Q3 2021 360 DigiTech Inc Earnings Call
Ladies and gentlemen, thank you for standing by and welcome to day 360 did your Tech third quarter 2021 earnings Conference call.
Also note todays event is being recorded at this time I would like to turn the conference over to MS. <unk> <unk> IR director. Please go ahead.
Thank you.
And welcome to our third quarter 2021 earnings conference call. Our results were issued earlier today and can be found.
Sorry go.
Joining me today on the job.
So our deal and thereafter.
Alex <unk>, our CFO and director and Mr. Jones.
Seattle.
Before we begin our prepared remarks, I'd like to remind you of our safe Harbor.
Really not.
Hi to these costs.
You may refer to forward looking statements based on our current plans estimates and projections also this call includes discussions of certain non-GAAP measures. Please refer to our earnings release for a reconciliation between non-GAAP and the cat one.
Unless otherwise stated all figure mentioned I E R&D and I'll now turn the call over to our CEO Mr. Shaw.
So you might be.
Hi, there.
Good afternoon gentlemen.
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How the company.
Hello, everyone I'm very happy to report another strong quarter. This marks the sixth consecutive quarter of a record breaking without since the pandemic last year.
During the courtyard facilitation volume reached RMB $97 6 billion to our past one marking another record high.
48% and 10-Q on Q.
Outstanding loan balance reached RMB $133 4 billion.
58%.
And that 31, 3% Q on Q.
Total revenue was RMB, one 6 billion in Q3 'twenty.
25% year on year, and 51, five kilo Q.
Non-GAAP net income was RMB, one 6 billion.
27% year on year, and 1% Q on Q.
Well yeah.
Tianjin was.
Hot topics come and go Oh myself to all of that is to consistently deliver record stacking rates out quarter.
We believe these are fully demonstrate strong defense of our team and the business.
Okay.
Sure.
They're well maintained when it goes from Chris I'm not sure.
So as you know well I forgot you had so you can meet your two times.
We've got a lot of questions about recent regulatory development.
Montana, South dialogue with regulators in recent months.
So let me share some updates here.
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It is the top priority for peer leading Internet caf one examined by regulators already this year.
They should have to be addressed by the end of this year.
October 19 2021 Mister.
Mr. Jim <unk> Chief of PD L D.
Man of the IRC stated publicly.
The protest rectification of the 14th.
The map halfway February interest rates to over 1000.
We have received a proactive response, but majority of the issues and about half of that you should have been resolved.
We anticipate more substantive progress by the end of this year.
Compared to other platforms with financial holding company structure, we don't do payment business, nor do we offer sophisticated one stop financial survey.
Our business model is rather simple and straightforward.
We have far fewer issues than most other platforms.
We are progressing based on the regulatory timeline.
These include enhancing corporate governance, adjusting operation on the various licenses and optimizing user experience exactly.
We are very confident to complete these compliance related items by the way.
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Julia.
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Yeah.
As for new regulations related to credit agencies, we have been.
Thank communications with regulators and the propel multiple proposals to cover depressing narrow.
But we can further elaborate the various financial lines that don't have and then we also have sufficient cash to inject capital into our licensed entity if necessary.
Second we can't actively in discussion with existing credit rating agencies to explore potential business arrangement of course. This is a rather complicated process from both operational and technology perspective.
That's why rapidly to escape a rather long period.
As a leading Fintech company in Shanghai International life without also proactively participating applying for a new credit.
Agency license and the opportunity it presents.
Fourth we are continuing to work with our strategy partner UCB.
Leveraging the banking license.
As you can see we have multiple solution to satisfy this requirement of new regulation and when might be the better prepared than most of the other peers.
But as you can gather.
And just hang goes you know once you go through its cycle at all.
It's always easier when you knew that.
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So I'm not sure it's anytime detour changing that you're going to be shut down this time of need.
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<unk> 24 per cent.
Financial institutions have been guiding to lower their API to below 24% by Nextgen it we'd.
We have proactively communicated with our financial planning to drive down our private cloud platform.
Turning to pricing in Q3 dropped by more than 1% compared to Q2.
