FinVolution (FINV) 14 Mar 232022 Q4 Earnings call transcript

Hello, ladies and gentlemen, thank you for participating in the Fourth Quarter and Full Year 2022 Earnings Conference Call for FinVolution Group. [Operator Instructions].

I will now turn the call over to your host, Mr. Jimmy Tan, Head of Investor Relations for the company. Thank you, Jimmy, please go ahead.

to call. quarter welcome XXXX full and conference earnings everyone, our and fourth year Hello, results issued company posted The were online. and earlier are today via Newswire services

a e-mail and You Officer, our of will session. Chief with and ir.finvgroup.com. Q&A our call for earnings Mr. download Li, at visiting their release start Tiezheng and Executive can the IR the the website conclude company prepared Financial Chief alerts Mr. section Jiayuan by the our with sign remarks Officer, Xu,

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

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

that XXXX. please the Private will Before of Act safe note provisions forward-looking under Securities of harbor we today's the U.S. statements, Reform made discussion continue, Litigation contain

and Forward-looking statements involve inherent uncertainties. risks

As and The view risks any expressed and the Commission. such, information Securities different not from does any in other Further and required may the results U.S. regarding these applicable obligation as law. are company's the to under filings today. included Exchange the statements, with materially assume update forward-looking company uncertainties be company except

Tiezheng for Mr. quarter. will CEO, now I Finally, we call Please post of to a slide sir. presentation our on the details our turn our IR go website, results providing over ahead, the Li.

today with of for thank take deeply FinVolution. Chief ahead the and and call. Tiezheng on I'm Executive of I'm role and prospects Hello, speak honored to company everyone, the earnings all of and pleasure a the the Li, explore Thanks, great for you excited today. to our opportunities joining Jimmy. Officer you it's Co-Founder and

multiple Shanghai the situation We throughout complex on varying with today complicated was core environment. The most strong The given of difficult to cities. year the based particularly year year, with market speak macro very turbulent challenging has was here. domestic our a lockdown leading following resurgence as XXXX are the in to you pandemic lockdown of been conclusion are teams another the us note. a happy the across degrees of for

However, we on digital record-breaking of and in each capabilities, continue challenges, results despite the set all priority another quarter financial these technologies build resilient ultimately our out to to delivering producing industry-leading year. close and growth operational

technologies that December throughout We to the and share of the are have as invested wisely pleased in year XXXX.

areas. and filed We have software fintech-related in XXX XXX successfully copyrights patents registered

with total XXXX, full achieved our total of XX%. RMB increase year For volume in transaction transactions, we a target XXX.X representing billion year-over-year

RMB volume quarter loan and the the XX XX% fourth Our quarter transaction domestic RMB fourth a Notably, year-over-year representing a our RMB grew year-over-year a increase X%. rose XX%, billion, XXX reached volume full billion, local an to loan increase increase X.X the volume total a and year-over-year X.X year year a XX% increase also where RMB billion, billion, for of sequential year-over-year. loan Thanks International focus, fourth effective of to strategy. a global to reached quarter for of our XX% climbed volume representing X%. of increase full the sequential XX.X billion, to in of increase year-over-year representing outlook XX% of of RMB volume increase and

of stands balance total XX%. billion, RMB loan at increase outstanding our Concurrently, XX.X a year-over-year

increase Our of has the And XX% an number increase outstanding RMB this XXX%. X.X international billion, representing year-over-year. XX.X a of finance billion, year-over-year in to markets, RMB totaled loan soared China

new such acquisition. as execution RTA borrowers well year as experience cutting-edge management overcome to us as throughout period, helped leveraging our Solid the the challenging for excellent year's technologies

fostered delivered borrowers, assessment of risk Mirror assessment by financial fraud credit and approach our detection. our operation for Octopus We results, prudent Our risk risk targeting for credit management Magic and advanced Ming our operational for system our model. high-quality advertisement Mirror to and robust

X.X% X.X% vintage and between healthy XXXX. throughout stable remained delinquency rates Our to

China In reopens, as metrics. further we XXXX, expect improvements in these

We approximately Zero the in also some quarter, the COVID loan in surrounding easing even December of recovery maintained XX% turbulence collection fourth rate policy strong XXXX. of a in

