Legal Proceedings Continue as FinTech Chain Expands SaaS Footprint and Cash Flow
FinTech Chain Limited reports a robust increase in cash balances and positive operating cash flow for Q3 2024, alongside new contract wins and ongoing legal proceedings related to a past misappropriation case.
- Cash balances rose from RMB 2.8m to RMB 13.0m in Q3 2024
- Net operating cash inflow of RMB 9.8m recorded for the quarter
- New contracts secured with Inner Mongolia Post and regional banks
- Ongoing legal proceedings with initial compensation received
- SaaS platform T-Linx™ expands digital payment and IoT services
Financial Performance and Cash Flow
FinTech Chain Limited (ASX: FTC) has delivered a strong financial performance in the third quarter ended 31 December 2024, reporting a significant increase in cash reserves. The company’s cash balance surged to RMB 13.0 million from RMB 2.8 million at the start of the quarter, driven by RMB 34.6 million in receipts from customers and a net positive operating cash flow of RMB 9.8 million.
Operating expenses totaled RMB 24.6 million, with notable increases in product manufacturing and operating costs linked to enhanced marketing activities supporting bank customers’ 2025 New Year and Lunar New Year promotions. Staff costs and administration expenses remained stable, reflecting controlled overheads amid growth.
Capital Structure and Borrowings
FTC’s financing activities included managing borrowings from related parties and financial institutions. The company repaid a RMB 10 million loan from Bank of Beijing in November 2024 and drew down RMB 12 million from Ms. Ling Fang, related to the company’s president, for working capital. Interest rates on these loans range between 3.45% and 6.0% per annum, with flexible repayment terms.
Legal Proceedings and Risk Management
The company continues to pursue legal action against a former cashier accused of fund misappropriation. An initial compensatory payment of RMB 163,906 was received in December 2024, signaling progress in recovering losses. While this legal matter remains unresolved, the company’s proactive stance mitigates potential financial risks.
Business Development and Contract Wins
FTC’s flagship SaaS platform, T-Linx™, continues to gain traction in China’s evolving digital payment landscape. The company secured a RMB 10.5 million contract with Inner Mongolia province’s postal service for SaaS marketing activities. Additionally, FTC won procurement bids for IoT SaaS solutions from Shanxi Changzhi Lidu Rural Commercial Bank and Liaoning Agriculture and Commercial Bank, reinforcing its foothold in the banking sector.
T-Linx™ integrates payment infrastructure, digital transformation services, and IoT hardware solutions, serving banks, merchants, and consumers with a comprehensive cloud-based ecosystem. This positions FTC well to capitalize on the accelerating digital transformation and scenario-based financial services demand in China.
Outlook and Strategic Positioning
Looking ahead, FinTech Chain is poised to leverage its innovative SaaS offerings and expanding client base to drive growth. The company emphasizes digitalization, online services, and scenario-based solutions to enhance value creation for financial institutions and enterprises. With a solid cash position and a pipeline of contracts, FTC’s strategic vision aligns with China’s broader digital economy initiatives.
Bottom Line?
FinTech Chain’s robust cash flow and contract wins set a strong foundation, but ongoing legal risks warrant close investor attention.
Questions in the middle?
- What is the potential financial impact if the legal proceedings against the former cashier extend or result unfavorably?
- How will FTC scale its SaaS platform to sustain growth amid increasing competition in China’s fintech sector?
- What are the timelines and expected revenue contributions from the newly secured contracts in 2025?
