金融壹账通(06638) - 2025 - 中期财报

Company Information This section provides an overview of the company's governance structure, key personnel, listing details, and contact information Board of Directors and Committees The company's board comprises executive, non-executive, and independent non-executive directors, with audit, remuneration, and nomination committees ensuring sound corporate governance - Board members include Executive Directors Mr. Chen Dangyang (Chairman and CEO) and Mr. Shen Chongfeng (resigned), along with several Non-executive and Independent Non-executive Directors[3] - Mr. Pu Tianruo chairs the Audit Committee, and Mr. Zhang Yaolin chairs the Remuneration and Nomination Committee[3] Company Secretary and Authorized Representatives Changes occurred in the Company Secretary and Authorized Representative roles during the reporting period, with Mr. Lin Rubo and Mr. Zou Xinglong appointed as Company Secretaries, and Mr. Chen Dangyang and Mr. Zou Xinglong as Authorized Representatives - Mr. Lin Rubo was appointed Company Secretary on April 11, 2025, and Mr. Zou Xinglong on August 21, 2025[3] - Mr. Chen Dangyang was appointed Authorized Representative on February 5, 2025, and Mr. Zou Xinglong on August 21, 2025[3] Listing Information and Contact Details The company's shares are listed on HKEX (stock code: 6638) and NYSE (ticker: OCFT), with details on registered office, headquarters, auditor, legal counsel, and principal bankers - The company's stock codes are 6638 (HKEX) and OCFT (NYSE)[3] - The auditor is PwC, and Hong Kong legal counsel is Cleary Gottlieb Steen & Hamilton (Hong Kong)[5] Financial Performance Summary This section provides a concise overview of the company's financial results for the reporting period Financial Performance of Continuing Operations For the six months ended June 30, 2025, revenue from continuing operations significantly decreased by 43.4% to RMB 801.2 million, gross margin fell to 26.1%, and loss attributable to owners expanded to RMB 78.5 million Key Financial Indicators of Continuing Operations (Six Months Ended June 30) | Indicator | 2025 (RMB million) | 2024 (RMB million) | Year-on-year Change | | :--- | :--- | :--- | :--- | | Revenue | 801.2 | 1,415.8 | -43.4% | | Gross Margin | 26.1% | 37.1% | -11.0 percentage points | | Loss Attributable to Owners of the Company | 78.5 | 70.5 | Increased by 8.0 | | Net Profit Margin | -9.8% | -5.0% | -4.8 percentage points | | Basic and Diluted Loss Per American Depositary Share | -2.16 | -1.94 | Increased by 0.22 | - Revenue decline primarily due to a 59.0% decrease in revenue from Ping An Group and Lufax, with third-party client revenue also down 13.1%[7] - The company completed the disposal of its virtual banking business (discontinued operations) on April 2, 2024, thus this report focuses on continuing operations[9] Business Review and Outlook This section details the company's business activities, strategic initiatives, market expansion, and future prospects Business Review As a commercial technology service provider in China's financial services industry, the company continues to expand internationally, offering digital banking, digital insurance solutions, and the Gamma platform, despite macro headwinds - The company is a commercial technology service provider in China's financial services industry, offering digital banking solutions, digital insurance solutions, and digital infrastructure (Gamma platform)[11] - The company aims to reduce revenue concentration on Ping An Group, but recent macro and industry headwinds have impacted third-party business growth[11] Digital Banking Solutions Digital banking solutions cover digital retail, digital lending, and digital operations, leveraging AI to enhance product intelligence, convenience, business growth, risk management, and operational efficiency for banks - Digital retail solutions provide integrated "consulting + system + operations" services, using AI to improve customer group operational efficiency and effectiveness[12] - Digital lending solutions offer end-to-end credit management, smart risk control, and operational services, leveraging AI and big data to enhance credit management efficiency and risk control capabilities[13] - Digital operations solutions provide comprehensive decision support for bank management, including asset-liability analysis, risk management, and pricing management, building a "super brain" for refined management[14] - AI mortgage loan solutions increased relationship manager productivity by approximately six times, shortening loan approval time to about one day; AI-powered tools help improve sales and marketing quality and efficiency[14] Digital Insurance Solutions Digital insurance solutions digitize the entire insurance process, assisting insurance companies in managing marketing and claims, and providing digital property & casualty and digital life insurance service management platforms - End-to-end digital P&C insurance solutions combine AI and advanced analytics to digitize and automate underwriting and claims processes, reducing costs and combating fraud[15] - Smart life insurance solutions empower insurance agents, brokers, and other channels, strengthening activity management, sales lead management, and customer analysis, and upgrading the "all-round agent" platform with integrated AI tools[15] Gamma Platform The Gamma platform integrates "AI + Data" as the foundation for digital transformation, enhancing anti-fraud capabilities with AI vision and building a "lake-warehouse integrated" architecture for efficient data management and smart operations analysis. Cloud services were gradually terminated from July 2024 - AI Vision combines AI with fingerprint recognition and blacklist screening to enhance deepfake detection, risk mitigation, and fraud prevention, compatible with HarmonyOS[17] - Data intelligence services are built on a "lake-warehouse integrated" architecture, providing flexible and efficient data management solutions and deep operational insights through ChatBI tools[17] - The company gradually terminated cloud services from July 2024, leading to a significant decline in revenue from the cloud services platform segment in H1 2025[18] International Market Expansion The company actively expands its technology and ecosystem cooperation network