The quantasing group (QSG.US) has made significant progress in transforming towards the silver economy, as reflected in its latest performance.

On November 27, the quantasing group published its financial report for the first quarter of fiscal year 2025 (three months ending September 30, 2024). The data shows that during the reporting period, the total number of registered users of the quantasing group reached 0.1346 billion, a year-on-year increase of 30.2%, demonstrating a high growth momentum; meanwhile, revenue for the period was 0.81 billion yuan (RMB, the same below), and net income reached 80.69 million yuan, a year-on-year increase of 21.0%.

A close analysis of this financial report reveals many highlights, one of which is the continuous rapid growth of the consumer business. Thanks to the accelerated implementation of the silver economy transformation strategy, the quantasing group’s health products have continuously launched during the reporting period, driving a year-on-year increase of 10.4% in consumer business revenue to 49.5 million, which also rose significantly by 48.5% compared to the previous quarter. The sustained growth of the consumer business has further optimized the company’s revenue structure, indicating that the quantasing group's strategic transformation has made significant progress.

Secondly, profitability is stable and cash flow is abundant. During the reporting period, although the quantasing group reduced investment in non-core businesses due to the transformation, leading to a year-on-year decrease in total revenue, net income still achieved over 20% year-on-year growth, and adjusted net income has been profitable for eight consecutive quarters. At the same time, as of September 30, 2024, the quantasing group's total cash reserves amounted to 1.194 billion, higher than the 1.0263 billion at the end of June. Sufficient cash reserves lay a solid foundation for the long-term sustainable development of the quantasing group.

It is evident that while the quantasing group is accelerating its transformation into the silver economy sector, it has not affected the overall development of the business; it still maintains healthy profitability and ample cash reserves, which also indicates that the quantasing group's transformation journey has gradually entered a favorable situation. This is supported by the innovative layout of the quantasing group in the silver economy sector, significantly enhancing its ability to serve the silver economy.

The consumer business is growing rapidly, and the integrated service model of 'learning - travel - retirement' is gradually taking shape.

2024 is referred to as the 'first year' of silver economy development, with the State Council issuing the 'Opinions on Developing the Silver Economy and Promoting the Well-being of the Elderly' in January, accelerating the development of the entire industry. Moreover, the 'Government Work Report' in March clearly pointed out 'implementing a national strategy to actively respond to population aging' and 'vigorously developing the silver economy', pushing the industry's popularity to a new peak.

Riding the industry tailwind, the quantasing group is accelerating its layout in the silver market. It combines interest and knowledge to accelerate the creation of an "online + offline" integrated service platform, and is user demand-oriented, vigorously developing products that can create more lasting value for users. This has resulted in a comprehensive solution providing "services + products" for the elderly population, meeting the diverse needs of users in the silver life stage.

Specifically, in terms of "services," the quantasing group is accelerating the promotion of the "online + offline" integrated layout. Online, it offers courses such as calligraphy master classes and Yangyuan Eight-section Brocade, helping students deeply learn the essence of traditional culture and accurately cover the needs of the elderly population. Offline, the quantasing group is trying to promote the layout of regional retirement service centers, creating a comprehensive service space that integrates learning, health care, and socialization, and has developed offline study tour programs in places like Jingdezhen and Wudang Mountain, providing a more diverse service experience for the elderly.

In terms of "products," the quantasing group expands its business combination according to the needs of elderly users, leveraging the scenario advantages of its "online + offline" integrated service platform and the cross-selling advantages of services and products within the platform. It has launched a health product line that combines traditional Chinese health preservation concepts with modern conveniences, which not only expands the company's competitive advantages and achieves income diversification but also opens up new growth spaces.

Figure: Display of some products from the quantasing group's health product line.

Thanks to the continuous penetration of health products within the platform, the quantasing group's consumer business has achieved rapid growth, with revenue in this segment increasing by 10.2% year-on-year and soaring by 48.5% quarter-on-quarter during the reporting period. As the scale of health products expands, the quantasing group's "study-travel-health" integrated service model is gradually taking shape.

It can be foreseen that with the large user accumulation on the platform and the advantages of cross-selling, the quantasing group's health products will continue to penetrate within the platform, increasing the share of its proprietary brand products. This will allow the consumer business of the quantasing group to maintain high-speed growth with a new growth curve, and the high profitability of its proprietary brand products is expected to further enhance the overall profitability of the quantasing group.

Accelerate the promotion of ecosystem construction and preliminary exploration of a light asset "retirement school" to complete the closed loop.

