Q1 2025 FinVolution Group Earnings Call
Operator: Ladies and gentlemen.
Operator: Thank you for participating in the first quarter 2025 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. Today's conference call is being recorded.
Hello, ladies and gentlemen.
Thank you for participating in the first quarter 'twenty 25 earnings conference call.
Sure.
At this time, all participants are in listen only mode.
After managements prepared remarks, there will be a question and answer session.
Operator: I will now turn the call over to your host, Yam Cheng, Head of Capital Markets for the company. Yam, please go ahead. Thank you. Welcome. Hello, everyone.
Today's conference call is being recorded.
Speaker Change: I will now turn the call over to your host Yeah, I'm, sorry, I have a couple of markets, where the company. Yeah. Please go ahead.
Operator: Welcome to our 2025 First Quarter Earnings Conference. The company's results were issued via newswire services earlier today and are posted online.
Speaker Change: Thank you Rocco Hello, everyone. Welcome to our 2025 first quarter earnings conference call. The company's yourselves with issue via Newswire services earlier today and are posted online you can download the earnings release and sign up for the company's E mail alerts by visiting the IR section of <unk>.
Operator: You can download the earnings release and sign up for the company's email alerts by visiting the IR section of our website at ir.finvgroup.com Mr. Tiezheng Li, our Chief Executive Officer, and Mr. Jiayuan Xu, our Chief Financial Officer, will start the call with the preparing remarks and conclude with the Q&A section. During this call, we will be referring to several non-GAAP financial measures to review and assess our operating performance. These non-GAAP financial measures are not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with U.S. GAAP.
Speaker Change: Website at IR <unk>.
Speaker Change: Dot com, Mr. Li our Chief Executive Officer and me.
Speaker Change: Mr. Yao you issue, our Chief Financial Officer will start the call with the prepared remarks and conclude with a Q&A session.
Speaker Change: During this call we will be referring to several non-GAAP financial measures to review and assess our operating performance.
Speaker Change: These non-GAAP financial measures are not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with U S. GAAP.
Operator: For information about these non-GAAP measures and the cancellation to GAAP measures, please refer to our earnings press release.
Speaker Change: Information about these non-GAAP measures.
Speaker Change: Nation to GAAP measures. Please refer to our earnings press release.
Operator: Before we continue, please note that today's discussion will contain four looking statements made under the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Four locking statements involved inherent risks and uncertainties. As such, the company's results may be materially different from the views expressed today. Further information regarding these and other risks and uncertainties are included in the company's filings with the U.S. Securities and Exchange Commission. The company does not assume any obligation to update any forward-looking statements except as required under applicable law.
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 Securities Litigation Reform Act of $19 95.
Speaker Change: Forward looking statements involve inherent risks and uncertainties as such the company's yourselves may be materially different from the views expressed today.
Further information regarding these and other risk and uncertainties.
Speaker Change: Included in the company's filings with the U S Securities and Exchange Commission.
Speaker Change: Company does not assume any obligation to update.
Speaker Change: Any forward looking statements, except as required under applicable law.
Operator: Finally, we posted a presentation on our IR website providing details of our results for the quarter.
Speaker Change: Finally, we posted a presentation on our IR website, providing details about we thought for the quarter.
Tiezheng Li: Now, I will turn the call over to our CEO, Mr. Tiezheng Li. Please go ahead. Thanks Yan. Hello everyone and thank you for joining our news call. This is Tiezheng Li, CEO of FinVolution Group. We are happy to speak with you today. We are pleased to report that FinVolution delivered strong financial and operational results in the first quarter of 2025. through effective execution of our local excellence global outlook growth strategy. While navigating the expected seasonal softness in the sector, we achieved 10% year-over-year revenue growth, fueled by our expanding take-away rate in China and surging international demand.
Speaker Change: Now I will turn the call over to all our CEO. Mr. <unk>. Please go ahead.
Mr. <unk>: Thanks, Jenn and Hello, everyone.
Mr. <unk>: Thank you for joining our earnings call, especially children D C O oxime elution cool.
Mr. <unk>: Yeah happy to speak with you today.
Mr. <unk>: We are pleased to report that evolution do you really delivered strong financial and operational results in the fourth quarter of 2025.
Mr. <unk>: So if I could take the execution of our local excellence global all look good with the strategy.
Mr. <unk>: We are navigating the expected seasonal softness in the sector.
Mr. <unk>: Achieved 10% year over year revenue girls.
Mr. <unk>: I'll, let Andy take rate in China and surgery International demand.
Tiezheng Li: International transaction volume grew robustly, up 36% year-over-year, complementing China's slightly 7% growth. These successes draw a record-breaking quarterly net profit of 738 million RMB, the highest since our transition to a loan facilitation model in 2019. This represented increases of 39% year-over-year and 8% quarter-over-quarter. Attestment to our operational excellence. We are mindful of ongoing macroeconomic uncertainties such as global trade tensions, property sector softening, and evolving regulations in China's consumer finance sector. we maintain a cautiously optimistic outlook. This confidence stems from two fundamental strengths in our business model. First, our proven reasoning. since our IPO in November 2017.
Mr. <unk>: International transaction volume grew robustly.
Mr. <unk>: 36% year over year.
Mr. <unk>: Complementing China.
Mr. <unk>: Southern percentage girls.
Mr. <unk>: Each successive job that Curt Brea breaching quarterly net profit.
738 meeting RMB.
Mr. <unk>: It's the highest since our transition to a loan facilitation model in 2019.
Mr. <unk>: This is represented increases of 13, 9% year over year, and 8% quarter over quarter attached.
Mr. <unk>: Attachment to our operational excellence.
Mr. <unk>: Well, we are mindful of ongoing macro economic uncertainties, such as global trade tensions property tour soft knee.
Mr. <unk>: And you've probably read regulation in China's consumer finance sector.
Mr. <unk>: We maintain a cautiously optimistic ultimately.
Mr. <unk>: This competence times from two fundamental strengths in our business model.
Mr. <unk>: First.
