Q3 2021 Lexinfintech Holdings Ltd Earnings Call
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Good day and thank you for standing by welcome to the La thing Senior Tech third quarter 2021 earnings Conference call.
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Now I'd like to have the conference over to your host today, especially short chain gatehouse capital markets. Thank you. Please go ahead.
Hello, everyone and welcome to <unk> Q3 earnings update I'm joined today by Joe Shell, Chairman and CEO Sunny Senior CFO, Stephen Chow C R O and CTO.
During the call we will discuss the business outlook any forward looking statements that we make are based on assumptions as of today. The actual results may differ materially and we undertake no obligation to update any forward looking statements.
Finally, unless otherwise stated all numbers mentioned are RMB.
I will now turn the call over to Sunny to go through the financial performance Sunny over to you.
Thank you Patricia.
Good morning, everyone. It's my pleasure to speak to you and give you an update on our third quarter results.
This quarter marks that you can accuse you of structural change of our core businesses.
And I'm delighted to say the progress has been encouraging.
Loan origination rose 15, 6% year on year to $55 9 billion RMB.
Of which 42, 9% was surprised within 24%.
Up from 37, 6% in the second quarter.
If we look at the last months of Q3, the improvement was even bigger.
About half was price within 24% in September.
Average APR for the September intake was 26, 8%.
Down one four percentage point from June.
In line with regulatory direction.
We are just on loan pricing and move away from high APR borrower.
There will be measured slow down topline matrix.
Total operating revenue reached $2 97 billion RMB in the third quarter.
<unk> by five 9% from last year.
Within management expectations.
As our CEO James Flack in the earnings call of last quarter we.
We placed quality overscale.
Gross margins.
Posted 54% increase to $1 5 billion RMB.
As a percentage of revenue gross margin advanced by almost 20 percentage points year over year.
And held steady quarter on quarter at about 51%.
Moving onto expenses.
We have stepped up the overall spending to support new growth initiatives.
Such as the further build out of my Yoki and waiting.
Well as the technology upgrade that urban our Chief Technology Officer.
Spearheading.
At the same time, we have also been streamlining operations.
And keep it did it and I am general expenditure.
G&A stays on the tongue trend going down by 2% year over year and 17% quarter on quarter.
Net profit rose over 58% year on year to 551 million RMB in the third quarter.
In addition take rate stayed stable at three 5% quarter over quarter.
Top line optimization cost management and operational efficiency.
Cole to profitability and will remain our priority.
There have been constant noises about the sector this year.
We understand investors' concern.
The third quarter result.
Proof that we are actively responding to change.
And we are determined to enhance the resilience of our businesses.
Next I would like to turn the call over to Jason <unk>, our chief risk officer to discuss credit performance.
Over to you. Thank you Tony.
We have been proactive in mitigating the pressure on asset quality coming from the change in policy or macro environment. The 90 day plus delinquency ratio finished the quarter at 185% unchanged from the end of Q2.
In response to 24% policy, we have tightened the underwriting criteria and approval rates the sequential drop in the number of active users and loan origination volume.
Our proactive management of high risk borrowers.
The transition we do expect some volatility in short term risk.
Is the industry moving to reduce funding priced at about 24% drop in liquidity will weigh on repayment ability of some borrowers.
In anticipation of the interruption, we have strengthen the risk management framework for new businesses the risk strategies. The models to make sure. There are strict control over loan origination, especially when early stage performance is not yet stable.
Risk management the buildup.
Densify assessing and monitoring of risk, we will keep refining the process and it will not compromise quality over volume.
Finally, I would like to highlight another recent change that is engagement with the technology team.
Our activities generate the vast amount of data from internal interactions to external relations. This welcome knowledge has been turning to powerful analytics and predictive modeling we have been working more closely with the technology team to better manage risks at both the business level at the operational level.
Pass it to urban who will talk more about this topic.
Thank you Jason.
I took up the CEO role in February this year.
This was a newly created position and my mandate is to sharpen our in house technology.
Ability.
By leveraging my international experience, including OLED in the U S. We're obviously about the micro.
Korea in software engineering at Microsoft and Facebook.
Optimization and innovation is our goal.
And the people are the most about it.
The vast majority of the R&D spending his comments related investments.
Taking new talents to improve the existing cost structure and address new opportunities.
And the best Man, we have build up a core engineering team dedicated to machine learning and data processing.
And customer acquisition thing matching as well as risk management models.
We've also been applying more AI and machine learning algorithms.
In our middle tier we have embarked on a re architecture of the platform into a kernel parking structure to provide more flexibility and robustness and serving our technical development.
As a result, the average engineer and delivery cycle has been reduced by more than 30%.
The new architecture has also improved extensibility to enable new features for future business requirements.
On the business problems.
We've operated our apps to make sure they need the latest the regulations and the safety requirements without losing any of the existing user friendly Linda.
To cope with the new privacy protection, we have strengthened the web security encrypted a storage of personal identifiable information data as well as restrictions and data usage.
In short we're pleased to see that technology is playing a bigger role in helping us.
Manage the cost of compliance and our revenue.
The upgrade has definitely become I look forward to sharing more with you later.
Thank you.
Last but not the least at Wassa.
So the home and Garden, Pesto, Saut, Antonio, Colorado, Pennsylvania, Kentucky.
You mentioned club deals or that you're pleased with it.
Charles I can Doug.
Sure.
So that's against the tumor.
What I'm, saying.
Uh huh.
Well in general could you will ease as the dog. So it goes in the Tilda.
She seldon the one to one so that is all women, Saudi Youll, probably liquidity vehicle Houston since you called me into the knee she's done I'll pick on patrol itself.
It's a pleasure to talk to you all again my colleagues had to walk through the highlights of the quarter I would like to take this opportunity to share with you about what we have been doing and we'll be doing for.
We're talking tech business, we have been responding to recent regulatory developments by rebalancing the business structure, reducing risk and improving efficiency and our efforts are paying off.
Hello.
Well, let people then you'll we will keep on with didn't answer. So we also have well when they need it to you, but in the us as well, but he didn't somebody although you bundle.
So sure that he isn't wasn't all while Mitchell's here, maybe we should do it.
Yeah.
Since I'm Susana Diego can you answer well machine you showed me a team with you soon thank you for waiting for you in terms of you I wouldn't be at Dolby, but well just have to say that if you don't weighting in that JV can throw at us.
Well as I told you.
Could you do the horizontal well minutes without Saddam.
Vehicles.
But we're gonna take rate may have sold all teradata user. So we kind of wind mobile goes without a unique so send me a woman told him to finish off the data well, but don't choose your total charges dilutive I think youll see it.
