Q1 2021 Lexinfintech Holdings Ltd Earnings Call
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Ladies and gentlemen, thank you for standing by and welcome to the listing Fintech first quarter 2021 earnings conference call. At this time all participants are in a listen only mode. I must advise you that this conference is being recorded today and I'd like to hand, the conference over to your first.
Our speaker today, Mr. Tony Holdings Senior director of capital markets. Thank you I'm. Please go ahead Sir.
Thank you operator, Hello, everyone and welcome to <unk> first quarter, 2020.1 earnings conference call. The company's results were issued earlier today and are posted on lot. Joining me today on the call are Mr. Jay Shah founder Chairman and Chief Executive Officer, Mr. Craig Zeng, our Chief Financial Officer, Mr. Young child.
And this barrel per our senior financial director and other members of our team for today's agenda. Mr. Shao will provide an overview of our recent performance and highlights Mr. Chen will discuss our core results and Mr. Chuck will discuss our credit performance before we continue I refer you to our safe Harbor statement and the earnings.
Press release, which applies to this call as we will make forward looking statements.
Also please note that this call includes discussions of certain non-GAAP financial measures. Please refer to our earnings release, which contains a reconciliation of non-GAAP measures to the most directly comparable GAAP measures.
And finally, please note that unless otherwise stated all figures mentioned during this conference call and let me be I will now turn the call over to our CEO, Mr. Shao and I will translate for.
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I am pleased to announce to everyone and this quarter. We have once again achieved a record high growth and our financial results, China has already become the world's largest consumption market and our new consumption and strategy will allow us to seize the benefits from this opportunity and the first quarter. This strategy enabled us to grow both our user base and business scale rapidly.
And the first quarter pushing its newly registered users reached 14 billion, continuing 7 straight quarters, where our newly registered users increased by over 10 million, leading the industry at the end of the quarter listings total registered users reached $132 million and increase of 56, 5% year on year users with credit lines reached <unk>.
<unk> 3 million and increase of 46, 5% year on year and new active customers for the quarter reached 1.8 million and increase of 88% year on year and the first quarter earnings platform facilitated to $53.8 billion and loans an increase of 57, 8%.
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The continued refinement of our risk management systems allowed our asset quality and to continue to improve at the end of the first quarter on 90 day, plus delinquency is at 1.8% to 4% and SPD <unk> for new loan originations has been below 1% for 8 months now the lowest since the pandemic.
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Both of our user base and our scale continues to grow rapidly and our risk continue to stabilize and decline this to arise and 1 decline allow many of our core financial metrics to reach record highs and the first quarter and listings revenues were $2.9 billion gross income was $1.37 billion and non-GAAP net income reached $771 million with EBIT.
Non-GAAP, reaching $911 million and anticipate this positive trend will continue and the following quarters and we are fully confident and our ability to reach our loan origination target of 240 to 250 billion renminbi.
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Next I'd like to share with everyone and several of our current strategies on and our financial technology services, and new consumption and the financial and technology services side. We're in the process of diversifying our assets and specifically towards micro business owners. We have worked with multiple scenarios to develop a series of pure operating credit products and the first.
Quarter. These products serve nearly 200000 customers, primarily for machinery, and Clinton and electronics and related manufacturing light manufacturing and wholesale generating $2.1 billion and transaction at the same time after analyzing our existing customer base, we discover that over 15% of our customers fit within this category of <unk>.
Operating and financing need and in the future we will increase efforts to fully uncover the potential of these assets.
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Currently many banks, especially small and medium sized and regional banks face common challenges when it comes to traffic acquisition operating models and other problems and have become overly reliant on outside channel. So a single partner on a model, which is difficult to sustain and creating a self operated products Inc.
Increasing operational and self sufficiency stability and compliance has become a real need machine for our past 7 years of solid internet product experience operating capabilities financial technology capability stance and a unique position to help financial institutions solve these problems as a result, we've initiated our co development.
And with regional banks plan and joint operations services to help banks to create a self operate and product group, enabling localized development on May 13, we signed strategic cooperation agreements with the bank of managing the bank have gone through some of your and Bank Bank of Queensland, Jonathan on for Insomnia Bank the bank to Hulu.
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In addition, our financial technology out for services as also achieved noteworthy growth or online micro loan credit products risk products led to.
<unk> already has over 30 participating institution, achieving tens of millions and financial technology revenues.
