Net Margin of Continuing Operations to Shareholders Improved to -2.4%Net Margin of Continuing and Discontinued Operations[1] to Shareholders Improved to 35.1%  SHENZHEN, China, Aug. 16, 2024 /PRNewswire/ -- OneConnect Financial Technology Co., Ltd. ("OneConnect" or the "Company") (NYSE:OCFT), a leading technology-as-a-service provider for the financial services industry in China, today announced its unaudited financial results for the second quarter and half year ended June 30, 2024. Second Quarter 2024 Financial Highlights Revenue from continuing operations was RMB692 million, compared to RMB939 million for the same period of the prior year. Gross margin of continuing operations was 36.6%, compared to 37.5% for the same period of the prior year; non-IFRS gross margin of continuing operations was 38.8%, compared to 40.0% for the same period of the prior year. Net loss from continuing operations attributable to shareholders was RMB17 million, compared to RMB41 million for the same period of the prior year. Net margin of continuing operations to shareholders improved to -2.4% from -4.4% for the same period last year. Net loss from continuing operations per basic and diluted ADS was RMB-0.46, compared to RMB-1.13 during the same period last year. Net profit from continuing and discontinued operations attributable to shareholders was RMB243 million, primarily due to the gains derived from the disposal of virtual banking business, compared to net loss of RMB82 million for the same period of the prior year. Net margin of continuing and discontinued operations to shareholders improved by 43.8ppt to 35.1% compared to -8.7% during the same period last year. Earnings from continuing and discontinued operations per basic and diluted ADS was RMB6.70, compared to RMB-2.25 during the same period last year. [1]  As previously reported, the Company completed the disposal of its virtual bank business (the "discontinued operations") to Lufax Holding Ltd ("Lufax") for a consideration of HK$933 million in cash on April 2, 2024. As a result of the disposal, the historical financial results of the Virtual Banking Business segment have been reflected as the "discontinued operations" in the Company's condensed consolidated interim financial information and the historical financial results of the remaining business of the Company have been reflected as the "continuing operations" in the Company's condensed consolidated interim financial information of the first half of 2024 and of the comparative period in 2023.   In RMB'000, except percentages and per ADS amounts Three Months Ended Six Months Ended June 30 YoY June 30 YoY 2024 2023 2024 2023 Continuing operations Revenue Revenue from Ping An Group 401,084 580,795 -30.9 % 822,880 1,117,649 -26.4 % Revenue from Lufax[1] 54,463 73,142 -25.5 % 112,719 144,499 -22.0 % Revenue from third-party customers[2] 236,952 285,222 -16.9 % 480,170 570,837 -15.9 % Total 692,499 939,159 -26.3 % 1,415,769 1,832,985 -22.8 % Gross profit 253,379 352,385 525,782 687,042 Gross margin 36.6 % 37.5 % 37.1 % 37.5 % Non-IFRS gross margin 38.8 % 40.0 % 39.4 % 40.1 % Operating loss (39,154) (38,226) (105,502) (116,368) Operating margin -5.7 % -4.1 % -7.5 % -6.3 % Net loss from continuing operations attributable to shareholders (16,789) (41,170) (70,485) (113,649) Net margin of continuing operations to shareholders -2.4 % -4.4 % -5.0 % -6.2 % Net loss from continuing operations per ADS[3], basic and diluted (0.46) (1.13) (1.94) (3.13) Net profit/(loss) from continuing and discontinued operations attributable to shareholders 243,348 (81,592) 139,014 (190,465) Net margin of continuing and discontinued operations to shareholders 35.1 % -8.7 % 9.8 % -10.4 % Earnings/(loss) from continuing and discontinued operations per ADS[3], basic and diluted 6.70 (2.25) 3.83 (5.24)   [1]  Reference is made to announcements made by Lufax dated July 3, 2024 and July 30, 2024, upon the completion of the allotment and issuance of new Lufax shares under the Lufax Script Dividend Scheme described therein, Lufax will become an indirect non-wholly-owned subsidiary of Ping An Group and the financial results of Lufax Group will be consolidated into the consolidated financial statements of Ping An Group. [2]  Third-party customers refer to each customer with revenue contribution of less than 5% of the Company's total revenue in the relevant period. These customers are a key focus of the Company's diversification strategy. [3]  In RMB. Each ADS represents 30 ordinary shares. Chairman, CEO and CFO Comments Mr. Chongfeng Shen, Chairman of the Board and Chief Executive Officer, commented, "During the first half of 2024, we achieved encouraging results in overseas markets and improved our bottom-line despite the year-over-year decrease in revenue. Throughout this time, we focused on our strategic goal of achieving mid-term profitability by upgrading and integrating products, deepening customer engagement, and expanding our presence in overseas markets. Consequently, our high-value products, protected by high barriers to entry, gained broader appeal from customers, reflected in the 14.8% year-over-year