Q1 2021 Yiren Digital Ltd Earnings Call
[music].
Good day, and thank you for standing by and welcome to the Euro and digital first quarter 'twenty 'twenty 1 earnings conference call. At this time all participants are in a listen only mode. After the speaker's presentation there'll be a question and answer session to ask a question. During the session you will need to press star 1 please.
Please be advised that today's conference is being.
And the competition for your first speaker today.
Thank you. Please go ahead.
Thank you and welcome to <unk> first quarter 'twenty 'twenty, 1 earnings conference call today's call for you trace the presentation by the founder Chairman and CEO credit E and I see on top.
Our ICP Ms and lays out.
Cortisol.
Good day.
Net income.
Okay.
Good day.
We will then.
Statements made under the Safe Harbor provisions for the U S. Private Securities Litigation Act of 1985.
Such statements are subject to risks uncertainties and.
And factor.
And cause actual results to differ materially from those contained in any such statements.
And they said regarding potential risks uncertainties and factors is included in the company's filings with the U S Securities and Exchange Commission.
The company does not undertake any obligation to update any forward looking statements as required under applicable law and you made a call. We will go for it we will be referring.
For us pickup on non-GAAP financial measures and simple thing to measure.
Review and assess our operating performance.
These non-GAAP financial measures are not intended to be considered and isolation or as a substitute for for.
And I thought was amazing and prepared and presented in accordance with U S. GAAP.
And about these non-GAAP measures and reconciliations to GAAP measures. Please.
And for it to our earnings press release.
I'll now pass on to name for opening remarks.
Thank you all for joining us today.
With the completion of our business restructuring and spin off of our legacy business.
We have completed our transition.
For for become a leading user centric digital personal financial management and platform.
We believe our solid quarter to start the year.
Resuming high quality growth and.
Returning to our normal profitability margin level.
As we continue.
2 to focus on our strategic transition and the business growth, we are constantly building and strengthening our key competitive.
Along the way for.
Firstly, we have accumulated a considerable user base.
With over 5.3.
2 new borrowers and a 2.4 million investors.
Who we are reactivating and at the same time, we are also continuing to acquire new customers in our served the settlements for.
And our established and networks and partner channels.
Secondly.
We have been making efforts and technology innovation and the building up our data and tech driven and I T systems.
And with AI, and blockchain and cloud computing to better serve our users and it has our operation and efficiency.
Thirdly, well and reaching and borderlands.
And our product portfolio in both credit and wealth management to force of schools back to on a financial products and services.
So for all these new tools, we're aiming to fully address our customers' financial needs in every stage of their lives.
And those through both online and offline channels.
And with product and services ranging from credit to investment and new insurers.
To help them better spend better invest and be better protected.
This is how we are differentiated and we believe.
On the right track to continue to expand our business map.
Now I will provide the business update on our wealth management side, and then I'll pass it to over and over to Mei to give an update on our credit business.
Our wealth management business.
We continue to see stable growth.
Prime assets for investment products reached RMB, 10, 7 billion and.
On March 31st 2021.
Representing an increase of 25% quarter over quarter.
And as total number of active investors stood at 307 cash as of March 31st 2021, representing an increase of 32% from last quarter and me.
Meanwhile, the number of newly registered users.
Coming from you and while referral program and the first quarter. This year grew by 22% from last quarter.
Indicating increasing trust and loyalty from existing and Masters and our brand and reputation.
In addition, we are making meaningful for treatment.
Increasing our investors our T V.
The first quarter of 'twenty 'twenty, 1 and the number of investors who have more than 2 asset classes on and well grew by 630% from prior year and the average client asset price.
Either increased by 65% quarter over quarter to RMB 85 K.
Next on to our insurance business hotelier insurance brokers and the growth momentum remains strong.
We expected our product portfolio.
Back into life insurance this quarter to fully tap into our customers' insurance needs.
As well as the rollout of a new strategic platform initiative.
And which leveraging on our insurer and tech capabilities, we partner with traffic channels.
