Yeahka Announces 2020 Annual Results

HONG KONG,March 25,2021 -- Yeahka Limited ("Yeahka" or the "Company",Stock Code: 9923),a leading payment-based technology platform in China,is pleased to announce the audited consolidated results for the year ended December 31,2020 (the "Reporting Period").

Mr. Luke Liu,Chairman of the Board,Chief Executive Officer and Executive Director of the Company,said,"I am pleased to present Yeahk's first annual results as a public company. Over the past year,we were able to maintain solid growth,and create value for our shareholders as well as merchants and consumers. As a leading payment-based technology platform in China,our business philosophy is 'Start From Payment,Go Beyond Payment' and we have progressively established a sustainable commercial digitalized ecosystem by leveraging our app-based payment services as the core. Leveraging the resources within our ecosystem,including traffic,data and R&D,we expanded our innovation business by launching technology-enabled merchant SaaS products,precision marketing services and fintech services,which have in turn helped to drive the rapid growth of various businesses within our company."

Mr. Liu continued,"As we continue to innovatively promote digitalized upgrades and integration across industries,we are creating greater value for both merchants and consumers. Looking ahead,the continued development of the consumer and industrial internet will accelerate the digital transformation of Chinese enterprises,and the landscape of business services will change significantly during this process. For both our merchant and consumer business segments,we will continue to utilize the traffic and data captured by the vast number of payment transactions that we process to explore new opportunities in various business segments,and fully commercialize our growing ecosystem."

Financial Highlights

During the Reporting Period,the Company's total revenue reached RMB 2,292.9 million,representing a year-on-year increase of 1.5%,mainly driven by the growth of the technology-enabled business. Revenue contribution from technology-enabled business services increased rapidly to 20.2% from 7.8% in 2019. Within this segment:

- Revenue from marketing services reached RMB 364.9 million,representing a year-on-year increase of 234.1% and 15.9% of the total revenue.

- Revenue from merchant SaaS products reached RMB 29.9 million,representing a year-on-year increase of 99.5% and 1.3% of the total revenue.

- Revenue from fintech services reached RMB 68.7 million,representing a year-on-year increase of 30.2% and 3.0% of the total revenue.

Gross profit increased 14.9% year-on-year to RMB 743.7 million. Gross profit margin increased to 32.4% from 28.7% in 2019.

Net profit increased 420.6% year-on-year to RMB 440.8 million. Adjusted net profit increased 19.8% year-on-year to RMB 360.6 million. Earnings per share was RMB 1.45.

Business Highlights

Despite the impact from the pandemic,the total number of app-based payment transactions saw a 119.1% increase in the second half of 2020 compared with the first half. As of December 31,2020,the number of active payment service customers increased by 4.5% year-on-year to 5.5 million,and the number of payment service customers increased by 75.5% year-on-year to 645.3 million.

The Company continued to expand and diversify its distribution channels. As of the end of 2020,the Company had collaborated with more than 10,000 independent sales agents and sales partners. Among them,the Company proactively cooperated with nearly 900 merchant SaaS service providers from offline scenarios spanning catering,retail,parking,refueling,ticketing,bicycle sharing,charger sharing,internet cafés,tourist attractions and vending machines. Fushi Technology,the Company's one-stop digitalized platform for merchants,accumulated more than 320,000 merchants. The daily active users of its merchant App had exceeded 120,000. The number of peak daily payment transactions of grew over 4 times year-on-year to over 7.3 million.

During the Reporting Period,the Company's technology-enabled business services achieved significant breakthroughs. The number of customers from technology-enabled business services hit 982,000,representing an increase of 128.2% year-on-year. Specifically,among the Company's merchant SaaS products,Juhuisaosao,the Company's payment aggregation tool,served over 63,000 merchants in 2020 and recorded a daily peak sales volume of 1,191 units. Smart Shopkeeper,an integrated SaaS management platform for restaurants,maintained solid growth,as its total number of merchants increased by 201.1% year-on-year and it ranked at the top of the charts in terms of sales volume and review ratings on various Chinese mainstream e-commerce platforms. On the precision marketing front,the total exposures generated by the Company's precision advertising platform were more than 23.9 times greater than 2019. For the Fintech services,the total number of transactions that the Company facilitated was approximately RMB568.5 million,a 15,2% growth year-on-year,and the weighted average tenor was 10.39 months. As of December 31,the M1+ delinquency rate by vintage (over 30 days overdue) has remained stable at around 1.05% since the second quarter of the year.