With quality quarter our year. better our the borrowers price have and we Coupled in a transition. efforts of XX% ongoing also period larger last A the increased from proportion quality domestic of B of borrowers, proportion our category to borrowers our completely better total acquire the XX% further market same in in borrowers, paid with to fourth

our with Our average bolstering to borrowing fourth directives. financial alignment compliance was rate XX% inclusion and commitment in regulatory quarter, where our level reaffirming the

expect range proportion borrowers. of the B to the XXXX has X% year. also to with borrowers the better our below Looking XX% the category helped quarter borrowing of compared to costs, in us quality in to XX% XXXX fourth dipped funding Notably, reduce in the same in last which period X.X% ahead, we and of transition increase the rates in A to due be

have institutions with incorporated We our partners robust. potential cumulatively remains financial pipeline and of XX

our rise. costs are A ahead, confident our proportion improvements achieve progressive we Looking and borrowers we B category as of in can funding continue to

our on our international to growth expansion. driver, Moving second

thrilled previous XXX representing increase increase of XXX% last as contribution year same fronts to XX% are -- of that across to report operational during a from the an total the of We year period improvement the quarter. well led segment, million to quarter, revenue revenue RMB from a and XX% from fourth contribution a multiple as this sequential

double-digit just the billion from international a revenue the the reached for quarter. contribution third XXXX, or international accomplishment year remarkable of full X.XX segment XX.X% a time total given the revenue, total in RMB level was For first to revenue

these financial have local well-known institutions to have in market pandemic-related interest we'll quality been many attractive and XXXX, Since collaboration to recognized relaxed to Bank of efforts quarter XX% in in such by funded period Among remain XX% the the to have previous loan last increase OCBC We in according rapid proportion borrowers quarter XXXX, in have merely Jago, same better the circumstances. in cautious although local the XX% Indonesia. of international countries. rules year. And a major with been NISP. we led XXXX targeting our continued to and rates Permata local and as our adjust compared in growing fourth strategy banks Indonesia and Bank the be partners our others, restrictions suite local with by fruitful

Our sparing market we countries. and as is into success strengthened in Indonesian additional our confidence has expand

the year-over-year. during example, loan XXX% fourth our quarter over outstanding grew in For Philippines financing the

from Going accelerate to of believe climb we the in forward, continue plan international markets will of in our on Indonesia other the diversifying Based to contributions rising while to assessment, between our XXXX, XX% revenue, region. evaluating our penetration revenue pace in Philippines, potential current opportunities and to sales. total we XX% the revenue further

briefly efforts at like I'd We our and value and update ESG fourth you aimed on least, of published enhancing not our our ESG initiatives for report annual forward-looking snapshot performance. a but Last driving providing thinking in to creation XXXX, stakeholders. sustainability our

also Compact Global initiative sustainability and joined universal corporate We a implement Nations practice, of social value our program, United the responsibilities. the demonstrating to fulfilling dedication voluntary our long-standing

and as a a second vision Furthermore, Sustainalytics the low-risk of our policies well rating ESG our testament as we year, accessibility powerful to from ESG practices. for current were to consecutive for future the proud receive

platforms protection data we to responsibility. alignment ESG and capital approach international XXXX. our will privacy development, with enhance operations, security, independent ESG to expand additional ensure rating environment corporate and aspects in best our we with To human and to to corporate promote forward, strive and our practice of our in Going ESG, social behavior, holistic the including cooperation governance plan

ability In to summary, our underscores outstanding strength as overall challenges. performance our overcome stability and as in XXXX team's our well

We to advance while embrace global logical to as dedicated our forge borrowers will to strategy, success our optimizing quality an sustainable will assessment Meanwhile, healthy global or our refine emphasis and expanding local our technology mix focus, foundation we and and to leveraging built outlook on further evaluating our drive remain building framework. firm ahead our countries a base, to on will empower XXXX, capabilities expansion. we risk strength serving more that customer better in have continue management we our us product regions domestic quality and long-term with growth

With height lie the opportunities these customers, our the value for of our are advantages, capital massive we life a greater all situated that stakeholders. that create we and well believe and at shareholders and on

