Q4 2024 FinVolution Group Earnings Call
Yan YongQiang: Xiaoxiong Ye, Thomas Chong
Xiaoxiong Ye, Thomas Chong, Jiayuan Xu, Jimmy Tan, Tiezheng Li
Ashal, Yareddy
Xiaoxiong Ye, Yada Li,
Speaker Change: Hello ladies and gentlemen, thank you for participating in the fourth quarter and four year 2024 Earning Conference call for FinVolution Group. At this time all participants are in listen only mode.
Yan YongQiang: Outdoor Management for Pair of Remarcer will be a question and an intercession.
Today's conference call is being recorded.
Yan YongQiang: 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 welcome to our fourth quarter and four-year 2024 earnings conference call. The company results with issue 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 IR section of our website at ir.finvgroup.com.
Speaker Change: 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 certain non-get financial measures to review and assess our operating performance.
Speaker Change: This non-GAAP financial measures are not intended to be considered in isolation or substitute for the financial information Prepare and present in accordance with US gap
Speaker Change: For information about these non-GAAP measures and reconciliation to GAAP measures , please refer to our earnings press release.
Speaker Change: 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 security slate education reform
Thank you. Thank you. Thank you.
Speaker Change: As such, the company results may be materially different from the views expressed today. For the information regarding this and other risks and uncertainties are included in the company's
Speaker Change: The company does not assume any obligation to update any forward-looking statements, except as required under the applicable law.
Speaker Change: Finally, we post a slight presentation of an IRF site providing details of our results for the quarter. I will now turn the call over to our CEO , Mr. Tiezheng Li, Peace Go Head, sir.
Speaker Change: Thanks, Jimmy. Hello, I run and thank you for joining our running squad. This is Tiezheng Li, CEO of FinVolution Group. We are happy to speak with you today. 2024 marked another strong year of growth and progress for the company.
Speaker Change: Despite the persistent uncertainties, over the micro-economy in China, our operations in Indonesia and the Philippines have experienced favorable micro-supported.
by Cedron Girls in a stable foreign exchange environment.
Speaker Change: Through strong execution of our local excellence, global outlook, our legal strategy, we successfully
Speaker Change: and the continued to deliver progressive growth in the China market and the rapid expansion in the international market.
Speaker Change: For example, in terms of transaction volume, we have achieved 5% growth in China and the rapid growth of around 28% in our international market.
Speaker Change: Both average and total transaction volume and the outstanding low-violence also reached a new record's height.
Speaker Change: for the full year rising to 206 beating R&B and 72 beating R&B respectively, both have to up by 6% into the year over the year.
Speaker Change: Cumulatively, we have served around 34 million followers across China, Indonesia and the Philippines.
Speaker Change: representing a net increase of around 4 million new borrowers in 2024.
Speaker Change: Achieving growth in all of these metrics, a made 2024 soft consumer environment, is a strong testament to our business resilience, our outstanding technology, innovation, and our overall operational excellence.
Speaker Change: It's worth noting that while the industry's transaction volume was generally shrinking in 2024, we continue to deliver growth in our business at stable risk levels.
Speaker Change: Inline with our strategy, we have expanded our regulatory license portfolio in our K-market, including micro-lending license in China, multi-financial license in Indonesia, and the non-banking financial company license in Pakistan.
Speaker Change: This additional license helps us expand our customer's outreach and product offerings.
We have also further expanded our customer acquisition channels.
Speaker Change: In China, we have established customer acquisition collaborations with leading internet platforms through API connections.
Speaker Change: in Indonesia. They are expanding beyond online into providing consumption loans in offline sightings.
Speaker Change: In the Philippines, we have been growing our binoculator product with OS partnership with leading e-commerce platforms as well.
Speaker Change: Both started by our robot's operational result. Total rhyming news for 2024 reached 30.1 billion RMB, up 4% year over year.
Speaker Change: Revenue from international operations rose 19% year-over-year to 2.5 billion RMB. Representing for a four-year 2024.
Speaker Change: We also improved our funding cost by over 200 basis points during the year, thanks to our sample liquidity and validated track record in risk performance.
