Bairong Inc. Announces 2024 Interim Financial Results

Solid Revenue Growth Coupled with High Gross Profit Margin (73%) and Non-IFRS Profit (RMB 200 Million)

BEIJING, Aug. 29, 2024 /PRNewswire/ -- Bairong Inc. (the "Company", "we" , "us" or "our" ; HKEX: 6608), a leading cloud-based AI turnkey service provider, today announced the consolidated results of the Company for the half year ended June 30, 2024.

Mr. Zhang Shaofeng, our founder, chief executive officer and chairman of the Board, commented:
"We proudly announce Bairong's continuous profitability as always. Our Non-IFRS profit margin maintained an impressive level of 15%, with half-year Non-IFRS profit approximately RMB 200 million. Gross profit margin further lifted to a remarkable 73%, demonstrating our strong capability to scale up. By integrating large language model and emotion-recognition technique into our AI VoiceGPT robot, we have extended our BaaS as a Service(BaaS) to achieve a double-digit revenue growth of 20% year-over-year, building on the impressive foundation laid in the prior years, and underscoring our leading position and sustainable value in the market."

Financial Summary

Revenue 

Our total revenue increased by 6% from RMB1,243.03 million for the six months ended June 30, 2023 to RMB1,321.35 million for the six months ended June 30, 2024, primarily attributable to our enhanced capabilities of providing products and services despite a challenging economic and consumption environment.

For the six months ended June 30, 2024, our MaaS business reported revenue of approximately RMB421.35 million. During the Reporting Period, the number of Key Clients reached 165, representing an increase of 19 from 146 period-over-period, while average revenue per Key Client was RMB2.00 million. Our Key Client Retention Rate was 96%.

Key metrics of MaaS

For the six months ended June 30, 2024, our BaaS – Financial Scenario business reported revenue growth of 20% period-over-period to RMB589.47 million. As a result of a rapid growing gross value of transactions we facilitate, of which grew by 23% period-over-period to RMB26,150.46 million for the first half of the year. During the Reporting Period, we deepened our cooperation with clients by jointly developing various marketing activities to contribute to the rapid expansion of the gross value of transactions. In addition, as we see more existing users contributing revenue, which combined with our user acquisition advantage via Generative AI, continue to improve user acquisition efficiency and bring higher ROI.

Key metrics of BaaS – Financial Scenario

In the first half of 2024, the BaaS – Insurance Scenario reported revenue decrease by 3% periodover-period to RMB310.52 million. Total premiums increased by 80% period-over-period to RMB2,872.66 million. In the first half of 2024, as the economy recovered gradually, the business performance of our BaaS – Insurance Scenario was revived, with first year premiums increasing by 103% period-over-period to RMB1,904.54 million and renewal premiums increasing by 47% period-over-period to RMB968.12 million.

Key metrics of BaaS – Insurance Scenario

Cost of sales 

Our cost of sales increased by 2% from RMB347.00 million for the six months ended June 30, 2023 to RMB354.19 million for the six months ended June 30, 2024, in line with the growth of our business scale.

Gross profit and gross margin

As a result of the foregoing, the Group's gross profit increased by 8% from RMB896.03 million for the six months ended June 30, 2023 to RMB967.16 million for the six months ended June 30, 2024. The Group's gross profit margin was 73% and 72% for the six months ended June 30, 2024 and 2023, respectively.

Research and development expenses

The Group's research and development expenses increased by 12% from RMB202.07 million for the six months ended June 30, 2023 to RMB225.88 million for the six months ended June 30, 2024, primarily attributable to the increase in the staff costs of our research and development personnel to support product offerings and technology development about various AI application technology, algorithm-driven machine learning platform and underlying database performance.

General and administrative expenses

The Group's general and administrative expenses increased by 13% from RMB123.98 million for the six months ended June 30, 2023 to RMB139.94 million for the six months ended June 30, 2024, primarily attributable to the increase in share-based compensation expenses from the grant of share options and restricted share units by the Company during the six months end June 30, 2024.

