Lexin(US:LX)2021-06-01 17:58Financial Data and Key Metrics Changes - In Q1 2021, Lexin's revenues reached CNY 2.9 billion, with gross income at CNY 1.37 billion and non-GAAP net income at CNY 771 million, marking a significant growth [8][17] - Loan origination facilitated by Lexin's platform amounted to CNY 53.8 billion, an increase of 57.8% year-on-year [6][8] - The cost of capital decreased to 7.46% from 7.7%, indicating improved funding costs [18] Business Line Data and Key Metrics Changes - Newly registered users reached 14 million, with total registered users at 132 million, a 56.5% year-on-year increase [5][6] - Users with credit lines grew to 30.3 million, up 46.5% year-on-year, while new active customers increased by 88% year-on-year to 1.8 million [5][6] - The Buy-Now-Pay-Later (BNPL) product, Maiya, generated over CNY 60 million in GMV in Q1 and served over 510,000 customers [13][14] Market Data and Key Metrics Changes - The company is focusing on micro business owners, with nearly 200,000 customers served through new operating credit products, generating CNY 2.1 billion in transactions [9][10] - The delinquency rate for loans over 90 days is at 1.84%, with the first payment default rate for new loan originations below 1% for eight consecutive months [7][20] Company Strategy and Development Direction - Lexin is diversifying its financial technology services and focusing on new consumption strategies to capture growth opportunities in China's consumption market [5][9] - The company has signed strategic cooperation agreements with multiple banks to enhance self-operated product groups and improve operational efficiency [11][10] - Future plans for Maiya include expanding use cases and targeting various sectors, including e-commerce and offline businesses [14][16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving loan origination targets of CNY 240 billion to CNY 250 billion for the year, supported by strong credit performance [8][17] - The regulatory environment is viewed positively, with management indicating that their loan facilitation model is stable and compliant with regulations [27][28] - Management remains cautiously optimistic about asset quality trends, maintaining guidance for vintage charge-off rates between 3.5% to 4% for the year [46] Other Important Information - The company is focusing on improving risk management systems and operational efficiency to enhance profitability [18][19] - Lexin's local service and lifestyle products are showing good growth potential, with significant GMV generated in recent months [15] Q&A Session Summary Question: Can you provide a breakdown of the Maiya product's GMV target for Q2? - Management indicated that the growth in offline channels is expected to be significant, but specific percentages are not yet available as it is still early in the product's development [23][25] Question: How will recent regulatory changes impact the loan facilitation business? - Management expressed confidence in their model's stability and noted that they do not provide credit scoring services, which mitigates regulatory risks [27][28] Question: What is the target for SME loans this year? - Management stated that it is still early to provide specific targets for SME loans, but there is potential for growth in this area [29] Question: What is the take rate for the first quarter? - The profit-sharing take rate was 47%, slightly down from 50% in the previous quarter, but overall stable [30][31] Question: Will the Maiya business incur expected credit losses? - Management noted that the accounting for Maiya is still being determined, but the risk associated with the product is considered low [33][35] Question: Are there plans to apply for a national micro loan license? - Management indicated that they do not plan to pursue the national micro loan license due to its low leverage levels, which do not align with their business model [39][40] Question: What is the typical size and APR for SME loans? - The typical size for SME loans is CNY 100,000 to CNY 150,000, with an APR of 18% to 24% [42][43]