Yiren Digital (YRD) 9 Jun 232023 Q1 Earnings call transcript

Thank you for standing by, and welcome to the Yiren Digital First Quarter 2023 Earnings Conference Call. All participants are in a listen-only mode. There will be a presentation followed by a question-and-answer session. [Operator Instructions]

I would now like to hand the conference over to Lydia Yu. ahead. go Please

our Hello, Head XXXX operator. questions. remarks welcome our join Mei.; in CreditEase to the our presenters Tang; Thank Ms. the our CFO, conference everyone, Consumer call. quarter Na and of CEO earnings Chairman Raymond prepared Q&A Mr. Today's first Ning Founder, and Fang, you, Mr. and and CEO, of call the by will features Finance,

contain forward-looking beginning, Private discussions call Before of would during harbor safe remind like Securities Act U.S. made that you statements provision we to Reform XXXX. the the under this of Litigation

Forward-looking uncertainties. statements risks involve inherent and

the Company's such, than materially different what we As may expressed today. results view be

do regarding factors to uncertainties or obligation future as our update is any information forward-looking filings under risks, undertake SEC. laws. not the relevant statements any in Further We required included with U.S.

to are will supplemental financial operating prepared call, measures we financial measures During as GAAP. isolation information to accordance the a substitute review and or U.S. be performance. and to and for with this non-GAAP our the not considered be assess referring in financial in presented measures non-GAAP intended These certain

those reconciliations measures, refer to our measures information please release. non-GAAP earnings GAAP press For to about and

now remarks. the CEO, will Ning, for to our I pass line opening

conference Thank earnings all you for joining call today. our

of XX%, significantly XX% growth industry and First, increased XX% of XX% which which brokerage our life reached property outpacing X.X%. by The business. up policies life insurance China's insurance RMBXXX mainly an driven contributed million, year-over-year, policies, on more life update Total increase year-over-year, gross premium than insurance premiums insurance was and respectively.

innovation, continues development growth customization, agent digitization. strategy Our and drive to business to be rapid product

cross-sell uptick first to improve initial entire and needs premiums up-sell a We enable significant in insurance and quarter throughout evolving success have skills year We to existing their products in their broaden established agents insurance to are service services, and from this customers' property help scope with our matching them programs them to lifecycle. professional life invested noted policyholders.

insurance last our outbound as global Belt and infrastructure Road On pace, and professional advantages management property coverage. leveraging expertise, its strategy. new a reinsurance risk construction China's Hexiang, construction initiative, scenarios providing well overseas projects of development, -- as is at product China's call, qualifications part investment in bringing and protection on as as insurance for reinsurance insurance, a for are expanding fast mentioned policy. development now partner

for close this billion. expect first this estimate least the over We to to rest grew RMBXX of a the insurance be continued size quarter-over-quarter. product In segment And XX% the the for increase year. premiums total market at see we potential segment quarter, to

increased RMBX.X credit quarter Next, by borrowers to our of revolving number year-over-year. year in increasing demand. In prior increase, loan XXXX, representing product, the from on prior a increase volume primarily year to increase loan from billion, Xiang side. XXX,XXX. The actually volume first due saw total XX% of Hua, the which quarter the Total was was XX% XX% Yi driven

quarter of reaching Yi platform quarter. million as from to Xiang MAU on is increasing end, X.X our users Hua X% close prior

These and continues which services, base loyalty services our e-commerce opportunity electronic from revenue recharging and an we our present accounts own and consider platform to our risk-free in on also up includes enhancing user active popping video to phone uptick revenue services establish have online As engagement. an ecosystem, we seen commerce streaming and membership the as also customer expand, like credits.

improving to delinquencies conservative macro maintained recovery, to an in we low quarter quality, institutional delinquency funding funding and X.X% historic On slower-than-expected with costs to our decrease as improvement a we the number prior front, amid continue diversify XX% a noted noted and year. rate a continue of funding partners we a quarter. from this grow quarter funding policy asset X.X% FPP sources, the risk to this our compared of On we management last in XX-plus

