Form 6-K - Report of foreign issuer [Rules 13a-16 and 15d-16]

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 6-K

REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 or 15d-16 UNDER THE SECURITIES EXCHANGE ACT OF 1934

For the month of October 2023

Commission file number: 001-34958

DUNXIN FINANCIAL HOLDINGS LIMITED

23rd Floor, Lianfa International Building

128 Xudong Road, Wuchang District

Wuhan City, Hubei Province 430063

People’s Republic of China

(Address of Principal Executive Offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40- F.

Form 20-F ☒ Form 40-F ☐

INFORMATION CONTAINED IN THIS FORM 6-K REPORT

Attached as Exhibit 99.1 to this report is the unaudited financial results for the six months ended June 30, 2023 of Dunxin Financial Holdings Limited (the “Company”), dated October 2, 2023.

This Form 6-K is hereby incorporated by reference into the registration statements of the Company on Form S-8 (Registration No. 333-266073) and Form F-3 (Registration No. 333-264179), to the extent not superseded by documents or reports subsequently filed or furnished by the Company under the Securities Act of 1933, as amended or the Securities Exchange Act of 1934, as amended.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This report on Form 6-K and the exhibit hereto contain “forward-looking statements” for purposes of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 that represent the Company’s beliefs, projections and predictions about future events. All statements other than statements of historical fact are “forward-looking statements,” including any projections of earnings, revenue or other financial items, any statements of the plans, strategies and objectives of management for future operations, any statements concerning proposed new projects or other developments, any statements regarding future economic conditions or performance, any statements of management’s beliefs, goals, strategies, intentions and objectives, and any statements of assumptions underlying any of the foregoing. Words such as “may”, “will”, “should”, “could”, “would”, “predicts”, “potential”, “continue”, “expects”, “anticipates”, “future”, “intends”, “plans”, “believes”, “estimates” and similar expressions, as well as statements in the future tense, identify forward-looking statements.

These statements are necessarily subjective and involve known and unknown risks, uncertainties and other important factors that could cause our actual results, performance or achievements, or industry results, to differ materially from any future results, performance or achievements described in or implied by such statements. Actual results may differ materially from expected results described in our forward-looking statements, including with respect to correct measurement and identification of factors affecting the Company’s business or the extent of their likely impact, and the accuracy and completeness of the publicly available information with respect to the factors upon which the Company’s business strategy is based or the success of the Company’s business.

Forward-looking statements should not be read as a guarantee of future performance or results, and will not necessarily be accurate indications of whether, or the times by which, the Company’s performance or results may be achieved. Forward-looking statements are based on information available at the time those statements are made and management’s belief as of that time with respect to future events, and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. Important factors that could cause such differences include, but are not limited to, those factors discussed more fully under the headings “Item 3. Key Information—D. Risk Factors” and elsewhere in the Company’s Form 20-F filed with the Securities and Exchange Commission (“SEC”) on May 15, 2023, as amended, in this report on Form 6-K and the exhibit hereto.

EXHIBIT INDEX

Exhibit No.		Description
99.1		Operating and Financial Review and Unaudited Interim Consolidated Financial Statements as of June 30, 2023 and for the Six Months Ended June 30, 2023 and 2022
101.INS*		XBRL Instance Document
101.SCH*		XBRL Taxonomy Extension Schema Document
101.CAL*		XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*		XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*		XBRL Taxonomy Extension Label Linkbase Document
101.PRE*		XBRL Taxonomy Extension Presentation Linkbase Document

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	Dunxin Financial Holdings Limited

Date: October 2, 2023	By:	/s/ Yuan Gao
	Name:	Yuan Gao
	Title:	Chairman and Chief Executive Officer

EXHIBIT 99.1

Dunxin Financial Holdings Limited Reports Financial Results for the First Six Months of 2023

WUHAN, HUBEI, China—October 2, 2023—Dunxin Financial Holdings Limited ("Dunxin" or the "Company") (NYSE American: DXF), a licensed microfinance lender servicing individuals and small and medium enterprises (“SMEs”) in Hubei Province, China, today announced its unaudited financial results for the first six months of 2023. The unaudited consolidated financial statements and other financial information included in this press release have been stated in Renminbi (“RMB”) unless otherwise indicated.

