Ling Tan

Ling Tan from Haitong inquired about the notable increase in fixed operating costs, particularly labor and G&A expenses, exceeding previous guidance, and asked for the specific reasons and future outlook. Ling Tan also requested a breakdown of Hong Kong's contribution to net asset inflow, revenue, and profit in Q3 2025, and the strategy to maintain growth in a competitive market.

Answer

CFO John Zeng explained that labor cost increases were due to staff growth, hiring R&D experts, and performance bonuses for employees and asset management fund managers. G&A rose due to professional services for global expansion (AML, audit, legal), expected to continue. For Hong Kong, John Zeng stated it contributed ~35% of new users and ~25% of net asset inflow, with profitability but low group profit contribution. The strategy focuses on product enrichment and market share, leveraging product and price advantages for continued growth.

Ling Tan from ICBCI asked for the outlook on revenue growth and profitability for the second half of 2020, noting the company's shift from historical profitability to a net loss of approximately RMB100 million.

Answer

CFO Steven Sim attributed the loss to the COVID-19 outbreak's impact on business activity, particularly in the travel sector, and a conscious strategic shift towards long-term SaaS-based technical services over lending. While not providing specific guidance, he stated the company has optimized its structure, cut costs, is well-positioned for recovery, maintains a healthy financial position, and is generating positive cash flow.