Core Viewpoint - CNFinance Holdings Limited will hold its annual general meeting of shareholders on June 7, 2024, with no proposals for shareholder approval, serving as an open forum for discussions with management [1]. Group 1: Company Overview - CNFinance Holdings Limited is a leading home equity loan service provider in China, focusing on connecting micro- and small-enterprise owners with financing needs to licensed financial institutions [3]. - The company operates through a trust lending model and a commercial bank partnership model, collaborating with sales partners and local channel partners to recommend eligible borrowers [3]. - The primary target borrower segment includes MSE owners who own real properties in Tier 1 and Tier 2 cities and other major cities in China [3]. - CNFinance's risk mitigation mechanism is integrated into its loan products, supported by an online and offline process that focuses on borrower and collateral risks, along with effective post-loan management procedures [3]. Group 2: AGM Details - The annual general meeting will take place at 44/F, Tower G, No. 16 Zhujiang Dong Road, Tianhe District, Guangzhou City, Guangdong Province, on June 7, 2024, from 9:30 a.m. to 11:00 a.m. (Beijing Time) [1]. - The record date for determining shareholders entitled to attend the AGM is set for May 8, 2024 [1][2]. - Both holders of ordinary shares and beneficial owners of American Depositary Shares (ADSs) are welcome to attend the AGM in person [2].

Company Information - CNFinance Holdings Limited filed its annual report on Form 20-F for the fiscal year 2023 on April 26, 2024[2] - The company is headquartered in Guangzhou City, Guangdong Province, People's Republic of China[1] Regulatory Compliance - The report is submitted under the Securities Exchange Act of 1934, indicating compliance with regulatory requirements[5]

GUANGZHOU, China, April 26, 2024 /PRNewswire/ -- CNFinance Holdings Limited (NYSE: CNF) ("CNFinance" or the "Company"), a leading home equity loan service provider in China, today announced that it filed its annual report on Form 20-F for the fiscal year ended December 31, 2023 with the U.S. Securities and Exchange Commission ("SEC") on April 26, 2024. The annual report can be accessed on the Company's investor relations website at http://ir.cashchina.cn as well as the SEC's website at http://www.sec.gov. T ...

PART I [ITEM 3. KEY INFORMATION](index=8&type=section&id=ITEM%203.%20KEY%20INFORMATION) This section outlines the principal risks of CNFinance's China-based operations, including PRC government oversight, regulatory uncertainties, potential U.S. delisting, and PFIC classification [Risk Factors](index=12&type=section&id=3.D.%20Risk%20Factors) The company faces substantial risks from its China operations, including regulatory changes, high leverage, and potential delisting or PFIC classification for ADS holders - The PRC government's significant oversight and potential changes in laws regarding overseas listings, cybersecurity, and anti-monopoly regulations could materially impact operations and stock value[35](index=35&type=chunk)[38](index=38&type=chunk)[59](index=59&type=chunk) - Trading of the company's securities may be prohibited under the Holding Foreign Companies Accountable Act (HFCAA) if the PCAOB cannot inspect the auditor for two consecutive years, despite the 2021 negative determination being vacated[37](index=37&type=chunk)[41](index=41&type=chunk)[114](index=114&type=chunk) - The company was likely a **Passive Foreign Investment Company (PFIC)** for 2023 and expects to remain so, leading to adverse U.S. federal income tax consequences for ADS holders[46](index=46&type=chunk)[293](index=293&type=chunk)[296](index=296&type=chunk) - The company's **high leverage ratio of 4.1 times** as of December 31, 2023, exposes it to liquidity risk and may limit future capital expenditures[168](index=168&type=chunk)[169](index=169&type=chunk) - The collaboration model with sales partners, involving **Credit Risk Mitigation Positions (CRMP)**, faces potential challenges from PRC regulators as illegal fundraising or disguised loans, risking fines and penalties[148](index=148&type=chunk)[150](index=150&type=chunk)[152](index=152&type=chunk) [ITEM 4. INFORMATION ON THE COMPANY](index=61&type=section&id=ITEM%204.%20INFORMATION%20ON%20THE%20COMPANY) CNFinance is a leading home equity loan service provider in China, connecting MSE owners with funding partners through a national network and sales partner collaboration, operating within a complex regulatory environment [History and Development of the Company](index=61&type=section&id=4.A.