中盈盛达融资担保(01543) - 2025 - 中期业绩

Performance Highlights H1 2025 performance saw declines in revenue, pre-tax profit, and profit attributable to equity holders, with no interim dividend declared Performance Summary | Metric | H1 2025 (RMB million) | H1 2024 (RMB million) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 141.46 | 177.21 | -20.17% | | Profit Before Tax | 37.36 | 39.51 | -5.44% | | Profit Attributable to Equity Holders of the Company | 20.76 | 21.62 | -3.98% | | Interim Dividend | Not Declared | N/A | - | Consolidated Financial Statements This section presents the group's consolidated financial statements, including the income statement, comprehensive income statement, and financial position, detailing revenue, profit, and asset/liability changes Consolidated Income Statement H1 2025 group revenue decreased 20.17% to RMB 141.46 million due to lower net guarantee fee income, with period profit slightly up despite reduced pre-tax profit Consolidated Income Statement Summary | Metric | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 141,456 | 177,208 | -20.17% | | Net Guarantee Fee Income | 86,037 | 116,918 | -26.41% | | Net Interest Income | 44,562 | 47,122 | -5.43% | | Consulting and Other Business Income | 10,857 | 13,168 | -17.55% | | Profit Before Tax | 37,355 | 39,508 | -5.45% | | Profit for the Period | 26,357 | 24,885 | +5.91% | | Profit Attributable to Equity Holders of the Company | 20,757 | 21,619 | -3.99% | | Basic and Diluted Earnings Per Share (RMB/share) | 0.01 | 0.01 | 0.00% | Consolidated Statement of Profit or Loss and Other Comprehensive Income For H1 2025, the group's total comprehensive income for the period increased 20.63% to RMB 26.66 million, driven by a reversal from loss to gain in fair value reserve for equity investments Consolidated Statement of Profit or Loss and Other Comprehensive Income Summary | Metric | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Profit for the Period | 26,357 | 24,885 | +5.91% | | Equity investments at fair value through other comprehensive income — net change in fair value reserve (non-recyclable) | 401 | (3,713) | N/A | | Other Comprehensive Income for the Period | 301 | (2,785) | N/A | | Total Comprehensive Income for the Period | 26,658 | 22,100 | +20.63% | | Total Comprehensive Income Attributable to Equity Holders of the Company | 21,058 | 18,834 | +11.81% | Consolidated Statement of Financial Position As of June 30, 2025, the group's total assets slightly decreased, while net assets increased, with a lower debt-to-asset ratio due to reduced interest-bearing borrowings and guarantee liabilities Consolidated Statement of Financial Position Summary | Metric | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Total Assets | 3,874,319 | 3,884,585 | -0.26% | | Cash and Bank Balances | 899,784 | 887,153 | +1.42% | | Accounts Receivable and Other Receivables | 1,222,410 | 1,114,437 | +9.69% | | Loans and Advances to Customers | 948,990 | 1,002,269 | -5.32% | | Total Liabilities | 1,503,668 | 1,523,500 | -1.30% | | Interest-Bearing Borrowings | 325,309 | 359,852 | -9.59% | | Guarantee Liabilities | 204,337 | 234,397 | -12.82% | | Net Assets | 2,370,651 | 2,361,085 | +0.41% | | Total Equity Attributable to Equity Holders of the Company | 2,021,181 | 2,029,778 | -0.42% | Notes to the Unaudited Interim Financial Report This section provides detailed notes to the unaudited interim financial report, covering accounting policies, revenue breakdown, and specific financial instrument details 1 Basis of Preparation This interim financial report is prepared in accordance with HKAS 34 and authorized for issue on August 28, 2025 - Interim financial report is prepared in accordance with HKAS 34 and authorized for issue on August 28, 2025[9] 2 Changes in Accounting Policies The group adopted HKAS 21 amendments, but it had no significant impact due to the absence of foreign currency non-exchangeable transactions - The group adopted HKAS 21 amendments, but it had no significant impact due to the absence of foreign currency non-exchangeable transactions[10] 3 Revenue The group's revenue, primarily from financing guarantee, lending, factoring, and supply chain services, decreased 20.17% year-on-year in H1 2025, mainly due to lower net guarantee and consulting service fees Revenue by Category | Revenue Category | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Net Guarantee Fee Income | 86,037 | 116,918 | -26.41% | | Net Interest Income | 44,562 | 47,122 | -5.43% | | Consulting and Other Business Income | 10,857 | 13,168 | -17.55% | | - Supply Chain Services | 8,419 | 6,275 | +34.16% | | - Consulting Service Fees | 2,438 | 6,893 | -64.50% | | Total Revenue | 141,456 | 177,208 | -20.17% | 4 Other Income Other income significantly decreased by 81.64% to RMB 1.12 million in H1 2025, mainly due to reduced investment income from receivables-backed investments, despite increased government grants Other Income Summary | Income Category | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Government Grants | 2,763 | 1,864 | +48.23% | | Investment Income from Financial Assets at FVTPL | 1,277 | 1,230 | +3.82% | | Investment Income from Receivables-Backed Investments | 129 | 1,154 | -88.82% | | Others | (2,749) | 1,952 | N/A | | Total Other Income | 1,117 | 6,104 | -81.69% | 5 Profit Before Tax Profit before tax for H1 2025 was RMB 37.36 million, a 5.44% year-on-year decrease, primarily influenced by reduced impairment losses partially offset by lower revenue and stable staff costs 5(a) Impairment and Provisions Made / (Reversed) Total impairment and provisions made decreased 23.76% to RMB 45.79 million in H1 2025, mainly due to a reversal of impairment losses on loans and advances Impairment and Provisions Summary | Item | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Receivables from Defaulted Guarantees | 41,657 | 40,118 | | Receivables from Guaranteed Customers | 5,256 | (1,970) | | Loans and Advances to Customers | (1,425) | 12,653 | | Factoring Receivables | (188) | 1,153 | | Total | 45,791 | 60,061 | 5(b) Staff Costs Staff costs for H1 2025 decreased 8.01% to RMB 34.43 million, comprising salaries, wages, bonuses, other benefits, and retirement plan contributions Staff Costs Summary | Item | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Salaries, Wages, Bonuses and Other Benefits | 30,091 | 33,469 | -10.10% | | Retirement Scheme Contributions | 4,336 | 3,955 | +9.63% | | Total | 34,427 | 37,424 | -8.01% | 5(c) Other Items Depreciation and amortization expenses increased 17.80% to RMB 7.69 million in H1 2025, while auditor's remuneration remained stable Other Items Summary | Item | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Depreciation and Amortization | 7,685 | 6,524 | +17.80% | | Auditor's Remuneration | 740 | 740 | 0.00% | 6 Income Tax in Consolidated Income Statement Income tax expense for H1 2025 decreased 24.76% to RMB 11.00 million, mainly due to reduced taxable profit and preferential tax rates for certain subsidiaries Income Tax Expense Summary | Item | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | YoY Change (%) | | :--- | :--- | :--- | :--- | | China Income Tax Provision for the Period | 30,258 | 49,705 | -39.12% | | Deferred Tax | (20,122) | (34,388) | -41.49% | | Under-provision / Over-provision in Prior Year | 862 | (694) | N/A | | Income Tax Expense | 10,998 | 14,623 | -24.79% | - Certain subsidiaries enjoy preferential income tax rates: High-tech enterprises (15%) and small-profit enterprises (20%)[17][20] 7 Earnings Per Share Basic and diluted earnings per share remained stable at RMB 0.01 for H1 2025, reflecting consistent outstanding ordinary shares despite a slight decrease in profit attributable to equity holders Earnings Per Share Summary | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Profit Attributable to Ordinary Equity Holders of the Company (RMB thousand) | 20,757 | 21,619 | | Weighted Average Number of Ordinary Shares Outstanding (shares) | 1,560,793,000 | 1,560,793,000 | | Basic and Diluted Earnings Per Share (RMB/share) | 0.01 | 0.01 | 8 Cash and Bank Balances As of June 30, 2025, total cash and bank balances increased 1.42% to RMB 899.78 million, driven by higher bank deposits, despite a decrease in restricted bank deposits and accrued interest Cash and Bank Balances Summary | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Cash in Hand | 10 | 9 | +11.11% | | Bank Balances | 580,691 | 559,211 | +3.84% | | Bank Time Deposits | 199,515 | 132,000 | +51.15% | | Restricted Bank Deposits | 113,713 | 188,251 | -39.59% | | Accrued Interest | 5,855 | 7,682 | -23.78% | | Total | 899,784 | 887,153 | +1.42% | - The group's principal activities are conducted in RMB, and the remittance of RMB out of China is subject to foreign exchange control restrictions[21] 9 Accounts Receivable and Other Receivables As of June 30, 2025, total accounts receivable and other receivables increased 9.69% to RMB 1,222.41 million, with increases in net receivables from defaulted guarantees, guaranteed customers, and repossessed assets 9(a) Ageing Analysis The ageing structure of receivables from defaulted guarantees, guaranteed customers, supply chain services, and trade receivables as of June 30, 2025, shows a significant portion remains within one year, with some long-term overdue balances persisting Ageing Analysis Summary | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Receivables from Defaulted Guarantees (net) | 412,630 | 343,984 | | Receivables from Guaranteed Customers (net) | 89,192 | 62,788 | | Receivables from Supply Chain Services (net) | 251,937 | 246,232 | | Trade Receivables (net) | 42,799 | 35,503 | 9(b) Impairment of Receivables from Defaulted Guarantees, Receivables from Guaranteed Customers and Receivables from Supply Chain Services As of June 30, 2025, the allowance for doubtful accounts for receivables from defaulted guarantees increased to RMB 321.94 million, for guaranteed customers to RMB 52.06 million, while for supply chain services, it slightly decreased to RMB 6.82 million Impairment Summary | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Allowance for Doubtful Accounts for Receivables from Defaulted Guarantees | 321,935 | 280,278 | | Allowance for Doubtful Accounts for Receivables from Guaranteed Customers | 52,055 | 46,796 | | Allowance for Doubtful Accounts for Receivables from Supply Chain Services | 6,824 | 7,408 | - Impairment loss on receivables from defaulted guarantees recognized in the consolidated income statement was RMB 41.66 million[30] - Net remeasurement of loss allowance for receivables from guaranteed customers was negative RMB 913 thousand, with new receivables from customer guarantees increasing by RMB 6.17 million[31] - RMB 584 thousand was reversed for receivables from supply chain services during the period[33] 10 Loans and Advances to Customers As of June 30, 2025, net loans and advances to customers decreased 5.32% to RMB 948.99 million, with a reduction in small loans, while the service industry remains the largest loan recipient and secured loans are the primary collateral method 10(a) Analysis by Nature As of June 30, 2025, entrusted loans increased to RMB 403.12 million, while small loans decreased to RMB 654.06 million, resulting in a slight overall decrease in total loans and advances and impairment loss provisions Loans and Advances by Nature | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Entrusted Loans | 403,121 | 385,460 | +4.58% | | Small Loans | 654,057 | 727,409 | -10.10% | | Total Loans and Advances to Customers | 1,074,370 | 1,129,051 | -4.84% | | Total Impairment Loss Provisions | (125,380) | (126,782) | -1.11% | | Net Loans and Advances to Customers | 948,990 | 1,002,269 | -5.32% | 10(b) Analysis by Industry As of June 30, 2025, the service industry remained the largest recipient of the group's loans at 42%, though its proportion decreased, while wholesale and retail trade loans increased and manufacturing remained stable Loans and Advances by Industry | Industry | June 30, 2025 (RMB thousand) | Proportion (%) | December 31, 2024 (RMB thousand) | Proportion (%) | | :--- | :--- | :--- | :--- | :--- | | Service Industry | 439,429 | 42% | 511,346 | 46% | | Wholesale and Retail Trade | 429,119 | 40% | 390,832 | 35% | | Manufacturing | 148,930 | 14% | 170,991 | 15% | | Real Estate and Construction | 39,700 | 4% | 39,700 | 4% | | Total | 1,057,178 | 100% | 1,112,869 | 100% | 10(c) Analysis by Collateral Method As of June 30, 2025, secured loans remained the group's primary collateral method, though their balance decreased, while unsecured and other loan balances both increased Loans and Advances by Collateral Method | Collateral Method | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Secured Loans | 408,805 | 459,383 | -10.99% | | Unsecured Loans | 189,740 | 177,719 | +6.76% | | Other Loans | 458,633 | 475,767 | -3.60% | | Total | 1,057,178 | 1,112,869 | -5.01% | 10(d) Overdue Loans by Overdue Analysis As of June 30, 2025, total overdue loans slightly decreased to RMB 285.66 million, with a reduction in loans overdue within one year, but a significant increase in loans overdue between one and two years Overdue Loans Summary | Overdue Period | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Overdue within one year (inclusive) | 127,949 | 155,990 | -17.98% | | Overdue between one and two years (inclusive) | 56,771 | 26,328 | +115.69% | | Overdue between two and three years (inclusive) | 8,969 | 4,356 | +105.90% | | Overdue over three years | 91,969 | 101,129 | -9.06% | | Total | 285,658 | 287,803 | -0.75% | 10(e) Analysis by Impairment Loss Provision Assessment Method As of June 30, 2025, total impairment loss provisions for loans and advances slightly decreased to RMB 125.38 million, with an increase in 12-month expected credit losses and a decrease in lifetime expected credit losses for credit-impaired loans Impairment Loss Provision Summary | Impairment Stage | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | 12-month Expected Credit Losses | 42,931 | 39,184 | | Lifetime Expected Credit Losses without Credit Impairment | 4,106 | 4,168 | | Lifetime Expected Credit Losses with Credit Impairment | 78,343 | 83,430 | | Total Impairment Loss Provisions | 125,380 | 126,782 | - Net remeasurement of loss allowance during the period was negative RMB 36.28 million, with new loans and advances increasing by RMB 34.86 million[40] 11 Factoring Receivables As of June 30, 2025, net factoring receivables increased 4.48% to RMB 201.13 million, with a slight decrease in factoring receivables provision reflecting improved impairment 11(a) Ageing Analysis As of June 30, 2025, factoring receivables within one year decreased, while those between one and three years increased, and those over three years slightly declined Factoring Receivables Ageing Analysis | Ageing | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Within one year | 101,501 | 135,400 | | One to two years | 52,900 | 22,000 | | Two to three years | 25,000 | 5,000 | | Over three years | 58,060 | 66,619 | | Less: Provision for Factoring Receivables | (36,334) | (36,522) | | Net Amount | 201,127 | 192,497 | 11(b) Impairment of Factoring Receivables As of June 30, 2025, total allowance for doubtful accounts for factoring receivables slightly decreased to RMB 36.33 million, with a net remeasurement of loss allowance of negative RMB 1.18 million during the period Factoring Receivables Impairment Summary | Impairment Stage | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | 12-month Expected Credit Losses | 2,056 | 1,173 | | Lifetime Expected Credit Losses without Credit Impairment | 559 | — | | Lifetime Expected Credit Losses with Credit Impairment | 33,719 | 35,349 | | Total Allowance for Doubtful Accounts | 36,334 | 36,522 | - Net remeasurement of loss allowance during the period was negative RMB 1.18 million, with new factoring receivables generated amounting to RMB 988 thousand[44] 12 Financial Assets at Fair Value Through Other Comprehensive Income As of June 30, 2025, financial assets at fair value through other comprehensive income, primarily unlisted equity investments, slightly increased to RMB 12.96 million Financial Assets at Fair Value Through Other Comprehensive Income Summary | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Unlisted Equity Investments | 12,959 | 12,558 | 13 Financial Assets at Fair Value Through Profit or Loss As of June 30, 2025, financial assets at fair value through profit or loss decreased 28.70% to RMB 109.12 million, mainly due to a reduction in wealth management products Financial Assets at Fair Value Through Profit or Loss Summary | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Wealth Management Products | 91,090 | 134,161 | | Unlisted Equity Investments | 12,665 | 12,719 | | Financial Assets Arising from Interests in Jointly Controlled Trust Schemes | 5,366 | 6,420 | | Total | 109,121 | 153,300 | 14 Receivables-Backed Investments As of June 30, 2025, net receivables-backed investments slightly increased to RMB 12.86 million, comprising certificates of deposit and trust products, with reduced impairment loss provisions Receivables-Backed Investments Summary | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Certificates