Mr. <unk>: Our proven resilience.
Tiezheng Li: we have successfully navigated multiple challenges. including our transition to an institutional funding model. Indonesia's Regulatory Change and the COVID pandemic. We have delivered consistent year-over-year growth in both transaction volume and revenue. for every single quarter since 2021. This track record demonstrates our ability to adapt to regulatory changes. and respond to market dynamics with agility and balance risk management with sustainable growth. Our strategic diversification initiatives in international markets continue to mitigate the impact of single-country risk. since entering Indonesia in 2018 and the Philippines in 2020. We have systematically built a broad-cred tech business designed to reduce geographic concentration risk.
Mr. <unk>: Since our IPO in November 20th 17.
Mr. <unk>: We have successfully navigated the multiple challenges in.
Mr. <unk>: Including our transition to our institutional funding model.
Mr. <unk>: Indonesia is regulatory change and the Covid pandemic.
Mr. <unk>: Notably.
Mr. <unk>: We have delivered consistent year over year girls in both transaction volume and revenue.
Mr. <unk>: Every single culture since 2021.
Mr. <unk>: This track record demonstrates our ability to adapt to regulatory changes.
Mr. <unk>: And to respond to market dynamics with agility and pilots rich combining my instruments, it's what's attainable girls.
Mr. <unk>: Second.
Mr. <unk>: Our third T J diversification initiatives.
Mr. <unk>: As you know market to continue to mitigate the impact of single country risk.
Mr. <unk>: Since entering in Indonesia in 2018, and the Philippines in 2020.
Mr. <unk>: We haven't stated my takeaway build a brown <unk> type of business designed to reduce Joker I take concentration risk.
Tiezheng Li: Our international business generated a total transaction volume of 3 billion RMB in the fourth quarter. and 36% year-over-year increase. This is our standing loan balance growing 46% to 1.9 billion RMB. Our international business contributes 20.4% of total net revenue in the first quarter, up from 18.8%. in the same period last year. We are on track to achieve our strategic goal of having international business contribute 50% of the group's total revenue by 2030. Our customer base remains the cornerstone of our long-term growth. In Q1 2025, we maintained strong momentum in borrower acquisition across all markets. onboarding 1.2 million new borrowers, up 62% year-over-year.
Mr. <unk>: Our international business generated a photo.
Mr. <unk>: Transaction volume 3 billion RMB in the fourth culture, and 36% year over year increase.
Mr. <unk>: This is outstanding loan balance growing 46% to $1 9 billion RMB.
Mr. <unk>: Our international business contribute 24% of total net revenue in the fourth quarter.
Mr. <unk>: Up from 18.8.
Mr. <unk>: In the same period of last year.
Mr. <unk>: We are on track to achieve our strategic goal of having an international business contributes 15% off the groups total revenue by 230.
Mr. <unk>: Our customer base remains the cornerstone of our long term growth.
Mr. <unk>: In Q1 hundred 95.
Mr. <unk>: Maintained strong momentum in borrower acquisition across all markets.
Mr. <unk>: On boarding one point too, meaning new borrowers up 62% year over year.
Tiezheng Li: This marked our third consecutive quarter, exceeding 1 million new borrowers. and showing the effectiveness of our AI-powered marketing strategy and diversified user acquisition channels. in China, we added 512,000 new borrowers, up 37% year-over-year, in our international market. We attracted 652,000 new borrowers, up 90% year-over-year. This marks the fourth consecutive quarter where international acquisitions have exceeded those in China. We expect this trend to continue, thanks to the rising penetration in online lending, as well as our strategic cooperation with the lending e-commerce and e-wallet platforms to acquire borrowers in international markets. Our technology initiatives continue to improve efficiency across our operations.
Mr. <unk>: This marks our third consecutive quarter exceeding one meaning new borrowers.
Mr. <unk>: And they're starting to affect any of our AI powered marketing strategy.
Mr. <unk>: And a diversified user acquisition channels.
Mr. <unk>: In China.
Mr. <unk>: I dated 512000, new borrowers almost 37% year over year.
Mr. <unk>: Our international markets.
Mr. <unk>: The <unk> 652, salt in your borrowers up 90% year over year.
Mr. <unk>: This marks the fourth consecutive culture, where our international acquisitions.
Mr. <unk>: Those in China.
Mr. <unk>: We expect this trend to continue.
Mr. <unk>: To the rising penetration online lending as well as our strategic cooperation with lending E Commerce and E wallet platforms to acquire borrowers in international markets.
Mr. <unk>: Our technology initiatives to continue to improve efficiency across our operations.
Tiezheng Li: We are exploring the use of large-language models in risk assessment, leveraging their diverse capabilities to automatically extract, analyze, and derive insights from unstructured data in consumer credit reports.
Mr. <unk>: We are exploring the use of a larger remodel in risk assessment leveraging their diverse capabilities to automatically extract analyze and derive insights from spark toward date in consumer Cry did report for instance.
Tiezheng Li: For instance. The frequency with which a borrower changes a residential address is unstructured, contextual detail that can provide valuable insights into the stability of borrower's work and living conditions. Larger long-brain models can automatically capture this type of contextual data and convert it into meaningful structured data that can be integrated into our existing risk assessment model to more comprehensively evaluate users' probability of default. In our recent A-B testing, our model achieved observable, statistically significant improvements, indicating enhanced risk assessment effectiveness. We've also made substantial progress in automation through our virtual representative program. By integrating large-language model, we will upgrade our natural language processing system with intelligent virtual agents.
Mr. <unk>: So frequency.
Mr. <unk>: Barbara change I'd say residential arthritis, it's unstructured contextual detail that you can provide valuable insight into the state pilot. So the ability of borrowers to work and are leaving conditions.
Mr. <unk>: Lots of luxury models can automatically capture at this type of contextual data and convert it into meaningful structured data that can be integrated into our existing risk assessment model to more comprehensively evaluates users' the probability of default.
Mr. <unk>: In a recent to a b testing our model achieved the Apis overbook, so they take totally significant improvements.
