Q3 2022 CNFinance Holdings Ltd Earnings Call

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Chorus call what conference would you like to do it.

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C N finance okay.

Ottawa and you know and the C N finance thank you Sheila.

Sure.

She won't change of heart or plenty of which just shows you four the change.

Since you said shojo cohorts are issued from Gleevec.

First.

Besides servicing the current sales partners.

But it'll put more resources to promote collaboration with channel partners, who have access to broader customers and empower them by providing them with refined services and management.

Whether you use our platform and system to empower those channel partners and help them to form scale.

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Jimmy Choo.

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I'm going to leave with Jody Johnson I'm thinking.

Hum.

And as you know.

So what do you call. It a time, you're gonna to encourage them, but you only show which usual.

Second.

So they'll continue to raise low cost capital from trust companies.

We're also continuing to expand our cooperation with commercial banks and make it a bigger part in our product mix.

In addition weather.

Also negotiate with subordinated you honest investor about refinancing mpls.

It makes sense to refinance into a ratio certain scale by the end of next year.

Weather also refine our own process to better coordinate loan application fundraising.

And better manage our cash.

And therefore further cut the interest rate on our loan products. So that the MSE owners can receive the infusion.

We don't see Cookie, where you for not being able to achieve all time here with Jim Juicing shows you what would you want to immediately change. So you go from a tranche with the sequel, when new haul being Bloomberg I'd want to haul shrunk cook with fossil creature.

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Third.

We will continue to empower our business with technology and make our products simpler and more efficient.

Within 2023.

Register and maintain an official public account and use this account to send notices for borrowers also customer inquiries and deal with complaints.

We hope such official account could enrich our toolkit in terms of developing customer loyalty and further harness the value of our products.

Do you feel well Magellan Chihuahua.

T shirts, and shoes home truths tissue, Swedish Sweden ever guarantees are to empower.

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Well, Joe which issued a warrant or should you should have to chalk genome coachable soon.

Four.

Participate more proactive in the capital market.

Other than keep pushing a secondary offering we're also seeking chances for an acquisition by exchanging shares using the treasury shares we have repurchased.

They will pay attention to the life fintech startups for that purpose.

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On behalf of the company and the board of directors.

I would like to welcome Mr younger who joined the board as an independent director Mr.

Mr Young Jose Bachelors degree from Nankai University.

<unk> and international Finance.

He also holds an MBA degree from Xinhua University.

And I am as you know accounting from Santa Clara University.

Her young has over 30 years of experiences incorporate finance nonbank financial institution and wealth and asset management.

Work with public companies listed in Shanghai.

Work in Hong Kong.

Mr. Young has worked experience both in China, and overseas, including Europe , and the U S.

Currently based in New York.

Expect that to together with other board member explore further opportunities for the company to continue growth in the capital market and create more value to our shareholders.

Schindler with Jones Bullshit enjoyable Liberty's CFO , Jim I'm sure you know with Halloween means yourself also on Iranian defense people will say what's wrong.

With that I'd like to hand, the call over to MS. Jamie the acting CFO of the company, who will walk you through the third quarter Sunday Sunday to financials.

Thanks, Kim and thanks, again to everyone joining us today for our third quarter.

Turning to financials.

Year over year comparison is a pathway to review our performance.

Unless otherwise stated or percentage change I'm going to get will be on that basis.

Marcel.

Unless and otherwise.

Otherwise state ordering them, but I'm going to get will be in RMB.

As of September 13, 2022.

Total outstanding loan principal with Tampa like five P M.

Compact to pinpoint for the land RMB at December 31, 31.

The total origination wanting them with that possibility.

One 9 billion in the third quarter of 2022 compared to <unk>.

Compared to RMB, three 1 billion.

In the same theory of 'twenty one.

Interest and financing service fee on no decreased to 9% to 413 million for the first quarter of 2022 from 415 5 million in the same period of last year.

Finally, etch business attributable to a decrease in the balance of average daily outstanding loan principal.

That should be crazy with mainly as a waste out of the company.

Transfer of law and that the changed enough.

Maintain model to a third party in block during the fourth quarter of last year.

Which was.

Partially offset by an increase in the total outstanding loan principal under that collaboration collaboration market.

Interest expense decreased to 11% to 119 5 million.

The first quarter attorney attorney too.

Compared to 219 million in the same theory of Lucky here.

Finally, due to the decrease in principle.

Net borrowings and lower interest rates charged by check company.

Interesting contracts DFAST partner, we're defending a fee charged to SaaS partners, who choose to repurchase default levels in installment.

English by 213 per sound to St.

234 million in the third quarter of 2022 from either 1 million in the same period of last year.

Primarily attributable to the increase in that delinquent loans that were repurchased by first partner in installment.

Collaboration cord blood test for us to be close to 85 million.

The first quarter of 2022 from RMB 102 million.

Finally accident as opposed to the lower average fee rate.

The company paid yourself partner in the third quarter of Tony's I think too as compared with the same theory of Latvia.

Theory under that collaboration with the virus.

[laughter] cornett person modest time, and it turns out that long.

Well wishes for credit losses increased by 3% to four.

To me that in the first quarter of attorneys that is true for all that he's free lenient in that.

The increase was due to the heightened economic uncertainty caused by COVID-19, pandemic and the relevant prevention and control measures.