Oh, Dear Oh, and yes women to other lengths of haul Dumper you go so should you need any.
As Tony mentioned, just now we were able to increase exposure of loan priced with a 24% while keeping the scale study.
Went up to about half of the total in September and the Uptrend continues.
Our 90 day delinquency ratio was unchanged at $1 eight 5%.
A lot of scientific alignment of the Suezmax with also increased operational efficiency.
G&A expenses fell by 17% quarter on quarter to RMB 100 million setting a new low as a percentage of revenue and loan balance.
More importantly take rate has not been compromised during the process.
I'm afraid the effectiveness of our response.
We're confident that once the transaction is completed next year, the sustainability and profitability of the business with a stronger.
So what you do well know kind on my other companies hopefully most of it to go up with anything that cause that'd be.
Yeah, maybe with all the changes sometimes yourself scientists all my also won't see them away so to say to you.
She's only I believe he's a he's.
Alright.
Okay sounds good.
How do you feel that way even bubble here.
So can somebody the tender.
So it wasn't so good piece I was hoping to see one might argue lymphocyte so to start with motor. So you won't hear the sounds of it.
And so some of the other charts with the dollar.
So what you end up with either.
Yeah.
Yeah, So it's well known to them I think you well know way too much into you got to your point or two so they seem to hold with them.
Some jobs.
But I suppose as I said, there's always season wholesale yoga yoga Tyler it's John So you saw it.
What was it in my Yeah, we have been further enhancing our product and service model is getting more recognition from offline merchant <unk> reached RMB 473 million in the third quarter of which the offline contribution almost doubled Q on Q to 185 million.
China is the world's largest casino market, even though my eyes in early pilot stage the impact brings to brands and merchants is indisputable and the growth potential in the.
But I now pay later model different in China.
Shape.
Identity and unique value, bringing tangible transaction gains in merchant and benefits to consumers.
So maybe if you guys have a sense at all once you finish I intend to us in the hotel side, that's really so it seemed to us sometimes it's a little well shall we.
Are you seeing yourself I Yehuda.
She was here why you win with other words are you at the time that people will see somebody who says.
Also worth noting is our support for small and micro business on it.
We are fully aligned with policy direction increased the loan origination to the script, but 32% Q on Q2, $5 8 billion.
So what I'm Gonna, that's I know, that's a gopro they'll come to us. So those things you've got in terms of the southern Gonzales. He said I want to say anything about the truth, you'll watch. It go she said he called me and Saudi feature of our search engine that moved up a bit closer. They just couldn't do it as soon as homecare, who might cause to think that it could be a pool. So do.
Total teaching puzzled why don't you go through the tunnel teachings anyhow you need any.
So it does seem that bundle.
Finally, I would like to.
We iterate that quality growth has always been a top priority at machine, we committed to optimizing our structure and housing credit quality and operational efficiency and keeping our full year target unchanged.
We'll also continue to explore and develop new products, such as <unk> and T Bank technology status.
In order to strengthen our competitiveness and profitability in the long run.
Thanks for your attention and support.
Operator, we will open now open up the floor for questions.
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Okay.
First question comes from the line of IV <unk> of Nomura. Please go ahead.
Hi management team. Thank you for giving me. This question for giving me this opportunity to raise the question and congratulations on the strong results I have.
A specific question for.
Sure.
Our new CFO Sunny I was wondering if you would be able to give us more guidance on the.
Although origination amount and the outlook for.
Fourth quarter this year. Thank you.
Oh I didn't get the name IV IV hi, good morning, Avi. Thank you very much.
Question.
Oh for the outlook as you just said and as we reported we had a very strong performance of the third quarter.
And based on the information at hand, and currently we will maintain our full year guidance on the loan origination.
And we do expect may be some.
Temporary.
Volatility on the operation matrix as all of the players along the value chain will take a bit of time to adjust to the 24 new policy.
Yeah.
And for the fourth quarter as we emphasized we will continue to place healthy growth over pure scale.
And we're also.
Expecting that to new growth areas will make higher contribution perhaps in the long run.
So overall, we will maintain our.
Our outlook for the full year and also we will focus on.
Structural changes as we just mentioned and also operational efficiencies.
Yeah.
I T.
Yeah. Thank you thanks for the.
Kind of.
Sure.
Thank you for the question do you have any follow up.
No that's it from my side. Thank you.
So Tony.
Next question comes from the line of Alex here.
Please go ahead.
Hi, Good morning, Thanks for taking my question I have two questions firstly.
So you had mentioned that your current pricing mix is about 50.
50% under 24.
Note that interest rate I'm, just wondering when do you expect our pricing.
Transition to finish in a fully comply.
And also related to that.
When do you expect that you could probably you're more comfortable too.
Pushing growth after that adjustment.
And.
Question, just on your core tier one.
Your early indicators P D ratio.
Picking up a little bit in Q3, so I'm just wondering if you could give us some color on it what are you seeing and also give us a month forward looking outlook. Thank you.
Alex Skewing younger when people went to Jewish well I want to say that the accounting.
Kind of kind of women's enjoy essence about hundred what was it.
That woman I kind of like unless you hopefully one since it accounts. It now do yoga when teachers acclaimed SPD sensitive when he said so it's not kind of kind of go to choose I think I said.
Alex will get the G to take your first question and then Jayden I would take your second question, Jamie I'll be able to begin with and you also said that when he said Hello.
I turned to us as a woman to change with them because they've got a war chest.
If I'm hearing what you hold or you go to a telco.
So until you actually selling in the deal we have been to churn your boyfriend that you want to go.
We'll let you know what you call it okay.
Okay got it.
Simultaneous beams, Australia, two months ago, Toyota La you guys hit the other talents at all so that's all what's due to us so that's a good color.
Many of new weapons of timber well I'm, a woman who would be the things that you get to the Gulf with each other.
On the Tusa woman.
Awesome.
Well, let me know if I don't know many of them do we have and so what are the social side of it.
Here's what I tell you even with that unless you want.
If you go in a way that's all points, let's say you did a year ago.
Hello, once you're there I just was hoping maybe you go one one time accounting this is.
London today, you're good to go.
So that's really those in Wuhan Suzhou, that's all one since you bought them and go because I mean, you know what happens with him involvement than they thought that you'll go to the southern Delaware.
As I mentioned in the past the 24% policy, it's a window guidance given by a local authorities to some of the financial institution asking them to complete by June of next year, but of course, not all financial institutions have received such window guidance as to listen.
Ourselves, we do target to finish the transition.
