CNFinance Holdings Limited (CNF) investor relations material

Company overview and business model

• Operates as a leading home equity loan service provider in China, connecting micro- and small-enterprise (MSE) owners with financing needs to trust companies and commercial banks through a network of 52 branches in over 50 cities.

• Targets MSE owners in Tier 1 and Tier 2 cities, offering home equity loans secured by first or second lien interests on real properties, with flexible principal amounts and tenors typically ranging from one to three years.

• Utilizes a trust lending model, commercial bank partnership model, and a direct lending model, with over 95% of borrowers introduced by sales partners under the trust lending model in recent years.

• Relies on a holding company structure, with the Cayman Islands entity holding subsidiaries in China; cash flows depend on dividends from PRC subsidiaries, which are subject to PRC regulations and restrictions.

Financial performance and metrics

• Originated home equity loans totaling RMB14.7 billion in 2022, RMB17.3 billion in 2023, and RMB9.8 billion in 2024, with significant year-over-year decreases.

• Weighted average effective interest rates on originated loans were 17.2% in 2022, 16.9% in 2023, and 16.6% in 2024.

• Investment return from subordinated units in trust plans was RMB381.3 million in 2022, RMB495.9 million in 2023, and RMB478.1 million (US$66.3 million) in 2024.

• Aggregate retained earnings for PRC subsidiaries were RMB2,990.3 million, RMB3,124.3 million, and RMB3,169.1 million (US$440.4 million) as of December 31, 2022, 2023, and 2024, respectively.

Use of proceeds and capital allocation

• Net proceeds from the sale of securities will be used for general corporate purposes, including working capital, capital expenditures, acquisitions, investments in or extensions of credit to subsidiaries, and repayment of indebtedness.