Q4 2023 FinVolution Group Earnings Call

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Unknown Executive: Hello, ladies and gentlemen. Thank you for participating in the fourth quarter and full year 2023 earnings conference call for FinVolution Group. At this time, all participants are in listen-only mode.

Hello, ladies and gentlemen.

Thank you for participating in the fourth quarter and full year Torchy twenty-three earnings conference call for the Involution group at this time all participants are in listen only mode. After management's prepared remarks, there will be a question and answer session. Today's conference call is being.

Unknown Executive: After management's prepared remarks, there will be a question and answer session. Today's conference call is being recorded. I will now turn the call over to your host, Jimmy Tan, Head of Investor Relations for the company. Jimmy, please go ahead.

Recorded.

I will now turn the call over to your host Jimmy Chen.

Head of Investor Relations for the company Jimmy Please go ahead.

Jimmy Tan: Hello everyone, and welcome to our 4th Quarter and Full Year 2023 Earnings Conference Call. The company results were issued via Newswire services earlier today and are posted online. You can download the earnings release and sign up for the company email alerts by visiting the IRR section of our website at irr.finvgroup.com. Mr. Tiezheng Li, our Chief Executive Officer, and Mr. Jiayuan Xu, our Chief Financial Officer, will start the call with their prepared remarks and conclude with a Q&A session. During this call, we will be referring to several non-GA These non-GAAP financial measures are not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with the U.S. Constitution.

Hello, everyone and welcome to our fourth quarter and full year 'twenty three earnings conference call. The company results, what you feel via Newswire services earlier today and are posted online.

Can download the earnings release and sign up for the company email alerts by visiting the IR section of our website at IR docs can be grouped dotcom. We spoke to you generally our chief Executive Officer and Mr. Jeremy <unk>, Our Chief Financial Officer will start the call. We've got prepared remarks, and conclude with a Q&A session. During this call.

We will be referring to several non-GAAP financial measures to review and assess our operating performance. These non-GAAP financial measures are not intended to be considered in isolation or as a substitute for the financial information prepared and.

Presented in accordance with U S GAAP.

Unknown Executive: For information about these non-GAAP measures and reconciliation to GAAP measures, please refer to our earnings press release. Before we continue, please note that today's discussion will contain forward-looking statements made under the Safe Harbor Prohibitions of the U.S. Privacy Law Investigation Reform Act of 1995, forward-looking statements that involve inherent risks and uncertainties. As such, the company's results may be materially different from those expressed today. Further information regarding this and other risks and uncertainties is included in the company's filings with the U.S. Securities and Exchange Commission. The company does not assume any obligation to update any forward-looking statement acquired under applicable law.

For information about these non-GAAP measures and reconciliation to GAAP measures. Please refer to our earnings press release 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 90 95.

Forward looking statements involve inherent risks and uncertainties as such the company results may be materially different from the rest of the day.

Information regarding these and other risks and uncertainties are included in the company filings with the U S Securities and Exchange Commission.

The company does not assume any obligation to update any forward looking statements.

And the applicable law finally, we post a slide presentation on our IR website, providing details of our results for the quarter I will now turn the call over to our CEO. Mr. <unk>. Please go ahead Sir.

Tiezheng Li: Finally, we post a slide presentation on our IR website providing details of our results for the quarter. I will now turn the call over to our CEO, Mr. Tiezheng Li. Please go ahead, sir.

Tiezheng Li: Thanks, Jimmy. Hello, everyone. And thank you for joining our running call. This is Tiezheng Li, CEO of FinVolution Group. We are happy to speak with you today. When I became CEO one year ago, FinVolution set a clear objective, to become a leader in the fintech industry, providing inclusive financial solutions for unserved borrowers and small business owners in 2023. We advance toward that goal with continued strong execution of our local focus, Global Outlook Strategy, adapting to the unique situation in different markets. I'm thrilled to report that we have delivered exceptional bureaucrats to our firm.

Thanks, Jamie Hello, everyone and thank you for joining our earnings call They said Tony.

Steel of evolution group, yes.

We are happy to speak with you today.

When I became CEO, Brian Youre at scope.

The evolution side, our clear objective.

<unk> a leader in Fintech industry.

Providing inclusive financial solutions for <unk>, and our small business owners.

In 2023.

The advanced toward that goal with the continued strong execution of our local focus global outlook stretching.

Adapting to the unique situations in different in market.

I am thrilled to report that we delivered exceptional burglaries.

All fronts.

Tiezheng Li: Throughout the year, we maintained our robust momentum with progressive expansion in China while pursuing much faster growth internationally, where economic conditions were more favorable. We have achieved leadership positions in both Indonesia and the Philippines. We are also fortifying our success and high-quality growth in China as we proactively adjust our strategies to suit China's dynamic economy. Performance-wise, we continue to grow our business across the board despite evolving macroeconomic challenges. The cumulative number of hours we served in China, Indonesia, and the Philippines has reached 30 million, growing at an accelerated pace with a net increase of around 3 million new borrowers year over year. For full year 2023, our total transaction volume reached RMB194 billion, and our outstanding loan finance reached RMB670 billion, representing year-over-year increases of 11% and 4%, respectively. Net revenue for the full year 2023 reached RMB12.5 billion, up 13% year-over-year.

Throughout the year, we maintained our robust momentum with the progressive expansion.

In in China about pursuing much Buster girls internationally.

Our economic conditions were more favorable.

We have achieved a leadership position in both Indonesia, and Philippines. We're also fighting our success and high quality girls in China.

We proactively adjust our stretch H two steels, China dynamic economy.

Portfolio wide we.

Continue to grow our business across the board despite the evolving macroeconomic changes.

The accumulated number of borrowers served in China, Indonesia, and the Philippines has reached 13 meeting.

Green and I decided to retain a piece.

The increase of a run through of meeting new borrowers year over year.

For full year 2023, our total transaction volume reached RMB, Mahindra and the 19th both bidding.

And our outstanding loan balance reached RMB six seven billing.

Hunting year over year increases of 11% and 4% respectively.

<unk> revenue for the full year <unk> reached RMB 12, 5 billion up 13% year over year.

Tiezheng Li: Our international business grew exceptionally well in 2023, propelled by our effective global outlook strategy of pursuing rapid growth in overseas markets. International transaction volume for 2023 soared to RMB 7.9 billion, and outstanding loan balance rose to RMB 1.3 billion, up 85% and 58%, respectively, compared to the prior year. International market revenue increased to RMB 2.1 billion, up 86% from full year 2022. Over the past year, international revenue contributions to total revenue increased significantly, rising to 17% in 2023 from 10% in 2022. Meanwhile, this is our local-focused strategy of pursuing high-quality growth in China. We continue to achieve progress in girls' domestic..., transaction volume increased to RMB186 billion, while outstanding loan balance reached RMB6 billion, up 9% and 4%, respectively, compared to the prior year. Revenue from the Chinese market in 2023 further expanded to RMB10.4 billion, up 4% compared to the prior year.

Our international business grew exceptionally well in 2023 her powered by our effective global outlook strategy.

We're seeing rapid growth in overseas markets.

International transaction volume for 2023, sorry, two RMB seven 9 billion.

And also new loan balance rose to RMB, one 3 billion.

Up, 85% and 58% respectively compared to the prior year.

International market revenue increased to RMB, two 1 billion up 86% from full year 2022.

