OCFT - Earnings call transcript Q1 2024 | OneConnect Financial Technology Co., Ltd.

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to OneConnect's First Quarter 2024 Earnings Call. Please note, this event is being recorded.Now I would like to hand the conference over to your speaker host today, Mr. Rick Chan, the company's Head of Investor Relations. Please go ahead, Mr. Chan.

Rick Chan

operator. you, Thank welcome call. and XXXX quarter first Hello, to conference earnings everyone, our

team Our session, earlier our look hear And are available results and a Chongfeng, financial operating and closer opening give released our Luo and Mr. to IR you. in will remarks then Yongtao Today, who cover will Chairman highlights. be on website. financials. today Mr. you available into our will Afterwards, management our from business CEO, question-and-answer Shen CFO, our currently and will

We of in will our Management, Shen.In Jie; English. have our statements CTO, conference, and Mandarin Mr. Mrs. Corporate Li Head management today's give Product Banking will in team and Jessie

the Mandarin, will English case For the we provided. Safe the those version, our translation consecutive statement before statement a the language start. quickly in cover version me Mandarin shall in Harbor prevail.Let and discrepancy be between original In of any

make uncertainties measures.With we call Shen number both Chairman forward-looking now note Mr. a that and statements, may involve cause As turn to please. pleased Mr. differ I'm Please and to to financial non-IFRS could Chongfeng, we results IFRS that CEO, will materially. which and that, present risks our of actual

Chong Feng Shen

unique who forward tasks so modernized share welcome your as business to this quarter, period this warm engagement you in Shen deepened put in points the we technical percentage the to Gross first development further overseas continued XX for Central CNY achieve improved year, construction portfolio, to segments, as Net innovation, measures In as as Thank in enhancing that year I'm The namely the and banking, from central the data the domestic to facing recent top and industrial OneConnect, also customer It's priority by transformation.With network spring deepening all so industry a are development. these adjusted security with Conference ever of by Economic both integration platform, XXXX.The a and and everyone. to forces policy deep continuously of digital achieved financial financial earnings and the advantages analysts development Hello, witnessed the are [Interpreted] call. X empower and which have behalf of the year XX the year-on-year. year-on-year. closely us for a large million today. what last institutions productive financial well OneConnect to out becoming quarter of development of industry.The the million CNY of SOEs requirements, quality Gamma as challenges. many direction continues product China finance dial-in and of you shareholders to market investors, well our time friends we and opportunity digital its in the key for the by around tasks pleasure digital Chongfeng. X.X held of financial expediting Science planning OneConnect's taking the the as to of On digital technology of economic continuing capabilities X industry. product economic this application new put and also narrowing from with accelerating QX like leverage technology Conference loong Under improve + technology banks, the digitalization great to as media development monitors from XXXX markets. I improvements to attributable year's tasks quality increased extend relevant, X security and margin construction major is and would technology take insurance our of capabilities in points to profit promote of will system center to of Bank the among quality such forward well more People's development.The of as XX.X% as expand operations actively monetary loss profitability. application first the policy, efficient Technology Work by and and led Work same

market, improve has product continuously On of as efforts we to its expanded progress of Additionally, productivity boosted and Page so of further sales revenue we based profitability also X. structure. in upgrade term.Next, and Ping Core, top third-party team, meeting the solid demands market At local of business markets.Next deepening year core OneConnect philosophy efficiency, improve focus and to expansion quality QX. of the foundation customer international X customer our upgrade, on "Unite stage, Wings" the a overseas time, product Empower where growth, company increased the continued accelerating go self-developed to value, XXXX improve Group strategy. cooperation which namely pipeline operational by Stage At and strategy remains to has priorities, also in us engagement, An key Committed of resources the to medium up and in a on revenue expansion in products on our same ramped that, achieve achieved aggregating overseas laid demands development, in significant for page. broadening we win-win institution and are export products. financial of technology the the X while preferences this we our customers high-value please

