Financial Data and Key Metrics Changes - The total loan amount facilitated and provided in Q1 2022 reached RMB 15 billion, up 40% year-over-year and 17% quarter-over-quarter [6] - Total net revenue decreased by 2% to RMB 888 million from RMB 906 million in the same period of 2021 [11] - Income from operations was RMB 314 million, compared to RMB 251 million in the same period of 2021 [12] - Net income was RMB 140 million compared to RMB 189 million in the same period of 2021 [12] - Non-GAAP adjusted net income was RMB 154 million compared to RMB 212 million in the same period of 2021 [12] Business Line Data and Key Metrics Changes - The delinquency rates for all outstanding loans that are past due for 31 to 60 days decreased to 1.31% from 1.48% as of December 31, 2021 [6] - Origination and servicing expenses decreased by 19% to RMB 465 million from RMB 573 million in the same period of 2021 [11] - Provision for accounts receivable and contract assets was RMB 26 million, compared with RMB 17 million in the same period of 2021 [12] - Provision for loans receivable was RMB 34 million compared with RMB 27 million in the same period of 2021 [12] Market Data and Key Metrics Changes - The company is actively exploring new opportunities in the personal financing market, particularly through partnerships with licensed financial institutions [7] - The Chinese government has emphasized the importance of promoting the healthy development of the platform economy, which is expected to benefit market participants [8] Company Strategy and Development Direction - The company aims to reduce the total borrowing cost for borrowers to stimulate economic growth while acquiring high-quality borrowers for sustainable growth [10] - The company is focused on strengthening user acquisition while implementing disciplined cost control measures [10] - The company is optimistic about capturing growth opportunities in a healthy regulatory environment [8] Management's Comments on Operating Environment and Future Outlook - Management expressed caution about the business outlook for the coming quarters due to uncertainties in the macroeconomic environment [5] - The company expects total loan amount facilitated and provided for Q2 2022 to be between RMB 15 billion and RMB 16 billion, with an incremental range of 15% to 25% for 2022 [13] Other Important Information - The company was included in the list under the Holding Foreign Companies Accountable Act, which may affect its listing status on the US stock exchange [9] - Management is exploring solutions to protect stakeholder interests amid regulatory uncertainties [9] Q&A Session Summary Question: What was your average interest rate in the quarter that you charge customers? - The company does not provide exact numbers but indicated that the general trend is a decrease in interest rates, with a majority of business based on a 24% rate going forward [16] Question: Why was the tax rate so high this quarter and in Q4? What is your outlook for the tax rate for the full fiscal year? - The high tax rate was due to a special charge related to deferred tax assets from a subsidiary that is not generating enough revenue [17][20] Question: Can you provide an update on your share repurchase program? - The share buyback program is subject to insider trading rules, and the company plans to start buying back shares soon [17] Question: Have you considered taking this company private? - Management stated that they understand the current low valuation but believe the company is still profitable and that the depressed valuation is mainly due to regulatory uncertainties [22][24] Question: Why are other competitors initiating stock repurchase plans and paying dividends? - Management noted that they have not sold any shares and are committed to share buybacks when possible, but dividends are not currently promised [26][28]
X Financial(XYF) - 2022 Q1 - Earnings Call Transcript