NYSE:XYF X Financial Q4 2023 Earnings Report $13.65 +0.32 (+2.40%) Closing price 05/2/2025 03:59 PM EasternExtended Trading$13.68 +0.03 (+0.18%) As of 07:46 AM Eastern Extended trading is trading that happens on electronic markets outside of regular trading hours. This is a fair market value extended hours price provided by Polygon.io. Learn more. Earnings History X Financial EPS ResultsActual EPS$0.64Consensus EPS N/ABeat/MissN/AOne Year Ago EPSN/AX Financial Revenue ResultsActual Revenue$167.98 millionExpected RevenueN/ABeat/MissN/AYoY Revenue GrowthN/AX Financial Announcement DetailsQuarterQ4 2023Date3/26/2024TimeBefore Market OpensConference Call DateWednesday, March 27, 2024Conference Call Time7:00AM ETUpcoming EarningsX Financial's Q1 2025 earnings is scheduled for Thursday, May 29, 2025, with a conference call scheduled on Friday, May 30, 2025 at 7:00 AM ET. Check back for transcripts, audio, and key financial metrics as they become available.Conference Call ResourcesConference Call AudioConference Call TranscriptSlide DeckPress Release (8-K)Annual Report (20-F)Earnings HistoryCompany ProfileSlide DeckFull Screen Slide DeckPowered by X Financial Q4 2023 Earnings Call TranscriptProvided by QuartrMarch 27, 2024 ShareLink copied to clipboard.There are 7 speakers on the call. Operator00:00:00Hello, and welcome to the X Financial 4th Quarter 2023 Earnings Conference Call. All participants will be in a listen only mode. After today's presentation, there will be an opportunity to ask Please note this event is being recorded. I would now like to turn the conference over to Victoria Yu. Please go ahead. Speaker 100:00:39Thank 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 irdoxiaoindao Group. On the call today from X Financial are Mr. Ken Li, President and Mr. Speaker 100:00:55Frank Fuya Zheng, Chief Financial Officer. 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 and A session. Speaker 100:01:13I 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 like involve known or unknown risks, uncertainties and other factors, 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 statements. Further information regarding these and other risks, uncertainties, factors is included in the company's filing with the U. S. Securities and Exchange Commission. Speaker 100:02:02The 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 and allowed. It is now my pleasure to introduce Mr. Kent Li. Mr. Li, please go ahead. Speaker 200:02:22Hello, everyone. We are pleased to conclude the year with solid operational and financial results, emphasizing our commitment to a sustained growth. In 2023, we facilitated and originated 43% more loans 2022 and delivered a notable year over year growth in both revenue and project. Total net revenue increased 35% on an annual basis, while income from operations increased 33% and net income improved by 46%. However, as we enter the second half of twenty twenty three, particularly in the Q4, we experienced increased risk levels in asset quality. Speaker 200:03:08While we strengthened our risk control and implemented various measures to managing delinquency rates, we also made a strategic decision to proactively reduce loan volumes in the Q4, prioritizing profitability over share volume growth. During the Q4 of 2023, our total loan amount facilitated and originated was RMB26 1,000,000,000, a 20% year over year increase by an 11% quarter over quarter decline. Delinquency rates for non past due were 31 to 30 to 60 days and 91 to 180 days were 1.57% and 3.12%, respectively, at the end of the quarter, compared with 1.02% and 1.93%, respectively, a year ago. Our team remains vigilant in monitoring asset dynamics and has taken further steps to mitigate risk by reducing our exposure to higher risk areas and adjusting our business approach to ensure sustainable profitability. We aim for continued gradual improvement over the course of 2024 and these measures have begun to have a positive impact on our risk indicators. Speaker 200:04:29For fiscal year 2024, our strategic approach will remain consistent and somewhat conservative, aligned with current market conditions in China. We believe the regulatory environment has become stable and the government is committed to promoting economic recovery. However, we recognize that challenges and uncertainties exist as the country undergoes a transformative shift in its economic growth model away from the rapid expansion of the past, and structural adjustments are imperative. All of this has far reaching impacts on various sectors, including our target market. Despite these challenges, we remain committed to executing our strategy and prioritizing profitable growth. Speaker 200:05:19Our commitment to delivering value to shareholders is unwavering and we intend to pay dividends and when probability and smooth operations allow. This overall approach reflects our decision to navigate in the evolving economic landscape, while ensuring the sustainable success of our business and returning value to our shareholders. Now, I will turn the call to Frank, who will go through our financials. Speaker 300:05:48Thank you, Ken, and hello, everyone. We are pleased to deliver solid financial results in 2023. Total net revenue increased by 35% year over year to RMB4.8 billion and the net income rose by 46% to approximately RMB1.2 billion In response to heightened asset quality risk in the Q4, we proactively reduced loan volumes to satisfy profitability, resulting a 15% sequential decline in total net revenue for the quarter. We recognized RMB26 1,000,000 and RMB46 1,000,000 of impairment losses