Group 1 - X Financial will release its unaudited financial results for Q1 2025 on May 20, 2025, before U.S. market opens [1] - The earnings conference call is scheduled for 7:30 AM U.S. Eastern Time on the same day [1] - Dial-in details for the conference call have been provided for various regions, including the U.S., Hong Kong, and Mainland China [2] Group 2 - X Financial is a leading online personal finance company in China, focusing on connecting borrowers with institutional funding partners [3] - The company utilizes proprietary big data-driven technology to establish strategic partnerships with financial institutions [3] - X Financial has a robust risk assessment and control system to facilitate loans to prime borrowers [3]

Core Viewpoint - X Financial, a leading online personal finance company in China, filed its annual report on Form 20-F for the fiscal year ended December 31, 2024, with the SEC on April 25, 2025 [1]. Company Overview - X Financial is committed to connecting borrowers with institutional funding partners through its platform [3]. - The company utilizes proprietary big data-driven technology to establish strategic partnerships with financial institutions, facilitating and originating loans to prime borrowers under a risk assessment and control system [3]. Annual Report Availability - The company will provide a hard copy of its annual report containing audited consolidated financial statements free of charge to shareholders upon request [2].

Regulatory Environment - The evolving regulatory environment poses uncertainties that may materially and adversely affect the company's business operations and financial condition[84]. - The Interim Measures for Microcredit Companies impose a range of requirements for microcredit companies, which must achieve full compliance within a transition period not exceeding two years[84]. - Regulatory restrictions on service fees may arise from changes in laws regarding private lending, potentially impacting the company's operations[93]. - The company may face regulatory risks due to the evolving regulatory environment for online consumer finance, which could impact its ability to obtain necessary licenses[127]. - The company is required to reapply for ICP licenses as foreign-invested telecommunications enterprises due to changes in shareholder nationality[130]. - The company must comply with evolving Chinese regulations, and failure to do so could result in significant operational disruptions and a decline in the value of its American Depositary Shares (ADSs)[209]. - New regulations may impose additional requirements on the company's corporate structure, potentially affecting its business operations and financial condition[207]. - The most updated negative list issued on September 6, 2024, may impose restrictions on the company's operations and require pre-approval for certain business activities[224]. - The company is classified as a foreign enterprise under Chinese laws, which imposes restrictions on foreign ownership and may require reapplication for licenses[204]. - The PRC Foreign Investment Law, effective January 1, 2020, may materially affect the company's business and financial condition due to uncertainties in its interpretation and implementation[221]. Financial Performance - Positive cash flow from operating activities was reported at RMB626.8 million, RMB1,391.4 million, and RMB1,523.4 million (US$208.7 million) for the years 2022, 2023, and 2024 respectively[150]. - The amount of loans facilitated through the platform was RMB 73,655 million in 2022, RMB 105,557 million in 2023, and RMB 104,889 million in 2024[102]. - The service fees collected from borrowers are critical to financial performance, and any material decrease could substantially impact revenues and profitability[90]. - The company has adjusted annualized fee rates not to exceed 36% to comply with regulatory requirements[102]. - The company may require additional capital for business objectives and may engage in equity or debt financings, which could lead to dilution for existing shareholders[151]. - Labor costs in the Chinese Mainland are projected to continue increasing, impacting the company's financial condition if not managed effectively[190]. - The company may be treated as a resident enterprise for tax purposes, subjecting it to Chinese Mainland income tax on global income[252]. - The company may be subject to a 25% Chinese Mainland enterprise income tax on global income if deemed a Chinese Mainland resident enterprise[253]. - Dividends paid to foreign investors may incur a 10% withholding tax if derived from sources within the Chinese Mainland[254]. Operational Risks - The company relies on third-party collection agencies for loan repayments, which may lack adequate resources to effectively collect payments[146]. - The company faces risks related to IT system errors and disruptions, which could adversely affect service delivery and user retention[155]. - Cybersecurity risks are present, with potential vulnerabilities to attacks that could