This leverage sector execute to in promote I'm quarter, expansion extensive we started demand the that wholly to to our establishing owned report we on inclusion. finance to have consumer in greater expertise financial which owns our experienced Philippines, very and a completed strategy international in the excited the already under we and since subsidiary online hope license We on over a XXX,XXX registered accumulating lending -- which license users Securities substantial Peso our Commission. beta app. from nation's surge an Easy have launched and the financing brand demand Exchange recently in then,

facilitation scale for while the in our our have the expect and services refining to growth conservatively enormous completed first and on on business. platform loan As a see new risk and these today, We is of financial models. markets, focusing we emerging driver of the underserved demand first markets become our international we for controlling enhancing

At flows efficiency. we in cost forward, same automation will in investing to the start potential our operational evaluating Going we plan enhance of to while opportunities and accelerate around regions also world. in pace the time, the increase other Philippines, penetration

the the AI generative and disrupt bring can Recently, of we AI sweeping changes application rise of industry. And ChatGPT the generative we've and witnessing to technology. been believe financial that

to utilizing technologies large generative our of This and established applications AI quarter, will AI each an on language be lab that we develop in sectors. ChatGPT, business focusing models

utilizing provide to or and personalized borrowers service using our cross-selling example, XX/X our chatbot to help technology increase customer up-selling. for For agents

aim of and the experience efficiency improve our lab, we enhance operations, With of and our user the business launch growth. effectiveness drive to AI

has is as I the thanks to sincere Board, like I few Resources selected Company on success. the excited his throughout to announced. and down transition levels say of contributions management are behalf Bin to like serve express Lastly, George for the new Board Human Ms. we my the years. of his the would Concurrently, the Together, Officer. outstanding to Chief as propel to Yang Company would to Company's words to a CRO, George about have we stepping

for the this now who to that, I it Na, With will go quarter. pass will through financials

call, for details. everyone. this only Please and hello to and key On our highlights. on further focus IR release refer details I earnings financial will you Thank the deck

revenue quarter decrease XXXX, reached decrease change volume. of total X% a year-over-year driven loan representing XX% increase our first a was in million, quarter-over-quarter our of The the mainly In quarter. from by slight prior and RMBXXX.X

this Our X.X was quarter growth a quarter. total billion, representing decline facility prior RMB X% by XX% a year-over-year and

quarter-over-quarter due loans, revolving our growth The in adjustments mix. growing loan we product business our small change sector. on small make adjustment can in we be to plan to actually while Basically,

sectors from and insurance revenue And from be starting brokerage therefore, our gross from driver Insurance this has quarter. the net this become total business. revenue premiums building our to from onwards, key we'll disclosed our revenue XX%, close quarter

from first quarter. timing reached attributable year, and finance. The mainly representing a impacted first a decline was the RMBXXX.X the in XX% quarter-over-quarter gross this In by of quarter year year-over-year XX% decline policy which written decline increase a to premium renewal, prior billion,

which business billion quarter quarter, representing first stable an year-over-year from prior XX% Revenue quarter. RMBXXX.X the increase of remained for from and

under As take our insurance -- gross quarter, higher written this both increased were broker premium, a of policy life portion accordingly. business revenue rate total thereby of a

cost the loan portion due to expense to and decreased the of structure offline existing expense revolving in our side, customers. for from of increase million RMBXXX XX% sales and period year our business same our On to marketing last to optimization the

our On year-over-year organization of XX% drive broker to mainly the to the and RMBXXX cost increase costs million, other business. hand, our to related general service and insurance increased service

receivables profit Quarter-over-quarter, at the million. and sector contract XX% of revenue a and our stable for was assets quarter, for general facility. remaining as X.X% service year-over-year and grew by insurance loan RMBXX of the for G&A has this million percentage Allowance expense the stable, decreased remained XX%. to RMBXX

prior And margin year-over-year represent increased of we continue this XX%, RMBXXX for net our income cash quarter. increase XX% operating deliver of fourth line, of a million quarter, strong with net bottom RMBXXX increased quarter, million a from to an XXX% in and profit profit from

