9F Inc. (NASDAQ:JFU) Q2 2019 Earnings Conference Call - Final Transcript

Sep 27, 2019 • 08:00 am ET


9F Inc. (NASDAQ:JFU) Q2 2019 Earnings Conference Call - Final Transcript


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Yanjun Lin


To drive long term sustainable growth, regardless of what regulatory environment finally emerges, we began evolving our business into becoming a provider of advanced technologies to institutional funding and merchant partners earlier this year by loading up our Technology Enablement Strategy. This will reduce regulatory risk and equip us with diversified and scalable funding sources.

Total loan origination volume during the quarter came in at RMB9.8 billion, essentially flat sequentially. We spent the majority of April and May carefully fine tuning the entire technical infrastructure of our lending platform in order to better connect to and synchronize with our institutional funding partners as part of Technology Enablement Strategy. While our performance in the second quarter was affected by an adjustment to our systems, once the process was majority complete in June, we were especially pleased to see an immediate and positive impact.

Loan origination volume in June was RMB5 billion, exceeding the RMB4.8 billion from April and May combined, which we believe reflects the trust and quality of our underlying asset and strength of our platform. Net revenues in June were RMB536.4 million compared with RMB510.1 million in April and May combined. So we were able to significantly increase the proportion of total loan origination volume that was funded by institutional funding partners to 58% from just 10.5% in the first quarter of the year.

As you can see, demand from institutional funding partners is strong and we are working to quickly fully diversify our funding sources. We expect institutional funding partners to increasingly account for a greater proportion of loan volumes going forward. As of June 30, 2019, the number of registered users increased 31.9% year-over-year to 82.8 million, while the number of active borrowers decreased 38.2% 0.6 million. This will allow [Phonetic] us to offer a more comprehensive portfolio of products that cover more segment for our institutional funding partners and help increase our conversion rates.

We also established our presence in certain markets outside of China, which we can leverage and acquire extensive experience in operations. We have now operations in Indonesia, Philippines, Thailand and Vietnam. We also work with a number of local banks there by providing them technology enablement services.

We also have obtained certain licenses which are critical for expansion in the future. Recently a JV fintech company in Thailand leased space in conjunction with a local partner [Indecipherable] personal loan in nano loan license in Thailand. I believe we are well-positioned to benefit from the high growth opportunity in these emerging markets. Looking forward with RMB5.9 billion in cash and cash equivalent and term deposit on the balance sheet as of June 30, 2019, and a clear strategy to scale business in uncertain regulatory environment, we believe we are positioned to sustainably grow our business over the long term.

Now let's go over the second quarter 2019 financial result in more detail. We believe year-over-year comparison is a best way to review our performance. All the percentage changes I'm going to give