FinVolution(FINV) - 2025 Q3 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Total revenue 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][20] - Funding costs improved slightly from 3.7% in the previous quarter to 3.6% [17] - The balance sheet remains healthy with cash and short-term investments of RMB 7 billion and a leverage ratio of 2.4 times [20] Business Line Data and Key Metrics Changes - The international business saw transaction volume increase by 33% year-over-year, with revenue rising 37% year-over-year [5][20] - The international segment represented a record 25% of total revenue, up from 19% a year earlier [5] - In Indonesia, transaction volume grew 14% year-over-year to RMB 2.1 billion, while loan balance increased by 21% year-over-year to RMB 1.4 billion [19] - In the Philippines, transaction volume surged 86% year-over-year to RMB 1.6 billion, and loan balance increased by 101% year-over-year to RMB 897 million [20] 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 due to typhoon season, while consumer confidence in Indonesia remained stable [18] Company Strategy and Development Direction - The company is focused on a balanced portfolio with a target of 50% of business coming from international markets by 2030 [44] - A proactive approach to regulatory changes has been adopted, including tightening credit standards and managing loan growth [7][13] - The company continues to enhance its technology and AI capabilities, hosting competitions to develop tools for various applications [14][15] 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 [8][13] - The company remains confident in the long-term fundamentals of its China business while international operations are gaining momentum [15][16] - The company is prepared to adapt to regulatory changes and has a resilient foundation built on 18 years of proprietary data [13][44] 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 [21] - The company has maintained a prudent provision coverage ratio of 517% [20] Q&A Session Summary Question: Impact of regulatory changes on normalized negative rate and buyback plan - Management indicated that the normalized situation under 24% is expected to stabilize, with risk-bearing loans averaging around 22% in Q3 [24] - The buyback plan is active, with $78.4 million worth of shares repurchased as of November 14, and the pace has increased significantly in Q4 [26] Question: Day-one delinquency rate and growth momentum in overseas markets - The day-one delinquency rate increased by 30 basis points quarter-over-quarter to 5%, with early signs of stabilization noted in November [33] - The international business is expected to continue its rapid growth, particularly in Indonesia and the Philippines, with diverse product offerings driving this growth [36][37] Question: Measures taken to address regulatory uncertainty and future priorities - The company has prioritized quality over quantity in response to market volatility, tightening underwriting standards and adjusting user acquisition spending [42] - Future development will focus on balancing risk and growth, with a strong foundation in international markets [44]