of Deposit | 10,734 | 10,734 | | Trust Products | 8,364 | 8,364 | | Less: Impairment Loss Provisions | (6,243) | (6,473) | | Net Amount | 12,855 | 12,625 | 15 Interest-Bearing Borrowings As of June 30, 2025, total interest-bearing borrowings decreased 9.59% to RMB 325.31 million, primarily due to reduced secured bank loans and other loans, while unsecured bank loans remained stable Interest-Bearing Borrowings Summary | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Bank Loans — Unsecured | 249,990 | 250,490 | -0.20% | | Bank Loans — Secured | — | 40,000 | -100.00% | | Bank Loans — Others | 75,000 | 39,000 | +92.31% | | Other Loans | — | 30,000 | -100.00% | | Total | 325,309 | 359,852 | -9.59% | - Loans bear interest at 3.05% to 5.0% (December 31, 2024: 3.05% to 10.00%)[46] 16 Bonds Payable As of June 30, 2025, total bonds payable slightly increased to RMB 509.65 million, following the adjustment of the 2021 corporate bond coupon rate to 3.40% on February 5, 2024 Bonds Payable Summary | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Corporate Bonds — Face Value | 500,000 | 500,000 | | Corporate Bonds — Interest Adjustment | (46) | (658) | | Corporate Bonds — Accrued Interest | 9,692 | 9,983 | | Total | 509,646 | 509,325 | - The coupon rate of the 2021 corporate bonds was adjusted to 3.40% on February 5, 2024[47] - For H1 2025, RMB 8.84 million in interest was paid on the 2021 corporate bonds[48] 17 Guarantee Liabilities As of June 30, 2025, total guarantee liabilities decreased 12.82% to RMB 204.34 million, primarily due to reduced deferred income, while guarantee compensation provisions slightly increased Guarantee Liabilities Summary | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Deferred Income | 141,281 | 174,779 | -19.17% | | Guarantee Compensation Provisions | 63,056 | 59,618 | +5.77% | | Total | 204,337 | 234,397 | -12.82% | - RMB 3.44 million was provided for guarantee compensation provisions during the period[49] 18 Deposits Received and Accruals and Other Payables As of June 30, 2025, deposits received slightly decreased, while total accruals and other payables increased 23.55% to RMB 228.86 million, driven by significant increases in accounts payable and dividends payable 18(a) Deposits Received Deposits received are interest-free collateral collected from customers for credit guarantees, refundable upon contract expiry - Deposits received are interest-free, used as collateral for credit guarantees, and are refundable upon contract expiry[50] 18(b) Accruals and Other Payables As of June 30, 2025, accounts payable significantly increased 70.76% to RMB 57.16 million, and dividends payable rose from RMB 2.24 million to RMB 32.62 million, driving the category's growth Accruals and Other Payables Summary | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Accounts Payable | 57,155 | 33,477 | +70.76% | | Advances from Customers | 46,625 | 42,035 | +10.92% | | Accrued Staff Costs | 35,493 | 48,503 | -26.82% | | Dividends Payable | 32,617 | 2,237 | +1358.56% | | Income Tax Payable | 30,668 | 35,955 | -14.69% | | Total | 228,860 | 185,239 | +23.55% | - Accounts payable primarily relate to suppliers for supply chain business, with most balances due within one year[51] 19 Other Financial Instruments As of June 30, 2025, total other financial instruments increased 5.35% to RMB 157.49 million, mainly comprising financial liabilities related to Zhongshan Zhongyingshengda, Yunfu Guarantee, and Guangdong Financing Guarantee Other Financial Instruments Summary | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Zhongshan Zhongyingshengda | 106,388 | 108,686 | | Yunfu Guarantee | 10,000 | 10,000 | | Guangdong Financing Guarantee | 40,560 | 30,000 | | Subtotal | 156,948 | 148,686 | | Accrued Interest | 540 | 802 | | Total | 157,488 | 149,488 | - The company has contribution return commitments and potential repurchase obligations to specific investors in Zhongshan Zhongyingshengda, Yunfu Guarantee, and Guangdong Financing Guarantee, recognized as financial liabilities[53][54] 20 Financial Liabilities at Fair Value Through Profit or Loss As of June 30, 2025, financial liabilities at fair value through profit or loss decreased 33.13% to RMB 7.16 million, primarily related to interests in jointly controlled trust schemes where the company guarantees losses Financial Liabilities at Fair Value Through Profit or Loss Summary | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Financial Liabilities Arising from Interests in Jointly Controlled Trust Schemes | 7,157 | 10,702 | - The company jointly controls trust schemes with third parties and guarantees losses exceeding the third parties' share[55][56] - Some trust scheme-related loans have matured, and borrowers failed to repay, leading the group to partially fulfill its guarantee obligations[57] 21 Capital, Reserves and Dividends The group declared a final cash dividend of RMB 1.9 cents per share for FY2024, totaling RMB 29.66 million, but the Board recommended no interim dividend for H1 2025 Dividends Declared | Dividend Type | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | 2024 Final Dividend (RMB 1.9 cents per share) | 29,655 | — | | 2023 Final Dividend (RMB 2.0 cents per share) | — | 31,216 | - The Board recommended no interim dividend for the six months ended June 30, 2025[4][99] 22 Financial Risk Management and Fair Value of Financial Instruments As of June 30, 2025, the group's maximum total guarantees issued (net of counter-guarantees) decreased 17.60% to RMB 6,207.64 million, indicating reduced exposure to guarantee business and potential credit loss risk Maximum Total Guarantees Issued | Guarantee Type | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Financing Guarantees | 