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20-05-2025
- Business
- Yahoo
Q1 2025 Yalla Group Ltd Earnings Call
Kerry Gao; Investor Relations Director; Yalla Group Ltd Tao Yang; Chairman of the Board, Chief Executive Officer; Yalla Group Ltd Saifi Ismail; President, Director; Yalla Group Ltd Yang Hu; Chief Financial Officer; Yalla Group Ltd Jianfeng Xu; Chief Operating Officer, Director; Yalla Group Ltd Xueqing Zhang; Analyst; China International Capital Corporation (Hong Kong) Limited Xiaoyue Hu; Analyst; Haitong International Lincoln Kong; Analyst; Goldman Sachs Kaifang Jia; Analyst; CITIC Jenny Wang; Analyst; UBS Operator Good morning and good evening, ladies and gentlemen. Thank you for standing by for Yalla Group Limited first-quarter 2025 earnings conference call. (Operator Instructions) Today's conference call is being recorded. Now I would like to turn the call over to your speaker host today, Ms. Kerry Gao, Investor Relations Director of the company. Please go ahead, ma'am. Kerry Gao Hello, everyone, and welcome to Yalla's first-quarter 2025 earnings conference call. We issued our earnings press release earlier today, and it is now available on our IR website as well as our Newswire outlets. Before we continue, please note that the discussion today will contain forward-looking statements made under the safe harbor provision of U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties. As such, our future results may be materially different from the views expressed today. Further information regarding these and other risks and uncertainties is included in our earnings release and our annual report filed with the SEC. Yalla does not assume any obligation to update any forward-looking statements, except as required by law. Please also note that Yalla's earnings press release and this conference call include a discussion of unaudited GAAP financial information as well as unaudited non-GAAP financial measures. Yalla's press release contains a reconciliation of the unaudited non-GAAP measures to the unaudited most directly comparable GAAP measures. Today, you will hear from Mr. Tao Yang, our Chairman and Chief Executive Officer, who will provide an overview of our latest achievements and growth strategies. It will be followed by Mr. Saifi Ismail, the company's President, who will briefly review our recent business developments. Mrs. Karen Hu, our Chief Financial Officer, will then provide additional details on the company's financial results and discuss our financial outlook. Following management's prepared remarks, we will open the call to questions. Mr. Jianfeng Xu, our Chief Operating Officer, will join the Q&A section. With that said, I'd now like to turn the call over to our Chairman and Chief Executive Officer, Mr. Tao Yang. Please go ahead, sir. Tao Yang Thank you, everyone, for joining our first-quarter 2025 earnings conference call. We kicked off 2025 with a strong first quarter, even with the impact of Ramadan, which fell entirely within the first quarter of this year, our Q1 revenue still reached USD84 million, up 6.5% year over year and beating the upper end of our guidance. Our persistent efforts to deliver quality growth and enhance our overall efficiency and also yielding positive results. In Q1, our net margin improved substantially year over year from 39.5% to 43.4%. Our robust quarterly performance benefited from our effective growth strategy and efforts to enhance our flagship application and optimize user acquisition. And these initiatives ultimately delivered a better experience for our users, boosting Yalla's and Yalla users' willingness to pay and stay. In recent months, shifting international economic policies have sharply impacted the global macro economy. Against this fast evolving backdrop, the MENA-region, Yalla's core strategic market, has maintained remarkable stability and immense potential upside. Historically, the Middle East served as a retail crossroads for cultural exchange and trade between east and west. Today, it is striving hard for digital services, thanks to its vibrant, young demographics and high internet penetration. Technology is actively embraced across the region, making MENA a prime incubator for advanced-type development and AI innovation. To capitalize on these opportunities, Yalla has MENA's logistic destinations for online social networking and entertainment activities remains deeply committed to R&D and AI deployment. During the first quarter, we leveraged extensive localized materials from our products in the Middle East, to change our self-developed, AI-content moderation model to support recognition of both images and text. In [Nordic] as well as several MENA's regional [tales]. We are especially proud that our progressory platform's recognition speed and accuracy now lead the MENA region. We also integrated