X Financial (XYF) 2024 Q3 法說會逐字稿

Hello and welcome to the X Financial third quarter 2024 earnings conference call. (Operator Instructions) Please note this so that is being recorded.

您好，歡迎參加 X Financial 2024 年第三季財報電話會議。（操作員說明）請注意這一點，以便進行記錄。

I would now like to turn the conference over to Victoria Yu. Please go ahead.

我現在想把會議交給維多利亞於。請繼續。

Thank you operator. Hello, everyone and thank you for joining us today. The company's results were released earlier today and are available on the company's IR website at ir.xiaoyinggroup.com. On the call today from X Financial are Mr. Kan Li, President; and Mr. Frank Fuya Zheng, Chief Financial Officer.

謝謝運營商。大家好，感謝您今天加入我們。該公司的業績於今天稍早發布，並可在該公司的投資者關係網站 ir.xiaoyinggroup.com 上查閱。今天，X Financial 總裁李侃先生接了電話；鄭福亞先生，財務長。

Mr. Li will give a brief overview of the company's business operations and highlights followed by Mr. Zheng who will go through the financials. They are all available to answer your questions during the Q&A session.

李先生將簡要介紹公司的業務運作和重點，隨後鄭先生將介紹財務狀況。他們都可以在問答環節回答您的問題。

I remind you that this call may contain forward-looking statements under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements are based on management's current expectations and current market and operating conditions and relate to events let involve known or unknown risks uncertainties or other factors.

我提醒您，本次電話會議可能包含 1995 年《私人證券訴訟改革法案》安全港條款下的前瞻性陳述。此類聲明是基於管理層目前的預期以及當前的市場和營運狀況，並與涉及已知或未知風險不確定性或其他因素的事件相關。

All of which are difficult to predict and many of which are beyond the company's control, which may cause the company's actual results, performance or achievements to differ materially from those in the forward-looking statement.

所有這些都很難預測，其中許多超出了公司的控制範圍，這可能導致公司的實際結果、績效或成就與前瞻性聲明中的結果有重大差異。

Further information regarding these and other risks, uncertainties and factors is included in the company's filings with the US securities and exchange commission. The company does not undertake any obligation to update any forward-looking statement as a result of new information, future events or otherwise except as required in the law.

有關這些和其他風險、不確定性和因素的更多資​​訊包含在該公司向美國證券交易委員會提交的文件中。除法律要求外，本公司不承擔因新資訊、未來事件或其他原因而更新任何前瞻性聲明的義務。

It is now my pleasure to introduce Mr. [Kan] Li. Mr. Li, please go ahead.

現在我很高興向大家介紹李[侃]先生。李先生，請講。

Hello everyone. We are pleased to report another strong quarter with loan volume exceeding our forecast and a significant sequential improvement in asset quality. In the third quarter, we continue to promptly adjust non volume based on risk level. As asset quality improved, we further intensified our borrower acquisition efforts which have yielded very positive results.

大家好。我們很高興地報告又一個強勁的季度，貸款量超出了我們的預測，資產品質也連續顯著改善。三季度，我們持續根據風險程度及時調整非成交量。隨著資產品質的改善，我們進一步加強了借款人收購力度，並取得了非常正面的成果。

Both the top and the bottom line continue to grow year over year. Non-GAAP adjusted net income reached a new record high. Specifically, on the operational front, our total loan amount of facilities and originated was down 4% a year on year, but up 25% sequentially to RMB28 billion, above the high end of our guidance.

收入和利潤均繼續逐年增長。非公認會計準則調整後淨利創下新高。具體而言，在營運方面，我們的貸款總額和發放貸款總額年減 4%，但環比增長 25%，達到 280 億元人民幣，高於我們指導的上限。

Delinquency rates for all outstanding loans past due for 31 to 60 days and 91 to 180 days were 1.02% and 3.22% respectively, at the end of the quarter, compared to 1.29% and 4.38% a quarter ago and 1.11% and 2.50% a year ago.

截至本季末，逾期31 至60 天和91 至180 天的所有未償還貸款的拖欠率分別為1.02% 和3.22%，而上一季為1.29% 和4.38%，上一季為1.11% 和2.50 %。

We are pleased with this improvement in asset quality and we will continue to optimize our risk management system through advanced technology.