RMBX.X total of billion cash equivalent was RMBX.X billion year-end the the and end of Our year. compared to at as quarter last of the cash

our we foster of technology With and resources business our to the macroeconomic, to strategic new and allocate will innovation recovery proactively proper growth. seek opportunity gradual investment, the initiatives

of declared million shares first pay our public market. the to around we In in the XXXX, quarter $X.X back

XX, million March $X As has XXXX, fund to share our close Company of around for the program. repurchase accumulated

and assessment net half marketing the year be conditions, to net quarter is RMBX.X to on business profit margin our expected second total of billion stable. of remain with billion revenue in this Based our RMBX to

course, and and Of current change the subject reflects this our preliminary which to view, uncertainties. is

With that, we are conclude our for open questions. first you. Operator, we Thank remarks. now

Fund. from Aurian] [Bruce Thank Your Haven New go from first you. ahead. Please question [Operator comes Instructions]

And my shareholders? unfavorably I considering current First, government on provide regards question you the Yiren offering are I'd Digital political is, another or have into dividend financial favorably like institutions to two questions. to like the outstanding climate? PRC whether a you economic congratulate and in Can insight quarter. you second quick

Thank go your no, Yes, ahead. questions. you for Hello? please

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question. I think I second can answer the

first the question… For

please. ahead, Go ahead. Go

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our Okay, on well, answer to purchases. share -- our opportunity thank And our we to purchased ratio December we now, by -- to growth we second to now. have can repurchase our have and also the business growth we're to -- about serve mostly our our return supply last accumulated want perform cash you. see, a more management cash have and focused hope deposits, own will stable $X use dividend for from of our [indiscernible]. have And I and our year. Yes, question our the last about million you by and for share business now, increase fund deposits

me can by And question. for tell can no to now, say if this plan currently. I question, any [indiscernible] has So the dividend the Company

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from you will the past things you and that dynamic consumption encouraged. And And first more now know regarding quite your conditions, economy the -- our small encouraged, business pandemic Thank is for must become but is like is of lot all. for cover first to me have we been compliment, a is back, sector, changes. the of years, things draw stabilized. several Let recovering have much macro a And the this question. and continue really

the we past conducive recent And environment is dynamic macro few are what doing. rather feel of after the so, we that period, years to

comes Instructions] from ahead. [Operator Your [Matthew Larson] from [Fincadia]. go Please question next

trading my And call. all for again, give If earnings. company, Thanks some Xx you're terrific advice greater to could a essentially at quarter. I bring of recognition your taking to

what the a times RMBX.XX your see that's And balance arithmetic, can that's make that's north million. stock at, is have that's RMBXXX greater plus market over -- do than several you If I year, cash. of a and what your trading grew we is. $XXX you cap less the quarter,

of eyes. initiative. the an report your So And reporting mean, intelligence got then said catch first I I the artificial all, up couple XXX% earnings. a I've questions. have should the in people's earnings mentioned of news release mean, versus you I just

significantly. your business If mean AI initiative screens I our we've on invest an you did saw that we company. you would the and undervalue And higher. your investors up rationale initiated could they value I would and to just say versus U.S. expected people's something they for as like if that alone your versus a are -- cash and think to it expand balance come in book balance, get your computed numbers how

want upon XXXX, peer-to-peer when you go mean, making you that, I you at and PRC did I the you've exited the because when assume higher. you back -- a guys done of government to went were plenty Stanley money. job not so a frowned frankly, and your December I you're Morgan lender doing public that stock and area government worked great in

detailed word to more out attention. I think, more hyperbolic, frankly, So, animated releases, there a and your and I little news got you the in being think gain would little more get a to

