FinVolution(FINV)2024-03-19 05:43Financial Data and Key Metrics Changes - For full year 2023, total transaction volume reached RMB 194 billion, with an outstanding loan balance of RMB 67 billion, representing year-over-year increases of 11% and 4% respectively [8] - Net revenue for 2023 reached RMB 12.5 billion, up 13% year-over-year, while net income increased to RMB 2.38 billion, up 5% year-over-year [24][26] - Funding costs improved by around 100 basis points year-over-year, reflecting enhanced operational efficiency [9][19] Business Line Data and Key Metrics Changes - International transaction volume for 2023 soared to RMB 7.9 billion, and outstanding loan balance rose to RMB 1.3 billion, up 85% and 58% respectively compared to the prior year [8][20] - Revenue from the China market in 2023 expanded to RMB 10.4 billion, up 4% compared to the prior year [9] - The company served over 811,000 small business owners in 2023, facilitating RMB 47 billion of loans, up 80.5% year-over-year [10] Market Data and Key Metrics Changes - Cumulatively, the company served over 30 million borrowers across China, Indonesia, and the Philippines, with a net increase of around 3 million new borrowers year-over-year [7] - In Indonesia, the consumer confidence index remained high at 125 points in January 2024, indicating positive macroeconomic conditions [20] - The Philippines experienced fourth quarter GDP growth of 5.6% in 2023, contributing to a favorable environment for business expansion [20] Company Strategy and Development Direction - The company aims to become a leader in the fintech industry by providing inclusive financial solutions for underserved borrowers and small business owners [6] - The strategy includes a local focus and global outlook, with significant investments in technology and R&D to drive growth [11][14] - The company plans to continue expanding internationally by acquiring more licenses and entering new markets [13][14] Management Comments on Operating Environment and Future Outlook - Management noted that while the macroeconomic environment in China remains uncertain, there are signs of gradual recovery [29] - The company expects transaction volume in the China market for 2024 to be in the range of RMB 195.7 billion to RMB 205 billion, representing a year-over-year increase of around 5% to 10% [27] - International transaction volume is expected to grow by around 20% to 40% in 2024, reaching between RMB 9.4 billion to RMB 11 billion [27] Other Important Information - The company has a robust cash position with over RMB 7.9 billion in cash and short-term liquidity as of December 31, 2023, representing an increase of 12% year-over-year [25] - The company returned a total of US62 million in dividends and US98 million through share purchases [26] Q&A Session Summary Question: Adjustments in lending strategy and outlook on asset quality - Management responded that they have reduced customer acquisitions from lower quality channels and tightened approval rates for borrowers more prone to economic uncertainties, leading to improved asset quality metrics [29][31] Question: Growth and profit outlook for Indonesian and Philippine markets - Management indicated that Indonesia's operations will focus on product adjustment and quality improvement in the first half of 2024, with expectations of achieving profitability [34] - For the Philippines, management expects rapid growth to continue, aiming for a number one market share position by the end of the year [35][39] Question: Customer acquisition cost targets and competitive landscape in the Philippines - Management stated that they will re-evaluate customer acquisition strategies in the second half of 2024, leveraging their advantages as a fintech company from China to capture market share [38][39] Question: Overall company positioning and capital return program - Management emphasized their commitment to high-quality growth and consistent capital return to shareholders, highlighting a cumulative return of over US600 million since 2018 [41][42]