Mr. <unk>: Improvements.
Mr. <unk>: Indicating inhouse to risk assess them into effect when in fact it emanates.
Mr. <unk>: We've also made substantial progress in automation, so our virtual representative program.
Mr. <unk>: By integrating a larger luxury model.
Tiezheng Li: that can handle customers' acquisition and compliance workflow.
Mr. <unk>: Upgrade our nitro lung reprocessing system with intelligent virtual agents.
Tiezheng Li: looking ahead. We plan to expand their role across additional business functions to further boost operational efficiency.
It can handle customers acquisition and the complex workflow.
Mr. <unk>: Looking ahead, we plan to expand their job across additional business functions to further boost operational efficiency.
Tiezheng Li: Before I wrap up, a brief update on our ESG efforts. Our commitment to sustainable finance continues to deliver meaningful impact. in Q1 2025. We facilitated 15 billion RMB in financing for 442,000 small business owners. of 15% and 10% respectively. These small business loans represent 30% of our China transaction volume. demonstrating our ongoing support for the backbone of China's economy. We further solidified our position as an industry thought leader by serving as a co-contributor to the China Finance Consumer Rights Protection Blue Book. A key industry publication developed in a partnership with the National Internet Financial Association of China.
Mr. <unk>: Before I wrap up a brief update on our ESG efforts.
Mr. <unk>: Our commitment to sustainable finance continued to deliver a meaningful impact.
Mr. <unk>: In Q1 295 be foreseen at age 15, BT RMB financing for 442 solved and small business owners.
Mr. <unk>: Up 15, and 10% respectively.
Mr. <unk>: These small business loans represent 30% of our China transaction volume.
Mr. <unk>: Demonstrating our ongoing support for the backbone of China's economy.
Mr. <unk>: The furthest solid defied our position.
Mr. <unk>: That's treating salted leader.
Mr. <unk>: Serving as a.
Mr. <unk>: Contributor to the China Finance consumer rights protection Blue book.
Mr. <unk>: Okay industry publication devoted to our partnership with visa nation, the Internet Financial Association of China.
Tiezheng Li: With its release in March, we helped shape best practice in consumer protection and financial literacy nationwide. In conclusion, our strong first quarter performance reflects excellent execution of our effective local excellence global outlook strategy. looking forward. We are well-positioned to capitalize on emerging opportunities while maintaining the agility required to navigate the evolving landscape. Our diversified footprint, technological leadership, and commitment to sustainable growth position us well to continue creating value for all stakeholders.
Mr. <unk>: Vijay to relieve the March we helped shape best practices in consumer protection and financial literacy nationwide.
Mr. <unk>: In conclusion.
Mr. <unk>: Our strong first quarter performance.
Mr. <unk>: It reflects excellent execution of our effective local excellent global I'll look stretched you're.
Looking forward.
We are well positioned to capitalize on emerging opportunities, while maintaining the agility required to navigate the evolving landscape.
Mr. <unk>: Our vice flight footprint.
Mr. <unk>: Technological leadership and commitment to sustainable growth position us well to continue creating value for all stakeholders stakeholders.
Jiayuan Xu: With that, I will now turn the call over to our CFO, Jiayuan Xu, who will discuss our operational and financial results. Thank you, Tiezheng, and hello everyone. Welcome to our first quarter 2025 earnings call. Let's go through our key results for the first quarter.
John: I will now turn the call to a work over to our CFO, John <unk>, who will discuss our operational and financial results.
Thank you Caitlin and Hello, everyone.
Jiayuan Xu: To be mindful of the length of earnings call today, I encourage listeners to refer to our first quarter earnings price release for further details. China's microenvironment remains uncertain in the first quarter due to global trade tensions. However, there were some encouraging signs. China's GDP grew by 5.4% year-over-year, while retail sales rose by 5.9% in March. Total social financing expanded 8.4% in March, up from February. Added manufacturing PMI remained above 50 in February and March. Signaling Continued Recovery Momentum On the regulatory front, we are pleased to see policies supporting consumption and consumer finance, including increased liquidity and credit supply to boost consumption.
Speaker Change: Welcome to our first quarter earnings call.
John: Let's go through our key results for the first quarter to.
John: To be mindful of the lands of the earnings call today I encourage listeners to refer to our first quarter earnings press release for further details.
John: China's macro environment remain uncertain in the first quarter due to global trade of patients.
John: However, there were some encouraging signs.
John: S. GDP grew by five 4% year over year, while retail Silversea goes by five 9% in March.
John: Hello, Social finance, he expect 90 to $8 four per say and you March up in February.
Jiayuan Xu: I guess it's a bad job we delivered a solid domestic performance by leveraging our operational powers and tactics. Our China business achieved an increase in tick rate from 3.3% to 3.4% sequentially. thanks to our strong partnerships with 114 funding partners that led to a 10-basis-point decline in funding. on the credit front. Day One Delinquency also improved by 10 basis points to 4.6% and our 30-day loan collection rate had a steady at 89%. Turning to our international markets, although GDP growth in Indonesia and the Philippines showed marginally due to trade tensions and the tariff uncertainty, the overall economy remained resilient.
John: Yeah.
John: I guess it did a bad job, we delivered a solid domestic performance by leveraging our operational powers and attacks.
John: Our China business achieved an increase integrate for our three 3% to three 4% sequentially.
John: Thanks to our strong partnerships with 100 and the <unk> funding partners that lead to a 10 basis point decline in funding cost.
John: On the credit front.
John: They weren't delinquency also improved by 10 basis points to four 6% and our 30 day loan collection rate had a steady at 18, 9%.
John: Turning to our international markets, although GDP growth, Indonesia, and the Philippines showed marginally due to trade tensions and the uncertainty.