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And our new consumption strategy, our buy now pay later be NPL product is growing rapidly and the first quarter and mine achieved over 60 million and GMB and to date and my I served over 510000 customers and.
And 1575 merchants generating a total <unk> of over $237 million. My App is already established and a sensor and ETR more excellent small and other core shopping and business areas, creating opportunities for merchants to grow their revenues and rapidly proving the viability of the <unk>.
Operating model next my other will also develop along 3 strategic directions and rapidly expanding to possible use cases first we will utilize our essentially our e-commerce platform to target existing users to push the online by our business second we will continue to work with major consumer brands and malls and outlets and third we will work with <unk>.
And fitness health and beauty educational and other businesses to use <unk> as a business solution towards the scope. We are diligently building our business development team integrating service providers, creating and online and offline joint development model from IR and the second quarter, we anticipate achieving $300 million and GM.
Through March we look forward to creating for China's vast online and offline merchants, a completely new sales to enabling merchants to improve their operating capabilities and driving the real economy.
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Our local service and lifestyle products low card and USA has also established relationships with leading nationwide vendors to provide benefits and privileges, increasing and gathering benefits and advantages to transfer to financial institution partners and also increasing the stickiness of our consumers and high frequency consumption scenarios look hard and we are already exhibit.
And good growth potential current numbers indicated that in may after rolling out the operating model and participating movie theaters 3.3.
And $3.65 million and GMB was generated and single months.
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And the future of these new consumption products connecting both online and offline consumption scenarios will expand nationally to every city industry and not only will it contribute revenues to us, but can also help financial institutions, especially local financial institutions to acquire customers more cheaply and to more effectively manage high quality local customers.
And creating a new driver of growth for listings businesses I believe that these new initiatives will enable us to further diversify opened new areas, even greater growth and create stayed low growth for the future.
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Thank you Jay as mentioned, we are very proud to announce our best quarter ever and addition to achieving our highest loan origination ever the numerous other all time highs. We are also pleased to announce that our highest adjusted net income however, as non-GAAP adjusted net income reached RMB $771 million.
Key to our success and in the quarter is the improvement of our credit debt statistics.
Statistics.
The recovery.
And so.
And the ability.
All of which we had already indicated back in January which is now being reflected in our financials, a trend, which we expect to continue for the year.
Our low on the Nathan trends continued to be strong and we fully expect to reach our guidance of RMB 240 billion to 250, Binney and the low automation for the year.
And our cost of capital declined to 7.
For 6% from 7.7% as we are once again lowering our funding cost a trend, which we also expect to continue over the course of the year.
For the quarter the property to sharing the proportion of our revenue remained relatively flat as we have decided to focus more on profitability and cash flow from this core part of our business.
We already have and the industry, leading position while to come.
And to profit sharing and then.
As we can choose to increase the portion of our funding from property share based on the market conditions.
And this year with our increasing scale, we will further refine our risk measurements operations, while simultaneously improving our operating efficiency, enabling our profitability to to future increase for.
And the same time, we will continue to invest in our new initiatives and and others to ensure our long term growth.
As a core of our strong profitability for the quarter.
The increase and strong performance of our credit team. So next I would like to turn the call over to Jason to discuss our credit performance.
Thank you Craig.
Previously mentioned, we have continued our stable credit performance and the first quarter and we expect this trend to continue our 90 day plus delinquency ratio is now at 1.8 and 4% and the first quarter and our credit performance continues to be stable as our lifetime charge off ratio has stabilized at between 3.5.
To 4% rate, which we expect to continue for the year. Our 30 day delinquency is at 3.6%.
Addition, as you can see from the graphs disclosed with our latest earnings release, and our first payment default rates 30 day, plus for new loan originations had been at well under 1 per se.
And to improve through continuous improvements and to refinements of our risk management system, we have been able to work continuously with financial institutions to enable them to tap into their preferred customer segments for new loans to further differentiate the risk level for these new for this.
It's high quality borrowers, thereby optimizing the overall asset mix, whether in terms of risk assessment loan pricing or low side, we have made additional improvements and efficiency in all areas, reducing the expected delinquency rates in terms of portfolio management, we have developed more accurate and differentiated strategy to manage overdue.
While enhancing collection rates through high efficiency and intelligence tool and a more refined to business management policies and enabling us to keep our overall collection rates and delinquency levels and are consistently healthy and stable level. As a result, I fully expect our strong credit performance to continue throughout the year.
With that I conclude our prepared remarks operator. Please proceed with questions and answer session.
