Financial Performance - Total revenue for the six months ended June 30, 2024, was RMB 413,111,000, representing a 5.6% increase from RMB 391,031,000 in 2023[5] - Gross profit for the same period was RMB 292,889,000, with a gross margin of 70.9%, up from 60.8% in 2023, indicating a 10.1 percentage point increase[5] - The company reported an adjusted loss of RMB 204,118,000 for the period, with an adjusted loss rate of 49.4%, compared to 22.1% in the previous year, marking a significant increase[5] - 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[24] - The 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[24] - The company reported a loss of RMB 240,801 for the six months ended June 30, 2024, compared to a loss of RMB 170,298 for the same period in 2023[88] Customer Metrics - The number of core enterprise partners increased to 1,750, a 17.6% rise from 1,488 in the previous year[6] - The number of core enterprise customers grew by 20.2% to 726, compared to 604 in 2023[6] - Customer retention rate improved to 96%, up from 86% in the previous year, reflecting a 10 percentage point increase[6] - The number of core enterprise and financial institution clients reached 856, a 16% increase from 2023, with a client retention rate rising from 86% to 96%[12] Supply Chain Assets - Total supply chain assets processed by the company's technology solutions reached RMB 165,860.2 million, a 16.8% increase from RMB 141,955.2 million in 2023[9] - In the first half of 2024, the total supply chain assets processed by the company's technology solutions reached RMB 165.9 billion, a year-on-year increase of 16.8%[11] - The company's supply chain financial technology solutions processed a total of RMB 156 billion in supply chain assets in the first half of 2024, a year-on-year increase of 14.6%[15] - The total amount of supply chain assets decreased to RMB 372,833,000 as of June 30, 2024, from RMB 780,990,000 at the end of 2023[123] Revenue Segmentation - Revenue from the core enterprise cloud increased by 28.7% from RMB 231.1 million to RMB 297.4 million during the same period, driven by an increase in the number of supply chain assets processed[26] - Revenue from the financial institution cloud decreased by 33.5% from RMB 132.5 million to RMB 88.2 million, primarily due to a decline in the securitization market and the termination of several experimental products[26] - The emerging solutions segment generated RMB 9,898.5 million, a 67.7% increase from RMB 5,901.5 million in 2023[9] Research and Development - The company’s R&D personnel reached 536, accounting for 59% of total employees, and successfully developed the first AI-based supply chain document review platform, "AI Agent"[13] - Research and development expenses for the six months ended June 30, 2024, were RMB 177.7 million, compared to RMB 188.9 million in the previous year[24] - Research and development expenses included in employee costs were RMB 94,700,000, down from RMB 111,886,000, representing a 15.4% decrease[104] Financial Position - Cash and cash equivalents increased from RMB 4,719.2 million on December 31, 2023, to RMB 4,923.1 million as of June 30, 2024, an increase of RMB 203.9 million[49] - The company's borrowings amounted to RMB 2,705 million as of June 30, 2024, compared to RMB 340 million on December 31, 2023[51] - The equity-to-debt ratio as of June 30, 2024, was 4.3%, up from 1.4% on December 31, 2023[53] - The total liabilities decreased to RMB 75,530 as of June 30, 2024, from RMB 80,758 as of December 31, 2023, indicating a reduction of 6.9%[87] Governance and Compliance - The audit committee has reviewed the unaudited interim results for the six months ending June 30, 2024, and discussed accounting policies and internal controls with senior management and auditors[60] - The company has established a corporate governance committee to ensure operations align with shareholder interests and compliance with listing rules[61] - The corporate governance committee confirmed that adequate measures are in place to manage potential conflicts of interest between different voting rights beneficiaries and shareholders[62] Shareholder Information - The company has a total of 267,626,789 Class A shares and 2,017,357,159 Class B shares issued as of June 30, 2024[67] - Major shareholder Cabnetvic owns 221,212,025 Class A shares, representing 82.66% of the total[69] - The company repurchased a total of 139,544,000 Class B shares during the reporting period, at a total cost of HKD 274,215,405[75] Impairment and Credit Risk - Significant impairment losses were primarily due to increased credit risk associated with financial assets, including RMB 106.3 million from receivables related to core enterprises and RMB 40.7 million from supply chain assets[35] - The company anticipates longer repayment periods and lower recovery amounts due to deteriorating operating conditions of core enterprise clients, leading to increased credit risk[36] - The impairment provision for receivables increased to RMB (261,452,000) as of June 30, 2024, compared to RMB (157,662,000) on December 31, 2023, reflecting a significant rise in credit risk[134] Future Outlook - The company plans to focus on sustainable growth and enhance shareholder returns while embracing technological advancements, particularly in artificial intelligence[23] - The company expects to achieve higher growth in the second half of 2024 by optimizing its cross-border and international business models[27] - The company plans to continue expanding its supply chain financial technology solutions, which are expected to drive future revenue growth[135]

Investment Rating - The investment rating for the company is "Buy" with a target price of HKD 2.00, representing a potential upside of 49.3% from the recent closing price of HKD 1.34 [3]. Core Insights - The company reported a 16.8% year-on-year growth in asset processing scale to HKD 165.86 billion in 1H2024, with core enterprise cloud processing assets increasing by 39.9% to HKD 123.7 billion [1]. - Total revenue for the first half of the year was HKD 413 million, reflecting a 5.6% increase, while gross margin improved significantly from 60.8% to 70.9% [1][2]. - The company is actively pursuing diversification through the acquisition of Shenzhen Bait Technology Co., aiming to enhance its service offerings to clients [2]. Financial Performance - The total asset processing volume for supply chain financial technology solutions reached HKD 156 billion, a 14.6% increase year-on-year, with notable growth in multi-polar circulation cloud processing assets, which surged by 56.9% [2]. - The company recorded an increase in asset impairment losses by 127.2% to HKD 162 million, attributed to cautious measures in light of economic pressures and challenges in the real estate sector [2]. - The company has a strong cash position with net cash reserves exceeding HKD 5.086 billion, and it has initiated a share buyback program of up to USD 100 million to enhance shareholder returns [2]. Market Position - The company is positioned to benefit from its diversified business model and strong cash reserves, which provide a buffer against macroeconomic challenges [2][3]. - The current valuation is considered safe, with a projected net cash value of HKD 2.43 per share, indicating potential for future growth [2].