A drink next year, and we're going to speed up the process, but of course since not all financial institutions. They are told to do so.
So next year for the market that might still be some are doing.
24 after the June deadline.
What's up with Toyota.
Quite honestly, it's a good telephone she's a finely tuned deutsches a woman's in downtown Macau.
They're going to go well and the team.
Michael.
Tell them. It's also shut holiday so until 2000 and chartered it depends and good day.
So it's all part of a woman's and they'll take a little bit also allow tidewater, Utah mobile phone, let's just say you get you to one minute and go there you go pathway. So yes. It does.
Carla So Sudan.
Well go to them and say, let's take what it is.
And then tie that in Utah, I tell them and they will come to us So that's a.
Syngenta Syngenta.
I'm going to decide how to take away. So I didn't know tape outs as I say either.
Oh, well, we're dealing desk structure change.
The idea is to bring down the risk as well so as to minimize the impact on take rate and you can see that from a three tier yourself, we've been able to keep at a take rate study and for the newly acquired a bolus.
The 24% you have to take rate is above 3%.
So the team would tell me.
Well I'm gonna depend on so.
And you're a woman I want to let you go you called horses, and they'll take a little pause so that'd be the holiday you go you need to fix.
That's why we are confident that we will be able to maintain right at a healthy level. After the transition next year.
Okay.
Oh, Okay I will take the next question.
You mentioned in the call earlier in the transition period, we do expect some volatility in short term risks because you know the industry is moving to reduce funding priced at about 24%. So as you noticed the SPD <unk> released.
It's about picking up but still maintained under 1% as.
As we.
Keep focusing on improving our quality mix going forward, we do expect that.
Sure.
Long term risk will continue to to be maintained at a relatively stable level and we have also noticed that.
Four new acquired customers, the new orders placed with pricing at or below 24% actually the F. P. D. Seven is well below the you know the general population of our entire portfolio. So that is a good sign because we are acquiring a high quality customers.
We you know the percentage is going higher.
In the next couple of quarters as Jay mentioned once by the end of the second.
Second quarter next year, we believe are short term risk will be continue to be maintained at the previous level.
Thank you.
Great. Thank you for your time.
That's all for me.
Thank you next question comes from July one of CLSA. Please go ahead.
Thank you Carmen.
I have two questions. The first one is stronger.
Requirements by POC to disconnect them.
What are those proceeds with from department of labor through the license.
<unk> Oh darn Julien.
So just wondering in our case, we have a timeline to make the change.
And right now.
Now are we working on any.
Any one of those nights into credit agencies.
Already and it's growing as fast.
And our corporate sharing their amount of appropriate sharing in the future do Chris.
Our take rate a little bit and maybe more importantly, the details.
He chose Oh.
This collaboration because we're the one one another.
So does that mean, we need to change the way, we collect data and the way we process them and the way to handle those days. So that's the first question.
Second question its almost some some data on its own.
It gets kosher for them. So we do see a lot more disclosure on some good quarter. So were really quite good I appreciate it.
But it seems that there are two.
Two things I missed them, which were reported in the past one is pursuing.
But signs of an appropriate share memorial Oh torso loan origination.
Hardly airports Theres no numbers, it's kind of difficult to steroids.
Standard that percentage.
The funding cost and a good quarter.
Yeah.
Yeah.
Yeah. Thank you, Jason J D O younger women.
Ethan you're not going to be can I, just ask one unique once again women and I think that's what data do you know that I can quantify yeah. This is Jim yeah, I mean, it sounds like not the OCA when teachers when you Peel that I can't really I would say that you wish you all a woman.
Having a belief, though is that what youre short woman Kinga keytruda and they get the funding cost.
Jayden, that's going to take your first question and then Sunny with U D F M y.
Thank you.
So I'll take the first question due to the.
New requirement from <unk>.
<unk> actively working with the credit bureaus, especially by how we have actually after a couple of negotiations that we have already.
Trapped up a plan a detailed plan to work with buy home and a financial institution, but at this time I cannot.
Reveal the name of the financial institutions. So we expect by the end of this year.
We will actually implement.
The new schedule. According to our plan. Once this worked we plan to propose this.
Planned to POC and see if it can be approved by the regulators.
So that's our plan.
But.
And you know in the process of this implementation, we do not expect any change to our.
Cost because you know this is actually a test pilot program for them and for US too. So we agreed that during this test pilot program progress, we actually will not incur any cost to you know to the data actually transferred or to add any implementation that we carry.
Through.
So that's the current plan, but going forward once the plan get approved by the PUC.
Still expect very minimal.
Change to our cost structure, because you know by how or put all.
Are actually positioned as a infrastructure so as a credit bureau or infrastructure institution. They do not actually they do not aim to make profit because of this change so I do believe the cost once it.
Yes.
It is incurred in the future.
Actually going to be very minimal to our.
Underwriting.
Thank you.
Okay. Thank you Jason for the second question.
The first one I understand is regarding the contribution percentage of sales or profit sharing.
Sharon business contributed a 43, 7% of the overall dnb in the third quarter.
The second question about our funding cost is that.
Thanks to the efforts of our our foreign sourcing colleagues. The funding cost has remained very stable at seven 4%.
Thank you.
Sure.
Sure.
Thank you for the questions next question comes from the line of Brian Roberts.
Capital. Please go ahead.
Oh Hi, Good morning. My question is kind of a little bit I think are some of the early numbers on volumes look pretty promising and I.
I wanted to just kind of check on the evolution of that business model I believe that is a kind of more on the merchant side and I was just curious number one if you could share some more color on that on how the development is going and number two on the on the kind of the ball or user sides. So to speak if youre seeing any synergy in those users.
Choose B N P L services and how that might.
Interact with your your lending business and your efforts to drive loan growth from higher quality borrowers I believe earlier, you said those were typically high quality potential customers that use being deal I'm just kind of curious how that's all shaking up.
<unk>.
I'm kind of when he said when he might you end up with an idea of potential short term kind of a woman's they're going to get one more thing that you should you should be in part due to the need of the uncoated thinking two or any way you can I just kind of need to put on.
Who would want that California, where he'll put incipient I kind of like Assembly language is that again he might want me thinking people won't have anything on behalf.
At that time and speaking with many of the two Tiger Naples.
Although for somebody else to do here with us at the.
That's what I want to say you got your indemnity.
Well the other chips will take the second.
One woman.
So you're in thousands of a woman has a seasonal type syngenta syngenta you want all of you.
Let me tell us is that why the color. She goes onto what you answered all of them that's helpful as well.
Okay, that's a woman.
