QFIN(US:QFIN)2023-05-19 05:27Financial Data and Key Metrics Changes - By the end of Q1 2023, the platform connected approximately 46 million users with approved credit lines, with total loan facilitation and origination volume reaching RMB 109.5 billion, up 10.7% year-over-year and 4.7% quarter-over-quarter [4] - Total net revenue for Q1 was CNY 3.6 billion, compared to CNY 3.9 billion in Q4 and CNY 4.3 billion a year ago [18][24] - Non-GAAP net profit was CNY 976 million in Q1, compared to CNY 919 million in Q4 [24] Business Line Data and Key Metrics Changes - Revenue from platform service capital light was CNY 969 million in Q1, down from CNY 1.1 billion in Q4 and CNY 1.4 billion a year ago [19] - The capitalized loan facilitation and technology solutions accounted for roughly 56% of total loan volume, remaining flat compared to the prior quarter [19] Market Data and Key Metrics Changes - Liquidity in the financial system improved, with total social financing and M2 money supply increasing by 10% and 12.7% year-over-year, respectively [7] - The day 1 delinquency rate decreased by 37 basis points from December 2022, while the M1 production rate increased by 189 basis points for the same period [6] Company Strategy and Development Direction - The company plans to enhance customer acquisition through partnerships and innovative marketing strategies, including live streaming and precision marketing [9][30] - The focus on existing users is crucial, with efforts to improve conversion effectiveness and user engagement [30] - The company aims to strengthen its ability to identify and manage specific segments, particularly SMEs, which account for over 40% of the user base [11] Management's Comments on Operating Environment and Future Outlook - Management noted a gradual recovery in the macroeconomic environment, with expectations for improved credit demand and business activities throughout 2023 [25] - The company maintains a full-year total loan volume target of between RMB 455 billion and RMB 495 billion, representing year-on-year growth of 10% to 20% [25] Other Important Information - The Board of Directors approved an increase in the dividend payout ratio to 20% to 30% from the previous 15% to 20% of net profit, transitioning to a semiannual dividend distribution schedule [24] - The establishment of a large language model department aims to leverage generative AI technologies for enhancing user experience and operational efficiency [13] Q&A Session Summary Question: Strategic focus for the rest of the year - Management emphasized the importance of both new customer acquisition and optimizing existing clients, with efforts to expand partnerships and improve marketing efficiency [28][30] Question: Measures for operational efficiency - Management highlighted variable costs in customer acquisition and plans to lower the unit cost per credit line user, with a target of around RMB 330 [32][33] Question: Loan pricing outlook - Management indicated that the recovery of credit demand is more significant than competitive pressures, with plans to maintain stable pricing while refining risk management models [36][37] Question: Loan demand trends - Management observed a moderate recovery in credit demand, with faster recovery in regions like Shanghai and among higher-quality users [40]