XYF - Earnings call transcript Q4 2021

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Operator

00:03 Hello, and welcome to the X Financial Fourth Quarter 2021 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] Please note, this event is being recorded. 00:37 I would now like to turn the conference over to Tanya Wen. Please go ahead.

Tanya Wen

operator. you, Thank XX:XX thank joining and today. you everyone, us for Hello, and released on ir.xiaoyinggroup.com. The were today are at company's results website earlier available IR the company's On Mr. Financial from call XX:XX are our today X Kan and Li, Mr. President; Financial Frank Officer. Fuya Zheng, Chief Mr. operations Li will overview followed brief give Mr. and company's of by highlights, the a business Zheng, go financials. the will who through to your during the are session. They answer all Q&A available questions of the may the safe under I XX:XX Private Litigation forward-looking Securities contain remind you that statements XXXX. Reform Act provisions this of call harbor achievements management’s and current operating factors the and uncertainties and Such may from those the to are predict many to and statements difficult which which on in which are other the market expectations conditions, events company's cause forward-looking current based are and to actual of beyond statements. all company's that control, or unknown relate and differ the the involve materially of performance known risks, results, uncertainties the XX:XX other regarding is risks, and U.S. the factors with in Further this filings and included information company's Commission. Exchange and Securities The as company except statements information, otherwise, other or update does future events of to any a result as not under new law. undertake required any forward-looking obligation It my is introduce to XX:XX pleasure Mr. now Kan Li. Mr. ahead. go please Li,

Kan Li

XX:XX Hello, everyone.

track business with of on amount to strategy the reached increase XXXX, and environment COVID-XX billion, compared in RMBXX our our in regulatory the loan The back an With the maintained RMBXX XXXX, XX:XX growth profitable XX:XX cost provided initiatives, very and fourth results with of and total fourth XXXX a before We of XXXX the delivering economy successfully improved we to over period line our macro XXXX. outperformed amount the have turned year-over-year significantly the XX% very quarter challenging Both and facilitated total outbreak. XX:XX facilitated provided another XXXX of quarter profitability from increased solid pleased are During full-year our product the bottom and billion. conclude the and Despite a XXXX. line year the by for year-over-year. quarter, we full-year. bottom momentum top in financial control for turned effective and focused same billion loan or RMBXX the steady XX%

which we regulations. the operation fourth seen our days higher result and mainly In XXXX XX XX is decline for loan normal the As the was shifted mainly of stricter Since to we available measures. attributed during mentioned microcredit we first institutional a saw funding In officially pattern. quarter, in the This the XXXX. has moderate improving quarter of tightening loan liquidity December X.XX% as the further the in risk XXXX, liquidity we the guidance with Since as days quality which quarter received our volume we and third fourth of balance XXXX, have microcredit sequential our previous XXXX as our December our to after resumed in year-end XX:XX outstanding partners. we its in of requirements was funds of confident markets in the XXXX, capital level registered RMBX in fourth as ample billion regulatory to management license, fluctuation quarter in to commenced the XXXX, increased total to delinquency and the focus product strategy, our September and are business for all XX, than contributed Loan, gradually loan the its in that quarter, product quality, we and Xiaoying XX, of XX:XX past XXXX. business With facilitation asset facilitated Regarding February XXX% in loan financial XXXX. asset to XX:XX XXXX. to compliance Card for attributed our to due of steady outstanding X.XX% in sustain have ability focused our amount in of the of loans XX, X.XX%, approval are rate provided proven this growth

business to XXXX, with of value we of indirect million forward and shareholder on invested a We RMBXXX track Liaoning, non-state-owned microcredit of XX:XX are creating the become company In and our shareholders. an look quarter and bank. more Newup minority fourth our Bank PRC for

and in the including into to been and being we emerge optimistic opportunities policy Recently, and affirmed may our Bank a could well condition XXXX. capabilities, address board are the to to financial market cooperate authorities. profits sustainable risk SMEs. expect share returning that that our multiple shareholders, the exploring Fintech Chinese of of Newup We of about support outlook has as approved from our company's for Bank remain co-operation fundamentals, our current and We on to China. environment, in strategy, better serve business and increase our with cash management and million to bring needs growth. share the confident cautiously possibilities Newup confidence regulatory pass based to US$XX market we as guidelines the our reflects government has the value, while confidence value business jointly with SMEs plan, based to to economy of on repurchase, timely dividend ways which empower shareholders in with repurchase regulatory inclusive to operation, our are distribution. business support XX:XX In development and advantages more development macro XXXX, Heading our uncertainties The clearer board industry in the uncertainties prepared any of our XX:XX subside on XX:XX evaluating, people's order technology