Investment Rating - Maintains an "Overweight" rating with a target price adjustment to HKD 2.20, corresponding to 5x PS for 2024 [3] Core Views - Revenue growth and gross margin improvement driven by quality and diversified customer acquisition [3] - Acquisition of Baite Technology to enhance services for core enterprise and financial institution clients [3] - Continuous share buybacks demonstrate confidence in the company's future [3] Financial Performance - 2024 H1 revenue reached RMB 413 million, a year-on-year increase of 5.6% [3] - Gross margin improved from 60.8% in 2023 to 70.9% in 2024 H1 [3] - Adjusted net loss of RMB 204 million in 2024 H1, with impairment losses of RMB 162 million due to the real estate sector's pressure [3] - Core enterprise cloud supply chain financing scale increased by 40% to RMB 123.7 billion, driving core enterprise cloud revenue to RMB 230 million, up 29% year-on-year [3] Customer and Market Expansion - Number of core enterprise and financial institution clients increased by 16% to 856 in 2024 H1 [3] - Further coverage expansion in state-owned enterprises among core clients [3] Strategic Initiatives - Proposed acquisition of Baite Technology to enter the treasury management market, offering comprehensive solutions from internal group treasury management systems to supply chain financing systems [3] - Approved a share buyback plan of up to USD 100 million in March 2024, with HKD 278 million repurchased in H1 2024 [3] Financial Forecasts - Revenue forecasts for 2024-2026 adjusted to RMB 918 million, RMB 1.049 billion, and RMB 1.149 billion, respectively [3] - Earnings per share forecasted at RMB 0.40, RMB 0.46, and RMB 0.50 for 2024-2026 [3] Market Data - Current stock price: HKD 1.53 [4] - 52-week price range: HKD 1.09 to HKD 2.17 [4] - Current market capitalization: HKD 3,496,025 thousand [4] Historical Financial Summary - Revenue growth rates: 47.0% in 2020, 16.5% in 2021, -22.9% in 2022, -6.1% in 2023, and projected 5.8% in 2024, 14.2% in 2025, and 9.6% in 2026 [5] - Gross profit: RMB 630.378 million in 2020, RMB 927.250 million in 2021, RMB 774.535 million in 2022, RMB 526.515 million in 2023, and projected RMB 642.495 million in 2024, RMB 734.004 million in 2025, and RMB 804.166 million in 2026 [5] - Adjusted net profit: RMB 192.482 million in 2020, RMB 289.440 million in 2021, RMB 196.015 million in 2022, RMB -286.267 million in 2023, and projected RMB -292.720 million in 2024, RMB 58.931 million in 2025, and RMB 111.256 million in 2026 [5]

Investment Rating - The report maintains a "Buy" rating for the company with a target price of HKD 1.8, while the current price is HKD 1.5 [1][2]. Core Views - The company reported a revenue of HKD 413 million for the first half of 2024, reflecting a year-on-year increase of 5.6%. However, the adjusted net profit was a loss of HKD 204 million, compared to a loss of HKD 86 million in the same period last year [1][2]. - The gross margin improved significantly to 70.9%, an increase of 10.1 percentage points year-on-year. However, impairment losses rose to HKD 162 million, a year-on-year increase of 127.2%, primarily due to extended ABS issuance cycles [1][2]. - The company plans to strategically acquire a 29.38% stake in Bait Technology, which will increase its ownership to 54.38%. This acquisition is expected to enhance customer base and provide integrated core system solutions [1][2]. - The financing amount facilitated by the company's supply chain financial technology business reached HKD 1,559.6 billion, a year-on-year increase of 14.6% [1][2]. - The company has maintained its leading position in the third-party supply chain financial technology provider market, with a market share of 20.9% [2]. Summary by Sections Financial Performance - For the first half of 2024, the company achieved total revenue of HKD 413 million, with a gross margin of 70.9% [1][2]. - The adjusted net profit was a loss of HKD 204 million, with a net loss margin increasing to 49.4% [1][2]. - The company’s expenses decreased by 3.4 percentage points year-on-year to 86.6% [1]. Business Segments - The electronic debt certificate business facilitated financing of HKD 1,149 billion, a year-on-year increase of 27.7% [1]. - The multi-level circulation cloud business, focusing on core enterprises, saw financing amounting to HKD 862.6 billion, a year-on-year increase of 56.9% [1]. - The cross-border cloud business facilitated financing of HKD 93.4 billion, a year-on-year increase of 63.1% [1]. Strategic Initiatives - The company is actively pursuing a strategic acquisition of Bait Technology to enhance its service offerings and customer base [1][2]. - The company has reaffirmed its share repurchase plan, indicating confidence in future stock price recovery [2]. Market Outlook - The report highlights the long-term growth potential of the supply chain financial technology industry, supported by policy backing and a recovering macroeconomic environment [2]. - The company is expected to benefit from a diversified customer base across various industries, enhancing its revenue resilience [1][2].

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].