%20History%20and%20Development%20of%20the%20Company) The company, originating in 1999 and spun off from Fanhua Inc. in 2006, incorporated in the Cayman Islands in 2014 and completed its NYSE IPO in November 2018 - CNFinance Holdings Limited was incorporated in the Cayman Islands in **January 2014** and became the holding company in **March 2018**[299](index=299&type=chunk) - The company completed its **IPO on the NYSE** under the symbol "CNF" in **November 2018**[300](index=300&type=chunk) [Business Overview](index=61&type=section&id=4.B.%20Business%20Overview) CNFinance provides home equity loan services to MSE owners in China, utilizing trust and commercial bank lending models, acquiring borrowers through sales partners, and operating under extensive PRC regulations Loan Origination Volume (2021-2023) | Year | Loan Origination (RMB billions) | YoY Growth | |:---|:---:|:---:| | 2021 | 12.8 | - | | 2022 | 14.7 | 14.8% | | 2023 | 17.3 | 17.7% | Loan Origination by Funding Model (2021-2023) | Funding Model | 2021 (%) | 2022 (%) | 2023 (%) | |:---|:---:|:---:|:---:| | Trust lending | 99.5% | 82.7% | 70.7% | | Bank lending | 0.3% | 17.2% | 29.0% | | Direct lending | 0.2% | 0.1% | 0.3% | - The company's primary business models include the **trust lending model** and a newer **commercial bank partnership model**, introduced in 2021 to diversify funding channels[306](index=306&type=chunk)[309](index=309&type=chunk)[364](index=364&type=chunk) - Borrower acquisition is primarily driven by a collaboration model with sales partners, who introduced **over 99.7% of borrowers** under the trust lending model and **77.4%** under the commercial bank partnership model in 2023[310](index=310&type=chunk)[315](index=315&type=chunk)[409](index=409&type=chunk) - The company is subject to extensive PRC regulations covering foreign investment, small loans, private lending interest rates, data security (Cyber Security Law, Data Security Law, PIPL), and overseas listings (CSRC Overseas Listing Trial Measures)[417](index=417&type=chunk)[433](index=433&type=chunk)[452](index=452&type=chunk) [Organizational Structure](index=101&type=section&id=4.C.%20Organizational%20Structure) CNFinance Holdings Limited, a Cayman Islands holding company, operates through subsidiaries primarily in the PRC, consolidating various trust plans as VIEs where it is deemed the primary beneficiary - The company is a **Cayman Islands holding company** with its main operating subsidiaries located in the PRC[508](index=508&type=chunk) - From an accounting perspective, the company consolidates the financial results of the trust plans it works with, as it is considered the **primary beneficiary** and exposed to the variability of returns[508](index=508&type=chunk) [Property, Plant and Equipment](index=102&type=section&id=4.D.%20Property,%20Plant%20and%20Equipment) The company leases its current 1,855 square meter Guangzhou headquarters until September 2024, has purchased a new 2,600 square meter office in Guangzhou, and maintains smaller leased properties in over 50 cities - The company leases its current headquarters in Guangzhou and has purchased a new, larger office space in the same city, expected to be acquired by **August 2024**[512](index=512&type=chunk) [ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS](index=102&type=section&id=ITEM%205.%20OPERATING%20AND%20FINANCIAL%20REVIEW%20AND%20PROSPECTS) This section analyzes CNFinance's 2023 financial performance, highlighting increased operating and net income driven by loan origination growth, and discusses key performance factors, loan quality, liquidity, capital, and critical accounting policies like CECL [Operating Results](index=102&type=section&id=5.A.%20Operating%20Results) For fiscal year 2023, CNFinance's total operating income grew **2.8% to RMB 770.1 million**, and net income increased **21.6% to RMB 164.6 million**, driven by higher loan origination, despite a rise in the NPL ratio including loans held for sale Key Financial Performance (2021-2023) | Metric (RMB in millions) | 2021 | 2022 | 2023 | |:---|---:|---:|---:| | Total Operating Income | 176.2 | 749.2 | 770.1 | | Net Income | 65.2 | 135.3 | 164.6 | | Diluted EPS (RMB) | 0.05 | 0.09 | 0.11 | Loan Performance Metrics (excluding loans held for sale) | Metric (%) | As of Dec 31, 2021 | As of Dec 31, 2022 | As of Dec 31, 2023 | |:---|:---:|:---:|:---:| | Delinquency Ratio | 16.17 | 18.26 | 15.54 | | NPL Ratio | 2.13 | 1.12 | 1.11 | - Net revenue from the commercial bank partnership model grew significantly by **52.6% to RMB 87.9 million** in 2023, reflecting successful funding channel expansion[644](index=644&type=chunk) - Provision for credit losses decreased to **RMB 183.2 million** in 2023 from **RMB 238.1 million** in 2022, primarily due to a lower delinquency ratio and increased protection from sales partners' CRMPs[647](index=647&type=chunk) - Total operating expenses increased by **12.6%** in 2023, driven mainly by higher fees to local channels for referring sales partners and increased service fees for third-party post-loan management[650](index=650&type=chunk)[652](index=652&type=chunk) [Liquidity and Capital Resources](index=123&type=section&id=5.B.