Q3 2024 FinVolution Group Earnings Call
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Jimmy Tan, Jimmy Tang Comic Thanks for Watching
Speaker Change: Hello ladies and gentlemen. Thank you for participating in the third quarter 2024 earnings conference call for Finvolution Group. At this time all participants are in listen-only mode. After management's prepared remarks, there will be a question and answer session.
Speaker Change: Today's conference call is being recorded. I will now turn the call over to your host, Jimmy Tan, head of capital markets for the company. Jimmy, please go ahead.
Jimmy Tan: Hello everyone and thank you and welcome to our third quarter 2024 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 company email alerts by visiting the IR section of our website at ir.finvegroup.com
Jimmy Tan: 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.
Jimmy Tan: 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 US GAAP.
Jimmy Tan: For information about these non-GAP measures and reconsideration to GAP measures, please refer to our earnings press release.
Jimmy Tan: Before we continue, please note that today's discussion will contain forward-looking statements made under the Safe Harbor Conditions of the U.S. Private Securities Litigation Reform Act of 1995.
Jimmy Tan: forward-looking statements involve inherent risks and uncertainties. As such, the company's results may be materially different from the views expressed today.
Jimmy Tan: Further information regarding this 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 forwarding statements except as required under applicable law.
Speaker Change: 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.
Speaker Change: Thanks, Jimmy. Hello, everyone, and thank you for joining us. This is Tiezheng Li, CEO of Involution Group. We are happy to speak with you today.
Speaker Change: Demolition made great progress despite the perilous challenges of strong execution of our local excellence, Global Outlook, our legal strategy.
Speaker Change: Although China's overall economic growth remained restrained in the third quarter.
Speaker Change: We anticipate more sustainable improvements in the fourth quarter, given the borderline anticipated stimulus virus announced in late September.
Speaker Change: Also, we have made great progress towards the objective of achieving 50% of our revenue coming from the international market by 2030.
Speaker Change: by constantly leveraging our experience in China and ongoing technological improvements.
We have propelled rapid growth in international transaction volume.
This has translated into higher revenue and net income contribution.
Speaker Change: With international revenue contribution increasing significantly from 3.7% in 2020 to 10.3% in 2022 and expected to be around 20% in 2024.
Speaker Change: Over the years, we have also consolidated our capabilities into individual models.
Speaker Change: which we can flexibly deploy while adapting to the evolving requirements of different countries.
Speaker Change: In line with our objective of increasing our international revenues, we recently strengthened our international team and invited Dr. Sun Xiaodong to join us as our Senior Vice President for International Business.
Speaker Change: Dr. Sun has held key positions at renowned firms such as Ant Financial International, MyBank, American Express, and Citibank.
Speaker Change: Both started by Mr. Sun's leadership and expertise. We are confident of accelerating our international business expansion and achieving new milestones.
as of September 30, 2024.
Speaker Change: We have cumulatively served 32.6 million borders across China, Indonesia and the Philippines.
Speaker Change: For our international markets, we are proud to share that the number of unique borrowers grew from 0.7 million in 2020 to 1.6 million in 2022 and to 2.1 million for the first nine months of 2024.
Speaker Change: Also, it's worthy to note the number of new borrowers were 0.63 million in 2020, 1.1 million in 2022, and 1.5 million in the first nine months of 2024.
Speaker Change: Validating the high percentage of new borrowers in our international business.
Speaker Change: The acquisition of high-quality borrowers across all our markets remains an important element of our strategy. As a result, the total number of new borrowers across our platform once again exceeded the 1 million mark.
Speaker Change: We are very pleased to share that as we enhanced our global operations during the third quarter, the number of new borrowers in international markets reached 671,000, up 68% year-over-year and 43% quarter-over-quarter.
Notably, the member of the New International Borough...
Thank you. Thank you.
Speaker Change: Such strong growth underscores our execution excellence and our strategy's effectiveness in driving the rapid expansion of our international business.