Speaker Change: By maintaining our long-term development trajectory and enhancing operational efficiency, we will lead a solid foundation for continued growth in 2025 and beyond.
Speaker Change: Our commitment to innovation is a primary driver for these positive outcomes. In 2024, we invited a promise to the 500 meeting in R&D bringing our cumulative R&D over the last five years to 2.3 billion.
Speaker Change: As of December 31, 2024, we employed a dedicated R&D team of around 700 skilled professionals.
and we built a comprehensive IP portfolio.
Speaker Change: Comparizing 287 registered software copyrights and successful filing of 196 patent applications with 58 invention patents already granted.
Speaker Change: Let me walk you through a few R&D highlights over the past year in 2024. We have completed a significant upgrade in AI by integrating the full version of DeepSeek R1 into our technologies.
Speaker Change: which already incorporated 17 years of credit data and dominant knowledge.
Speaker Change: With this upgrade, we are now able to further automate some of the processes in marketing content creation, customer acquisition, and servicing, resulting in better productivity.
Speaker Change: For example, our internal pilot testing indicated AI-procidated content can generate 60% potential reduction in advertising production costs.
Speaker Change: AI-powered customer service and acquisition can more accurately identify the customer demand and concerns, leading to 9% increased employers' conversion rate.
Speaker Change: On the risk management front, the enhanced AI model enables us to better identify fraud from deep-fake technology, with an accuracy of up to 99%.
Speaker Change: We are also proud to share that we have completed the General AI Service Registration.
Speaker Change: with the Cypress-based administration of China for our right-seat, large-language model.
Speaker Change: Not only violating regulatory recognition, but also allow wider protection to consumer applications which we will explore in the future.
Speaker Change: To date, we have published and presented more than 25 papers at top-tier international artificial intelligence conferences.
Speaker Change: These three of these papers were recognized as the best papers at the top-tiered conferences.
Time stretching our leadership in this field.
Speaker Change: As we have mentioned previously, we have set a target of reaching 50% of revenue from international markets by 2030 and our legal strategy.
Speaker Change: and pleased to say that our strong strategic institution had paid off over the years.
Speaker Change: to 10.3% in 2022, to around 20% in 2024. Looking ahead, we expect international business to play an even greater role in our company, supported by our validated successes in Indonesia and the Philippines.
We plan to accelerate our international expansion efforts this year.
Speaker Change: For 2020-25, we anticipate the total revenue will increase between 10% to 15%, and the international revenue contribution will further increase to around 25%.
Speaker Change: Let's move on to ESG, in line with our social responsibility goals. We depend our commitment to financial inclusion in Tan D Tan before.
Particularly with respect to Small Bay and its owner.
Speaker Change: We believe the three things the more business are the heart of a higher economy. That's why we will constantly support their efforts to create jobs and foster hyper-local economic prosperity.
Speaker Change: in 2024. We empowered 836,000 small business owners with loans totaling 58 billion RMB, up to 2% and 23%, respectively year over year.
Speaker Change: We also published our first consumer protection annual report in 2024. One of the many ways we integrate our consumer protection into the group's ESG strategy.
Speaker Change: This initiative aims to enhance boroughs financial literacy, promote financial inclusion, and it consists to stimulate the river, exception, no consumer experiences.
Speaker Change: Contributing to our outstanding borrower satisfaction rate of 98.9% and proud to report that our ESG efforts continue to bring accolades from leading international rating agencies.
Speaker Change: In 2024, on your start and SNP, among others, ranked as a top-tier ESD performer within the diversified financial industry.
Speaker Change: In summary, we successfully leveraged and expanded our strengths in technology, customer acquisition and the rotation to deliver solid results and made a challenging environment in 2024.
Speaker Change: So, firm execution of our local excellence, global auto-look strategy, a sharp focus on AI innovation, and deep dedication to our mission of financial inclusion.
Speaker Change: We continue to advance and accelerate our progress in the 16-hour long-term girls trajectory.
Speaker Change: Our accomplishments in 2024 has both stirred our confidence in achieving our vision for 2025 and beyond to become the leading Fin type player across the financial region.