3,326,384 | 3,988,892 | -16.61% | | Performance Guarantees | 2,936,727 | 3,603,841 | -18.51% | | Subtotal | 6,263,111 | 7,592,733 | -17.49% | | Less: Deposits Received | (55,471) | (59,483) | -6.74% | | Total | 6,207,640 | 7,533,250 | -17.60% | - The maximum total guarantees issued (net of counter-guarantees) represents the maximum potential loss to be recognized if counterparties completely fail to perform their contractual obligations[62] 23 Commitments and Contingent Liabilities As of June 30, 2025, the group had no significant capital commitments or outstanding litigation and disputes - The group had no significant capital commitments as of June 30, 2025[63] - The group had no significant outstanding litigation or disputes as a defendant as of June 30, 2025[64] 24 Non-Adjusting Events After the Reporting Period The group paid the 2024 final dividend of RMB 29.66 million to shareholders on July 30, 2025 - The group paid the 2024 final dividend of RMB 29.66 million to shareholders on July 30, 2025[65] Management Discussion and Analysis This section provides an overview of the group's business performance, financial review, and future outlook, highlighting strategic initiatives and industry trends Overview In H1 2025, China's economy grew 5.3%, with resilient SMEs; the group, as a comprehensive service provider, focuses on financing guarantees, loans, and consulting for SMEs, aligning with national policies for high-quality development - China's GDP grew 5.3% year-on-year in H1 2025, with the Small and Medium-sized Enterprise Development Index (SMEDI) at 89.1, higher than 2023 and 2024 levels[66][67] - The group has transformed into a comprehensive service provider rooted in credit, supported by industry, and driven by finance, offering customized solutions for SMEs[68] - The group will adhere to a "stable and adaptive" work approach, focusing on its core business, balancing development with risk control, and empowering enterprise growth through innovation[68] Business Review The group's H1 2025 business review shows a decline in net guarantee fee income and outstanding guarantees, while entrusted loans grew and small loans decreased, with continued internal control strengthening and AI platform launch Guarantee Business As of June 30, 2025, the group's outstanding net guarantee balance decreased 17.60% to RMB 6,207.64 million, and net guarantee fee income fell 26.41% due to reduced outstanding balances and stricter admission standards Guarantee Business Summary | Metric | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Outstanding Net Guarantee Balance | 6,207.64 | 7,533.25 | -17.60% | | Net Guarantee Fee Income (H1) | 86.04 | 116.92 | -26.41% | - The decline in guarantee fee income is primarily due to reduced outstanding financing guarantee balances, tightened guarantee admission standards, and decreased deferred income from the transition between old and new business entities[84] SME Lending Business The group's SME lending business saw entrusted loans increase 4.58% to RMB 403.12 million, while small loans decreased 10.10% to RMB 654.06 million, resulting in a 5.43% year-on-year decline in net interest income SME Lending Business Summary | Loan Type | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Entrusted Loan Balance | 403.12 | 385.46 | +4.58% | | Small Loan Balance | 654.06 | 727.41 | -10.10% | | Net Interest Income (H1) | 44.56 | 47.12 | -5.43% | - Entrusted loans have a monthly fixed interest rate range of 0.5% to 1.15%, while small loans have a monthly fixed interest rate range of 0.55% to 2%[71][72] Internal Control The group has established comprehensive internal control policies for guarantee, entrusted loan, and small loan businesses, covering pre-approval, post-lending monitoring, risk assessment, collateral management, and overdue collection - Guarantee business implements post-event management procedures, including regular and special post-guarantee monitoring, risk assessment, collateral management, and a five-level risk classification system[75][76][77] - Entrusted loan business approval involves project managers, legal reviewers, and the Executive Committee Chairman, with post-lending management including regular client visits, risk assessment, repayment plan formulation, and collection procedures for overdue loans[78][79][80] - Small loan business approval is handled by the Risk Management Department and Review Committee, with post-lending management including maturity reminders, overdue visits, repayment plan negotiations, and recourse or collateral foreclosure for overdue loans[81] Major Business Activities During the Period In H1 2025, the group facilitated its first cross-city loan transfer, undertook the "Urban Industrial Financing Risk Compensation Fund Project," issued a land reclamation guarantee for a highway project, and launched an AI intelligent platform based on DeepSeek+Qwen3 - Successfully facilitated Yunfu City's first cross-city loan transfer for enterprises, alleviating local business difficulties[82] - Undertook the Foshan Chancheng "Urban Industrial Financing Risk Compensation Fund Project," promoting industrial and financial integration[82] - Issued a land reclamation guarantee for a temporary land use project in Yunfu City, supporting cost reduction and efficiency improvement for real enterprises[82] - Launched its self-developed AI intelligent platform, based on DeepSeek+Qwen3, focusing on financial services, risk prevention, and office efficiency, marking entry into the era of AI-driven intelligence[83] Financial Review The group's H1 2025 financial performance saw reduced revenue and pre-tax profit, mainly from lower net guarantee and interest income, but was partially offset by decreased impairment losses and