LX - Earnings call transcript Q4 2021 | LexinFintech Holdings Ltd.

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Operator

Good day and thank you for standing by. Welcome to the LexinFintech Fourth Quarter and Full Year 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker’s presentation, there will be a question-and-answer session. [Operator Instructions]. today's being that advised be conference recorded. is Please Instructions]. [Operator the to your I'd now speaker over hand to like first conference today, Ms. of Patricia Head Capital Cheng, Markets. Please ahead. go

Patricia Cheng

and quick call. Good year Sunny CEO, Sun, you. morning. Jayden to we CFO; fourth Thank Qiao. begin. CRO; A Welcome Jay Xiao, XXXX before joined I'm quarter earnings and today reminder, by Lexin's full

results outlook. all are During any the now forward-looking statements. today. may in. numbers the to be And, that call mentioned call translation based we the undertake to and in unless Jay. assumptions will statements jump materially otherwise no will I The call we Chinese update differ actual remarks Jay, will Any will stated, we in and make RMB. forward-looking discuss over of His are on business as turn English follow. obligation on

Jay Xiao

share It's in development. macro and industry my development pleasure morning. will Good remain you environment to the about my environment, short-term. macro likely business thought our with The the volatile

I meeting, GDP China past think decades. record a has two for three low sessions the of X.X%, a target set see from you'll the

internet restriction on the regulatory scrutiny geographic the on with operations the and loan Chinese well geopolitical on tensions, also versus of major because as year, been information moving companies XX%, more protection. on from heard sentiment changes of banks have There in at very US front, in As have been and such trading cap the the volatile, as pricing regional away and personal market the fundamentals. past company platforms

[ph] roll mitigating long-term to Also exposure In XX% actively potential from with enhance finance to our changes consumer solid, new information finance on coming very the been our these model to to trillion. remain asset the matching, market customers and demand more in and and protection. Tier we non-tel out with funding RMBX remain to relationship [Foreign institutions the fundamentals broaden and liability below reducing the include customers. financial and focus nationwide up reaching and So ability the strong direct far, also existing for strengthen and personal measures to targeting risk a have compliance in see response making growth of study for and X to Language] consumer We population cohort the responding attractive.

revenue next for also growth the look XX We’ll more of niche expand In and depth new further our opportunities. institutions. channels be will offline monetizing exporting years. as compliance, generating we customers to we order we offline channels enhance into growth. Language] online to will our to becomes risk strengthen and to We in innovate drive look continue strong more the also growth the our into And management new competitiveness acquisition In customer acquisition, also, existing service, capability expensive. we'll expect customer [Foreign core breadth to our in and management to and in from also customer financial of

e-commerce and business, into We’ll overview our you [Foreign me give B treatments to be to leveraging be Platform developing. the our in further XXXX. let insights addition, In our solutions. consumers Next, in we’ll Language] build of also an

the billion, by origination with RMBXXX.X at grew Our year-over-year year. in beginning the to line volume expectations loan of XX%

at While full year the XX% on was the policy revenue put operations year, RMBXX.X in billion. of half stable pressure second our largely

reflecting reached focus. RMBX.XX net high quality record full billion, our of year the Our for profit of

with commitment Well, will in also recent [Foreign some We be drive fluctuations demonstrating years, there Language] process. growth investment. in R&D in the to have talent top brought XX change our

partners our experience; from a and advantage proprietary over been customer and due the from adjusting slowdown touch and new number consumption our and cap eight behavior data and Number two, as one, three, drop XX% number risk and of the tuned offline the four, multiple [Foreign banking in the technology machine a the to for fine scenarios; XXXX acquisition. years in and relationship number intact. six strategic be transformation trend language] capabilities a affected continue driven loop We And institutions; pricing focus traffic Number pivotal changing Nevertheless, revenue also The pricing online five, of will is regional we've creating on journey. result. refined result consumer year continue these remain the our and in This drive success with some in more to our core funding management; our to model the financial as has segmentation. compliance. year to customer stable profit. in risk lastly, future. points There's both a quarterly to also policy and identification the

We funding also cost will management to our we the strengthen competitiveness continue we and broaden liability and opportunities. expand introduce and will like This nationwide funding will new to institutions, also and in customer funding optimize financial management. step-up operations structure our And our Look, language] will compliance. asset with more And step-up channels risk our our digitization will into we into [Foreign to continue cooperation to new to continue has our to ABS. optimize year structure compliance. expand and to also efficiency and

confident the our value to achieving year we're business by keep Although, confident complete the driving language] strategic the about XX% to We're committed policy reflect current full critical XX company. full share increase will strengthening to value. fundamentals We can fell headwinds met. that execution volume be shareholder rate and origination believe no price target the is the the transformation of year we [Foreign X%. this the We're about that expect of external to and We year. remain, to

With a go Sunny, the to program the purchase of share allow repurchase to months. million next will authorization XX coming in financial that, us Sunny board, over worth the to which have of With will we over adopted up results, the $XX you. stock

Sunny Sun

Good you, Patricia. Thank Okay. morning, everyone.

