360 Finance Inc (NASDAQ:QFIN) Q4 2019 Earnings Conference Call - Final Transcript

Mar 27, 2020 • 08:00 am ET


360 Finance Inc (NASDAQ:QFIN) Q4 2019 Earnings Conference Call - Final Transcript


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Haisheng Wu

our main target market, the prime borrowers with third-parties who are more resilient to recurrent expansions. As a result, with further update on our cooperation with [Indecipherable] funding partners.

Next, I would like to brief you on a few key updates during the quarter. In respect of regulatory compliance, with the test in the past, a rigorous assessment conducted through a joint government campaign, are a type of stress augmentation in China, the municipality of leading industry and the committee technology. The ministry of public security and the state administration were making regulations. This was a direct result of our strict standards, a direct action of personal financial interaction.

In addition, they took a new structure of supply floor and they were one of the first to batch out select companies to have [Indecipherable] approved by National Internet Finance Association. In January of 2020, regulators removed the adopted version of the commercial banks internet loan provisional regulatory measures. This legitimize that the loans issued business model and with the new geographic restrictions on online lending business is usually a regulation that's beneficial through the Fintech industry, which were allotted to growth in a more healthy manner.

In respect of customer acquisition, the proactive activity led by our acquisition activity [Indecipherable] approval standards and cut acquisition costs of each new buyer. Efforts were on protecting users positive contribution through cost reduction of buyer acquisition and LTV accretion. In the meantime, we're devoted to loan repurchase through our consistent buyer operations, and the results. The contributions to loan origination volume during the fourth quarter, increased to 81.9%.

In respect of funding, despite a turbulent market, we continue to add our institutional funding partners. We now work with a total number of 81 in the fourth quarter, up from 24 last quarter. Along with nearly 80 -- nearly 40 operator in nationalized areas, but the geographic pressures on online lending business have been removed. Our internal skeptics indicate that we have tipped off the most difficult regulation. Our funding costs saw the long term momentum throughout 2019, growing by more than 100 basis points and we expect this trend to continue in 2020.

During the COVID-19 outbreak, in the first quarter of 2020, with the capital issued RMB500 million ABS as the first consumer demand adjust in 2020. In terms of equity stakeholders, FountainVest [Phonetic] already announced projects equity growth ramping up to become a significant strategy to investors and the Board member in November last year. They were subsequently joined by our Chairman Mr. Hongyi and all key members of management team in December to announce a plan to jointly invest up to $60 million to purchase 360 Finance shares in the next 12 months. By the end of December 2019, the management team and FountainVest have already purchased $20 million worth of shares in addition to the initial investment made by FountainVest in November. FountainVest's strategic investments in the repurchase of our share not only ease the pressure on our stock