X Financial(XYF) - 2023 Q2 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Total loan facilitation and origination amount reached nearly RMB 50 billion, an increase of over 55% year-over-year [6] - Total net revenue increased by 48% year-over-year to RMB 1,220 million, up from RMB 824 million in the same period of 2022 [9][10] - Net income surged by 97% year-over-year to RMB 366 million, compared to RMB 186 million in the same period of 2022 [12] Business Line Data and Key Metrics Changes - Total loan amount facilitated and originated in Q2 increased by 53% year-over-year to RMB 26 billion [7] - Outstanding loan balance reached RMB 45 billion at the end of June 2023 [7] - Delinquency rate for loans past due for 31 to 60 days remained stable at 0.96%, while the rate for loans past due for 91 to 180 days improved to 2.5% [7] Market Data and Key Metrics Changes - The company noted a stable regulatory environment following the settlement of fines on large financial platforms, which is expected to support industry growth [8] - The company aims to meet the financing needs of consumers and SMEs, contributing to China's economic recovery [8] Company Strategy and Development Direction - The company continues to execute its proven strategy and maintain growth momentum, focusing on operational efficiency and risk management [6][8] - A share repurchase program and special dividend of USD 0.17 per ADS were announced to enhance shareholder value [10][12] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving sustainable growth in the second half of 2023, supported by a stable regulatory environment [8][10] - The company anticipates total loan facilitation and origination for Q3 to be between RMB 28.5 billion and RMB 29.5 billion, and for the fiscal year 2023 to be between RMB 105 billion and RMB 110 billion [13] Other Important Information - The company purchased approximately 406,000 ADS for a total consideration of USD 1.6 million under its share repurchase plan [12] - The Board approved the extension of the existing share repurchase program for an additional 12 months until the end of September 2024 [12] Q&A Session Summary Question: Current trends among active borrowers - The average loan size is approximately RMB 10,000 to RMB 16,000, with an average tenure close to 12 months [15][16] Question: Adjustments to loan provision rates - Demand for loans remains high, and the company reviews its provisions to align with risks, maintaining robust provisions over the years [18]