Q1 2023 Jiayin Group Inc. Earnings Call
Good day, ladies and gentlemen. Thank you for standing by and welcome to the JIA In-Group First Quarter 2023 earnings conference call. Currently, all participants are in listen-only mode. Later, 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 send the call over to Mr. Xuan Zhang from Investor Relations of Jia Ying Group. Please proceed.
Thank you, operator. Good day, everyone, and welcome to Giant Group's 2023 first quarter earnings conference call. We released our earnings results earlier today via news wire services. You may check the press release and sign up for the company's email alerts.
by visiting our IR webpage.
On the call with me today are Mr. Yan Ding Gui, Chief Executive Officer, Mr. Fan Chunlin, Chief Financial Officer, and Ms. Xu Yifeng, Chief Risk Officer.
Before we continue, please note that today's discussion will contain forward-looking statements made under the CPAPR provisions of the U.S. Private Security Litigation Reform Act of 1995. For more information, visit www.usda.gov.
Forward-looking statements evoke inherent risks and uncertainties.
As such, the company's actual results may be materially different from the expectations expressed today.
Further information regarding these and other risks and uncertainties is included in the public filings with the SEC.
The company does not assume any obligation to update any forward-looking statement except ask required under applicable law.
Finally, we will post a slide presentation on our investor relations webpage soon.
providing details of our resource for the quarter.
Also, please note that unless otherwise stated, all figures mentioned during the conference call are in Chinese screaming bee.
Let me now turn the call over to CEO Mr. Yan Dinggui. Mr. Yan will deliver his remarks in Chinese and I will follow up with corresponding English translations. Please go ahead Mr. Yan.
Thank you for your attention.
Hello everyone, thank you for joining our first quarter 2023 earnings conference call.
Thank you for your attention.
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I am delighted to share with you today the exceptional performance of Jia Yi in the first quarter of 2020.
Our robust resources this quarter are a testament to the steady recovery of the domestic economy and the solid foundation we have built through the consistent improvement of our operational efficiency
In the quarter, we achieved a record long origination volume of RMB 19.8 billion.
surpassing our previous projections.
Additionally, our net revenue for the quarter reached RMB 1.12 billion, marking a year-over-year increase of approximately 119.5%. Our profit margins also remain strong, maintaining our robust growth trajectory.
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Looking at the first quarter from a broader perspective, the National Bureau of Statistics of China has reported a promising start to the year with a 4.5% year-over-year growth in China's GDP.
This represents an increase of 1.6 percentage points from the fourth quarter of last year.
marking and encouraging beginning to China's macro recovery in 2023.
Particularly, consumption contributed to 66.6% of economic growth, with online consumption maintaining a strong momentum.
The simultaneous recovery of urban and rural markets has led to a rapid release of consumer potential.
indicating a swift
recovery train.
Additionally, the People's Bank of China's financial statistics for the first quarter revealed a cumulative increase in the scale of social financing of RMB 14.53 trillion.
An increase of RMB 2.47 trillion from the same period last year.
Industry experts attribute this to the efforts of policies aimed at the stabilizing groups and promoting development.
which have significantly boosted market confidence, accelerate the recovery of effective financing demand, and solidified...
the trend of macroeconomic recovery.
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We have believe, it is always strong andaina, with mission planning and development capability.
Amidst this macroeconomic environment, we have seen an abundant supply of funding and substantial market liquidity.
As of March 31, 2023, we have partnered with 64 financial institutions and are currently in discussions with another 68.
The diversification of our funding sources and the ample credit lines provided by our partners form the bedrock of our rapid long-volume growth. Furthermore, a majority of our funding are not restricted by geographic regions.
Moreover, we have deepened our relationships with key financial institutions and partners leading to an improved.
structure of our loan facilitation funding sources.
Notably, the contribution of loans we facilitated for banks has continued to increase in this quarter. These ongoing efforts have allowed us to continue reducing the average funding cost for the loans we facilitated in the quarter.
We are confident that the size and quality of our partnership network will provide a powerful guarantee for the medium and long-term development of our domestic business.
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As we continue to enhance our FinTech capabilities, we are also fostering more of the West.
partner partnerships. We are leveraging our technological purpose to empower our partners, adding them in their digital transformation.
By the end of the first quarter, we have assisted five financial institutions in digitizing their in-house operations and are currently interfacing with another three.
We are also in active discussion with five more institutions to explore potential collaborations.
