Financial Performance - For the six months ended June 30, 2024, the company's revenue was RMB 413.1 million, an increase of 5.6% compared to RMB 391.0 million in the same period of 2023[2]. - The gross profit for the same period was RMB 292.9 million, representing a 23.3% increase from RMB 237.6 million year-on-year, with a gross margin rising from 60.8% to 70.9%[2][7]. - The adjusted net loss for the first half of 2024 was RMB 204.1 million, a significant increase of 136.1% compared to RMB 86.5 million in the previous year[2]. - The company reported a net loss of RMB 241.5 million for the six months ended June 30, 2024, compared to a net loss of RMB 171.7 million for the same period in 2023[57]. - Total comprehensive loss for the period was RMB 198,839,000, significantly higher than the RMB 78,701,000 reported in the previous year, indicating a year-over-year increase of 152.5%[58]. - The basic loss attributable to equity shareholders of RMB 240,801,000 for the six months ended June 30, 2024, compared to a loss of RMB 170,298,000 for the same period in 2023, reflecting an increase in loss of approximately 41.2%[83]. Customer Metrics - The number of core enterprise customers increased by 20.2% to 726 from 604 in the previous year, while the total number of core enterprises rose by 17.6% to 1,750[3]. - The customer retention rate improved to 96%, up from 86% in the previous year, indicating stronger customer loyalty[3][4]. - The overall customer retention rate improved from 86% in 2023 to 96% in the first half of 2024, with a retention rate of 99% in the core multi-level circulation business segment[8]. - The company has maintained a high customer retention rate of 99% in the multi-level circulation cloud business, with a total of 701 customers as of the first half of 2024[12]. Technology and Innovation - The company ranked first in market share among third-party supply chain fintech solution providers in China for four consecutive years, with a market share of 20.9%[9]. - The number of R&D personnel reached 536, accounting for 59% of the total workforce, contributing to the development of the first AI-based supply chain document review platform, "AI Agent"[9]. - The company successfully delivered its AI smart platform "AI Agent" to over 10 financial institutions, aiding in their digital transformation efforts[13]. - The company is focused on expanding and optimizing its technology solutions across various business segments to enhance supply chain management[67]. - The company aims to enhance its digital supply chain management services for core enterprises and their suppliers through its Core Enterprise Cloud solutions[68]. Financial Position - The company reported a total of RMB 5,086.1 million in cash and cash equivalents as of June 30, 2024, maintaining a healthy financial position[7]. - The cash and cash equivalents increased to RMB 4,923.1 million as of June 30, 2024, up from RMB 4,719.2 million as of December 31, 2023[43]. - As of June 30, 2024, the company's borrowings amounted to RMB 270.5 million, a significant increase from RMB 34.0 million as of December 31, 2023[45]. - The company's equity-to-debt ratio as of June 30, 2024, was 4.3%, up from 1.4% as of December 31, 2023[46]. Revenue Breakdown - Revenue from supply chain financial technology solutions was RMB 385.6 million, up 6.0% from RMB 363.6 million in the same period last year[2]. - Revenue from core enterprise cloud solutions rose by 28.7% from RMB 231.1 million to RMB 297.4 million during the same period[22]. - Revenue from financial institution cloud solutions decreased by 33.5% from RMB 132.5 million to RMB 88.2 million, primarily due to a decline in the securitization market[22]. - Emerging solutions revenue was RMB 27.5 million, a slight increase of 0.5% compared to RMB 27.4 million in the previous year[2]. Expenses and Losses - Operating loss for the six months ended June 30, 2024, was RMB 186.5 million, compared to RMB 144.4 million for the same period in 2023[20]. - Research and development expenses for the six months ended June 30, 2024, were RMB 177.7 million, a decrease from RMB 188.9 million in the previous year[20]. - Sales and marketing expenses increased by 13.4% from RMB 58.4 million for the six months ended June 30, 2023, to RMB 66.2 million for the six months ending June 30, 2024, driven by increased salaries and benefits for sales and marketing staff[27]. - General and administrative expenses rose by 8.8% from RMB 104.5 million for the six months ended June 30, 2023, to RMB 113.7 million for the six months ending June 30, 2024, mainly due to higher salaries and professional service fees[28]. Strategic Initiatives - The company is actively exploring strategic acquisitions to enhance market competitiveness and operational efficiency, focusing on businesses that align with its core operations[16]. - The proposed acquisition of a controlling stake in Bait Technology will increase the company's ownership from 25% to 54.3763%, integrating Bait Technology's treasury management solutions into the company's offerings[16]. - The company continues to explore innovative practices in green supply chain finance, integrating environmental and social responsibility considerations into its solutions[10]. Market and Industry Position - The company processed supply chain asset transactions exceeding RMB 2 billion across 13 industries in the first half of 2024, showcasing its extensive industry coverage[17]. - The company introduced the innovative "Small Micro Bee E-commerce Loan" product, targeting the expanding live-streaming e-commerce market, and has successfully partnered with 14 financial institutions[15]. - The company launched innovative cross-border "Go Early" products for well-known cross-border e-commerce platforms, enhancing their logistics financing solutions[8].