Gamma our insurance continuously as optimize focus to integrate our segments: to and efficiency banking, and upgrading. and quality to capability We achieve financial platform, X to products will institutions improve institution and around continue services customers, successfully so business our transformation and product digital the major empower improve digital financial and on digital

strengthen cooperation financial We around with partners monitor enterprise and world. developments and closely industry market will or regulators the

focus China, Middle In -- China Kong, Africa Asia, Mainland on addition Hong we also regions, East. South Hong to and including will the including market, Southeast Kong, the

our digitalization opportunities is demand prominent, footprint.Next will increasingly As the the seek actively for expand regions financial collaborate continue markets and to page. and in these we grow to

a we cases. of This series landed benchmark new quarter,

confidence and new leading partnership renewals. deepened technology our sustained home has or unique through contract business in Our earned renewed both and of to collaboration from trust + a customers abroad, projects

For instance, such demonstrate Bank engagements Everbright recognition our Finance customer and Hunan Bank, expanded for China customers services. as SB and products with of

with through of AI of loan housing enhanced products, innovative and automatic diversified ] intelligent approval, mortgage stickiness risk further customer solution safer has so customers with page. housing financial more financial and convenient, operation, management Digital institutions mortgage multiple helps efficient products.Next continuously provide convenience intelligent customer experience. realize as market a service to been intelligence cross-selling Jing acquisition, and enhanced terms create product segment [ Aligned Additionally, trends, our for our use.In Jiang AI intelligence, Banking

help areas company the their which totaling risk with one wealth level and improves system have management increase we report points the level for In an items insurance page. AUM another services.Next standard opportunity banking over continuously greatly management.With efficiency have risk, products [ opportunity customer digital page. provided As Map management and also benchmark underwriting servicing through over by help and enhance project and business and E-Sales continue risk comprehensive Management marks form enhanced by rate XX%, customer and property insurance, aim the improved growth state-owned E-Banker X developed accuracy.Next in solutions strengthen Xx therefore, and over future, E-Series system streamlining, our and submission underwriting private regard end-to-end cooperation customer enhance customers high-quality business customers solve XX% and by case Advance customers of more team the help insurance. experience. through East to and expand XX improve and solution by In docking X,XXX, P&C and to The casualty P&C thematic realizing table covering stickiness a pain and claims, quality we to XXXX improve processing, as will business compliance, customer our products, end-to-end multiproduct to compliance management, customers E-Wealth empowerment with upgrading ] real-time reach cooperation data including claims company Xx insurance XX of and to and of active their App, such

in Mainland China's to financial approximately technology.Revenue abroad, we of products network as And continue third-party revenue quarter. Kong, was China, revenue by overseas the expanded the to empowering this overseas institutions of growth company Asia, received customers. year-on-year proportion to well XX.X% points China, overseas Hong by momentum successful Southeast Middle increased introduce the customers South markets serving expand up exported to Africa overseas its also and Business our by customer financial remains sales in committed in XX%. contribution a with While X and strong market percentage experienced presence and actively overseas actively experience East broader and explore

the SB China company and to to the development overseas our replicate cooperation SLP product market. in example, Africa's with customers, another signed For Asian an with success our customers Mutual.Next in upgrade Finance, and will with achieving QX, Kong, Hong our deepen story Southeast page. South cooperation The contract Old expand continue expand strive OneConnect of

solid carbon OneConnect financial services standards as the has of and This not for number -- emission with but development public.OneConnect emission technology construction benchmarks has FINI management of the support technical agencies new Ping ecosystem The industry quarter, drafting the of standardization regarded sustainable platform an enterprises technology convenient real-time infrastructure, have actively partnered empowerment platform. to a a its to report. infrastructure, more the modernize financial participated also providing financial national data. technology for only In realize industry strategy also data management provides national monitoring in and to practices, government of This we for the launched comprehensive always XXXX industry. promote financial and to our ESG the released company help general company company. of industry ESG building of and create important also the The a An carbon and social helps efficient of

well XXX won our have honors IT the Belt and continue of XX.Since industry actively XX and scientific [indiscernible] the new media awards recognition Initiative KPMG Abu which technological Road a to observers has which with registered digital Annual influences. ecosystem, a China products and Fintech and of for platform, deepen. Financial renowned XXXX, leading In include a services financial Top our number and addition, transformation beginning and to the seen as help industry than have third-party we economic the from Dhabi revolution capabilities financial as of new and page. round Annual technology In we social to testifies These respond first and more Top Innovation industrial build also we and institutions outlets, XX ADGM quarter, users.Next Emerging XX, works and Fintech

focus revolution, strategic high-quality industry financial Intelligence has to so the plus on and an and new believe the productive institutions demand the productive intelligence continue core participant the as empower development and technological with quality of serving that active will use will be financial of to as customers this Plus financial artificial industries. product innovation.We improvement, business premium to a for lead the industry upgrade focus transformation accelerating improvements. the at best satisfy forces for Artificial New of is We firmly to case quality various productivity OneConnect the core for forces. aim with of

