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Operator
Ladies and gentlemen, hello and thank you for participating in the first quarter 2020 for earnings conference call for Finvolution Group. At this time, all participants are in listen-only mode. After management's prepared remarks, there will be a question and answer session. Today's conference call is being recorded. I will now turn the call over to your host, Jimmy Tan, Head of Investor Relations for the company. Jimmy, please go ahead.
Jimmy
Hello everyone and welcome to our first quarter 2024 earnings conference call. The company results were issued via Newswire Services earlier today and are posted online. You can download the earnings release and sign up for the company email alerts by visiting the IRR section of our website at irr.pimpigroup.com. Mr Tianjian Li, our Chief Executive Officer and Mr Jia Yuanxu, our Chief Financial Officer will start the call with their prepared remarks and conclude with a Q&A session. During this call, we will be referring to several non-GAAP financial measures to review and assess our operating performance. These non-GAAP financial measures are not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with US GAAP. For information about these non-GAAP measures and reconciliation to GAAP measures, please refer to our earnings press release. 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 Securities Litigation Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties. As such, the company results may be materially different from the views expressed today. Further information regarding these and other risks and uncertainties are included in the company filings with the U.S. Securities and Exchange Commission. The company does not assume any obligation to update any forward-looking statements except as required under applicable law. Finally, we post a slide presentation on our IR website providing details of our results for the quarter. I will now turn the call over to our CEO, Mr. Chia-Jun Lee. Please go ahead, sir.
Chia - Jun Lee
Thanks, Jamie. Hello, everyone, and thank you for joining our earnings call. This is Chia-Jun Lee, CEO of InfoLution Group. We are happy to speak with you today. We kicked off 2024 with continued strong execution of our local focus, global outlook strategy, in line with the domestic and international micro trends. China's economic recovery is progressing gradually, while Indonesia and the Philippines are growing more vigorously. There has been a pickup in economic and consumption activities during China's recent holidays, but the M1 financial data in April turned negative year over year, sending mixed signals to the market. But in such situation in mind, we will continue to closely monitor the micro environment while leveraging on our technologies to increase the efficiency of our operations. Driven by our local focus, global outlook strategy, we have served around 31 million borrowers across China, Indonesia, and the Philippines. as of the end of the first quarter of 2024. Our first quarter's performance highlights our strategy's effectiveness as well as its flexibility. Transaction volume in China reached 46 billion RMB, up 10% year-over-year, while outstanding loan balance increased 64 billion RMB, up 4.4% year-over-year. Our ongoing investment in information speed advertising drove further expansion in the number of new borrowers in the China market, up 3% year-over-year, accounting for 20% of unique borrowers. Transaction volume from new borrowers contributed around 15% of total transaction volume, reflecting potential for our continued progressive growth in the China market. Meanwhile, we leveraged our leading technologies strategic agility and deep experience to overcome various challenges facing our Indonesia operations since last quarter, and delivered solid growth in our international markets. International transaction volume reached 2.21 billion RMB, up 41% year-over-year, while outstanding loan balance expanded to 1.27 billion RMB, up 34% year-over-year, demonstrating our ability to capture opportunities in different countries. Driven by our effective social media strategy, the number of our new borrowers in international markets increased by 13% year-over-year and represented 41% of unique borrowers. International business stands as our second growth driver and its revenue contribution has been increasing steadily. For the first quarter, Revenue from international business reached 595 million RMB, up 33% from the same period last year, and representing 19% of total revenue. Going forward, we believe this segment's contribution to revenue will continue to increase as we strengthen our existing markets and expand it into new territories. We also continue to make and drive progress on the technology front in the first quarter of 2024. In February, our extensive collaboration with leading global academic institutions produced three papers, which were selected for the 38th Annual AAAA Conference on Artificial Intelligence, one of the world's top artificial intelligence conferences with an acceptance rate of just 24%. Through our ongoing investment in large language models, we have self-developed a proprietary technology called XCoder. It increases