compromise user data[160]. - The company may face significant legal and financial repercussions if found in violation of intellectual property rights held by other parties[172]. - The company is subject to liabilities if it fails to verify borrower information and detect fraud adequately[139]. - Misconduct or errors by employees or third-party service providers could lead to significant reputational and financial harm[158]. - The company may face administrative penalties if its business practices regarding service fees are deemed non-compliant with regulations[140]. Market Competition - The online consumer finance industry in Chinese Mainland is highly competitive, with significant competition from other sizable online lending marketplaces[97]. - Marketing efforts are essential for attracting borrowers and institutional funding partners, and any inefficiencies in these efforts could harm financial results[153]. - Approximately 80.4% and 79.8% of active borrowers for Xiaoying Card Loan were engaged through channel partners in 2023 and 2024, respectively[103]. - The company collaborates with 58 partners to obtain borrowers for various loan products as of December 31, 2024[103]. Compliance and Legal Issues - The company has implemented internal controls and "know-your-customer" procedures to prevent money laundering and terrorist financing[179]. - The company has not been subject to fines or penalties related to money laundering or terrorist financing activities as of December 31, 2024[180]. - The company faces ongoing risks from geopolitical tensions and economic downturns, which may adversely affect borrower credit profiles and increase default rates[193]. - The company has not been able to assure compliance with future anti-money laundering implementation rules[181]. - The company may incur additional costs and liabilities if unable to comply with evolving personal information protection laws in the Chinese Mainland[164]. Corporate Governance - Mr. Yue (Justin) Tang controls 42.91% of the total outstanding share capital and 93.14% of the voting power, which may limit other shareholders' influence over corporate matters[215]. - The company has not established arrangements to address potential conflicts of interest among shareholders of its consolidated VIEs[214]. - The company relies on legal documents executed with chops or seals, and any misuse of these assets could disrupt its business operations[217]. VIE Structure and Risks - The company does not have direct ownership of its operating entities in Mainland China but exercises control through Variable Interest Entities (VIEs) via contractual arrangements[202]. - A significant portion of the company's revenue is derived from these VIEs, and any deficiencies in the VIE agreements could lead to a loss of control and significant financial impact[202]. - The company faces uncertainties in the Chinese Mainland legal system, which could limit its ability to enforce contractual arrangements and adversely affect its financial condition[212]. - The company’s operations rely on the shareholders of its consolidated VIEs, whose interests may not align with those of the company, leading to potential conflicts of interest[213]. - If the VIE agreements are deemed illegal, the company may face severe penalties, including loss of control over its VIEs and potential fines[208]. Technology and Infrastructure - The company has implemented technology infrastructure enhancements to support business growth and maintain system security[92]. - The quality of user experience is critical, with most transactions completed through the mobile application as of December 31, 2024[147]. - The company’s proprietary credit analysis and risk management system may not be continuously effective as loan facilitation increases[112]. Currency and Economic Factors - Fluctuations in the Renminbi against the U.S. dollar may materially affect the value of investments and reported financial results[258]. - The company relies on dividends from operating subsidiaries in Chinese Mainland for cash needs, making it vulnerable to Renminbi revaluation[259]. - All net income is denominated in Renminbi, which is convertible under the "current account" but faces restrictions under the "capital account"[257]. Reporting and Compliance - The company has fully remediated previously identified material weaknesses in internal control over financial reporting, specifically regarding U.S. GAAP knowledge and financial statement presentation[167]. - As of December 31, 2024, the company's internal control over financial reporting was deemed effective, as confirmed by independent registered public accounting firm KPMG Huazhen LLP[167]. - The company is subject to stringent reporting obligations under the Cybersecurity Law of the PRC, which may adversely impact business operations and user confidence[165]. - The company faces potential penalties ranging from approximately RMB10,000 to RMB1 million for violations of the Cybersecurity Law, Data Security Law, and related regulations[164].

