CNFinance(US:CNF)2024-03-28 18:20Financial Data and Key Metrics Changes - In 2023, the company facilitated loans of RMB 17.3 billion, representing a year-on-year growth of 18% [6] - Net income for 2023 was RMB 165 million, reflecting a year-on-year growth of 21% [6][25] - Total interest and fees income for the fiscal year increased by 1% to RMB 1,755 million compared to RMB 1,731 million in 2022 [21] - Provision for credit losses decreased to RMB 183 million from RMB 238 million in the previous year, primarily due to a lower delinquency ratio [23] Business Line Data and Key Metrics Changes - Under the commercial bank partnership model, net revenue increased by 53% to RMB 88 million from RMB 58 million [22] - The company originated loans of RMB 5 billion under the commercial bank partnership, with an outstanding loan principal of RMB 4.3 billion as of December 31, 2023 [8] - Collaboration costs for sales partners increased by 7% to RMB 334 million, attributed to an increase in daily average outstanding loan principal [23] Market Data and Key Metrics Changes - The delinquency ratio for loans decreased from 19.2% at the end of 2022 to 15.6% at the end of 2023 [25] - The NPL ratio for loans increased slightly to 1.2% from 1.1% year-on-year [25] - In 2023, the company facilitated loans of RMB 12.2 billion under the trust lending model and RMB 50 billion under the commercial bank model, with the latter accounting for 30% of total loans originated [28] Company Strategy and Development Direction - The company aims to diversify its product offerings and target high-quality collaterals and borrowers with better risk profiles in 2024 [14] - There is a strategic shift towards core areas in Chinese Tier 1 and Tier 2 cities, with 90% of loans facilitated in these regions [11] - The company plans to enhance compliance building and internal control mechanisms to support sustainable growth [16] Management's Comments on Operating Environment and Future Outlook - The management acknowledged ongoing challenges in 2024 due to uncertainties in China's real estate market but emphasized the importance of maintaining growth while containing risks [13] - The company will continue to refine its risk control mechanisms and prioritize asset quality in light of the complex property market [15] - Management expressed a commitment to leveraging technology for improved credit assessments and evaluations [12] Other Important Information - The company held cash and cash equivalents of RMB 2 billion as of December 31, 2023, compared to RMB 1.8 billion in the previous year [25] - The average rate charged to borrowers in 2023 was 16.1%, down from 16.3% in 2022, with a goal to further reduce financing costs in 2024 [26] Q&A Session Summary Question: Will the borrowing rate seen in the last quarter be expected going forward? - The average rate charged to borrowers in 2023 was 16.1%, and the goal is to keep lowering financing costs based on market conditions [26] Question: Can you discuss the demand for loans in terms of size and split between trust and commercial? - In 2023, loan demand was lower than expected due to uncertainties in the real estate market, with a target of RMB 20 billion in total loan origination for 2024 [28][29] Question: Does compliance training tie into technology upgrades for the platform? - Compliance building and technology investment are separate tasks, with a focus on enhancing collateral evaluation and borrower ratings [30][31] Question: Are there plans to renew the share repurchase plan? - The CFO indicated plans to present the extension of the share repurchase plan to the Board of Directors [32]