Jiayin Group, Inc. Q3 FY2024 earnings call

• In the third quarter, loan facilitation volume was ~RMB26.7 billion, revenue from loan facilitation services ~RMB1.1 billion, up 18.1% y-o-y. - Continued to refine technologies, deepened large language model application, upgraded Wenquxing knowledge base, launched knowledge-driven operation model, introduced MingYi automated machine learning platform. - Expanded institutional partnerships, had 70 financial institution partners, advanced joint projects. - Acquired 826,000 new borrowers in Q3, up ~71.3% y-o-y. - Asset quality improved, 61-90 days delinquency rate 0.55%, downward trend for 2 consecutive quarters. - Overseas, loan facilitation demand increased, Indonesia business grew, Mexico regulations tightened, adjusted Nigerian business. - Committed to leveraging technology for growth, deepening digital and intelligent transformation.

In the third quarter, loan facilitation volume was approximately RMB26.7 billion, setting a new record. Revenue from loan facilitation services reached around RMB1.1 billion, a year-over-year growth of 18.1%. The loan facilitation services revenue proportion in total revenue increased from 56.3% in the first quarter to around 76% in the third quarter, while guarantee service-related revenue proportion decreased from around 35% in the first quarter to around 17% in the third quarter.

• Anticipates Q4 loan facilitation volume no less than RMB25 billion, confident in achieving annual target. - Board of Directors approved revision to dividend policy, starting 2025, plan to declare and distribute cash dividends once per fiscal year, total amount no less than 15% of previous fiscal year's net profit after tax.

• Regulatory risks in Mexico regarding listing of financial apps. - Intense competition in Indonesian market with leading participants dominating market share. - Strategic adjustment in Nigerian market to optimize overseas business layout.

Q: Noticing net revenue decreased 1.5% and net profit dropped 16.8% y-o-y, explain underlying reasons from revenue structure and cost of competition, and forecast profit margin trend. Also, question on loan facilitation volume growth continuation.

A: Guarantee service-related revenue with lower profit margin reduced proportion; borrower acquisition and credit cost increased; loan facilitation volume reached RMB26.7 billion y-o-y up 10.3% and q-o-q up 11.25%; loan facilitation service revenue RMB1.105 billion q-o-q up over 16%; expect profit margin to improve as guarantee-related revenue proportion decreases and investment in new borrowers contributes to long-term growth. Regarding growth continuation, confident in sustained strong growth trend in coming quarters and 2025.

Q: Accounts receivable balance at end of Q3 exceeded RMB2.8 billion, increase of nearly RMB400 million from Q2; revenue from loan facilitation service up 10.3% y-o-y but average borrowing amount per borrowing down 30.5% y-o-y. Explain accounts receivable increase and recovery status; reason for average borrowing amount per borrowing decrease.

A: Accounts receivable increase due to growth in facilitation volume and revenue; closely monitor recovery, historically good collection. Average borrowing amount per borrowing decrease due to business strategy optimization: focus on retaining high-quality borrowers improving convenience, new borrowers with lower initial credit levels, sustained new borrower acquisition refreshing borrower base leading to overall borrower base growth and decline in average borrowing amount per borrowing.