FINV - Earnings call transcript Q1 2022

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Operator

Hello, ladies and gentlemen. Thank you for participating in the First Quarter 2022 Earnings Conference Call for FinVolution Group. At this time, all participants are in a listen-only mode. After management's prepared remarks there will be a question-and-answer session. Today's conference call is being recorded. the Investor to Relations turn Tan, host, now of Head for will call your over Jimmy I the company. ahead. go please Jimmy,

Jimmy Tan

Hello, were our call. to posted online. earlier everyone, XXXX are and conference earnings today first and The via issued quarter results Newswire services company welcome

our You the our Mr. at website ir.finvgroup.com. session. and Feng Zhang, earnings Financial sign company and for the Chief our can alerts section by start and Xu, with of Executive will download Chief Jiayuan Officer; prepared e-mail their Q&A visiting conclude release the up the Officer IR Mr. a with call remarks

this During presented to in in financial isolation our will assess operating and certain to performance. substitute GAAP. information or These prepared as be non-GAAP considered a measures referring for intended financial call, non-GAAP the accordance to not and we measures US review financial with be are

and to release. GAAP these about to measures, reconciliation information refer please non-GAAP For press earnings measures our

note will Act of Before provisions Private Reform Litigation continue, the contain Securities of the today's harbor under made please XXXX. safe we statements US forward-looking that discussion

statements risks and uncertainties. Forward-looking involve inherent

applicable update As these forward-looking are the and other information views Further expressed and company any as regarding The company the law. Commission. under from Exchange any be company's results to today. statements, different assume such, materially uncertainties filings the obligation included the Securities in risks with and may US required not does except

Zhang. a ahead, for to turn post over Please slide our the website results now Feng the CEO, sir. we Finally, will our on go Mr. our details I IR providing presentation quarter. of call

Feng Zhang

technical weeks. lockdown under in and lockdown to persisted has today additional during certain similar Furthermore, fluctuations management are aspects the bear pandemic affected you We're Since through team operations. our macro Shanghai, due our to Hello, against imposed us other business so and encounter March everyone, Jimmy. happy call. and multiple XXXX recent Thanks, homes, their been completion strong quarter our joining XXXX, any lockdowns headwinds. of with you we for quarter XXXX's if in have the in of from speak with have following to please difficulties earnings successful Due call. afflicting another the thank upon Shanghai first been the of the cities environment dialing

enabled strong However, of line billion flexibly and navigate strategic a our transaction consistent of technological our year-over-year and RMBXX.X eighth total growth quarter-over-quarter increase expectation. quarter towards a us our We total with of deliver challenges representing volume, this borrowers XX% quarter, transition results, highlighted quality transaction better foundation first X%. in in by achieved solid and consecutive volume record-setting increase to sequential

the Now, share for let quarter. some achievements me first other major

new an we proprietary technologies engines. and towards outstanding self-developed volume also loan borrowers, for as [indiscernible] XX, billion, March the our acquire of to RMBXX.X As ever strategy quality originated risk billion XXXX, such better surged skillfully XX% of XX% RMBX.X shift Thanks balance transaction increased increase as borrowers, Notably, our progressive evolving year-over-year. representing assessment and increase to relentlessly lose credit to our X% year-over-year better and of sequentially. quality an execute our visualized borrowers our total to

of credit growing delinquency saving and XXX time. quarter risk us just our which combines rate our management We both management system, Increasing a model while learning platform have fourth over for is requires [indiscernible] day our quarter our us iterative of that tremendously, risk maintenance XXXX. seconds efficiency improved recent prudent the levels XXXX on Platform swiftly relevant to efficient framework, in and enables and in adjustments to and cost X.X% first from acquire and cutting-edge deployment implement step further our at X.X% to make new complex and one stabilized into low assessment. by one rules our [indiscernible] algorithm an Supported metrics continuously [indiscernible] appropriate volume. technologies model an in automatic resources XX% transaction design, the operating

due to expectations. X.X%, slightly lockdowns then pandemic-related still this metric to has since However, increased within but