Speaker Change: For the third quarter, total transaction volume reached 52.2 billion RMB, while total outstanding loan balance reached 68.1 billion RMB, up 1.8% and 3.3% respectively year over year.
Speaker Change: This continued growth across all the markets in which we operate validates our strategy's efficiency and sustainability.
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I'm going to be a good friend of yours.
Speaker Change: given the low penetration rate for financial services in our international markets.
Speaker Change: We continue to enhance our holistic approach to customer acquisition with innovative marketing campaigns that capitalize on our strategic partners' resources and our local team's deep understanding of market trends.
Speaker Change: For instance, our comprehensive social media strategy continues to attract new site visitors and enhance our brand exposure, facilitating positive word-of-mouth publicity and projecting a trustworthy image that encourages borrower conversion.
Speaker Change: As of the end of the third quarter, our total followers on major social media platforms reached 2.5 million, up 21% year-over-year.
Speaker Change: As a tech pioneer, we are leveraging tech innovation to strengthen our operations and promote the fintech industry's integrity and security. During the third quarter,
Speaker Change: Filmolution presented its detection solutions for combating deepfake voice command scams during the 33rd International Joint Conference on Artificial Intelligence in South Korea.
Speaker Change: Advancement in voice synthesis technology are making it increasingly difficult to distinguish between genuine and cloned voices.
Speaker Change: posing significant risk in terms of data security and asset protection affecting different industries.
Speaker Change: We believe that our sophisticated large-long-grid model-based solutions have the potential effectively fight voice command fraud.
Speaker Change: We have also integrated larger language models into our loan collection recovery process.
Speaker Change: which has improved our loan collection recovery rate and saved us millions of dollars.
Speaker Change: The development of such innovative technologies is a result of our strong commitment to R&D and the annual Finvolution Technology Cup competition.
which has incubated many cutting-edge solutions over its nine-year history.
Speaker Change: Looking ahead, we will continue to invest heavily in R&D to enhance service quality and operating efficiency empowered by leading technologies across our operations.
Speaker Change: Before I wrap up, a brief update on our ESG efforts.
Speaker Change: In line with our co-commitment to financial inclusion, we continue to support the backbone of the economy by facilitating loans for small business owners during the third quarter. As IGO, community-oriented providers of local employment opportunities.
Speaker Change: Serving small businesses ultimately contributes to a more rapid economic recovery.
Speaker Change: During the quarter, we empowered 447,000 small business owners with loan totaling 15.4 billion RMB during the quarter, up 25% year-over-year.
Speaker Change: In summary, we successfully navigated the third quarter's challenge by capitalizing on our strengths in technology, customer acquisition, and retention.
Speaker Change: We also continue to attract quality talent across multiple countries, which has further strengthened our R&D capabilities and will eventually enable business processes of sourcing from Indonesia and the Philippines.
facilitating our expansion as we enter into more new markets.
Firm execution of our local excellence, global outlook strategy.
Speaker Change: Continuous technological innovation and our unwavering commitment to our vision of financial inclusion continue to drive our steady progress and long-term sustainable growth.
Speaker Change: Going forward, we are confident of becoming the leading fintech player across the Pan-Asian region. With that, I will now turn the call over to our CFO, Jiayuan Xu, who will discuss the operational and financial results.
Thank you.
Jiayuan Xu: Thank you, Li, and hello, everyone. Welcome to our third quarter of the 2024 Ernest Corp.
Let's go through our key results for the third quarter.
Jiayuan Xu: To be mindful of the length of Ernest's call today, I encourage listeners to refer to our third quarter Ernest Press release for further details.
Thank you.
Speaker Change: As Li mentioned, the recent announcement of a series of border-to-expected stimulus measures during China's national holidays has resulted in positive growth in travel and consumption data.
765 million domestic trips were made
A year-over-year increase of 5.9%.
Speaker Change: Domestic tourists collectively spend around RMB 701 billion, representing year-over-year growth of 6.3%.
