FINV - Earnings call transcript Q4 2023

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Operator

Hello, ladies and gentlemen. Thank you for participating in the Fourth Quarter and Full Year 2023 Earnings Conference Call for FinVolution Group. [Operator Instructions] After prepared remarks, there will be a question-and-answer session. Today's conference call is being recorded.

I will now turn the call over to your host, Jimmy Tan, Head of Investor Relations for the company. ahead. go please Jimmy,

Jimmy Tan

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

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

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

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

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

inherent Forward-looking uncertainties. and statements risks involve

Exchange with assumes As required U.S. may forward-looking under included different today. access in the uncertainties these be company's except risks information results any regarding the obligation filings such, to from Further and and are company materially Securities other the Commission. statements, company's The and the update applicable law.

providing our results of details for post we website on slide a quarter. IR Finally, our presentation the

Mr. our will Li. I call CEO, go Tiezheng ahead, the to over now Please sir. turn

Tiezheng Li

thank Group. is Li, FinVolution Tiezheng Thanks, you joining This call. CEO Jimmy. for Hello, everyone, our and earnings of

FinVolution for became inclusive set fintech I observed today. a industry, solutions and ago, owners. providing to a year small borrowers leader are speak become happy We you X in When with clear financial business objective, CEO

to that outlook adapting thrilled towards advanced our different that focus on all strong the local with we global for fronts. markets. progress to unique strategy, I'm in report delivered goal we continued situations execution XXXX, In

in expansion much growth with we robust faster year, our maintained China Throughout internationally. while momentum progressive the pursuing

and also strategy were China While our Philippines. and We're economic dynamic success to favorable, leadership conditions our a we proactively in China's suit have Indonesia fortifying economy. adjust growth both more as we in position high-quality

accelerated new Performance-wise, grow China, across challenges. the borrowers has and number [indiscernible] reached RMB the of pace macroeconomic XX% around respectively. outstanding million billion served cumulative representing finance of The despite X%, increases to we with board XXX evolving billion, and net increase a we RMB borrowers reached and our Indonesia X at of growing XX loan XX our business continue year-over-year in year-over-year. Philippines an million,

year Net billion, revenue XXXX up XX% for the full XX.X reached RMB year-over-year.

grew volume transaction international of to X.X effective the and prior XXXX, exceptionally Our for in strategy pursuing our outlook growth RMB rose and balance respectively, X.X billion, loan outstanding propelled year. to to overseas business up XX% rapid billion XXXX global by market. soared in well XX%, RMB International compared

market International X.X billion, XX% RMB XXXX. year up from full revenue increased to

in contribution in the to revenue XXXX. year, significantly, XX% from revenue international to rising XX% Over past increased XXXX total

achieve to of compared respectively, with and growth while increased the RMB billion, in X% Transaction to Meanwhile, year. billion, to reached pursuing XX balance prior XXX focus X%, continue loan we growth progressive local high-quality strategy RMB our domestically. up China, volume outstanding

prior XXXX up in the the further Revenue to compared RMB year. from China market billion, to XX.X X% expanded

around XX notable on year-over-year. bps and Another quarterly bps cost, was funding by XXX by a improvement basis which improved

industry. compared coupled to efficiency and deliver the industry borrowing with better higher ROA us operational delinquency enabled rates Our to stable sustainably rates than enhanced

XX% of the small and period. of last served business XX XX.X% commitment representing compared further, are business strengthening loans fragile transaction over In we facilitated sometimes We by and prudent up this total China. billion a volume supported XXX,XXX also to owners approach with owners, recovery small our during volatile year in XXXX, and RMB

fintech continue Part to innovation. sustainable footprint. the shareholders of FinVolution our is development commitment company's with expertise is to industry technology a transformation profound through providing extensive an and across frontrunner industry-wide digital