Speaker Change: We will continue to work tirelessly towards that goal and look forward to sharing our successes with our customers, shareholders and the communities in the regions that we are offering.
Speaker Change: With that, I will now turn the call over to our third floor, Jiayuan Xu, who will discuss our operational and financial results. Thank you, Lee, and hello, everyone. Welcome to our first quarter and the full year 24 earnings call.
Let's go through our key results for the fourth quarter.
Speaker Change: To be mindful of the lands of our earnings quarter day, I encourage listeners to refer to our fourth quarter and a full year earnings press release for the details.
Xiaoxiong Ye, Yada Li,
Speaker Change: China's recovery was uneven throughout the 2024, and the fourth quarter was no exception.
Speaker Change: China's GDP expanding by 5% for the Fuyi, various uncertainties persist and the consumption
Speaker Change: On a bright note, data from the recent Chinese New Year holidays show that 500 and 1 million domestic trips were undertaken, representing a year-over-year increase of 5.9%.
Speaker Change: Total spending on domestic travels amounted to 617 billion yuan, marking a year-on-year
Speaker Change: We successfully navigated this tuberous by capitalizing our operational and the tax trends to achieve consistent growth throughout the 2024 and the beyond.
Speaker Change: of a long application ready to remand the strong following the end of September's
Speaker Change: As a result, during the fourth quarter, transaction volume and also a new loan balance for the increase to RMB 54 billion and RMB 69.8 billion, up 8% and 6% respectively year over year.
Xiaoxiong Ye,
Speaker Change: We continue to drive progress across multiple operational metrics in our China market during the
Xiaoxiong Ye, Yada Li,
Speaker Change: Criminatively, we have served 26.8 million followers in the China market with the number of unique followers in the fourth quarter remaining steady at the 2.1 million.
Speaker Change: Our consistent investments in IND led to a further improved day-wind delinquishing rate of 4.7% in recent weeks.
Speaker Change: given the ongoing recurring consumer competence and our holistic enhancement to technology and operational system.
Speaker Change: We expect vintage delicancy for the quarter to improve to around 2.4%.
Xiaoxiong Ye,
Moving out to our second-year-old driver, our international marquee [inaudible]
Speaker Change: Which continue to grow rapidly and deliver an increase in revenue contribution at the group level?
Speaker Change: As of the end of the fourth quarter, we have cumulatively filled around seven million followers in international markets.
Speaker Change: Notably, we have acquired around 2.2 million new powers in 2004 from a variety of channels Up 60 will present year over year.
Speaker Change: For the first time, International Transaction Volume Exceeded on the 10 Billion for the full year. While standing loan balance reached on the 1.7 billion, up 28% and 13% respectively over year.
Xiaoxiong Ye, Yada Li,
Speaker Change: Specifically, for the fourth quarter, international transaction volume reached on the 2.9 billion of 26% year-over-year and the same percent sequiturally.
Speaker Change: Notability, during the fourth quarter, revenue for international markets was expanded to be 700 and a 39 million of 23% year-over-year and accounted over 22% of total revenue.
Speaker Change: Let's look more closely at our foot in the largest overseas market in Indonesia.
Speaker Change: For the four year of 2024, Indonesia's economy grew over 5% compared to 2023.
Given primary by increased household spending and investment,
Speaker Change: Notably, the consumer confidence index in Indonesia has a demand above 100% and 20% for two
Intertember, China, Nufu [inaudible]
Speaker Change: Expectations of a more favorable macroeconomic economy and stabilize the regulatory environment for Indonesia's national election boosted Indonesia's manufacturing PMI to 51.2 points.
Speaker Change: Makae S. Forza, Ritun, about 15 points in June .
Speaker Change: For the full year of 2014, motorbike sales in Indonesia increased by 1.5% over year to 6.3 million units.
I also want to highlight that in January , 2025,
Speaker Change: Indonesia joined BRICS, a strategic move that will allow the nation to leverage various economic opportunities and partnerships.
Speaker Change: Accelerate its development agenda, diversify trade and attract a crucial investment in powering its domestic economy and its position in the global trade landscape.
