Zero Fintech Group Limited Overview
Zero Fintech Group is a small-cap Hong Kong consumer-credit lender that has completed a decade-long migration from a family-controlled printed-circuit-board and property conglomerate (Termbray) into a technology-led, licensed money lender. More than 97% of FY2025 revenue (HK$350.8M of HK$359.5M) came from interest income on loans originated in Hong Kong, predominantly unsecured personal instalment and revolving loans distributed through its proprietary "X Wallet" app, which markets itself as an AI-driven express-loan and buy-now-pay-later (X Pay) "super app". The loan book has grown from HK$589M gross at end-2021 to HK$1,354M at June 2026, priced at a weighted average of roughly 38% per annum on unsecured credit, supported since late 2024 by a HK$800M bank-funded asset-backed securitisation facility. A residual, loss-making property arm (unsold units at Ever Success Plaza, Zhongshan) is in run-off. The equity story is high-yield, high-credit-cost growth lending controlled by the Lee family.
Company's own description
In its FY2025 annual results announcement, the Group defines two reportable segments: (i) Property development and investment — "property development for sale of properties in the PRC and property investment for letting of properties in Hong Kong and the PRC"; and (ii) Money lending — "provision of mortgage and personal loan financing to customers." A third, unallocated revenue line, IT service income, has been reported since FY2024 following the acquisition of Alpha Times Technology Limited. Company press releases describe three core areas — property development and investment, money lending, and payment solutions — serving individuals and SMEs in Hong Kong and Mainland China (press release, 16 Apr 2025).
How the business actually works
Unsecured consumer lending (core profit engine): Customers apply through the X Wallet app for (a) fully automated revolving loans — approval requires a Hong Kong Identity Card, facial recognition, OCR and live testing, with a TransUnion credit report pulled by API and a proprietary scoring model setting limit, rate and tenor with "no human intervention" — and (b) instalment products (debt-consolidation and personal loans) underwritten by the credit department. Tenors are mostly 2–7 years; loan sizes range from HK$5,000 to HK$1.5M (raised from HK$700k in FY2023 and HK$800k in FY2024). Rates mostly 25%–48% p.a., weighted average ≈38% in FY2025 and H1 2026 (≈41% FY2023; ≈40% FY2024) (FY2023–FY2025 results; Interim 2026). Unsecured revenue was HK$311.3M in FY2025 (FY2024: HK$211.1M) and HK$204.3M in H1 2026.
Secured property lending: Conducted mainly through X8 Finance Limited; first/second mortgages over Hong Kong residential and commercial property sourced via independent mortgage referral agents; tenors 1–20 years; amounts HK$80k–HK$103M; rates mostly 11%–24% (FY2025 weighted ≈16%), rising to 12%–25% with a weighted ≈23% in H1 2026 as the mix shifted toward large short-term bridging loans (Interim 2026). Customer count is shrinking (73 → 70 → 57 → 45 from FY2023 to H1 2026) and concentrated (top 10 = 71% of mortgage receivables at June 2026).
Buy-now-pay-later (X Pay): Launched in H2 2023 within X Wallet, offering interest-free three-instalment payments at merchants; the company claimed over 1,000 merchants in April 2025 (press release 16 Apr 2025). X Pay revenue is not separately disclosed.
IT services: Revenue of HK$2.8M (FY2024), HK$7.2M (FY2025) and HK$4.5M (H1 2026) recognised over time, derived from Alpha Times' PRC subsidiaries (Alpha Shenzhen, Alpha Chongqing), part of which are connected-party technology service agreements with entities related to the controlling family (cap HK$9.5M p.a. for FY2025–FY2027; Interim 2026 supplemental disclosure).
Property (run-off): Ever Success Plaza, Zhongshan, Guangdong: 56 unsold residential units at 30 June 2026 (2 let), vacant commercial arcades and car parks; no unit sold since FY2021; plus one vacant Hong Kong investment property (fair value HK$48.5M) (Interim 2026).
Revenue model mix (FY2025)
| Revenue type (FY2025) | HKD Mn | % of total | Nature |
|---|---|---|---|
| Interest income – money lending | 350.8 | 97.6% | Spread/interest (financial services) |
| IT service income | 7.2 | 2.0% | Service fees, over time |
| Rental income – properties | 1.5 | 0.4% | Lease income |
| Sale of properties | 0.0 | 0.0% | Product (none since FY2021) |
| Total | 359.5 | 100% | — |
Source: FY2025 Annual Results Announcement (27 Mar 2026).
Value-chain position, customers and end-markets
Zero Fintech is a balance-sheet, non-bank originator: it acquires customers directly (heavy above-the-line advertising on buses, MTR, TV and online; FY2025 advertising and promotion HK$65.4M, 18% of revenue), underwrites in-house, funds itself with equity, a shareholder loan and bank-funded securitisation, and services and collects loans itself (external collection agents for delinquent accounts). Customers are Hong Kong retail borrowers (21,512 active unsecured customers at 30 June 2026), property owners seeking second-tier mortgage or bridging finance, and merchants using X Pay. No customer contributes ≥10% of revenue, but the largest borrower represented 5% and the top five 9% of loan receivables at June 2026 (FY2024: 10% and 22%) (Interim 2026; AR2024).
Independent characterisation. Economically this is a near-prime/sub-prime Hong Kong consumer finance company with a digital front end, earning gross yields of ~31–35% on average gross receivables against credit costs of ~10–13%, i.e., a high-risk, high-margin lending model whose profitability is dominated by three swing factors: loan growth, impairment charges and customer-acquisition spend. The "fintech" label reflects distribution and decisioning automation rather than a fee-based platform; there is no disclosed meaningful non-interest revenue.
Strategy
Stated strategy (themes from FY2025 annual results and H1 2026 interim)
- "From lending-focused to integrated financial services platform." Management repeatedly states that, with continued growth of X Wallet, the Group is "on track to evolve into a comprehensive financial services platform" offering payments and money management (FY2025 Outlook; Interim 2026 Outlook).
