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spk08: Good day, ladies and gentlemen. Thank you for standing by and welcome to the Jiayin Group's third quarter 2023 earnings conference call. Currently, all participants are in listen-only mode. Later, we will conduct a question and answer session and instructions will follow at that time. As a reminder, we are recording today's call. If you have any objections, you may disconnect at this time. I will now turn the call over to Mr. Shawn Zhang from Jiayin Group's Investor Relations. Please go ahead.
spk05: Hello everyone. Thank you all for joining us on today's conference call to discuss Jiayin Group's financial results for the third quarter of 2023. We released our earnings results earlier today. The press release is available on the company's website as well as from Newsware Services. On the call with me today are Mr. Yan Dinggui, Chief Executive Officer, Mr. Fan Chunlin, Chief Financial Officer, and Ms. Xu Yifeng, Chief Risk Officer. Before we continue, please note that today's discussion will contain four looking statements made under the safe harbor provisions of the U.S. Private Security Litigation Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties. As such, the company's Act II results may be materially different from the expectations expressed today. Further information regarding these and other risks and uncertainties is included in the company's public filings with the SEC. The company does not assume any obligation to update any forward-looking statement except as required under applicable law. Also, please note that unless otherwise stated, all figures mentioned during the conference call are in Chinese. With that, let me now turn the call over to our CEO, Mr. Yan Dinggui. Mr. Yan will deliver his remarks in Chinese, and I will follow up with the corresponding English translations. Please go ahead, Mr. Yan.
spk00: Hello, everyone. Thank you for attending our telephone conference today. We will review the initial performance of the third quarter of 2023.
spk05: Hello, everyone. Thank you for joining us today to discuss our outstanding results for the third quarter of 2023.
spk00: At the same time, net profit has also grown steadily to 3.24 billion yuan. The result of this answer again proves that the development path of Jiayin is healthy and sustainable. Jiayin's group strategy is accurate and feasible. We have the confidence and ability to create and continue to create value for the investors of the company and grow into important participants in the world financial technology industry.
spk05: This quarter, we have achieved new milestones in key financial and operational metrics. Our loan origination volume reached RMB 24.2 billion in the third quarter, a 62.4% increase compared to the same period last year. Net revenue grew by 64%, while net income further expanded to approximately RMB These results once again prove that our development path is healthy and sustainable, and our strategy is precise and practical. We are confident and capable of continuously creating value for our investors and growing into a significant player in the global fintech industry.
spk00: However, in the third quarter of 2023,
spk05: Both the global and Chinese economies face significant challenges. Despite the complexity and constant changes in the global economic environment and ongoing adjustments in monetary policies of major economies, we have observed that China's economy is undergoing a slow recovery process. Although the pace of this recovery has not reached the expected speed, it still demonstrates that underlying strength and the resilience of China's economy.
spk00: In the domestic financial field, we have observed that the risk fluctuation of the modern market at this stage is still relatively obvious. The market situation and risk management have become key issues in the recent period of time. We even know that under such an environment, continuous and detailed operation and management can be stable for us for a long time. In the domestic financial sector, we have noticed fluctuations
spk05: in credit market risks during this period, with asset qualities and risk management emerging as key topics in our industry recently. We understand that continual prudent and detailed operation and management are crucial for our long-term stable and healthy development in the current environment. Therefore, whether in the third quarter of this year the upcoming fourth quarter or the beginning of next year, we anticipate continuing our cautious business strategy under the premise of maintaining stable development and profitability. We will also closely monitor market dynamics with a special focus on controlling risks and tracking changes in asset quality.
spk00: In the past two years, the volume of financial technology business in China has steadily increased. The coverage of cooperating financial institutions has also continued to expand. By the end of the third quarter of this year, the total number of financial institutions we have cooperated with has reached 73. Compared with the previous quarter, 69 have further increased. With the growth of business volume, the distribution of types of cooperating institutions is also continuing to change. In this quarter, we can see that the affordable funds provided by mutual bank and private bank partners Over the past two years, our fintech business in China has continued to grow steadily in scale with an expanding reach across financial institutions. By the end of the third quarter,
spk05: The total number of financial institutions in our partnership network has reached 73, marking an increase from the 69 in previous quarter. As our business volume grows, the diversity and concentration of our partner institutions are also evolving. In the quarter, we are pleased to see that the proportion of funds to be facilitated provided by Internet banks and private banks partners has already accounted for the majority. Furthermore, we are currently in talks with 76 financial institutions aiming to extend the powerful FinTech capabilities of us to benefit even more licensed financial institution partners in the future.
