Zhitong Finance App learned that Tianfeng Securities released a research report saying that it is expected that as the spread of new energy vehicles to low-tier cities accelerates, Yixin Group (02858) has been deeply involved in the low-tier market for many years and has extensive customer resources and channel networks that can provide it with endogenous growth impetus; in addition, with the increase in demand for customized financial services from new energy vehicle companies, the fintech business may become a new growth point. The company's revenue for the first half of 2023 was 2,844 billion yuan, up 16% year on year; adjusted net profit reached 413 million yuan, up 25% year on year. Furthermore, the fintech business facilitated more than 2 billion financing transactions and achieved revenue of about 86 million yuan, an increase of 101% over the previous year. Core business revenue increased to $1,821 million.

Tianfeng Securities's main views are as follows:

The auto finance transaction business is growing strongly, focusing on core business to drive revenue growth.

The company's total number of financing transactions in the first half of the year was 312,000, up 17% year on year from 266,000 in the same period last year; total financing was 30.4 billion yuan, up 21% year on year from 25 billion yuan in the same period last year; the number of new car financing transactions was 180,000, up 55% year on year from 116,000 in the same period last year; and the financing amount was 18.1 billion yuan, up 66% year on year over 10.9 billion yuan in the same period last year. The number of new energy vehicle financing transactions of the company was 39,000, a sharp increase of 236% over the previous year, and the financing amount was 4.351 billion yuan, an increase of 267% over the same period last year; the amount of NEV financing accounted for 22% of the total amount of new vehicle financing. The company actively grasps initiatives related to new energy industry trends by establishing cooperative relationships with more new energy brands. Currently, the company has established cooperative relationships with ten emerging electric vehicle manufacturers. The company is expected to further strengthen bargaining power and optimize capital costs, or continue to promote profit growth in related businesses.

The aftermarket service business is progressing steadily and continues to advance into a leading position in the industry.

In the first half of the year, the company achieved revenue of 104 million yuan in aftermarket services, an increase of 17% over the same period in 2022; the penetration rate of used car market services reached 70%, which is still higher than the penetration rate of the new car market. In addition, the company launched a new battery differential insurance business to help electric vehicle customers solve battery depreciation and residual value problems, and the renewal service provides a seamless car insurance service experience for existing and historical customers. The bank expects to utilize the company's long-term data assets and big data analysis capabilities to provide various derivative services, and is expected to tap the full life cycle value of customers.

Actively promoting fintech platforms, new energy and low-tier cities are expected to become new business growth points for the company.

Fintech business services achieved revenue of 86 million yuan in the first half of the year, an increase of 101% over the same period in 2022. The company has reached cooperation agreements with various OEMs, including new energy brands and traditional high-end joint venture brands, targeting high-end customers in the auto finance industry. In the first half of the year, the penetration rate of new energy in new vehicle transactions completed by the company through the SaaS model reached 36%. In addition, the company provides comprehensive auto finance service solutions to more regional banks, including Bank of Suzhou. This move is expected to help develop car finance scenario service capabilities in the local market through a technology-enabled system. At the same time, the company is actively deepening relationships with existing SaaS partners, such as helping the Bank of Hebei establish auto finance solutions and expand its used vehicle financing business, continuously optimize service plans, and enhance customer experience. The bank expects that the continuation of the fintech business will help the company itself break through capital bottlenecks, or further expand its market share in the auto finance sector.