#China #Shenzhen #Financial Technology #OneConnect #Q1 2025

OneConnect Financial Technology Q1 2025 Financial Results Overview

OneConnect Financial Technology Co., Ltd. has recently disclosed its unaudited financial results for the first quarter of 2025, revealing notable declines in various operational metrics compared to the same period last year. The report, released on May 28, 2025, highlights a marked downturn in revenue alongside ongoing strategic changes within the Company.

Financial Performance Highlights

• - Revenue: OneConnect reported revenue from continuing operations of RMB 368 million, representing a dramatic 49.2% drop from RMB 723 million in Q1 2024. This substantial decline can primarily be attributed to a RMB 317 million decrease in revenue from their cloud services platform, which the Company has intentionally phased out, as previously communicated.

• - Gross Margin: The gross margin for continuing operations fell to 28.5%, down from 37.7% a year prior. This reduction indicates challenges in maintaining profitability amidst shrinking revenue streams.

• - Net Loss: The loss attributable to shareholders from continuing operations was reported at RMB 38 million, a slight improvement from RMB 54 million in the previous year, reflecting a net margin of -10.4% compared to -7.4% in Q1 2024. Each American Depositary Share (ADS) faced a loss of RMB -1.06, down from RMB -1.48 last year.

Revenue Breakdown

The breakdown of revenue from continuing operations further underscores the challenges faced by OneConnect:

1. Implementation Services: Revenue stood at RMB 143 million, a decline of 9.2% year-over-year, driven by reduced demand for financial technology implementations.
2. Transaction-based and Support Revenue: This segment, which includes business origination, risk management, and operational support, generated a total of RMB 225 million, a staggering 60.3% drop from the previous year. Specific areas such as digital loan origination have particularly suffered due to decreases in transactional volumes.
3. Cloud Services Revenue: The firm earned just RMB 2 million, marking a 99.5% decrease compared to RMB 318 million last year, a direct result of the aforementioned strategic withdrawal.
4. Digital Banking and Insurance: Within the divisions, the Digital Insurance segment reported growth, reaching RMB 143 million, reflecting an 8.1% increase attributed to rising demand for digital insurance solutions. Meanwhile, the Digital Banking segment saw revenues dip 35.6%, underscoring the mixed performance across sectors.

Challenges Ahead

The first quarter results exemplify the rapid shift and ongoing transition within OneConnect as it adapts to a changing landscape in the financial technology sector. The transition away from cloud services poses risks, yet management remains committed to exploring new pathways for sustained growth and profitability.

Despite the significant challenges, OneConnect is poised to continue strengthening its partnerships with financial institutions and leveraging its innovative technology applications to navigate these turbulent waters. The Company is hopeful that the restructured focus on core services will yield positive outcomes in the long run.

Conclusion

In conclusion, OneConnect's Q1 2025 financial report illustrates a critical juncture for the Company, characterized by substantial revenue declines and losses. As the Company refines its operational strategy and seeks new growth avenues, investors will closely monitor its performance in the upcoming quarters to determine the efficacy of these changes and the prospects for a recovery.

For more details about OneConnect's various services and offerings, visit their official website.