growth to of includes aspects the in just technological different advancements and I'd as This year. accuracy. speech process capabilities, over pivotal dialogs the we a our like in high-quality million cutting-edge made markets investment significantly investment improving automatic throughout and of such amplified chatbot's the optimized This few We R&D, leveraging all of technological growth, operate. XXX improved we boosting across R&D while our our to our greatly strengthen technologies, increased RMB of operational in share its recognition efficiency Chinese technology. driving which XXXX

success. R&D is invest our our people. and tech our to in ongoing to critical And continue we

the As of around XXX employed built skilled team XXX already comprised invention comprehensive a proudly XXX our offering Each December software new the of for industry's of patent copyrights enhance patents XX, granted. of IP the to financial growth and have and portfolio supporting successful applications, and industry, wide set dedicated services R&D registered including XX FinVolution's professionals benchmarks R&D that consumers filing and progress. accomplishments XXXX, our a we

leads, these recognized Commission technology of the [ XXXX on and earned of the to of We and In our IT economy efforts, These prestigious Shanghai information XXth contributions the innovation Shanghai position, XXX leads the ] and advancement service Municipal its excellence. recognition commendations FinVolution ranking in XXth on respectively. for software securing the recently industry. honored both and

but back top on program our least, with ESG at focus XXXX We Last the enhanced society. integrated giving not priority and throughout a ESG inclusion to remains diligently FinVolution.

For RMB dreams help have offered reality. for we cumulative million owners to their of XXX business interest-free into loans example, eligible build small

rating. and renowned agencies rating led commitment industry independent several efforts above-average this Our by also been have

as FinVolution's a amongst us enterprise glimpse growth. our XXth prospects anniversary that XXXX future an affords of in long-term in We sustained grounded those celebrated

the pandemic. the business quality by and PXP success shift of Over transition, such been challenges, past multiple as borrowers our validated expansion the towards XX model strategy in years, international face have the and better amidst

proud have are to which markets we resources, expanded and limited we all in with platform independent an flourished As operate. in

existing regions to to the deliver committed of our remain additional more international increasing services pace the in and licenses into will markets borrowers. by expanding we innovative borrowers expansion financial and countries our to more while acquiring serving forward, Going

focus, shareholders. global the continue development in enterprise drive we technologies local outlook we on confident advantages, markets, sustainable unlocking value replicate fintech consistently as By our and new returning guide Our and will embarked operational to world-class to our and leveraging success are while us to and healthy making XXXX. and international domestic our a value company strategy

With turn over Xu, that, will our CFO, our results. will now discuss the to call financial who operational and Jiayuan I

Jiayuan Xu

to full and and Li, Welcome fourth year quarter everyone. our Thank you, hello, earnings XXXX call.

X% the quarter. today, call mindful listeners release fourth for on China's note. overall our over of to leveraged evolve. results continues conclude a encourage in our earnings To our for further GDP be details. Despite quarter and length fourth We economic various strengths to of solid key to turbulence growth our through go Let's I XXXX your XXXX, press refer environment the earnings to navigate of the

technology, Our resilience metrics domestic X% operational transaction fourth up balance soft both and year-over-year billion while outstanding testament our grew excellence. in sequentially as business volume as Achieving the year-over-year made is X% up to X% a reached XX loan outstanding and for environment innovation quarter, growth and are RMB consumer such as sequentially. our RMB to well X% XX billion,

XXXX. observed quarter several we improvements move We have through as notable the of first

XX% the million by travel also and trips tourist consumption XXX period rapidly with Total surpassing Lunar nationwide, XXXX recent in period train from in Year, XXX picked tourism the to XXXX, X% levels billion New up activities comparable new with XX% record RMB and the from climbed respectively, up reaching During XXXX. spending highs. comparable XX%, air

and reached rebounded for metrics setting degrees than ticket a Box period. more X improvement. varying of billion, several macro also office the new holiday sales record RMB Furthermore, exhibited

RMB million, in up X.X% total increased general social For year-over-year. X,XXX to example, financing

For increased to X.X% the X,XXX was year-over-year. retail consumption billion, in RMB up December

