Ladies and gentlemen, good day and welcome to Yeahka Ltd. 2025 Interim Results Announcement Call. At this time, all participants are in listen-only mode. After management's prepared remarks, there will be a question and answer session. Please be advised that today's conference is being recorded. I'll now pass the call to Mr. Vincent Chan, Head of Corporate Development and Capital Markets of Yeahka. Please go ahead, sir.
Thank you and hello everyone. Welcome to Yeahka's 2025 Interim Results Conference Call. Before we start, we would like to remind you that this presentation includes forward-looking statements that involve a number of risks and uncertainties. Information on general market conditions comes from a variety of sources outside of Yeahka's control. Please refer to our disclosure documents on our website's IR section for a detailed discussion of risk factors. Now, let me introduce the management team on today's call. Luke Liu, our Founder, Chairman, and CEO, will kick off with a short overview. I will then provide a business review. John Yao, our CFO, will conclude with a financial review translated by Derek Lai, our Director of Finance, before we open up the floor for questions. Without further ado, I will now turn the call over to Luke.
Thank you, Vincent. Hello everyone. Our results in the H1 of 2025 clearly demonstrate our technological advancement and product capabilities, strengthened commercialization of our business model, and scalability of our global business. Our international operations continue to deliver stellar growth and serve more global-branded clients with diversified payment and value-added services. Our AI efforts drove further measurable results in client production, adoption, and innovation. Our in-store e-commerce business achieved profitability and is well-positioned to deliver more returns to our group. Compared to the H1 of the year, we delivered stronger top line, higher efficiencies, lower operating costs, and, of course, much higher bottom-line growth rate for our shareholders. This solidifies our market-leading position to leverage our core product expertise, global footprints, and borderless applications for merchants and consumers, and better capture opportunities under the rapid digital currency evolution around the world.
Our international business set a larger milestone with 1.5 billion transaction value in the H1 of this year, already exceeding the full year in 2024, and is poised to deliver multiples of growth as we finish this year. Our higher growth builds on our multi-fold internationalization strategy. First, we expanded into other global major economies, such as the U.S., with penetration into the state level, as well as with Japan with license applied across the nation. Second, we deepened support to other global financial payment players like HSBC to bring synergies on an international basis. Third, we leveraged best practice based on our decades of industry experience and selectivity applied to each overseas market to bring additional value. In fact, our core overseas advantages lie in our capabilities to serve not only Chinese or cross-border clients, but also domestic merchants and consumers based on local preference.
All these factors will triangulate and continue translating into more global clients, benefiting more merchants and consumers in each overseas market locally and cross-border. Our product innovation provides a rather solid growth leg. In 2025, our AI-generated digital human videos revolutionized the marketing industry. First, with optimized LLM integration, we use shorter time, lower cost to generate higher volume of good quality marketing videos and images. Second, we co-created use cases, spearheading knowledge-sharing sessions with platform counterparts like ByteDance. In fact, we were ByteDance's first partner in the usage of digital humans in their public domain. Third, we expanded the world-industrial adoption and won new clients like JD and Kuaishou in e-commerce. All this from a virtuous cycle of intelligent commercial ecosystem and would drive our growth in AI-related transaction volume, which is growing at 40% month-on-month at the moment. So did our one-stop payment services grow healthily.
It delivered more robust revenue, profit, and cash flow in the H1 of this year. We concentrated on operational excellence and achieved higher fee rates and margin in mainland China, widening distribution network, more dynamic pricing, and increased focus on customers with higher profitability, and the fee rates, margins, and average transaction volume per merchant overseas are multiple times higher than growth in mainland China. With our overseas business still at an early stage, contributing to just 4% of the payment gross profit, I'm confident it would continue to grow attractively. Beyond payments, our merchant solution business, in particular, our precision marketing transaction volume will reach the record high in the H1 of this year. We expanded a coverage to leading enterprises in more industry verticals and maintained higher market share serving the key customers.