Mr. role a Wang his Officer, Operating to as current our Next, team, of down June the I serve March Zhang XXXX. say selected express Board is behalf about Mr. Technology the the words XXXX On Board, other as the CEO like his I Mr. a Officer, greater few company management company to opportunity Officer. Concurrently, since he Chief the Together rest Yuxiang I Wang the Chief Chief would today. to after to even contributions to role my this stepping the and the to as heads. outstanding Zhang and gratitude the has the take X also to pursue to throughout interests year. Wang look propelling to XXXX, sincerest the while for served the From as forward Product retaining transition announced company. with Feng has held would company's Board to we of with years like

turn for will who now our the to quarter. discuss will I that, over results With Xu, CFO, call Jiayuan financial the our

line not details. the to year Tiezheng, and all fourth In further for Thank call. Welcome hello, the I time, call. release financial you, through quarter to refer items on go Please our this will full of our earnings everyone. and XXXX of interest earnings

X overall RMB across around skill encouragingly, by year-over-year. revenue results year-over-year, mark research the XX% to we momentum in XX execution to unique to up total our quarter exceeding capabilities challenges of billion reached revenues RMB XX gain XXXX. more our the of Even XXXX we driver, net the segment, despite over ongoing full XX% reach our for Tiezheng our and we business with our and of International contribute strong continued in time and deployment development, the first investment heartened billion, robust are year for technological strategy. the Notably, Thanks encountered. second growth RMB the As up XX% billion, net revenues the financial fourth in mentioned, in achieved progressive

total healthy operating We a non-GAAP profit fourth million billion also quarter delivered in the sheet and maintained RMB equity. of shareholders' XXX in RMB balance with XX a solid

cash the balance X comfortable our position. an increase are of and and year-over-year. remains XXXX, over of sheet position with December short-term strong as cash RMB XX% billion end liquidity particular, with of liquidity of our We very In

indicating define loan remained by divided Our X.Xx, balance stable at equity the leverage ratio, shareholders' which we risk-bearing future growth potential. as

ratio of our for important and these leverage During position, coupled with uncertainty, suppliers. our institutional low an employees, is source our and times liquidity shareholders, partners including our of all strong confidence capital

market. public shareholders year to year. the the buy deployed We throughout also buybacks our share full continued to around In return we value through shares back to our XXXX, in

XX, deployed of cumulatively the million repurchase programs. its for As XXXX, company USD December share has XXX around

Our XXXX total, after XXXX income our net repurchase per dividend the in we fiscal declared Board our growth The for average policy. dividend capabilities, XXX our trend year after net and income is increasing of shareholders Between has returned fifth for dividend to company's period. our XX% to year X.XXX ratio also our worth million historical and to million which This long-term USD confidence programs business the USD distributions. declaration, ratio payout about cumulatively XXX fiscal and dividend dividend ADS In deployed share with the a of consecutive tax same for XXXX. tax XXXX, payout for around we market in have USD XXXX shareholders of core and annual our reaffirms XX.X% of potential. company's the the

Last XXXX. the efforts for matters, throughout actually COVID keeping employees like partners our in strong would of to all and our but I least, their not breakout thank company

Our business is we as continue grow ever, culture both than domestically internationally. stronger broadly to our innovate and will and we

outlook me my on some business Before I color conclude provide additional remarks, XXXX. our let for

company the review the our closely reassess of optimistic a China and domestic while will driver strategy plan of in the aggressive yet the internationally. to half year to strategy pursuing reversal still COVID we the adopt Zero situation as for continue policy prudent a we Although for more the The market, monitor in an first positive accordingly. XXXX, approach

strengthening an Despite borrowers, a our grow and challenging environment, acquisition continues as innovation initiatives. of the gain the transaction our we the result, in to increase our XXXX focus Preparing of RMB we expect representing constant billion XXX momentum higher-quality macro technological to year be to on efforts China around RMB in on as XX% range XXX business year-over-year. XX% the international and for billion, to market our full of volume

increase to be billion, international representing year XXXX expect of We also market an around transaction our around XX%. for RMB volume X.X full in

We XXXX. continued look are and have excited about the made in in progress to XXXX we success forward

I remarks. With prepared my conclude will that,

open continue. now the the please questions. Operator, We call to will

Instructions]. [Operator

Alex UBS. Your comes Ye question from first from

first demand my credit QX. question consumer in your So so is trend on far

the asset months, quality historical give been compare have volume us you doing is February how loan is in it demand about last quarter? how are underlining say, rate indicators on the versus, and run So how earlier QX you does trend, recent observing? update the to And Or an your in could you March? Secondly, security level? the

