Investment Rating - The report maintains a "Buy" rating for the company with a target price of $13.00, indicating a potential upside of 51.3% from the current price of $8.59 [1][11]. Core Insights - The company reported better-than-expected earnings, achieving a net profit of RMB 738 million in Q1 2024, which represents a year-on-year increase of 38.7% and a quarter-on-quarter increase of 8.4%, marking the highest quarterly profit since 2019 [6]. - The international business segment continues to grow, with a year-on-year increase of 36.4% in loan facilitation from international markets, contributing to 5.8% of total loan facilitation [6]. - The company aims to increase the proportion of international business revenue to 25% by 2025 and 50% by 2030 [6]. Financial Performance Summary - Revenue is projected to grow from RMB 12,547 million in 2023 to RMB 14,138 million in 2025, reflecting a compound annual growth rate (CAGR) of 8.2% [5][8]. - Net profit is expected to increase from RMB 2,341 million in 2023 to RMB 2,763 million in 2025, with a year-on-year growth rate of 15% anticipated for 2025 [5][8]. - The company's net take rate is projected to stabilize around 4.01% in 2025, with a slight decrease from previous estimates [9]. Business Metrics - The company facilitated loans totaling RMB 206.11 billion in 2024, with a year-on-year growth rate of 6.0% [8]. - The loan balance is expected to reach RMB 74.1 billion by Q1 2025, with a year-on-year growth of 13.5% [7]. - The 90-day overdue rate is projected to be 2.04% in Q1 2025, showing a slight improvement from previous quarters [7].

Investment Rating - The investment rating for the company is "Buy" with a target price of $12.00 [7][8]. Core Insights - The company's Q1 2025 performance showed a net profit of 750 million RMB, exceeding Bloomberg's expectation of 600 million RMB, with a year-on-year increase of 41.4% and a quarter-on-quarter increase of 9.7% [1][4]. - Loan quality has slightly improved, with the first-day overdue rate decreasing to 4.6% and the annualized net profit take rate increasing by 20 basis points to 4.1% [3][4]. - The company maintains a cautious operational approach, with a focus on improving loan quality and increasing the proportion of light capital business, which is expected to drive profit growth in the short term [1][2]. Summary by Sections Q1 2025 Performance - The company reported a net profit of 750 million RMB, which is better than expected, with a quarter-on-quarter increase of 9.7% and a year-on-year increase of 41.4% [1]. - The overdue rate decreased by 10 basis points to 4.6%, indicating improved loan quality [1][3]. - The total loan amount for Q1 2025 was 52.1 billion RMB, with a quarter-on-quarter increase of 8.4% [2]. Loan Quality and Capital Structure - The first-day overdue rate improved to 4.6%, and the 30-day repayment rate remained stable at 89% [3]. - The light capital business's balance proportion increased to 43.0%, which is expected to enhance profit margins due to the absence of income and provision mismatches [2][3]. Profit Forecast and Valuation - The profit forecasts for 2025, 2026, and 2027 have been adjusted to 3.22 billion RMB, 3.91 billion RMB, and 4.02 billion RMB respectively, reflecting a positive outlook [4][6]. - The target price remains at $12.00 based on DCF valuation methodology [4][12].

Core Viewpoint - The company reported strong financial performance in Q1 2025, with a focus on both domestic and international business growth, while adapting to new regulatory frameworks in the lending sector [2][3][4]. Financial Performance - In Q1 2025, the company achieved revenue of 3.481 billion yuan and a net profit of 738 million yuan [2]. - The transaction volume facilitated by the company reached 52.1 billion yuan, representing a year-on-year growth of 7.9% [2]. - The loan balance stood at 74.1 billion yuan, showing a year-on-year increase of 13.5% [2]. - Domestic transaction volume was 49.1 billion yuan, up 6.5% year-on-year, with a loan balance of 72.2 billion yuan, increasing by 12.8% [2]. Business Segments - The company served 44.2 thousand domestic micro and small enterprises, facilitating nearly 15 billion yuan in transactions, which accounted for 30% of the domestic transaction volume [2]. - International business transaction volume surpassed 3 billion yuan for the first time, growing by 36% year-on-year, with independent borrower numbers reaching a record high of 1.7 million, up 106% [3]. - International revenue was 710 million yuan, a year-on-year increase of 19.5%, contributing 20.4% to the total revenue [3]. Growth Guidance - The company maintains its full-year revenue growth guidance of 10% to 15%, with expectations for international market contributions to rise to 25% [4]. Regulatory Impact - The new lending regulations, effective in October, are expected to enhance the regulatory framework for lending businesses, focusing on qualitative rather than quantitative aspects [4][5]. - The CFO noted that the new regulations would improve transparency and compliance, benefiting platforms with strong capital and risk management capabilities [5]. Risk Management - The company has adjusted its risk appetite for marginal assets in response to macroeconomic uncertainties, monitoring trends closely to balance risk management and business objectives [5]. - In Q1, the domestic loan facilitation revenue rate improved by 10 basis points, driven by a reduction in funding costs and an extension of loan terms [5].

