Q3 2024 X Financial Earnings Call
Transcription by ESO. Translation by —
Hello and welcome to the ExFinancial Third Quarter 2024 Earnings Conference Call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions.
Speaker Change: To ask a question you may press star then 1 on the touchstone phone. To withdraw your question please press star then 2. Please note this event is being recorded. I would now like to turn the conference over to Victoria Yu. Please go ahead.
Unknown Executive, Kan Li
Speaker Change: On the call today from X-Financial are Mr. Kan Li, President, and Mr. Frank Tuya Zheng, Chief Financial Officer.
Speaker Change: Mr. Li will give a brief overview of the company's business operations and highlights, followed by Ms. Zheng, who will go through the financials.
Speaker Change: They are all available to answer your questions during the Q&A session.
Speaker Change: I remind you that this call may contain forward-looking statements under the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995. Such statements are based on management's current expectations and current market and operating conditions, and relate to events that involve known or unknown risk uncertainties or other factors, all of which are difficult to predict and many of which are beyond the company's control, which may cause the company's actual results, performance, or achievements to differ materially from those in the forward-looking statements.
Speaker Change: Further information regarding these and other risks, uncertainties, and factors is included in the company's filings with the U.S. Securities and Exchange Commission.
Speaker Change: The company does not undertake any obligation to update any forward-looking statement as a result of new information, future events, or otherwise, except as required under law.
Speaker Change: It is now my pleasure to introduce Mr. Kan Li. Mr. Li, please go ahead.
Speaker Change: Hello everyone, we are pleased to report another strong quarter with non-volume exceeding our forecast and a significant sequential improvement in asset quality.
Speaker Change: In the third quarter, we continued to promptly adjust loan volumes based on risk level. As asset quality improved, we further intensified our borrower acquisition efforts, which have yielded very positive results.
Speaker Change: Both the top and the bottom line continue to grow year over year, non-gap adjusted net income reached a new record high.
Speaker Change: Specifically, on the operational front, our total known amount facilitated and originated was down 4% year-on-year, but up 25% sequentially to RMB 28 billion, above the high end of our guidance.
Speaker Change: The delinquency rates for all outstanding non-PASs due for 31-60 days.
and 91 to 180 days were 1.02% and 3.22% respectively.
Speaker Change: at the end of the quarter, compared to 1.29% and 4.38% a quarter ago, and 1.11% and 2.50% a year ago.
Speaker Change: We are pleased with this improvement in data quality and will continue to optimize our risk management system through advanced technology.
Speaker Change: In September this year, the Chinese government unveiled a comprehensive stimulus package aimed at improving liquidity, boosting the property market, stabilizing financial markets, and stimulating consumption.
Speaker Change: We expect this will provide a meaningful boost to the microeconomic recovery as an integral part of the economy. The personal finance market we serve should benefit from this upturn.
Speaker Change: We have already observed positive signs in the market and are committed to adjusting loan volumes in line with the risk level.
Speaker Change: Now, I will turn the call to Frank, who will go through our financials. Thank you, Ken, and hello, everyone. I'm pleased to report that our strategy of a balanced business growth and profitability continues to pay off.
http://www.kenhub.com
Speaker Change: Total net revenue was RMB 1.6 billion, up 13% year-on-year, and 15% sequentially. Our non-GAAP-adjusted net income reached a record high of RMB 434 million, up 60% year-on-year and sequentially.
Speaker Change: Purchase the purchase program to return more value to our shareholders over the long term now I would like to brief some financial performance for Q3. Please note that all numbers stated in IMB and rounded up
Speaker Change: Total net revenue increased by 30% to RMB 1,582 million from RMB 1,397 million in the same period of 2023.
Speaker Change: Primarily due to growth in the various disaggregated revenue items compared with the same period of 2023.
Origination and servicing expenses increased by 14% to RMB458 million.
Unknown Executive, Kan Li
Speaker Change: Resulting from the cumulative effect of increased volume of the loan facilities and originate in the previous quarters, compared with the same period of 2023.
Speaker Change: Borrow Acquisition and Marketing Expenses increased by 21% to RMB507 million from RMB420 million in the same period of 2023.
Speaker Change: Primarily due to intensified efforts in border acquisitions compared with the same period of 2023. Income from operations was RMB 509 million compared with RMB 435 million in the same period of 2023.
Speaker Change: 347 million in the same period of 2023. Non-GAAP adjusted net income with RMB 434 million compared with RMB 375 million in the same period of 2023.
regarding our share repurchase plan.
Speaker Change: In September 2024, we further extended the period of U.S. 30 million share repurchase program until the end of March 2026.
In Q3, we repurchased approximately
282,000 ADS
Speaker Change: For a total consideration of US $1.3 million, we have approximately US $4.1 million remaining for the potential to purchase.
and our current US $30 million Shared Purchase Plan.
Additionally, in May 2024, we announced
Speaker Change: U.S. $20 million Shared Repurchase Plan effectively until November 30, 2025, following a tender offer completed in July 2024 for approximately U.S. $9.2 million.
Speaker Change: and U.S. $10.8 million remain available under this plan. Together, these two share repurchase plan programs reflect our commitment to enhancing shareholder value.
