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Operator
Good day ladies and gentlemen, thank you for standing by and welcome to the Jynes Group's first quarter 2024 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 Investor Relations of Jiayin Group. Please proceed.
Shawn Zhang
Thank you, operator. Hello, everyone. Thank you all for joining us on today's conference call to discuss Jiayin Group's financial results for the first quarter of 2024. 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 Ding Gui, Chief Executive Officer, Ms. Fan Chunlin, Chief Financial Officer, and Ms. Xu Yifeng, Chief Risk Officer. Before we continue, please note that today's discussion will contain forward-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 actual 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 on our 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 corresponding English translations. Please go ahead, Mr. Yan.
Yan
Hello, everyone. Thank you all for participating in the first quarter of the Chia-Yin Technology's
Shawn Zhang
Hello, everyone. Thank you for joining our first quarter 2024 Earnings Conference Call.
Yan
In 2024, for home science and technology, it is a year that is fully strengthened by technology and new technologies. At present, the Chinese economy is gradually showing signs of recovery, but needs are facing challenges. The Chinese consumer loan hospital is still recovering. For our company, 2024 is a year dedicated to comprehensively strengthening development that is both led by technology and driven by new momentum.
Shawn Zhang
China's economy is currently showing signs of gradual recovery, but there are challenges on the demand side, and risk factors such as the stage of recovery in residents' willingness to take up loans for consumption still need to be considered. Against the backdrop of these risks and opportunities, we successfully achieved our strategic goals in the first quarter. Through its unremitting efforts, the company made solid achievements in financial performance and business expansion, enhancing the confidence we have in the operation for the whole year of 2024.
Yan
In the first quarter, we highly focused on the market risk fluctuation that occurred throughout the year, the decline in market share and the increase in overseas regulatory requirements, continue to improve the company's ability to use large-scale data and artificial intelligence to support co-operative partners, continue to strengthen the core competitiveness of the company, and achieve good results in detailed business management and external business expansion. In the first quarter, the company's initial transaction size reached 22.5 billion yuan, which increased by 13.6% in the same ratio, exceeding the previously set target value. The current revenue is 4.75 billion yuan,
Shawn Zhang
In the first quarter, we focused on a number of important market factors such as the fluctuation of the market risk levels emerged last year, the decrease in market interest rates, and changes in overseas regulatory requirements. We continue to enhance the company's ability to empower partners with big data and artificial intelligence, which continuously improves the company's core competitiveness. Both refinements in internal management and external business expansion contributed to our strong results. Our loan facilitation volume for the three months ended on March 31st, which RMB $22.5 billion. a year-over-year increase of 13.6%, exceeding the previously set target guidance. During this period, we achieved net revenue of RMB 1.475 billion, a year-over-year increase of 31.5%, continuing a trend of healthy growth.
Yan
In the beginning of 2024, the company fully implemented the development and application of artificial intelligence technology, and the level of AI is constantly increasing, and the results of technology management are constantly increasing. In a more mature AI business field, the company uses all the core capabilities of all-in-one applications and unites, unites, unites, unites, unites, unites, unites, unites, unites, unites, unites, unites, unites, unites, unites, unites, unites, The company's technology team is gradually growing in terms of market-famous large-scale verification management and application capabilities. Large-scale application scenarios also include telecom, customer service, post-hoc, and so on. As far as specific scenarios are concerned, we will gradually expand the professional knowledge-based specific scenarios such as smart search and smart recommendation. With the wide and in-depth application of artificial intelligence technology, the efficiency of the company's operation is significantly improved. We are looking forward to the next year
Shawn Zhang
From the beginning of 2024, we comprehensively implemented technology empowerment, deepened the development and application of AI technology, and continuously improved the level of business intelligence. These technological achievements are constantly emerging. In the relatively mature field of AI commercial services, the company has fully integrated and applied core capabilities in various business scenarios and unified the design, implementation, and delivery of AI technology applications. At the same time, the company's technical team is gradually maturing in terms of the validation management and application capabilities of popular large language models in the market. The application scenarios of large language models are also gradually expanding from task-intensive scenarios such as telemarketing, customer services, and post-mortem empowerment to expert knowledge-intensive scenarios, including intelligent search and intelligent recommendation. The extensive and in-depth application of AI technology has significantly improved the company's operational efficiency, and we are full of confidence in further achieving data-driven developments in the future.