Creation tool that conduct tightens other windows of course, you don't know what your teacher woman C. All of them in my other thing the other thing.
Wimpy Philippine Patchy thought again, another shelf, you'll get to see them.
She said no.
Okay.
Oh My God, it's still in a pilot phase at the moment most of our focus is in Shenzhen, and Guangdong province, and but we have been exploring some upset studies with a shopping mall partners and I think that there has been promising so far and Oh Vascepa has been that are doing festivals, such as national day holiday.
In the Autumn festival, if we look at it for the sake of emerging for the outlets that work with them not yet versus those outlet without such cooperation we see an obvious.
Up lift in the <unk> transaction of contribution to that.
So that's what she was telling me he goes crazy so I'm going to talk about whether he said, so knowing who said to us. So it's all of them as I say that you do it you didn't kind all I shouldn't tell you about the sungard even cause of fulfillment.
That's a woman.
So I'm gonna sulfate Targa, who does what.
Jonathan the surface of a yeah, I told him and what comes out of a woman's I'd say, there's holiday what functions. So if I don't either and I will conduct a woman is whether you've got F. P V. Chile, you should do so the children's with dealers.
Yeah. So that's all I'll say took a took lunches I say Toyota Philip mentioned like Colorado too. So that's the ultimate thought I'd love to get my other than or Johan I couldn't do the same thing with <unk>.
Yields are that you're seeing the culturally the shelf LNG.
Consolidated a lot of interest.
Well, then my answer well I thought I'd seen anybody there to see them a whole bunch of one woman in Los Angeles, Louisiana, Sugar and Stevia Lingo volatile Soundgarden and lets you couldn't door doesn't go to if we go to well. Okay. You can do that he says about luck.
Women's Athletic Ali Baba motor frequency, even in a quarter.
The other let's say somebody else yogurt.
So I've been chair Vincente here, you know who those are the things.
Please ask yourself with another you'll love to hear your whole wonderful glib, but how about your total diner legitimate machines out of Korea.
Did I hear you all go to Tien tsin for that as well.
Well, it's at a time with families along well do that in my yard.
So there you go.
Although the vote, but he might have.
Yeah.
So okay.
Well I'd say that most of what I just talked about Jonathan Oh, Yeah, you got it up Oh, well, it's only 10 of them just on the margin well that has a door to what my youngest son got in a little house. So I didn't know if it was how well the hydro have also conducted undo it sounds familiar colleagues, who talks about how to get that.
Got you.
So our merchant partners.
The trial period, and we've seen a strong response to conversion after the trial period into a paying customer and the fee that we charge is between three and 4% and in terms of asset quality.
We look at the P D seven very low from offline convergence in several basis points.
And customer profile, mostly female with a strong spending power. So at the moment our focus is on bringing the value to the merchants can making sure that we can help them improve their transaction activity.
Dallas, and then teams without a hershey before scaling up and at this moment, we would also not considering not be considering bringing in my young users into the loan facilitation business because right now our focus is on improving the emerging value and also.
Making sure that.
It remains a very important retail consumption to actually use it before.
Before we move into the next phase.
Sure. Thanks.
Thank you for the questions.
Next question comes from the line of Richard Tse.
Morgan Stanley. Please go ahead.
Hey, Janet on your behalf.
What would your club and E. J I just heard you ill sure she got a competitor Shaw.
The chunky D do Crinone Cui all church on the Orange, but I'll take Oh, you mean, we don't take them back to you want your surgical IBD, Darren Joseph who couldn't get by homeschool, that's what they'll find a woman Chennai that treats she does she isn't at the at home coffee <unk>.
Sure just two questions for me one is.
Any plan to reduce long term interest rates to 20% given there's.
Some are rumored guidance in some regions and secondly is any detailed cooperation fund with buy home at the moment. Thanks.
Thanks.
Oh, so it's almost a socialist because you do it you will see in bulk and wait and see.
You got me, England.
He goes down they go for each of the.
So as I said going back into you.
Whether it be with us.
David.
No what it is.
Yes.
Sure.
Yeah.
Got you got you did.
Because he is hopeful that so the doctors are treating people well.
Well another year with him so, but yeah, well many of those orders on the shelf if you will it sounds like Timberlake.
The other sort of I think the theory.
So that's a lot of words here I think that's going to cause overall yeah.
But yes, those events because I know you've got EBITDA. So a couple of points you hit it.
Give me just a.
<unk>.
Quite started let's see here the haynesville.
The woman the wages are good at it.
So again, they've been boyo team.
You also have to download those are those are lessons that you said youll see a sugar sugar it goes into your Eagle Ford here.
She says that junior when we kind of think.
Golf Ops Yoyo APR somebody else. So this is absolutely in the.
So that's the layout.
The hotel will mail it to you at all so you ought to at all.
You may have seen saw play yards.
Also the us.
On your question about the 20% that one guidance, we have not heard anything from the regulators about that new level first of all for C. B R. O C. They have always said is 24% level for commercial banks, even though that has some local window guidance for different financial institutions, but then you have to look at the nature.
The business, we'd be a consumer finance and 24% level and you know what it's in line with our policy and also global at level. This is not like SME business.
Hum.
And at that level. So that's why we do not expect a further tightening up on this level from regulators and also last year you can see that now from the Supreme Court decision about that.
<unk>, 4% on the LPR at that level.
Are you still sticking to about 24%.
The whole what actually you tend to be the low teens and go take a cohort of 20.
One woman.
Well minimally she said the wireline woman then courts and so there's a lot of it.
Yeah, It's a woman with her son, that's always hard to say what it is.
Okay, So hey, you need.
So what did I say with Ohio has he oversaw the colgan with almost suicidal well then well Nicola.
So my thought is it true.
Well, they are gene, which I don't need to even though I'm not sure if you're able to I don't know.
Okay.
The Covid is a cool so underway, okay, youre letting them go through that.
Hello, Mr. Levine timber CBS all cause of that.
So the Doctor that you see out there so well then.
It is always obviously looking at all of women's or whether you go so well so you need a need somebody I'll, let you know.
Yeah.
When we look at our risk management and also our customer base. We're confident that we can still make a profit when loan pricing goes down to a 15% now let me give you a numbers to illustrate this funding cost at the moment is about 7% and loan pricing goes down that means that that you know our risk preference would also will go down so our risk.
We'll go down to 3% to 4% and for our operation expenses, it's going to be about 2% to 3%. That's why we're confident that even though even though we don't believe that a 24% who is going to change, but if it goes down it will still be profitable.
Both the classrooms.
Alright.
I'll briefly talk about the second question.
