Q3 2023 CNFinance Holdings Limited Earnings Call

Good day and welcome to the Cm Finance Holdings limited third quarter of 2023 financial results Conference call. All participants will be in listen only mode should you need assistance. Please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions to ask a question.

You May press Star then one on your Touchtone phone to withdraw from the question queue. Please press Star then two please note. This event is being recorded I would now like to turn the conference over to Mr. Jay manager of capital marketing.

Please go ahead.

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And that's what you're seeing there.

Other financial results conference call today's call all of dielectrics and tungsten Mr. Tianjin will walk us through the operating results follow a five financial results from our acting CFO Mr. Li.

I'll put that to me will have a Q&A session.

Before we start I'd like to remind you that this conference call contains forward looking statements, but their demanding sexual hockey Hawaii off the Securities Exchange Act of market before.

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In the U S.

Private Securities Litigation Reform Act of 1995.

Yes.

That can be identified by Paul Mclaughlin, such a real effects anticipated to check in cash right.

Estimates.

Yes.

Going forward outlook and similar statements.

Such statements are based upon management's column expectation of current market and operating conditions.

As it relates to the fact that in Baltimore or on low risk.

These and other factors.

All of which are difficult to store days and many of which are beyond the company's control, which may cause the company's actual results performance or achievements to differ materially from those in the forward looking statements.

Further information regarding this and other risks uncertainties or factors is included in the company's following the U S Securities and Exchange Commission.

Company does not undertake any obligation to update any forward looking statement as a result of new information future events or otherwise.

As required under law.

Now please welcome mixture Tien tsin.

She's a lot Joshua Barber their Susanna Chau teams in fluid handling fleet.

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Johnson <unk> Johnson yourself for what you are suddenly in defense you to their needs and I wish you well.

Shay hold when the junk wheat.

Where are you at all times out of one two.

Thank you for taking time to join this conference call.

Mr Coffman.

Yes, I'll answer a corner I'll, probably tell me three operating and financial results.

Oh, five Q&A section.

Okay on your opinion Central Queensland funds will you what are you waiting more to fund.

Sure Neal.

So we don't seem to be on especially in the Colombia the syndrome.

But as you go through the call Mr. Jeff Palmer.

Yes, I mean Pete.

I'm Josh <unk>.

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Josh This young woman.

But in general that we shouldn't you don't thoughts at that time did you buy you should go flip in to do that.

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During the third call to write off part of why the.

Like how many phone calls on the conference with scale.

At the plant.

Yellow rose in all important indicators.

When you culture.

The company is centrally located to a loss of RMB five probably won't feel it.

<unk> was down year on year and achieved a lot in home all 53 mill it increased by 15% year on year.

More of.

As a result of a south of risk control metabolism.

These recoveries remained at 110% the company's highlights for the quarter, including the following.

So what are your quota you win more telephone, but would you consider taking on some cobalt with Wuxi I mean, Pete Toby thing Jonathan Josh.

I think Jonathan just sure.

She is all she started this whole loan strategy.

You can go into this whole long shot.

Enrollment to expanding this is Gail do you want to get caught up the company's total loan origination volume was $5 1 billion with red flashing a year on year increase of 20% on a couch percent increase has come.

Patrick the second quarter of talking 'twenty three.

I'm gonna find quite a lot there let alone for its limitations.

3.9 billion was under trust lending model and one one points you Bill that was under a commercial bank hardship.

Yeah.

<unk> learned a fool to whats your plans you did mention the yard.

So you want me to finish if we go to them for them.

No. The Wuxi you also kind of stuff. So I think you said you said when you go to Christian Sushi.

She should things.

Do you see that side of the state wants to use your friendship Waco, you'll show the phones will go through John keyed off once you're in trouble.

Continuing to refine our surveys to SaaS partners and help ease their attention to your precious few two hour if someone policy south on us because it T has significantly improved.

During the quarter a few historical default if south partners were able to recognize there is still payments.

This has effectively reduced the risk is Porsche off the company.

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Simple, which you saw on your friend you and your friend Defense, you too close to that changing the old Gutenberg Joan into you also shocked you go for your shutting that told you must give me a country. That's RMP Pogo Johan you'll walk very fun jugal, Joe do you Cook with Wonder woman three you're supposed to say John.

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Optimizing clawbacks and how they can finance more courses.

In the third quarter of 'twenty to 'twenty three the comedies average fundings and costs were slightly lower than that in the beginning of the year.

And the comedy as Jacek portions portion off the lower interest rate products in his problem. This accordingly.

By optimizing the product mix and lower customer interest the right people.

We were able to get some real benefits to the MSE owners and to lay a good foundation for surfing the need of borrowers with better credit history.

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Would you go so we're trying to.

Sharon Cushing true Chi shoot benches for whole genome. So you shouldn't she shouldn't change at all frankly.

That'll change you don't want him to Boston.