As team collection is out rate above and of remained our loan May in collection cities, spread several XX%. our largely across Shanghai at loan based recovery strong

to low Our at XX delinquency below in the rate days X.XX% remained X.XX% quarter. previous compared

vintage stable past several for delinquency remained the quarters. rates have Our

of expect manageable of rate performance around newly the now monitor implementing loans. prolonged However, In quarter considering riskier strategically closely for and as for resurgence first existing have originated the continue the risk China, in such The lockdown. (ph) the of delinquency as X.X%. the and in reducing the food regions have [pricing] the by to and loan measures to us the for as impact transactions which COVID been meantime, rate we beverage, our be both preemptive been is we badly approval pandemic such vintage affected will we impact sectors

better from team first due a the customers lost over IRR to them been difficult of validated the from increased transaction their ongoing this facilitated service the of of same who of the period ago. note, total just in accounted additional XX% borrowers, for just quarter, proportion customer previous quality year. our in and payment borrowers the them quarter COVID, to in loans for XX% first Furthermore, by separate A is and help to last category our at or to XX% On XX% borrowers to Our percentage providing below the for tide increased assistance our year of which XX% has period. B compared XX% short-term a in quarter up capabilities

empower digital regulatory our overcome achieving in-house us to period, capabilities challenging industry-leading while We that this developed are technologies and confident compliance. will

advanced overall strategy funding While quarter, sustaining the structure. our our over growth strong trajectory we also optimize to our

line. date, over and have As our to we platform financial stable, funding we at empowering To while cultivate pipe small progress we our funding to cooperated remain in and substantial maintain refine finance in diversified ample. our and sources, aimed operations with a continue provinces with momentum Alongside, robust of growth we partners, a they have business mix augment cumulatively consumer business, owners. funding solid our ensuring different secure also our across institutions XX continue

we others, XXX,XXX industries, over quarter wholesale and an across service increase of last small representing among retail, sectors served from owners same as business the year. multiple such During period XX% the

high volume segment's total year-over-year the transaction While quarter. contributing XX% volume for increased to record a of XXX% RMBX.X of transaction billion, the

strongly delegation for of pandemic. SMEs, Our the the of is aligned objective government's the in in quality of business global excess small financing aftermath providing with promoting to finance especially

on commitment as business, FinVolution's a forward, efforts focused will Going corporate citizen. remain responsible small our we assist to the reaffirming

our to our traction business continues stability. to which expansion, as our to now Turning enhance international in gain domestic business

borrowers, We from is The have and of improving the period product better attractive This strategically bearing transition to of interest rates the proportion XX% quality year. better first our the to in XX% as last implemented our multiple the quality mix, same fruit. borrowers in expanding markets. partner increased approach base offering measures such XXXX international in quarter

of transition in to better quality funding borrowers, have the confident business the as funding our our we With we are grows. base and strengthened additional also region securing further institutional

RMBX.XX under RMBX.XX loan billion, balance XX% billion With note, markets X% of quarter an volume of representing year-over-year. Asia, our an in totaled transaction control XX% increase year-over-year the situation Southeast for international of first largely outstanding reached representing the markets in XXXX, during Of increase COVID-XX our and international our particular sequentially.

continue We the and products new partnerships services our with our offering region different to to in will cultivate introduce players improve and mix.