Market Overview - US stock index futures are all down, with Dow futures down 0.75%, S&P 500 futures down 0.50%, and Nasdaq futures down 0.51% [1] - European indices also show declines, with Germany's DAX down 0.10%, UK's FTSE 100 down 0.01%, France's CAC40 down 0.54%, and the Euro Stoxx 50 down 0.37% [2] - WTI crude oil is up 0.74% at $62.49 per barrel, while Brent crude is up 0.67% at $65.82 per barrel [2] Currency and Economic Sentiment - There is a rising expectation of US dollar depreciation, with the Bloomberg dollar index's one-year risk reversal indicator showing a negative 27 basis points, indicating the lowest level on record [3] - Morgan Stanley suggests buying US assets excluding the dollar, predicting a series of interest rate cuts by the Federal Reserve that could support the bond market and boost corporate earnings [3] Inflation and Tariff Impact - Federal Reserve officials warn that the impact of tariffs will soon be fully realized, potentially leading to a new wave of price increases in the US economy [4] - Atlanta Fed President Bostic indicates that many companies' buffer strategies against high tariffs are running out, which could weaken overall economic activity [4] Investor Sentiment and Market Dynamics - JPMorgan's CEO warns of "extreme complacency" among investors, suggesting that the market may soon face turbulence [5] - Goldman Sachs reports that clients are increasingly seeking to withdraw funds from the US market, questioning whether the US stock market's rally has reached its peak [6] Company Performance Highlights - Lowe's reported same-store sales down 1.7% but expects this key sales metric to remain flat or grow up to 1% for the year [7] - ZTO Express achieved a 19.1% year-on-year increase in package volume, with net profit up 40.9% [7] - Baidu's Q1 net profit increased by 41.65% year-on-year, reaching 77.17 billion yuan [8] - XPeng Motors reported a net loss of 660 million yuan, a 51.5% decrease year-on-year, with total revenue up 141.5% [8] - Weibo's Q1 net profit grew by 116.36% year-on-year, reaching $107 million [9] - Target's Q1 performance fell short of expectations, leading to a downward revision of sales forecasts [10] - Full Truck Alliance reported a 19% year-on-year increase in revenue, with significant growth in operational metrics [11] - iQIYI's Q1 revenue reached 71.9 billion yuan, with a 9% quarter-on-quarter increase [12] - Xinyi Technology reported a Q1 revenue of 34.81 billion yuan, with a net profit of 7.38 billion yuan [12] - Tuya Smart's Q1 revenue grew by approximately 21.1%, exceeding expectations [12]

Financial Performance - In Q1 2025, the company reported revenue of 3.481 billion RMB and a net profit of 738 million RMB [1] - The transaction volume for the quarter reached 52.1 billion RMB, representing a year-on-year growth of 7.9% [1] - The loan balance stood at 74.1 billion RMB, showing a year-on-year increase of 13.5% [1] Strategic Initiatives - The company maintains a robust growth trajectory driven by technological innovation and diversified strategies [1] - As of the end of Q1, the company has provided digital services to 114 domestic financial institutions and credit technology services to over 27.3 million users [1] - The company served 442,000 domestic micro and small enterprises in Q1, facilitating transaction volumes of nearly 15 billion RMB, which accounted for 30% of the domestic transaction volume [1] International Business Development - The company's international business has entered its eighth year, establishing localized fintech platforms in multiple countries [2] - International business transaction volume exceeded 3 billion RMB for the first time, with a year-on-year growth of 36% [2] - Revenue from international operations reached 710 million RMB, reflecting a year-on-year increase of 19.5%, constituting 20.4% of the company's total revenue for the quarter [2]