our moderation platform into our flagship products during the quarter, a win-win in terms of technology growth advancement and cost efficiency. Beyond moderation, we extended AI applications to user profile management. Our data integration and the systematic management to bring us deeper insights into user activity, spending patents, and other behaviors, whether optimizing our customer acquisition efficiency. Moving to our gaming business, amidst global economic volatility. MENA's young population in-house the digital infrastructure and visionary government support for the culture and entertainment industries are generating unique growth momentum for the gaming sector. With a robust product pipeline spanning casual and medical games, we have matched for official release in Q3. We just completed one round of product testing and the team is working to further improve various details before this tide is launched. We may test the water, seeing a few additional regions. I'll start MENA with this game. Moving forward, we will continue to build our product metrics with a steady displayed approach and collaborate with industry partners to bolster the growth and the prosperity of MENA's gaming ecosystem. Before I turn the call over to Saifi, an update on our shareholder return program. We mentioned last quarter that we would accelerate our share repurchases this year, targeting at least double the amount of last year's buyback or a minimum of USD28 million. As of May 16, 2025, Yalla had repurchased over 4.2 million ADS or Class A ordinary shares in 2025 totalling USD27.4 million bring us close to fulfilling our commitment made this much. In line with our commitment to sustained shareholder returns, we have decided to raise this year's buyback target by an additional USD22 million on top of the previously outlined USD28 million, bringing our total planned share repurchases to USD50 million for 2025. We will provide another progress update next quarter and discuss whether to increase the buyback scale even further. Moreover, the company has decided to cancel all shares repurchased this year. As part of our commitment to generating sustained benefits for our shareholders. In summary, Yalla Group debt capitalized on diverse opportunities during the third quarter amidst a complex global [net], achieving breakthroughs in both R&D and product offerings. Harnessing MENA's vast potential and take forward eases, we continue to deepen our technological capabilities using AI innovation to drive efficiency improvements and optimize user experience while further strengthening our localized advantage. We remain committed to amplifying Yalla Group's role in the Middle East digital transformation, creating value for all of our stakeholders. Now I will turn this call over to our President, Mr. Saifi Ismail, for a closer look at our recent development. Saifi Ismail Hello, everyone. Thanks for joining us today. Let's take a closer look at our first-quarter operations and our product's performance. First, let me walk you through our operational and product performance in the first quarter. It is important to note that Ramadan in 2025 started earlier than usual with the entire month falling within the first quarter, even so our products delivered impressive results, notably, while our flagship application near Yalla Ludo's user base continued to grow. Our WeMuslim organically gained broader popularity during Ramadan. Without raising our selling and marketing expenses, we increased our group's average monthly active user by 17.9% year over year to $44.6 million, achieving an accelerating growth rate substantially higher than that of previous quarters. We continued to roll out competing online and offline initiatives drafted to enhance user experience and boost engagement and we are set to see them drive meaningful results within Yalla's vibrant community. Yalla Ludo's Sixth Anniversary Campaign was a resounding success, attracting around three million participants including a remarkable share of devoted users who have been with Ludo since its launch. For Ramadan, we introduced a spectacular race of one long celebratory events online across our mobile apps, drawing users closer to our products and each other, participating in our activities and exploring Yalla's apps became a new part of our users' daily lives during Ramadan. To celebrate the closure Ramadan, we also hosted a star gathering in Dubai, showcasing the crucial road, our off-line activities play in driving industry progress. These events brought together over 100 government officials, business partners, industry leaders, and regional media executives to engage in thought-provoking discussions on the latest trend and innovation opportunities in technology while sparking insightful exchanges of ideas. This gathering also expanded the region's gross