an leading of confident support least, goal part an the these players in on one update performance, of becoming important our efforts to creation ESG growth We Last and value provide but which of not like our our will that long-term the region. are is philosophy. I'd

well opportunities and determination effective presented ESG our stepped to for our in challenges I'm enormous these overcome organization lockdown with quarter's solutions. proud and develop team to challenges as up entire meet [indiscernible] as This [indiscernible]. Shanghai incredibly creativity, that to

who Our quickly and provide employees areas. timely community assistance updates to us for and and surprise work by our gave to are minimize team certain On assistance department software allow in home, immobilized and residents our to lockdown. are local working assist the work to a from employees IT procurement teams partners IT obtain department and administrative ongoing pandemic-related a disruptions, provide to for system our authorities, our to solutions level to provided a relentlessly notification

district. Our employees Songjiang also the for procured stationed volunteers in food supplies

reported provider that Finally, from rating we low last we ESG in data. a ESG global and risk received independent quarter a ratings leading research, Sustainalytics,

prosperity. FinVolution their next accomplishments. financial, We goals with in platforms technological also firmly will ESG goals ESG plan, us our insight and stakeholders strategic and long-term into and believe even Definitive growth Enterprise ratings, our that its of phase lead included such Additional our providing including ESG to independent as and our have greater

summary, by services efforts our in In well our any team's stability, mission make ability tech strength to always, as underscores As as are leveraging XXXX our excellent inspired of overcome first our the our financial and performance innovative challenges. to quarter of better.

base, Taken quality empower our run and foundation industry. execution long firm drive growth strengthen that position together, will to leadership credit the a management the form in risk customer overall and high-quality our system, strong a and sustainable outstanding us in further

better management will to our define mix. technological our our Going framework dedicated leveraging risk optimize domestically assessment customers to acquire to we internationally, capabilities and quality while remain credit both further forward, product and

value the for results the massive our to opportunities believe customers, financial our our shareholders I we of turn advantages, stakeholders. and Xu, will Jiayuan quarter. well-positioned great call to ahead who these and our With that over the With on create now will we that, for CFO, all to discuss are capitalize

Jiayuan Xu

our through hello Please our line this I details. to on and Feng, of first interest release items financial the will you, call. everyone. Thank of go not quarter earnings to the refer Welcome earnings time, call. XXXX further all for In

mentioned, quarter, for relatively eighth achieved risk goals consecutive in volumes our are despite metrics are that while that the the stable we level. Feng encouraged quarterly first multiple we maintaining at challenges transaction quarter, As still

coupled Our partner compared approval to strengthened transaction same March, year. with better borrowers in our quality relationships consistent for technological partners with last XX% and funding The loan XX% period the to in rate rose to enhancements. funding

more RMBXX.X sheet non-GAAP across revenues billion metrics. our RMBX.X year-over-year. to and in Even by credit quarter profit and operations, are the Our assessment technologies enhanced near pipeline strong and acquisition, we our meaningful in in risk Leveraging share continuously operating of also these a business among been increase delivered the XX% of remain first have an for strong balance future. areas. substantial of research to rose improvement customer billion, equity. by we confident achieve validated the funding with our shareholders' million a operational other we efforts These maintained trends, RMBXXX development, of net our encouragingly, total our cost partners much consistent including throughout our improvement have in efforts Driven more potential

allow first new ongoing the our in in with the year. During of remained deliver solid XX.X% note, are X.X%. ability pace effort reflecting XX%, with nearly all operating our results going We to XX.X% at forward. growing compared that at borrowers commitment cost quarter the Together borrowing with optimizing our around quotes for take quarter, particular maintained period the average stable loans are we in same last and regulatory can and consistent stable our inclusion our rate confident efficiency, On financial partners' a to to directives. we our for our originated continue

of ratio, divided by our risk stable remained capital-light loan shareholders' XX%, equity leverage is cooperation balance at X.X defined model bearing at our the around times. stabilizing as With which

compared liquidity short-term and our XX%, increase billion previous the RMBX.X a of of cash representing billion quarter, balance further unrestricted in increased position robustness sequential to RMBX.X the demonstrating Our with sheet.