narrower associate losses, with period profit up but attributable profit down Net Guarantee Fee Income Net guarantee fee income decreased 26.41% year-on-year to RMB 86.04 million, primarily due to reduced outstanding guarantee balances, cautious business deployment, and lower deferred guarantee fee income Net Guarantee Fee Income Summary | Metric | H1 2025 (RMB million) | H1 2024 (RMB million) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Net Guarantee Fee Income | 86.04 | 116.92 | -26.41% | - The decline is due to reduced outstanding financing guarantee balances, tightened guarantee admission standards, and decreased deferred income from the transition between old and new business entities[84] Net Interest Income Net interest income decreased 5.43% year-on-year to RMB 44.56 million, with entrusted loan interest income rising 22.73%, but small loan interest income falling 10.41%, and bank cash/deposit interest income decreasing 26.07% Net Interest Income Summary | Item | H1 2025 (RMB million) | H1 2024 (RMB million) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Net Interest Income | 44.56 | 47.12 | -5.43% | | Interest Income from Entrusted Loan Business | 13.77 | 11.22 | +22.73% | | Interest Income from Small Loan Business | 30.30 | 33.82 | -10.41% | | Interest Income from Factoring Business | 10.20 | 9.97 | +2.31% | | Interest Income from Bank Cash and Deposits | 5.36 | 7.25 | -26.07% | - The decrease in interest income from bank cash and deposits is mainly due to the Central Bank's reduction of commercial bank deposit benchmark interest rates[90] Consulting and Other Business Income Consulting and other business income decreased 17.54% year-on-year to RMB 10.86 million, primarily due to a 64.59% drop in consulting business income, which was not fully offset by a 34.16% increase in supply chain business income Consulting and Other Business Income Summary | Item | H1 2025 (RMB million) | H1 2024 (RMB million) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Consulting and Other Business Income | 10.86 | 13.17 | -17.54% | | Supply Chain Business Income | 8.42 | 6.28 | +34.16% | | Consulting Business Income | 2.44 | 6.89 | -64.59% | Other Income Other income significantly decreased 81.64% year-on-year to RMB 1.12 million, mainly due to a decline in investment income from debt investments Other Income Summary | Metric | H1 2025 (RMB million) | H1 2024 (RMB million) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Other Income | 1.12 | 6.10 | -81.64% | - The decrease is primarily due to a decline in investment income from debt investments[87] Share of Loss of Associates Share of loss of associates decreased 41.57% year-on-year to RMB 4.09 million, mainly due to the recovery in operations of some investee companies Share of Loss of Associates Summary | Metric | H1 2025 (RMB million) | H1 2024 (RMB million) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Share of Loss of Associates | 4.09 | 7.00 | -41.57% | - The reduction in loss is mainly due to the recovery in operations of some investee companies[88] Guarantee Compensation Provisions Guarantee compensation provisions significantly decreased 83.77% year-on-year to RMB 3.44 million, primarily due to a reduction in the group's outstanding net guarantee balance compared to the same period Guarantee Compensation Provisions Summary | Metric | H1 2025 (RMB million) | H1 2024 (RMB million) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Guarantee Compensation Provisions | 3.44 | 21.20 | -83.77% | - The decrease in provisions is mainly due to a reduction in the outstanding net guarantee balance[89] Impairment Losses Impairment losses decreased 23.76% year-on-year to RMB 45.79 million, primarily due to a reversal of impairment losses on loans and advances Impairment Losses Summary | Metric | H1 2025 (RMB million) | H1 2024 (RMB million) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Impairment Losses | 45.79 | 60.06 | -23.76% | - The decrease in impairment losses is mainly due to a reversal of impairment losses on loans and advances[91] Operating Expenses Operating expenses remained stable year-on-year at RMB 59.99 million Operating Expenses Summary | Metric | H1 2025 (RMB million) | H1 2024 (RMB million) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Operating Expenses | 59.99 | 60.50 | -0.84% | Profit Before Tax Profit before tax decreased 5.44% year-on-year to RMB 37.36 million, primarily impacted by lower revenue Profit Before Tax Summary | Metric | H1 2025 (RMB million) | H1 2024 (RMB million) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Profit Before Tax | 37.36 | 39.51 | -5.44% | Income Tax Income tax decreased 24.76% year-on-year to RMB 11.00 million, primarily due to reduced taxable profit Income Tax Summary | Metric | H1 2025 (RMB million) | H1 2024 (RMB million) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Income Tax | 11.00 | 14.62 | -24.76% | - The decrease in income tax is primarily due to reduced taxable profit[94] Profit for the Period and Profit Attributable to Equity Holders of the Company Profit for the period increased 5.91% year-on-year to RMB 26.36 million, while profit attributable to equity holders of the company decreased 3.98% to RMB 20.76 million, with net profit margin rising from 14.04% to 18.63% Profit for the Period and Attributable Profit Summary | Metric | H1 2025 (RMB million) | H1 2024 (RMB million) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Profit for the Period | 26.36 | 24.89 | +5.91% | | Profit Attributable to Equity Holders of the Company | 20.76 | 21.62 | -3.98% | | Net Profit Margin | 18.63% | 14.04% | +4.59pp | Capital Expenditure Capital expenditure slightly decreased year-on-year to RMB 0.92 million, mainly for office equipment and