Yada Li, Thomas Chong, Jiayuan Xu,
Speaker Change: Indonesia's interest rate reduction implemented in January 2024 poses some challenges to our
Speaker Change: However, we quickly adjusted our operations to adapt to the new interest rate cap.
Speaker Change: Successfully completing the transition within the first five months of the year.
Speaker Change: During the second half of 2024, our Indonesia Transaction Volume goes to Mb3.7 billion of 11% compared to the first half of the year.
Speaker Change: We are also proud to share that with the Successful Transition, we continue to attract new funding partners such as Super Bank to support all requests for financial inclusion in Indonesia.
Speaker Change: To date, we have 10 solid and active founding partners in the country.
Speaker Change: With the new business model firmly in pace, we are confident of returning to exaggerated goals in the country.
Xiaoxiong Ye,
Speaker Change: I also want to highlight that of several quarters of preparation, we have successfully acquired a large majority state in the local multi-finals company, which will enable us to diversify our product into offline consumption loans, with different scenarios such as mobile and electronic devices.
Speaker Change: This incident will empower us to expand our presence to serve more followers.
Speaker Change: The completion of this acquisition underscores the regulatory trust trust and the confidence in our local operations.
Xiaoxiong Ye, Thomas Chong, Jiayuan Xu, Jimmy Tan
Speaker Change: The Philippines, our second international market, achieved an economic growth rate of 5.6% for 2024.
Speaker Change: Position it as the one of the finest growing economies in the Asia-Pacific region.
Speaker Change: As a manufacturing PMI has remained above 50 points for three consecutive years and an employment rated by 80 beeps from 3.9% in Oktuba to 3.1% in December 2024.
Reflecting, Substant and Video Activity
Speaker Change: Hayton, the production and the heritage job creation, a Yasko and the growing population stable inflation, and the consistent remittance for overseas fellow panel workers are also
Xiaoxiong Ye,
Speaker Change: Also, final consumption expenditure recorded the highest the year-on-year growth rate at 9.7% in 2024.
Speaker Change: Together, this condition is to create a solid foundation for the stand economic course.
Xiaoxiong Ye,
Speaker Change: Our operations in the field being continue to grow rapidly in 2024. With the transaction volume we shall be 3.1 billion for the year up 138% year-over-year.
Speaker Change: We are the first platform in the country to introduce the concept of institutional funding through our loan prostitution model in 2024, with a list of reliable trusted partners.
Xiaoxiong Ye, Yada Li,
Speaker Change: We are also proud to share that the percentage of the loan facility by local financial institutions has grown from nearly 10% in the first quarter of 2024 to around 17% in the first quarter of 2024.
Speaker Change: Going forward, we are confident of maintaining high double-digit goals in the Philippines as we cement our rules in the country.
For the expand our funding sources, and the diversify our business models.
Speaker Change: and a part of our strategy to translate to better quality borrowers.
Speaker Change: Our exciting initiative, we have undertaken in the Philippines, is our local operation with mainstream e-commerce pioneers such as TT and other leading players to promote Bind Operator Model
Speaker Change: by directly embedding FinTech capabilities in the e-commerce platform's payment interface.
Speaker Change: We gradually broaden our reach while also facilitating financial inclusion for more Philippines consumers.
Speaker Change: Internet 4, the final period model contributed 19% of Philippines' transaction volume and we expect further contribution from this segment internet 5.
Now, see you to our final matches.
This culture's operational actions resulted in a solid financial performance.
Speaker Change: Now revenue for the 4.8, which I believe is 3.5 billion, marking a 7% increase the over a year and a 6% increase increasingly.
Speaker Change: Meanwhile, sales and marketing expenses rose by 8% year-over-year to R&B 500 and 32 million as we continue to stress efforts to acquire new boroughs of high quality in both China and international markets.
Speaker Change: Furthermore, our laboratory research defined as risk-bearing loans divided by shareholder's equity
Reflecting potential growth opportunities as the macroeconomic environment stabilizes.
Speaker Change: showcasing a robust, basic balance sheet that is well able to support our business girls across multiple countries where consistently increased shareholder returns.
Xiaoxiong Ye, Yada Li,
Speaker Change: Before I conclude, a few words about our ongoing efforts to ensure that there is value.