Thank you ladies and gentlemen, we will now begin the question and answer session.
If you wish to ask a question. Please press star 1 on your telephone and wait for your name to be announced if you wish you can see your request. Please press the pound to husky. Please standby, while we compile the question and answer roster.
Once again, if you wish you ask a question. Please press star 1 on your tell us and.
Your first question comes from Jackie to or from China Renaissance. Please ask your question.
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I observed that management gave 300, and then B 300 medium and B targets G&P for second quarter. So can you give us a breakdown in terms of online offline channels.
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<unk> Credit Bureau, so how will that impact our expectation based on and its going forwards and last question and bounce our SME business.
So just want to understand what is our SME loans targeted for this year. Thank you.
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2 questions first with regards to the NPL on my.
And our product I think obviously, we started on the first quarter and there is a big difference between what this product to us and what we've done traditionally not the least of which of course is that it's a zero percent interest product to the customers and we collect the fee.
On the merchant now when we created this product and we sat out on these growth we had a few principles in mind that this is not going to be and other way like traditional consumer finance and it would not be structured that way and then turn it would require a new type of funding model.
We have to say that all these things right now are very early.
We were able to achieve $60 million in terms of <unk> and the first quarter, which was primarily driven by online and online transaction and the second quarter and can see that the offline has been growing very very rapidly and we believe that most of the growth and the future that we can see it's probably likely go.
And to come from offline as opposed to online that said, we're hesitant to say a very specific percentage right now or breakdown because it is early it is a little bit unstable.
Similarly for the asset quality, it's probably too early to say that said based on what we can see right now it's clear that the customer quality is far better than what we've seen before and in fact, it's better by a substantial level and it's definitely much lower our goal here is to try to keep the losses down to say and.
1% or so now also like to emphasize that for the BNP out. This is very very early on in terms of the model. So when it comes to defend other mato growth and otherwise.
Still early but we can see and it depends on to the sector industry and for example, we offer a 3 month product charging to 4%. It's no problem at all and longer term charging a higher percent wouldn't be too much of a problem now that said, though the revenue model and exact percentage will no doubt depending on the sector, but certainly we'd like to hold on.
Up until a later before giving everyone more details on the numbers and otherwise.
Essentially the things that you would need to build a financial model. So that's on the ERP NPL products now on the regulation, we have to emphasize our loan facilitation model, what's the balance.
And a very stable manner under the regulators have seen within a regulatory framework that is actually a fairly mature. So we're very confident and our model what we do at the core as we get the banks at the new services, including customer acquisition service and the ability to pay customers.
And provide our customers with your traditional financial service. So we have not provided credit scoring services and we have not provided a credit services. So it has a while we'll have to see on how things develop on the regulators on the credit, scoring and credit Bureau from AUM.
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SME is right now.
And to say that it's pretty early.
That said as mentioned on the call Theres definitely a lot of our customers and users on our platform that are either SME business owners or have similar backgrounds. So hence we feel that this could become a real good net new growth engine for our business, but right now it's probably too early to talk.
Some of the details of the numbers or to give a guidance for this business.
Okay.
Great. Thank you and next question comes from even lung from CLSA. Please ask your question.
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And so Eaton I think when you look at the first quarter for profit sharing we mentioned earlier.
Earlier in the prepared remarks for the.
The first quarter was 47% to us as compared to.
The 50% and the previous quarter. So overall.
Pretty stable now and of course, it's notable that this is a market and this is a shall we say.
From a funding that we develop.
And we're in the process of getting more and more banks to assess.
Net taking on the risk and also improving the potential take that we get on it. So it's a combination of more and more financial institutions are assessing this motto and assessing shall we say to give us a higher take rate on it now until that time.
And if you will in the meantime, we may focus a little bit more on keeping more of the profitability for ourselves until such time as the market and your financial institutions is willing to give us a higher take rate on the takeaway to itself.
And see actually based on some of the math debt.
And the take rates, depending on how you do the math would be the highest in the past 5 quarters for a variety of reasons, including risks, but we can talk about the details of this offline and the future.
Thank you. Our next question comes from Steven Chan from Haitong International. Please ask your question.
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Although it was at $10.10, well and what kind of E. D to T. Net Ciena and you did too early to draw that and these are needs and it's always a syndrome and a dichotomy.
Neither been page knee towels and.
And drunk how's that going to change.
And they need to.
And I've been pitched, a needless to say and the Centaur and I'm, saying it was all about home the OTC woman kind of dealer and what do you do a house on being hedged currency, there and to them.