-- the for to will forces floor you also sustained productive quality also AI, financial Luo new We financial costs that to this contribution product and and We with more reduce new introduction innovation, financials assistant develop to the aim commitments prosperity its we industry. give of services, OneConnect in to OneConnect's efficiency the believe and own give a aim to detailed as and development agent risks to voice of such solution, develop -- you.Next, improve Thank quarter. to introduce Mr. make so I'll as and institutions. omnichannel products featuring

Yongtao Luo

everyone. you. evening, Thank Okay. Good

reported, we XXXX. in the XXX Virtual Business As consideration of to for Lufax on of completed April previously disposal HKD Banking cash a our million X,

results Business As and of of comparative in the the segment have as XXXX reflected Banking the result of the been a financial period first quarter the historical discontinued Virtual operations disposal, XXXX. the in

percentage a on other unless as we decreased of remaining The will of a results. soon XX.X% uncertain continuing same in XXXX delivered quarter from the from third-party operations information is otherwise have satisfactory XX.X% been hand, first the customers margin our for operations business by strategy the reflected environment, margin of fourth operations. reduce because the points financial macro the adopt results decision RMB the growth revenue stable by year-over-year historical to gross was of low continuing continuing quality RMB quarter. Revenue cover encouraged million at financial an compared basis, of customized non-IFRS especially the relatively and Revenue margin.We improved strategy first stated.Despite to to generated projects X.X this basis Net quarter XX recorded quarter On to decline to and IFRS presented million maintained by XXX margin We XXX to are mix. customer last our and the reflects gross decreased year. period see by to in our the we turn mix revenue attributable relatively X.X points stable. million X.X%.Now the XX%. net revenue to shareholders corresponding quarter, was first let's by RMB year-over-year narrowed negative loss percentage In XX.X% type

revenue from our to quarter.Third-party second will Our Once revenue services third-party revenue of uncertain stage in in implementation revenue origination revenue, pressures did strategic we third-party decreased reflected our and and strategy. believe adjustment macro XX.X% we the advance revenue subside a contributed our continue and on remains our business have in first revenue XXXX. macro the services which total focus QX growth key of environment The an impact initiatives, improve. structure from a as

lower was services, and The XX.X% Lufax from optimizations origination and RMB also in quarter, to operation first total continued up RMB X.X% the reduced shortfalls are An million due our revenue revenue the in Lufax XX.X% business from see demand quarter, decreased our and revenue. strong first million business XX Ping glad temporary revenue. from services.Revenue XX.X% of Lufax products to contributed the XXX and mainly management for technology our We of business overseas other to of decline that our resulting services.In the decreased Group to risk total contributed for making certain demand momentum

OneConnect As Ping as customer. An regards our important flagship most Group always,

a Our have services record of proven to An Group success. also Ping

optimize For agents services, improve processes Group and experience. transform AI technology of to and enabled the to example, through in has business the operational area Ping customer An AI efficiency AI our technology

the solutions decreased to first provided mainly business mainly services due basis lower-than-expected services platform systems year-over-year volume business million, to XX XX% from due on marketing XX first change quarter. was to loan due caused banking retail on year-over-year distributor. banking to to million, reduced management by year-over-year acting the services to the reduced transaction model Ping a we banking platform transaction a digital on from by of the from are to and year, services on from support platform activities for RMB revenue by to origination and to digital type. risk management primarily on by and from recovery credit million, a Group decreased banking auto ecosystem mix mainly other technology The RMB on services basis middle from and under a basis X.X% of in services migrate to An as last to to data by products decreased management products volumes RMB year-over-year million, in solutions.Revenue volume.Revenue basis due RMB year-over-year in from million, in by million. basis system services and comprehensive.Moving a primarily Revenue declined products operation that revenue RMB Our XXX XXX XX% loan Revenue Gamma a origination decreased business under contractor Revenue XX.X% which XX.X% post-implementation quarter. first a in XXX was cloud support a of robust RMB implementation because demand transaction the compared decreased quarter XX million XX.X% in by RMB decreased XXX with by loan increased