spk00: At the same time as institutional cooperation is expanding, we are also focusing on strengthening the depth and breadth of cooperation with key partners, helping the cooperating financial institutions to develop their own business cooperation model and continue to make progress. As of September 30, we have listed six financial institutions under this model. In addition, there are many other cooperating partners actively interacting with each other. In addition, the number of non-contractable housing cooperation funds is still more than 60%.
spk05: While expanding our institutional coverage, we are also focusing on deepening and broadening our cooperation with key partners. A cooperation model that supports financial institutions in carrying out their self-operating business is making continued progress. As of September 30th, we have launched cooperation with six financial institutions under this model, with several more actively joining or are currently in discussion. Moreover, the proportion of non-regionally restricted funds to be facilitated continues to stay above 60% which solidified our foundation for contributing to the development of inclusive finance across all regions in China while we expand our business scale.
spk00: On the other hand, under the premise of ensuring high-quality care, we still maintain our investment in new customers. In recent years, we have noticed that the risk fluctuation in the market has had a certain impact on the asset value of private financial institutions. As a trusted business partner of private financial institutions customers, we know that asset value is important for customers to have long-term stable resources. Therefore, during the growth period, we have never relaxed our high-standard requirements for risk control. As we have emphasized in the past few quarters,
spk05: Optimizing the structure of our borrowing customers remains a top priority this quarter. On one hand, we strive to refine the stratification of our user structure while further providing high-quality full lifecycle services to our existing borrowers. On the other hand, we continue to invest in new borrower growth while ensuring high-quality acquisitions. Since the beginning of this year, we have observed that the risk fluctuations in the market have had a certain impact on the asset quality of licensed financial institutions. As a trusted business partner of those clients, we deeply understand the importance of asset quality for the long-term stability and sustainability of their businesses. Therefore, during our group phase, We have never relaxed our high standards and strict demands for risk control. As of September 30, 2023, our delinquency rate for 61 to 90 days has slightly decreased, maintaining a stable level at 0.52%. With the economy gradually warming up, we will closely monitor market risk fluctuations and changes in asset quality, making timely and accurate adjustments for our clients to address future uncertainties.
spk00: 人工智能技术对于金融科技领域的重要性, 人工智能技术的开发和应用在家营内部已经被提升到非常重要的地位。 为了进一步扩大大模型AI技术在家营智慧运营中的应用, 我们在第三季度启动了家营AI系列活动, We are actively aware of the significance of artificial intelligence technology in the fintech sector.
spk05: and the development and application of AI have been elevated to a very important position within Giant Group. To further advance the application of large model AI technology in Giant's smart operations, we launched the Giant AI Season series of events in the third quarter. This included the construction of our own Jiayin GPT lab and the numerous GPT training sessions, as well as the GPT innovation competition, aiming to promote the application of AI technology across all business processes.