In order to improve the asset quality. The company has still continuously before entering the factors in his credit assessment and have fully leverage technology to improve the accuracy of the assessment of floors and collaterals and.

In addition, the comedy has drastically shift is specific to core we just.

During the quarter loans that they got paid in the first tier and Neil first tier cities have to reach 80% of overall flow test and the patient.

One is underway, which in the jumbo sharp change once a week.

So you don't they're not sure where you're more to each other.

I wish you well me as she mentioned courtyard.

Sweetheart deal agent schools are doing what would you how are you.

Were you trying to use a cheat sheet well mcquade Jixi Gee are we more we are true there with our coaching on Farzana Leach it off with you.

Treaty lagoons, there won't be a bulk pool.

Management believes that China's market is currently in a peer rates of recovery and that's why sell for real estate market is still frustrating.

At the same time, we believe that China is kind of thing because we will continue to introduce some stimulus policies.

And China's inclusive finance is that tree is still in the upstream T O P rate.

People continue to adopt the guiding principle of high quality development, which emphasize.

<unk> quality and compliance with the following specific objectives in mind.

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Optimize supply by mix improved SaaS capabilities, we find the risk control system reached Joe perspective, Flores with high quality collateral that's about as good REIT calls.

In order to match this call the company needs to continuously broaden his financing channels, bringing in new fathers and launch new products.

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Continue to promote the application of models systems, and they think that they'd her in credit profile.

Make the whole process more standardized general test systematize and intelligence.

To reduce human intervention and improve overall efficiency.

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Continued their transition to the type of model by accelerating the disposal of non performing loans.

The company plans to chat for a bulk of default and loss to a third party before the end of the year to recover our cash and reduced the company's risk is Porsche.

Show Me, what you answered your own children.

Toby Jimmi Sue fee, what half way nuclear saw a hole through on your opinion.

Thank you Lewis Hall now.

Now I'd like to hand, the call over to MS. Jami and she will walk us through what the third party financial.

[noise]. Thank you now we will go over the financials. So you've noted that the currency, we use will be in RMB and all comparisons will be made on a year on year basis, unless otherwise stated.

For the third quarter of Sunday, 23, total interest and fees income was oriented and the 25 million that's compared to 445 million.

Interest and financing service fees on loans was 300, and I think 18 88, maybe as compared to 413.

The decrease was due to the decrease of weighted average interest rate of loans outstanding.

Interest income pod to itself partners was 332.7 minutes as compared to $33 5 million.

Total interest and fees expenses decreased by 13% to 117 million, that's compared to 100 and my take five minutes.

The decrease was mainly due to the lower funding cost of Trust company, partly as a result of the basin.

Regulatory development.

Net interest and fee income increased slightly from 254 million to 255 million.

And that's revenue, although the commercial bank partnership model was.

27.6 million as compared to their low point for a minute.

The outstanding loan principal I Wonder the commercial bank partnership with <unk>.

5 billion as well.

On September 13th 2023.

Compared to 0.6 billion as of September 30th 'twenty, 'twenty through 2020 two.

Collaboration cost for sales partners well.

Eight 7 million as compared to 85 million.

Net interest and fee income after collaboration costs increased 15.5% to 119 6 million from 117 million.

Provision for credit losses decreased by 17, 2% to 12 million from 41 million in the third quarter of 2023.

So its partners, who they say they are tragic mitigation.

Mitigation position due to the inability to fulfill their obligation to repurchase delinquent loans in last few quarters, we're able to recognize their payments, which had provided more protection to the lows.

Total operating expenses increased by 27% to 106 minutes from a taste to remove it.

Employee compensation and benefits was increased 16% to 58 million from 15 million.

Due to an increase in the performance based bonuses as a result of an increase in loan origination volume during the third quarter of 'twenty to 'twenty, two 'twenty to 'twenty three.

Other expenses increased by 17, 1% to 13 5 million from 20 minutes and then due to the increase in fees paid to local channels, who are rewarded for reforming that before referring south partners to the company.

And we also received commission so a certain percentage of those recommended to the company by the South partners they have been for it.

Net income increased by.

15% to 53 million from 46 million now well what wed like to start the Q&A session. Operator. Please.

Okay.

Okay.

We will now begin the question and answer session to ask a question you May Press Star then one on your Touchtone phone, if you're using a speakerphone. Please pick up your handset before pressing the keys to withdraw from the question queue. Please press Star then two.

The first question comes from William Grubbs, Gregory's Lasky of Green Ridge Global. Please go ahead.

Oh, Hey, great quarter.

With regard to the trust one thing at $3 9 billion, that's up quite a bit from where it has been can you just talk about where the I.

I guess the demand you saw for that does that growth came from and if you expect it to continue going forward.

Of course, you need to go whether you go for hard to do a show territories household lineage I blame you shouldn't hold most of your childhood Central Joel you a phone call. So it'll be a church and the phone since almost all of our young college dual.

She also deeply there's always challenges with three children hung in Great Britain.

So it sounds like.

