PT - Earnings call transcript Q4 2020 | Pintec Technology Holdings Limited

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Operator

Good day and welcome to the Pintec Full Year 2020 Financial Results Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. Please note, this event is being recorded. I would now like to turn the conference over to Joyce Tang. ahead. go Please

Joyce Tang

Hello, year operator. operational welcome Pintec's posted to were Thank conference everyone, call. full online. are and earnings earlier and The XXXX issued you, today and company's results financial

earnings the ir.pintec.com. on Participants at of the the view also website replay Mr. Mr. can press by Management a IR be A be visiting will Q&A will Victor remarks call with on in release the Steven IR website the will available hours. CFO You call of a and Li, call today's Pintec; the Pintec. Sim, of begin with will few prepared and CEO conclude session.

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

inherent statements risks Forward-looking uncertainties. and involve

I earnings to discussions the and measures. unaudited most as measures press now that conference CEO. comparable call release go the information this the from to be will factors contains measures. company's today. The laws. not the Mr. include turn Exchange to ahead. Commission. press Li, in the obligation required may assume Pintec's views our Please please company's note as unaudited except also the forward-looking Victor under expressed company Securities does filings uncertainties of of as filed and included non-GAAP and regarding unaudited Pintec's information financial public applicable results statements and such, is materially update call financial these risk the unaudited as release well non-GAAP a any As different over other GAAP other recalculation U.S. any and risks with directly Further

Victor Li

and you, today's joining Joyce. Hello, thanks for Okay. Thank everyone call.

our and initiatives you of performance. families wish strategic XXXX our updates will I healthy. Then in review first and safe value. delivering your start, today's will I some call, I discuss I In staying are Before long-term

we as in operating was Pintec history unprecedented global pandemic. an the the most of were XXXX probably affected challenging expected, environment by As

in XXXX assets. services, controlling However, product which and in transformation mix eliminating legacy pivotal risky our business and structure, a also optimizing reducing corporate was year operating expenses we initiated a

we [ph] is and and augment has by quality. digital And business services operations services our into digital to digital technical digital stabilize XXXX, strategy revenue, technical services profitability recurring services. asset the operations recorded As been long-term by of in Pintec's restructured refining while revenue increasing

a and to Given this full backdrop, XXXX [indiscernible] decline achievements XX% mention been like advancements while for to we partnerships. in execution compared I few revenue by would significantly a of Pintec's wins strategy, and our defined our year our has are our XXXX, impacted of allow technical demonstrating and

now management, technical We business digital retail and process banking for credit wealth transformation. services XXX management, diversifying credit revenue corporate clients robotic corporate over intelligent Firstly, in further includes management, the digital digital which automation, process our financial have sources.

are transaction our sales. revamping our we loan from on to services infrastructure revenue model addition, focused In of revenue driven traditional nature software the recurring and the facilitation

RMBXX million XXXX. For comparing his report close XXXX; RMBX.X has times to in contribution from that we revenue XXXX, to increased to million increased pleased three to recurring are

Although the it drive but growth. to momentum, is will it we still continue in and we showed the believe early good stage,

medium expanding deepen contractual our the large our revenue regional continue while our As institutions. is model intention to corporate to and financial services evolves, to partners existing services and with small

expansion. capabilities as expertise some and digital core their we retail leverage AI in and channel empowering in seeing transformation are the success early our We efforts loan clients

into implementation. significantly loan; software as and our system and various now clients and we expanded such Telecom For well Bestpay, is collaboration for risk long-term our been who domestic began as our relationship designs China has partner, management, initially model have analysis example, we as installment