Financial Data and Key Metrics Changes - Total loan volumes in Q4 reached RMB32 billion, a 24% year-over-year increase, while full-year loan volumes were RMB104.9 billion, reflecting stable performance compared to 2023 [8][9] - Q4 net income more than doubled year-over-year to RMB386 million, with total net revenue increasing 43% year-over-year to RMB1.7 billion [11][18] - Full-year total net revenue reached a record RMB5.9 billion, and full-year net income was RMB1.5 billion, with total shareholder equity increasing by 19% year-over-year [18][19] Business Line Data and Key Metrics Changes - The delinquency rate for loans overdue by 31 to 60 days improved to 1.17% from 1.57% a year ago, and the 91 to 108 days overdue delinquency rate declined to 2.48% from 3.12% last year, indicating strengthened asset quality [11][12] Market Data and Key Metrics Changes - The Chinese government implemented monetary and fiscal stimulus measures in the second half of 2024, which lowered funding costs and fostered healthy borrower demand in the personal finance market [10][12] Company Strategy and Development Direction - The company aims to leverage technology, particularly AI, to enhance financial services efficiency, focusing on risk analytics, automated underwriting, and fintech solutions [13][15] - A forecasted 30% increase in total loan volumes for 2025 is expected, driven by organic demand and a stable regulatory environment [14][22] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the growth trajectory for 2025, citing improved risk management and lower funding costs as key factors for profitability [46][47] - The company remains committed to enhancing shareholder value through disciplined capital allocation and strategic investments in AI [23][54] Other Important Information - The Board of Directors approved a semiannual dividend of USD0.25 per ADS, reinforcing the commitment to shareholder value [19][20] - The company repurchased 38.4 million Class A ordinary shares in Q4, totaling USD49 million, with a total repurchase of 52.2 million shares for USD59.4 million in 2024 [20][21] Q&A Session Summary Question: Clarification on share repurchase accounting - Management clarified that the share count calculation is based on a weighted average, which is why the reduction is not fully reflected in the year-end report [29] Question: New hire's role in the company - The new hire, Noah Kauffman, will focus on deepening engagement with U.S. capital markets and enhancing investor relations [38] Question: Drivers behind expected loan volume growth for 2025 - Management indicated that improved customer acquisition and partnerships with more platforms are key drivers for the anticipated 30% increase in loan volume [40][41] Question: Impact of loan volume growth on profitability - While specific profitability forecasts were not provided, management expressed confidence that profit will increase at a similar pace to loan volume growth [44][46] Question: Capital allocation priorities going forward - Management indicated a preference for share buybacks over dividends, emphasizing the stock's value and potential for appreciation [52][54]

Financial Performance - Total loan facilitation and origination amount reached RMB 32,297 million in Q4 2024 [10] - The loan balance as of December 31, 2024, was RMB 52,327 million [12] - Total net revenue for FY2024 was RMB 5,872 million, compared to RMB 4,815 million in FY2023 [59] - Non-GAAP adjusted net income for FY2024 was RMB 1,539 million, compared to RMB 1,277 million in FY2023 [61] - Operating margin for FY2024 was 319%, compared to 304% in FY2023 [64] - Non-GAAP adjusted net income margin for FY2024 was 262%, compared to 265% in FY2023 [66] - Net revenue per employee for FY2024 was RMB 10,429 thousand, compared to RMB 9,242 thousand in FY2023 [69] Business Model and Strategies - The company operates a loan facilitation model based on 100% institutional funding [14] - The company utilizes credit insurance and financial guarantee models to protect institutional funding partners against default [17, 20] - The company employs a technology-driven approach to servicing borrowers and funding partners, utilizing a proprietary risk management model [25, 26]