First Six Months 2023 Highlights

	·	Total outstanding principal balance of loans was RMB753.0 million (US$103.8 million), which remained unchanged compared to the balance as of December 31, 2022.
	·	Loans receivable, net of credit impairment losses of RMB646.6 million (US$89.2 million), was RMB601.3 million (US$82.9 million) as of June 30, 2023, representing an increase of 8.1% from RMB556.1 million as of December 31, 2022.
	·	Total interest income was RMB51.5 million (US$7.4 million) in the first six months of 2023, representing a decrease of 10.9% from RMB57.8 million in the same period of the prior year.
	·	Net interest income was RMB40.9 million (US$5.9 million) in the first six months of 2023, representing a decrease of 14.3% from RMB47.7 million in the same period of the prior year.
	·	Net profit was RMB30.5 million (US$4.4 million) in the first six months of 2023, representing a decrease of 49.3% from RMB60.2 million in the same period of the prior year.
	·	Earnings per American Depositary Share ("ADS") was US$0.34 in the first six months of 2023 compared to US$0.99 in the same period of the prior year.

First Six Months 2023 Financial Results

Interest Income on Loans

Interest income on loans primarily consists of the accrued interest of Stage 3 credit-impaired loans. Accrued interest is the present value of the estimated future cash flows of credit-impaired loans expected to be recovered, discounted at the loan’s original effective interest rate. Interest income on loans for the first six months of 2023 decreased by 10.9% to RMB51.5 million (US$7.4 million) from RMB57.8 million in the same period of the prior year. The decrease was primarily attributable to the revaluation of the present value of interest receivable and estimated recovery date.

Interest Expense

Interest expenses on loans increased to RMB10.4 million (US$1.5 million) for the first six months of 2023 from RMB10.0 million in the same period of the prior year. The increase was mainly due to the company accrued RMB0.4 million (US$0.1 million) for relevant listing service fee in the current reporting period.

Net Interest Income

Net interest income for the first six months of 2023 was RMB40.9 million (US$5.9 million), representing a 14.3% decrease from RMB47.7 million in the same period of the prior year.

Credit Impairment Losses

The Company maintains the allowance for loan losses, as presented in the financial statements, at a level it considers to be reasonable by management to absorb probable losses inherent in the loan portfolio as of each balance sheet date. The management evaluates the adequacy of the allowance for loan losses on a regular basis or more often as necessary. The allowance is based on the past loan loss history, known and inherent risks in the portfolio, adverse situations that may affect the borrower’s ability to repay, the estimated value of any underlying collateral, composition of the loan portfolio, current economic conditions and other relevant factors. This evaluation is inherently subjective as it requires material estimates that may be susceptible to significant revision as more information becomes available.

The Company provided the credit impairment losses amounting to RMB6.3 million (US$0.9 million) for the first six months of 2023. The increase was primarily attributable to the revaluation of the present value of interest receivable and estimated recovery date during the first six months of 2023. Although the economic and business environment for SMEs remained challenging and some of the Company’s loan customers were experiencing financial difficulty, the Company believed that the recoverability of loan was much more optimistic due to the ending of government controls procedures of the epidemic. The Company assessed credit loss allowance on these credit-impaired loans based on an assessment of the recoverable cash flows under a range of scenarios, including the realization of any collateral held where appropriate. The loss provisions held represent the difference between the present value of the cash flows expected to be recovered, discounted at the instrument’s original effective interest rate, and the gross carrying value of the instrument prior to any credit impairment.

Operation Expenses

Operating expenses consisted solely of general and administrative expenses, which increased from RMB3.9 million for the first six months of 2022 to RMB4.2 million (US$0.6 million) for the first six months of 2023. The increase was primarily attributable to accrual more expenses for services rendered by auditor and counsel in the current reporting period.

Net Profit and Earnings per ADS

As a result of the foregoing, net profit was RMB30.5 million (US$4.4 million) for the first six months of 2023, as compared to RMB60.2 million (US$9.3 million) in the same period of the prior year.

Earnings per ADS for the first six months of 2023 was US$0.34, compared to US$0.99 in the same period of the prior year.

Statements of Financial Position

As of June 30, 2023, the Company had cash and restricted cash of RMB289,000 (US$40,000) compared to RMB295,000 as of December 31, 2022. Most cash deposits with the bank are frozen by court orders as the Company is involved in multiple legal proceedings, administrative proceedings, claims and other litigation as a result of overdue payments to service providers and loans payable to the lenders. The Company has actively worked with Wuchang District Court to broker a series of settlement solution for its obligations with a hope of reaching a deal.