in emerging markets like Southeast Asia, the Middle East, and Africa, offering six digital solutions and aiming to build a replicable and localized overseas automotive ecosystem platform - The company has expanded its overseas business to 20 countries and regions, covering as many as 214 clients[20] - Signed an agreement with a prominent Vietnamese automotive service enterprise to establish a long-term strategic partnership centered on the "automotive ecosystem," accelerating the integration of the automotive industry and financial services[19] 2024 ESG Report The company published its "2024 Environmental, Social and Governance Report" on April 24, 2025, detailing its efforts and progress in ESG management - The report emphasizes the company's commitment to environmental protection, social responsibility, and excellent governance[21] Recent Developments After Reporting Period Post-reporting period, the company disclosed progress on its privatization proposal, including approval from the State Administration for Market Regulation and submission of relevant transaction statements to the SEC - The company jointly published an announcement on May 15, 2025, regarding the proposal to privatize the company by way of a scheme of arrangement[22] - On July 9, 2025, the concentration of undertakings filing for the scheme was approved by the State Administration for Market Regulation[23] - The company, the offeror, and Ping An Group submitted a Schedule 13E-3 transaction statement to the U.S. Securities and Exchange Commission on July 18, 2025[23] Business Outlook For H2 2025, the company will continue its second-stage strategy, focusing on the FinTech and AI industries, deepening client relationships, targeting high-quality clients, and optimizing product integration to expand its client base and drive third-party revenue growth - The company will continue to combine financial services industry expertise with market-leading technology[25] - Future focus will be on the FinTech and AI industries, targeting financial institution clients, while expanding the ecosystem and international business[25] - Through continuous R&D investment, accumulated business knowledge, and client insights, the company is committed to long-term client base expansion and third-party revenue growth[25] Management Discussion and Analysis This section provides a detailed analysis of the company's financial performance, cash flow, liquidity, risk management, and employee situation Analysis of Financial Performance of Continuing Operations For the six months ended June 30, 2025, revenue from continuing operations significantly decreased by 43.4%, mainly due to the strategic termination of cloud services. Gross profit and gross margin also declined, while operating loss and loss for the period increased Revenue Breakdown of Continuing Operations (Six Months Ended June 30) | Revenue Category | 2025 (RMB thousand) | 2024 (RMB thousand) | Year-on-year Change | | :--- | :--- | :--- | :--- | | Implementation | 291,417 | 326,086 | -10.6% | | Customer Acquisition Services | 9,942 | 22,775 | -56.3% | | Risk Management Services | 105,785 | 126,514 | -16.4% | | Operations Support Services | 309,517 | 265,391 | 16.6% | | Cloud Services Platform | 2,349 | 607,416 | -99.6% | | Post-Development Maintenance Services | 38,842 | 29,348 | 32.3% | | Others | 43,305 | 38,239 | 13.2% | | Total | 801,157 | 1,415,769 | -43.4% | - Cloud services platform revenue significantly decreased by 99.6%, primarily due to the strategic gradual termination of cloud services from July 2024[27] - Gross profit from continuing operations decreased by 60.2% to RMB 209.2 million, and gross margin fell from 37.1% to 26.1%, mainly due to reduced economies of scale from lower revenue[29] - R&D expenses decreased by 70.7% to RMB 117.0 million, primarily due to business structure adjustments and ROI-oriented R&D project management[30] - Loss for the period from continuing and discontinued operations was RMB 85.7 million, compared to a profit of RMB 128.0 million in the same period of 2024[40] Cash Flow and Liquidity For the six months ended June 30, 2025, net cash used in operating activities was RMB 209.8 million, net cash used in investing activities was RMB 1,333.4 million, and net cash used in financing activities was RMB 15.6 million. The company's liquidity primarily comes from cash and cash equivalents, redeemable wealth management products, and borrowings Cash Flow Data (Six Months Ended June 30) | Activity Category | 2025 (RMB million) | 2024 (RMB million) | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | 209.8 | 298.0 | | Net Cash Used in Investing Activities | 1,333.4 | (480.3) (Generated) | | Net Cash Used in Financing Activities | 15.6 | 129.8 | - As of June 30, 2025, cash and cash equivalents were RMB 385.0 million (December 31, 2024: RMB 1,947.9 million)[42] - Short-term borrowings were RMB 20.7 million, with a weighted average annual interest rate of 4.9%[43] - The capital gearing ratio increased from 1.7% as of December 31, 2024, to 2.0% as of June 30, 2025[46] Risk Management and Employee Information The company faces currency risk (primarily from USD/RMB exchange rate fluctuations) and interest rate risk, partially hedging foreign exchange risk with currency swap contracts. As of June 30, 2025, the company had 1,981 employees, with R&D personnel forming the largest proportion - The company's foreign exchange risk primarily arises from fluctuations in the USD/RMB exchange rate, which is partially hedged by entering into spot-forward USD/RMB currency swap contracts[52][53] - Interest rate risk is mainly related to deposits and short-term borrowings, managed by matching interest rate terms of deposits and short-term borrowings[54] Number of Employees by Function (As of June 30, 2025) | Function | Number of Employees | | :--- | :--- | | Research and Development | 1,276 | | Business Operations | 234 | | Sales and Marketing | 320 | | General and Administrative | 151 | | Total | 1,981 | - For the six months ended June 30, 2025, employee benefit expenses for continuing operations were RMB 426.2 million[55] Corporate Governance and Other Information This section covers the company's corporate governance practices, directors' and major shareholders' interests, share incentive schemes, and other