{"text":[[{"start":6.8,"text":"This article only represents the author's own views."}],[{"start":10.8,"text":"After years of being pelted by fallout from China’s prolonged real estate slump, Linklogis Inc. (9959.HK) is finally signaling a turn in its fortunes. But as a financier, the company is also probably well aware that its improvement, based mostly on accounting factors and better efficiency, means that more work lies ahead to make the comeback truly complete."}],[{"start":35.8,"text":"Last Friday, the Tencent-backed provider of online supply chain financing services said it expects to post a consolidated net profit of 5 million yuan ($700,000) to 25 million yuan for the first half of this year. While modest, the figures represent a dramatic swing from three consecutive years of annual losses, including an eye-popping 379.7 million yuan net loss in the first half of 2025."}],[{"start":62.55,"text":"For a company whose share price crumbled into penny-stock territory at the height of its woes, the return to profits may signal its multi-year turnaround efforts are finally bearing fruit."}],[{"start":73.64999999999999,"text":"Founded in 2016, Linklogis built its business by digitizing supply chain finance. By acting as a technological middleman between large enterprise \"anchor\" buyers, their suppliers, and commercial banks, Linklogis simplifies the process of securitizing trade receivables and extending short-term credit."}],[{"start":93.29999999999998,"text":"However, its early reliance on China's large property developers proved to be a double-edged sword. That group was a handy source of profits for Linklogis during the sector’s boom years. But as some of its key real estate clients started facing liquidity crunches in late 2021, Linklogis began booking large impairment charges linked to their unpaid receivables."}],[{"start":116.19999999999999,"text":"A major contributing factor to last year‘s first-half loss came from provisioning for legacy warehoused supply chain assets, or receivables that got stuck on Linklogis’ books in the brief period it held them before its typical practice of passing them on to financial institutions."}],[{"start":131.79999999999998,"text":"In the past two years, management has set out to overhaul the business model. Linklogis has steadily expanded its partner network to thousands of anchor enterprises and hundreds of financial institutions, pushing its supply chain finance services into non-property sectors such as advanced manufacturing, renewable energy and consumer goods."}],[{"start":151.1,"text":"The company has also been aggressively writing off legacy bad debt while promoting a cloud platform that digitizes financing and automated payments for Chinese cross-border e-commerce sellers on platforms like Amazon and Shopee, as well as manufacturers expanding into Southeast Asia and the Middle East."}],[{"start":171.25,"text":"Linklogis is also using AI to enhance its operational efficiency. Leveraging its proprietary large language model, LDP-GPT, and its enterprise AI agent framework, BeeLink, the company has automated significant parts of its credit risk assessment process, document processing and customer onboarding to facilitate customer acquisition and expand the scale of assets it handles."}],[{"start":195,"text":"In its profit alert, Linklogis said AI-driven automation led to a sharp drop in its expense-to-revenue ratio during the first half of 2026. At the same time, higher average revenue per customer and a healthy customer retention rate helped restore its top-line growth."}],[{"start":213.4,"text":"Brief respite"}],[{"start":215.45000000000002,"text":"Yet the upbeat earnings outlook may only provide a brief respite for the company’s long-suffering stock. Linklogis shares initially rallied a bit on Monday, the day after the announcement, but ended the day down 1.3%. The company’s stock has lost more than 80% of its value since its IPO in April 2021, when it raised $1 billion amid peak market interest Chinese fintech disruptors."}],[{"start":241.15,"text":"The cool reaction to the latest news suggests that investors remain skeptical about the company’s prospects, probably for good reason. The core question is whether this modest profit for the first half marks the beginning of a sustained recovery, or merely a temporary outcome resulting from aggressive belt-tightening and efficiency improvements."}],[{"start":263.05,"text":"In a business where transaction volumes are a company’s lifeblood, returning to the black on just 25 million yuan or less in net profits means that underlyling operating margins are probably razor thin – a factor investors will be watching when Linkogis announces its full midyear results on Aug. 20. And as noted earlier, the bottom-line swing owes in large part to the absence of massive write-downs, rather than explosive top-line revenue growth."}],[{"start":289.85,"text":"Ultimately, Linklogis’ long-term earnings growth will depend on its ability to generate sufficient income from non-property customers. The company’s revenue fell last year, down 4.7% to 983 million yuan, meaning investors will also be watching closely to see if the figure returned to growth in the first half of 2026."}],[{"start":309.5,"text":"Crucially, the company must cultivate LDP-GPT and BeeLink agents to earn higher-margin recurring fees and reduce its historical dependency on one-off transactions. That kind of transformation would help change Linklogis into a capital-light technology provider from its current status as a de-facto bearer of credit risk for its customers."}],[{"start":329.55,"text":"Equally important will be expansion overseas, specifically in markets like Southeast Asia and the Middle East. Such places are relatively less competitive than more mature Western markets, though they also pose challenges from local bank networks and regulations that are vastly different from China‘s."}],[{"start":347.15000000000003,"text":"Investors will also pay attention to whether a recent leadership change will help accelerate this evolution. In April, Zhao Yu resigned after seven years as the company’s CFO, a tenure during which the former Tencent M&A manager helped guide Linklogis through its Hong Kong IPO and its capital-intensive growth phase."}],[{"start":367.1,"text":"The transition of financial oversight to Vice President Huang Weibo, an executive with strong tech-platform operational experience as the former CFO of fitness app Keep Inc., may signal a broader management pivot away from capital-driven expansion toward lean corporate finance and operational cost discipline."}],[{"start":387.85,"text":"Linklogis shares currently trade at a price-to-sales (P/S) ratio of 3.9, a figure that is modest for a tech-oriented company but looks much better than valuations for pure online loan facilitators like FinVolution (FINV.US), which trades at a multiple of just 0.6. Given that FinVolution is stably profitable, the valuation contrast indicates investors may view Linklogis as a tech-enabled software platform going through an operational turnaround, while treating FinVolution as a mature, regulated credit provider. They may also prefer Linklogis‘ positioning as a manufacturing-oriented financier, as Beijing strongly supports that sector, versus FinVolution’s focus on consumer and small business finance."}],[{"start":431.8,"text":"If Linklogis can maintain its high customer retention rates while expanding its reach across advanced manufacturing and global trade, its multi-year pivot away from property finance could serve as a rare playbook for Chinese fintechs making similar structural shifts. But for now, at least, the turn back to the black only gives management some much-needed breathing room to show shareholders it‘s capable of operating profitably again on an ongoing basis."}],[{"start":465.9,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1786576648_8475.mp3"}