Financial Data and Key Metrics Changes - Total loan volumes in Q4 reached RMB32 billion, a 24% year-over-year increase, while full-year loan volumes were RMB104.9 billion, stable compared to 2023 [8][10] - Q4 net revenue increased by 43% year-over-year to RMB1.7 billion, and net income grew by 104% year-over-year to RMB386 million [14] - Full-year total net revenue reached a record RMB5.9 billion, with full-year net income at RMB1.5 billion [15] Business Line Data and Key Metrics Changes - The delinquency rate for loans overdue by 31 to 60 days improved to 1.17% from 1.57% a year ago, and the 91 to 108 days overdue delinquency rate declined to 2.48% from 3.12% [10][11] - The company expects total loan volumes to increase by approximately 30% for the full year of 2025, driven by organic demand and a stable regulatory environment [12] Market Data and Key Metrics Changes - China's government implemented monetary and fiscal stimulus measures that lowered funding costs and fostered healthy borrower demand in the personal finance market [9][10] - The company anticipates sequential growth in total loan volume in Q1 2025, despite the usual seasonal impact of the Chinese New Year [12] Company Strategy and Development Direction - The company is focused on leveraging technology to enhance financial services efficiency, utilizing AI-powered risk analytics and automated underwriting models [12][13] - Strategic investments in AI are being expanded, with AI now powering customer service robots and intelligent marketing campaigns [13] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the growth trajectory for 2025, supported by robust underwriting standards and disciplined risk management [16][18] - The company is confident in achieving meaningful growth in both volume and profitability in 2025, despite some visibility challenges [36][37] Other Important Information - The company returned approximately USD 76 million to shareholders in 2024, including cash dividends and share repurchases [15][16] - A semi-annual dividend of USD 0.25 per ADS was declared, reinforcing the commitment to delivering shareholder value [15] Q&A Session Summary Question: Clarification on share repurchase accounting - Management clarified that the share count calculation is based on a weighted average, which is why the reduction is not fully reflected in the year-end report [21][22][23] Question: New hire's role in the company - The new hire, Noah Kauffman, will focus on deepening engagement with U.S. capital markets and enhancing investor relations [26][28] Question: Drivers behind expected loan volume growth for 2025 - The expected 30% increase in loan volume is attributed to improved customer acquisition strategies and partnerships with more platforms [29][30] Question: Impact of loan volume growth on profitability - Management indicated that profitability is expected to increase at a similar pace as loan volume, driven by lower funding costs and improved risk management [33][36] Question: Capital allocation priorities going forward - The company plans to emphasize share buybacks over dividends, while still maintaining a balanced approach to capital returns [38][42]

Core Viewpoint - X Financial reported strong operational and financial results for the fourth quarter and fiscal year 2024, with significant growth in loan facilitation and net income, driven by improved asset quality and favorable macroeconomic conditions in China [16][30]. Financial Highlights - Total net revenue for Q4 2024 was RMB1,708.7 million (US$234.1 million), a 43.3% increase from RMB1,192.7 million in Q4 2023 [9][17]. - Net income for Q4 2024 reached RMB385.6 million (US$52.8 million), up 104.1% from RMB189.0 million in the same period of 2023 [10][30]. - For the fiscal year 2024, total net revenue was RMB5,871.8 million (US$804.4 million), representing a 22.0% increase from RMB4,814.9 million in 2023 [15][32]. - Net income for the fiscal year 2024 was RMB1,539.9 million (US$211.0 million), a 29.8% increase from RMB1,186.8 million in 2023 [44]. Operational Highlights - The total loan amount facilitated and originated in Q4 2024 was RMB32,297 million, a 23.6% increase year-over-year [2][3]. - The number of active borrowers in Q4 2024 was 2,120,068, a 32.2% increase from 1,603,760 in Q4 2023 [3][16]. - The total outstanding loan balance as of December 31, 2024, was RMB52,327 million, compared to RMB48,847 million as of December 31, 2023 [4]. Delinquency Rates - The delinquency rate for loans past due for 31-60 days was 1.17% as of December 31, 2024, down from 1.57% a year earlier [14]. - The delinquency rate for loans past due for 91-180 days was 2.48% as of December 31, 2024, compared to 3.12% as of December 31, 2023 [14]. Shareholder Returns - The company allocated US$76 million to share repurchases and dividends in 2024, reflecting its commitment to delivering value to shareholders [16][47]. - A semi-annual dividend of US$0.25 per ADS was declared, payable on or about July 2, 2025 [48]. Business Outlook - For Q1 2025, the company expects total loan volumes to be between RMB33.5 billion and RMB34.5 billion, with a full-year forecast of RMB134.4 billion to RMB138.4 billion [49].

Core Viewpoint - X Financial, a leading online personal finance company in China, is set to release its unaudited financial results for Q4 and the fiscal year ending December 31, 2024, on March 20, 2025, before U.S. market opening [1] Group 1: Financial Results Announcement - The unaudited financial results will be announced before the U.S. markets open on March 20, 2025 [1] - An earnings conference call will be hosted by the management team at 7:00 AM U.S. Eastern Time on the same day [1] Group 2: Conference Call Details - Dial-in details for the earnings conference call include numbers for the United States, Hong Kong, Mainland China, and international participants [2] - A replay of the conference call will be available until March 27, 2025, with specific access numbers provided [2] - A live and archived webcast of the conference call will be accessible on the company's investor relations website [2] Group 3: Company Overview - X Financial is dedicated to connecting borrowers with institutional funding partners through its online platform [3] - The company utilizes proprietary big data-driven technology to establish strategic partnerships with financial institutions, facilitating loans to prime borrowers [3]