We and to February's manufacturing travel-related Index Year. and are down points believe as New PMI XXX.X ticket and to improved property ticket these consumer reflect other small of activities. large slightly items [indiscernible] trends and also the consumption automobiles shifting away expenditures items, such points. signs service from spending like XX.X

with drove we Cumulatively, credit recovery yet borrowers was million of sold the in application XX X.X have modest our and quarter increasing China, of million. our fourth consumer a X%. borrower by quality encouraging through we X% number new ongoing number Amid competitive and in the over the between these refinement borrower to demographics unique dynamics, for demand of borrowers

addition, In empowered and which our credit enhanced risk to us and fraud stabilize assessment we headwinds the during quality. further detection quarter, macro our asset navigate technologies

X.X% in and delinquency December to to improved February. further Our day in X.X% rate X improved

We vintage delinquency expect X.X%, be X [indiscernible] our months to most the resilience. for business recent our

XX%. at collection the deployment remained mentioned as well recombination the early, recent months healthy X [indiscernible] by of as our the we chatbot AI-powered loan advanced technologies for recovery our Boosted

our In have as expanded cumulative diversified as the quarter, end financial terms costs rise, of continue to to of of has our institutions funding reputation partners funding sources. basis points in our fourth around of year-over-year. funding improving by the number partners, we XX The XXX industry with the our funding further

growth second driver. our to on Moving

overseas. to on visibility XXXX investing our January FinVolution's international continues embarked targets in global worldwide in which Our We deeply and expansion, outperform our expansion and expectations. been have

million surged first to of as cycles, in points record Full most the units macroeconomic appropriate consumer Indonesia, model index January. to the remained overseas in growth of sales continued our XXX high motor market, year-over-year. to XX.X% Indonesia, the year confidence X.X transportation by

XXXX with growing data. overseas GDP positive of second further The amount in X.X%. Our ended The growth macro with economics Philippines, also will Asia fourth quarter market, Philippines

has since XX in points PMI Manufacturing was February points XX September. above remained and

borrowers in to channels diversified acquisition borrowers. Cumulatively, over explore we markets consumer continue X.X served as attract to we have million new international

in and of rose The international increased XXXX. to million number X.XX number X.X unique markets of to around XX% year-over-year XX% million, new by borrowers year-over-year borrowers by for the

full reached billion. for RMB XX% X.X by year-over-year International transaction volume the XXXX year soared

fourth balance billion, of X.XX our grew Transaction At quarter XXXX, time, reached to X.X outstanding same RMB up XX% year-over-year. year-over-year. loan XX, volume RMB December the up for XX% billion, the as

Indonesia As over same institutions from fortified we our financial the model and our giving in XXXX, increased from institutions. rules as our loans Indonesia facilitated population reputation, assessment as XX% our interest well of to local financial of credit reflecting deepened in local effectiveness in XX% period from the

excellent The also demonstrated Philippines growth. has

contributing This are loan basis, volume by in international around over During transaction XXXX, a led to the the in year-over-year number XXX% growth XX% over transaction exponential and quarter. of Philippines the new on of by borrowers in XXX%. balance, registered volume grew fourth outstanding

secured players the as proven in in the as a partners have we the in partner, we as fundings well our have Thanks our to of boosted institutional future our pipeline institutional confidence of one also strong accomplishments and lending top have and as attractive emerge record visibility also These Philippines. Philippines the place.

high remain expect to to a In maintain operation -- Philippines momentum. our XXXX, we growth robust double-digit

and year-over-year. the XX% in quarter XXX fourth increased revenue. business International total the up around revenue XX% to represented of progressively RMB million, company's

into initiatives have our we license and has progress serves outstanding such our significant XX% strategic our full development. revenue demographics international made XXXX in metrics multiple RMB markets of year with international billion, reached refining achievement the acquiring new company's X.X total springboard ongoing readied financial international across marking efforts This and expansion perspective, success in operational For The up countries. XX% for as representing overseas year-over-year, as to expansion us development. amplify more our a venturing our and a revenue,

