CNFinance Holdings - Earnings Call - Q2 2025

Transcript

Speaker 0

Today, 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 IR Manager Matthew Lu. Please go ahead.

Thank you, and welcome to the CNFinance Holdings Limited first half of 2025 Financial Results Conference call. Our Director and Vice President, Mr. Chen Jun, will walk us through the operating and financial results. After that, we will have a Q&A session. Before we start, I would like to remind you that this conference call contains forward-looking statements within the meaning of Section 21E 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.

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. Chen Jun.

Speaker 1

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 0

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.

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pressure, this has laid a solid foundation for the company's long-term and stable development.

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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.

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loss provision of RMB 31.25 million.

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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 impairment loss provision of RMB 31.3 million.

Speaker 1

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。

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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.

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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。

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

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products, launching new products that meet market demand, and creating new growth points.

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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 (AMCs), 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 1

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：即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。

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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 1

谢谢大家。

Speaker 0

Thank you.

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. If there are no questions at this time, I'd like to hand the call back over for any closing remarks.

Thank you, and thank you again for joining us today. If you have any further questions, you can contact us at [email protected]. Thank you.

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