Hexindai Inc. (NASDAQ:HX) Q2 2019 Earnings Conference Call Transcript

Dec 03, 2018 • 08:00 am ET

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Hexindai Inc. (NASDAQ:HX) Q2 2019 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Hello, ladies and gentlemen, and thank you for standing by for Hexindai's Second Quarter Fiscal Year 2019 Earnings Conference Call. At this time all participants are in listen-only mode. After managements prepared remarks there will be a question-and-answer session. As a reminder, today's conference call is being recorded.

I would then like to turn the meeting over to your host for today's call, to Ms. Daisy Wang, IR Director. Please proceed, Daisy.

Executive
Daisy Wang

Thank you, operator. Hello, everyone, and thank you for joining our call today. Our earnings release was distributed earlier today and is available on our IR website at ir.hexindai.com. On the call today from Hexindai are Mr. Xinming Zhou, our CEO; and Mr. Johnson Zhang, CFO. Mr. Zhou will review business operations and company highlights, followed by Mr. Zhang who will review financials and guidance. They will be available to answer your questions during the Q&A session that follows.

(Forward-Looking Cautionary Statements)

It is now my pleasure to introduce our CEO, Mr. Xinming Zhou. Please go ahead, Mr. Zhou.

Executive
Xinming Zhou

Thank you, Daisy, and thank you everyone for joining our call today. This quarter was certainly challenging for us and the entire P2P sector as the overall market environment shifts around us. The industry is gradually weeding out the firms who are financially weaker, fraudulent or unable to maintain compliance standards, leaving only the best around (ph) demand throughout this turbulent period. Many investors are taking a cautious approach, preferring to remain on the sidelines until regulations are fully implemented and ironed out. A clear and definitive regulatory environment will have a positive impact on the industry and allow it to grow sustainably over the long term.

One of the strategic preemptive steps we took during the quarter to stay one step ahead of the industry was to protect our existing investors. Leveraging our data analytics system, we saw demand for loan transfers growing as liquidity in the market. In response, we reduced new loan offerings on our platform and placed a priority on promoting loan transfer solutions (ph) to increase their liquidity and meet the growing demand. As a result, net revenue during the quarter decreased 83% or USD3.6 million from USD21.2 million in the same period of last year, while total loan facilitated decreased 37% to USD33.8 million from USD273.6 million in the same period of last year. While our top line decreased significantly, these steps helped to strengthen confidence in our platform and the loyalty of our existing investors. The total amount of investments made on our platform during the quarter, which got some new loans facilitated and loan transfers was USD219.5 million. The proportion of the new loans facilitated to total investment amount was 15.4% for the quarter compared with 81.2% during the same period of last year.

Investor participation in the entire sector also declined with the number of investors in the entire sector who made an investment during the months of July, August and September, decreasing 23%, 42% and 46% year-over-year, respectively. This compared