Our products, including tools driven by AI, continue to drive customer stickiness and growth. After our strategic upgrade implemented last year, our in-store e-commerce solutions also started to deliver profits month-over-month in the Q2 of this year, setting a foundation for higher quality growth in the future. Our focus on large-scale, higher-margin customers, expansion in key cities, and increased connection with platforms to boost customers' network extension all contribute to quality client acquisition and retention. This provides support to better consumption experiences both locally and abroad, where we've already been replicating our business model overseas. So, across all our business segments, our results in the H1 of 2025 exemplify early progress of our core strategy in product investment, increased commercialization among payment and other value-added technology services, and replication of tools to marrying more merchants in the rest of the world.
This long-term vision will continue to drive myself and everyone at Yeahka. With dedicated execution and a restless approach to excellence, we are very well-positioned to lead the industry and deliver more to our shareholders. Along this way, may I pass to Vincent to give a detailed business review?
Thank you, Luke. Indeed, profitability across all our business segments enhanced in the H1 of this year thanks to our product advancement, business models upgrade, and scale-up of our global businesses. Our overseas business achieved robust and rapid growth in the H1 of this year. Overseas GPV exceeded 1.5 billion, surpassing the total transaction volume of full year in 2024 already, which highlights our differentiated international strategy serving payment acceptance for local merchants and customers overseas, in addition to cross-border transactions. Across our overseas market, payment rate was 67 basis points, and gross margin exceeded 50%. Together with average transaction value per merchant, all these three unique economic metrics are at multiple times higher overseas compared to those in mainland China. If you multiply these three metrics together, you get to the long-term profit potential of this strategy we are adopting.
Of course, there is a fourth driver: new markets. We target global major economies. This year, after federal MSB license, we further obtained state MTL license in the US. We've also obtained Japan's nationwide payment license. These open up more huge markets for us to expand our services to. Yet, the other growth driver is more strategic alignments with other major global payment companies as well. This year, we added Alipay, Alipay HK, and WeChat Pay to widen our partner HSBC's payment channels. We'll continue to explore further cooperation in digital currencies and overseas markets. 2025 is also a year of product innovation for us. We greatly expanded merchants' adoption of digital humans in their marketing efforts. They simply input keywords, and our tools automatically generate lively videos with digital influencers speaking to the hearts of audiences.
This significantly reduced labor costs in human actors and traditional production processes by more than 80%. It allows instant production of large volume of high-quality advertising materials. Our application of technology won industry's accolades, such as with ByteDance, putting us as their inaugural partner for digital humans, where their customers on all their platforms can use our products as well. As such, AI transaction volume grew by 40% month-on-month. AI-generated content only accounted for 20% of the total production volume. There is a long way for growth both locally and overseas. For merchants, we also use AI to generate business analysis and decision-making recommendations for clients. For consumers, we created personalized shopping experiences through checkboxes. Fuzhi Technology, our investee company, created AI Shop, where these checks in an app generate product categories based on users' indication of preferences and behavioral data.
So more precise product recommendations and sales conversion could be made. And for our operations, we have also further applied AI to KYC, risk control, customer service, and product programming. For example, adoption rates of AI-assisted programming reached nearly 40%. And our overall operating expenses were reduced by almost 20%. In our China payment business, we also upped our performances at all fronts. Our revenue, fee rate, and margins all increased to demonstrate our market leadership and operational excellence against local competitors. We did this with three approaches. First, dynamic pricing. We tiered up clientele by value propositions and optimized rates accordingly. Second, diversified channels to penetrate more regions. We collaborated with over 7,000 partners and deepened cooperation with major agents to synergize and expand into more local markets and prefecture-level cities. Thirdly, more focus on higher potential clients.
We tapped into clients with larger transaction flow and more sophisticated demands in industries such as gas stations and property management, who have stronger willingness to pay for more stable and higher-quality servicing. As fundamentals for local payment business enhanced, so will the benefits to our value-added services. Let's start with merchant solutions. Our precision marketing business achieved a record high transaction volume of over CNY 1.7 billion in the H1 of this year. That's a 23% increase year-on-year. We expanded servicing of major fintech enterprises to well-known consumer and internet brands such as Haier, Hello, Hello Bike, and Ele.me. Clients like these enjoyed increased adoption of AI, where our core competencies played in. They only needed to input tests.