XX:XX who Now, turn go financials. in our We are will through will to looking forward of value Frank, to an I call the future. increase shareholder the

Frank Fuya Zheng

hello Kan, everyone. you, and Thank XX:XX

XX:XX net loss decreased by period fourth XX% XX% in by both to the bottom efforts our RMBX,XXX adjusted from million increased the Thanks on XXXX. Non-GAAP quarter results with our The RMBX,XXX net million year and XXXX XXXX. For of million XX% the in a to conclusion, XXXX, income million. solid in net delivered are and to of improved full-year ago. RMBXXX total loss results costs encouraged We from demonstrate net XX:XX the the improvement increased non-GAAP to our We XXXX, we we million a relentless improved RMBXXX the significant line are in million. a full-year RMBXXX management million to by quarter. same income of saw fully revenue expenses and which total potential the by in and of pleased cost to strong business. fourth In greatly of deliver a RMBX,XXX for financial to resilience adjusted total operating growth RMBXXX revenue year-over-year

expenses period of in shareholders in was as an fourth due same are the total the and provision of with quality from due period same same same compared XXXX, the to in institutional in with expenses million, and provided our Card million, accounts X needs in loss same with of decreased growth XXXX, XXXX. collection financial of XX.X% the XX:XX asset Financial the stated the net services proven from period by Provision attributable in to to will X facilitated quarter shareholders period quarter in XXXX. X million net the RMBXX.X compared and XX:XX the performance million, in RMBXXX.X for was same receivable period the total RMBXXX.X fourth to for and more the drive XX:XX with result the the fourth to servicing receivable I the attributable in RMB. receivable cooperation compared was a revenue Net an in XX:XX primarily increase fourth attributable insurance to attributable net of period forward, to all by for fourth XXXX. in million RMBXXX.X in meet resulting our RMBXXX.X long-term the shareholders compared increase for million and like that with million the some XXXX, the of primarily quarter million of from quarter of RMBXX.X sustainable quarter. improvement from XXXX, due net of as primarily in in in continue receivable fourth RMBXX.X amount of of SMEs, was company Going funding we here with in loss of of period RMBXX.X compared the of Origination in partners Xiaoying XXXX facilitation result in and of increase receivable and to income decline operations Financial returns compared provided RMBXXX the loans due the quarter the RMBXXX.X compared expand increased a loans brief X of would to adjusted execute same to income period a increase of and the XX:XX compared paid amount insurance Now, adjusted facilitated in XX% assets XXXX. loan shareholders in this fourth consumers with first the reversal Total fourth operations for RMBXXX.X quarter our period Provision in same to with fee million loss and to million, to loan million RMBXXX.X numbers in from deepen Please to XX:XX shareholders. partners same the to XXXX. of in and of decrease company. RMBXXX.X held with total the of the of Non-GAAP non-GAAP XXXX, by XXXX, XXXX. contract strategy increase quarter quarter facilitation accounts primarily note of the million, an quarter Financial in same million RMBXXX.X was period and Financial from assets contract fourth quarter million the accounts Loan amount Income

release please at business for the company's further refer outlook. website. to For Now information, our XX:XX earnings IR financial the

Now the facilitated to the XX% RMBXX.X to of XX%. total be in our views, loan changes. and questions. We for This and [XXXX] please? remarks, call which billion provided be concludes like of and [ph] reflects to first billion, subject preliminary incremental [XXXX] we expect for and and our this between prepared to loan amount Operator, [ph] the facilitation total XX:XX from forecast to are open amount RMBXX.X quarter to current range

Operator

The Instructions] first [Operator Bourne XX:XX ahead. Mason Please from go of AWH question comes Capital.

Mason Bourne

Why start, could on your you main goals? for more hoping your was Thanks XX:XX taking questions. To I Newup? and give Hi. investment in now background

Frank Fuya Zheng

for Bank owned is Newup banks And this one Frank. the Thanks Mason, privately. XX:XX is seven your of Hi, the question.

purpose the encouraged one purpose our government So, try new to jointly at the to this try Business, with develop opportunity it bank. owned – develop to to which not only we very is is a times. we – by equity current interest, And way state is SME and the the only is explore

Mason Bourne

go ahead. then… And XX:XX

Frank Fuya Zheng

long like will you see more so us. otherwise there in term much of investment or some sorry, for volume strategic you. this Yeah, and business XX:XX now Thank the is is

Mason Bourne

And profitability then how the you compared on side, about do to your think current SME XX:XX potential segment, that of business?

