奇富科技（03660.HK，QFIN.US）2025年第一季度业绩电话会

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会议摘要

Kifu Technology reported strong Q1 2025 financial results, with revenues at RMB 4.69 billion and a 59.9% year-over-year increase in non-GAAP net income. The company is advancing its AI Plus Credit strategy, enhancing risk management, and expanding user acquisition channels, showcasing its commitment to AI integration and high-quality growth.

会议速览

Kifu Technology's 2025 Q1 Earnings Conference Call

Kifu Technology holds its first quarter 2025 earnings conference call, discussing financial results, non-GAAP measures, and featuring a CEO's remarks delivered via AI-generated voice.

AI-Driven Credit Innovation Fuels Growth Amidst Economic Recovery

In Q1 2025, amidst global economic transformation and China's mild recovery, the company leveraged AI to reshape credit processes, achieving high-quality growth, serving 58 million users, and increasing loan facilitation volume. By implementing an AI-powered credit decision engine and asset distribution platform, they improved operational efficiency, enhanced risk management, and reduced funding costs, while also optimizing user acquisition strategies through multimodal recognition technology.

Strategic Expansion in Embedded Finance and Technology Solutions

The company focuses on expanding embedded finance channels and technology solutions, achieving significant growth in new credit line users and loan volume, while forming partnerships with municipal banks and deploying AI products for digital transformation.

Regulatory Guidance Boosts China's Internet Loan Facilitation Sector

In April, China's Financial Regulatory Administration issued guidelines enhancing management of internet loan facilitation by commercial banks, emphasizing equal partnerships and long-term perspectives. These regulations recognize the value of the loan facilitation model, improving sector health and sustainability. Despite international uncertainties, the economy is expected to remain resilient, supported by technological innovation and government measures. Financial policies aim to stabilize markets and increase support for key consumption areas. The company focuses on operational efficiency, capital allocation, and shareholder returns, executing a long-term strategy to sustain high-quality growth in core businesses and empower financial institutions' intelligent transformation. Recent convertible senior notes issuance and share repurchases demonstrate commitment to shareholder value and efficient capital allocation.

2025 Q1 Earnings Call Summary: Stable Performance Amid Trade War Uncertainty

Despite recent trade war uncertainties, the company reported a solid Q1 in 2025 with total revenue reaching 4.69 billion, driven by increases in unbalanced loans and lower early repayment discounts. The company emphasizes its focus on optimizing operations and managing risk exposures, noting a cautious approach towards new user acquisition amidst volatile microeconomic conditions. Key metrics highlight a 2.02% 90-day delinquency rate and a non-GAAP net profit of 1.93 billion. The company also discusses its successful share repurchase plan and the issuance of a 690 million U.S. dollar convertible bond, showcasing confidence in future growth and commitment to shareholders.

Impact of New Loan Facilitation Rules and Credit Quality Trends in 2025

The dialogue discusses the expected impacts of new loan facilitation regulations effective in October 2025, emphasizing the industry's move toward greater organization and health. Speakers address questions regarding the rules' positive signals for leading platforms, the encouragement of risk-sharing partnerships, and the stability of asset quality, noting fluctuations within expected ranges and the absence of major risk policy adjustments. They also comment on the mild recovery in credit demand and the adaptability of their business model to balance growth and risk amid global trade uncertainties.

Update on Financial Health and Credit Demand Trends Amid Trade Tensions

The company addresses concerns over rising day-one delinquency rates, attributing the increase to changes in loan mix and business channel proportions. Despite external uncertainties, asset quality remains healthy, and credit standards have been slightly tightened. Credit demand experienced minor fluctuations due to trade tensions, yet strategic partnerships aim to mitigate potential declines, with loan volumes expected to align with yearly projections.

Assessment of Tariff Impacts and ADR Delisting Risks

The speaker discusses the limited direct impact of tariffs on their business, focusing on consumer lending and adjustments made to mitigate risks. They also address the reduced risk of ADR delisting following recent developments and the preparedness for potential scenarios, including improved liquidity in the Hong Kong market.

Analysis of Q1 Customer Acquisition Costs and Strategies Amidst Trade War Impacts

The increase in customer acquisition costs in Q1 is attributed to a shift in business mix towards API channels, which incur fees for both new and repeat borrowers. Despite higher costs, these channels generate incremental loan volume and offer lower acquisition cost per loan. The company also increased spending on in-fee marketing to attract higher quality users, implementing tailored strategies across different pricing segments. Focus shifts from cost to efficiency of customer acquisition, optimizing the entire acquisition journey for improved lending efficiency.

Q2 Credit Line Conversion Rates and Strategic Adjustments Amid Trade Tensions

The company's conversion rates from new credit line users to borrowers hit 74% this quarter, despite trade tensions affecting customer credit needs. Plans include monitoring macro changes, adjusting acquisition pace, and optimizing channels for efficiency.

Analysis of Loan Demand, Funding Costs, and Lending Strategy Amidst Policy Stimulus for Domestic Consumption

In response to policy measures aimed at boosting consumption, the company observes increased credit demand and retail sales growth. With expected supportive funding environments and prudent lending strategies, the focus remains on sustainable growth and optimizing funding structures, anticipating slight decreases in funding costs and continued improvement in net take rates.