relevant disclosures Directors' and Major Shareholders' Interests The report discloses interests of directors and major shareholders in the company's shares and related shares, with Mr. Dou Wenwei and Ms. Wang Wenjun holding a 32.91% interest through controlled entity Ronghan Limited, which, along with Senrong Limited, forms a concert party group owning approximately 32.91% of the share capital Directors' Interests in the Company's Shares or Related Shares (As of June 30, 2025) | Director Name | Capacity / Nature of Interest | Number of Shares or Related Shares | Approximate Percentage of Shareholding | | :--- | :--- | :--- | :--- | | Mr. Dou Wenwei | Interest in Controlled Corporation | 385,077,588 | 32.91% | | Ms. Wang Wenjun | Interest in Controlled Corporation | 385,077,588 | 32.91% | Major Shareholders' Interests in the Company's Shares or Related Shares (As of June 30, 2025) | Shareholder Name | Capacity / Nature of Interest | Number of Shares or Related Shares | Approximate Percentage of Shareholding | | :--- | :--- | :--- | :--- | | Ronghan Limited | Beneficial Interest | 385,077,588 | 32.91% | | Senrong Limited | Beneficial Interest | 188,061,642 | 16.07% | | Ping An Insurance (Group) Company of China, Ltd. | Interest in Controlled Corporation | 375,764,724 | 32.12% | | HKSCC Nominees Limited | Trustee | 77,009,867 | 6.58% | - Ronghan is held by Mr. Dou Wenwei and Ms. Wang Wenjun as nominees for certain senior employees of Ping An and its subsidiaries and associates[59] - Ronghan and Senrong entered into a concert party agreement to jointly exercise shareholder rights, with Senrong entrusting Ronghan to exercise its voting rights[59] Share Incentive Schemes The company has share incentive schemes, including share options and performance share units, to attract and retain talent and promote long-term development, with a total not exceeding 10% of issued shares post-listing, and defined vesting periods and exercise price determination bases - The share incentive schemes aim to attract and retain top talent, promote the Group's long-term sustainable development, and maximize shareholder value[62] - The total number of shares available for use shall not exceed 10% of the total issued shares immediately after listing, i.e., 116,998,065 shares[65] - Granted awards will vest over four years, with an annual vesting cap of 25% of the award, provided that the vesting of performance share units is further subject to the termination of the lock-up period for shares in the NYSE IPO[68] - The exercise price of share options shall not be less than the higher of the closing price of the shares as stated in the daily quotation sheet of the Stock Exchange on the date of grant or the average closing price for the five business days immediately preceding the date of grant[70] Corporate Governance and Compliance The company strives for high corporate governance standards and has complied with most Code provisions, but the combined roles of Chairman and CEO, and the appointment/removal of the Company Secretary via written resolution, deviate from the Code - The company has complied with all applicable Code Provisions of the Corporate Governance Code, except for Code Provision C.2.1 (separation of roles of Chairman and CEO) and C.6.2 (appointment/removal of Company Secretary should be discussed at board meetings)[72][73] - The Board believes that combining the roles of Chairman and CEO is in the company's best interest, providing consistent leadership and facilitating rapid execution of business strategies[72] - All Directors confirmed full compliance with the Model Code for Securities Transactions by Directors for the six months ended June 30, 2025[74] Other Information The company disclosed the use and remaining plan for net proceeds from its NYSE listing and subsequent public offerings, confirmed no purchase, sale, or redemption of listed securities during the reporting period, and does not recommend an interim dividend - For the six months ended June 30, 2025, approximately RMB 184.9 million of net proceeds were utilized in accordance with the intended uses disclosed in the prospectus[80] - The company plans to utilize the remaining net proceeds from the NYSE listing and subsequent public offerings over the next eight to nine years according to the intended uses[80] - During the six months ended June 30, 2025, neither the company nor any of its subsidiaries purchased, sold, or redeemed any securities listed on the Stock Exchange[76] - The Board does not recommend the distribution of an interim dividend for the six months ended June 30, 2025[82] Review Report on Interim Financial Information This section presents the independent auditor's review report on the company's interim financial information Conclusion of Review Report PwC reviewed the company's interim financial information for the six months ended June 30, 2025, in accordance with ISRE 2410 and found no matters indicating non-compliance with IAS 34 in all material respects - The auditor reviewed the interim financial information in accordance with International Standard on Review Engagements 2410[86] - A review is substantially less in scope than an audit, so it does not provide assurance that all significant matters will be known, thus no audit opinion is expressed[86] - The auditor found no matters leading them to believe that the interim financial information was not prepared, in all material respects, in accordance with International Accounting Standard 34 "Interim Financial Reporting"[87] Interim Condensed Consolidated Statement of Comprehensive Income This section provides the interim condensed consolidated statement of comprehensive income, detailing the company's financial performance for the period Overview of Comprehensive Income For the six months ended June 30, 2025, the company recorded a loss from continuing operations of RMB 85.7 million, compared to a loss of RMB 81.5 million in the prior period. Total comprehensive loss for the period was RMB 92.2 million, mainly due to loss from continuing operations and foreign currency translation differences Interim Condensed Consolidated Statement of Comprehensive Income (Six Months Ended June 30) | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Revenue | 801,157 | 1,415,769 | | Gross Profit | 209,161 | 525,782 | | Operating Loss | (105,691) | (105,502) | | Loss from Continuing Operations | (85,713) | (81,458) | | Profit from Discontinued Operations | – | 209,499 | | (Loss) / Profit for the Period | (85,713) | 128,041 | | Loss from Continuing Operations Attributable to Owners of the Company | (78,495) | (70,485) | | Total Comprehensive (Loss) / Income for the Period | (92,239) | 163,674 | | Loss Per American Depositary Share (Basic and Diluted) | (2.16) | (1.94) | - Loss from continuing operations attributable to owners of the company increased from RMB 70.5 million in the same period of 2024 to RMB 78.5 million in 2025[90] - In other comprehensive income, foreign currency translation differences from continuing operations were a gain of RMB 579 thousand (2024: loss of RMB 2,645 thousand)[91] Interim Condensed Consolidated Statement of Financial Position This section presents the interim condensed consolidated statement of financial position, outlining the company's assets, liabilities, and equity at the reporting date Overview of Statement of Financial Position As of June 30, 2025, total assets were RMB 3,727.5 million, a decrease from December 31, 2024. Cash and cash equivalents in current assets significantly decreased, while financial assets at fair value through profit or loss and restricted cash substantially increased Interim Condensed Consolidated Statement of Financial Position (As of June 30) | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Assets | | | | Total Non-Current Assets | 568,453 | 569,948 | | Total Current Assets | 3,159,017 | 3,397,304 | | Total Assets | 3,727,470 | 3,967,252 | | Equity | | | | Equity Attributable to Owners of the Company | 2,469,667 | 2,558,452 | | Non-Controlling Interests | (61,727) | (54,509) | | Total Equity | 2,407,940 | 2,503,943 | | Liabilities | | | | Total Non-Current Liabilities | 27,381 | 23,616 | | Total Current Liabilities | 1,292,149 | 1,439,693 | | Total Liabilities | 1,319,530 | 1,463,309 | | Total Equity and Liabilities | 3,727,470 | 3,967,252 | - Cash and cash equivalents decreased from RMB 1,947.9 million as of December 31, 2024, to RMB 385.0 million as of June 30, 2025[93] - Financial assets at fair value through profit or loss increased from RMB 455.0 million to RMB 1,082.6 million[93] - Restricted cash and time deposits with original maturities over three months significantly increased from RMB 51.9 million to RMB 794.1 million[93] Interim Condensed Consolidated Statement of Changes in Equity This section presents the interim condensed consolidated statement of changes in equity, illustrating movements in the company's equity components over the period Overview of Changes in Equity For the six months ended June 30, 2025, equity attributable to owners of the company decreased from RMB 2,558.5 million at the beginning of the period to RMB 2,469.7 million at the end, mainly due to loss for the period and the impact of share-based payments Interim Condensed Consolidated Statement of Changes in Equity (Six Months Ended June 30) | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Equity Attributable to Owners of the Company at Beginning of Period | 2,558,452 | 2,966,771 | | Loss / Profit for the Period | (78,495) | 139,014 | | Other Comprehensive Income, Net of Tax | (6,526) | 35,633 | | Share-Based Payments | (3,764) | 2,205 | | Equity Attributable to Owners of the Company at End of Period | 2,469,667 | 3,143,623 | - Loss for the period was RMB 78.5 million, leading to a decrease in equity attributable to owners of the company[97] - Total share-based payment transactions resulted in a RMB 3.8 million loss, including the value of employee services and business cooperation arrangements, shares vested under restricted share unit schemes, and shares exercised under share option schemes[97] Interim Condensed Consolidated Statement of Cash Flows This section presents the interim condensed consolidated statement of cash flows, summarizing the cash inflows and outflows from operating, investing, and financing activities Overview of Cash Flows For the six months ended June 30, 2025, net cash and cash equivalents decreased by RMB 1,558.7 million, primarily due to a significant increase in net cash used in investing activities and continued cash outflow from operating activities Interim Condensed Consolidated Statement of Cash Flows (Six Months Ended June 30) | Activity Category | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | (209,799) | (297,993) | | Net Cash (Used in) / Generated from Investing Activities | (1,333,389) | 480,298 | | Net Cash Used in Financing Activities | (15,558) | (129,792) | | Net (Decrease) / Increase in Cash and Cash Equivalents | (1,558,746) | 52,513 | | Cash and Cash Equivalents at End of Period | 385,031 | 1,438,886 | - Net cash used in investing activities was RMB 1,333.4 million, mainly due to payments for financial assets at fair value through profit or loss[41][100] - Net cash used in operating activities was RMB 209.8 million, primarily affected by profitability[41][100] Notes to the Interim Condensed Consolidated Financial Information This section provides detailed explanatory notes to the interim condensed consolidated financial information, offering further insights into specific financial items and accounting policies 1 General Information and Basis of Presentation This note outlines OneConnect Financial Technology Co., Ltd.'s registration, listing, ADS ratio change, business scope, and the basis for preparing the interim financial information - The company was incorporated in the Cayman Islands on October 30, 2017, and completed its initial public offering on the New York Stock Exchange on December 13, 2019[101] - The ADS ratio changed from one American Depositary Share representing three ordinary shares to one American Depositary Share representing thirty ordinary shares on December 12, 2022[101] - The Group primarily engages in providing cloud-based FinTech solutions, online information services, and operational support services to financial institutions in China[102] - The interim financial information is prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting" and presented in RMB[103] 2 Summary of Significant Accounting Policies This note states that accounting policies used for interim financial information are consistent with