Financial Performance - Total revenue for the year 2023 was RMB 867,764,000, a decrease of 6.1% compared to RMB 924,200,000 in 2022[5]. - Gross profit for 2023 was RMB 526,515,000, reflecting a significant decline of 32.0% from RMB 774,535,000 in the previous year[5]. - The company reported a net loss attributable to equity shareholders of RMB (441,240,000) for 2023, compared to a loss of RMB (13,458,000) in 2022[5]. - The gross margin decreased to 60.7% in 2023, down from 83.8% in the previous year, a decline of 23.1 percentage points[5]. - The company reported an adjusted net loss of RMB 286.3 million for 2023, attributed to continued investments in product development and customer marketing[11]. - The company reported a net loss of RMB 443,298,000 for the year ended December 31, 2023, compared to a loss of RMB 21,855,000 in 2022[42]. - The company incurred a net cash outflow from operating activities of RMB (324,183) thousand for 2023, compared to a net inflow of RMB 1,859,628 thousand in 2022[195]. - The total comprehensive loss for the year was RMB (441,240) thousand, reflecting a decline from the previous year's performance[194]. Customer Metrics - The number of core enterprise customers increased by 50.6% to 604 in 2023, up from 401 in 2022[6]. - The customer retention rate dropped to 86% in 2023, down from 96% in 2022, indicating a decline of 10 percentage points[6][7]. - The number of core enterprise partners increased by 34.1% to 1,488 in 2023, compared to 1,110 in 2022[6]. - The customer retention rate in the multi-level circulation business segment reached 99%, despite an overall decline to 86% due to losses in the real estate sector[12]. Technology and Solutions - The total amount of supply chain assets processed by the company's technology solutions reached RMB 321,977,000, an increase of 24.2% from RMB 259,299,800 in 2022[9]. - In 2023, the total transaction volume processed by the company's technology solutions reached RMB 322 billion, a year-on-year increase of 24.2% from RMB 259.3 billion in 2022[11]. - The company launched the LDP-GPT model for supply chain finance, enhancing efficiency in information integration and transaction analysis[13]. - The company has established partnerships with 39 central state-owned enterprises and leading private enterprises for supply chain comprehensive platform projects[15]. Financial Position - Cash and cash equivalents, along with restricted cash, totaled RMB 4.85 billion as of December 31, 2023, indicating a healthy financial position[11]. - The company’s cash and cash equivalents decreased to RMB 4,719,157,000 in 2023 from RMB 5,731,387,000 in 2022, a reduction of 17.7%[190]. - The total liabilities decreased to RMB 536,973,000 in 2023 from RMB 1,937,845,000 in 2022, a decrease of 72.2%[190]. - The company’s equity attributable to shareholders decreased to RMB 9,115,571,000 in 2023 from RMB 9,957,299,000 in 2022, a decline of 8.5%[191]. Expenses and Investments - Research and development expenses increased by 4.2% from RMB 351.1 million in 2022 to RMB 365.8 million in 2023[29]. - Sales and marketing expenses decreased by 15.2% from RMB 162.6 million in 2022 to RMB 137.8 million in 2023[30]. - The company has allocated RMB 353.4 million for enhancing core technology capabilities and R&D, with a remaining balance of RMB 846.3 million expected to be used by December 31, 2026[134]. - The company has allocated RMB 527.6 million for expanding cross-border business, with a remaining balance of RMB 88.5 million expected to be used by December 31, 2026[134]. Governance and Management - The board of directors is composed of three executive directors, two non-executive directors, and three independent non-executive directors[55]. - The company has independent non-executive directors with extensive experience in finance and management, including Mr. Gao, who served as the general manager of Deutsche Bank China[105]. - The company has established a risk management committee to oversee the implementation of risk management policies and ensure effective monitoring of risks[164]. - The board has adopted a diversity policy that considers various factors such as gender, age, race, language, cultural background, education, and industry experience to enhance board efficiency[154]. Shareholder Information - The largest single customer accounted for 13.3% of total revenue and income for the year ended December 31, 2023, compared to 13.1% in 2022[63]. - The top five customers represented 35.3% of total revenue and income for the year ended December 31, 2023, up from 29.3% in 2022[63]. - The company is owned by several entities, with the largest shareholder holding 33.40%[88]. - The company has a dual-class share structure where Class A shares have ten votes per share, while Class B shares have one vote per share, allowing certain beneficiaries to exert significant control over corporate decisions[110]. Compliance and Risk Management - The company has established an internal control system and regularly reviews its effectiveness, ensuring compliance with all necessary licenses and permits[165]. - The company has implemented strict internal control procedures to protect the integrity and security of data collected during business operations[166]. - The company is subject to potential tax audits that could negatively impact profitability and shareholder value if additional taxes are owed[89]. - The company has made sincere efforts to comply with applicable laws and regulations regarding its business operations[93].

