Financial One Account is gradually approaching its goal of achieving mid-term breakeven.
According to the unaudited performance report released by Financial One Account (06638. HK, OCFT. N) on March 18, 2023, the gross profit margin increased by 0.2 percentage points year-on-year to 36.8%, the net loss attributable to shareholders narrowed by 58.4% to 363 million yuan, and the net profit margin attributable to shareholders increased from -19.5% to -9.9%, a significant increase of 9.6 percentage points year-on-year.
At the performance press conference held on the evening of March 18th, Luo Yongtao, Chief Financial Officer of Financial One Account, stated that by reducing labor costs, improving efficiency, optimizing R&D and marketing expenses, costs have been greatly reduced and indicators such as gross profit margin have been improved, which is expected to achieve the mid-term break even goal. Previously, Luo Yongtao stated in an interview with First Financial that he expects to achieve a breakeven point in 2024.
In terms of revenue, for the whole year of 2023, the total revenue of Financial One Account decreased by 17.8% year-on-year to 3.67 billion yuan, and almost all high proportion revenue items showed a year-on-year decline trend. Among them, the revenue from customer acquisition services decreased by 65.6% year-on-year to 132 million yuan. Financial One Account explained that this was mainly due to a decrease in transaction volume and the company's proactive elimination of low value products in digital banking business; The revenue from risk management services decreased by 22.8% year-on-year to 320 million yuan, mainly due to the slower than expected recovery rate of banking business, resulting in a decrease in transaction volume of bank loan solutions; The revenue from operational support services decreased by 24.5% to 860 million yuan, mainly due to reduced demand from insurance and banking customers. Due to reduced demand, the revenue of cloud service platforms also decreased by 5.3% year-on-year to 1.246 billion yuan.
However, despite a double-digit decline in revenue, Shen Chongfeng, Chairman and CEO of Financial One Account, stated that benefiting from the ideal progress made in products, customers, and fee control, the company's loss reduction performance in 2023 was effective, with a net loss attributable to shareholders narrowing by 58.4% year-on-year to 363 million yuan.
From the performance data, it can be seen that the R&D expenses, sales and marketing expenses, general and administrative expenses, and other expenses of Financial One Account in 2023 have all achieved a year-on-year decrease of over 30%, mainly due to continuous cost optimization measures such as a decrease in labor costs.
Regarding the issue of how to further reduce losses in 2024, Luo Yongtao stated at the performance conference that the company will continue to take cost control and efficiency improvement measures in 2024. In terms of resource utilization, we will strengthen production, improve efficiency, concentrate resources on high-quality research and development, continuously upgrade and develop according to our own development needs, and maintain the company's competitiveness. "The control and use of expenses ultimately serve the sustainable development of the business, so we will effectively utilize resources to invest in the company's key business development areas, such as overseas operations," said Luo Yongtao.
In fact, overseas business is seen as a new growth point in Financial One Account, and it is also a major driving force for it to increase the proportion of third-party customer revenue except for Ping An Group. Performance data shows that since 2018, we have been expanding our business in Southeast Asia. Excluding the revenue contribution of Ping An One Account Bank, the overseas customer revenue contribution of Financial One Account in 2023 has increased by more than 30% year-on-year, and its proportion in third-party total revenue has increased from 9.7% last year to 15.7%. Driven by the increase in revenue from overseas customers, as of the end of 2023, the proportion of third-party customer revenue from Financial One Account has increased from 33.1% at the end of 2022 to 35.6%.
"Looking ahead to 2024, Financial One Account will continue to deepen the implementation of the second phase strategy, take big steps towards the goal of mid-term profitability, and solidly deepen various business growth points." Shen Chongfeng said.
Against the backdrop of five major articles on "vigorously developing technology finance, green finance, inclusive finance, pension finance, and digital finance" and the rapid development of artificial intelligence, Shen Chongfeng stated at the performance conference that the financial industry will undoubtedly be the best practice scenario for the implementation of "artificial intelligence+" and the strategic key point for the vigorous development of new productive forces. "Considering the rapid development of the digital economy, more and more financial institutions are adopting digital transformation, creating more prospects for the expansion of financial technology solutions. We still believe in the potential growth of third-party revenue," said Shen Chongfeng.