service remains the core revenue driver, although it experienced a decline [2]. - International business continued to grow rapidly, with transaction volume exceeding 1.1 billion RMB, a nearly fivefold increase year-on-year [2]. - The contribution of value-added services to total revenue increased from 11.8% in 2023 to 13.0% in 2024 [2]. Cost Management - Sales, administrative, and R&D expenses decreased by 11.0%, 10.8%, and 10.5% respectively, with a 20% reduction in related operational costs [3]. - The company attributed these reductions to the widespread application of artificial intelligence across various business lines [3]. Technological Advancements - The AI Lab established in 2017 has been instrumental in deploying AI technologies to enhance operational efficiency and risk management [4]. - The company has developed tools like "Y-Copilot" to improve internal coding practices and "Xiao Ka Assistant" for enhancing customer service and content creation [4]. - Future plans include extending non-payment applications and value-added products to support diversified and international business growth [4].

Core Insights - The company, Yika Co., Ltd., reported a significant increase in revenue and profit for the fiscal year 2024, with total revenue reaching 3.087 billion RMB and a profit of 73 million RMB, marking a growth of over six times compared to the previous year [1] - The overall gross profit margin improved from 18.7% in 2023 to 23.6% in 2024, indicating enhanced operational efficiency [1] Group 1: Financial Performance - Total revenue for 2024 was 3.087 billion RMB, with a gross profit margin increase to 23.6% from 18.7% in 2023 [1] - The profit for the year was 73 million RMB, representing a growth of over 600% year-on-year [1] - In the second half of 2024, gross profit rose by 42.7% to 429 million RMB [1] Group 2: Business Segments - The core business of one-stop payment services generated a GPV of 23.4 trillion RMB, with revenue of 2.686 billion RMB and peak daily transaction volume reaching nearly 60 million transactions [1] - The gross profit margin for payment services in the second half of 2024 increased to 21.6%, leading to a rise in payment gross profit from 92.9 million RMB in the first half to 290 million RMB in the second half [1] - The contribution of value-added services, including merchant solutions and in-store e-commerce, increased from 11.8% in 2023 to 13.0% in 2024, with higher gross margins compared to payment services [1] Group 3: Merchant Solutions and E-commerce - The gross profit margin for merchant solutions remained stable at approximately 87.2%, with annual revenue of 340 million RMB [2] - The company utilized AI algorithms for precise advertising targeting and dynamic creative generation, significantly enhancing conversion rates and achieving industry-leading marketing services [2] - The in-store e-commerce business saw a strategic upgrade, resulting in a doubling of average revenue and profit contributions from merchants, with pre-revenue accounting for about 50% of in-store e-commerce revenue [2] Group 4: Operational Strategy - The company focused on refined operations and extensive AI applications, including tools for automated scene-based store construction, AI content creation, and live streaming planning, which greatly improved operational efficiency [2] - By gradually phasing out less profitable clients and concentrating on large clients, the company enhanced its full-service marketing capabilities and attracted well-known brands in key consumer sectors, leading to a continuous increase in store numbers [2]

Investment Rating - The investment rating for the company is "Buy" with a target price of HKD 9.90 [6][7]. Core Insights - The company's performance in 2024 was impacted by a decline in payment transaction volume (GPV), which fell by 19% year-on-year, leading to a net profit of RMB 0.82 billion, significantly below expectations [1][2]. - Despite the challenges, the company has seen rapid growth in its overseas business, with transaction volume increasing nearly fivefold in 2024 [1][2]. - The company is expected to return to growth in its core payment business in 2025, driven by an improving consumer sentiment and its leading position in the QR code payment sector [1][2]. Summary by Sections Financial Performance - In 2024, the company reported total revenue of RMB 3.09 billion and a net profit of RMB 0.82 billion, with a significant non-recurring expense related to transaction fee adjustments [1][5]. - The adjusted payment fee rate for 2024 was 11.9 bps, down 1.4 bps year-on-year, while the adjusted gross margin for payment services was 17% [2][4]. Business Segments - The merchant solutions segment saw a revenue decline of 6% in 2024, with a gross margin of 87% [3]. - The in-store business is nearing breakeven, with a gross margin improvement from 80.3% in 2023 to 81.3% in 2024 [3]. Profit Forecast and Valuation - The profit forecasts for 2025, 2026, and 2027 have been revised down to RMB 2.1 billion, RMB 2.4 billion, and RMB 3.3 billion respectively, reflecting a significant reduction of 53% and 60% [4][17]. - The company is valued using a sum-of-the-parts (SOTP) approach, with expected multiples of 16.3x PE for payment services, 5.1x PS for merchant solutions, and 2.5x PS for in-store e-commerce [4][12].

