Financial Data and Key Metrics Changes - As of June 30, 2025, the company reported a total loan balance of RMB 11.2 billion, a decrease of 29.6% year on year [6] - Interest income for the first half of the year was RMB 416 million, reflecting a decline of 55% year on year [6] - The net loss was RMB 40.4 million, primarily due to an impairment loss provision of RMB 31.3 million [7] - The non-performing loan (NPL) ratio stood at 16.9%, with a 103% NPL recovery rate achieved in the first half [7] Business Line Data and Key Metrics Changes - The number of loan transactions decreased by 78.1% year on year, and total loan origination dropped by 85.4% [5] - The company signed a total of 2,184 sales partners, marking a year on year increase of 2% [5] - There were 1,485 sales partners who introduced borrowers, representing a 3.3% growth [5] Market Data and Key Metrics Changes - The company focused on risk mitigation and asset quality enhancement, which impacted short-term performance but aimed to establish a foundation for long-term growth [6][8] Company Strategy and Development Direction - The company adhered to the principle of "survival first, victory first," actively tackling challenges and optimizing business operations [5] - Key priorities included reducing NPLs, stabilizing funding sources by attracting new institutional investors, and expanding into new business areas [8][9] - The company plans to persist in its core strategy of containing non-performing loans while optimizing new growth [9] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the complex and ever-changing market environment and emphasized the importance of strategic adjustments and business optimizations [5] - The focus on reducing NPLs and ensuring stable funding channels is expected to support future business development [9] Other Important Information - The company achieved a significant reduction in operating costs through organizational optimization and personnel streamlining [7] Q&A Session Summary - There were no questions during the Q&A session [10]

Financial Data and Key Metrics Changes - As of June 30, 2025, the company's loan balance was RMB 11.2 billion, a decrease of 29.6% year on year [6] - Interest income for the first half of the year was RMB 416 million, reflecting a decline of 55% year on year [6] - The net loss was RMB 40.4 million, primarily due to an impairment loss provision of RMB 31.3 million [7] - The non-performing loan (NPL) ratio was 16.9%, with a 103% NPL recovery rate achieved in the first half [7] Business Line Data and Key Metrics Changes - The total number of loan transactions decreased by 78.1% year on year, and total loan origination dropped by 85.4% [5] - The company signed a total of 2,184 sales partners, marking a year-on-year increase of 2% [5] - The number of sales partners who introduced borrowers increased by 3.3% [5] Market Data and Key Metrics Changes - The company focused on risk mitigation and asset quality enhancement, which impacted short-term performance but aimed to establish a foundation for long-term growth [6] Company Strategy and Development Direction - The company adhered to the principle of "survival first, victory first," focusing on reducing non-performing loans and optimizing new growth [8] - Key priorities included reducing NPLs, stabilizing funding sources by attracting new institutional investors, and expanding into new business areas [8] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the complex and ever-changing market environment and emphasized the importance of strategic adjustments and business optimizations [5] - The company plans to persist in its core strategy of containing non-performing loans and supporting new business development [8] Other Important Information - The company achieved a significant reduction in operating costs through organizational optimization and personnel streamlining [7] Q&A Session Summary - There were no questions during the Q&A session [9]