on long term investments related to our indirect investment in New Up Bank of Liaoning in 20222023, respectively, mainly due to depreciation in the market devaluation of Chinese banking sector. However, the banking loan portfolio and operation remain healthy, and we believe it continues to be a good investment for us. Speaker 300:06:59Looking ahead, we will not pursue Q loan volume growth at expense of the profitability, which is always our strategic focus to ensure long term growth and returns to the shareholders. We will continue to strengthen our risk management system to improve asset quality and balance our revenue and profitability growth. Now I would like to read some financial performance for Q4. Please note that all numbers stated are in RMB and rounded up. Total net revenue increased by 25 percent to RMB1193 million from RMB956 1,000,000 in the same period of 2022, primarily due to an increase in the total loan amount of facilities and originated this quarter compared with the same period of 2022. Speaker 300:07:55Origination and the servicing expenses increased by 28% to RMB755 1,000,000 from RMB589 1,000,000 in the same period of 2022, primarily due to the increase in the commission fees and the collection expenses, resulting from the increase in total loan amount facilitated and originated this quarter compared with the same period of 2022. Provisions for loans receivable was RMB99 1,000,000 compared with RMB75 1,000,000 in the same period of 2022, primarily due to an increase both in loan receivables held by the company as a result of increase in total loan amount of facilities originated this quarter and in the estimated defer rate compared with the same period of 2022. Income from operations was RMB254 1,000,000 compared with RMB274 1,000,000 in the same period of 2022. Net income was RMB189 million compared with RMB275 million in the same period of $1,000,000 in the same period of 2022. Non GAAP adjusted net income was RMB231 1,000,000 compared with RMB278 1,000,000 in the same period of 2022. Speaker 300:09:24For further financial information, please refer to the earnings on our IR website. Regarding our share repurchase plan, in Q4, we repurchased approximately 36 1,000 ADS for a total consideration of USD143,000. Since the beginning of 2023, we had purchased an aggregate approximately 838,000 ADS for a total consideration of US3.5 million dollars We have approximately US5.5 million dollars remaining for the potential repurchase under our current plan. With respect to our dividend, our Board has approved a final annual dividend policy. Under this policy, the determination to declare and pay such semi annual dividends and amount of dividends in any particular half year will be made at the discretion of the Board and will be based upon the company operations and earnings, cash flow, financial condition and other relevant factors that the Board may deem appropriate. Speaker 300:10:37Within to the semi annual dividend policy, the Board has approved the declaration and the payment of semi annual dividend, US0.17 dollars per annum in the second half of twenty twenty three. Now, our business outlook. For Q1 this year, we expect the total loan amount facilitated and originated to be between RMB21 1,000,000,000 and RMB22.5 billion. This concludes our prepared remarks, and we would like to open the call to questions. Operator, please. Operator00:11:14We will now begin the question and answer session. The first question today comes from Boyd Hynes with Equinox Capital. Please go ahead. Speaker 400:11:52Hi. I'd like to spend a few minutes talking about some of the recent changes in regulation. I'm wondering how some of those changes will affect you as a smaller consumer financing company? Thanks. Speaker 200:12:13Can I ask you exactly which regulation that you are referring to? Speaker 400:12:20Yes. There are 2 that I'm speaking of. 1 is the requirement for a minimum registered capital of $1,000,000,000 or $139,000,000 and the other regulation is to have a major investor hold a stake of at least 50%. I'm just wondering how the company is going to be able to comply with those two regulations? Speaker 300:12:50Okay. I think I'll take that question because I Speaker 200:12:54Okay. Okay. Speaker 300:12:55Yes. I can take this question first and because I received Mr. Boy's email and that one. First of all, we are not consumer financing company in China. We are so called fintech company. Speaker 300:13:14So that particular regulation is not directly applied to us, actually applied to the consumer financing company. Those kind of companies usually owned by major banks. They are mainly exclusively focused on issuing a consumer loan. As you see the article, they haven't come out to the detail in terms of the timeline how to implement this. Mainly is because the $1,000,000,000 capital requirement mostly or they already met already meet that requirement. Speaker 300:14:02But the mainly is that about half of maybe over 10 consumer financing company do not haven't met the largest shareholder up to at least up to 50% ownership. That second requirement haven't met. But once again, they haven't not come up with a detail in terms of when they have to apply the second requirement, meaning as you did the article you sent to me, we are a fintech company. So we are basically doing is mainly is acquire the borrower mainly through online or offline method. And forward those consumer, we also get some risk profile sent to the those potential demand to the bank, also to the consumer institution also. Speaker 300:15:10So the banking also the consumer