The project with by how have three phases. We're currently in phase one the first one is to.
Actually we've been working very closely with by Heartland financial institution regarding the details of the plan. So right now we have agreed on the specifics.
Specific stand all the key milestones of the <unk>.
Project, and we are going to sign a project contract to get it implemented around the end of this year. So this is a phase one phase II is in implementation phase. So we expect the entire project to be completed.
Around the end of this year or early.
Next year in the first quarter. So once the plan is implemented successfully phase III is to get the whole plan approved by <unk>. So we're going to.
The guys are document and.
Proposed <unk>. This plan can be approved eventually so that's our current progress.
Thank you.
Okay. Just one quick follow up when do you expect the plan to be approved when do you plan to submit the plan for approval to the PUC.
Right we do.
We did not have a specific date to submit a plan.
But you know if everything goes smoothly we expect.
To get maybe a first round of submission.
Submission.
Towards the end of this year or early next year.
Got it thank you.
Thank you for the questions as a reminder, if you'd like to ask a question you can press star one and we've tried name to be announced.
Got a new question is from the line of hotspots from CLSA. Please go ahead.
Oh sure. They go with you went your way of our chance yet to come.
Okay. So you don't know when it wasn't cheap price at the time.
So I'm gonna Minnetonka on future that's for sure.
Sure sure Goldman Goodbye households, who are the heart not women's suits, they're gonna switches to chunk up at home.
Let's try and possibly Yogi Berra.
How about Huntington's disease type thing with them attempting a in house.
C G in the minimal government because that would totally sir. So my question is that I put up on the on the.
Decoupling of data feeds from Fintech to the banks. So when you collaborate with by Hong credits can you elaborate in terms of what kind of data you're going to pass through to buy homes and do you also have passed their algorithms to them as well and what types of products generated from them buy a home which can be.
Yeah, just some details.
Okay.
Right now I cannot say exactly what.
The plant is because you know some of the details are still.
Underway and there are some back and forth discussions with by home at the moment. The reason is you know to be fully compliant as you mentioned.
Eventually the algorithm might be placed at the at by Homesite, but right now I mean due to the technical.
Capability and you know the.
Based on the valuation of the time it will take for us to implement that whole process is it's way too complicated for the financial institutions and four by hump.
So right now I mean, the plan is to.
<unk> transfer all the required data to them and they will actually process the data and eventually.
Transfers that process data too.
Our financial corporate and financial institutions, that's a process. So basically it's not just a.
Uh huh.
The two largest asked act like a.
Transitional institution, so what I mean is they take to take an active role in this process, we transferred the data required by <unk> to them they actually take.
Some are processing of the data and they transfers our process data to the finished a financial institution. That's fleet actually how this plan would work eventually but as you mentioned in the future.
According to <unk>.
But we still need to wait for the instructions.
In Chile, the algorithms might be placed at a by homesite Yep.
Thank you.
Thank you for the questions. Once again to ask a question you May press Star one.
Yeah.
At this time there no more questions from Tonight, I would like to hand, the call back to the management for closing remarks.
Thank you everyone for your time and interest will wrap up the call here and we look forward to speaking with you I.
Thank you.
That does conclude today's conference call. Thank you for your participation you may now disconnect your lines.
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Good day and thank you for standing by welcome to the last thing Fin Tech third quarter 2021 earnings Conference call. At this time all participants are in a listen only mode. After the speaker's presentation. There will be a question and answer session to ask a question. During the session you will need to press star one.
On your telephone please be advised that today's conference is being recorded.
If you require any further assistance please press star zero.
Now I'd like to have the conference over to your host today, especially short chain head of capital markets. Thank you. Please go ahead.
Hello, everyone welcome to lessen our Q3 earnings update I'm joined today by Joe Shell, Chairman and CEO Sunny Sanyal CFO, Stephen Chow C. R O and I Wouldnt CEO Dwayne.
During the call. We will discuss this is outlook any forward looking statements that we make are based on assumptions as of today. The actual results may differ materially and we undertake no obligation to update any forward looking statements.
Finally, unless otherwise stated all numbers mentioned are in RMB.
I will now turn the call over to Sunny to go through the financial performance Sunny over to you.
Thank you Patricia.
Good morning, everyone. It's my pleasure to speak to you and give you an update on our third quarter result.
This quarter marks the execution of structural change of our core businesses.
And I'm delighted to say the progress has been encouraging.
Loan origination rose 15, 6% year on year to $55 9 billion RMB.
Of which 42, 9% what surprised within 24%.
Up from 37, 6% in the second quarter.
If we look at the last month of Q3, the improvement was even bigger about.
About half was priced within 24% in September.
Average APR for the September intake was 26, 8%.
Down one four percentage point from June.
In line with regulatory direction.
We adjust our loan pricing and move away from high APR borrowers.
There will be measured slowdown in topline matrix.
Total operating revenue reached $2 97 billion RMB in the third quarter.
<unk> by five 9% from last year and within management expectations.
As our CEO Jay Slack in the earnings call of last quarter.
We played quality overscale.
Gross margin.
Posted 54% increase to $1 5 billion RMB.
As a percentage of revenue gross margin advanced by almost 20 percentage points year over year and held steady quarter on quarter at about 51%.
Moving onto expenses.
We have stepped up the overall spending to support new growth initiatives.
The further build out of my Yoki and waiting.
As well as the technology upgrades that urban our Chief Technology Officer.
Spear heading.
At the same time, we have also been streamlining operations.
And keep it did it and I am generally expenditure.
G&A stays on the pound trend going down by 2% year over year and 17% quarter on quarter.
Net profit rose over 58% year on year to 551 million RMB in the third quarter.
In addition take rate stayed stable at three 5% quarter over quarter.
Top line optimization cost management and operational efficiency.
Cole to profitability and well remain our priority.
There have been constant noises about the sector this year.
We understand investors' concern.
The third quarter result.
Proof that we are actively responding to change.
And we are determined to enhance the resilience of our businesses.
Next I would like to turn the call over to Jason Our Chief risk officer to discuss credit performance.
Over to you. Thank you.
We have been proactive in mitigating the pressure on asset quality coming from the change in policy macro environment. The 90 day plus delinquency ratio finished the quarter at 185% unchanged from the end of Q2.
In response to 24% policy, we have tightened the underwriting criteria and approval rates the sequential drop in the number of active users and loan origination volume reflects our proactive management of high risk borrowers.
The transition we do expect some volatility in short term risk with the industry moving to reduce funding priced at about 24% the drop in liquidity will weigh on repayment ability of some borrowers.