The part of the year International revenue contribution to total revenue increased significantly.

Turning to 17% in 2023 from 10% in 2022.

Yeah.

Meanwhile.

Our local focus strategy of pursuing high quality growth in China.

We continue to achieve progressive girls domestically.

Transaction volume increased to RMB by a hindrance and 86 billion, while outstanding loan balance reached RMB, six 6 billion up 9% and 4% respectively compared to the prior year.

Revenue from the China market in 2023 further expanded to RMB 10, 4 billion up 4% compared to the prior year.

Tiezheng Li: Another notable improvement was the funding cost, which improved by 30 bps on a quarterly basis and by around 100 bps year over year. Our stable borrowing rates, coupled with better-than-industry delinquency rates, and enhanced operational efficiency, enabled us to sustainably deliver higher ROA compared to the industry. We are also strengthening our commitment to small business owners, supported by a prudent approach during this fragile and sometimes volatile recovery period. In 2023, we served over 811,000 small business owners and facilitated RMB47 billion of loans for them, up 80.5% compared with last year and representing 25% of total transaction volume in China. FinVolution is a fintech frontrunner with profound expertise across an extensive industry footprint.

Another notable improvements while funding cost.

Which improved by 30 Bips.

Multiday basis, and by around 300 bps year over year.

Our staple ballroom in rate, coupled with <unk> dealing with delinquency rates and to enhance the operational efficiency.

So to us too so it's a 10 ability lever higher all way compared to the industry.

We also strengthened our commitment to small business owners facilitated by a prudent approach during this fragile and sometimes volatile recovery period.

In 2023.

811, salt in the small business owners and facilitated RMB 47 billion of loans for them.

Up 85% compared with last year, and representing 25% of the total transaction volume in China.

The evolution is a fintech front runner meet the profound expertise across an extensive industry footprint.

Tiezheng Li: Part of our commitment to shareholders is to continue propelling the company's sustainable development and industry-wide digital transformation through technological innovation. I'd like to share just a few of the pivotal technological advancements we made throughout the year. We amplify our investment in technological R&D, driving high-quality growth by leveraging cutting-edge technology. We have significantly improved and optimized our operational process across all markets in which we operate. This includes increased R&D investment of over RMB 500 million in 2023 to strengthen different aspects of our technology, such as the Automatic Speech Recognition Capability, greatly improving its grasp of Chinese dialects while boosting our chatbot's efficiency and accuracy. R&D is critical to our ongoing success. And we will continue to invest in our tech and our people, as of December 31, 2023.

Part of our commitment to shareholder a to continue providing the accompanies such attainable development and industry wide digital transformation through technology innovation.

I'd like to share just a few of the pivotal technological advancements being made throughout the year.

We amplified our investment in technology.

Technological R&D driving high quality growth leveraging cutting edge of technology.

They are significantly improved and optimized our operation no precise it across all markets in which we operate.

This includes increased R&D investment of over RMB 500 meeting in 2023 to address different aspects of our technologies.

Such as the automatic speech recognition capabilities.

Grid today, improving its grasp of Chinese dialects about boosting our chatbot efficiency and accuracy.

R&D is critical to our ongoing success.

And we continue to inviting our work and our people.

As of December 31093.

<unk> heard properly exploit employed a dedicated R&D team of around seven or hindered skilled professionals.

Tiezheng Li: We proudly employ a dedicated R&D team of around 700 skilled professionals and have built a comprehensive IP portfolio that comprises 239 registered software copyrights and a successful filing of 179 patent applications, including 53 invention patents already granted. Each of our R&D accomplishments enhance our offering to consumers and sets new benchmarks for the financial services industry, supporting FinVolution's growth and industry-wide progress. In recognition of these efforts, the Shanghai Municipal Commission of Economy and Information recently honored FinVolution on its Shanghai 2023 Double 100 list for software and IT service excellence. We earned prestigious rankings on both lists, securing the 18th and 26th position, respectively.

And have built a comprehensive IP portfolio that comprises 200 and a 13 nine graduates towards software copyrights.

And a successful filing of 117 nine patent applications, including 53, you mention patents already granted.

Each year for our R&D accomplishments enhance our offering to consumers and the state's new benchmarks for the financial services industry.

So bring through evolution skills and industry wide per request.

[noise] in recognition of these efforts the Shanghai Municipal commission of economy and information.

This internally all narrative evolution on a Shanghai 2023, <unk> hundred late both software and service excellence.

We earned <unk> prestigious rankings on both the late so occurring the 18th and the 26th positioning respectively.

Tiezheng Li: These accommodations recognized our contributions to technological innovation and the advancement of the industry. Last but not least, ESG remains a top priority at FinVolution. We diligently enhanced our integrated ESG program throughout 2023 with a focus on inclusion and giving back to society. For example, we have offered RMB 120 million in interest-free loans for eligible small business owners to help turn their dreams into reality. Our commitment and efforts have also been recognized by several renowned independent rating agencies, these above-average industry peers. We celebrate FinVolution's 16th anniversary in 2023, a milestone that affords us a glimpse of our future prospects as an enterprise grounded in sustained, long-term growth. Over the past 16 years, our business model and strategy have been validated by success in the face of multiple challenges, such as the P2P transition, the shift towards better quality borrowers, and international expansion amid the pandemic, as an independent platform with limited resources.

These accommodations recognized our contributions to technology innovation and advancement of the industry industry.

Last but not the least.

<unk> remains a top priority at evolution.

We are diligently enhanced our integrated ESG program throughout 2023, with the focus on inclusion and giving back to society.

For example.

The accumulated offered RMB Mahindra at <unk> meeting of interest free loans for.

Eligible small business owners to help turn their dreams into reality.

Our commitment and efforts have also been recognized by several renowned independent reaching agencies.

This above average industry rankings.

We celebrated the evolutions 16th annual research in 2023 milestones that affords us a glimpse of our future prospects as our enterprise Grande.

The sustained long term growth.

Over the past 16 years, our business model and strategy have been validated by success in the face of a multiple challenges such as the <unk> transition shift towards better quality borrowers and the international expansion amid the pandemic.

As either independent platform with limited resources.

Tiezheng Li: We are proud to have expanded and flourished in all markets in which we operate. Going forward, we will remain committed to serving borrowers in our existing markets while increasing the pace of our international expansion by acquiring more licenses and expanding into additional countries and regions to deliver innovative financial services to more borrowers. Our local focus, the Global Outlook Strategy, will continue to guide us and drive our healthy and sustainable development as we embark on 2020. Leveraging our peerless technologies and operational advantages, we are confident to replicate our domestic and international success in new markets, unlocking value and making the company a world-class fintech enterprise, while consistently returning value to our shareholders. With that, I will now turn the call over to our CFO, Jiayuan Xu, who will discuss our operational and financial results. Thank you, Li, and hello everyone.

We are proud to have expanded and flourished in all markets in which we operate.

Going forward, we will remain committed to the two Serbian borrowers in our existing markets, while increasing the pace of our international expansion.

Or are you more licenses and expanding into additional countries in the region to deliver innovative financial services to more borrowers.

Our local forecast global outlook strategy will continue to guide us and to drive our healthy and a sustainable environment as we embarked on 2024.

By leveraging our Peerless technology and the operational advantages.

We are confident to replicate our domestic and international success in new markets.

Locking baidu and making the company a word class Fintech enterprise.

