Discontinued Operations

12 Months Ended

Jun. 30, 2025

Discontinued Operations [Abstract]

Discontinued operations

(4) Discontinued operations

Disposal of Meidiya and its subsidiaries

A disposal is categorized as a discontinued operation if the disposal group is a component of an entity or group of components that meets the held for sale criteria, is disposed of by sale or other than by sale and represents a strategic shift that has or will have a major effect on an entity’s operations and financial results. The results of disposals that qualify as a discontinued operation are presented as such for all reporting periods presented. Results of discontinued operations include all revenues and expenses directly derived from such disposal group; general corporate overhead is not allocated to a discontinued operation. For disposals other than by sale, results of operations of a business would not be recorded as a discontinued operation until the period in which the business is actually disposed of other than by sale.

In January 2025, the Group’s subsidiary AIFU disposed of 100% equity interests in Guangdong Meidiya Investment Co., Ltd. (“Meidiya”) to a third party for cash consideration of RMB 30,240. Meidiya holds approximately 44.7% of the equity interests of Fanhua Insurance Surveyors & Loss Adjustors Co., Ltd. (“FHISLA”) and its subsidiaries (collectively referred to as the “Disposal Group”). The Disposed Group historically constituted the Group’s claims-adjusting segment, over which the Group exercised control through a series of act-in-concert arrangements. Accordingly, the Group deconsolidated the Disposed Group with effect from January 1, 2025 and no longer conduct any material operations in the claims-adjusting business. Concurrently, the act-in-concert arrangements among Meidiya and the other shareholders of FHISLA were mutually terminated by all parties effective February 1, 2025.

The Company’s sales of the Disposal Group represented a strategic business shift having a major effect on the Group’s operations and financial results. The results of operations for the Disposal Group are presented as discontinued operations on the consolidated statements of operations and comprehensive loss, and assets and liabilities are reflected as “Assets and Liabilities of Discontinued Operations” on the consolidated balance sheets for all periods presented. Amounts for all periods discussed below reflect the results of operations, financial condition and cash flows from the Company’s continuing operations, unless otherwise noted.

On January 1, 2025, the Group calculated a loss resulting from such disposition as follows:

Reconciliation of the carrying amounts of the major classes of assets and liabilities from the discontinued operations in the consolidated balance sheets as of January 1, 2025 is as follow.

	RMB
Consideration		30,240

	As of January 1, 2025
Assets	RMB
Cash and cash equivalents and restricted cash		88,579
Short term investments		52,025
Accounts receivable		85,721
Other receivables		50,668
Other current assets		9,211
Property, plant, and equipment, net		7,306
Goodwill		126,941
Other non-current assets		6,237
Right of use asset		14,032
Total assets		440,720
Liabilities
Other payable and accrued expenses		130,551
Accrued payroll		41,846
Income tax payable		10,104
Operating lease liabilities		13,538
Deferred tax liabilities		3,929
Total liabilities		199,968
Total net assets of the Disposal Group		240,752
Less: Non-controlling interest of the Disposal Group		(86,801	)
Net assets of the Disposal Group contributable to the Group		153,951
Loss on disposal of the Disposal Group		(123,711	)

The assets and liabilities for discontinued operations of the Disposal Group comprised the following items as of June 30, 2024:

	As of June 30, 2024
	RMB
Current assets for discontinued operations
Cash and cash equivalents and restricted cash		75,407
Short term investments		10,015
Accounts receivable and contract assets		84,759
Other receivables		15,443
Other current assets		9,430
Total current assets		195,054
Non-current assets for discontinued operations
Restricted bank deposit - non-current		1,527
Property, plant, and equipment, net		7,195
Goodwill		126,941
Deferred tax assets		5,000
Other non-current assets		6,619
Right of use asset		17,038
Total non-current assets		164,320
Total assets		359,374
Current liabilities for discontinued operations
Other payable and accrued expenses		10,198
Accrued payroll		37,980
Current operating lease liabilities		6,962
Income tax payable		7,840
Total		62,980
Non-current liabilities for discontinued operations
Non-current operating lease liability		9,098
Deferred tax liabilities		1,555
Other liabilities		3,923
Total		14,576
Total liabilities		77,556
Total net assets of the Disposal Group		281,818

As refer to Note 1, the Group started to consolidate AIFU’ s financial statement since December 31, 2023. The financial statements for the fiscal year ended June 30, 2023 do not include any profits and cash flows of AIFU. Consequently, the Disposal Group is not reflected in the financial statements for that period.

The condensed cash flows of Disposal Group were as follows for the fiscal year ended June 30, 2024 and 2025:

	Years ended June 30,
	2024			2025
	RMB			RMB
Net cash (used in) generated from operating activities		(16,087	)		4,653
Net cash (used in) generated from investing activities		44,252			(43,798	)
Net cash (used in) generated from financing activities		(29,500	)		52,318

Reconciliation of the major classes of losses from discontinued operations in the consolidated statements of operations and comprehensive loss for the fiscal year ended June 30, 2024 and 2025 is as follow:

	Years ended June 30,
	2024			2025
	RMB			RMB
Major classes of line items constituting pre-tax profit of discontinued operations
Net revenues		222,114			254,940
Operating costs		(147,333	)		(165,752	)
Selling expenses		(51,203	)		(53,087	)
General and administrative expenses		(20,881	)		(27,523	)
Investment income		366			(366	)
Interest income, net		368			277
Others, net		(332	)		316
Gain(loss) from discontinued operations, before income tax		3,099			8,805
Income tax (expense) benefit		581			(7,341	)
Share of gain (loss) of affiliates		97			(97	)
Net income from discontinued operations		3,777			1,367

	Years ended June 30,
	2024			2025
	RMB			RMB
Significant non-cash operating items:
Depreciation and amortization		1,706			1,597
Impairment loss		-			126,941
Loss on disposal of property and equipment		96			186
Significant investing activities:
Purchase of property, plant and equipment		(550	)		(3,297	)
Proceeds from disposal of property and equipment		269			1,509