Speaker Change: Alongside the trend of consumption recovery, consumer willingness to purchase houses in the first-tier cities such as Beijing, Shanghai, Guangzhou, and Shenzhen has rebounded significantly due to favorable real estate policies.
Speaker Change: Furthermore, the manufacturing PMI rose by 70 basis points in September.
Reaching 49.8 points, the highest level since May
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Speaker Change: During the third quarter, we observed ongoing improvement across multiple operational metrics in our China market.
Speaker Change: For the first nine months of 2024, the transaction volume in China reached RMB 142 billion, up by over 4% year-over-year.
Other operational metrics also exhibited varied degrees of continuous improvement.
Speaker Change: Furthermore, our average of borrowing rate in China remained stable in the third quarter.
A strong validation of our commitment to financial inclusion.
Speaker Change: Leveraging ample market liquidity and a continuous shortage of quality loan assets, we further improved our funding costs by an additional 50 bips in the third quarter.
Speaker Change: Since the beginning of the year, we have improved funding costs by 190 bips.
Speaker Change: Reflecting financial institutions strong recognition of our asset quality and the credit risk assessment capabilities
Speaker Change: Regarding risk, we achieved significant improvement in our recent day one delinquency rate.
Speaker Change: driving a 20 basis point improvement to 4.9% through effective use of our angel and involving credit risk assessment models
Speaker Change: Meanwhile, our loan collection recovery rate rebounded to 88.5%, up 50 basis points quarter over quarter.
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Speaker Change: Given our growing confidence in the acceleration of the macroeconomic recovery, we anticipate sustaining the improvement for the remainder of the year.
Turning now to our international expansion.
Speaker Change: Our validated second growth driver, for the first nine months of the year, international transaction volume reached RMB 7.2 billion of 29% year-over-year.
Speaker Change: Revenue contribution from the international markets grew further to RMB 636 million, up 9% year-over-year, and representing 19% of total revenues.
Thank you.
Speaker Change: capitalizing on a reverse the global micro environment through effective execution of our legal strategy we are confident in our international operations sustainability and the diversification of our business models across various countries
Thank you.
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Speaker Change: Let me begin with our first and largest overseas market in this year.
Speaker Change: This market continues to exhibit strong growth momentum, with the consumer confidence index remaining above 120 points for 21 consecutive months.
Speaker Change: In September 2024, motorbike sales in Indonesia increased by 3.7% year-over-year, reaching 529,000 units.
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Speaker Change: After several months of business adjustments and attracting high-quality borrowers under the new pricing cap, we are pleased to announce that our transaction volume in Indonesia has resumed growth.
Speaker Change: This quarter also marks one of our best performing quarters ever in terms of transaction volume.
Following the completion of our recent business adjustments
Speaker Change: We forged a new strategic partnership agreement with Superbank, a leading digital bank in Indonesia, highlighting the trust and recognition we have earned from local financial institutions.
Speaker Change: To date, we have entered into strategic partnerships with multiple renowned digital and traditional local financial institutions, including Silver Bank, Bank Jago, Citi Bank, OCBC Bank, and Parmata Bank, among others.
Speaker Change: I also want to highlight that after several quarters of preparation, we have successfully acquired a large majority stake in a local multi-finance company.
Speaker Change: which will enable us to diversify our products into non-cash loans.
Speaker Change: This, in turn, will empower us to expand our presence to some more borrowers.
Speaker Change: The completion of this acquisition underscores regulators' trust and confidence in our local operations.
Speaker Change: In the Philippines, our second international market, reversed macroeconomic conditions are boosting consumption.
[inaudible]
Speaker Change: In September, the Purchase Manager's Index, PMI, reached 53.7 points, reflecting year-over-year growth of 6% and asset equation increase of 5%.
© The Bulletproof Executive 2013
Speaker Change: This micro-trend also drove a reduction in the Philippines' unemployment rate to 3.7% in September 2024.
down from 4.5% during the same period last year.