Sales and marketing expenses

Our sales and marketing expenses increased by 10% from RMB460.68 million for the six months ended June 30, 2023 to RMB506.54 million for the six months ended June 30, 2024, primarily due to an increase of RMB40.24 million of promotion, advertising, information technology services and other related expenses, which was mainly due to the increased branding and business promotion to enhance our brand recognition and our continuous efforts to obtain high-quality traffic to improve conversion efficiency.

Other income

Our net other income decreased by 30% from RMB104.98 million for the six months ended June 30, 2023 to RMB73.03 million for the six months ended June 30, 2024. This is primarily due to a decrease of RMB22.24 million of government grants.

Profit for the year

As a result of the foregoing, the Group's profit for the period decreased from RMB206.81 million for the six months ended June 30, 2023 to RMB142.83 million for the six months ended June 30, 2024.

Cash, cash equivalents and time deposits

The Group had cash and cash equivalents and time deposits of RMB2,852.85 million and RMB3,301.84 million as at June 30, 2024 and December 31, 2023, respectively. During the Reporting Period, we repurchased class B ordinary shares ("Class B Shares") from the open market for a total of HK$70.05 million including expenses.

Conference Call

Our management will hold a conference call at 10:00a.m. Beijing/Hong Kong Time on Friday, August 30, 2024 (10:00 p.m. U.S. Eastern Time) to discuss the financial results and answer questions from investors and analysts.

For participants who wish to join the call, please complete online registration using the link provided below prior to the scheduled call start time.

Participant Online Registration:
https://webcast.roadshowchina.cn/b3NZVk50YUk3Rng4VmF6U3p0Qkk0Zz09

Dial-in details for the earnings conference call are as follows:

International: +86-23-62737100
Mainland China: 023-63623333/4008-063-263
HK China: +852-30183602/+800-961505

English Dial-in Password: 447012932
Chinese Dial-in Password: 532157549

Please scan the QR code in the poster below to register for the conference:

Additionally, a live and archived webcast of the conference call will be available on the Company's investor relations website at http://ir.brgroup.com/earnings

About Bairong Inc.

Bairong Inc. is a leading artificial intelligence (AI) technology services company. The Company applies natural language processing (NLP), privacy computing, machine learning, cloud computing and other technologies to provide services to enterprises through model-as-a-service (MaaS) and business-as-a-service (BaaS). The MaaS services leverage discriminant AI to digitalize the know-your-customer (KYC) and know-your-product (KYP) process for enterprises, by analyzing users' risk, willingness, and capability. The BaaS services use discriminant AI to analyze and stratify users into groups and develops generative AI-powered VoiceGPT using human natural languages to interact with users. The Company's products and services are widely used by enterprise customers in banking, consumer finance, insurance, e-commerce, automobiles, logistics, ticketing, energy, construction and other industries.

For more information, please visit: http://ir.brgroup.com

Safe Harbor Statement

This press release contains statements that may constitute "forward-looking" statements. These forward-looking statements can be identified by terminologies such as "will," "expects," "anticipates," "aims," "future," "intends," "plans," "believes," "estimates," "likely to," and the negative of these words and other similar expressions or statements. Bairong may also make written or oral forward-looking statements in its periodic reports to the HKEx, in its annual and interim reports to shareholders, in press releases and other written materials, and in oral statements made by its officers, directors, or employees to third parties. Statements that are not historical facts, including statements about Bairong's beliefs, plans, and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statements, including but not limited to the following: Bairong's strategies, future business development, and financial condition and results of operations; Bairong's limited operating history; risks associated with the financial service industry, Bairong's ability to develop and deliver services of high quality and appeal to clients; Bairong's ability to generate positive cash flow and profits; Bairong's ability to compete successfully; Bairong's ability to build its brand and withstand negative publicity; and changes in client demand and government incentives, subsidies, or other favorable government policies. Further information regarding these and other risks is included in Bairong's filings with the HKEX. All information provided in this press release is as of the date of this press release, and Bairong does not undertake any obligation to update any forward-looking statements, except as required under applicable laws.

For investor inquiries, please contact:
Bairong Inc.
Ms. Sandy Qin, CFA, CMA, GradCG
Email: [email protected]

For media inquiries, please contact:
Bairong Inc.
Email: [email protected]