institution, they both provide us funding for so called the loan portfolio. But those loan portfolio is legally under there, but not belong to us. So we are not because we don't have a acceptor, we have a small our own capital, about $1,000,000,000 in a capital small loan company, we can directly issue the loan, but because of funding limitation, we mainly source of funding is from the banks and the financial institution. So that one is to not because of the Chinese monetary policy right now, it's very loose. And so we that requirement do not affect us in terms of the lending available our funding in that regard. Speaker 300:16:15So no effect at all. So we don't see that when have any effect on us anytime soon. Ken, you want to add on something? Speaker 200:16:29No, I think you got it. Speaker 300:16:33Okay. Speaker 400:16:36Thank you. I appreciate the detailed answer. That's all I have. Thanks. Operator00:16:43The next question comes from Mason Born with AWH Capital. Please go ahead. Speaker 500:16:51Hi, thanks for the questions. I have 2. To start, could you talk about your growth outlook? And I know you gave guidance for Q1, but just how you're thinking about the opportunity to grow going forward given kind of the pullback in, I guess, your aggressiveness on growth given what's happening on the risk side of things? And then how that looks longer term, both, I guess, 'twenty four and beyond? Speaker 200:17:20Okay. I'll take this one. It's really difficult for me to give you a forecast 2024 and beyond. Let's talk about 2024. I think over Q1 and then looking forward, it looks to us that the environment has been becoming from worse from the past situation to a little bit better one. Speaker 200:17:47But we still feel that the so called better environment is not as good as the much better environment for the first half of twenty twenty three. So in terms of growth, I think we will gradually go into the growth mode, but the growth rate will be slower than that of the last year. Speaker 500:18:09Okay, thanks. And then the second one, if I look at your dividend policy, it's good to see that you're returning some of the capital to shareholders. But if I look at peers, some of them are returning substantially more as a percentage of net income is up to about 50% through buybacks and dividends combined or another competitor announced a large special dividend this week. I was wondering how you think about your balance sheet given where tangible book value is per share and if you could do more on the dividend side of things? Thanks. Speaker 300:18:47Yes. We actually yes, we do have beside a dividend payout, we are looking for other way to return the shareholder value. Right now, we have just issued the Q4 and the last year financial reports, and we will do 20 F by the end of next month. And in May, we will have for the Q1 financial reports, earnings call. After that, we are we definitely, this year, looking for the way to have a more way to return the shareholder value. Speaker 300:19:44Our situation is a little bit different compared with our peers because we are trading volume is very thin and almost now you know that. So we are regular open window period, we just cannot add much we are restricted by 25% of flow on a daily basis. So we are looking for more way to return shareholder value. That's all I can say at this moment. Speaker 500:20:19Thank you. Operator00:20:31The next question comes from Matt Larson with Cinquedia Capital Markets. Please go ahead. Speaker 600:20:39Thanks for taking my questions. My question is just kind of follow-up the previous 2 people who have called in. Thanks for the dividend because it puts you on the map and is returning some capital to shareholders. What I'm asking is kind of abstract. Your company trades at a multiple, which one would never see in certainly United States and probably in not many parts of the world of slightly above 1 to 1.5 times earnings. Speaker 600:21:19The dividend will definitely draw in a few more investors. But in the past, when people have brought up the subject of maybe going private or finding a way to get your share price higher. The answer was that wasn't an option. And so I'm kind of wondering what is your plan? Some of your a couple of your competitors do trade at 4x earnings or so. Speaker 600:21:53They pay a similar dividend to what you are forecasting. So if you could get your multiple to a 4, that's at least a triple in your price and it gets you to a level where I think your primary shareholders would be happier from a financial point of view and also for any long term investor. Your stock has been in an uptrend, so which is contrary to what the stock indices out of the PRC have been in. So one can't complain over the last 6 or 8 months. But is there a game plan to get better awareness of your company and the fact that you've had pretty stable earnings and consistent earnings, so that more investors are aware of your stock. Speaker 600:22:54It's thinly traded, but that can work both ways. If social media and other sites here in the United States became more aware of a company trading at 1.3x earnings with significant cash on the balance sheet. It wouldn't take much to move the stock. Sorry, I'm rambling on here, but for investors to be frustrated with a stock trading 1 and change multiple, what game plan do you have? My suggestion is to get the word out there, and that would be more news releases and things like that. Speaker 600:23:32Sorry to take so long, but Anderson, what do you have Speaker 300:23:36to say? Yes. We are as you know, we are in kind of not that