Jiayuan Xu: boosted by a large population with solid domestic consumption demand. a match credit demand from underserved communities in our footprint market continues to support our strong growth trajectory. Our total international transaction volume exceeds RMB 3 billion for the first time, up 36% year-over-year and 5% secretion. Outstanding loan balance rose to RMB 1.9 billion, up 46% year-over-year and 9% sequestration. Our cumulative international borrower base has now reached around 8 million. Notably, our unique borrower sold to a record high of 1.7 million in the first quarter, marking an impressive 106% year-over-year increase. As a result, revenue from international markets increased to RMB 711 million of 19.5% year-over-year.
John: The overall economy remained resilient.
John: Both of you to buy a large poverty issue with solid domestic consumption demand.
John: Our net credit demand and a slew of the communities, although food printer market continues to support our strong growth trajectory.
John: Our total international transaction volume.
John: <unk> 3 billion for the first time.
John: 36% year over year and 5% sequentially.
John: Outstanding loan balances rose to RMB, one 9 billion up 46% year over year and 9% sequentially.
John: Our accumulative international borrower based heightened our reach around $8 million.
John: Notably our unique borrowers sold to record high of $1 7 million in the first quarter, marking an impressive 100% and 6% year over year increase.
John: As a result revenue for our international markets increased to RMB 700, and the $11 million of 19, 5% year over year.
Jiayuan Xu: And for Indonesia, why we experienced some seasonal impact in March due to Ramadan? Girls continue at a measured pace in the first quarter. Indonesia's Consumer Confidence Index stayed above 120, maintaining its high level for nearly 2.5 years. Unemployment also reached its lowest level in the past 10 years during the first quarter. The change in the interest rate cap imposed at the end of 2024 has had a limited impact on our business, as our average loan tenure in Indonesia is less than six months. Moving forward, we will closely monitor potential effects from macroeconomy and domestic uncertainty.
John: And what Indonesia.
John: We experienced some seasonal impact in March due to revenue.
John: Growth continue at a measured pace in the first quarter.
John: Indonesia is the consumer confidence index data above 120, maintaining it at high level for nearly two.
John: Five years.
John: Unemployment also reached its lowest level in the past 10 years during the first quarter.
John: The change in the interest rate cap imposed entity and all the <unk>.
John: Has had a limited impact to our business.
John: Our average low tenure.
John: This year is less than six months.
John: Moving forward, we will closely monitor potential effects from macro economy, and the domestic and synergies.
Jiayuan Xu: Our transaction volume in Indonesia reached RMB 1.8 billion, up 10% year-over-year, while our standing balance hit RMB 1.2 billion, up 18% year-over-year. Our user base continues to expand, with unique borrowers reaching 671,000 of 32% year-over-year. With the interest rate cap overhand resolved, we allocated more resource to marketing and focus on quality growth. drive an increase in new borrowers to 312,000 this quarter. up 69% year-over-year and 4% secretion. leading cumulative borrowers in Indonesia to 5.3 billion. We also continue to diversify into offline consumption loans under the multi-finance license we acquired. broadening our reach to near-prime customers through scenarios like mobile phone and the electronic portrait.
John: Our transaction volume, Indonesia reached RMB, one 8 billion up 10% year over year, while outstanding balance Pete RMB, one 2 billion up 18% year over year.
John: Our user base continued to expand with unique borrowers, reaching 671000 up 32% year over year.
John: With the interest rate cap overheads resolved were allocated and more resource to marketing and focus on quality growth.
John: Driving an increase in our new borrowers to 312000 this quarter.
John: Up 69% year over year in the 4% accretion.
John: Greeting.
John: Accumulative borrowers Indonesia.
John: $5 3 million.
John: We also continue to diversify into offline consumption loan another module finance license that we acquired.
Jiayuan Xu: All of these efforts drove solid growth in Indonesia amid the seasonal impact of COVID-19.
John: Broadening our reach to near prime customers through scenarios like a mobile home and the electronic approaches.
Jiayuan Xu: Now let's zoom in on the Philippines. where we achieved rapid growth and profitability despite Q1 being the traditional low season. In the first quarter, our transaction volume in the Philippines reached RMB 1.2 billion, up 180% year-over-year and 18% integration. Outstanding loan balance also grew to RMB693 million, a 142% year-over-year and 26% secretion increase. It accounted for 37% of our international loan balance compared with 23% in the first quarter of 2024. Our outstanding performance in the Philippines has been driven by several key factors. including ongoing improvements in risk management and deeper collaboration with major e-commerce platforms to expand binopilator offerings.
John: All of these efforts drove solid growth in Indonesia, and made it a seasonal impact.
John: Of Remicade.
John: Now, let's zoom in on the Philippines, where.
John: While we achieved a rapid growth and the profitability despite Q1 being the traditional low season.
John: In the fourth quarter, our transaction volume, Philippines reached RMB, one 2 billion up 180% year over year and 18% sequentially.
John: Outstanding loan balance also grew to RMB 600 at a 93 million% to 142% year over year and 26% secretion increase.
John: It accounted for 37% of our international balance compared with 23% in the first quarter oftentimes kind of warm.
John: Our outstanding performance in the Philippines has been driven by several key factors.
John: Including ongoing improvements in risk management and deeper collaboration with major e-commerce platforms to expand by an operator offerings.
Jiayuan Xu: Our excellent asset quality has consistently attracted institutional funding partners. This quarter, we onboarded the Union Digital Bank as a funding partner with several additional institutions in the pipeline. The percentage of loans facilitated by local financial institutions remained around 70% for the quarter. Binocular business continues to grow, contributing 30% of Q1 volume, up from 19% in 2021. Going forward, we are confident of maintaining rapid transaction volume growth in the Philippines as we cement our roots in the country, further expand our funding sources, and diversify our business model.
John: Our excellent asset quality has consistently attract institutional funding partners.
John: This quarter, we are body of the Union digital bank as founding partner with several additional institutions in the pipeline.
John: The percentage of loan facilitated by local financial institutions remained around 70% for the quarter.
John: Ben Operator business continued to grow contributing 30% of Q1 volume up from 19% in 2024.
John: Going forward, we are confident of maintaining rapid to transaction volume growth in the Philippines.
John: We see meant our roofs in the country.