borrowing the of our as and ongoing the in both target continued rate quarter, markets quality to higher attractive During international with strategic part transactions. domestic borrowers, we first

total online in direct buy initiated to Our repurchase share of offline channels our healthy diversified cumulatively Internet ranging annual we information sales XXXX supporting (ph) programs. stable our and January shareholders and stores our and $XXX our form remained shares online value dividend repurchase mobile public repurchase. representing customer app engines cost. been from XX% deployed customer share search to a team, [echo] and in our market. returning Apart have sources, Since from million, also deployed and acquisition the we a XXXX, about $XX referrals we in XXXX, across feeds, back the program million our offline acquisition of we share customer to strong have policy, Between

and XXXX. to internationally. my our conclude that macro continue Despite parts I domestically additional provide both the COVID-XX China the color lockdown environment, some confident let business will on recurring we're momentum get outlook remarks, of for Before while a me in business operations more and challenging still of

result, to RMBXX we guidance representing expect assessment, unchanged. to XX% on that, to in RMBXX to XXXX a . will around of an increase like year-over-year. would full XX% As Based our be conclude now the billion reiterate our remarks second the of billion, With quarter in current remain volume my transaction I for our I year prepared range

open now call continue. please the will to questions. We the Operator,

Operator

you. Thank

We will CICC. the come Please now first our session. Instructions] Li [Operator will from with Yada begin question-and-answer And go ahead. question

Yada Li

I'll [Foreign translation Then part. Okay. the do Language]

one first the on So is funding side. the

the cost to what one is second the due our actually quarter any the can to what So our see last fourth about And And funding limited costs and improvement trend expect of are in we international the is funding the year and increased supply, future? the this there in business. quarter?

also the progress on more of elaborate of optimization So, our on Thanks. base? could product development and please you client our the

Feng Zhang

Language] [Foreign

Jimmy Tan

Hi, Yada, Jimmy. is This

do translation me Let you. for the

quarter this all-in from this during and the our better from from These our cost are industry for a year. a X.X% bps. metrics approval efficiency. the the between forward, And that And funding to improve funding partners few will has our around we has improved XX going Our operating next we apart funding from to improved significant also in confident And funding trend, quality see XX that XX% first quarters, by on been greatly improved see was we very actually rates actually XX% demand the year-on-year costs borrowers basis. cost our greatly.

Feng Zhang

Language] [Foreign

Jimmy Tan

I'll do translation for Yada, the you. Jimmy again. this is

transition half quality the have borrowers. borrowers, better have during we been XXXX, like quality doing been business, we better we in And than expectation in second of the what international China. to to experienced our transitioning For actually just better have progress

of quarter lastly, see the You -- loans, from to to period from the last from grew time, experienced loan XX% of also the proportion the RMBXXX year. in that just basis, actually better same And year-over-year our outstanding from XX% the of in first year. from in first the XXXX quarter balance particular last same you of to And of proportion installment by RMBXXX by that to RMBXXX million. of grew proportion in this first can also XX% XX% XX% same quality customers period note, grew can on million 'XX the our see quarter RMBXXX a the million. and actually grew XX% transaction our at million improvement -- grew And from our volume

Feng Zhang

[Foreign Language]

Yada Li

Language] [Foreign

Operator

question from Please next ahead. Our come will Suisse. Frank go Zheng with Credit

Frank Zheng

management opportunity [Foreign myself. have Language] you, giving questions. me ask Let me questions. translate the to Thank quickly I for two

of is management on and management more see second quality. the quarter. plus half international question quick early rise the a the as company markets. XX-day risk going My gradually slightly outlook second recover for first second on that better from on What done what's as in well forward of your risk year the first second we The indicators is as continues this delinquency COVID? in quarter We follow-up quarter-to-date? Can have give credit kind adjustments to color for

markets, what expect and this in international of Thank terms For volume growth we for earnings you. year? of contribution kind should

Jiayuan Xu

[Foreign Language]