On through to brand awareness leading related media business build and to our campaigns. note, a platform our advertising creative social presence we international continue upgrades AIGC-driven on

TikTok Facebook, the to over than up end and on had of at the more fourth we an grew more quarter, XX% accelerated of on pace reach followers X than our XXX,XXX, quarter-over-quarter. followers As million

will overseas of new countries enter our as reaching media marketing efforts innovative target and our with a debut products. we means Social key be audience

our RMB up to billion, while for financial by of our increased execution net X% XXXX to Driven income strategy, RMB revenues metrics. XX.X up Now year net XX% global year-over-year. to increased local billion, strong outlook turning focus, full year-over-year X.XX

when of leverage fourth defined macroeconomy shareholders' opportunities remained ratio, our stable the by for which loans quarter, as mobilized. the the As at growth equity, risk divided reflecting value is X.Xx,

increase cash RMB our strategy. of and while of over us year-over-year. position X.X optimal liquidity particular, flexibility end enhance to remains XX% our to XXXX, December billion balance strong an and with of the robust position short-term In sheet execute with confidence shareholders' cash continued liquidity representing of Our as providing

increasing is believe current shareholders. to cash our of while our to value return We our expansion business position support our sufficient

XX.X% of share program. Now have let our in returned annual USD dividends. return continuously Directors Recently, value approved our Since capital briefly of on shareholders X.XXX our dividend XXXX, of form and me sixth in Board of ADS, increase you to year-over-year. the we per the amount an update repurchase our

of XX around net representing XXX XX around XX% through For million share a returned rate USD a income. capital consisting of of million USD year million XXXX, to we total full return repurchase, dividends shareholders, USD in our and XXXX

to As consistent actions value. of enhancing the December cumulatively our USD commitment has shareholders. These company returned shareholder to million XX, XXX XXXX, our underscore

Before I our remarks, provide business I and outlook conclude progress. color to the additional XXXX. Despite would on for base macro some thrive my environment, continues like to our evolving

we international preparing consumer expanding optimizing profile. We are initiatives, as healthy technological on gaining product our substantial advancing momentum base for innovation, our our focus and

As a transaction year-over-year. to be of in our representing of China in an the result, we range market RMB to billion, XX% in to XXX around expect volume billion increase RMB X% the XXX.X XXXX

around of of to international X.X transaction XXXX billion addition, RMB XX to expect In we XX%. in representing the in be growth range RMB billion, volume XX% year-over-year to

concludes prepared That remarks. my

to call the Operator? open We the will questions. now

Operator

Li The Instructions] CICC. question with Yada [Operator from comes first

Yada Li

considering we done adjustments wondering the strategy, current risk [Foreign acquisition Language] I environment, have lending and Firstly, what macro in customer the was management.

of help asset measures, going how view to the quality these the With forward?

the for the and respectively? Philippine secondly, branches, market, Indonesia what And for are profit international and outlook the the growth

Jiayuan Xu

Language] [Foreign

Jimmy Tan

year, economy a gradual and [Interpreted] observed asset translation. last study, facing China results macro Around the expect in Okay, have have industry, From me negative the Yada, uncertainties is on recovery. do which but third let some to still the impact fluctuations. observation quarter we

our We with have been quick responses.

who higher the channels For higher more the to limit such model debts. work models, credit a we our customer with example, step economic approval of those reduced acquisitions China's for rates prone from level borrowers as from are up updating the have and uncertainties quality tightening quality updates and

lower for And tighter we example in services financial through disbursed borrowers, remain ensured delinquency also different and as We our rates, analysis rates those changes the intact. borrowers, day and approval such the monitor closely levels have higher-quality metrics debt core segments with collection for loans. of X loan have recovery

loan of telephone lines For collection post-loan post-loans, I are due minimal The sufficient collections our needs the team. us of on aware to you of to believe are of reductions satisfy impact lines. is the our to preparations impact on due telephone which the advanced able

ahead the Although leading in declined XX%, these we are our recovery still collection of to from with have industry. positive of results December. slightly XX% loan efforts, implementation the seen rate we And

X.X% quarter February. For further from recent X in months, the improved X.XX% third our improved X.X% rate day to X to in and delinquency

XX% returning XXXX. should quality to be recovery collection loan recovery to with continuous the industry. with of X.X%, delinquency While and rate into going our remained are at ahead vintage stable we confident asset maintain improvement industry-leading

Jiayuan Xu

[Foreign Language]

Jimmy Tan

[Interpreted].