Jiayuan Xu: Moving on to our financial match. This quarter's operational excellence results in a strong financial performance. Net revenue for the quarter, which will be $3.5 billion, marking a 10% increase year-over-year and a 1% increase sequentially despite the low season. Net income was RMB738 million, representing a 39% increase year-over-year, and an 8% security increase. Meanwhile, sales and marketing expenses rose by 18% year-over-year to RMB 530 million as we continue to strengthen efforts to acquire new borrowers of higher quality in both China and international markets.
John: Expand our funding sources and diversify our business models.
John: Moving onto our financial metrics.
John: This quarter's operational excellence resulted in a strong financial performance.
John: Net revenue for the quarter reached RMB, three 5 billion, marking a 10% increase year over year and 1% increase sequentially. Despite the low season.
John: Net income was RMB $738 million, representing a 39% increase year over year and up.
John: An 8% sequential increase.
John: Meanwhile, sales.
John: Sales and marketing expenses rose by 18% year over year to RMB $530 million as we continue to suggest efforts to acquire new borrowers of higher quality in both China and international markets.
Jiayuan Xu: Labor Ratio. Defined as risk-bearing assets divided by shareholders' equity, improved to around 2.7 times. Our total liquidity position consisting of cash and cash equivalent plus short-term investment remained strong at RMB 8.5 billion.
Leverage ratio.
John: Defined as risk bearing assets divided by shareholders equity improved to around two seven times.
Our total liquidity position consisting of cash and cash equivalents plus short term investments remained strong at RMB eight 5 billion.
Jiayuan Xu: A brief update on our ongoing efforts to enhance shareholder value. Since 2018, we have continuously returned value to our shareholders in the form of share repurchase and dividends. Recently, our board of directors approved our 7th annual dividend in the amount of US 0.277 per ADS. reflecting a DPS increase of 17% year-over-year. This dividend was distributed on May 7, 2025, bringing our total dividend distribution to shareholders for fiscal year 2024 to US $70.3 million.
John: Next a brief update on our ongoing efforts to enhance shareholder value.
John: Since 2018, we have continuously return value to our shareholders in the form of share repurchase and the dividends.
John: Recently, our board of directors approved our <unk> and your dividend in the amount of U S. <unk> 77 per <unk>.
John: Reflecting a dps increase of 17% year over year.
John: This dividend was distributed on May 710, UNFI, bringing our total dividend distribution to shareholders for fiscal year 'twenty before to USD $72.3 million.
Jiayuan Xu: In summary, strong execution of our local excellence global outlook strategy job continued growth in the first quarter of 2025, despite micro headwinds and seasonal soft trends. We remain confident in capitalizing on China's recovery while maintaining momentum in our international expansion. As such, we are reiterating our 2025 full-year revenue guidance of RMB 14.4 to 15 billion, representing 10% to 15% gross year-over-year.
John: In summary, strong execution of our local excellence global outlook strategy drove continued growth in the first quarter the opportunity to fly despite macro headwinds and the seasonal softness.
John: We remain confident in capitalizing on China's recovery, while maintaining momentum in all way international expansion.
John: As such we are reiterating our Chinese and five full year revenue guidance of RMB 14 for 215 billion.
Operator: With that, I will now hand it over to our Q&A. Operator, please continue. Thank you!
John: Representing 10% to 15% growth year over year.
Operator: We will now begin the question and answer session. If you would like to ask a question, please press star then 1 on your telephone keypad. If your question has already been addressed and you'd like to remove yourself from the line, please press star then two.
With that I will now.
John: Now I'll hand, it over to Q&A.
Speaker Change: Operator, please continue.
John: Thank you.
Speaker Change: We will now begin the question and answer session.
Speaker Change: I'd like to ask a question. Please press Star then one on your telephone keypad.
Operator: And 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: If your question has already been addressed I would like to remove yourself from them.
Speaker Change: Please press Star then two.
Speaker Change: And for the benefit of all participants on today's call.
Cindy Wong: Today's first question comes from Cindy Wong at China Renaissance. Please go ahead. Okay, thank you for giving me the opportunity to ask this question, and congratulations on the company's outstanding performance in the first quarter. I have two small questions to ask. The first one is about the recent launch of the new generation of portable devices. Do you have any impression on the portable business in China? Could you please explain it to us? The second question is about the recent US tariffs. Have you seen the local consumer's loan demand in Indonesia or the Philippines has been slowing down since April?
Speaker Change: Ask your question to management insurance.
Speaker Change: We ask that you. Please repeat your question in English.
Cindy Wrong: Today's first question comes from Cindy wrong, China Renaissance. Please go ahead.
Speaker Change: That answers your question George I think Q1 next year quite yet.
Cindy Wrong: Sure.
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Speaker Change: Hello, Thiago Rafael Shin.
Speaker Change: And she said I'll make with our clients and that now puts it out now.
Cindy Wong: And how do you see the overall amount of overseas new loans in the second quarter? I will quickly translate my question. Thanks for taking my question and congrats for the great first quarter results. So I have two questions here. First, with the recent new regulation on loan facilitation in China, do you see any business impact from it? And what's our business adjustment for this? And second, so given the recent US tariff uncertainty, have you seen any impact on the Indonesia or Philippines consumption loan demand since April? And how do you expect the international new loan volume in second quarter?
Speaker Change: If anything the taper tantrum charter days at that point she transform.
Speaker Change: Sure.
Speaker Change: Are you asking about <unk>.
Speaker Change: Hey, why don't you guys can come back down now.
Speaker Change: <unk>. Thanks.
Speaker Change: Thanks for taking my question and congrats.
Speaker Change: Great quarter result.
Speaker Change: So I have two questions here first with <unk>.
Speaker Change: Anything new regulation on loan facilitation in China can.
Speaker Change: Can you see any impact from <unk> and our.
James: Thanks, James that Jackman forecasts.
Speaker Change: And second.
James: So given the season.
U S tariff risk.
James: Have you seen any.
Tiezheng Li: Thank you. Okay, thanks Cindy.
