Oneconnect Financial Technology (OCFT) Q2 Earnings call transcript Aug 16, 2024

In the recent earnings call, OneConnect, a leading digital finance technology company, showcased its robust financial performance and outlined its strategic initiatives for the future. The call, led by Chairman and CEO Chong Feng Shen and CFO Yongtao Luo, provided insights into the company's achievements, financial metrics, and growth prospects.

Financial Performance and Strategic Focus

OneConnect reported a significant improvement in its financial performance, with a net loss from continuing operations attributable to shareholders decreasing by 38% year-on-year, indicating a step closer to achieving profitability. The company's revenue from overseas customers increased by 14.8%, highlighting the success of its overseas market expansion strategy. The management emphasized their commitment to product upgrades, customer expansion, and overseas expansion as part of their second-stage strategy.

Strategic Initiatives and Expansion

The company's focus on digital banking, digital insurance, and its Gamma platform has been instrumental in helping financial institutions and enterprises improve their digital operation and service capabilities. OneConnect has been successful in implementing these solutions for major customers, including a top 5 city commercial bank and a foreign bank operating in China. The company's expansion into Southeast Asia, South Africa, and the Middle East is a testament to its global ambitions, with a particular emphasis on smart credit lending systems and P&C insurance solutions.

Overseas Business and Dividend Payout Plans

OneConnect's overseas business has shown remarkable growth, with revenue from overseas customers contributing over 20% to the company's total third-party revenue. The company's strategy for overseas business expansion includes focusing on markets like Southeast Asia, Hong Kong, China, South Africa, and the Middle East, with a strong emphasis on banking solutions. The management also hinted at potential dividend payout plans, considering the company's development needs, financial position, regulatory requirements, and shareholder rewards.

Challenges and Future Prospects

The call also acknowledged the challenges ahead, including the phase-out of cloud services and market unpredictability. However, the company remains optimistic about its future prospects, focusing on improving third-party revenue, enhancing gross margins, and expanding overseas markets. The management's confidence in achieving midterm profitability underscores the company's resilience and strategic vision in the digital finance sector.

In conclusion, OneConnect's earnings call highlighted its strong financial performance, strategic initiatives, and future growth prospects. The company's focus on digital finance solutions, overseas expansion, and customer engagement position it well for continued success in the digital economy. As OneConnect continues to innovate and adapt to market dynamics, it is poised to contribute significantly to the digital transformation of the financial industry.