For October more than 16% of loans from our platform well priced low 24%.
Going forward well they'll continue to lower our average pricing you know all the manner to make 24% by Q2 and now here.
Meanwhile, the how does that benefit of lower private are gradually showing we start to attract quality customer and a larger financial institution.
New customer risk profile appear that thought that existing one Meanwhile, operational efficiencies also in housing.
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Wholesale channel, which are general box.
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Wichita.
In addition to consumer loan users.
SME and the large ticket.
Users have both grown nicely and the quality of our SME borrower continues to improve.
Right.
SME bar at what time.
Yeah, Yeah yeah.
Stacy I kept them out position is no longer a proper measure to evaluate our user acquisition efficiency.
We have established on the Moor.
To find a floor a matrix that has.
The quantity and higher.
In addition, our.
Embedded finance API model continued to grow rapidly and have maintained a leadership position.
In Q3 more than half hour.
Our new consumer loan borrower.
Under this model.
Okay.
So women, who didn't Ghansham you trimmed what he was saying that you kind of a joke Jon that you're watching document M D.
And how about for one that you just hang your hat on you can come down.
John we have a woman. She wouldnt you have been doing that can do that and when we're gonna start it's Ricky.
When people went to owner Richard Sandy do you weigh that against them, but sometimes the instrument boxes that back from diluted share.
On the funding front with a gradually expand our collaboration with national banks and a diverse the young consumer finance company and urban commercial bank.
Currently we have a number of national banks in our pipeline, including Everbright Bank Jewish I'm Ben and.
And if we don't do that from bank among others.
Spending in relationship with the larger national banks that provide us with more stable funding source at a more attractive cost.
In Q3, our all of our funding costs, we met at around six 7% near historical lows.
And so I think once you do that with sensors you put your hands you Goldman tell me the time they are getting jobs.
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With you once you go what you're going to need help with their decisions.
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Pretty consistent.
Who would be Joshua background before you ship.
So quick answer we don't see a dwarf what I found ways do want a human cause you concern.
Next I would like to share some strategy at bank of America.
Sort of tax driven interim data strategy.
See the patient under the cap and other tech model increased to 56, 8%.
Traveling to our full year target.
Our smart marketing program.
In Canada, and it continues to grow with more innovative products rolling out.
That's a volume on the IV in October increased by 53% compared to June.
For our customer. So these are just kind of what kind of upgrading its more my model OSM House and.
And the a b test data shows average of crowding my wrap there.
Waste by 20%, but the dollar we spend.
Well, they're continuously you progress the past round and upside to what channels southern pen banjo quality customers.
We have received a paycheck and outstanding patent applications in several cutting edge areas, such as Saudi Arabia.
Perception and recommendation and the Bionic telematic.
So far we have fired over 900 patent applications in Fintech related area.
Recently, we have received multiple awards from the Asian banks It three years.
With one of the best with the data and then that it takes technology implementation in China, The best fraud Prevention Tonight and implementation of the year in China.
Did your TV lending service in China.
Mountain Fintech company, we had a lot of wood in the most of the categories for 2021.
I'm glad you saw either done there.
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Yes.
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Cool.
And from there we gave him come with it.
Our F&B business continued to deliver solid as well in Q3.
So the amount of Aneel approved the credit lines increased 13, 1% Q on Q to RMB 8 billion, we are constantly refining our business process to roll out more innovative products.
Simple leverage our technical strengths to improve borrower experience more than 30% three zero.
We own or we see that there are credit lines within 10 minutes.
Baton Rouge user experience give us a clear companion apps in marketing channels.
We also established a process for that and the tax interaction model a financing channel by reach band provide long based on their historical tax payments.
I'll make breakthroughs in corporate credit rating and the credit approval.
Last but not least our.
Offline direct salespeople, who didn't know prevent operation and it's contributing about 20% new customer in Q3.
I'll try and keep you can't access better quantities firsthand customer information.
Our risk models.
With these measures we have gradually built up our competitive strengths.
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In terms of risk management funding goes out for dinner and a protest.
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So you got to do that which you're full year, we'll be done with it you talked about your children.
You shouldn't why you end up getting your fleet.
