Core Viewpoint - The company reported strong financial performance in 1H25, with significant revenue growth and a return to profitability, driven by strategic asset sales and robust payment processing activity [1][2]. Financial Performance - 1H25 revenue increased by 27% year-on-year to 780 million yuan, with net profit turning positive at 151 million yuan compared to a net loss of 35 million yuan in 1H24, largely due to over 1.6 billion yuan in gains from the sale of a stake in a subsidiary [1][2]. - Adjusted recurring operating profit was 6.258 million yuan, a significant improvement from a loss of 8.88 million yuan in 1H24, indicating enhanced core business profitability [2]. Business Trends - Total Payment Volume (TPV) for 1H25 grew by 32% year-on-year to 2.1 trillion yuan, outpacing revenue growth of 27% [1]. - Global payment TPV surged by 94% to 198.5 billion yuan, while domestic payment TPV rose by 28% to 1.9 trillion yuan, with stable fee rates contributing to revenue growth [1]. - Value-added services revenue increased by 34% to 90 million yuan, driven by virtual card offerings and the expansion of digital products [1]. Profitability Metrics - Gross profit for 1H25 rose by 25% to 410 million yuan, maintaining a high gross margin of 52% [2]. - The gross margin for global payments was 72.7%, while domestic payments stood at 19.9%, with a slight decline in value-added services margin attributed to lower profitability in virtual card operations [2]. Strategic Outlook - The company anticipates steady growth in payment business, projecting TPV to continue increasing and revenue growth to exceed 20% in the coming years, with a target recurring operating profit of nearly 70 million yuan in 2025 [3]. - The company plans to allocate 30% of its fundraising to enhance global licensing and local service capabilities, while 50% will focus on blockchain technology innovations in cross-border payments [3]. Market Position - As a leading cross-border payment service provider, the company is well-positioned to benefit from Web3 payment innovations and has obtained a VATP license, which opens new growth avenues [3]. Valuation and Forecast - Revenue forecasts for 2025 and 2026 have been raised by 2% to 1.65 billion yuan and 2.02 billion yuan, respectively, while maintaining adjusted profit estimates [4]. - The target price has been increased by 3.3% to 15.8 HKD, reflecting a potential upside of 39% based on a price-to-sales ratio of 9x for 2025 and 8x for 2026 [4].

Core Viewpoint - The report from CICC indicates a strong performance for Lianlian Digital, with an upward revision of revenue forecasts for 2025 and 2026 by 2% to 1.65 billion and 2.02 billion HKD respectively, while maintaining adjusted profit estimates unchanged [1] Group 1: Financial Performance - In 1H25, Lianlian Digital's revenue increased by 27% year-on-year to 780 million HKD, with net profit turning positive at 1.51 billion HKD compared to a net loss of 350 million HKD in 1H24, largely due to over 1.6 billion HKD in gains from the sale of part of its stake in LianTong [2] - The total payment volume (TPV) for 1H25 rose by 32% year-on-year to 2.1 trillion HKD, outpacing the revenue growth of 27% [3] - Gross profit for 1H25 increased by 25% year-on-year to 410 million HKD, maintaining a high gross margin of 52% [4] Group 2: Business Segments - Global payment TPV surged by 94% year-on-year to 198.5 billion HKD, with a decline in overall fee rates to 24 basis points due to higher growth in lower-fee service trade and B2B sectors [3] - Domestic payment TPV grew by 28% year-on-year to 1.9 trillion HKD, with stable fee rates at 1.1 basis points [3] - Value-added services revenue increased by 34% year-on-year to 90 million HKD, contributing 11% to total revenue, driven by virtual card services and the expansion of digital products [3] Group 3: Strategic Outlook - The company expects steady growth in payment business, with TPV projected to increase and payment revenue maintaining a growth rate of over 20% in the next 2-3 years [6] - The company plans to allocate 50% of its fundraising to enhance blockchain technology in cross-border payments, aiming to improve efficiency and security [7] - The recent approval of the VATP license opens up new growth opportunities in the Web3 payment sector, allowing the company to explore additional revenue streams [7]