Financial Performance - Total interest and fees income decreased by 55.1% to RMB415.7 million (US$58.0 million) for the first half of 2025 from RMB926.5 million in the same period of 2024[6] - Interest and financing service fees on loans decreased by 54.4% to RMB380.2 million (US$53.1 million) for the first half of 2025 from RMB834.1 million in the same period of 2024[7] - Net loss was RMB40.4 million (US$5.6 million) in the first half of 2025, compared to net income of RMB47.9 million in the same period of 2024[19] - Net interest and fees income after collaboration cost fell to RMB 96,941, down from RMB 423,971, indicating a decrease of around 77.25%[33] - Comprehensive income attributable to ordinary shareholders decreased to RMB (39,557) for the six months ended June 30, 2025, compared to RMB 53,920 for the same period in 2024[34] Loan and Credit Metrics - The delinquency ratio for loans originated by the Company increased from 29.7% as of December 31, 2024 to 46.0% as of June 30, 2025[21] - Provision for credit losses decreased by 81.7% to RMB31.2 million (US$4.4 million) for the first half of 2025 from RMB170.8 million in the same period in 2024[13] - Provision for credit losses significantly reduced to RMB 31,250 from RMB 170,751, a decrease of approximately 81.69%[33] Operating Expenses - Total operating expenses decreased by 50.5% to RMB101.4 million (US$14.2 million) in the first half of 2025, compared with RMB204.7 million in the same period of 2024[15] - Employee compensation and benefits decreased by 39.2% to RMB52.9 million (US$7.4 million) in the first half of 2025 compared to RMB86.9 million in the same period of 2024[15] Assets and Liabilities - Cash and cash equivalents and restricted cash decreased to RMB0.8 billion (US$0.1 billion) as of June 30, 2025, compared with RMB1.2 billion as of December 31, 2024[20] - Total assets increased to RMB 15,027,115 as of December 31, 2024, up from RMB 12,520,362 as of June 30, 2025, representing a growth of approximately 19.98%[31] - Total liabilities increased to RMB 10,969,556 as of December 31, 2024, from RMB 8,489,169, marking an increase of approximately 29.25%[31] - Total shareholders' equity slightly increased to RMB 4,057,559 as of December 31, 2024, from RMB 4,031,193, reflecting a growth of about 0.65%[31] Taxation - The effective tax rate was 21.5% in the first half of 2025, compared to 18.7% in the same period of 2024[19] Business Partnerships - The Company established partnerships with supply chain finance firms, with current business volume exceeding RMB100 million[4]

Core Viewpoint - CNFinance Holdings Limited, a leading home equity loan service provider in China, is set to report its unaudited financial results for the first half of 2025 on August 28, 2025, before U.S. markets open [1]. Company Overview - CNFinance operates by connecting demands and supplies through collaboration with sales partners and trust companies under a trust lending model, as well as with commercial banks under a commercial bank partnership model [3]. - The primary target borrower segment for CNFinance consists of micro- and small-enterprise (MSE) owners who own real properties in Tier 1 and Tier 2 cities and other major cities in China [3]. - The company employs a risk mitigation mechanism embedded in its loan products, supported by an integrated online and offline process that focuses on the risks of both borrowers and collateral, further enhanced by effective post-loan management procedures [3].

Group 1 - The top five Chinese concept stocks that experienced the largest declines at closing were Bit Origin, Duojusi, Sanyi Technology, Shenfanlian, and Mingzhu Freight, with declines ranging from approximately 10% to nearly 20% [1] - Bit Origin saw a decline of 11.58%, closing at a price of 0.4519, with a trading volume of 3.5652 million [1] - Duojusi dropped by 11.20%, closing at 14.190, with a trading volume of 1.8711 million [1] Group 2 - Sanyi Technology fell by 10.56%, closing at 0.8855, with a trading volume of 36,100 [1] - Shenfanlian decreased by 10.08%, closing at 0.5300, with a trading volume of 117,700 [1] - Mingzhu Freight experienced the largest drop of 19.996%, closing at 0.7200, with a trading volume of 11,300 [1]

Core Viewpoint - CNFinance Holdings Limited plans to change the ratio of its American depositary shares (ADSs) to its Class A ordinary shares from 1:20 to 1:200, which is equivalent to a one-for-ten reverse ADS split [1][2]. Group 1: ADS Ratio Change - The new ADS Ratio will be effective on or about September 5, 2025, subject to regulatory approval [2]. - Existing ADS holders will need to surrender ten current ADSs to receive one new ADS [3]. - No fractional new ADSs will be issued; instead, fractional entitlements will be aggregated and sold, with net cash proceeds distributed to ADS holders [4]. Group 2: Impact on Trading and Company Overview - The change in the ADS Ratio is expected to lead to a proportional increase in the ADS trading price, although no assurance can be given that the price will be ten times the previous trading price [5]. - CNFinance is a leading home equity loan service provider in China, focusing on micro- and small-enterprise owners in major cities [6].