James: Impact on the Indonesia, Philippines consumption loan demand since April and how can you expect the international new loan volume in second quarter. Thank you.
Tiezheng Li: I will take your first question and Tim will take your second question. Well, your first question is about the new regulations. Yeah, you know, it's about the loan solicitation model. And the new regulation was announced in April and will be effective in October. I think it's the first time to clearly define the core model of loan facilitation as the loans issued by the traditional financial institutions through the external third-party platform. So it marks the official inclusion of the loan facilitation business in China's financial regulatory framework. It represents the regulatory authorities' formal recognition across the sector.
James: Yeah.
James: Okay.
Speaker Change: I will take your first crushing and Tim will it take for your second question.
Speaker Change: Well. Your first question is about the new regulations, yes.
Speaker Change: It's about the loan facilitation model and.
Speaker Change: The regulation was announced in April and we're being effective in October.
Speaker Change: I think that's the.
Speaker Change: The first time to clearly defines the Coe model of long presentation.
Speaker Change: Those issued by the traditional financial institutions through the extra nose to the party platforms.
Speaker Change: So as it marks the official <unk> of the loan facilitation business in China as the financial records of framework.
Tiezheng Li: Meanwhile, we noted that the regulations were just following the regulator's focus on consumer finance. We believe it's a positive signal to promote the healthy development of the industry and to encourage the increase in supply of consumer finance products and boost the consumer's competitiveness. And if we look at some details in the documentation, we can find the final version seems to be relatively moderate stance compared with the draft. as a focus more on qualitative aspects than the quantitative ones. And according to the regulation, banks now are required to implement a whitelist management system for those cooperative Internet platforms. And the financing costs are clearly defined with all revenue costs should be included and discarded in the contract.
Speaker Change: And should reference dragged into <unk> formal recombination across the sector.
Speaker Change: Meanwhile, we noted a rugged issues to what just a flooring regulators focused on consumer finance.
Speaker Change: We believe.
Positive <unk> to promote the healthy development of the industry and then to encourage you that increase in supply of consumer finance products and boosted our consumers' confidence.
Speaker Change: And if we look at some details in the producing we would have funded the final version you seem to be relatively moderate interest this compared with the Dropdowns is.
Speaker Change: As of folks is more qualitative aspects that the quantity was.
Speaker Change: And according to the regulation banks now are required to implement right. This measurement system.
Speaker Change: For those cooperative Internet platforms.
Tiezheng Li: So we think it will promote the industry's compliance level and benefit those leading platforms which have the adequate capital, the strong risk management capabilities, and the high compliance standards.
Speaker Change: The financing cost clearly defined with all revenue cost of shipping included and discord.
Speaker Change: In our contracts.
Speaker Change: So we think it will promote the industry compliance level and the benefit of dose leading platforms, which will have to.
Tiezheng Li: So in conclusion, we believe the overall impact of the new regulation is manageable and it's crucial for the long-term development of the industry.
Speaker Change: Adequate capital the strong risk management capabilities and high compliance standards.
Speaker Change: So in conclusion, we bleed over impact of the new regulation is manageable and as.
Tiezheng Li: I think I will answer the second question. Yeah, we do have observed the global trade tensions, have introduced certain economic challenges to Southeast Asia. Some of the trade-oriented economies in the region are encountering slower-than-expected economic growth, and many countries are currently engaged in negotiations with the United States to secure variable tariff rates. And this year, the microeconomic trends of Indonesia and the Philippines are different. in the first quarter. In the initial GDP growth, growth rate decreased to 4.9%, slightly below the 5.2% target. And the PMI in April declined by 11% month-on-month to 46.7%. Well, in the Philippines, GDP growth came in at 5.4%, up slightly by 0.1% from previous quarter.
Speaker Change: Very crucial for the downturn development of the industry Okay.
Speaker Change: ICD every answer the second question.
Speaker Change: We do have.
Speaker Change: Observatory global trade tensions.
Speaker Change: Have introduced certain economic challenges.
Speaker Change: Through Southeast Asia.
Speaker Change: Some of the trade oriented economies in the region are encountering slower than expected economic growth.
Speaker Change: Right now many countries are currently engaged in negotiations with the United States to secure a favorable tariff rates.
Speaker Change:
Speaker Change: And as this year's odds of microeconomic trends of Indonesia in the Philippines are different.
Speaker Change: In the first quarter.
Speaker Change: Indonesia to GDP growth.
Speaker Change: Grocery is decreased.
Speaker Change: Q4, 9% slightly below the five 2% target in.
Speaker Change: And the PMI in April declined by 11% months online to $46 seven.
Speaker Change: Rather in the volume.
Tiezheng Li: and keeping it among Asia's fastest-growing economies. Domestic demands continue to drive the economy, with consumer spending making up nearly 80% of GDP in Q1. Fortunately, our customers are mainly consumers and the loan demands are less affected by the trade war. On the ground, we've seen some seasonal softness in Indonesia. Rwanda slowed things down a little bit, but volume was still up nearly 10% year-over-year. We expect a nice rebound in Q2 with sequential growth. In the Philippines, it's been a strong start in Q1. Volume jumped 18% quarter-on-quarter. And in Q2, we are projecting another solid quarter with good sequential growth.
Speaker Change: <unk> GDP growth.
Speaker Change: At five 4% up slightly by <unk>.
Speaker Change: 1% from previous quarter.
Speaker Change: And keeping the among the fastest growing economies.
Speaker Change: Domestic demand continued to drive with the economy with consumer spending making up nearly 80% of GDP in Q1.
Speaker Change: Yes.
Speaker Change: Fortunately, our customers, mainly consumers and loan demands are less affected by the trade War.
Speaker Change: On the ground, we will see some seasonal softness in Indonesia <unk>.
Speaker Change: <unk> slowed things down a little bit, but volume was up nearly 10% year over year.
Speaker Change: We expect a nice rebound in Q2 with sequential growth in the Philippines. It's been a strong start in Q1 volume jumped to 18% quarter on quarter.