AI across the credit lifecycle: Credit scoring, periodic reviews, strict application criteria, algorithmic risk-based pricing and real-time early-warning monitoring (Interim 2026).
Risk discipline: Proactive portfolio assessment, rigorous collateral evaluation and enhanced risk pricing (FY2025).
Brand-led customer acquisition: Celebrity-driven campaigns (Anthony Wong/Denis Kwok 2025; Edison Chen 2026), "beyond typical industry norms" of female ambassadors and catchy slogans.
Property: no new investment: Management "will not explore investment opportunities in the property markets in the short term" (FY2024, FY2025, Interim 2026) — a reversal from FY2023, when it was still seeking PRC land, especially in Guangdong.
In-sourcing technology: Acquisition of Alpha Times to reduce reliance on external IT vendors (AR2024).
Initiatives register (last ~24 months)
| Date | Initiative | Type | Detail / target |
|---|---|---|---|
| Apr 2024 | Alpha Times acquisition | Technology platform | ≈HK$25,000 consideration; PRC IT team |
| Jun–Jul 2024 | Rebrand to Zero Fintech | Corporate identity | Name, logo, website changed |
| Oct 2024 | HK$800M ABS programme | Funding | Senior notes from bank; proceeds to originate unsecured consumer loans |
| Dec 2024 | Standard Chartered partnership announcement | Funding / partnership | "AI financing solutions for X Wallet" with up to HK$800M limit |
| Dec 2024 | Tenancy and technology service agreements | Connected transactions | Tech services cap HK$9.5M p.a. through FY2027 |
| 2024–25 | Upgraded X Wallet (X Lend + X Pay) | Product | "Super App" positioning |
| 2,025 | X Pay / Storeberry alliance | Merchant partnership | E-commerce BNPL payments |
| 2,025 | "Act now! Outsmart the 99.9%!" campaign | Marketing | FY2025 advertising +108% |
| Jan 2026 | X Cash.AI sustaining campaign | Marketing | "Instant" theme |
| 2,026 | Edison Chen brand ambassador; "AI reborn" campaign | Marketing | H1 2026 advertising +116% |
| 2025–26 | Unsecured loan cap raised to HK$1.5M | Product/credit | From HK$800k (FY2024) |
ESG commitments: annual ESG reports published (2023, 2024, 2025); no quantified emissions targets found. Cost programmes: none announced. Medium-term financial targets/guidance: none published; the company issues only Listing Rule 13.09 profit alerts (positive alert 13 Aug 2026: H1 2026 PBT ≥HK$65M; profit warning 27 Feb 2026 for FY2025).
Products & Services
Money lending segment
| Product / brand | Description & capabilities | Target customer | Launch / latest version | Pricing (disclosed) |
|---|---|---|---|---|
| X Wallet app (Zero Finance) | Mobile lending/payments app; HKID + facial recognition + OCR + liveness; TransUnion API pull; automated scoring; marketed as "the first A.I. Express Loan App in Hong Kong" and a lending-plus-payments "Super App" | HK retail borrowers | Developed 2018; upgraded app with "X Lend" and "X Pay" relaunched 2024–25 | See products below |
| X Cash.AI (revolving loans) | Fully automated revolving credit line; repay and re-draw within limit; real-time feature extraction and adaptive scoring per company outlook | Digitally active consumers needing short-notice liquidity | Branded campaign from Jan 2026 ("instant noodles" theme) | Within 25%–48% p.a. range |
| X Loan (instalment loans) | Debt-consolidation and personal instalment loans underwritten by credit officers via X Wallet; fixed term, limit and schedule; tenor mainly 2–7 years | Borrowers consolidating card/other debt | Current; cap raised to HK$1.5M by FY2025 | Weighted average unsecured ≈38% p.a. (FY2025, H1 2026) |
| X Pay (BNPL) | Interest-free three-instalment payments at participating merchants inside X Wallet; >1,000 merchants claimed (Apr 2025); alliance with e-commerce platform Storeberry | Online/offline shoppers; SME merchants | Launched H2 2023 | Interest-free to consumer; merchant fees not disclosed |
| Property mortgage loans (X8 Finance and Zero Finance) | First and second mortgages over HK residential/commercial property; LTV-based underwriting with three preliminary valuations | Property owners, investors, SMEs | Ongoing | 11%–24% (FY2025, weighted ≈16%); 12%–25% (H1 2026, weighted ≈23%) |
| Large secured bridging loans | Short-tenor (9–12 month) loans of HK$35M–HK$103M, often with step-down rates (e.g., 27.04% then 21.68%; 30% then 18%) | High-net-worth/corporate borrowers (e.g., Horn King Ltd) | Recurring since 2021 | Disclosed per transaction |
| Corporate loans | Small book (HK$29M at FY2021; HK$26M at FY2022); nil from FY2023 | Corporates | Discontinued | — |
Unallocated / technology
| Offering | Description | Customer | Year |
|---|---|---|---|
| IT development and technology services (Alpha Times, Alpha Shenzhen, Alpha Chongqing) | In-house system development for X Wallet and external/connected IT services in the PRC | The Group; connected entities Zhongshan Wanli, Shenzhen Zero, Chongqing Liangjiang | Acquired Apr 2024 |
| ABS servicing | Zero Finance services receivables sold to Zenith Funding No.1 | Securitisation SPV / bank | Oct 2024 |
Property segment
| Asset | Description | Status (30 Jun 2026) |
|---|---|---|
| Ever Success Plaza, Zhongshan, Guangdong | >440 residential units over three levels of commercial arcades and car parks; river view | 56 residential units unsold (2 let); arcades vacant; carrying value of completed properties for sale HK$56.6M |
| Hong Kong investment property | One property, direct-comparison valuation HK$20,700/sq ft | Fair value HK$48.5M; seeking tenant |
| Owner-occupied leasehold land and buildings (Hong Kong) | Revaluation model, HK$66,500/sq ft | HK$200.0M |
Note on branding. Marketing campaigns: "X Possibilities, X Wallet" (2024–25); "Act now! Outsmart the 99.9%!" featuring actors Anthony Wong and Denis Kwok (2025); 2026 campaign with brand ambassador Edison Chen using AI-recreated imagery and the tagline "Time & money. Yours at once." (FY2025 results; Interim 2026).
