On August 29, 2024, Linklogis Inc. (09959.HK, “Linklogis”) releasedits 2024 interim results. In the first half of 2024, the totaltransaction volume processed by the technology solutions ofLinklogis reached RMB165.9 billion, a year-over-year increase of17%. The total revenue and income from principal activitiesamounted to RMB410 million, up 5.6% from the previous year, with agross profit margin of 70.9%, showing significant improvementcompared to the same period last year.Bythe end ofJune, Linklogis has empowered over 290,000 SMEs to access efficientand convenient digital inclusive financial services.
Linklogismaintains a stable financial position with cashreserves of RMB5.1 billion. Linklogis continues toenhanceshareholder returnsthrough cash dividends andshare repurchases. So far this year,Linklogishasdistributed HK$215 million in cash dividends and repurchased sharestotaling HK$278 million.
Additionally, Linklogis has signed a letter of intentforacquisitionwithShenzhen Bytter Technology Co.,Ltd. (“Bytter”)’s shareholder. Upon completion of the acquisition,Linklogis will become the controlling shareholder of Bytter. Byintegrating the core strengths of both partiesintreasurymanagement and supply chainfinancetechnology,the two sides willjointly helpcustomers build world-class financial managementplatformsandfacilitatetheconstructionofintelligent treasury management systems for state-owned enterprisesand large-and-medium-sized private enterprise customers.
Market Share Remains Top withContinued Growth in Transaction Volume and CustomerNumbers
In the first half of 2024, the total transaction volume ofsupply chain assets processed by Linklogis’ technology solutionsreached RMB156 billion, representing a year-over-year growth of15%, mainly benefiting from a comprehensive focusandtargetedinvestment in strategically prioritizedbusinesses. The total volume of supply chain assets processed byAnchor Cloud reached RMB123.7 billion, a year-over-year increase of40%. The total volume of supply chain assets processed by FI Cloudwere RMB32.3 billion.TheMulti-tier Transfer Cloudwithin the Anchor Cloud continued to show robust growth, processinga total volume of supply chain assets ofRMB86.3 billion, ayear-over-year increase of 57%,andmaintaining a highcustomer retention rate of 99%.
In the first half of the year, Linklogis continuedtoacquirea broad and diverse range of businesspartners. The total number of anchor enterprises and financialinstitutioncustomersforitssupply chainfinance technology solutions increased by 152, up 16%, to 856compared with 2023.Linklogis’anchorenterprisecustomerscoverall 31 industries listed in the SWS Industry Classification, amongwhich 13 industries contributed more than RMB2 billion in supplychain asset transactions in the first half of 2024. According toChina Insights Consultancy, Linklogis held 20.9% market share,ranking No.1 in the third-party supply chain finance technologysolutions providers in China for four consecutive years.
On the anchor enterprise side,Linklogiscontinued topromote deep-diving in the regions and industries, furtherexpandingitscoverage of state-owned enterprisecustomers, with 78 new state-owned enterprise customers added inthe first half of the year. On the financial institutionside,Linklogiscontinued toexpanditscooperation with financial institutions andacceleratethecoverage of bankbranches.Inthe first half of2024,Linklogisserved 336 financial institutions,including banks, trust companies, insurance asset managementcompanies, securities companies,andassetmanagementcompanies.
In terms of product and scenario innovation, centering on theexpansion of product categories and innovative scenarios in theupstream and downstream of supply chains, Linklogis hascontinuously explored the innovative practice of the “de-anchored”business model for supply chain finance. Linklogis has offered andlanded comprehensive supply chain finance technology solutionsincluding order financing and distributor financing, and assisted17 state-owned enterprises and leading private enterprises inbuilding supply chain finance technology platforms.
As forthe overseas market, the volume of supply chainassets processed byLinklogis’Cross-border Cloudamounted to RMB9.3 billion, marking a 63% year-over-year increase.Linklogis has been actively exploring development opportunities forvarious innovative scenarios to servefinancial institutionsoutside Chinamainland,andcontinues to exploreinnovative business models in cross-border and international supplychain finance, assisting multipleChineseenterprisesinexpandingtheir globalsupply chain industry-finance systems.
Strategic Acquisition of Bytter toAdvanceIntelligentTreasurySystemConstruction
To further enrich its product portfolioand establish acomprehensive digital service capability for the corporateindustry-finance system,Linklogis has signed a letter ofintent for acquisition withBytter’s shareholderonAugust 29. Upon completion of the acquisition, Linklogis willbecome the controlling shareholder of Bytter.