%20Liquidity%20and%20Capital%20Resources) The company's liquidity primarily stems from financing and operating activities, with **RMB 2.0 billion** in cash and equivalents as of December 31, 2023, though PRC regulations restrict fund transfers from subsidiaries, and capital expenditures increased due to a new office purchase Summary of Cash Flows (RMB in millions) | Cash Flow Activity | 2021 | 2022 | 2023 | |:---|---:|---:|---:| | Net Cash from Operating Activities | 689.7 | 919.3 | 1,705.8 | | Net Cash used in Investing Activities | (2,350.6) | (1,098.2) | (2,483.9) | | Net Cash from/(used in) Financing Activities | 1,932.6 | (288.2) | 1,005.5 | - As of December 31, 2023, the company held **RMB 2.0 billion** in cash and cash equivalents, an increase from **RMB 1.8 billion** at year-end 2022[670](index=670&type=chunk) - As a holding company, CNFinance relies on dividends from its PRC subsidiaries, but PRC regulations restrict cash transfers abroad; as of year-end 2023, aggregate retained earnings of PRC subsidiaries were **RMB 3.12 billion**[672](index=672&type=chunk)[693](index=693&type=chunk) - Capital expenditures increased to **RMB 114.5 million** in 2023 from **RMB 89.9 million** in 2022, primarily due to the purchase of a new office in Guangzhou[682](index=682&type=chunk) [Research and Development](index=128&type=section&id=5.C.%20Research%20and%20Development) The company continues to invest in its technology system for platform scalability and flexibility, with R&D expenses increasing to **RMB 1.8 million** in 2023 from **RMB 0.8 million** in 2022 R&D Expenses (2021-2023) | Year | R&D Expenses (RMB in millions) | |:---|:---:| | 2021 | 1.6 | | 2022 | 0.8 | | 2023 | 1.8 | [Critical Accounting Estimates](index=128&type=section&id=5.E.%20Critical%20Accounting%20Estimates) The company's critical accounting estimates, including allowance for credit losses and guaranteed liabilities, are determined using the **CECL methodology (ASC 326)**, requiring significant judgment on default probabilities, loss given default, and macroeconomic scenarios - The estimation of the **Allowance for Credit Loss (ACL)** is a critical accounting estimate, based on the **CECL model** which incorporates historical data, current conditions, and forward-looking macroeconomic forecasts[704](index=704&type=chunk) [ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES](index=129&type=section&id=ITEM%206.%20DIRECTORS,%20SENIOR%20MANAGEMENT%20AND%20EMPLOYEES) This section details the company's leadership, compensation, board structure, and workforce, including the six-member Board of Directors, 2023 executive compensation, share incentive plan, 897 employees as of December 31, 2023, and significant share ownership by key executives [Directors and Senior Management](index=129&type=section&id=6.A.%20Directors%20and%20Senior%20Management) The company is led by Chairman and CEO Bin Zhai, with a Board of Directors comprising two executive and four independent directors, and a senior management team experienced in China's finance industry - The Board of Directors is composed of **six members**: Bin Zhai (Chairman & CEO), Jun Qian (Director & VP), and four independent directors (Fengyong Gao, Lin Xu, Xi Wang, Ge Yang)[707](index=707&type=chunk) [Compensation](index=130&type=section&id=6.B.%20Compensation) In fiscal year 2023, the company paid **RMB 5.7 million** in cash compensation to executive officers and maintains a **2018 Share Incentive Plan** authorizing up to **307,608,510 ordinary shares** for equity awards - For the fiscal year ended December 31, 2023, the aggregate cash compensation paid to executive officers was **RMB 5.7 million (US$0.8 million)**[716](index=716&type=chunk) - The **2018 Share Incentive Plan** authorizes the issuance of up to **307,608,510 ordinary shares**, with options for the entire amount outstanding as of the report date[725](index=725&type=chunk)[249](index=249&type=chunk) [Board Practices](index=132&type=section&id=6.C.%20Board%20Practices) The Board of Directors, comprising six members, has established Audit, Compensation, and Nominating and Corporate Governance committees, with the Audit Committee consisting entirely of independent directors, including an audit committee financial expert - The Board has three committees: **Audit, Compensation, and Nominating and Corporate Governance**[735](index=735&type=chunk) - The Audit Committee is composed of **three independent directors**, satisfying NYSE and SEC requirements[736](index=736&type=chunk) [Employees](index=135&type=section&id=6.D.