In anticipation of the interruption, we have strengthen the risk management framework for new businesses, the risk strategies the models to make sure they're strict control over loan origination, especially when early stage performance is not yet stable.
Risk management the buildup.
Simplifying assessing and monitoring of risk, we will keep refining the process and it will not compromise quality over volume.
Finally, I would like to highlight another recent change that is the engagement with the technology team.
Activities generate the vast amount of data from internal interactions to external relations. This welcome knowledge has been turning to powerful analytics and predictive modeling we had been working more closely with the technology team to better manage risks at both the business level and the operational level I will pass it to urban.
Who will talk more about this topic.
Thank you Jason.
I took up the CEO role in February this year.
This was a newly created position and my mandate is to sharpen our in house technology capability.
By leveraging my international experience, including OLED in the U S, where I developed my career in software engineering at Microsoft and Facebook.
Optimization and innovation is our goal.
People are the most about it but.
The vast majority of the R&D spending is collins related investments.
We're taking new talents to improve the existing infrastructure and address new opportunities.
And the best that we have built a core team dedicated to machine learning and data processing and.
And customer acquisition as a bank matching as well as risk management models. We have also been applying more AI and I'm assuming learning algorithms.
In our middle tier we have embarked on a re architecture of the platform into a kernel plugging structure to provide more flexibility and robustness and serving our technical development.
As a result, the average engineering delivery cycle has been reduced by more than 30%.
The new architecture has also improved extensibility to enable new features for future business requirements.
On the business problems.
Opted into our apps to make sure they need the latest the regulations and assembly requirements without losing any of the existing user friendly Linda.
To cope with the new privacy protection, we have strengthened the web security encrypted a storage of personal identifiable information data as well as restrictions and data usage.
In short we're pleased to see that technology is playing a bigger role in helping us.
My name is cost of compliance in our revenue.
The upgrade it has definitely become I look forward to sharing more with you later.
Thank you.
Last but not the least you West Africa.
Hum.
So I suppose that Antonio, Colorado, Pennsylvania, Kentucky.
So you mentioned that you're pleased with it.
And Douglas and sell them in the door.
So you said that you all called it against the chalk.
What ive seen that too much insulin.
Well in general could you will even if at all so it goes in the Tilda.
Sheldon that goes on so that is all women, Saudi yoga woman kitchen, jugal Houston since you'll find me either the knee she's done I'll pick on people trying to sell.
It's a pleasure to talk to you all again my colleagues had to walk through the highlights of the quarter I would like to take this opportunity to share with you about what we have been doing and we'll be doing.
If we're talking cat business, we have been responding to meet the regulatory developments by rebalancing the business structure, reducing risk and improving efficiency and our efforts are paying off.
Hello.
Well not that ball then you'll we will keep them within the Tulsa doing yoga woman that neutropenia, but in the us as well, but he didn't tell me, although you bundle.
Yeah, Hi, Doug socio that he isn't causing those raw materials and maybe you should do that.
Power.
Since I'm Susana Diego corneal ulcer will materially showed me a team with Jason essentially the widening for you in terms of you I wouldn't be at Dolby.
Sorry, yes, so I'm, sorry that would be the weighting in that JV and Toyota.
Well, maybe I told you 10 countries could even if it wasn't.
Woman and Suzanne Saddam lots of when did it go.
Well, they're not take rate may also they'll cut out of Utah. So it kind of goes to the other unique so send me a woman told them that sometimes the data well, but don't use your total charges dilutive I think youll well it sounds good.
Oh, there Anya women's other lengths of haul will Mcdowell for you Phil Hawkins, So should you need any.
As Sunny mentioned, just now we were able to increase exposure of loan priced with a 24% while keeping the scale study.
Went up to about half of the total in September and the uptrend continues or.
Our 90 day delinquency ratio was unchanged at $1 eight 5%.
Alongside the realignment of the seismic with also increased operational efficiency G&A.
G&A expenses fell by 17% quarter on quarter to RMB $100 million setting a new low as a percentage of revenue and loan balance.
More importantly, it really has not been compromised during the process. This demonstrates the effectiveness of our response.
We're confident that once the transaction is completed next year, the sustainability and profitability of the business with a stronger.
So let me go on my other companies hopefully most of it to go up with anything that definitely yeah, maybe a daughter since it sounds like there's no sense at all my absolute Kimberly.
Yes, she's only I believe.
He's on I believe things are these all can Panasonic I'll tell you feel away even bubble U S. Colombia is also coming from data center.
So it wasn't all games will get because I was hoping to see.
So it's Asia grew modestly once you're done.
Hey, Jim Hi, insulin, so I'm Gonna Chancellor called Michelle will you end up with either.
Yeah.
Well I'm told my team one way too much into your good your bundle tours are they seeing a whole lot of them, whereas some jobs.
This is Jody tusa wholesale yoga yoga Tyler, it's John So you sleep.
Those are in my yeah, we have been further enhancing our product and service model is getting more recognition from offline merger <unk> reached RMB 473 million in the third quarter of which the offline contribution almost doubled Q on Q2 185 million.
China is the worlds largest consumer market, even though my eyes in early pilot stage, the impact brings to brands and merchants.
It's beautiful and the growth potential in that.
By now pay later model, the Fernandina, China, Leica will shape, its local identity and unique value.
Tangible transaction gains marches and benefits to consumers.
Goodbye I believe he was sort of a sense at all once we finish our intend to hold on Saturday. So it seemed to hint that intensity well Michelle Wei senior whichever way you want.
So.
She was here why you win with other words are you at the time that people will see somebody who says.
Also worth noting is our support to small and micro business. Yes, we are fully aligned with policy direction and increase the loan origination to the script by 32% Q on Q2, $5 2 billion.
So what I'm gonna, that's another Gulf, where they'll come to us so those things you're going to answer the others.
She said I wasn't going to say anything about the tusa you'll watch. It go. She said she calls me wasabi Ginger about search engine, a little garbled, yes, Tulsa. He just couldn't do it as soon as homecare Houma yard so to think that it could be a pool. So door total tissue types. What don't you think also that allocations anyhow you need any.
She said that.
The bundle because those.
Finally, I would like to reiterate.
We iterate that quality growth has always been a top priority at machine.
<unk> committed to optimizing the infrastructure and housing credit quality and operational efficiency and keeping our full year target unchanged.
We'll also continue to explore and develop new products, such as <unk> and T Bank Technology service.
In order to strengthen our competitiveness and profitability in the long run.
You for your attention and support.
Operator, we will open now open up the floor for questions.
Please repeat that.
Okay.
As a reminder to ask a question you will need to press star one on your telephone.