Okay. Alex, let Xu. do Mr. the for me translation

The Year, but is We that going XX% the first we overall is the that due this will it Chinese and reopening actually -- changed seen believe growing, the up forward, period has is last still of continue trend a to has we a question the Year, New demand. And XX% environment lot year-over-year around user demand have Chinese before to related we a compensation due a the the still increased by after basis. to At positive. Chinese to to declining, that is seen mostly macro grow. have and demand lot, on end recovery. trend New the And year, before think trend

do me as translation let REIT the well. Alex, for the Okay.

the On the similar demand both REIT to trend, some had fluctuations. actually trend,

And X.X%. period, it X now. fallen it back but Day also rate such but well, have XX seen XX%. Day remaining as has vintage delinquency expecting to collection rapidly, as During the X right now, recovery increased at delinquency seen we has to reopening right And fluctuation have stable X.X% some we some also, the early indicators

reopening now Our books is for the the COVID existing loans And loans below by during optimized been loan those XX%. disbursed period disbursed has X.X%. current

Yada from comes question from CICC. next Your Li

question the in small inject pandemic, Hello, capital is, My the what XXXX business perspective CICC. model, is, macroeconomic and the of today future? and lending management, proportion of be I this the impact. any of Yada during slowed there trend is the capital-heavy in into the XXXX, strategy license? And My our the segment capital-light choice the from to would the of down from growth what the first is question and overall actually second future? to in COVID plans positioning about wondering is our of due And SME SME in was the loan

Xu. me let do the Mr. translation Yada, for

year capital-heavy. -- on progress. was with question have question model Your for and under of the is reached partners the good And number have Difficulty] capital-light and the models. our first of under this [Technical -- is we XX%, has capital-light trust related been model our operate versus under have to capital-light very been the full making cooperated And assessment validates funding we model risk business the partners funding This whom XX. in capabilities credit us has also our

the We will of regulators capital-light. monitor also the attitude the towards

models both capital-heavy are seen As we light have right them. to that acceptable now, of and

needs. partners attitude consider their and will funding We the our also of

do well. as translation me for let the Yada, question this

loans in the on to for their with Our and for loans. to And owner that improved the from loan of the forward believe further focus the daily be between resumed will this to demand or the during levels And consumption XX% rate risk pandemic, have for our segment business certificate our compared COVID The increased. delinquency our of will business we the volume. the the them the rest and with loans. actually than have back on And is higher of individuals we pandemic XX% for during we normal the license. XXXX, XX% is stabilized our seen with has easing And still be small about consumption the pandemic, policies, actually data gradual is reopening loans period, necessities. focus believe segment going this

[Operator Instructions].

comes next Your Jefferies. question from from Thomas Chong

international our about is question My business.

Given affect And bottom into spending overseas should line? the the in are making other opportunities that would going countries Philippines, future? is are the And the for in expect expect the Indonesia this business. much we which progress explore that on we should year? we question How spending and further to more another we

me Hello, do Thomas, explanation let -- for Xu. translation Mr. the

markets, are the fast expanding international We can you very as actually in see.

actually the have quality in And faster better transition -- growing our we Indonesia, -- our to the than December, is XX% above completed borrowers have completion, XXX transition been actually and resumed has our has actually outstanding And growing We much expectation. have grown after this this quarter, a led actually we growth balance Q-over-Q since and to the end the third year-over-year. has of larger RMB loan revenue contribution. by million to XXX%

And in contributed more for XX%. revenue year the For has the it quarter. of total than contributed example, it fourth has of XX% full XXXX,

from we these Apart to rapidly continue we efforts meantime, Indonesia is contribute also continue the able countries. will model very revenue our and Indonesia, are to countries, also of metrics. more to our other issue the in duplicate successful focusing growing believe to we we operational which and more we will are most business evaluate our into believe Philippines, and In we

Let me translate for Mr. Xu.

you is company. our for As expansion see, a international strategy long-term can

We bear in investments Indonesia all we have need international started to X will that with X and sacrifice constantly also, investment, and longer-term can these our investment years our balance And on look and for will see ago fruit. not longer-term to some but earnings for actually more keep gains, short-term a we between earnings basis. short-term also a our our investment you

remarks. are turn the management If now back I questions, for no the team to to like closing there call further over would

Thank conference you XXXX QX all call. and for joining earnings our

feel have questions, out team please very Thank FinVolution. IR the free you at to further reach to any If much. you

conference this concludes This call.

please. Thank lines, you. your disconnect may You now