我們對資產品質的改善感到高興，我們將繼續透過先進技術優化我們的風險管理系統。

In September this year, the Chinese government unveiled a comprehensive stimulus package aimed at improving liquidity, boosting the property market, stabilizing financial markets and stimulating consumption. We expect this will provide a meaningful boost to the macroeconomic recovery as an integral part of the economy, the personal finance market, we should benefit from this upturn.

今年9月，我國政府推出了一項旨在改善流動性、提振房地產市場、穩定金融市場、刺激消費的綜合刺激計畫。我們預計這將為宏觀經濟復甦提供有意義的推動，作為經濟不可或缺的一部分，個人金融市場應該會從這種改善中受益。

We have already observed a positive signs in the market and are committed to adjust loan volumes in line with the risk net. As a result of this favorable environment, we are raising our guidance and expect our monthly loan volume to exceed RMB10 billion in the fourth quarter, setting a new record.

我們已經觀察到市場的正面跡象，並致力於根據風險網調整貸款量。在這種有利的環境下，我們正在上調指引，預計第四季月度貸款額將突破100億元人民幣，創下新紀錄。

Now, I will turn the call to Frank, who will go through our financials.

現在，我將把電話轉給弗蘭克，他將檢查我們的財務狀況。

Thank you, Kan and hello everyone. I'm pleased to report that our strategy of balanced business growth and the profitability continue to pay off. Total net revenue was RMB1.6 billion, up 13% year on year and 15% sequentially. While our non-GAAP adjust net income reached a record high of RMB434 million, up [6%] year on year and sequentially.

謝謝你，坎，大家好。我很高興地報告，我們平衡業務成長和獲利能力的策略繼續獲得回報。淨收入總額為人民幣16億元，較去年成長13%，較上季成長15%。同時，我們的非 GAAP 調整淨利潤達到 4.34 億元人民幣的歷史新高，較去年同期成長 [6%]。

As we continue to deliver strong profitability and execute on our proven strategy, we have full confidence in our future. We will continue to execute our family annual dividend policy and explore opportunities and our share purchase the purchase program to return more value to our shareholders, over the long term. Now, I would like to brief some financial performance for Q3.

隨著我們繼續提供強勁的獲利能力並執行我們行之有效的策略，我們對未來充滿信心。我們將繼續執行我們的家族年度股息政策，並探索機會和我們的股票購買計劃，從長遠來看為我們的股東回報更多價值。現在，我想簡單介紹一下第三季的財務表現。

Please note that all numbers stated in RMB and rounded up. Total net revenue increased by 30% to RMB1,582 million from RMB1,397 million in the same period of 2023. Primarily due to growth in the various this is aggregated revenue items compared with the same period of 2023.

請注意，所有數字均以人民幣表示並四捨五入。淨收入總額由2023年同期的人民幣13.97億元成長30%至人民幣15.82億元。主要是由於與 2023 年同期相比，各種總收入項目的成長。

Origination and servicing expenses increased by 14% to RMB458 million from RMB403 million in the same period of 2023. Primarily due to the increase in collection expenses resulting from the cumulative effect of increased volume of the loans facilities and originate in the previous quarter compared with the same period of 2023.

發起和服務費用從 2023 年同期的人民幣 4.03 億元增長 14% 至人民幣 4.58 億元。主要是由於上一季與 2023 年同期相比，貸款額度增加的累積效應導致催收費用增加。

Borrow acquisition and the marketing expenses increased by 21% to RMB507 million from RMB420 million in the same period of 2023 primarily due to intensified efforts in borrow acquisitions compared with the same period of 2023. Income from operations was RMB509 million compared with RMB435 million in the same period of 2023.

借款收購及行銷費用由2023年同期的人民幣4.2億元增加21%至人民幣5.07億元，主要是由於借款收購力度較2023年同期加大。營業收入為人民幣5.09億元，而2023年同期為人民幣4.35億元。

Net income was RMB376 million compared with the RMB347 million in the same period of 2023. Non-GAAP adjust the net income with RMB434 million compared with RMB375 million in the same period of 2023.