Group 1 - The core business of the company is one-stop payment services, with a total payment transaction volume (GPV) of 2.34 trillion RMB in 2024, generating revenue of 2.686 billion RMB [1] - The overall gross margin improved from 18.7% in 2023 to 23.6% in 2024, while the profit for the period reached 73 million RMB, representing an increase of over six times compared to the previous year [1] - The company has seen significant growth in its overseas business, with transaction volume exceeding 1.1 billion RMB, marking a nearly fivefold year-on-year increase [1] Group 2 - The company has established an AI Lab since 2017, which began deploying and applying artificial intelligence in 2023, leading to a reduction in sales, administrative, and R&D expenses by 11.0%, 10.8%, and 10.5% respectively in 2024 [1] - The company launched the first local AI Agent solution in Southeast Asia, enhancing merchant services through AI technology, which significantly improved user experience and order conversion rates in restaurants [2] - The company's in-store e-commerce business is nearing breakeven, with a consensus on the potential for large-scale development while maintaining stable and healthy growth [2]

Core Insights - The company reported a significant increase in revenue and profit for the fiscal year 2024, with total revenue reaching 3.087 billion RMB and net profit growing over six times to 73 million RMB compared to the previous year [1] - The company's core business, one-stop payment services, achieved a gross payment volume (GPV) of 2.34 trillion RMB, with revenue from this segment amounting to 2.686 billion RMB [1] - The company has expanded its overseas business significantly, with transaction volume exceeding 1.1 billion RMB, marking a nearly fivefold increase year-on-year [1] Financial Performance - Total revenue for 2024 was 3.087 billion RMB, with a gross margin improvement from 18.7% in 2023 to 23.6% in 2024 [1] - Net profit reached 73 million RMB, representing a growth of over 600% compared to the previous year [1] - The company's value-added services contributed 13.0% to total revenue, up from 11.8% in 2023, with gross margin for these services also improving from 18.7% to 23.6% [1] Business Expansion - The company partnered with 6,000 SaaS partners, a 32% increase year-on-year, and collaborated with nearly 160 acquiring banks [2] - The company achieved record-high business volume in precision marketing, with revenue from merchant solutions reaching 340 million RMB, a year-on-year increase of approximately 87.2% [2] - The company is focusing on high-quality, profitable clients in its local e-commerce services, adding new brands such as InterContinental Hotels and Joy City [2] International Growth - The company has established partnerships with major global payment networks like Visa, Mastercard, and UnionPay, enhancing its international payment acceptance capabilities [3] - The company has expanded its overseas operations into markets like Japan, Singapore, and Hong Kong, helping local merchants in sectors such as dining and tourism to globalize [3] - The company is also collaborating with its invested company, Fushi Technology, to provide a one-stop digital platform for international brands in Southeast Asia [4] Strategic Focus - The company aims to leverage artificial intelligence to enhance operational efficiency and product competitiveness [4] - The company is prioritizing localized operations in its global expansion strategy, responding to local market demands while utilizing its domestic operational experience [4] - The company plans to deepen the commercialization of a broader product matrix to solidify its position as a leading cross-regional one-stop payment and business empowerment technology platform [4]

