LexinFintech Holdings Ltd. (NASDAQ:LX) Q4 2022 Earnings Conference Call March 13, 2023 9:30 PM ET Company Participants Jamie Wang - Investor Relations Manager Jay Xiao - Chairman and Chief Executive Officer James Zheng - Chief Financial Officer Jared Wu - President Conference Call Participants Yada Li - CICC Alex Ye - UBS Operator Good day, and thank you for standing by. Welcome to LexinFintech's Fourth Quarter and Full-Year 2022 Earnings Conference Call. At this time, all participants are in a listen-only ...

LexinFintech Holdings Ltd. (NASDAQ:LX) Q3 2022 Earnings Conference Call November 16, 2022 8:30 PM ET Company Participants Echo Yan - Investor Relations Director Jay Xiao - Chairman and Chief Executive Officer Sunny Sun - Chief Financial Officer Jared Wu - President Conference Call Participants Hans Fan - CLSA Frank Zheng - Credit Suisse Alex Ye - UBS Operator Good day, and thank you for standing by. Welcome to the LexinFintech's Third Quarter 2022 Earnings Conference Call. At this time, all participants are ...

LexinFintech Holdings Ltd. (NASDAQ:LX) Q2 2022 Earnings Conference Call August 16, 2022 9:30 PM ET Company Participants Echo Yan - Investor Relations Director Jay Xiao - Chairman and Chief Executive Officer Sunny Sun - Chief Financial Officer Jayden Qiao - Chief Risk Officer Conference Call Participants Yada Li - CICC Alex Ye - UBS Hans Fan - CLSA Operator Thank you all for standing by, and welcome to the LexinFintech Second Quarter 2022 Earnings Conference Call. At this time, all participants are in a list ...

Financial Data and Key Metrics Changes - In Q1 2022, loan origination volume reached RMB 43.2 billion, with an outstanding loan balance of RMB 83.8 billion, reflecting a slight drop of 2.5% quarter-over-quarter [6][16] - The net profit declined to RMB 81 million in Q1 2022, but the business remained profitable, with cash reserves at RMB 5.6 billion, up 9% year-over-year [19][20] - The contribution from non-credit driven services increased to 47.7% of total operating revenue, up by 10 percentage points year-over-year [20] Business Line Data and Key Metrics Changes - Non-credit driven services accounted for 47.7% of total revenue, indicating a strategic shift towards revenue diversification [7][20] - The APR for loans decreased to 25%, with 78% of loan originations priced within 24% APR, up by 40.5% year-over-year [7][16] Market Data and Key Metrics Changes - The company reported that nationwide partners accounted for 76% of total funding in Q1 2022, up by more than 10% from the previous quarter [17] - Loans to small and micro businesses amounted to RMB 4.24 billion, reflecting a 9.5% increase quarter-over-quarter [7] Company Strategy and Development Direction - The company is focusing on three strategic priorities: strengthening management of existing customers, enhancing revenue structure for diversification, and optimizing management systems for operational efficiency [8][20] - The management emphasized the importance of maintaining asset quality over pursuing scale, especially in the current uncertain macroeconomic environment [5][8] Management's Comments on Operating Environment and Future Outlook - The management acknowledged the challenges posed by COVID-19 and external factors such as inflation and geopolitical tensions, but expressed confidence in navigating these challenges [4][9] - The company expects loan origination volume in Q2 2022 to be higher than Q1, despite the uncertainty in achieving a 10% loan growth target for the year [8][29] Other Important Information - The company has facilitated over RMB 702 billion in loans since inception, with a user base of over 171 million [5] - The management has been proactive in adjusting operations and strategies in response to external changes, focusing on risk management and operational efficiency [5][11] Q&A Session Summary Question: Outlook for take rate and its impact on asset quality - The management aims to maintain a take rate around 3% for the full year, with expectations of stable funding costs and improved risk management [22][24] Question: Full year loan growth targets - The management has not changed the full year loan growth guidance, maintaining optimism for economic recovery [28][29] Question: Changes in lending standards and customer profiles - The company is focusing on managing existing customers and exploring their potential, while also tightening lending standards for new borrowers [34][36] Question: Strategy for the Maiya business amid COVID - The Maiya business is adapting by enhancing online capabilities and supporting offline brands to increase sales volume [38]