Speaker Change: Notably, private consumption in the Philippines has accounted for over 70% of its nominal GDP for over a decade.
Speaker Change: serving as the country's primary growth engine boosted by steady remittance inflows and a strong labor market.
Our Philippines' operations continue to outperform expectations.
Speaker Change: With transaction volume growing 137% year-over-year and 24% sequestration to RMB 838 million
Speaker Change: It's also worth noting that its contribution to international transaction volume grew to about 32% over the quarter.
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Speaker Change: We have established the robust financial and operational partnerships in the region and remain highly confident in our ability to sustain rapid growth here.
Speaker Change: For example, we are stressing our Buy Now Pay Later BNPL partnership with TikTok.
Speaker Change: We have also initiated a pilot project with another leading e-commerce platform to diversify our customer acquisition channel.
Speaker Change: Furthermore, we have ample funding from leading local financial institutions such as Maya Bank, C-Bank, and Union Bank to support our growth.
Speaker Change: These solid partnerships have enabled us to capitalize on the vast opportunities in the Philippines market.
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Given the accomplishments we have achieved in our international markets,
Speaker Change: We are confident we can replicate this success in additional countries and regions by leveraging our in-depth experience and technological advantages.
Now, turning to our financial metrics.
This quarter's operational excellence resulted in solid financial performance.
Speaker Change: Net revenue for the quarter reached RMB 3.3 billion, marking a 3% increase year-over-year and a 3% increase equationally.
Speaker Change: Net income was RMB 624 million, representing a 9% increase year-over-year, and a 13% increase sequentially.
Meanwhile...
Speaker Change: Sales and marketing expenses rose by 6% year-over-year to RMB 560 million as we continued to strengthen efforts to acquire new borrowers of high quality in both China and international markets.
Speaker Change: Furthermore, our leverage ratio defined as risk-bearing loans divided by shareholders' equity remained low at 3.2 times, reflecting potential growth opportunities as the macroeconomic environment stabilized.
I'm going to tell you what I'm doing.
Speaker Change: Our total liquidity position, consisting of cash and cash equivalents plus short-term investments, reached a run-up of $9 billion, up 13% from December 2023.
Speaker Change: Showcases a robust balance sheet that's well able to support our business growth and exploration of new opportunities while consistently increasing shareholders' returns.
Speaker Change: Before I conclude, let me briefly update you on our share repurchase program.
Speaker Change: For the first nine months of 2024, we deployed US $81.1 million to repurchase our shares in the market, up 23% year-over-year.
Speaker Change: As of September 13, 2024, we had cumulatively returned US$316.1 million and US$325 million to our shareholders in the form of share purchase and dividend distribution, respectively.
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Speaker Change: In summary, our reversal results for the third quarter demonstrate the effectiveness of our local excellence global outlook strategy.
empowered by our Andrew business model and the technological advantages
Speaker Change: Given consumers' growing confidence in an accelerating economic recovery, we believe our operations will continue to build positive momentum throughout the remainder of the year.
Speaker Change: We will remain committed to seizing the global market's vast opportunities and sharing our achievements with all shareholders through sustainable business growth and a strengthening capital return program.
Speaker Change: That concludes my prepared remarks. We will now open the call to the questions. Operator, please continue.
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Speaker Change: Thank you. If you would like to ask a question, please press star then 1.
Speaker Change: If your question has already been addressed and you'd like to remove yourself from queue, please press star then 2.
Speaker Change: Once again, that is star than one if you have a question.
Speaker Change: Today's first question comes from Alex Yee with UBS. Oh, and I do apologize. I did want to mention that 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 repeat your question in English.
Speaker Change: And once again, our first question today comes from Alex Yee with UBS. Please go ahead.
Alex Yee: Good morning, management. Thanks for taking my question. So my first question is on China business.
Alex Yee: So the growth has rebounded from 1% in the last quarter.
