Summary of the Conference Call for Lianlian Digital Company Overview - Lianlian Digital's revenue has steadily increased from 589 million yuan in 2020 to 1.315 billion yuan in 2024, while the net profit attributable to shareholders has continued to show losses, primarily due to investment losses in Unicom. However, the scale of losses has gradually narrowed since 2022, with losses expected to decrease to 290 million yuan in 2024 [2][6][7]. Financial Performance - Gross profit increased from 380 million yuan in 2020 to 680 million yuan in 2024, but the gross margin has declined due to a decrease in the comprehensive fee rate for payment services and an increase in the proportion of domestic payment business revenue [2][8]. - The company has seen a significant reduction in expenses, particularly in management fees, which have decreased notably due to increased employee benefits and IPO-related expenses prior to 2023 [2][8]. Industry Trends - The global cross-border e-commerce GMV is projected to reach 5.8 trillion yuan by 2027, with China's cross-border e-commerce penetration rate expected to reach 27.7%. In 2024, China's cross-border e-commerce import and export scale is expected to reach 2.71 trillion yuan, a year-on-year increase of 14% [2][9]. - The overall digital payment service market in China is projected to reach a total payment amount of 354 trillion yuan by 2027, with a compound annual growth rate (CAGR) of approximately 14% from 2022 to 2027. The cross-border market is expected to grow at a CAGR of 25%, which is higher than the overall market growth [2][9]. Competitive Landscape - The digital payment industry is significantly influenced by policies, with increased entry barriers leading to a reduction in the number of licensed institutions. As of June 2025, the number of licensed non-bank payment institutions in China has decreased to 169, indicating a potential increase in industry concentration [2][10]. - Lianlian Digital ranks seventh among independent suppliers in China with a market share of 0.6%, and it is the leading independent supplier with a market share of over 9% [2][10]. Business Model and Revenue Streams - Lianlian Digital primarily provides digital payment services and related value-added services, with revenue models based on transaction payment volume (TPV) fees. Global payment fees are generally higher than domestic payment fees [2][12]. - In 2024, the revenue growth rate for domestic payments is expected to be 57%, significantly higher than the 23% growth rate for global payments [2][13]. Growth and Development - The company has established a global presence, having obtained various licenses, including those in New York and Singapore, and has partnered with over 100 cross-border e-commerce platforms [4][16]. - R&D expenses account for over 20% of total expenses, with a CAGR of 27% from 2020 to 2024, reflecting the company's commitment to technological investment [2][18]. Valuation and Investment Outlook - Due to the lack of long-term stable profitability, the company is currently valued using the price-to-sales (PS) method, with an average PS of 9.6 times for similar companies. The target price for 2025 is set at 15.28 HKD, with a buy rating [2][19].
连连数字20250909