(Yicai Global) March 14 -- Shares of China's OneConnect Financial Technology dropped after the fintech subsidiary of Ping An Insurance Group revealed a shrinking net loss of CNY872 million (USD127 million) for 2022.

OneConnect’s stock price [HKG: 6638] dived 6.6 percent to close at HKD1.56 (20 US cents), resulting in a 71 percent decline over the past 12 months. Its New York-listed shares [NYSE: OCFT] closed 5.5 percent lower at USD6.01 yesterday.

Net loss narrowed by 32 percent from 2021 due to the rising virtual banking business, the Shenzhen-based firm that runs a technology-as-a-service platform for financial institutions said in its earnings report released yesterday. OneConnect, which has no deposits at the troubled Silicon Valley Bank, has ample funds to break even, according to executives.

Revenue rose 8 percent to nearly CNY4.5 billion (USD654 million) last year from a year earlier. Income from virtual banking, interest from Ping An OneConnect Bank, and commissions totaled about CNY107 million, more than tripling. But the biggest earner was its technology solution offered to insurers and banks as such revenue tallied nearly CNY4.4 billion, up 6 percent.

The focus of future work will be breaking even, improving the income structure, and expanding third-party revenue streams, executives said.

Chief Financial Officer Luo Yongtao said that OneConnect grew steadily in 2022 as key indicators such as the number of quality customers and gross margins rose due to standardized products and efficient delivery. Consequently, OneConnect has confidence in achieving profitability in the future, per Luo.

In an interview with Yicai Global in July 2022, Luo said that OneConnect is expected to achieve breakeven in 2024. Executives at the briefing said that OneConnect had a CNY2.6 billion balance of funds as of 2022, enough to stay on track to reach the goal.

Editor: Emmi Laine, Xiao Yi