On March 26, 2024, Linklogis Inc. (09959.HK, “Linklogis”), a leading supply chain finance technology solution provider in China, released its 2023 annual results. In 2023, the total revenue and income from principal activities amounted to RMB870 million, of which, the revenue and income for the second half of 2023 reached RMB480 million, representing a 15.2% year-over-year increase. During the year, the total transaction volume processed by its technology solutions reached RMB322 billion, a 24.2% year-on-year increase, serving more than 1,800 anchor enterprises and financial institutions. By the end of the year, Linklogis has empowered over 250,000 SMEs to access efficient and convenient digital inclusive financial services. The company maintains a stable financial position with cash reserves of RMB4.8 billion.
Linklogis announced a new shareholder return plan, intending to enhance capital returns to shareholders through cash dividends and share repurchases. The board of directors of Linklogis proposes to pay a special dividend of HK$0.1 per share, totaling approximately HK$230 million. Furthermore, the board expresses confidence in the company’s prospects and sustained growth in the future, and announces a share repurchase plan of up to US$100 million.
Accelerating the Replacement of Old Growth Drivers with New Ones, the Accumulated Transaction Volume Surpasses RMB1 Trillion
In 2023, Linklogis expedited the replacement of old growth drivers with new ones, continuously enhancing the resilience of its business development. The total transaction volume processed by its technology solutions reached RMB322 billion, representing a year-over-year increase of 24.2%. By the end of 2023, the accumulated total volume of supply chain assets processed by Linklogis since its establishment had exceeded RMB1.13 trillion. In 2023, the number of anchor enterprise customers for Linklogis’ supply chain finance technology solutions increased 203 to reach a total of 604, an increase of 51% from 2022. According to China Insights Consultancy, Linklogis held 20.9% market share, ranking No.1 in the third-party supply chain finance technology solutions providers in China for the fourth consecutive year.
Anchor Cloud and FI Cloud are the key supply chain finance technology solutions of Linklogis. In 2023, the total volume of supply chain assets processed by Anchor Cloud reached RMB201.3 billion, a year-over-year increase of 36.5%. Regarding the Multi-tier Transfer Cloud within the Anchor Cloud, it achieved explosive growth and accelerated the replacement of old growth drivers with new ones for the company. The Multi-tier Transfer Cloud processed a total volume of supply chain assets amounting to RMB136.8 billion, marking an impressive year-over-year growth of 82.2%. The number of new customers in this sector increased 235 during the year, achieving a customer retention rate of 99%.
In terms of product and scenario innovations, Linklogis landed technology solutions including order financing and distributor financing based on its asset-backed securitization and multi-tier transfer products. Linklogis successfully landed 39 supply chain platforms projects in collaboration with state-owned enterprises and leading private enterprises including China Electrical Equipment Group, Jiangxi Financial Investment Group, and Chengdu Xingcheng Investment.
In 2023, the total volume of supply chain assets processed by FI Cloud were RMB107.4 billion, with the eChain Cloud segment processing a total supply chain assets volume of RMB80.4 billion, up 18.7% from a year earlier. Linklogis actively explored opportunities for development in providing scenario-based financial technology services and modular intelligent-tools output with various financial institutions. Linklogis successfully applied supply chain finance GPT model including AI-powered check of documents, AI-powered guaranty registrations, and AI-powered intelligent KYC identifications to projects in collaboration with multiple financial institutions such as Standard Chartered Bank and Bank of East Asia.
Embracing AIGC: Large Language Model Applications Promote a Virtuous Cycle of “Technology-Industry-Finance”
As a leader and pioneer in the supply chain finance technology industry, Linklogis continues to increase its investment in technology innovation, fostering the synergetic and efficient development of industrial ecology, and facilitating the virtuous cycle of “technology-industry-finance.” With ChatGPT and other large language models taking off globally, artificial intelligence has shifted from an early-adopter technology to a universal one. Linklogis is actively embracing the industry transformation opportunities brought by innovations in AIGC applications, by utilizing open-source large language models to create a GPT model for supply chain finance, namely LDP-GPT. In collaboration with a foreign bank, Linklogis successfully applied LDP-GPT in a project that involved the AI-powered intelligent check of document. By deeply applying GPT models in supply chain finance, Linklogis significantly improves efficiency in compiling industrial information and analyzing transactions, facilitates intelligent risk assessment, and reduces financing and operating costs. Linklogis also used it in the company’s daily operation of customer management, operation delivery and software development, to help the group implement cost reductions and efficiency improvements.