When we started getting tangled with affiliate fees.
And as you've heard it tells me is that one times.
Let's begin with them have whether or not that was a long time.
Okay.
It's yet to be done.
So we gotta go but either quick answer yes.
Hum.
So can you tell me if that's okay.
As a leading Fintech company with regard ESP as a key component of our long term business strategy.
Under the Black line, China Association of small and medium enterprise.
SME, we have launched joined long product with over 100.
Including India, knowing all young young and the bylaw.
This product so different industries, including supermarket supplier and logistics. Meanwhile, we announced in November the special SME market.
We target to wait.
<unk> 10 million worth of interest well, our SME customers.
Supply of China, how long do you draw a commitment we have rollouts consumer loans by electric vehicles.
The word economy Forum recently.
New champions community of what of excellence.
Business governance 2021.
We are honored to be the only company in Asia to have received diesel what is yet.
This speaks to our increasing impact and a commitment to social responsibility and corporate governance.
So Glenn you said you do that.
Sure.
So you got the only thing that.
You mentioned you're in that financing.
And this would you account for them in your thinking towards you shouldn't get for that.
Nancy.
Finally, a note on our guidelines for Gil.
What is already a middle of November based on our yesterday performance and the business momentum. So far this year. We are confident that we will deliver a solid Q4 and exceed our previous full year loan volume guidance.
Partially I mean, so I'm, the CFO Alexey <unk> and.
And I can do this with you.
Yes.
Okay.
Hi, Shane.
And good evening, everyone welcome to our quarterly earnings call for the interest of time I will not go over all the financial line items on the call. Please to refer to our earnings release for details.
As Joe mentioned, we delivered the sixth consecutive quarter brakes braking.
Record breaking quarterly results in both operational and the financial terms for the third quarter of 2021 in a relatively muted macro backdrop. We saw continued strong consumer demand for credit and stable asset quality.
Faster than market growth suggest that we continue to gain shares in the targeted segments.
Total net revenue for Q3 was $4 6 billion versus 4 billion in Q2, and $3 7 billion a year ago.
Revenue from credit driven service kept on heavy was 262 billion compared to $2 4 billion in Q2, and two point 96 billion a year ago. The year over year decline was mainly due to facilitation volume mix change as capital having long.
Volume decreased significantly mainly.
Well capital heavy facilitation revenue take rate improved modestly quarter on quarter.
Revenue from platform service capital Light was 199 billion compared to $1 6 billion in Q2, and 748 million a year ago.
The robust growth was mainly driven by continuous progress we have made in capitalized and other technology solutions.
During the quarter capitalized and other tech solution contribute roughly 57% of <unk>.
Total loan volume.
Cut capitalized facilitation revenue take rate also improved nicely.
During the quarter average pricing was 26, 1% compared to 27, 2% in Q2, and 25, 9% a year ago.
The 24% rate cap being implemented across the industry gradually we are expecting average pricing to trend down by about one percentage point each quarter through mid 2022 to satisfy the rate cap.
Requirement.
As we discussed in the past even under more restrictive and steep rate cut scenario, we should still be able to maintain healthy growth and profitability in the transitional year of 2022 and resume to a more robust growth afterwards.
During the quarter, we continue to maintain healthy pace.
Customer acquisition.
While focusing on attracting high quality borrowers in particular, we significantly increased the number of customers with much larger credit line, then and relatively low risk.
The average ticket size of these type of customer typically runs between 150000 to 200000 RMB compared to the average of 10000 RMB for quote unquote regular borrowers.
Such on a blended basis average customer acquisition cost, which is calculated by dividing the sales and marketing costs.
With the total new quite of our users.
Customer acquisition cost per user with approved credit line was RMB 305.
In Q3 compared to RMB 250 in Q2, however, excluding large ticket size customers in both consumer and SME market average cost per approved credit line was approximately RMB 249 in Q3.
Compared to RMB 224 in Q2.
As we discussed in the past average cost per approved credit line is a calculated number with limited value in our internal decision, making process. We will continue to use lifecycle ROI and LTV as key metrics to determine the pace and scope of our customer acquisition strategy.