annual financial statements, lists new and amended standards adopted and not yet adopted, and highlights the potential broad impact of IFRS 18 on financial statement presentation and disclosure - The accounting policies and methods of computation used in preparing the interim financial information are consistent in all material respects with those applied in the financial statements[105] - The Group first applied IAS 21 (Amendment) – Lack of Exchangeability for the annual reporting period beginning January 1, 2025, with no significant impact expected[107] - IFRS 18 "Presentation and Disclosure in Financial Statements" will be effective from January 1, 2027, and is expected to have a broad impact on the presentation and disclosure of the statement of profit or loss and management performance measures in the financial statements[108][111] 3 Critical Accounting Estimates and Judgements This note indicates that preparing interim financial information requires management judgments, estimates, and assumptions consistent with those applied in annual financial statements, and actual results may differ from estimates - The critical judgments and key sources of estimation uncertainty made by management in preparing the interim financial information are the same as those applied in the financial statements[112] 4 Financial Risk Management The Group faces market, credit, and liquidity risks, managing liquidity by maintaining sufficient cash, monitoring cash flows, and managing financial asset maturities. Fair value estimates use a three-level hierarchy, with disclosure of financial asset and liability fair value measurement levels - The Group manages liquidity risk by maintaining sufficient cash and cash equivalents and committed borrowing facilities, and continuously monitoring forecasted and actual cash flows[115] - Fair value measurements are categorized into three levels: Level 1 (quoted prices in active markets), Level 2 (observable market inputs), and Level 3 (unobservable inputs)[118][121] Fair Value Measurement Hierarchy of Financial Assets and Liabilities (As of June 30, 2025) | Indicator | Level 1 (RMB thousand) | Level 2 (RMB thousand) | Level 3 (RMB thousand) | Total (RMB thousand) | | :--- | :--- | :--- | :--- | :--- | | Financial Assets | | | | | | Financial Assets at Fair Value Through Profit or Loss | – | 1,082,608 | – | 1,082,608 | | Financial Liabilities | | | | | | Derivative Financial Liabilities | – | 3,889 | – | 3,889 | - There were no transfers between different levels of fair value measurement for the six months ended June 30, 2025, and for the year ended December 31, 2024[123] 5 Segment Information and Revenue For the six months ended June 30, 2025, the Group had one reportable segment, Technology Solutions, with revenue of RMB 801.2 million. Cloud services platform revenue significantly decreased due to strategic termination, while operational support services and post-development maintenance services revenue increased - For the six months ended June 30, 2025, the Group had one reportable segment, Technology Solutions; for the same period in 2024, there were two segments, with the virtual banking business disposed of[125] Revenue Breakdown of Continuing Operations (Six Months Ended June 30) | Revenue Category | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Implementation | 291,417 | 326,086 | | Operations Support Services | 309,517 | 265,391 | | Customer Acquisition Services | 9,942 | 22,775 | | Risk Management Services | 105,785 | 126,514 | | Cloud Services Platform | 2,349 | 607,416 | | Post-Development Maintenance Services | 38,842 | 29,348 | | Others | 43,305 | 38,239 | | Total | 801,157 | 1,415,769 | - Cloud services platform revenue significantly decreased, primarily due to the Group's strategic gradual termination of cloud services from July 2024[130] Contract Assets Breakdown (As of June 30) | Contract Asset Category | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Implementation | 110,936 | 113,986 | | Transaction-Based Services and Support Services | 5,480 | 11,856 | | Operations Support Services | 981 | 6,905 | | Post-Development Maintenance Services | 4,499 | 4,951 | | Total | 116,416 | 125,842 | 6 Expenses by Nature For the six months ended June 30, 2025, total expenses from continuing operations were RMB 908.1 million, a significant decrease from RMB 1,528.2 million in the prior period, mainly due to lower technical service fees and employee benefit expenses Expenses Breakdown of Continuing Operations (Six Months Ended June 30) | Expense Category | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Technical Service Fees | 289,092 | 793,319 | | Employee Benefit Expenses | 426,184 | 507,967 | | Outsourced Labor Costs | 42,065 | 45,643 | | Product Procurement Costs | 38,518 | 30,953 | | Amortization of Intangible Assets | 12,702 | 29,777 | | Depreciation of Property and Equipment | 17,846 | 29,325 | | Total | 908,067 | 1,528,222 | Employee Benefit Expenses Breakdown (Six Months Ended June 30) | Employee Benefit Category | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Wages and Salaries | 314,566 | 352,776 | | Benefits and Other Allowances | 114,363 | 153,788 | | Share-Based Payments | (2,745) | 1,403 | | Total | 426,184 | 507,967 | 7 Other Income, Gains or Losses – Net For the six months ended June 30, 2025, other income, gains or losses – net from continuing operations was RMB 15.1 million, a 50.1% decrease from RMB 30.2 million in the prior period, mainly due to a reduction in net gains from derivative instruments Other Income, Gains or Losses – Net (Six Months Ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Net Foreign Exchange Gains / (Losses) | 2,217 | (4,906) | | Government Grants and Tax Refunds | 6,459 | 6,652 | | Net Gains from Financial Assets at Fair Value Through Profit or Loss | 10,280 | 9,531 | | Net (Losses) / Gains from Derivative Instruments | (3,510) | 14,462 | | Total | 15,076 | 30,184 | - Net gains from derivative instruments turned from a RMB 14.5 million gain in 2024 to a RMB 3.5 million loss in 2025[136] 8 Finance Income – Net For the six months ended June 30, 2025, finance income – net from continuing operations was RMB 22.3 million, largely stable compared to RMB 21.7 million in the prior period, despite decreases in both finance income and costs