Investment Rating - The report maintains a "Buy" rating for the company, with a target price of HKD 1.91 per share based on a 4x price-to-sales (PS) valuation for 2024 [4][8]. Core Insights - The company reported a revenue decline of 6.1% year-on-year to HKD 868 million in 2023, primarily due to changes in customer and product mix leading to a decrease in average transaction prices and pricing strategy adjustments. The gross margin fell by 23.1 percentage points to 60.7% [2][8]. - Operating losses reached HKD 341 million in 2023, with a loss margin of 39.2%. The net loss attributable to shareholders was HKD 441 million, with an adjusted net loss of HKD 288 million [2][8]. - The core enterprise cloud segment showed resilient growth, with a 4.0% increase in revenue to HKD 524 million, driven by an increase in the number of supply chain assets processed. The number of core enterprise clients rose by 51% to 604 [2][8]. - The financial institution cloud segment experienced a revenue decline of 17.4% to HKD 300 million, primarily due to a downturn in the asset-backed securities (ABS) market [2][8]. Summary by Relevant Sections Revenue and Growth - The company expects stable growth in transaction volumes from 2024 to 2026, with projected revenues of HKD 1,005 million, HKD 1,116 million, and HKD 1,273 million, representing year-on-year growth rates of 15.8%, 11.0%, and 14.1% respectively [3][8]. - Total transaction volumes are expected to reach HKD 4,035 billion, HKD 4,862 billion, and HKD 5,900 billion for the same period, with year-on-year growth rates of 25.3%, 20.5%, and 21.4% [8]. Profitability Forecast - The adjusted net profit is forecasted to improve from a loss of HKD 250 million in 2024 to a profit of HKD 1.4 million in 2026, indicating a recovery trajectory [3][8]. - The overall gross margin is expected to gradually recover to 66.3%, 66.7%, and 67.9% over the forecast period [8]. Market Position and Valuation - The company is positioned as a leading supply chain financial technology SaaS provider in China, with ongoing penetration into multiple industry sectors and optimization of customer and business structures [2][8]. - The report references comparable companies in the SaaS sector, noting their revenue growth rates and corresponding PS ratios, which support the valuation of the company at 4x PS for 2024 [8][13].

Investment Rating - The report assigns a "Buy" rating to the company with a target price of HKD 2.05, representing a potential upside of 20.6% from the recent closing price of HKD 1.50 [3]. Core Insights - The company experienced a 24.2% year-on-year increase in asset processing scale to HKD 322 billion, while total revenue decreased by 6.1% to HKD 870 million due to changes in customer and product structure and a flexible pricing strategy [1]. - The gross profit margin significantly declined by 23.1% to 60.7%, and the adjusted net loss was HKD 286 million, a shift from profit due to increased R&D and marketing expenses [1]. - The company announced a shareholder return plan, proposing a special dividend of HKD 0.1 per share, totaling approximately HKD 230 million, and a share buyback plan of up to USD 100 million [1][2]. Business Performance Summary - The multi-level circulation cloud and e-chain cloud services are in a rapid growth phase, with supply chain asset processing volumes increasing by 82.2% to HKD 136.8 billion and 18.7% to HKD 80.4 billion, respectively [2]. - The company added 235 new clients to its multi-level circulation cloud service, bringing the total to 558, with a high customer retention rate of 99% [2]. - Cross-border cloud business showed steady growth, processing supply chain assets worth HKD 12.6 billion, with revenue increasing by 1% to HKD 35.12 million [2]. - The asset securitization business faced challenges, with a 10.9% decline in AMS cloud processed assets to HKD 64.4 billion and a 15.7% drop in ABS cloud processed assets to HKD 27 billion [2]. Financial Overview - The company has a strong cash position with net cash reserves exceeding HKD 4.8 billion, indicating robust risk resilience [1][2]. - Despite the pressures on revenue and profitability in a complex macroeconomic environment, the company is expected to return to growth in 2024, supported by the shareholder return initiatives [2].