Yan
The company has gradually formed a rich, diverse, and long-term stable corporate network. As of the end of the first quarter, we have established a cooperative partnership with 70 financial institutions and are currently working with another 32. At the same time, with the development of overseas business, we are exploring more extensive and in-depth cooperation with foreign banks. In addition, we use financial institutions to strengthen all aspects of operation, technology, risk management, and consumer protection areas, and actively deepen the working model of partners with existing important financial institutions. On the one hand, the whole process of business with technology advanced non-cooperative partners achieves mutual benefit and win-win. On the other hand, we are also exploring the cooperation of clients to achieve cost-efficiency optimization.
Shawn Zhang
We have gradually formed a diverse and long-term stable network of institutional partnerships. As of the end of the first quarter, we have established partnerships with 70 financial institutions and are in discussions with additional 32 financial institutions. At the same time, we are beginning to explore cooperation with foreign banks as our overseas business development is under progress. In addition, we have deepened our cooperation with financial institutions in operations, technology, risk management, and consumer rights protection. These comprehensive collaborations are further empowering the financial institutions' business processes through technology. leading to a complementary win-win outcomes for our company and our institutional partners. Further, we are also exploring cooperations on borrower acquisition to further optimize costs.
Yan
The continuous optimization of the customer structure of this type of person is the basis for the long-term stable development of the company. Although we observed some early risk indicators in the first quarter, they have improved. We will also consider risks while pursuing growth, to balance the speed and quality development, and realize the scale and efficiency of sustainable development. The demand for 61 to 90 days remains at a level of 0.68%, which is in line with the company's expectations. It is due to our recognition ability of superior customers and a more detailed wind and air strategy. The rate of new customers has reached 27% in the first quarter, and it remains at a relatively stable level. In addition, the average payment amount in the first quarter is 10,570 yuan, which is 6.6% more than the growth. In addition to deepening the original customer channel, we have continued to increase the customer weight of the small program section of the head Internet platform. The key layout risk performance is good and the cost-effectiveness is optimized for innovation.
Shawn Zhang
Continuously optimizing the risk performance of borrowers is the cornerstone for the company's long-term and stable development. Although we have observed some improvements among some early risk indicators in the first quarter, we will still continue to prioritize risk factors well of pursuing growth to balance the speed and quality of development and achieve sustainable development of scale and efficiency. The 61 to 90 days delinquency rate remaining at 0.68% meeting expectations. Thanks for our ability to identify high quality borrower groups and our more refined risk control strategy. The proportion of new borrowers reached 27% in this quarter, maintaining a relatively stable level. In addition, the average borrowing amount per borrower in the first quarter was RMB 10,570, representing a year-on-year increase of 60.6%. In addition to deepening our original borrower acquisition channel metrics, we have also continuously increased the proportion of borrower acquisition through the many apps on leading internet platforms. We focus on the innovative model with good risk performance and continuously optimized costs. striving to raise more target users and maintain growth of Vitality.
Yan
At the same time, the overseas business has achieved good results in the first quarter. In the Indian market, our local business group, the number of new registered users has increased by 37%. At the same time, under the new regulatory requirements of the local government, the product structure has been positively optimized. We will also actively seek opportunities to expand to more overseas areas. Overseas business will also be a key factor in the future development of the group. We will further expand our investment in overseas business.