segment partnership networks industry-wide, laying a solid foundation for future synergistic growth. We were honored to host these distinguished guests and to extend our heartfelt gratitude to our partners for their continued trust and support. At the end of March, we hosted an additional offline event to amplify our regional presence and strengthening our brand impact, returning to Iraq with the Yalla Ludo Friendship tournament. Tens of thousands of users registered for the online qualifying rounds to compete for a coveted spot in the offline event. These events gave us invaluable insight into the passion of this region's players and their high regard for the Yalla Ludo brand. Looking back at the first quarter of 2025, we see our success reflected in gross metrics as well as deepen user trust and market recognition. Looking ahead, we remain committed to harnessing technological innovation as our engine and user needs as our compass driving synergy between our social and gaming businesses, while expanding the boundaries of MENA's digital ecosystem. As always, our vision is to build the largest destination for online social networking and entertainment activities in MENA, and we will never lose sight of that goal. With that, I will now turn the call over to our CFO, Karen, who will discuss our key financial and operational results. Yang Hu Thank you, Saifi, and hello, everyone. Thank you for joining us today. I'm pleased to report that we delivered a robust first quarter as we continue to elective our high-quality growth strategy and enhance overall efficiency. Our revenues increased by 6.5% year over year to USD83.9 million despite the impact of Ramadan. Thanks to our disciplined cost control and stronger operating leverage across the business. We further enhanced our profitability with net income increasing by 17% year over year to USD36.4 million. Our net margin also rose substantially to 43.4% in from 39.5% in the same period last year. And excluding share-based compensation, non-GAAP net margin increased to 46.6%, supported by our solid fundamentals and the clear strategy road map, we remain confident in our ability to seize new opportunities across MENA region and beyond and deliver enduring value to our stakeholders. Let's move on to our detailed financials for the fourth quarter of 2025. Our revenues were USD83.9 million in the fourth quarter of 2025, a 6.5% increase from USD78.7 million in the same period last year. The increase was primarily driven by our broadening user base and enhanced monetization capability. Turning to our costs and the expenses. Our total cost and expenses were USD52.7 million in the fourth quarter of 2025, a 6.2% increase from USD49.6 million in the same period last year. Cost of revenues was USD29.2 million in the fourth quarter of 2025, a 2.2% increase from USD28.6 million in the same period last year, primarily due to higher commission fees paid to third-party payment platforms as a result of increasing revenues generated. Cost of revenues as a percentage of total revenues decreased to 34.8% in the fourth quarter of 2025 from 36.3% in the same period last year. Our selling and marketing expenses were USD6.9 million in the fourth quarter of 2025, a 14.3% decrease from USD8.1 million in the same period last year, primarily driven by a decrease in incentive compensation. Selling and marketing expenses as a percentage of total revenues decreased to 8.3% in the fourth quarter of 2025 from 10.3% in the same period last year. Our general and administrative expenses were USD8.7 million in the fourth quarter of 2025, a 30.8% increase from USD6.6 million in the same period last year, primarily due to an increase in incentive compensation and higher professional services fees. General and administrative expenses as a percentage of total revenues increased to 10.4% in the first quarter of 2025 from 8.4% in the same period last year. Our technology and product development expenses were USD7.8 million in the first quarter of 2025, a 25% increase from USD6.3 million in the same period last year, primarily due to an increase in salaries and benefits for our technology and product development staff driven by an increase in the head count of the staffs to support the development of new businesses and expansion of our product portfolio. Technology and product development expenses as a percentage of total revenues increased to 9.3% in the first quarter of 2025 from 8% in the same period last year. As such, our operating income was USD31.2 million in the first quarter of 2025, a 7.1% increase from USD29.1 million in the same period last year. Interest income was flat at USD6.6 million in the first quarter of 2025 compared with the same period last year. Income tax expense was USD1.4 million in the first quarter of 2025 compared with USD3.5 million in the fourth