sexy industry. And also, we are definitely not among the leader of this industry like the leader is Ant Financial and not so far so far. You know what I mean. Speaker 300:24:01And in terms of whatever visibility for the sector and for the whole thing, you can contribute a lot of factors. We know it's very much interesting to talk about it. But the main thing I think everyone agree those factors not in our control, like the U. S. Relationship with China or something like that. Speaker 300:24:29So we believe, 6 example that we believe we should continue to what is the right, mainly run our business as best we could and return the correspondent, return our return to shareholder value. I think over time, it will play out. But definitely, I don't know when. And regarding the privatization, I would say once again, that it was kind of tricky because U. S. Speaker 300:25:00Investor consider privatization. It's basically, it's a value play. You have definitely have no obstacle to reshape and come back anytime you want to do this. But in China, it's different. If you don't believe me, just look at it. Speaker 300:25:20There's a big company, real estate company. They run the bigger in China, run the biggest mall, use the real estate company. They run on and run the biggest shopping mall in China, the Wang Jianlin, the Liaoning company. They used to live in Hong Kong. Then somehow in like 2015, 2016, they say the valuation is horrible. Speaker 300:25:44They go to privatization and they want to really split in domestic AA market, but they never got a commission and they never get a chance to come back to the Hong Kong market. We are in the somehow in the consumer sector also. Chinese, there's a rule on the book applied to definitely applied to us. So like anything, you have over 1,000,000 consumer, we have to get approval from the Chinese government in order to list overseas, especially in the U. S. Speaker 300:26:28Hong Kong is a little bit of gray area because technically, you can consider it as a China territory. So if you can if you delisting, you the real listing is not sure. That's all I want to say. It's what I say, because we are subject to government approval because we have more than 10,000,000 dollars the customer base. That's much more than that. Speaker 300:27:04So that is another something we can talk about and we can have someone who can give us kind of there's no insurance policy for that. So if we delisting, maybe we're never going to list again. So that's why everyone do not want to do that. It's kind of a listing status is kind of a privilege in China. In terms of the plan, I have I don't have a detailed plan, but I have a general plan. Speaker 300:27:41The first plan is get a stock over $5 So the institution investor can technically contact us. So if we have some period of time, say like more than half a year or so, our stock has mainly over $5 We will probably rethink our PR policy. We are maybe I will be more on the roadshow, other road, do whatever usually the stuff we do and hope for the best result. That's the general plan. I hope I can answer your question. Speaker 600:28:21All right. Yes, you did in a way. You're kind of trapped in your current listing because you can't go private because then you've got no other exit strategy. But I guess, I was looking for some sort of, I don't know, illumination of the game plan because your stock has been mired in a low multiple. You're not the only one there. Speaker 600:28:52I understand there's 1 or 2 FinTech companies that trade less than one times earnings in Hong Kong. So it's just a sector that people are concerned about regulation and things like that. But when you're trading your cash value, just coming from the capital markets here in the United States, we have options to handle that. I mean, like going private or merging. What would prevent you from selling to a partner who has like a bank or somebody that has a significantly higher multiple where it would be very accretive to them to buy a company of yours with your client base and your reach with all your millions of customers. Speaker 600:29:42But I'll leave that there just for you to consider. Thanks for your time. Speaker 300:29:46Thank you. Operator00:29:51This concludes our question and answer session. I would like to turn the conference back over to Victoria Yu for any closing remarks. Speaker 100:30:00Okay. 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 contacts. We look forward to speaking with you again in the near future. Thank you.Read morePowered by Conference Call Audio Live Call not available Earnings Conference CallX Financial Q4 202300:00 / 00:00Speed:1x1.25x1.5x2x Earnings DocumentsSlide DeckPress Release(8-K)Annual report(20-F) X Financial Earnings HeadlinesX Financial Files Annual Report on Form 20-F for Fiscal Year 2024 | XYF Stock NewsApril 25, 2025 | gurufocus.comX Financial Files Annual Report on Form 20-F for Fiscal Year 2024April 25, 2025 | prnewswire.comBlackrock’s Sending THIS Crypto Higher on PurposeWhile everyone's distracted by Bitcoin's moves, a stealth revolution is underway. One altcoin is quietly positioning itself to overthrow the entire banking system.May 5, 2025 | Crypto 101 Media (Ad)X Financial Enters the Top 20 Stocks to Buy. Should You Jump on the Bandwagon?April 15, 2025 | msn.comX Financial falls -9.0%April 2, 2025 | markets.businessinsider.comX Financial (NYSE:XYF) Q4 2024 Earnings Call TranscriptMarch 23, 2025 | insidermonkey.comSee More X Financial Headlines Get Earnings Announcements in your inboxWant to stay updated on the latest earnings announcements and upcoming