and I you would to like your year XXXX of interest year of The Before full was a continued team. challenges. thank all, in results, the call talking Lexin's attending quarter fourth XXXX year full our and about first the for

industry. companies delivered new were The policy year. encouraging. results full for these For of times, from is China, a highs the reaching regardless Amidst of difficult the the solid companion profit with progress set change pricing also in we operating changes policy constant

on with the policies. start the me Let update XX

For from in the was origination quarter, XX%, in QX the of loan fourth XX.X% loan XX.X% average our About went down in pricing to XX% for XX% within QX. in and priced up XX% versus over origination QX QX.

down XX%. in XX targets the The by time towards volume. our lower of means months. billion XX% almost below in geographic revenue appetite from new adjustment we're exposure QX. Chinese QX peer, in across RMBX.XX funding loan on a was profits Operating decline does to the that loan achieved origination loan pattern. loan shift XXXX. -- by been on billion regional meet over has strategy to rising Like lower from expectations. revenue. pricing midpoint in fell billion, gross financial XX.X% and The the progress the track quota amount to with Lower and Gross a constraints gradually reduce June sequential price come volume representing gross XX.X% factors the result pain. well institutions. seasonal to in the QX. financial The reflects from of billion was we improvement decline The confirmed RMBXX.X QX for above the our quarter-on board to Our same process RMBX.X profits loan. year. lower experienced to also institution became quality up RMBX.X ADR loan The bring year, more of There the at XX% in fourth XX.X% a -- assessment This of Risk smaller, place. impact the end drop held at short-term XX% quarter. earlier year was QX The the was in came quarter-to subdued decreased quarter-on-quarter of in This towards additional end, margin in at on two

quality Jayden has in safeguarding measures this My So, proved headwinds. on later. elaborate The effective. taken number topline by achieved have been asset external will colleague,

our how trends. manage is organization. thing external liquidity, The all working always are to The rates, outside our us such interest macro other nature we subject forces control that lending of been we've will these on as

We have defense in our to internal up these times. boost uncertain management been beefing

while million so we more equipped expenses and to ramping technology, RMBXXX infrastructure move in front. We especially the operations, a to efficiency, up goal. quarter-over-quarter opportunities address R&D million. have know-how operating can stronger in increased XX% quarter-over-quarter and new in RMBXXX QX. invest, our year-over-year fell we and to at and Discipline XX% continue more expenses efficient be XX% to Total back-end,

QX and QX. policy evident the quarter, part was to the on for began became response disruption in RMBXXX of latter results Moving The industry's million. into the bottom in profit to fourth the our in the environment largely net change more therefore, line,

the of RMBX.X second we higher company. record profit in slowdown half billion, achieved new the overcame net setting XXX% full-year, for year-over-year a For the and the a and

sector around. the things While surrounding some of still We likely believe this will are stabilize. uncertainties year our

expand can The regulators move on their with we more forward. sets continue to to competition. well. i.e. This F, We into the and constant new to dialogue understand as how and in better cope are intentions dimensions we taking business to From Lexin focus to approach from B is would institutions a apart areas. business financial what interactions and C integral to as new i.e. is

C, finance, giving which points of turn us leads and expands relationships to into ecosystem to Our deeper in and customer-centric with access to from broader more financial institutions. business lifestyle

Jay be operational through There operation been will unprecedented earlier, going our times. have strategic in priorities volatility roadmap We’re the outlined well defined. and but as

to to agility our Thank will can over that With hand of quality business the now the I performance. move solidly the respond, and confident continue and team forward the Jayden. foundation CRO, you. we're laid to fully deliver we

Jayden Qiao

macro the The time. It’s we the you, policy with one at year times of to team challenging Thank Sunny. tightening put test. slowdown most are and as our working XXXX same

market, by interior asset tight of the be perspective well. plus period. X.XX% financial moving delinquency from ability the the financial goes part very XX simply cap, institutions in in the X.XX% liquidity year ratio the being from to on whole the borrowers at versus especially supply points down, QX September. medium same increased repayment across system. down in of serving many Following pricing ratio at end felt XX% a of a day basis X pressure goes finished of XX as can have plus quality has industry. to been the The away The The it When delinquency day X.XX% introduction

revised our the process proportion, have started did results back so customers with experience We the acquisition than asset approach risk to the process. the our we The have in channels reflect keep more At expanding experience we we but online adjustment with priced front, better peers. across quality prudent the higher As interruptions, of above quality and management to the low XX%, or and we scaling board. far, relatively at strategies, the a managed [Indiscernible]. line in it volatility from the trend strengthening expect offline

the we management refining and segregation As market addressable is to real-time enhanced have In monitoring. our risk the customer continuously models. has middle risk been layer, strengthen portfolio redrawn, been

effort Thank term, as Nonetheless, the The we overdue ongoing. We stepped performance up bucket going have that transition, quality the macro you. environment. policy can the The once day credit on the the in But began also business asset enter is collection still still for is face through signs of loans. of chapter. confident early of in to the get near indicators restructuring in to remain pressure pressure and late improvement the the the we we're a have mix new emerge.

Patricia Cheng

Operator, Thank questions. for line can you, the we open now Jayden.