Financial Narrative
All figures HK$ M unless stated. FY2021–FY2025 from annual results announcements; H1 data from interim announcements.
Income statement
Notes: (1) The company presents no cost of sales other than cost of properties sold (FY2021 HK$1.6M), so "gross profit" is not a meaningful lender metric; revenue net of finance costs and risk-adjusted revenue are better proxies. (2) FY2021–FY2023 finance costs were almost entirely non-cash unwinding of deferred acquisition consideration (e.g., HK$7.0M of HK$7.1M in FY2023); from FY2024 they are cash bank, shareholder-loan and lease interest plus loan arrangement fee amortisation. (3) In FY2021, the investment property fair value loss was reported within "other (losses)/gains, net". (4) EBITDA is dossier-calculated (operating profit before finance costs plus depreciation and amortisation); it matches the company's own ROCE numerator for FY2023 (HK$32.4M) and FY2024 (HK$48.3M).
Margins and growth
FY2021 growth shown as 0 because the comparative is a nine-month period (not meaningful). Revenue CAGR FY2021–FY2025: ≈33.7% (HK$112.4M → HK$359.5M). Net profit CAGR over the same period is ≈−0.4%, demonstrating that growth has not translated into earnings until H1 2026.
Interim P&L (six months to 30 June)
Source: Interim Results Announcement, 27 Aug 2026. H1 2026 profit exceeded every full-year profit in the company's post-2020 history.
Balance sheet (31 December)
Notes: (1) FY2021 repossessed assets were not separately presented. (2) "Total debt" excludes the deferred acquisition consideration payable to Earth Axis carried within other payables in FY2021–FY2023 (≈HK$161M at end-2023), which was debt-like and was extinguished in January 2024 by set-off against the Fujian disposal proceeds; including it would turn FY2021–FY2023 net cash into modest net debt. (3) FY2023 working capital includes HK$160.2M of assets held for sale. (4) Goodwill is nil; intangibles relate to the 2020 acquisition and IT assets.
30 June 2026 snapshot: total assets HK$1,881.9M; cash HK$252.2M; gross loans HK$1,353.7M (personal HK$1,151.4M; mortgage HK$202.2M); provision HK$132.8M; net loans HK$1,220.8M; bank borrowing HK$541.6M (floating rate, weighted effective 6.5%, secured on gross receivables of HK$749.2M); shareholder loan HK$96.4M; total liabilities HK$694.6M; equity HK$1,187.3M (Interim 2026).
Loan book composition and credit quality
FY2021 personal and mortgage figures include interest receivables (HK$3.5M and HK$1.8M). FY2021 yield and credit cost not computed (nine-month comparative base) and shown as 0. H1 2026 annualised yield ≈35.4% and credit cost ≈9.8%; unsecured share 85.1%.
FY2023 ageing not disclosed in the results announcement (shown as 0). H1 2026 write-offs HK$63.7M.
Cash flow
Structurally, loan growth is classified within operating cash flow for a money lender, so reported operating cash flow is likely to be negative in high-growth years and funded by bank and shareholder borrowings; capex is small (FY2025 depreciation HK$7.3M; H1 2026 PPE additions HK$1.1M). No dividends were declared for FY2021–FY2025 or H1 2026, and no shares were repurchased.
Ratios
Notes: Company-defined ROCE = (PBT + interest + D&A) / average (equity + non-current debt); FY2023–FY2024 as published in AR2024, FY2025 dossier-calculated on the same basis; FY2021–FY2022 not published (shown as 0). The company reported a "net debt position" for FY2021–FY2022 on its liabilities-based definition but did not publish a percentage (shown as 0). ROIC and cash conversion cycle are not meaningful for a lender and are not presented. Negative net debt/EBITDA denotes net cash.
Commentary on trends, inflections and drivers
Growth. The 2020 reverse-style acquisition of the Zero Finance business converted a stagnant property holding into a lending growth vehicle. Interest income rose from HK$107.0M (FY2021) to HK$350.8M (FY2025) and HK$231.4M in H1 2026 alone, driven by active unsecured customers rising from 8,269 to 21,512 and by the loan-size cap rising to HK$1.5M. Average yield has drifted up from ~27% to ~31% (35% annualised in H1 2026) as unsecured loans grew from one-third to 85% of the book.
Profitability inflections. Three distinct phases are visible. (i) FY2021–FY2023: earnings fell despite revenue growth because impairments rose from HK$17.2M to HK$83.8M as the unsecured book scaled and investment-property revaluation losses (HK$19.5M in FY2022) hit. (ii) FY2024: a first operating-leverage year — revenue +33%, impairment +15%, profit +123% to HK$27.1M. (iii) FY2025: management "bought growth" — advertising doubled to HK$65.4M, impairments rose 53% to HK$147.1M, and finance costs quadrupled to HK$24.5M as the Standard Chartered ABS facility was drawn; profit fell 23% to HK$20.9M. (iv) H1 2026: a sharp inflection — impairment fell slightly in absolute terms while revenue rose 49%, lifting operating profit 2.7x and net profit 3x. Whether H1 2026 credit costs are sustainable (the annualised ~9.8% compares with 13.0% in FY2025) is the single most important analytical question.
Balance sheet transformation. Equity has been essentially flat at ~HK$1.1bn for five years (no capital raised, no dividends, modest retained profits offset by property revaluation losses in OCI of HK$58.2M in FY2021, HK$32.2M in FY2022, HK$20.4M in FY2023 and HK$11.6M in FY2024). Growth has instead been funded by leverage: total debt went from ~nil to HK$585.6M (FY2025) and ~HK$642.9M (June 2026). At FY2025, the entire HK$481.6M bank borrowing was classified as current, compressing the current ratio to 1.13x — a classification point that warrants monitoring of facility tenor and covenants (the company states covenants were complied with). Non-earning assets remain material: HK$200M owner-occupied property, HK$48.5M investment property, HK$56.6M unsold Zhongshan units and HK$65.5M repossessed assets at June 2026, roughly 19% of total assets.