Shawn Zhang
Our overseas business achieved favorable results in the first quarter. In the Indonesian market, the number of newly registered users through our partnered local business entity increased 37% quarter on quarter, while actively optimizing product structure in response to new local regulatory requirements. we have learned that our Indonesian business partner was in discussion with five local licensed financial institutions in the first quarter aiming to further expand the volume of loan facilitation business in Indonesia in the future. The business performance in Nigeria showed steady progress with an increase in the amount of borrowing loan volume and new borrowers. At the same time, the local exchange rates gradually stabilized towards the end of this quarter, providing favorable conditions for our further market expansions in the region. In the Mexican market, the lending scale of the local business entity we invested in also grew rapidly in this quarter. In addition, we are actively exploring opportunities to expand to more overseas regions, and overseas business will also be one of the key focuses of the group's future development. We will further increase our investments in overseas businesses.
Yan
In 2023, China China China China China China China China China China China China China China
Shawn Zhang
We always place great emphasis on consumer rights protection and anti-fraud efforts in finance services. Our white paper on consumer rights protection in 2023 released at the beginning of this year elaborates on the company's achievements in the systematic and refined operation of consumer protection, including building anti-fraud firewalls, improving customer service quality and efficiency, strengthening external cooperation, and innovating consumer protection education. In terms of anti-fraud, the company's fraud prevention and control report for the first quarter reveals that we have cumulatively identified and blocked 65,000 malicious attacks from illicit industry and manually investigated and disposed of 20,400 applications from potentially high-risk borrowers in the first quarter. In addition, the company has jointly conducted anti-fraud lectures with law enforcement departments and collaborated to establish a cooperation mechanism, effectively combating financial gray and black industries, as well as illegal intermediaries, leveraging technological innovation the company has built a solid anti-fraud defense line to safeguard the financial security of borrowers and continuously contribute to purifying the financial market environment.
Yan
This is the first time that the company has encouraged the development of the stock market. The company is developing the stock market this time. The other details of the stock market, including the date and other information, will be announced after the board of directors has confirmed it. In terms of the repurchase plan, last quarter, the board of directors approved the current stock repurchase plan to go up to $30 million. And in the near future, there will be further approval to extend the return plan to June 12, 2025. In the future, we will continue to report on the actual action, and provide long-term information on the company's investment and the development of the company. Finally, considering the market risk level and the demand for business growth, we decided to set the second quarter of 2024 as a loan amount of 23 billion yuan.
Shawn Zhang
Based on our confidence in the company's sustained future growth and the company's ample cash reserves, I am pleased to announce the company's plan of the first tranche of dividend distribution for 2024. The company plans to distribute a cash dividend of $0.5 USD per ADS. Further details and relevant dates regarding these dividend payout will be announced separately after further confirmation by the Board of Directors. With regard to share repurchase plan, in the previous quarter the Board of Directors approved raising the upper limit of the current share repurchase plan to 30 million USD and recently further approved extending the validity period of the repurchase plan to June 12, 2025. In the future, we will continue to reward our shareholders, enhance the sense of gain among investors, and boost their long-term confidence in the company's development. Finally, considering the level of market risk and the demand for business growth, we have decided to set the guidance of loan facilitation volume for the second quarter of 2024 at RMB 23 billion. With that, I will now turn the call over to our CFO, Mr. Fan Chunli.
Yan
Please go ahead. Thank you.