Turning to you and Joe turns on a quieter.
Hum.
Well, obviously, we're trying to.
And to go through with Tidewater to stand and will come without saying what does that new day. He's on you see.
What are you simple current TNT.
It's going to be engage dealing what do you do the C and a syndrome.
I'll put on.
She and will come within the 1 teasing me to 1 to 1 to you I see and go on that 1 to you and who you might will come down and it was time to do that and anytime soon and so and to do need to them, saying boy.
Please dial tone and a need.
So where did the vintage and.
And they just need to have him to syndrome.
Let me translate on to questions first of all from a.
A follow up question on on my young from.
The accounting point of view on.
And I like to understand that.
And when the business of my job growth.
We are going to.
And you're going to see some.
Expected credit loss to be bulk as you know.
Some part of that provision and charge in the P&L a con and so we also expect.
Something like guaranteed income for to my yacht business, and secondly, and <unk>.
And we take a look at the vintage.
We can take to charge off.
Chart.
And what we find that to ease for those loans originated in Q1, and Q2.2020 to see.
Of these vintage charge off is different from our previous quarters rate, especially as we see.
Vintage stock to see a sharp rise starting from the 6 month onward, so I'd like to understand the reason behind you as it relates to achieve.
The risk management model borrowers character or macro economy and unfortunately.
And I'm not able to identify to Q3.
So did you see a similar to say for.
For the coffee Bean page.
And you know charge off balance.
On a deal.
And you're going to my other accounting truly on my.
And I actually going on in EMEA to hot.
Copies are seeing because of a bunch of Mcdonald's and yes that kinds of down to new star woman and shortly and are off to pay down due to a function.
That cost on to truly Jacobs obviously.
M Jacob J.
So to speak with icon on a go.
Thank you for your receivable on the risk.
Happy to and believe it's in that timeframe and how do you think and receivable and risk.
And I call them cash could you just kind of imagery to cope with for you.
Due to particularly for GE.
And I, just said to you guys to who buy out of my adjuvant and buscher human treatment and all the properties.
For you the receivable.
And so for the.
The first question and that Stephen and I think and it's important to emphasize the product is.
Is there a new the scale right now is not large.
And on these things and it's fair to say that.
We still have to figure out exactly how the accounting will work now that said of course, everybody can look at for example, after pay globally and how their accounting works for a consideration, but that's a whole lot in terms of what it would be it would actually be more of like receivables and receivable gross risk has already stated that so.
Importantly this.
And this is not a loan product and it will probably not be accounted for in that way now overall.
Still early but very very clear that the risk for this product is very low.
To New Jersey from key tissues, and he is going to do the charge off and you can charge off curb Carter C D and show them. The chart over time, just how to write offs that and typically I think he can do that and you hit 1 day.
And Rd agenda, and truth to cobalt and the charge off side to me, if we cut out the share repurchase.
Sure.
Thanks for that cause you to hold to the to ship, we gave him and vintage thanks, Joshua Youtube on to each of Wuxi go from sandhill attach on to each other.
And so M. Steven maybe I'll jump to the and first up it's not a indication of the risk performance, but rather.
It's an indicator of how the charge offs works basically to charge off time for example, and to 7 months so as it goes out.
Would actually be consistent with the 30 day numbers and while there have been early charge offs and the past again I don't think you can read actually too much into the close and that way.
If you will.
Alright. Thank you. Our next question comes from Alex here from UBS. Please ask your question.
Okay, Nick and doing it.
To your point and are willing to outgrow when D D.
And when you came on I mean.
Just to change reaches and.
And Jim I mean.
Yeah, well oney and time.
To sue.
<unk> got to most of you know who don't want to jump down to James so much and.
So for all of that merchant to merchant.
So and its impact.
And that's what I'm, saying right now and and.
You don't have a teenager and I've seen that sounds to be more chance like Oh, sorry, you can think of you didn't college and right now to everyone isn't a claim on my young to attempt to.
Okay.
And I think for that.
Joining me on good times, and she said to me on Monday.
So we know from she shop anytime to.
Uh huh.
And that's why you don't sound to Utah, now and we're not to want to call John to you on them and I think of a whole bunch on but not much and and you know kind of share as it sounds.
Choose to almost over time.
I mean, they share go right now.
So I have to question.
First 1 is on the regulatory from document or on steam and some.
And centered around the regulatory tomorrow.
And I'm just wondering a winter to management is considering to apply for and national online micro loan and Iceland.