Finance Income – Net (Six Months Ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Interest Income from Bank Deposits | 25,415 | 29,686 | | Interest Expense on Borrowings | (1,498) | (6,153) | | Interest Expense on Lease Liabilities | (600) | (1,472) | | Finance Income – Net | 22,346 | 21,698 | - Finance income decreased by 14.4% to RMB 25.4 million, primarily due to a lower average deposit balance[35][137] - Finance costs decreased by 61.6% to RMB 3.1 million, primarily due to a lower average loan balance[36][137] 9 Income Tax (Expense) / Benefit For the six months ended June 30, 2025, continuing operations recorded an income tax expense of RMB 2.4 million, compared to an income tax benefit of RMB 2.3 million in the prior period, mainly due to increased current income tax adjustments for prior periods after annual tax filing Income Tax (Expense) / Benefit (Six Months Ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Current Income Tax | (2,368) | 665 | | Deferred Income Tax | – | 1,681 | | Income Tax (Expense) / Benefit | (2,368) | 2,346 | - Certain PRC subsidiaries enjoy preferential income tax rates of 15% as "High and New Technology Enterprises" or 15% in the Shenzhen Qianhai Shenzhen-Hong Kong Modern Service Industry Cooperation Zone[139] - Hong Kong profits tax is provided at a rate of 16.5%, and other jurisdictions are calculated at prevailing tax rates not exceeding 25%[141][142] - No withholding tax was provided as of June 30, 2025, and 2024, due to accumulated losses in the Group's retained earnings[144] 10 (Loss) / Earnings Per Share For the six months ended June 30, 2025, basic and diluted loss per share from continuing operations attributable to owners of the company was RMB 0.07 (ADS loss per share was RMB 2.16), an increase from the prior period (Loss) / Earnings Per Share (Six Months Ended June 30) | Indicator | 2025 (RMB) | 2024 (RMB) | | :--- | :--- | :--- | | Basic Loss Per Share from Continuing Operations Attributable to Owners of the Company | (0.07) | (0.06) | | Diluted Loss Per Share from Continuing Operations Attributable to Owners of the Company | (0.07) | (0.06) | | Basic Loss Per American Depositary Share from Continuing Operations Attributable to Owners of the Company | (2.16) | (1.94) | | Diluted Loss Per American Depositary Share from Continuing Operations Attributable to Owners of the Company | (2.16) | (1.94) | | Basic (Loss) / Earnings Per Share Attributable to Owners of the Company | (0.07) | 0.13 | | Basic (Loss) / Earnings Per American Depositary Share Attributable to Owners of the Company | (2.16) | 3.83 | - One American Depositary Share represents thirty ordinary shares of the company[146] - Diluted (loss) / earnings per share for the six months ended June 30, 2025, and 2024, were the same as basic (loss) / earnings per share for the period, as the effect of all outstanding share options was not included[147] 11 Property and Equipment As of June 30, 2025, the net book value of property and equipment was RMB 45.2 million, a slight increase from RMB 43.9 million as of December 31, 2024. Depreciation expense is mainly recognized in general and administrative expenses Net Book Value of Property and Equipment (As of June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Office and Telecommunication Equipment | 14,835 | 14,798 | | Right-of-Use Properties | 27,421 | 23,706 | | Leasehold Improvements | 2,953 | 5,391 | | Total | 45,209 | 43,895 | Depreciation Expense of Continuing Operations (Six Months Ended June 30) | Allocated to | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Cost of Revenue | 2,159 | 2,208 | | Research and Development Expenses | 1,164 | 1,797 | | Sales and Marketing Expenses | 489 | 692 | | General and Administrative Expenses | 14,034 | 24,628 | | Total | 17,846 | 29,325 | 12 Intangible Assets As of June 30, 2025, the net book value of intangible assets was RMB 182.6 million, a decrease from RMB 195.6 million as of December 31, 2024. Amortization expense is mainly recognized in cost of revenue Net Book Value of Intangible Assets (As of June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Internally Developed Applications and Platforms | 23,455 | 23,757 | | Purchased Software | 410 | 2,613 | | Development in Progress | 352 | 5,864 | | Goodwill | 157,260 | 157,260 | | Business Licenses | 1,082 | 6,142 | | Total | 182,559 | 195,636 | Amortization Expense of Continuing Operations (Six Months Ended June 30) | Allocated to | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Cost of Revenue | 12,565 | 29,228 | | Research and Development Expenses | 55 | 67 | | General and Administrative Expenses | 82 | 482 | | Total | 12,702 | 29,777 | 13 Discontinued Operations The company completed the disposal of its virtual banking business to Lufax Holding Ltd. on April 2, 2024, which has been reported as discontinued operations. As of the disposal date, discontinued operations recorded a profit of RMB 209.5 million, mainly from the gain on disposal of subsidiaries - The company completed the disposal of its virtual banking business to Lufax Holding Ltd. on April 2, 2024, for a cash consideration of HKD 933,000,000[152] Financial Performance of Discontinued Operations (January 1 to Disposal Date, 2024) | Item | 2024 (RMB thousand) | | :--- | :--- | | Revenue | 44,295 | | Expenses | (46,549) | | Loss from Discontinued Operations After Income Tax | (50,638) | | Gain on Disposal of Subsidiaries After Income Tax | 260,137 | | Profit from Discontinued Operations | 209,499 | Details of Disposal of Disposal Group (2024) | Item | 2024 (RMB thousand) | | :--- | :--- | | Cash Consideration Received, Net of Transaction Costs | 839,087 | | Less: Cash and Bank Balances Disposed | (115,916) | | Net Cash Inflow from Disposal | 723,171 | | Less: Carrying Amount of Net Assets Sold | (560,713) | | Gain on Disposal After Income Tax | 260,137 | 14 Financial Instruments (By Category) As of June 30, 2025, the Group held total financial assets of RMB 2,971.5 million and total financial liabilities of RMB 933.2 million. Financial assets at fair value through profit or loss significantly increased Financial Instruments (By Category) (As of June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Financial Assets | | | | Financial Assets Measured at Amortized Cost | 1,538,887 | 2,165,998 | | Financial