Q4 2023 CNFinance Holdings Ltd Earnings Call
Welcome to chorus call. Please hold and operator will be with you shortly.
Okay.
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Could you confirm your full name please.
David Brown.
David Brown.
And which company workforce up.
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AIE.
None: Thank you so much for each call you wanted me to connect you to.
He and his finance holdings earnings call.
Joining me after the call.
Thank you.
So naturally you would choose a charger.
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Well I'm trying to time be choosing the tuition well my high Junkies recharged young Sheldon if you should have changed somewhat.
Oh sure yeah, when its injected.
First.
They they'll keep Nic innovation and put up next.
None: So anytime the three we have optimized our geographic footprint.
Our Gulf War time, you're talking for us to diversify our product offerings to meet borrowers need in different scenarios.
And target high quality collateral as well as borrowers with better risk profiles.
At the same time.
Further optimize our sales team to accommodate with the adjustment of product mix.
Yeah, I mean, there's plenty of times youre trying to be tricky as you well know who you can joke ones will choose to do so.
John you want both of them in fact, one focal one to ones with you all which you don't you work with Johnson Matthey Chitlins, Switzerland soon cooking pot.
Telephone call is different and so towards the whole year.
Do you see one of them that neither esher Fujian.
Switching routes, where mortgage I'm sorry.
And you can find all of a sudden cheap so why.
None: Aren't you should treat them to put emphasis on the true true bulks or false propulsion, either Fujian cooking.
Second.
Facing the complex property market.
They'll prioritize asset quality.
First we will refine our risk control mechanism.
Except for collateral value.
Assign greater an importance to evaluating borrowers in decision making.
For example.
They will take into account the ethnic has industry I found that impact its ability to make payments.
None: Other than that little apply different hated reveal procedures for large cases.
In addition.
It'll come from continuing to dispose of nonperforming loans to contain our risk exposure.
Deferred until we get a trigger to engender G.
You just don't you.
What was your insurance these are once a year closer to your Florida, and it's one of our future.
I'll be honest with you when the junk that usually Georgetown who would you issue.
So as you well know if you want one Sean Lee from Citigroup.
She's the one quick sushi in their curriculum hopefully a pretty sure thing John you Wonder if are we use it.
Oh, well, Jonathan English hungry to Jim's Huh, Grunted seafood and poultry show plus false hope with the Union.
None: Third.
It's one of the leaders in the industry.
Financed fully recognizes the importance of compliance building for the company's sustainable girls.
And Tony Tanya for Libbey will continue to strengthen the compliance building.
We will continue to refine our internal control mechanism.
And then they'll conduct compliance training I regular basis. So your hands are employees awareness.
And also apply regular inspections pit audits and other critical means.
Sundar, what's your own shoes, and jewelry will know simple needs Eugenia should be with her women's yourself going through on your friend and pieces you do G. Trinian, that's I was wrong.
Now I will hand, the call over to our CFO Ms <unk> Li.
I'll walk you through fourth quarter and fiscal year, I'll suddenly twenty-three financials.
Okay.
Thank you Mr. Kim.
Jing Li: And welcome to our conference call now.
I would like to walk you through the fourth quarter and fiscal year of tourism free financially.
Please notice that the currency that we use.
Our N V and order comparison, moving late on a year over year basis.
And that's why the state.
The first quarter off tournament free the total interest and freezing carnivores remain.
Rather stable at 445 million.
Jing Li: The interest income tragedies salaries partner English by 11% to 36 million firm that is bringing them into fine yes.
It's finally atrophy with Tivo to English and getting people on staff with great Pride that partner is.
Jing Li: Yeah.
Total interest and so you think south decreased by two 1% to 118th and wasn't nearly as compared to 201 million in last year.
And this is primarily due to the lower funding costs.
Jing Li: Trust Company partners.
Net interest and fee income English by 2% to 215 8 million as compared to 215 3 million in last year.
Net revenue under the commercial Bam partnership Murdo.
What town million has compared to 15 6 million last year.
The Christmas time is due to the decrease of non recommended by the commercial banks in the first quartile of Chinese or a free as compared to it.
Yeah.
Jing Li: Collaboration cost for the sales partners increased to 19, one me allows from 18 million.
Primary activity as opposed to an English outstanding average outstanding loan principal.