Investment Rating - The report maintains a "Recommended" investment rating for the company, indicating an expectation to outperform the benchmark index by 10%-20% over the next six months [6][18]. Core Views - The company's significant share buyback plan, utilizing up to $100 million to repurchase up to 10% of its issued shares as of June 13, 2023, reflects strong confidence in its fundamentals [2][3]. - A special dividend of HKD 0.1 per share is expected to be implemented on July 29, 2024, which is projected to enhance the company's value and support a rebound in its stock price [3][4]. - The company is positioned as a leading third-party supply chain financial technology solution provider, benefiting from policies that encourage financial technology to reduce financing costs for SMEs [3][4]. Financial Summary - The company reported total revenue of HKD 867.76 million for 2023, with a projected increase to HKD 1,065.88 million in 2024, representing a year-on-year growth of 22.83% [4]. - Adjusted net profit is expected to improve from a loss of HKD 286.27 million in 2023 to a loss of HKD 35.56 million in 2024, with a forecasted profit of HKD 89.99 million in 2025 [4]. - The report anticipates adjusted EPS of -0.02, 0.04, and 0.12 for 2024, 2025, and 2026 respectively, with corresponding price-to-sales ratios of 2.85, 2.40, and 1.87 [3][4]. Valuation - The target price for the company is set at HKD 1.77, based on a price-to-sales ratio of 3.5 times for 2024 [6][3]. - The current share price is HKD 1.44, indicating potential upside based on the target valuation [6].

Investment Rating - The report maintains a "Recommended" rating for the company with a target price of HKD 1.77, compared to the current price of HKD 1.44 [2][5]. Core Views - The company remains a leader in the industry, and the optimization of its business structure is expected to help overcome current challenges [2]. - The overall performance in 2023 was under pressure, with total revenue of HKD 867.76 million, a year-on-year decrease of 6.11%, and an adjusted net loss of HKD 286.27 million, compared to a profit of HKD 196 million in 2022 [2][6]. - The company achieved a financing amount of HKD 3,086.4 billion in supply chain financial technology solutions, reflecting a year-on-year increase of 24.9% [2]. - The gross profit margin decreased by 23.1 percentage points to 60.7%, primarily due to the contraction of high-margin real estate business and increased sales channel expenses [2]. - The company has accelerated the development of core enterprise clients, with a total of 1,488 core enterprises cooperating, a year-on-year increase of 34.1% [2]. Summary by Sections Financial Performance - Total revenue for 2023 was HKD 867.76 million, with a year-on-year decline of 6.11% [6]. - Adjusted net profit for 2023 was a loss of HKD 286.27 million, a significant decrease of 246.05% year-on-year [6]. - The company expects revenue growth of 22.83% in 2024, reaching HKD 1,065.88 million [6]. Business Segments - Supply chain financial technology solutions generated revenue of HKD 824 million, down 4.9% year-on-year, while emerging solutions revenue was HKD 44 million, down 23.6% [2]. - The asset securitization business faced challenges, with a financing amount of HKD 914 billion, a decrease of 12.4% year-on-year [2]. Market Position - The company holds a market share of 20.9% in the third-party supply chain financial technology solutions sector, maintaining its leading position for the fourth consecutive year [2]. - The diversification of client industries is expected to enhance the company's resilience, with coverage across 31 industries [2]. Future Outlook - The company is optimistic about long-term growth potential in the supply chain financial technology industry, supported by policy encouragement and macroeconomic recovery [2]. - The report suggests monitoring PMI, social financing, and ABS issuance as leading indicators for the company's performance [2].