Core Viewpoint - X Financial has announced a share repurchase agreement to buy back 6,349,206 American depositary shares (ADSs) at a price of US$7.67 per ADS, totaling approximately US$48.7 million, reflecting the company's confidence in its long-term growth potential and commitment to enhancing shareholder value [1][3]. Group 1: Share Repurchase Details - The company will repurchase 6,349,206 ADSs, equivalent to 38,095,236 Class A ordinary shares, for a total of approximately US$48.7 million [1]. - A new share repurchase plan has been approved, allowing the company to repurchase up to US$50 million worth of Class A ordinary shares until June 30, 2026 [2]. - After the current repurchase, approximately US$15.9 million will remain for future repurchases under the new plan [2]. Group 2: Financial Performance and Shareholder Returns - In 2024, the company returned approximately US$76.0 million to shareholders through dividends and share repurchases, including US$16.5 million in cash dividends and US$9.2 million in a tender offer [3]. - The total number of shares repurchased in 2024 was approximately 52.2 million Class A ordinary shares, representing 17.8% of the ordinary shares issued and outstanding as of December 31, 2023 [3]. Group 3: Management's Perspective - The Chief Financial Officer expressed confidence in the company's long-term growth potential and emphasized a balanced approach to capital management to prioritize growth opportunities and shareholder value creation [3]. - The company plans to fund the new repurchase plan from its existing cash balance, with repurchases to be made through various means depending on market conditions [2][3]. Group 4: Company Overview - X Financial is a leading online personal finance company in China, connecting borrowers with institutional funding partners through proprietary big data-driven technology [4].

Financial Data and Key Metrics Changes - Total net revenue increased by 13% year-on-year to RMB1.582 billion, up from RMB1.397 billion in the same period of 2023 [9][11] - Non-GAAP adjusted net income reached a record high of RMB434 million, up 6% year-on-year [9][14] - Total loan amount facilitated and originated was RMB28 billion, down 4% year-on-year but up 25% sequentially [6][8] Business Line Data and Key Metrics Changes - Delinquency rates improved, with loans past due for 31 to 60 days at 1.02% and for 91 to 180 days at 3.22%, compared to 1.29% and 4.38% in the previous quarter [6] - Origination and servicing expenses increased by 14% to RMB458 million, primarily due to increased collection expenses [12] - Borrower acquisition and marketing expenses rose by 21% to RMB507 million, reflecting intensified efforts in borrower acquisitions [13] Market Data and Key Metrics Changes - The Chinese government introduced a comprehensive stimulus package aimed at improving liquidity and stabilizing financial markets, which is expected to benefit the personal finance market [7] - The company anticipates a monthly loan volume exceeding RMB10 billion in Q4, setting a new record [8] Company Strategy and Development Direction - The company is focused on balancing business growth and profitability, continuing to execute its semi-annual dividend policy and exploring share repurchase opportunities [10] - Management is committed to optimizing risk management through advanced technology [6] Management Comments on Operating Environment and Future Outlook - Management views the regulatory environment as stable, with no significant changes expected in the near term [22] - The company expects continued growth in loan volumes due to favorable macroeconomic conditions [23] Other Important Information - The share repurchase program has been extended until March 2026, with approximately USD4.1 million remaining for potential repurchase [15][16] - The total loan amount facilitated and originated for 2024 is expected to be between RMB102.6 billion and RMB103.6 billion [17] Q&A Session Summary Question: Update on capital return program and regulatory landscape - Management confirmed a true repurchase program with about USD50 million remaining and expressed preference for share repurchase over dividends [20] - The regulatory environment is currently stable, with no significant changes expected [22] Question: Thoughts on dividend payout relative to peers - Management acknowledged the potential for higher dividends but emphasized the focus on share repurchase and maintaining a competitive yield [27][28] Question: Challenges faced regarding share buybacks - Management noted low volume as a challenge but expressed hope for increased buybacks as volumes rise [31]