OneConnect Financial Technology Co., Ltd.

OneConnect reported third-quarter 2024 revenue of RMB417 million, down 48.3% year over year, with third-party customer revenue down 12.4% to RMB236 million. Gross margin from continuing operations was 32.7% versus 36.0% a year ago, and non-IFRS gross margin was 35.6% versus 40.7%. Net loss from continuing operations attributable to shareholders improved to RMB30 million from RMB51 million last year, while operating loss from continuing operations was RMB50 million versus RMB56 million. For the full year outlook, management said it started phasing out cloud services in July and expects that discontinuation to hurt 2024 top-line performance; it reiterated focus on product upgrades, cost controls, and overseas expansion to support midterm profitability.

The CEO framed the quarter around policy support for digital finance and OneConnect’s role in helping financial institutions digitize, with emphasis on the company’s three segments: digital banking, digital insurance, and Gamma platform. He highlighted product upgrades, customer expansion, and overseas expansion as the key priorities, and said the company is deepening work on AI-enabled tools, core banking, SLP, and E-KYC. His tone was constructive and confident, especially on overseas momentum and the ability to build toward medium-term profitability.

The CFO emphasized the company’s continuing-operations reporting after the April 2 disposal of the virtual banking business to Lufax for HKD933 million in cash. He said revenue fell because of the strategic phase-out of cloud services, but pointed to lower R&D expense of RMB70 million versus RMB230 million last year, lower sales and marketing expense of RMB46 million versus RMB66 million, and improved net loss from continuing operations of RMB30 million. He also said gross margin was pressured by lower scale, but reiterated that the company is on track toward its midterm breakeven target and will keep focusing on cost control and overseas growth.

An analyst asked whether a lower level of transactions with Ping An Group implied a margin-improvement strategy, and management replied that Ping An remains the most important partner and shareholder, while OneConnect is intentionally phasing out low gross margin, high-customization business. Management said the cap on related-party transactions reflects historical amounts and future needs, and suggested Ping An demand should recover from 2025 onward. On overseas expansion, management said hiring will be aligned with business progress and focused on solutions, R&D, and delivery, with target markets including the Middle East, South Africa, Hong Kong, China, and ASEAN.