And to Oh, that's attached to the regulatory risk.
And I'm wondering if you have for Oh for.
And the new regulatory environment on this from.
Even debt.
And a nice to ease do on competition and dropped stage.
And second questions on the M. Oh my yard so I'm on I'm wondering on winter, we shouldn't expect some synergies between these 4 times.
And all of our major.
From a non purpose going forward and so basically and that should have.
Michelle in millwork and come up with just from cost.
Email and some interest going forward and I'm just wondering.
If you have seen any and any trends.
On such a commercial and also comes from Us.
Yeah.
I'll tell you the other other timber on it and watch what the other thing relative to a woman.
A woman that each year and 10 of them got it you got to divest everyone to of timberland value, if I wait and see things, even though interest.
Okay and to take.
Gen..1 doesn't go to.
And when Venetian and Guy says.
And to that so for me to way to that I talked to that knitting, and there's an opportunity to invest.
You got to go to shop.
<unk> got to the other 1 <unk> trial for <unk>.
And she was a woman Yana what to watch all that and you've got pedal to supplement that I see is even quarter to either so that's all women to solar and she's a weighted to sanchez what else other than I thought whatever.
Why don't we take Oh shut up right to get to.
Yeah, well talk about new tidy went away and said, let's say and hopeful goal of entitle to let the godfather and anyway. That's the other.
And we're going to or many other.
Just on my other.
And I always hits at Liberum I've got to so what am I noticed a.
And so to see the hit to hopefully.
From a reported a cohort so first on churn.
Nobody and either.
Well then to look at a cohort table.
And can continue to do it for Coca Cola.
To go holiday you got you guys have done.
And on a same.
On the way and said it also turns out to other content pendulum without my yes, it's a little more to that.
You have to deal with that change.
So the bulk of that unless there's other data. So what you talked to you that needs to go well.
And you tend to authorized for you.
Just on top women's and then sometimes the non menthol and Melissa hole. So what I did hear corridor payable and that's a whole pile on.
100, and maybe Tom Mccourt to us each and go to cohort..1 can you think of them in a cohort of to them, but had to you so much.
So what did I say.
Attention to change my us and Trinidad and you got to and data you're going to.
Got it to another day and soak up some other visit Pelican NATO and go to negotiate to.
Hopefuls has.
That's what day, you go home and buy that you've got to I'll. Let you go to your credit. So let's talk to you you got to a lot of other day.
We're not if other let you go you got to you. Please try to focus them, but yeah, there's all day.
Peter.
And also.
And I like some and we did mentioned the regulatory situation and a little bit earlier.
And I think we want to emphasize here that well.
<unk> as we all know around loan facilitation is out and has been established.
We will say that in fact, it's stable and the regulatory environment around the loan facilitation model is also stable and the associated risk with the model and also with the environment have actually decreased and been reduced over time. So that's the first.
We would like to emphasize about this now with regards to what you asked about the national micro loan license well, we do have a micro loan licenses for example, we have.
Juncture micro loans license.
And now when we look at the underlying model involved with a national micro loans license.
And that the leverage levels are too low and it's not consistent with the type of business and the business model that we would like to operate so actually we will not be pursuing that particular license now with regards to your second question on my share.
And we say whether or not it can lead to other conversions or positive externalities.
It's clear that for the P. M. P O clients for the customers. These are very very good customers and there's a very good and open space and opportunity here.
And obviously potentially most obvious solution will be consumer loans that are lower interest and we can see a very strong potential market for offering these things up to the <unk>. Our customers now its also interesting to note that there's a lot of potential for customer acquisition.
So what we're finding is because our P. M P L.
And is so new and it is and open space and a space.
Tremendous potential growth.
For customer acquisition cost are also quite low so give an example.
And when we did a promotion with the ETF and other outlets here and a sense in a response.
And we spent only something like 50 to 60000 living B and we got over 1000, new customers. So literally the customer acquisition cost was like 10, and so let me be so hence we can see the tremendous potential here given to <unk> P. M. P. O is a completely new space and.
And hence the potential for many fronts, including on the customer acquisition side.
Yeah.
Thank you as a reminder, ladies and gentlemen, if you wish to ask a question. Please press star 1 on your telephone on next question comes from Cindy Wang from DBS. Please go ahead.
And how often you can.
Just a follow on to that you wanted to add to your plan.
Uh huh.
Yeah.
Well, that's the thing that was hang on 1 day.
