Half Year 2025 CNFinance Holdings Ltd Earnings Call

Speaker #3: Good day and welcome to the CNFinance Holdings Ltd. first half of 2025 financial results conference call. All participants will be in a listen-only mode.

Matthew Liu: Good day and welcome to the CNFinance Holdings Limited first half of 2025 Financial Results Conference Call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on a touch-tone phone. To withdraw your question, please press star, then two. Please note this event is being recorded. I would now like to turn the conference over to Investor Relations Manager Matthew Liu. Please go ahead.

Speaker #3: Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions.

Speaker #3: To ask a question, you may press Star, then 1 on a touchtone phone. To withdraw your question, please press Star, then 2. Please note, this event is being recorded.

Speaker #3: I would now like to turn the conference over to IR Manager Matthew Liu. Please go ahead.

Speaker #4: Thank you, and welcome to the CNFinance first half of 2025 financial results conference call. Our Director and Vice President, Mr. Chen June, will walk us through the operating and financial results after that.

Matthew Liu: Thank you. Welcome to the CNFinance Holdings Limited first half of 2025 Financial Results Conference Call. Our Director and Vice President, Mr. Shen Jun, will walk us through the operating and financial results. After that, we will have a Q&A section. Before we start, I would like to remind you that this conference call contains forward-looking statements within the meaning of Section 21(e) of the Securities Exchange Act of 1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as will, expects, anticipates, future, intends, plans, believes, estimates, target, going forward, outlook, and similar statements.

Speaker #4: We will have a Q&A section. Before we start, I would like to remind you that this conference call contains forward-looking statements within the meaning of Section 21(e) of the Securities Exchange Act of 1934.

Speaker #4: As amended and as defined in the US Private Securities Litigation Reform Act of 1995, this forward-looking statement can be identified by terminology such as 'will', 'expects', 'anticipates', 'future', 'intends', 'plans', 'believes', 'estimates', 'target', 'going forward', 'outlook', and similar statements.

Speaker #4: Such statements are based upon management's current expectations and current market and operating conditions. They relate to events that involve known or unknown risks.

Matthew Liu: Such statements are based upon management's current expectations and current market and operating conditions and relate to events that involve known or unknown risks, uncertainties, and other factors, all of which are difficult to predict and many of which are beyond the company's control, which may cause the company's actual results, performance, or achievements to differ materially from those in the forward-looking statements. Further information regarding these and other risks, uncertainties, or factors is included in the company's filings with the U.S. Securities and Exchange Commission. The company does not undertake any obligation to update any forward-looking statement as a result of new information, future events, or otherwise, except as required under law. Now, please welcome Mr. Shen Jun.

Speaker #4: Uncertainties, and other factors. All of which are difficult to predict. And many of which are beyond the company's control. Which may cause the company's actual results performance or achievements to differ materially from those in the forward-looking statements.

Speaker #4: Further information regarding these and other risks, uncertainties, or factors is included in the company's filings with the US Securities and Exchange Commission. The company does not undertake any obligation to update any forward-looking statement.

Speaker #4: As a result of new information, future events, or otherwise. Except as required under law. Now, please welcome Mr. Chen June.

Speaker #2: 大家好, 2025年上半年, 上半年在复杂多变的市场环境中, 兼职以生存第一、胜利第一为指导思想, 积极应对挑战, 稳步地推进战略调整与业务优化, 先将上半年的运营与财务情况向大家汇报。

Shen Jun: 大家好，2025年上半年，CNFinance Holdings Limited在复杂多变的市场环境中，坚持以"生存第一，胜利第一"为指导思想，积极应对挑战，稳步地推进战略调整与业务优化，现将上半年的运营与财务情况向大家汇报。

Speaker #4: Hello everyone. In the first half of 2025, amidst the complex and ever-changing market environment, CNF is here with the guiding principle of survival first, victory first.

Matthew Liu: Hello everyone. In the first half of 2025, amidst a complex and ever-changing market environment, CNFinance Holdings Limited adhered to the guiding principle of "Survival first, victory first," actively tackled challenges and steadily advanced strategic adjustments and business optimizations. Now, I'd like to report to you on our operational and financial performance for the first half of the year.

Speaker #4: Actively tackled challenges and steadily advanced strategic adjustments and business optimizations. Now, I'd like to report to you on our operational and financial performance for the first half of the year.