reports for companies like X Financial? Sign up for Earnings360's daily newsletter to receive timely earnings updates on X Financial and other key companies, straight to your email. Email Address About X FinancialX Financial (NYSE:XYF) provides personal finance services in the People's Republic of China. The company offers services as an online marketplace connecting borrowers and investors or institutional funding partners. Its loan products include Xiaoying credit loan, which consists of Xiaoying card loan; and Xiaoying preferred loan to small business owners. The company also offers Xiaoying housing loan, a home equity loan product for property owners; investment products through Xiaoying wealth management platform, such as funds, money market, and insurance products; and loan facilitation services to other platforms. In addition, it engages in the technology development, service, and sale of products; and provision of guarantee and consulting services. The company was incorporated in 2014 and is headquartered in Shenzhen, the People's Republic of China.View X Financial ProfileRead more More Earnings Resources from MarketBeat Earnings Tools Today's Earnings Tomorrow's Earnings Next Week's Earnings Upcoming Earnings Calls Earnings Newsletter Earnings Call Transcripts Earnings Beats & Misses Corporate Guidance Earnings Screener Earnings By Country U.S. Earnings Reports Canadian Earnings Reports U.K. Earnings Reports Latest Articles Amazon Earnings: 2 Reasons to Love It, 1 Reason to Be CautiousMeta Takes A Bow With Q1 Earnings - Watch For Tariff Impact in Q2Palantir Earnings: 1 Bullish Signal and 1 Area of ConcernVisa Q2 Earnings Top Forecasts, Adds $30B Buyback PlanMicrosoft Crushes Earnings, What’s Next for MSFT Stock?Qualcomm's Earnings: 2 Reasons to Buy, 1 to Stay AwayAMD Stock Signals Strong Buy Ahead of Earnings Upcoming Earnings Advanced Micro Devices (5/6/2025)American Electric Power (5/6/2025)Constellation Energy (5/6/2025)Marriott International (5/6/2025)Energy Transfer (5/6/2025)Mplx (5/6/2025)Brookfield Asset Management (5/6/2025)Arista Networks (5/6/2025)Duke Energy (5/6/2025)Zoetis (5/6/2025) Get 30 Days of MarketBeat All Access for Free Sign up for MarketBeat All Access to gain access to MarketBeat's full suite of research tools. 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There are 7 speakers on the call. Operator00:00:00Hello, and welcome to the X Financial 4th Quarter 2023 Earnings Conference Call. All participants will be in a listen only mode. After today's presentation, there will be an opportunity to ask Please note this event is being recorded. I would now like to turn the conference over to Victoria Yu. Please go ahead. Speaker 100:00:39Thank 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 irdoxiaoindao Group. On the call today from X Financial are Mr. Ken Li, President and Mr. Speaker 100:00:55Frank Fuya Zheng, Chief Financial Officer. 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 and A session. Speaker 100:01:13I 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 like involve known or unknown risks, uncertainties and other factors, 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 statements. Further information regarding these and other risks, uncertainties, factors is included in the company's filing with the U. S. Securities and Exchange Commission. Speaker 100:02:02The 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 and allowed. It is now my pleasure to introduce Mr. Kent Li. Mr. Li, please go ahead. Speaker 200:02:22Hello, everyone. We are pleased to conclude the year with solid operational and financial results, emphasizing our commitment to a sustained growth. In 2023, we facilitated and originated 43% more loans 2022 and delivered a notable year over year growth in both revenue and project. Total net revenue increased 35% on an annual basis, while income from operations increased 33% and net income improved by 46%. However, as we enter the second half of twenty twenty three, particularly in the Q4, we experienced increased risk levels in asset quality. Speaker 200:03:08While we strengthened our risk control and implemented various measures to managing delinquency rates, we also made a strategic decision to proactively reduce loan volumes in the Q4, prioritizing profitability over share volume growth. During the Q4 of 2023, our total loan amount facilitated and originated was RMB26 1,000,000,000, a 20% year over year increase by an 11% quarter over quarter decline. Delinquency rates for non past due were 31 to 30 to 60 days and 91 to 180 days were 1.57% and 3.12%, respectively, at the end of the quarter, compared with 1.02% and 1.93%, respectively, a year ago. Our team remains vigilant in monitoring asset dynamics and has taken further steps to mitigate risk by reducing our exposure to higher risk areas and adjusting our business approach to ensure sustainable profitability. We aim for continued gradual improvement over the course of 2024 and these measures have begun to have a positive impact on our risk indicators. Speaker 200:04:29For fiscal year 2024, our strategic approach will remain consistent and somewhat conservative, aligned with current market conditions in China. We believe the regulatory environment has become stable and the government is committed to promoting economic recovery. However, we recognize that challenges and uncertainties exist as the country undergoes a transformative shift in its economic growth model away from the rapid expansion of the past, and structural adjustments are imperative. All of this has far reaching impacts on various