While consistently returning value to our shareholders.

I will now turn the call over to our CFO, John <unk>, who will discuss our operational and financial results.

Thank you Li Hello, everyone welcome to our fourth quarter and full year 2023 earnings call.

Jiayuan Xu: Welcome to our fourth quarter and the full year 2023 at NIST. Let's go through our key results for the fourth quarter. To be mindful of the length of the earnings call today, I encourage listeners to refer to our fourth quarter earnings price release for further details. Nevertheless, despite GDP growth of over 5% in 2023, China's overall economic environment continues to evolve. We leveraged our various strengths to navigate the turbulence and conclude 2023 on a solid note. Our domestic transaction volume reached RMB50 billion for the fourth quarter, up 6% year-over-year and 2% sequentially.

Let's go through our key results for the fourth quarter.

To metaphor of the landfills.

To date I encourage listeners to refer to our fourth quarter earnings press release for further details.

Despite GDP growth of over 5% in 2023, China's overall economic environment, the continuous teen Wolf.

We leverage it all woodbury strength to navigate the turbulence and concludes 2023 40 to note.

Our domestic transaction volume reached RMB 15 billion for the fourth quarter up 6% year over year, and a 2% sequentially.

Jiayuan Xu: While the outstanding loan balance goes to RMB66 billion, up 4% year-over-year and 2% year-over-year, Achieving growth in both metrics amid such a soft consumer environment is a testament to our business resilience, as well as our outstanding technology, innovation, and operational excellence. We have observed several notable improvements as we move through the first quarter of 2024. During the recent Lunar New Year, consumption activities picked up rapidly with 474 million tourist trips nationwide, up 19% from the comparable period in 2019. Total Tourism Spending Also Climbed, 8% to MB 633 billion from the comparable period in 2019, with air and train travel surpassing 2019 levels by 15% and 36%, respectively, reaching new record highs. Box office ticket sales also rebounded and reached more than 8 billion, setting a new record for the holiday period.

While standing loan balance go to be 66 billion up 4% year over year and 2% sequentially.

Achieving growth in both metrics have made such a soft consumer environment is a testament to our business resilience.

As with outstanding Technology innovation and operations.

Excellent.

We have observed several notable improvements as we move through the first quarter of 2024.

During the recent <unk>, new year consumption activities pick up rapidly with 417 4 million tourist chiefs nationwide.

Up 19% from the comparable period in 2019.

Total tourism spending also class eight.

8% to RMB, six country, and <unk> 3 billion from the comparable.

Ignite 2019 with air and between travel surpassing 2019 levels by 15% in this 36% respectively.

New record highs.

Box office ticket piece. There was also rebounded in the region more than <unk> 8 billion setting a new record for the holiday period.

Jiayuan Xu: Furthermore, several micrometrics exhibited varying degrees of improvement. For example, total social financing in January increased to RMB 6,500 billion, up 9.5% year-over-year. Total retail consumption in December increased to RMB 4,355 billion, up 7.4% year-over-year.

Furthermore, several macro metrics exhibited varying degrees of improvement.

For example, total social financing in January increased to RMB, 6000, and 500 million up nine 5% year over year.

For the retail consumption in December was increased to RMB 4300, <unk> and <unk> 5 billion up seven 4% year over year.

Jiayuan Xu: The Fabric Manufacturing and Service PMI Index also improved slightly to 14 9.1 points and 15 1 points. We believe this science reflects the dawn of a new era, whereas consumer spending trends are shifting away from large ticket items, such as automobiles and poverty, to small ticket items like travel-related expenditures and other consumption activities. Amid these complex dynamics, we drove a modest yet encouraging recovery in our consumer credit demand through our ongoing refinement of borrower demographics and quality, with the number of new borrower applications increasing by between 3% to 5%. Cumulatively, we have served over 25 million borrowers in China, and the number of unique borrowers for the fourth quarter was 2.1 million.

February is the manufacturing and the services PMI Index also improved slightly to 14, nine one points and the 15 one points.

We believe DSI is reflected the Dol off a new era.

We're being as consumer spending trends are shifting away from larger ticket items, such as automobiles into poverty to small ticket items like travel related expenditures and other consumption activities.

I've made at these complex dynamics, which drove a modest yet encourage a recovery in our consumer credit demand.

[laughter] refinement of Baruah demographics, and the quality with the number of new ballroom application increasing by between.

3% to 5%.

Cumulatively, we have saved over 25 million followers in China and that the number of unique borrowers for the fourth quarter was $2 1 million.

Jiayuan Xu: In addition, we further enhanced our credit risk assessment and fraud detection technologies during the quarter, which empowered us to navigate the macro headwinds and stabilize our asset quality. Our day one delinquency rate improved to 5.3% in December and further improved to 5.2% in February. We expect our vintage delinquency for the most recent three months to be 2.5%.

Yes.

We further enhanced level of credit risk assessment and fraud detection technologies during the quarter.

Which empowered us to navigate the macro headwinds and stabilize all asset quality.

Our day, one delinquency rate improved to five 3% in December at a further improved to 551, 2% in February.

We expect our vintage delinquency for the most recent three months.

It would be two 5%.

Jiayuan Xu: Demonstrating our business resilience, boosted by the deployment of our advanced speech recognition technologies, as well as the AI-powered chatbots we mentioned earlier, our loan collection recovery rate for the recent three months remained healthy at 87%. In terms of our founding partners, as our reputation in the industry continues to rise, we have further diversified our founding resources. The cumulative number of our founding partners has expanded to 94 financial institutions as of the end of the fourth quarter, with funding costs improving by around 100 basis points year-over-year.

Emerson changing our business resilient.

Both data by the deployment of our advanced Beach combination technologies as well as the AI Paul wanted to chat both a diminishing doherty.

Our loan collection recover rates for the resource room nights remained healthy at 87%.

In terms of our funding partners as our reputation in the industry continue to rise we have further diversified our funding sources.

The accumulative number of our founding partners has expanded to 19 four financial institutions.

End of the fourth quarter with funding cost improving.

180 basis points year over year.

Jiayuan Xu: Moving on to our second growth driver, our international expansion, which continues to outperform our targets and expectations. We embarked on our global expansion in January 2018 and have been deeply invested in elevating FinVolution's visibility worldwide ever since. Indonesia, our first overseas market, continued to record macroeconomic growth. As the consumer confidence index remained high at 100 and 25 points in January, full year sales of motorcycles, the most popular mode of transportation in Indonesia, increased by 19.4% to 6.2 million units year-over-year.

Moving on to our second growth driver, our international expansion, which continues to outperform our target and expectations.

We bought eight our global expansion generate in 2018 and have been deeply investing in elevating evolutions to visibility would wide ever sees.

Indonesia first the overseas market continued to record macro economic growth.

Consumer confidence index, the rumen Hyatt <unk> and <unk> five points in January.

Full year sales of the motorcycles the multiple through the model of the transportation in Indonesia.

By 19, 4% to six 2 million units year over year.

Our second overseas market to the Philippines also Andy to 'twenty to 'twenty three with Paul just your micro data.

Jiayuan Xu: Our second overseas market, the Philippines, also ended 2023 with positive microdata. The Philippines was among the fastest-growing economies in Asia with fourth-quarter GDP growth of 5.6%. However, manufacturing PMI was 51 points in February and has remained about 15 points since September.