spk00: In the last episode, I mentioned some applications of Jiayin's AI technology. Today, I would like to take this opportunity to share with you some of the latest developments in the past three months. First of all, in terms of resources, we have used LLM and a large database in this quarter to complete the important automation upgrade of the knowledge library. This upgrade will allow the host to perform multi-dimensional blur search through the language and show the knowledge point in seconds, which greatly increases the efficiency of search and introduces the automation function to provide customer service with more efficient and high-quality support. In addition, one of our student support functions has been launched in the customer CRM system, including text-to-text transfer, customer intention label, student behavior label, and so on. These functions effectively improve the work efficiency and accuracy of the student assistant. Currently, the accuracy of the application in many scenes of the small plot has been continuously improved to 87% or so. At the same time as the first function is launched, the practical knowledge recommendation of student support 2 is also in the R&D framework. Last quarter, I mentioned some of the application of AI technology at Giant Group
spk05: and today I would like to take this opportunity to share with you some of the latest developments over the past three months. First, in terms of proprietary tools, we completed an important intelligent upgrade of our knowledge base using LLM plus vector database this quarter. This upgrade allows our staff to perform multi-dimensional and fuzzy searches through semantics, presenting knowledge points in seconds, greatly improving search efficiency and introducing intelligent functions that provide more efficient and high-quality support for customer services. Secondly, our phase one auxiliary functions for customer service agents have been launched in the customer service CRM system, including real-time text transcription, customer intention tagging, and agent behavior tagging. These features have effectively improved the efficiency and accuracy of customer service agents' work. Currently, the application accuracy rate of the session summary in various scenarios has been continuously improved to around 87%. Along with the launch of Phase 1 functions, the real-time knowledge recommendation of Phase 2 auxiliary functions is also in development and internal testing. Once launched, it is expected to further enhance the depth of AI-empowered agent operation processes. The long-chain quality inspection system, which I mentioned in the second quarter, has also got an important upgrade. This upgrade comprehensively improved the coverage and accuracy rate of quality inspections using AI technology, further expanded support for various types of quality inspections, and improved business efficiency through data mining.
spk00: The progress of AI technology and applications has not only improved our operational efficiency, but also made us able to provide more superior services to our customers. Here I would like to announce an important message to you all. Our company name will be changed to Jiayin Technology and use the brand new company logo. This change not only means the development of good technology, The progress and application of AI technology have not only enhanced our operational efficiency,
spk05: that also enabled us to commit in providing more exceptional services to our clients. Here, I would like to announce an important news. Our company's name will be changed to Jiayin Technology and we will adopt a new company logo. This change signifies that developing and applying technology has been structured strategically prioritized at the group level. And more importantly, it underscores that technology will become the foundation of our existence. In the future, Jiaying will continue to closely monitor the development and application of AI technology, continuously strengthen the basics of FinTech, and let the technology Atribute become Jiayin's most shining label.
spk00: In the third quarter, Jiayin's international business continues to show an overwhelming development. The profit and loss ability of the Lillia region has made significant progress. At the same time, the important strategic goal of this quarter, which is the first time in this quarter, is to make a turn. At the same time as financial indicators show significant growth, we can see that the 30-day expected rate, This important indicator has been further significantly improved. We see that the large population size and population structure of Nigeria and the constant growth of mobile phone penetration rate for financial and technology areas, especially cash and credit services, has provided a huge opportunity. In the medium to long term, our goal is to achieve continuous cash flow in this area, and thus seek to develop long-term health and stability in this area.
spk05: In the third quarter, Giant's international business continued to show a robust growth trend. The profitability of the Nigerian region has made significant progress, and for the first time, we achieved an important strategic goal in this region, turning a net profit positive. While we have seen significant growth in financial indicators, we are pleased to note that the the important risk indicator of the 30-day delinquency rate has further improved significantly. We recognize that Nigeria's superior population size and demographic structure, along with the continually increasing mobile penetration rate, provide tremendous opportunities for the fintech sector, especially cash credit services. In the medium to long-term, our goal is to achieve sustained net cash flows in this area, thereby realizing the long-term, healthy, and stable development of our business there.
spk00: In Indonesia, we are working with a local company that has potential and is continuing But we also noticed that Indonesia, we have formed a collaboration with a local entity full of potential
spk05: in an innovative way and continue to closely monitor the business environment and operating conditions. We believe that with the rapid progress of Indonesian regulatory policies and the industry environment in recent years, the loan facilitation business model is likely to be realized quickly in this region. We have seen our partners' profitability improving this quarter and have made a breakthrough in achieving the loan facilitation business access for the first local financial institution partner. While discussions are underway with several others, however, we also noticed that the regulatory policies in the Indonesian region are systematically supporting the orderly development of the Internet finance industry in the long term. Such a market environment represents both opportunities and challenges for all participants. We will continue to focus on and support the development of our Indonesian partner and discuss the possibility of further cooperation in the future. 除此之外,我們也在其他位於非洲、中南亞以及那里美洲的新興市場國家擴大了探索。
spk00: Furthermore, we are expanding our explorations and feasibility analysis for business implementation in other
spk05: emerging market countries in Africa, Southeast Asia, and Latin America seeking potential expansion opportunities. We believe that our international business can not only contribute to the inclusive growth of local economies but also create substantial value for our stakeholders with the goal of global expansion of inclusive financial coverage.