要点回答

Q：What are the key performance indicators that show the company's growth in the first quarter of 2025?

A：The key performance indicators for the company's growth in the first quarter of 2025 include a total of 163 financial institutions being empowered by the AI-powered credit decision engine and asset distribution platform, serving over 58 million users with approved credit lines, a year-over-year increase in total loan facilitation and origination volume, an increase in non GAAP net income by 59.9% year over year, and an increase in non GAAP diluted EPS by 70.0% year over year.

Q：How is the company reshaping its credit value chain using AI?

A：The company is reshaping its credit value chain using AI by leveraging AI to power a credit decision engine and asset distribution platform, and by accelerating the recruitment of script algorithm engineers to transform into an AI-native organization.

Q：What is the role of the AI agent platform introduced by the company?

A：The AI agent platform introduced by the company is designed to empower core credit processes and has been deployed across key functions such as data analytics, operations, compliance, risk management, strategy, and financial reconciliation. It integrates real-time data insights into decision-making workflows, providing real-time data insights and attribution analysis to optimize strategy and enhance decision efficiency.

Q：What were the outcomes of the company's AI agent Chat B integration?

A：The integration of the AI agent Chat B into the company's workflows resulted in dynamic optimization of strategies and enhanced decision efficiency by providing real-time data insights and attribution analysis.

Q：What actions are being taken to improve underwriting efficiency and the balance between risk and return?

A：To improve underwriting efficiency and balance risk and return, the company has enhanced its intelligent asset distribution platform, which has helped to increase precision in fund asset matching, and has maintained robust asset quality to negotiate favorable funding costs.

Q：How is the embedded finance business contributing to the company's growth?

A：The embedded finance business is contributing to the company's growth by expanding the breadth and depth of channel coverage, adding new channels, and increasing new credit line users and loan volume. This resulted in a year-over-year growth of 36% in new credit line users from embedded finance channels and a surge in loan volume.

Q：What strategic partnerships have been formed in the technology solutions business?

A：In the technology solutions business, the company has formed partnerships with additional mid to large-sized municipal banks, leading to a year-over-year growth of about 140-240% in loan facilitation volume from this segment. These partnerships have been driven by the Focus Pro Credit tech platform and the proprietary solution for SME lending.

Q：What was the purpose of the notice issued by China's Financial Regulatory Administration in April?

A：The notice issued by China's Financial Regulatory Administration in April aimed to strengthen the management of the internet loan facilitation business of commercial banks with the goal of enhancing the quality and efficiency of financial services. It provided clearer guidance for internet-based lending practices and emphasized the importance of equal and mutually beneficial partnerships among banks, platform operators, and credit enhancement providers.

Q：What progress has been made in US-China trade talks?

A：Encouraging progress has been made in US-China trade talks, contributing to a stabilization in the macroeconomic and policy landscape.

Q：What is the company's focus for the near term and long term?

A：In the near term, the company plans to enhance operational efficiency, optimize capital allocation, and increase shareholder returns. Over the long term, it will continue executing its one core strategy, with the core loan facilitation business sustaining high-quality growth and the technology solutions business empowering financial institutions to accelerate their intelligent transformation.

Q：How much was issued in convertible senior notes in Q1 and what percentage of the proceeds will be allocated to share buybacks?

A：In Q1, the company issued USD 690 million in convertible senior notes and 1% of the proceeds will be allocated to share buybacks.

Q：What were the main sequential and year-on-year changes in revenue components in Q1?

A：The sequential growth in revenue was mainly due to increases in unbalanced loans and lower early repayment discount. Overall funding costs declined modestly. Year-on-year growth in revenue was mainly due to strong contribution from ICSI and other value-added services, more than offsetting the decline in capitalized loan facilitation platform service.

Q：What was the total revenue for Q1 and how did it compare to Q4 and the same period last year?

A：The total revenue for Q1 was 4.69 billion, compared to 4.48 billion in Q4 and 4.15 billion a year ago.

Q：How did the company's core loan origination business perform in Q1 in terms of revenue and IRR?

A：The core loan origination business had a revenue of 1.58 billion in Q1, with a sequential decline in the ratio of the loan origination platform service accounts to the quarter-ending loan balance. The sequential increase in sales and marketing expenses was attributed to larger volume contribution from API channels. The average IRR of the loans originated and facilitated was 21.4% in Q1.

Q：What is the current delinquency rate and how does it compare with the previous quarter?

A：The 90-day delinquency rate was 2.02% in Q1, compared to 2.09% in Q4. The delinquency rate was 5.0% in Q1 versus 4.8% in Q4.

Q：What is the purpose of the share repurchase plan initiated by the company?

A：The purpose of the share repurchase plan is to support the company's business initiatives and to return value to shareholders. As of May, the company had purchased approximately 178 million ADS in the open market, ahead of the schedule, as part of the script million share repurchase plan initiated on January 1st.

Q：How will the new loan facilitation rules impact the industry and the company's position within it?