Speaker Change: Since 2018, we have continuously written value to our shareholders in the four-mile-for-share of the repurchase and the dividends.
Speaker Change: Recently, our Board of Directors approved our seventh annual dividend in the amount of US $0.277 per ADS, reflecting a DPS increase of 17% year-over-year.
Speaker Change: After sought for consideration, our Board of Directors have also approved the revision of a given policy from no less than 10% of net income to between 20% to 30% of net income 425 onwards.
Validated, the cabinet's commitment to enhancing Xiaoxiong Holder's value.
Speaker Change: We believe the current environment presents an opportunity to further increase shareholder value and share the purchase of an effective capital management tool to achieve our goal.
Xiaoxiong Ye,
Speaker Change: For 4-year tour number 4, we return the total of over US 116 million to our shareholders consisting of US 17 million in dividends and US 19 million through shared repurchase
representing a total payout of 49% of 24 net income.
Speaker Change: As of December 31, 2004, the company has collectively returned the US 765 million to our shareholders, demonstrating our world-consistent commitment to enhancing shareholder value.
Xiaoxiong Ye, Yada Li
Speaker Change: In summary, our BNS continued to glow and thrive in alternative four through firm execution of our local excellence global outlook strategy.
Speaker Change: Despite an even micro-environment for 2025, we will remain committed to expanding our international presence and diversifying our product offer.
Speaker Change: We are providing a standing service to a growing consumer base and a home and a board.
Speaker Change: As shared previously, we have established a target of achieving 15% revenue contribution from international markets by 2030.
Speaker Change: In lieu of this, we would like to introduce our Rhyme New Gardens 425 to be in the range of around the 14.4 billion to the 15 billion representing an increase of between 10% to 15%
Speaker Change: So, that concludes my prepared remarks. We will now open the quantitative questions, Operator, and continue.
Speaker Change: Thank you. If you'd like to ask a question, please press star then want on your telephone.
Speaker Change: If you would like to enjoy your question, please press star them too.
Speaker Change: For the benefit of all participants on today's call, if you wish to ask your question to management in Chinese, we ask you please kindly repeat your question in English.
Speaker Change: Today's first person comes from L&T with UBS, please go ahead.
Xiaoxiong Ye,
Speaker Change: The goal is to achieve a 50% contribution to revenue, so I would like to further inquire about some details regarding cost reduction. For example, we have observed that the overall revenue from overseas currently accounts for about 20% of the group's total.
Speaker Change: But what is the overall scale of these several operating cost items, and how do you view the costs in 2025, particularly the expansion of overseas costs?
Uh, a rhythm, and then how to project their contribution to the overall profit of our group. The second question is about um.
Speaker Change: As for shareholder returns, looking ahead to 2024, the overall shareholder return is approximately a 50% payout ratio. This includes nearly 20% in dividends and 30% in buybacks. Of course, we also observe the pace of these buybacks.
Speaker Change: It seems that there was a noticeable acceleration compared to the previous year. So looking forward, it should be 2025, right? How do we view the overall distribution ratio and the ratio distribution between these two?
Speaker Change: So I'll translate for my question. Our first question is about your international business. So we are glad to see the company's target of international environmental contribution to raising to 50% of the group by 2030.
Speaker Change: So I just want to have some more color in terms of the operating cost base for the overseas segment. For example, what's the total of all packs for this and then the ecstatic growth for this year.
and down to the bottom line contribution for this year.
Second question is about your shareholder's return policy.
So, we have noted that the company has ended up paying
Speaker Change: about 50% of the payout in last year, consisting of about 20% in cash and 30% rear buyback.
Speaker Change: and we have noticed that the pace on pay-by-back has a side-arrhythmic visibility from previous years. So, how should we think about the total pay-out going forward for this year and then this bleak-playing catch-and-pick-bye-back?
Xiaoxiong Ye, Yada Li,
Okay, next next. I will check your questions.
Speaker Change: Your first question is about our overseas business. Okay, thanks for your attention for our ambitious target by 2030. Okay, and you have to see, we have shifted our guidance from the rejuvenation to revenue.
