Lexin(US:LX)2022-05-31 05:04Financial 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]