Yang
Thank you, Mr. Yen, 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, our company successfully achieved its strategic targets in the first quarter. We have also recorded solid financial results. Notably, our loan facilitation volume grew by 13.6% to $22.5 billion. Our net revenue was about $1.48 billion, up 31.5%, as our other revenue dropped to $119.8 million from $126.9 million in the same period last year. Moving on to costs. Facilitation and servicing expenses were $667 million, representing an increase of 143.3% from the same period of 2023, primarily due to the increase of guaranteed costs incurred and increased loan facilitation volume. Allowance for uncredible receivables, country assets, loans receivable, and others was $2.6 million, compared with $6.7 million in the first quarter of 2023. Sales and marketing expense was $359.8 million, representing a decrease of 5.5% from the same period of 2023, primarily due to lower commission expenses. G&E expense was $46.2 million, compared with RMB 46.4 million in the first quarter of 2023. R&D expense was 83.3 million, representing an increase of 28.5% from the same period of 2023, primarily due to higher employee compensation benefits as the number of our research and development employees increased. Consequently, our net income for the first quarter was $273.1 million, representing a decrease of 2.4% from $279.7 million in the same period of 2023. Our basic and diluted net income per share was $1.29 compared to $1.31 in the first quarter of 2023. Basic and diluted net income per ADS were both $5.3 compared to 5.24 in the first quarter of 2023. We are pleased to report a significant improvement in our cash position this quarter. As of March 31, 2024, our cash and cash equivalents reached $568.2 million, a substantial increase from $370.2 million at the end of December 31, 2023. This growth highlights our strong financial discipline and operational efficiency. With that, we can open the call for questions. Ms. Xu, our Chief Risk Officer and I will answer your questions. Operator, please proceed.
Operator
Thank you. To ask a question, you will need to press star 1 and 1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1 and 1 again. Please stand by while we compile the Q&A roster. Once again, that's star 1 and 1 to ask a question. Thank you. We will now take our first question. Please stand by. First question is from the line of Hua Rong from Jin Yu Asset. Please go ahead.
Hua Rong
Hello, Manager Teng. I'm Huarong, an analyst from Shanghai Capital. I have two questions for you, Manager Teng. The first question is, compared to the previous high-speed growth, the company's first quarter loan balance increase this year was 13.6%. What is the main reason for the slowdown in the increase? What will be the main supply channels in the future? Hello, management. I'm Huarong from Jinyu Asset, and I have two questions. The first one is compared to the previous period of the rapid growth, the company's loan facilitation volume in the first quarter of this year increased by 13.6%. Could you please explain the main reasons for the slowdown in growth? Which borrower acquisition channels will be the primary focus in the future? My second question is the revenue in the first quarter of this year decreased compared to the fourth quarter of 2023. but cash positions increased by nearly 200 million RMB by the end of the fourth quarter. Could you please explain the reason for this? That's all. Thank you.
Teng
Hello, Ms. Huarong. I'm Xu Yifang. Thank you very much for your continued attention to Jiayin. Hello, Farong. I'm Xu Yifeng. Thank you for your question and thank you for your long-term support on us. And I will answer about your first question. In 2019, Jiayin experienced rapid growth in the past few years. The rapid growth in the past few years is mainly due to the accumulation in the industry for more than ten years. This accumulation includes two aspects. One aspect is the accumulation of risk management and operating capacity. On the other hand, it comes from the development of the entire Internet financial and financial technology industry. After deepening our market, we will accumulate at the customer level.
Shawn Zhang
Okay, so since 2019, our explosive growth in recent years after our transformation is attributed to over a decade of dedication in the industry includes two reasons. First is the accumulation of the operational and risk management capabilities. And second is the accumulation of market clients, the users' borders through the in-depth industry development and growth.
Teng
However, as the entire development of the industry becomes more mature, the regulatory framework is gradually improving steadily. The competitive structure of the entire market has also maintained a more dynamic and stable development. So, in terms of the growth of this system, we did not see the rapid release of potential a few years ago. With the steady advancement of the industry's regulatory framework, orderly market development, and a competitive landscape that remains dynamically stable,
Shawn Zhang
We have also still achieved a relatively solid performance for this quarter with a 13.6% growth. I would like to emphasize that what we see here is a 3.6% growth.
Teng
It actually comes from our very cautious and systematic assessment of market risks and credit risks. After comprehensive consideration, the entire business has achieved results.
Shawn Zhang
So the group we observed are from cautious and systematic business operations that consider the market and credit risk assessments. Well, the macroeconomic environment remains positive change we maintain a cautiously optimistic outlook regarding its level.
