FinVolution Group Q2 FY2025 earnings call

• FinVolution sustained healthy momentum in Q2 with net revenue RMB 3.6 billion (+13% y-o-y) and net income RMB 751 million (+36% y-o-y).
• 18 consecutive quarters of y-o-y growth in transaction volume and revenue since 2021.
• Monitored China's consumer finance regulation changes, maintained dialogue with funding partners (expanded from 114 to 119 in Q2).
• International operations drove growth, with 39% y-o-y increase in transaction volume and 22% revenue contribution. Onboarded 1.6 million new borrowers, with international new borrower growth outpacing China.
• Leveraged AI in risk management, achieved 98.8% detection accuracy for AI fraud. Secured 2 FinanceAsia 2025 Awards.
• Completed USD 150 million convertible bonds offering in June to support international expansion and lower capital cost.

China: Despite macro uncertainties, China's economy showed resilience. FinVolution's take rate remained stable at 3.4%, average loan tenure extended to 8.3 months, risk metrics broadly stable with day 1 delinquency rate at 4.7% and 30-day collection rate at 89%, provision coverage ratio 543%. International: International transaction volume grew 39% y-o-y to RMB 3.2 billion, loan balance rose 50% to RMB 2.1 billion, contributing 22% of net revenue (up from 18% last year). Onboarded 1.6 million new borrowers, with international new borrower growth outpacing China for fifth consecutive quarter. Indonesia: Loan volume grew 9% y-o-y, outstanding loan balance up 25% to RMB 1.3 billion; OJK's new circular provided stability. Philippines: Loan volume more than doubled y-o-y to RMB 1.4 billion, 45% of international business, Buy Now, Pay Later products contributed 32% of volume.

• Reiterated full-year 2025 revenue guidance of RMB 14.4 billion to RMB 15 billion, 10%-15% y-o-y growth.

• China's consumer finance regulation changes may impact loan mix and asset risk profile. Industry liquidity tightening poses challenges but manageable due to core business in high-quality assets and risk management capabilities.
• Macro uncertainties in international markets could affect business performance.

Q: Regarding new regulation on loan facilitation in China, how do you see the impact to your business? Would you slow down new loan volume in second half to adjust loan structure and ensure asset quality?

A: New regulations will provide order to the industry. Impact on high-priced assets is seen, but core high-quality assets remain stable. Impact manageable due to know-hows in high-quality assets, disciplined risk management, and international business as growth driver.

Q: The new loan volume in international market in second quarter maintained rapid growth. What is the current run rate in July and August? And is there any target customer profile change in Indonesia and Philippines in the second half?

A: International transaction volume trend steady into July and August, projecting double-digit quarterly growth in Q3. In Indonesia, expanded offline installment scenarios; in Philippines, expanded partnerships with telecom operators to onboard new customer base.