The Philippines will amount to five days of growing economics in Asia with fourth quarter GDP growth of five 6%.

Manufacturing PMI was 51 points in February and has remained above 50 points since September.

Jiayuan Xu: Cumulatively, we have served over 4.8 million borrowers in international markets as we continue to explore diversified consumer acquisition channels to attract new borrowers. The number of new borrowers for international markets increased by 20% year-over-year to 1.37 million, and the number of unique borrowers rose by 18% year-over-year to around 1.9 million in 2023. International transaction volume for the full year 2023 soared by 85% year-over-year Transaction volume for the fourth quarter reached RMB 2.25 billion, up 64% year-over-year.

Cumulatively, we have served over $4 8 million borrowers in international markets as we continue to explore diversified consumer acquisition channels to attract new borrowers.

The number for new borrowers for international <unk> increased by 20% year over year to $1 $3 7 million and a number of our unica borrowers rose by 18% year over year to around $1 9 million in 2023.

International transaction volume for the full year 2023 sold by 18, 5% year over year, reaching RMB seven 9 billion.

Transaction volume for the fourth quarter reached RMB two <unk>, two 5 billion up 16, 4% year over year.

Jiayuan Xu: At the same time, our outstanding loan balance as of December 31, 2023 grew to RMB 1.3 billion, up 58% year-over-year. As we deepened our roots in Indonesia and fortified our reputation, the number of loans facilitated from local financial institutions in Indonesia increased to over 90% from 63% in the same period of 2022, reflecting our credit assessment model's effectiveness as well as deepening trust from local financial institutions. The Philippines has also demonstrated excellent growth. During 2023, the number of new borrowers in the Philippines grew by over 188%.

At the same time, our outstanding loan balance as of December 31, 2023 grew to RMB, one 3 billion up 58% year over year.

As we deepened our roots in Indonesia, and fortified our reputation the population.

<unk> simplicity from local financial institutions, Indonesia increased to over 90% for all of <unk>, 3% in the same period of 2022.

Reflecting our credit assessment models effectiveness as well as deepening trust for our local financial institutions.

The Philippines has also demonstrated excellent growth.

During 2023, the number of new borrowers are in the beginning.

The Philippines grew by over 188%.

Jiayuan Xu: This led to explanational growth in A's transaction volume and outstanding loan value, which grew by over 200% on a year-over-year basis, contributing around 20% of international transaction volume in the fourth quarter. Thanks to our proven record as a trusted lending partner, we have also secured institutional funding in the Philippines and also have a strong pipeline of future institutional partners in place. These accomplishments have boosted our confidence as well as our visibility as we emerge as one of the top players in the Philippines. In 2024, we expect our Philippines operation to maintain its robust, high double-digit growth momentum. International business revenue in the fourth quarter gradually increased to RMB 602 million, up 53% year-over-year, and it represented around 19% of the company's total revenue.

This led to export national growth in Ace transaction volume and outstanding loan balance.

Which is led by over 200% all year over year basis.

Could you beauty around 20% of international transaction volume in the fourth quarter.

Thanks to our proven record as a trustee of lending ponder. We have also secured the institutional fundings in the Philippines and also have a strong pipeline of future institutional partners in pace.

These accomplishments have boosted our confidence at the with our visibility and we emerge as one of the top players in the Philippines.

In 2024, we expect our Philippines operation to remain to maintain a robust high double digit growth momentum.

It's a national business revenue in the fourth quarter progressively increased to RMB 600, and a 2 million up 53% year over year.

And they represented around 19% of the company's total revenue.

Jiayuan Xu: From a full-year 2023 perspective, international revenue reached RMB 2.1 billion, up 86% year-over-year, and represented 17% of the company's total revenue, marking a significant achievement in our international development. This success has led us to amplify our international expansion efforts with strategic initiatives such as refining border demographics, acquiring licenses, and venturing into new countries. The outstanding progress we have made in our overseas marquees across multiple operational and financial metrics serves as a springboard for our ongoing expansion and development. On a related note, we continue to build our international business presence and brand awareness on leading social media platforms through AIGC-driven upgrades to our creative advertising campaigns. As of the end of the fourth quarter, we had more than 1 million followers on Facebook, and our followers on TikTok grew at an accelerated pace to reach over 816,000, up more than 15% quarter over quarter.

For a full year tonnage suite perspective international revenue reached RMB, two 1 billion up 86% year over year as it representing 17% of the Companys total revenue, marking a significant achievement in our international development.

This success has.

Readied us to amplify <unk>.

New expansion efforts with jet TG initiatives, such as refining Motorola demographics, acquiring license and debenture into new countries.

The outstanding progress, we have made in our overseas markets across multiple operational and financial metrics.

Springboard.

<unk> expansion and the development.

On a related note we continue to build our international business presence and brand awareness, a leading social media platforms through Aig's driven.

<unk> upgrades to our creative advertising campaigns.

As of the end of the fourth quarter, we had more than 1 million followers on Facebook and our Fort worth Arctic told grew at an accelerated pace to reach over eight country, and 16 sullivant up of more than 15% quarter over quarter.

Jiayuan Xu: Social media will be a key means of reaching our target audience with our overseas marketing efforts as we enter new countries and debut innovative products. Now, turning to our financial metrics. Driven by strong execution of our local focus, global outlook strategy, net revenues for full year 2023 increased to be $12.5 billion, up 13% year-over-year, and net income increased to RMB 2.38 billion, up 5% yearly. As of the fourth quarter, our leverage ratio, which is defined as the risk-bearing loss divided by shareholders' equity, remained stable at 4.1 times, reflecting opportunities for growth when the microeconomy becomes

Social media will be a key means of reaching our target audience with our overseas marketing efforts as we enter new countries and the debut innovative products.

Now turning to our financial metrics.

Driven by strong execution of our local focus global outlook strategy net revenues for full year 2023 increased to <unk> 12, 5 billion up 13% year over year.

Net income increased to RMB two three.

Three 8 billion up 5% year over year.

As of the fourth quarter, our leverage ratio, which is defined as the risk of battery loads divided by shareholders equity remained stable at four one times.

<unk> opportunities for growth when the macro economy normalized.

Jiayuan Xu: Our strong balance sheet and liquidity position continue to enhance shareholders' confidence while providing us with optimal flexibility to execute our strategy. In particular, our cash position remains robust with over RMB 7.9 billion of cash and short-term liquidity as of the end of December 2023, representing an increase of 12% year-over-year. We believe our current cash position is sufficient to support our business expansion while increasing our return of value to our shareholders. Now, let me briefly update you on our capital return program. Since 2018, we have continuously returned value to our shareholders in the form of share repurchase and dividends. Recently, our Board of Directors approved our 6th Annual Dividend at US $0.237 per ADS, an increase of 10.2% year-over-year.

Our strong balance sheet and liquidity position continue to enhance shareholders' confidence, while providing us with more flexibility to execute our strategy.

In particular, our cash position remains robust with over RMB, seven 9 billion of cash and short term liquidity as of the end of December 2023.

Representing an increase of 12% year over year.

We believe our current cash position is sufficient to support our business expansion, while increasing our return of value to our shareholders.

Now let me briefly update you our capital return program.

Since 2018, we have continuous need return value to our shareholders in the form of share repurchase and the dividends.

Using today, our board of directors approved our sixth annual dividend in the amount of U S <unk> to $3 seven per ads.