Financial Data and Key Metrics Changes - The company achieved a 10% year-over-year revenue growth, with a record-breaking quarterly net profit of RMB738 million, representing a 39% increase year-over-year and an 8% increase quarter-over-quarter [9][27] - The take rate in China increased from 3.3% to 3.4% sequentially, with a 10 basis point decline in funding costs [20][44] - Net revenue for the quarter reached RMB3.5 billion, marking a 10% increase year-over-year and a 1% increase sequentially [27] Business Line Data and Key Metrics Changes - International transaction volume grew by 36% year-over-year, while China's transaction volume grew by 7% [9] - The international business contributed 20.4% of total net revenue in the first quarter, up from 18.8% in the same period last year [11] - The outstanding loan balance in international markets rose to RMB1.9 billion, up 46% year-over-year [21] Market Data and Key Metrics Changes - China's GDP grew by 5.4% year-over-year, while retail sales rose by 5.9% in March [19] - In Indonesia, transaction volume reached RMB1.8 billion, up 10% year-over-year, while in The Philippines, transaction volume reached RMB1.2 billion, up 180% year-over-year [22][24] - The unique borrower base in international markets reached a record high of 1,700,000, marking a 106% year-over-year increase [22] Company Strategy and Development Direction - The company aims to have international business contribute 50% of total revenue by 2025 [11] - The strategic diversification initiatives in international markets are designed to mitigate single country risk [11] - The company is exploring the use of larger language models in risk assessment to improve operational efficiency [13] Management Comments on Operating Environment and Future Outlook - Management expressed a cautiously optimistic outlook despite ongoing macroeconomic uncertainties such as global trade tensions and evolving regulations in China's consumer finance sector [9] - The company remains confident in achieving its full-year revenue guidance of RMB14.4 billion to RMB15 billion, representing 10% to 15% growth year-over-year [29] - Management noted that the new regulations on loan facilitation in China are seen as a positive signal for the industry's healthy development [35] Other Important Information - The company facilitated RMB15 billion in financing for 442,000 small business owners, representing a 1510% increase [15] - The Board of Directors approved a dividend of US$0.27 per ADS, reflecting a 17% year-over-year increase [29] Q&A Session Summary Question: Impact of new regulations on loan facilitation in China - Management acknowledged the new regulations and viewed them as a positive signal for the industry's development, stating that the overall impact is manageable [33][35] Question: Impact of U.S. tariffs on consumption loan demand in Indonesia and the Philippines - Management noted that while trade tensions have introduced challenges, domestic demand remains strong, and they expect a rebound in Q2 [36][38] Question: Loan application demand trend in China and credit approval plans - Management reported steady loan application demand in April and May, with a slight decline in April followed by a rebound in May [41][42] Question: Drivers for improved take rate in the Chinese business - The take rate increased due to improved funding costs and extended loan tenure, with expectations for stability moving forward [44]

Financial Data and Key Metrics Changes - The company achieved a 10% year-over-year revenue growth, with a record-breaking quarterly net profit of RMB738 million, representing a 39% increase year-over-year and an 8% quarter-over-quarter increase [9][28]. - The take rate in China increased from 3.3% to 3.4% sequentially, with a 10 basis point decline in funding costs [21][45]. - Net revenue for the quarter reached RMB3.5 billion, marking a 10% increase year-over-year and a 1% increase sequentially [27]. Business Line Data and Key Metrics Changes - International transaction volume grew robustly, up 36% year-over-year, while China's transaction volume saw a slight 7% growth [9][11]. - The international business contributed 20.4% of total net revenue in the first quarter, up from 18.8% in the same period last year [11]. - The outstanding loan balance in international markets rose to RMB1.9 billion, up 46% year-over-year [22]. Market Data and Key Metrics Changes - China's GDP grew by 5.4% year-over-year, and retail sales rose by 5.9% in March [20]. - In Indonesia, transaction volume reached RMB1.8 billion, up 10% year-over-year, while in The Philippines, transaction volume reached RMB1.2 billion, up 180% year-over-year [25][22]. Company Strategy and Development Direction - The company aims to have international business contribute 50% of total revenue by 2025 [11]. - The strategic diversification initiatives in international markets are designed to mitigate single country risk [10]. - The company is exploring the use of larger language models in risk assessment to improve operational efficiency [13]. Management's Comments on Operating Environment and Future Outlook - Management maintains a cautiously optimistic outlook despite ongoing macroeconomic uncertainties such as global trade tensions and evolving regulations in China's consumer finance sector [9]. - The company expects to achieve its full-year revenue guidance of RMB14.4 billion to RMB15 billion, representing 10% to 15% growth year-over-year [30]. Other Important Information - The company facilitated RMB15 billion in financing for 442,000 small business owners, up 1510% year-over-year [15]. - The Board of Directors approved a dividend of US$0.27 per ADS, reflecting a 17% year-over-year increase [30]. Q&A Session Summary Question: Impact of new regulations on loan facilitation in China - Management noted that the new regulations are expected to promote healthy development in the industry and benefit leading platforms with strong risk management capabilities [34][36]. Question: Impact of U.S. tariffs on loan demand in Indonesia and the Philippines - Management observed that while trade tensions have introduced challenges, domestic demand remains strong, and they expect a rebound in Q2 [37][39]. Question: Loan application demand trend in China - Management reported steady loan application demand in April and May, with a slight decline in April followed by a rebound in May [42][44]. Question: Drivers for improved take rate in China - The improved take rate was driven by reduced funding costs and extended loan tenure, with expectations for stability moving forward [45][46]. Question: Updates on international expansion and revenue guidance - Management confirmed strong performance in international markets, with expectations for increased revenue contribution from these regions [51][52].