Returns. ROE has never exceeded 2.5% on an annual basis; the H1 2026 annualised ROE is ≈10% (HK$115M annualised profit / HK$1.15bn average equity), the first time the business has approached a cost-of-equity-like return.
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Group Entities
| Entity | Role | Location |
|---|---|---|
Zero Fintech Group Limited | Listed holding company | Bermuda / HK HQ |
aEasy Credit Investment Limited | Holding company of the Zero Finance group (acquired Oct 2020) | — |
Zero Finance Hong Kong Limited | Licensed money lender (Money Lenders Ordinance, Cap. 163); operates X Wallet / X Pay; seller and servicer under ABS | Hong Kong |
X8 Finance Limited | Secured/mortgage lending; counterparty to major loan transactions | Hong Kong |
Termbray Wealth Investment Limited | Acquirer vehicle for aEasy Credit | — |
Termbray (China) Land Development Company Limited | PRC property holding (Ever Success Plaza) | PRC/HK |
Alpha Times Technology Limited (+ Alpha Shenzhen, Alpha Chongqing) | In-house IT development and IT services | Shenzhen, Chongqing |
Zenith Funding No.1 Limited | Orphan Cayman SPV issuing senior notes to the bank; receivables remain consolidated | Cayman Islands |
“—” = not publicly disclosed.
Revenue by Segment
| Segment | FY2021 | FY2022 | FY2023 | FY2024 | FY2025 |
|---|---|---|---|---|---|
Money lending revenue (HKD Mn) | 107.0 | 159.3 | 194.5 | 257.5 | 350.8 |
Property development and investment revenue (HKD Mn) | 5.5 | 3.6 | 2.1 | 1.5 | 1.5 |
Unallocated IT service revenue (HKD Mn) | 0.0 | 0.0 | 0.0 | 2.8 | 7.2 |
Total revenue (HKD Mn) | 112.4 | 162.9 | 196.6 | 261.8 | 359.5 |
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View Subscription PlansResults by Segment
| Segment | FY2021 | FY2022 | FY2023 | FY2024 | FY2025 |
|---|---|---|---|---|---|
Money lending segment result (HKD Mn) | 41.9 | 48.5 | 34.8 | 48.7 | 36.7 |
Property segment result (HKD Mn) | 0.6 | -16.5 | -8.5 | -8.4 | -0.7 |
Segment total (HKD Mn) | 42.5 | 32.0 | 26.4 | 40.3 | 36.0 |
Segment Margins & Growth (%) and Revenue by Segment (%)
| Metric | FY2021 | FY2022 | FY2023 | FY2024 | FY2025 |
|---|---|---|---|---|---|
Money lending segment margin (%) | 39.2 | 30.4 | 17.9 | 18.9 | 10.5 |
Money lending share of group revenue (%) | 95.1 | 97.8 | 98.9 | 98.4 | 97.6 |
Property share of group revenue (%) | 4.9 | 2.2 | 1.1 | 0.6 | 0.4 |
Segment Margins & Growth (%)
| Metric | FY2022 | FY2023 | FY2024 | FY2025 |
|---|---|---|---|---|
Money lending revenue YoY growth (%) | 48.9 | 22.1 | 32.4 | 36.2 |
Property revenue YoY growth (%) | -34.9 | -41.4 | -27.4 | -3.0 |
Revenue by Segment and Segment Margins & Growth (%)
| Metric | H1 2025 | H1 2026 |
|---|---|---|
Money lending revenue (HKD Mn) | 155.5 | 231.4 |
Property revenue (HKD Mn) | 0.8 | 0.7 |
IT service revenue (HKD Mn) | 3.1 | 4.5 |
Money lending segment result (HKD Mn) | 30.0 | 76.0 |
Property segment result (HKD Mn) | -0.9 | -1.7 |
Money lending segment margin (%) | 19.3 | 32.8 |
Segment Assets & Liabilities
| Metric | FY2021 | FY2022 | FY2023 | FY2024 | FY2025 |
|---|---|---|---|---|---|
Money lending segment assets (HKD Mn) | 603.4 | 654.2 | 704.5 | 1,018.1 | 1,356.2 |
Property segment assets (HKD Mn) | 425.6 | 350.5 | 340.5 | 172.0 | 176.2 |
Money lending segment liabilities (HKD Mn) | 196.5 | 164.5 | 170.8 | 291.8 | 602.3 |
Income Statement and Per-Share Data
| Metric | FY2021 | FY2022 | FY2023 | FY2024 | FY2025 |
|---|---|---|---|---|---|
Revenue (HKD Mn) | 112.4 | 162.9 | 196.6 | 261.8 | 359.5 |
Gross profit – revenue less cost of properties sold (HKD Mn) | 110.8 | 162.9 | 196.6 | 261.8 | 359.5 |
Finance costs (HKD Mn) | 7.2 | 8.1 | 7.1 | 5.7 | 24.5 |
Revenue net of finance costs (HKD Mn) | 105.2 | 154.8 | 189.5 | 256.1 | 335.0 |
Impairment losses on loans, net (HKD Mn) | 17.2 | 57.8 | 83.8 | 96.4 | 147.1 |
Risk-adjusted revenue after funding and impairment (HKD Mn) | 88.0 | 97.0 | 105.7 | 159.7 | 187.9 |
Advertising and promotion (HKD Mn) | 15.9 | 19.4 | 27.6 | 31.4 | 65.4 |
Employee benefits expenses (HKD Mn) | 15.1 | 17.6 | 24.8 | 37.1 | 42.3 |
Other operating expenses (HKD Mn) | 23.6 | 18.1 | 25.6 | 46.9 | 49.6 |
Fair value gain/(loss) on investment property (HKD Mn) | -6.8 | -19.5 | -9.0 | -6.0 | 1.0 |
Operating profit (HKD Mn) | 38.9 | 32.9 | 27.2 | 42.7 | 53.1 |