A：The new rules released in April are seen as a positive signal as they recognize the value of loan facilitation platforms and aim to promote a more orderly and healthy industry. The rules encourage banks to adopt a wireless approach and build equal, long-term, and mutually beneficial partnerships based on risk sharing. As a leading industry player, the company expects to benefit from the new rules by operating in a less competitive market environment, continuing to engage with regulators, reviewing practices, and operating with prudence and compliance.

Q：What is the current status of asset quality and how does it compare to the second half of 2022 and 2023?

A：Asset quality has remained largely stable, with the CM2 ratio (measuring delinquency rate after 30-day collections) fluctuating within a tight band, in line with expectations. The CM2 ratio is significantly better than the second half of 2022 and 2023 and is expected to remain largely stable going forward.

Q：Is the company planning any major adjustments to its risk policies?

A：The company's risk levels remain well under control and no major adjustments to its risk policies are needed at present. The full year loan volume growth will largely depend on consumer credit demand in Q, which shows early signs of mild recovery and stabilizing trend. However, the macro environment has increased uncertainties due to the changing global trade environment, and the company will continue to monitor the impact on China's economy while operating prudently.

Q：What is the reason behind the increase in the day one delinquency ratio and how does the company expect this indicator to trend in the future?

A：The increase in the day one delinquency ratio was mainly driven by a change in the loan mix, with a higher percentage of loan volume from the embedded finance channel, which usually has a higher day one delinquency rate compared to app-based or H5-based business. The overall loan volume was roughly flat, leading to a smaller portion of early-stage loans with a lower day one delinquency rate. The company expects the C2M2 ratio for the full year to remain largely stable around zero point Lyle, assuming a stable macro environment.

Q：How did the company manage credit demand trends and what is their strategy for the upcoming period?

A：The company managed credit demand trends by slightly tightening credit standards in response to the uncertainty around the tariff impact. Since then, risk indicators have remained stable through both April and May. The company's strategy going forward is to continue addressing risk strategy on a dynamic basis, expecting the C2M2 ratio for the full year to remain stable around zero point Lyle, assuming a stable macro environment.

Q：What is the company's strategy regarding potential ADR in risk and the liquidity of their Hong Kong tier?

A：The company's strategy regarding potential ADR in risk includes monitoring the impact of the tariff situation on risk performance and dynamically adjusting the strategy as needed. In terms of liquidity, while currently about 99% of trading volume is in the US market, a shift in listing from the US to Hong Kong could improve liquidity in Hong Kong, potentially making the liquidity in Hong Kong more significant if forced delisting occurs.

Q：How does the company expect the loan volume in the second quarter, and what has been the impact of the trade war on new borrowers and the customer acquisition strategy?

A：The company expects loan volume in the second quarter to be largely on track with the年初 plans. The impact of the trade war on new borrowers has not been fully described in the transcript, but the reference to a potential slowdown in loan demand due to the trade war suggests it could have affected the quality of new borrowers and necessitated adjustments to the customer acquisition strategy. The exact nature of these adjustments is not detailed in the provided text.

Q：What factors contributed to the increase in unit customer acquisition costs in Q1?

A：The increase in unit customer acquisition costs in Q1 was mainly driven by a change in business mix where a higher percentage of sales expenses came from API channels. API channels incur fees for both new and repeat borrowers, but costs are calculated using only new users. This, combined with increased spending on in fee marketing to reach higher quality users, led to the higher costs.

Q：Why does the company focus on customer acquisition efficiency rather than just the cost?

A：The company focuses on customer acquisition efficiency because they aim to optimize the entire acquisition journey, making targeting more accurate in terms of user quality and intent. This end-to-end approach improves the efficiency of acquiring new users and the quality of the acquired customer base.

Q：How has the conversion rate from new credit line users to new borrowers changed, and what does this indicate?

A：The conversion rate from new credit line users to new borrowers has increased to 74% in the current quarter from around 65% in the same period last year, indicating a healthy land to end customer acquisition efficiency.

Q：What impact did trade tensions have on users' credit needs and customer acquisition efficiency in Q2?

A：Trade tensions have affected users' credit needs since the start of Q2, which is expected to impact customer acquisition efficiency. The company will continue to monitor the macro environment and competitive landscape and adjust acquisition pace accordingly.

Q：How is the company's loan strategy affected by the macro environment and risk outlook?

A：The company's loan strategy is influenced by the risk outlook and customer demand. Despite stable risk indicators, there's uncertainty in the broader macro environment. Therefore, the company will maintain a prudent strategy to ensure high-quality and sustainable growth.

Q：What is the expectation for funding costs and liquidity in the near future?

A：The government's interest rate cuts and reserve ratio reductions in May are expected to keep the funding environment supportive, allowing for potential further decreases in funding costs. The company plans to optimize its funding structure through increasedABS issuance, leading to a slight decrease in funding cost for Q2 compared to Q1.

Q：What is the expected trend in the net take rate for the remainder of the year?

A：The company expects the net take rate to continue improving on a full-year basis, from 2024 to 2025, assuming no dramatic macro changes until the end of the year. The improvement in the take rate is a continued focus and remains on target.

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