Teng
One of the positive effects of this growth is the growth in goods. We are still actively exploring the supply and demand markets in the market. In terms of the growth and development of customer capacity, this is one of the key points of our long-term health development. Although we have seen some changes in the customer market, including mainly in the information flow channel, the information flow channel itself is also in the direction of financial technology. But overall, we have maintained a more diversified channel management policy. Under this large diversified background, we will focus on the expansion and construction of local customers and some new channels. Mr. Yan also talked about some explorations in the small program direction. In general, it is our focus to cultivate high-tech customer channels and abilities.
Shawn Zhang
So one thing that the growth was from our borrower acquisitions, we continue to actively acquire upstream forest in the market, particularly focused on the expansion and development of high-quality borrower segments. And on the other hand, we pursue prudent and rational risk management in the operation of our current borrower base. We are currently exploring the development of differentiated and diverse products and services that incorporate risk considerations aiming for further breakthroughs in attracting and retaining high-quality borrowers. 刚才我们谈到一下获客这个部分,
Teng
But although we often want to emphasize customers when we talk about growth, we still have to see that the business of bringing in customers is also very important. It is the head of our entire industry. So from risk caution and rationalized business, we will take risks and profits as a major starting point. Then look at the growth needs of the entire business and some possibilities of growth.
Shawn Zhang
So just as important as the new borrowers, our current borrowers are also very important. So we will, so in the future we will look for the potential growth considering both risk and profit.
Teng
We are still exploring the needs of supply management and the construction of our entire differentiated product service to become our new specialization direction. We hope that through this catcher, we can attract, pick up, land, So, as we talk about the risk,
Shawn Zhang
We are just like we have talked before that we are exploring differentiated products and services that aiming for our high quality borrower groups and also this is in line with our ongoing strategy to enhance our capability in managing high quality borrower operations.
Teng
This is my answer for your first question. And your second question, Mr. Yang, can you answer for that? Thank you, Mr. Yang.
Yang
Thank you, Ms. Falun, for this question. Yes, our cash flow in the first quarter of 2024, especially my cash balance, compared to Q4 last year, has increased by nearly two billion. Right? So my Q1 revenue in 2024, as Falun just mentioned, is actually a little lower than Q4 in 2023. It's a little bit lower than that. So there are several reasons for this. First of all, The structure of our revenue has undergone some changes, which has led to an increase in our operating profit. As we mentioned before, the service fee for the flow control section has a relatively high profit rate, and the profit rate for the single-sale income section is relatively low. In Q1 of 2020, the ratio of the flow control service has been improved, and the ratio of the single-sale income has dropped. And this trend will continue throughout 2024. This is related to the strategic performance of the company. The optimization of such a revenue structure has improved our operating profit. Therefore, the operating profit of QE in 2024, as mentioned in the announcement, is 3.16 billion yuan, which is 2.32 billion yuan compared to the fourth quarter last year. So in the first quarter of 2024, the revenue was 1.475 billion RMB, which has a decrease from 1.6 billion RMB in the Q4 2020.
Shawn Zhang
There are some reasons for that. The first reason is that the revenue structure has changed with a higher proportion coming from loan origination services and a lower proportion from guarantee services. And this trend is expected to continue. I have mentioned before the profit margin for guaranteed income is lower, so the optimization of the revenue structure has improved the company's operating profit margin. And Giants' income from operation in the first quarter was about 316 million RMB, which is an increase of more than 36%. compared to the 232 million RMB in the fourth quarter of the previous year. And the operating cash flow has significant increase. That's the first reason.
Yang
The second reason is that the company's receivables have always been relatively good. And now, with the strategic reduction of the insurance business and the continued optimization of some related business terms,
Shawn Zhang
所以保证金对我们公司的资金占用也在不断地得到释放。 So the second reason is that our accounts receivable recovery is performing very well, and the funds tied up in the margins are being continuously released. 对,所以这两点是我们这个
Yang
uh, uh, uh, So these are the two main reasons. But other than that, remember, in the first quarter, we have also picked out cash dividends with a total amount of about 152 million RMB.