Linklogis actively explores the application of cutting-edge technologies, such as blockchain, big data, and privacy computing. In 2023, Linklogis was successfully certified as Global Software Development Capability Maturity Model Integration (CMMI) Level 5, and was awarded as an “Outstanding Contribution Institution” by Trusted Blockchain Initiatives (TBI). Besides, Linklogis was certified as “Specialized and Sophisticated Enterprise” in Shenzhen, was featured in the “Top 50 Influential AI SaaS Enterprises in 2023” list, won “Global SME Finance Award”, and received the “Best Digital Solution–Supply Chain” award from “The Asset” in 2023.
Advancing Global Presence, and Assisting Chinese Manufacturing Enterprises in Going Global
Linklogis has been optimizing its cross-border and international business models while actively implementing global development strategy. In 2023, the volume of supply chain assets processed by Cross-border Cloud amounted to RMB12.6 billion.
Linklogis’ cross-border cloud business mainly includes platform-based digital cross-border trade financing as well as supply chain financing technology solutions for Chinese enterprises expanding globally. With respect to the platform-based business, Linklogis has been collaborating with global platforms including Infor, Amazon, and Shopee to provide comprehensive digital cross-border trade financing services for SME merchants on the platforms. In serving Chinese enterprises, Linklogis seized the wave of Chinese companies going overseas and assisted large domestic enterprises such as OPPO in in building and expanding global supply chain financing systems, expanding its supply chain finance platform to cross-border supply chain financing scenarios, and facilitating the digital intelligence transformation of its overseas supply chain system. Moreover, in 2023, Linklogis’ international business team broke into the Vietnamese and Bangladeshi markets by establishing local teams in addition to its existing offices in Hong Kong and Singapore.
Promoting Sustainable Growth in the Supply Chain, and Supporting Financing for Small Live-streaming E-commerce Merchants
As sustainable development becomes an important component of the global agenda, a growing number of supply chain finance solutions are beginning to incorporate environmental impact and social responsibility considerations. Adhering to the mission of “technology empowers the development of sustainable supply chain finance”, Linklogis is earnestly fulfilling its commitments in environmental, social and governance (ESG).
In 2023, Linklogis collaborated with a number of financial institutions to promote innovative exploration of sustainable supply chain finance models. In 2023, the assets of transactions that Linklogis served related to sustainable supply chains (including renewable energy, rural revitalization, environmental protection, intellectual property, etc.) reached RMB19.2 billion, up 178% from last year. Linklogis’ efforts and contributions in the ESG field continued to be recognized. During the year, Linklogis was again graded as “low risk” in the ESG rating by Sustainalytics, a global authoritative rating agency, ranking in the top 5% within the global software and service industry.
Supply chain finance continues to play an important role in driving economic recovery and revitalizing SMEs. In response to the thriving live e-commerce industry and its high demand for capital turnover, Linklogis offered supply chain financing services to small live-streaming e-commerce merchants based on their trade, logistics and payment data, and collaborated with financial institutions to optimize financing models. In 2023, Linklogis facilitated around 500 small live-streaming merchants on Douyin, Kuaishou, PDD and other platforms in obtaining nearly RMB700 million in financing.
Charles Song, the founder, chairman and CEO of Linklogis, said, “Looking ahead to 2024, Linklogis will focus more on its core business of sustainable high growth, expedite the replacement of old growth drivers with new ones and steer toward a new stage of high-quality development. While ensuring swift customer acquisition, we will also cater to the needs of our existing customers, and focus on increasing customer value. We will embrace the opportunities brought by the wave of AIGC, continuously explore new technologies and applications, and continue to improve operational efficiencies and cost reductions. Linklogis will continue to enhance shareholder returns through cash dividends and share repurchases. Linklogis is embarking on a new journey with confidence, poised to create even greater value for both customers and shareholders in the future.“