increase in revenue from third-party overseas customers in our continuing operations during the first half of the year. We completed the disposal of our non-core virtual banking business to focus on our core businesses, and continued to implement disciplined expense control measures. As a result, we recorded net profit from continuing operations and discontinued operations during the first half of the year while further cost reductions continued to narrow our loss from continuing operations." "Despite our recent decision to gradually phase out the FinCloud business starting in July 2024, we maintain our strategic focus and will continue to empower the digital transformation of financial institutions and enterprises through our three main businesses: digital banking, digital insurance, and the Gamma platform. Leveraging our customer insights, industry expertise, and artificial intelligence technologies, we will further optimize our products, services, and solutions, and expand our premium-plus customer base. At the same time, we will explore broader overseas markets and expand our ecosystem to drive third-party revenue growth to ensure long-term healthy development." Mr. Yongtao Luo, Chief Financial Officer, commented, "Since the start of this year, our focus on improving resource and capital allocation efficiency has generated solid results. We completed the sale of our virtual banking business to refocus resources on our core businesses, resulting in a one-time gain recognized from the disposal in the amount of RMB260 million. This contributed to our net profit from continuing and discontinued operations attributable to shareholders of RMB139 million during the first half of the year, compared to a net loss of RMB190 million for the prior year period. Excluding gains from the sale of virtual banking business, net loss from continuing operations attributable to shareholders also narrowed significantly, falling 59.2% year-over-year and 68.7% sequentially during the second quarter, and 38.0% year-over-year to RMB70 million during the first half of the year. This significant narrowing of our losses from the continuing operation was primarily due to our ROI-oriented approach in managing expenses. In the first half of 2024, adjusted gross margin of continuing operations remained healthy at 39.4%, with operating expenses for continuing operations falling by 21.9% year-over-year. Looking ahead, we will leverage our ample cash position to drive research and development and accelerate innovation in the digital economy as we continue to implement disciplined cost control measures. We are confident this will enable us to grow our market share both domestically and internationally, ultimately achieving sustainable profitability." Revenue from Continuing Operations Breakdown  Three Months Ended Six Months Ended In RMB'000, except percentages June 30 YoY June 30 YoY 2024 2023 2024 2023 Implementation 168,627 233,089 -27.7 % 326,086 443,023 -26.4 % Transaction-based and support revenue  Business origination services 9,940 32,081 -69.0 % 22,775 81,127 -71.9 %  Risk management services 61,031 72,574 -15.9 % 126,514 150,317 -15.8 %  Operation support services 131,329 249,040 -47.3 % 265,391 471,585 -43.7 %  Cloud services platform 289,109 322,373 -10.3 % 607,416 614,620 -1.2 %  Post-implementation support services 14,427 13,308 8.4 % 29,348 25,649 14.4 %  Others 18,036 16,694 8.0 % 38,239 46,664 -18.1 %  Sub-total for transaction-based and support revenue 523,872   706,070 -25.8 % 1,089,683   1,389,962 -21.6 % Total Revenue from Continuing Operations 692,499 939,159 -26.3 % 1,415,769 1,832,985 -22.8 %   Revenue from continuing operations in the second quarter of 2024 decreased by 26.3% to RMB692 million from RMB939 million during the same period last year, primarily due to strategic adjustments made to our revenue mix as we focus on high-value products. Implementation revenue decreased by 27.7% year-over-year to RMB169 million during the second quarter of 2024, mainly due to a decline in demand for implementation of financial services systems domestically. Revenue from business origination services decreased by 69.0% year-over-year to RMB10 million during the second quarter of 2024, primarily due to a decline in transaction volumes from loan origination systems under digital credit management solutions. Revenue from risk management services decreased by 15.9% year-over-year to RMB61 million during the second quarter of 2024, mainly due to a decline in transaction volumes from banking related risk analytic solutions. Revenue from operation support services decreased by 47.3% year-over-year to RMB131 million during the second quarter of 2024, primarily due to a shift in business model for a number of auto ecosystem service providers where we transitioned from acting as a contractor to a distributor. Revenue from cloud services platform decreased by 10.3% year-over-year to RMB289 million during the second quarter of 2024, primarily due to reduced demand of cloud services.   Three Months Ended Six Months Ended In RMB'000, except percentages June 30 YoY June 30 YoY 2024 2023 2024 2023