Financial Performance - Operating revenue for the six months ended June 30, 2022, was RMB 305,419,000, representing a 127% increase compared to RMB 134,754,000 in the same period of 2021[12]. - Operating expenses surged to RMB 191,717,000, a significant increase of 1,221% from RMB 14,509,000 year-on-year[12]. - Profit attributable to owners of the company reached RMB 18,149,000, marking a 23% increase from RMB 14,776,000 in the previous year[12]. - Basic earnings per share increased by 21% to RMB 0.017 from RMB 0.014[12]. - Total assets as of June 30, 2022, were RMB 2,846,077,000, showing a slight increase of 0% from RMB 2,836,195,000 at the end of 2021[12]. - The overall operating revenue for the company reached RMB 305,419, an increase from RMB 134,754 in the previous year, primarily due to a significant rise in supply chain revenue[79]. - The net profit attributable to equity holders was RMB 18,149, up from RMB 14,776 year-on-year, mainly due to a reduction in credit impairment losses[79]. Loan and Mortgage Activities - Loans granted to customers amounted to RMB 1,929,962,000, reflecting a 6% increase from RMB 1,815,077,000[12]. - Total new mortgage loans issued in the first half of 2022 amounted to RMB 263 million, a decrease of 36.5% compared to RMB 414 million in 2021[18]. - The balance of real estate mortgage loans as of June 30, 2022, was RMB 687 million, down from RMB 870 million in the previous year, representing a decline of 21%[21]. - Interest income from real estate mortgage loans was RMB 25,172 thousand, a decrease from RMB 27,729 thousand in the same period last year, reflecting a decline of 9.2%[21]. - The balance of personal goods mortgage loans reached RMB 79 million, an increase from RMB 47 million in the previous year, marking a growth of 68.1%[23]. - Interest income from personal goods mortgage loans increased to RMB 6,802 thousand, up from RMB 5,496 thousand, representing a rise of 23.7%[23]. - The balance of non-mortgage loans remained stable at RMB 375 million, with interest income dropping significantly to RMB 11,997 thousand, down from RMB 21,206 thousand, a decline of 43.5%[27]. Business Strategy and Development - The company aims to enhance its position as a leading provider of inclusive financial services in China, focusing on small loans, pawn services, and asset investments[2]. - The management strategy emphasizes value creation, refined management, and the exploration of new business areas, including financing consulting and art auction services[14][15]. - The company is committed to supporting small and micro enterprises and individuals facing financial difficulties through its diverse financial services[14]. - The company aims to expand its operations by establishing 1 to 2 new pawn shops in provincial capital cities annually, targeting a network of 10 to 12 cities by 2025[22]. - The company plans to enhance digital capabilities in its stores to improve customer satisfaction in the personal goods mortgage segment[26]. - The company plans to enhance digital construction in the small loan business and increase service efforts for technology-driven and low-carbon SMEs, fulfilling its social responsibility in promoting inclusive finance[34]. Risk Management and Credit Loss Provisions - The expected credit loss provision for loans granted to customers as of June 30, 2022, totaled RMB 678,078 thousand, representing approximately 26% of the outstanding loans before provisions[98]. - The total expected credit loss provision increased by RMB 33,597 thousand compared to the end of the previous year[98]. - The expected credit loss provision for collateralized loans was RMB 457,810 thousand as of June 30, 2022, compared to RMB 389,812 thousand at the end of the previous year[97]. - The expected credit loss provision for non-collateralized loans was RMB 220,268 thousand as of June 30, 2022, compared to RMB 254,669 thousand at the end of the previous year[97]. - The increase in expected credit loss provisions for the first and second stages was primarily due to the deterioration of some customers' operating conditions due to the COVID-19 pandemic and an increase in the loan balance compared to the end of the previous year[98]. - The group conducts due diligence on SMEs applying for refinancing funds, ensuring compliance with bank management requirements[148]. - Continuous credit risk assessments are conducted based on clients' credit records, repayment sources, and significant events affecting collateral[139]. Business Segments and Performance - The ecological finance division achieved operating revenue of RMB 194,352, a substantial increase from RMB 8,856 in the previous year, driven by significant growth in supply chain management and commercial factoring[83][84]. - The inclusive finance division reported operating revenue of RMB 105,616, a decrease from RMB 116,054, attributed to lower interest income from non-collateral loans and small loans[80][82]. - The total number of new loans issued in the small loan business increased to 111 in the first half of 2022, up from 89 in the same period of 2021, representing a growth of 24.7%[30]. - The total amount of new loans issued reached RMB 187 million in the first half of 2022, slightly up from RMB 185 million in the same period of 2021, indicating a growth of 1.1%[30]. - The total number of new loans issued in the refinancing fund business increased significantly to 312 in the first half of 2022, compared to 220 in the same period of 2021, representing a growth of 41.8%[36]. - Total amount of new loans issued in the refinancing fund business reached RMB 1,937 million in the first half of 2022, a substantial increase from RMB 1,151 million in the same period of 2021, indicating a growth of 68.3%[36]. Corporate Governance and Shareholder Information - The board is committed to maintaining high standards of corporate governance to protect shareholder interests and enhance corporate value[199]. - The corporate governance practices are based on the principles and code provisions set out in Appendix 14 of the Listing Rules[200]. - As of June 30, 2022, major shareholders include Xiaolai Investment Co., Ltd. with a 23.85% stake and Zhu Tianxiao with a 29.81% stake in the company[182]. - The board members hold a total of 4,330,000 shares, representing 0.39% of the issued shares as of June 30, 2022[177]. Operational Challenges and Future Outlook - The company will continue to monitor the impact of the pandemic on the macro economy and review the effectiveness of risk control policies[172]. - The company faces various risks in its art investment and luxury goods sales, including regulatory changes and market liquidity risks[44][47]. - The company aims to strengthen its marketing team and focus on luxury goods sales and art investment, targeting breakthroughs in both scale and quality within the year[172]. - The company has established partnerships with several prominent firms, including ZTE Corporation and New Hope Group, to expand its supply chain management operations[58].
中国汇融(01290) - 2022 - 中期财报