So far in 2020, one we have maintained healthy ROI and.
Our TV trends, which in turn drive stable net take rate.
Well overall risk metrics were relatively stable in Q3, we continue to take prudent approach in booking provisions against the potential credit loss, new provision for contingent liability for loans originated in the quarter was approximately one five.
Billion. Meanwhile, approximately 800 million of provisions for contingent liability our previous period loans was written back.
Actual performance of those loans was better than expected.
<unk> booking ratio, which is defined as new provision for contingent liability divided by capital having loan facilitation volume remained stable.
With strong operating results and increased contribution from capital light model, our leverage ratio, which is defined as risk bearing loan balance divided by shareholders equity further declined to four three times in Q3 from four.
Eight times in Q2, and seven four times a year ago.
We expect to see continued deleveraging in our business driven by further movement towards capital light and solid operating results.
We generate 174 billion cash from operation in Q3, compared to $1 3 billion in Q2, and 142 billion a year ago.
Total cash and cash equivalents was seven 6 billion in Q3 compared to $8 8 billion in Q2 non restricted cash was approximately $4 2 billion in Q3 versus $5 2 billion in Q2.
<unk> in cash was mainly due to more proactive deployment of cash in our operations to support ABS and pre ABS assets, which generate higher returns.
As a result during the quarter on balance sheet loan volume increased to $12 8 billion from $9 8 billion sequentially.
Meanwhile, a significant portion of our cash was also allocated to securely deposit with our institutional partners and registered capital of different entities to support our daily operations.
As we continue to generate strong cash flow from operations. We believe our current cash position is more than sufficient to support the growth of our business.
Invest in key technologies and to satisfy potential regulatory requirements. Therefore yesterday, our board of directors approved a quarterly dividend policy and declared our first ever quarterly dividend of U S. Dollar 28.
Per ads for Q3.
Going forward, we will distribute approximately 15% to 20% of quarterly net income after tax in the form of cash dividends on a recurring basis. We believe it is appropriate way to generate additional return to our shareholders and to appreciate the long term.
For us.
Finally, let me give you some update about outlook for the fourth quarter. The operating results for the first three quarters of the 2021 were very encouraging and then we continue to see healthy business development in Q <unk> Q4, despite some seasonal headwinds and muted.
Growing conditions.
Thus, we now expect Q4 total loan volume to be between RMB 90 billion and RMB 100 billion.
Which bring our 2021 total loan volume guidance to be between RMB 350 billion and RMB 360 billion compared to previous guidance of RMB 340 billion and RMB 350 billion.
The revised guidance represents year on year growth of 42% to 46% as always this forecast reflects the company's current and preliminary view, which is subject to material change.
With that I would like to conclude our prepared remarks, operator, we can now take some questions.
Thank you management, we now begin our question and nice sections. If you have questions. Please.
Zero 1 million telephone keypad, if you did need to cancel please spent zero two.
For those who want.
And last question can use.
Chinese please ask your question in Chinese tourists and followed by an English translation.
In additional in order to have enough time to address everyone on the call. Please keep to one question and one follow up and then return to queue.
More questions.
Yeah.
And our first question is Luca <unk> from Morgan Stanley.
Hi.
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Richard.
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Profitability.
My question is basically.
The management mentioned that are.
There are 60% of loans already priced at below 24%.
What's the gross and net take rate and risk profile of these client base and that will give us probably a better indicator of the profitability after the transition period.
John you have any idea when tissue.
Okay.
Got it.
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But let's say you get a medium eager to go to Houston.
Okay.
Pat.
I would translate for hours.
Hi, Sean first.
I think you laid out for your question.
Some color about this take rate number one Gordon that's a great asset.
4% is 1% lower than our current total loan book, which is 3%.
Great.
As for the risk profile of this asset.
24% cap asset.
What we observed in Q3, the new transaction has a Bachelor of risk performance then.
Existing asset light somehow in the day, one delinquency rate matrix the new transaction is.
Four 2% and the total loan book, it's by <unk>, 1%.
Okay.
Okay.
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Okay.
Kimberly I'll come off that.
