Core Viewpoint - Lakala is planning to issue H-shares and list on the Hong Kong Stock Exchange, which has led to a significant increase in its stock price, but the company faces challenges such as declining revenue and compliance risks [1][3][11]. Company Overview - Lakala Payment Co., Ltd. was established in 2005 and became the first digital payment company listed on the A-share market in April 2019 [4]. - The company holds a payment license issued by the central bank and operates various payment services [4]. Recent Developments - Lakala announced its plan for overseas share issuance and listing on the Hong Kong Stock Exchange, with discussions ongoing with relevant intermediaries [3][4]. - Following the announcement, Lakala's stock price surged, with a peak increase of 16.16% on June 17, but later experienced a decline of 6.28% by June 19 [3]. Financial Performance - In Q1, Lakala reported a revenue of 1.299 billion yuan, a year-on-year decrease of 13.01%, and a net profit of 101 million yuan, down 51.71% [11]. - For the full year 2024, the company expects a revenue of 5.759 billion yuan, a decrease of 2.96%, and a net profit of 351 million yuan, down 23.26% [11]. - The company’s cross-border payment transaction volume reached 49.2 billion yuan in 2024, a year-on-year increase of 14% [4]. Market Position and Challenges - Lakala's cross-border payment transactions accounted for only about 1.2% of its total payment transaction volume of 4.22 trillion yuan last year, indicating limited contribution to overall performance [4]. - The company faces intense competition from major players like PingPong, Alipay, and WeChat Pay, which dominate the market [4][11]. - Lakala's efforts to transition from traditional payment services to comprehensive financial technology services have encountered significant challenges [11]. Compliance and Governance Issues - Lakala has been reducing its registered capital, with a decrease from 788.08 million yuan to 776.66 million yuan in April 2023, marking the second reduction this year [7]. - The company has faced multiple compliance issues, including fines for regulatory violations, which could pose challenges for its future listing in Hong Kong [9][11]. - The company’s major shareholder has been frequently reducing their stake, raising concerns about governance and stability [8][9]. Shareholder Structure - The largest shareholder of Lakala is Legend Holdings, holding 26.54% of shares, followed by Chairman Sun Taoran with 7.01% [5].