Loans receivable, net of credit impairment losses of RMB646.6 million (US$89.2 million), was RMB601.3 million (US$82.9 million) as of June 30, 2023, representing an increase of 8.1% from RMB556.1 million as of December 31, 2022, primarily due to increase of interest accrued. Accrued interest is the present value of the estimated future cash flows of credit-impaired loans expected to be recovered, discounted at the loan’s original effective interest rate.

As of December 31, 2022 and June 30, 2023, loans payable to third parties, related parties and shareholders, amounting to RMB161.4 million (US$22.3 million) are all overdue. Although certain loans payable were negotiated with new schedules of repayments, the Company is unable to fulfil those obligations due to liquidity issues.

Statements of Cash Flows

Net cash used by operating activities for the first six months of 2023 was RMB164,000 compared to RMB29,000 net cash used by operating activities in the same period of the prior year and the Company has very limited liquidity available to fulfil its obligations for the first six months of 2022.

Safe Harbor Statement

This news release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates," "target," "going forward," "outlook" and similar statements. Such statements are based upon management's current expectations and current market and operating conditions, and relate to events that involve known or unknown risks, uncertainties and other factors, all of which are difficult to predict and many of which are beyond the Company's control, which may cause the Company's actual results, performance or achievements to differ materially from those in the forward-looking statements. Further information regarding these and other risks, uncertainties or factors is included in the Company's filings with the U.S. Securities and Exchange Commission. The Company does not undertake any obligation to update any forward-looking statement as a result of new information, future events or otherwise, except as required under law.

Exchange Rate Information

The United States dollar (US$) amounts disclosed in this press release are presented solely for the convenience of the reader. Translations of amounts from Renminbi (“RMB”) into United States dollars for the convenience of the reader were calculated at the certified exchange rate of US$1.00 = RMB7.2513 on June 30, 2023 as set forth in the H.10 weekly statistical release of The Board of Governors of the Federal Reserve System. No representation is made that the RMB amounts could have been, or could be, converted into US$ at that rate on June 30, 2023, or at any other date. The percentages stated are calculated based on RMB amounts.

About Dunxin Financial Holdings Limited

Dunxin is a licensed microfinance lender in Hubei Province, China. The Company has been granted a microfinance license by the Financial Affairs Office of the Hubei Provincial People’s Government to provide loans to individuals and SMEs. The Company was awarded the “Vice President Unit” of China Micro-credit Companies Association under the China Banking Regulatory Commission in January 2017 and the “President Unit” of Hubei Micro-credit Company Association in December 2017. In 2016, we were recognized as a “National Excellent Microfinance Company” by China Micro-credit Companies Association. We have been named one of the “Top 100 Most Competitive Microfinance Companies in China” by China Microfinance Institution Association for four consecutive years since 2013, an “AA- Credit Rating Enterprise” by China Credit Management Co., Ltd in August 2017, and a “Top 10 Private Enterprises in Wuchang District, Wuhan City” by the People's Government of Wuchang District in July 2017. The Company has professional credit business experience in the microfinance industry in China. For more information, please visit the Company's website at http://hbctxed.com.

For additional information, please contact Mr. Johnny Zhou: +86-13917303401.

DUNXIN FINANCIAL HOLDINGS LIMITED

UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Expressed in Thousands of Chinese Renminbi Yuan, except per share and per ADS amounts)

	For the six months ended June 30
	2022 RMB			2023 RMB			2023 US$

Interest income on loans		57,844			51,545			7,393
Interest expense:
Interest expenses on loans		(9,988	)		(10,393	)		(1,491	)
Business related taxes and surcharges		(203	)		(203	)		(29	)
Total interest expense		(10,191	)		(10,596	)		(1,520	)

Net interest income		47,653			40,949			5,873
Reversal of /(Provision of) credit impairment losses		16,382			(6,311	)		(905	)
Net interest income after credit impairment losses		64,035			34,638			4,968

Operating costs and expenses
General and administrative		(3,866	)		(4,175	)		(599	)
Total operating costs and expenses		(3,866	)		(4,175	)		(599	)

Profit before income taxes		60,169			30,463			4,369
Income tax expense		-			-			-
Net profit		60,169			30,463			4,369

Other comprehensive income for the period:
Exchange differences on translation of financial statements of entities outside the mainland of the People’s Republic of China		(170	)		(397	)		(57	)
Total comprehensive income for the period		59,999			30,066			4,312