Right. So no real based data driven product design and digitize the policy administration and distribution services.
Using our partnership with the ski and snowboard platform as an example, their platform helps users plans their next ski trip.
Took her lessons purchase equipment and now she's a D au ARPA around 250 K.
And we work with our insurance partner to tailor, our personal accident insurance plan, specifically for sport related incidents and digitize their entire process.
Book from customer on boarding to underwriting and claims management, helping them realize and entirely new revenue stream.
We will continue to open our platform to an increasing number of channel partners to serve different consumption scenarios.
Last but not least.
Our digital stock brokerage platform is set for launch and the second quarter, which will offer and offshore stock brokerage and financial services to retail investors.
Bringing additional synergies to our wealth management business.
We note and ongoing trend.
<unk> gold assets in China increasingly being shifted from deposits to money market funds and the equity assets, including staff and future.
Given there are more attractive to you.
In addition, global capital markets are experiencing a sizeable structural shift.
And how as trading volumes are hitting new highs in 2020, 1 with increasingly strong participation from retail investors.
This retail investing phenomena has taken off and accelerating and our new initiative will allow us to see the benefit from these market trends.
Leveraging client resources and partnerships with credit <unk> ecosystem, that's why our strong professional investment capabilities. The platform will target both mass affluent and high net worth customer segments and offer value added services, including <unk>.
And to see 1 on 1 consulting and financial information and services.
Now I will turn the call over to Mei, who will highlight key updates for our credit business this quarter.
Thanks, Nene and how the other 1 I would.
<unk> provide enough day on our credit business.
We continue to see solid business and growth in the first quarter out for 2020.1.
All in for 3 consecutive quarter yourself for growth in the low volume how can he has to start at 8 years strong.
And as the first quarter, Yeah and credit.
Now part of New Jersey, Richard and 95, 8 and alien increasing 8% year on year.
Total number of the borrowers therapy, and the first quarter, which are closer to 315000 and in trades up to 83% quarter on quarter.
Registered in the first quarter and credit platform for 17, and RMB 429 dealing and on and there's a loan facilitation model.
And the increase of 17% quarter over quarter, and 5.555% year on year.
We are now focused on that.
And key strategic initiatives, which echo what Neil mentioned earlier on and our positioning to be a leading user centric and digital personal financial management platform can meet our customers' diverse.
Diversified diverse and financing needs. So we're offering a comprehensive suite of for financial service.
True.
Firstly, we have been diversifying and enriching our product by countries and broadening our channel partners and now we are uncovering a growth numbers of consumption scenarios, including traveling shopping.
Social networking and containment.
This is like education waste.
And we said it makes a price offering from the secured and unsecured long with the various the ticket size and the tenors offering through both online and offline channels. We have established a suit crowded proudest metric to meet our customers and various trials.
And any.
Also on par from Chiesi channel. We have also established a partnership to be companies such as third party payment SaaS platforms and.
And tax and financial management platform, which houses the further drives up our scale.
And so far we are working with more than 30 channel partners and we are continue to expand more external cooperation.
Secondly, we started to work with our hooked on reinsurance brokers last year.
To offer and wise and.
Property insurance and products and services to our browse Ah trial borrowers to better protect them and their families for.
Both our online platform and the offline national and now where it helps them more than 200 stores.
And insurance has now become a new driver outside <unk>.
And the premise.
Average premium per policy, so the visible growth by 200, and a 70% from August to try and hit 22 April 2029.
Driven by increasing cross sell and that south and strategy.
So you can see that by.
Private separate and different business line, we have viewed and specific and enter and complementary ecosystem all financial services.
On the push and you'll from we continue to achieve the cost efficiency and improve our proudly unique economics for it.
And until we see further.
M T decline and the customer acquisition cost as we broaden our products and services offering, thereby increasing the percentage on adult volume on January 5 we keep borrowers by 64% from prior quarters.
Lastly on fiscal performance.
We have been stable any in <unk>.
Proving credit performance.
And that's off the March for the 31st for 2020.1.
