Group 1 - The company expects to achieve a net profit attributable to shareholders of approximately RMB 140 million to RMB 180 million for the six months ending June 30, 2025, compared to a net loss of approximately RMB 76 million for the six months ending June 30, 2024 [1] - The adjusted net loss attributable to shareholders is expected to be approximately RMB 87 million to RMB 127 million for the six months ending June 30, 2025, compared to an adjusted net loss of approximately RMB 64 million for the six months ending June 30, 2024 [1] - The adjusted net loss is defined as profit/loss excluding certain items such as fair value changes of convertible preferred shares and warrants, share-based payments, professional fees related to special purpose acquisition company (SPAC) transactions, and expenses arising from capital restructuring [1] Group 2 - The turnaround from loss to profit is primarily due to fair value changes of financial liabilities measured at fair value through profit or loss, resulting in a non-cash gain of approximately RMB 769 million, compared to a non-cash loss of approximately RMB 4 million in the same period of 2024 [2] - This gain mainly arises from the conversion of convertible preferred shares into ordinary shares through a SPAC transaction, which has been confirmed by the company's auditors [2] - The adjusted net loss has widened mainly due to the cessation of services under the financial technology solutions, specifically the "Fat Cat White Bill" and "Fat Cat Easy Purchase" [2]

Core Viewpoint - The China Securities Regulatory Commission (CSRC) has requested additional documentation from Yuxin Technology regarding the discrepancies in the identification of its controlling shareholder and other related matters as part of its overseas listing application [1][2]. Group 1: Regulatory Requirements - The CSRC has asked Yuxin Technology to clarify the reasons and standards for the inconsistent results in the identification of its controlling shareholder and to provide a conclusive legal opinion on this matter [1]. - Yuxin Technology must disclose specific details about the pledging of shares held by its controlling shareholders and the impact on the company's control and normal business operations, assessing whether it constitutes a situation that prohibits overseas listing [1][2]. - The company is required to outline its issuance plan, including the number of shares to be issued, the proportion of total share capital post-issuance, and the expected amount of funds to be raised, along with potential changes in the shareholding structure that may affect control [1][2]. Group 2: Business Overview - Yuxin Technology is a provider of financial technology solutions, operating in both domestic and international markets, offering product-oriented full-stack technology solutions to a wide range of financial institutions [3]. - The company's main business segments include banking technology solutions, non-banking technology solutions, and innovative operational services, covering areas such as credit, digital banking, financial regulation, data services, and smart finance [3]. - Yuxin Technology has established a broad customer base, achieving a penetration rate of 100% among major financial institutions, including the central bank, policy banks, state-owned banks, and joint-stock commercial banks in China [3].

Core Viewpoint - Yuxin Technology's upcoming listing in Hong Kong raises questions about the viability of its overseas business, which has consistently contributed less than 1% to total revenue. Despite industry growth, the company's revenue has been declining in 2024 and the first quarter of 2025. Additionally, the actual controller has reduced holdings at a discount prior to the listing [1]. Group 1: Company Overview - Yuxin Technology, established in 1999, is one of China's early local enterprises serving bank information technology, with thousands of technical employees and a leading market share in the banking IT solutions sector [3]. - The company primarily serves financial institutions, including the central bank, major state-owned banks, and over 380 regional banks, as well as non-bank financial institutions [3]. Group 2: Financial Performance - In 2024, Yuxin Technology's revenue from banking technology solutions was 3.461 billion RMB, accounting for 87.53% of total revenue [5]. - The company's total revenue for 2022, 2023, and 2024 was 42.81 billion RMB, 51.99 billion RMB, and 39.54 billion RMB, respectively, showing a significant decline of 23.94% in 2024 [12]. - Despite the revenue drop, net profit increased from 253 million RMB in 2022 to 384 million RMB in 2024, with a net profit margin rising from 5.9% to 9.7% [12]. Group 3: Market Trends - The global technology spending by financial institutions is projected to grow from approximately 2.8 trillion RMB in 2020 to 4.2 trillion RMB by 2024, with a compound annual growth rate (CAGR) of about 10.4% [7]. - The market for banking IT solutions in China is expected to reach 102.17 billion RMB by 2028, with a CAGR of 8.1% from 2023 to 2028 [9]. Group 4: Challenges and Client Structure - Yuxin Technology's revenue decline contrasts with the overall growth in the banking IT solutions market, attributed to its client structure, where large state-owned banks contributed 52.49% of revenue in 2024 [9]. - The company has faced challenges due to the domestic banking sector's pressures, including declining asset quality and rising non-performing loan rates [9]. Group 5: Operational Adjustments - The company has reduced its workforce significantly, with total employees decreasing from 12,547 in 2023 to 10,811 in 2024, including a notable drop in technical and research staff [13]. - The actual controller's discounted share reduction prior to the listing raises concerns about the company's financial health and future prospects [14][15].