Q3 2022 Jiayin Group Inc Earnings Call

Good day, ladies and gentlemen, thank you for standing by and welcome to the Chilean groups third quarter 2022 earnings Conference call.

Currently all participants are in 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 will now turn the call over to Mr. Sean Zhang from Investor Relations of Giant group. Please proceed.

Okay.

Good day, everyone. Thank you all for joining us on today's conference call to discuss join groups financial results for the third quarter of 2022.

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. Yanking Quake, Chief Executive Officer, Mr Font, Rooney, Chief Financial Officer, and make sure your phone.

Chief 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 Securities Litigation Reform Act of 1995.

Forward looking statements involve 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 company's public filings with the SEC.

The company does not assume any obligation to update any forward looking statements, except as required under applicable law.

Also please note that unless otherwise stated all figures mentioned during the conference call are in Chinese renminbi.

With that let me now turn the call over to our CEO , Mr. Yang Tang Wei.

Sure Yeah, well deliver his remarks in Chinese and I will pull up with corresponding English translations. Please go ahead Mr. Again.

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Hello, everyone. Thank you for joining our third quarter 2022 earnings conference call.

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We delivered another outstanding quarter with strong financial and operational results.

Our loan origination volume grew by approximately 123, 5% to RMB $14 9 billion in the third quarter.

The second.

Consecutive quarter with over 100% year over year growth.

Our net revenue increased by approximately 55% year over year in the third quarter to reach RMB 894 million.

Our margin profile is also continuing to improve as we further refine our cost structure and optimize our operating efficiency resolve it resorting inconsistent margin improved improvements.

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Our exemplary third quarter performance attests to our commitment towards strengthening our partnership network refining our risk management strategies, strengthening our technology capabilities and accelerating our global business expansion.

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In the third quarter, expanding and strengthening partnerships with larger financial institutions remain our top business priority.

Under the current macroeconomic conditions, we are focused on reassessing their needs of financial institutions and in building long term partnerships to safeguard our funding sources and optimized our funding structure.

As of September 30th Tony Tony too, we have four partnerships with 46 financial institutions and we are currently in discussion with another 60.

Notably National financial institutions in our partnership network still contributed to the majority of our total loan origination volume in the third quarter.

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In addition to strengthening partnerships since earlier this year, we began collaborating with partner financial institutions to provide them with technology enabled services for their in house operations, we offered them access to our intelligent.

Platform and automated solutions under our new collaboration modal four partner institutions. Currently we have empowered three financial institutions to digitize their in house business from phone management risk management intelligent marketing costumer services too.

Other operation processes, we are now interfacing with another three financial institutions and are actively negotiating with six more institutions to bolster the development of this new cooperation motor.

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On the Bora, France, we continue to invest in online marketing programs to streamline our borrower acquisition efforts. Meanwhile, our focus remains on optimizing the structure of our borrower base as we expand it.

We are categorizing our borrowers based on their credit profiles risk assessment and a borrowing behavior.

Categorization enabled us to streamline our resource allocation towards premium borrowers and built a foundation for the future launch of more customized services and targeted for operation in this year initiatives.

In the third quarter, our average borrowing amount.

Barring reached RMB 10158 inch.

Increasing 58, 1% year over year.

Moreover, despite adding new borrowers in the quarter, our repeat borrowing rate still maintained at a healthy level above 60%.

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We also remain committed to strengthening our core technology capabilities in the quarter.

We successfully.

Our Thai how AI modeling platform and a mean top anti fraud system as part of our ongoing efforts in proactively re collaborating risk control strategy and addressing the COVID-19 induced asset quality pressure, our 61 to 90.

Day delinquency rates.

Remain relatively stable in the quarter, reflecting our Australian risk control capabilities under the volatile macro environment.

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Moving on to our global expansion, we are increasing our investments in Indonesia to explore more business opportunities in the local market.

We also substantially expanded the skill of our loan origination and our revenue generation in Nigeria.

Going forward, we will continue to focus on improving the profitability the profitability of our Nigerian operation is developing.

And no our innovative partnership motors as well as accelerating our product development and penetration in the local market.

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Finally, I want to mention our recent efforts in our corporate social responsibility.

Last year, we established the charging charity special phone with the Shanghai Sone Qingli Foundation to raise social awareness of youth mental health and provide mental health support to the younger generation.

In the third quarter, our charging charity special phone organized the lap children smell a charity fundraising even on Tencent charity platform, where we help phone 10 salt in mental care service packages for their use.

Looking ahead, we are planning to invest in more charitable initiatives to better leverage our unique strengths and fulfill our social responsibility.

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In addition, the repeated COVID-19 resurgence and consequent control measures have had a negative impact on small business owners this quarter.

Sucks government agencies have unveiled a series of new regulations to help fulfill depressing funding needs of small businesses boring.

Following the government's coal we also continue our efforts in supporting small and micro businesses during the quarter by expanding our services for small and micro business owners, who have long been underserved.

By the end of September our specialized loan program has served approximately 361.5 thousand small business owners in 31 provincial level bridges across China.

On a sequential basis, we have expanded the geographical coverage.

This one program will substantially boosted the number of small business owners we serve.