Delinquency rate for loans, arguing that are past due for 15 to 29 days.
13 to 15.
And these days and 60 to 89 day tour a point on site plus 5% for 0.8 person and.
0.6% respectively.
Recovery in line to our he's got his historical lower levels.
And ninth in terms of the risk of 19th of May and we have to improve for collection rate for more refined access manager and policy, enabling us to stabilize our delinquency rates and the healthy level.
As a result, we expect our strong credit performance to continue.
And throughout the year.
And that we would now pass it to our Fiat for now who will provide a financial update.
Yes.
Thank you and me Hello, everyone and for financial update and a focus on key items all of business operations under the financial for from Us.
And what kind of and for to the detailed financial results and I'll argue.
And released on a task that husky and pulse on all lifetime for.
Total operating highlights for wells and Muslim business as of March for smoking for 2020..1 we'll have some for miles on to ponder for feeding and lifetime.
Oh and hold on.
On T.
Activity in the West coast and in all your WAF and.
Product growth was 300 on a 7000 Wow hungry for on the silent increasing chunky troops on the culture and will call Don Klumb, Alsace and all you want some products increased 25% to call. It her on a culture to them and be part.
And also for southern feeding I felt not just something for 2021 on the classified loan origination for the culture with young default on Tonight, beating.
On increase of 17% quarter over collagen and cultural 1 it's all he's talk on slowing for culture and people to try on a holiday I'm doing.
Non class 1 of them for father's day out in the following quarter.
I'm far from National and the first I'll call. It on total revenue increased 7% year on year 2 M. D..1 on 1 beating off late something for a pause on to King for all wells and I can make business go to the vet Lucky and Red Hawk and dollars.
And.
This net revenue generating funds from what's young insurance for a car is now show and insurance for because it's always no cow would have also M. D and you know financials, so and surrounding a lot of items at least from the planes and love and you'll fall out from from nationally.
And it's Pos decreased by Sun for Sunday year on year on.
And so on zero 8 neat, beating setting on the mouthpiece past equates to searching for songs from flyway or it wouldn't be for hungry on and fine tuned and beating maybe in July and by increasing operational efficiency.
On the service, it's pumps increased 7% from a year or 2 and be Wow hungry.
And can T flow quantified, beating making total inquiries from companies that use pumps patron sales channel as a result for us.
And he issuance of pioneer a.
Net loss for comfort.
Both on the ovens, what's it going to be while countries on the $41.2 beating this call true equivalent to 2 o'clock Tonight.
So on and off no millennial and compliant with zero pounds, 8% last quarter, that's called her way up John Stumpf loss rate based on changing actual collections rate, which means all you allow us to black box and closed either white box allows for blades of last call from 1.3% for late in Q1, 2020.1.
And precisely when compared to last quarter.
Net income for the call time from Christ 8 times range on the 14th floor for sound and phone power here.
And maybe 181.2 meeting on the balance sheets that I'll catch quotations and and strong once again be true pumps and think feeding of cash on the Shanghai and Watson.
Let's pass on much smoking first on page 21, our strong finish sheet provision as well in for kind of operating environment and allow us to continue on to empower and new in niche and keep on deposit into new opportunity.
Finally on business outlook for the full year 'twenty 'twenty, 1 all forecast for women.
Range of M. B 22 smoking, meaning for the total.
B why from a part on and it shouldn't be 'twenty to 'twenty from beating for the total loan force anything there.
For cost, but first I'll call them and they're pretty new reveal off the marketing on the operating confusion, we talk from try to change.
And on close all comes on that Mark.
3 times, while waiting for Kandi.
Thank you.
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There's no more further questions at this time.
Going back to today's presenters for closing remarks. Please go ahead.
Thank you everyone for joining the call today. This concludes our call for this quarter. Thank you.
Yeah.
Thank you you may disconnect and have a great day and goodbye.
Yeah.
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[music].
Good day, and thank you for standing by and welcome to the Euro and digital first quarter 'twenty 'twenty 1.
