FinVolution(US:FINV)2022-05-31 16:00markdown [Executive Summary](index=1&type=section&id=Executive%20Summary) [First Quarter 2022 Unaudited Financial Results Overview](index=1&type=section&id=1.1%20First%20Quarter%202022%20Unaudited%20Financial%20Results%20Overview) FinVolution Group reported its unaudited financial results for Q1 2022, highlighting its **eighth consecutive quarter** of transaction volume growth, reaching a new record high of **RMB39.7 billion** - FinVolution Group achieved its **eighth consecutive quarter** of transaction volume growth[1](index=1&type=chunk) Key Financial and Operational Metrics (Q1 2022 vs. Q1 2021) | Metric | Q1 2021 (RMB billion) | Q1 2022 (RMB billion) | YoY Change | | :---------------------------------- | :----------------------- | :----------------------- | :--------- | | Total Transaction Volume | 26.8 | 39.7 | 48.1% | | Transaction Volume (China's Mainland) | 26.0 | 38.8 | 49.2% | | Transaction Volume (International) | 0.76 | 0.86 | 13.2% | | Total Outstanding Loan Balance | 32.5 | 53.8 | 65.5% | | Outstanding Loan Balance (China's Mainland) | 32.2 | 53.4 | 65.8% | | Outstanding Loan Balance (International) | 0.25 | 0.36 | 44.0% | [First Quarter 2022 Operational Highlights Summary](index=1&type=section&id=1.2%20First%20Quarter%202022%20Operational%20Highlights%20Summary) The company continued its strategic transition towards better-quality borrowers, achieving record transaction volume and outstanding loan balances, with significant growth in small business and international operations, despite an increased 90-day+ delinquency ratio - The company continued its strategic transition towards better-quality borrowers[3](index=3&type=chunk) Key Operational Metrics (Q1 2022) | Metric | Value (Q1 2022) | YoY Change | | :---------------------------------- | :---------------- | :--------- | | Total cumulative registered users | 145.3 million | N/A | | Total unique borrowers | 3.2 million | N/A | | Total repeat borrowers | 2.4 million | N/A | | Total transaction volume | RMB39.7 billion | 48.1% | | Transaction volume for new individual borrowers | RMB6.4 billion | 14.3% | | Total outstanding principal of loans | RMB53.8 billion | 65.5% | | Transaction volume for small business owners | RMB9.8 billion | 122.7% | | Number of small business owners served | 507 thousand | 66.2% | | Transaction volume (international) | RMB0.86 billion | 13.2% | | Outstanding loan balance (international) | RMB0.36 billion | 44.0% | | 90 day+ delinquency ratio | 1.64% | +0.51 pp | | Average loan size | RMB7,107 | +62.7% | | Average loan tenor | 8.8 months | +0.4 months| [First Quarter 2022 Financial Highlights Summary](index=2&type=section&id=1.3%20First%20Quarter%202022%20Financial%20Highlights%20Summary) Net revenue increased by 15.8% year-over-year, driven by loan facilitation and post-facilitation service fees, though net profit and Non-GAAP adjusted operating income decreased due to increased operating expenses and credit losses Key Financial Highlights (Q1 2022 vs. Q1 2021) | Metric | Q1 2021 (RMB million) | Q1 2022 (RMB million) | YoY Change | | :---------------------------------- | :-------------------- | :-------------------- | :--------- | | Net revenue | 2,112.9 | 2,446.8 | 15.8% | | Net profit | 592.8 | 534.3 | -9.9% | | Non-GAAP adjusted operating income | 671.2 | 602.1 | -10.3% | | Diluted net profit per ADS | RMB2.00 | RMB1.81 | -9.5% | | Non-GAAP diluted net profit per ADS | RMB2.05 | RMB1.88 | -8.3% | [Operational Performance](index=1&type=section&id=Operational%20Performance) [User and Borrower Metrics](index=1&type=section&id=2.1%20User%20and%20Borrower%20Metrics) As of March 31, 2022, FinVolution Group's cumulative registered users reached **145.3 million**, serving **3.2 million** unique borrowers, including **2.4 million** repeat borrowers User and Borrower Statistics (as of March 31, 2022) | Metric | Value | | :-------------------------- | :------------ | | Total