Alex Yee: I'm wondering what drove the loan volume pickup during the quarter, is that an industry-wide trend? And then also going to Q4, have you seen any sort of pickup in credit demand and loan allocation in October and November?
And secondly, it's on your international business. So after the...
Alex Yee: and other experts. So I'm wondering when do we expect to see, you know, the Indonesian business to start generating more meaningful profits. Thank you.
Thank you.
Speaker Change: X, let me answer your two questions. The first question is about the dealings between Q4 and China.
Speaker Change: The scale of Yeom international airport is also shrinking what is your message to the newcomers to the international airport?
Speaker Change: We have achieved more than 4% growth in the first three quarters of our domestic business. In the third quarter, our domestic sales amounted to 4.95 billion RMB, a 6.7% increase over the previous quarter.
三季度以來,我們從兩個方面來看,一個是客戶需求,客戶需求相對於二季度確實出現了一定的回升的態勢
Speaker Change: That's also a trend that has been going around for the past half a century.
We can see clients needs are reduced by 12 percent.
这是一个方面
Speaker Change: On the other hand, we have been sticking to the strategy of continuing to invest in new customers. Our domestic business investment in new customers is a leading position in the industry. Historically, we have always maintained a 10% share of new customers.
Speaker Change: In the third quarter, the number of newcomers has increased by 14%, reaching 400,000. So maintaining high-quality newcomers is a key factor for us to continue to grow.
Speaker Change: Also, as you may have noticed, at the end of September, a series of stimulus policies were released. From our own business perspective, we can see that the Japanese military's turnover has shown a significant improvement.
同比环比都有百分之十以上的增幅 然后用户的日均的错量也是有显著的提高
Speaker Change: After October, we see that the number of users is gradually decreasing It is probably a level of adjustment to September
Speaker Change: 但即使這樣,相比上半年仍然是有比較明顯的一個好轉。 But even so, compared to the first half of the year, there is still a significant improvement. 所以三季度所呈現的需求回暖趨勢,在四季度我們預計會繼續得到延續。 So the demand-return trend presented in the third quarter is expected to continue in the fourth quarter.
Speaker Change: So starting from the end of September, we have a series of stimulus policies which are very encouraging. This gives us more confidence in the long-term development of our domestic business.
Speaker Change: We have always insisted on high quality domestic business and we will continue to invest in this. Whether it is customer service or customer experience, we believe that with the effects of these policies, it will bring greater value.
Speaker Change: Of course, it takes time for the policy to take effect. We need to be more patient in this regard.
Hello, Alex. Let me do the translation for Alexis.
Speaker Change: Since the second half of 2023, the industry has experienced some silica fluctuations and the industry is facing the challenges of a science reduction.
Speaker Change: However, Finvolution, with its steady risk performance, has still managed to achieve a growth rate of above 4% in transaction volume for the first nine months of the year, with transaction volume in the third quarter reaching RMB49.5 billion, up 6.7% sequentially.
Speaker Change: And during the third quarter, from two different perspectives, we have, number one, we have observed that customer applications have increased compared to the second quarter, reversing the trend of a continuous week applications during the first half.
Customer application in the third quarter increased by 12% sequentially.
Speaker Change: And another view is that the continued investment in new customer acquisitions enable us to have a leading status in the industry. Historically, our percentage of new customers have constantly been above 10%. And during the third quarter, this percentage further grew to 14%, reaching 400,000.
continue growth. I believe you guys have also noticed
Speaker Change: the stimulus package announced in late September. We have observed that the daily transaction volume has shown some improvement along with an increase of around 10% in application rates. And entering into late October, customer application has gradually slowed down and returned to the September levels.
Speaker Change: The September-end bolded and anticipated stimulus greatly motivated us. It provided us with greater confidence regarding the development of our China market.
Speaker Change: As you know, we have been maintaining high-quality growth in our China market and through continued investment in areas such as customer acquisitions and user experience.