Under the chapter 11 markets during the fourth quarter off the Tories are free.
So as to and wasn't enough sounds from that in the commercial bank permission Margo things to begin like.
Jing Li: Yeah.
But wish him for credit losses was 42 million at some point to one of them, Jeff furnace free meals and Lafayette primary attributable to the lower delinquency ratio. Besides the fourth quarter of attorneys on the free themselves from their who's afraid they are quite diverse.
Mitigation position due to the in the Philippines is pursued their obligation to repurchase that didnt mezzanine loans during the first half turning to free and then.
And in the Indiana and before the year end thing, we're able to recommend that payment.
In addition, we stopped in warrior South department out on that.
Michelle Phan furnishing things to beginning of attorneys are free.
She has joined to lead to an increased guarantee asset and also for wind more protection to the loans.
Net loss on sale of loans.
Jing Li: 12 million, that's compared to 1 million in last year.
Total operating expense increased by 15% to 19 7 million as compared to 84 mainland and Latvia.
Net income decreased by 33% to 19 million.
From 28 minutes.
But the typical year I'll turn into a free.
The total interest fee thing time, Inc increased by 1% to <unk>.
1000, 715 million 15.
<unk> 5 million as compared to 1770 1 million.
Interest income tied to just as part of that increased by 10% to 135 million from Detroit to mean, it and lost yes, just finally due to an increase in the new England. Some notes Weaver with purchased by just sounds spotlight in installment.
Total interest expense decreased by eight six out to several hundred I'm, sorry, 3 million Eskom had to say 185 million.
Jing Li: However, due to the lower funding course of Trust company partners.
Net revenue under the commercial bank partnerships more adult English 515th screaming for Sam to 18 8 million from 58 million. The increase was primarily due to the English law and recommended by the commercial banks in this year as compared to the last year.
Collaboration courseware sales partner English by 7% to 344 million.
That's compared to the 321 million last year.
Finally attribute so to English off daily average outstanding loan principal under the troughs come chopped Lily Morgan was saying towards it for free.
And also the enforcement of South Park, and the commercial spend partnership mortgage things like anything else this year.
And for credit losses was 183 million, that's compared to 238 million in last year, primarily due to the lower delinquency ratio.
In the basically a year of total Corona free.
Some says partner, who is a fit there, but there were some mitigation positions due to the inability to fulfill their obligation to associated anyway, she loves doing.
Jing Li: During the first half trying to get some risk free we're able to recommend their payments.
Jing Li: Yeah.
In addition, we start to invest in more of a sales partner under the commercial van punish it seems that the gaming of Attorney General Fleet would you have joined led to an increase of guarantee assets and also provide more protection to the lungs.
Other games.
Was fighting Union part of this year and some past 19 million last year.
Yeah.
Jing Li: Starting to study in the second half of October they were free.
It was off but it relates to mitigation petitions buffeted by the partner has to be a decrease.
None: That's really fun.
Our installment policy to he's done a good thing to take pressure off the sales partners.
When the credit risk mitigation position.
Okay perfect size, that's probably not a complicated by the probably the company will recognize the amount off of future profit in artist games.
In the fourth quarter I was trying to sort of a free some self fund our pools of fate that credit risk mitigation position, we're able to continue to sustain that guarantee Betsy.
Responsibilities.
And associated with the credit risk mitigation position will not be deemed as complicated.
Total operating expenses was 318 more mainland and somehow to 339 minutes.
Net income increased by 22% to 116th fight maintenance at some path to the 113 climbing it in last year.
None: Yes.
None: Okay.
As of December 31st tried to Tetra free the company has cash and cash equivalents.
None: Yes.
That's compared with 1.8 D. A N S.
But the take rate in 'twenty is that a fluke attorneys are there too.
The delinquency ratio for loans originated by the company decreased from 19, 2% at December 31st Treasury's Arctic two to $16 six and then at the end of 'twenty to 'twenty three.
And the FTE out ratio for the loan originated by the company increased plus one.
0.2% and stuff and that's after the end of this year compared to 1.1 S off December that's his first country subject to where.
We would like to start the Q&A section.
We will now begin the question and answer session.
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Again, it is stores and one to ask a question.
None: At this time, we will pause momentarily to assemble our roster.
The first question.
William: It comes from William.
