#China #Shenzhen #Financial Technology #OneConnect #Business Results

OneConnect Reports First Half 2025 Financial Results

On August 21, 2025, OneConnect Financial Technology Co., Ltd. released its unaudited financial results for the first half of 2025, revealing substantial challenges faced by the company in the competitive financial services technology sector. The key takeaway from the report is the significant drop in revenue and increased losses compared to the same period in the previous year.

Financial Overview

The financial results show a revenue from ongoing operations of RMB 801 million, a dramatic decrease of 43.4% from RMB 1,416 million in the first half of 2024. This sharp decline is primarily attributed to a major downturn in revenue from their cloud services platform, which plummeted by 99.6% due to the strategic decision to phase out this service starting July 2024.

In addition to revenue losses, the gross profit also decreased from RMB 526 million to RMB 209 million, reflecting a gross margin drop from 37.1% to 26.1%. This reduction in gross margin highlights pressures that OneConnect faces regarding its operational efficiency and service delivery amid a contracting market.

Key Financial Highlights:

• - Revenue from third-party customers fell by 13.1% to RMB 417 million.
• - Operating loss remained stable at RMB 106 million, with an operating margin deteriorating further from -7.5% to -13.2%.
• - Loss attributable to shareholders from continuing operations was RMB 78 million, worsening from RMB 70 million the previous year.

Business Segments Analysis

The report indicated varying performance across different business segments. The digital banking division generated RMB 241 million, indicating a decrease of 7.9% year-on-year, while the digital insurance segment performed better, climbing 11.2% to RMB 288 million. The Gamma Platform, however, faced a staggering 69.6% drop, supporting the narrative of significant challenges stemming from the cloud services element.

OneConnect attributed the decrease in business origination services and risk management services to lower transaction volumes, reflective of the broader economic environment which poses challenges for the financial services sector in China. Closing the gap, implementation services saw a minimal decline by 10.6%, reinforcing the notion that while certain segments are resilient, most face decline.

Operating Expenses and R&D

OneConnect has also proactively addressed its cost base, reducing total operating expenses from RMB 638 million to RMB 316 million. R&D expenditures specifically fell 70%, signifying a strategic response to the declining revenue landscape. However, the company noted that despite the decrease in R&D spending, the need to maintain competitive technological offerings remains critical.

Forward-Looking Considerations

Looking forward, OneConnect emphasizes its ongoing efforts to rekindle growth while managing the transition from phased-out services. The technology provider has underscored its commitment to digital transformation initiatives for financial institutions, positioning itself as a vital partner in advancing technological capabilities within the industry despite the current challenges it faces.

Moreover, the company continues to enhance its relationships with existing partners while exploring opportunities for expansion into new markets, thereby diversifying its revenue streams and mitigating risks associated with its existing business model.

Conclusion

In summary, OneConnect's financial results for the first half of 2025 paint a picture of substantial difficulty, with cutbacks in revenues and ongoing losses reflecting a challenging environment for technology providers in financial services. The management's strategy of reallocating resources and scaling down certain business lines is a necessary, albeit painful, step towards regaining traction in a competitive landscape. Stakeholders will be closely watching OneConnect's future announcements for signs of recovery or further strategic pivots needed in these uncertain times.