cumulative registered users | 145.3 million | | Total unique borrowers (Q1 2022) | 3.2 million | | Total repeat borrowers (Q1 2022) | 2.4 million | [Transaction Volume and Loan Balance](index=1&type=section&id=2.2%20Transaction%20Volume%20and%20Loan%20Balance) The company achieved record-breaking total transaction volume and outstanding loan balances, demonstrating robust growth across its platforms, including a significant increase in new individual borrower transactions [Total Transaction Volume](index=1&type=section&id=2.2.1%20Total%20Transaction%20Volume) Total transaction volume reached **RMB39.7 billion** in Q1 2022, marking an increase of **48.1%** year-over-year and an **eighth consecutive quarter** of growth Total Transaction Volume (Q1 2022 vs. Q1 2021) | Metric | Q1 2021 (RMB billion) | Q1 2022 (RMB billion) | YoY Change | | :-------------------- | :----------------------- | :----------------------- | :--------- | | Total Transaction Volume | 26.8 | 39.7 | 48.1% | [Transaction Volume for New Individual Borrowers](index=1&type=section&id=2.2.2%20Transaction%20Volume%20for%20New%20Individual%20Borrowers) Transaction volume facilitated for new individual borrowers grew by **14.3%** year-over-year, reaching **RMB6.4 billion** in Q1 2022 Transaction Volume for New Individual Borrowers (Q1 2022 vs. Q1 2021) | Metric | Q1 2021 (RMB billion) | Q1 2022 (RMB billion) | YoY Change | | :---------------------------------- | :----------------------- | :----------------------- | :--------- | | Transaction volume for new individual borrowers | N/A | 6.4 | 14.3% | [Total Outstanding Loan Balance](index=1&type=section&id=2.2.3%20Total%20Outstanding%20Loan%20Balance) The total outstanding principal of loans reached **RMB53.8 billion** as of March 31, 2022, representing a substantial **65.5%** increase compared to the previous year Total Outstanding Loan Balance (as of March 31, 2022 vs. 2021) | Metric | March 31, 2021 (RMB billion) | March 31, 2022 (RMB billion) | YoY Change | | :---------------------------------- | :------------------------------ | :------------------------------ | :--------- | | Total Outstanding Loan Balance | 32.5 | 53.8 | 65.5% | [Small Business Owners' Loans](index=1&type=section&id=2.3%20Small%20Business%20Owners'%20Loans) Loans for small business owners significantly increased, with transaction volume growing **122.7%** to **RMB9.8 billion** and the number of owners served rising **66.2%** Small Business Owners' Loan Metrics (Q1 2022 vs. Q1 2021) | Metric | Q1 2021 | Q1 2022 | YoY Change | | :---------------------------------- | :------ | :------ | :--------- | | Transaction volume for small business owners | N/A | RMB9.8 billion | 122.7% | | % of total transaction volume | N/A | 24.7% | N/A | | Total numbers of small business owners served | N/A | 507 thousand | 66.2% | [International Expansion](index=2&type=section&id=2.4%20International%20Expansion) International markets continued to strengthen, with transaction volume increasing by **13.2%** to **RMB0.86 billion** and outstanding loan balance growing by **44.0%** to **RMB0.36 billion**, reflecting a focus on better-quality borrowers in these regions International Market Metrics (Q1 2022 vs. Q1 2021) | Metric | Q1 2021 (RMB billion) | Q1 2022 (RMB billion) | YoY Change | | :---------------------------------- | :----------------------- | :----------------------- | :--------- | | Transaction volume (international) | 0.76 | 0.86 | 13.2% | | Outstanding loan balance (international) | 0.25 | 0.36 | 44.0% | [Asset Quality and Loan Characteristics](index=2&type=section&id=2.5%20Asset%20Quality%20and%20Loan%20Characteristics) The 90-day+ delinquency ratio increased to **1.64%** as of March 31, 2022, with average loan size and tenor also rising, indicating a shift in loan portfolio characteristics Loan Quality and Characteristics (Q1 2022 vs. Q1 2021) | Metric | March 31, 2021 | March 31, 2022 | Change | | :-------------------------- | :------------- | :------------- | :----- | | 90 day+ delinquency ratio | 1.13% | 1.64% | +0.51 pp | | Average loan size (Q1) | RMB4,369 | RMB7,107 | +62.7% | | Average loan tenor (Q1) | 8.4 months | 8.8 months | +0.4 months | [Management Commentary](index=3&type=section&id=Management%20Commentary) [CEO's Remarks](index=3&type=section&id=3.1%20CEO's%20Remarks) CEO Feng Zhang highlighted the company's strong technological foundation and strategic shift to better-quality borrowers, driving record transaction volume and growth in small business and international operations, alongside new ESG ratings - CEO emphasized strong technological foundation and strategic transition towards better-quality borrowers as drivers for solid, consistent results[9](index=9&type=chunk) - Record-setting total transaction volume of **RMB39.7 billion**, a **48.1% YoY increase**, was achieved[9](index=9&type=chunk) - Operations empowering small business owners maintained solid growth, with transaction volume increasing **122.7% YoY to RMB9.8 billion**[10](index=10&type=chunk) - International transaction volume grew **13.2% YoY to RMB0.86 billion**, with outstanding loan balance up **44.0% YoY**, supported by partnerships and new product introductions[11](index=11&type=chunk) - FinVolution Group received a '**low-risk**' rating from Sustainalytics and was included in ESG ratings by platforms like ESG Enterprise, reinforcing its commitment to ESG goals[12](index=12&type=chunk) [CFO's Remarks](index=3&type=section&id=3.2%20CFO's%20Remarks) CFO Jiayuan Xu attributed the **15.8%** net revenue increase to R&D and operational improvements, highlighting strong Non-GAAP operating income of **RMB602.1 million** and a robust balance sheet with **RMB10.8 billion** in equity and increased liquidity - CFO attributed net revenue growth to consistent R&D efforts and continuous development of technologies[13](index=13&type=chunk) Key Financial Strength Indicators (as of March 31, 2022) | Metric | Value (RMB) | | :---------------------------------- | :------------ | | Non-GAAP operating income | 602.1 million | | Total shareholder's equity | 10.8 billion | | Unrestricted cash and short-term liquidity | 6.3 billion | - Unrestricted cash and short-term liquidity increased by **12.5% sequentially to RMB6.3 billion**, demonstrating balance sheet robustness[13](index=13&type=chunk) [Detailed Financial Analysis](index=4&type=section&id=Detailed%20Financial%20Analysis) [Net Revenue Breakdown](index=4&type=section&id=4.1%20Net%20Revenue%20Breakdown) Net revenue for Q1 2022 increased by **15.8%** to **RMB2,446.8 million**, primarily driven by significant increases in loan facilitation service fees and post-facilitation service fees, partially offset by decreases in guarantee income, net interest income, and other revenue Net Revenue (Q1 2022 vs. Q1 2021) | Metric | Q1 2021 (RMB million) | Q1 2022 (RMB million) | YoY Change | | :-------------------- | :-------------------- | :-------------------- | :--------- | | Net revenue | 2,112.9 | 2,446.8 | 15.8% | [Loan Facilitation Service Fees](index=4&type=section&id=4.1.1%20Loan%20Facilitation%20Service%20Fees) Loan facilitation service fees increased by **31.5%** to **RMB1,001.4 million**, mainly due to higher transaction volume, despite a decrease in service fee rates Loan Facilitation Service Fees (Q1 2022 vs. Q1 2021) | Metric | Q1 2021 (RMB million) | Q1 2022 (RMB million) | YoY Change | | :---------------------------------- | :-------------------- | :-------------------- | :--------- | | Loan facilitation service fees | 761.6 | 1,001.4 | 31.5% | [Post-Facilitation Service Fees](index=4&type=section&id=4.1.2%20Post-Facilitation%20Service%20Fees) Post-facilitation service fees saw a substantial increase of **102.5%** to **RMB458.4 million**, driven by the growth in outstanding loans and the rolling impact of deferred transaction fees Post-Facilitation Service Fees (Q1 2022 vs. Q1 2021) | Metric | Q1 2021 (RMB million) | Q1 2022 (RMB million) | YoY Change | | :---------------------------------- | :-------------------- | :-------------------- | :--------- | | Post-facilitation service fees | 226.4 | 458.4 | 102.5% | [Guarantee Income](index=4&type=section&id=4.1.3%20Guarantee%20Income) Guarantee income decreased by **7.1%** to **RMB612.1 million**, primarily due to improved asset quality and the company's transition to better-quality borrowers, which reduced the fair value of quality assurance commitments Guarantee Income (Q1 2022 vs. Q1 2021) | Metric | Q1 2021 (RMB million) | Q1 2022 (RMB million) | YoY Change | | :-------------------- | :-------------------- | :-------------------- | :--------- | | Guarantee income | 659.2 | 612.1 | -7.1% | [Net Interest Income](index=4&type=section&id=4.1.4%20Net%20Interest%20Income) Net interest income decreased by **4.0%** to **RMB269.1 million**, mainly due to lower interest rates, partially offset by an increase in the outstanding balance of on-balance sheet loans Net Interest Income (Q1 2022 vs. Q1 2021) | Metric | Q1 2021 (RMB million) | Q1 2022 (RMB million) | YoY Change | | :-------------------- | :-------------------- | :-------------------- | :--------- | | Net interest income | 280.4 | 269.1 | -4.0% | [Other Revenue](index=4&type=section&id=4.1.5%20Other%20Revenue) Other revenue declined by **42.9%** to **RMB105.8 million**, primarily due to a decrease in customer referral fees from third-party platforms Other Revenue (Q1 2022 vs. Q1 2021) | Metric | Q1 2021 (RMB million) | Q1 2022 (RMB million) | YoY Change | | :-------------------- | :-------------------- | :-------------------- | :--------- | | Other revenue | 185.2 | 105.8 | -42.9% | [Operating Expenses](index=4&type=section&id=4.2%20Operating%20Expenses) Total operating expenses increased, driven by higher origination and servicing costs and increased R&D investments, while sales and marketing and general and administrative expenses saw slight decreases or improved efficiency [Origination, Servicing Expenses and Other Cost of Revenue](index=4&type=section&id=4.2.1%20Origination,%20Servicing%20Expenses%20and%20Other%20Cost%20of%20Revenue) These expenses increased by **20.5%** to **RMB497.7 million**, mainly due to higher employee expenditures and fees paid to third-party service providers, correlating with the increase in loan origination volume Origination, Servicing Expenses and Other Cost of Revenue (Q1 2022 vs. Q1 2021) | Metric | Q1 2021 (RMB million) | Q1 2022 (RMB million) | YoY Change | | :---------------------------------- | :-------------------- | :-------------------- | :--------- | | Origination, servicing expenses and other cost of revenue | 413.1 | 497.7 | 20.5% | [Sales and Marketing Expenses](index=4&type=section&id=4.2.2%20Sales%20and%20Marketing%20Expenses) Sales and marketing expenses remained relatively stable, decreasing slightly by **0.7%** to **RMB332.0 million** Sales and Marketing Expenses (Q1 2022 vs. Q1 2021) | Metric | Q1 2021 (RMB million) | Q1 2022 (RMB million) | YoY Change | | :-------------------------- | :-------------------- | :-------------------- | :--------- | | Sales and marketing expenses | 334.2 | 332.0 | -0.7% | [Research and Development Expenses](index=4&type=section&id=4.2.3%20Research%20and%20Development%20Expenses) Research and development expenses increased by **19.8%** to **RMB112.4 million**, reflecting increased investments in technology development Research and Development Expenses (Q1 2022 vs. Q1 2021) | Metric | Q1 2021 (RMB million) | Q1 2022 (RMB million) | YoY Change | | :---------------------------------- | :-------------------- | :-------------------- | :--------- | | Research and development expenses | 93.8 | 112.4 | 19.8% | [General and Administrative Expenses](index=4&type=section&id=4.2.4%20General%20and%20Administrative%20Expenses) General and administrative expenses decreased by **19.1%** to **RMB91.1 million**, indicating