Company Overview - CNFinance Holdings Limited is a leading home equity loan service provider in China, focusing on connecting borrowers with financial institutions through various partnership models [3]. - The company primarily targets micro- and small-enterprise (MSE) owners who own real properties in Tier 1 and Tier 2 cities and other major cities in China [3]. - CNFinance employs a risk mitigation mechanism embedded in its loan products, supported by an integrated online and offline process that emphasizes borrower and collateral risks, along with effective post-loan management procedures [3]. Annual General Meeting (AGM) Details - The company will hold its annual general meeting of shareholders on May 29, 2025, from 9:00 a.m. to 11:00 a.m. Beijing Time at the South Finance Center in Guangzhou [1]. - No proposals will be submitted for shareholder approval at the AGM; instead, it will serve as an open forum for discussions between shareholders and management [1]. - The record date for determining shareholders entitled to attend the AGM is set for May 22, 2025 [2].

Company Information - CNFinance Holdings Limited filed its annual report on Form 20-F for the fiscal year 2024[6] - The company is headquartered in Guangzhou, Guangdong Province, China[1] Compliance and Reporting - The report was issued on April 30, 2025, indicating the company's compliance with SEC regulations[4] - The CEO and Chairman of CNFinance, Bin Zhai, signed the report, affirming its accuracy[9]

Group 1 - CNFinance Holdings Limited filed its annual report on Form 20-F for the fiscal year ended December 31, 2024, with the SEC on April 29, 2025 [1] - The annual report is accessible on the Company's investor relations website and the SEC's website [1] - The Company offers free hard copies of its annual report to shareholders and ADS holders upon request [2] Group 2 - CNFinance is a leading home equity loan service provider in China, focusing on micro- and small-enterprise (MSE) owners with real properties in Tier 1 and Tier 2 cities [3] - The Company operates through a trust lending model and a commercial bank partnership model, connecting borrowers with licensed financial institutions [3] - CNFinance's risk mitigation mechanism is integrated into its loan products, supported by an online and offline process that emphasizes borrower and collateral risks [3]