Speaker Change: We believe the impact of such investment will be multiplied as the stimulus package gradually materializes. And during this period, we all should have some patience.
Speaker Change: The second one is about our business in Indonesia. This year we went through a process of lowering our fees from 1,400 to 1,300 Japanese Yen.
Speaker Change: 大家可能也注意到了,我們差不多花了五個月時間 We spent about five months 就完成了在整個定價調整相關的一個運營方面的一些調整 on the adjustment of the price adjustment
Speaker Change: So we have proven many times that we have the ability to deal with the adjustment of the price.
Speaker Change: We have also prepared a better class accumulation and can quickly adjust the population after the cost reduction to continue to adjust the risk to maintain a stable profit level.
Speaker Change: From the perspective of next year, we don't have any further notice. Now, based on the price of the first three weeks, there is a possibility that there will be further clear information in the fourth quarter. But no matter what, we will be well prepared.
Speaker Change: If the price stays unchanged, we are confident that we can make a better profit next year.
Thank you.
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Speaker Change: In 2024, we have been through a price reduction process from 0.4% to 0.3% on a daily basis. We have completed the transition to better quality borrowers and upgraded our credit risk assessment models in nearly 5 months.
Speaker Change: Transaction volume has since resumed growth and up by 10% sequentially.
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Speaker Change: Throughout these several times of price reduction, we have accumulated sufficient experience in handling interest rate reduction and currently, we didn't receive any notifications for further price decline.
Speaker Change: We are still operating at the current level of 0.3%, although there might be further information in the fourth quarter.
Speaker Change: And under a stable pricing environment, we believe we are able to contribute more meaningful profits for this Indonesian business, for the cash loan business.
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Thank you.
Speaker Change: Thank you. And our next question today comes from Cindy Wong with China Renaissance. Please go ahead.
Speaker Change: Okay, thank you for the question. I have two questions. First, I'd like to ask about the loan cost. As you said, the BIPs have dropped by 190 this year. How much room do you think can be improved in the fourth quarter? Second, I'd like to ask about overseas loans. The number of overseas loans has increased two times in a row, faster than in China. I'd like to talk about the current strategy of Indonesia and the Philippines on the BIPs, as well as the BIPs. And what do we think about the future of the BIPs?
那我很快地翻譯一下我的問題
Speaker Change: Thanks for taking my question. I have two questions here. First one is the funding cost has been lower $190 this year. Do you think is there any room to improve in fourth quarter? And second question is...
Speaker Change: The number of the new borrowers in the international market has surpassed China for the second consecutive quarters. So can you talk about your Indonesia and Philippines customer acquisition strategy and customer acquisition cost? And how would that impact your sales and marketing expenses? Thank you.
Speaker Change: Cindy, thank you for your question. I will answer the first question first, and then ask Jimmy Tan to answer the second question.
Speaker Change: As you can see, the domestic capital cost has maintained a very obvious trend of optimization and decline in the first nine quarters of this year. We have also achieved a very objective decline in the whole year. This actually represents the confidence and recognition of the quality of the market.
Speaker Change: In the future, I think there is still room for improvement. But this space should not be as big as it was before. After all, the interest rate level on the market will continue to rise. It will also be an influential factor.
Speaker Change: From a long-term perspective, I think we will maintain a competitive level in terms of funding cost.
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Speaker Change: Hello, Cindy. Let me do the translation for Alexis. I believe you guys have seen the funding cost in China has improved a lot since the beginning of the year, reflecting the market recognition in our technologies and asset quality. We believe there is still room for improvement in the fourth quarter. However, the improvement rates might be smaller compared to the remaining of the year.
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Speaker Change: Hello, Cindy. I would like to answer your question about the business development of Indonesia and the Philippines. I will share with you some of the considerations of Indonesia, the Philippines and other overseas countries in the future.
Speaker Change: In the first half of this year, we spent five months to transform the LXS into a crowd-surfing service. We have now entered the next phase of the three-quarter growth strategy. I will not elaborate on this part.