William: We're gonna Jetski with Greenwich Global.
William: Please go ahead.
Okay.
Hi.
The continued decrease in the borrowing costs do you think that the rate you've seen in the last quarter is the rate that we should expect you guys to be borrowing at going forward.
William: Save everyone's lives homes and put us in a job.
Good quarter.
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William: And so we are their phone Jon for sweetener, your food well Joe abuse.
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Okay.
So.
Average rate that we charge all borrowers in 'twenty to 'twenty three it was 60 employing 1%.
Down from 16 points to 8% from 'twenty to 'twenty, two and going forward in 'twenty 'twenty, four and got them based on the market conditions. Our goal is to.
William: Lowering the financing cost of our borrowers.
Okay.
Okay.
You talked kind of generally about the demand for loans that youre seeing in terms of the size and the split between truck and commercial.
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None: Okay.
So.
In Colombia in Colombia, three due to uncertainties associated with the real estate market.
The lower demand from them at the owners are actually not as expected.
So in the first two months, but they don't they don't see this shrink to recover in the first two months in the ear off our California, four if you take a look in the release that data China's new RMB alone in the first two myself plenty of time before it was actually.
1100 building.
Lower than that of the same the same time off 2023.
And in the year after only 23, we facilitated long yourself.
[noise] 12, one 2 billion.
I'm there.
Under the trust lending model and 50 50 ability under the commercial bank model.
So the commercial bank the loan facilitated under the commercial bank model, where it's actually a very different times.
None: The total loan originated raid shoval met our goal is that in the beginning of a 70 33.
Also for for the year of 'twenty 'twenty four.
We still target the ratio between 11 facilitated under trust lending and commercial lending to be 723, mainly mainly at the.
Commercial commercial backlog, though they'll pick up 30%, how far along our recognition and our targets for loan origination for 2024.
We want to achieve growth and have a target to be plenty of building.
Total.
Yeah.
Okay great.
Thanks Cindy.
Doing some things like the compliance training and the audits and the increase.
All of the evaluation does that tie in at all to the technology upgrades for our platform you've been talking about or is that something different.
Okay.
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Okay.
John.
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Okay.
So those are two different two different task.
As a participant in the financial industry, we believe that our compliance building is one essential thing that we should do.
And so far for the year also anybody for our living will surely he has all of our compliance building and we want everyone to make all of the all day long to do the trainings and make compliance why he central thing for for the culture and the culture of the company as for the.
The investment in the in the in the technology.
L. A in the ear after only 23, we're basically investing in two things one is to I had a salary evaluation of plateaus to make more accurate evaluation of the value off the collateral and the other thing is that is it that we all work the way, it's laying off our commercial bank partners.
None: To bringing this one off big time motto, two to give a more thorough ratings to our our our borrowers.
And also and the year of 2024, where they will keep on investing in technology and we want to use the actual practical data that we collect from from our daily operations to make adjustments to the all four men to two two of those two cyst.
And to make them more affordable to our business.
And to adjust if if there is anything that needs to be removed or anything that they need to be add into that model.
None: Yeah.
Yeah.
Okay, Great and then last question the share repurchase plan looks like a expire is there any plans to renew that.
I'm, sorry could you could you say that again.
Yeah, the share repurchase plan books like the term on that expired.
Or we can have the call. If there are any plans to renew that.
None: Uh huh.
Moshe I Love goes up we're going to have a similar to what you thought Sheila on Xtra was real footage issue. It is a D C downtown Debacles enclave audio.
None: Well, let's take off the table when he went out Napa.
None: Well it tell me, what's going on in that direction sensing a T shirt finicky apart put against unions.
And so that was absolutely pharma are therefore a necessity.
None: Is that a way they were going to present it.
In front of our of our board of directors.
Hoping to extend their salary for a share repurchase plan for another year.
Okay, great. Thank you guys.
Again, if you have a question. Please press Star then one.
Yeah.
Again, if you have a question. Please press Star then one.
This concludes our question and answer session I would like to turn the conference back over to Matthew Li for any closing remarks.
Thank you Joe and thank you all everybody for joining us today in this conference call.
Do you have any questions. Please feel free to contact us.
Okay. That's it thank you.
None: Okay.
The conference has now concluded. Thank you for attending today's presentation you may now disconnect.
None: [music].
Okay.
[music].