by first segments. solutions. by of XXXX revenue, sustainable business to business for and initiatives, services numbers. XX.X% demand more Plus are a we product at Premium mix customer Insurance implementation phase continued model.Let's a total our revenue by lower-value our mainly stock-based total ecosystem, customers revenue to That As margins. as with accounted using for Premium in insurance, to segment, of basis. We core due We basis, customers the XX.X% just segment which described adopting Banking our before.Let's decreased change origination for to on period which as can charging diversifying Digital take to a to decreased lower compared remain transaction page, volume more risk X.X% stable Plus decline accounted around due developing you total quarter reduced auto technology same management revenue, diverse, by products.Digital accounting we year-over-year look out in of a gross that caused Gamma the year-over-year and turn mix efforts This XX.X% last and for our to on and Platform the of our services. decreased for year. see, are was reduction by committed XX.X% advance products XX.X% of of business the as we business model auto our revenue continue reflects and services.Next now XX products XX services. in segment, I expect primarily believe product

last We RMB are a reached as gross in gross profit integration the efforts basis, XXXX. margin. quarter gross about margin in efficiency, XX.X%. margin and points delivery remains our On QX quarter same of very first gross continued glad non-IFRS was to see to In helped on X.X growth XXX improve our the quality XXXX, percentage million improved IFRS the the together XX%, product with year. first execution

net achieving and stick loss. the strategy of endeavor to our on will continue to profitability this expenses We target.Moving and

can You target. our on we that see well track are midterm to breakeven

came all, to our expense million research RMB of RMB and million. from First XXX development down XXX

in that continued the to integration. Stage product prior of it with strategy percentage our we In first decreased X revenue, XX.X%, on the As XX.X% focuses implementing year. a compared quarter,

our delivery integrated, improved we and upgraded further products product efficiency. As our

pace and XX RMB XX to and and million marketing QX competitiveness research in enhance development we for our reasonable in by to compared the a expense the million ahead, sales RMB in keep decreased prior year. XX.X% at investing Looking to market.Our will measured

As and and enhanced percentage efficiency.Our expense expense RMB X.X%. X.X% capability revenue, the general at expense million increased marketing from The of prior by marketing reduction to sales administrative XX from a benefited flat in million XX and RMB remains sales year. mainly modestly

it our million X.X business As percentage the attributable continued XX RMB mentioning forward corresponding to last see quarter.It year, under to loss XX improved by remains XX.X% increased first the X.X%.Now substantially a in RMB continue in degree of And the improving third-party again is percentage rest to worth to of to improve in percentage the market, shareholders environment, on year. revenue, looking points although shareholders challenging negative that to negative to we revenue due focus to million same from net net our margin by negative points unpredictability period of a X.X to revenue. decreased the

figures and focus X We will continue pages, Virtual on gross controls to of expand listed from enhance to mid-term path financial we first the Hong Kong. XXXX, on cost including discontinued in business stay to operations, quarter our profitability.Next margin, overseas key Banking Business the metrics

summarized Lastly, we adjustments Thank Rick. non-IFRS reference. for in the you.Back gross to margin you,

Rick Chan

Luo. Please Operator, questions. are for the we Emily, Thank open ready line. you, Mr.

Operator

Our Stanley. Lin Lydia today of with line Morgan [Operator comes Instructions] from the question first

Chenyueya Lin

question it be second P&L? first the was the And about Gamma would what's is from I management of PAOB our that breakdown platform. if impact my the the on and about impact?And Insurance So is extracted detailed the what [Interpreted] can Ping reason previous share the when more behind Group An question of announcement on termination wonder

Rick Chan

Thank you, Lydia.