An increase of 10, 2% year over year.

Unknown Executive: For full year 2023, we will send a total amount of US $116 million to our shareholders, consisting of US $16 billion, $62 million in dividends, and US$98 million through share repurchase, representing a capital return rate of around 49% of our 2023 net gain. As of December 31, 2023, the company has cumulatively returned US $605 million to our shareholders. These actions underscore our consistent commitment to enhancing shareholder value. Before I conclude my remarks, I would like to provide some additional color on our business outlook for 2024. Despite the evolving micro-environment, our business continues to thrive and progress. We are gaining substantial momentum as we focus on advancing our international initiatives, preparing technological innovation, expanding our healthy consumer base, and optimizing our product profile.

For full year 293, we returned a total around USD 160 million to our shareholders consisting of U S 60.

$62 million in dividends and the U S 19, 8 million suits shareholders share repurchase.

Presenting our capital return rate around 14, 9% of 2023 net income.

As of December 31, 2023, the company. The company has committed to be returned the U S 600, and a $5 million to our shareholders.

These actions and our consistent commitment to enhancing shareholder value.

Before I conclude my remarks, I would like to provide some additional color on our business outlook for 2024.

And despite of the inquiry macro environment, our business continues to thrive and progress.

We are gaining substantial momentum as we focus on advanced advancing our international initiatives preparing technology core innovation, expanding our KFC consumer base and optimizing our pro data profile.

Unknown Executive: As a result, we expect our transaction volume in the Chinese market in 2024 to be in the range of RMB 195.7 billion to RMB 205 billion, representing an increase of around 5% to 10% yearly. In addition, we expect our international transaction volume in 2024 to be in the range of RMB 9.4 billion to RMB 11 billion, representing year-over-year growth of around 20% to 40%. That concludes my prepared remarks.

As a result.

We expect our transaction volume in the China market in 2004 to be in the range of RMB $195 7 billion to RMB, two <unk> and two 5 billion, representing an increase of around 5% to 10% year over year.

In addition, we expect international transaction volume in 2024 to be in the range of RMB nine 4 billion to RMB 11 billion reps.

Representing year over year growth of around 20% to 40%.

That concludes my prepared remarks, we will now open the call to the questions.

Unknown Executive: We will now open the call to questions. Operator, please proceed. We will now begin the question and answer session. To ask a question, you may press star on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing this button. If at any time your question has been addressed, you would like to withdraw your question.

Later.

Yes.

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.

If at any time. Your question has been addressed and you would like to withdraw your question. Please press Star then two.

Unknown Executive: Press Star, The New York Times, for the benefit of all participants on today's call, wish to ask your question to management in Chinese? We ask that you please leave your comments below. We ask that you please leave your comments below, and others. We'll see you next time.

For the benefit of all participants on today's call. If you wish to ask your question to management in Chinese we ask that you. Please kindly.

Your question in English.

At this time, we will pause momentarily to assemble our roster.

Yada Li: Question in English. At this time, we will pause momentarily. The first question comes from Yada Li with CIC. Okay, let's go ahead.

Okay.

The first question comes from Lee.

<unk> with TICC. Please go ahead.

Yada Li: Hello, Mr. Guan. Thank you for giving me the opportunity to ask you this question. I have two questions for you today. The first question is about the uncertainty of the current public relations environment. What positive adjustments have we made in terms of the payment strategy, customer service, and block control? Based on the above-mentioned adjustments, how do you view the company's future asset quality? Second question, I would like to ask about the specific progress of overseas business this year and the overall growth of business in Indonesia and the Philippines next year and how to judge profit? Thank you, Mr. Guan, for your respect of Indonesian and Philippine markets. That's all.

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Tiezheng Li: Okay, thank you, Yada. Let me answer your first question first. It's about the current situation in the environment. From our current national benchmark and research findings, we feel that the overall domestic economy is in a relatively weak state, but it is expected that there will be a slow recovery.

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Tiezheng Li: Since the third quarter of last year, we have seen that the whole industry has been affected by the environment. There have been some fluctuations in the quality of assets. We have made some quick adjustments and changes. For example, in terms of cargo, we have reduced the placement of relatively low-quality channels.

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Tiezheng Li: In terms of higher-quality information flow channels, we have quickly replaced the relevant models. In terms of human resources, we adjusted the ratio and pass rate for high-debt clients. In terms of core indicators, we are also paying close attention to the core indicators, such as the expected return rate of DayOne and the expected rate of 90 plus. [inaudible] We did a lot of big data analysis for each frequency and each period to ensure that, under the overall risk-controlling strategy, we can guarantee a relatively high-quality medium-to-low-debt level of people's financial well-being. [inaudible] The supply of the whole resource is still able to meet the needs of our entire backup battery.

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Tiezheng Li: Although our repayment rate has been affected, it has dropped from 89% to 87%, this data is still in the forefront in the entire industry. After all these measures, we can see some positive results in December. In the last three months, we have seen that the number of day ones has dropped from 5.7 to 5.3, and in February it dropped to around 5.25.

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Tiezheng Li: The return rate can be stabilized at around 87%, and the final loss rate is back to around 2.5. I should say that our data is relatively fast and stable in the industry. From this year's outlook, although there is still a lot of uncertainty in the overall environment, we are still confident that we will be able to continue this year.

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Tiezheng Li: From observation and study, China's macroeconomy is still facing uncertainties, but it is expected to have a gradual recovery. Around the third quarter last year, we observed some negative impact on the industry, which resulted in asset fluctuations. We have been quick with our responses. For example, we have reduced customer acquisitions from lower-quality China and stepped up our model updates from higher-quality China, updating the models, and tightening the approval rate and credit limit for borrowers who are more prone to economic uncertainty, such as those with a higher level of debt. We have also closely monitored changes in our core metrics, such as Day 1 delinquency and loan collection recovery rates for the disbursed loans, and through the analysis of different borrower segments and title approval rates, we have ensured financial services for higher quality borrowers, for example, those with lower debt levels, remain intact. For post-loans, I believe you are aware of the impact on loan collections due to the reductions of telephone lines. The impact on us is minimal due to our sufficient advanced preparations of telephone lines, which are able to satisfy the needs of our post-loan collection team.

From observational study, China macro economy is still facing uncertainty, but expect to have a gradual recovery.

Around the third quarter last year, we have observed some negative impact on the industry, which results in excess fluctuations. We have been quick with our responses. For example, we have reduced customer acquisitions from the low quality Chinese and step up our model updates from higher quality, China's updating the motives type lending.

And credit limit for borrowers.

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The impact on us is minimal due to our sufficient advance preparations of telephone lines, which are EBIT to satisfy the needs of our post low collection team.

Tiezheng Li: Although our loan collection recovery rate slightly declined from 89% to 87%, we are still leading ahead of the industry. And with the implementation of these efforts, we have seen positive results in December. For the last three months... Our Day 1 delinquency rate improved to 5.3% from 5.7% in the 3rd quarter and further improved to 5.25% in February, while the loan collection recovery rate remains stable at 87% with vintage delinquency returning to 2.5%

Although our loan collection recovery recovery slightly declined from 89% to 87%, we're still leading a heat of the industry.

And with the implementation of these efforts we have seen positive results in December for our recent three months.

Our day, one delinquency rate improved to five 3% from five 7% in the third quarter and further improved to five 5% in February.

