Tongdao Liepin Group Annual Report 2025: Key Developments, Financial Highlights, and Investor Implications

1. Financial Performance Overview

• Revenue & Profitability: The Group reported a decrease in profit from operations to RMB166.0 million in 2025, down from RMB192.0 million in 2024. This decline was primarily due to a significant 33.5% drop in other income, which fell from RMB137.3 million in 2024 to RMB91.3 million in 2025. The reduction was mainly attributed to a special dividend distributed to shareholders, which reduced funds available for wealth management products, thus resulting in lower investment income, and a broader decline in interest rates and dividend income.
• Net Finance Cost: There was a notable rise in net finance cost to RMB16.2 million in 2025 from RMB2.8 million in 2024. This increase was primarily due to foreign currency exchange losses arising from the depreciation of the USD against the RMB.
• Profit Before Tax: Profit before taxation dropped to RMB152.8 million in 2025 from RMB189.8 million in 2024.
• Net Profit: Profit for the year attributable to equity shareholders was RMB102.6 million, with total comprehensive income at RMB112.8 million, demonstrating a year-on-year decline from RMB133.5 million and RMB195.1 million, respectively.

2. Dividend Announcements & Shareholder Returns

• Special Dividend: A special dividend of HK42 cents per share was declared and paid in 2025, amounting to RMB185.2 million. This is a significant return to shareholders and may be price sensitive, as it reflects the company’s confidence in its capital position and willingness to reward shareholders.
• Final Dividend: The Board recommended a final dividend of HK20 cents per share, subject to approval at the AGM, to be paid on or before 2 July 2026. The record date for entitlement is 10 June 2026.
• Dividend Policy: The company does not have a predetermined payout ratio. Future dividends will depend on financial results, cash flow, business conditions, and strategic needs.

3. Share Buybacks and Treasury Shares

• Share Repurchase: In December 2025, the Group repurchased 9,578,600 shares on the Hong Kong Stock Exchange for a total consideration of approximately HKD37.5 million. These are held as treasury shares and may be used for share incentive schemes or other strategic purposes. This action may have an impact on share value by reducing the number of outstanding shares and signaling management’s confidence in the company’s intrinsic value.

4. Use of IPO Proceeds and Capital Deployment

• IPO Proceeds Utilization: Out of HKD2,804.6 million raised from the IPO, HKD2,595.1 million has been utilized as of 31 December 2025. A remaining HKD209.5 million is reserved primarily for strategic acquisitions and investments, to be used gradually in 2026 and 2027. The slower-than-expected deployment was attributed to funds optimization, market conditions, and the absence of suitable investment targets.
• Future Investment Plans: The company affirmed there are no other plans for material investments or capital assets beyond those disclosed.

5. Corporate Governance and Risk Factors

• Governance Structure: The company maintains compliance with the Hong Kong Stock Exchange’s Corporate Governance Code, with only a deviation regarding the separation of Chairman and CEO roles, which are both held by Mr. Dai Kebin.
• Risks and Uncertainties: Key risks include the Group’s reliance on user experience and technological innovation, intense competition, macroeconomic volatility, and exposure to foreign currency and credit risks. The company also highlighted specific risks related to its Contractual Arrangements structure in China, including potential regulatory challenges and enforceability issues.
• Contractual Arrangements: The Group operates through contractual arrangements in China, which are subject to ongoing regulatory scrutiny. If Chinese authorities find non-compliance or alter relevant laws, the Group could face severe consequences including loss of control over its operating entities.

6. Share Schemes and Employee Incentives

• Post-IPO Share Option and RSU Schemes: The company operates post-IPO share option and restricted share unit (RSU) schemes to incentivize employees. In 2025, no options were exercised, and the weighted average closing price of the shares before option exercise was not applicable.
• New Restricted Share Scheme (2023): The Group adopted a new restricted share scheme in 2023, funded solely by existing shares, to attract and retain key staff and align interests with shareholders. No RSUs were granted under this scheme in 2025.

7. Regulatory and Compliance Updates

• Continuing Connected Transactions: The Group’s contractual arrangements with its PRC operating entities constitute continuing connected transactions and are subject to Hong Kong Listing Rules. The company has received waivers for some requirements, but these arrangements remain under annual review and auditor scrutiny.
• Risk Management: The company maintains robust risk management and internal control systems, covering data security, privacy, investments, and counterparty risks. Regular reviews and audits are conducted, and no material deficiencies were identified in 2025.
• Legal and Regulatory Compliance: The Group confirmed full compliance with all major laws and regulations applicable to its operations during the reporting period.

8. Events After Reporting Period

• Structured Deposit Subscriptions: In early 2026, the Group subscribed to structured deposit products with Xiamen International Bank and Bank of Hangzhou, constituting discloseable transactions under Chapter 14 of the Listing Rules. These transactions may signal ongoing efforts to optimize cash management.
• Proposed Amendments to Constitutional Documents: On 28 April 2026, the company announced proposed amendments to its Memorandum and Articles of Association, subject to shareholder approval at the next AGM. Any constitutional changes may affect governance or shareholder rights and should be monitored.

9. Other Notable Items

• Major Customers and Suppliers: The Group has a diversified customer and supplier base, with no concentration risk; the top five suppliers and customers each account for less than 30% of purchases and sales, respectively.
• Capital Management: The Group maintains a strong capital structure with a liability-to-asset ratio of 29.55% at year-end 2025, ensuring continued financial flexibility.
• Employee and Environmental Initiatives: The Group continues to invest in employee training, talent retention, and green office initiatives, reinforcing its commitment to sustainability and human capital development.

10. Forward-Looking Statements and Outlook

• While the Group experienced a decline in profitability in 2025, it remains focused on strategic investments, technology enhancement, and user growth. The company’s planned use of remaining IPO funds and continued shareholder returns via dividends and buybacks signal confidence in future prospects, but investors should note ongoing regulatory risks in China and the impact of macroeconomic uncertainty.

Disclaimer: This article summarizes and interprets key developments from the Tongdao Liepin Group Annual Report 2025 based on available data. It does not constitute investment advice. Investors should review the full report and consult professional advisors before making investment decisions. The company’s actual performance and future prospects may differ from those discussed due to various risks and uncertainties.

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