Okay to add a little bit more in the Meanwhile, we have seen that there was some it'll be fluctuations based on performance. For example, the day one delinquency rate has declined for five consecutive quarters.
Is five 1% in this quarter slightly higher than the second quarter and a 30 day recovery rate decreased slightly from 90% features for less than 1%.
However, that's something interesting that changes very controllable soybean crush 10 changes our cost by the settling cofactors at vitro hospitals.
They are short term and tenants are already and have relatively little impact on mckesson.
Hey.
At the same time, our cost of acquisition team risk management team has made contingent proactively.
Clothing, Firstly sarcasm acquisition, we have improved our impactful marketing strategy will change from improving efficiency and controlling costs to improving quality and controlling cost.
Taking information from China in general the propulsion RTA caisson acquisition.
The increase to more than 40%.
This quarter the play a model with optimized focusing on user quality and the user acquisition efficiency.
So can you just sort of explaining a bit I think it was influenced by 17% and the user acquisition efficiency.
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And passion has mentioned before which I think in the acquisition cost.
It also includes increased quite a lot by turning to perform.
Secondly, what potential with key customers, we have Charlie listen reduction strategies in advance.
We make full use of our self developed advanced algorithm models, such as GP FTE to accurately identify with basketball hoops and tightened risk management accordingly.
For example for people barring some macro platform we have nowhere.
Right.
Certainly.
Shifting gears customized later reduced prices, while matching user consumption and business really following me.
So as to achieve the efficiency of transferring balanced to lower it with customers.
Eventually as Haisheng has mentioned we can see the risks when you transactions is decreasing.
Taking the first repayment of new loans in September as an example.
Rates decreased to four 2%, which is lower than the average of the second.
Okay.
In short with a continuous improvement of our customer base and the optimization of our risk management. We are very confident to keep the risks within expected range in the future.
Yeah.
Yeah.
Richard do you have any follow up or we can move on to the next question.
Just one quick follow up what's the overall I mean, if you if you factor in the risks.
And client acquisition cost differences any any overall guidance on sort of the net take rate for this client base.
Well.
Mainly we can take this one we are still seeing the same logic as we mentioned after the second quarter results. If you recall we have.
Sort of a stress test under the 24% scenario.
We still see one percentage drop when everything being said and done when the entire portfolio and we've moved down below 24%.
Average pricing will probably sitting somewhere around 22, 5% and the net take rate will drop from 4% roughly to about 3% that's still does.
For the moment.
Okay, so consistent with.
Our original estimates.
New data suggest right. Okay got it thank you.
That's right yes.
Next question is the old <unk> ICT.
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Jack did you chose our total kitchen is helpful.
Okay cutoff points and should be able to schedule at that table Youll parish, Louisiana, Colorado, you don't wish a women don't go to J P O.
Okay that will translate my question. My question is regarding the risk of matrix I see some of our risk matrix in Europe at the level in Q3. During this quarter I was wondering when we're looking forward what interest rate gradually declined and loan origination continue increasing can we expect to see a better level operates a matrix or is it what we can see now.
It's almost as about the weekend do thanks management.
Okay.
Yeah.
I'd have to go into that.
Hello.
Yes.
Well it seems.
Tim It yet that will be canceled as bunzl is a hit to employment the way lastly, Wichita, So good health in the quarter and.
This is how quickly you'll invest agenda.
Tom This is <unk>.
Single women CW. The CW. This is on PD. So what's your sense of potential signs of hope so it's all a function of please.
And our mission.
So it <unk> just help us again with us.
People got sent the Fujian potent Joel.
You said halfway stood Ics OCC issue, so you should see.
So it wasn't until the strategic shift on to the <unk> portal.
Okay, we will take some time until that adjustment so when the adjustment is.
John we can say that the proportion of new transactions.
Our customers improved eventually the risk performance will be improved while during the process there will be cyclical and regulatory policies change. So that will be later be fluctuations fluctuations in the process.
Okay.
Okay.
Okay.
Yeah that to have any follow up.
Oh I see.
Got it Okay, well noted I went to Washington.
Thank you.
Next question is Alex <unk> from UBS.
Great.