Depreciation and amortisation (HKD Mn) | 8.9 | 5.4 | 5.2 | 5.6 | 8.6 |
EBITDA – operating profit plus D&A (HKD Mn) | 47.9 | 38.3 | 32.4 | 48.3 | 61.7 |
Profit before income tax (HKD Mn) | 31.7 | 24.8 | 20.1 | 37.0 | 28.7 |
Income tax expense (HKD Mn) | 10.5 | 9.6 | 7.9 | 9.9 | 7.7 |
Net profit attributable (HKD Mn) | 21.3 | 15.2 | 12.1 | 27.1 | 20.9 |
EPS basic (HK cents) | 0.80 | 0.57 | 0.45 | 1.01 | 0.78 |
EPS diluted (HK cents) | 0.80 | 0.57 | 0.45 | 1.01 | 0.78 |
Dividend per share (HK cents) | 0 | 0 | 0 | 0 | 0 |
Margin Analysis (%)
| Metric | FY2021 | FY2022 | FY2023 | FY2024 | FY2025 |
|---|---|---|---|---|---|
Revenue YoY growth (%) | 0 | 44.9 | 20.7 | 33.1 | 37.3 |
Gross margin (%) | 98.6 | 100.0 | 100.0 | 100.0 | 100.0 |
Operating margin (%) | 34.6 | 20.2 | 13.8 | 16.3 | 14.8 |
EBITDA margin (%) | 42.6 | 23.5 | 16.5 | 18.4 | 17.2 |
Pre-tax margin (%) | 28.2 | 15.2 | 10.2 | 14.1 | 8.0 |
Net margin (%) | 18.9 | 9.3 | 6.2 | 10.3 | 5.8 |
Effective tax rate (%) | 33.0 | 38.7 | 39.5 | 26.8 | 27.0 |
Impairment as % of revenue | 15.3 | 35.5 | 42.6 | 36.8 | 40.9 |
Advertising as % of revenue | 14.2 | 11.9 | 14.1 | 12.0 | 18.2 |
Income Statement and Per-Share Data (Half-Yearly)
| Metric | H1 2025 | H1 2026 |
|---|---|---|
Revenue (HKD Mn) | 159.3 | 236.6 |
Interest income – money lending (HKD Mn) | 155.5 | 231.4 |
Impairment losses, net (HKD Mn) | 67.2 | 64.0 |
Advertising and promotion (HKD Mn) | 15.3 | 33.0 |
Employee benefits (HKD Mn) | 23.2 | 25.2 |
Operating profit (HKD Mn) | 33.6 | 90.7 |
Finance costs (HKD Mn) | 8.9 | 20.4 |
Profit before tax (HKD Mn) | 24.6 | 70.3 |
Profit for the period (HKD Mn) | 18.9 | 57.5 |
Basic EPS (HK cents) | 0.71 | 2.16 |
Balance Sheet
| Metric | FY2021 | FY2022 | FY2023 | FY2024 | FY2025 |
|---|---|---|---|---|---|
Total assets (HKD Mn) | 1,334.6 | 1,270.7 | 1,265.0 | 1,400.6 | 1,738.8 |
Cash and cash equivalents (HKD Mn) | 180.9 | 166.8 | 101.1 | 121.5 | 182.5 |
Gross loan and interest receivables (HKD Mn) | 589.3 | 593.4 | 711.3 | 1,001.2 | 1,263.3 |
Impairment provision (HKD Mn) | 25.8 | 49.9 | 72.7 | 91.3 | 127.5 |
Net loan and interest receivables (HKD Mn) | 563.5 | 543.5 | 638.6 | 910.0 | 1,135.7 |
Investment properties (HKD Mn) | 241.5 | 222.0 | 53.0 | 47.0 | 48.0 |
Property, plant and equipment (HKD Mn) | 271.0 | 235.4 | 213.3 | 205.5 | 205.3 |
Completed properties for sale (HKD Mn) | 60.1 | 55.1 | 54.3 | 53.1 | 54.5 |
Repossessed assets (HKD Mn) | 0.0 | 27.9 | 21.4 | 37.3 | 77.1 |
Goodwill and intangibles (HKD Mn) | 11.9 | 10.6 | 9.2 | 7.9 | 9.3 |
Bank borrowing (HKD Mn) | 0.0 | 0.0 | 0.0 | 112.4 | 481.6 |
Loan from a shareholder (HKD Mn) | 0.0 | 0.0 | 0.0 | 160.4 | 98.0 |
Lease liabilities (HKD Mn) | 1.4 | 0.8 | 1.5 | 7.8 | 6.1 |
Total debt (HKD Mn) | 1.4 | 0.8 | 1.5 | 280.7 | 585.6 |
Short-term debt (HKD Mn) | 0.8 | 0.7 | 0.9 | 3.3 | 485.1 |
Long-term debt (HKD Mn) | 0.6 | 0.1 | 0.6 | 277.3 | 100.5 |
Net debt (HKD Mn) | -179.6 | -166.0 | -99.6 | 159.2 | 403.1 |
Total liabilities (HKD Mn) | 211.7 | 178.6 | 184.2 | 307.7 | 617.9 |
Total equity (HKD Mn) | 1,122.9 | 1,092.1 | 1,080.8 | 1,093.0 | 1,120.9 |
Working capital (HKD Mn) | 265.1 | 144.8 | 311.9 | 499.8 | 68.3 |
Key Financials and Margin Analysis (%)
| Metric | FY2021 | FY2022 | FY2023 | FY2024 | FY2025 |
|---|---|---|---|---|---|
Personal (unsecured) loans gross (HKD Mn) | 195.3 | 359.6 | 439.6 | 659.0 | 1,049.7 |
Property mortgage loans gross (HKD Mn) | 364.9 | 207.8 | 271.7 | 342.2 | 213.6 |
Corporate loans gross (HKD Mn) | 29.0 | 26.0 | 0.0 | 0.0 | 0.0 |
Unsecured share of gross loans (%) | 33.1 | 60.6 | 61.8 | 65.8 | 83.1 |
Provision coverage of gross loans (%) | 4.4 | 8.4 | 10.2 | 9.1 | 10.1 |
Interest yield on average gross loans (%) | 0 | 26.9 | 29.8 | 30.1 | 31.0 |
Credit cost on average gross loans (%) | 0 | 9.8 | 12.8 | 11.3 | 13.0 |
Key Financials and Margin Analysis (%) (FY2023–FY2025)
| Metric | FY2023 | FY2024 | FY2025 |
|---|---|---|---|
Loans written off (HKD Mn) | 63.6 | 73.4 | 105.0 |
Over-90-days past due, gross (HKD Mn) | 0 | 53.4 | 48.1 |
Over-90-days past due ratio (%) | 0 | 5.3 | 3.8 |
1–90 days past due, gross (HKD Mn) | 0 | 82.5 | 63.1 |
Cash Flow
| Metric | FY2021 | FY2022 | FY2023 | FY2024 | FY2025 |
|---|---|---|---|---|---|
Dividends paid (HKD Mn) | 0 | 0 | 0 | 0 | 0 |
Share buybacks (HKD Mn) | 0 | 0 | 0 | 0 | 0 |