In fact, the financial performance of the current period is just the "tip of the iceberg" in terms of the business value released by quantasing group after its transformation to the silver economy. If there is an in-depth understanding of its overall layout, a more comprehensive recognition of the true value of quantasing group can be achieved.

Since fully focusing on the silver economy, quantasing group has continuously strategically transformed its business portfolio, solely to build a comprehensive ecosystem for the silver economy. In this process, quantasing group has gradually reduced its unrelated businesses while vigorously expanding services that resonate with its core silver user group.

The "online + offline" integrated service platform and the "learning-travel-retirement" triadic service model are the two cores for quantasing group to establish the silver economy ecosystem, which can comprehensively meet the spiritual and cultural needs of the silver group. This marks the shift of quantasing group from a traffic-driven to a product-driven business model, entering a new stage of development, achieving a dual upgrade of deep service and user experience, significantly enhancing the market competitiveness of quantasing group, thereby further solidifying the company's "moat."

During the reporting period, quantasing group continued to promote ecosystem construction, while continuously enhancing platform services for the silver economy and also uncovering new growth engines from it. According to Zhito Finance APP, quantasing group hosted the 2024 home community retirement service autumn "Home Year" event in October; meanwhile, quantasing group explored the creation of a inclusive community "retirement school" with an integrated "online + offline" service model, collaborating with industry associations, ecological enterprises, and leveraging the systemic characteristics of the Peking regional retirement comprehensive center.

Image: 2024 Home Community Retirement Service Autumn "Home Year" Event

It is reported that the "retirement school" adopts an "online + offline" integrated model, merging traditional cultural courses with digital technology, providing seniors with a new experience in smart retirement while encouraging professional seniors to join the teaching ranks of the retirement school, enabling them to learn and contribute. This project is attempting trial operations within this year in the six districts of Peking, with plans to expand citywide after the model matures, hoping to gradually achieve offline coverage of regional retirement centers.

It is noteworthy that quantasing group attempted to create the "retirement school" without significant investment; it abandoned capital-intensive expansion methods and adopted a light asset model, choosing to cooperate with Beijing's existing community centers and civil affairs department infrastructure, which is crucial for quantasing group to maintain a stable profit level during its transformation.

Through this cooperative approach, the quantasing group can fully utilize existing facilities and community resources to efficiently expand physical businesses. Additionally, engaging users through trusted community channels helps rapidly scale operations, creating great expectations for the future development of the quantasing group's "Retirement Academy."

The exploration of the offline "Retirement Academy" is not only a key part of the quantasing group's construction of an integrated service platform of "online + offline" but also a strategic initiative for its deep layout in services for the aging society. This can quickly attract regional silver-haired users and significantly enhance their stickiness and dependence on the quantasing group platform, laying a solid foundation for the platform’s long-term sustainable and stable development. Moreover, the launch of the "Retirement Academy" creates a new model for the quantasing group in community building and product discovery, allowing the quantasing group to further expand its product and service offerings in the future by leveraging existing advantages and continuously enhancing the company's competitiveness in the market.

Summary

As of the end of 2023, the elderly population aged 60 and above in China has reached 0.297 billion, accounting for 21.1% of the total population, an increase of 30 million compared to 2022, and it is expected to reach nearly 0.5 billion by 2050. The vast elderly population will bring huge market space for the silver-haired economy.

According to predictions and estimates from institutions such as the China Research Center on Aging, the current scale of China's silver-haired economy is approximately 7 trillion yuan, expected to reach 30 trillion yuan by 2035, accounting for about 10% of GDP during the same period. This means that in the next decade, the silver-haired economy market, which has already reached a trillion scale, will continue to grow at a compound annual growth rate approaching 13%, providing enormous business opportunities and development space for service providers within the industry.

The quantasing group's transformation towards the silver-haired economy market has already achieved significant results. The integrated service platform being created, composed of "online + offline" services and a "learn-travel-nurture" triad, can provide comprehensive services across multiple fields such as education, health, tourism, and retirement. This diversified product service matrix not only greatly enhances the quantasing group's market competitiveness but also opens up future growth potential. The rapid growth of the consumer business and stable profitability both prove that the quantasing group is on the right path.

As a leader in the transformation toward the silver-haired economy sector, the quantasing group is expected to benefit from the rapid development of the industry, achieving sustained value growth in the long term, which will eventually be reflected in its stock price. This makes it worthy of significant attention from investors.