Financial Performance - The company's main operating revenue for the year ended December 31, 2023, was RMB 867.8 million, a decrease of 6.1% compared to RMB 924.2 million in 2022[1]. - The adjusted net loss for the year was RMB 286.3 million, compared to a profit of RMB 196.0 million in 2022, reflecting a significant change in financial performance[1]. - Total revenue decreased by 6.1% from RMB 924.2 million in 2022 to RMB 867.8 million in 2023[19]. - Gross profit fell to RMB 526.5 million in 2023 from RMB 774.5 million in 2022, reflecting a significant decline[18]. - The company reported a net loss of RMB 443.3 million for the year ended December 31, 2023, compared to a loss of RMB 21.9 million for the year ended December 31, 2022[35]. - The company recorded an operating loss of RMB 340.6 million in 2023, compared to an operating profit of RMB 109.1 million in 2022[31]. Customer Metrics - The number of core enterprise customers increased by 51% to 604, while the total number of partners rose by 34.1% to 1,488[3]. - Customer retention rate decreased from 96% in 2022 to 86% in 2023, primarily due to the loss of clients in the real estate sector[3][8]. - The company added 188 new core enterprise and financial institution clients during the year, bringing the total client count to 735[8]. Technology Solutions and Growth - The total transaction volume processed by the company's technology solutions reached RMB 322.0 billion, representing a year-on-year growth of 24.2% from RMB 259.3 billion in 2022[7]. - The total supply chain assets processed by the company's technology solutions reached RMB 308.6 billion in 2023, representing a year-on-year growth of 24.9%[11]. - The company processed RMB 804 billion in supply chain assets through its e-chain cloud business, reflecting an 18.7% year-on-year growth[12]. - The company’s multi-level circulation cloud business saw a significant increase, processing RMB 136.8 billion in assets, up 82.2% year-on-year[11]. Financial Position - The company's cash and cash equivalents totaled RMB 4.85 billion as of December 31, 2023, indicating a healthy financial position[7]. - As of December 31, 2023, the group's cash and cash equivalents decreased by RMB 1,012.2 million to RMB 4,719.2 million from RMB 5,731.4 million as of December 31, 2022[41]. - The group had unused bank credit facilities of RMB 7,076.0 million as of December 31, 2023, down from RMB 9,950.0 million as of December 31, 2022[44]. - The group’s equity-to-debt ratio was 1.4% as of December 31, 2023, compared to 0.6% as of December 31, 2022[46]. Expenses and Cost Management - Total operating costs surged by 128.0% to RMB 341.2 million in 2023, despite a decrease in revenue[22]. - Research and development expenses increased to RMB 365.8 million in 2023 from RMB 351.1 million in 2022[18]. - Sales and marketing expenses decreased by 15.2% from RMB 162.6 million in 2022 to RMB 137.8 million in 2023[25]. - Administrative expenses decreased by 11.8% from RMB 235.6 million in 2022 to RMB 207.7 million in 2023[26]. Impairment and Credit Risks - Impairment losses increased from RMB 41.8 million in 2022 to RMB 214.4 million in 2023, reflecting deteriorating conditions among clients, particularly in the real estate sector[29]. - The company faced credit risk related to supply chain assets with an outstanding balance of RMB 2,644.2 million as of December 31, 2023[39]. - The overdue amounts for supply chain assets under small and medium-sized enterprise credit technology solutions total RMB 61,735,000 as of December 31, 2023, compared to RMB 38,031,000 in 2022, indicating an increase in overdue receivables[94]. Strategic Initiatives - The company is actively exploring new financing products and expanding its service offerings in response to customer needs, including cross-border supply chain financing solutions[8]. - The company aims to focus on sustainable high-growth core businesses and embrace new technologies to enhance operational efficiency in 2024[17]. - The company continues to explore market expansion opportunities and new strategies to enhance its financial technology offerings[101]. Shareholder Information - The board proposed a special dividend of HKD 0.10 per share for the year ended December 31, 2023, subject to shareholder approval at the annual general meeting scheduled for June 17, 2024[54]. - The company plans to hold its annual general meeting on June 17, 2024, with a suspension of share transfer registration from June 12 to June 17, 2024[55].