Net change in cash and equivalents (HKD Mn) | -75.5 | -14.2 | -65.7 | 20.4 | 61.1 |
Returns & Leverage Ratios (%) and Financial Ratios (x)
| Ratio | FY2021 | FY2022 | FY2023 | FY2024 | FY2025 |
|---|---|---|---|---|---|
ROE on average equity (%) | 1.86 | 1.37 | 1.12 | 2.49 | 1.89 |
ROA on average assets (%) | 1.57 | 1.17 | 0.96 | 2.03 | 1.33 |
Company-defined ROCE (%) | 0 | 0 | 2.98 | 3.95 | 4.77 |
Current ratio (x) | 5.13 | 1.81 | 2.70 | 17.48 | 1.13 |
Total debt to equity (x) | 0.00 | 0.00 | 0.00 | 0.26 | 0.52 |
Company gearing – (liabilities less cash)/equity (%) | 0 | 0 | 8 | 17 | 39 |
Net debt to EBITDA (x) | -3.75 | -4.33 | -3.07 | 3.30 | 6.53 |
Interest coverage – operating profit/finance costs (x) | 5.4 | 4.1 | 3.8 | 7.5 | 2.2 |
Asset turnover – revenue/average assets (%) | 8.3 | 12.5 | 15.5 | 19.6 | 22.9 |
Revenue by Region and Revenue by Region (%)
| Region | FY2021 | FY2022 | FY2023 | FY2024 | FY2025 |
|---|---|---|---|---|---|
Hong Kong revenue (HKD Mn) | 108.8 | 161.2 | 195.0 | 257.5 | 350.8 |
PRC revenue (HKD Mn) | 3.6 | 1.7 | 1.6 | 4.3 | 8.7 |
Hong Kong share of total (%) | 96.8 | 99.0 | 99.2 | 98.4 | 97.6 |
Region Margins & Growth (%)
| Region | FY2022 | FY2023 | FY2024 | FY2025 |
|---|---|---|---|---|
Hong Kong revenue YoY growth (%) | 48.1 | 21.0 | 32.0 | 36.2 |
PRC revenue YoY growth (%) | -52.9 | -4.6 | 167.0 | 101.5 |
Segment Overview
| Segment | Hong Kong (HKD Mn) | PRC (HKD Mn) |
|---|---|---|
Money lending | 350.8 | 0.0 |
IT services | 0.0 | 7.2 |
Property rental | 0.0 | 1.5 |
Region Assets & Liabilities
| Region | FY2021 | FY2022 | FY2023 | FY2024 | FY2025 |
|---|---|---|---|---|---|
Hong Kong non-current assets (HKD Mn) | 1,004.0 | 943.2 | 761.6 | 859.4 | 1,137.2 |
PRC non-current assets (HKD Mn) | 0.0 | 0.0 | 0.0 | 1.4 | 0.8 |
Share Price
| Metric | Oct 2021 | Oct 2022 | Oct 2023 | Oct 2024 | Oct 2025 |
|---|---|---|---|---|---|
Share price (HKD) | 0.25 | 0.40 | 0.63 | 0.60 | 0.54 |
Performance Details
| Performance | Value | Source |
|---|---|---|
1-year change | ≈ −37% | MarketScreener; consistent with HK$0.54 → HK$0.34 |
3-year change | ≈ −43% to −46% | MarketScreener −43.3%; digrin-implied −46% |
5-year change | ≈ +36% | digrin (HK$0.25 Oct 2021 → HK$0.34) |
Calendar returns | 2026 YTD −32%; 2025 −19.4%; 2024 −3.1%; 2023 +28.0%; 2022 +100.0% | MarketScreener |
Valuation Multiples
| Multiple | Zero Fintech | Basis |
|---|---|---|
Market cap (HKD Mn) | 907 | 2,667.6M shares × HK$0.34 |
Enterprise value (HKD Mn) | 1,298 |
|
P/E – trailing 12 months (x) | 15.2 | TTM profit HK$59.6M (FY2025 − H1 2025 + H1 2026); Google Finance shows 15.45x |
P/E – FY2025 (x) | 43.4 | FY2025 profit HK$20.9M |
P/B (x) | 0.76 | Equity HK$1,187.3M |
EV/Sales – TTM (x) | 3.0 | TTM revenue HK$436.8M |
EV/EBITDA – TTM (x) | 10.9 | TTM EBITDA ≈HK$118.7M |
Capital Markets
| Item | Detail |
|---|---|
Analyst consensus | None — 0 analysts cover the stock (Simply Wall St) |
Dividend history & policy | No dividends FY2021–H1 2026; dividend policy has no fixed payout ratio (AR2024). Last notable distribution: 2017 in-specie dividend of Petro-King shares; earlier cash dividends paid in FY2011–FY2012 |
Distributable reserves | HK$333.1M at company level (contributed surplus HK$191.8M + retained earnings HK$141.3M) at 31 Dec 2024 |
Buyback authorisation | Annual general mandate to repurchase shares sought at each AGM (latest 18 Jun 2026; standard Listing Rules limit of 10% of issued shares); no repurchases executed |
Share issuance mandate | Annual general mandate to issue shares (latest 18 Jun 2026) |
Credit ratings | None (Moody's/S&P/Fitch: not rated) |
Debt maturity profile | Bank borrowing HK$481.6M classified current at 31 Dec 2025 (HK$541.6M at Jun 2026, floating rate, secured on receivables); shareholder loan HK$96.4M non-current at 3%; lease liabilities HK$4.8M. Detailed maturity ladder not disclosed in reviewed sources |
Analyst Conclusions
Management guidance
No numerical guidance. FY2025 and H1 2026 outlook statements emphasise continued X Wallet growth, evolution into an integrated financial services platform, AI-driven risk management and pricing, sustained brand campaigns, and no new property investment in the short term, against a "demanding" operating environment with tightening financial conditions.