Frank Fuya Zheng

have a at is quiet, tough. is with XX:XX from That but our side we market different serve. is us, overlap with of some the market current current kind business, That the

mainly. served individual whatever. somewhere We between XX% overlap the consumer are XX%. anywhere Up to for mainly now to – like in about right market is or XX% The

us. of market for So, there, other's person develop this especially in small they So, know leverage It's lack by – way. their market]. traditional you from to technology by ability [SME we each mainly the reached, kind cooperation, try the our approached is bank of but advantage to our they the by They have own market, have bank very are XX:XX mainly

So, strongly we should at for [indiscernible] very market the not us. see are preliminary advice you assets providers or cautious, forecast I'll result But maybe any it. technical about projection marketplace stage be their not know and some and outcome mainly provide this is anyone other we would maybe approach, any give to regarding

Mason Bourne

think And XXXX? on in loan great. volume you you how about do provided guidance, Okay, your XX:XX total expectations, profitability then

Frank Fuya Zheng

people year. terms gave So, are is we of volume our even [ph] give but XXXX, just the kind in this on and though be zero competitors now, they not did China, in of of, like like spread caused are quite many, stable now supply many a kind especially test XX:XX the XX% COVID tolerance of Shanghai lockdown, increase we many situation believe a situation it's greatly and status] affected it a in situation the Provinces, current for us, a cautious regulatory this a this day, right is those a [further you is COVID among quite So, lot any know and we And the earning uncertain, for side Shanghai, not city of quite year. COVID-XX. industry at XX know… time, restaurant, in test, of you entertainment, in [indiscernible] the the in doing it general lot are size, city, Right total kind mainly it biggest otherwise, in, it's every now [ph]. just forecast – some will right is there's many, travel, economic not in like XX:XX industry We like [XX%] kind all affects to from cities

I is related I those basically. to think [indiscernible] what XX:XX employees people kind are the in industry, know, mean. serve You – of but So, our market some business they we those

of as sure You much give time, to time. exactly not know, – main and we profitable we cautious, are last give Thank you. not what we're but substantially not are, this at earning maybe but one reluctant kind that’s of at year, reason as big this will figure I this we year, provide mean? So, did be we kind thing pretty not, but as the did

Mason Bourne

can XX:XX it's appreciate in think forward? how Could talk good lastly, about allocation to buyback going I then that. more And you put place. capital you see about

Frank Fuya Zheng

we a price correct press from – back XX:XX to we not this very share Just will to do time stated the but so-called in release, are severe trying as we time, undervalue situation. the

terms I line think that when many very price. to by the also it's industrial-side situation to it's share situation, in do we the position; other definitely think you on we are But know will many, we things. long, not it's much in tied of correct

basically. cash our, and use and more to use business our opportunity customer still the exploit business new our mainly our acquire will intention. and That’s we grow So,

Mason Bourne

XX:XX Great. Thank you.

Frank Fuya Zheng

you. Thank XX:XX

Operator

from ahead. next Securities. The question Please National comes XX:XX Matthew with Larson go

Matthew Larson

regulatory YRD called growing, about uncertainty why those same probably an a you plus two your, business know companies has with Upstart issues? that Thanks some XX:XX any company, or Okay. one to lending times times We've extent even call you have to the yet them lender trading your or to companies, there's delinquencies underwriting competitors, a very payday model. have and explanation you certain you're faced [ph], it's the company and or lenders, strong That at whether of which peer call. for XX your seems the loan, [FINV] where taking peer are a to XXX economy, has, my experienced Do year’s here your be multiple. whether our for earnings, similar your and trades at I’ll earnings headwinds

in out I think it's make buyback your because buy buying and even stock smart to of is is down up the also by be share very accretive your a very, difference it a volume dried stock and could because you mean, floor something and here else could very low of you putting the explanation course really bit. the anomaly interest any is at a quite you there there? an with group's investors sheet. you as up why your have or some essentially XX:XX industry lost trade them trade cash Do on have that I just balance is

Frank Fuya Zheng

your very this joining think share, I call. for I Larson, a for Mr. believe our actually. question. XX:XX value time like happy get is if your And we will we cash be thank

lower will much because short very than actually at. I for question environment our right blankly are cash, now the for And [indiscernible] because answer okay. We your put that industry industry no is our future it regular the