And for school at this time, all participants are in a listen only mode. After the speaker's presentation there'll be a question and answer session to ask a question. During the session you will need to press star 1 please.
Please be advised that today's conference is being recorded on it.
And I'm going to hand, the conference over to your first speaker today, Mr. Lydia Yu. Thank you. Please go ahead.
Thank you and welcome to answer those first quarter 'twenty 'twenty 1 earnings conference call. Today's call features for presentation by the founder Chairman and CEO of credit E and I see all of the things on our.
Our ICP, Ms and lays out and our CFO Medisoft day.
For today's call are director at well sites.
During the session.
Yes.
We will Oh my statements made under the Safe Harbor provision for the U S. Private Securities Litigation Act of Nike and 5.
Such statements are subject to risks uncertainties and factors that could cause actual results to differ materially from those contained in any such statements.
And my son regarding potential.
I'm sorry for factories. That's included in the company's filings with the U S Securities and Exchange Commission.
The company does not undertake any obligation to update any forward looking statements as required under applicable law COVID-19.
We will go for it we will be referring to separate on non-GAAP financial metrics and simple, but from others to.
For review and assess our operating performance.
These non-GAAP financial measures are not intended to be considered and isolation or a substitute boyfriend and I felt was the message and prepared and presented in accordance with U S. GAAP.
As I mentioned about these non-GAAP measures and reconciliations to GAAP measures. Please refer to our earnings press release.
I'll now pass on to name for opening remarks.
Thank you all for joining us today.
And the completion of our business restructuring and spin off of our legacy business. We have completed our transition to become a leading user centric digital personal financial management and platform.
And he learned a solid quarter to start the year.
Assuming high quality growth and returning to our normal profitability margin level.
As we continue to focus on our strategic transition and the business growth.
We are comfortably building.
And the strengthening our key competitive assets along.
Along the way.
Firstly, we have accumulated a considerable user base.
And over 5.3 million borrowers and the tube core and $4 million in plastics.
Who we are reactivating.
Building at the same time, we are also continuing to acquire new customers in our served segments for our established and networks and partner channel.
Secondly, we have been making efforts and technology innovation and building up our data and tech driven.
And that's couple.
Coupled with AI, and blockchain and cloud computing to better serve our users and you have on our operation and efficiency.
Certainly well and reaching and broadening our product portfolio in both credit and wealth management and so forth.
And financial products and services.
So for all these moves we are aiming to fully address our customers' financial needs and every stage of their lives.
Serving them through both online and offline channel.
With product and services.
For spectrum from credit to investment and insurance.
Have them, better and better invest and be better protected.
This is how we're differentiated and we believe we're on the right track to continue to expand our business map.
No.
Range provide the business update on our wealth management side and that our profit into over and over to Mei to give an update on our credit business.
Our wealth management business continues to see stable growth.
Client assets for investment products.
On the RMB 10, 7 billion and so.
On March 31st 2021.
Representing an increase of 25% quarter over quarter.
Total number of activity and masters stood at 307.
Rich cash as of March 31st 2021, representing an increase of 32% from last quarter.
Meanwhile, the number of newly registered users coming from either well referral program and the first quarter of this year grew by 22.
And from last quarter.
Indicating increasing trust and loyalty from existing and Masters and our brand and reputation.
In addition, we are making meaningful achievements and increasing our ambassadors our T V.
And the first quarter of 'twenty 'twenty 1.
The number of investors, who have more than 2 asset classes on either well grew by 630% from prior year and the average client assets, probably investor increased by 65% quarter over quarter to RMB.
1.5 K.
Next on to our insurance business on Julian insurance brokers and the growth momentum remains strong.
We expected a report on our portfolio into life insurance this quarter to fully tap into our customers' insurance needs.
And as well as the rollout of a new strategic platform initiative.
And which leveraging on our insurance carrier.
Capabilities, we partner with traffic channels to provide and scenario based on data driven product design.
And is the policy administration.
And the distribution services.