Assets at Fair Value Through Profit or Loss | 1,082,608 | 455,016 | | Derivative Financial Assets | – | 40,356 | | Total | 2,971,495 | 3,161,370 | | Financial Liabilities | | | | Liabilities Measured at Amortized Cost | 929,355 | 714,219 | | Derivative Financial Liabilities | 3,889 | – | | Total | 933,244 | 714,219 | - Financial assets at fair value through profit or loss increased from RMB 455.0 million as of December 31, 2024, to RMB 1,082.6 million as of June 30, 2025[156] 15 Financial Assets at Fair Value Through Other Comprehensive Income As of June 30, 2025, and December 31, 2024, the Group held no financial assets measured at fair value through other comprehensive income - The Group acquired a 5% equity interest in Fujian Transaction Place Clearing Center Co., Ltd. for RMB 5,000,000 on August 4, 2016, with changes in fair value recognized in other comprehensive income[157] 16 Leases As of June 30, 2025, the company's right-of-use assets (property) were RMB 27.4 million, and total lease liabilities were RMB 28.0 million. Both lease-related depreciation expenses and interest expenses decreased Lease-Related Amounts (As of June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Right-of-Use Assets (Property) | 27,421 | 23,706 | | Lease Liabilities (Non-Current) | 14,291 | 10,670 | | Lease Liabilities (Current) | 13,709 | 13,735 | | Total Lease Liabilities | 28,000 | 24,405 | Lease-Related Expenses (Six Months Ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Depreciation Expense of Right-of-Use Assets | 12,147 | 18,248 | | Interest Expense | 600 | 1,552 | | Total | 12,747 | 19,800 | - Total cash outflow for leases for the six months ended June 30, 2025, and 2024, was RMB 13,563,000 and RMB 17,805,000, respectively[159] 17 Trade Receivables As of June 30, 2025, net trade receivables were RMB 559.8 million, an increase from RMB 506.5 million as of December 31, 2024. Most receivables were aged within one year Trade Receivables (As of June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Gross Trade Receivables | 635,261 | 582,068 | | Less: Provision for Impairment Losses | (75,482) | (75,533) | | Net Trade Receivables | 559,779 | 506,535 | Ageing Analysis of Trade Receivables (As of June 30) | Ageing | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Within 1 Year | 534,520 | 510,135 | | 1 to 2 Years | 67,391 | 35,830 | | 2 to 3 Years | 22,746 | 20,069 | | Over 3 Years | 10,604 | 16,034 | | Total | 635,261 | 582,068 | 18 Prepayments and Other Receivables As of June 30, 2025, net prepayments and other receivables were RMB 289.9 million, a decrease from RMB 348.7 million as of December 31, 2024, mainly due to a decline in deposits receivable and deductible VAT Prepayments and Other Receivables (As of June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Deposits Receivable | 86,199 | 127,732 | | Deductible VAT | 104,292 | 152,930 | | Advances to Suppliers | 35,945 | 29,055 | | Advances to Employees | 7,482 | 10,680 | | Others | 62,704 | 35,090 | | Less: Provision for Impairment Losses | (6,760) | (6,760) | | Total | 289,862 | 348,727 | - Deposits receivable primarily refer to deposits paid to related parties and other suppliers under contractual terms, repayable within one year[163] 19 Financial Assets at Fair Value Through Profit or Loss As of June 30, 2025, financial assets at fair value through profit or loss were RMB 1,082.6 million, a significant increase from RMB 455.0 million as of December 31, 2024, primarily consisting of wealth management product investments Financial Assets at Fair Value Through Profit or Loss (As of June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Wealth Management Products | 1,082,608 | 455,016 | - As of June 30, 2025, RMB 1,076,836,000 of wealth management products were managed by subsidiaries of Ping An Group, redeemable upon holder's request[164] 20 Restricted Cash and Time Deposits with Original Maturities Over Three Months As of June 30, 2025, total restricted cash and time deposits with original maturities over three months were RMB 801.9 million, a significant increase from RMB 51.9 million as of December 31, 2024, mainly due to a substantial growth in time deposits with original maturities over three months Restricted Cash and Time Deposits with Original Maturities Over Three Months (As of June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Restricted Bank Deposits | 34,256 | 40,960 | | Accrued Interest | 10,680 | 442 | | Time Deposits with Original Maturities Over Three Months | 756,998 | 10,538 | | Total | 801,934 | 51,940 | - Restricted cash balances refer to funds held in specific bank accounts, subject to agreements with specific parties or regulatory restrictions[165] 21 Cash and Cash Equivalents As of June 30, 2025, total cash and cash equivalents were RMB 385.0 million, a significant decrease from RMB 1,947.9 million as of December 31, 2024, primarily consisting of bank deposits Cash and Cash Equivalents (As of June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Cash on Hand | – | 12 | | Bank Deposits | 385,031 | 1,947,910 | | Total | 385,031 | 1,947,922 | 22 Share Capital As of June 30, 2025, and December 31, 2024, the company's authorized share capital was 5,000,000,000 ordinary shares with a par value of USD 0.00001 each, and issued share capital was 1,169,980,653 shares, equivalent to RMB 78,008 thousand Share Capital Information (As of June 30) | Item | Number of Shares | USD (thousand) | Equivalent RMB (thousand) | | :--- | :--- | :--- | :--- | | Authorized Ordinary Shares (Par Value USD 0.00001 per share) | 5,000,000,000 | 50,000 | – | | Issued Ordinary Shares (Par Value USD 0.00001 per share) | 1,169,980,653 | 11,700 | 78,008 | 23 Other Reserves As of June 30, 2025, total other reserves were RMB 11,026.4 million, a slight decrease from RMB 11,041.2 million as of January 1, 2025, mainly affected by foreign currency translation differences and share-based payments Changes in Other Reserves (As of June 30) | Item | January 1, 2025 (RMB thousand) | Changes During the Period (RMB thousand) | June 30, 2025 (RMB thousand) | | :--- | :--- | :--- | :--- | | Capital Reorganization Reserve | 1,200,000 | – | 1,200,000 | | Share Premium | 9,627,159 | – | 9,627,159 | | Share-Based Compensation Reserve | 225,258 | (8,276) | 216,982 | | Foreign Currency