Akso Health (AHG) - 2019 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - In Q4 2019, net revenue was US$4.1 million, a decrease of 85% year-over-year, primarily due to a significant decrease in the volume of credit loans facilitated, which fell to US$61.7 million from US$418.4 million in the same quarter last year [15][18] - On a sequential basis, net revenue increased by 117% as the market recovered [16] - Net income was US$2.8 million compared to US$17 million in the same period last year, with basic EPS at US$0.06 compared to US$0.36 [17][18] Business Line Data and Key Metrics Changes - Total loans facilitated doubled sequentially to US$61.7 million, with net revenue increasing to US$4.1 million [8] - Gross billing amounts net of VAT more than tripled sequentially to US$9 million, with net income at US$2.8 million [8] Market Data and Key Metrics Changes - The number of first-time investors on the marketplace increased by 39% compared to the previous quarter [8] - M3+Net Charge-Off Rates remained low and steady at 6%, reflecting effective risk management systems [9] Company Strategy and Development Direction - The company launched an online microfinancing loan business in January 2019 to diversify revenue streams, targeting younger demographics [11][12] - Partnerships with financial institutions like Bohai International Trust and Kunming Aotou are expected to enhance funding sources and drive growth [10] Management's Comments on Operating Environment and Future Outlook - Management believes the worst of the market environment is behind them, with improved investor confidence and a positive outlook for the industry [8][13] - The company is optimistic about future growth and is focused on regulatory compliance and expanding its funding sources [13][20] Other Important Information - The company maintained a strong cash position of US$57.4 million as of March 31, 2019, and has initiated a US$25 million share repurchase program [19] - The company has repurchased approximately 1.2 million ADS at an average price of US$3.4 per ADS [20] Q&A Session Summary Question: Will sales and marketing expenses increase as business recovers? - Management indicated that costs will likely increase at a lower rate than business volume, with room for leveraging operational costs [24] Question: What is the average client profile for microfinancing compared to traditional lending? - The typical demographic for microfinancing is younger, and management is confident in maintaining a low delinquency rate [26] Question: Can you discuss the economics behind the improved gross billing ratio? - The gross billing ratio improved as more lenders regained confidence, and management believes this level can be maintained [28] Question: Any directional comments for Q1 and fiscal 2020 regarding loans and revenue? - Management suspended providing detailed guidance but has internal targets to recover to previous fiscal year levels [30] Question: Will U.S.-China tariff negotiations impact lending activity? - Management refrained from commenting on macroeconomic factors, focusing instead on operational performance [34]