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Diveraging the robust support of our current risk control system and capitalizing on the emerging foreign needs spread by the recovery in consumption, we continue to implement an active borrower acquisition strategy. This strategy is...
is P. Woldow in maintaining our current trajectory of rapid growth.
We added nearly half a million new boroughs in the first quarter. Representing and year-over-year increase of approximately.
96.4%.
At the same time, we have maintained a stable proportion of repeat boroughs at 67.8%.
with the average pouring amount reaching RMB 9913.
marking a 13.5% increase year over year.
These figures underscore our commitment to expanding our borrower base and extending the reach of inclusive finance.
To further this goal, we have strengthened our collaborations with several mainstream information platforms.
diversifying our user engagement scenarios and enhancing the precision of our target customer identification.
Our focus on high quality borrowers who demonstrate superior loan demand and repayment capabilities contributes to a healthy and sustainable borrower structure as we continue to scale our business.
We remain committed to investing in high-quality borrower acquisition channels, ensuring continuous optimization of our borrower structure amid rapid business development.
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In managing our borrower base, our tech enable risk control capabilities continue to be a cornerstone of our operations.
These capabilities have proven effective in managing reflect fluctuations and fostering robust, healthy business growth.
As of March 31st, 2023, our 61 to 90-day delinquency rate has remained stable at 0.63% compared to 0.51% at the end of 2022.
recognizing the fluctuations in our risk metrics. We will persist in refining our boroughs of stratification process, striking a balance between asset growth and quality in improvement.
This approach is designed to foster a
a virtual cycle of enhanced asset quality reduced funding costs and improved borrower quality.
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Turning to our international business, we have been vigilantly observing and adopting to the evolving dynamics in the Nigerian and the Indonesian markets.
The Nigerian market encountered some risk fluctuations in the first quarter.
These fluctuations serve as a significant task for our robust risk control team and our continually refine advanced risk control models.
The outcomes in the original markets have reaffirmed our risk control progress in international markets. And we can now utilize this successful case study to bolster our steady growth in other regions. By the end,
of the first quarter, our Nigerian operations had achieved a substantial goal thereby solidifying the foundation of our future expansion objectives in the African market.
Concurrently, we are strategizing to diversify our customer acquisition channels further, reduce our reliance on any single acquisition channel and persistently enhance our customer acquisition efficiency.
This strategic approach is designed to foster the system and healthy growth of our Nigerian operations.
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We will persistently monitor the Indonesian market environment and adjust our strategies accordingly.
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Finally, on the policy and regulatory front, the China International Finance Association is presently spearheading the creation of the Greece control guidance for long.
collection of personal online consumer credit in internet finance, also known as the National Collection Standards.
We view post-loan services as a crucial compliment of the comprehensive loan facilitation service cycle. And the establishment of these standards will offer a definitive regulatory framework for the industry standardization.
We are also actively strengthening our dedication to ensuring the compliance of post-loan services and safeguarding
and we're really strengthening our dedication to ensuring the compliance of post-loan services and safeguarding consumer rights.
In February this year, we published the 2022 Consumer Rights Protection Web Paper.
which provides a detailed account of our consumer protection initiatives.
accomplishments and plans over the previous year. We are confident that a regulated industry environment will substantially contribute to the sustained development of both the industry and our business.
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The Ministry of Justice have requested us to look into the collaborative approach for humanitarian protection towards South inverse resources and ???????? a long-term safety priority.
Moreover, in response to the regulatory mandate to terminate direct data connections or called Duan Zhilien in Chinese.
We have proactively engaged with credit institutions to establish collaborative plans and have successfully completed all necessary technical and system preparation.
We are confident in our ability to meet the regulatory requirements ahead of the deadline.
ensuring a seamless transition in our business operations. As a front runner in the FINGTAC industry, JIAIN remains committed to safeguarding consumer information, upholding data security within the industry.
and delivering high quality financial services.
Compliance has always been at the forefront of our operations. And we will persist in this commitment as we continue to foster the growth of inclusive finance.
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In conclusion, the first quarter of 2023 has been a period of significant progress and robust performance for Jain. Our remarkable performance this quarter is a testament to the efficacy of our strategic initiatives.
which have enabled us to expand our business operations, navigate risk fluctuations, optimize our boiler-based structure, and extend our reach in international markets.
We are confident that these concerted efforts will allow us to maintain our growth trajectory in the medium to long term and deliver outstanding results in the coming quarters.
As such, we reiterate our full year of our
guidance for 2023 and Are setting a new loan origination volume target ranging from R&B 23 billion to R&B 24 billion
for the second quarter of 2023.
