Recently, the results of Financial One Account in the first three quarters of 2023 were released.
On November 14th, OneConnect Financial Technology Co., Ltd. (OCFT.US, 06638. HK) (referred to as "OneConnect Financial") announced its performance for the nine month period ending September 30, 2023.
During the reporting period, Financial One Account achieved a revenue of 2.74 billion yuan and a gross profit of 990 million yuan; The net profit margin attributable to the parent company increased from -21.6% to -10.3%, an optimization of 11.3 percentage points compared to the same period in 2022, and the gross profit margin increased by 0.9 percentage points year-on-year to 36.1%.
But as of now, Financial One Account has not yet achieved profitability. Shen Chongfeng, Chairman and CEO of Financial One Account, said, "In the first nine months of this year, the company suffered a year-on-year loss of 410 million yuan, with a reduction of 60%. The company is steadily moving towards its mid-term goal of achieving a breakeven balance
In addition, it is worth noting that on November 14th, Financial One Account also released another announcement that it will sell 100% of its wholly-owned subsidiary, Ping An One Account Bank (Hong Kong) Limited (hereinafter referred to as "Ping An One Account Bank" or "PAOB"), to Lujin Holdings Limited for HKD 933 million.
According to the announcement, Ping An One Account Bank is the first virtual bank in Hong Kong to focus on providing flexible and efficient banking services for small and medium-sized enterprises. Its total revenue in the first half of 2023 was 66 million yuan, a year-on-year increase of 45.2%.
The reduction in losses in the first three quarters reached 60%, but profitability has not yet been achieved
The first three quarters of Financial One Account saw a 60% reduction in losses, but it has not yet achieved profitability. According to the report, in the first three quarters, the operating revenue of Financial One Account was 2.74 billion yuan, with a gross profit of 990 million yuan.
Financial One Account's revenue in the third quarter also came under pressure. In response, Shen Chongfeng, Chairman and CEO of Financial One Account, stated, "During the reporting period, we faced unfavorable factors that led to a decrease in our revenue. We actively adjusted our product portfolio, competitive pressure, and constantly changing market conditions, resulting in a decrease in revenue
However, it is worth noting that the losses of Financial One Account have decreased. As of the end of September, the gross profit margin of Financial One Account was 36.1%, an increase of 0.9 percentage points and 1.5 percentage points compared to the same period in 2022 and 2021, respectively; The net profit margin attributable to the parent company has been optimized year by year, with more than 11.3 percentage points and 22.1 percentage points optimized to -10.3% compared to the same period in 2022 and 2021, respectively.
The reporter learned that the loss reduction of Financial One Account also needs to be attributed to its business structure adjustment. It is reported that at present, Financial One Account is accelerating its exit from high customization and low gross sales businesses, and continuing to deeply cultivate the "pay as you go" type of business. Chief Financial Officer Luo Yongtao also emphasized, "We have always been committed to identifying and improving our underperforming business areas, and focused on strengthening our revenue structure
Shen Chongfeng introduced that in the third quarter, Financial One Account continued to improve its product capabilities around three major sectors: digital banking, digital insurance, and the Gama platform. At the same time, on the basis of accelerating the exit of high customization and low gross sales businesses, we have further strengthened customer expansion and expanded business opportunity reserves, and the proportion of third-party customer revenue has increased year-on-year.
Shen Chongfeng stated that in the next stage, the company will focus on the upgrading and growth of standardized products, and continue to deepen the "pay according to quantity" type of business. At the same time, adjustments will be made to the research and development cost structure, including tilting more resources towards the research and development of core flagship products, and steadily increasing the revenue share of new products.
Financial One Account executives previously stated in media interviews that Financial One Account relies on Ping An, but does not rely on Ping An. In the development process of Financial One Account, Ping An Group needs to play a supportive role, but in the long run, it is still necessary to increase the proportion of external income until it "significantly exceeds the proportion of Ping An Group".
The executives of Financial One Account have undergone significant changes in recent years. On November 2nd, Financial One Account (06638. HK) announced that Chen Rong, the executive director and joint general manager of the company, has resigned and will no longer serve as a member of the compensation and nomination committee; Zhu Min and Chen Xinying resigned as non-executive directors. Meanwhile, Guo Xiaotao has been appointed as a non-executive director and a member of the Compensation and Nomination Committee.
Prior to this, in August 2022, Financial One Account announced that Ye Wangchun would step down as chairman and be replaced by CEO Shen Chongfeng. At that time, director Li Rui also resigned. At that time, Financial One Account Express stated that "the resignations of Ye Wangchun and Li Rui were not due to any disputes or differences related to the company's operations, policies, or practices." In November 2022, Ye Wangchun resigned as an executive director and Fu Xin was appointed as a non-executive director.
Financial OneConnect will sell Ping An OneConnect Bank for HKD 933 million
At the same time as the performance announcement for the first three quarters, on November 14th, Financial One Account also announced that it would sell 100% of its wholly-owned subsidiary, Ping An One Account Bank (Hong Kong) Limited (referred to as "Ping An One Account Bank" or "PAOB"), to Lufax Holdings Limited for a consideration of HKD 933 million.
According to the announcement, Ping An One Account Bank is the first virtual bank in Hong Kong to focus on providing flexible and efficient banking services for small and medium-sized enterprises. Its total revenue in the first half of 2023 was 66 million yuan, a year-on-year increase of 45.2%.
It is reported that the capital adequacy ratio of Ping An One Account Bank is currently 100%, which is higher than regulatory requirements. All of its loans are small and medium-sized enterprise loans in Hong Kong, and a large portion of the outstanding balance is supported by the Hong Kong government's small and medium-sized enterprise financing guarantee program.
Why choose to sell Ping An One Account Bank? Shen Chongfeng responded, "This time, Financial One Account chose to sell PAOB, which is in line with the company's overall strategic layout and shareholder interests. The company will continue to focus on its technology positioning and the improvement of technology driven product services in the next stage, committed to steadily promoting deep cooperation with global financial institutions through digital solutions of 'two improvements and two reductions'
  Ping An One Account Bank is a fully licensed bank with a service scope similar to traditional banks.
The reporter learned that in the future, Financial One Account intends to use the obtained funds as general working capital, including but not limited to improving the company's main business operations, optimizing the allocation of resources for technology products and services, etc.