Consensus expectations
None available (no coverage). A simple run-rate check: if H2 2026 merely matches H1 2026, FY2026 profit would be ≈HK$115M (EPS ≈4.3 HK cents), implying ≈7.9x P/E at HK$0.34; historically, however, H2 has not consistently matched H1 (FY2025 H2 profit was only ≈HK$2.0M versus H1 HK$18.9M).
Bull case
-
Operating leverage is real: H1 2026 revenue +49% with impairment −5% and segment margin 33% demonstrates the model can earn double-digit annualised ROE (~10%).
-
Funded runway: ≈HK$258M undrawn bank capacity plus HK$252M cash supports another ~30–40% loan growth without equity issuance.
-
Asset backing: P/B of 0.76x with ~HK$300M of property assets that could be monetised and recycled into lending or dividends (distributable reserves HK$333M).
Bear case
-
Credit costs are cyclical and recently volatile: FY2025 credit cost 13% with H2 2025 near breakeven; H1 2026 improvement may reflect book growth denominators rather than better underwriting.
-
Funding fragility and rate exposure: single-bank facility, current classification of borrowings and floating-rate costs (6.5%) against capped consumer pricing (48% ceiling).
-
Governance and concentration: 73.6% family control, repeated connected transactions, no dividends and multi-HK$100M exposure to one borrower group reduce minority-shareholder visibility; no research coverage and thin liquidity amplify discount.
Key catalysts and monitorables (next 12 months)
-
FY2026 results (expected late March 2027) and any profit alert (Feb–Mar 2027): H2 2026 credit costs vs H1.
-
Ageing (>90 dpd ratio, 3.8% at FY2025) and write-offs (HK$63.7M in H1 2026).
-
Facility renewal/tenor and any new funding partners or ABS upsizing.
-
Repayment of the HK$103M (due Feb 2027) and HK$45M (due Apr 2027) Horn King loans.
-
INED appointment renewals (terms end 31 Dec 2026).
-
Any dividend initiation or capital-return policy.
-
Regulatory developments on money-lender interest caps or advertising.
-
Sale of Zhongshan units or Hong Kong investment property.
Analyst verdict
Zero Fintech Group is a genuinely transformed company: the legacy Termbray conglomerate has become a focused Hong Kong digital consumer lender whose gross loan book has more than doubled since 2021 to HK$1.35bn, generating 98% of revenue from interest income at yields above 30%. The FY2021–FY2025 record, however, is one of growth without profitability — revenue compounded at ~34% while net profit was flat and annual ROE never exceeded 2.5%, because impairments, customer-acquisition spending and, latterly, bank funding costs absorbed the incremental spread. The first half of 2026 is the first credible evidence of operating leverage: profit of HK$57.5M exceeded any prior full year, driven by 49% interest-income growth against flat absolute impairments. At HK$0.34 the shares trade on ~15x trailing earnings, ~0.76x book and potentially high-single-digit forward earnings if the H1 run-rate holds.
The investment case therefore rests almost entirely on credit-cost durability. The FY2025 pattern — a strong first half followed by a near-breakeven second half — is a cautionary precedent, and the business carries structural risks: pricing already at the statutory ceiling, floating-rate funding concentrated in one bank facility, large bespoke secured loans to a repeat borrower group, and governance that is dominated by a controlling family with a history of connected transactions and no dividend payments. Thin liquidity and zero analyst coverage mean the market is unlikely to re-rate the stock without sustained proof.
Our synthesis: Zero Fintech is a high-beta, special-situation lender that screens cheaply on book value and run-rate earnings but warrants a substantial governance and credit-cycle discount. A constructive stance would require FY2026 to confirm credit costs near or below ~10% of average loans, stable funding terms beyond 2026, and the start of a capital-return policy funded by legacy property monetisation. Absent these, the valuation is likely to remain anchored to discounted book value.