With that, I will now turn the call over to our CF will Mr. Fan Chun Ling. Please go ahead.
Thank you Mr. Yan. And hello everyone, we're joining our call today.
I will now review our financial highlights for the quarter.
Please know that all numbers were being R&B, and of percentage changes to the first two year over year comparisons.
Unless otherwise noted. As Mr. Yeh mentioned, we deliver the exceptional results in the first quarter.
Our loan origination volume surged 142.9% to 19.8 billion.
Exiting our forecast made last quarter.
Our net revenue was 1.12 billion, up 119.5%.
driven by a 94.1% increase in our revenue from loan participation services.
Other revenue grew significantly to 255.7 million from 64.7 million in the same period last year.
Mainly driven by the revenue from individual investors of the federal services and the guarantee income from financial guarantee services.
Moving on to costs. Origination and servicing expenses were $274.2 million, up 193.6%.
driven by the increased loan origination volume and post loan services related expenses.
Allowing for receivables in the country assets grew by 67.5% to 6.7 million.
Primarily due to the increased role volume from overseas markets. Sales and marketing expenses increased by 155.9%.
to 380.8 million.
mainly reflecting an increase in borrower acquisition expenses and commission fees for partnership referrals.
As a percentage of net revenue, S&M expenses increased to 33.9% from 29.1% in the same period last year as we continued our investments to attract and retain high quality borrowers.
GNA expenses were 46.4 million, up 14%.
Primarily driven by higher stock costs in the quarter. As a percentage of net revenue, G&E expenses reduced to 4.1% from 8% in the same period last year.
R&D expenses were 64.8 million, up 55% from 41.8 million, making the view to increase the improved compensation benefits expenses and professional service fees.
As a percentage of net revenue, R&D expenses reduced to 5.8% from 8.2% in the same period last year.
As we continue to prudently manage our costs, our profitability remains strong. Our net income for the first quarter increased by 93.4% to 279.7 million from 144.6 million in the same period last year. Our basic and diluted net income per share.
were both R&B 1.31 compared to R&B 0.67 in a thin period last year.
Basic and diluted net income per ADS were both RMB 5.23 compared to RMB 2.68 in the same period last year.
We end this quarter with 340.6 million in cash and cash equivalents.
Up from 291 million as of December 31, 2022.
As of March 31, 2023, we have brought back approximately 1.5 million file ADFs.
For US dollar, 3.5 million on our US dollar 10 million share repurchase plan were announced in June 2022.
In addition to that, the company's board of directors just approved to extend the share repurchase plan for a period of 12 months on June 7, 23.
The extension will be commenced on June 13, 2023 and ending on June 12, 2024.
Persuint to the extended share repurchased plan, the company may repurchase its order shares through June 12, 2024, with an aggregate value not exceeding the remaining balance on the share repurchased plan. With that, we can open the call for questions. Operator, please proceed.
To the extended share repurchased plan, the company may repurchase its order shares through June 12, 2024, with an aggregate value not exceeding the remaining balance on the share repurchased plan. With that, we can open the call for questions. Operator, please proceed. Thank you.
We will now begin the question and answer session. If you like to ask a question, please press star 11 and wait for a name to be announced. If you prefer to ask your question in Chinese, please repeat your questions in English immediately after for the convenience of everyone on the call.
Once again to ask questions, please press star 111. One moment for the first question. There were questions from the line of Barthien Chin from 10-Sat, please proceed.
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Hi, measurement team, congratulations on the third strong result. This is Martin from 10SF. I have two questions. The first one is regarding the guidance. The Longwell-Lune guidance in the second cortex is about 23 billion combined with 20 billion in the first quarter.
A con around 60% of 70 billion for Lafogia guidance.
Thus this implies that the volume in the second half of the year will slow down compared to the first half.
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So thank you for your question. And so generally we believe that the loan volume we facilitate in the second half of 2023 would not be simply limited by the whole year guidance we just expressed before.
As you have mentioned, we maintain our whole year guidance as the same without any change, but we are very confident to complete the guidance in this year.
We know that there are probably going to be some risk, risk fluctuations during the year, but we still see that generally the economic environment is stable. So I think the volume, the volume would mainly depends on two things. So firstly,
It will depend on the total funding supply from our partners. And secondly, it will depend on the requirement we have on the asset and our goal to strike a balance between risk metrics and our sustainable growth in the second half year.
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happen, How do you define high quality and the what strategy are you using to attract and return these borrowers in the future?