Speaker Change: These adjustments are closely aligned with our long-term strategy to go by twenty-three teams.
Speaker Change: It provides the shareholders with a more transparent and specific room map in understanding the company's long-term strategic goals.
Xiaoxiong Ye, Yada Li
Speaker Change: Well, there was subject to the different stages of the business, okay?
Speaker Change: So, the preparation of the operation costs were decreased, where our bareness, operations entered the mattress stage, and that the unit economics will improve as well.
Speaker Change: I will give you some examples. In 2024, we achieved a profit of 5 million dollars in the niche. And in 2025, we expected that the profit of buying the niche here will be at least double.
Speaker Change: And for our free-to-beam market, at what that law is seeing in Turnivore, and we expect it will begin to make profit graduates from Turnivine.
Speaker Change: So, the cooperation of profit from these two countries will increase significantly in 2025.
Speaker Change: But also, you know, we were exaggerating our overseas expansion, so it will require initial investment in the early stage.
Speaker Change: and they will have some, you know, shared impacts on our fortitude.
Speaker Change: But, General speaking, if we are looking ahead to the 2030, the percentage of the international profit contribution is sure to rise. And the pace of the increase should be tied to the development of our business.
Yada Li, Thomas Chong, Jiayuan Xu, Jimmy Tan
Xiaoxiong Ye,
And your second question is about what Xiaoxiong Hu did written, okay?
Speaker Change: You know, we are committed to delivering the down-term, sustainable returns to our shareholders.
Speaker Change: We aim to create a value for our shareholders, primarily through the sustainable and rapid growth of all the business.
Speaker Change: and also we are exploring to utilize the capital tools to reward our shareholders.
Speaker Change: Although we have mentioned since 2018, we have convictively distributed a difference and conducted a share buy-backs for seven years.
Speaker Change: as I've made one more of the earliest in the industry to do so.
OK.
Speaker Change: So, over the past seven years, we have received a total of $65 million to our shareholders by these two methods.
and almost close to the 40% of our market cap.
https://www.youtube.com.au
Speaker Change: And then in China, therefore, we deployed 19 million foreshared repurchase and the distribute to 17 million US individuals.
Speaker Change: It's a resulting total kept return of $160 million for shareholders, and it represents almost 49% of the net profit.
Effie Louise, our long-term capital written strategy.
Xiaoxiong Ye,
Speaker Change: And although we have mentioned, we have revised our dividend policy to raise the payroll ratio for at least 10% to the range of 20% to 30% of that profit.
Thanks for watching!
Speaker Change: Okay, the revision reflects all the strong commitment to rewarding our shareholders.
and for Chinese report.
Speaker Change: The given in the purchase reached a US 0.277, representing a 17% increase compared to the previous year.
Speaker Change: and this much the spiff's consecutive year of DPS goals with a 5-year k-group of 80%.
and Addestam Tan.
Speaker Change: A World Board of Directors has approved a fourth share repurchase program of an allocation of $115 million with a duration of two years.
Speaker Change: Basically, the specific execution will depend on market conditions, the liquidity and the liquidity transfer requirements, okay.
and consistently utilizing the capital tools to what all was shareholders.
Speaker Change: and then supported by the strong cash flow and the solid profitability, even during the, you know, we accelerated the phrase of go-by-expression, we are capable of balancing the downturns, strategic investments with the increasing shareholder return, okay.
Speaker Change: and also I want to do attention is the revision of our work given in policy indicates the company we have the flexibility to create the value for our shareholders.
Okay, thanks.
Yaro Li: Thank you, and I'd like to ask questions from Yada Li at CICC. Please go ahead.
Xiaoxiong Ye, Yada Li,
Yada Li: Hello Director, thank you for giving me the opportunity to ask questions. Today, I have two questions. The first one is about Q4 2024 and Q1 2025. Currently, we are observing a trend of recovery on the demand side. How do we view the growth expectations for domestic business in 2025?
Yada Li: The second question is about how the integration of DeepSeek with the company can help improve the efficiency of the system. In the future, will it help us reduce overall credit risk and enhance profitability potential? Thank you.
Xiaoxiong Ye,
Speaker Change: Today, I will do the translation, hello management. Thank you for taking my questions.