And choppy on 1 page.
And to Calpine and you just want to say.
And just thoughts on how we get back on.
And I think quite on watches you tend to have.
And we're trying to get back on a 2.1 P M D and a balance.
So on SEDAR short just to kind of painting that site.
And she now how did you pick up.
And if I shall just to stick.
So I don't want to get back on it being Josh.
Capital losses.
Now, let's move on he can tell me to see.
I didnt catch all that detail.
He has on a class action suit and whatnot.
Yeah, it's on shot and hunger tend to you guys about chi to get San Diego, how it sure now.
And so that's what that woman say on that.
Pardon me.
Oh, well you have to shop, how they go.
So that to your point not.
And I'm going to take on it that way and that.
Okay, Oh and synthetic off for.
To be done, Washington, Xiaomi, and they'll fall 1 on kind of where he got to my dumping a bunch to hydrogel attention and the fact that I'll pass on from Johnson's you're flying to a woman and thank him and Kim.
And pen pals.
Got it got Cheesecake to you don't see to somehow.
Cash flow for any time merchant to hand off to John Clarke and I can see canyon to what I'll call on my Heisey weighted to Tiger.
I'm just going to go.
Charge off rates to digest that.
Got to see that percentage, a cheeky and I just try to call them, Okay, 10 value up and people take a patch and they come to.
And then.
Now on what we're all about 1 and I want to finding.
And my first question is related to that I think being on can talk.
Cost that Oh this type of net long has been calling batteries foundry and the cheap debt.
To be to play a lumpy on the Unbilled balance in first call day and Ah cost.
And provide some color on what that long tenor and to size up to that know us to us that.
Jeff on this.
And U S M P alone.
My second question is to me and they take care of the Arsenal and me.
And I called co develop a way for small and medium.
Besides our banks I felt that joint operation services could.
Could you provide for what type of that pop out to you are going to work on with me.
And what's the profit model, what that looks like going forward.
Question is related to the asset quality trends.
Could you give us some colors on and what's the trend to attack in the second quarter off to here and how do we expect to in the and <unk>.
And half off base here is.
Is that any.
Possibility that the vintage charge off rate is going to.
Interest Chad I'll take your third 0.5 per Spanish debt off are you on.
And guidance up to 5 to 4 per cent.
Thank you.
For the what's that going to play.
The Eagle and team to sell.
And does this sound way to take a credit to quite a low woman. Okay. So to the little opinion each other that's helpful day. She thought so wanted to go to jail.
And case, Okay, and so as I went to hear that there's other you got in China, you talked to us about the orders. So that's good to you Jim.
And that there might have been left and you're going to teach and Saturday such well tend to say, let's hold on to as a woman centric portfolio hernia portfolio and look and go to shortly that they're going to cohort to well they would I to the typhoon.
And your team for that and good even if that doesn't go to and shall be though not to be.
So I think us continuing to show whether you'd go to clients, but they might go on to the woman and saying.
Sounds like you to.
The woman tender to debt.
Depending on the local vote.
Right.
Women and counseling can come in 12, and maybe all of.
To that you know where that goes on most of what well Mitchell okay.
And as teaching and sinton citizens other.
The other 2.
And Tim isn't good and you got to England and go to you go according to us on that she's on Dorothy function to don't you commented that a 10 day to day simple interest.
Okay.
And on site to centralize and where they sit.
And the knee and any of that.
Those are kind of as I look so another woman.
Got it and he told him and somewhat linear in nature, and yet functionally and power.
G suite and that's what I.
And what would that be able to gain some of them and definitely.
Central to 10 day, either either tiers and although you can call it sort of just 10 P M life.
Hey, Bob.
And how to hit me when I say to the uncle you need to go to tell me to tell me when they're sold on a good and daughters, who can go to Hugo Fenton and they just all of them and puzzle to income.
To send up I don't believe yet, but she's other dishes claim in 2 and I'll, let you and other expenses.
And that's what to do.
And I know cohort to things that day.
Do you go to Bonnie Hudson.
1 pump per surgery seamless.
I'm going to associate for Union, so nobody likes to say you were supposed to day.
And I know for the future when we're going to go to quite tiny to say.
And so that to be willing to sell it and go to that you go and you go so either for you.
So not that guys just for a minute and other you've got to Yamana and.
So Cindy for your first 2 questions on.
And the SME loans.
The typical <unk>.