quarter of 2024, primarily due to a decrease in UAE corporate tax. As a result of foregoing, our net income was USD36.4 million in the first quarter of 2025, a 17% increase from USD31.1 million in the first quarter of 2024. And our non-GAAP net income in the fourth quarter of 2025 was USD39.1 million, a 10.9% increase from USD35.3 million in the same period last year. Moving on to our liquidity and capital resources. Our cash position remains solid and healthy. As of March 31, 2025, we had cash and cash equivalents, restricted cash, term deposits and short-term investments of USD690.9 million compared with USD656.3 million as of December 31, 2024. We continue to return value through our share repurchase program, pursuant to the company's current share repurchase program from January 1 through May 16, 2025. The company repurchased 4,275,812 ADS or Class A ordinary shares, totaling approximately USD27.4 million, including USD5.4 million in the first quarter of 2025. As of May 16, 2025, the company has cumulatively completed cash repurchases in the open market of 11,580,950 ADS, all Class A ordinary shares, totaling approximately USD76.9 million, since the inception of current share repurchase program. The aggregate value of ADS or Class A ordinary shares that remain available under the current share repurchase program was USD73.1 million as of May 16, 2025. Furthermore, as our CEO just mentioned, we had reached our 2025 share buyback target to USD50 million, strengthening our commitment to share our success with shareholders. We believe our solid fundamentals and ample liquidity will support us in returning value to shareholders while maintaining daily operations and investing in future growth. Moving to our outlook. For the second quarter of 2025, we expect our revenues to be between USD76 million and USD83 million. The bulk outlook is based on the current market conditions and reflects the company's management's current and preliminary estimates of the market and operating conditions and customer demand, which are all subject to change. In the interest of time, please refer to our earnings press release for further details on our first-quarter 2025 financial results. This concludes our prepared remarks for today. Operator, we are now ready to take questions. Operator (Operator Instructions) Xueqing Zhang, CICC. Xueqing Zhang Hi, good morning, management. Thanks for taking my question and congratulations on another solid quarter. My question is about your financials. What's the main driver of the significant year-over-year increase in net margin and guidance for next quarter and this year? Thank you. Yang Hu Thank you, Xueqing. I will take your questions. On the revenue side, revenues from game services are the main growth driver. Our flagship products like Yalla Ludo continues to progress smoothly, and [while] Yalla has achieved record high revenues for three consecutive quarters. On the expense side, we have significantly decreased our selling and marketing expenses, mainly thanks to enhanced user acquisition efficiency driven by our innovative AI-predictive model for analyzing users' lifetime value. Together, these factors support our robust net margin performance. Regarding next quarter's guidance, I would say it's fair to expect our net margin to remain at around 40%. It is a relatively sustainable level given our current business. Thank you. Operator Xiaoyue Hu, Haitong International. Xiaoyue Hu Hello, management. Thank you for taking my questions and congrats on a strong first quarter. So can management please share the recent developments of our two flagship products, so Yalla and Yalla Ludo. Thank you. Saifi Ismail I'll take this question. Thanks. So Yalla is celebrating its ninth anniversary today coincidentally on the same day as our earnings release. So we have kicked off a major in-app celebration to mark this special occasion. We also have some itration lined up for Yalla's operation and design this year to enrich user chatting experience, making it more fun. The goal is to keep things fresh and engaging of our users and draw in a wider audience. For Yalla Ludo, we continue to boost user engagements in our online community through high-quality operational activities. We also continue to host highly praised tournaments across MENA countries effectively expanding Yalla Ludo's brand influence from online to offline. So overall, we see both products performing [suedely], generating steady and consistent cash flow for the company. Thank you. Operator Lincoln Kong, Goldman Sachs. Lincoln Kong Thank you, management, for taking my question. So my question is about shareholder return. So we have seen actually the share price rally quite nicely in the past two months. So at this moment, could you share the latest (spoken in foreign language) the minds behind the shareholder