Financial Performance - Total revenue for the six months ended June 30, 2023, was RMB 391,031,000, a decrease of 23.4% compared to RMB 510,468,000 in the same period of 2022[6]. - Gross profit for the same period was RMB 237,593,000, down 44.0% from RMB 424,033,000, resulting in a gross margin of 60.8%, down from 83.1%[6]. - The company reported a loss attributable to equity shareholders of RMB 170,298,000 for the period, compared to a profit of RMB 43,046,000 in the same period last year[6]. - The adjusted net loss for the first half of 2023 was RMB 86.5 million, reflecting ongoing investments in product development and customer marketing[11]. - The company reported a net loss of RMB 171.66 million for the six months ended June 30, 2023, compared to a profit of RMB 35.20 million in the same period of 2022[22]. - The company’s operating loss for the period was RMB 144,367 thousand, compared to an operating profit of RMB 90,814 thousand in the same period last year[83]. - The basic and diluted loss per share for the six months ended June 30, 2023, was RMB (0.08), compared to earnings of RMB 0.02 per share in the prior year[83]. Customer Metrics - The number of core enterprise customers increased by 14% to 458 from 401 in the previous year, while the number of financial institution customers decreased by 14% to 126[7]. - Customer retention rate decreased to 86% from 96%, reflecting a decline of 10 percentage points[7]. - The total number of partners increased to 1,240, up 12% from 1,110 in the previous year[7]. - The total number of customers for the supply chain financial technology solutions increased by 7% year-on-year to 584, with core enterprise customers growing by 57 to a total of 458[12]. Market and Product Development - The company aims to expand its market presence and enhance its technology solutions in response to the current market challenges[6]. - The company is focusing on developing new products and technologies to improve its service offerings and regain market share[6]. - The company is focusing on integrating advanced technologies such as AI, blockchain, and big data to enhance supply chain financial services and improve operational efficiency[13]. - The company continues to expand and optimize its solutions to serve a broader range of scenarios and target customer groups within the supply chain ecosystem[97]. - The company aims to enhance its supply chain financial capabilities through innovative solutions tailored for financial institutions[99]. Revenue Breakdown - Revenue from core enterprise cloud decreased by 20.7% to RMB 231.1 million, primarily due to a sluggish supply chain asset securitization market[25]. - Revenue from financial institution cloud decreased by 30.1% to RMB 132.5 million, attributed to a decline in supply chain assets processed[25]. - Revenue from cross-border cloud increased by 27.7% to RMB 21.5 million, driven by expansion into various cross-border financing scenarios[26]. - Revenue from the Supply Chain Financial Technology Solutions segment was RMB 363,625,000, down 24.5% from RMB 481,107,000 in the previous year[95]. - The Emerging Solutions segment generated revenue of RMB 27,406,000, a slight decrease of 6.5% from RMB 29,361,000 in the prior year[95]. Expenses and Costs - Research and development expenses increased by 18.0% to RMB 189.0 million, reflecting continued investment in product and technology development[29]. - Sales and marketing expenses decreased by 19.1% to RMB 58.4 million, due to efforts to improve operational efficiency[30]. - General and administrative expenses decreased by 7.0% to RMB 104.5 million, mainly due to a reduction in unallocated share-based compensation[31]. - Total operating costs increased by 77.5% from RMB 86.4 million to RMB 153.4 million, despite a decrease in revenue[27]. Cash Flow and Financial Position - The net cash used in operating activities for the six months ended June 30, 2023, was RMB (444,042) thousand, compared to RMB 93,603 thousand for the same period in 2022, indicating a significant decline in cash flow[91]. - The net cash generated from financing activities was RMB 584,508 thousand, an increase from RMB 443,625 thousand in the previous year, showing improved financing capability[91]. - The total cash and cash equivalents at the end of the period increased to RMB 5,832,904 thousand from RMB 5,285,402 thousand, marking an increase of approximately 10.4%[91]. - As of June 30, 2023, the group's cash and cash equivalents increased to RMB 5,832.9 million from RMB 5,731.4 million as of December 31, 2022[47]. Governance and Compliance - The company has adhered to all provisions of the corporate governance code during the reporting period, except for the deviation regarding the roles of the Chairman and CEO being held by the same individual, Mr. Song[57]. - The Audit Committee, composed of three independent non-executive directors, reviewed the unaudited interim results for the six months ended June 30, 2023, and discussed accounting policies and internal controls with senior management and auditors[60]. - The Corporate Governance Committee reviewed the company's compliance with governance policies and regulations, including the diversity policy and shareholder communication policy[62]. Shareholder Information - As of June 30, 2023, Mr. Song holds 267,626,789 Class A shares and 19,799,907 Class B shares, representing approximately 57.44% of the voting rights for shareholder resolutions excluding reserved matters[63]. - Major shareholder Cabnetvic owns 221,212,025 Class A shares, accounting for 82.66% of the Class A shares[69]. - Tencent Holdings Limited holds 342,121,980 Class B shares, representing 16.96% of the Class B shares[69]. - The company has a total of 10.04% ownership in Class B shares attributed to Mr. Lin and his spouse[69]. Future Outlook - The company is actively expanding its international business, particularly in cross-border financing scenarios to support Chinese manufacturing enterprises[13]. - The company plans to reassess the separation of the roles of Chairman and CEO in the future, considering the overall situation of the group[57]. - The company aims to ensure sustainable operations and continue delivering returns to shareholders and benefits to other stakeholders through effective capital management[170].

