Core Viewpoint - Lakala, a leading third-party payment company, is making significant strategic moves by investing in Tian Cai Shang Long while divesting from Baotou Rural Commercial Bank, indicating a shift back to its core payment business [3][5][6]. Investment Actions - Lakala announced a strategic investment of 250 million yuan in Tian Cai Shang Long, becoming its largest institutional shareholder with over 35% ownership [3][6]. - The company exited its investment in Baotou Rural Commercial Bank by divesting its shares at zero cost, resulting in a fair value change of approximately -135 million yuan [3][5][7]. Financial Performance - For the year 2024, Lakala reported a revenue of 5.759 billion yuan, a decrease of 2.96% year-on-year, and a net profit of 351 million yuan, down 23.26% [5][6]. - The decline in revenue was attributed to reduced hardware sales and technology service income [6][12]. Strategic Focus - The shift from financial investments to the restaurant sector is seen as a crucial step for Lakala to refocus on its payment services [5][6]. - The collaboration with Tian Cai Shang Long aims to leverage technology to reduce operational costs for merchants, enhancing their focus on product innovation and service upgrades [11][13]. Market Outlook - The restaurant industry is experiencing growth, with Tian Cai Shang Long reporting a 23.86% increase in sales during the May Day holiday compared to 2024 [10]. - Lakala plans to deepen its "payment + SaaS" strategy in the restaurant sector, having added over 10,000 SaaS service stores with a transaction amount growth of 65% [13]. Future Plans - Both companies are exploring overseas expansion, targeting regions such as Hong Kong, Macau, Japan, and Southeast Asia [14]. - They are set to launch a new lightweight restaurant software product named "Qing Cheng Restaurant Cloud" [14].

Core Viewpoint - Lakala's registered capital has been continuously decreasing due to unmet performance targets in its restricted stock incentive plan, raising concerns about its financial health and strategic direction [1][2][3]. Financial Performance - In 2023, Lakala's revenue was 5.938 billion yuan, a year-on-year decrease of 2.96%, while the net profit was 457 million yuan, showing a significant increase of 131.78% compared to the previous year [3][6]. - For 2024, revenue further declined to 5.758 billion yuan, with a net profit of 351 million yuan, reflecting a year-on-year decrease of 23.26% [3][6]. - Cumulatively, the net profit over the two years was only 800 million yuan, reaching just half of the set performance target [4]. Business Segmentation - Lakala's main business segments include digital payment and technology services, with the payment business accounting for 89.7% of total revenue in 2024, an increase of 2.42 percentage points from the previous year [4][6]. - The technology services segment contributed only 4.91% to the revenue, showing a decline of 0.93 percentage points year-on-year [4][6]. Capital Structure - Lakala's registered capital decreased from 788.08 million yuan to 776.66 million yuan within six months, amounting to a reduction of approximately 24 million yuan [2]. - The company has been repurchasing and canceling shares due to unmet performance targets in its incentive plans [1][2]. Market Challenges - Lakala faces intensified competition from major players like Alipay and WeChat Pay, which are squeezing its market share in the payment sector [4]. - The company reported a decline in transaction amounts, with a total of 982 billion yuan in payment transactions, down 10.51% year-on-year [4]. Compliance and Legal Issues - In 2024, Lakala faced fines totaling nearly 8 million yuan due to compliance violations, including issues related to fund settlement processes [8]. - The company has also been involved in various legal disputes, with significant amounts at stake [11]. Management and Governance - Despite declining performance, executive compensation has been on the rise, with the chairman's salary increasing from 5.263 million yuan in 2022 to 5.306 million yuan in 2024 [14][15]. - The company has a significant portion of shares pledged, with approximately 38% of the top ten shareholders' shares being pledged as of December 31, 2024 [13].