spk00: Out of two days,
spk05: we have decided to set the loan origination volume guidance for the fourth quarter at RMB 20 billion. It is anticipated that the full year loan origination volume will exceed the previously issued annual guidance. Going forward, Jiayin will contribute to work diligently with our partners to manage risks and face challenges. striving for healthy and sustainable long-term joint development.
spk00: 最后,我想借此机会向长期关注或支持公司发展的各位股东或投资者宣布, 今年第二次股息派发的计划已基本确定。 基于流通中的普通股,我们预计将支付每股0.1美元, 只合每IDS 0.4美元的现金股息。
spk05: 有关这次股息发放的具体时间安排及其他相关细节,我们将在后续 的信息披露中陆续公布。 Lastly, I would like to take this opportunity to announce to our shareholders and investors who have been long-term supporters and followers of our company's development that the plan for the second dividend distribution of this year has been almost finalized. For the outstanding ordinary shares, we anticipate paying a cash dividend of USD 0.1 per share, equivalent to USD 0.4 per ADS. Specific details regarding this schedule and other relevant information about this dividend payment will be announced progressively in our subsequent
spk00: disclosure announcement.
spk05: For the specific financial results for this quarter, I will turn the call over to our CFO, Mr. Fan. Thank you all.
spk04: Thank you, Mr. Yan. And hello, everyone, for joining our call today. I will now review our financial highlights for the quarter. Please note that all numbers will be in RMB, and all percentage changes refer to year-over-year comparisons, unless otherwise noted. As Mr. Yen mentioned earlier, we carried through our robust growth momentum over the past year to achieve new milestones in the quarter. Notably, our loan addition volume grew by 62.4% to $24.2 billion. exceeding our previous guidance. Our net revenue was about $1.47 billion, up 64%, as our other revenue grew to $529.8 million from $101.4 million in the same period last year, mainly driven by the growth in guaranteed income from financial guarantee services. Moving on to costs. Origination and servicing expenses were $544.3 million, up from $148.4 million in the same period last year, driven by the increased loan origination volume and expenses related to financial guarantee services. Allowance for uncollectible receivables, counter-assets, loans receivable, and others grew by 44.1% to $84.1 million. from $5.9 million in the same period last year. However, as a percentage of net revenue, that decreased to about 0.6% from 0.7% in the same period last year. Sales and marketing expenses increased by 26.1% to $407.9 million, mainly reflecting higher borrow acquisition expenses. As a percentage of net revenue, S&M expenses decreased to 27.8% from 36.2% in the same period last year, demonstrating our improving efficiency in attracting and retaining high-quality borrowers. G&A expenses were $53.2 million, up 3.5%, primarily driven by higher staff costs as a result of increased expenditures for employee compensation and related benefits in the quarter. As a percentage of net revenue, G&E expenses reduced to 3.6% from 5.8% in the same period last year. R&D expenses were 70.5 million, up 25%, mainly due to the higher employee compensation as a result of an increase in research and development headcount. As a percentage of net revenue, R&D expenses reduced to 4.8% from 6.3% in the same period last year. Consequently, our net income for the third quarter increased by 30.6% to $323.9 million from $248.1 million in the same period last year. Our basic and diluted net income per share were both RMB 1.51 compared to RMB 1.15 in the same period last year. Basic and diluted net income per ADS were both RMB 6.03 compared to RMB 4.60 in the same period last year. We ended this quarter with $180.3 million in cash and cash equivalents compared to $288.9 million at the end of the previous quarter. Regarding our stock repurchase program, as of September 30, 2023, we have bought back approximately 1.8 million of our ADSs for a total of U.S. dollar 5.5 million on our U.S. dollar 10 million share repurchase plan we announced in June 2022 and extended in June 2023. With that, we can open the call for questions. Ms. Xu, our Chief Risk Officer, and I will answer questions.
spk07: Operator, please go ahead. Thank you.