Financial Data and Key Metrics Changes - Total revenue decreased by 21% from RMB3.9 billion in 2023 to RMB3.1 billion in 2024 due to a volatile macroeconomic environment and phasing out less profitable projects [27] - Gross profit slightly declined by 1.3% to RMB728 million, but overall gross profit margin increased by 4.7 percentage points from 18.7% in 2023 to 23.6% in 2024 [28] - Adjusted EBITDA exceeded RMB100 million with net profit growing over sixfold year over year to RMB73 million compared to 2023 [30] Business Line Data and Key Metrics Changes - The annual gross margin of One Stop payment increased by 4.5 percentage points from 9.7% in 2023 to 14.2% in 2024, reaching 21.6% in the second half of 2024 [29] - Revenue and profit per merchant served in the in-store e-commerce business doubled year over year in 2024, with upfront fees contributing around 50% of revenue in this segment [21][9] - The position marketing business achieved a record high in business transaction amount in 2024, with marketing transaction volume hitting a record high [8][19] Market Data and Key Metrics Changes - Overseas gross payment volume (GPV) grew five times year over year, with significant expansion in Japan, Singapore, and Hong Kong [11][17] - QR code payments accounted for about 80% of total payment volume, indicating a strong preference for mobile payment methods [36] - The penetration of QR code payments in other Asian markets is still at an early stage, providing opportunities for growth [55] Company Strategy and Development Direction - The company aims to strengthen cohesiveness along the value chain and increase commercialization of business segments, focusing on high-quality and profitable customers [6][10] - Emphasis on leveraging AI to enhance quality, risk management, and operational efficiency, with a commitment to continuous innovation [8][25] - The strategy includes expanding into more regions in Asia and enhancing partnerships with global banks to provide more product offerings [11][18] Management Comments on Operating Environment and Future Outlook - Management expressed optimism about consumer spending trends and government policies enhancing consumer sentiment [35] - The company is focused on maximizing profit delivery to stakeholders rather than just revenue, with a gross profit take rate increasing by over 10% year to date [36] - The long-term growth opportunities in overseas markets and AI products are seen as key drivers for future profitability [72] Other Important Information - The company significantly reduced investment in direct sales teams and instead developed distribution channels, leading to improved sales efficiency [20] - AI applications have contributed to a 20% reduction in operating expenses, enhancing overall cost efficiency [25] - The company has built a customized one-stop solution for cross-selling payments, merchant solutions, and in-store services [6] Q&A Session Summary Question: Can management provide more color about the app-based payments and traditional payment of total payment volume in 2024? - Management noted that QR code payments account for about 80% of total payment volume, with a focus on maximizing gross profit levels rather than just revenue [36] Question: Should we expect AI to be earnings accretive or dilutive? - Management indicated that AI is viewed as a mid to long-term opportunity, with investments being made prudently to ensure profitability is in sight [40] Question: What is the competition landscape for QR code payments in China and the Asian market? - Management highlighted that the QR code payment market is growing and dominated by a few key players, with a focus on service excellence and product customization to maintain market share [49][50]

Financial Data and Key Metrics Changes - Total revenue decreased by 21% from RMB3.9 billion in 2023 to RMB3.1 billion in 2024 due to a volatile macroeconomic environment and the phasing out of less profitable projects [26] - Gross profit slightly declined by 1.3% to RMB728 million, but overall gross profit margin increased by 4.7 percentage points from 18.7% in 2023 to 23.6% in 2024 [27] - Adjusted EBITDA exceeded RMB100 million with net profit growing over sixfold year over year to RMB73 million compared to 2023 [29] Business Line Data and Key Metrics Changes - The annual gross margin of One Stop payment increased by 4.5 percentage points from 9.7% in 2023 to 14.2% in 2024, reaching 21.6% in the second half of 2024 [28] - Revenue and profit per merchant served in the in-store e-commerce business doubled year over year in 2024 [21] - The overseas GPV grew five times year over year, with significant expansion in channels and partnerships [12] Market Data and Key Metrics Changes - QR code payments accounted for about 80% of total payment volume, indicating a strong preference for mobile payment methods [35] - The penetration of QR code payments in other Asian markets is still low, providing opportunities for growth [52] Company Strategy and Development Direction - The company aims to strengthen cohesiveness along the value chain and increase commercialization of business segments, focusing on high-quality and profitable customers [6] - AI applications are being leveraged to enhance operational efficiency and product competitiveness, with a focus on customer-facing solutions [40] - The company is expanding its presence in Asia, particularly in Japan, Singapore, and Hong Kong, to capture market opportunities [22] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about consumer spending trends and government policies enhancing consumer sentiment [34] - The company is confident in the continued growth of its payment business and the profitability of its AI initiatives [39] - The long-term growth opportunities in overseas markets are viewed as highly attractive, with plans for further expansion [70] Other Important Information - The company reduced its investment in direct sales teams and instead developed distribution channels, leading to improved sales efficiency [20] - AI tools have contributed to a 20% reduction in operating expenses, enhancing overall cost efficiency [24] Q&A Session Summary Question: Can management provide more details about app-based payments and traditional payment volume in 2024? - Management noted that QR code payments still dominate, making up about 80% of payment volume, and expressed optimism about profitability trends [35] Question: Is AI expected to be earnings accretive or dilutive? - Management indicated that AI is viewed as a mid to long-term opportunity, with a focus on monetization and prudent cash flow management [39] Question: What is the company's strategy regarding overseas expansion? - Management highlighted ongoing expansion in Asia, focusing on partnerships and capturing market opportunities, particularly in Japan and Singapore [66] Question: What is the competition landscape for QR code payments in China and Asia? - Management noted increased concentration among top players in China and highlighted growth opportunities in other Asian markets due to lower penetration rates [46][52]

Financial Performance - For the fiscal year ending December 31, 2024, the company's revenue was RMB 3,086.7 million, a decrease of 21.9% compared to RMB 3,950.6 million for the fiscal year ending December 31, 2023[8]. - The total payment transaction volume (GPV) for the fiscal year ending December 31, 2024, was RMB 233.55 billion, down 19.0% from RMB 288.29 billion for the fiscal year ending December 31, 2023[10]. - Total revenue for 2024 was RMB 3,086,742 thousand, a decrease of 21.9% compared to RMB 3,950,585 thousand in 2023[15]. - Revenue from the one-stop payment service fell by 22.9% from RMB 3,485.0 million in 2023 to RMB 2,685.9 million in 2024, primarily due to macroeconomic fluctuations[38]. - The revenue from merchant solutions slightly decreased by 6.4% from RMB 363.0 million in 2023 to RMB 339.6 million in 2024, offset by a record high in transaction volume[39]. - Revenue from in-store e-commerce services dropped by 40.4% from RMB 102.7 million in 2023 to RMB 61.2 million in 2024, due to a strategic shift towards higher quality and more profitable customers[40]. - The company reported a total operating expense of RMB 3,008,887,000 for the year ended December 31, 2024, down from RMB 3,941,797,000 in 2023, indicating a reduction of 23.6%[133]. - The company incurred a total tax expense of RMB 10,433,000 for the year ended December 31, 2024, compared to RMB 25,321,000 in 2023, representing a decrease of 58.8%[134]. Profitability - The company's overall gross profit margin increased from 18.7% for the fiscal year ending December 31, 2023, to 23.6% for the fiscal year ending December 31, 2024[8]. - The adjusted EBITDA for the fiscal year ending December 31, 2024, was RMB 384.5 million, with net profit for the same period rising over sixfold to RMB 73.0 million from RMB 10.1 million in the previous year[12]. - Net profit for the period surged to RMB 73,014 thousand, a significant increase of 622.0% from RMB 10,113 thousand in the previous year[15]. - Net profit surged over six times year-on-year to RMB 73.0 million in 2024, with