Shawn Zhang
So if you're counting in this part of cash, the company's cash balance will be even higher.
Yang
Yes, so the continuous optimization of the cash flow situation has also laid a solid foundation for our long-term competitive development and further better return to shareholders. Just now, the Chairman also mentioned in the remark that we will continue to implement our previous share policy. And the board of directors has already passed a resolution on June 4th. Our first non-profit development plan this year
Shawn Zhang
Okay, so the continuous optimization of the company's cash flow will lead a solid foundation for the company's long-term sustainable development and better returns for shareholders in the future. Just like what Mr. Yan, our chairman, just said before, we will continue to pay out the dividends and to continue to commit in our dividend policy. And also, you can see that we have the Board of Directors recently further approved the extending of the valid period of the repurchase plan to June 12, 2025. So in the future, we will continue to reward our shareholders, or better reward our shareholders. Okay, thank you.
Operator
Thank you. We will now take our next question. This is from the line of Yushuan Chen from Huai Tai Securities. Please go ahead.
Yushuan Chen
Good evening, I am Chen Yixuan from Huaxia Stock Exchange. I have two questions for you. The first question is, in the first quarter of 2024, the exchange rate and revenue have increased, but the net profit has declined. What is the reason? And what do you think is the trend of the company's future profit rate? This is the first question. The second question is about the Indonesian market. We also observed that the Indonesian market is a key point of overseas business. Okay, let me do the translation. This is from Huatai Security. And I got two questions. The first one is facilitation volume and revenue both increased year over year in the first quarter 2024. but net income slightly declined. Could you please explain the reasons for this? And could the management provide more color on the future trend of the company's net margin? The second question is, I have noticed that the Indonesian market is one of the key targets for the company's overseas business. What are the company's view on the Indonesian regulators' requirements for the interest rate reduction? Does the company have any effective countermeasures for that?
Yang
Thank you. Thank you for your question. The first question is about the exchange rate, revenue, and profit. Let me answer it. In 2024, QE's total exchange rate increased by 3.6% compared to the previous year. 31.5% growth, but our net profit has decreased by 2.4%. There are two reasons for this. The first reason, as mentioned, is a change in the structure of our revenue. Because in 2023, especially in the second half of 2023, the company's revenue related to security services will rise relatively quickly. In this part of revenue, we have repeatedly mentioned that its profit margin is actually lower than that of our traffic control service. In Q1 of 2024, the relevant revenue of our security service has a relatively large growth compared to Q1 of 2023. So this will lower the profit margin of my entire Q1 of 2024. This is one reason. If we look at this part of the reason separately, due to the improvement in operating efficiency, in fact, in Q1 of 2024, Okay, so in the first quarter of
Shawn Zhang
2024, our loan facilitation volume increased by 13.6% year-over-year, and the revenue increased by 31.5% year-over-year. However, the net profit decreased slightly by 2.4% year-over-year. I think there are some main reasons are as follows. So the first reason is that it's about the change in our revenue structure. Throughout the year of 2023, especially in the second half, the company's revenue from guarantee services increased rapidly. So the profit margin from this revenue, this kind of revenue is lower compared to our loan facilitation services. If we exclude this factor, Both our S&M and G&A expenses slightly decreased in absolute amounts year-over-year due to our improved operational efficiency. And R&D expenses increased year-over-year reflecting our continued investment in technology and research development. That's the first reason.
Yang
The second reason is about the decline of our take rate.
Shawn Zhang
So although the loan facilitation volume increased year-over-year in the first quarter of 2024, the overall take rate of the company's loan facilitation services actually decreased year-over-year.