Withdraw your question. Please press the pound key.
Once again to ask question. Please press star one.
Please standby, while we compile the Q&A roster.
First question comes from the line of IV <unk> of Nomura. Please go ahead.
Hi management team. Thank you for giving me. This question for giving me this opportunity to raise the question and congratulations on the strong results I have a specific question for <unk>.
Our new CFO Sunny I was wondering if you would be able to give us more guidance on the.
Although origination amount and the outlook for.
Fourth quarter this year. Thank you.
Oh I didn't get the name IV IV hi, good morning, Avi. Thank you very much and there are questions.
Oh for the outlook as you just said and as we reported we had a very strong performance of the third quarter and based on the information at hand, and currently we will maintain our full year guidance on the loan origination.
And we do expect may be some.
Temporary.
Volatility on the operation matrix as all of the players along the value chain will take a bit of time to adjust to the 24 new policy.
And for the fourth quarter as we emphasized we will continue to place healthy growth over pure scale.
And we're also.
Are you expecting that to new growth areas will make higher contribution perhaps in the long run.
So overall, we will maintain our outlook for the full year and also we will focus on.
Structural changes as we just mentioned and also operational efficiencies.
Yeah.
I T.
Yes. Thank you thanks for the.
Kind of.
<unk>.
Thank you for the question do you have any callable.
No that's it from my side. Thank you.
So Tony.
Next question comes from the line of <unk> next year of UBS. Please go ahead.
Hi, Good morning, Thanks for taking my question I have.
Two questions Rusty.
So you had mentioned that your current pricing mix is about.
50% under 24.
Kind of like interest rate I'm, just wondering when do you expect our.
Transition to finish in a fully comply.
And oh sort of related to that.
When do you expect that you could probably youre more comfortable too.
With some growth after that adjustment.
And then second.
Second question is on your car T. So I have seen your early indicators P D ratio.
And it would be in Q3, so I'm just wondering if you could give us some color on the recent and also give us some forward looking outlook. Thank you.
Alex Skewing younger when people went to Jewish while I want to say that the the couch it.
So I was kind of kind of what message are we essentially that is what we see now.
Now women I can't Novakovich Yahoo, one since like accounted now for yoga when teachers appointment of SPD sensitive when you could have some younger so is that kind of kind of go to choose I think this is Amanda I'm, Alex will get a J to take your first question and then Jayden would take your second question, Jamie I'll be able to articulate it when you ship.
I just wanted to get into that as a woman to change within that they've gotten worse since then.
Our CFO, Jim what do you how do you go to the telcos.
So studio toys to Dominion the deal we have been to churn your booth and that you want to go.
We'll let you know once you go ahead and get those done in Europe.
Okay got it.
Simultaneous beams as I'll show you two months ago Toyota Law, you got to get all the challenges at all so that's all what did I say, that's a good color.
No new opens a timber well I'm a woman who would be the things that you can see a golf with each other.
Other than the Tusa woman.
Awesome.
Well, let me just.
Many of them do we open so what are the sort herself.
Here's what I tell you, even though I do want.
As you go so in a way that's all quite so let's say you did a year ago. So don't want to the artist suite has been really you go one London accounting as you know.
London today.
If you don't see you go.
So that's really where most of the lessor warm since you bought them and go no go ahead I mean, you know what happens with your involvement in lethargic hotel in the southern Delaware.
Okay.
As I mentioned in the past be 24% policy, it's a window guidance given by a local authorities to somewhat be financial institutions asking them to complete by June of next year, but of course, not all financial institutions have received such window guidance as tuition ourselves.
E target Ikea finished the transition I'm buying a drink next year, we're going to speed up the process, but of course since not all financial institutions. They are told to do so so.
So next year for the market that might still be some are doing like 24. After the June <unk> deadline.
What's up with Toyota quite honestly, a bit of color and she's a fallacy deutsches a woman's endogenous.
So the ability of golf limiting CDR and the angle.
Tell them. It's also want me to.
It doesn't bother chartered it depends and good day.
So it's all it's all about Dell Wilmington articulated, but also about high dollar in terms of the Alpha that you said.
So you can see it all woman isn't gonna Yugo partway through the year.
And Carla So Sudan tusa.
I mentioned that easy pick whatever 10, entitled in Utah, Idaho woman, who come to us. So that's a pool funders and good of Syngenta to that so I don't see them at this time.
Okay, Paul So as I say you thought.
While we are dealing desk structure change.
Idea is to bring down the risk as well so as to minimize the impact on take rate and you can see that from our three key results, we've been able to keep at a take rate steady and for the newly acquired borrowers within the 24% you have to take rate is about 3%.
So to your hotel maintenance dollars.
Well I'm gonna depend on that.
Nino woman I want to let you go your horses and they take a long time then on tape outs is a bigger holiday you go you need the ships.
That's why we are confident that we will be able to maintain right at a healthy level. After the transition next year.
Okay.
Oh, Okay I will take the next question as I mentioned in the call earlier.
The transition period, we do expect some volatility in short term risks because the industry is moving to reduce funding priced at about 24%. So as you noted the MPD 30, we released.
Is that picking up but still maintained under 1%.
We.
Keep focusing on.
Improving our asset quality mix going forward, we do expect that.
Sure long.
Long term risk will continue to to be maintained at a relatively stable level and we have also noticed that.
Four new acquired customers, the new orders placed with pricing at or below 24% actually of SPD seven is well below that.
The general population of our entire portfolio. So that is a good sign because we're acquiring.
High quality customers as we you know the percentage is going higher.
Next couple of quarters as Jay mentioned once by the end of the.
Second quarter next year, we believe our short term risk will be continued to be maintained at the previous level.
Thank you.
Great. Thank you.
That's all for me.
Thank you next question comes from July of <unk> of CLSA. Please go ahead.
Thank you.
I have two questions. The first one is.
Requirements by POC to disconnect.
Sure Dave.
Feed with from the department of Labor licensed credit agencies, or Don Julio and <unk>.
So just wondering in our case, we have a timeline to make the change.
And right now are we working with any one of those nights into credit agencies.
Already and which one is Scott.
And our corporate sharing their amount of appropriate shares in the future. The groups that may affect our take rate a little bit and maybe more importantly, the details.
This collaboration because we're the one one another NATO on does that mean with need to change the way, we collect data in a way with process and the way to handle those days. So that's the first.
First question.
Second question.
It's Amazon some data.
Alright, its closure for them. So we do see a lot more disclosure each quarter. So we're really quite good I appreciate it.
But it seems that there are two.