Core Viewpoint - Mobile payment has become an essential part of daily life, with a shift towards multi-payment strategies driven by diverse consumer habits and regulatory needs, leading to the rise of aggregation payment platforms [1][13]. Aggregation Payment Industry Overview - Aggregation payment, also known as "fusion payment," integrates multiple payment services into one platform, providing merchants with various services to reduce costs and improve efficiency [2]. - The industry can be divided into online and offline aggregation payment, both serving different merchant needs through a unified system [3]. Development Stages of Aggregation Payment - The development of aggregation payment has gone through three stages: 1. Initial phase (2014-2015) with the rise of QR codes and the shift to offline payments 2. Rapid growth phase (2016-2017) driven by product innovation and market expansion 3. Compliance phase (2017-present) with regulatory policies ensuring healthy industry growth [5]. Industry Value Chain - The upstream of the aggregation payment industry includes technology providers, payment service providers, and hardware suppliers, while the downstream focuses on merchants and consumers benefiting from simplified payment processes [7]. Current Market Trends - The aggregation payment market in China is projected to reach a transaction scale of 22.6 trillion yuan in 2024, reflecting a year-on-year growth of 14.1% [1][13]. - The user base for online payment is expected to reach 1.029 billion by the end of 2024, indicating a growing demand for aggregation payment services [11]. Competitive Landscape - The aggregation payment industry is becoming increasingly competitive, with key players including Lakala, Lichu Business Services, and Qianba Internet Technology, among others [15][17]. Future Development Trends 1. **Market Expansion to Lower-Tier Cities**: Aggregation payment companies are targeting third and fourth-tier cities for growth opportunities as urban markets become saturated [21]. 2. **International Market Exploration**: Companies are looking overseas for growth, leveraging their domestic advantages to participate in global payment solutions [22]. 3. **Technological Innovation**: The integration of new technologies like IoT and biometric payments is expected to enhance user experience and security [23]. 4. **Intensifying Market Competition**: Increased market entry will lead to more competition, potentially resulting in mergers and acquisitions to optimize resources [24].

Core Viewpoint - The decline in payment transaction volume is the primary reason for the company's performance downturn, but as an industry leader, the company is expected to benefit from supply-side clearing and maintain a positive outlook for its development [1]. Financial Summary - The company maintains a "Buy" rating with a target price of 27.90 yuan, corresponding to a 31x P/E for 2026. Projected revenues and net profits for 2024 are 57.62 million yuan, 3.51 million yuan, and 5.53 million yuan, respectively, reflecting year-on-year declines of -2.98%, -23.26%, and -2.82%. For Q1 2025, revenues and net profits are projected at 13.00 million yuan, 1.01 million yuan, and 0.85 million yuan, showing year-on-year declines of -13.02%, -51.71%, and -62.97%. EPS estimates for 2025-2027 have been adjusted to 0.76, 0.91, and 1.11 yuan, respectively [2]. Payment Business Performance - In 2024, the company's payment business revenue is projected at 51.65 billion yuan, accounting for 90% of total revenue. The total transaction volume for the year is expected to be 4.22 trillion yuan, a year-on-year decrease of -6.43%. Notably, the scan code transaction volume is expected to increase by 13% to 1.36 trillion yuan, while card transaction volume is expected to decline by -14% to 2.86 trillion yuan. The net fee rate for the year is projected at 0.1224%, slightly improved from the end of 2023. The decline in revenue is primarily attributed to the drop in transaction volume [3]. Quarterly Performance - For Q4, the company anticipates revenues, net profits, and net profits excluding non-recurring items of 13.70 million yuan, -1.62 million yuan, and 0.37 million yuan, respectively, with quarter-on-quarter declines of -2.74%, -273.17%, and -64.20%. The transaction volume is expected to be 1.04 trillion yuan, a quarter-on-quarter decrease of -1.21%. The net fee rate is projected at 0.1219%, a slight decrease from Q3 [3]. Strategic Initiatives - The company is deeply investing in the "Payment+" business to drive transformation and growth. It is expected to benefit from increased market share due to supply-side clearing in the payment industry. The company is accelerating the integration of payment services with the SaaS industry, having covered 50,000 brand catering merchants in Q1 2025 with customized SaaS products. The cross-border payment business is also showing strong growth, with the number of cross-border merchants and transaction volume increasing by 76% and 85%, respectively. Additionally, the company is enhancing its merchant wallet app through AI to create intelligent applications for smart store management [4]. Market Dynamics - The competitive landscape in the offline acquiring market is improving, leading to enhanced fee rates and scale [5].