FinVolution Group I n v e s t o r P r e s e n t a t i o n May 2025 Disclaimer 2 Value Creation Through Long-termism Vision Be the Most Popular and Trusted Fintech Group Mission Better Finance, with Technology This presentation has been prepared by FinVolution Group (the "Company") pursuant to Section 5(d) of the U.S. Securities Act of 1933, as amended (the "Securities Act") solely for informational purposes and is not an offer to buy or sell or a solicitation of an offer to buy or sell any security or instr ...

Core Insights - FinVolution Group reported strong financial results for the first quarter of 2025, with total transaction volume reaching RMB52.1 billion, a year-over-year increase of 7.9% [1][13] - The company's international transaction volume saw significant growth, reaching RMB3.0 billion, up 36.4% year-over-year [1][11] - Net revenue for the first quarter was RMB3,481.0 million, reflecting a 10.0% increase compared to the same period in 2024 [1][15] - The international business contributed RMB710.5 million to total revenue, representing 20.4% of net revenues, with a year-over-year growth of 19.5% [1][15] Financial Performance - Total outstanding loan balance increased to RMB74.1 billion, up 13.5% year-over-year [2][13] - The average loan size for the first quarter was RMB10,494, compared to RMB10,121 in the same period of 2024 [11] - The 90-day+ delinquency ratio stood at 2.04% as of March 31, 2025 [11] - Net profit for the first quarter was RMB737.6 million, a 38.7% increase from RMB532.0 million in the previous year [30][31] Operational Highlights - Cumulative registered users reached 216.2 million, with a 11.7% increase year-over-year [11] - The number of unique borrowers for the first quarter was 2.2 million, marking a 22.2% increase compared to the same period in 2024 [11] - The company added 1.2 million new borrowers in the first quarter, continuing a trend of surpassing one million new borrowers for three consecutive quarters [14] Business Outlook - The company maintains a full-year revenue guidance of approximately RMB14.4 billion to RMB15.0 billion, indicating a year-over-year growth of 10.0% to 15.0% [35] - The management expressed confidence in navigating global macro uncertainties while capitalizing on growth opportunities in both domestic and international markets [14][35]

Market Overview - US stock index futures showed mixed performance with Dow futures slightly up, S&P 500 futures down by 0.16%, and Nasdaq futures down by 0.66% [1] - European indices saw positive movement with Germany's DAX up by 0.61%, UK's FTSE 100 up by 0.60%, France's CAC40 up by 0.56%, and the Euro Stoxx 50 up by 0.50% [2][3] - WTI crude oil prices fell by 0.42% to $61.88 per barrel, while Brent crude oil dropped by 0.46% to $65.24 per barrel [3][4] Federal Reserve Insights - Federal Reserve officials indicated that interest rate cuts may not occur before September due to uncertain economic outlook, with current expectations for a rate cut in June being less than 10% [5] - The market anticipates two rate cuts by the end of the year, each by 25 basis points, which is lower than previous expectations of four cuts [5] Banking Sector Developments - Moody's downgraded the deposit ratings of major US banks, including Bank of America and JPMorgan Chase, citing reduced government support following the downgrade of the US credit rating [6] - The long-term deposit ratings for these banks were lowered to Aa2, which is Moody's third-highest rating [6] Currency and Economic Outlook - Deutsche Bank warned of potential depreciation risks for the US dollar, suggesting that upcoming budget negotiations will significantly impact the dollar's position [7] - Wells Fargo advised investors to reduce exposure to emerging market stocks in favor of US equities, predicting a stronger dollar and cautioning against overly optimistic sentiment towards emerging markets [7] Company-Specific News - Vodafone reported a decline in revenue in its key German market, forecasting minimal growth for the upcoming fiscal year and announcing a new €2 billion share buyback plan [8] - Yalla Technology's Q1 revenue grew by 6.5% year-over-year to $83.9 million, but paid user numbers fell by 8% [9] - Vipshop's Q1 net revenue decreased by 4.7% to RMB 26.3 billion (approximately $3.6 billion), with active customer numbers down by 4.2% [10] - Home Depot's sales fell short of expectations, indicating weakened consumer confidence, with comparable sales down by 0.3% [10] - Cathie Wood's ARK Invest made significant purchases of Taiwan Semiconductor Manufacturing Company (TSMC) shares, marking a shift in strategy amid easing trade tensions [11] Upcoming Economic Events - Key economic data releases include the US Redbook retail sales year-on-year and API crude oil inventory changes [12][14] - Notable speeches from Federal Reserve officials are scheduled, which may provide further insights into monetary policy [13][14]