PPDAI Group Inc. (NYSE:PPDF) Q3 2019 Earnings Conference Call - Final Transcript

Nov 19, 2019 • 08:00 am ET

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PPDAI Group Inc. (NYSE:PPDF) Q3 2019 Earnings Conference Call - Final Transcript

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Presentation
Executive
Jun Zhang

ticker symbol was also changed to FINV on November 29. Whilst the PPDAI brand will continue to be the main interface for our borrowers, the rebranding of the Group will better reflect our diversified businesses such as in providing technology related services to our financial institution partners and our growing overseas businesses. FinVolution is integration of finance and evolution, representing better alignment with the range of our businesses, our strategic developments and our mission.

As a leader in the technology-driven, consumer finance space, we will remain focused on our strategies and maximize shareholder value by expanding our core business, enhancing our brand recognition and continuing to invest in technology.

Now I'd like to pass the call over to our Co-CEO, Feng, to discuss an update of our business.

Executive
Feng Zhang

Thank you, Cliff, and hello, everyone.

As Cliff mentioned, we have undergone a significant transition. In less than a year, our platform shifted from being mainly facilitated by individual investors to being predominantly facilitated by institutions.

To illustrate more details, in the year ago period, our institutional funding partners only facilitated around 14% of total loan originations, while looking at the third quarter of 2019, our institutional partners facilitated more than 75% of loan originations. Notably, since October, all of our loan originations are being facilitated by institutional partners. Today, the number of institutional partners active on our platform have increased to around 30.

During this transition period, we have continued to deliver consistent performance. Overall loan volume grew sequentially in each of the past four quarters, with an average growth rate of 14% for each quarter. Our third quarter loan volume grew 66% year-over-year. Our revenues and operating income are both higher by over 30% versus the year ago period. And during this period our delinquency rates have remained broadly stable, despite the ups and downs in the industry and the impact of the macroeconomic slowdown.

Our transition has been rapid and smooth and arguably one of the most successful in the P2P industry. This successful operational transformation demonstrates our internal extensive experience, strong execution and management capability. This transition would not have been possible without our institutional partners. Their trust and supporting us reflects our value proposition to them and further validates our core capabilities, our experience as well as our broad technology capabilities.

Today we also announced that we are discontinuing the P2P mode of the business and going forward we will focus entirely on servicing and facilitating loans partnering with the financial institutions. Since we have started new loan originations funded by individual P2P investors, our P2P related loan balance will continue to shrink as evidenced by the monthly P2P loan balance figures disclosed on the NIFA website. Our P2P loan balance has already decreased by more than a half from RMB19 billion at the end of June to RMB9 billion at the end of October.

The loan tenures on our platform are relatively short, on average eight to nine months. So this loan balance will run off