Yada Li: The first one is about the user demand and the KU elaborate more about whether there is a sense of user demand recovery in 4Q24 and 1Q25
Yada Li: Additionally, how to view the loan guidance of domestic business for 2025.
Yada Li: Secondly, the question made about the progress of AI development.
Speaker Change: I was wondering how the AI tools such as DeepSafe utilized to help increase the operational efficiency and are there any potential for decreasing the overall credit risks and increasing the profitability in future and that's all. Thank you.
Speaker Change: Okay, next, Yada, I will take your first question and team will take your second question.
Speaker Change: You know, the customers are mounting the fourth quarter and continue their recovered trend, although we have observed the last quarter in Tan Chenli 4.
Speaker Change: In terms of the quarter-on-quarter and the year-on-year basis, the growth rate exceed. It is 10%.
Speaker Change: So it reflects the gradual recovery of all the consumer confidence in the second half of the year.
Speaker Change: And if we look at the full year of 2004, we have observed the consumer demand, the exhibit pattern of being weaker in the first half and the stronger in the second half.
Speaker Change: and that the recovered trend in the second half will be expected to continue in 2025.
Speaker Change: And for the first quarter of 2025, you know, it's always the typical late season-long period due to the factors such as the Chinese New Year holiday
We have all preserved the custom of the modern remains of the resident.
Speaker Change: Okay. And the, for example, the application volume shows a high single digit year-to-year
Speaker Change: So, it will lead us all the foundations from our full year development.
Speaker Change: and also at the national level, the government is actively implementing various measures to boost the consumer confidence.
following the two sessions meetings.
Speaker Change: And also, you must have seen the notice from last week, the National Financial Regulator of the Administration issued a document to encourage the healthy development of
Speaker Change: So we believe in this series of regulatory measures where larger boosts the factors' confidence and
Speaker Change: that will provide support for the continued recovery of consumer sentiment.
[inaudible]
Speaker Change: So, look ahead, we are optimistic to wait and see those detailed implementations for consumer finance from regulatory sites, and the consumer-quieted demolities expect to receive an additional boost.
Speaker Change: and it will launch a stable and a positive growth trend in our domestic business.
Thank you.
Speaker Change: Hai Yada, this is Tiezheng, I will answer the AI question.
Speaker Change: Generally, we are very excited about the AI opportunities in front of us.
Speaker Change: and we have explored integrating AI into various parts of our business.
Speaker Change: Last November , just as I mentioned, we successfully completed the General AI Service, fighting with Cyberspace of the Administration of China.
for our self-divide direct-seed larger-language model.
Speaker Change: With this qualification, we are now able to integrate a larger, longer model into customer facing application.
Like customer service, user acquisition, and loan collections etc.
Speaker Change: We have also debuts for our AI agents and AI automation tools for our operations.
Speaker Change: from user acquisition, customer service, crisis management, to process automation.
Here are some examples.
Speaker Change: The first example is on our user acquisition and customer service.
We use AI to simplify the content production process.
Speaker Change: In our recent pilot tests, we were able to generate 50% of our idealizing content with the AI.
We have also implied AI bots for our customer service.
The second example is about credit risk.
Speaker Change: With AI and our domain data, we create AI model that successfully identifies fraud, a credit application based on deep-sake technology in Indonesia, and we are replicating the experience in other countries.
and the Lone Collection Fund.
Speaker Change: We are developing AI powered bots that are capable of calling and interacting with customers for early
Typically, these are the first three days of overdue.
Speaker Change: The AIBOTS is optimized and replicate human-like conversation capabilities from tone, pitch, rhythm, and general ability to react to complex emotion and the intention from human conversation.
Speaker Change: and additionally by analyzing factors such as repayment timelines mentioned by user, their adjuds and emotions and the system comprehensively assesses their willingness to repay and the site's timely reminder.
and the third example is on our process automation.
Speaker Change: Now some of our automation are progressively implemented across our organization. For example, code generation, AI agents for documents, review and facilitated booking and management.
Speaker Change: Overall, we see a lot of opportunities from EA and we will continue to explore the potential applications in our business. Thank you, Yada.