That's about extra downturn pressure faced by China After the China real estate market during the first quarter of 'twenty two.

The total operating expenses decreased by 11% to 18 3 million for the first quarter of Chinese anything too.

The Nike free media.

Income tax expense increased by 115.

3%, while I'm, just I think 3% to 17 million for the first quarter attorneys I need to for our seven minions.

Primarily due to an increase in the amount of taxable income.

Net income increased by 142% to what he thinks me now for the third quarter checking type.

Two from 19 unions in the same period of last year.

As of December 30, 2010 at two and December 31, 20001 the companies.

The company has cash and cash at two women have restricted cash of $1 4 billion and two two points to be there.

The delinquency ratio for loans.

Originate by the company decreased from 341% as of December 31.

So anything that he wants to sorry, Charlie 2.9% as of September 30th Tony's attitude.

The delinquency ratio, excluding low hauswirth out for.

For a loan originated by the company decreased from 16.

<unk>, 2% S. L December that's even went so anything they want.

Two a 13% at stuff that kind of protective coatings they need to.

The NPL ratio for lung cell region needs by company English from Knight, 0.4% S. L.

Laughter.

Sandburg that you want to anything want to pinpoint a self December 13th 2032.

And the MPL ratio, excluding loans held for sale for loans originated by the company.

From two 1% as of December 32 towards the 32 to $1 flying as of September 13th towards attitude.

Yes.

Yeah.

Right.

Yeah.

With that.

[noise] they would like to open the Q&A section with that.

Operator please.

We will now begin the question and answer session.

To ask a question you May press Star then one on your telephone keypad.

If youre using a speakerphone please pick up your handset before pressing the keys.

To withdraw your question. Please press Star then two.

This time, we will pause momentarily to assemble the roster.

And our first question will come from William glucose Husky with Greenwich Global. Please go ahead Sir.

Hi, guys great quarter can you provide an update on the number of active sales partners and give some kind of indication on how their liquidity is.

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So that's the end of this quarter.

Number of active sales partners is about.

167.

She is a about 100 more than the same period in Q2 2801.

And 30 more than that's the end of Q2 'twenty to 'twenty two.

The liquidity they actually made a trend toward a better rich can be observed in two aspects. The first day as the increase in the loan origination volume, which which means they have they now have liquidity to expand their business.

And the second aspect is that they're there they can now fulfill their obligation associated with the defaulted loans.

Because we are seeing fewer accounts confiscation of a credit risk mitigation position.

Thank you.

Okay great.

Can you talk about the commercial lending you know you were it was about 10% of total origination is that where you guys want to be at this point and how do you see that continuing to grow.

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So.

Facilitated the loans introduced two commercial banks.

And in this quarter was about 400 million, which is not quite there yet, but we are hoping the loans were introduced to our commercial banks continue to cause bigger shares in our portfolio and our go in 'twenty two 'twenty three four loans introduced to commercial banks is to make it about 'twenty.

25% to 35% of the total loans originated including the lowest weight under the trust lending model.

Which is about 500 to 600 million every month.

Okay, great great.

And then can you just give an update on the demand youre seeing from the SME borrowers.

In terms of.

Having a lot of demand if there is a lot of demand and if they have good collateral with that.

Okay.

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Okay. So because of the uncertainties raised a soc.

With the pandemic prevention and control as well as the downward pressure of the economy. So we're actually seeing less demand as compared to the same period of <unk> 2021.

Ever is getting better.

If you compare it to the first half.

And also from a data released by P. B C.

And at the end of October the new RMB loans. So.

About 615 billion, which is 211 billion lower from the same period of 'twenty 'twenty. One. So you can you can see that.

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Okay.

Uh huh.

Okay.

Well then sends you to change that you should be hopefully an even though.

The doses are true she was on the charts here on the or Tom whichever since I'm guessing if you're gonna come upon them.

You should go to a woman with him on the phone would Ya Li.

As for the collateral.

Three of that both all day delinquency ratio and the NPL ratio has decreased in AR at the end of the third quarter. So that means the the quality of collateral is still within our control.

Yeah.

Okay Perfect and last question is you guys mentioned looking to do some acquisitions is there anything in that in Texas, specifically, you're looking for just any.

That might be you know.

Complementary to what you guys offer.

Oh.

Sure No no rush at all are you going to put on those although July although range Oh, you're going to see.

Tonight, you know totally on the move out on my husband's or just your thoughts as how you go you got to be dull.

Complementary.

It can be done without a butcher meal, which are familiar you are putting the movie for sure because some of us are somewhat familiar with certain chemicals.

Sure she wants with your system.

There is not a particular target at this moment, it's just something we want to achieve in the aftermarket.

Okay alright, thank you.

[noise] again did you have a question. Please press Star then one.

[noise].

Yes.

There was no further questions. We will conclude our question and answer session I would like to turn the conference back over to Matt <unk> for closing remarks.

Thank you and thank you again for joining us Tonight.

Or on this this morning, if you have any further questions you can always a real hour.

Officials left at IR at <unk>, China Telecom also against sending US email. Thank you. Thank you again.

Okay.

Okay.

The conference has now concluded. Thank you very much for attending today's presentation. You may now disconnect your lines.