Speaker Change: In addition, there are several important things we are doing, including a part of it is that we are continuing to introduce local financial institutions.
Speaker Change: In the third quarter, we got strategic cooperation with the local Superbank.
Speaker Change: We have established a cooperation with seven local financial institutions. We have established a cooperation with seven local financial institutions.
Speaker Change: are basically provided by local financial institutions. These include CBank, OCBC, BankJargo, BankPermit, etc. Many financial institutions continue to cooperate with us.
Speaker Change: On the other hand, to go back to what you just mentioned about the development of Hawker, in the third quarter, we also completed the multi-faceted financial card photo in Indonesia.
Speaker Change: this placement established some base for future development We are now with some famous local mobile brand and retail chain building a long term collaboration Next stage We will provide more 3C consumers provide more financial services
Speaker Change: In addition, I would like to mention that in the past period of time, the growth of our customers, as we mentioned in the data just now, the overall growth of our customers is actually very significant. I will not go into the details of the figures, such as yuan, copper, etc. At the same time as the growth of our customers, we also see that we are already at a very healthy level in terms of the business of the modern era in Indonesia.
Speaker Change: Our take rate is relatively stable. At the same time, we also expect that in 2024, the whole industry in Indonesia will make an annual profit contribution. As Jiayuan mentioned, in 2025, we have the opportunity to contribute to further increase the profit.
Thank you.
Thank you.
Thank you.
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Speaker Change: Hello Cindy, let me do the translation. As mentioned by Alexis, right we have spent the first five months to transit to better borrows in Indonesia and has since resumed growth in the third quarter.
And along this process, we have been...
Speaker Change: expanding our base of local funding institutions and now we have been working with seven different partners such as
Speaker Change: CBank, OCBC, JAGO, among others. And all our loans facilitated in Indonesia are facilitated by these local players.
Speaker Change: We have also acquired a multi-finance license, validating the recognition and trust from local regulators. We have also established cooperations with renowned local partners such as OPPO and WUC.
Speaker Change: And you have also noticed that our customer growth has been very robust in both year-over-year and Q-over-Q growth. And take rate is also stable and like Alexis mentioned, there will be much more meaningful profit in 2025.
and I'm going to be a good friend of yours.
接下来我介绍一下菲律宾的一些情况
Speaker Change: In addition, on the customer side, in addition to starting to do business with our online customers, we have also established a deep cooperation with TikTok Shop.
Speaker Change: to provide convenient online payment solutions for these users. At present, the traffic from TikTok Shop has already reached nearly 20% in the Philippines. We also expect to contribute further customers and transactions next year.
Speaker Change: We expect that next year we will have a better development rate. At the same time, we expect that the Philippines will achieve profit by the end of this year.
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Hello Cindy, let me do the translation
Speaker Change: The Philippines macro is robust and we have achieved great operational results.
Speaker Change: C-Bank and Maya Bank and today, about 60% of our loans are being facilitated through local financial institutions. In addition, we have established strong cooperations with local partners such as TikTok Shop and today, around 20% of our transaction volume is from them and we expect it to grow further in 2025.
Speaker Change: The business operations performance in Philippines is above our expectation, with strong growth both in year-over-year and Q-over-Q comparisons. And also, we expect Philippines operations to contribute profits in 2025.
Thank you.
Speaker Change: Next, I would like to introduce some of our ideas on the development of overseas countries.
那接下来呢我们
Speaker Change: will open up more overseas markets We have also made some reservations and layout in different countries We will share more information with you in the future
Speaker Change: In the future, we will have a few core strategies to keep up with the development of India and the Philippines in the overseas markets.
Speaker Change: The first is that we will keep the health development basis based on the cashloan business. We will follow the local policies and market development to continue to boost the population and help in the long-term business layout.
Speaker Change: In addition, we will also carry out strategic cooperation based on scene traffic and local financial institutions. Based on these strategies, we hope that in every market we enter, we can become the leading player in the local market.