do you doing your you you looking This for on sheet? lot Let that have maybe the is and keep some changes should have and $X But what long or $X, investor going make and loans an a I've capital me so stock capital after on the and XX, ask June because not PRC minimum, be you. be loan Since at much in book, if your frustrated. are are a this, a companies I'm light time, have that to lending do and balance detail been though, higher. you small as

hiring actually, your lending have the question. guaranteed model our Yes, models. two income, model. our for we Yes, like the it One is I'll used answer business, means

the long is hiring our the balance model, you as in -- So know. sheet,

just two revenue promotion don't partner a decide partner. of consulting volume model. the this any on have both and our is that in sales channel highly sheet. Yes, just model we the to worked -- And now, to And is guarantee model asset our our performance it's responsibility. funding this life and loan have second do we and out now reference funding for balance we And we model, the

if lowering responsibility, take the balance And guaranteed so so we model, sheet. our for first the

I'm licensed loans loans, on issue of one to is competitors, some some it's besides that's whether the the particular, really take capital-light. your of just FINV, competitors has in to be QFIN, the to maybe I or the XYF, that think keeping sheet of balance seeing And being risk. make more former

Now as that income investment see as your should that on you some having have balance of of should you which getting -- all cash balance, that part interest rates far a large you huge lot cash be income. your and risen a income? I these have, just that had Was interest be of

taking this you are question? Na,

interest a you have cash, earning you are on mean I Yes. of sort What million. of that? lot $XXX

deposits attached Yes, balance you see we in sheet. our Okay. can about RMBX.X billion have

basis, have funding deposits profit income. -- so the is our make have to is partner profit For the cash first our we financial income, on one, we for sheet have our we financial products our balance the actually, -- and

line actually for our your second year, Hexiang. this are trust up is to -- add usage, cash we -- figures trust own quarter. set first for companies The we in we in corporate, for product for we reference from some have for There the example, also, our

Our own about second about has million volume. for transaction And RMBXXX expected loan the the the the track RMBXXX end the money up by loan of to quarter. million our set amount already

the we'll to own Yi So, own in Hua. money use our profit own can Xiang from product we our profile service and --

thing Tang mentioned as Ning next U.S. script. other such planning still our in we're course, Of

expand on have also some to strategy. opportunity. pre-expenditure use And business overseas there We'll [indiscernible] We own money strategy. our overseas is overseas our

technology mentioned keep best generally, seek in more will that use I And stable also, there a AI opportunity And -- as also, more proper we on set to -- increase we'll our return and the will have our Tang technical. management, our lab, be cash we our innovations, to hope our cash profit. and as fund have to future as we tried ratio expenditure

an have the stakeholders that. produce Let been I about not old people meet friend feel who past to add for me It's all have trusted and -- easy us to to of not returns been the great has the around, I bad great really few but for years some and us. able

our efforts continue do to good will we double a job. So, to

and utilize hope so proactive on We'll but didn't on use initiative advice the your good yes, just first. more seen we as well take to taken. more a things many is really eye-catching, terms it AI we've I communicating. Yes. in our better be market point so like work of it people achieve we making daily because and But highlight numbers the logo, in

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you any this do to do expect buy So shares to not dividend you're back if quarter? a going

buyback. question? take this believe share we keep I Na, you will doing

Yes.

pay before, back by share Board mentioned last our we $X the for about And after As year we perform now, And shares have million the from used the... approved. I repurchase. performed December to

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keep the this this think rest of frankly doing we'll for on I year.

Because mean, low, up price sensitive to Okay. be the $X could that stock is stock even don't or to to price. pay have share. a $X I you you so

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going to seriously to debts now we're we the back So rule because pay comply must

basic.

limited we yes. every have can purchase the, amount from We day market,

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your you thank time work. for good up So the and keep

for you the Thank advice.

There this time. no you. participating. does our conclude today. questions for further for Thank at Thank That are you conference

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