Financial Performance - The company's main business revenue for the six months ended June 30, 2023, was RMB 391.0 million, a decrease of 23.4% compared to RMB 510.5 million in the same period of 2022[3]. - The gross profit for the same period was RMB 237.6 million, down 44.0% from RMB 424.0 million year-on-year, resulting in a gross margin of 60.8%, down from 83.1%[3]. - The adjusted net loss for the period was RMB 86.5 million, with an adjusted loss margin of 22.1%, compared to a profit of RMB 147.4 million and a margin of 28.9% in the previous year[3]. - The total revenue decreased by 23.4% to RMB 391.0 million in the first half of 2023, down from RMB 510.5 million in the same period of 2022[17]. - The revenue from core enterprise cloud solutions decreased by 20.7% to RMB 231.1 million in the first half of 2023, down from RMB 291.6 million in the same period of 2022[18]. - The revenue from financial institution cloud solutions decreased by 30.1% to RMB 132.5 million in the first half of 2023, down from RMB 189.5 million in the same period of 2022[18]. - The company reported a net loss attributable to equity shareholders for the period was RMB 170,298 thousand, compared to a profit of RMB 43,046 thousand in the same period of 2022[50]. - The company recorded an operating loss of RMB 144.4 million for the six months ended June 30, 2023, compared to an operating profit of RMB 90.8 million for the same period in 2022[28]. Customer Metrics - The total transaction volume processed by the company's technology solutions increased by 22.5% year-on-year, reaching RMB 142 billion, driven by the growth of existing core enterprise customers[7]. - The number of core enterprise customers increased by 14% to 458, while the total number of partners rose by 12% to 1,240[4]. - The company reported a customer retention rate of 86%, down from 96% in the previous year, indicating a 10 percentage point decline[4]. - The total number of customers for supply chain financial technology solutions increased by 7% year-on-year to 584 in the first half of 2023, with core enterprise customers growing by 14% to 458[8]. Operational Challenges - The company faced challenges due to the ongoing pressure in the real estate sector, impacting its AMS and ABS cloud products, which continued to show a downward trend[7]. - The company's main operating costs increased by 77.5% from RMB 86.4 million in the six months ended June 30, 2022, to RMB 153.4 million in the six months ended June 30, 2023, despite a decrease in revenue and income[20]. - Impairment losses increased by 215.3% from RMB 22.7 million in the six months ended June 30, 2022, to RMB 71.5 million in the six months ended June 30, 2023[26]. Financial Position - Cash and cash equivalents, along with restricted cash, totaled RMB 5,966.2 million as of June 30, 2023[7]. - The company's borrowings amounted to RMB 581.8 million as of June 30, 2023, compared to RMB 10.0 million at the end of 2022[39]. - The company had unutilized bank credit facilities of RMB 6,128.3 million as of June 30, 2023[39]. - The company's equity-to-debt ratio was 6.6%, a significant increase from 0.6% as of December 31, 2022[40]. - The total liabilities for accounts payable increased to RMB 54,416,000 as of June 30, 2023, compared to RMB 39,900,000 as of December 31, 2022, representing a rise of 36.3%[100]. Research and Development - Research and development expenses rose by 18.0% from RMB 160.2 million in the six months ended June 30, 2022, to RMB 189.0 million in the six months ended June 30, 2023[22]. - The company is actively exploring the application of AI, blockchain, big data, and privacy computing in the supply chain ecosystem to drive industry transformation and innovation[9]. Strategic Initiatives - The company has implemented rapid adjustments in its management structure to focus on customer value enhancement and improve return rates on customer acquisition[7]. - The company aims to focus on quality growth and optimize internal resource allocation to achieve sustainable revenue and profitability growth[15]. - The company is focused on expanding and optimizing its supply chain financial technology solutions to serve a broader range of scenarios and target customer groups[64]. - New products are continuously launched under various business segments to enhance service offerings within the supply chain ecosystem[64]. Dividends and Shareholder Information - The company did not declare an interim dividend for the six months ended June 30, 2023[48]. - A special dividend of HKD 0.25 per share, totaling RMB 526,610,000, was approved and is expected to be paid on July 14, 2023[80].

