Q4 2021 Jiayin Group Inc Earnings Call
Good day, ladies and gentlemen, thank you for standing by.
And welcome to the giant oops.
Fourth quarter 2021 earnings conference call.
Currently all participants are in a listen only mode.
We will conduct a question and answer session and instructions will follow at that time.
As a reminder, we are recording today's call. If you have any objections you may disconnect at this time.
I'll now turn the call over to Mr. Sean Zhang from Investor Relations of Shine Group. Please go ahead.
Good day, everyone. Thank you all for joining us on today's conference call to discuss <unk> group's financial results for the fourth quarter and full year of 2021 .
We released the results earlier today.
The press release is available on the company's website as well as from Newswire services.
On the call with me today are Mr. Yes, Jim Gray chief.
Chief Executive Officer.
So no chance.
Co Chief Financial Officer.
And Ms Trudi <unk>.
<unk> risk officer.
Before we continue please note that today's discussion will contain forward looking statements made under the safe Harbor provisions of the U S. Private Security Litigation Reform Act of 90 95.
Forward looking statements you won't inherent risks and uncertainties.
As such the company's actual results may be materially different from the expectations expressed today.
Well their information regarding these and other risks and uncertainties is included in the Companys public filings with the SEC.
The company does not assume any obligation to update any forward looking statement, except as required under applicable law.
Also please note that unless otherwise stated all figures mentioned during this covers coal are in Chinese renminbi.
With that let me now turn the call over to our CEO , Mr again doing great.
Please go ahead Sir.
Hello, everyone.
Our broad SCADA.
<unk> conference call.
And funding for new one.
He knew Lubbock eight one so Michael environment.
I'm committed to building upon our I'll call it a bit.
Two advantages.
Absolutely you should see our funding sources for individuals.
<unk> founding.
Yeah.
What are your priorities.
Forging partnerships with financial institutions.
Yeah, It was defining our founding.
Strengthening our risk management systems and enhancing that.
Al.
Profiles of our borrowers and they improve.
That's correct.
What do you have in Brazil.
Bold policy changes.
Including the hot on loan pricing.
4%, we actively responded to the new policies and airline pricing stage in line with our regulator rate requirements.
And being part of yours.
As a result.
Fighting intensified any regular labor rate over siding.
Macro uncertainties, we have steadied at all from the.
Fintech space and it delivered a solid financial and operating result in a New York, notably Lloyd.
The relation volume increased by 89 seven.
7% year over year to <unk> 191 beauty from 11, five five beating in 'twenty one.
While our revenue grew by <unk>, 9% to 107 eight bidding.
With a pen.
Oh I refuse a podium girls. We also maintain a 90 gable any currency rate by improving our overall credit risk profile all boroughs.
Painful.
Our 30 day delinquency rate greatest diarrhea at 131% compared to 1003, 4%.
End of September .
The 90 day delinquency rate increased slightly to their own pardon.
<unk>, 2% from their own policy, but then at the end of September .
But youll have handled that EBIT.
That is true every range.
In the fourth quarter.
We continue to expand our borrower paid.
What are your refined our marketing programs to barack corrupt prioritized acquiring new customers.
High credit quality.
We introduced the accuracy of our marketing programs, we are able to reach our target customers more especially to you.
Consequently, the lumber the bottles with a ball.
Average critic football via continuous to arise.
And could enable us to increase our overall credit quality, while expanding our borrower base.
We also continued to invest our development.
Integrated highly automated platform with industry, leading risk management capabilities.
So as the <unk> hundreds to find financial institutions.
The end of the 2021 what do you have what Virgin.
Partnerships with 38 financial institutions and the way I do.
Okay.
Passion with another 46 institutions to further expand our partnerships.
I must say five founding resource.
Also most of our existing institutional funding partners a commercial bank.
We are actively developing.
Aberrations with National Bank.
Sumer.
Financing services provider two liter okay, that's certain.
And just where you had in regional market.
Our existing partnership with spectra.
Meanwhile, we will.
They're focused on.
Following our card.
Financial institutions.
Through our pool should also be offerings that are thankful borrow.
Our presentation tools lawn and education services, we are constantly.
Optimizing these services to help our company.
Qs.
That business.
You should aid us while improving their operating shortly.
It shouldn't making process.
Going forward, we plan to explore more in Norway, you've raised to cooperate with our founding partners.
In addition to deepening our collaboration with financial institutions. We also continue to optimize our product portfolio during the quarter.
For example, with <unk>.
Launched a loan program was more business.
Orders in the fourth quarter small business owners are one of the most marginalized underserved groups.