%20Employees) As of December 31, 2023, CNFinance had **897 employees**, with **Risk Management** being the largest department at **50%** of the workforce, and maintains good employee relations without labor unions Employees by Function (as of Dec 31, 2023) | Function | Number of Employees | % of Total | |:---|:---:|:---:| | Risk Management | 510 | 50% | | Sales and Marketing | 191 | 21% | | General and Administration | - | 10% | | Finance | - | 12% | | Others | - | 7% | | **Total** | **897** | **100%** | [Share Ownership](index=137&type=section&id=6.E.%20Share%20Ownership) As of March 31, 2024, Chairman and CEO Bin Zhai beneficially owned **20.1%** of ordinary shares, while Kylin Investment Holdings Limited, controlled by executive officers, is the largest principal shareholder with **17.8%** ownership Beneficial Ownership (as of March 31, 2024) | Shareholder | Number of Shares | Percentage (%) | |:---|:---:|:---:| | Bin Zhai (Chairman & CEO) | 283,949,380 | 20.1% | | Kylin Investment Holdings Limited | 243,949,380 | 17.8% | [ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS](index=145&type=section&id=ITEM%207.%20MAJOR%20SHAREHOLDERS%20AND%20RELATED%20PARTY%20TRANSACTIONS) This section details major shareholders by reference and describes related party transactions, primarily employment agreements and share incentive grants to directors and officers, with no other material transactions in 2023 - The company's related party transactions are mainly **employment agreements** and **share incentive grants** to directors and executive officers[754](index=754&type=chunk)[756](index=756&type=chunk) - There were no other material related party transactions during the fiscal year 2023[756](index=756&type=chunk) [ITEM 8. FINANCIAL INFORMATION](index=146&type=section&id=ITEM%208.%20FINANCIAL%20INFORMATION) This section presents the company's consolidated financial statements, noting no material legal proceedings and a dividend policy of retaining earnings for business expansion without near-term payouts - The company is not currently a party to any material legal or administrative proceedings[758](index=758&type=chunk) - The company has no plan to declare or pay dividends in the near future, intending to retain earnings to fund business growth[759](index=759&type=chunk) [ITEM 10. ADDITIONAL INFORMATION](index=147&type=section&id=ITEM%2010.%20ADDITIONAL%20INFORMATION) This section provides supplementary details on exchange controls, taxation, and material contracts, including tax structures in the Cayman Islands, PRC, and Hong Kong, and U.S. federal income tax considerations for ADS holders, notably the high likelihood of PFIC classification [Taxation](index=148&type=section&id=10.E.%20Taxation) The company is not subject to Cayman Islands tax, while its PRC subsidiaries face a **25% enterprise income tax rate**; for U.S. investors, the company was likely a **PFIC** for 2023 and expects to remain so, with the Active Financing Exception unlikely to apply - The company's PRC subsidiaries are subject to a **25% enterprise income tax rate**, and dividends paid from PRC entities to non-resident enterprises are subject to a **10% withholding tax**[770](index=770&type=chunk)[582](index=582&type=chunk) - The company was likely a **PFIC** for its 2023 taxable year and expects to be a **PFIC** for 2024 and future years, resulting in significant adverse U.S. federal income tax consequences for U.S. Holders[779](index=779&type=chunk)[781](index=781&type=chunk) - Due to recent Treasury regulations and guidance, the **"Active Financing Exception"** to the PFIC rules is not expected to apply to the company for recent or future taxable years[781](index=781&type=chunk) [ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=155&type=section&id=ITEM%2011.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) The company's primary market risks include interest rate risk affecting borrowing and funding costs, and foreign exchange risk due to RMB-denominated revenues and functional currencies in HKD and USD, while China's inflation has not been material - The company is exposed to **interest rate risk**, as changes can affect borrower demand and the company's own funding costs[803](index=803&type=chunk) - Substantially all revenues are denominated in **Renminbi (RMB)**, exposing the company to **foreign exchange risk** from fluctuations between the RMB, U.S. dollar, and Hong Kong dollar[805](index=805&type=chunk)[806](index=806&type=chunk) [ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES](index=156&type=section&id=ITEM%2012.%20DESCRIPTION%20OF%20SECURITIES%20OTHER%20THAN%20EQUITY%20SECURITIES) This section details the fees and expenses for the company's American Depositary Shares (ADSs), administered by JPMorgan Chase Bank, N.A., listing various charges applicable to ADS holders for services like issuance, cancellation, and cash distributions - ADS holders are subject to various fees charged by the depositary, including up to **$5.00 per 100 ADSs** for issuance or cancellation and up to **$0.05 per ADS** for cash distributions[809](index=809&type=chunk)[811](index=811&type=chunk) PART II [ITEM 15. CONTROLS AND PROCEDURES](index=158&type=section&id=ITEM%2015.