spk08: If you wish to ask a question, please press star 1 on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star 2. If you are on a speakerphone, please pick up the handset to ask your question. If you prefer to ask your questions in Chinese, please repeat your questions in English immediately after for the convenience of everyone on the call. Again, if you have a question, please press star then one on your touch-tone phone. Your first question comes from Guarong with Jinyu Asset Management. Please go ahead.
spk02: Hello, I'm Huarong, an analyst from Shanghai Jinyu Real Estate. First of all, the housing company has made a very strong growth in this quarter. I have two questions. The first question is that the company's Q3 loan sum has increased by 62.4%. But if you predict the fourth quarter, the increase is only a small increase. Compared to the previous few seasons of high growth, this kind of slowdown is due to the expansion of the scale or there are other factors. In addition, the company believes that the current growth is sustainable. Given the current market conditions, what are the company's expectations for the future? My second question is, what factors have promoted the company's large growth of other income? This is Huarong from Shanghai. First, congratulations on the strong results. And I have two questions. The first one is, as you have reported a 62% 0.4% year-over-year increase in loan origination volume in Q3, yet forecast a single-digit growth in Q4 compared to higher growth rates in previous quarters. Is this deceleration solely due to scaling, or are there any other factors? How sustainable is the current growth, and what trends do you foresee under the current market conditions? And the second question is, what factors are driving the significant increase in your other revenue, which now accounts for over a third of total revenues? Could you provide a breakdown of this segment and your future plans for it? Thank you.
spk03: Hello, I'm Xu Yifang. Okay, this is Xu Yifeng and your first question is about the loan origination and I will do the answer for you. As you mentioned in the question, the slowdown is due to the size of the port and other factors. I think you have already talked about one of the most important factors, which is that the size of our chip has reached the level of 4 billion plus. Of course, we have other considerations. Today, we are at the level of 4 billion. If we look at the development of our previous performance, since 2022, our performance has been very rapid, especially in Q4 of 2022, which is very rapid. Therefore, it seems that the expected growth of Q4 of 2023 is not so obvious in terms of the same ratio.
spk05: Okay, so for your question, I think there are several factors we can consider. And the first one is just as you mentioned, that our scale has reached a level of over 40 billion RMB, so thanks to the rapid development since the year of 2022, especially the quarter-over-quarter growth in the fourth quarter of 2022, the expected growth in the fourth quarter 2023 will not seem as that significant. 今年年初以来,尤其是第二季度以来,我们看到整个近代市场是异常的活跃。
spk03: This is due to the recovery and development of the economy after the epidemic, and we also have a sufficient supply of funds from the private sector. In such a market environment, from the management point of view, our consideration is a very key problem, which is how to balance the development of performance and the demand for risk indicators management. So since the beginning of this year, the credit market has been exceptionally active, driven by the development of the consumer economy after the COVID-19 period.
spk05: the ample supply of funds and balancing the demands of performance development and risk indicator management are among the strategic issues our management is focusing on. We hope to continue adhering to a cautious and prudent risk management style to ensure the sustainable and healthy development of the entire platform.
spk03: Then the third factor is from the point of view of our internal strategic work plan. Currently, we are targeting the growth of the number of customers. If we look at it from the same point of view, it is also growing very rapidly. Then in our work center, it is to continue our overall detailed operation of this strategy and risk management related to this model strategy. All hope is to follow closely the efficiency of the operation of each node and the efficiency of our risk division based on our customer group changes. During this process, our entire model is evaluated and accelerated to ensure that our active customers, especially high-quality customers, are satisfied with the products and services. In order to achieve this effective and healthy growth, we can also achieve the continuous optimization of our overall risk management indicators. This aspect of work has become one of the key points of our current work.
spk05: So for the third one, the growth of our number of active borrowers is also very rapid. Our refined operations and the risk management models and strategies are closely tracking changes in borrower groups, closely monitoring the effectiveness of operations and risk stratification at each node. The evaluation and iteration of models are accelerating to ensure satisfaction with products and services for active borrowers, especially high-quality ones, and to achieve continuous optimization of risk measurement indicators. And this part of work seems like very important to us right now.