Speaker Change: Thank you, and our next question comes from Cindy Wang, which are the Renaissance. Please go ahead.
Cindy Wong: Thank you for the opportunity to ask about achievements. My question is about international business because we see that the overall development of international business is very rapid. Now, in addition to Indonesia and the Philippines, we have also entered Pakistan.
Cindy Wong: So could you tell me about the layout and outlook in these three markets this year?
Then I'll quickly translate my question
Speaker Change: So your international market is growing fast and now you operate not only in Indonesia and Philippines, but also in Pakistan. So could you talk about your international business expansion strategy and I'll look in these three markets in 2025? Thank you.
Speaker Change: Thanks, Cindy. There's a team. There's a Tiezheng. I will answer the question. First, it's about Indonesia. In the past year, the Indonesia business of the achieved two significant milestones.
Speaker Change: The first one is the successfully completed transformation to target higher quality customers within six months.
Speaker Change: After the pricing adjustment, the business returned to a healthy growth.
Speaker Change: The average loan amount per customer increased by 12%, well, risk decreased 25%, and the customer acquisition cost improved by low double digits, and this take a return to prior judgment
Speaker Change: Now, members of our institution of founding partners reached their 10th and the business achieved the full year of profitability for the first time.
Speaker Change: And the second milestone is we complete the acquisition of around 84% stake in the multinationalization.
Speaker Change: and began laying the groundwork for offline business operations, combining multiple channels and scenarios. And also in Indonesia, there has been some positive development on the policy front.
Speaker Change: at the end of 2024, the Indonesia Financial Regulatory Authority, or OJK.
Speaker Change: is still the new interest rate adjustments inside of the previous plan to reduce fees to 0.2 percent.
The new policy difference pricing based on loan tenor.
Speaker Change: The interest rate kept for long with a 10-year-of-six months or less is set at 0.3%, while long with a 10-year-of-exceeding six months, have a cap of 0.2%, 0.2%.
Speaker Change: Given that our average loan tenure is about three to four months, so the impact on our
Speaker Change: So this policy shifts signals a child in object stance, animating long-term regulatory and certain things and providing such strong support for our sustainable growth.
Speaker Change: And the looking of high defaults of the year, the Indonesia business is expected to continue its growth trajectory while maintaining healthy profitability. Just as Alexis mentioned, the Indonesia business achieved a net profit of US $5 million.
Speaker Change: and is projected to at least double its net profit in 2025.
Speaker Change: and the Philippines part. The Philippines business achieved three major milestones in last year. The first one is we have rapid expansion in cash alone business.
Speaker Change: The transaction volume was more than double the year over year, and the business successfully reached the breakeven by the year end.
Speaker Change: The second line is we broke through in targeting higher quality customer segments and the installments and narrals
Speaker Change: We established a strategic partner with Tiktok Shop to provide online installment payment service for its users.
By 2024, TikTok-related transactions are counted for 19% of total volume.
Speaker Change: and we saw rapid growth in the number of institutional partners reaching 5 by 2024.
Speaker Change: and the proportion of institutional funding increased significantly, from 10% as the beginning of the year to nearly 7%.
by Year End.
Speaker Change: Looking at the third bean business is expected to maintain rapid growth, with the share of financial pay later transaction further increasing. At the same time, the third bean business will begin contributing profit to the group.
Speaker Change: and the last is for the new market expansion. In terms of the new market expansion, we obtained a non-banking financial company, NBFC license from the Security and Exchange Commission of Pakistan at CCP.
Speaker Change: And we plan to accelerate our operations in Pakistan in 2025. We also actively, actively continue exploring opportunities in other countries.
and the Vivier Chair, more updates than a pro-appreciate.
So, thanks in this.
Speaker Change: Thank you. As there are no further questions now, I'd like to turn the call back over to the company for closing remarks.
Speaker Change: Thank you again for watching us. If you have any further questions, please feel free to contact Pimpil N?ian Group Best of Relations team.
Xiaoxiong Ye, Yada Li,
and have a nice view.
Speaker Change: Thank you, sir. This includes the conference call. You may now disconnect your lines. Thank you.
[music]