XYF - Earnings call transcript Q3 2020

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Operator

Good day and welcome to the X Financial Third Quarter 2020 Earnings Conference Call. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Tanya Wen. Please go ahead.

Tanya Wen

Thank you, operator. you us thank and everyone, for today. joining Hello, earlier are at available company's results the and released were website The on today company's ir.xiaoyinggroup.com. IR

and of Mr. company's It result Mr. Cheng, introduce law. any new company Securities my under difficult factors information, achievements obligation otherwise, Session. your to Simon risks, available business of and Q&A Frank will other cause the Cheng. filings with financials. regarding that call events Financial as statements. statements Act and call give unknown or Securities or information Officer. events Zhang, questions a actual the performance factors, the from current from now predict are who ahead. of undertake Cheng, required which go you a the during to future I results, please highlights The will control, the Mr. does the President; and uncertainties and They and in the the this risks, followed expectations statements Reform other overview market all may which related pleasure remind to are company's Mr. risks Further On company's that forward-looking under may based differ Mr. Simon not U.S. operating Exchange uncertainties Cheng of the and statements and are to beyond Zheng, company's Fuya and involve is are in Safe Litigation today Mr. current Commission. as many answer included and on brief of Such forward-looking update the except Chief known is operations contain the all any Financial through go forward-looking XXXX. Harbor those which materially are to management's provision Private X of by or conditions

Simon Cheng

delivered in facilitation we total amount and financial RMBX,XXX in tightened encouraging Card you recovery our from Xiaoying the increased results China, of regulatory Thank Hello third environment XX.X% loan in the COVID-XX amount impact facilitation by billion. solid quarter. to quarter-over-quarter operational everyone. loan Despite Loan, and the to

We to decreased XXXX. XX risk respectively, for management and and to further loans XX XX X.XX% that rates due outstanding all of The compared adhere past and approach. delinquency continued are X.XX%, to our September days days of XXX X.XX% to June days prudent XXXX XX, to for XX, X.XX%, respectively, days as as to

gradually risk pandemic our ease both the we bottom recovers profile As our China, front, operational macro Based lines. the and on top environment to on continues credit continues to have improved economic in improve. we progress and the the made solid

by loans local The lending Recently, small Despite lending, individuals on lending and prohibition impose government tighter the expected businesses. as pressure of regulators industry our instead to Due ruling with limits, financial caused is small moment new three in interim also which the over to strategies on by directly challenging mainly regulatory XX.X% August this a this new Court online only leverage, fundamentals We loans XXXX, will to In private or their People's by individuals China. PRC lending we end authorities. precisely the rate law. the visibility applicable and on environment bring challenges other a period started they small institutions. affect impact opinion in a our policy is moment, planned to and from policies. RMBXXX.X difficult personal the total The strong the by ahead, lowered demand significantly financing seeking made the and sector transitional borrowing the previous public Chinese The expand regulation the this refers regulatory believe to of and does companies fund demonstrating to for all financial of net million quarter-over-quarter adjust revenue will economy. private low organizations financial to for to on with to to our on narrowed years applicable to evaluate the regulatory of Our or quarter, multi-regional at whole of ceiling by lending not improve this currently the for net new requirements we RMBXXX.X have online their measures uncertainties, increased but interest to measures. one this operations comply is that protected the private changes administration business growing Supreme online be to or It but lending the microloan put of shareholders the million in its of are loss to to Financial capability navigate X by will offerings businesses new year. in finalized uncertain at it's continue regulations regulated institution offered by cater companies. it need will regulations substantial companies contributable to the the their an sector,

track and a We are will an and apply to environment. online market on keep close regulatory watch license the dynamics on for evolving microcredit

in stronger periods industry. a emerged We this have difficult as experienced reforms before, player key and and navigated

into adjustments of We are way are confident strategic environment. making to fit in that new business timely the a capable we

credit expand expand. institutional facilitated total have quarter, for During cooperation the continued XXX% the with third with of funding Both XX.X% achieved institutions. quarter lines in institutional we our we financial platform, loans previous In and to partners third new successfully financial compared continued the the through the number the our available to quarter.

capabilities our have by financial partners. management and fully record recognized institutional proven risk been Our

business interests helps minimize to has believe in risks balance as regulatory our the XXXX. a October establish of of integrity in to and investors and finance business progressed sector. trust June Protecting RMBX.X XXXX is loan XX, solid personal priority we top from XX, Our billion manner. orderly our September of the the RMBX.X XX, billion decrease us billion it decreased foundation the XXXX always from PXP as outstanding to continued and exit of The an further RMBX.X PXP of of and as