R&D expenses for business operating system enhancements Capital Expenditure Summary | Metric | H1 2025 (RMB million) | H1 2024 (RMB million) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Capital Expenditure | 0.92 | 0.97 | -5.15% | - Capital expenditure is primarily related to the acquisition of office equipment and R&D expenses for enhancing business operating systems[96] Capital Commitments and Contingent Liabilities As of June 30, 2025, the group had no significant capital commitments or contingent liabilities - The group had no significant capital commitments or contingent liabilities as of June 30, 2025[97] Pledge of Assets As of June 30, 2025, the group had not pledged any assets to obtain bank credit or loans - The group had not pledged any assets to obtain bank credit or bank loans as of June 30, 2025[98] Interim Dividend The Board recommended no interim dividend for the six months ended June 30, 2025 - The Board recommended no interim dividend for the six months ended June 30, 2025[99] Outlook and Future Business Development of the Group For H2, China's economy is expected to remain stable; the group will formulate its "15th Five-Year Plan" focusing on ecological cooperation, industrial deep cultivation, and digital intelligence to become a leading integrated industrial ecosystem service group (I) Industry Development Trends The Chinese government actively supports SME financing and inclusive finance through policy measures, with the financing guarantee industry transitioning from "scale expansion" to "quality improvement" and prioritizing digital transformation - Eight departments, including the National Financial Regulatory Administration, issued 23 measures to support SME financing, aiming to improve their financing conditions[101] - The People's Bank of China lowered re-lending rates by 0.25 percentage points and financial institution reserve requirement ratios by 0.5 percentage points to encourage greater support for the real economy[103] - The financing guarantee industry is shifting from "scale expansion" to "quality improvement," focusing on specialized, refined, unique, and innovative enterprises, technological innovation, and green development, with digital transformation being key to enhancing competitiveness[105] (II) Group Development Strategy The group's preliminary "15th Five-Year Plan" outlines a strategy of ecological cooperation, industrial deep cultivation, and digital intelligence, aiming to build a leading integrated industrial ecosystem service group with guarantee enhancement, financial facilitation, and equity investment - The group has formulated its preliminary "15th Five-Year Plan," positioning itself as a "nationally leading integrated industrial ecosystem service group" combining financing, intelligence, and business integration[107] - The development path includes ecological cooperation, synergistic sharing, industrial deep cultivation, and digital intelligence[107] - The new business development framework is based on guarantee enhancement, driven by financial facilitation and value-added services, and opportunistic equity investments[107] Other Information This section provides additional information on the group's capital structure, liquidity, financial resources, significant investments, human resources, and corporate governance Capital Structure, Liquidity and Financial Resources The group maintains a robust capital structure, balancing shareholder returns and risk, with RMB 899.78 million in cash and bank balances, reduced interest-bearing debt, and a 38.81% debt-to-asset ratio, while managing foreign exchange risk without hedging Capital Structure The group's primary capital management objective is to ensure continuous operation and provide returns to shareholders and stakeholders through risk-aligned pricing and reasonable financing costs - The group's primary objective is to ensure continuous operation and provide returns to shareholders and stakeholders through risk-aligned pricing and reasonable financing costs[108] Foreign Exchange Risk Operating primarily in RMB, with most cash and deposits in RMB subject to foreign exchange controls, the group holds minor HKD and USD bank deposits, facing foreign exchange risk without a hedging policy - The group primarily operates in RMB, and the remittance of RMB out of China is subject to foreign exchange control restrictions[109] - The group holds minor HKD and USD denominated bank deposits, facing foreign exchange risk, but currently has no foreign currency hedging policy[109] Liquidity and Capital Resources The group's liquidity and capital needs are for subsidiary investments, loan disbursements, default payments, and working capital, funded by shareholder contributions, operating cash flow, and bank borrowings, with RMB 899.78 million in cash and bank balances as of June 30, 2025 - Liquidity and capital needs are primarily for subsidiary registered capital investments, loan disbursements, default payments, and working capital[110] - Funding sources primarily include shareholder contributions, operating cash flow, and bank borrowings[110] Cash and Bank Balances | Metric | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | | :--- | :--- | :--- | | Cash and Bank Balances | 899.78 | 887.15 | Indebtedness As of June 30, 2025, the group's interest-bearing borrowings were RMB 325.31 million, bonds payable RMB 509.65 million, and other financial instruments RMB 157.49 million, with the debt-to-asset ratio decreasing to 38.81% due to reduced interest-bearing debt and fair value changes Indebtedness Summary | Debt Type | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | | :--- | :--- | :--- | | Interest-Bearing Borrowings | 325.31 | 359.85 | | Bonds Payable | 509.65 | 