Okay, Yada, me let translation. the do

question the Your countries. expansion, we international different and on the explanation into is down break whole will

Indonesia in a new example, For cap XXXX. has price

these reduction our reductions. been through small and their risk these to adjustment. the the data borrowers' acquisition Example, series on to current reduce model medium changes cohort complete outcome, fully around impact met impacted impact have many perspective, in January pricing this of And since customer operations and will months borrowers and led X, need of acquisition further quarter customer Our acquisition adjusting all all been X has Based XXXX, price from platforms improved regulatory of requirements local a Indonesia to new has the a fourth by past the cohort, X% which our decrease in the change. by reducing And has have and in And XX%, loans an changes. our undergo to costs, we our that helps means experience, our metrics also, we compliant. regulation had positive. efforts, customer seen adjustments from Indonesia. rate The reducing rules

from on quality in based the of reevaluate improving we be to financial policies. profitability due strategies first operation on be the of And product XXXX, better half growth. macro achieve Indonesia will rapid to And will and will accounting compared business focus second of situation. a of we growth expect And the the the profitability. X, view the The adjustment view to during XXXX, part the half instead Indonesia in our

some have for points addition, our data disclosed In we Philippines also additional operations.

economic observation, years, Philippines from been regulatory very few Philippines been relatively stable. And environment rapidly. countries, developing past the current and Over has operations has

and to in the year. of will the the into believe the XXXX, we target expect We currently the #X end rapid by are market. we We growth continue of can achieve #X segment of our

Additionally, the operations expect achieve we in profitability second Philippines can under that our rules. of the year half relevant accounting the

licenses, strengthen advantage. We have increase our both image will to consider in And further managed to of achieve going different our competitive to and types Indonesia profitability our our in enhance we and forward, operations Philippines. diversify investment brand

Southeast consider are We to Asia, countries are also and of not to our actively these speed international expansion countries, new limited up footprint. and also matters exploring other we

Jiayuan Xu

Okay. Yada. Thank you,

Jimmy Tan

you, Thank Yada.

Operator

The with China Wang next question comes from Renaissance. Cindy

Yun-Yin Wang

So market on expansion, first question Language] related is the so you [Foreign are this cost. aggressive the acquisition Since the customer international what is market to [indiscernible] your year?

is the landscape? #X would to to will And year? you -- market. achieve how second to talk competitive be relate XXXX? that And the do market contribute market the the the Philippines very this how in XXXX. you Philippines market about Can international position strong growth And in revenue share first

Jiayuan Xu

[Foreign Language]

Jimmy Tan

the [Interpreted] me do let Cindy, translation.

to fact, operating been continue have market the to we us. the understanding time, acquire fees period the of for and be a Indonesia of have market. We borrowers Information X for in deep a years quite better main in quality matter

has Although positive. our been have impact and the some to on we has our pricing made adjustments very models results operations, cap the

in second our strategies half borrowers, example, acquisition fee customer competition. and XXXX, will in and higher with we size we further stabilize. with the tenure, improved loan, For are when reevaluate longer continue increase this have rates And weaker the macro quality the trend to able loan when our environment ticket we will believe we our

the has much is And X it more the over XXXX. will market. believe this a and trend Philippines, to Indonesia it pretty earlier years, and efforts top, we marketing compared been the stable are much among stage the our in past proactive into continue For