Trying to take a lot to you on the team.
When he is going to jump on that.
What I'm, saying.
Cut on Brian's on the P&L.
Call it a need someone like Goldman Sachs always tried to take a somewhat.
Yes.
Thanks Sheila.
And finally initial diet.
Milton.
You'd think with US so she went up a hold or you go to college.
Thank Glenn Thanks for questions, so that probably does take time.
So we don't know.
Sure.
No it does.
I guess I'm, Glenn Engel, Colorado Jin Guan.
So you mentioned that you got a few times consists about youll, just Colorado realized some good Sam Washington.
Huge out to eat.
<unk>, it's all true near the convention. So my question is regarding regulation. So.
The prepared remarks, you mentioned about considering different options the company financial license.
Could you give us some additional color on that in terms of what you mean.
We saw from the news earlier debt.
One of the micro loan.
License under under Q3.
Increased capital from 500 million to 1 billion.
Wondering what's your consideration behind.
Any progress you have heard from the regulators about the mention of micro long license and finally so.
The current regulatory.
Progressive.
Direction have you consider a scenario where future Europe model too.
The conduct through any kind of license. Thank you.
Okay.
Yeah.
Hi, Eli.
Okay Alright.
Well Neal.
Good day.
Hello.
Women you can go on and go to India to get food.
The time lines that you're going to have any gesture.
So she wanted to good gentlemen, could you go through your youngster Pat.
Dallas.
So you'll be able to pay it off.
Oh My God.
Hello can grow Cleveland St Jude medical.
It should have on it.
I wouldn't quite call it that.
Well no question Jason.
Thank you Pedro.
Yeah, just show them in.
But San Juan had thought it would be good things differently.
And just with Holly.
Dan I thought you had some difficult times with other yugo.
The biggest thing we always say.
That would be great.
I definitely appreciate it.
And then like I said that'd be good.
Yeah.
Thanks.
Please call me.
Google again 10 call it quits alright, great.
Jay I was hoping to get.
A woman with cancer.
<unk> got to get something done.
Okay.
Okay great.
Got you.
We don't know how long does it get you only go out you can do at the beginning.
So you could read that aren't doing well again.
Yeah, we didn't see a woman.
And then can you talk to that.
Sure.
Okay.
Thank you.
Sure.
Oh, well compared to other let's say peers, we are one of the company.
A company that has a direct dialogue with the regulator. Therefore, we can proactively borrowed a regulatory guidance. According to our first hand information Firstly on board our credit rating agency way, we are participating actively in applying for Aneel credit rating license.
County, or the current existing financial license, Oh, I can't wait to see the carefully to inject capital into the licensed.
And of course, we have abundant capital reserve to inject second Dudley according to the regulator.
Firemen, Florida financing company and that we are nowadays we are half way.
Have share holiday cure guarantee companies in the discussion with many til.
Yeah.
From one guarantee company, but there will be very limited impact to our operation.
Yes, sorry, I wanted to get a little bit of clarification on this so we currently hold to a financial guarantee licenses and according to the new regulatory guidelines.
Or any entity can only code one so we will in the future consolidated two into one license and because of this license basically the business is driven by the registered capital advisors essentially we just need to move the registered capital from one <unk> to another.
From the scale in terms of scale of the business. We can do with this license there is no impact because it's based on the capital registered capital.
That's just one add to that.
So you can continue.
Okay. Thank you.
Well I mean, when they do hit Willow. Consequently, so each one will depends on kind of on here with the condition.
Now many of you will.
That nobody does that kind of put that one gigabit.
<unk> had a good time to that.
Let's see here with that kind of on that four months since we would take a while.
We like how that type of clause in the demo picked up gradually.
That's the way to a degree if we can pick up.
So that could come back to you.
Okay.
You could go down to get you know when you go downhill.
Okay. So you don't want to go with.
That's a good thing and you know kind of what type of company.
Yes, it definitely has it created in the PR you had.
Got it.
It's a theme that you are going to go to that you do that you want to do is a tool they can.
Children Fancy has it been since then.
Because the good thing that you should think of them with you in your margin.
Jim Mountain.
They went through looking at downgrades.