%20CONTROLS%20AND%20PROCEDURES) Management concluded that the company's disclosure controls and internal control over financial reporting were effective as of December 31, 2023, having successfully remediated a prior material weakness related to U.S. GAAP and SEC reporting expertise - Management concluded that as of **December 31, 2023**, the company's disclosure controls and procedures were effective[820](index=820&type=chunk) - A material weakness identified in prior years concerning a lack of sufficient **U.S. GAAP and SEC reporting experience** was remediated as of **December 31, 2023**[822](index=822&type=chunk)[823](index=823&type=chunk) - Management concluded that the company's internal control over financial reporting was effective as of **December 31, 2023**, and **KPMG Huazhen LLP** issued an unqualified opinion on its effectiveness[824](index=824&type=chunk)[826](index=826&type=chunk) [ITEM 16](index=159&type=section&id=ITEM%2016) This section covers corporate governance and compliance, including the audit committee financial expert, code of ethics, accountant fees, share repurchase program, differences from NYSE governance standards as a foreign private issuer, and cybersecurity risk management overseen by the board [Principal Accountant Fees and Services](index=160&type=section&id=16.C.%20Principal%20Accountant%20Fees%20and%20Services) The company paid **KPMG Huazhen LLP** a total of **RMB 8.9 million** for services in 2023, primarily for audit fees, with all services pre-approved by the audit committee Auditor Fees (RMB in thousands) | Service Type | 2022 | 2023 | |:---|---:|---:| | Audit Fees | 6,620 | 8,900 | | Other Fees | 100 | 7 | | **Total** | **6,720** | **8,907** | [Purchases of Equity Securities by the Issuer and Affiliated Purchasers](index=160&type=section&id=16.E.%20Purchases%20of%20Equity%20Securities%20by%20the%20Issuer%20and%20Affiliated%20Purchasers) The company has an active **US$20.0 million share repurchase program**, authorized in March 2022 and extended in March 2023, with approximately **US$1.5 million** remaining available as of March 31, 2024 - The company has a **US$20.0 million share repurchase program**, extended for 12 months starting **March 16, 2023**[834](index=834&type=chunk) - From April 2023 to March 2024, the company repurchased a total of **1,424,360 ADSs** in the open market[836](index=836&type=chunk)[837](index=837&type=chunk) [Corporate Governance](index=161&type=section&id=16.G.%20Corporate%20Governance) As a foreign private issuer, CNFinance follows Cayman Islands corporate governance practices, differing from NYSE standards by not requiring a majority of independent directors on the board or fully independent compensation and nominating committees - The company follows home country (**Cayman Islands**) practices, which differ from NYSE standards, particularly regarding director independence on the board and certain committees[838](index=838&type=chunk)[839](index=839&type=chunk)[841](index=841&type=chunk) [Cybersecurity](index=162&type=section&id=16.K.%20Cybersecurity) The company maintains a cybersecurity risk management program overseen by its board and managed by a dedicated team, which includes assessing, mitigating, and reporting threats, with no material threats identified in 2023 - The Board of Directors has overall oversight responsibility for the company's **cybersecurity risk management program**[844](index=844&type=chunk) - In 2023, no cybersecurity threats were identified that had a material effect on the company's business strategy, results of operations, or financial condition[845](index=845&type=chunk) PART III [ITEM 18. FINANCIAL STATEMENTS](index=163&type=section&id=ITEM%2018.%20FINANCIAL%20STATEMENTS) This section presents CNFinance Holdings Limited's audited consolidated financial statements for fiscal years 2021-2023, prepared under U.S. GAAP, including balance sheets, income statements, equity changes, and cash flows, with an unqualified opinion from KPMG Huazhen LLP on both financial statements and internal control effectiveness Consolidated Balance Sheet Highlights (As of Dec 31) | (RMB in millions) | 2022 | 2023 | |:---|---:|---:| | Total Assets | 14,481.9 | 16,364.3 | | Total Liabilities | 10,544.2 | 12,355.4 | | Total Shareholders' Equity | 3,937.7 | 4,008.9 | Consolidated Income Statement Highlights (Year Ended Dec 31) | (RMB in millions) | 2021 | 2022 | 2023 | |:---|---:|---:|---:| | Net Interest and Fees Income | 1,040.2 | 946.6 | 1,031.5 | | Total Operating Income | 176.2 | 749.2 | 770.1 | | Net Income | 65.2 | 135.4 | 164.6 | - The independent auditor, **KPMG Huazhen LLP**, issued an unqualified opinion on the consolidated financial statements and the effectiveness of internal control over financial reporting as of **December 31, 2023**[856](index=856&type=chunk) - A critical audit matter identified was the assessment of the **allowance for credit losses (ACL)**, involving complex and subjective judgments regarding models, macroeconomic forecasts, and other assumptions used to estimate potential losses[864](index=864&type=chunk)[866](index=866&type=chunk)