Financial Performance - The company originated RMB214 billion (US$33.6 billion) in loans in 2021, representing a year-on-year increase of 21%[401]. - As of December 31, 2021, the average user loan balance was RMB8,753 (US$1,374), up from RMB8,125 in 2020[401]. - The total operating revenue was RMB11,381 million (US$1,786 million) in 2021, with contributions from technology-driven platform services exceeding 30%[394]. - The outstanding balance of funds provided by institutional funding partners increased from RMB52.1 billion in 2019 to RMB88.6 billion (US$13.9 billion) in 2021[408]. - The loan origination generated by serving SME owners reached RMB15.3 billion in 2021, accounting for 7.1% of total loan origination[393]. - The company served more than 36.9 million users, with over 60% being urban working population and more than 5% being SME owners as of December 31, 2021[400]. - The company added 14 new funding partners in 2021, cumulatively serving over 130 funding partners by year-end[408]. Research and Development - Research and development expenses in 2021 amounted to RMB 549 million (US$ 86.2 million), representing a year-on-year increase of 15.8%[423]. - The company has developed over 60,300 decisioning rules using 22,000 potential data variables, accumulating data from over 36.9 million users and 249.9 million credit applications since inception[416]. - The proprietary Hawkeye system supports various analytical techniques and model outputs, including traditional regression models and artificial intelligence[415]. - The company has built a high-accuracy customer profiling and risk modeling system based on thousands of variables from extensive data resources[421]. - The company has registered 165 patents in China and applied for 385 additional patents, along with 202 software copyrights[439]. Data Security and Compliance - The company has received ISO/IEC 27701:2019 certification for its data security and privacy protection efforts, indicating compliance with international standards[426]. - The company has formed strategic cooperation with Qi'anxin, a leading information security company, to enhance data security practices in consumer finance[425]. - The PRC Foreign Investment Law, effective January 2020, replaces previous laws and establishes a unified legal framework for foreign investment in China[445]. - The 2021 Negative List reduces the number of industries with restrictions on foreign investment, expanding permitted sectors[445]. - Foreign investors must report investment activities through the Enterprise Registration System and National Enterprise Credit Information Publicity System since January 1, 2020[445]. - The Security Review Mechanism for foreign investments, effective January 18, 2021, requires declarations for investments in sensitive sectors[446]. - The company operates value-added telecommunication services through consolidated variable interest entities to comply with foreign investment restrictions[451]. Regulatory Environment - The company must comply with regulations requiring real identity authentication for online audio-visual information service providers[461]. - The CAC's amended provisions require providers to implement strict user registration and verification processes, including measures like compound verification based on mobile phone numbers and identity card numbers[464]. - The Circular 141 specifies that cash loans must not exceed an annualized interest rate limit set by the Supreme People's Court, and loans to borrowers without income sources are prohibited[465]. - Commercial banks are restricted from granting individual credit lines exceeding RMB200,000 and must ensure that the loan term does not exceed one year for lump-sum repayments[468]. - The Civil Code of PRC stipulates that interest rates under loan agreements must comply with applicable laws, and advance deduction of interest from loan proceeds is prohibited[472]. - The Supreme People's Court's amendments to private lending interest rates now set the upper limit based on the Quadruple LPR Limit, replacing previous thresholds of 24% and 36%[475]. - The CBIRC's guidelines prohibit marketing loans to individuals unable to repay and restrict lending services to college students under 18[478]. Consumer Protection and Advertising - The Measures for Financial Consumer Protection, effective November 1, 2020, require non-bank payment institutions to implement internal management measures to protect financial consumers' rights[562]. - The Advertising Law, amended in April 2021, mandates that advertisements must be authentic and legal, with penalties for violations including fines and orders to cease dissemination[563]. - The Internet Advertising Interim Measures, effective September 2016, require internet advertisers to ensure the authenticity of advertisement content and to clearly mark advertisements[564]. - The Circular 316, effective January 25, 2020, prohibits unqualified market players from conducting financial marketing campaigns[565]. - The E-Commerce Law requires e-commerce operators to respect and protect consumers' legitimate rights and provide options without targeting personal characteristics[569]. Financial Operations and Licensing - The company operates network microcredit businesses through Ji'an Microcredit, which holds a valid network microcredit license updated in July 2021, expiring in July 2023[501]. - The registered capital for a network microcredit business must not be less than RMB1 billion, and it is prohibited to use loans for investments in bonds, stocks, or to repay mortgage loans[500]. - The financing balance of microcredit companies funded by bank loans and shareholder loans must not exceed the company's net assets[499]. - Microcredit companies are restricted from upfront deduction of interest and fees from loans, ensuring borrowers only repay the actual loan amount[499]. - Outstanding guarantee liabilities of a financing guarantee company must not exceed ten times its net assets, with specific limits on liabilities to the same guaranteed party[505]. Intellectual Property - The company has registered 165 patents in China and applied for 385 additional patents with the PRC State Intellectual Property Office[583]. - The company has registered 202 software copyrights and 3 copyrights for artworks with the PRC National Copyright Administration[583]. - The company holds 160 registered domain names, including lexin.com, lexinfintech.com, and fenqile.com[583]. - The company has 446 registered trademarks, including "LEXIN乐信," "Fenqile," and others[583].