Two things I missed them, which were reported in the past one is but signs of an appropriate share modal hum. Okay torso neuromodulation. So there's a chart there, but there's no numbers, it's kind of difficult you don't understand the exact percentage.
One is the funding cost and hit their quota.
Yeah.
Yeah. Thank you, Jason J D O younger wins.
Ethan you Gotta go into Vega, and agile squad unique that's one thing.
Well I mean, I think that's what the data and you Gotta Arching question Somebody asked me. If this is Jimmy album, and if that's not the yoga when teachers with when you Peel that has helped me out yet that you wish you all a woman.
Or should I haven't got the east towards that high ultrashort, what meeting of Keytruda negative funding costs.
Jayden, that's going to take your first question and Destiny with U D F N y.
Thank you.
So I'll take the first question due to the you know the.
The rig for a new requirement from <unk>.
Actively working with the credit bureaus, especially by how we have actually after a couple of negotiations that we have already.
Trapped up a plan a detailed plan to work with <unk> and a financial institution, but at this time I cannot.
Reveal the name of the financial institutions. So we expect by the end of this year.
We will actually implement.
The new schedule according to our plan.
Once this worked we plan to propose this.
The plan to <unk> and see if it can be approved by the regulators.
So that's our plan.
And you know in the process of this implementation, we do not expect any change to our.
Cost because you know this is actually a test pilot program for them and for US too. So we agreed that during this test pilot program progress, we actually will not incur any cost to you know.
Two the data actually transferred or to add any implementation that we carried through.
So that's the current plan, but going forward once the plan get approved by the PUC.
We still expect very minimal.
Change to our cost structure, because you know by how or put all.
Are actually positioned as a infrastructure so as a credit bureau or infrastructure institution. They do not actually they do not aim to make profit because of this change so I do believe the costs at once.
Yes.
It's incurred in the future is actually going to be very minimal to our.
Underwriting process. Thank you.
Okay. Thank you Jason for the second question.
First one I understand it's regarding the contribution percentage of sangria and or profit sharing the profit sharing business contributed 43, 7% of the overall dnb in the third quarter.
The second question about our funding costs is that.
Thanks to the efforts of our our thoughts sourcing colleagues.
Funding cost has remained very stable at seven 4%.
Thank you.
Yeah.
Sure.
Thank you for the questions next question comes from the line of Brian Roberts, often Mavericks capital. Please go ahead.
Oh Hi, Good morning, My question is kind of.
My a little bit I think are some of the early numbers on volumes look pretty promising.
I was just going to check on the evolution of our business model I believe that is a kind of more of a merchant side and I was just curious number one if you could share some more color on that on how the development is going and number two on the on the kind of the borrower user sides. So to speak if youre seeing any synergy in those users that.
Choose the NPL services and how that might.
Interact with your your lending business and your efforts to drive our loan growth from higher quality borrowers I believe earlier, you said those were typically high quality.
Central customers that use being deal I'm, just kind of curious how that's all shaking up.
<unk>.
Kind of when he said why don't you ask a person that either both into a short term contract moments ago. They gave them Washington that you should you should be and what the need of the uncoated thinking of her two or.
Any way you can just kind of need it.
Who would want a California, where you can put in so again I kind of play assemble and go to the pathogen. He might want me thinking people won't have anything on behalf and I'm gonna.
I'll go back home and seeking a woman named two data Naples.
Well then my answer here with us.
So the hedge without one.
If you don't know what other people just take a second on his own momentum.
In terms of a woman to or has it all ties into the Syngenta Syngenta want all of you let.
Let me tell us is that why the color. She goes onto <unk> sold out of English football.
Oh to utter women.
Great.
And so the Willis towers Watson has a total jets ETF woman. So youll remember the other thing that appeals to Olympias Philippine Hershey's Hot again kind of another sales will get to see them.
And she said no.
Okay.
My I still in a pilot phase at the moment most of our focus is in Shenzhen, and Guangdong Province, and we have been exploring some outside studies with a shopping mall partners and I think that there has been promising so far and our vascepa has been that during festivals, the Qatar National day holiday.
And the Auto Festival, if you look at it for the sake of emerging for the outlets that what was not yet versus those outlet without such cooperation we see an obvious uplift in the transaction our contribution to that.
Does it sound like it goes Crazy Sunday, I thought about whether he hits and knowing it's up so it's all of them and so I figured it or you didn't kind of dollar shouldn't tell your daughter is yesterday about some guy you can cause a failure.
So a woman.
So I've got a sulfate stuck up with us and also that the AMA with all of a sudden joggers and that's all physical yeah. That's all I'm gonna look under a woman's after this holiday will focus so if they don't either for him and he'll conduct a woman has a leather U S. PV, Chile, you should do so the children's or dealers or whether you've ever again. So that's all I'd have to go to the lunches I say Toyota So I mentioned, Colorado, just Oh my thought on that.
My other than what Johan couldn't border. So it turns out that our yields are the machine the culturally the subway Lynch.
Consolidated another Lynch.
Well, Matt I thought I'd seen.
In order to see them a whole bunch of one woman sorry, it's another Savannah Savannah, Cynthia Lingo volatile Soundgarden and lets you can order to go to if we go to well means you can build it yourself.
Women's how COVID-19 could you talk with them on Tuesday June quarter.
So at no cost or the other that to somebody else yogurt with Aloha. So I've been chair vignettes. So here you know who those are the things.
Please ask yourself in the New York.
So here you go.
But how about your total dollar well they know what machines out of a call it quite to Tuesday, Youll go to attention for that as well.
Was it a dumb with families along well do that.
So I'll take the first Honeywell Johnson.
So I'll go to go to the human touch.
So I tell everybody says Oh my God I also realize that most of what I was talking about jobs is Oh, yeah, you have got a dozen oh well, it's only 10 of them just on a margin well that has a luca took them by a bunch of sungard in the little housing because they can see themselves. As you have also conducted under all kinds of myocardial two types of a slug get back with you.
So our merchant partners.
They have a trial period and we've seen a strong response to conversion after the trial period into a paying customer and the fee that we charge is between three and 4% and in terms of asset quality.
Look at F. P D seven very low from offline converted several basis points and customer profile, mostly female with a strong spending on power. So at the moment, our focus is on bringing the value to the merchants to making sure that we can help them improve their transaction.
To the.
Our repeat seller and then to increase at a Hershey before scaling up and at this moment, we would also not considering or not be considering and bringing in my young users into the loan facilitation business because right now our focus is on improving the emerging of value and also.
Sure that.
It remains a very important retail consumption to actually use it before.
Before we move into next.
Yes.
Sure. Thanks.