Financial Data and Key Metrics Changes - In 2023, the company facilitated loans of RMB 17.3 billion, representing a year-on-year growth of 18% [6] - Net income for 2023 was RMB 165 million, reflecting a year-on-year growth of 21% [6][25] - Total interest and fees income for the fiscal year increased by 1% to RMB 1,755 million compared to RMB 1,731 million in 2022 [21] - Provision for credit losses decreased to RMB 183 million from RMB 238 million in the previous year, primarily due to a lower delinquency ratio [23] Business Line Data and Key Metrics Changes - Under the commercial bank partnership model, net revenue increased by 53% to RMB 88 million from RMB 58 million [22] - The company originated loans of RMB 5 billion under the commercial bank partnership, with an outstanding loan principal of RMB 4.3 billion as of December 31, 2023 [8] - Collaboration costs for sales partners increased by 7% to RMB 334 million, attributed to an increase in daily average outstanding loan principal [23] Market Data and Key Metrics Changes - The delinquency ratio for loans decreased from 19.2% at the end of 2022 to 15.6% at the end of 2023 [25] - The NPL ratio for loans increased slightly to 1.2% from 1.1% year-on-year [25] - In 2023, the company facilitated loans of RMB 12.2 billion under the trust lending model and RMB 50 billion under the commercial bank model, with the latter accounting for 30% of total loans originated [28] Company Strategy and Development Direction - The company aims to diversify its product offerings and target high-quality collaterals and borrowers with better risk profiles in 2024 [14] - There is a strategic shift towards core areas in Chinese Tier 1 and Tier 2 cities, with 90% of loans facilitated in these regions [11] - The company plans to enhance compliance building and internal control mechanisms to support sustainable growth [16] Management's Comments on Operating Environment and Future Outlook - The management acknowledged ongoing challenges in 2024 due to uncertainties in China's real estate market but emphasized the importance of maintaining growth while containing risks [13] - The company will continue to refine its risk control mechanisms and prioritize asset quality in light of the complex property market [15] - Management expressed a commitment to leveraging technology for improved credit assessments and evaluations [12] Other Important Information - The company held cash and cash equivalents of RMB 2 billion as of December 31, 2023, compared to RMB 1.8 billion in the previous year [25] - The average rate charged to borrowers in 2023 was 16.1%, down from 16.3% in 2022, with a goal to further reduce financing costs in 2024 [26] Q&A Session Summary Question: Will the borrowing rate seen in the last quarter be expected going forward? - The average rate charged to borrowers in 2023 was 16.1%, and the goal is to keep lowering financing costs based on market conditions [26] Question: Can you discuss the demand for loans in terms of size and split between trust and commercial? - In 2023, loan demand was lower than expected due to uncertainties in the real estate market, with a target of RMB 20 billion in total loan origination for 2024 [28][29] Question: Does compliance training tie into technology upgrades for the platform? - Compliance building and technology investment are separate tasks, with a focus on enhancing collateral evaluation and borrower ratings [30][31] Question: Are there plans to renew the share repurchase plan? - The CFO indicated plans to present the extension of the share repurchase plan to the Board of Directors [32]

Core Viewpoint - CNFinance Holdings Limited, a leading home equity loan service provider in China, is set to report its unaudited financial results for the fourth quarter and fiscal year ended December 31, 2023, on March 28, 2024, 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 local channel partners and commercial banks under a commercial bank partnership model [2]. - 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 [2]. - The company's risk mitigation mechanism is integrated into its loan products, focusing on both borrower and collateral risks, and is further enhanced by effective post-loan management procedures [2].