XXXX and business. account such partnered micro digitization, management in We also SME Commercial has our domestic FinTech risk of lending of China Bank gained it's is a enabling intelligent Mobile, applications. that for and and few especially for We solutions accepted XG and from Aspire, Industrial solutions with companies new in SME China subsidiary mandates a

the supply completed is China also phase We digitization of one China. who in largest wholesalers chain financing and product one the Group, Daily of for operation the agricultural

efficiently For capabilities respectively management. our Earlier XXXX, digital in overseas in next-generation a solutions WizPay we also to with quickly installment platform, Janko found credit [ph], offer intelligent arised in strategic cloud-based provide launching lending partnership leveraging order upgraded to with expansion, unsecured we lending Australia of Judo modern and successfully partnered end-to-end in loans online and process with Bank Australia. credit

other with throughout expand against to testaments our Bank penetrations Bank, These Africa. we be on-track in Swiss are Toyota the UOB Europe, competing as strong continue of and winning market Our global collaboration and capabilities overseas and players. Oceania Finance

business mainly operations and Next services loan includes our facilitation. which for digital traditional licensed origination

risk-taking to our reduce and As quantity, enhance model, in and call asset RMBX.X with or market actively has the we asset -- prioritize mentioned total for industry XXXX, decline our quality solutions. into total partner high technical more the market caliber continue expand decreased in XXXX, profit-sharing collaboration, loan revenue volume we because leaders, last expand facilitated primarily of and XX% year-over-years billion. in to digital services resulted the incorporate by our to decision This strategic

increased business, technical profile. in core facilitation the we in will free our that are volume risk redeploy In the of to this However, the long-term enhance to means has confident in quality revenue enhancing significantly which loan composition. on-track risk XXXX, strengthen are of XX% us services and we total to about allow digital loan the our compared XXXX of XX% resources,

interfaced reports company, with micro [ph] in China. of which [ph] Bank real-time first into Bank linked data micro Kenzo credit loan the lending credit company to center, some our be Jiangsu China's is scale is updates, into to and now ISM ISM access Kenzo For full inquiries. formally of internet province very directly data

leveraging license and we XXXX started channels. of insurance new also to have our focus brokerage expansion brokerage of the end the insurance on exploring Towards business, our

provide are from there be still me initiatives updates XXXX, our global strategic uncertainties pandemic. broader let array into but Now, reminded on some outlook that of some and please a

innovation immense growth with this long disruptions level, macro on our accelerating of are from China XXXX see execution. customers. fulfill are the these pandemic actually annual opportunities XX% according proven research. we from are institutions compared from is all-round about we track records an from of transformation digitalization that our digital to -- the in was sector order stringent the positioned and to financial over which Firstly, demand which estimated oversights in Chinese FinTech US$XX as in It to governments Therefore, well are in all increasingly representing regulatory potentials billion, and investment XXXX, global of

AI, Secondly, the we'll our big talents machine order forefront continue FinTech and to enhance especially data, stay advancements, technical to in invest for learning, industry. capabilities the digital of transformation, in into our at and

a our opportunities. advancement to partners our integrated, focus faster further in in and with well better capture on to is global product and order target enable operation and expansion overseas and optimization, Our as growth service This costs as more reduced automated [ph]. drives risks the

partners management optimizing clients. expertise to for and corporate fully to funding, services digitized potential business. modules, for origination, servicing, collaborating order and in existing solutions to end-to-end of digital with customize standardized innovation, our domain SMEs, collection, leverage and risk module customer continue the both, SME technical provide analysis specifically retail technical and the and developments We'll loan Now,

upsell retail In terms excited and in business local successes to to establishing We're expansion, duplicating and further partnership open government overseas, other big loan of cross-sell about platform such with for SMEs wealth we our we also our collaboration funding services management. as are our and data deepen to as entities order management. empowering in risk

license operation retail loans and originate and micro to in continue We'll business. stringent internally profile. leverage Next, for our compliance to digital facilitate internet our services more to risk to loan regulations

to We business this stabilize. continue revenue expect to

was data data continuously learning engineering terms. analysts and risks and AI techniques machine and refine to Our underwriting cutting edge mine and optimize this

continue we retail systems So this with deliver will in automated building and seamless, to experiences. highly business access leverage customer broaden software proprietary unique to credit to and

are advantages insurance actively acquisitions order into environment. especially for the in our In growth current addition, extending exclusion XXXX. business data we to Starting and mergers for of and plan, this organic from in units, under also we our are accelerate growth business both our engaged technology