淨利為人民幣3.76億元，2023年同期為人民幣3.47億元。非公認會計原則調整淨利為人民幣4.34億元，而2023年同期為人民幣3.75億元。

For further financial information, please refer to the earnings release on our IR website. Regarding our share repurchase plan. In September 2024, we further extended the period of USD30 million share repurchase program until the end of March 2026.

如需了解更多財務信息，請參閱我們的投資者關係網站上的收益發布。關於我們的股票回購計畫。2024年9月，我們進一步將3,000萬美元的股票回購計畫期限延長至2026年3月底。

In Q3, we repurchased approximately 282,000 ADS for a total consideration of the USD1.3 million. We have approximately USD4.1 million remaining for the potential of the purchase and our current USD30 million share repurchase plan. Additionally, in May 2024 we announced a USD20 million share purchase plan effectively until November 30, 2025.

第三季度，我們回購了約 282,000 份美國存託憑證，總代價為 130 萬美元。我們還剩下大約 410 萬美元用於潛在的收購和我們目前 3000 萬美元的股票回購計劃。此外，我們於 2024 年 5 月宣布了一項 2000 萬美元的股票購買計劃，有效期至 2025 年 11 月 30 日。

Following a tender offer complete in July 2024 for approximately USD9.2 million and the USD10.8 million remain available under this plan. Together, these two share purchase plans programs reflect our commitment to enhancing shareholder value.

繼 2024 年 7 月完成約 920 萬美元的要約收購後，該計劃下仍有 1,080 萬美元可用。這兩項股票購買計畫共同體現了我們對提高股東價值的承諾。

Now on our business outlook. For Q4 this year, we expect the total loan amount facility and originated to be between RMB30 billion and RMB31 billion in the total loan amount of facility and originated for about for 2024 to be between RMB102.6 billion and RMB103.6 billion. This concludes our prepared remarks and we would like to open the call to questions. Operator, please.

現在談談我們的業務前景。今年第四季度，我們預計融資總額和發放貸款總額將在人民幣300 億元至人民幣310 億元之間，而2024 年融資總額和發放貸款總額將在人民幣1,026 億元至人民幣1,036 億元之間。我們準備好的演講到此結束，我們想開始提問。接線員，請說。

(Operator Instructions)

（操作員說明）

Randy Ballista, Blackbird Capital.

蘭迪·巴利斯塔，黑鳥資本。

Hi there. I was wondering if you can update us. On the capital return program. And if there is a plan as to what it would be relative to the net income of the company and as well, if you could update us on the regulatory landscape? Thank you.

你好呀。我想知道你是否可以更新我們的情況。關於資本返還計畫。如果有一個關於它與公司淨利潤的關係的計劃，以及您能否向我們介紹最新的監管情況？謝謝。

Yeah. We are, you know, we have a two repurchase program, you know, have about [RMB50 million] remaining in place. And if we have a talk, you know, working with a few one or two big investor regarding the shares repurchase program, if those programs, the current program is not enough to, we will have an initial you know, to have a new purchase plan in place to add.

是的。你知道，我們有一個兩次回購計劃，你知道，還有大約[5000萬元人民幣]剩餘。如果我們與一兩個大投資者就股票回購計劃進行談判，如果這些計劃，當前的計劃還不夠，我們將有一個初步的，你知道的，進行新的購買計劃到位添加。

Between the two [methods] dividend return and the share repurchase based on our current share price, we are much prefer our share repurchase, you know that's our stand. But we will continue to do semi-annual dividend payout on continued basis. That our plan.

在股息回報和基於我們目前股價的股票回購這兩種[方法]之間，我們更傾向於股票回購，你知道這就是我們的立場。但我們將繼續持續派發半年度股利。那是我們的計劃。

I hope, by end of the year and ULC even though we do not give out in terms of the percentage out to return the capital. But by end of this year, I hope you will see, we will do beyond the normally the percentage in terms of the capital return. Thank you, I'll ask Kan to answer the first question.

我希望，到今年年底和 ULC，即使我們沒有給出返還資本的百分比。但到今年年底，我希望你們會看到，我們在資本回報率方面將超越正常的百分比。謝謝，我會請 Kan 回答第一個問題。

In terms of the regulatory environment. It is the management view that there is right now, the regulation has been fairly stable and normally the end of the year is not the time for the government to issue some new rules or regulations. So at this moment, I would say the environment is fairly stable and we do not expect any significant regulations in our industry.