Jimmy Tan

Frank, this Hi Jimmy. is

me for the Let translation Alex. do

I know we also Okay. the credit our the concerned is market about impact pandemic earlier. very -- risk the shared and some of have

now And which early-day have back X% is this back situation the our first existing of compared our than metrics. a X% the lot you a years. vintage expected was quality was fluctuation is locked back of our set take actually in the the performance better, is around proportion increase then our today in strategy which because the XXXX, about quality delinquency And transition example, China the few quarters. let XX% the balance, XX%. around to last the then. adopting today compare in better because borrowers, to Wuhan XX%. And me borrowers better fluctuation previous more another by -- quarter And to the situation with the if of on XX% This down in compared actually is about X.X% around look quarter we been and the credit to is over first today, you For delinquency to loan if talk

about in the quarter. previous Our day first X.X% X.X% was in quarter delinquency the one versus

to of is our X.X% which due May, in the one day still delinquency impact However, our pandemic, to the estimation. increased within

Feng Zhang

[Foreign Language]

Jimmy Tan

me Hi Frank, let do the again. translation

data, quality For year current our progress international will the momentum aggressive transitional -- our borrowers. this we we for of on growth the our [indiscernible] loan business, half because business China. able in we from very transit to based target better volume expectation. also in have China in this away and in to continue that confidence And is are that strong is a better is than growth cities very strategy year to different the second lock international diversify like down our the faced strong the the And risk

Feng Zhang

[Foreign Language]

Frank Zheng

[Foreign Language]

Operator

come will question Ye from go ahead. Please with next Our UBS. Alex

Alex Ye

Language] have two So questions. [Foreign I

on First pricing. one, it's

we an QX, So which pricing of from in loan flat is previous average XX.X% quarter. have

How is approaching we to your to cap, ahead are the trend the QX? as to and So debt deadline what on for on full implication your plan is complying XX% And on rate pricing? take loan your And so loan compared you the rate? average year the do what's expect my take application. what's the second on question June outlook

future last compared could off due does concerned COVID and growth behaviors application how borrowers the would the borrowing and conservative prospect? the their a year, same you more So becoming your do on in you decline? are -- loan visible which you. that period that the lead to see of to your Thank overall So affect to resurgence, how

Feng Zhang

Language] [Foreign

Jimmy Tan

is this Jimmy. Alex,

the Let translation. me do

our mind and our bear that quarter loans last of the first quarter fourth first rate Our under – the increased on of customer was first believe pricing in please of still proportion this be terms and quarter regulations, XXXX, of will preparation. in proportion (ph) preparation, pricing pricing we to With our in in flexibility was and the compliance quarter the XX% half we [XX%] ready XX%. during certain IRR XX%. will take forward for of right, year, in XX.X%, further going around We of our in financials believe second the preparation, we are and that the year, maintain

earlier, second X.X%. We also -- stated but quarter Our offset take in will quarter fluctuations [indiscernible] year, take -- this of the be half improve the rate rate the cost as in first our will in and around the have level. expect maintain was actually funding at was first that will rapidly some we our this has will

Feng Zhang

[Foreign Language]

Alex Ye

[Foreign Language]

Feng Zhang

Language] [Foreign

Jimmy Tan

translation. is we is Alex, cautiously the X% also policy noticed confidence less that we has you impact [activeness] introduced fluctuations, to and impact consumer and There let our are forward. boost China has but adopting going on do some thus, -- the as it me (ph) some measures optimistic attitude than positive a

Feng Zhang

Language] [Foreign

Alex Ye

Thank That's from Language] you. [Foreign me. all

Jimmy Tan

you, Thank Alex.

Operator

now As remarks. closing to there are over company for no the back turn further the like I'd to call questions,

Jimmy Tan

Hello, you everyone. today. joining again us for Thank once

If to free feel contact you Thank FinVolution's so please teams. investor you question, have any further much.

Operator

This concludes call. this conference

You may Thank now your disconnect you. line.

FinVolution (FINV) 1 Jun 222022 Q1 Earnings call transcript