Financial Performance - Total revenue for 2022 was RMB 924.2 million, a decrease of 22.9% from RMB 1,198.0 million in 2021[10] - Gross profit for the year was RMB 774.5 million, down 16.5% from RMB 927.3 million in the previous year, with a gross margin of 83.8%[10] - Adjusted profit for the year (non-IFRS) was RMB 196.0 million, a decline of 35.0% from RMB 301.6 million in 2021, with an adjusted profit margin of 21.2%[10] - The company's main business revenue decreased by 22.9% to RMB 9.24 billion from RMB 11.98 billion in 2021, primarily due to changes in customer and product structure[20] - The company reported a net loss of RMB 21.9 million in 2022 compared to a net loss of RMB 12,990.7 million in 2021[38] - The company reported a significant increase in user data, with a growth rate of 25% year-over-year in active users[141] - The overall revenue for the year reached approximately $500 million, reflecting a 15% increase compared to the previous year[142] - The adjusted profit for 2022 was RMB 196.0 million, compared to RMB 301.6 million in 2021[65] Customer and Market Metrics - The number of core enterprise partners increased by 63.5% to 1,110, while the number of core enterprise customers rose by 83.9% to 401[12] - The company reported a customer retention rate of 96%, down from 97% in the previous year[12] - The company acquired 197 new core enterprise and financial institution clients in 2022, bringing the total to 1,110, a 56% increase year-over-year[22] - The company processed supply chain asset transactions exceeding RMB 5 billion across nine industries in 2022, including real estate, infrastructure/construction, and healthcare[34] Technology and Innovation - The company aims to enhance its technology solutions and expand its market presence in the coming year[10] - Research and development investment reached RMB 35.11 million, a 26.6% increase, accounting for 38.0% of total revenue[22] - New product development initiatives are underway, focusing on fintech solutions, with an expected launch in Q3 2023[144] - The company is investing $50 million in research and development for new technologies aimed at enhancing supply chain efficiency[150] Operational Efficiency and Cost Management - The company aims to enhance operational efficiency and achieve sustainable, high-quality growth while creating greater value for customers in 2023[36] - A cost reduction strategy is anticipated to save the company $10 million annually, improving overall profitability[152] - The company has implemented new risk management strategies, which are expected to reduce operational risks by 10%[142] Financial Stability and Capital Management - The company reported a cash and cash equivalents total of RMB 5.9 billion as of December 31, 2022, ensuring a solid financial foundation for future growth[24] - The company's borrowings amounted to RMB 10.0 million as of December 31, 2022, down from RMB 1,190.3 million as of December 31, 2021, reflecting a significant reduction in leverage[73] - The capital-to-debt ratio was 0.6% as of December 31, 2022, compared to 12.9% as of December 31, 2021, indicating improved financial stability[76] Shareholder and Governance Matters - The company has a dual-class share structure, with Class A shares having ten votes per share and Class B shares having one vote per share, allowing certain beneficiaries to exert significant control over company decisions[155] - The board of directors consists of eight members, including three executive directors, two non-executive directors, and three independent non-executive directors[191] - The company has established mechanisms to ensure independent viewpoints reach the board, enhancing shareholder protection[198] - All independent non-executive directors have confirmed their independence according to listing rules, ensuring objective decision-making[195] Future Outlook and Strategic Plans - The company anticipates a gradual recovery in the overall market in 2023, supported by policy measures and industry demand rebound[31] - The company plans to expand its market presence in Southeast Asia, targeting a 30% increase in market share by 2025[146] - Future outlook includes an expected revenue increase of 20% for the upcoming year, driven by new product launches and market expansion strategies[152] Compliance and Regulatory Matters - The company has complied with relevant laws and regulations affecting its business as of December 31, 2022[90] - The company has demonstrated sincere efforts to comply with applicable laws and regulations in its business operations, particularly in commercial factoring and supply chain finance[128] Risks and Challenges - The company faces significant risks including reliance on innovation and the ability to respond to rapidly changing technology and market dynamics[87] - Risks associated with the contractual arrangements include potential penalties from the Chinese government if found non-compliant with foreign investment regulations, and uncertainties regarding the enforceability of these contracts under Chinese law[125]