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That's enough Josh, we're done something else Okay, so Okay So you mentioned that there have been some public Madam President,
to reach the better quality borrowers or one of the strategic goal of Giant Group from when we finish our business transformation that our funding sources just changed from a former individual.
better credit standing. We may find many similarities among those spores, such as the are younger in their age. They may care more about their credit standing and the half rational use of the loan, et cetera. Those characteristics made them
without overboring from too many sources and add a better personal balance sheet position. So to reach those more high-quality boroughs we just mentioned we are now selectively tracing
borer acquisition channels just like out there platforms. And we are providing more competitive products to those high quality boroughs when they need. And focusing on the boroughs with good credit.
who may grew up with us in the long run. Joining is the platform who have the business for over 10 years.
And so we are also trying to attract those forests through our service during the loans, such as providing them with better products and lower rates.
are also trying to attract those borrowers through our service during the loans, such as providing them with better products and lower rates. Thank you.
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Thank you for the questions. One more one for the next question.
Next question, we have the line from Ling Yao from Huawei Securities. Please proceed.
I will do the translation for myself. I'm Lingyao from GuaZu Securities. My first question is about sales and marketing experience.
Can you share some details on yourself and marketing events increase in this quarter? Thanks.
Thank you, Lin Yao. This question, I am Fan Chongming. I will answer this question.
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So the sales and the marketing expense in the first quarter of 2023 reached 380 meeting RMB with a year or year increase of more than 150%. And...
and it's also a slight increase from the previous quarter. The SNM expenses mainly include borrower acquisition expenses,
employees, conversations, and other related expenses. The main reason for the substantial year-over-year increase was the increase in the volume of loan we just facilitated.
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We hope you will enjoy this video. If you have any questions, please let us know. We will answer them in the comments section. Thank you for watching. We hope you will enjoy this video. Please subscribe to our channel.
So after we just transform our business model from the funding sources from the individuals to our funding partners from institutions,
So in line with the company's strategy on the rapid growth, we have adopted a very active oral acquisition strategy and spending more on the acquisition process to ensure that we can achieve those high quality assets efficiently. So the proportion of new borrowers of our platform has remained...
and to continue, continuously optimize our borough base where our business is developing rapidly.
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So, from the perspective of our operation and finance, we will also carry out a top-level planning on the ratio of SMM expenses to our revenue and also some budget control to ensure the accuracy and effectiveness of our sales and marketing.
In the first quarter of 2003, you can see the S&M expenses accounted for above 33.9% of our revenue. Basically at the same level as 33.1% in the whole fiscal year of 2022.
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Okay, so just because we have a strong control and process on our sales and marketing, we are keeping our development at a very high quality and we are confident that we will but be States, these are their muted silence.
develop at a very sustainable way in the future as well. Thank you very much.
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Again, I will do the translation for myself. Thanks for your answer. My second question is about the total receivable. Notice that the total receivable is only for the largest proportion of the total assets of the company right now. And there is also an increase of about 200 million YMP, compared to the end of 2022.
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So you are right Mr. Lin. At the end of the first quarter of 2023, the company's balance of account receivable was...
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So under the currently accounting principles, at the same time as the loan is issued, the rights and obligations under our facilitation services have been fully met. So the corresponding accounts receivable and income are recognized immediately when the loan is issued to the bar.
So you may observe that our balance of receivables also continue to increase.
So under our currently business model, as our volume, the volume we facilitate,
continues to increase, the absolute value of our AR balance would surely increase accordingly.
On the other hand, our emergency period is welcome. In 2020, our emergency period is welcome.
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I want to mention that the collection of our accounts receivable is very good. After we just completed the transformation from personal funds to institutional funds for our gifts, it is our last day at therabble together with
there have been almost no bad deaths in the domestic loan facilities business.
And no bad debt loss has been accrued so far either. And our management team and our auditors will pay very close attention to the recovery of Account Receivable.
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Generally speaking, the company's profitability is satisfying and our balance sheet also continues to improve. It has laid a very solid foundation for the healthy development of our business in the future.
I hope that we will answer your question.
We will now take questions from the audience. Hope that will answer your question. Thank you.
Thank you for the questions. We have no more questions at this time. I will return the call back to Sean for closing remarks. Please go ahead. Thank you, operator, and thank you all for joining our call today. If you have further questions, please feel free to contact our investor relations team.
We appreciate your interest and look forward to reporting to you again next quarter on our progress.
That's concludes this conference call. Thank you for your participation. See me now. Disconnect your lines.
Let us conclude today's conference call. Thank you for your participation. You may now disconnect your lines.