our programmers' efficiency through auto software bug detection and auto revision of frequently used codes, which greatly reduces human error. We have also utilized AIGC to streamline advertising costs and increase efficiency. producing more than 20% of video content with AI for vivid and precise advertising that resonates with our target borrowers while reducing market costs. On a related note, we leveraged our advertising, social media influence, and video content to expand our brand awareness in our international markets on popular channels such as Facebook, TikTok, and Instagram. Our followers reached 1.1 million, 855,000, and 234,000 on those sites respectively. During the first quarter of 2024, up 87%, 55%, and 10% respectively year over year. Before I will wrap up, a brief update on our ESG efforts. In line with our co-commitment to financial inclusion, We continue to support the backbone of the economy by facilitating loans for small business owners during the fourth quarter, both during the gradual and sometimes fragile recovery. We facilitate a total of 13 billion RMB of loans for small business owners, up 26% year-over-year. Furthermore, we made additional strides with our public welfare program aimed at improving farmers' livelihood through the live stream of agricultural products created in collaboration with China's national weightlifting team. This initiative has attracted over 2 million viewers and increased farmers' incomes with more than 2,000 online transactions. In summary, we made most of the first quarter's positive through leveraging on our technologies and increasing efficiency. Firm execution of our local focus, global outlook strategy, ongoing tech innovation, and deep dedication to our vision of financial inclusion propelled our steady progress and long-term sustainable growth. We will remain committed to fostering inclusion, accessibility, and technology as we create value for stakeholders and deliver better financial services to borrowers throughout the Pan-Asian region. With that, I will now turn the call to our CFO, Jia Yuanxu, who will discuss our operational and financial results.
Jia Yuanxu
Thank you, Li, and hello, everyone. Welcome to our first quarter of 2024. Let's go through our key results for the first quarter. To be mindful of the length of our news call today, I encourage listeners to refer to our first quarter earnings repressed release for further details. As Li mentioned, China's recent microdata, coupled with economic activities during the holidays, reflect China's slower-than-expected economic recovery, with a few bright spots that are outpacing the overall trend. China's GDP expanded by 5.3% in the first quarter compared to the same period last year, and by 1.6% compared to the previous quarter. In March, China's manufacturing activity expanded for the first time in six months, with the manufacturing PMI reaching 15.8 points, up 1.7 points month over month. Non-manufacturing PMI rose to 53 points, boosting composite PMI to 52.7 points, up 1.6 and 1.8 points month over month, respectively. All three indexes are within the expansion range, indicating an acceleration in enterprise production and operational activities. The consumer confidence index improved to reach 89.4 points in March but still hovering at relatively low levels. As Li mentioned, transaction volume in the China market grew 10% year-over-year with an annual increase in the number of new borrowers, reflecting our commitment towards progressive growth in China's small market. Our average borrowing rate in the first quarter remained stable at IR22.3%, validating our commitment towards financial inclusion. Capitalizing our strong presence and reputation for reliability, we grow our cumulative number of founding partners to 102 institutions during the quarter. This broad base coupled with China's recovery economy boosted our founding partners' confidence in facilitating loans for better quality borrowers. improving our funding costs by an additional 50 bps on a quarterly basis. Looking forward, we are confident to achieving continuous optimization in our funding costs throughout the rest of the year. Furthermore, we have made great strides in our ABS insurance initiative, which will further diversify our funding source. Regarding risk, we expect our vintage delinquency to remain stable at 2.5% for the fourth quarter. Meanwhile, we drove an improvement in our recent April day one delinquency to 5.2% through a shift in our loan collection strategy. Loan collection recovery rate towards the end of the first quarter stood at a healthy range of 86%. Turning now to our international expansion, Our crucial second growth driver during the quarter, the cumulative number of borrowers for our international market exceeded 5 million, reflecting our commitment to promoting financial inclusion across all the markets in which we operate. In our first international market in Indonesia, the economy remains robust. with GDP growth of over 5% in 2023 and a further increase to 5.1% in the first quarter of 2024, driven by resilient domestic consumption and increasing investment. Furthermore, Indonesia's PMI has consistently remained above 15 points for the past 2.5 years, indicating a strong