Net profit attributable to:
Equity holders of the Company		48,136			24,370			3,495
Non-controlling interests		12,033			6,093			874
Net profit		60,169			30,463			4,369

Total comprehensive income attributable to:
Equity holders of the Company		47,999			24,053			3,450
Non-controlling interests		12,000			6,013			862
Total comprehensive income		59,999			30,066			4,312

Earnings per share - basic and diluted (in RMB)		0.05			0.03
Earnings per ADS - basic and diluted (in US$)		0.99			0.34

Weighted average shares outstanding in the period (‘000)		1,002,201			1,134,021
Weighted average ADS outstanding in the period (‘000)		9,357			12,941

One ADS represents 480 ordinary shares.

DUNXIN FINANCIAL HOLDINGS LIMITED

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

(Expressed in Thousands of Chinese Renminbi Yuan)

	As of
	December 31,			June 30,			June 30,
	2022			2023			2023
	RMB			RMB			US$
				Unaudited			Unaudited

Assets
Current assets
Cash and restricted cash		295			289			40
Loans receivable, net of credit impairment losses		556,112			601,346			82,929
Prepaid expenses and others		4,629			4,895			675
Total current assets		561,036			606,530			83,644

Non-current assets
Property and equipment, net		39,228			37,754			5,206
Intangible asset		5			4			1
Total non-current assets		39,233			37,758			5,207

Total assets		600,269			644,288			88,851

Liabilities
Loans payable		161,439			161,439			22,263
Convertible notes payable		7,264			5,777			797
Salary and benefit payable		12,179			13,202			1,821
Income taxes payable		32,477			32,477			4,479
Interest payable		72,810			81,797			11,280
Other payable		25,942			29,330			4,045
Total current liabilities		312,111			324,022			44,685

Shareholders’ equity
Capital and reserve attributable to equity holders of the Company
Share capital		340			430			59
Additional paid-in capital		383,684			385,636			53,182
Statutory reserve		18,706			18,706			2,580
General risk reserve		9,180			9,180			1,266
Foreign currency translation reserve		(231	)		(549	)		(76	)
Accumulated losses		(181,049	)		(156,679	)		(21,608	)
Non-controlling interests in equity		57,528			63,542			8,763
Total shareholders’ equity		288,158			320,266			44,166

Total equity and liabilities		600,269			644,288			88,851

DUNXIN FINANCIAL HOLDINGS LIMITED

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Expressed in Thousands of Chinese Renminbi Yuan)

	For the six months ended June 30,
	2022			2023			2023
	RMB			RMB			US$
Cash flows from operating activities:
Profit before income taxes		60,169			30,463			4,369
Adjustments for:
Depreciation of property and equipment		1,477			1,474			211
Amortization of intangible asset		*			1		*
(Reversal)/ Provision of credit impairment losses		(16,382	)		6,311			905
Operating profit before working capital changes		45,264			38,249			5,485
Loans receivable		(57,093	)		(51,545	)		(7,393	)
Prepaid expenses and others		(158	)		(266	)		(38	)
Salary and benefit payable		1,068			1,023			147
Interest payable		9,015			8,987			1,289
Other payable		1,875			3,388			486
Cash used in operating activities		(29	)		(164	)		(24	)
Income tax paid		-			-			-
Net cash used in operating activities		(29	)		(164	)		(24	)

Net decrease in cash and restricted cash		(29	)		(164	)		(24	)
Cash and restricted cash at beginning of the period		396			295			43
Exchange losses on cash and restricted cash		(170	)		158			21
Cash and restricted cash at end of the period		197			289			40

* Less than 1,000.

Cover	6 Months Ended
Cover	Jun. 30, 2023
Cover [Abstract]
Entity Registrant Name	DUNXIN FINANCIAL HOLDINGS LIMITED
Entity Central Index Key	0001499494
Document Type	6-K
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Document Period End Date	Jun. 30, 2023
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2023
Entity File Number	001-34958
Entity Address Address Line 1	23rd Floor, Lianfa International Building
Entity Address Address Line 2	128 Xudong Road
Entity Address Address Line 3	Wuchang District
Entity Address City Or Town	Wuhan City
Entity Address Country	CN
Entity Address Postal Zip Code	430063