Cindy Wong: Thank you, Cindy. Thank you.
Speaker Change: And in Q2, we are projecting another solid quarter with good sequential growth.
Alex Yi: And our next question today comes from Alex Yi with UBS. Please go ahead. Hello, Mr. Wang. Thank you for giving me the opportunity to ask this question. I have two questions. The first is about the business in China. On may 1st last year.
Speaker Change: <unk>.
Speaker Change: Thank you and our next question today comes from Alex <unk> with <unk>.
Speaker Change: Please go ahead.
Speaker Change: Okay.
Speaker Change: I Wonder if you wanted to.
Speaker Change: <unk>.
Speaker Change: Got you.
Speaker Change: So kind of you.
Alex Yi: What do you think will happen in the future? to concentrate on the new scenario and prep for a strong innovation in the 2021 eventual. It was okay with my estimate.
Speaker Change: Okay.
Speaker Change: So you're right.
Speaker Change: She told me she nitrogen.
Speaker Change: Good.
Speaker Change: The whole day is unchanged.
Speaker Change: Thank you <unk>.
Speaker Change: With only two months.
Speaker Change: All right.
Alex Yi: The second question...
Speaker Change: Sure so James in that sense.
Alex Yi: 想請教一下我們中國,這邊Tikray剛剛也提到說, I would like to ask about China, as Tikray just mentioned, Thank you for your time.
Speaker Change: So I hope to someone to buy homes.
Speaker Change: Taiwan.
Tiezheng Li: Let's talk about the main improvements in Drivers. Yada Li, Jiayuan Xu, Jimmy Tan, Tiezheng Li, Huanan Zhou, FinVolution Group So I have two questions. First one is on the loan application demand trend in China in the past two months. And do you plan to tighten credit approval preemptively given the rise in Micro-RM30? And how would that impact your four-year loan volume outlook?
Speaker Change: The other one.
Speaker Change: Shanghai's elements onboard.
Speaker Change: Great.
Speaker Change: Couple of Goldman Sachs.
Speaker Change: Hi, Thank you Sanjay good Florida.
Bert: Hi, Bert.
Bert: Hi.
Bert: Anthony Good question.
Bert: With my financial so I have two questions.
Bert: First one is on the loan application demand trend in China.
Tiezheng Li: The second question is regarding the drivers for the improved take rate for China's business and outlook. Thanks, guys. I will take your questions. The first question is about the credit demand in April and May. We have delivered solid results in the first quarter. And in terms of the loan application demand, we observed the rate holding steady in April and May. Well, April, we saw a slight month-over-month decline and rebounded in May. It surpassed the March levels. Historically, you know, the main demand tends to be softened slightly due to the seasonal holidays. But this year, we are seeing the moderately better demand.
Bert: The past two months.
Bert: And do you plan to tighten the credit approval Preventively, given the rising macro uncertainty and how would that impact your for your ethanol volume.
Bert: Outlook.
Bert: Question is regarding the drivers for the improved take rate from the Chinese business and kind of look ahead. Thank you.
Bert: Thanks, guys.
Bert: I will take your questions.
Bert: Our first question is about the.
Bert: Credit demand in.
Bert: <unk>, yes.
Bert: We have delivered solid results in the first quarter and the in terms of.
Bert: Loan application demand.
Bert: We observe the rate.
Bert: Holding steady in the April and May.
Bert: April we saw a slight <unk> decline and.
Bert: Rebounded in May.
Bert: The past.
Bert: The March levels.
Tiezheng Li: So that's about the application rate. And in terms of the credit performance, yeah, it showed slightly improvement in the first quarter and have remained stable in the second quarter so far. As the macroeconomy still has a lot of uncertainties, and given the moderately supportive demand, we have selectively adjusted our risk appetite for marginal assets. Meanwhile, we will closely monitor the macroeconomic trends and the industry development, and will dynamically balance between the risk management and the business goals. You know, the performance of April and May, the transaction volumes indicate that a healthy growth trajectory has emerged.
Bert: <unk>.
Bert: Historically.
Bert: The mental model tends to be soft in <unk> due to the seasonal holidays, but this year, we are seeing in the moderately better demand.
Bert: That's about it.
Bert: Application.
Bert: Application rate.
Bert: And.
Bert: In terms of the credit performance, Yes, EDA showed steady in <unk>.
Bert: Improvement in the first quarter and have remained stable.
Bert: The second quarter so far.
As the macro economy still has a lot of facilities and.
Bert: Given the moderately supportive demand, we have selectively adjusted our risk appetite where modular headsets.
Bert: And Meanwhile, we will closely monitor the macro economy trends in the industry development.
Bert: And they will dynamically balance between risk management and the biggest growth.
Tiezheng Li: So given our current business performance and operation capabilities, we are confident in achieving our guidance of 10% to 15% full-year revenue goal. OK, so that's about the first question.
Bert:
Bert: The performance of April end of May the transaction volumes indicate that a healthy growth trajectory has emerged.
Bert: So given our current business performance and operation capabilities, we are confident in achieving our guidance of 10% to 15% full year revenue goes.
Tiezheng Li: And your second question is about the take rate in our domestic business. In the first quarter, our take rate in China increased by 10 basis points, the QCNA. Probably driven by several factors. Yeah, number one, we further improved the funding cost by 10 basis points, quarter for quarter. And number two, our long-term tenure extended slightly from 8 months to 8.2 months with improved risk performance. Currently, both risk metrics and funding costs are at historical favorable levels. And looking ahead, we expect that both will remain stable, so it will stabilize the T-grid at the current level.
Speaker Change: Okay. So thats a positive progression and second question is about the.
Bert: Take rates in our domestic business yes.
Bert: In the first quarter.
Bert: Our take rate in China increased by 10 basis points sequentially.
Bert: Primarily driven by.
Bert: Several factors number one we further improved our funding cost by 10 basis points quarter over quarter, and then number two.
Bert: Our long tenure extended slightly from eight <unk> to $8 two months with the improved the risk of performance.