return plan going forward? How should we think about the consistency of our buyback program. Thank you. Tao Yang Lincoln, this is Tao. I will take this question. We are glad to see a market direction in the company's valuation. Our buyback program is definitely picking up speed. Two months ago, we committed to at least doubling last year's buyback amount for 2025, and we are close to achieving this goal. As we just mentioned, to further strengthen our efforts to return value to shareholders, we have raised this year's buyback target by additional USD22 million, bringing our total planned share repurchase to USD50 million. I also want to highlight that the company has decided to cancel all shares repurchased this year. As part of our commitment to delivering sustained benefits to our shareholders. We will provide another update next quarter and discuss whether to further ramp up the buyback. I hope that helps. Thank you, Lincoln. Lincoln Kong Thank you. Operator Kaifang Jia, CITIC. Kaifang Jia Hi, management. Thanks for taking my questions. Could management break apart -- brief us on the advancements in mid-core and hard-core games? Thank you. Jianfeng Xu Hi, Kaifang. Thanks for raising this. Our CEO just mentioned a match-three title set to be released in Q3, and we have several additional mid-core games in the pipeline with potential launches as early as Q3. For these games, we are not only focusing on the Middle East, but are also exploring several other overseas markets to expand our user base. We provide more details after the official rollout. Thank you. Operator Jenny Wang, UBS. Jenny Wang Hello. Thanks, management for taking my question. So Yalla (MAU) strong growth momentum this year with multicore products. So looking ahead, where we see a more meter acquisition plan in the future? Thank you. Jianfeng Xu Thank you, Jenny, for your question. I'll be taking this question. So MAU growth in Q1 indeed came in well above our expectations. Historically, our quarterly MAU growth has ranged from 2% to 3% when Q1 exceeded 7%. This was largely driven by our refined user-acquisition strategy tailored for Ramadan, as well as our UI-driven -- AI-driven traffic acquisition optimizations. Overall, this year's MAU growth may not follow the smooth trajectory we saw in the past two years. We will adjust and plan dynamically based on the needs of products and communities. We are keeping a close eye on the ROI of our marketing initiatives. Currently, we still expect full-year MAU growth to be around 10% year over year. We'll revisit this and keep you posted if anything new comes up. Thank you. Operator As there are no further questions now, I would like to turn the call back over to management for any closing remarks. Please go ahead. Kerry Gao Thank you once again for joining us today. We look forward to speaking with you in the next quarter. If you have further questions, please feel free to contact Yalla's Investor Relations or PSN Financial Communications. Both parties contact information is available in today's press release as well as on our company website. Operator This concludes this conference call. You may now disconnect your lines, and thank you.
Hi Dubai
16-05-2025
- Business
- Hi Dubai
CICC Launches Dubai Branch to Strengthen China-Gulf Financial Ties
China International Capital Corporation (CICC), one of China's top investment banks, has officially opened its branch in Dubai International Financial Centre (DIFC), reinforcing growing financial ties between China and the Gulf region. Operating under the name CICC (DIFC Branch), the new office is licensed by the Dubai Financial Services Authority and will serve as a key platform for the firm's Middle East, Africa, and South Asia (MEASA) operations. It also marks a significant step in CICC's international expansion strategy. DIFC, home to several major Chinese financial institutions, serves as a strategic hub for cross-border capital flows. Nearly 30 percent of the Chinese firms operating in DIFC are Fortune 500 companies, highlighting the centre's appeal to global financial powerhouses. His Excellency Essa Kazim, Governor of DIFC, welcomed the move, noting that it strengthens the UAE-China partnership and underscores DIFC's commitment to fostering innovation and financial excellence. 'Dubai remains a top destination for Chinese investments, particularly as we align on AI and digital transformation goals,' he said. CICC Chairman Chen Liang described the new branch as a vital link in the firm's global network. 'We aim to support regional clients with tailored solutions and help Chinese enterprises seize strategic opportunities abroad,' he said, adding that the branch will play a key role in driving Belt and Road Initiative projects. With established offices in global financial centres like New York, London, and Singapore, CICC is positioning the Dubai branch as a two-way investment gateway, offering advisory, asset management, and capital market services that bridge China and the Gulf. News Source: Dubai Media Office