Kan Li

say industry the some to trying has think what of is is XX:XX right. sites investor that Frank this I that future, in no

the team, put have That people should think our in difficult why this that moment, in shares. as buy of we it's stock case, valuable a a for industry think this. is is end Different think governance, I with be right? it's [indiscernible] certainly move we very undervalued. the different governance comment though people industry I amount to is just this U.S. we clear say risk, not, our will And why on just China a going particular for industry still not – really of is risk to I going going another like would course, not with think associated other that between we we some will forward. still, think the are industry different would is is is repurchase management say, And in develop [indiscernible] back levels. and And even and this industry it's very of one, I we how great, at to our right. relationship natural XX:XX us this is this be mentioned, how plan XX:XX I it the that

are investors think Chinese about that it. discount [indiscernible] company that they I some where So, majorly thinking on put, put

end it really, is, where than at I are it's a lower evaluation where moment, So, to feeling think you the is have that this be. correct nobody probably the that knows And certainly what we think in we should should we of

Matthew Larson

ahead. XX:XX Well Speakers] [Multiple go

Frank Fuya Zheng

order and XX:XX [indiscernible] all listed [Indiscernible] know. The the U.S. Chinese U.S. company work for you the trade issue is in China this. between as

So, are could or there's all in sure will hope and to you a a now PCLV [indiscernible]. that right listed when aware continued of the issue, Chinese that is company in and be U.S., whether doubt listed question be solved we we Chinese be all company it’s time some that I'm

are your is It’s industry, the our zero order, issue almost think uncertainties I the the all industry, answer regular also regulatory because for For the I is visibility environment for answer very anything, our another I and simple. question. particular the think aware that's believe – [indiscernible] you

Matthew Larson

look is you could more trap. moments some investors and if sorry, it's of competitors XX:XX been I’ll I value Well, couple for because your It's just, frustration were… a were, at industry don't a guys I'm because I a spend your

Operator

location speaker moment, The XX:XX Excuse just There's please. me, the operator. is disconnected, sir. an interruption. This a

Matthew Larson

Sure. XX:XX

Operator

reconnected Thank you. Excuse speaker location. you. Thank me, I’ve the XX:XX

Matthew Larson

XX:XX Hello?

Operator

asking question. XX:XX another Yes, Larson was Mr.

Matthew Larson

is investment know a do buyback after what growing company very percentage that enough X% very, would do because would me, how obviously, say market in – on or is, don't just buyback, got sheet considerably to your looking I and would of get well others really share enough the thing. this kind could has some such I cap put they've upward hopefully forgotten. of just, get occur as be your if I $X price bid or being, it’s a cash could but been – down trajectory And term that but the that thing X% I a company very couple interested you ignore to for really done $X orphaned is because it we accretive I'm investors, lucky. have the it's of prices. the just kind stocks stock and share very a to XX:XX at once been my see long good balance just investor, very runs a of Yes, in large to They flow, mean, has almost and I at we're and And and they you and higher XX:XX stock guess again, your the maybe at of spare

And which goal and which small to now, to a to any show easily it more way just very because where earnings in to to get investors. just it discount a minimum so, ways above well stock continue XX:XX do or one be profitable your stock, good another book, a only $X, find a if and way do but is manner. a which you operating would it to bring this say for obvious, is not would industry, could operate big So, a multiple to give you would continue business would investors is trade to the still earnings besides see that you twice in continue at elevate I your hope to within but your

trailing guys find to aggressive forward is, it you extremely buybacks, now which that accretive. at in the know, look where is you're price particularly United at you share I with you earnings, States. less where trading mean, times would attractive than never and it's So, being I X earnings,

I the listening like for you for thank going congratulations quarter So, me forward. and to guidance and the

Frank Fuya Zheng

the to Mr. your and buyback – is but basically do know, the the That’s of thank that’s legally. exactly We regarding floor And, we a share to for exactly, you what to XX:XX as kind were try not big. you we, trying that Thank share floor you, set Larson question. price. for

are that’s we we a [trade that. but were afraid checked the want big because am not very I everybody's [indiscernible], kind in [indiscernible] that little improve something do low, industry, probably, we we we buy something lot price is to a like can to unless is of below] there bit. of So, We shares [ph] very way, XX:XX

at definitely times we’re XX saying. earnings earnings. That's not times the like We earnings, in XX kind traded of are

again. we question do So, thank you the expect basically something and you for

Matthew Larson

XX:XX Alright. you. Thank

Operator

back session. closing Tanya XX:XX I to the This over conference concludes question-and-answer any Wen would turn our like to for remarks.

Tanya Wen

call on us you Thank XX:XX the for joining today.

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

Operator

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

disconnect. You may now

X Financial (XYF) 31 Mar 222021 Q4 Earnings call transcript