position in the expansion zone. In March 2024, PMI increased by another 1.5 points to reach 54.2 points. Sales of motorcycles, a primary means of transportation in Indonesia, increased 4.5% month over month in March to 584,000 units. We are also glad to share that by leveraging our proven experience and technologies in the transition to better quality borrowers in the China market, our operations in Indonesia have largely overcome the recent challenges posed by interest rate adjustment. We will continue to actively monitor regulatory developments and refine our operations accordingly. In the Philippines, our second international market the government has forecast a GDP growth rate of between 6% to 7% for full year 2024. Its PMI index has remained in the expansion zone for eight consecutive months, and the unemployment rate remained low at 3.9% in March 2024. This further boosted consumption with growth in household consumption accelerating to 5.3% in the first quarter of 2023, up for 5% in the previous quarter. All these positive micrometrics support our strong growth momentum in the Philippines market. Overall, our performance in international markets remained solid for the first quarter of 2024. Transaction volume for the international markets grew 41% year-over-year to RMB 2.21 billion. while outstanding loan balance grew 34% year-over-year to RMB 1.27 billion. Number of unique borrowers in international markets was 849,000, up 15% year-over-year, while number of new borrowers reached 344,000, up 13% year-over-year. These results highlight borrowers' thickness on our platform as well as our ability to acquire additional new borrowers through diversified channels with generous social media awareness. Notably, our Philippines operations continue to outperform expectations, with transaction volume growing 194% year-over-year and 27% sequentially, contributing 25% of international transaction volume. This outstanding local performance has been widely recognized by regional financial institutions, attracting reputable local funding partners such as C Bank and the Union Bank. Notably, we have entered into a transnational collaboration with C Bank to facilitate loans in both our overseas markets. Our credit facility from these two partners in the Philippines alone totalled nearly 650 million pesos, greatly enhancing our presence in the country and facilitating our efforts to promote financial inclusion. Looking ahead, we are confident we will continue to attract reputable financial institutions to join us in the quest to advance financial inclusion in the country. As we strengthen our presence in the Philippines and gain greater recognition from our local partners and regulators, we believe our Philippines operation will assume a bigger role in our international business. Now, turning to our financial metrics, driven by strong execution of our local forecast global outlook strategy, total net revenues for the first quarter grew to RMB 3.17 billion, up 4% year-over-year. Our net income was RMB 532 million, an increase of 1% quarter-over-quarter, reflecting our increased operating efficiency. Meanwhile, sales and marketing expense increased by 13% year-over-year to RMB 449 million as we continued to strengthen efforts to acquire new borrowers in both our China and international markets. Furthermore, leveraging our unparalleled industry expertise and operational efficiency, we have achieved an above-industry hourly of 3.2%. Our leverage ratio, defined as risk-bearing loss divided by shareholders' equity, remained stable at four times, reflecting opportunities for growth when macroeconomy normalized. Our total liquidity position consisting of cash and cash equivalent plus short-term investments reached 8.5 billion, up 10% from a year ago, reflecting a robust balance sheet that is well able to support our business growth, exploration of new opportunities, and consistently return value to our shareholders. Finally, a brief update on our capital return program. As part of our commitment to consistently return value to shareholders, we deployed over US$27 million in the first quarter of 2024 to repurchase our shares on the secondary market. Cumulatively, we have returned a total of US$632 million to our shareholders through our capital return program since 2018. demonstrating our consistent and sustainable commitment to our shareholders. The company reiterated its full-year 2024 transaction volume guidance for the China market in the range of RMB 195.7 billion to RMB 205 billion, representing year-over-year growth of around 5% to 10%. At the same time, the company expressed its full-year 2024 transaction volume for its international market to be in the range of RMB 9.4 billion to RMB 11 billion, representing year-over-year growth of around 20% to 40%. That concludes my prepared remarks. We will now open the call to the questions. Operator, please continue.
Operator
Thank you. If you wish to ask a question, please press star then 1 on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star then two. If you're on a speakerphone, please pick up the handset to ask your question. Your first question comes from Thomas Chung. Apologies. Your first question comes from Yada Li from CICC. Please go ahead.