CONSOLIDATED STATEMENTS OF PROFIT AND OTHER COMPREHENSIVE INCOME - CNY (¥)	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
CONSOLIDATED STATEMENTS OF PROFIT AND OTHER COMPREHENSIVE INCOME
Interest income on loans	¥ 51,545,000	¥ 57,844,000
Interest expense:
Interest expenses on loans	(10,393,000)	(9,988,000)
Business related taxes and surcharges	(203,000)	(203,000)
Total interest expense	(10,596,000)	(10,191,000)
Net interest income	40,949,000	47,653,000
Reversal of /(Provision of) credit impairment losses	(6,311,000)	16,382,000
Net interest income after credit impairment losses	34,638,000	64,035,000
General and administrative	(4,175,000)	(3,866,000)
Total operating costs and expenses	(4,175,000)	(3,866,000)
Profit before income tax	30,463,000	60,169,000
Income tax expense	0	0
Net profit	30,463,000	60,169,000
Exchange differences on translation of financial statements of entities outside the mainland of the People's Republic of China	(397,000)	(170,000)
Total comprehensive income for the period	30,066,000	59,999,000
Equity holders of the Company net profit	24,370,000	48,136,000
Non-controlling interests	6,093,000	12,033,000
Net profit loss	30,463,000	60,169,000
Total comprehensive income attributable to:
Equity holders of the Company	24,053,000	47,999,000
Comprehensive income non-controlling interests	6,013,000	12,000,000
Total comprehensive income	¥ 30,066,000	¥ 59,999,000
Earnings per share - basic and diluted (in RMB)	¥ 0.03	¥ 0.05
Earnings per ADS - basic and diluted (in US$)	¥ 0.34	¥ 0.99
Weighted average shares outstanding in the period ('000)	1,134,021,000	1,002,201,000
Weighted average ADS outstanding in the period ('000)	12,941,000	9,357,000

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION - CNY (¥)	Jun. 30, 2023	Dec. 31, 2022
Current assets
Cash and restricted cash	¥ 289,000	¥ 295,000
Loans receivable, net of credit impairment losses	601,346,000	556,112,000
Prepaid expenses and others	4,895,000	4,629,000
Total current assets	606,530,000	561,036,000
Property and equipment, net	37,754,000	39,228,000
Intangible asset	4,000	5,000
Total non-current assets	37,758,000	39,233,000
Total assets	644,288,000	600,269,000
Loans payable	161,439,000	161,439,000
Convertible notes payable	5,777,000	7,264,000
Salary and benefit payable	13,202,000	12,179,000
Income taxes payable	32,477,000	32,477,000
Interest payable	81,797,000	72,810,000
Other payable	29,330,000	25,942,000
Total current liabilities	324,022,000	312,111,000
Share capital	430,000	340,000
Additional paid-in capital	385,636,000	383,684,000
Statutory reserve	18,706,000	18,706,000
General risk reserve	9,180,000	9,180,000
Foreign currency translation reserve	(549,000)	(231,000)
Accumulated losses	(156,679,000)	(181,049,000)
Non-controlling interests in equity	63,542,000	57,528,000
Total shareholders' equity	320,266,000	288,158,000
Total equity and liabilities	¥ 644,288,000	¥ 600,269,000

CONSOLIDATED STATEMENTS OF CASH FLOWS - CNY (¥)	6 Months Ended
CONSOLIDATED STATEMENTS OF CASH FLOWS - CNY (¥)	Jun. 30, 2023	Jun. 30, 2022
Cash flows from operating activities:
Profit before income taxes	¥ 30,463,000	¥ 60,169,000
Depreciation of property and equipment	1,474,000	1,477,000
Amortization of intangible asset	1,000
(Reversal)/ Provision of credit impairment losses	6,311,000	(16,382,000)
Operating profit before working capital changes	38,249,000	45,264,000
Loans receivable	(51,545,000)	(57,093,000)
Prepaid expenses and others	(266,000)	(158,000)
Salary and benefit payable	1,023,000	1,068,000
Interest payable	8,987,000	9,015,000
Other payable	3,388,000	1,875,000
Cash used in operating activities	(164,000)	(29,000)
Income tax paid	0	0
Net cash used in operating activities	(164,000)	(29,000)
Net decrease in cash and restricted cash	(164,000)	(29,000)
Cash and restricted cash at beginning of the period	295,000	396,000
Exchange losses on cash and restricted cash	158,000	(170,000)
Cash and restricted cash at end of the period	¥ 289,000	¥ 197,000

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