FAST NEWS: Yeahka’s operating profits soar on post-Covid rebound
The latest: Mobile payment services provider Yeahka Ltd. (9923.HK) announced on Thursday its net profit for the first half of the year fell 55.8% year-on-year to 33.16 million yuan ($4.55 million). But its adjusted EBITDA, which reflects profits for its core operations, jumped 317% to 291 million yuan.
Looking up: Payment transaction volume for Yeahka’s one-stop payment services rose 33.5% to 1.42 billion yuan in the first half of the year as retailing activity returned to more normal levels with the end of China’s pandemic controls. Gross merchandise value of the company’s in-store e-commerce services surged by an even larger 78.9% to 2.4 billion yuan, leading to an overall 25.6% jump in revenue to 2.06 billion yuan.
Take Note: The company’s gross margin for the first half of the year was 17.7%, a significant decrease from 32.2% for the same period last year, mainly due to the “netting off of the non-recurring impact of approximately 162 million yuan in relation to interchange fee rate adjustments from our revenue for the reporting period,” Yeahka said.
Digging Deeper: Yeahka provides mobile payment and related services for retail merchants. The company went public in Hong Kong in May 2020 and is backed by Tencent (0700.HK). Its largest revenue source is providing payment services for small and medium-sized merchants, while it also is trying to generate additional business from consumer e-commerce services. In search of growth after China’s pandemic controls severely affected many of its major clients, the company launched its in-store e-commerce services as a key extension of its existing payment services. That business saw triple-digit revenue growth last year.
Market Reaction: Yeahka shares fell on Friday to close down 12.3% at HK$14.74 by the midday break. The stock now trades near the lower end of its 52-week range.
Translation by A. Au
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