While loan collection and recovery rates remained stable at 87% with vintage delinquency returning to two 5%.

Tiezheng Li: Our recovery should be ahead of the industry, and we are confident to maintain industry-leading asset quality with continuous improvement going into 2024. Mr. Yada, your second question is about the situation for our overseas business. I want to talk about it in several countries.

Our recovery.

The industry and we are confident to maintain industry, leading asset quality with continuous improvement going into 2024.

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Tiezheng Li: The first one is our largest overseas Indian business. Last year, in the fourth quarter of 2020, this business was affected by some regulatory requirements. In terms of pricing, we need to make corresponding adjustments in 2024. This project was completed on January 1, 2020. , In terms of the pricing adjustment, it means that we need to make a series of related adjustments and adjustments in terms of the number of people, models, data, and strategy in our business. According to our past experience, it takes about six months to complete all these tasks.

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Tiezheng Li: So far, the work has been going very well, and we've seen some positive results. For example, at the risk end, we adjusted the population structure, and we see that the risk data has dropped by 20% compared to before. After the price adjustment, many small and medium-sized platforms have also left the market, so there is a significant reduction in the competition between investment and shipping. The price of shipping has dropped by 8%. Hence these quality increases and competition weaknesses can effectively reduce the impact of price adjustments. In the first half of this year, we focused on product adjustment and structural adjustment. We did not particularly pursue the speed increase.

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Tiezheng Li: In the second half of the year, we will combine the results of these adjustments and some changes in the external situation to judge the specific strategy for the second half of the year. In terms of business profitability, we are confident that we can maintain a healthy level. This year, in 2024, we expect that the E-Link business will achieve full profit.

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Tiezheng Li: [inaudible] We have also disclosed some relevant data on the Philippines this time because the Philippines has been developing very fast and very healthy in recent years. In terms of the environment in the Philippines, the economic and business environment are relatively stable.

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Tiezheng Li: So we look forward to a fast-growing economy this year. We are now second in the local market, and our goal today is to become number one in the local market. In terms of profitability, FinVolution has also performed very well. We expect to achieve monthly profitability in the second half of this year. This is how the situation is in the Philippines.

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Tiezheng Li: In short, in Indonesia and the Philippines, we have achieved profitability on a certain scale in terms of business. In the future, we will continue to consider, for example, the investment in photography because more photos can help us to expand more business types and the depth of our products. At the same time, it can also enhance our brand image and further promote our local customer service.

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Tiezheng Li: In addition to these two countries, we will also work hard to open up new countries, and we are not limited to Southeast Asia. In terms of business, we will consider more ways of cooperation to accelerate the overseas strategy of the Second World War. Okay, Yada, let me do the translation.

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Tiezheng Li: Your question is about the whole international expansion, and we will break down the explanation into different countries. For example, Indonesia has a new price cut in 2024. Our Indonesian operations in the fourth quarter have been impacted by local regulatory changes, and since January 1, 2024, all our new loans have met Regulator X requirements and are fully compliant. The pricing adjustments mean that our borrower's cohort, model data, and rules have to undergo a series of adjustments.

Your question is on the whole international expansion and we will breakdown with experian entering into different countries. For example, Indonesia has a new price cutting plane titanfall.

Our Indonesian operations in the fourth quarter has been impacted by local regulation change and since January one 'twenty plentiful.

Our new loans has met regulatory requirements and fully compliance.

The pricing adjustments means that all those cohort model data and Bruce have to undergo suvs off adjustment.

Tiezheng Li: Based on our past experience, we will need around six months to complete all these changes, and from the current outcome, these changes have been positive. For example, through adjusting our Borrows Cohort, the risk metrics have improved by 20%. And also, from a customer acquisition perspective, we have seen many small and medium platforms reduce their customer acquisition efforts, which led to an 8% decrease in our customer acquisition costs, and this further helps to reduce the impact of price reduction in Indonesia. And thus, in the first half of 2024, Indonesia's operation focus will be on product adjustment and improving quality instead of rapid growth And during the second half of 2024, we will re-evaluate our strategies based on macro situations, and in 2024, we expect Indonesia to achieve profitability. The profitability from the business view will be better compared to the financial view due to the rules of the accounting policy.

Based on our past experience, we would be around six months to complete all these changes and from the current outcome. These changes has been positive.

Example, adjusting our borrowers cohort of the.

The REIT metrics have improved by 20%, reducing the <unk>.

Impact of reductions and also from a customer acquisition perspective, we have seen many small and medium platforms.

Reducing our customer acquisition efforts, which led to an 8% decrease in our customer acquisition costs and this further helps to reduce the impact of price reduction in Tunisia.

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That will be from the business view will be better compared to what a financial view due to the rules of accounting policies.

Tiezheng Li: In addition, we have also disclosed some additional data points for our Philippines operation. Over the past few years, its operations have been developing very rapidly, and from current observation, the Philippines country's economic and regulatory environment has been relatively stable.

In addition, we have also disclosed some additional data points for our Philippines operations over the past few years, Philippines operations has been developing very rapidly and from carbon observation, Philippines country economy, and regulatory environment has been relatively stable.

Tiezheng Li: We expect the rapid growth to continue into 2024, and we are currently number two in that segment of the market. We believe we can achieve our target of being number one by the end of the year. Additionally, we expect that our Philippines operations can achieve profitability in the second half of the year under the relevant accounting rules. We have managed to achieve profitability in both Indonesia and Philippines, and going forward, we will consider strengthening our investment in different types of licenses, diversify our operations, and enhance our brand image to further increase our competitive advantage. We are also actively exploring new countries, and these countries are not limited to Southeast Asia. We are also considering other methods of expansion to speed up our international footprint. Thank you, Yada.

We will expect a rapid growth to continue into 'twenty plentiful and we are currently number two in the segment of the market. We believe we can achieve our target of number one by the end of the year.

Additionally, Additionally, we expect that our Philippines operations can achieve profitability.

In the second half of the year.

The relevant accounting Rus.

We have managed to achieve profitability in both Indonesia, and Philippines, and going forward, we will consider to strengthen our investment in different types of licenses diversify our operations and enhance our brand image to further increase our competitive advantage.

We are also actively exploring new countries and these countries are not limited to southeast Asia and we also consider other matters of expansion.

Our international footprint.

Okay. Thank you thank.

Thank you goodbye.

Thank you Nathan.

Unknown Executive: The next question comes from Cindy Wong with China Run. I will work ahead. Thank you for the opportunity. I have two questions to ask.

The next question comes from Cindy Guan with China Renaissance. Please go ahead.

Oh I'm sorry.

Right now we're talking about.

Unknown Executive: First, this year we have a fast schedule overseas. Can you tell us how you assess the cost of shipping this year? Second, I want to ask about the Philippine market. The overall growth of the Philippine market is expected to be very fast in 2023. Now, the company is second in the Philippines. Can you tell us about the current situation in the Philippines? How can we achieve the leading position this year? How much percent can the Philippines contribute to the overall overseas revenue in 2024? I will quickly translate my question. Thank you for taking my call. I have a question here.

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Question here. So the first question is related to customer acquisition cost.

Unknown Executive: So the first question is related to customer acquisition cost. Since you are aggressively pursuing the international market expansion, what is your CA market this year? And the second is related to the Philippine market. The Philippine market is expected to grow very strong in 2023. Can you talk about the competitive landscape and how you achieve to be the first number one market share position this year? And how will that contribute to the international market revenue in 2024? Thank you.