Now on our business outlook
Speaker Change: For Q4 this year, we expect the total loan amount facilitated and originated to be between RMB30 billion and RMB31 billion, bringing the total loan amount facilitated and originated for 2024 to be between RMB30 billion and RMB31 billion.
Speaker Change: RMB 102.6 billion and RMB 103.6 billion. This concludes our prepared remarks and we would like to open the call to questions. Operator, please. Thank you.
We will now begin the question and answer session.
Speaker Change: To ask a question, you may press star and one on your touchtone phone.
Speaker Change: If you are using a speakerphone, please pick up your handset before pressing the keys.
Speaker Change: If at any time your question has been addressed and you would like to withdraw your question, please press star then two.
Speaker Change: At this time, we will pause momentarily to assemble our roster.
Hong Kong Chinese New Year's Day
Speaker Change: The first question today comes from Ramsey Ballickpast with Blackbird Capital. Please go ahead.
Speaker Change: Hi there, I was wondering if you can update us on the capital return program and if there is a plan as to what it would be relative to the net income of the company, and as well if you could update us on the regulatory landscape. Thank you.
Speaker Change: talking with one or two big investors regarding their shares repurchase program.
Speaker Change: Based on our current share price, we are much prefer our
Speaker Change: share repurchase you know that that's our stand but we will come we will continue to do a semi-annual dividend payout on you know on continued basis that that's that's that's our plan
Speaker Change: Okay, I hope, you know, by the end of the year, you will see whether even though we do not give out in terms of the percentage out
Speaker Change: to return the capital, but at the end of this year, I hope you will see we will, you know, do beyond, normally, the percentage in terms of capital return.
Thank you. I'll attempt to answer the first question.
Speaker Change: In terms of the regulatory environment, it is the management's view that right now the regulation has been fairly stable and normally the end of the year is not the time for the government to issue some new rules or regulations.
Speaker Change: and we think that it will in turn sort of benefit our industry as a whole and basically as we are in this industry. So that's why we expect that our volume will continue to grow from this moment.
That's it.
Thank you. Thank you.
Updated daily Monday to Friday.
Speaker Change: As a reminder, if you would like to ask a question, please press star then 1 to enter the question queue.
Speaker Change: The next question comes from Mason Bourne with AWH Capital. Please go ahead.
Would You Rather
Speaker Change: It's good to see the strong results and I appreciate the return of capital. Frank, I think...
Speaker Change: You started sort of alluding to it on the dividend, but I just wanted to follow up on that. I mean, the stock is trading on this quarter's results if you annualize them.
Speaker Change: Unknown Speaker 1.3 times earnings, you're paying out about six and a half percent of your earnings per share as a dividend. It seems like that could be potentially significantly higher. I know you said you're not looking at setting a percentage of income, but if you look at your peers, they're paying somewhere in the low 20s.
Speaker Change: I was just kind of hoping that you would consider that. Do you have any thoughts on that?
Speaker Change: I may say, you know, we did this year the public buyback, you know, and at least that we did a public buyback, you know, we were only able to, we were only able to collect about just over about 2 million ADS.
Speaker Change: So we definitely have more money available to do more, except the technical currency exchange issue, but that's not an excuse, but yes, we would like to
to do more in terms of the shared purchase.
Hopefully, you know, we're, you know,
on the blockchain space.
and OB EFF.
Speaker Change: Unknown Speaker 4.5%, we will, you know, keep the yield around about 6%, even, you know, as we stock price go up, we will adjust that accordingly.
You know, we, we, we, we, you know.
Speaker Change: Again, we will continue to attract the rate and yield, and also we will do, every possible available share buyback, we will do that, and hopefully, in terms of the valuation or whatever, I think the overtime will adjust by itself. We will continue to focus on the operations.
Thank you.
October 26, 2011 – 6 p.m.隨時通報
Speaker Change: Different so that your peers, some of them trade at 3, 4 or 5 times earnings and you're trading at just over 1 times earnings. And so, yeah, if you can get the buyback done there and you're trading it about a third of your tangible book value.
Speaker Change: You can get the buyback done. That's great. I just know you've had limits on that in the past and so maybe the dividend increase could be a way that you sort of
Unknown Executive, Kan Li
Thank you for having this discussion.
Speaker Change: Hello everyone. I am here to serve as the Secretary of Health of the People's Republic of China.
Speaker Change: Just one more thing, you know, in terms of, you know, the only, you know, the, the,
Speaker Change: You know the major issue we face in challenges is our volumes very low and So we hope we will this volume And you know went up for the last month or so we could do more directs during the open period That's another another thing we will definitely will do and you know you know That's what I say Even every possible way. We will you know to the maximum in terms of Yield and the share buyback and and hopefully we were just just just a low valuation issue in in short period of time, but but we
Speaker Change: We're not willing to talk too much, you know, like our peer, you know, regarding like, you know, you know, something like next year or so, something like that, because first of all, we, in terms of operation, we are, for the last year, two or so, you know, two or three years, in general, we are in
Unknown Speaker 05.05.15 Presentation Convened 05.05.15 PT
Speaker Change: For the last two years, you know, our stock appreciation is, is, you know, maybe much there's much more but still still going up to see, I think I, I, when I was on board this company, the stock is around the $2 right now it's almost $7 and let's see what's going to be but.
Speaker Change: We definitely hope that the stock price is the fact that the true value of this company and we believe eventually it will. Thank you.