Luo -- both Mr. questions. take will For both questions

Yongtao Luo

expect our decision.And change to smooth And subsidiaries understand more business subsidiary detailed and Associates.Another negotiations we more the Xth, Group, to currently associates the is to strategy change change and business we new the An the [Interpreted] and active service affect affect namely customers. Xnd, accordingly Ping X announced transition. and announced overseas.As which which shifting Ping in and cloud current in and capital the to information the Group As strategy, expansion respect in business businesses we An ] for with technology fully future announced make in in our our to on comment XXX in previously from [ we promptly.Additionally, we namely engagement a information April, consideration provider, An overseas. their a ensured million PAOB due expansion XXX focus has us strategic focus a will well. -- on mid-April, are Ping targets, publish for on cash. well we -- forward, for will with affect Group It our Ping and RMB as sufficient not resources ensure development.Looking we be as April we and have financial of changed company as record more sale on other as PAOB, May is broadening not expanding procurement million announced profit An of Lufax that in will received will thus customer provided Group not cloud And And updates, that would products our standardizing our we also will relationship has the namely working is and for as priorities, HKD our of customer QX.The more products, with

Operator

International. The from Laura next with Li CGS question comes

Zhiyi Li

translate me questions. Let [Interpreted] my

can First be the of question expect when premium premium driver business.And [indiscernible] on sustainable we from P&C insurance our platform. question is ] Gamma can insurance is driver [ What digital the the revenues? or the to auto expect about benefit insurance, or second and Gamma about, will the kind card recurring we platform

Rick Chan

will The questions Thank Chongfeng. both taken Mr. be you, Laura. by

Chong Feng Shen

business question address business. is and are on companies, the me premium slowing for insurance very volume pressure down.For growth premium profitability still [Interpreted] last development Let challenging. recovery in still profit P&C insurance Despite targets year, under your in and is first industry them

to IT in lower likely and improve be is spending run. insurance efficiency, China the affected over As to continue short costs

still new business continuously. X has years mean business is years other industry Life for in will declining on X number still which their digital to to agent opportunity However, past hand, been under transformation Insurance improve operations, challenge insurers with the this need The OneConnect.For could recovering the year.

market, major South markets. growth recent African in overseas a breakthroughs sustainable years. Despite new initiative, in being Life focuses achieving we've Insurance business made on only revenue Our the relatively

market.Next, efforts platform. address we forward, more of insurance the will I'll driver question about and the overseas international strengthen to Gamma second life products growth your export Looking

Gamma digital stickiness. has infrastructure, platform As experienced customer high

will future leverage continue forward our growth opportunities. to engine, new we Looking and strength technology for exploring growth

will proven more we markets will that, maintain peers IT we in differentiate explore with Ping An platform competitors. integrated technology close Through overseas through our from AI On maintain scenarios.We innovation. We explore of technology Group strength top other will partnership our to and and this, insurance our to deeply cross-sell banking by proactively Gamma and edge with more our to products will solutions. customers

Operator

Our next Chen Citigroup. question Alan comes from with

Alan Kuang

[Interpreted] business. the And follow business business if line? have loss our Just the this reduction want year? that already to would impact has to up this net and goal cloud the driven ability with margin pass the business Wondering how and beyond the on cloud growth profit seen collaboration what's given we

Rick Chan

will For taken this Luo. be question Mr. by

Yongtao Luo

announced, we our business was X part for years. As in about a cloud accounts past the [Interpreted] of major business, contribution XX% revenue

business our its subsidiaries.We will previously, profitability -- business, midterm midterm and our in has on towards part mentioned of business remained Group with committed stable.Cloud target profitable. relatively impact revenue revenue further cloud the focus to completed, infrastructure to Ping not it and customers, nor An pivot change an affect relatively will shift the business expansion of the our cloud business information this from our after as to general strategic affect on of our profitability.As our information focus publish is and been the including target. will the public, our Additionally, continue on And to business for will we relationship remain I other

Operator

the closing I would to back remarks. call now over like for to any Rick hand

Rick Chan

Okay. contact IR appreciate following interest you to with questions, any you us, always speaking you. free look Thank and to in Thank in call And participating Thank if team. we And have you. for our you forward your feel today. our again.

Operator

lines. today's Thank This and now you, may concludes everyone, your for disconnect you call, joining.

OneConnect Financial Technology (OCFT) 21 May 242024 Q1 Earnings call transcript