Bairong Inc. Announces 2024 Interim Financial Results
PR Newswire
BEIJING, Aug. 29, 2024
Solid Revenue Growth Coupled with High Gross Profit Margin (73%) and Non-IFRS Profit (RMB 200 Million)
BEIJING, Aug. 29, 2024 /PRNewswire/ -- Bairong Inc. (the "Company", "we" , "us" or "our" ; HKEX: 6608), a leading cloud-based AI turnkey service provider, today announced the consolidated results of the Company for the half year ended June 30, 2024.
Mr. Zhang Shaofeng, our founder, chief executive officer and chairman of the Board, commented:
"We proudly announce Bairong's continuous profitability as always. Our Non-IFRS profit margin maintained an impressive level of 15%, with half-year Non-IFRS profit approximately RMB 200 million. Gross profit margin further lifted to a remarkable 73%, demonstrating our strong capability to scale up. By integrating large language model and emotion-recognition technique into our AI VoiceGPT robot, we have extended our BaaS as a Service(BaaS) to achieve a double-digit revenue growth of 20% year-over-year, building on the impressive foundation laid in the prior years, and underscoring our leading position and sustainable value in the market."
Financial Summary
Six months ended June 30,
2024 2023 Change
(unaudited) (unaudited) ( %)
(RMB in thousands, except percentages)
Revenue 1,321,348 1,243,032 6
Model as a service ("MaaS") 421,352 431,134 (2)
Business as a service ("BaaS") 899,996 811,898 11
BaaS -- Financial Scenario 589,473 492,095 20
BaaS -- Insurance Scenario 310,523 319,803 (3)
Gross profit 967,155 896,034 8
Operating profit 156,832 211,697 (26)
Profit for the period 142,833 206,808 (31)
Non-IFRS measures
Non-IFRS profit for the period 197,479 226,847 (13)
Non-IFRS EBITDA 243,481 267,644 (9)
Revenue
Our total revenue increased by 6% from RMB1,243.03 million for the six months ended June 30, 2023 to RMB1,321.35 million for the six months ended June 30, 2024, primarily attributable to our enhanced capabilities of providing products and services despite a challenging economic and consumption environment.
For the six months ended June 30, 2024, our MaaS business reported revenue of approximately RMB421.35 million. During the Reporting Period, the number of Key Clients reached 165, representing an increase of 19 from 146 period-over-period, while average revenue per Key Client was RMB2.00 million. Our Key Client Retention Rate was 96%.
Key metrics of MaaS
Six months ended June 30,
2024 2023 Change (%)
(unaudited) (unaudited)
(RMB in thousands, except percentages)
Revenue from MaaS 421,352 431,134 (2)
Revenue from Key Clients(Note) 329,398 355,246 (7)
Number of Key Clients 165 146 13
Average revenue per Key Client 1,996 2,433 (18)
Retention rate of Key Clients 96 % 98 % -2 pct
Note:"Key Clients" are defined as paying clients that each contributes more
than RMB300,000 total revenue to the Company year-to-date.
For the six months ended June 30, 2024, our BaaS -- Financial Scenario business reported revenue growth of 20% period-over-period to RMB589.47 million. As a result of a rapid growing gross value of transactions we facilitate, of which grew by 23% period-over-period to RMB26,150.46 million for the first half of the year. During the Reporting Period, we deepened our cooperation with clients by jointly developing various marketing activities to contribute to the rapid expansion of the gross value of transactions. In addition, as we see more existing users contributing revenue, which combined with our user acquisition advantage via Generative AI, continue to improve user acquisition efficiency and bring higher ROI.
