CNFinance(US:CNF)2023-05-26 18:03Financial Data and Key Metrics Changes - In Q1 2023, loan origination volume increased by 48% year-on-year to RMB3.4 billion, with RMB1.2 billion from commercial bank partnerships [5][6] - Total interest and fees income for Q1 2023 was RMB450 million, representing a year-on-year increase of 9% [6] - Net income in Q1 2023 increased by 14% year-on-year to RMB49 million [6][24] - The delinquency ratio decreased from 18.3% at the end of 2022 to 15.2% at the end of Q1 2023 [24] Business Line Data and Key Metrics Changes - Net revenue under the commercial bank partnership model was RMB21.5 million for Q1 2023 [5] - Interest income charged to sales partners increased by 16% to RMB38 million from RMB23 million [20] - Interest and fees expense decreased by 8% to RMB185 million compared to RMB201 million [21] Market Data and Key Metrics Changes - The outstanding loan principal under the commercial bank partnership was RMB3.4 billion as of March 31, 2023, compared to RMB70.4 million in the same period last year [21] - The provision for credit losses was RMB79 million in Q1 2023, compared to a reversal of RMB14 million in the same period of 2022 [22][23] Company Strategy and Development Direction - The company aims to increase loan origination volume and continue promoting commercial bank partnerships [9][12] - Plans to roll out a new bank lending product with an annual interest rate of less than 12% in Q2 2023 [9][12] - Focus on high-quality development and compliance in operations to build a sustainable business model [34] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in the recovery of China's economy and the stability of lending demand [34] - The company anticipates total loan origination of RMB20 billion for the year, emphasizing asset quality and compliance [34] Other Important Information - Cash, cash equivalents, and restricted cash amounted to RMB2.2 billion as of March 31, 2023, compared to RMB1.8 billion at the end of 2022 [24] Q&A Session Summary Question: How should the provision for credit losses be modeled going forward? - Management stated that the provision policy remains consistent and is supported by auditors. The lower delinquency ratio and improved macroeconomic conditions contribute to lower provisions [26][27][28] Question: Will the commercial lending proportion remain around a third of origination? - Management indicated that commercial bank partnership loans accounted for 35% of origination in Q1 2023 and expect this proportion to remain stable as overall loan origination grows [29][31][32] Question: Is there more demand for traditional lending products? - Management noted stable lending demand compared to the same period in 2022 and expressed confidence in future growth opportunities while focusing on high-quality development [33][34]