Size are these days would be about 100000 to 150000 and b the pricing would be typically 18% to 24% and terms of the interest and the tender with the 12 months, but it's fair to say that there is a high variation in terms of the day.
And the SME and our potential customers out there so and the future as we do more of the business and we get into if you will a lot more detailed calculations, we will have issuance and the products as well now on your second question with regards to the.
And you will cooperation with the smaller and medium sized banks and what products are we would cooperate on well well first start with working with a select group for a deeper cooperation and what we do see of course right now.
As a situation where for a lot of the financial institutions.
Credit the money you can't leave the province, and also their operations on several levels has room for improvement. So what we would aim to do is actually to work with them and cooperate with them on a 1 on 1 basis and on a side by side basis and.
Effectively to help them develop the new and more innovative products targeting their customers to help them run their operations better, especially when it comes to managing their existing customers and to look more closely at their portfolio and their customers as well and what we would make on this.
Effectively be like a commission on the business. So obviously under this model, we won't be taking on any risk.
To the design win here.
And what we're doing which is all on women kill you see due to temperature down and sometimes you can't talk to you can see energy loans on to kind of each usually some other tissue.
Okay.
She is on attitude to to do even though we should touch on them to be from Tien and seem to hop on either to do once you do them and their frequency at home.
And seem to get that for you.
The woman, she seaborne and touch on the puts on the.
It seems to me my plan do you have to you that you wanted to boost Pangu and locum Tenens institution and you call. It on it seem to me.
To take a golf of patents easily you on that high box for you could teach and look when you tend to work more.
And I lead Shaw and Vince.
Additional suites and suddenly switch again to do the guidance.
So Cindy I think as mentioned earlier and.
And that we see from the first quarter is going and a positive direction and this continues and the second quarter and we will definitely continue to further refine our risk control models and to approve it and so we certainly hope to improve the numbers and to continue to see the asset quality.
And continuing to improve but also taking to the account that we do have if you will new initiatives and businesses and of course, we are continuing to grow. So overall, we want to be cautiously optimistic about the general asset quality trends. So I think on what we would like to do.
Is maintaining the outlook at 3.5% to 4%.
Okay.
Great. Thank you. We're now closing on the end of the call. Your final question comes from the line of your debt Lee from C. ICC. Please ask your question.
Oh, great from a home.
And if they don't come to agree with you got to you.
And Oh, you're going to come through right.
And I have to go to to what you like can you talk on.
Obviously, you talked to you we used to should we project, what's been interesting there and what's going to cause.
And so I'm going to achieve Georgetown EBIT would require them to go for.
For Gulfport why aren't you may want to enjoy what they're doing.
And did you at all.
You can argue and he changed or are you going to do without a doubt you don't want to go.
Oh sure door shops, and that simply trying to put them on shoes. How did you go for Oh, I'm going to you and 3 years from 3 ways to share what are your to go used to choose from to your hometown and card to go down so even if you go to.
Equal to what you just you don't wait for maybe easier to charters to go again, we have no more suitable Richardson and I'd go to English.
Even more share you don't do it you're going to go credit non.
Felicia to which I'm going to let him go more to talk to you. It was and what should you do seem to agree on what should be on the higher so without that biologist and younger jarring to more ship. Okay. I would trust and a question on how would you break questions. Just first wanted to bought out work from new partners. So could you. Please share more information and we got on how many people and partners, we have and in total credit and a warm through 'twenty, 1 and besides hold me to.
Congress to do we have on there to appropriate sharing model or the second question is regarding our new joint operation and service model and I noticed that.
So I was wondering if you could help us understand what's to extra difference between the new draw and calibration and service model and Oh, what do we have been doing before things to watch.
Yeah.
Yeah.
Okay to a woman easy just to listen to them.
So the woman that goes on.
To go to go well then the high and so on the quality or somebody to other than the other 2 months ago with I went into central and have.
Montana Junior and you'll hear it and go to India found out they let it you wanted to let you and once it's what how about you said it and he has seen that seem to be out you'll have to stop.
No 1 does that give me some money and send to the downtime on to Chi from US and go to you've got total cost for that so much I will mainly deals the other cities other than what you eat well to a whole lot and since I just thought it was a volatile.
And you talked yet so, let's say to total Mayo atone and tier 2 to the treaty.
No well many other I'll just.
And then chewy and holidays like unions and the Melissa Cool and then inhibitor, but for new Melissa you want to them, but yeah.
Oh, what's that turned out to that whole it took on.
And so you'll see that until the time you hit on it.