During number due borrowers of an the diversifying the Loan. Credit sources. representing we economic With of is consumption, execution the we and for and acknowledgement long-term to to cooperation offer quarter, to our the value domestic support implementation borrowers, rebound strengthen mainly of of active to China’s as institutional as in and high the investors continues favorable will to as further our products capabilities grow the previous XXX,XXX, well gained relationships of momentum and our quarter, traction of and to funding from increase are in value loan continue the XX.X% confident our an steady we Xiaoying continued increase third to borrowers to quality XXX,XXX in recover. active financial number This our institutions Overall, create and shareholders. keep gradually growth market we policies with of

the who Now I Frank, financials. call turn our go through will will to

Frank Fuya Zheng

pleased and recovery the improving are across third growth of during to our business. gradual our enhance have efforts line thanks top overall We the seen reduce quarter, costs continuous to various and parts market to conditions the

third focused credit in the and RMBXX.X other borrower quarter. improvement provisions continued management significant when base. quarter We profile capabilities our bad for quality in decrease has risk the The risk our receivable accounts with narrowed Together the control successfully million for expanding measures, a of loans and debt on the in with net to the strengthen compared previous cost loss quarter. receivable the brought our of we

are seeing quarter, fourth we far the more the So into side. borrower signs on positive

borrowers. X.XX% loans outstanding of October X.XX%, for showing an due XX, quality for outstanding to XX XX high are of XXX of risk As XXXX, further delinquency respectively, performance all days the to days that days dropped XX the in rates and days control improvements the to model effectiveness our and and past our

cooperation addition, partners overall our increase financial deepen institutional efforts at total institutions The and financial to In managed continued the which the with costs our cooperate funding bear during quarter, quarter. to fruit. third this to we number reduce and time, expand also we in same to of continued with

We will we monitor environment. financial on guarantee and continue to any will conclusion, ensure potential financial partnerships regulations will the with our we macro conditions, changes to further with structure. diversify And impact institutions our in our closely more market continue companies. adapt response quickly due In to we third-party cost to to to the engage business meantime, optimize continued in in

we explore additional personal will products, borrower the finance with to addition, financial opportunities growth further capture institutions cooperation loan the industry. attractive untapped credit and In to of continue quality improve in base provide our more

by the of period loan the about RMBXX.X RMBXXX.X loans in a compared Origination XXXX. US$XX.X Now million same in loss third million million RMBXXX.X some in million finally in assets, an financing from interest increase increase of million around receivable address policy the increased compared related loans. net period and to active XXXX, accounts of million attributable and collection about resulting about Total to decreased amount performance decline to million primarily combined this business in about RMBXXX.X I’d taken financial same contract to of primarily like and XXXX, the million to RMBXXX.X an RMBX.X assets Financial from primarily of the million, XXXX. total compared to for expenses RMBXXX.X impact Provision was same the to outlook. accounts the with from same to a XX.X% period period attributable of in net revolving expenses US$XX.X primarily (X) and the default an X to a due decrease servicing loans shareholders contract in for from of credit Financial million effect in of million million receivable shareholders US$XX.X when (X) RMBXX.X Provision the XXXX, XX.X% And XXXX, quarter US$X.X in and period receivable the same income. in estimated RMBXX.X loans following period with due quarter from million million, expenses the in to revenue rates. same decreased more by receivable by the due RMBXXX the (X) facilitation in factors: US$X.X income to a million Net COVID-XX, due with XXXX. increase the decrease to of was XX.X% X and brief for

are the more and approach deposits taking market to the regulatory its business. near-term company's its changes, company of process risks. a unable reasonably Given institutional Consequently, cooperators. players to Based prudent preliminary ongoing for company subject the its the outlook institutional management risk is paid is reassessing a the are to all determine in assessment, impairment cooperators the on

we'd our questions. please. open concludes this to prepared like and Operator, Now, remarks, to call the

Operator

you. Thank

question-and-answer begin [Operator the Instructions] now will We session.

Operator

back conference further to question-and-answer session. over the questions remarks. Showing would no this closing at for to our concludes like time, this Tanya Wen I turn any

Tanya Wen

Thank you, the joining today. for on call us everyone,

If pleased you a raise with to speaking Thank contacts. got to We the be haven't you. future. follow-up in to answer chance forward you again near through will questions, we your look them

Operator

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

You may now disconnect.

X Financial (XYF) 2 Dec 202020 Q3 Earnings call transcript