Yada Li
Hello, everyone. Thank you very much for giving me the opportunity to ask a question. Today, I have two questions that I would like to ask you. The first question is about the management of overseas business in different regions such as Indonesia and the Philippines, as well as the market competition environment, as well as a outlook for this year and the future profit and loss prospects. The second question is about the change in our current overall balance of assets, as well as the continuous growth and profit-making improvement of overseas business. How do you look at this year and the overall change in the take rate of future companies? Is there still a lot of room for improvement? Thank you, Mr. Guan. Then I will do the translation. Hello, management. Thanks for taking my questions. I have two questions today. And the first one is about the international branches. I was wondering how to view the regulation, market competition, and profit outlook in different regions, such as Indonesia and the Philippines going forward. Secondly, if we take the asset quality trend and the potential profit overseas into consideration, how to view the trend of tick rate for this year and the future? That's all. Thank you.
Jia Yuanxu
Thank you, Yada. Let me answer these two questions. The first one is about the situation of our overseas business. As I mentioned before, we have been doing this for six years from the perspective of Indonesia in 2024. We have also been doing this in the Philippines for four years. So, in total, we have 10 years of experience overseas. Um, um, um, um, um, um, um, um, um, So there is no doubt that overseas business has become a very strong second growth curve for us. I will introduce the current situation in two countries separately. One is Indonesia, which is our main overseas market. As you all know, there has been a adjustment in terms of pricing since the end of last year. And then on January 1st of this year, we have completed such an adjustment on the pricing side. As we mentioned last time, we actually need some time to digest the price adjustment because some of the key assumptions, some of the key elements of business will also need to be adjusted accordingly. Now we are also very happy to report to you that we have been adjusting the price in Indonesia for about four or five months. The whole business model has basically been completed. The entire business has entered a stable situation. This is reflected in several aspects. First, the quality of the customer base has increased significantly. The share price of Indonesia has increased by 10% and the return rate has also increased by 5.6%. This is an improvement in customer year-on-year. The second is that the transfer rate of high-quality customers has also become higher. Now, the transfer rate of the entire retail transaction is 23% higher than before the price adjustment. The third is also the most important is that we are in terms of risk ah ah from last year's four seasons ah to now the whole risk has been optimized by 23% Ah, the fourth one, we continue to increase in the number of institutions we work with and now we have reached six Um, the last one is that we see in the goods section that because of the adjustment of the pricing, in fact, the competition of the entire market is actually weak Ah, in addition to our own improvement in operating efficiency, we have also improved by 10% on the price of goods and services. So these factors finally showed a result, which is that we are in this round of pricing adjustment, our T-Cred is now back to about 10%. This level is basically the same as the T-Cred we had before the pricing adjustment. So we are very confident that we can maintain a take rate of about 10% at this price level throughout the year. Similarly, on this basis, we expect the business to be profitable throughout the year at the accounting level. Of course, as I mentioned last time, the approach of accounting and the actual business approach are still different. From the business approach, the actual profit and loss situation of the Indian business will be better.
Jimmy
Okay, hi Yadah, this is Jimmy. Let me do the translation for you first. Okay, for the first question, let us do an overall recap on the international market situation. We have been doing our international market for six years, and for the Philippine markets, we have been in operation for over four years. And in total, we have over 10 years of experience in doing international operations. I would say that the international business has been growing very quickly, with CAGR growth of over 100%, with CAGR growth of 100% in revenue for the past three years, and revenue contribution from this segment has also reached 19% of total revenue, with total registered users reaching 26 million, representing 14% at group level. And the cumulative numbers of borrowers also exceeded 5 million, representing 17% as group level. This international business is confirmed as the group's second growth driver. And as you know, there has been a cap adjustment earlier this year on the borrowing rates. And after five months of business adjustment, we have optimized our borrowers' cohort models and data strategy to achieve stable operations. Our borrowers' cohort data, our borrowers' cohort quality increased in average ticket size and repeat borrowing rates are up 10% and 5.6% respectively. The conversion rate for higher quality borrowers increased with approved credit line increasing by 23%, and most importantly, our risk performance improved by 23% on a sequential basis. And the number, our efforts have also been recognized by local financial institutions, with the numbers of funding partners increasing to six. And from customer acquisition perspective, we have seen small and mid-sized platforms reducing the acquisitions, and we managed to reduce our acquisition costs by 10%. And coming to take rate, after this round of adjustment, our take rate, we are confident to maintain around 10% in 2024. And this is similar to what we have in our take rate before the pricing adjustment. And in 2024, we expect our international business to realize profits of over 10 of millions.