Our system would evaluate clients' industry attributes and their target consumer groups, create or select suitable influencers, design their facial expressions and movement details, and generate videos with content as smooth as, if not smoother than real life. This eliminated the cumbersome processes of traditional live-action shooting and editing. In fast-paced consumer and internet sectors, timely production of personalized marketing content means more effective, more targeted sales otherwise lost to competitive categories. This business continues to command a high gross margin of over 90% in the H1 of this year. Deepening AI applications and expanding cooperation with domestic and international partners will amplify revenue and profitability for Yeahka. Similarly, our third business segment, in-store e-commerce solutions, also delivered profitability in consecutive months in the Q2 after our strategic upgrade implemented since last year.
We focused on high-quality and higher-margin customers, significantly reduced our investment in direct sales team, and instead developed distribution networks. We concentrated on providing services to large-scale customers like China Telecom, Midea, Haidilao, and Yili, promoted services upsell and enhanced customers' repurchase rates. Their fees paid upfront contributed over 60% of revenue, further ensuring profitability and cash flow ahead of selecting each project to take on. Our windfall in in-store e-commerce is truly platform agnostic, having integrated into mainstream platforms like Douyin, Xiaohongshu, Dianping, and Gaode Map, further boosting marketing sales conversion, delivering continuous year-on-year growth in the number of service stores with new brands, including China Telecom and Midea. This business has also been more integrated with our payment services, enabling for us more resource sharing and for clients' more seamless e-commerce and payment acceptance experiences all in one.
We've also successfully replicated our business model overseas, such as in Japan, Singapore, Hong Kong, and Macau, assisting more foreign F&B and hospitality merchants in bettering consumption experiences for Chinese consumers abroad. To conclude, in the H1 of this year, with better profitability across all our business segments, we have laid out a very strong foundation for Yeahka to deliver higher-quality sustainable growth for years to come. This will continue to set us apart in the industry with our uniquely unified product offerings that are based on payments but go way beyond payments for locals across China, Asia, and beyond. With that, I will now turn the floor over to John, our CFO, to present a review of our financial results with translation provided by Derek, our Director of Finance. Thank you both.
谢谢 Vincent。大家好，现在由我来介绍 Yeahka 2025 年上半年的财务业绩重点。
Thanks, Vincent. Hello everyone. Let me introduce the financial performance of Yeahka in the H1 of 2025.
我们的收入由 24 年上半年的 15.78 亿人民币增长 4%，达到 25 年上半年的 16.42 亿人民币。这主要来源于我们的一站式支付服务收入增长。
Our revenue increased by 4% from CNY 1.57 billion in the H1 of 2024 to CNY 1.64 billion in the same period of 2025, mainly due to the growth of our one-stop payment services revenue.
我们的收入结构进一步国际化。25 年上半年的海外业务交易量为人民币 15 亿元，以超过 2024 年全年约 11 亿元的交易量。
Our revenue structure is further internationalized. The overseas GPV in the H1 of 2025 was CNY 1.5 billion, which has exceeded the full-year GPV of about CNY 1.1 billion in 2024.
今年上半年，我们的毛利增长至 3.8 亿人民币，同比增长 27.6%。整体毛利率由 24 年上半年的 19% 上升至今年同期的 23.3%。
In the H1 of this year, our gross profit increased to CNY 380 million, increased 27.6% year-on-year. The overall gross profit margin increased from 19% in the H1 of 2024 to 23.3% in the same period of this year.
一站式支付毛利率由 6.9% 上升至 13.7%。这主要是由于我们的支付业务利用行业龙头地位，逐步降低对代理商的分润比例。
The gross margin of one-stop payment service increased from 6.9% to 13.7%, mainly because our payment business gradually reduced the commission level to agents by taking advantage of the leading position in the industry.
Yeahka 的独特优势是能为商户提供从基础支付设施以及数字化解决方案的全套服务。这使得我们的业务有极强的弹性和可扩展性。
The unique advantage of Yeahka is that it provides merchants with a full range of services, from basic payment facilities to digital solutions, which gives us great flexibility and scalability.