Translation Differences | 225,978 | (6,526) | 219,452 | | Others | (237,186) | – | (237,186) | | Total | 11,041,209 | (14,802) | 11,026,407 | - Foreign currency translation differences resulted in a decrease of RMB 6,526 thousand[168] - Share-based payments led to a decrease of RMB 8,276 thousand in share-based compensation reserve[168] 24 Share-Based Payments The Group has share option schemes and restricted share unit schemes to incentivize employees. For the six months ended June 30, 2025, share-based compensation expense was a RMB 3.97 million loss. Both share options and restricted share units have vesting periods and exercise prices/fair values - The Group established equity-settled share option schemes and restricted share unit schemes, aimed at recognizing and rewarding eligible directors, employees, and other individuals[170] Allocation of Share-Based Compensation Expense (Six Months Ended June 30) | Allocated to | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Cost of Revenue | (573) | 562 | | Research and Development Expenses | (273) | 292 | | Sales and Marketing Expenses | (383) | 183 | | General and Administrative Expenses | (2,737) | 1,022 | | Total Continuing Operations | (3,966) | 2,059 | Changes in Number of Share Options (Six Months Ended June 30) | Item | 2025 (Number of Share Options) | 2024 (Number of Share Options) | | :--- | :--- | :--- | | Beginning of Period | 6,830,110 | 8,141,810 | | Exercised | 139,950 | – | | Forfeited | (769,140) | (833,510) | | End of Period | 6,200,920 | 7,308,300 | Changes in Number of Restricted Share Units (Six Months Ended June 30) | Item | 2025 (Number of Restricted Share Units) | 2024 (Number of Restricted Share Units) | | :--- | :--- | :--- | | Beginning of Period | 23,129,137 | 30,526,123 | | Granted | 200,000 | – | | Vested | 3,241,753 | – | | Forfeited | (10,613,535) | (3,465,592) | | End of Period | 15,957,355 | 27,060,531 | 25 Trade and Other Payables As of June 30, 2025, total trade and other payables were RMB 927.6 million, a decrease from RMB 1,004.5 million as of December 31, 2024. Amounts due to related parties and accrued expenses were major components Trade and Other Payables (As of June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Trade Payables | 97,365 | 90,686 | | Redeemable Liabilities | 232,951 | 232,951 | | Accrued Expenses | 205,036 | 218,942 | | Lease Liabilities | 28,000 | 24,405 | | Amounts Due to Related Parties | 156,046 | 234,828 | | Others | 160,922 | 148,833 | | Total | 927,610 | 1,004,512 | - Trade payables are primarily aged within one year[182] - Redeemable liabilities of RMB 232,951 thousand are estimated based on the terms of put options entered into with certain non-controlling shareholders of Panpay Technology[183] 26 Short-Term Borrowings As of June 30, 2025, short-term borrowings were RMB 20.7 million, bearing fixed interest rates with a weighted average annual interest rate of 4.90% Short-Term Borrowings (As of June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Unsecured | 20,658 | 19,160 | - As of June 30, 2025, and December 31, 2024, the weighted average annual interest rate for short-term borrowings at nominal rates was 4.90%[184] 27 Derivative Financial Assets and Liabilities As of June 30, 2025, the Group held derivative financial liabilities of RMB 3.9 million, compared to derivative financial assets of RMB 40.4 million as of December 31, 2024, primarily consisting of currency forwards Derivative Financial Assets and Liabilities (As of June 30) | Item | 2025 Fair Value (RMB thousand) | 2024 Fair Value (RMB thousand) | | :--- | :--- | :--- | | Derivative Financial Assets | – | 40,356 | | Derivative Financial Liabilities | 3,889 | – | 28 Dividends For the six months ended June 30, 2025, and 2024, the company neither paid nor declared any dividends - The company neither paid nor declared any dividends for the six months ended June 30, 2025, and 2024[186] 29 Related Party Transactions The Group engaged in several significant related party transactions, including revenue from Ping An Group and its subsidiaries and service purchases. As of June 30, 2025, trade receivables and payables with related parties were substantial - Key related parties include Senrong Limited, Ronghan Limited, Boyu Limited, and Ping An Group and its subsidiaries[189] Significant Transactions with Related Parties (Six Months Ended June 30) | Transaction Type | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Revenue (Ping An Group and its Subsidiaries) | 384,046 | 822,880 | | Purchase of Services (Ping An Group and its Subsidiaries) | 121,248 | 704,051 | | Interest Income from Bank Deposits (Ping An Group and its Subsidiaries) | 7,119 | 12,554 | Significant Balances with Related Parties (As of June 30) | Balance Type | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Trade Receivables (Ping An Group and its Subsidiaries) | 252,235 | 179,019 | | Trade and Other Payables – Amounts Due to Related Parties (Ping An Group and its Subsidiaries) | 171,244 | 242,320 | | Cash and Cash Equivalents, Restricted Cash, and Time Deposits with Original Maturities Over Three Months (Ping An Group and its Subsidiaries) | 587,235 | 192,604 | - Balances with related parties are unsecured, interest-free, and repayable on demand[192] 30 Maximum Exposure to Unconsolidated Structured Entities The Group invests in unconsolidated structured entities (primarily wealth management products). As of June 30, 2025, the Group's maximum exposure to wealth management products managed by related parties was RMB 1,076.8 million, and by third parties was RMB 5.8 million Maximum Exposure to Unconsolidated Structured Entities (As of June 30) | Item | 2025 Size (RMB thousand) | 2025 Maximum Exposure (RMB thousand) | | :--- | :--- | :--- | | Wealth Management Products Managed by Related Parties | 1,076,836 | 1,076,836 | | Wealth Management Products Managed by Third Parties | 5,772 | 5,772 | - The maximum exposure is approximately equal to the sum of the Group's direct investments, which are classified as financial assets at fair value through profit or loss[193] 31 Contingent Events As of June 30, 2025, and December 31, 2024, the Group had no significant contingent liabilities - The Group had no significant contingent liabilities as of June 30, 2025, and December 31, 2024[196]