Operator

question you of Thank very Li Yada Please, of First [Operator the from comes CICC. much. go Instructions] ahead. line

Yada Li

translation. the [Foreign Language] do I’d now

going transmission still exploration the the credit final one Have we of to expect the our are one So I stage? matrix? when elaborate delinquency is plan? And we to to forward, and mechanism second you. on was cooperation data the with institutions reporting started bureau for and can underlying implementation And the can wondering regarding improvement up an the And matrix. can risk first I've about experiment expect if you the credit risk the and the financial about the we the team. XXXX related we of went and XQ is more the Thank noticed in that see reasons.

Patricia Cheng

is take [Foreign Language] the Jayden going to questions.

Patricia Cheng

Okay.

Jayden Qiao

so Language] [Foreign Okay,

Patricia Cheng

As okay. I -

Jayden Qiao

Okay.

financial institutions for of bureaus direct active get institutions discussion we to information data, the with since priority. from compliance ever financial first credit in different we disconnecting take data So transition as bureau we've been credit and and the

end test since Our plan the of and schedule has design of one passed been online and credit by this it been has and the XXXX. bureau approved

plan least we're bureau one cooperation June discussion at At well data complete institutions. is information forward with all end bureau the of output do financial processing like And Now and the the least, and in in we and same this between the more works platform of discussion the and the expect active bureaus, year, credit this to we bureaus other not data financial a not upload the still United a relevant deadline Europe time, lurching of Last, to that at we for before plan. credit one to financial credit push in that the are credit results putting our with will institutions PBOC and institutions the the mode specific team us what has plan for States. given place. institution. our least but It's to financial in the this

the before year, with one plan Language] schedule, Okay. our on [Foreign financial before to end institution. be based least So we'll -- implement able that a very this confident June at we're current

the translation. [Foreign Language] Now

Patricia Cheng

[Foreign Language]

Sunny Sun

Okay.

call, across quite begun to has mentioned I improve noticed indicators year, from risk in as So, the of and significantly. have the did this But industry especially early the we that risk so stage, we. conference beginning performance fluctuated have

the in increase to as Jay continue conference we part our online acquisition offline mentioned his As and of call, channels.

and refine our continue we also by with enhancing to cooperation strategy As modeling high and and risk large segregation customer our institutions. financial quality and effort,

increase especially high And this high or will continue that expect at you. the We priced quality year Thank risk speed. XX%. proportion below performance increase will our to customers, our below customers at

Operator

Instructions] from the Please comes from Next CLSA. ahead. of [Operator for question line the Wang questions. you Ethan Thank go

Ethan Wang

had you. questions. [Foreign two Language] I Thank

The first funding is the on costs.

including remarks method has have So that year, his ABS. some through to in mentioned Jay preparing we're funding new security this

trading capital And the trend that of terms of of the the in in our quality a the latest model. funding of quarter, or a course forward. discrepancies, our fourth with any of on in and heavy is what to platform second costs there We and capital platform platform-based difference importantly, data? future terms over model percentage our maybe going funding Thank of business question wondering get more heavy costs, versus from you. services view Just the loan that's business any color want origination and some asset is on maybe

Patricia Cheng

[Foreign Language]

Ethan Wang

go Okay, ahead.

Jay Xiao

nationwide We look this our expanding will into funding year.

allows non have unlike the is standardised public of For and also the the regional i.e. ABS issues. that both issuance, the doesn't into any constraints non-standardised banks. we're ABS our looking side ABS the geographical channel itself

it that's slowdown the we're fourth So financial the looking year into Last [ph] loan institutions. why doing by in part constraints our in ABS. quarter, due to some of the faced volume, was original of

was funding quarter has asset in volume improved year, situation been looking mismatch into up. has first and nationwide some much liability. the there So going this and the And

costs expect for versus we don't looking So the funding volatility this at year. any last year, much

Jay Xiao

the towards there slowdown the because development. also the towards policy year, end translate. the sharing [Foreign profit calmer quality difference quality minor. slightly target We And some some about year, Language] market the bit but second the of model capital-heavy sharing but terms reservation for the better, the a is of is model, profit between became local in the last the for model on asset in on the question depends and this the or And me ABS Let it end, the governance. did was three issuances the of difference

Ethan Wang

Thank you. Language] [Foreign

Operator

time, from for there line. the are Thank management Instructions] I hand no the closing questions. you remarks? back May At phone for the the to questions [Operator call this further

Patricia Cheng

here. going to Lexin. conclude you in interest Thank We're your call you. for Thank the

you Keep touch and have well to any information get [Foreign in see soon. on You if Language] IR questions. website. can free contact our follow-up you feel you Do find our

Operator

conclude That your today's Thank call. for you does participation. conference

disconnect may line. You now your

Patricia Cheng	Investor Relations
Jay Xiao	Chairman & Chief Executive Officer
Sunny Sun	Chief Financial Officer
Jayden Qiao	Chief Risk Officer
Yada Li	CICC
Ethan Wang	CLSA

LexinFintech (LX) 16 Mar 222021 Q4 Earnings call transcript