spk03: In the first question, we also talked about the continuity of the current growth of the company and the future expectations. From the future expectations, we will closely monitor the development of a large part of the domestic credit market. For the overall development of the company, we are still looking forward to stable, sustainable and healthy growth.
spk05: And lastly, you just mentioned sustainable and forecast. I would like to say that we are closely monitoring the development of the domestic credit market and looking forward to a stable, orderly, and healthy growth for our company's future development. This is my answer for your first question.
spk03: This is my answer for your first question.
spk04: B, the amount of other income is absolutely up to 5.3 billion, right? That is mainly included in the insurance income, traffic increase income and overseas income, etc. In the middle, the ratio of insurance income is the highest. In Q3 of 2023, the amount of our insurance income is 3.98 billion, nearly 4 billion. Then in the listed company system, we have a Longdan company. Okay. Hello, Huarong. This is the CFO of the company, and I will answer your second question. Your second question is about the proportion of other revenue
spk05: out of our total revenues, and you also mentioned a breakdown of the segment and future plans. Firstly, I would like to say that other revenue, yes, amounted to RMB $530 million, mainly including revenue from financing guarantee services, referral services in an overseas business, Among them, the revenue from financing guarantee accounted for the highest proportion, just as what you mentioned, maintaining rapid growth each quarter of this year with that part of revenue in the third quarter of 2023 approaching RMB 400 million. And within the listed group system, there is a financing guarantee firm. And just as requested by some financial institution partners, this forum provides financing guarantee services for some projects. However, from the perspective of the overall business development strategy of our group, the listed group will focus on border acquisition and risk control services, with guarantee services shall mainly be provided by independent third-party financial guarantee companies. Therefore, this part of business and corresponding revenue growth of this part will be relatively stable in the future.
spk04: 另外,担保服务它本身的margin比较导流风控服务要略低一些, 从而也拉低了上市公司的整体的经营利润率。 所以从债务指标角度考虑,导流和风控业务会继续占公司营收的大头。
spk05: Additionally, the margin of the guarantee business is relatively lower if you compare with the borrower acquisition and risk control services, which will reduce the overall operating profit margin of the listed group. So from a financial metrics perspective, border acquisition and risk control services will continue to account for the vast majority of our revenue. And the company will reasonably manage the balance of different business subtypes in revenue share.
spk04: So this is my answer for your second question.
spk05: And let's see if you have any other questions. Thank you.
spk06: Huarong, did you have a follow-up?
spk02: Yeah. Thanks. Thank you for your answer. I don't have any other questions. Okay. Thank you.
spk05: So, operator, we can get the next question, please.
spk08: Thank you. Your next question comes from Yu Shuancheng with Huatai Securities. Please go ahead.
spk01: Hello, Mr. Guan. I'm Chen Yuxuan from Huatai Securities. First of all, thank you, Mr. Guan, for giving me the opportunity to ask a question. I have two questions to ask. The first is about risk management. We can see that the company is relatively stable. Can we ask the leaders to talk about the company's risk management strategy and how the company can ensure this stability? If we look at the fourth quarter and 2024, will the company continue to maintain the current peak level? This is the first question. The second question is about our cost. We observed that in the past year, the cost of operation of the company and the proportion of income have been continuously decreasing. I would like to ask the management level why the cost rate has decreased. Hello, management. Thanks for giving me this opportunity to ask questions. This is Chen Yusheng from Huatai Securities. I got two questions. The first one is about your risk management strategies with a stable delinquency rate. Could you provide insights into your risk management strategies and their evolution in the tenant's stability? Also, do you expect your risk profile to remain stable going to Q4 and 1024? The second one is about your expenses. We have observed consistent reduction in operating expenses as a percentage of revenue over the past year. Is this because of your cost control, efficiency improvement, or both? Can this trend be expected to continue in Q4 under 2024? Thanks. Hello, Mr. Chen.
spk03: This is Xu Yifeng, and your first question will be answered by me. Talking about the strategy and stability of risk management, from the perspective of risk management, we are certainly pursuing such a goal and result. From the current point of view, it is true that the trend of recent market development is quite challenging. First of all, we hope to actively pay attention to the development of the entire market, especially the active new generation and new generation customers. The overall income of the new generation customers abroad, the overall debt situation, and the willingness and activity of the new generation to apply.