Group 1 - The cross-border e-commerce comprehensive pilot zone is perceived as beneficial for the cross-border e-commerce sector, but only nine core companies are expected to truly benefit [1] - Sifang Precision (300468) is the only A-share company involved in the multilateral central bank digital currency bridge project, leading in cross-border payment technology development and application [1] - Focus Technology (002315) operates China Manufacturing Network, one of the earliest B2B cross-border e-commerce platforms in China, and plans to launch Cairo Network in 2024 to enter the cross-border B2C market [1] - Cross-border通 (002640), the former parent company of Global Easy Buy, will focus on cross-border exports after divesting its loss-making business in 2024, with a 12% year-on-year revenue growth in Q1 2025 [1] - Anker Innovation (300866) is a benchmark in global consumer electronics cross-border e-commerce, with a market share in charging devices ranking among the top three on Amazon, and projected revenue exceeding 20 billion yuan in 2024 [1] - Lakala (300773) is one of the first holders of cross-border payment licenses, reporting 820 million yuan in cross-border payment revenue in 2023, a year-on-year increase of 85% [1] - Changliang Technology (300348) provides distributed architecture support for cross-border payment systems to institutions like Postal Savings Bank and the Central Bank of the UAE, processing 100,000 transactions per second [1] Group 2 - SF Holding (002352) reported a 25% increase in cross-border business revenue in Q1 2025, with international routes covering 80 countries and Ezhou Huahu Airport becoming a cross-border logistics hub [2] - Yonyou Network (600588) offers ERP systems for cross-border e-commerce, supporting multi-currency accounting and cross-border tax compliance, with a 259% increase in overseas customers in 2024 [2] - Small Commodity City (600415) is a core enterprise in the Yiwu cross-border e-commerce pilot zone, with a market procurement trade volume expected to exceed 150 billion yuan in 2024, and has partnered with TikTok for live streaming sales [2]

Core Viewpoint - Lakala's financial performance in 2024 and Q1 2025 shows a decline in revenue and net profit, primarily due to reduced hardware sales and pressure on payment business, but the company benefits from improved gross margins in both payment and technology service sectors [1][2][3]. Financial Performance - In 2024, the company achieved operating revenue of 5.759 billion, a year-on-year decrease of 2.96%, and a net profit attributable to shareholders of 351 million, down 23.26% year-on-year [1]. - For Q1 2025, the company reported operating revenue of 1.299 billion, a decline of 13.01% year-on-year, and a net profit attributable to shareholders of 101 million, down 51.71% year-on-year [1][3]. Business Segments - Payment business revenue in 2024 was 5.17 billion, a slight decrease of 0.27%, with a gross margin of 27.22%, up 0.92 percentage points, driven by a higher proportion of higher-fee QR code transactions [2]. - Technology service revenue in 2024 was 280 million, down 18.43%, but with a gross margin of 90.92%, up 19.03 percentage points, mainly due to a 67.71% increase in high-margin external card organization marketing services [2]. Market Dynamics - The third-party payment market is undergoing optimization, with regulatory measures leading to the exit of smaller players, which may create new opportunities for industry leaders like Lakala [4]. - In 2024, 10 payment licenses were revoked, bringing the total to 100, indicating a trend towards market consolidation [4]. Growth Opportunities - The cross-border payment sector presents significant growth potential, with the company actively expanding its services in emerging markets. In Q1 2025, the number of cross-border merchants and transaction volume increased by 76% and 85% year-on-year, respectively [5]. - The recent regulatory framework aims to enhance the convenience of cross-border financial services, which could benefit qualified third-party payment institutions [5]. Investment Outlook - The company maintains a "buy" rating, with projected net profits for 2025-2027 of 398 million, 399 million, and 415 million, reflecting growth rates of 13.3%, 0.3%, and 4.1% respectively, supported by its strong position in the third-party payment sector [6].