Jia Yuanxu
Then take a look at our Philippines. The Philippines also shared some numbers earlier. In the first quarter, in fact, our sales growth was still very rapid. Then the entire sales volume is more than 5.6 billion. Then the share growth is close to 200%. The share growth is 27%. Then the entire Philippine sales also reached 25% of the overall overseas sales volume. The entire monitoring environment is relatively stable. The competition situation is also relatively good. So we expect that in the second quarter, the whole transaction will remain at a speed of more than three digits. On this record, our Philippine business has also received the recognition and support of local financial institutions. You can see that we already have two local financial institutions that have become our cooperative partners. In total, we have reached 6.5 billion BISO. So in the future, we are very confident that we will continue to receive more support and recognition from local funds.
Jimmy
Hello, we are coming to our Philippines market. Growth in the first quarter has been rapid. Transaction volume in the first quarter reached RMB 560 million, up 194% year-over-year and 27% sequentially, representing 25% of total volume in the international market. The regulation in the Philippines is relatively stable and our second quarter growth is expected to be interpreted as well. We have also attracted reputable financial institutions such as CBank and Union Bank to be our funding partners of over 650 million peso. And going forward, we are confident to continue our rapid momentum in the Philippines.
Jia Yuanxu
Yes, and your second question is about some of the changes we will face in the future. I will look at it separately. First of all, let's look at our domestic market. Our domestic market is now relatively stable overall. And then in terms of risk, although last year, in the second half of the year, the risk was fluctuating, and there was some pressure, but now it has basically stabilized. And then the capital cost continues to maintain a rapid decline in the first quarter, and it has improved by 50 bps. Then in the second quarter, we are also very happy to see that this trend continues to maintain. So in the first quarter, we can see that the entire take rate is from 2.9 in the fourth quarter last year to 3.0. From the current situation, we feel that we can continue to maintain a relatively healthy take rate. Hello, Yada. Let me do the translation for this question as well.
Jimmy
Although for the China market, there has been some fluctuation in our risk last year, but the situation has been stabilized. And you can also see that we have a huge improvement in our funding cost of 50 bps in the first quarter and going forward in the second quarter, we expect this trend to continue. And this is why our take rate has slightly improved from 2.9% in the previous quarter to 3% in the current quarter. And for our Indonesian market, the take rate has returned to a level of around 10%, similar to what it has been prior to the price adjustment.
Jia Yuanxu
Okay, thank you, Yada.
Operator
Thank you. Your next question comes from Thomas Chong from Jefferies. Please go ahead.
Thomas Chong
Thank you, Guan Yichang, for introducing my question. 我的問題是關於科技如何提升資產資量還有運營效率。 Thanks, management, for taking my question. My question is about how technology can improve asset quality and operational efficiency. Thank you. 謝謝管理層介紹。 Hi, Jeffrey. Hi, Thomas.
Chia - Jun Lee
In terms of technology, we have always been very concerned about and maintained long-term investment. If we look at 2015 to this day, we have accumulated nearly 3 billion yuan in technical research and development investment. Currently, we have about 700 colleagues who are involved in technical research and development related work. Among them, the proportion of professors and professors is about 20%. We have also established long-term cooperation with domestic and foreign institutions in terms of research and talent. We believe that the entire technology, in terms of our company's improvement and improvement, has different manifestations on both the business and cost sides. On the business side, over the past period of time, we have used AI investment and AI customers to improve our risk accuracy, We also established a whole set of decision-making data, which is about one episode a day, as well as more than 100,000 headings of strategy. This also helped us to build a deeper echo. We also used these models for different materials and interests to control the user's mind through the continuous transfer effect of the information stream. Currently, we use AI-generated The technology video reached more than 20% of our entire technology flow. Our material cost also decreased by 60%. In addition, our material production has also been greatly improved. In addition, at the cost end, we also created our technology center by continuing to invest in technology, helping us to continue to deepen our rich energy in the process of the middle and back stage of our business to improve the operating efficiency within the enterprise. As you can see, in the first quarter, when we achieved 4% growth in revenue, the overall G&A ratio of the company also achieved further optimization, reaching 2.6%. If we lengthen the time further back to 2019 before the epidemic, the G&A ratio at that time was about 7.3%. Through these continuous investments, we have greatly improved the overall operating efficiency of the company. At the same time, in the first quarter, the proportion of revenue created by the production capacity of our professional personnel has increased by 8.4% compared to last year. The above are some of the effects of our investments in the technology sector.