Speaker #2: 截止到2025年6月30号, 公司累计签约的贷款合伙人2,184家, 同比增长2%。有效的放款合伙人1,458家, 增长3.3%。但由于公司主动控制增量, 聚焦存量, 不良资产的压降, 放款的比数同比下降了78.1%。放款的金额下降了85.4%。截止到二季度末, 贷款余额为112.63亿元, 同比下降了29.6%。我们始终坚持盘活存量做优增量的策略, 将资源集中用于风险化解与资产质量提升。虽然短期业绩承压, 但是为长期的稳健发展奠定了坚实的基础。

Shen Jun: 截止到2025年6月30号，公司累计签约的贷款合伙人2184家，同比增长2%。有效的放款合伙人1458家，增长3.3%。由于公司主动控制增量，聚焦存量，不良资产的压降，放款的笔数同比下降了78.1%，放款的金额下降了85.4%。截止到二季度末，贷款余额为¥11.263 billion，同比增长下降了29.6%。我们始终坚持盘活存量，坐优增量的策略，将资源集中用于风险化解与资产质量提升。虽然短期业绩承压，但是为长期的稳健发展奠定了坚实的基础。

Speaker #4: As of June 30, 2025, our company has signed a total of 2,184 sales partners, marking a year-on-year increase of 2%. We had an aggregate of 1,485 sales partners who have introduced borrowers to us.

Matthew Liu: As of June 30, 2025, our company had signed a total of 2,184 sales partners, marking a year-on-year increase of 2%. We had an aggregate of 1,485 sales partners who had introduced borrowers to us, representing a 3.3% growth. However, due to our proactive efforts to control loan issuance and focus on reducing non-performing loans in our existing portfolio, the number of loan transactions decreased by 78.1% year-on-year, and the total loan origination dropped by 85.4%. By the end of the second quarter, our loan balance stood at RMB 11.2 billion, a decrease of 29.6% compared to that of last year. We adhered to the strategy of leveraging existing assets and optimizing new ones, focusing our resources on risk mitigation and asset quality enhancement. Although this approach puts pressure on short-term performance, it lays a solid foundation for long-term steady growth.

Speaker #4: Representing a 3.3% growth; however, due to our proactive efforts to control loan issuance and focus on reducing non-performing loans in our existing portfolio, the number of loan transactions decreased by 78.1% year-on-year.

Speaker #4: And the total loan origination dropped by 85.4%. By the end of the second quarter, our loan balance stood at ¥11.2 billion, a decrease of 29.6% compared to that of last year.

Speaker #4: We are here to discuss the strategy of leveraging existing assets and optimizing new ones, focusing our resources on risk mitigation and asset quality enhancement. Although this approach puts pressure on short-term performance, it lays a solid foundation for long-term steady growth.

Speaker #2: Start半年实现贷款利息及相关收入4.16亿元, 同比下降了55%。资金成本同比下降了32%。经营费用下降了74%。体现公司强效的成本控制能力, 净亏损4,037万元。主要是因为具体的资产减值的损失3,125万元。

Shen Jun: asset impairment loss of RMB 31.25 million.

Speaker #4: In the first half of the year, our interest income was ¥460,000,000, a decline of 55% year-on-year. Our financing costs decreased by 32%.

Matthew Liu: In the first half of the year, our interest income was RMB 460 million, a decline of 55% year-on-year. Our financing cost decreased by 32%, and operating expenses fell by 74%, demonstrating the company's strong cost control capabilities. Our net loss was RMB 40.4 million, primarily due to an asset impairment loss provision of RMB 31.3 million.

Speaker #4: And operating expenses fell by 74%, demonstrating the company's strong cost control capabilities. Our net loss was 40.4 million RMB, primarily due to an impairment loss provision of 31.3 million RMB.

Speaker #2: 截止到2025年6月30号, 公司发放的贷款的不良率16.9%。尽管不良率有所上升, 但是新增不良贷款得到的控制。公司通过多种不良贷款压降手段, 在上半年实现了103%的不良贷款的回收率。

Shen Jun: 截止到2025年6月30号，公司发放了贷款的不良率16.9%。尽管不良率有所上升，但是新增不良贷款得到了控制。公司通过多种不良贷款压降手段，在上半年实现了103%的不良贷款的回收率。

Speaker #4: As of June 30, 2025, the non-performing loan (NPL) ratio of the company’s loan was 69.16%. Although the NPL ratio rose, the increase of new NPLs was effectively contained.

