CNFinance(US:CNF)2021-05-27 17:45Financial Data and Key Metrics Changes - Total loan origination volume was RMB 2,841.8 million in Q1 2021, a 143% increase from RMB 1,200 million in the same period last year [6][12] - Interest and financing service fees on loans decreased by 13.7% to RMB 422 million from RMB 489.2 million [7] - Net income was RMB 85.6 million compared to a net loss of RMB 65.7 million in the prior year [10] - Total outstanding loan principal was RMB 10.3 billion as of March 31, 2021 [6] Business Line Data and Key Metrics Changes - The collaboration model accounted for RMB 8.7 billion of the total outstanding loan principal, while the traditional facilitation model accounted for RMB 1.6 billion [6] - Provision for credit losses decreased by 93.8% to RMB 13.7 million from RMB 220.7 million [8] - Net gains on sales of loans increased by 35.2% to RMB 40.3 million from RMB 29.8 million [8] Market Data and Key Metrics Changes - The actual delinquency rate for loans originated by the company was 21.3% as of March 31, 2021, with a 16.5% rate under the collaboration model [10] - The actual NPL rate for loans was 10.9%, with a 6% rate under the collaboration model [10] Company Strategy and Development Direction - The company plans to expand funding sources and strengthen collaborations with trust partners while diversifying funding sources [16][19] - Investment in technology is prioritized to enhance loan approval efficiency and credit assessment capabilities [18] - The company aims to refine incentive plans for sales partners to maintain high retention rates [17] Management's Comments on Operating Environment and Future Outlook - The recovery of the national economy and the efficiency of the collaboration model were key drivers for growth [12] - The company anticipates challenges in 2021 but is committed to securing more funding sources and lowering costs to meet market demand [19] Other Important Information - Cash, cash equivalents, and restricted cash totaled RMB 2.2 billion, with RMB 1.3 billion from structured funds designated for new loans [10][32] Q&A Session Summary Question: What was the total number of transactions in the quarter and the duration of the loans? - The total number of transactions was over 5,000, with an average loan duration of one year due to regulatory changes [22][23] Question: What was the average interest rate paid on loans in the quarter? - The average interest rate for 12-month duration capital from trust companies was around 5.5% to 9%, and for longer durations, it was around 9.5% to 10% [24][25] Question: Does the high forfeited sales partner position income indicate a lower risk on loans? - The provision for credit losses as a percentage of revenue under the collaboration model was around 0.8% to 1%, indicating a lower risk profile [26][28] Question: What are the expectations for origination volume for 2021 and 2022? - The company projects a loan origination volume of CNY 3 billion every quarter if market conditions remain stable [29][30]