improved operating efficiency General and Administrative Expenses (Q1 2022 vs. Q1 2021) | Metric | Q1 2021 (RMB million) | Q1 2022 (RMB million) | YoY Change | | :---------------------------------- | :-------------------- | :-------------------- | :--------- | | General and administrative expenses | 112.6 | 91.1 | -19.1% | [Provisions and Credit Losses](index=4&type=section&id=4.3%20Provisions%20and%20Credit%20Losses) Provisions for accounts receivable, loans receivable, and credit losses for quality assurance commitment all increased year-over-year, primarily due to the growth in outstanding loan balances, despite efforts to transition to better-quality borrowers [Provision for Accounts Receivable and Contract Assets](index=4&type=section&id=4.3.1%20Provision%20for%20Accounts%20Receivable%20and%20Contract%20Assets) Provision for accounts receivable and contract assets increased by **83.7%** to **RMB73.1 million**, driven by the increase in outstanding loan balances, partially mitigated by a lower default rate from better-quality borrowers Provision for Accounts Receivable and Contract Assets (Q1 2022 vs. Q1 2021) | Metric | Q1 2021 (RMB million) | Q1 2022 (RMB million) | YoY Change | | :---------------------------------- | :-------------------- | :-------------------- | :--------- | | Provision for accounts receivable and contract assets | 39.8 | 73.1 | 83.7% | [Provision for Loans Receivable](index=5&type=section&id=4.3.2%20Provision%20for%20Loans%20Receivable) Provision for loans receivable significantly increased to **RMB99.5 million** from **RMB18.8 million** in the prior year, mainly due to higher on-balance sheet loan volume, with some offset from improved borrower quality Provision for Loans Receivable (Q1 2022 vs. Q1 2021) | Metric | Q1 2021 (RMB million) | Q1 2022 (RMB million) | YoY Change | | :---------------------------------- | :-------------------- | :-------------------- | :--------- | | Provision for loans receivable | 18.8 | 99.5 | 429.3% | [Credit Losses for Quality Assurance Commitment](index=5&type=section&id=4.3.3%20Credit%20Losses%20for%20Quality%20Assurance%20Commitment) Credit losses for quality assurance commitment increased to **RMB659.0 million** from **RMB444.9 million**, primarily due to the increase in outstanding loan balances, partially offset by a lower default rate from the transition to better-quality borrowers Credit Losses for Quality Assurance Commitment (Q1 2022 vs. Q1 2021) | Metric | Q1 2021 (RMB million) | Q1 2022 (RMB million) | YoY Change | | :---------------------------------- | :-------------------- | :-------------------- | :--------- | | Credit losses for quality assurance commitment | 444.9 | 659.0 | 48.1% | [Profitability Metrics](index=5&type=section&id=4.4%20Profitability%20Metrics) Operating profit and net profit both decreased year-over-year despite increased net revenue, primarily due to higher operating expenses and credit loss provisions, while other income, net, increased due to government subsidies [Operating Profit](index=5&type=section&id=4.4.1%20Operating%20Profit) Operating profit decreased by **11.2%** to **RMB582.0 million** in Q1 2022 Operating Profit (Q1 2022 vs. Q1 2021) | Metric | Q1 2021 (RMB million) | Q1 2022 (RMB million) | YoY Change | | :-------------------- | :-------------------- | :-------------------- | :--------- | | Operating profit | 655.7 | 582.0 | -11.2% | [Non-GAAP Adjusted Operating Income](index=5&type=section&id=4.4.2%20Non-GAAP%20Adjusted%20Operating%20Income) Non-GAAP adjusted operating income, excluding share-based compensation, decreased by **10.3%** to **RMB602.1 million** Non-GAAP Adjusted Operating Income (Q1 2022 vs. Q1 2021) | Metric | Q1 2021 (RMB million) | Q1 2022 (RMB million) | YoY Change | | :---------------------------------- | :-------------------- | :-------------------- | :--------- | | Non-GAAP adjusted operating income | 671.2 | 602.1 | -10.3% | [Other