Bert: Currently both <unk> and our funding cost Iota historical favorable levels and looking ahead, we expect that both were remains stable. So it with stabilize the take rate at current enabled.
Tiezheng Li: We will continue to drive high-quality growth in China market with refined operations and management. Okay, thank you. Thank you.
Yada Li: And our next question today comes from Yada Li with CICC. Please go ahead. Hello, everyone. Thank you for giving me this opportunity to ask questions.
We will continue to drive high quality growth in China market with refined operations and measurement. Okay. Thank you Ed.
Yada Li: Today, I would like to ask you about some directives related to international business in 2025, such as revenue and revenue. In addition to Indonesia and the Philippines, are there any other progress in other areas of the company? That's the question. Thank you.
Bert: Thank you and our next question today comes from the auto we see RCC. Please go ahead.
Speaker Change: Okay. So then again with regard to you in the D J Jones from going out.
Yada Li: Then I'll do the translation. I was wondering if you could give more color on the latest business updates regarding the international Any guidance for revenue and profit. And besides Indonesia and the Philippines, could you elaborate more about the development of other...
Speaker Change: Would you already own yeah sure.
Bert: Sure.
Bert: <unk> you.
Bert: Louisiana, BBB and food should have your tissue for yoga.
Bert: So what you're going to you guys. Good morning, Tom.
Bert: Then I'll do the translation.
Speaker Change: I was wondering if you could give more color on the Lady subcutaneous upgrades regarding international expansion.
Tiezheng Li: Okay, thanks Yada, I will take your question. Well, for international markets, despite the uncertainties in the macroeconomic environment, with our proven technological capabilities and risk control expertise across those diverse markets, it enables us to deliver a strong first-class performance. The transaction volume in our international market has surpassed RMB 3 billion for the first time in this quarter, with an annual increase of 36% and a quarter-over-quarter increase of 5%. And the number of unique borrowers reached a historical high at $1.7 million with triple-digit year-over-year growth. And the revenue from our international market boosted to $711 million, marking a year-over-year increase of nearly 20% and accounting for 20.4% of total revenue.
Speaker Change: Guidance for revenue and profit in 2025, Besides Indonesia, and Philippines could you elaborate more about the development of auto regions as well that's all thank you.
Speaker Change: Okay. Thanks for that I will take a question.
Speaker Change: Well.
Speaker Change: While international market despite.
Speaker Change: Despite the uncertainties in the macroeconomic environment with our proven technology nickel capabilities and the risk control activities across those diverse Marquis at.
Speaker Change: To enable us to deliver a strong first quarter performance.
Speaker Change: The transaction volume in our international market surpassed RMB 3 billion for the first time in this quarter.
Speaker Change: The year over year.
Speaker Change: The increase of 36% and quarter over quarter increase of 5%.
Speaker Change: And the number of unique borrowers reached <unk>.
Speaker Change: Historical high at $1 7 million.
Speaker Change: Yes.
Speaker Change: Triple digits year over year growth.
Speaker Change: Revenue for our international market velocity to be.
Speaker Change: $711 million marking.
Tiezheng Li: and in terms of the revenue and the profit You know, we maintain our full-year revenue growth target of 10% to 15%. The contribution from international markets is expected to increase to 25%. That indicates the growth rate of international revenue will outpace the overall growth. In the first quarter, Indonesia and the Philippines collectively achieved a modest profit, aligned with our projections. And looking ahead, we expect they will generate a minimum net profit of $10 million in 2025. Forward expansion to the new market, you know, we have mentioned in the early earnings call. We share that we recently obtained a banking finance company license in Pakistan.
Speaker Change: Year over year increase of nearly 20% and accounting for timing, 0.4% of total revenue.
Speaker Change: And then in terms of the revenue and the profits.
Speaker Change: No.
Speaker Change: We can tell with full year revenue growth target of 10% to 15%.
Speaker Change: Contribution for international market is expected to increase to 25%.
Speaker Change: That indicates the growth rate of international revenue will outpace the overall course.
Speaker Change: And your first quarter, Indonesia, Philippines, collectively achieved a modest profit aligned with our projections.
Speaker Change: And then look ahead, we expect they will generate a minimum net profit.
Speaker Change: $10 million in 205.
Speaker Change: For our expansion into new markets.
Speaker Change: We have mentioned in the early earnings call.
Tiezheng Li: The operation in Pakistan is still in an early stage. Meanwhile, we were actively exploring the new countries to support our long-term strategy. That means we aim to deliver at least a 15% revenue contribution from international market by 2013. We would be happy to share if there are any... Okay, thanks, Yada. Thank you.
Speaker Change: We share that we recently obtained.
Speaker Change: In banking Finance company licensed in Pakistan.
Speaker Change: And the operating impact.
Speaker Change: And early stage.
Speaker Change: We are actively exploring the new countries to support our long term.
Speaker Change: Not a strategy that means we will we intend.
Speaker Change: And to deliver at least 15% of revenue contribution from international market by 2030.
Operator: As there are no further questions at this time, I'd now like to turn the call back over to the company for closing remarks. Thank you once again for joining us today. If you have any further questions, please feel free to contact us at our investorrelations.com. Thank you so much. Thank you.
Speaker Change: We wouldn't be happy to share if there are any updates okay. Thanks.
Speaker Change: Thank you.
Speaker Change: There are no further questions at this time I would now like to turn the call back over to the company for closing remarks.
Speaker Change: Yeah.
Speaker Change: Okay.
Speaker Change: Once again for joining us today, if you have any further questions. Please feel free to contact us.
Operator: This concludes this conference call. You may now disconnect your lines. Thank you.
Speaker Change: Our.
Investor Relations team.
Speaker Change: Thank you so much.
Speaker Change: Thank you. This concludes this conference call you may now disconnect your lines.
Speaker Change: Yes.
Speaker Change: Okay.
Speaker Change: Okay.
Operator: Thank you for watching, you can find a link of the cartoon at the description.
Speaker Change: Okay.