從監管環境來看。管理階層認為，目前監管已經相當穩定，通常年底不是政府發布一些新規則或規定的時候。所以目前，我想說環境相當穩定，我們預期我們的產業不會有任何重大監管。

And that being said that we have seen that the Chinese government has been fairly active in trying to stimulate the economy to push up the development rate. And we think that will in turn sort of benefit our industry as a whole and basically as we are in this industry. So that's why that we expect our volume will continue to grow from at this moment. That's it.

話雖如此，我們看到中國政府一直相當積極地試圖刺激經濟以提高發展速度。我們認為這反過來會對我們整個行業有利，基本上就像我們在這個行業中一樣。這就是為什麼我們預計我們的銷售將從現在開始繼續成長。就是這樣。

Thank you.

謝謝。

(Operator Instructions)

（操作員說明）

Mason Bourne, AWH Capital.

梅森伯恩，AWH 資本。

It's good to see the strong results and appreciate the return of capital. Frank, I think you started sort of alluding to it on the dividend, but I just wanted to follow up on that. I mean, the stock is trading on this quarter's results, if you annualize on 1.3 times earnings.

很高興看到強勁的業績並欣賞資本的回報。法蘭克，我想你一開始就提到了股息，但我只是想跟進。我的意思是，如果以年化本益比 1.3 倍計算，該股的交易價格取決於本季的表現。

You're paying out about 6.5% of your earnings per share as a dividend. It seems like that could be potentially significantly higher.

您將支付每股收益的約 6.5% 作為股息。看來這個數字可能會高很多。

I know you said you're not looking at, you know, setting a percentage of income, but if you look at your peers, they're paying somewhere in the low 20s as a percentage. So it seems like you could pay a lot more and not affect your business. I was just kind of hoping that you would consider that. Do you have any thoughts on that?

我知道你說過你不會考慮設定收入的百分比，但如果你看看你的同齡人，他們支付的百分比在 20 多歲左右。因此，您似乎可以支付更多費用，而不會影響您的業務。我只是希望你能考慮一下。您對此有什麼想法嗎？

We did this year, the public buyback and at least we did a public buyback, we were only able to collect about just over about [RMB22 million] ADS. So we definitely have more money available to do more, except the technical currency exchange issue, but that's not excuse, but we yes, we would like to make to do more in terms of the share repurchase.

我們今年進行了公開回購，至少我們進行了公開回購，我們只能籌集到大約[2200萬元人民幣]的ADS。因此，除了技術性貨幣兌換問題外，我們肯定有更多的資金可以做更多的事情，但這不是藉口，但我們是的，我們希望在股票回購方面做更多的事情。

Hopefully, we lately whatever with prices since the end of September, the prices from like below $5 up to right now, almost 7 will attract more attention and then hopefully there will be more available share for us to buy back. But in terms of our dividend yield, we will continue as I told you before, we will continue to pay above the industry and yield, it's over since right now it's after two dividend Fed rate cuts will be like around about 44.5%. We will keep the yield about around about 6%.

希望我們最近自 9 月底以來的價格，從低於 5 美元到現在的近 7 美元的價格會吸引更多的關注，然後希望會有更多的可用份額供我們回購。但就我們的股息收益率而言，我們將繼續，正如我之前告訴過你的，我們將繼續支付高於行業和收益率的股息，因為現在在美聯儲兩次降息之後，股息收益率將約為44.5% 左右。我們將把收益率保持在6%左右。

Even as we stock price go up, we will adjust that accordingly. Other than that, I don't know, public buyback offering, what else we can do, which is to the -- just again, we will continue to attract to do dividend payout at attractive rate yield.

即使我們的股價上漲，我們也會隨之調整。除此之外，我不知道，公開回購發行，我們還能做什麼，那就是——再次，我們將繼續吸引以有吸引力的收益率進行股息支付。

And also we will do every possible available share buyback we will do that. And hopefully, in terms of the valuation or whatever, I think that over time it will address by itself. You know, we will continue to focus on the operations. Thank you.

我們還將進行一切可能的股票回購。希望就估值或其他方面而言，我認為隨著時間的推移，它會自行解決。你知道，我們將繼續專注於營運。謝謝。

Just if I could follow up on that, I think that your peers, I think when you first instituted your dividend, it was about a 10% yield and now you're right, it's around 5%.