strategy pioneer build M&A offerings, well technology, needs, software with the geographical deeper and to product in broaden complimentary advanced our as expansion overall client relationships Our penetration. in as fulfilling market

teams refer product in with accelerate our So proven know-how; you a talented growth corporate capabilities, press recently, partner this to servicing our to added have releases, value. further new excited operating intense as order and capabilities the will drive of our in partners technology to very and diversification shareholder can are we

will business and cost which will liquidity be order the later. continue all we I to discussed want disciplined while having that the these fundamentals on Finally, containment emphasize further have to impact initiatives discuss overall very strategic and on our protection, minimize Steven our to

So our the from foundation, they partners deliver people business and well the more in are opportunities values to was our the now way continued continue consume. to a results We remain and and navigating greatly to committed turn our of Sim dedication challenging value. in deliver hard review to to in shareholder the focused business scalability on strategy aspects. stronger shareholders. in clients. our many summary, and and as as We With in year great challenges worked long-term support I'll We floor a work Steven clear company XXXX very trust live, CFO, order our in executing those as in change from models details. over to our innovation see appreciate financial that, as relating a We revamping differentiated and employees,

Steven Sim

stay like all you, and of to that Thank I'd safe everyone. you sentiments, echoing and Victor. by healthy. your begin Victor's families Hello,

Before I like would make start comments. I the financial XXXX to some discussion, full year

mentioned top bottom significantly unprecedented XXXX internal in already impacted the and by as our business Firstly, lines. pandemic our transformation Victor, and

foundations, However, and layout short-term. review intensely believe we our are uncertainties these business we as

domestic intangibles losses XX% our including represents Second, XXXX. We expect PRC and investments these we even net the had impact and financial any impairments write-offs, items. which goodwill, totaling regulatory onetime financial for not several the from markets, undertake for do RMBXX.X macroeconomic tightening of to headwind the about of future million,

our cut necessary. Thirdly, decision where difficult our aggressively as part to made expenses of transformation, we a business

reduce had other we XX%, and costs associated to unfortunately, XXXX. by in So all headcount

discipline capabilities, our focus successfully RMBXXX enhance and XXXX. core position cost demonstrated financing by successful on investment sheet management, our However, we in will talents and balance as be million which -- can well liquidity as into our continued

another wealth future securities pillar mergers is Finally, which firm, and be by acquisition Bright, Riche demonstrated which our our a is two Jishengtai, forward, the value of the create they brokerage is announced which in core management driver of We believe acquisition lay future. in security these for firm, our Bright. a will licensed of business of going that and growth Riche will as the recent the development technology will technological background acquisitions foundation

management very are long-term while in talents, hidden empowerment, focused are synergistic reviewing growth in on We prudent financial business values averages philosophy, potentials. of model, and we technical also terms

to the XXXX decreased following over that are financial as basis, XX.X% by our usual, year-over-year revenues to please remarks turning year-over-year all RMBXXX.X terms, are for all in specified. Now, million. for for and our XXXX. comparisons note stated Total unless RMB results year numbers otherwise And in full

with RMBX.X in loans. sorry, In with services to revenue for billion the the mainly of during XX.X% decrease activity RMBXXX.X billion was risk XXXX balance decreased our of our breakdown; bearing RMBXX The total facilitated sheet our in RMBX.X front that changes of loan in billion minimizing compared [ph] -- of loss compared period. due station terms by volume The fees in service that XXXX. technical XXXX, business to million, for

due COVID-XX in by to risk our the This facilitator our XXXX to XX% Revenues of in XXXX outbreak, was from optimize mainly million. structure. line and strategy due ongoing in was declined to free reduction the XXXX. loan to in installment volume portfolio installments However, increased RMBXX.X loans XX% services from decrease with was XX.X% to