CNFinance Holdings Limited (NYSE:CNF) Q3 2023 Earnings Conference Call November 29, 2023 8:00 AM ET Company Participants Jun Qian - Director and Vice President Jing Li - Acting Chief Financial Officer, Assistant President Conference Call Participants William Gregozeski - Greenridge Global Operator Good day, and welcome to the CNFinance Holdings Limited Third Quarter of 2023 Financial Results Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today's presentation, th ...

Financial Data and Key Metrics Changes - In Q2 2023, total loan origination volume was RMB4.5 billion, a year-on-year increase of 45% [5] - Total interest income for Q2 2023 was RMB430 million, representing a year-on-year increase of 5% [5] - Net income for Q2 2023 was RMB44 million, a year-on-year increase of 142% [5] - For the first half of 2023, total loans originated was RMB8 billion, a year-on-year increase of 43% [6] - Total interest income for the first half of 2023 was RMB885 million, a year-on-year increase of 7% [19] - Net income for the first half of 2023 was RMB93 million, a year-on-year growth of 52% [23] Business Line Data and Key Metrics Changes - Under the commercial bank partnership model, loans originated in the first half of 2023 accounted for 40% of overall loan origination volume, totaling RMB3 billion [6] - The delinquency rate of loans originated decreased from 18% at the end of 2022 to approximately 15% as of June 30, 2023 [8] - The number of transactions under the trust lending model was 7,734 in the first half of 2023, while under the commercial bank partnership it was 4,074 [28] Market Data and Key Metrics Changes - Overall loan demand from SMEs has decreased, with new loans in July 2023 at RMB528 billion, down from RMB270 billion year-on-year [27] - New loans issued to the real economy in July 2023 were RMB36 billion, a decrease of RMB389 billion compared to the same period last year [27] Company Strategy and Development Direction - The company aims to focus on growth by improving product mix and launching differentiated products with low interest rates [9] - Plans to shift business to core areas in first-tier and new first-tier cities to optimize asset quality [10] - Investment in technology to enhance borrower evaluation capabilities and collaboration with fintech companies is a priority [11] Management Comments on Operating Environment and Future Outlook - Management acknowledges uncertainties in China's economy and the downward trend in the real estate market but sees opportunities for growth [9] - The company maintains its target of RMB20 billion in loan origination for the year, emphasizing high-quality development [31] Other Important Information - As of June 30, 2023, cash and cash equivalents were RMB1.9 billion, an increase from RMB1.8 billion at the end of 2022 [24] - The NPL ratio increased from 1.1% at the end of 2022 to 1.4% as of June 30, 2023 [24] Q&A Session Summary Question: Update on SME loan demand - Management noted a decrease in overall loan demand from SMEs, with specific figures indicating a decline in new loans issued [27] Question: Origination growth outlook - Management confirmed the target of RMB20 billion in loan origination remains intact despite economic uncertainties [31] Question: Sales partners' loan interest changes - A decrease in interest on loans to sales partners is viewed positively, indicating improved asset quality and fewer defaults [33]

Loan Origination and Borrowers - Total loan origination volume was RMB4.5 billion (US$626.8 million) in Q2 2023, a 45.2% increase from RMB3.1 billion in Q2 2022[1] - Total number of active borrowers reached 25,657 in Q2 2023, up 18.5% from 21,649 in Q2 2022[1] - Total loan origination volume for the first half of 2023 was RMB8.0 billion (US$1.1 billion), a 42.9% increase from RMB5.6 billion in the same period of 2022[3] Financial Performance - Net income increased by 142.0% to RMB43.8 million (US$6.0 million) in Q2 2023 from RMB18.1 million in Q2 2022[2] - Basic earnings per ADS were RMB0.64 (US$0.09) in Q2 2023, compared to RMB0.27 in Q2 2022[2] - Net income