Lexin(US:LX)2020-08-18 23:59Financial Data and Key Metrics Changes - The company's revenues reached CNY 3.0 billion, an increase of 19% compared to the previous year [7] - Gross profit was CNY 968 million, and non-GAAP pretax profit was CNY 541 million [7] - Adjusted net income was CNY 453 million, with fully diluted adjusted net income per ADS at CNY 2.21 [15] - Operating expenses as a percentage of average loan balance was 3.9% for the quarter [16] Business Line Data and Key Metrics Changes - Credit-oriented service income reached CNY 2 billion, representing an increase of 48.8% from the second quarter of 2019 [15] - Platform service income was CNY 419 million, an increase of 109% from the second quarter of 2019 [15] - The number of registered users reached 95.3 million, increasing by 90%, and surpassed 100 million shortly after [10][12] Market Data and Key Metrics Changes - The company facilitated CNY 41.1 billion worth of loans, an increase of 57.8% [8] - Current loan balance is CNY 61.9 billion, an increase of 52.4% [8] - Day-7 delinquency rate declined to 2.32%, lower than the previous year's third quarter [9][40] Company Strategy and Development Direction - The company is focusing on a new consumption platform strategy, aiming to create a new consumption ecosystem [12] - The strategy includes enhancing control over consumption scenarios and expanding both online and offline offerings [20][21] - The company aims to increase the contribution of financial services to a larger portion of its registered users [22] Management's Comments on Operating Environment and Future Outlook - Management noted signs of recovery in consumption, with year-on-year growth potentially reaching 2% [13] - The company expects loan originations in the third quarter to exceed CNY 48 billion, a growth of over 30% [9] - Management expressed confidence in achieving full-year loan origination guidance of CNY 170 billion to CNY 180 billion [9] Other Important Information - The company reported that all funding for new loan originations came from institutional funding partners, with no funding from its Juzi Licai platform [17] - The average credit limit was CNY 10,039, with a weighted average APR of 26.5% for the quarter [16] Q&A Session Summary Question: Can you elaborate on the new retail strategy and how it differentiates from peers? - The company emphasizes greater control over consumption scenarios, which helps in customer acquisition and retention [20][22] Question: What is the outlook for revenue take rates considering the increasing platform revenue-sharing model? - The company anticipates improvements in take rates over time as more funding partners come aboard [25][26] Question: What is the trend for processing and servicing costs? - Processing costs have been high due to COVID-19 impacts, but management expects these costs to normalize over time [27] Question: What is the expected impact of potential policy changes on APR? - Management believes that while there may be a reduction in APR, it could also lead to a decrease in overall risk [30] Question: What is the current expected lifetime loss for recent loans facilitated? - The expected lifetime loss is projected to be around 4%, with hopes for improvement in the latter half of the year [32] Question: What is the average customer acquisition cost for offline efforts? - The average customer acquisition cost is around CNY 150, with expectations that offline costs are lower [42] Question: How is the company improving credit quality? - Improvements in credit quality are attributed to a better macro environment and optimized collection processes [46]