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Tiezheng Li: Okay, thank you Cindy. Now, let me answer the question about overseas customers. I would like to answer it in two separate ways. One is that in the Indonesian market. We have been in the English market for many years, and it has been six years now. We have reached a considerable level in the development and understanding of the local market. [inaudible] Since the end of last year, as I mentioned before, there are still relevant requirements in terms of regulation and pricing.

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Tiezheng Li: Based on the results of our adjustment at the beginning of this year, the effect is quite good. On the one hand, we have observed that with the increasing number of customers, we can give customers a higher average and a longer period of time. On the other hand, the competition in the market is better than last year, so it has a comprehensive impact on our performance in Indonesia. Compared to the past, there has been a significant improvement and improvement. Based on this year's overall forecast, I think the overall trend may still be able to keep up with this trend. Of course, we still focus on the adjustment of the entire model. Then, based on the results of our adjustment in the future, we will look at further expansion of the cargo sector or faster development. The Philippines is a bit earlier than Indonesia, and the environment is also very good.

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Tiezheng Li: In the market, our investment has always been very strong in the relevant information. In terms of customer cost, the overall situation is relatively stable. So basically, our judgment for the next 24 years is probably in this direction. So this is probably the expected situation for our customers in India and the Philippines. Cindy, let me do the translation.

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Tiezheng Li: We have been operating in the Indonesian market for quite some time now, in fact, six years, and we have a deep understanding of the market. Information feeds continue to be the main method to acquire better quality borrowers for us. Although the pricing cap has some impact on our operations, we have made adjustments to our models, and the result has been very positive. For example, when we have higher-quality borrowers, we are able to increase our loans, our ticket size, with longer loan tenure. The fee rates further improve with weaker competition, and we believe this trend will continue in 2024, and we will re-evaluate our customer acquisition strategies in the second half when the macro environment stabilizes for the Philippines.

We have been operating in the Indonesian market for quite a period of time in fact, six years and we have a deep understanding of the market information fees continue to be the main matter to acquire better quality borrowers for us.

Although the pricing.

Has some impact on our operations, we have made adjustments to our models and the result has been very positive.

For example, when we have higher quality borrowers, we are able to increase our loan our ticket size with logos on Daniel and the fee rates further improve weaker competition and we believe this trend will.

We will continue in 2024 and <unk>.

Evaluate our customer acquisition strategies in the second half when the economy went up.

Pro environment stabilize.

For the Philippines.

Tiezheng Li: It is in a much earlier stage compared to the Indonesian market, and over the past two years, our marketing efforts have been... much more proactive, and it has been pretty stable among the pop. And we believe this trend will continue into 2024. The second question is about our business and competitive environment in the Philippines. We entered the Philippines in 2020, and now we are in our fourth year. The total population of the Philippine market is about 1.3 billion, and our target population is about 40 million, which accounts for about 30% of the total population. At present, we have almost 5 million registered users. And the number of users who have already borrowed money is 740,000, or nearly 800,000.

It is in a much earlier stage compared to the Indonesia market and over the past two years, our marketing efforts.

Much more proactive and it has been pretty stable.

Among the court and we believe this trend will continue into 'twenty plentiful.

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Tiezheng Li: We think the market is relatively new compared to the domestic market, and the annual growth rate is relatively fast, so the market space is still very large. There are more than 100 players in the market now, and there are big companies with American backgrounds and local companies in the Philippines. As a participant from China, I think we still have a very obvious advantage in terms of technology and understanding the Philippine market. So we will continue to replicate our successful experience in China and Indonesia to develop more rapidly in the Philippine market to fight for a better competitive position. In terms of business, our overseas business accounts for about 20% of our total business in the Philippines. We look forward to the rapid development of our business this year, and we hope to increase the proportion of our business in the Philippines. Cindy, let me do the translation.

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Tiezheng Li: We entered the Philippine market in 2020, and this is our fourth year of operation. Philippines has a population of around 130 million, and our target customer base is around 40 million. To date, we have registered users of around 5 million, and our borrowers are around 740,000. There are currently over 100 players, and the largest players are from the U.S. and local Philippines.

We entered the Philippine market in 2020, and this is our fourth year of Accretions, Philippines has a population of around $130 million and our target customer base is around $40 million.

To date, we have registered.

Users of around $5 million and our borrowers is around 740 thousands there are currently over 100 players and the largest players from.

From the U S and local Philippines companies, we believe as a Luca.

Tiezheng Li: We believe as a FinTech company from China, our advantage is obvious, and we will continue to leverage on our advantages and duplicate our success in China and Indonesia in the Philippines market. Around 20% of our transaction volume for the international market came from the Philippines in the fourth quarter, and we believe this proportion will continue to increase in 2024. Okay, thank you, Cindy. The next question comes from Alex Ye with UBS. Go ahead.

Fintech company from China, our advantages is obvious and we will continue to leverage on our advantages and duplicate our success in China and Indonesia in the Philippines market.

Around 20% of our transaction volume for the international market is coming from the Philippines in the fourth quarter and we believe this proportion will continue to increase in 2024.

Okay. Thank you Steve.

The next question comes from Alex.

Xiaoxiong Ye: Thank you, Mr. Guan. First, about overseas business, can you continue to ask about how the price of the Indonesian market will affect our income and profit compared to the previous year after the adjustment of the price? How do you expect to quantify the impact? Will there be further adjustments in terms of supervision, and how are we going to deal with that?

UBS. Please go ahead.

Good morning.

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Xiaoxiong Ye: The second question is about shareholder returns. The company has also accelerated the speed of repurchase, and the annual share price ratio has also reached 48.5%. I would like to ask, in the future, our plan... [inaudible] I will do a translation, first on the Indonesian market, so after the... Pricing adjustment starting this year, how do you expect the impact on revenue and earnings? And do you expect any further move from the regulators with regard to the timetable to further adjust the pricing cap? And how will we tackle the change?

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First on the Indonesian market, it's up to them.

Pricing adjustments starting this year.

Is that the impact on revenue.

And do you expect any sort of move from the regulators.

With regard to the timetable.

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Tycho Tycho the trench and secondly in terms of the total shareholders return.

Xiaoxiong Ye: And second, in terms of the total shareholders' return, we note the company has also speeded up the pace of share repurchase this year, bringing the total payout ratio to 48.5%. So how should we expect a more sustainable payout ratio going forward? Thank you, Axel.

The company has also speeding up the pace of share repurchase this year.

The total payout ratio to 48, 5%. So how should we expect more sustainable payout ratio going forward.

Partially yes.

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Got you.

Tiezheng Li: First, I'd like to talk about the situation in Indonesia. Actually, I just introduced a lot of data about Indonesia. In the current situation, we expect that after the adjustment, the take-away will be around 10, and before that, it will be around 13. So there will be some impact, but overall, we still maintain a relatively healthy level. After deducting the customer and operating costs, our ROA before tax is about 2.4%, which is still a very healthy level in this business. In terms of adjustments, there are still some adjustments to be made according to the requirements of the local regulators.

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Tiezheng Li: We will evaluate this in the second half of the year. But based on our performance so far, we think that even if we make some adjustments, we can still maintain a healthy and profitable level in our business. Hello, Alex.