Regulatory Environment and Compliance Risks - The company is subject to significant legal and operational risks due to its operations in China, including potential sanctions from the China Securities Regulatory Commission (CSRC) if it fails to comply with regulations[34]. - The Overseas Listing Trial Measures, effective March 31, 2023, require PRC domestic companies to fulfill filing procedures with the CSRC for overseas offerings, which could impact future capital raising activities[36]. - The Data Security Law and the Personal Information Protection Law impose strict requirements on data handling and cybersecurity, which could lead to substantial costs if the company is deemed a critical information infrastructure operator[37][38]. - The PRC Foreign Investment Law and its Implementing Regulations require compliance with a negative list for foreign investments, which could affect the company's corporate structure and operations if restrictions are imposed[40]. - The regulatory environment in China is uncertain, and new laws or regulations could adversely affect the company's business operations and ability to accept foreign investments[42]. - The PCAOB was unable to inspect or investigate registered public accounting firms in mainland China and Hong Kong for two consecutive years, leading to potential trading prohibitions under the HFCAA[47]. - The SEC identified the company under the HFCAA due to audit reports from a firm that could not be inspected, which could affect trading on U.S. markets[54]. - The PRC government has significant authority over business operations, which may influence the company's ability to conduct business and accept foreign investments[52]. - Regulatory actions in China, including the Data Security Law and Cybersecurity Review Measures, may incur significant expenses and affect business operations[52]. - The company faces risks related to compliance with anti-monopoly laws, which could lead to governmental investigations and enforcement actions[55]. - The possibility of being classified as a Commission-Identified Issuer could adversely affect the trading price of the company's securities[48]. - The company may be required to obtain approval from the CSRC for overseas securities offerings, which could pose compliance challenges[73]. - The newly promulgated Overseas Listing Trial Measures may impose filing requirements that the company must comply with to maintain its listing status[75]. - The CSRC issued the Confidentiality Provisions effective March 31, 2023, requiring companies in mainland China to establish confidentiality systems for overseas securities offerings[77]. - There are uncertainties regarding the need for CSRC approval for maintaining ADS listing status on NYSE or conducting future securities offerings[80]. - The company's PRC legal advisor indicates no permission is required for overseas offerings, but uncertainties remain regarding future interpretations by PRC authorities[81]. - The Data Security Law and Personal Information Protection Law require national security reviews for data handling activities that may affect national security[82]. - The company does not believe it qualifies as a "CII operator" or a "network platform operator" requiring cybersecurity reviews, but cannot guarantee regulatory agreement[86]. - Regulatory approvals are required for loans and capital contributions to PRC subsidiaries, which may delay the use of public offering proceeds[93]. - The PRC Foreign Investment Law and its Implementing Regulations, effective January 1, 2020, replaced previous laws and established a negative list for foreign investments[104]. - The loan service industry is currently not subject to foreign investment restrictions, but future changes to the negative list could impact business operations[105]. - Company may face fines and legal sanctions if it fails to comply with PRC regulations regarding employee stock incentive plans[106]. - If classified as a PRC resident enterprise, company could be subject to a 25% enterprise income tax on global income[107]. - Non-PRC shareholders may face a 10% withholding tax on dividends and a 20% tax on gains from ADS transfers if the company is deemed a PRC resident enterprise[108]. - Indirect transfers of equity interests in PRC resident enterprises by non-PRC holding companies may lead to tax obligations under SAT Bulletin 7[109]. - The inability of the PCAOB to conduct inspections in China could lead to trading prohibitions under the HFCAA[117]. - Company’s auditor is subject to PCAOB inspections, reducing the risk of trading prohibition under the HFCAA[118]. - Future SEC administrative proceedings against Chinese accounting firms could impact the company's ability to file compliant financial statements[120]. - Negative news regarding audit firms may adversely affect investor confidence and the market price of the company's stock[122]. Financial Performance and Risks - The company has not transferred any cash proceeds to its PRC subsidiaries in 2022, 2023, and 2024, and none of its PRC subsidiaries have issued dividends or distributions to the holding company or investors[44]. - The company relies on dividends from its PRC subsidiaries for cash requirements, and any debt incurred by these subsidiaries may restrict their ability to pay dividends[43]. - The company has not raised cash proceeds from overseas financing activities for its PRC subsidiaries, relying instead on capital contributions and shareholder loans[44]. - The company faces risks related to potential changes in government policies that could materially affect its business and results of operations[34]. - Prolonged economic slowdowns in China or globally may negatively impact the company's business operations and financial condition[63]. - The company faces uncertainties due to expansionary monetary and fiscal policies in major economies, including the U.S. and China, and geopolitical tensions such as the Russia-Ukraine war[64]. - Regulatory changes in China, including the amendment to private lending interest rates, may adversely affect the company's profit margins and financial position[65]. - The U.S. Department of Treasury's outbound investment rules could restrict U.S. investments in the company, impacting capital-raising efforts[66]. - The Final Rule on outbound investments may introduce new hurdles for cross-border collaborations and funding opportunities for the company[67]. - The PRC legal system's uncertainties and potential changes in laws could materially affect the company's operations and legal protections[69]. - The PRC government's significant oversight may influence the company's operations and could result in adverse effects on its business[72]. - The company relies on dividends from PRC subsidiaries for funding, and limitations on these payments could materially affect operations[57]. - The trading price of the company's American Depositary Shares (ADSs) may be volatile, leading to potential losses for investors[62]. - The company's leverage ratio was 3.7 times, 4.1 times, and 4.9 times as of December 31, 2022, 2023, and 2024 