Akso Health (AHG) - 2020 Q1 - Earnings Call Transcript

Financial Data and Key Metrics Changes - In Q1 2020, net revenue was $4.9 million, a decrease of 90.5% from the same period last fiscal year [14] - Volume of credit loans facilitated through the peer-to-peer marketplace was $28.2 million, down from $2.9 billion during the same period last fiscal year [14] - Operating costs and expenses were $12.6 million, a decrease of 18.9% from the same period last fiscal year [14] - Net loss was $7.2 million, compared to net income of $29.7 million during the same period last year [16] - Basic loss per common share was $0.15 compared to basic earnings per share of $0.62 in the same period of fiscal year 2019 [16] Business Line Data and Key Metrics Changes - The loan assistance business is expected to drive future growth alongside the P2P business [7] - Loan volumes funded by institutional partners accounted for approximately 20% of total loans facilitated during the quarter [9] - Microfinance loan products accounted for approximately 22% of total loan volume during Q1 2020 [22] Market Data and Key Metrics Changes - The market remains challenging due to an uncertain regulatory environment affecting the P2P industry [7] - Demand from partner institutions for short-term, small-amount loans is growing, reflecting trust in the quality of underlying assets [11] Company Strategy and Development Direction - The company is strategically repositioning its business by developing a loan assistance business to drive future growth [7] - Partnerships with licensed financial institutions are being developed to diversify funding sources and ensure sustainable growth [9][27] - The company aims to leverage its experience in borrower acquisition and risk management to enhance the loan assistance business [27] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the future of the loan assistance business despite the decline in the P2P business [10] - The company is committed to creating value for shareholders and users through its share repurchase program [17] - Management believes that the loan assistance business will allow for growth regardless of the regulatory environment for the P2P industry [11][18] Other Important Information - The company has repurchased nearly 1.2 million ADS for approximately $4 million at an average price of $3.4 per share [17] - The company is compliant with new regulations requiring P2P lending companies to connect to the Credit Reference Center at the People's Bank of China [31] Q&A Session Summary Question: Percentage of borrowers acquired from online channels - In Q1, 42% of borrowers were acquired online and 58% offline, with microfinance loans contributing significantly to online acquisitions [22] Question: Advantages of loan assistance compared to P2P business - Loan assistance has advantages such as strong demand for investment opportunities and partnerships with licensed financial institutions, reducing regulatory uncertainty [25][26] Question: Remaining share repurchase authorization - Approximately 1,160,000 ADS have been repurchased under the share repurchase program, with ongoing evaluations based on market conditions [29] Question: Timing for P2P lending companies to connect to the Credit Reference Center - The company has already connected its systems to Baihang Credit and began sharing credit data in January, ensuring compliance with new regulations [31]