Income, Net](index=5&type=section&id=4.4.3%20Other%20Income,%20Net) Other income, net, increased by **19.0%** to **RMB50.8 million**, primarily due to an increase in government subsidies, partially offset by a decrease in investment gains Other Income, Net (Q1 2022 vs. Q1 2021) | Metric | Q1 2021 (RMB million) | Q1 2022 (RMB million) | YoY Change | | :-------------------- | :-------------------- | :-------------------- | :--------- | | Other income, net | 42.7 | 50.8 | 19.0% | [Income Tax Expense](index=5&type=section&id=4.4.4%20Income%20Tax%20Expense) Income tax expense decreased to **RMB98.6 million**, mainly due to the decline in operating profit Income Tax Expense (Q1 2022 vs. Q1 2021) | Metric | Q1 2021 (RMB million) | Q1 2022 (RMB million) | YoY Change | | :-------------------- | :-------------------- | :-------------------- | :--------- | | Income tax expense | 105.7 | 98.6 | -6.7% | [Net Profit and EPS](index=5&type=section&id=4.4.5%20Net%20Profit%20and%20EPS) Net profit decreased by **9.9%** to **RMB534.3 million**, with diluted net profit per ADS falling **9.5%** to **RMB1.81** and Non-GAAP diluted net profit per ADS decreasing **8.3%** to **RMB1.88** Net Profit and EPS (Q1 2022 vs. Q1 2021) | Metric | Q1 2021 (RMB million) | Q1 2022 (RMB million) | YoY Change | | :---------------------------------- | :-------------------- | :-------------------- | :--------- | | Net profit | 592.8 | 534.3 | -9.9% | | Diluted net profit per ADS | RMB2.00 | RMB1.81 | -9.5% | | Non-GAAP diluted net profit per ADS | RMB2.05 | RMB1.88 | -8.3% | [Liquidity and Capital Position](index=5&type=section&id=4.5%20Liquidity%20and%20Capital%20Position) As of March 31, 2022, the company maintained a strong liquidity position with **RMB3,621.0 million** in cash and cash equivalents and **RMB2,689.6 million** in short-term investments Liquidity and Capital Position (as of March 31, 2022) | Metric | Value (RMB million) | | :-------------------------- | :------------------ | | Cash and cash equivalents | 3,621.0 | | Short-term investments | 2,689.6 | [Asset Quality and Delinquency Rates](index=6&type=section&id=Asset%20Quality%20and%20Delinquency%20Rates) [Delinquency Rates for Outstanding Loans](index=6&type=section&id=5.1%20Delinquency%20Rates%20for%20Outstanding%20Loans) The delinquency rates for outstanding loans in China's Mainland showed fluctuations across different delinquency buckets as of March 31, 2022, with a general increase compared to March 31, 2021, particularly in the 90-179 days past due categories Delinquency Rates for Outstanding Loans (China's Mainland) as of March 31, 2022 | Delinquency Period | March 31, 2021 | March 31, 2022 | | :----------------- | :------------- | :------------- | | 15-29 days | 0.29% | 0.35% | | 30-59 days | 0.52% | 0.64% | | 60-89 days | 0.43% | 0.57% | | 90-119 days | 0.39% | 0.58% | | 120-149 days | 0.38% | 0.57% | | 150-179 days | 0.36% | 0.49% | [Historical Cumulative 30-Day Plus Past Due Delinquency Rates](index=6&type=section&id=5.2%20Historical%20Cumulative%2030-Day%20Plus%20Past%20Due%20Delinquency%20Rates) The report includes historical cumulative 30-day plus past due delinquency rates by loan origination vintage in China's Mainland, offering insights into long-term asset quality trends[22](index=22&type=chunk) [Business Outlook and Corporate Actions](index=7&type=section&id=Business%20Outlook%20and%20Corporate%20Actions) [Business Outlook for Q2 2022](index=7&type=section&id=6.1%20Business%20Outlook%20for%20Q2%202022) Due to COVID-19 resurgence in China, the company anticipates Q2 2022 transaction volume between **RMB40.0 billion to RMB41.0 billion**, a **19.8% to 22.8%** year-over-year increase, subject to market conditions - The company holds a cautious view on Q2 2022 operations due to COVID-19 resurgence in China[23](index=23&type=chunk) Q2 2022 Transaction Volume Forecast | Metric | Forecast (RMB billion) | YoY Increase | | :-------------------- | :------------------------ | :----------- | | Transaction Volume | 40.0 - 41.0 | 19.8% - 22.8%| [Shares Repurchase Program Update](index=7&type=section&id=6.2%20Shares%20Repurchase%20Program%20Update) The board extended the **US$60 million** share repurchase program for another twelve months, with approximately **US$147.2 million** worth of ADSs repurchased under current and previous programs as of April 30, 2022 - The **US$60 million** share repurchase program was extended for another twelve months, from January 1, 2022, to December 31, 2022[24](index=24&type=chunk) Share Repurchase Program Status (as of April 30, 2022) | Metric | Value | | :---------------------------------- | :-------------- | | Total aggregate value repurchased (current and previous programs) | Approximately US$147.2 million | [Additional Information](index=7&type=section&id=Additional%20Information) [Conference Call Details](index=7&type=section&id=7.1%20Conference%20Call%20Details) Details for the earnings conference call, including dial-in numbers for various regions and webcast information, are provided for investors and media - Conference call details, including dial-in numbers for the US, Canada, International, Hong Kong, and Mainland China, are provided for the earnings call on May 31, 2022[25](index=25&type=chunk)[26](index=26&type=chunk) - A live and archived webcast of the conference call is available on the company's investor relations website[26](index=26&type=chunk) [About FinVolution Group](index=8&type=section&id=7.2%20About%20FinVolution%20Group) FinVolution Group is a leading China-based fintech platform, established in 2007, connecting underserved borrowers with financial institutions using advanced technologies and serving over **145.3 million** users - FinVolution Group is a leading fintech platform in China, established in 2007, connecting underserved individual borrowers with financial institutions[29](index=29&type=chunk) - The company utilizes proprietary technologies in credit risk assessment, fraud detection, big data, and artificial intelligence[29](index=29&type=chunk) - As of March 31, 2022, FinVolution Group had over **145.3 million** cumulative registered users[29](index=29&type=chunk) [Use of Non-GAAP Financial Measures](index=8&type=section&id=7.3%20Use%20of%20Non-GAAP%20Financial%20Measures) Non-GAAP financial measures, such as adjusted operating profit and diluted net profit per share/ADS, are used to evaluate operating results by excluding share-based compensation, but are not U.S. GAAP defined and should not be considered in isolation - Non-GAAP financial measures (operating profit, basic/diluted net profit per share/ADS) are used for evaluating operating results and financial decision-making[30](index=30&type=chunk) - These Non-GAAP measures exclude share-based compensation expenses to identify underlying business trends[30](index=30&type=chunk) - Non-GAAP measures are not defined under U.S. GAAP and should not be considered in isolation or as a substitute for GAAP measures[31](index=31&type=chunk) [Exchange Rate Information](index=8&type=section&id=7.4%20Exchange%20Rate%20Information) The report specifies that all RMB to U.S. dollar translations are made at a rate of **RMB6.3393 to US$1.00**, the rate in effect as of March 31, 2022 - All RMB to U.S. dollar translations in the announcement are based on an exchange rate of **RMB6.3393 to US$1.00**, as of March 31, 2022[32](index=32&type=chunk) [Safe Harbor Statement](index=9&type=section&id=7.5%20Safe%20Harbor%20Statement) The press release contains forward-looking statements subject to known and unknown risks and uncertainties that could cause actual results to differ materially, with no obligation to update unless legally required - The press release contains forward-looking statements, which are subject to various known and unknown risks and uncertainties[33](index=33&type=chunk) - Potential risks include the company's ability to attract borrowers/investors, increase loan