X Financial (XYF) 24 May 222022 Q1 Earnings call transcript

Hello and welcome to the X Financial First Quarter 2022 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Tanya Wen. ahead. go Please

Hello today. operator. and thank for at you available Thank company's everyone results us ir.xiaoyinggroup.com. website IR The the today were joining on you company's and released are earlier

otherwise, Kan update go or with to introduce Securities events, pleasure statements forward-looking any Li, other the statements. as It Li. to market are you of cause X for Frank and section. as and which I who in highlights, materially give available of followed operations Mr. not forward-looking to Chief all relate factors, a does this the today those call Q&A predict Reform information, overview forward-looking expectations is Zheng, uncertainties financials. Mr. regarding please and information and go performance statements the a involve may the beyond and which the Financial contain Mr. that the are Securities on events through current obligation the many future President; Fuya statements law. which from Li Kan company's Private control, the filings other Mr. remind U.S. the Act or of Officer. in my your any Zheng, actual and of and Exchange answer operating by achievements will questions all risks, Provisions that Harbor conditions based are the company's unknown call to Financial are brief company Such results, required risks, XXXX. Commission. Mr. current the Mr. ahead. and undertake are now Li, or result new will is under They differ to business Safe and may to these On uncertainties known factors company's Further company's The of Litigation under management's the effect difficult of and included during

everyone. Hello

XXXX and with from for amount the both basis. quarter start and COVID-XX quarter multiple China. to pleased despite economic in and facilitated a The first loan performance the the in first are quarterly yearly We a of challenges increased on of slowdown resurgence provided solid the total

during asset our quality saw remain stable also the quarter. We

uncertainties the the outlook for given macroeconomic environment, cautious we However, coming are quarters. of the business about the

will related We to to closely dynamics in and and to China. inefficiencies continue issues monitor pandemic vigilant market the the any stay

billion, rates loans During XX and first XX with total loan to March facility that XXXX reached outstanding the of decreased days XX% in amount as our as XX, X.XX% XXXX. our X.XX% from for past up all and are December due year-over-year XX, delinquency of The quarter, guidance. provided quarter-over-quarter XX line for XX% RMB previous to

of quarter services explore the see amid second an new In environment, to stabilized we Bank. especially COVID-XX of of been shareholder we measures the financing provide the of complex actively became have quarter started working that to recent and resurgence tightened personal have during our asset loan the pleased XXXX, we have various are successfully to risk jointly We Bank quality partners In Liaoning. XXXX, Since to our market. in control lockdowns. indirect Newup fourth and meantime, facilitation with Newup opportunities the the minority the

China. in needs We the programs call and support government’s micro discussions believe long control cutting-edge will their financial assessments. parties both business and our the design tech-driven active and and in enterprises leveraging deepening look are grow to Bank in capabilities business, products we We cater develop with helping and Newup of in line experience extensive small that Newup of Now forward with market, and the small with our jointly and to financing our in the to and medium cooperation the institutions Bank financing benefit risk development licensed by the personal to to run. in

On side, clear including recently of and the will healthy the benefit all standardized highlighted us. market and We regulations compliant Chinese platform and development with long-term promote industry. promoting economy the more the of importance the believe We're development the government's government participants with market initiatives supported the a the policies fully to visible regulatory the in China. of

very US our and regulators will the look and the the to near In three meantime, for Foreign on progress merge year Whether the environment. have allows protect stock Accountable been laid regulator solutions the forward foundation hope the the years. in a which of exploring to sales cooperation. regularly have the our standards these maintain has expertise in in of agreement Recently, an According Holding future. the regard. under healthy in regulator aimed Foreign on status for stakeholders of York regulatory reaching consecutive delisted we to the New US strong securities to been two China, companies, list capture governments be not our the communicating audit were Ministry China-US We are listing the from Exchange. companies delist comply interest supervision at the with audited and and this first confident opportunities Act growth with included depends exchange, proactively We or if the to possible we Companies Chinese US results the of the Stock the

our the turn will call I to Frank who will Now, financials. go through

you, Kan, everyone. hello Thank and

first line X% sequentially We quarter. in our top increased are to quarter-over-quarter pleased see the

stimulate are promote guiding reduce the economic we of to on borrowers further cost government, per total track As the to borrowing the jointly the order growth. of principles and in