Using our partnership with the ski and snowboard platform as an example, their platform helps users Plaza and next day trip book lessons and purchase the equipment and now sees a D. A new off around 200.
Tricia T K.
Work with our insurance partner to tailor, our personal accident insurance plan, specifically for sports related incidents and digitize their entire process from customer on boarding to underwriting and claims management, helping them realize.
And a new revenue stream, we will continue to open our platform 12, and increasing number of channel partners to serve different consumption scenarios.
Last but not least our digital stock brokerage platform.
And for launch and the second quarter, which.
And how offer offshore stock brokerage and financial services to retail investors.
Bringing additional synergies to our wealth management business.
We note and outgoing trend on household assets and China increasingly being shifted from deposits to money market.
Which ones and equity assets, including staff and future <unk>.
Given there are more attractive you.
In addition, global capital markets are experiencing a sizeable structural shift and trading volumes are hitting new highs in 2020, 1 will increasingly slot.
And from retail investors.
This retail investing phenomena has taken up and accelerating and our new initiative will allow us to see the benefit from these market trends.
Leveraging client resources and partnerships with credit <unk> ecosystem.
The peak was our Salon professional investment capabilities the platform will target both mass affluent and high net worth customer segments and offer value added services, including exclusive 1 on 1 consulting and financial information and services.
No.
As well I will turn the call over to Mei, who will highlight key updates for our credit business this quarter.
Thanks, Neil and Hello, everyone.
And we now provide and update on our credit business.
We continue to see solid business.
<unk> and the first quarter out for 2020.1.
And the 3 consecutive quarters of the growth and the low volume, helping us to start on 8 years strong and.
And as the first quarter, Yeah, and credit and register New Thursday, Richard net.
And 5.8 million increasing 8.
And as a percent year on year.
Total number of borrowers served and the first quarter, which are closer to 315000.
And in trade sell to 83% quarter over quarter in the first quarter and credit platform for 17 and RMB 4.9.
18 months and or the loan facilitation model.
And the increase of 17% quarter over quarter, and 5 or 565% year on year.
We are now focused on 2 key strategic initiatives, which echo what Nick mentioned earlier.
Building on our position and to be a leading user centric a digital personal financial management platform to meet our customers' diversified diverse and financial needs for offering a comprehensive suite of for financial services.
Firstly, we havent been diversifying and enriching our product like.
On the kids and broadening our channel partners and now we are uncovering and growth numbers on the consumption scenarios, including traveling shopping.
Social networking and containment and education.
And makes a product offering from the secure and.
By click here, along with the various the ticket size and the tenders offering through both online and offline channels. We have established a suit crowded progress nature to meet our customers and various it tried and needs.
Also our power from Chiesi channel we have.
And so established a partnership with <unk> to be company, such as third party payment SaaS platforms, and tax and financial management platforms, which help us to further drive up our scale.
So far we are working with more than 13 channel partners and we are.
Oh, Gee, new to expand more external collaborations.
Secondly, we started to work with our Hirsch and reinsurance brokers last year.
To offer and wise and a property insurance and products and services to our Broward and 12 borrowers to better protect.
And and their families for.
For both our online platform and the offline national now warehouses and more than 200 stores and new.
Insurance has now become a new driver to our credit business.
Average premium per policy cells and visible growth by.
200, and a 70% from August to try and make 22 April 2029 day.
Driven by increasing profit out and that's our strategy.
So you can see that by integrating different business line, we have viewed as specific and entering complementary.
Ecosystem on financial services.
On the all pushing on all fronts, we continue to achieve the cost efficiency and improved our priority you need economics for it.
And as ankle we see further decline in the customer acquisition cost as we broaden our products and services.
This is the offering thereby increasing the percentage on adult volume on January 5 we keep borrowers by 64% from prior quarters.
Lastly, our risk and performance, we have been stable and improving credit performance.
As of the March for the 31st for 2020, 1 a day.
They can see rates for loans aren't and you got a path to do for 18 to 29 days.
30 to 59 days and 60 to 89 day tour a point on site plants.
