Huifu Payment Announces 2019 Annual Results:

Transaction Volume Exceeded RMB 2 Trillion

Dual Engine of "Payment + SaaS" Drives Latest Digitalization Movement

The leading payment technology company in the PRC - Huifu Payment Limited ("Huifu" or the "Company"; Stock Code: 1806.HK) announces its 2019 annual results in the evening of 25 March 2020. In 2019, the Company's transaction volume recorded a 21% year-on-year ("YoY") increase to RMB 2.2 trillion. That has translated to a 13% YoY increase in revenue to RMB 3.68 billion, with the net profit surging by 39% YoY to RMB 243 million, and adjusted net profit increasing by 15% YoY to RMB 303 million. During the year, the Company has fully implemented its digitalization strategy, and has repositioned itself as an omni-channel digital payment solutions provider, achieving strong business growth through the commencement of various innovative projects.

SaaS Service recorded a 10 times growth whereas the transaction volume of Cross-border Business surged by 1.5 times

Using payment as the gateway, Huifu has significantly strengthened its "payment + SaaS" digitalized solution capabilities during the year, achieving remarkable results in assisting its SaaS partners to transform from an information and product and service provider to a transaction service provider, bring disruptive changes to the existing value chain and business flow.

According to the annual results, the transaction volume of SaaS Service reached RMB 195.9 billion in 2019, representing a YoY growth of 926%. This has led to a 1,010% YoY increase in revenue to RMB 519 million. Notably, the number of QR code scan transactions has exceeded 2.4 billion, and the highest number of daily transactions surpassed the 13 million mark. Partnering SaaS providers also increased by 255 to 392 in 2019.

Huifu launched "Zhi·Hui Guanjia" - a one-stop SaaS solution catering to different industries - with the aim of providing integrated account management and omni-channel payment services in-one. Positioned as the middle-end facilitator, Zhi·Hui Guanjia was able to work in tandem with industry SaaS, fueling the growth of the Company's SaaS business. Such solution was unveiled in WAIC 2019 and was awarded the "The 4th Top 10 FinTech Innovation Cases" in the China Finance 40 Forum in the same year.

Meanwhile, Huifu launched "Adapay" - a simple "Payment + SaaS" product - which greatly reduced the effective connection time from a few weeks to three days, and 80% of clients were able to go DIY on the service.

In addition to the rapid growth of SaaS Service, Huifu continued to refine its business structure, and all the core businesses remain on track of rapid and steady development.

For the Integrated Merchants Acquiring business, the transaction volume has increased by 19% YoY in 2019. Supported by its refined operational capability, revenue of value-added services also surged by 104% YoY.

Regarding the Industry Solutions business, the Company cooperated with 100+ clients along the value chain, covering logistics, insurance, funds, and B2B platforms. Notably, transaction volume from the airline and travel industry grew by 42%YoY. The Company's aviation industry solution "Qianguanjia 2.0" was also awarded the "Excellence Award of Digital Aviation Solution of the Year" by the Shanghai Society of Aeronautics ("SSA").

Cross-border and International business continued to enjoy strong growth in scale, as annual transaction volume reached RMB50.1 billion, achieving a YoY growth of 148%. During the year, Huifu also obtained the VISA QSP certification along with the Hong Kong MSO license, becoming one of the first payment companies to provide full-service solutions to overseas purchases.

Established new digital operating system through advanced in-house Cloud technologies

From beginning to end, Huifu always embraces the value of "digital transformation driven by technological advancement". The Group invested more than RMB 300 million in R&D in 2019, representing a growth of 32% YOY, with the proportion of R&D personnel to total staff increasing to 54%. Through continuous investment in R&D, the Group has achieved admirable results in digital technology innovation.

Through processes of re-engineering and flexible configuration, the Group has taken the lead in building a digital operations platform to ensure an automated, flexible and measurable operation. Such innovation does not only support the fast-growing business development, but also yield costs and efficiency benefits.

Under the digital transform strategy, the Group became the first in the industry to apply In-house Cloud technologies to achieve flexibility and scalability in its operating system, recording a 99.995% system stability with a 100 million daily handling capacity. It also recorded a 100% success rate in product launch and an 80% rate in automated testing, demonstrating significant improvement in R&D efficiency.

With its Big Data technology and systematic capabilities, the Group has further reduced the risk default rate to 0.02BP (BP as in 1/10,000), showcasing its leading risk management ability in the industry.

New Positioning brought new opportunities in the pursuit of digital marketing and operation

In 2020, opportunities arise as the positioning of players along the value chain, including clearing authority, commercial banks, wallet issuers, payment institutions etc., becomes increasingly different and obvious. The new, digital business ecosystem is developing rapidly, and the trend of online and offline integration as well as digital operation has become increasingly prevalent. The globalization of retail businesses, meanwhile, also urgently requires the support of digital payment solutions. In the aftermath of the epidemic, digital and contactless economy would bring additional new opportunities.

Under the new ecology, the Group has effectively integrated all payment methods, such as bank cards and wallets, initiating the digital transformation ahead of its peers. Leveraging its expertise in digital marketing and operation, the Group is dedicated to become the digital solutions service provider of omni-channel payment.

Looking forward to 2020, the Group will continue to promote digital marketing and launch more innovative solutions for emerging applications. The Group will strengthen its digital operation capability and continue to improve its technology, data processing capability and management efficiency. Putting its customers at the highest priority, Huifu will strive to accelerate its digital transformation by continuously launching innovative digital payment solutions, achieving another leap in business development.