spk05: Okay, so you just mentioned the strategies and the abilities and these are actually the goal and also the result of our risk measurement work. So we have some different approaches to that. The first will be We will pay attention to the development trends of the market, especially the overall income to debt ratio of our borrower group and also the debt situation and also the willingness and activity of your credit application.
spk03: So the second one is for our models and strategies and as the borough group of us is growing so fast, it is very important for us to accelerate the monitoring process.
spk05: And at the same time, we also need to update our models and strategies. And the integration of them is also very important.
spk03: So the third one is that we think the risk management works shall now only be on the decision stage.
spk05: But to strengthen the management and operation of the entire lifecycle of our borrower group from a risk perspective is also very important. And with that, we also can see that the risk indicators are getting better because of it.
spk03: So after the loan facilitation process,
spk05: We also need to differentiate the strategies to further enhance the experience of our high-quality borrowers, thereby to improve the retention and loyalty of them. And we can also see that those improvements also makes our risk indicators getting better.
spk03: So for the goal of the fourth quarter of this year and the whole year of 2024,
spk05: we are expecting to maintain and further optimize these risk management approaches. And this will be really important for all of our team.
spk03: Then I will talk to you from the above directions about some of the ideas and focus of our company in risk management. See if there are any other questions.
spk05: And this will be some ideas of our risk management works. And my answer for your question, let's see if you have other questions.
spk04: Yu-Hsuan, let me answer your second question. The second question is about our three costs. From this year's first quarter to the trend of the third quarter, management costs, sales costs, and R&D costs are continuously decreasing. Especially in the third quarter, the ratio of my management, development, and sales expenses has dropped to 3.6%, 4.8%, and 27.8%. The main reason is two. First, the increase in the number of transactions and the increase in revenue has brought a scale effect. The fixed cost of each cost is relatively stable. The efficiency of variable cost is greatly improved. In addition, the increase in expenses is far lower than the normal percentage of my revenue. Okay, so your second question is about our expenses.
spk05: And I think from the first quarter to the third quarter of this year, the proportion of our GMA expenses, S&M expenses, and also R&D expenses in the revenue has continuously decreased. In the third quarter, the proportions of G&A expenses, R&D expenses, and S&M expenses in the revenue were reduced to 3.6 percent, 4.8 percent, and 27.8 percent, respectively. And the main reasons are twofold. Firstly, it's because the scale effect brought by the growth in facilitation volume and also revenue. And the fixed costs are relatively stable and the variable costs are getting more efficient. If you compare with other kinds of expenses and their growth percentage is much lower than that of revenue growth. And the second reason would be the efficiency improvements both by the application of AI technology and also our refined smart operations.
spk04: From a short-term perspective, with the high-quality growth and refined operation of the company, our management and sales costs will remain stable overall. As for the development costs, we will continue to increase the technical development investment, and greatly enhance the application of AI technology in various business environments, and continuously enhance our technology properties. We will also upgrade the development strategy of the company,
spk05: Okay, so in the short to medium term, in line with our strategy of high quality group and smart operations, our proportion of G&E and S&M expenses will remain relatively stable. And we will also continue to increase investment in R&D and strongly enhance the application of AI technology in various business processes. And just as Mr. Yan just said, our company has been officially renamed as Giant Technology, and we will continuously strengthen our technology attribute. 通过我们精细化的智慧运营,我们将进一步的提升运营的效率,优化成本费用的结构。
spk04: Okay, through the refund operation, we are very confident to make
spk05: to make our net profit margin to maintain above a relatively sustainable and healthy level. And just as Mr. Yen just mentioned that our second dividend distribution plan is almost decided and we are very confident to give out more to our investors in the future.
spk07: So Yuxuan, I hope those will answer your question. We've reached the end of the call. I will return the call back to Sean for closing remarks.
spk08: Please go ahead.
spk05: Okay, thank you, operator, and thank you all for participating on today's call, and thank you for your support. We appreciate your interest and look forward to reporting to you again next quarter on our progress.
spk08: That does conclude our conference for today. Thank you for participating. You may now disconnect.
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