5% or 0.8% and the 0.6% respectively.
Recovery in line to our he's got a historical lower levels in terms of the risk management, we have and improved collection rate.
For more refined access manager and policy, enabling us to stabilize our delinquency rates and the healthy level.
And as the results, we expect our strong credit performance to continue throughout the year.
And that we would now pass it to our CFO.
And now who will provide a financial update.
And <unk>.
Thank you Li Hello, everyone and for financial update and focus on key items, our business operations under the financial for from US owning what kind of refer to the detailed financial results and are already released on Argos somehow.
And that has been posted on our Wildcat Foster our operating highlights for our wealth management business as of March searching for 'twenty or 'twenty..1 we'll have some small non to ponder swap eating at restaurants and for the total number of active activity that you asked us for email you wasn't on products go.
For 2 or 307000, Wow hungry for on the silent and Crazy Cherokee true pause on the culture of what called her climb Alsace and all you want some products increased 25% culture, our culture to them and the pawn cross sell and beating I felt March 31st 2021 on the cloud new fine.
No argument for the culture with Yankee for crime Tonight, beating representing an increase of 17% quarter over quarter cultural 1 and it's all historical slowing for the culture and due to try on a holiday and.
And 1 of them for father wiped out in the following quarter.
On to our financial and the.
First I'll call. It on total revenue increased 7% year on year for M. D..1 punch 1 beating of wage something for them for soccer team for all wealth margin might be isn't it.
And to the left Lucky and Red Hawk and dollars and insurance business revenue generating far from what's young insurance broker is now shown.
So and on each 1 for customers and knocking out would have also and even in your financials silver surrounding a lot of items waste from the problems and revenue for altra and foundational knees total.
And I'll just pause decreased by Sun for Sunday year on year on tour M. P zero 8 neat, beating setting on the mouthpiece past equates to searching for them for.
Aside from flower yard for them to be 405 hundred true meeting, maybe and joined by increasing operational efficiency. All on as you know on the surface pumps increased 7% from probably a year and try and be 100 under 70 flow quantified, beating mainly due to increased income and you should use pumps paid for itself.
Sales call channel as a result officer Pat issuance for pioneer.
Allows for calling for Iva receivables on the August what's your and be 141 pontoon, beating this call to equivalent to 2 o'clock Tonight for signs off and on rhodium as compliant with zero pounds, 8% last quarter, that's called her way.
We have dropped off that loss rate based on changing actual clubs and great, which means all you allowed us to write backs and quantities and redbox allows for range of last quarter was 3 condensate puts on the rate in Q1 'twenty to 'twenty, 1 what's badger and comprise from last quarter.
Net income for the quarter increased 800.
On the 14th for sound from power here. So again, maybe 181.2 meeting on that.
Our balance sheets that archived for patients remains strong with a gang be true pumps, and think feeding off cash and sheltering and Watson and found much looking for plenty of 'twenty, while our strong balance sheet provision as well.
And the current operating environment and allow us to continue on to empower new in Asia and.
Todd into new opportunity for you.
Finally on business outlook for the full year, 'twenty or 'twenty, 1 all forecast of roaming and the range of M. B, a 20 to 30 meeting for the total.
B why from a part of.
And it shouldn't be 'twenty to 'twenty from beating for the total loan facilitated this forecast reflects I'll call them and they're pretty new reveal off the marketing and operating a confusion we talked from dry to change.
This concludes all courses and Mark.
Operator, while waiting for Crown day.
Thank you well now begin the <unk>.
Question and answer session. If you wish to ask a question. Please press star 1 on your telephone and waste.
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If you wish to cancel your quick please press the pound asking once again it is star 1 thank you.
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Yeah.
Once again, if you wish to ask a question it is star 1.
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There's nowhere for the questions at this time I'd like to hand, the call back to today's presenters for closing remarks. Please go ahead.
Thank you everybody on the call today. This concludes our call for this quarter. Thank you.
Yeah.
Thank you you may all disconnect and have a great day and goodbye take care.