Yeah.

Since you've over on the lumpy sounds like it'd be useful syndrome.

So what do you usually you know women into chicken the to show you shouldn't cause she's yes of course, you can treat them or you put her to go trying to do with you.

You guys pushing forward because I've thought of Trillium.

One of them does hunting, you'll work with Xiaomi.

Susan Ginger, who we don't care.

Well I'm Gonna Trimble times, you usually want to.

Oh is that right.

That's exactly what I was hunting.

You're gonna shortage junctions with you Jonathan as it usually does.

Some people do you know what I'm searching good juice with digital with what she sees something she was a mortgage you had one well meet mingle.

Simply to watch it was just under 10 months truthful Butch on what else you want individual city.

Should you.

Should you should go to grocery Shaw, Oh, I wonder if he wanted us as usual, especially on a woman's triangle.

So one of them didn't shoot a syndrome.

So for as far as for the increase of a little like originations under the trust within the motto. Thank God. The main reasons are twofold.

The first one is that in the beginning of the year, we have decided to shift our business more to on.

Sure why a new tier one cities and also the second the second reason was because we had kind of focused on our most competitive product, which is a large ticket size products with house with a higher value as the collateral. Thank god. Those two are the other two main reasons.

That gave us the chance to grab the the model itself. The borrower in such you know I said, the fishing sector uncertainties seen him economy I felt as though as the fluctuation in property prices.

Got it on women.

G would have jumped you don't think they're going to look something club deals or do you do.

So that's where you it's usually too though couldn't go on quarter Yoga Tucson E. G. You would you would choose to good wishes on screen.

G, but to pull one of them to call out even quicker.

Got you.

Also since we have been able to manage to be of course, the overall financing costs.

Allowed us to race to customers with a better better our collateral as well as the other credit record.

The records and that also helped to broaden our customer reach as well.

Yeah.

Okay great.

As far as the originations since we're getting close to the 'twenty 'twenty. Four you guys have any forecast for where you are looking for that for next year on a total basis or broken out by truck and commercial.

Are they are they are sitting on the phone quite a down you'll know what you're going to be cheap that's allowing you to you too.

You know how much of a push until most of the Sunday that Joe.

June should be prone to tungus shown.

Yeah, and so they took a photo of a petri dish if you ever want to our friend you Wonder a fun and Youll true kidney because somebody bushel and push it a honda.

He was a Sunday.

Sunday Tricia cushion in front of me, who your true.

They tend to pick one telephone institution nobody.

If I can move on a mobile phone.

She lunch and good you have to put out most of the third quarter.

Quinn will Trump put to you, but I'm just central Central was William.

Yeah.

So based on the current uncertainty of the market. We have said that a lot of there are realistic and are also conservative goal for the year all suddenly gone before so all protected loan originations within that for next year, It's 20 billion with.

And there are facilitated under the commercial bank motto picking up 33% to 35%.

Yeah.

Okay, So roughly flat on an overall basis from this year.

So you're gonna gymnastics, even shrinking should've.

Sure Yes.

Okay.

And last question is the with the field partners.

Buying back into their position in the quarter is that are you seeing your sales partners with more cash to be a little more flexible to not fall behind on payments or what can you just kind of briefly talk about the health of the sales partners financially.

Golar Carnival.

They want to order in 2020, while the other day go to Richard Shannon with Harmony, Jake just for those who don't see and you also have Hugo I assure you that he said she'd hottest magazine.

I mean, it feels agenda and show how much energy into other hydrogen in the U S Army.

No wonder woman, who shouldn't be equivalent admissions you know Joe we quite soon the fringe.

If it goes it Didnt school and what do you do that seemed a little she could go.

The neat.

That's all you can do that sushi a.

Who would have imagined when a woman says you don't take them since you can go to get to the.

Took a gauge student school.

So on the first the first thing that help to improve their liquidity as we can loosen the terms are on.

There are installment installment payments.

Do you want to jump on the woman Java articles and good so sudden switches with Youtube.

Well I'm sorry, the schedule of Piedmont.

It's a sudden switches on it when we talk about some good a sofa.

I want to go to do the Chengdu shutdown on cigarettes.

Uh huh.

Sure, you'll do that to the Hershey, who will touch on wave climates, either on the Eagle.

So where you show the phones with Brooklyn, and show them to get up to go on so something that's a good sign.

And the second reason is that we have made all efforts to help the sales partners to dispose their their.

Their nonperforming loans.

We have made all efforts to push the legal proceeding as well as the settlement with borrowers, which also helped the sales partners to get read of the nonperforming assets and also recover cash.

Yeah.

Okay, great. Thank you.

Yes.

Yeah.

No other questions at this time. This concludes our question and answer session I would like to turn the conference back over to Mr. <unk> for closing remarks.

Thank you for joining us today.

Question.

Oh, gosh I cursed child of fine. Thank you.

The conference.

So is now concluded. Thank you for attending today's presentation you may now disconnect.