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Public company info - Quanzhou Huixin Micro-credit Co. Ltd.-H shares , 01577.HK
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Quanzhou Huixin Micro-credit Co. Ltd.-H shares, 01577.HK - Company Profile
Chairman WU Zhirui
Share Issued (share) 180,000,000
Par Currency Renminbi
Par Value 1.0
Industry Other Financials
Corporate Profile Business Summary: The principal activity of the group was the provision of loans to small and medium enterprises (‘‘SMEs’’), microenterprises and entrepreneurial individuals, as well as automobile finance lease and investment consulting services. Performance for the year: The Group recorded net profit, defined as net profit and total comprehensive income, of RMB88.0 million and RMB74.5 million for the years ended 31 December 2018 and 2019, respectively. Business Review The Group is principally engaged in loan business and finance lease business. The Group conducts the Group’s loan business primarily through the Company and JJHX which was consolidated into the Group’s consolidated financial statements from April 2019. Based in Quanzhou city, the Group is the largest licensed microfinance company in Fujian province in terms of revenue in 2019, according to the statistics of the Fujian Financial Supervision Bureau (福建省地方金融監督管理局). The Group is primarily dedicated to providing local entrepreneurial individuals, SMEs and microenterprises with practical and flexible short-term financing solutions to support their continued development and address their ongoing liquidity needs. Since October 2018, the Group commenced the Group’s finance leasing business principally engaged in the provision of automobile finance leasing services for SMEs and individuals in the PRC. The Group generates substantially all of the Group’s income by charging interest on the loans and finance leases extended to the Group’s customers. For the years ended 31 December 2019, the total loans and finance leases granted to the Group’s customers amounted to RMB2,936.0 million. The Group’s interest income from loans receivable was RMB165.4 million for the year ended 31 December 2019. The Group’s interest income from finance lease receivables was RMB5.4 million for the year ended 31 December 2019. The Group financed the Group’s operations primarily through a combination of share capital of the Group’s shareholders and bank borrowings. The Group’s Loan Business Loan Portfolio The principal amount of the Group’s outstanding loans increased steadily from RMB1,000.3 million as of 31 December 2018 to RMB1,108.7 million as of 31 December 2019, primarily due to the consolidation of JJHX. Revolving Loans and Term Loans The Group offers two types of loans, namely, revolving loans and term loans, as part of the Group’s flexible financing solutions, depending on a customer’s repayment and re-borrowing needs. Loan Portfolio by Security The Group’s loans receivable consist of credit loans, guaranteed loans and collateral-backed loans. The Group’s credit loans significantly decreased from RMB46.4 million as of 31 December 2018 to RMB6.0 million as of 31 December 2019 mainly because (i) the Group collected the credit loans granted in 2018; and (ii) no new credit loans were granted in 2019. Collateral-backed Loans The collateral obtained by the Group under their collateral-backed loans mainly consists of building ownership rights, building and land use rights, equipment ownership rights and shares. Maturity Profile of Loan Portfolio As of 31 December 2019, the Group’s maturity profiles within one year and over one year accounted for 72.7% and 20.1% of the total principal amount of outstanding loans, respectively. Past Due Loans The principal amount of the Group’s past due loans was RMB76.9 million and RMB80.2 million as of 31 December 2018 and 2019, respectively, accounting for 7.7% and 7.2% of the total principal amount of the Group’s outstanding loans as of the same dates. The Group had 21 past due loans with an aggregate amount of RMB76.9 million as of 31 December 2018. As of 31 December 2019, RMB14.0 million of the principal amount of these past due loans as of 31 December 2018 had been settled and RMB9.9 million of the principal amount of these past due loans as of 31 December 2018 had been written off. As of 31 December 2019, the remaining portion of principal amount of past due loans as of 31 December 2018 was RMB53.0 million and the allowance for impairment losses for these loans was RMB25.8 million. As of 31 December 2019, the Group had 23 past due loans with an aggregate principal amount of RMB80.2 million, and the Group’s allowance for impairment losses for these past due loans as of the same date was RMB42.8 million. The principal amount of the Group’s past due loans increased from RMB76.9 million as of 31 December 2018 to RMB80.2 million as of 31 December 2019, mainly due to (i) the addition of 7 past due loans of JJHX with an aggregate amount of RMB22.8 million resulting from the consolidation of JJHX; and (ii) the increase of 5 past due loans of the Company with an aggregate amount of RMB4.4 million, which is partly offset by the collection of 9 past due loans of the Company with an aggregate amount of RMB15.0 million. Loan Portfolio by Exposure Size The Group adopted a loan classification approach to manage the Group’s loan portfolio risk. The Group categorizes the Group’s loans by reference to the ‘‘Five-Tier Principle’’ set forth in the Guideline for Loan Credit Risk Classification (貸款風險分類指引) issued by the CBIRC. The Group makes provisions for the anticipated level for loan loss after categorizing the loan according to the ‘‘Five-Tier Principle’’. According to the ‘‘Five-Tier Principle’’, the Group’s loans are categorized as ‘‘normal,’’ ‘‘special-mention,’’ ‘‘substandard,’’ ‘‘doubtful’’ or ‘‘loss’’ according to their levels of risk. The Group considers the Group’s ‘‘substandard,’’ ‘‘doubtful’’ and ‘‘loss’’ loans as impaired loans. The Group assesss impairment either collectively or individually as appropriate. The Group assesss the Group’s loans for impairment at the end of each relevant period, determine a level of allowance, and recognize any related provisions using the concept of impairment under HKFRS 9. For ‘‘normal’’ and ‘‘specialmention’’ loans, given that they are not impaired, the Group makes collective assessment based primarily on factors including prevailing general market and industry conditions and historical impaired ratio. For ‘‘substandard’’, ‘‘doubtful’’ and ‘‘loss’’ loans, the impairment losses are assessed individually by evaluating the loss that the Group expects to incur on the balance sheet date. The Group’s ‘‘doubtful’’ loans increased from RMB12.1 million as of 31 December 2018 to RMB46.7 million as of 31 December 2019 mainly because (i) part of the past due loans of the Company categorized as ‘‘substandard’’ in 2018 with an aggregate amount of RMB30.2 million were downgraded to ‘‘doubtful’’; and (ii) RMB12.8 million of past due loans of JJHX were categorized as ‘‘doubtful’’. The Group’s Finance Leasing Business The Group categorizes the Group’s lease receivables according to the Group’s ‘‘Five-Tier Principle’’. As of 31 December 2019, the past due portion of the Group’s lease receivables was categorized as ‘‘substandard’’, and the remaining lease receivables were categorized as ‘‘normal’’. Both the lease receivables due in one year to two years and due in two years to three years decreased from RMB23.1 million and RMB8.4 million as of 31 December 2018 to RMB11.9 million and RMB0.8 as of 31 December 2019, mainly because the repayments of the previously issued financial leases have been gradually received. Prospects: The vision of the Group is to become China’s leading provider of microfinance services. The Group’s core mission is ‘‘assisting in adding value to customers with professional and efficient services and good credit’’, and the Group uphold the core values of ‘‘integrity, professionalism, responsibility, innovation and cooperation’’. During the Reporting Period, the Group applied to Quanzhou Market Supervision and Administration Bureau (泉州市市場監督管理局) for the change of the Group’s business scope to ‘‘conducting microfinance business in Quanzhou city’’ and obtained its approval on 25 June 2019. This allows them to further expand the Group’s customer base. While the expansion of the Group’s business scope brought both opportunities and challenges to the Company, the outbreak of novel coronavirus in 2020 has adversely affected China’s economy. In order to equip ourselves against risks in the Group’s business operation, the Group has taken certain measures as described below. Enhancing the Group’s employees’ service capabilities. Based on the Group’s understanding of the Group’s employees’ projected career path and capability profile, the Group has streamlined the Group’s personnel training system and mentor system, and introduced customized courses developed by external professionals as well as internal sessions on business practices sharing for the Group’s employees, with a view to enhancing the quality of the Group’s employees and their service capabilities. Optimizing the Group’s asset structure. From a macro-economic perspective, the Group sees both complexity and uncertainty in traditional businesses as well as opportunities in other areas of businesses. As such, the Group has made certain adjustments to the Group’s plan for future asset structure and have started to increase the proportion of the Group’s non-credit assets. Adopting new operation model. On-site operation model does not suit the Group’s needs during the period of the novel coronavirus outbreak. As such, the Group has been actively developing the Group’s business on-line with the use of the Group’s online information system, which the Group has been developing all along, in order to build up an online operation model and approval system to gradually replace the traditional operation model.

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