sectors, including our target market. Despite these challenges, we remain committed to executing our strategy and prioritizing profitable growth. Speaker 200:05:19Our commitment to delivering value to shareholders is unwavering and we intend to pay dividends and when probability and smooth operations allow. This overall approach reflects our decision to navigate in the evolving economic landscape, while ensuring the sustainable success of our business and returning value to our shareholders. Now, I will turn the call to Frank, who will go through our financials. Speaker 300:05:48Thank you, Ken, and hello, everyone. We are pleased to deliver solid financial results in 2023. Total net revenue increased by 35% year over year to RMB4.8 billion and the net income rose by 46% to approximately RMB1.2 billion In response to heightened asset quality risk in the Q4, we proactively reduced loan volumes to satisfy profitability, resulting a 15% sequential decline in total net revenue for the quarter. We recognized RMB26 1,000,000 and RMB46 1,000,000 of impairment losses on long term investments related to our indirect investment in New Up Bank of Liaoning in 20222023, respectively, mainly due to depreciation in the market devaluation of Chinese banking sector. However, the banking loan portfolio and operation remain healthy, and we believe it continues to be a good investment for us. Speaker 300:06:59Looking ahead, we will not pursue Q loan volume growth at expense of the profitability, which is always our strategic focus to ensure long term growth and returns to the shareholders. We will continue to strengthen our risk management system to improve asset quality and balance our revenue and profitability growth. Now I would like to read some financial performance for Q4. Please note that all numbers stated are in RMB and rounded up. Total net revenue increased by 25 percent to RMB1193 million from RMB956 1,000,000 in the same period of 2022, primarily due to an increase in the total loan amount of facilities and originated this quarter compared with the same period of 2022. Speaker 300:07:55Origination and the servicing expenses increased by 28% to RMB755 1,000,000 from RMB589 1,000,000 in the same period of 2022, primarily due to the increase in the commission fees and the collection expenses, resulting from the increase in total loan amount facilitated and originated this quarter compared with the same period of 2022. Provisions for loans receivable was RMB99 1,000,000 compared with RMB75 1,000,000 in the same period of 2022, primarily due to an increase both in loan receivables held by the company as a result of increase in total loan amount of facilities originated this quarter and in the estimated defer rate compared with the same period of 2022. Income from operations was RMB254 1,000,000 compared with RMB274 1,000,000 in the same period of 2022. Net income was RMB189 million compared with RMB275 million in the same period of $1,000,000 in the same period of 2022. Non GAAP adjusted net income was RMB231 1,000,000 compared with RMB278 1,000,000 in the same period of 2022. Speaker 300:09:24For further financial information, please refer to the earnings on our IR website. Regarding our share repurchase plan, in Q4, we repurchased approximately 36 1,000 ADS for a total consideration of USD143,000. Since the beginning of 2023, we had purchased an aggregate approximately 838,000 ADS for a total consideration of US3.5 million dollars We have approximately US5.5 million dollars remaining for the potential repurchase under our current plan. With respect to our dividend, our Board has approved a final annual dividend policy. Under this policy, the determination to declare and pay such semi annual dividends and amount of dividends in any particular half year will be made at the discretion of the Board and will be based upon the company operations and earnings, cash flow, financial condition and other relevant factors that the Board may deem appropriate. Speaker 300:10:37Within to the semi annual dividend policy, the Board has approved the declaration and the payment of semi annual dividend, US0.17 dollars per annum in the second half of twenty twenty three. Now, our business outlook. For Q1 this year, we expect the total loan amount facilitated and originated to be between RMB21 1,000,000,000 and RMB22.5 billion. This concludes our prepared remarks, and we would like to open the call to questions. Operator, please. Operator00:11:14We will now begin the question and answer session. The first question today comes from Boyd Hynes with Equinox Capital. Please go ahead. Speaker 400:11:52Hi. I'd like to spend a few minutes talking about some of the recent changes in regulation. I'm wondering how some of those changes will affect you as a smaller consumer financing company? Thanks. Speaker 200:12:13Can I ask you exactly which regulation that you are referring to? Speaker 400:12:20Yes. There are 2 that I'm speaking of. 1 is the requirement for a minimum registered capital of $1,000,000,000 or $139,000,000 and the other regulation is to have a major investor hold a stake of at least 50%. I'm just wondering how the company is going to be able to comply with those two regulations? Speaker 300:12:50Okay. I think I'll take that question because I Speaker 200:12:54Okay. Okay. Speaker 300:12:55Yes. I can take this question first and because I received Mr. Boy's email and that one. First of all, we are not consumer financing company in China. We are so called fintech company. Speaker 300:13:14So that particular regulation is not directly applied to us, actually