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Public company info - Yinsheng Digifavor Company Limited , 03773.HK
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Yinsheng Digifavor Company Limited, 03773.HK - Company Profile
Chairman HUANG Junmou
Share Issued (share) 415,000,000
Par Currency U.S. Dollar
Par Value 0.01
Industry Telecomm. Services
Corporate Profile Business Summary: The principal activities of the Group is the provision of mobile top-up services to mobile users in the PRC through (i) electronic banking systems of PRC banks; (ii) offline channels, including convenience stores, mobile phone stores and other third party retailer chains; and (iii) other channels, including third-party online platforms, the Group’s self-operated websites and WeChat public account. Performance for the year: The profit attributable to owners of the Company for the year ended 31 December 2019 was approximately RMB0.7 million, as compared to loss attributable to owners of the Company for the year ended 31 December 2018 of approximately RMB25.8 million. Business Review In recent years, the competition in mobile top-up service industry was fierce. The traditional mobile top-up service (including mobile top-up services through electronic banking systems of PRC banks and offline channels) was facing challenges from third-party online platforms such as WeChat and Alipay. It results in decreasing market share of the traditional top-up channel in the overall mobile top-up industry. In addition, as various social media contains vocal and video call functions and the provision of much favourable service plans by the operators in response to the state policy, there was a decrease in mobile top-up amounts by users. The average top-up value of a top-up request for the year ended 31 December 2019 was RMB60.4, which was lower than RMB78.4 for the year ended 31 December 2018. However, through the measures taken as discussed below, the profit attributable to owners of the Company for the year ended 31 December 2019 was approximately RMB0.7 million, as compared to loss attributable to owners of the Company for the year ended 31 December 2018 of approximately RMB25.8 million. In response to the current market condition, the Group has adjusted its business strategy during the year ended 31 December 2019. In view of the increasing budget from the major PRC banks in promotion activities for their mobile banking services, the Group focused on expanding its bank network and deepening its cooperation with major PRC banks, and increase its services provided through its platform. As at 31 December 2019, the Group had cooperative relationships with 66 (2018: 66) PRC banks, including five largest state-owned commercial banks and 10 of 12 nation-wide joint stock commercial banks. The Group has cooperated with certain major PRC banks by supplying mobile and data usage top-up for promotion activities in these banks on their websites and mobile applications. As at 31 December 2019, the gross transaction value via electronic banking systems increased by approximately 5.2% to approximately RMB5,825.2 million for the year ended 31 December 2019 from approximately RMB5,539.8 million for the year ended 31 December 2018. Moreover, due to the good cooperation with major PRC banks over the past periods, the Group has successfully reduced in commission fee rates charged by certain PRC banks, which can solidify the long-term relationship with those banks and reduce cost of operating bank channel. The Group has reviewed the inputs and outputs of existing channels in order to increase the Group’s operating efficiency and increase gross margin. In view of the high operating costs, low transaction prices or high commission fees from certain channels, the Group streamlined downstream channels during this period and terminated cooperation with several third-party channel partners that charged higher commission rates and reduced the scale of offline channels. The number of mobile top-up requests processed by 007ka top-up platform was approximately 117.7 million for the year ended 31 December 2019, representing a decrease of approximately 12.9% as compared with approximately 135.2 million for the year ended 31 December 2018. The gross transaction value with mobile users (including mobile top-up and data usage top-up services) decreased by approximately 33.0% to approximately RMB7,107.2 million for the year ended 31 December 2019 from approximately RMB10,601.6 million for the year ended 31 December 2018. Although cutting lower-efficiency channels resulted in decreasing the gross transaction value with mobile users during the year, the Group has benefited by reducing fixed costs such as interface maintenance fees charged by network providers and supporting staff cost. At the same time, the Group’s resources can be diverted to channels and projects with higher margins by streamlining downstream channels to improve overall operational efficiency. In view of increasing staff costs in recent years, the Group has diverted some fundamental research and development and customer service works to Chengdu in 2019. It resolved the problem of high staff costs of recruiting technicians in Shenzhen. The Group will consider to expand the scale of Chengdu’s research and development and customer service segments depending on the development of its business, with an aim of gradually reducing the cost of supporting services while maintaining the quality of the Group’s services. Prospects: With the fierce competition within the industry and the slowing down of economic growth of the PRC, the mobile top-up service industry in the PRC is facing challenge. The Group believes that currently the mobile top-up service in the PRC is a necessity for people’s livelihood in the PRC, the mobile top-up service industry in the PRC is still promising. In the beginning of 2020, the PRC government enacted draconian quarantine measures and strict travel restrictions in response to the outbreak of COVID-19, affecting various businesses and millions of citizens. The mobile top-up service provided by the Group remained stable since the Group performs its business activities mainly through on-line platform. As such, the COVID-19 has not resulted in material impact to the Group as at the date of this report. Depending on the development of COVID-19 situation in the PRC, further changes in economic conditions arising thereof may have impact on the business and financial results of the Group. Regardless, the Group will leverage its extensive experiences and competitive advantages in the mobile top-up service industry to enhance cooperation with PRC banks and the operators, and expand the Group’s service offerings in existing channels. Moreover, the Group will actively seek for opportunities to cooperate with the leading internet companies and e-commerce companies and strive for the market share in those e-commerce channels. The Group will also continue to optimise its operational procedure to reduce the operating cost and improve the efficiency of its workflow so it can continue improve its performance.

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