Matthew Liu: As of June 30, 2025, the non-performing loan (NPL) ratio of the company's loan was 16.9%. Although the NPL ratio rose, the increase of new NPLs was effectively contained. Through diversified NPL reduction measures, the company achieved a 103% NPL recovery rate in the first half.

Speaker #4: Through diversified NPL reduction measures, the company achieved a 1003% NPL recovery rate in the first half.

Speaker #2: 总体来说, 公司上半年进行了组织架构优化与人员精简, 实现了运营成本的大幅的下降。

Shen Jun: 总体来说，公司上半年进行了组织架构优化与人员精简，实现了运营成本的大幅的下降。

Speaker #4: During the first half, the company optimized its organizational structure and streamlined personnel, resulting in a significant reduction in operating costs.

Matthew Liu: During the first half, the company optimized its organizational structure and streamlined personnel, resulting in a significant reduction in operating costs.

Speaker #2: 公司在上半年的三项重点工作包括: 第一, 压降不良资产; 创新并利用有效的压降工具; 第二, 稳定资金端, 引进了一批以地方AMC为主的新的机构资金, 保证了融资渠道的畅通; 第三, 拓展了新的业务, 精进产品, 推出了符合市场需求的新产品, 开辟了新的增长点。

Shen Jun: 公司在上半年的三项重点工作包括: 第一, 压降不良资产, 创新并利用有效的压降工具。第二, 稳定资金端, 引进了一批以地方AMC为主的新的机构资金, 保证了融资渠道的畅通。第三, 拓展了新的业务, 精进产品, 推出了符合市场需求的新产品, 开辟了新的增长点。

Speaker #4: In one word, our key priorities in the first half included: First, reducing NPLs by innovating and leveraging effective reduction tools. Second, we've stabilized our funding source by bringing in a bunch of new institutional investors.

Matthew Liu: In one word, our key priorities in the first half included: First, reducing NPLs by innovating and leveraging effective reduction tools. Second, we've stabilized our funding source by bringing in a bunch of new institutional investors, mainly local asset management companies, to ensure smooth financing channels. Third, we have expanded into new business areas. We refined our existing products and launched new ones that meet market demands.

Speaker #4: Mainly local AMCs. To ensure smooth financing channels. Third, we have expanded into new business areas where we find our existing products and launched new ones that meet market demands.

Speaker #2: 面对依然严峻的市场环境, 公司将继续坚持生存第一、胜利第一的指导思想, 以盘活存量、做优增量为核心策略。坚持三项重点工作, 继续集中资源支持压降、资金端稳中求进, 支持发展新的业务。

Shen Jun: 面对依然严峻的市场环境，公司将继续坚持"生存第一，胜利第一"的指导思想，以盘活存量，做优增量为核心策略，坚持三项重点工作：既继续集中资源支持压降，资金端稳中求进，支持发展新的业务。

Speaker #4: Facing continued market challenges, the company will uphold the 'survival first, victory first' principle. With containing non-performing loans and optimizing new growth as the core strategy, we will persist in the three key priorities.

Matthew Liu: Facing continued market challenges, the company will uphold the "Survival first, victory first" principle. With containing non-performing loans and optimizing new growth as the core strategy, we will persist in these three key priorities: dedicating resources to NPL reduction, ensuring stable funding channels, and supporting new business development.

Speaker #4: Dedicating resources to NPL reduction, ensuring stable funding channels, and supporting new business development.

Speaker #2: 谢谢大家。

Shen Jun: 谢谢大家。

Speaker #4: Thank you.

Matthew Liu: Thank you.

Speaker #3: We will now begin the question and answer session. To ask a question, you may press star, then one, on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys.

Matthew Liu: We will now begin the question and answer session. To ask a question, you may press star, then one on your touch-tone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star, then two. Once again, to ask a question, that's star, then one. There are no questions at this time. I'd like to hand the call back over for any closing remarks.

Speaker #3: If at any time your question has been addressed and you would like to withdraw your question, please press star, then two. Once again, to ask a question, that's star, then one.

Speaker #3: If there are no questions at this time, I’d like to hand the call back over for any closing remarks.

Speaker #4: Thank you. And thank you again for joining us today. If you have any further questions, you can contact us at ir@cashchina.cn. Thank you.

Matthew Liu: Thank you, and thank you again for joining us today. If you have any further questions, you can contact us at ir@catchchina.cn. Thank you.

Matthew Liu: The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.