Business Review

Payment Services

The Company regards payment services as an important portal to attract traffic. During 2020,the Company continued to steadily expand its payment business and remained focused on building out its app-based payment services. The Company continued to diversify payment channels to rapidly expand its merchant base. Meanwhile,it also actively optimized its payment-based technology platform,further integrated its internal resources,substantially increased R&D investments and continuously refined the management of its payment business operations.

Payment services continued to expand during the Reporting Period. The number of app-based payment transactions jumped 119.1%,while GPV increased by 28.5% in the second half of 2020 as compared to that in the first half of 2020. The peak daily average number of QR code payment transactions exceeded 30 million. Despite the pandemic,and the number of payment service customers increased by 75.5% year-on-year to 650.0 million.

The Company continued to collaborate with premium industry partners. As of December 31,000 independent sales agents and sales partners. The Company also proactively cooperated with almost 900 merchant SaaS service providers that offer services in a wide range of offline-scenarios,including across food and beverage,retail and parking,by providing one-stop payment services to the merchants they serve. By leveraging the abundant merchant resources and the nationwide branch network of joint stock banks,urban commercial banks and rural commercial banks,the Company co-developed a merchant payment service system and jointly provided bank card acquiring services with these banks,and had established a merchant resources sharing system with almost 50 banks,efficiently expanding the Company's payment service business. In terms of emerging payment methods,the Company set up dedicated teams during the Reporting Period to support development in digital currencies.

Merchant SaaS Product Portfolio

As merchants continued to digitalized their operations,the Company developed and provided a comprehensive merchant SaaS product portfolio,allowing merchants to reduce their operational costs and acquire customers more easily. The Company's SaaS products and services are primarily accessible to merchants through online channels such as WeChat mini programs and merchant applications,as well as other offline touch-points. During the Reporting Period,the Company invested in Fushi Technology (Shenzhen) Co.,Ltd. Fushi's one-stop merchant digitalized platform,Haoshengyi,is an important part of the Company's ecosystem that helps the Company expand and serve its merchant base. As of December 31,Fushi had expanded its coverage to 25 cities nationwide and accumulated more than 320,000 merchants. The number of its peak daily payment transactions exceeded 7.3 million,which was more than four times higher than 2019,and the daily active users ("DAU") of its merchant app exceeded 120,000 as of December 31,2020. Furthermore,the latest data shows that,as of March 22,2021,its peak daily payment transaction counts rose further to 8.1 million.

For the retail industry,in the first half of 2020,the Company launched Juhuisaosao,a proprietary QR code payment SaaS with a voice reminder function. Leveraging the big data capabilities of the Company's ecosystem,Juhuisaosao can provide merchants with multi-dimensional transaction reports and analysis,cash flow analysis and forecasts via mobile devices and WeChat mini programs based on their needs,thereby allowing merchants to gain additional insights into their business performance and facilitating business decisions. Since its launch,Juhuisaosao has been well received by merchants as it effectively reduce delays and omissions during rush hours. In the first half of 2020,it had served over 11,000 merchants,which further increased significantly by 439.1% to 63,250 merchants in the second half of the year. During the Reporting Period,Juhuisaosao recorded daily peak sales volume of 1,191 units. In 2020,the Company also launched Smart Store,a lightweight SaaS product that offers merchants a one-stop platform to manage store procurement,sales and inventory.

For the catering industry,the Company launched its first one-stop SaaS platform Smart Shopkeeper in China in 2015. Since then,Yeahka has developed two brands,namely Smart Shopkeeper and Milican,that target different segments of the catering industry and different types of merchants to offer better solutions. In particular,Smart Shopkeeper targets catering merchants with single stores,while Milican targets catering franchises with multiple stores. As of December 31,the total number of merchants served by Smart Shopkeeper increased by 201.1% year-on-year. The App ranked at the top of various Chinese mainstream e-commerce platforms in terms of sales volume and review ratings. In order to help merchants manage decentralized native traffic,in March 2020,the Company launched Yuehuiquan,a coupon aggregation and distribution platform built on blockchain technology. During the Reporting Period,the platform has served over 56 thousand merchants and expanded to become a platform that manages millions of coupons. In October 2020,Yuehuiquan was officially titled and given a recordation number in the domestic blockchain-based information service by the Cyberspace Administration of the PRC. In January 2021,the Group launched Yuehuiquan Pro,a community-based fully-automated hosting membership management system,with the aim of assisting more merchants build customized membership programs from scratch and satisfying merchant's' increasing needs for customization.

In 2020,the Company made a number of strategic investments through RYK Capital Partners Limited,an investment platform jointly established by the Company and Recruit Holdings Co.,Ltd.,a renowned Japanese internet company,including Shenzhen Zhibaiwei Technology Development Co.,an O2O mobile internet SaaS provider focusing on retail and F&B POS-ERP services,and Jiangsu Ruipos Data Technology Co.,a SaaS service provider focusing on domestic catering chains,including tea and beverages,fast food and lu wei (braised snacks) restaurants (operated under the Shuaishouzhanggui brand).