Jiayuan Xu

Language] [Foreign

Jimmy Tan

me do our a and the of to is currently is players users There the players, million. XX and fourth around We Let and has entered XXX companies. registered customer over the largest and have this population in Philippine target our [Interpreted] and of XXX million, markets from year translation. base are operations. Philippines around Philippines U.S. around XXXX, of And the are XXX,XXX. is million, X our we date, local borrowers around

a China, our fintech will We -- advantages a and leverage China company local obvious, advantages in on our is to success as Indonesia duplicate from believe market. in and we the Philippines continue as our and

from increase Around coming in transaction we in the believe quarter, volume for our XX% the fourth proportion market to is the will of international continue Philippines XXXX. and this

Tiezheng Li

Okay. Cindy. Thank you,

Operator

The from UBS. comes next Ye Alex question with

Xiaoxiong Ye

First, And [Foreign how market. impact After Language] we the the Indonesian the be further you will pricing you how earnings? the regulators with regard to do expect revenue adjustment on further and the this on cap year, that and the adjust to move from tranche? any expect do timetable

the up speeded ratio XX.X%. company the terms the pace to know bringing has in also second, the repurchase And total we year, payout shareholders' return, of of this total share

forward? sustainable should how ratio So a we payout expect more going

Jiayuan Xu

[Foreign Language]

Jimmy Tan

Hello, translation. me [Interpreted] do let Alex, the

X.X% rate our we rate, an shared was pricing CAC costs. we some And after the deduction adjustment XX%. Indonesia and of be it some We adjustment, pricing ROE around around have And perspective, and it actually take from to expect around the prior earlier. XX%, after the to be other to expect data take

this advice, the to reduction. the in And there the in of change further year. based current be half might a second reevaluate We price need regulators on

at believe remain sub-healthy reduction level current However, based the on price the if we kicks business in. even will [indiscernible], further our

Jiayuan Xu

Language] [Foreign

Jimmy Tan

Alex, let translation. the [Interpreted] me Hi, do

to would FinVolution I like all, of position. First reiterate

finance a global company. technology We are consumer

in China position. Our been and China, as leadership our entered Indonesia success market the the known matures, growth. progressive as validated business recent a In stage Philippines has with high-quality years, into

a Philippines hand, are our we are in market where while expanding and our of rapid the And to still the cement early in countries, ensuring On is stages the enormous. Indonesia development growth our more rate to on very company. for markets other observation, opportunity international growth for confident based success

Our value capital and our to positioning. closely return our the shareholders. create hope healthy line with program can rapid be main for in way company business is We growth

Over the this years, have proven last point. X we

and China value We average have over we have around CAGR apart revenue the business to And and from of an these, with growth program. our growth returned our expanded capital also XX%. completed of business transition return internationally shareholders of through XX%

program industry. repurchase began We earliest the our share in dividend since program and XXXX, our

last our X we cumulatively Over to half equivalent today. almost shareholders, returned market USD cap our to the over have XXX of years, million

and USD XXXX, distribution, In dividend deployed to repurchase of for XXXX representing dividend shares of for XX% million XX%. XXX $XX we income net close and to our around combined million a

X.XXX, our this on ADS the XXXX, year in was consecutive In fourth of dividend the average, above dividend increase. per USD And increase X-year was XX%.

ADR, EPS not would than more like in X and are I this, companies. one there dividend on to years And consistent China increase of emphasize for companies consecutive and of we these with are X

value to of we summary, capital in program. returning return are and growth leading a shareholders in And terms

we will to forward, and shareholders high-quality our remain and program. return with a our concurrently value capital this growth core return continue leading maintain Going as let to method belief

and in dividends maintain consistent we track to our dividends, our increase to Regarding shareholders. confident for continue record deliver are

Operator

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

Jimmy Tan

once again all us today. for you Thank joining

If any Relations contact please to feel Investor you free FinVolution's further have questions, team.

Operator

This concludes the conference call.

line. you. may now Thank your You disconnect

Tiezheng Li

you. Thank

FinVolution (FINV) 19 Mar 242023 Q4 Earnings call transcript