Core Viewpoint - The article highlights the presence of Shenzhen Stock Connect seats in 17 stocks on the weekly leaderboard, indicating significant net buying activity and overall positive market performance for these stocks [1] Group 1: Net Buying Activity - A total of 17 stocks appeared on the leaderboard, with 12 showing net buying from Shenzhen Stock Connect seats [1] - The stocks with the highest net buying amounts were Satellite Chemical (58,960.09 million), Tuo Wei Information (23,414.60 million), and Lakala (8,096.46 million) [1] - The average increase for the stocks with net buying was 14.13%, outperforming the Shanghai Composite Index, which rose by 0.56% [1] Group 2: Stock Performance - The stock with the largest increase was Hai Lian Jin Hui, which saw a cumulative rise of 46.57% over the week [1] - Other notable performers included Satellite Chemical (21.43% increase) and Lakala (23.83% increase) [1] - The stocks with the highest turnover rates included Tuo Wei Information (68.12%) and Lakala (123.35%) [1] Group 3: Net Selling Activity - Five stocks experienced net selling, with the largest net sell amounts recorded for Ying Wei Ke (12,449.79 million) and Wuhan Fan Gu (4,295.78 million) [1] - The net selling stocks included Ying Wei Ke (-8.93% change) and Wuhan Fan Gu (28.87% increase despite net selling) [1]

Core Viewpoint - The company reported a decline in net profit and revenue for 2024, but showed a significant recovery in Q1 2025, indicating potential for growth despite challenges in the payment industry [1][2]. Financial Performance - In 2024, the company achieved a net profit of 350 million, down 23.3% year-on-year, and a revenue of 5.76 billion, down 3.0% year-on-year [1]. - For Q1 2025, the company reported a net profit of 100 million, a significant increase of 51.7% year-on-year, with revenue of 1.3 billion, also up 13.0% year-on-year [1]. Business Segments - Payment business revenue for 2024 was 5.17 billion, down 0.3% year-on-year, while technology services and other businesses saw declines of 18.4% and 24.0%, respectively [2]. - The company experienced a net loss of 160 million in Q4 2024, primarily due to losses from the disposal of equity in a financial institution [2]. Market Position and Growth - The company's payment transaction volume reached 4.2 trillion in 2024, a 6.4% increase year-on-year, with a market share in card and QR code transactions continuing to rise [3]. - The gross profit margin for the payment business improved to 27.7%, up 0.92 percentage points year-on-year, with an average net fee rate of 0.122%, an increase of 0.76 basis points [3]. Technology Services - Revenue from technology services was 280 million in 2024, down 18% year-on-year, largely due to a 78% decline in credit card marketing services [4]. - The company made significant progress in its SaaS business, adding 10,000 retail service stores and achieving a 65% increase in transaction volume [4]. Cross-Border Payment - The cross-border payment business grew steadily, with a GPV of 49.2 billion, up 14% year-on-year, and the number of cross-border merchants served increased by 80% [5]. - The company expanded its foreign card acceptance, covering 285 cities and doubling the number of active foreign card merchants [5]. Investment Outlook - The company is projected to achieve net profits of 380 million, 450 million, and 500 million for 2025E-2027E, representing year-on-year growth of 9%, 18%, and 11% respectively [5].

Core Viewpoint - Lakala is experiencing significant declines in both revenue and net profit, particularly in Q1 2025, where net profit has halved compared to the previous year, indicating severe operational challenges and investment losses [1][2][3]. Financial Performance - In 2024, Lakala reported a revenue of 5.759 billion yuan, a decrease of 2.96% year-on-year, primarily due to reduced hardware sales and technology service income [2]. - The net profit for 2024 was 351 million yuan, down 23.26% year-on-year, influenced by high investment income in the previous year and losses from equity disposals [2]. - For Q1 2025, revenue fell by 13.02% year-on-year, while net profit dropped by 51.71% [2][3]. Investment Losses - Lakala faced a significant investment loss from its stake in Baotou Rural Commercial Bank, where it incurred a fair value loss of approximately 135 million yuan after opting for a zero-value buyout of its shares [4][5]. - This investment failure has adversely affected the company's financial health and investor confidence [5]. Business Challenges - The company’s digital payment business saw a slight revenue decline of 0.27% in 2024, with total payment transaction volume at 4.22 trillion yuan, down 13.62% year-on-year [6]. - The technology service segment experienced a revenue drop of 18.43%, primarily due to a 78.17% decrease in credit card marketing service income [6]. - The competitive landscape in the payment industry is intensifying, with major players like Alipay and WeChat Pay dominating market share, posing a threat to Lakala's growth [6][7]. Stock Market Reaction - Following the release of disappointing financial results, Lakala's stock price fell significantly, with a cumulative drop of over 15% in two days, closing at 23.28 yuan per share [1][7].