For login success, even though small and mid sized businesses contribute 50% of the Texas, 60% of that Chinese GDP and is 70% of the technical innovation, 80% of it in problems and led lightening setup all companies in the country.
Better so that backbone countries, Colombia development and our common prosperity.
With us we will continue to increase our investments in product offering for Smes.
In terms of our global expansion with Halo dog food strategy, while each region based on the timing of stage for our business development.
Gen market in particular achieved a robust.
Bruce well Minto.
We are also on track to develop new partnerships with <unk>.
Additional licensed financial institutions in Mexico to further expand our local operations and fortify our market leadership.
Lord falling in the Doj and yeah, we will.
What do you have already had an unnecessary financial services, we continue to accelerate our best guess.
This expansion we are regularly develop.
<unk> underwriting our products in a circumstance in region.
Which enable us to continue to improve the Ritchie perfect margin going forward, we're trying to penetrate.
Although very Perm you see international is flat.
It's really emerging markets in the South East Asia to build a marquee and tested crossfield.
Hi, Russified global business metrics.
Looking about 2021 what are you saw major changes.
On the regulatory problems and prescient.
Disruptions to the long hard by Covid.
19.
The increased uncertainties.
Macro environment. However, we remain on the parade.
These challengers to chew getting crews and probe all our critical risk by flow of buyers.
Expanding our borrower base and optimize our product portfolio.
As evidence of the success in our efforts we had record years 'twenty one pilot line one being in long our emulation volume in the full year of that and you can use via the higher eight of our previous guidance well 2022 we are helping them.
That's our market leadership will enable us to carry us through our schools.
To achieve long a regulation of.
36, meaning b.
With that I will allowed turn the call over to our CFO Juliet.
Celia. Please go ahead.
Thank you Mr again, and thank you everyone for joining joining our call today.
And Mr. Yan mentioned, we achieved a robust financial performance in the fourth quarter and full year of 2021.
And the first full year after our business transformation, we grew our loan origination volume by 89, 7% revenue by 36, 9% and net income by 87, 1% year over year.
The solid growth further demonstrating the effectiveness of our strategy in diversifying our funding sources.
Turning to our risk management, and the improving asset quality.
Now, let me go through our financial highlights for the quarter.
Please note that unless stated otherwise all numbers quoted are in RMB.
And the person needs a change refer to year over year comparison.
<unk> revenue was $368 2 million up eight 2%.
Revenue growth was primarily driven by the significant growth in loan originations volume.
Increased seven five.
Thanks.
Other revenue was $7 1 million.
Now 84, 4%.
This decrease was primarily due to a change in the consolidations of our overseas entities.
Moving onto costs.
Our nation and servicing expenses were $84 8 million up 37%.
Primarily due to the increase in credit and settlement expenses, which was in line with the increasing our loan origination volume.
Allowance for uncollectible receivables and contract assets loans receivables and others were $17 2 million down 15, 3%.
The outstanding loan balance of our luxury peer to peer lending business, what's the reducer to zero in November 2020.
G&A expense was $46 8 million up nine 1% as we continue to enhance our cadence to support our business expansion.
R&D expense was 46.6 million up 11, 2%.
We recorded a higher employee compensation and benefit costs and increase the investments in developing our I T infrastructure in the quarter.
That was in the marketing expense.
<unk> expenses were $156 9 million.
Three point 33, 5%.
Which is in line with the growth of our loan origination volume.
Yeah.
Consequently, we reported a net income of $122 5 million compared to $81 1 million in the same period of last year.
We ended this quarter with $182 6 million in cash and cash equivalents.
Compared with $117 3 million and Sox December 30, 31 2020.
Moving to the guidance, we expect our loan origination volume in the first quarter 'twenty to 'twenty two to achieve a year over year growth of over 78% and the sequential growth of over 37%.
With that we can open the call for questions let.
Mr Yan our risk.
Our and Ah Kim Smith offers or is she and I will answer the question.
Operator, Please go ahead.
Thank you, ladies and gentlemen, if you'd like to ask a question you will need to press. The Star then one key on your Touchtone telephone.
Please stand by while we compile the Q&A roster and we have a question coming from the line of Andrew Scott from Roth Capital. Your line is open.
Good morning, and thank you for taking my questions. My first question is about the recent Covid lockdowns.
In China I was wondering just how that'll affect arguing.
Origination growth, particularly in the first half of the year.
Any any color you can provide there would be great.
Hi, Andrew this is Hank.
I'm Gonna taking on your first question. Thank you for your answer.
Operations about a lockdown situation in Shanghai.
I'm pleased to report that the country Lockdown situations hasn't had.
The impact on our Q1 growth.
In fact, what we are expecting a pretty.