applied to the consumer financing company. Those kind of companies usually owned by major banks. They are mainly exclusively focused on issuing a consumer loan. As you see the article, they haven't come out to the detail in terms of the timeline how to implement this. Mainly is because the $1,000,000,000 capital requirement mostly or they already met already meet that requirement. Speaker 300:14:02But the mainly is that about half of maybe over 10 consumer financing company do not haven't met the largest shareholder up to at least up to 50% ownership. That second requirement haven't met. But once again, they haven't not come up with a detail in terms of when they have to apply the second requirement, meaning as you did the article you sent to me, we are a fintech company. So we are basically doing is mainly is acquire the borrower mainly through online or offline method. And forward those consumer, we also get some risk profile sent to the those potential demand to the bank, also to the consumer institution also. Speaker 300:15:10So the banking also the consumer institution, they both provide us funding for so called the loan portfolio. But those loan portfolio is legally under there, but not belong to us. So we are not because we don't have a acceptor, we have a small our own capital, about $1,000,000,000 in a capital small loan company, we can directly issue the loan, but because of funding limitation, we mainly source of funding is from the banks and the financial institution. So that one is to not because of the Chinese monetary policy right now, it's very loose. And so we that requirement do not affect us in terms of the lending available our funding in that regard. Speaker 300:16:15So no effect at all. So we don't see that when have any effect on us anytime soon. Ken, you want to add on something? Speaker 200:16:29No, I think you got it. Speaker 300:16:33Okay. Speaker 400:16:36Thank you. I appreciate the detailed answer. That's all I have. Thanks. Operator00:16:43The next question comes from Mason Born with AWH Capital. Please go ahead. Speaker 500:16:51Hi, thanks for the questions. I have 2. To start, could you talk about your growth outlook? And I know you gave guidance for Q1, but just how you're thinking about the opportunity to grow going forward given kind of the pullback in, I guess, your aggressiveness on growth given what's happening on the risk side of things? And then how that looks longer term, both, I guess, 'twenty four and beyond? Speaker 200:17:20Okay. I'll take this one. It's really difficult for me to give you a forecast 2024 and beyond. Let's talk about 2024. I think over Q1 and then looking forward, it looks to us that the environment has been becoming from worse from the past situation to a little bit better one. Speaker 200:17:47But we still feel that the so called better environment is not as good as the much better environment for the first half of twenty twenty three. So in terms of growth, I think we will gradually go into the growth mode, but the growth rate will be slower than that of the last year. Speaker 500:18:09Okay, thanks. And then the second one, if I look at your dividend policy, it's good to see that you're returning some of the capital to shareholders. But if I look at peers, some of them are returning substantially more as a percentage of net income is up to about 50% through buybacks and dividends combined or another competitor announced a large special dividend this week. I was wondering how you think about your balance sheet given where tangible book value is per share and if you could do more on the dividend side of things? Thanks. Speaker 300:18:47Yes. We actually yes, we do have beside a dividend payout, we are looking for other way to return the shareholder value. Right now, we have just issued the Q4 and the last year financial reports, and we will do 20 F by the end of next month. And in May, we will have for the Q1 financial reports, earnings call. After that, we are we definitely, this year, looking for the way to have a more way to return the shareholder value. Speaker 300:19:44Our situation is a little bit different compared with our peers because we are trading volume is very thin and almost now you know that. So we are regular open window period, we just cannot add much we are restricted by 25% of flow on a daily basis. So we are looking for more way to return shareholder value. That's all I can say at this moment. Speaker 500:20:19Thank you. Operator00:20:31The next question comes from Matt Larson with Cinquedia Capital Markets. Please go ahead. Speaker 600:20:39Thanks for taking my questions. My question is just kind of follow-up the previous 2 people who have called in. Thanks for the dividend because it puts you on the map and is returning some capital to shareholders. What I'm asking is kind of abstract. Your company trades at a multiple, which one would never see in certainly United States and probably in not many parts of the world of slightly above 1 to 1.5 times earnings. Speaker 600:21:19The dividend will definitely draw in a few more investors. But in the past, when people have brought up the subject of maybe going private or finding a way to get your share price higher. The answer was that wasn't an option. And so I'm kind of wondering what is your plan? Some of your a couple of your competitors do trade at 4x earnings or so. Speaker 600:21:53They pay a similar dividend to what you are forecasting. So if you could get your multiple to a 4, that's at least a triple in your price and it gets you to a level where I think your primary shareholders would be happier