Today, Yikatong (09923.HK) released its interim performance report for 2024. During the reporting period, the company achieved a revenue of 1.578 billion yuan, including one-stop payment services of 1.347 billion yuan, merchant solutions of 202 million yuan, and in-store e-commerce services of 288.4 million yuan. The profit for the period increased by 7.3% compared to the previous year, reaching 325.8 million yuan, surpassing the full-year figure for 2023.

In the one-stop business, the peak daily transaction volume based on the application payment reached nearly 60 million transactions, with the payment rate remaining stable. The company further explored the lower-tier market, especially in the North China and Southwest regions, continuously strengthening cooperation with partners to reach customers in different industries. To further support business expansion, Yikatong has partnered with over 100 commercial banks for joint payment acceptance in the first half of 2024.

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At the same time, Yikatong has placed greater emphasis on developing vertical industry markets with strong resistance to economic downturns, and has enhanced service levels in industries with high profit margins and market concentration to increase customer stickiness, including sports and fitness, healthcare, energy, and services.

Since 2021, Yikatong began to explore overseas markets, successively obtaining licenses such as the MSO in Hong Kong, China, MPI in Singapore, and MSB in the United States. It has also built an intelligent risk control system to reduce user transaction funds and regulatory risks, and officially launched its cross-border payment service brand YeahPay in 2023, with the cross-border payment service network continuously improving.

In the first half of 2024, Yikatong's overseas business grew rapidly, with Singapore making breakthrough progress, successfully partnering with internationally renowned brands such as Bulgari, Chow Tai Fook Jewelry, Rolex, MCM, and Bee Cheng Hiang, with a year-on-year increase in GPV of over 50%.

Yikatong's cross-border payment business is not only about seeking new business growth but also about the internationalization of the entire group. It aims to replicate domestic payment channels, big data algorithms, and first-hand experience from over a decade of cooperation with numerous merchants to overseas markets, providing a broader range of business empowerment solutions for overseas merchants.

The performance report shows that Yikatong has collaborated with invested overseas companies to jointly promote digital merchant solutions, with clients including Starbucks, Muji, Pizza Hut, Sunway, New Balance, and Levi's, among more than 200 global and regional brands, covering over 20,000 stores in Southeast Asia, including Singapore, Indonesia, Vietnam, and Malaysia.

In 2024, Yikatong will further expand its global payment and currency exchange, settlement, and remittance services, enriching the company's overseas product matrix, building a new pattern for Yikatong's overseas payment business, and continuously deepening compliance management, focusing more on commercialization, and promoting the coordinated development of domestic and international payment services.

From a financial perspective, in the first half of 2024, Yikatong's revenue composition and capital structure have been continuously optimized. The revenue and company income share of non-payment services (merchant solutions and in-store e-commerce services) have continued to increase, rising from 11.0% in the same period of the previous year to 14.6% in the first half of 2024, making the company's business model more comprehensive and diversified.

Additionally, benefiting from the increased share of non-payment business revenue and higher gross margins, the overall gross margin of the company has increased from 17.7% in the same period of the previous year to 19.0% in the first half of this year. The gross margin for merchant solutions has risen by 3.3% year-on-year to 90.9%, and the in-store e-commerce gross margin has risen by 4.6% year-on-year to 81.5%.Due to the early redemption of convertible bonds by Yikatong, the debt-to-asset ratio decreased to 41.1% in the first half of 2024.

Based on an open-source large model, Yikatong independently developed and locally deployed an AI-assisted programming plugin in 2023. In the first half of 2024, the adoption rate of AI-assisted programming code further increased, and the efficiency of automated customer service also increased to over 80%. As a result, the sales and administrative expenses in the first half of 2024 decreased by 11.2% compared to the same period of the previous year. While the large model meets its own needs, it is also helping the company serve merchants. In the first half of this year, the number of brand stores served by the in-store e-commerce increased by about 35% year-on-year, and the revenue from merchant solutions also increased by 21.2% year-on-year to 202 million yuan.