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In summary, our efforts and accomplishments in the quarter have put us in a solid position to maximize our opportunities in the future.

Despite the increasing uncertainties in the global economy, we believe that the underlying fundamentals of the Cleantech sector remains strong.

We have proven our capabilities to develop leading financing service service offerings, intelligent finances solutions and a compelling value prop.

Propositions, we are confident that we will continue to empower our partner with financial institutions serve with our broad borrower base and to generate sustainable value for our shareholders in the long term.

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With that I will now turn the call over to our CFO Mr financially.

Please go ahead.

Thank you Mr <unk>.

Thank you everyone for joining our call today.

I will now review our financial highlights for the quarter.

Unless stated otherwise all numbers quoted are in RMB.

And the percentage changes refer to year over year comparisons.

Okay.

As Mr. Han mentioned, we delivered another quarter of robust financial performance.

Loan origination volume grew by 123, 5% to 14 point of $9 billion as we expanded and strengthened our collaboration with institutional funding partners.

Our net revenue was $894 3 million.

55%.

Driven by a 47, 7% increase in our revenue from loan facilitation services.

Our revenue take rates decreased slightly in the quarter as we adapt to evolving market dynamics and the regulatory changes.

Other revenue more than doubled to 100, and a 1.4 million mainly.

Mainly driven by incremental revenues from individual investor referral services.

Moving onto cost.

Origination and servicing expenses were 100 can afford to $8.4 million.

Up six to eight point of 1%.

In line with our loan origination volume growth.

Loss for receivables and contract assets reduced moderately 548% to $5 9 million.

Mainly as a result of the ongoing restructuring of our overseas business during the quarter.

Sales and marketing expenses increased by 36 quarters of 6%.

310 to $3 6 million.

Tracking higher borrower acquisition expenses in the quarter as we continue to invest in our online marketing programs.

G&A expenses were 51 4 million.

13.5%.

Primarily driven by expenditures in compensation and related benefits in the quarter.

R&D expenses were 56.4 million up 52%.

We recorded a higher employee compensations and benefits as well as increase the fees for professional services in the quarter.

Our ability to carefully manage our expenses or find our cost structures and improve operating efficiencies, while growing our business enabled us to further enhance our profit margins in the quarter.

Our net income increased significantly by 98, 8% to 204 to eight points of 1 million from 120 418 million in the same period of last year.

I'll now topics margin also expanded to 27, 7% from 21, 6% in the same period of last year.

We ended the quarter with 217 5 million in cash and cash equivalents up from 213 point of 9 million as of June 32802.

As of September 30 tenants in there too.

We have deployed approximately today U S dollar 2.1 million to repurchase approximately 0.9 million American depositary shares under the share repurchase plan, we initiated since June 13th tender in there too.

Moving to our guidance.

Given our better than expected performance in the first nine months of the year. We now further revise our full year 'twenty tended to loan origination volume outlook. So.

M B 50 billion.

Which compares to the original RMB 36 billion were provided in the first quarter and updated RMB four 3 billion, we announced last quarter.

With that we can.

Now I'll open the call for questions. Mr. Hu, our chief risk Officer, and I will answer your questions. Operator. Please go ahead.

Thank you if you would like to ask a question. Please press star one one on your telephone and wait for your name to be announced.

Once again, if you would like to ask a question. Please press star one one on your telephone please standby, while we compile the Q&A roster.

Thank you, we'll now take our first question. Please.

Please standby.

Your first question is from the line of Sam Lee and invest at please go ahead.

Good evening and thank you for taking my question. My first question is regarding the really strong growth, especially in the past few quarters or some of the key drivers for the growth and how long do you expect to sustain a high double digit growth going forward. Thank you.

Okay.

Hi, Sam Hi, Sam does is if I'm going to take your questions.

So your question is about our key drivers for our strong forever.

In my opinion, there are primarily coming from three fronts. The first is coming from our laser focus on strengthening and expanding our partnership with the licensed financial institutions as Michigan mentioned early we have established an established over 46.

So the over 46 financial institutions.

With a deepened in the broader network.

And for how long this has been driven up as a result.

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My base since the start of the triangle, we have or we have already started to over 12 million customers in terms of their loans.

And it will continue to drive higher quality.

Overall customer base, but the second the last but the most important is really the technology technological capabilities.

And expertise spilled over the years, focusing on data driven quite a strategy and operational strategies.

As such.

With such capabilities that will allow us to keep into our customer base and to properly assess properly to SaaS they'll cut guard banding and be able to.

Driving up our overall umbrella.

Your question is about how long will it be able to keep the growth of course, we'd like to see that as.

As long as possible, but as we all know in terms of the well.

The absolute loan growth, what we really focusing on making sure that it's healthy.

Sustainable and a forward looking especially relative to overall economic outlook.

Let's legislation framework.

That's where all of us are kind of at market.

Our market outlook.

So that when you're trying to balance both our quotes and.

And.

That's one.

So I hope that answer your question.

Okay.

Thank you.

And we have saved more questions at this time I'll return the call back to Sean for closing remarks. Please go ahead.

Okay.

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.

Thank you. This does conclude the conference for today. Thank you for participating and you may now disconnect.

The conference will begin shortly to raise your hand during Q&A you can dial star one one.

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