increased by 52.1% to RMB93.1 million (US$12.8 million) in the first half of 2023, compared to RMB61.2 million in the same period of 2022[26] - Basic earnings per ADS and diluted earnings per ADS were RMB1.36 (US$0.19) and RMB1.22 (US$0.17), respectively, in the first half of 2023, compared to RMB0.89 and RMB0.80 in the same period of 2022[26] Income and Expenses - Total interest and fees income for the first half of 2023 was RMB884.5 million (US$122.0 million), a 6.9% increase from RMB827.1 million in the same period of 2022[3] - Total operating expenses increased by 4.6% to RMB179.0 million (US$24.7 million) in the first half of 2023 from RMB171.2 million in the same period of 2022[24] - Employee compensation and benefits increased by 3.7% to RMB95.0 million (US$13.1 million) in the first half of 2023 from RMB91.6 million in the same period of 2022[24] - Other expenses increased by 13.7% to RMB59.8 million (US$8.2 million) in the first half of 2023 from RMB52.6 million in the same period of 2022[26] Credit Losses and Risk Management - Provision for credit losses decreased by 25.7% to RMB50.8 million (US$7.0 million) in Q2 2023 from RMB68.4 million in Q2 2022, reflecting improved credit risk control[11] - Provision for credit losses increased by 136.1% to RMB129.6 million (US$17.9 million) in the first half of 2023 from RMB54.9 million in the same period of 2022[22] - The delinquency ratio for loans decreased from 18.3% as of December 31, 2022, to 15.2% as of June 30, 2023[27] - The NPL ratio for loans increased from 1.1% as of December 31, 2022, to 1.4% as of June 30, 2023[28] Cash and Equity - Cash and cash equivalents and restricted cash amounted to RMB1.9 billion (US$0.3 billion) as of June 30, 2023, compared to RMB1.8 billion as of December 31, 2022[27] - Total liabilities and shareholders' equity stood at RMB 14,481,920 thousand as of June 30, 2023, compared to RMB 14,474,698 thousand at the end of 2022[41] Share Repurchase and Other Financial Metrics - The company repurchased approximately US$14.8 million worth of its ADSs under the share repurchase program as of June 30, 2023[30] - Total interest and fees income increased from RMB 409,832 thousand in Q2 2022 to RMB 431,325 thousand in Q2 2023, representing a growth of 5.3%[44] - Net income rose significantly from RMB 18,115 thousand in Q2 2022 to RMB 43,780 thousand in Q2 2023, marking an increase of 141.5%[44] - Earnings per ADS increased from 0.27 in Q2 2022 to 0.64 in Q2 2023, reflecting a growth of 137%[44] - Total operating expenses increased from RMB 91,381 thousand in Q2 2022 to RMB 98,702 thousand in Q2 2023, an increase of 8.4%[44] - Net interest and fees income after collaboration cost and provision for credit losses improved from RMB 78,254 thousand in Q2 2022 to RMB 144,830 thousand in Q2 2023, a growth of 85%[44] - Total comprehensive income attributable to ordinary shareholders increased from RMB 29,222 thousand in Q2 2022 to RMB 52,664 thousand in Q2 2023, a rise of 80%[44] - The company reported a net loss on sales of loans of RMB 3,293 thousand in Q2 2023, a slight decrease from RMB 3,440 thousand in Q2 2022[44] - Interest expenses on interest-bearing borrowings decreased from RMB 187,304 thousand in Q2 2022 to RMB 181,687 thousand in Q2 2023, a reduction of 3.4%[44] - The provision for credit losses decreased from RMB 68,416 thousand in Q2 2022 to RMB 50,820 thousand in Q2 2023, a decline of 25.8%[44] Strategic Goals - The company aims to achieve 'high-quality development' by expanding its business and managing overall risk while designing new products and investing in technology[6]

CNFinance Holdings Ltd (NYSE:CNF) Q1 2023 Earnings Conference Call May 26, 2023 8:00 AM ET Company Participants Matthew Lou - Investor Relations Manager Jun Qian - Director and Vice president Jing Li - Acting Chief Financial Officer Conference Call Participants William Gregozeski - Greenridge Global Operator Hello and welcome to the CNFinance First Quarter of 2023 Unaudited Financial Results Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today's presentation, th ...