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Tiezheng Li: Let me do the translation. We have actually shared some Indonesian data earlier, and we expect the take rate after our pricing adjustment to be around 10%. And parallel to the pricing adjustment, it was around 13%.

Hello, Alex Let me do the translation, we have actually shipped some to initial data earlier and.

And take rate, we expect the take rate after our pricing adjustment to be around 10% and parallel to the pricing adjustment it was around 13%.

Tiezheng Li: And from an ROA perspective, we expect it to be around 2.4% after the deduction of CAC and some other costs, based on the current regulators' advice that there might be a further change in price reduction. We need to re-evaluate this in the second half of the year. However, based on the current UEE, we believe our business will remain at a healthy level even if further price reductions... I would like to talk about the issue of wind and solar recycling.

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Tiezheng Li: First, I would like to reiterate our strategy. We are a global consumer finance technology company. In the past, we have successfully launched businesses in China, Indonesia, and the Philippines, and we are leading in each market. The Chinese market has become more and more mature in recent years, so our business has entered a relatively stable stage of development. So we are pursuing higher quality development in China. According to our observations, the overseas market is still relatively early.

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Tiezheng Li: It has a lot of space and potential, so we are confident that in the future, with the development of Indonesia and the Philippines, as well as the expansion of new countries other than these two countries, the overseas business of the company can maintain very rapid growth. Our share return strategy is directly related to the company's strategy. We hope to deliver a healthy and fast-growing business. This is the main way to create value for shareholders. In the past three years, we have fully proved this point.

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Tiezheng Li: After we have completed the domestic transformation and the expansion of the overseas new market, In fact, in the past three years, the average annual income has increased by 40%. The annual income growth rate is 20%. We are leading in this field. In addition, we also actively use capital tools such as repurchase and Fenghong to... We have been doing re-purchasing and re-selling since 2018. This should be the earliest in the industry. Over the past six years, we have been working together in these two ways, and have repaid more than 6 billion U.S. dollars to our shareholders. If we look at the market value of this number, it should be close to half.

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Tiezheng Li: In 2023, our return on investment was close to $100 million, and our planned dividend was more than $60 million. So, in total, we have built up to about 50%. If we count the yield, it can also exceed 10% and reach 50%. In 2023, our DPS, Meigu Fenghong, was 0.237; the DPS has risen for the fourth consecutive year. If we look at the past five years, the increase in frequency should be around 10%.

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Tiezheng Li: I want to emphasize that the number of companies that can maintain a five-year boom and DPS can continue to grow in the Chinese stock market is no more than six. So in the past, we not only brought returns to shareholders through business growth, but we also continued to bring returns to shareholders with the smart tool of leading the market. In the future, we will continue to uphold this concept. First of all, we need to ensure high-quality business growth as the core and bring a sustainable economy to shareholders. [inaudible] We are confident that FinVolution Group will be able to maintain its previous record and continue to provide shareholders with a stable and growing share price. Transcribed by https://otter.ai Hi Alex, let me do the translation.

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Hi, Alex let me do the translation.

Tiezheng Li: First of all, I would like to reiterate FinVolution's position. We are a global consumer finance technology company. Our success has been validated in China, Indonesia, and the Philippines with leadership positions. In recent years, as China's market matures, our business enters into a stage known as high-quality progressive growth. On the other hand, based on our observation...

First of all I would like to reiterate evolution position we.

Global consumer finance technology companies, our success has been validated in China, Indonesia, and the Philippines with leadership position.

In the recent years as China market matures, our business enter into stage known as high quality Progressive group.

On the other hand based on our observation the international markets are still in early stages of the Panama, where market opportunities for growth is phenomenal and we are very competent to cement our success in Indonesia, and the Philippines, while expanding to more countries and rapid growth for our company.

Tiezheng Li: The international markets are still in the early stages of development, where market opportunities for growth are enormous, and we are very confident of cementing our success in Indonesia and the Philippines while expanding to more countries, ensuring a rapid growth rate for our companies. Our capital return program is closely in line with our company positioning. We hope rapid and healthy business growth can be the main way to create value for our shareholders. Over the last three years, we have proven this point.

Our capital return program closely in line with our company position we hope.

And how the business grew 10 B the main way to create value for our shareholders over the last three years. We have proven this point, we have completed the business transition of our China business and expanded internationally.

Tiezheng Li: We have completed the business transition of our China business and expanded internationally with an average CAGR growth of over 44% and revenue growth of around 20%. And apart from this, we have also returned value to our shareholders through our capital return program. We began our Dividend Program and Shared Repurchase Program in 2018, the earliest in our industry. Over the last 6 years, we have cumulatively returned over US$600 million to our shareholders, equivalent to almost half of our market cap today. In 2023, we deployed close to U.S. dollars $100 million to repurchase our shares and $62 million for dividend distribution, representing around 50% of net income for 2023 and a combined dividend yield of $11.5 million. In 2023, our dividend per ADS was USD0.237, the 4th year of consecutive dividends.

And average CAGR growth of over 44%.

And revenue growth of around 20% and apart from this we have also return value to our shareholders through our capital return program.

We began our dividend program and share repurchase program since joining eating the earliest in our industry.

Over the last six years, we have cumulatively return over.

<unk> dollars $600 million to our shareholders equivalent to almost half of our market cap today in.

In 20 countries, we deployed close to U S dollars $100 million to repurchase our shares and $62 million for dividend distribution, representing around 50% of net income for 2023.

And a combined dividend.

7%.

In 'twenty, when we treat our dividend per U S. Dollar 0.37 to four years of consecutive increase and on a five year average this increase in dividend was above 10%.

Tiezheng Li: And on a 5 year average, this increase in dividend was above 10%. And I would like to emphasize this, for China ADR, there are not more than 6 companies with 5 years of consecutive dividends and consistent increases in DPS, and we are one of these companies. In summary, we are returning value to shareholders in terms of growth and a leading capital and a leading capital return program. Going forward, we will continue with this belief and let high-quality growth remain as our core method to return value to our shareholders and concurrently maintain a leading capital return program. Regarding dividends, we are confident that we can maintain our track record and continue to deliver consistent increases in dividends for our shareholders. Alex said,

And I would like to emphasize on this for China, Edr, yeah, not more than six companies with five years of consecutive dividend and consistent increase in.

EPS and we are one of these companies.

And.

In summary, we are returning value to shareholders income of growth and a leading Hector.

And a leading capital return program going forward, we will continue with disbelief and less high quality group remain as our core matter.

To our shareholders and concurrently maintain a leading capital return program.

Regarding dividend, we are confident to maintain our track record and continue to deliver consistent.

And dividends for our shareholders.

Alex.

Unknown Executive: Thank you. As there are no further questions now, I'd like to turn the call back over to the company for closing remarks. Thank you all once again for joining us today. If you have any further questions, please feel free to contact FinVolution's Investor Relations team. This concludes the conference call. You may now disconnect your line, and many more. Thank you. [inaudible] https://www.facebook.com.com [inaudible] https://www.facebook.com.com [inaudible] Transcription by Trans-Expert at Fiverr.com

Okay.

As there are no further questions now I'd like to turn the call back over to the company for closing remarks.

Thank you all at once again for joining US today. If you have any further questions. Please feel free to contact <unk> Investor Relations team.

This concludes the conference call you May now disconnect. Your line. Thank you.

Thank you.

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