Gulf Business
16-05-2025
- Business
- Gulf Business
Chinese investment bank CICC opens branch in Dubai's DIFC
Image: Dubai Media Office Investment bank China International Capital Corporation (CICC) has officially launched its branch at Dubai International Financial Centre (DIFC), strengthening China's financial presence in the Middle East, Africa, and South Asia (MEASA) region. Operating under China International Capital Corporation Hong Kong Securities and trading as CICC (DIFC Branch ) , the new office holds a category 4 license and is regulated by the Dubai Financial Services Authority (DFSA). CICC's entry into Currently, around 30 per cent of Chinese firms operating in DIFC are Fortune 500 companies. Dubai a top destination for Chinese investments 'Dubai and DIFC remain a top destination for Chinese investments, further accentuated by a surge in interest from banks, wealth and asset management firms, large corporations, and insurance sector market players,' said Essa Kazim, governor of DIFC. 'We are delighted to welcome CICC to DIFC, bolstering the strategic relations between the UAE and China.' Kazim added that DIFC provides a well-developed ecosystem designed to support Chinese businesses looking to scale across MEASA, and pointed to growing synergies between China's strengths in research and technology and Dubai's ambition to lead in artificial intelligence through initiatives such as the Dubai AI Campus. Chen Liang, chairman of From UAE, a key gateway for the Gulf region, we will build tailored solutions to serve regional clients' evolving needs while supporting Chinese enterprises seeking strategic opportunities abroad,' he added. CICC to enable two-way investment banking gateway CICC is positioning the new Dubai branch as a premier two-way investment banking gateway between China and the Gulf region. The bank plans to work closely with sovereign wealth funds, financial institutions, and major corporations to structure cross-border investments and facilitate greater participation in China's capital market projects. Founded as China's first joint venture investment bank, CICC has been instrumental in the development of China's capital markets. It combines global best practices with deep local expertise across investment banking, asset management, FICC (fixed income, currencies, and commodities), wealth management, and private equity. It operates globally through offices in Hong Kong SAR, New York, London, Singapore, Frankfurt, and Tokyo. With the DIFC launch, CICC is seeking to deepen financial ties under China's Belt and Road Initiative, while expanding its influence in the region's financial services ecosystem.
Business Times
29-04-2025
- Business
- Business Times
China's CICC eyes Middle East, South-east Asia in global push
[NEW YORK] China International Capital Corporation (CICC), one of the nation's largest brokerages, is seeking to tap the growing demand for cross-border financial services in the Persian Gulf and South-east Asia as the firm pushes its global expansion. Beijing-based CICC is gearing up to open a new branch in Dubai to target sovereign wealth funds and conglomerates in the Gulf region, according to Wang Hanfeng, deputy president for CICC International. It's also exploring more South-east Asian markets, after having opened a representative office in Vietnam last year and a Singapore unit in 2008. 'If we don't connect with the world and just focus our efforts on the domestic market, our role and influence will wane,' Wang said. 'We aim to form a bridge for Chinese firms to go abroad and overseas firms to invest in China.' The company will now also prioritise deploying resources to areas including Latin America, central Asia as well as Japan and South Korea to better support China's Belt and Road Initiative, Wang said. Since the inception of the initiative in 2013, China has managed to extend its global influence through the development programme that mainly funds infrastructure for member countries. Beijing is now actively seeking closer ties with trade partners in regions including South-east Asia as it braces for growing tensions with US President Donald Trump's US administration. The overseas expansion of Chinese brokerages also dovetails with the nation's strategy for its firms to 'go global' and a drive to cultivate two to three top-class Chinese investment banks by 2035. A NEWSLETTER FOR YOU Friday, 8.30 am Asean Business Business insights centering on South-east Asia's fast-growing economies. Sign Up Sign Up The push comes amid increasing tension with the US over tariffs and as China's economy has struggled to regain traction. The firm's profit dropped 