Oh, there you go.
They don't have.
Okay got yanked creates a week ago.
You got Pandora.
As for your second part question for Albert <unk>.
Part of our business model change.
Ah graph. This question in two parts.
Our self funded business, we can further leverage our micro finance license and guarantee it.
Licensed both licensed our national wide and they have enough leverage to be utilized.
Second part for our loan facilitation business.
We actually cooperate with apparent exiting.
Secondly, the micro finance license can also play a vital role in the participation business.
Okay.
But let me set up between doing it yourself.
That.
What's your opinion on British woman did sort of pegged all kinds of Amiga accordingly.
Hey, So you can see what they can just simply.
Okay.
What I will add and then Walgreens pending Jack couldn't increase.
Yup.
Assuming you get paid obviously Eva.
Yes.
KCB has a broader relationship with us where your cancer.
Two for you to come by.
Hi.
Sorry, Monday was breaking up a little bit.
But basically it has instead is that KCB is even though it's not our directly holding license related party hold it but we can still leverage in our relationship with KCB and.
To use the banking license.
Conduct a series of business ex Covid hits there.
Thank you.
Thank you.
Uh huh.
I don't think that will create some kind of trailing touches all got to get ourselves back and I'm, saying wait I can always sometimes it even though you got a Toyota.
I mean, it sounds sometimes like the other thing go ahead, that's until we can counsel them all.
Yeah.
So your question was Oh, my Lord eat the whole time.
Hi.
Jos is without sungard.
She's only Shanghai shortly.
So a quick follow up for me so.
You mentioned that the micro lending license.
Railroad in the future so given that the regulation regarding the.
And I'll talk about Microloan license deal.
In the consolidation status do you have any expectation of when it's going to be rolled out and also you did it.
As such you know micro long life as part of your self infection and ratification of progress for the 14 platforms. Thank you.
Thank you.
Good Lord the that CGM, which a new administrator Shaw.
You've got pretty bad.
And that's how you get me that somebody has got to hope.
You might have.
The measure.
So can you go into your tablet your sure.
And that's just again because when you go to.
Yes, I think one again.
So that is a good can you even got should pay for a way to.
<unk>.
To answer your question no we are not informed about the timeline of that.
<unk> for our micro finance license.
The late that May follow.
Some basic law about the nine financial institutions.
Really the county, Yes, you are right.
Guideline.
Micro finance life anything we think that you should after forking internet platforms and applications.
Yeah.
That's all from me thank you.
The next question is Thomas Chong from Jefferies.
So thats all physical H J.
Well, they're going to do ulcers.
You saw that.
Sorry, Cai that you got that one.
Sure.
Didn't see that.
Bob.
I hope all of you.
Doug.
<unk>.
And our father.
A couple of PK.
So as a color what Melissa.
Thanks management for taking my questions. My question is more about the 2022 outlook.
A bit early to talk about next year.
But given the fact that the macro headwinds and the uncertainties uncertainties of the Papa Pizza.
How should we think about our business momentum into next year.
Basically it will be great. Thank you.
So they came back.
Yeah.
Kendall.
I got you.
It should be good thank you.
<unk>.
And women.
Dominion.
Yeah, you got it.
And that hurdle.
Okay.
Mexico, when you get to a tender type of thing.
<unk> got one year now.
You didn't make our guidance and then we can okay and then you could get to some kind.
Kind of happened in gross margin will be flat and so we see good yes are you guys thinking.
Anyway.
Got you to women.
Could you write down will lose it.
Please continue.
Can you go through.
Good how are you.
They get hungry the Kochi.
That's a good thing.
From a woman.
Got you.
They tend to have to go with say a woman.
Thank you.
The main thing right because as you can see a woman can wait until Monday, I'm trying to get any hiccups in terms of Iraq.
Is it too much into that.
Yes.
Sure sure.
I understand that market has come down.
The macro economy next year always stay very vigilant and accompanying monitor our operational metrics on every front.
Got it.
Nowadays we are still you end up back in control of that we do not have more concrete to share with you by the way can sure that order outlook color. We are getting now is based on a prudent approach.