商户解决方案的毛利率从 2024 年上半年的 90.9% 上升至今年同期的 91.3%。这主要得益于我们加大 AI 技术应用，持续提升产品盈利能力，并保持严格的成本控制，同时聚焦于高利润的客户群体。
The gross margin of merchant solutions increased from 90.9% in the H1 of 2024 to 91.3% in the same period of this year, which is mainly due to our increased application of AI technology, continued improvement of product profitability, and strict cost control, while focusing on high-margin customer groups.
第二半年，我们 2025 年上半年的净利润 4,137 万人民币，比 2024 年同期 3,258 万人民币增长 27%。经调整 EBITDA，从 2024 年上半年的 1.63 亿上升 6.2%，达到 2025 年同期的 1.73 亿。
In terms of profit, our net profit in the H1 of 2025 was CNY 41.3 million, an increase of 27% compared to CNY 32.6 million in the same period of 2024. Adjusted EBITDA increased by 6.2% from CNY 163 million in the H1 of 2024 to CNY 173 million in the same period of 2025.
这些进步得益于我们的成本和费用端的进一步提升优化。
This improvement is due to enhanced cost optimization across our operation.
首先，AI 的深度使用为我们节省了人力成本。今年上半年的销售、行政及研发开支对比去年同期减少了 19.3%。
Firstly, the deep integration of AI has significantly reduced labor expenses, with selling, administrative, and research and development expenses in the H1 of this year decreased by 19.3% compared to the same period of last year.
其次，我们降低融资成本并优化了资本结构，使得融资成本上半年对比去年同期减少了 52.7%。同时，负债率也从去年年底的 35.9% 下降至今年年终的 33.4%。
Secondly, through optimized capital structure and cost reduction measures, our financing cost decreased by 52.7% year-on-year during the H1 . Meanwhile, our debt ratio dropped from 35.9% at the end of last year to 33.4% at the end of the H1 of this year.
这些布局为公司利润持续高质量的增长提供了扎实的基础，也帮助公司在全球数字化竞争中健康发展。
These arrangements provide a solid foundation for the company's continued high-quality profit growth and help the company develop healthily in the global digital competition.
谢谢 John。 With that, may we open up the call to any questions from the line? Operator, kindly go ahead. Thank you, management.
To ask a question, please press star one and one on your telephone keypad and wait for your name to be announced. To withdraw your question, please press star one and one again. Please stand by as we compile the Q&A roster. Our first question comes from the line of Johnny Xie from Deutsche Bank. Please go ahead.
Hi, this is Johnny from Deutsche Bank. I have two questions. First question is about our GPV in the H1 . Manager mentioned there is a rebound in the Q2 , so I would like to know how is the rebound moving on since the Q3 and what's the driver for the GPV growth? Is it come from the traditional payments or is it come from the app-based payments? Or is it because of the overseas payments? My second question is about the payment fee rates. We noticed that our fee rate has picked up about 1%. So I would like to know what's the driver for the pickup of take rates and if management expect this take rate to be sustainable for the H2 and beyond. Thank you.
Thanks for the question, Johnny. Let me address the first one about GPV growth over the H1 of this year. This year, we are seeing sequential growth in our GPV in both traditional payments as well as app-based payments in the Q2 over the Q1 against the backdrop of some challenges in the industry GPV or even drops in some of our competitors, which is largely driven by consumption downgrade and lowering of ticket size per transaction. But our fee rate, as you rightly mentioned, has increased by one basis point to 12.5 basis points compared to last year.
To your question, we achieved this by three folds. First of all, we leverage our wider partner networks to penetrate further into more regions and get into higher quality clients. Secondly, we also have a more targeted approach towards larger size customers who naturally demand more sophisticated servicing and hence have higher willingness to pay and more attractive fee rates. Last but not least, we also have a more refined approach towards our customer pricings based on segmentations and relationships in order to achieve the results. At this point in time, we are still seeing these strategies at work. We are confident about our growth in both the GPV as well as rate for the rest of the year. That is for our local business. You also touched upon our overseas business.
In the H1 of this year, our overseas gross profits from payments contributed about 4% to our total payments gross profits. And the overseas GPV contribution comparatively is only slightly above 0.1%. And you can see that there's a huge differential between gross profits and GPV contribution percentage from overseas versus the total. So that's a structural multiplier effect in our opinion across fee rates, across margins, as well as across average transaction per customer in more developed overseas markets compared to Mainland China markets. So each of these three metrics are about three to five times higher overseas versus the domestic Mainland China markets. And that speaks to the bigger profitability potential of the overseas payment acceptance business development. So we are confident that these structural differences across overseas and domestic markets will broadly remain.
