Jiayin Group Inc. (NASDAQ:JFIN) Q2 2020 Earnings Conference Call - Final Transcript

Sep 02, 2020 • 08:00 am ET


Jiayin Group Inc. (NASDAQ:JFIN) Q2 2020 Earnings Conference Call - Final Transcript


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Dinggui Yan

to execute this rapid and smooth transition without disrupting our business operations. We will continue to onboard new institutions and deepens the relationship with existing ones in order to drive loan growth.

As the economy recovers and consumption rebounds, we'll further expand and diversify our institutional funding sources and continue to work on driving down our funding costs. We think that we are well-positioned to resume attractive top line growth.

With the success of our business transition, we were able to leverage our technology and operational capabilities to empower some business platforms to better serve their small to medium enterprises customers. To advance this, we have made significant progress across our partnership goals. We believe this partnership will create more application scenarios for our business and further expand our high-quality borrower space. We except to deliver more detailed progress in the third quarter.

Besides our successful business transition in Q2, we remained prudent in our operations with increased efforts in risk management and credit assessment. In order to ensure a high-quality borrower base, we focused on serving repeat borrowers, which have the better average credit quality.

You can see this in our repeat borrowing rate, which was 72% in Q2 versus 60.8% a year ago. The increase in repeat borrowing rate improved our credit risk profile. In addition, we tightened our risk management policies and improved our credit scoring system by utilizing advanced data analytics, behavior analysis and algorithm-driven credit assessments. The economy is recovering and our credit quality is improving. We will encourage you to see many operating metrics that showing improvements in Q2.

On the regulatory front, last week, The Supreme People's Court of the PRC announced the new guidelines to the court mandate interest rate cap for private lending. The saving will be kept at four times that of the LPR. This guidance is being interpreted and discussed. However, it appears that the new guidelines are only applicable to private lending.

Since we successfully completed the transition into institutional funding, we expect the impact to operations to be minor and manageable. Meanwhile, we will also prepare for the possibility that these guidelines may apply to institutional lending as well. As one of the leading Fintech platforms in China. our management team can navigate these sorts of changes. We are not concerned.

Our platform and system is sophisticated and has the capability to offer different rate products to different risk profile borrowers. We continue to work closely with our institutional partners to better serve our borrowers and grow our business, while complying with all applicable regulations.

To conclude, we expect our growth to resume in Q3, with our platform now fully transitioned to institutional funding sources. We are confident that Jiayin is well-positioned to emerge from short-term challenges with an optimized business model and strong execution capability.

With that, I will now turn the call over to our CFO, Charlie. Charlie, please go ahead.

Chunlin Fan

Thank you, Mr. Yan and Shelley, and thanks to everyone for joining our call