509.33 | | Other Financial Instruments | 157.49 | 149.49 | | Financial Liabilities at Fair Value Through Profit or Loss | 7.16 | 10.70 | | Lease Liabilities | 15.40 | 17.08 | Debt-to-Asset Ratio | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Debt-to-Asset Ratio | 38.81% | 39.22% | - The decrease in the debt-to-asset ratio is primarily due to reduced interest-bearing borrowings and fair value changes in financial liabilities arising from interests in jointly controlled trust schemes[112] Off-Balance Sheet Arrangements The group enters into guarantee contracts with off-balance sheet risks in its ordinary course of business, with total outstanding guarantees of RMB 6,207.64 million as of June 30, 2025, and no other off-balance sheet arrangements Total Outstanding Guarantees | Metric | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | | :--- | :--- | :--- | | Total Outstanding Guarantees | 6,207.64 | 7,533.25 | - Apart from guarantee contracts, the group had no other off-balance sheet arrangements as of June 30, 2025[113] Significant Investments As of June 30, 2025, the group held no other significant investments beyond the major business activities disclosed in the management discussion and analysis - The group held no significant investments as of June 30, 2025, other than the major business activities already disclosed[114] Significant Acquisitions and Disposals of Subsidiaries, Associates and Joint Ventures For the six months ended June 30, 2025, the group did not undertake any significant acquisitions or disposals of subsidiaries, associates, or joint ventures - For the six months ended June 30, 2025, the group undertook no significant acquisitions or disposals of subsidiaries, associates, or joint ventures[115] Future Plans for Material Investments or Capital Assets As of June 30, 2025, the group had no specific future plans regarding material investments or capital assets - The group had no specific future plans regarding material investments or capital assets as of June 30, 2025[116] Events After the Reporting Period From June 30, 2025, to the date of this announcement, the group had no other significant events after the reporting period - From June 30, 2025, to the date of this announcement, the group had no other significant events after the reporting period[117] Human Resources As of June 30, 2025, the group had 287 employees, with 87% holding bachelor's degrees or higher, and staff costs decreased 8.01% to RMB 34.43 million, with efforts to attract and retain talent through competitive compensation and training Human Resources Summary | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Employees | 287 | 291 | | Proportion of Employees with Bachelor's Degree or Above | 87% | N/A | Staff Costs | Metric | H1 2025 (RMB million) | H1 2024 (RMB million) | | :--- | :--- | :--- | | Staff Costs | 34.43 | 37.42 | - The group attracts, retains talent, and enhances employee loyalty through salaries, bonuses, benefits, allowances, and annual training[118] Purchase, Sale or Redemption of Listed Securities For the six months ended June 30, 2025, neither the company nor its subsidiaries purchased, sold, or redeemed any of the company's listed securities, and the company held no treasury shares - For the six months ended June 30, 2025, neither the company nor its subsidiaries purchased, sold, or redeemed any of the company's listed securities[119] - As of June 30, 2025, the company held no treasury shares[119] Audit Committee The Board's Audit Committee, comprising five members with Mr. Wu Xiangneng as Chairman, reviewed the unaudited consolidated interim financial statements for H1 2025, which were also reviewed by KPMG - The Audit Committee consists of five members, with Mr. Wu Xiangneng serving as Chairman[120] - The Audit Committee reviewed the interim financial statements, which were also reviewed by KPMG[120] Corporate Governance The company adheres to the Corporate Governance Code in Appendix C1 of the Listing Rules, with the Board deeming the combined role of Chairman and CEO beneficial for stable leadership and efficient strategy execution, despite deviating from a specific code provision - The company complies with the Corporate Governance Code in Appendix C1 of the Listing Rules[121] - The roles of Chairman and CEO are combined, deviating from Code Provision C.2.1, but the Board believes this arrangement fosters stable leadership and efficient strategy execution[121] Standard Code for Securities Transactions The company adopted the Standard Code for Securities Transactions by Directors of Listed Issuers, with all directors and supervisors confirming compliance for H1 2025 - The company adopted the Standard Code for Securities Transactions by Directors of Listed Issuers[122] - All directors and supervisors confirmed compliance with the Standard Code for the period[122] Interim Dividend The Board recommended no interim dividend for the six months ended June 30, 2025 - The Board recommended no interim dividend for the six months ended June 30, 2025[123] Interim Report The company's interim report for the six months ended June 30, 2025, will be dispatched to shareholders in September 2025 and available on the HKEX and company websites - The interim report will be dispatched to shareholders in September 2025 and available on the HKEX website and the company's website[124] By Order of the Board This announcement was issued by Mr. Wu Liejin, Chairman of the Board, on August 28, 2025, on behalf of a Board comprising executive, non-executive, and independent non-executive directors - The announcement was issued by Mr. Wu Liejin, Chairman of the Board, on August 28, 2025[125] - The Board comprises executive, non-executive, and independent non-executive directors[125]