Lastly, revenues our slower million, business previously XXXX insurance decreased expected. we of as growing from wealth management primarily brokerage a RMBX.X result by than to XX.X% service in

of series consumer retail products. with insurance optimization model, the During to cross-selling brokerage refine this our and terminate period, initiatives a we implemented business financed

of stopped including gradually in which for in attributable the of of purposely related However, decrease for RMBXXX.X the loan full million this loans, revamping liability of towards provide by the the under XXXX, we of reduced significantly was million period charged led model, of XXXX. XXXX in as credit the and completed acquisition from same service volume to brokerage market sheet since XXXX. service in XX.X% enhancements our enhance second under Total party in Also, under order providing This quality. costs the the to such guarantee the used decrease decreased origination XXXX, facilitation related our business model balance balance of off several the user factors, mainly decreased original the costs end as these loan RMBXXX.X in And fee XXXX. party the asset for and to the guarantee delinquency the improvement resulting on in insurance revenue of significant new XXXX costs from by and we year rapid growth efforts the a lastly, the costs, result we to business declined. of any beginning quarter further the oriented decrease to the expect borrowers decrease related All because a rate cooperation XXXX. company's since model and to

risk bearing service new related business costs, in business; reduce We will of liabilities almost legacy costs continue guarantee and loan to the the mainly under there XXXX no risk loans to guarantee facilitated as model. our sharing was the on

profit quality, full XX.X% million; margin, reflection loans we we fact, margin we without year sharing period gross which business. to RMBXX.X the a decreased the this facilitate with XX.X% any risk-bearing switch the a our will to future. services, Gross represents guarantees of for This all of licenses, XXXX. and volatility of is a other in only that in of minimizing model In compared XXXX guarantee higher provide profitability our profit the operate overall financial in services lower own less while gradually same to for XXXX

same operating forward, we from -- million of full billion on expect in XXXX we focus subspace business technology by year RMBXXX.X Going services, as a XXXX. to Total the improve the of RMBX.X decreased XXXX to in margin digital in in gross XXXX. sorry, period XX.X%

structure, continued marketing to product organization and and the since strategies optimize beginning We XXXX. have refine of our portfolio

have was and business RMBXX.X increased in XXXX; expenses Let's pleased expenses. transformation. from full however, -- personnel period expenses by million year as aggressively report and XXXX marketing the RMBXX.X to RMBXXX.X of loss XXXX by from cost to to I'm now development for staff in environment, professional due RMBXX.X Sales by million we structure Micro optimization million goodwill that declined the under review to due driven every tightening and XX.X% for also primarily in million with by the the the expenses in increased to due and and of approximately and optimization same RMBXX.X related expenses owned associated the decreased reduction a XXXX This regulation and same intangible by specific XXXX by XXXX by operating no primarily acquisition of primarily category. expenses, debt bad decreased of personnel in reduced million in to in same assets from in XXXX, to the loans decrease and future Finance expense and new changing consulting staff by XXXX in part loans; expects Impairment online operate in same General in the smaller corporate related million of period reduction the decreased by to costs the period from from impairment in to of billion XX.X% million to Ganzhou decreases RMBX.X advertisement RMBXX.X of Network goodwill in RMBXX.X RMBXX.X from decrease of RMBXXX.X of of from structure a impairment RMBXX.X expenses in to Aixin Companies the promotional assets period in in Research market decrease the RMBX.X the XXXX. impact. decrease considering license from stock party the structure. business intangible million company XXXX; agreement reduction primarily administrative million and million costs and driven decrease million and costs in XX.X% our driven

XXXX was primarily the increased deferred it million XXXX. year the RMBX caused RMBXX.X by million RMBXXX.X likely full Therefore, was of expense the year expense for XXXX; same will the RMBXXX.X RMBXX.X less compared as in of asset adjusted were XXXX only benefit tax future tax deferred while be the in and in allowance expense in loss the to determined million million tax year due tax the for Tax to that utilized deferred to period and million of the RMBXX in the respectively. As of operating management a net loss deferred loss net valuation in XXXX RMBXX.X million, result, million. increase of RMBXXX.X million

has balance, adjusted decrease RMBXXX.X due one-time deferred of RMBXXX.X one-off mentioned loss and it XXXX first decreased with year million XXXX non-GAAP XXXX. was asset and the loss million of our for and suffered XXXX were the GAAP net decreased the in impact for the RMBX.XX second business The the and the -- loss write-offs legacy be was [ph] to diluted net ordinary in well above well it excluding respectively. Diluted tax However, half mainly net respectively. RMBX.XX loss half in should adjustments and shares as of net of and compared

turn let's our to balance Now, over sheet.