borrowers up a critical long-term high-quality due put long-term solid our line a development This we growth. stepping some is of pressure on securing increased for our believe but acquisition been the bottom sustainable bases acquire user business. user strategy foundation that more a to large to has have borrowers to our cost, and our of We efforts

deliver measures We a will balanced control top acquisition, continue to growth. while line to bottom cost strengthen line implementation our and user disciplined

same company. note XXXX, for million RMBXXX Please stated in with increase in quarter. in some Now, and net and Provision receivable accounts XXXX. the quarter same fee numbers in are first and of due same expenses I revenue the million, from X% of to Origination financial primarily of total RMBXX company loans was RMBXXX that as compared by insurance of first by contract up. in XXXX, RMBXXX receivable of the facilitation to compared expenses RMBXX in rounded million with facilitated decreased quarter RMBXXX of RMB from total the was to the the million all to million and period RMBXXX million XXXX. Total and Provision due from increase operations performance the a would XXXX, in like period brief XXXX, average increased total Net period compared with to of of partially XXXX. of the fee same a RMBXX consulting compared period compared from million a accounts servicing with with compared primarily decreased was in increase of million in the income decrease XXXX, income by in loan X% the an borrowers, million RMBXXX to to increase in result by increase services, loan same Income RMBXXX XX% same same period RMBXXX net same due and the was administration the primarily provided cost adjusted million Non-GAAP due borrowing primarily increase -- expense period total million a in an for RMBXX million an provided the in for of result the in amount the amount insurance loan RMBXXX to million offset General the million XXXX. paid receivable of in this million, in million same assets compared of due the period of in compared held decrease same quarter the of in by period RMBXXX as service period with first from loan the also the RMBXX the in with of to first facility in XXXX. RMBXX of quarter XXXX. same XXXX. amount primarily RMBXX with XXXX, receivable period the XXXX, period of was to an facilitation

further information, release of earnings to please the the company's refer IR website. For financial

our for outlook. business Now

the and This to views, the billion loan total and of quarter loan [indiscernible]. facilitated in for range RMBXX are which our RMBXX and be expect We XX%. preliminary for XXXX current XXXX, amount provided second of total XX% provided to amount to reflects forecast and incremental be billion between facility from

Now, this the to questions. to and our please. concludes I open like the would Operator, call prepared remarks,

Thank you.

ahead. We comes Equinox from will question-and-answer Capital. question Instructions] [Operator Today's the begin Haynes with [ph] Boyd go session. now Please first

in your so was questions. Hi. I is tax Thank The at is repurchase quarter update the and program? in high QX? with what on charge you three for your average quarter is, rate question the for tax provide any full share What you year? that the Thanks. taking customers? Why on can rate. have interest my was question the And this you it second last the fiscal moment. rate your And us outlook for

Okay.

about number but I in your trend, our we for we do the And to XX% general question, provide the between general like, to it's -- regarding about exactly the that in the rate XX% quarter is will you rate is And first charge borrowing not the down. regarding can also -- going XX% and year provide for -- this Regarding we borrower. first the range. tell the loan

rate are business have our based we on XX% forward. going So of majority to will a on track be on

assets. of enough tax -- to quarter, the have rate, in deferred it is the subsidiary offset way I this so those last in all And called one assets. be quarter, would we tax to for revenue the this business deferred that subsidiary has think end not this -- generate It Regarding the or quarter since will the that deferred and year, future process China. okay? especially tax

have So around of example, we that this the about for line line. quarter, RMBXX million tax like in

is between quarter overall, question. below special second net. little of That's special And over million -- XX%, overall So high bit amount this the the but tax because XX% XX% something is, so and somewhere charge. our rate the is it's RMBXX relatively around is stable, a the first tax for our --

we start inside share XXb-X, will so Friday. program, specifically company's Regarding this share program the buyback starting starting the the still is XXb-X, doing doing the -- rule subject buyback to trading buyback

far point, other because any allowed window in buyback this we words, do so. to us to buyback haven't to no yet had So so there's up

start start will shares this -- doing We buying Friday. starting our back

Okay.

to Let rate going should XX% so forward statutory trying the that tax question. to XX% it, follow what you're rate it quarter, that on -- to in saying implying. starting are tax I'm drop closer Is rate? the me you up going just understand to is be that second

to No. way sense say, have of this one last trying I'm in we all subsidiary the on the some the year quarter tax back first line quarter of is the and year, loss. last the for the have we number XXXX, like abnormal because

