CNFinance Reports Decrease in Financial Performance for H1 2025 Amid Challenges

CNFinance Holdings Limited, listed on the NYSE under CNF, has released its unaudited financial results for the first half of 2025. The results display a notable decline in critical areas, primarily due to the ongoing economic conditions and the sluggish real estate market in China.

In a strategic move, the company chose to minimize new loan issuance, concentrating instead on maintaining the quality of its existing loan portfolio. This decision naturally resulted in a significant drop in both loan origination volume and interest income. For the first half of 2025, CNFinance reported total interest and fees income plummeting by 55.1%, down to RMB 415.7 million (approximately USD 58.0 million) from RMB 926.5 million in the same time frame last year.

The sharp reduction in interest income has been largely attributed to a decrease in the average daily outstanding loan principal. Interest income from loans fell by 54.4%, landing at RMB 380.2 million (USD 53.1 million). Moreover, fees charged to sales partners for repurchasing defaulted loans witnessed a dramatic decrease of 60.8%, highlighting the challenges faced in managing non-performing loans.

In addition to lower income, CNFinance's total interest and fees expenses also saw a reduction of 32.4% to RMB 271.7 million (USD 37.9 million), indicating a concerted effort towards managing costs, with notable reductions in compensation and lease expenses year-over-year. As a result, the net interest and fees income was reported at RMB 144.0 million (USD 20.1 million), a stark contrast to RMB 524.8 million for the same period in 2024.

The company has also been proactive in its operations, as evidenced by its ongoing efforts to enhance operational efficiency. Through rigorous cost management steps, compensation expenses decreased by 39.2% to RMB 52.9 million (USD 7.4 million). Furthermore, operating expenses overall dropped by 50.5% to RMB 101.4 million (USD 14.2 million) compared to last year.

A brief analysis of CNFinance's profitability indicates the company was at a net loss of RMB 40.4 million (USD 5.6 million) in the first half of 2025, a glaring decrease from the net income of RMB 47.9 million reported for the same period in 2024. Correspondingly, basic and diluted earnings per ADS were also negative for the first half of 2025, standing at RMB (0.59) (USD (0.08)) and RMB (0.63) (USD (0.09)) respectively, compared to a positive performance last year.

Despite the current challenges, CNFinance remains dedicated to reducing non-performing loan ratios while simultaneously exploring new avenues for growth, such as partnerships with supply chain finance firms. Currently, they have recorded a business volume that exceeds RMB 100 million in this venture.

The delinquency ratio for loans originated by the company has escalated to 46.0% as of June 30, 2025, compared to 29.7% at the end of 2024. The non-performing loan (NPL) ratio also surged to 16.9%, up from 8.5%. This trend underscores the ongoing concerns regarding loan repayment amidst an evolving economic landscape.

In summary, CNFinance’s performance in the first half of 2025 exhibits considerable challenges, reflected in the sharp declines in revenue and profits. However, under the leadership of Chairman and CEO Zhai Bin, the company is making strategic adjustments aimed at not only weathering the current storm but also positioning itself for stronger future performance. A conference call scheduled for August 28, 2025, will provide further insights into the company’s strategies and future outlook as they navigate these turbulent financial waters.