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View Subscription PlansExecutive Leadership
Board of Directors
| Name | Title | Age (AR2024) | Tenure / appointment | Background & education |
|---|---|---|---|---|
Lee Lap | Chairman; Chair of Nomination Committee; member Remuneration Committee | 82 | Founder; chairman throughout listed history | PCB/electronics industry since 1968; honorary citizen of Zhongshan, Shenzhen and Guangzhou; interests in competing PRC/HK property businesses disclosed under Listing Rule 8.10 |
Tommy Lee | Vice Chairman (since 2008) & Chief Executive Officer (since 1 Nov 2010) | 48 | ~16 years as CEO | Son of Lee Lap; studied economics at Seneca College (Canada); investments in high-tech, property, financial services, oilfield engineering; non-executive director roles at Petro-king entities; formerly director and VP of Guangdong Ellington Electronics Technology (2001–2008, per MarketScreener) |
Chau Hau Shing ("Carlos Chau") | Executive Director; President of Zero Finance Hong Kong Ltd | 48 | ED since 8 Apr 2021 | 20+ years in money lending since 1996, including Prime Credit Ltd and United Asia Finance Ltd; employed by an entity controlled by Tommy Lee since April 2014 |
Shu Wa Tung, Laurence | INED; Chair of Audit and Remuneration Committees | 52 | Since 15 Apr 2022 | 30+ years audit/corporate finance; Deloitte (1994–2002); CFO of Texhong Textile, Jiangsu Rongsheng Heavy Industries, Petro-king Oilfield Services (2010–2018), Brainhole Technology; CFO and ED of ContiOcean Environment Tech (2613.HK); INED of several HK-listed issuers; B.Bus (Deakin), EMBA (Washington University in St. Louis), HKICPA |
Wu Wai Pan | INED; member of Audit, Remuneration and Nomination Committees | 52 | Since 10 Jun 2022 | 22 years in ISP/telecom/cloud; Cisco, Hutchison Global Communications, New World Telecom; chairman of Asia Pacific Cloud Application Alliance and IOT Hong Kong Association; MSc (University College Dublin), BSc (HK PolyU) |
Chak Wai Ting | INED; member Audit Committee | 40 | Since 9 Nov 2022 | Company secretary of Starjoy Wellness and Travel (3662.HK) since 2019; formerly company secretary of Colour Life Services; BBA (HK Metropolitan University), LLM (Greenwich); FCG, HKFCG |
Governance Overview
| Item | Detail |
|---|---|
Board size | 6 (3 executive, 3 INED); independence 50% |
Gender | 1 female director (17%); workforce 38% female, 27% of managers female (AR2024) |
Chair/CEO | Separate individuals but father and son; both from the controlling family |
Committees | Audit (3 INEDs, chaired by Shu); Remuneration (Shu chair, Lee Lap, Wu); Nomination (Lee Lap chair, Shu, Wu) |
Meeting attendance FY2024 | 4 board meetings, 100% attendance; audit committee met twice |
CG Code deviation | Code B.2.2: chairman and MD not subject to rotation due to the 1991 Bermuda private act; mitigated by bye-law requiring re-election every three years |
Internal audit | Outsourced to an external professional firm; 3-year IA plan; no significant deficiencies identified in 2024 |
INED terms | Appointment letters run to 31 Dec 2026 for all three INEDs — renewal is a 2026–27 monitorable |
Board & Management Changes
| Date | Change |
|---|---|
8 Apr 2021 | Chau Hau Shing appointed ED |
14 Apr 2022 | Changes of directorship (Shu appointed) |
10 Jun 2022 | Retirement of an INED; Wu Wai Pan appointed |
12 Aug 2022 | INED resignation; temporary non-compliance with Listing Rules |
9 Nov 2022 | Chak Wai Ting appointed, restoring compliance and achieving board gender diversity |
19 Jun 2025 | Appointment of member of nomination committee |
2023–Aug 2026 | No change in board membership |
Major Shareholders
| # | Holder | Shares | % | Nature |
|---|---|---|---|---|
| 1 | Lee & Leung (B.V.I.) Ltd (Lee & Leung Family Trust; trustee HSBC International Trustee) | 1,252,752,780 | 46.96 | Family trust; settlor Lee Lap; beneficiaries include spouse Leung Lai Ping and Tommy Lee |
| 2 | Earth Axis Investment Ltd (via aEasy Finance Holdings; controlled by Tommy Lee) | 710,000,000 | 26.62 | Consideration shares from 2020 acquisition |
| 3 | Cosmo Telecommunication Inc. (Ms. Jing Xiao Ju) | 151,202,960 | 5.67 | Substantial shareholder |
| 4 | East Glory Trading Ltd (Mr. Yuan Qinghua) | 103,397,540 | 3.88 | Former substantial shareholder (diluted) |
| 5 | Chau Hau Shing | 7,150,000 | 0.27 | Director personal interest |
| — | Others / public | ≈443,139,770 | ≈16.6 | — |
Competitive Landscape
Competitors by Segment
| Segment | Competitor | Type | Notes |
|---|---|---|---|
Unsecured consumer lending | AEON Credit Service (Asia) (0900.HK) | Listed card/personal loan issuer | FY ended Feb 2026 revenue HK$1,825.4M; profit HK$468.2M; gross receivables HK$7,912.7M |
Unsecured consumer lending | United Asia Finance (UA Finance), subsidiary of Sun Hung Kai & Co. (0086.HK) | Listed group | FY2025 consumer finance pre-tax profit HK$793.5M; H1 2026 UAF pre-tax HK$565.2M |
Unsecured consumer lending | Prime Credit | Licensed money lender | Mr. Chau's former employer; financials not publicly disclosed |
Unsecured consumer lending | Promise (Hong Kong) | Japanese-affiliated lender | Financials not publicly disclosed |
Digital lending | WeLab / WeLend | Private fintech lender | Financials not publicly disclosed |
Digital banking | ZA Bank, Mox Bank, WeLab Bank, livi bank, airstar bank, PAO Bank, Fusion Bank, Ant Bank (HK) | Virtual banks | Lower funding costs; personal loan products |
Bank personal loans/cards | HSBC, Hang Seng Bank, Bank of China (HK), Standard Chartered (HK), DBS (HK) | Incumbent banks | Prime borrowers; also Zero Fintech's bankers/funder |
BNPL / payments | Atome, Alipay HK, WeChat Pay HK, card issuers' instalment plans | Payment platforms | Compete with X Pay |
Secured property lending | Sun Hung Kai Credit (SHK & Co.), other licensed mortgage lenders | Non-bank mortgage | SHK Credit H1 2026 pre-tax HK$26M |
Peer Comparison FY2025
| Metric | Zero Fintech (FY Dec 2025) | AEON Credit Asia (FY Feb 2026) | Sun Hung Kai & Co. (FY Dec 2025) |
|---|---|---|---|
Revenue / total income (HKD Mn) | 359.5 | 1,825.4 | 5,474.0 |
Revenue growth (%) | 37.3 | 3.8 | 28.4 |
Net profit (HKD Mn) | 20.9 | 468.2 | 1,593.0 |
Net margin (%) | 5.8 | 25.6 | 29.1 |
Gross loans (HKD Mn) | 1,263.3 | 7,912.7 | 12,507.0 |
R&D intensity (%) | 2.1 | 0 | 0 |
Dividend payout (%) | 0 | 51.9 | 0 |