what the are of during what net and as come. December combined loan cash to to has under could XXXX. we of period receivable business. the XX, book the outbreak as lower we December in achieved December conclusion, XX, team restricted XX, of XX.X% of million RMBXXX.X our In about volume RMBXXX.X XXXX, are COVID-XX collectively as and we years XXXX decreased cash transition of by very very mainly the and the XX, long-term XXXX, RMBXXX.X of own due excited achieve and financing we proud RMBXX.X compared As Total as including December equivalents, receivable from of had short-term million to to million cash long-term million short-term

on will up digital and expect our up focus our we service revenue business, in to long-term. driver the technical -- volumes ramping we ahead, revenues ramping be which Looking in key

quality our risk these development the operating questions. This we We are refine digital now our changes Despite prepared impacts, well to for ready solid concludes licensed also confident for and today. we financial short-term these remarks optimized as future. for take will to asset that continue profile. our services, services, foundation sustainable and our as we are bring Operator,

Operator

your you Ling, Tan Thank line from Ling go ahead. Instructions] ICDC first question [ph] is is muted? International. [Operator Please Our from Hello

Unidentified Analyst

acquisition? my questions. And the for wealth give you revenue And how some questions there the next five as do acquisition. us this the management integrate taking services? question Thank from have into is, Jishengtai acquisition? target first foresee color was question what My contribution Bright wealth to this second management and I Riche management regarding will changes two margin management you And Thank profile you. this under you three growth could revenue years? acquisition for your from

Steven Sim

part second Ling. first. you, Steven. Thank the I'll is the question of This take

the is I mentioned the we of organically, and potential terms XXXX Kong; into collectively for target And it past aspects to for will the feel to what's offering well in understood in integrated and market market has and team release, think significant wealth not think the go looking brokerage insurance the differentiates -- for Hong line in in market; how BXB of digital met should there. current as feel operating which portfolio. Riche that it just And -- that from a of terms we we've very terms in some innovation terms a brokerage licensed that completing which this that it technological the the already known we in business, difference And itself add expect opportunities in that not the time smoothly. with investors good brokerage our received by we before our with it press of we in growth think it's Bright, they business will license whereas is in well at has feel in advantage of potentially penetrate in integration, it's significant also we into terms M&As. management wealth remarks, the technological out able will be business the part current management of have expect and integration that so today's and our we the acquisition; other also business in the

normal your terms have fact, question; to on since compared Bright to a rate business business in And that BXC of whereas course businesses first higher we take small Now, believe margins. operating of should not in it in their type model, a purely Riche is the the BXBXC of business I model, be your normal market. in expect think -- other traditional it part as we contributing the

example, non-traditional factor the driven better an cost of other whereas business players that In takeaway. we will business us lower, by we be other the As of to it's will business have having acquisition; same you our in well. sources. understand market opportunities will corporates brokerage customers having that more these the increase At feel other we offer to as this from are and therefore, our in Thank in -- certain also you. much giving corporate, to way, be that a time, income you to acquisition case able players which of have users the corporate that the potentially have case targeting that cost mainly large in in our customers think we

Operator

concludes in Instructions] Victor would for session. over questions more like Li to conference [Operator are question-and-answer to queue. the our I no turn the closing back There This remarks. any

Victor Li

call. We you see a wish again, And time. and today's day, operator. for next joining you. thanks, good Thank Thanks, we'll everyone Okay. you

Operator

you conference for presentation. Thank The has today's attending now concluded.

You may now disconnect.

Joyce Tang	Director of Investor Relations
Victor Li	Chief Executive Officer
Steven Sim	Chief Financial Officer

Pintec Technology Holdings Limited (PT) 14 Apr 212020 Q4 Earnings call transcript