FinVolution(US:FINV)2023-05-18 03:59Financial Data and Key Metrics Changes - Total transaction volume increased by 9.3% year-over-year to reach RMB43.4 billion, while total outstanding loan balance rose by 15.8% year-over-year to RMB62.3 billion [7] - Net revenues for Q1 2023 rose to RMB3.1 billion, up 25% year-over-year, and net income reached RMB690 million, up 29% year-over-year [20] - Diluted net profit per ADS was RMB2.42, an increase of 34% year-over-year [20] - Cash position improved to over RMB7.8 billion, representing a 10% sequential increase [21] Business Line Data and Key Metrics Changes - Domestic transaction volume rose year-over-year to RMB141.8 billion, representing an increase of 8%, while total outstanding loan balance stood at RMB61.3 billion, up 15% year-over-year [15] - International loan volume decreased by 83% year-over-year to RMB1.57 billion, but outstanding balance grew 164% year-over-year to RMB0.95 billion [18] - International revenue reached RMB448 million, an increase of RMB163.6 million year-over-year, contributing around 15% of total revenue in Q1 [18] Market Data and Key Metrics Changes - The Purchasing Managers' Index showed improvements across various industries, but fell to 49.2% in April, indicating ongoing economic recovery challenges [13] - Total social financing amount grew by RMB14.5 trillion in Q1, but only RMB1.2 trillion in April, below market expectations [14] - In Indonesia, the Consumer Confidence Index remains high at 100 points, with GDP growth projected at 4.8% for 2023 [17] Company Strategy and Development Direction - The company is committed to its "Local Focus, Global Outlook" strategy, expanding its borrower base to 28 million across China, Indonesia, and the Philippines [7] - Continued investment in technology, with over RMB2 billion invested in the last five years, focusing on AI and data tools to enhance operational efficiency [7][8] - Plans to build an open-source model platform to improve intelligent marketing and customer service operations [8] Management Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding economic recovery, expecting growth to accelerate in the second half of 2023 [14][22] - The company plans to maintain a prudent approach to risk management, with expectations of vintage delinquency around 2.3% [15] - Anticipated transaction volume in China for Q2 2023 is around RMB45 billion, representing an 11% year-over-year increase [23] Other Important Information - The company achieved a strong loan collection recovery rate of 90% in Q1 [15] - The average borrowing rate was reduced to 22.7% in Q4, with funding costs optimized to 6.7% from 7.8% a year ago [15][20] - The company has returned US$458 million to shareholders through dividends and share repurchase programs [21] Q&A Session Summary Question: Loan pricing stability and vintage delinquency trends - Management indicated that the average borrowing rate was 23.7% in Q1, with expectations for future rates between 22% to 23% [26] - Vintage delinquency remained stable at 2.3%, with confidence in maintaining this level [27] Question: Domestic growth and take rate clarification - Management acknowledged that the recovery is below expectations but noted improvements in user demand metrics [31] - The reported take rate of 3.5% is specific to the domestic business, with higher rates expected in international markets [32] Question: Sustainability of high take rates in international markets - Management stated that the international take rate depends on pricing, funding costs, and risk performance, with expectations for adjustments based on borrower quality [36]