Speaker Change: At the end, we hope that our goal is to have the whole group in Xinye Group by 2030.
Speaker Change: We hope that more than 50% of overseas revenue will come from overseas. We also hope to provide better universal financial services to users from more countries around the world.
Thank you.
Thank you.
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Speaker Change: Cindy, let me do the translation for this one as well. Since entering the Indonesian market in 2018, we have been doing international business for 7 years.
Speaker Change: and as you can see along all these years our operational metrics such as risk, customer acquisition has all been improving and currently the revenue contributions for international operations has reached 20%.
And we have also been proactively planning...
Speaker Change: and deploying resources into more new countries and will share more when there is more concrete news.
Speaker Change: Some of the ideas is that when we enter into a new country, we will focus on the cash loan first and then adapt to local regulators' regulations and eventually upgrade to better borrowers. And secondly, we will then adapt into loans with consumption scenarios.
Speaker Change: By 2030, we have a target of achieving 50% of our revenue from international business and provide more borrowers.
with Better Services.
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Speaker Change: Thank you. And our next question today comes from Yada Li with CICC. Please go ahead.
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Yada Li: Hello, Mr. Guo. Thank you for giving me this opportunity to ask questions. Today, I would like to ask Mr. Guo about his outlook on shareholder returns in 2025 and how to balance business growth and shareholder returns in the company's future development. Thank you very much.
Speaker Change: Then I'll do the translation. Hello, management. Thank you for taking my questions. The question is regarding the shareholders' return. Do you expect to deliver more value to the shareholders in 2025, and how the company's balance will grow with the total shareholders' return? That's all. Thank you.
Speaker Change: From 2018 to now, we have been doing a lot of repurchase for six consecutive years, which is the earliest in the industry. In the six years, we have accumulated 680 million dollars in return, but our market value is about 43%.
Speaker Change: In the third quarter, our total return was more than 24 million US dollars. Compared to last year, it increased by 24%.
Speaker Change: In the first 9 months, the total amount of reimbursement is 8,100,000 USD which is 23% more than last year By the end of November, the total amount of reimbursement is more than 75%
Speaker Change: What do the nails say? There is a science. So we are now doing it. At the same time, we can see that, whether it is overseas, apartment growth restrictions or in industry, we are maintaining high quality growth.
Speaker Change: So in the future, we will continue to uphold this concept.
Speaker Change: High-quality business growth is the core to provide shareholders with a sustainable source of return. At the same time, we will take into account a leading capital return strategy. We are confident and able to keep a record of the past. We will continue to provide our shareholders with stable and growth-encouraging returns.
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Speaker Change: Hello Yadah, let me do the translation. The company has prioritized the long-term return of shareholder value. On one hand, we are creating value through rapid sustainable growth of our business. On the other hand, we have established a leading capital return program consisting of share repurchases and dividends. And since 2018, we have launched our dividend and repurchase program for six consecutive years, the earliest in the industries. And during this period, we have cumulative return $680 million to our shareholders, which is around 43% of our market cap.
Speaker Change: And during the third quarter, we have deployed U.S. dollars 24.3 million for share repurchases up 24% year-over-year.
Speaker Change: And for the first 9 months of the year, we have cumulatively repurchased, deployed $81 million, up 23% from the same period last year. And we have already utilized 75% of our third share repurchase program by the end of October.
Speaker Change: Also, returning value to shareholders through high quality growth in both international markets and China markets. Our principle is that we will maintain high quality growth.
Speaker Change: and also we are confident of distributing dividends at a stable growth rate for our shareholders.
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Speaker Change: Thank you. As there are no further questions, I'd now like to turn the conference back over to the company for closing remarks.
Speaker Change: Hello, thank you all for joining our earnings conference call today. If you have any further questions, please feel free to contact our investor relations team. Thank you all. Have a nice day.
Speaker Change: Thank you. This concludes this conference call. You may now disconnect your line and have a wonderful day.
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