Said differently, but probably better than half.
What has that project at the earlier part of two one times total lending volumes we.
We actually.
We expect it.
Higher weight in terms of I'll call collection volumes.
Has it gone up by a few percent in terms of the number of of course cortisol customer service.
At the same time.
Our investment team.
Infrastructure has enabled us to collaborate effectively.
Even when we are working fine.
The multi mode.
Okay, I hope that answers your question.
Yeah. Thank you very much for the details.
My second question here.
It's about your operations in international markets.
I know you guys have one of the one of the top players in Mexico, and we're looking to band in Nigeria. So I was just looking for an update on <unk>.
Howard generation, how origination growth is going over there if you plan on entering any new markets and it might start sharing metrics in these other countries.
Yeah.
So angel does he found a gamble, let me take them up on your question on the international expansion.
Charlie is cautionary I think our international market yesterday.
Am I going to think it's a little bit of more color into each individual market. So in Mexico. As he said we remain at the top players in the market, sometimes volume wise as well as the total number of customers number of transactions.
We remain to be the top player and the numbers are pretty stable I wonder if they have been focusing on in Mexico is really to improve is viscometric.
That's correct yes.
So if we move onto the Nigeria as we discussed last time in Q3 should be in the second half of the Q3 that are we have secured our the official lending licenses to operating online lending.
Yeah.
So the Q4 four giant stupidity.
Two.
Ramping up the acquisition volumes at a faster pace.
So just to give a little bit of more detail something to how what the growth is looking like on the transaction volume. So we have seen month over month is in the high double digit number.
For the entire Q4 peleus and.
After we are able to further train our fraud detection model from a risk assessment models.
The size of the loans are weak spending in this market are also seeing some growth we're.
So we're looking at a 20 plus.
Trying to kind of possible foundation quality in terms of the size of the loan.
The evidence showing that we are taking a more healthier customers and everything we are seeing improvement on our western metrics there.
But even campaign that.
We are a team from we're facing some uncertainties.
Supporting our market.
One thing the impact from the Covid.
The collections after the collection operations. He is heavily we still are relying.
Relying on.
Operating them.
Call Center call Center employees, So I'll take all Covid situation had some impact over there.
We are an employee AI.
Got it.
So the voice service is there to help us to navigate through that.
Too bad but that downtown.
We are right now with messaging that is called basketball's myself waiting.
The state again on.
On the other side on the customer acquisition, we are feathering, expanding all customer acquisition channels.
Partnering with major online.
Mark its place them, but on the upswing.
On the other side of it we're also exploring some smaller partners. So overall is that are we are seeing whereas we started accumulating more than pizza formula. So we are seeing in that volume.
Market is growing that's why I said the risk metrics.
Getting more stable and improving.
So that's the one we have human that German market why don't you walk down she was Indonesia, if theyre looking at it trying 2021 overall.
In the first half of 2021 twisting some pretty healthy good momentum over there. Unfortunately, it was put on hold because I've got regulatory changes.
But overall, we remain pretty positive about the maturity of saying don't vishal market it sounds like fun online lending.
Hum.
Strong we have strong strike that you can fit in terms of our capabilities and a proven.
Chocolate in.
Chinese O&M market, where we can have a.
Strong foundation for us to pull out.
Asia. So now we are working on.
Actually we have already identified that we're working on executing.
Executing our strategy to re enter the market in that legal and regulatory compliant approach to reenter that market.
We Rx so that's that's where we have seen the major markets internationally.
The loss pick.
2021 I'm looking at 2022, we are evaluating some of the potential market, but I can't because of the cold weather situations. We are taking a prudent approach in terms of making as big strategy, just a quick little premature at.
At this point.
Hope that answers your question.
Yeah that was very very helpful. So thank you very much.
Last one for me with you as in our online platform and China, now, putting a new cyber security regulations.
Do you believe you need to get reviewed do you believe this may impact shareholders over in the U S. Can you just provide some background there.
Yeah.
On that question, we don't have too much to report on but we expect to further expand that won't be able to meet or the public companies and and at this point I think technology company that we are pretty confident no way.
All the standards.
But yeah, I think I don't we don't.
We don't have yet.
Uh huh.
Sure.
So there's good news. Thank you very much for your answers that's all for me now.
Yeah.
Thank you and I'm showing no further questions at this time I will now turn the call back over to management for any closing remarks.
Thank you operator, and thank you all for participating on today's call and thank you for your support we appreciate your interest and look forward to reporting to you again next quarter on our progress.
Ladies and gentlemen that does conclude our conference for today. Thank you for your participation you may now disconnect.
Yeah.
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No.
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Sure.
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