from a financial point of view and also for any long term investor. Your stock has been in an uptrend, so which is contrary to what the stock indices out of the PRC have been in. So one can't complain over the last 6 or 8 months. But is there a game plan to get better awareness of your company and the fact that you've had pretty stable earnings and consistent earnings, so that more investors are aware of your stock. Speaker 600:22:54It's thinly traded, but that can work both ways. If social media and other sites here in the United States became more aware of a company trading at 1.3x earnings with significant cash on the balance sheet. It wouldn't take much to move the stock. Sorry, I'm rambling on here, but for investors to be frustrated with a stock trading 1 and change multiple, what game plan do you have? My suggestion is to get the word out there, and that would be more news releases and things like that. Speaker 600:23:32Sorry to take so long, but Anderson, what do you have Speaker 300:23:36to say? Yes. We are as you know, we are in kind of not that sexy industry. And also, we are definitely not among the leader of this industry like the leader is Ant Financial and not so far so far. You know what I mean. Speaker 300:24:01And in terms of whatever visibility for the sector and for the whole thing, you can contribute a lot of factors. We know it's very much interesting to talk about it. But the main thing I think everyone agree those factors not in our control, like the U. S. Relationship with China or something like that. Speaker 300:24:29So we believe, 6 example that we believe we should continue to what is the right, mainly run our business as best we could and return the correspondent, return our return to shareholder value. I think over time, it will play out. But definitely, I don't know when. And regarding the privatization, I would say once again, that it was kind of tricky because U. S. Speaker 300:25:00Investor consider privatization. It's basically, it's a value play. You have definitely have no obstacle to reshape and come back anytime you want to do this. But in China, it's different. If you don't believe me, just look at it. Speaker 300:25:20There's a big company, real estate company. They run the bigger in China, run the biggest mall, use the real estate company. They run on and run the biggest shopping mall in China, the Wang Jianlin, the Liaoning company. They used to live in Hong Kong. Then somehow in like 2015, 2016, they say the valuation is horrible. Speaker 300:25:44They go to privatization and they want to really split in domestic AA market, but they never got a commission and they never get a chance to come back to the Hong Kong market. We are in the somehow in the consumer sector also. Chinese, there's a rule on the book applied to definitely applied to us. So like anything, you have over 1,000,000 consumer, we have to get approval from the Chinese government in order to list overseas, especially in the U. S. Speaker 300:26:28Hong Kong is a little bit of gray area because technically, you can consider it as a China territory. So if you can if you delisting, you the real listing is not sure. That's all I want to say. It's what I say, because we are subject to government approval because we have more than 10,000,000 dollars the customer base. That's much more than that. Speaker 300:27:04So that is another something we can talk about and we can have someone who can give us kind of there's no insurance policy for that. So if we delisting, maybe we're never going to list again. So that's why everyone do not want to do that. It's kind of a listing status is kind of a privilege in China. In terms of the plan, I have I don't have a detailed plan, but I have a general plan. Speaker 300:27:41The first plan is get a stock over $5 So the institution investor can technically contact us. So if we have some period of time, say like more than half a year or so, our stock has mainly over $5 We will probably rethink our PR policy. We are maybe I will be more on the roadshow, other road, do whatever usually the stuff we do and hope for the best result. That's the general plan. I hope I can answer your question. Speaker 600:28:21All right. Yes, you did in a way. You're kind of trapped in your current listing because you can't go private because then you've got no other exit strategy. But I guess, I was looking for some sort of, I don't know, illumination of the game plan because your stock has been mired in a low multiple. You're not the only one there. Speaker 600:28:52I understand there's 1 or 2 FinTech companies that trade less than one times earnings in Hong Kong. So it's just a sector that people are concerned about regulation and things like that. But when you're trading your cash value, just coming from the capital markets here in the United States, we have options to handle that. I mean, like going private or merging. What would prevent you from selling to a partner who has like a bank or somebody that has a significantly higher multiple where it would be very accretive to them to buy a company of yours with your client base and your reach with all your millions of customers. Speaker 600:29:42But I'll leave that there just for you to consider. Thanks for your time. Speaker 300:29:46Thank you. Operator00:29:51This concludes our question and answer session. I would like to turn the conference back over to Victoria Yu for any closing remarks. Speaker 100:30:00Okay. 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 contacts. We look forward to speaking with you again in the near future. Thank you.Read morePowered by