Revenue continues to decline! What challenges does Zhaolian Financial still face?

Ask AI · How does Zhaolian Finance respond to regulatory pressure under a high complaint rate?

Zhaolian Finance’s 2025 net profit increased slightly by 1.26% year over year, but revenue fell by 6.78% year over year. At the same time, the company has recently still been facing a large number of complaints

Investment Times Network, Punctuated Finance Researcher Tian Wenhui

Zhaolian Consumer Finance Co., Ltd. (hereinafter referred to as Zhaolian Finance) halted its downward trend in 2025 net profit and achieved a slight increase, but its revenue continued to decline, indicating that the company is still facing performance pressures. At the same time, the company has recently still been dealing with a high number of customer complaints.

According to Zhaolian Finance’s 2025 financial data recently disclosed by its shareholder, China United Network Communications Co., Ltd. (hereinafter referred to as China Unicom, 600050.SH), Zhaolian Finance’s 2025 net profit rose 1.26% year over year, while operating revenue fell 6.78% year over year.

Regarding complaints, according to information from the Black Cat Complaint platform on March 25, Zhaolian Finance received 369 complaints in the past 30 days, with a cumulative total of 29,561 complaints. Recent complaints mainly involve high interest rates, violent collections, privacy leaks, and so on.

Investment Times Network and Punctuated Finance Researcher Tian Wenhui sent a discussion outline to Zhaolian Finance about the above issues such as revenue and complaints; as of the time of publication, no response had been received.

Revenue decline

Zhaolian Finance’s operating revenue for 2025 continues to decline, even as its net profit still decreases.

China Unicom’s 2025 annual report shows that Zhaolian Finance’s 2025 net profit was RMB 3.054 billion, up slightly by 1.26% year over year; operating revenue was RMB 16.144 billion, down 6.78% year over year. China Unicom’s annual report does not explain the reasons for Zhaolian Finance’s revenue decline.

Zhaolian Finance’s performance growth rate in recent years has also shown fluctuations. From 2022 to 2024, Zhaolian Finance’s year-over-year growth rates for operating revenue were 9.84%, 12.01%, and -11.65%, respectively, while its net profit year-over-year growth rates were 8.68%, 8.14%, and -16.22%, respectively.

On capital adequacy, according to information on Zhaolian Finance’s official website, at the end of the third quarter of 2025, the company’s capital adequacy ratio, tier-one capital adequacy ratio, and core tier-one capital adequacy ratio were 13.54%, 12.53%, and 12.53%, respectively, down by 0.15 percentage points, 0.16 percentage points, and 0.16 percentage points compared with the end of the previous year.

According to information on Zhaolian Finance’s official website, when Xu Mingjie, deputy general manager of China Merchants Bank Co., Ltd. (hereinafter referred to as China Merchants Bank, 600036.SH), visited Zhaolian Finance for research on March 9, he said that Zhaolian Finance has achieved balanced development in terms of quality, efficiency, scale, and structure. The provision coverage ratio has remained at a relatively high level, and the company has explored a distinctive development path that relies on technology for customer expansion, operational management, risk prevention and control, and consumer protection governance. In the next stage, the company should adhere to “risk-based approach, quality first,” continuously build technological capabilities, strengthen coordination among shareholders, and maintain high-quality development.

Industrial and commercial information shows that Zhaolian Finance is held 50% each by China Merchants Bank and China Unicom’s subsidiary.

More complaints

Zhaolian Finance has recently been facing a large number of complaints.

According to information from the Black Cat Complaint platform on March 25, Zhaolian Finance received 369 complaints in the past 30 days, with a cumulative total of 29,561 complaints. Recent complaints mainly involve high interest rates, violent collections, privacy leaks, and so on.

Among them, a customer stated in a complaint posted on March 17 that he took a loan from Zhaolian Finance in November 2025, and recently, due to temporarily encountering repayment difficulties, he did not handle overdue amounts in time. Since March 17, collection personnel have frequently called him and his relatives, as well as colleagues, disclosing his debt information. He alleges there have been behaviors such as contacting his entire address book and violent collections, which seriously disrupt his and those around him’s normal lives, and have had a negative impact on his personal reputation and family relationships. Zhaolian Finance’s reply on the Black Cat Complaint platform was: it agrees with some of the customer’s requests and has reduced the frequency of calls.

Another customer complained on March 15 that “Borrow 50,000 to repay 90,000—Zhaolian Consumer Finance’s penalty interest is too high.” The complaint shows that the user’s total borrowings from Zhaolian Finance were RMB 50,920. As of now, the user has cumulatively repaid RMB 70,084.89, meaning the repayment amount has already far exceeded the principal borrowed. His employment income was previously unstable, leading to overdue payments. Now, he is proactively negotiating a repayment plan and is willing to assume the remaining principal, but the platform (which should be the lending platform) still requires paying fees such as interest and penalty interest. His request is only to repay the reasonable remaining principal and so on. Zhaolian Finance replied on the Black Cat Complaint platform that the company arranged dedicated staff to contact the customer for communication, has provided a plan, and cannot agree to all of the customer’s requests.

On March 18, Zhaolian Finance’s official website publicized a list of third-party cooperation institutions for its credit business, including collection service institutions. Collection service institutions include Shenzhen Hezhongli Information Consulting Co., Ltd. (hereinafter referred to as Shenzhen Hezhongli) and Guangdong Huarong Data Technology Co., Ltd. (hereinafter referred to as Huarong Data), among others.

On the Black Cat Complaint platform, there are complaints from Zhaolian Finance customers, as well as complaints from customers of other institutions regarding violent collections by Shenzhen Hezhongli. There have also been complaints from customers of other institutions about violent collections by Huarong Data.

For individual loan interest rates and total financing costs, regulatory policy is tightening its control.

According to reports, on December 19, 2025, the People’s Bank of China and the National Financial Regulatory Administration jointly issued the “Guidelines for the Management of Comprehensive Financing Costs of Small Loan Companies,” which require that: the comprehensive financing cost of newly issued loans must not exceed 24%. Otherwise, local financial regulators will take regulatory measures and require immediate correction. The comprehensive financing cost of newly issued loans should be gradually reduced to within 4 times the 1-year LPR (loan prime rate) (the current 1-year LPR is 3%, i.e., the cap is 12%). By the end of 2026, the proportion of loans whose comprehensive financing costs exceed 4 times the 1-year LPR should decrease significantly. By the end of 2027, the comprehensive financing cost of all newly issued loans must be reduced to within 4 times the 1-year LPR.

According to the “Several Provisions of the Supreme People’s Court on the Application of Law in the Trial of Private Lending Cases,” as amended for the second time in December 2020, “where the lender and the borrower have both agreed on overdue interest and also agreed on default damages or other fees, the lender may choose to claim overdue interest, default damages, or other fees, or may claim them together; however, for the portion that exceeds four times the one-year loan market prime rate at the time the contract is formed, the People’s Court will not support it.”

Year-over-year revenue growth rates of Zhaolian Finance in recent years

Data source: China Unicom’s annual report

Investment Times keywords: Zhaolian Finance｜China Unicom (600050.SH)｜China Merchants Bank (600036.SH)

Author’s statement: Personal views are for reference only