Yang
So talking about the key factors that affect the company's profit rate in the future, I will talk about a few of them. The first is the downfall period of the entire domestic interest rate. So talking about the future trend of our profit margins, I want to talk some more information. So firstly, within the downward interest rate cycle,
Shawn Zhang
Our pricing and take rate will be relatively steady, but there will be some decrease to benefit our borrowers. That's the first one. The second is about decreasing proportion of our guaranteed service revenue. Just as what I mentioned before, the proportion of the revenue from guaranteed services will continue to decline, which will positively impact overall profit margins.
Yang
The third one is about the stable growth and operational efficiency. So with robust growth in scale and continuous improvement in operational efficiency,
Shawn Zhang
cost effectiveness will further improve, which will also positively impact our profit margins.
Yang
So our focus in the future is that we will
Shawn Zhang
balance our growth and also the risk factors to ensure a healthy development in the future.
Yang
Your second question is about our overseas business.
Shawn Zhang
I will let Mr. Xu to answer your second question.
Teng
Okay, thank you, Mr. Guan. We will talk about the Indonesian market here. Of course, a strong trend in the industry is definitely a challenge for entrepreneurs. But if you look at it from a positive perspective, it also reflects the possibility of monitoring the development and long-term development of this industry, which is actually a kind of recognition. Thank you, Mr. Fang. So talking about the Indonesian market,
Shawn Zhang
Although the reduction in interest rate poses a challenge for industry operators, we also see it as a recognition from the regulators upon the industry's potential for long-term development. And additionally, it reflects the management approach and strength of policies designed to continuously explore and safeguard the industry's long-term development.
Teng
With the rapid development of the fintech industry,
Shawn Zhang
regulatory policies and the frameworks are becoming more systematic and iterations and adjustments or within our expectations this also reflects the industry's various aspects especially from the clients perspective in their demand for the for the high quality products and services
Teng
When it comes to the challenge of industry entrepreneurs, the lower interest rate will be more advantageous for two types of companies. Which two types? One is a platform that has been in the market for a long time. After a long time, the data and customer accumulation allows them to have more room for adjustment and trial and error. The other one is not necessarily in the market, but in the industry, there are companies that accumulate and have outstanding performance in risk management and detailed management. So regarding the challenges you just mentioned, the reduction of interest rate will give two types of firms an advantage in meeting these challenges.
Shawn Zhang
kind of companies or the platforms that have been dedicated in the market for a long time, which have more room for adjustments and trial for error due to their data and also the accumulation of users. The second is the companies with outstanding risk management and refined operational capabilities. that they can accelerate their adjustment and iteration pace through technical capabilities to adopt to new market requirements.
Teng
Back to Jiayin and her partners in the Indonesian market, we have been in the Indonesian market for a while. Although it is not a long-term business, it has accumulated certain knowledge and experience. In the second category of risk management, we are talking about risk management and mechanical operation. In this industry, there are long-term accumulations. I think the negative energy of these abilities will allow us to make appropriate and faster adjustments to the requirements of our new interests.
Shawn Zhang
So talking about giant group, we have been operating in Indonesia for some time, although it cannot be considered as very long time, but we have already gained some understanding, knowledge, and experience. Our long-term experience in risk management and refined operations allows us to respond and adjust quickly to new requirements upon the interest rates.
Teng
In the first half of this year to the present, we have seen that the Indonesian business, under the new interest rate requirements, which began on January 1st, we have made quite a rapid adjustment and response. All aspects of the indicators have been improved. In the first half of this year, we have seen rapid and positive
Shawn Zhang
improvements in various indicators of our business in Indonesian market under the new interest rate requirements. For the next step, we look forward to breakthrough and further development in the scale of our business in this market. Overall, we are committed to long-term development in the Indonesian market.
Teng
That's our opinion about our business in the Indonesian market, and that's all for me. Thank you.
Operator
Seeing no more questions, I will return the call to Sean for closing remarks. Please go ahead.
Shawn Zhang
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 programs.
Operator
This concludes today's conference call. Thank you for participating. You may now disconnect.
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