So it naturally follows that we would keep working on expanding our overseas businesses.
Thank you. Just a moment for our next question, please. Next, we have Vicky Wei from Citi. Please go ahead.
Thanks, management, for taking my question. So would management provide some color about your thoughts on shareholder return programs and potential investment for the year for new opportunities such as overseas payment and stablecoin? And then my second question is about the domestic payment. So what is the latest competition landscape of domestic payment that you would like to share? Thank you.
Thanks, Vicki. Hope you're doing well. First question about our investments for new opportunities. Especially in overseas, we indeed have a very differentiated proposition away from other Chinese companies in that we serve local merchants and customers overseas as opposed to just Chinese going overseas. So that opens up a much larger and a very attractive market in the rest of the world.
If you look at the GDP, the economies, and the markets in the rest of the world, they are huge to begin with, and they also tend to have higher average transaction value per merchant, higher fees, higher take rates, and higher margins. And we also have an edge versus the foreign competitors in that we offer a wider range of payment channels, much more cost-efficiently there. And on top of payments, we also offer other value-added services. So there's a genuine proposition for us to invest and help these merchants and consumers overseas. Now, the investment would come in a few aspects. First, licenses. The ones in the U.S., Japan, Singapore, Hong Kong, etc., they are only a start. We'll continue to pursue major economies globally and invest. And secondly, investment will go into products.
The product suite that sets us apart from our competitors needs to be continually innovated to maintain the edge. Our processing system and our setup already in place overseas do give us operating leverage to expand in a more agile manner. Thirdly, we need to continue investing into people, local sales who can develop local clients and stay closest to their truest needs. Fourth, local partners and channels where we can replicate our market-leading business model in China overseas. We will continue to invest for our international growth based on payments and beyond payments into a one-stop digital solution. That's our vision. Our success in China and in the rest of the world encourages us to be a global player. Our chairman, our employee plans have been purchasing Yeahka shares in the market.
We are invested in this mission, and we will continue doing that to provide more return to our stakeholders, and you asked about our domestic payment businesses as well as landscape as well. Based on the industry data we have been seeing lately, large major players in the industry, including ourselves, are gaining market share. I think this is because of one. Larger players tend to have better services, especially for larger-sized customers. They have more sophisticated demands, so they focus more on service stability and breadth of services provision. So they tend to select more established service providers. These customers also tend to have more needs on value-added services beyond payment, which also tend to be more offered by larger service providers. Second reason is larger players also have the means to invest more into their systems, particularly risk management.
For example, their larger data sets tend to provide more information points to incorporate AI into forecasting or modeling computation. This probably will play an increasingly larger role as AI applications will be more embedded into the payment risk detections, and last but not least, a third reason is the consumption patterns are very dynamic, and hence, the wider geographical footprints of larger players allow them to penetrate into regions and adjust faster to these dynamics and capture market share more efficiently, so then, as a market leader in China, we are also playing our strengths against this backdrop. We serve more larger-sized customers to capture these secure transaction flows, such as those in property management and those in energy industries. We also continue to apply technology, including AI, to raise our fraud detection and increase quality and stability of our transaction flow.
And we also work very hard to step up our network of agents, our network of partners, our network of banks, so as to optimize our outreach in attracting and retaining end clients. I hope that addressed your questions.
Thank you.
Thank you. As a reminder, to ask a question, please press star one and one on your telephone keypad and wait for your name to be announced. Just a moment for our next question, please. Next, we have Meianny Leung from DBS. Please go ahead.
Hi, management. Thanks for taking my question. And I have a question regarding to hi, can you hear me? Yes, perfectly well. Yeah, yeah, yeah, good. Yeah. Yeah. So my question is whether management can share more color on the latest development of the overseas expansion.
Sure, Manny. As you have probably realized from the news, Japan is our latest payment expansion.