Bytter is a leading provider of treasury management solutions inChina, possessing the technical implementation capabilities for all11 treasury function modules required by the State-owned AssetsSupervision and Administration Commission of the State Council.With over 20 years of industry experience, it has a comprehensivetreasury management product system, a rich anchor enterprise andfinancial institution customer base, a professional implementationand delivery team, as well as a favorable reputation in theindustry.This acquisition aims to maximize synergies of thetwo sides, enhance operational efficiency through resourcesintegration, and improve Linklogis’overall productcapabilities and core competitiveness.
Linklogis will further enrich its product portfolio based on thestrategic direction of building modern intelligent industry-financetreasury products, extending from anchor enterprises upstream anddownstream supply chain financing solutions to group treasurymanagement solutions,providingcomplete servicesfromtreasury managementto supply chain finance systemconstruction for state-owned enterprises andlarge-and-middle-sizedprivate enterprise customers to upgradetheir intelligent treasury managementplatforms,andhelping customers accelerate theconstruction of world-class financial management systems.
Driving Industry Transformationthrough Innovation and Accelerating Full-Stack AI LLMDevelopment
As a leader and pioneer in the supply chain finance technologyindustry, Linklogis continues to invest heavily in cutting-edgetechnologies such as AI, aiming to achieve a deep integration of“technology-industry-finance”. By driving industry transformationthrough technological innovation, Linklogis creates tangible andeffective value for all parties in the chain-affiliated ecosystemof industry chains.
In the first half of 2024, Linklogis' R&D expenses reachedRMB178million. As of June 30, 2024, the company’s R&Demployees numbered536, accounting for 59% of total employees.Linklogis has successfully developed “AI Agent”,the firstAI-basedplatform of the industry for supply chaindocument verification, which significantly enhanced the automationand accuracy of document processing through the application of deeplearning and natural language processing. The platform has beensuccessfully delivered and applied in many financial institutionsand won the “Best AI Technology” award from The Asian Banker in2024.
Furthermore, Linklogis accelerated the full-stack technologicalconstruction of the vertical domainlarge language model(“LLM”), LDP-GPT, establishing a distributed training and inferenceframework covering LLM pre-training, fine-tuning to deployment. Inaddition, the company explored the application of technologies suchas RAG-based vertical knowledge base Q&A and intelligentwriting in multiple scenarios including operations, risk control,and customer acquisition of financial institutions, therebypromoting the implementation of more LLM commercial applications infinancial institutions.
Technology InclusivenessDrivestheDevelopmentofSustainableSupply Chain
Linklogis actively fulfills its social responsibility, upholdingthe mission of “technology empowers the development of sustainablesupply chain finance.” Linklogis is committed to building ahigh-quality inclusive financial system and contributing to boththe growth of the real economy and the progression of the digitaleconomy.
In the first half of the year, the assets of transactions thatLinklogis served related to sustainable supply chains (includingrenewable energy, rural revitalization, environmental protection,intellectual property, etc.) reached RMB15 billion, up 241%compared to the same period last year. Linklogis furtheraccelerated the effective penetration of its chain-affiliatedecosystem, cumulatively assisting more than 290,000 SMEs throughoutthe upstream and downstream ecosystem of the supply chain inaccessing efficient and convenient digital inclusive financeservices.
Linklogis’ outstanding performance in ESGwaswidelyrecognized. Linklogis’ ESG solution “SCeChain”, developed incollaboration with Standard Chartered Bank, won the “Best China ESGSolution Award” from The Asset, alongside theExcellentCorporate in ESG Innovation and Practice, amongother awards.
In terms of ESG ratings, Linklogis was graded as “Low Risk” bySustainalytics, an authoritative ESG rating agency underMorningstar, ranking in the top 5% of the global software andservices industry. Linklogis was awarded an “A” rating by WindInformation in its ESG evaluation, ranking No.5 among 181 softwareservice companies assessed. In the first half of 2024, Linklogiswas selected for inclusion in S&P Global’s The SustainabilityYearbook (China Edition) 2024.
Charles Song, the founder, chairman and CEO of Linklogis, said,“Looking ahead to the second half of the year, we will focus oncore businesses that generate sustainable revenue growth andprofitability, while expediting the replacement of old growthdrivers with new ones. We will continue to deepen customerengagement, embrace AI-driven technological breakthroughs thatherald a new era in technological revolution, and enhance customervalue through innovative product applications. We plan to optimizeinternal resource allocation, improve operational efficiency, andimplement technology-driven cost reduction and efficiency measuresto regain profitability. Additionally, we will remain committed toenhancing shareholder returnsand creatingsustainablevalue for our shareholders."
Gloria Zhoupr managerLinklogiszhoushiqian at linklogis.com
