FinVolution(FINV) - 2025 Q3 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Total revenue for Q3 2025 grew 6.4% year-over-year to RMB 3.5 billion, while net profit increased by 2.7% year-over-year to RMB 641 million [5][21] - Transaction volume rose 33% year-over-year, with revenue from international business up 37% year-over-year [5][21] - Funding costs improved slightly from 3.7% in the previous quarter to 3.6% [17] Business Line Data and Key Metrics Changes - The international business segment represented a record 25% of total revenue, up from 19% a year earlier [5] - In Indonesia, transaction volume increased by 14% year-over-year to RMB 2.1 billion, while loan balance grew 21% year-over-year to RMB 1.4 billion [20] - In the Philippines, transaction volume surged 86% year-over-year to RMB 1.6 billion, and loan balance increased 101% year-over-year to RMB 897 million [21] Market Data and Key Metrics Changes - The consumer confidence index in China trended up slightly in Q3, but domestic demand remains relatively mild amid a complex external environment [17] - The Philippines experienced a PMI drop to 49.9 during the typhoon season, while consumer confidence in Indonesia remained stable [19] Company Strategy and Development Direction - The company is focused on a "local excellence, global outlook" strategy, emphasizing disciplined execution and proactive risk management in response to regulatory changes [15][22] - The strategic target is to achieve 50% of business from international markets by 2030, with ongoing efforts to enhance profitability in these regions [42] Management's Comments on Operating Environment and Future Outlook - Management anticipates short-term uncertainties due to the full implementation of new consumer finance regulations in China, which could impact volume, revenue, and risk metrics [7][13] - The company remains confident in the long-term fundamentals of its China business while recognizing the exciting momentum in international operations [15][22] Other Important Information - The company repurchased approximately $2.6 million worth of shares in Q3, with a cumulative repurchase amount of $437 million since 2018 [22] - The company has maintained a prudent provision coverage ratio of 517% and a healthy balance sheet with cash and short-term investments of RMB 7 billion [21] Q&A Session Summary Question: Regarding the current regulatory changes and their impact on normalized negative rates and buyback plans - Management indicated that the average risk-bearing loan rate is around 22%, with expectations for normalization based on market conditions and liquidity [25][27] - The company has actively repurchased shares, with $78.4 million bought back as of November 14, and plans to continue this momentum [27] Question: Inquiry about day-one delinquency rate and stabilization of credit risk - The day-one delinquency rate increased by 30 basis points to 5%, but early signs of stabilization were noted in November [31][32] - Management is refining risk models and tightening underwriting standards to manage credit risk effectively [33][34] Question: Measures taken to address regulatory uncertainty and future development priorities - The company has prioritized quality over quantity in its borrower base and adjusted user acquisition spending to maximize risk-reward efficiency [40][41] - The international business has built a strong foundation with diverse partnerships and flexible product offerings, positioning for further growth [42]