Kelly I want to emphasize that our business and.
The tenant has experienced that cycle of regulation and pandemic. Yeah. This is a very strong demonstration of the resilience of our business.
We don't think next year.
Michelle.
More severe damage the previous regulator.
Our pandemic cycle. Therefore, we are very confident.
But you can kind of say what pretty tight.
A follow up on the drug doses song Lin he saw a button.
Those out.
Yeah.
In the.
Okay.
I'm gonna need bandwidth clothing.
Hi.
You don't just put them in the business operation.
And you'll be alcon.
So, let's just talk about the commercial banking.
Okay.
And my follow up question is about an hour.
Cut some Oh boy.
Terrific.
Industry categories, given that we are ramping up.
S. M E business just wanted to get some color about the industries that they are engaging in any way.
Impacted by the macro headwinds.
Is there any categories that are.
Doing okay. Some are not.
Doing.
So doing better or a bit below expectation.
When you talk about the key factors that they're engaging in and I would like to thank you.
Women.
I need to go to a new engine.
Thank you Tricia.
And to assure you that we were subdued.
How they function shoot the cohorts are quite young so kudos you guys see.
Will it be a body shaping.
Switching kind of woman that Copel, Amy and goodwill gesture.
Unfortunately gets at Kimco in cohort three the one that type of thing.
It can be all are waiting for you and congratulate you say you thought that you said got how should we do.
Okay.
Go ahead and manage.
Okay, Alex I say threat currently SME takes a small portion.
It takes us publish any of our business and our customers is that timing.
Tiny small business.
Based on our first hand information with them.
You'll see a very good performance.
Joseph Please go ahead.
Okay, great well woman in essence is the niches or further will mentioned Odessa music.
Julianna.
This is Holly Misuses assembly ourselves <unk>.
While Nielsen dwarf potion of the call Jim.
<unk> this is.
No woman Central Hammond ratio when you adjust for.
<unk> does that sound like kind of a simple.
<unk>.
<unk> dealt with Dana.
Stop <unk>.
So this is Susan Boyle, each listeners with tissue to shallow in terms of the portal.
<unk>.
Hello, and essentially how quickly.
Nonetheless was realized.
So in that sense.
<unk> seen of course was the kind of woman Omega suicide.
On the Chi is on women.
Yes.
This in 2001 number.
But the deep with our sensors as the amortization that will ship over the phone Sir.
Since then <unk> faster.
Cost reductions since agenda initiatives.
The credit demand central a new salad. She is a yield equates to about <unk>.
Thanks Alejandro.
Yeah.
Apache has mentioned about our volume.
We have imagined.
The customer wants.
Four body.
I would like to say that we interact with new study.
Sure Tom.
Covid problem does a small fluctuation.
Well with Dakota. This model can show this performance will become again and as mentioned before who are customers acquired the portion of direct sales is increasing.
The weak performance of the diary.
<unk> sales come from acquisition.
Like 80% to 90% of the average so it was a increasing of the channels we can see.
It will be lower.
Okay.
I just wanted to add.
Thomas I just wanted to add one color to your first question regarding the outlook for 2022.
And as you mentioned, yes, we at this point, we can't give you any official sort of a guidance to the.
Two the outlook, but if you recall after the second quarter, we did the stress test, which related to the 24% rate cap in that state.
Stress test, we consider the macro environment for 2022 as well as the regulatory the regulatory change in particular related to the credit agency connectivity issues, which we believe is a very complicated issue involve a lot of technology.
Problem solving and was that kind of assumption in that stress test. If you recall, we assumed a 20%.
Volume growth for next year.
And then the net take rate as I mentioned early in this call will come down from 4% right now to about 3%.
In that stress test.
That assumption as well as the conclusion for that stress test still hold at this point, although I want just wanted to emphasize again. This is not official guidance. Thank you.
Got it thank you.
And thank you.
This is the end of the question and answer session.
And thank all of our team management for closing remarks.
Okay. Thank you everyone for joining us for the call. If you have additional questions. Please contact us directly thank you.
Bye bye.
Goodbye SDN or via conference call you can hang up thank you.
Yeah.
Okay.
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