volume, introduce new products, compete effectively, and comply with regulations[33](index=33&type=chunk) - FinVolution does not undertake any obligation to update forward-looking statements, except as required by applicable law[33](index=33&type=chunk) [Investor and Media Inquiries](index=9&type=section&id=7.6%20Investor%20and%20Media%20Inquiries) Contact information for investor and media inquiries is provided for both China and the United States, including direct contacts at FinVolution Group and The Piacente Group, Inc - Contact information for investor and media inquiries is provided for both China (FinVolution Group and The Piacente Group, Inc.) and the United States (The Piacente Group, Inc.)[34](index=34&type=chunk) [Unaudited Interim Condensed Consolidated Financial Statements](index=10&type=section&id=Unaudited%20Interim%20Condensed%20Consolidated%20Financial%20Statements) [Balance Sheets](index=10&type=section&id=8.1%20Balance%20Sheets) The unaudited interim condensed consolidated balance sheets present the company's financial position as of March 31, 2022, with total assets of **RMB19,399.8 million** and total liabilities of **RMB8,572.6 million** Key Balance Sheet Figures (as of March 31, 2022) | Metric | Value (RMB thousands) | | :---------------------------------- | :-------------------- | | Total assets | 19,399,791 | | Total liabilities | 8,572,586 | | Total shareholders' equity | 10,827,205 | | Cash and cash equivalents | 3,621,008 | | Short-term investments | 2,689,558 | | Loans receivable, net | 2,415,650 | [Statements of Comprehensive Income](index=11&type=section&id=8.2%20Statements%20of%20Comprehensive%20Income) The unaudited interim condensed consolidated statements of comprehensive income detail the company's revenues, expenses, and net profit for the three months ended March 31, 2021, and 2022, showing a net profit of **RMB534.3 million** for Q1 2022 Key Comprehensive Income Figures (Q1 2022) | Metric | Value (RMB thousands) | | :---------------------------------- | :-------------------- | | Net revenue | 2,446,794 | | Total operating expenses | (1,864,753) | | Operating profit | 582,041 | | Profit before income tax expense | 632,890 | | Net profit | 534,259 | | Diluted net profit per ADS | 1.81 | [Statements of Cash Flows](index=12&type=section&id=8.3%20Statements%20of%20Cash%20Flows) The unaudited interim condensed consolidated statements of cash flows show that for the three months ended March 31, 2022, the company had net cash used in operating activities of **RMB35.2 million**, net cash used in investing activities of **RMB1,743.2 million**, and net cash provided by financing activities of **RMB401.2 million** Key Cash Flow Figures (Q1 2022) | Metric | Value (RMB thousands) | | :---------------------------------- | :-------------------- | | Net cash provided by/ (used in) operating activities | (35,152) | | Net cash provided by/ (used in) investing activities | (1,743,175) | | Net cash provided by/ (used in) financing activities | 401,228 | | Cash, cash equivalent and restricted cash at end of period | 7,112,346 | [Reconciliation of GAAP and Non-GAAP Results](index=13&type=section&id=8.4%20Reconciliation%20of%20GAAP%20and%20Non-GAAP%20Results) This section reconciles GAAP to Non-GAAP financial measures for operating income and net profit by adjusting for share-based compensation, showing Non-GAAP adjusted operating income of **RMB602.1 million** and net profit of **RMB554.8 million** for Q1 2022 GAAP to Non-GAAP Reconciliation (Q1 2022) | Metric | GAAP (RMB thousands) | Adjustment (RMB thousands) | Non-GAAP (RMB thousands) | | :---------------------------------- | :------------------- | :------------------------- | :----------------------- | | Operating Income | 582,041 | +20,098 (share-based comp) | 602,139 | | Net Profit attributable to FinVolution Group | 534,663 | +20,098 (share-based comp) | 554,761 | | Non-GAAP diluted net profit per ADS | N/A | N/A | 1.88 |