CNFinance's Q2 2025: Contradictions Emerge on Loan Balance, Interest Income, and Strategic Shifts

The above is the analysis of the conflicting points in this earnings call

Date of Call: None provided

Financials Results

• Revenue: RMB416 million interest income, down 55% YOY

Business Commentary:

* Non-Performing Loan (NPL) Reduction: - CN Finance Holdings Limited reported a year-on-year decrease of 78.1% in loan transactions and an 85.4% drop in total loan origination for the first half of 2025. - This decline is attributed to proactive efforts to control loan issuance and focus on reducing non-performing loans in the company's existing portfolio, aiming to improve asset quality.

• Financial Performance Amidst Market Challenges:
• The company's interest income decreased by 55% year-on-year, while financing costs and operating expenses fell by 32% and 74% respectively.

• Despite the financial pressures, the company resorted to strong cost control capabilities and focused on strategic adjustments and business optimizations amidst a complex and ever-changing market environment.

• Non-Performing Loan Ratio and Recovery Efforts:

• CN Finance Holdings Limited reported a non-performing loan ratio of 16.9% as of 06/30/2025, with a 103% NPL recovery rate in the first half of 2025.
• The company effectively contained the increase of new NPLs and achieved a high recovery rate through diversified NPL reduction measures, indicating a solid focus on asset quality enhancement.

Sentiment Analysis:

• Loan transactions decreased 78.1% YOY; total loan origination dropped 85.4% YOY; loan balance fell 29.6% YOY to RMB11.2B; interest income declined 55% YOY to RMB416M; net loss was RMB40.4M driven by RMB31.3M impairment; NPL ratio rose to 16.9%, though management cited a 103% NPL recovery rate and cost reductions (financing costs down 32%, operating expenses down 74%).