LexinFintech Holdings Ltd. (NASDAQ:LX) Q4 2021 Earnings Conference Call March 15, 2022 9:30 PM ET Company Participants Patricia Cheng - Investor Relations Jay Xiao - Chairman & Chief Executive Officer Sunny Sun - Chief Financial Officer Jayden Qiao - Chief Risk Officer Conference Call Participants Yada Li - CICC Ethan Wang - CLSA 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 lis ...

Financial Data and Key Metrics Changes - Loan origination increased by 15.6% year-on-year to RMB 255.9 billion, with 42.9% priced within 24%, up from 37.6% in the previous quarter [5][6] - Total operating revenue reached RMB 2.97 billion, down 5.9% year-on-year, while gross margins increased by 54% to RMB 1.5 billion, with gross margin percentage advancing by almost 20 percentage points year-over-year [6][7] - Net profit rose over 68% year-on-year to RMB 551 million, with a stable take rate of 3.5% quarter-over-quarter [7] Business Line Data and Key Metrics Changes - The company has shifted focus towards quality over scale, resulting in a measured slowdown in top-line metrics [6] - The average APR for September intake was 26.8%, down 1.4 percentage points from June, reflecting a move away from high APR borrowers [5] Market Data and Key Metrics Changes - The 90-day plus delinquency ratio remained unchanged at 1.85%, indicating stable asset quality despite regulatory changes [8][12] - Loan origination to small and micro business owners increased by 32% to RMB 5.2 billion [13] Company Strategy and Development Direction - The company is rebalancing its business structure in response to regulatory developments, focusing on reducing risk and improving efficiency [12] - The strategy includes enhancing the product and service model for Maiya, which saw GMV reach RMB 473 million in Q3, with offline contributions nearly doubling from previous quarters [13] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges posed by regulatory changes but expressed confidence in maintaining profitability and operational efficiency [7][12] - The company plans to complete the transition to the 24% pricing policy by June next year, aiming to maintain a healthy take rate during this period [19][20] Other Important Information - The company is investing in technology upgrades and talent acquisition to enhance its operational capabilities and risk management [10][11] - G&A expenses decreased by 17% quarter-on-quarter, reflecting improved operational efficiency [12] Q&A Session Summary Question: Guidance on loan origination amount and outlook for Q4 - Management expects to maintain full-year guidance on loan originations, anticipating some temporary volatility due to regulatory adjustments [17] Question: Timing for pricing transition completion - The company targets to finish the transition by June next year, with a focus on minimizing the impact on take rate [19][20] Question: Asset quality outlook - Management noted that while short-term risk may experience volatility, long-term asset quality is expected to remain stable [21] Question: Data feed disconnection requirements - The company is actively working with credit bureaus to comply with new PBOC requirements, with minimal expected changes to cost structure [26][28] Question: Profit sharing model and funding costs - Profit sharing contributed 43.7% of overall GMV in Q3, while funding costs remained stable at 7.4% [29] Question: Maiya business model development - The company is focused on enhancing merchant value and improving transaction activities before scaling the Maiya business [32][34] Question: Long-term interest rate reduction plans - Management has not received guidance on reducing long-term interest rates below 24% and remains confident in maintaining profitability even if rates decrease [36][37]

LexinFintech Holdings Ltd. (NASDAQ:LX) Q2 2021 Earnings Conference Call August 25, 2021 7:00 AM ET CorporateParticipants Patricia Cheng - Head of Capital Markets Jay Xiao - Chairman and Chief Executive Officer Kris Qiao - Interim Chief Financial Officer Jayden Qiao - Chief Risk Officer ConferenceCall Participants Eddie Leung - Bank of America Merrill Lynch Ethan Wang - CLSA Alex Ye - UBS Jacky Zuo - China Renaissance Operator Ladies and gentlemen, thank you for standing by and welcome to the LexinFintech Se ...