Precision Marketing Services

The Company is dedicated to building a precision digital advertising platform which is based on diversified data traffic. Using proprietary payment data,integrated from a wide range of case scenarios,Yeahka maximizes value for its customers by intelligently matching target users with advertisers and merchants through its precision marketing services. In recent years,the Company has established a proprietary data management platform (DMP) and used it as the core to launch a precision advertising marketing platform "Juliang". Yeahka leveraged its growing artificial intelligence ("AI") and machine learning capabilities to intelligently match target users,refining and labelling data in Juliang,thus precisely matching offline traffic owners' demands for monetization with advertisers' demand for advertisement placement results.

In November and December 2020,the Company reached an agreement to acquire an 85% equity interest in Beijing Chuangxinzhong Technology Co.,a leading content performance-based marketing service provider in China. The acquisition will not only allow the Company to quickly expand its advertising inventory,but will also further enhance its capabilities to collect data related to user behaviors and preferences. Beijing Chuangxinzhong's online media network will quickly bolster the Company's consumer profiles and data based on their preferences,strengthen traffic labels on Juliang,as well as improve ad placement efficiency.

Fintech Services

Yeahka provides fintech services,including loan facilitation services,entrusted loan services,and small-sized loan and insurance referral services to merchants. During the Reporting Period,representing an increase of 15.2% from 2019,with a weighted average tenure of 10.39 months. As of December 31,the M1+ delinquency rate by vintage (over 30 days overdue) had remained stable at around 1.05% since the second quarter of the year,demonstrating the effectiveness of the Company's credit risk management capabilities across various economic cycles.

Outlook

Looking ahead,the continued development of the consumer and industrial internet will facilitate the ongoing digital transformation of Chinese enterprises. The landscape of business services will change significantly during this process. For both its merchant and consumer business segments,the Company will continue to utilize the traffic and data captured through the vast number of payment transactions it processes to explore and capitalize on opportunities in various business segments. The Company will further leverage its ecosystem to support digital transformation and commercialize services around it.

For technology-enabled business services,the Company will continue to enhance its ecosystem,which includes merchant SaaS products,precision marketing services and fintech services. In addition,the Company will accelerate its embrace of market changes,stay at the forefront of technological advancements,and proactively promote emerging payment methods such as digital currencies.The Company will continue to expand its business boundaries,strive to enable businesses to operate and acquire customers through decentralization,and enhance consumer lifestyles and merchant capabilities by providing greater convenience.

About YEAHKA LIMITED (9923.HK)

Yeahka Limited is a leading payment-based technology platform in China providing payment and technology-enabled business services to merchants and consumers. The Company was listed on The Stock Exchange of Hong Kong Limited (the "Stock Exchange") in June 2020 under the stock code "09923.HK". The Company's value proposition is to create a commercial digitalized ecosystem that enables seamless,convenient and reliable payment transactions between merchants and consumers and further offer a rich variety of technology-enabled business services,including (i) merchant SaaS products,which help customers improve their operational efficiency,(ii) precision marketing services,allowing customers to effectively reach their target markets,and (iii) fintech services,which cater to customers' diverse financial needs.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

Year ended December 31

2020

2019

RMB'000

RMB'000

Revenue

2,292,903

2,258,019

Cost of revenue

-1,549,224

-1,610,984

Gross profit

743,679

647,035

Selling expenses

-73,691

-66,869

Administrative expenses

-181,273

-129,564

Research and development expenses

-127,778

-78,400

Impairment losses on financial assets

-50,189

-27,411

Other income

13,482

4,983

Other gains – net

28,196

2,922

Operating profit

352,426

352,696

Finance costs

-9,822

-5,615

Share of losses of investments accounted

for using the equity method

-13,964

-14,521

Fair value changes of convertible redeemable

preferred shares

125,822

-181,521

Profit before income tax

454,462

151,039

Income tax expenses

-13,682

-66,376

Profit for the year

440,780

84,663

Attributable to:

Equity holders of the Company

438,907

84,663

Non-controlling interests

1,873

–

440,663

Other comprehensive loss:

Items that may be subsequently reclassifiedto

profit or loss

Currency translation differences

-156,620

-19,993

Total comprehensive income for the year

284,160

64,670

Attributable to:

Equity holders of the Company

282,287

64,670

Non-controlling interests

1,873

–

284,670

Earnings per share attributable to

equityholders

of the Company (expressed in RMB pershare)

– Basic

1.45

0.46

– Diluted

0.87

0.39