Bairong AI (6608) H1 2024 earnings summary

Executive summary

• H1 revenue rose 6% YoY to RMB1,321.35m; gross profit increased 8% to RMB967.16m, while IFRS profit fell to RMB142.83m from RMB206.81m.

• Non-IFRS profit was RMB197.48m; BaaS contributed 68% of revenue and MaaS 32%.

• BaaS Financial Scenario was the main growth driver; management cited early MaaS recovery but noted macroeconomic and consumption pressures.

Financial highlights

• Operating profit declined 26% YoY to RMB156.83m; non-IFRS EBITDA was RMB243.48m, down from RMB267.64m.

• R&D expenses rose 12% to RMB225.88m, G&A increased 13% to RMB139.94m, and sales and marketing rose 10% to RMB506.54m.

• Other income fell 30% to RMB73.03m, mainly reflecting lower government grants; impairment loss rose to RMB10.99m from RMB2.58m.

• Operating cash flow was negative RMB126.67m; cash, cash equivalents and financial assets totaled RMB3,582m at June 30, 2024.

Segment performance

• BaaS Financial Scenario revenue rose 20% to RMB589.47m; gross transaction value increased 23% to RMB26.15bn, with a 2.3% technical service fee rate.

• BaaS Insurance Scenario revenue fell 3% to RMB310.52m, while facilitated premiums grew 80% to RMB2.87bn; first-year premiums rose 103% and renewal premiums 47%.

• MaaS revenue declined 2% to RMB421.35m; key clients increased to 165 from 146, average revenue per key client was RMB2.00m, and retention was 96%.

• Small and micro enterprise BaaS services recorded 47% YoY revenue growth; wealth-management revenue and client numbers also increased.