a net profit margin increasing to 2.4%[27]. - Basic and diluted earnings per share for the year were RMB 0.22, compared to RMB 0.03 in 2023, indicating a significant improvement[94]. Cost Management - The financing cost decreased by 31.5% for the fiscal year ending December 31, 2024, compared to the previous year, due to proactive upgrades in equity and financing structure[8]. - The company’s sales, administrative, and R&D expenses decreased by 11.0%, 10.8%, and 10.5%, respectively, for the fiscal year ending December 31, 2024, attributed to the broader application of AI technologies[12]. - Operating costs decreased by 26.6% from RMB 3,212.4 million in 2023 to RMB 2,358.0 million in 2024, attributed to improved bargaining power and reduced commission fees[41]. - Financial costs decreased by over 30% year-on-year in 2024 due to streamlined debt structure and financing cost control[27]. Strategic Initiatives - The company is focusing on AI and generative technologies, having developed new products tailored to various vertical industries to enhance operational efficiency and reduce costs[8]. - The company plans to accelerate its globalization strategy and expand into overseas markets, leveraging its established product system and operational experience in China[28]. - The company has successfully introduced local life services in Japan, Singapore, and Hong Kong, enhancing its global presence[26]. - The company expanded its global payment network by joining major institutions like Visa, Mastercard, and UnionPay International, enhancing service quality[18]. Shareholder Engagement - The company’s ESG rating improved to 59 points, achieving an A- rating in the Hang Seng Corporate Sustainability Index[31]. - The company’s stock buyback program approved a total of $10 million to enhance shareholder returns[30]. - The board does not recommend the payment of a final dividend for the year ending December 31, 2024 (2023: zero)[73]. Employee and Governance - The company has a total of 871 employees, primarily located in China[77]. - The board is actively seeking female candidates to promote diversity and improve corporate governance standards[33]. - The company emphasizes the protection of minority shareholders' rights through various communication methods[33]. - The audit committee, consisting of three independent non-executive directors, has reviewed the audited consolidated financial statements for the year ending December 31, 2024[184]. Risk Management - The company has made over 170 billion risk-based decisions and handled over 19 million risk transactions during the reporting period, enhancing transaction safety[32]. - The company is exposed to credit risk related to cash and cash equivalents, restricted cash, receivables, and loans provided to partners[109]. - The company provides guarantees for loans issued by certain lending partners, which may require repayment if the borrowers default[109]. Financial Position - Total assets decreased from RMB 8,420.4 million as of December 31, 2023, to RMB 7,705.5 million as of December 31, 2024, while total liabilities decreased from RMB 5,803.0 million to RMB 5,116.0 million, resulting in a debt-to-asset ratio decrease from 68.9% to 66.4%[61]. - Cash and cash equivalents decreased by 32.9% from RMB 887.9 million to RMB 595.7 million due to early redemption of convertible bonds and payments to the trustee for restricted share units[62]. - The company’s total issued shares decreased to 443,012,442 as of December 31, 2024, from 445,992,842 in 2023, reflecting a reduction of about 0.7%[151]. Investments and Acquisitions - The company did not engage in any significant investments, acquisitions, or disposals during the fiscal year ending December 31, 2024, but will continue to identify new business development opportunities[69]. - The investment in the associate company, Fushi Technology, amounted to RMB 834.96 million, representing 10.8% of total assets, with an unrealized fair value gain of RMB 103.06 million recognized during the year[70]. Future Outlook - The company has set a future revenue guidance of 3,094,193 thousand currency units for the upcoming fiscal year, indicating growth expectations[97]. - Future guidance indicates a cautious outlook, with expectations of gradual recovery in user engagement and revenue growth[98].