Key metrics of BaaS -- Financial Scenario
Six months ended June 30,
2024 2023 Change (%)
(unaudited) (unaudited)
(RMB in thousands, except percentages)
Revenue from BaaS -- Financial
Scenario 589,473 492,095 20
Gross transaction value 26,150,459 21,262,052 23
Technical service fee rate 2.3 % 2.3 % 0 pct
In the first half of 2024, the BaaS -- Insurance Scenario reported revenue decrease by 3% periodover-period to RMB310.52 million. Total premiums increased by 80% period-over-period to RMB2,872.66 million. In the first half of 2024, as the economy recovered gradually, the business performance of our BaaS -- Insurance Scenario was revived, with first year premiums increasing by 103% period-over-period to RMB1,904.54 million and renewal premiums increasing by 47% period-over-period to RMB968.12 million.
Key metrics of BaaS -- Insurance Scenario
Six months ended June 30,
2024 2023 Change (%)
(unaudited) (unaudited)
(RMB in thousands, except percentages)
Revenue from BaaS -- Insurance
Scenario 310,523 319,803 (3)
Revenue from first year premiums 254,658 270,236 (6)
First year premiums 1,904,544 939,753 103
Revenue from renewal premiums 55,865 49,567 13
Renewal premiums 968,119 657,650 47
Cost of sales
Our cost of sales increased by 2% from RMB347.00 million for the six months ended June 30, 2023 to RMB354.19 million for the six months ended June 30, 2024, in line with the growth of our business scale.
Gross profit and gross margin
As a result of the foregoing, the Group's gross profit increased by 8% from RMB896.03 million for the six months ended June 30, 2023 to RMB967.16 million for the six months ended June 30, 2024. The Group's gross profit margin was 73% and 72% for the six months ended June 30, 2024 and 2023, respectively.
Research and development expenses
The Group's research and development expenses increased by 12% from RMB202.07 million for the six months ended June 30, 2023 to RMB225.88 million for the six months ended June 30, 2024, primarily attributable to the increase in the staff costs of our research and development personnel to support product offerings and technology development about various AI application technology, algorithm-driven machine learning platform and underlying database performance.
General and administrative expenses
The Group's general and administrative expenses increased by 13% from RMB123.98 million for the six months ended June 30, 2023 to RMB139.94 million for the six months ended June 30, 2024, primarily attributable to the increase in share-based compensation expenses from the grant of share options and restricted share units by the Company during the six months end June 30, 2024.
Sales and marketing expenses
Our sales and marketing expenses increased by 10% from RMB460.68 million for the six months ended June 30, 2023 to RMB506.54 million for the six months ended June 30, 2024, primarily due to an increase of RMB40.24 million of promotion, advertising, information technology services and other related expenses, which was mainly due to the increased branding and business promotion to enhance our brand recognition and our continuous efforts to obtain high-quality traffic to improve conversion efficiency.
Other income
Our net other income decreased by 30% from RMB104.98 million for the six months ended June 30, 2023 to RMB73.03 million for the six months ended June 30, 2024. This is primarily due to a decrease of RMB22.24 million of government grants.
Profit for the year
As a result of the foregoing, the Group's profit for the period decreased from RMB206.81 million for the six months ended June 30, 2023 to RMB142.83 million for the six months ended June 30, 2024.
Cash, cash equivalents and time deposits
The Group had cash and cash equivalents and time deposits of RMB2,852.85 million and RMB3,301.84 million as at June 30, 2024 and December 31, 2023, respectively. During the Reporting Period, we repurchased class B ordinary shares ("Class B Shares") from the open market for a total of HK$70.05 million including expenses.
Conference Call
Our management will hold a conference call at 10:00a.m. Beijing/Hong Kong Time on Friday, August 30, 2024 (10:00 p.m. U.S. Eastern Time) to discuss the financial results and answer questions from investors and analysts.
For participants who wish to join the call, please complete online registration using the link provided below prior to the scheduled call start time.
Participant Online Registration:
https://webcast.roadshowchina.cn/b3NZVk50YUk3Rng4VmF6U3p0Qkk0Zz09
Dial-in details for the earnings conference call are as follows:
International: +86-23-62737100
Mainland China: 023-63623333/4008-063-263
HK China: +852-30183602/+800-961505
English Dial-in Password: 447012932
Chinese Dial-in Password: 532157549
Please scan the QR code in the poster below to register for the conference:
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