7.5 per cent in 2024 from a year earlier as brokerage commissions and investment banking revenue slid. Underwriting and sponsoring fees from equity financing dropped almost 37 per cent as initial public offerings and follow-on share sales in China plummeted. CICC aims to participate in the energy transition and infrastructure construction drive in the Gulf region by providing structured financing and services, according to Wang. It will cater to increasing demand from both Chinese firms and their counterparts in that region for cross-border investment, share offerings, as well as mergers and acquisitions, he said. There's 'great synergy' between the two sides in areas including green energy, he said. The firm expects stronger ties and more cooperation between companies in China and South-east Asia as the latter seeks to upgrade the new energy, high technology and consumption sectors. CICC can play to its strength by facilitating two-way financing and investment services, said Wang. Peer CGS International, a unit of China Galaxy Securities, is also looking to help boost cross-border investments by Chinese and South-east Asian firms amid optimism over stronger ties between the two sides given the US tariffs, CEO Carol Fong told Bloomberg Television in early April. CICC will add more headcount in both the Gulf region and South-east Asia to aid its local expansion, Wang said, without disclosing specific targets. The company, a leading underwriter and sponsor for initial public offerings in Hong Kong, also expects listing activities in the city to pick up in 2025 from the past few years with more big deals above US$1 billion. The benchmark Hang Seng Index has gained 9.5 per cent this year, ranking among the best-performing major indexes globally. CICC's global operations began as early as 1997 when it set up a Hong Kong unit, the predecessor of CICC International. Its global business operations have over the years expanded to amass HK$194.4 billion (S$32.8 billion) in assets as at end-2024, with its net profit contributing to about 50 per cent of the group's total last year. BLOOMBERG
Business Recorder
21-04-2025
- Business
- Business Recorder
China's yuan hovers near 2-week high, tariffs in focus
SHANGHAI: China's yuan hovered near a more than two-week high against the dollar on Monday, although uncertainty surrounding Sino-US trade tensions restricted the currency's upside potential. Traders said the yuan's movements were following the dollar's weak performance, as the US currency tumbled after investor confidence in the US economy was shaken by President Donald Trump's plans to overhaul the Federal Reserve. By 0342 GMT, the onshore yuan was 0.17% firmer at 7.2868 per dollar, not far from a two-week high of 7.2855 reached on Friday. Its offshore counterpart climbed to a one-week high of 7.2879 per dollar in morning deals before trading at 7.2890 around midday. However, market participants remained cautious due to ongoing trade tensions between Washington and Beijing, and refrained from pushing the yuan to new highs. China on Monday warned countries against striking a broader economic deal with the United States at its expense, escalating its rhetoric in the intensifying trade war between the world's two biggest economies. 'If there is positive progress between China and the United States on tariff issues, the yuan exchange rate will gain some support,' said analysts at China International Capital Corporation (CICC). 'Otherwise, the yuan may still face certain depreciation pressure due to cross-border capital outflows,' they said, expecting the yuan to fluctuate between 7.28 and 7.33 per dollar this week. Prior to market opening, the People's Bank of China (PBOC) set the midpoint rate, around which the yuan is allowed to trade in a 2% band, at 7.2055 per dollar, 833 pips firmer than a Reuters' estimate of 7.2888. This month, the PBOC slightly eased its control on the currency, allowing official guidance to weaken past the key threshold of 7.2. However, it came in stronger than market forecasts, which traders interpreted as an official attempt to keep the yuan steady while allowing some flexibility to counteract tariff shocks. China's yuan rises to 2-week high on hopes of de-escalation in US-China tensions Nonetheless, the yuan's value against the its major trading partners, as measured by the CFETS yuan basket index, fell to a new 21-month low of 95.97, according to Reuters calculations based on official data. The CFETS index has lost about 5.42% year-to-date, while the yuan was up about 0.18% against the dollar during the same period. Separately, China kept benchmark lending rates steady on Monday for the sixth successive month, aligning with market expectations. But analysts and traders anticipate that monetary easing measures could be rolled out soon to support the economy.