Dave just to want me to kind of for no more to especially warm until you to copel hoodie or whatever but that's on page 2 of the day and even more so.
So, but other than somebody told you and therefore, well mindset on that.
And that type of deal and some not.
And I'd say you got to OTT.
Now the other union, she's a woman and so well.
So youll it didn't kill them and Lewis and that didn't go to you've got 10 P M Delta or how to time King women's apparel to let you know what to go to.
Sure.
And so it's hard to choose the other 70 and door issue to that 19 him and bend to them to allow them to go on for me.
So I'm not saying, it's on a just a HUD until you're on us as well so he has to cool and Brazil, Europe and Russia.
So we're not tied to a woman.
And I'll give it up with some growth.
And then go and shame on us as well.
And then Dan could.
So did it to the Permian.
And so you're open to doesn't go to your gum.
And you guys you got a whole co Ltd. So.
And so I'm not saying to toner.
And then go to for CDR and go.
Good day.
To your plan to file for this as well.
To enhance sales how much of it.
On to the literature, you got to okay.
There's other it tends not to hold on and I just want to go out there and as I said those are we on went up on her wants and didn't really you got to hold on and so lots of attempting to income as well as a bunch and let's say you've got to it.
And because of the Yugo and you got to that assumption.
Wait a minute. There's other you got your go to French animals or something in a good way to help at all not woman and she said, yes, I'm trying to read on the filter those aren't on let's say, that's a sort of towards it and with a cool for me and you got to be young closer to cohort as it relates to go from a b and C O to O W.
And that'll be young for some other.
And that's a long to tell a woman.
And at that time that you didn't even come into New York. So now that you've come out of it and go to either you've got to kind of cohort now to recoup with hunting and mill installed and they need it and.
No way to go with me away kind of on issue the demolition and the television and Huntington and alcohol I bought her to.
Luca just to holiday disorder, and the other day.
Yeah, and I think what you will talk to that a woman to what I would tell you and so there's always going to be able for you and you sell them and core to your total cost could be and Polish and so they'll try and hold it and try to hold that.
And the Laguardia to chime in but you go through to women to I'll, let you go to them and it's on day census was older titles on dish to hub.
I'm going to or you can call even to some balance to bundle come on to your funds into the EBITDA would've been right for them.
So with that kind of just for a 10 year plus other egencia and to who.
It seemed to loosen that didn't go to youll be able to touch on really attributed to the Holdco for to report on that neither you got to have and so in the 10-Q.
And so I think with regards to the first question.
Well, our asset quality and the attractiveness of our assets has always been high. So we've consistently had over 100 and funding partners and they're certainly and we continue to increase the number it's perhaps worth noting and highlighting that as of late there's been a series of.
Local regulations.
Or guidelines and targeting towards more shall we say a.
Local type banks.
As a result, some of our operations and and our girls have targeted.
Local banks in light of the type of guidance that they've received and we've signed up.
Over 10 regional banks recently, but.
We don't have the definitive exact number on that particular initiative to give you on the call right now so that's on the first question now on the second question.
And there's actually a very very obvious difference in terms of the cooperation and how it works.
At a high level or at the customer acquisition and level the traditional market is our customers and.
And it's our Traffics and.
Our customers and our traffic getting direct it to the financial institution.
Under the new cooperation model it will no longer be using actually our particular customers traffic or actually our current products. It would be working with the financial institutions to themselves.
Local products and to help with their local operations and based on their local environment and conditions to develop the appropriate set of products targeting their local customers. So again at a high level and a very key thing is this is not our customers being diverted there it's rather.
Eloping and capability not only to serve well the local bank customers, but also actually to help with the low code customer acquisition. So we would be able to for example help direct their online advertising and marketing something that we certainly have the expertise and now.
And interestingly once the product and that's developed.
And we have these revenue drivers in terms of the revenue and the proppant and to split it may actually be very similar to our existing products.
And that sense of similar but again the underlying models very very different now also I think it's important to emphasize that for example, we see a lot of banks. They have many depositors that many customers, but they don't necessarily know how to develop the right type of financial products and loan products to target.
But these are the positives and customers. So that's what we aim to do and we aim to help with a complete model. So this would involve actually a dedicated team.
And in fact dedicated teams that with live and breathe and actually work at the banks to the wells side by side. So hence that you can see that this would actually be a very different product and what our existing products on.
Alright, Thank you very much ladies and gentlemen that does conclude our conference for today. Thank you for participating you may all disconnect.
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