Baiwang (6657) H1 2024 earnings summary

Executive summary

• H1 revenue fell 16.1% YoY to RMB281.6m, while gross profit rose 16.3% to RMB110.3m and gross margin expanded to 39.2% from 28.3%.

• Net loss widened to RMB445.8m from RMB253.1m, largely reflecting RMB303.0m in fair-value losses on preferential-rights liabilities as the IPO became more certain.

• H Shares listed on July 9, 2024; the listing ended preferential rights, and the related shares were reclassified from liabilities to equity after period-end.

Financial highlights

• Revenue was RMB281.6m versus RMB335.6m; cost of sales fell 29.0% to RMB171.2m, lifting gross profit to RMB110.3m from RMB94.9m.

• Operating loss narrowed to RMB138.6m from RMB218.7m; R&D expense rose 19.0% to RMB102.6m, while administrative expense fell 65.0% to RMB38.0m and selling expense fell 25.0% to RMB80.0m.

• Net loss was RMB445.8m versus RMB253.1m; basic and diluted loss per share was RMB3.18 versus RMB1.80.

• The reported loss included a substantial non-cash remeasurement: RMB303.0m of fair-value losses on FVTPL liabilities tied to preferential-rights shares and the expected IPO.

Outlook and guidance

• H2 priorities include retaining customers, lowering acquisition costs, improving revenue and profitability, and investing further in technology and R&D, including AI, blockchain and the proprietary large-scale compliance model.

• Product strategy targets large-customer financial use cases, supply-chain and industrial-chain analytics, risk-control model commercialization, and more modular, intelligent offerings.

• Digital analytics plans emphasize deeper multi-product and multi-scenario penetration among key accounts, stronger risk intelligence, and improved digital marketing gross margins through lower referral-fee outlays.

• Digital invoice reform under the Fourth Phase of Golden Tax is expected to support demand for compliant, automated finance and tax solutions and supply-chain settlement collaboration.