respectively[160]. - The financing costs under the repurchase arrangement ranged from 8% to 14% per annum of the transfer prices in 2022, 2023, and 2024[158]. - The outstanding principal of home equity loans originated by the company was RMB 11,123 million, RMB 11,828 million, and RMB 10,124 million (US$ 13.9 million) as of December 31, 2022, 2023, and 2024 respectively[157]. - The delinquency ratio for loans originated by the company decreased from 18.26% as of December 31, 2022 to 15.54% as of December 31, 2023, but increased to 29.72% as of December 31, 2024[157]. - The company may face challenges in securing funding on acceptable terms, which could adversely affect its ability to provide attractive products and services[138]. - The company’s credit losses may increase due to concentration in loans secured by real properties, especially during downturns in local or national property markets[156]. - An increase in market interest rates could reduce the amount of loans facilitated and impair the company's competitive position[168]. - The company’s funding costs may fluctuate with market interest rates, potentially impacting profitability[169]. - The company may not effectively monitor the intended use of loan proceeds, which could lead to reputational harm[176]. - Fraudulent activities pose a risk to the company’s operating results and brand reputation, potentially decreasing loan transaction volumes[177]. - The company’s collection efforts must comply with relevant laws, and any misconduct could harm its reputation and ability to collect payments[165]. - The effectiveness of the company’s credit assessment may be compromised by inaccurate borrower information, affecting risk management[174]. - The foreclosure process for defaulted loans may be time-consuming and uncertain, adversely affecting liquidity and financial condition[172]. - The company primarily relies on trust company partners and commercial bank partners for loan funding, which may expose it to regulatory risks under the Civil Code of the People's Republic of China[180]. - The company has substantial existing debts, which may lead to default risks and limit operational flexibility[206]. - The company has not maintained adequate business insurance coverage, which could lead to substantial costs and resource diversion in case of disruptions[215]. - The company has ceased to be an "emerging growth company," resulting in increased compliance costs and management efforts related to Section 404 of the Sarbanes-Oxley Act[218]. - The company has granted share-based compensation awards under the 2018 Plan, with a maximum of 307,608,510 shares authorized, potentially increasing expenses related to share-based compensation[221]. - Kylin Investment Holdings Limited holds 17.8% of the company's ordinary shares, which may influence corporate decisions and affect stockholder interests[222]. - The company has not made full contributions to social insurance plans as required by PRC regulations, which may lead to penalties and adversely affect financial results[224]. - The company operates 52 branches and sub-branches across over 50 cities in China, which may face regulatory scrutiny if domicile and business locations are inconsistent[225]. - Strategic alliances may divert management attention and resources, potentially disrupting business operations and adversely affecting financial results[226]. - As of December 31, 2024, the company had 1,371,643,240 ordinary shares outstanding, with 823,681,600 in the form of ADSs, which could lead to price declines if substantial sales occur[232]. - The trading price of the company's ADSs may be volatile due to various factors, including market conditions and company-specific events[227]. Operational Challenges and Market Conditions - The company has a limited operating history in the home equity loan market, which makes it difficult to evaluate future prospects[126]. - The company’s lack of product and business diversification may inhibit growth opportunities, as its primary activities include facilitating home equity loans and providing loan management services[154]. - The company has entered into agreements with sales partners to utilize their offline networks to engage prospective borrowers, which may affect loan origination volume[155]. - The company’s operations could be materially disrupted by natural disasters or health epidemics, particularly in Guangzhou where its headquarters are located[140]. - The company’s concentration of funding from trust company partners and borrower acquisition through a single sales partner poses risks to its financial condition and liquidity[142]. - The company faces significant competition in the home equity loan market, with competitors potentially having more financial and technical resources, which could adversely affect market share and growth[200]. - There is a risk of misconduct and errors by employees and third-party service providers, which could lead to regulatory sanctions and reputational harm[197]. - The company relies on effective marketing strategies to maintain its brand and attract borrowers, with potential challenges in cost efficiency and market penetration[203]. - Negative publicity regarding the home equity loan industry could harm the company's reputation and operational results[202]. - The company may face challenges in attracting and retaining qualified employees due to intense competition for skilled personnel[212]. - The company is indirectly subject to PRC financial regulations due to partnerships with financial institutions, which could impact its operations[198]. - The company may incur significant expenses related to potential litigation over intellectual property rights, which could distract management and affect business operations[205]. - Labor costs in China are expected to continue increasing, which may adversely affect the company's financial condition and results of operations[213]. - The company has not experienced any material incidents of security breaches as of the date of the annual report, but it does not have cybersecurity insurance[182]. - The PRC Anti-money Laundering Law, effective since January 2007 and amended in November 2024, imposes significant compliance requirements on financial institutions[184]. - The Administrative Measures for Credit Reporting Business, effective January 1, 2022, may challenge the company's operations if deemed to be engaged in credit investigation services[193]. - The company faces uncertainties regarding the interpretation and implementation of anti-money laundering requirements applicable to home equity loan service providers[186]. - The company collaborates with sales partners to promote real estate mortgage loan projects, which may be scrutinized under financial marketing regulations[188]. - The collection and sharing of personal information among the company, sales partners, and trust companies may face compliance risks under evolving regulations[189]. - The company relies on third-party service providers for various operational aspects, including data security and borrower credit histories[195].