And our payment license over there plays to our existing Japanese product and sales setup in Tokyo, our team, as well as adding payments as a step up to our other value-added services that are already being served in the country. Now, Japanese merchants are broadly keen on attracting foreign consumers to spend in the country. Our Tokyo teams have been helping F&B clients, hospitality clients, hotels, and retail clients there to market to Chinese consumers already. And we look to expand that servicing to these Japanese merchants on payment acceptance as well. So then it becomes a more unified solution from customers' acquisition and then to payment acceptance and then the ongoing recommendations and repeat purchases that come afterwards. As a country, we are very optimistic about the future growth in cashless payments.
For example, QR code payment penetration in the country is still very low at around 5%, but it's growing very fast at about 30% CAGR in Japan. And so there are increasing demands from Japanese clients to address wider sources of customers, add QR code wallets, and leverage merchants and in-store e-commerce solutions. We already served all these one-stop in China, so we believe we can add values with our best practices in Japan as well. And there are also more local products that we are looking to introduce anew in Japan. It's a very large, good potential market with a lot of gaps we're looking to fill.
Thank you.
Okay, thanks .
Just one moment for our next question, please. As a reminder, to ask a question, please press star one one on your telephone keypad and wait for your name to be announced. Next question comes from Yonghao from CITIC Securities. Please go ahead.
Thanks, management, for taking my question. I would like to ask one more question about the international business. As more payment companies go overseas, whether there are any changes in the competitive landscape? Thank you.
Thanks a lot, Lunhan, for the question. First of all, we look at it from a licensing perspective because obviously, compliance is the most important aspect of expansion and doing any payment businesses. And we stay the most stringent and most compliant in all these matters when we are expanding overseas as well. So we are seeing tightened approval processes as well from an overall regulatory perspective overseas for licenses. These regulators tend to check things very thoroughly from risk management systems, compliance track records, overseas expansion plans, local commitments, etc., etc., before granting further licenses.
So that would take more time and create a natural barrier for entry going forward. As a market, overseas markets, by and large, are more mature given their economies' development stage compared to Mainland China. We are confident that the multiple times higher fee rates there versus Mainland China and the multiple times higher average transaction value are there to stay. And hence, they present very structural opportunities for us to address. And then our edge versus the local competitors lies in our ecosystem and our technological capabilities, as in our system of partners and channels that provide services and customer stickiness. And then our broader suite that can also provide additional value these partners and peers may not be able to provide. So we are not worried about competitive economics in these overseas markets. We focus on servicing quality, stability, and innovation. And then economics would easily follow naturally.
So we are confident that our progress contribution from overseas would continue to increase.
Thank you. Just a moment for our next question, please. Next, we have Linhan from CITIC Securities. Please go ahead.
Thanks for the opportunity. I'm Lunhan from CITIC Securities. My question is, could you share your latest thoughts and plans on cross-border payments? 我的问题是想请教一下关于跨境支付业务方面的最新的思考和安排，谢谢。
谢谢 Yonghao, thank you. Cross-border payments. From a macro perspective, traders and export companies indeed wish constructing their supply chains globally. We have been observing a lot of this in our clients as well. There are more segmentations along that chain across more participating countries and going through more value-adding steps along the way, so to speak.
So under the current climate, we believe these clients will have increasing demands for more efficient payment channels and methods that could streamline their processes amongst these reconstructed value chains, the new world, so to speak, and then reduce friction to facilitate better trades. And I believe we have also been observing more countries facilitating similar protocols and channels. We think this would benefit more enterprises, including private payment service providers, to participate in that change. And then aside from the cross-border business growth, our overseas business also comprises a sizable local payment acceptance that would also add value to merchants and customers locally overseas. So then this business model not only covers clients across geographies and makes the connections, but it also provides more diverse exposure to economies and local consumption trends globally. Thank you. Last chance to ask questions for the management team.
To ask a question, please press star one and one on your telephone keypad and wait for your name to be announced. Thank you. I see no further questions on my side. I will now pass it back to Vincent.
Thank you very much. We are now ending the call. If you have any further questions, please feel free to contact us directly. Our contact together with other information in relation to our results can be found on our website at www.yeahka.com. I appreciate everyone for joining our results today, and see you again soon. This concludes today's conference call. Thank you for participating. You may now.