XX a you absorb first enough that mean have rate RMB have will tax But generate – credit subsidiary. can that's those subsidiary took one. that not future, in to prudently, tax that But business have in will we normally, -- for a we do you cover this income because tax have you subsidiary, in on earn those the we if for tax So we lower a to order profit have to something million that zero that happened you -- foreseeable tax credits, or why offset future quarter available so credits. charge the rate about in those Chinese the revenue -- order

tax of quarter. amount this year and the -- normal the quarter year, will to to is this between the quarter starting of next for XX% be So abnormal XX% back this

Great. really question management this Thank the considered you. Have private? to you company taking My last is team.

very we below And low money. And like well is making X%. still is No. PV we valuation and understand the our are

are money. not losing We

believe the We making kind mainly China. I reason so to money -- due in XXXX, a But uncertain this shareholder. are in like it's special COVID of are level right, why the not except mainly we normal now in believe, China. we for that environment depressed because valuation valuation of situation right -- reasonable Normally, a in make regulate we year cannot situation like

see, regulated government As you will maybe pay this we script have the -- refrain government feel in Chinese for quarter, you Chinese we we you this industry. to the this we at will arm-twisting if to so-called will moment attention news, gave measure

new are So have measure have stop coming so-called we doing we It normal -- normal a will we a environment -- will in mean will we -- -- with normal doesn't maybe not up. the a future. regulatory we

to We those whatever. have a -- a kind for stuff. like will like every a a like earthquake will that the expect will same still -- those country, we'll believe, It's is But protection last you measures of areas. it's and any like of company normal something regulation from we event, consumer few kind It's like come for not years thing. have

measure So one valuation back one back believe reach we PV believe will like right to maybe than depressed to higher much not it normal. we will P/E -- X.XX% the definitely back feel like we PV both rate or Well maybe, it's like now. but to

consumer on the regulatory very thing business are the we front China. And will to the is turn So think around. believe in still we still we we -- contributed involved the are are

maybe -- a have big are long-term, And for society. will to play. a role have the contributor We to us for e

so the our -- the back effect normal. company negative we be will to appear of not to on of But which in or effect and we they biggest regular it result be will believe normal. whole know terms is -- the back believe the how most when. same we trend But thing is just maybe to effect sector So don't

your have They plans. initiated senior them Right. purchased and followed of of through. have executives top repurchase instead Well dividend stock have most stock a They some also competitors their of selling actually have some stock. seen pay of

to undervalued that all shares So going do delisted your if that. urge would I they you are be not to believe of are and you aggressively

know any Certainly, sell share. do nobody team share sold haven't All not I our any I myself far as as yet. management

in more than adjusting Our substantially company shareholder XX%. like the personally very biggest is share is

So you I some which disclosure the a but think one believe if big a with XX-F, shares yes, he not in he his compare his one some holding buy -- and I of And did did means last buy. purchase as he at small with small end is also. a year, did

we the we profile buyback we committed will buyback else. in us -- will the share let's we as haven't the -- do for we dividend think but something then we day Every -- due time, in for not we'll of the promise opportunity. faster will for the every terms I there's So will share do see But that. the work same, we buyback at And buyback. share exclusively maybe available before no have

purchase repurchases. to as right share little. XX% company share don't for XX% that of much dividends as agree I make very now the sense But aggressive could repurchase

If they that. us allow will we to do do that

it's in As you see of we market put out RMB XX XX% million to day. XXBA the to doing that. cap every terms the flow you they Definitely But of buy XX%. about allow current only

So have available mean? That's know for But we the to I flow slow. us rule. what the very everything follow So still is now we you -- will to buy buy. right

Okay. Thank answering my you. I appreciate question. you

Thank you.

turn remarks. the this Thank for you. And like to Wen over to Tanya gentlemen closing and question-and-answer ladies I'd conference concludes session. your back

speaking call today. on joining us Okay. the in We Thank with Thank the new look again quarter. everyone you. for you you forward to

ladies concludes We you today's call. this thank and attending gentlemen for all today's you. And presentation. conference Thank

now have a You your day. disconnect lines may wonderful and