如果我能跟進這一點，我認為你的同行，我認為當你第一次設立股息時，收益率約為 10%，現在你是對的，約為 5%。

The difference though is that your peers, some of them trade it 3, 4, 5 times earnings and you're trading at just over one time earnings. And so, if you can get the buyback done there and you're trading at about a third of your tangible book value, you can get the buyback done.

但不同之處在於，你的同業中，有些人的交易本益比是 3、4、5 倍，而你的交易本益比略高於一倍。因此，如果您可以在那裡完成回購，並且您的交易價格約為有形帳面價值的三分之一，那麼您就可以完成回購。

That's great. So you've had limits on that in the past. And so maybe the dividend increase could be a way that you sort of help the share re-rate? Is that you increase that and then eventually it gets to a 5% dividend yield from share price appreciation.

那太棒了。所以你過去對此有限制。那麼，也許增加股息可能是您幫助股票重新評級的一種方式？是你增加它，然後最終透過股價升值獲得 5% 的股息收益率。

But just some thoughts there, I know that you guys are focused on returning capital and that's been a real positive over the past year. So I'm not knocking it and just having discussion.

但只是有一些想法，我知道你們都專注於資本返還，這在過去的一年裡是一個真正的積極因素。所以我不會敲門，只是進行討論。

You know, just one more thing, in terms of, the major issue we face in challenges is our volume is very low. And so we hope this volume, went up for the last month. So we could do more direct during the open period. That's another thing we will definitely will do.

你知道，還有一件事，我們在挑戰中面臨的主要問題是我們的數量非常低。因此，我們希望上個月的銷量有所增加。所以我們可以在開放期間做更多直接的事情。這是我們肯定會做的另一件事。

And that's what I say, every possible way we will do the maximum in terms of the yield and the share buyback. And hopefully we will just the low valuation issue in a short period of time. But, we're not willing to talk too much, like our peer regarding like something like next year or so, something like that.

這就是我所說的，我們將盡一切可能在收益率和股票回購方面最大化。希望我們能在短時間內解決低估值問題。但是，我們不願意談論太多，就像我們的同行談論明年左右的事情一樣。

Because first of all, in terms of the operation, we are for the last year two or three year, in general, we are in kind of a smooth operation, nothing we can like to point out like a turnaround or a big change.

因為首先，就營運而言，我們過去一年兩三年了，總的來說，我們的營運比較順利，沒有什麼可以指出的，例如扭虧為盈或大的變化。

As we always do, mainly based our operation, many other risk level, definitely on Chinese environment, we'll do our best regarding that. But something else, I think once again nothing I can say other things, just advise for the patients. I think at least for the last two years, our stock appreciation is, maybe much deserve much more but still going up.

正如我們一貫所做的那樣，主要基於我們的營運、許多其他風險水平，尤其是中國的環境，我們將盡力而為。但除此之外，我想我無話可說，只是為患者提供建議。我認為至少在過去兩年裡，我們的股票升值也許值得更多，但仍在上升。

I think, when I was on board, this company stock is around the $2. Right now, it's almost $7 and let's see what's going to be. But we definitely hope, the stock price reflect the true value of this company and we believe eventually it will. Thank you.

我想，當我加入時，這家公司的股票大約是 2 美元。現在，它幾乎是 7 美元，讓我們看看會怎樣。但我們絕對希望股價能反映該公司的真實價值，我們相信最終會如此。謝謝。

Thank you.

謝謝。

This concludes our question-and-answer session. I would like to turn the conference back over to Victoria Yu, you for any closing remarks.

我們的問答環節到此結束。我想將會議轉回維多利亞·於，請你發表閉幕詞。

Thank you, everyone for joining us on the call today. If you haven't got the chance to raise your questions, we will be pleased to answer them through follow up contact. We look forward to speaking with you again in the near future. Thank you.

謝謝大家今天加入我們的電話會議。如果您沒有機會提出問題，我們將很樂意透過後續聯繫予以解答。我們期待在不久的將來再次與您交談。謝謝。

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.

會議現已結束。感謝您參加今天的演講。您現在可以斷開連線。