Jimmy
Hi Thomas, let me do the translation for our CEO. Technology is the core of evolution and we have remained consistent investment in technology throughout the year. For example, we have consistently invested in R&D since our establishment with a cumulative R&D investment of nearly $3 billion since 2015. We have around 700 experts in R&D with 20% holding Master's or Doctorate degrees. And additionally, we have established long-term academic collaborations relationship with seven leading universities. And all these have our investments in the aspect of operations and cost can be supported by our technologies. For example, in terms of customer acquisitions, we have invested over $2 billion in our information feeds. And through the accumulations of billions of user data and strategies involving over 100,000 iterations, we have built a deep mode for us. And more than 20% of our video content is now generated by AI. And this has reduced our video production cost about 60%. And cost-wise, we have also been deploying technology with our back-end operations, and thereby optimizing our internal operating efficiency. And in the first quarter alone, our revenue achieved a year-over-year growth of while G&A expenses as a percentage of revenue optimized to 2.6%. And during the period of pre-COVID to COVID, our G&A expenses as a percentage of revenue was 7.3%. And in terms of labor efficiency, during the first quarter 2024, average revenue per employee increased to 8.4% year over year. And these are the benefits that we have achieved through our tech investments.
Operator
Thank you. Your next question comes from Alex Yeh from UBS. Please go ahead.
Alex Yeh
Thank you for your question. My question is mainly about... This is a part of the user's needs. The reason for the decline is mainly due to the fact that we are more cautious in terms of risks, or even more so in terms of the performance of the user's needs. Looking at it, for example, the situation of user needs in the fourth to fifth month, whether it is the same or the same trend, and what is our expectation? So, I've noticed that in Q1 for our domestic business, we have seen the new customer, new borrowers, the repeat borrowers, and the conversion ratio for the domestic business has all appeared to have declined year-on-year basis. I'm wondering, was that many driven by our patent equity approval, or many from weakened credit demand. And related to that, how to think about outlook going forward, how has been the credit demand trend in April and May, and what's the implication for our four-year target? Thank you.
Chia - Jun Lee
Hi, Alex. First of all, let's take a look at the overall situation in China in the past period, as well as the market environment in the modern field. In the first quarter, we saw that the increase in GDP reached 5.3%, as well as the rebound in exports during the process, The PMI of the manufacturing industry has been greatly improved. On the other hand, we also see that in April, we just announced that there was a rare negative growth, including M1, as well as a decline in the total number of social facilities, as well as a lack of confidence in consumers. So, from the macro level, it is actually a relatively complicated situation. We can see that In the area of small-scale retail credit, we have seen some changes in demand and risk over the past period of time. In the second half of 2023, we saw that the overall risk of credit in the market rose. From the first quarter, the overall risk was relatively stable. But from the warm-up of this situation, compared to what we expected or compared to the previous year, it is still a little bit lower. The trend of future risks still depends on some major changes in the environment. Secondly, from the point of view of demand, we see that this year's first quarter, considering the impact of seasonal factors such as the Spring Festival, we think that the overall demand is relatively stable. However, after entering the second quarter, demand has dropped. As you have just seen, the data of the market share in April has also been verified. In recent years, we are facing some complicated situations in China. What we mainly adopt is a high-quality growth strategy. It can be expressed in several aspects. First, we actually use more precise risks to increase risk, the accuracy of the identification, as well as a certain degree of strategic tightening. We have realized that our overall risk has entered a relatively stable state. Alex also introduced that our risk is currently at a 2.5% of Vintage, which is approximately a 2.5% level. Our return rate and return rate are also relatively stable at present. The second level is that through In the process, we achieved greater efficiency improvement through technology and operation. As you can see, in the first quarter, our entire capital cost decreased by 50 bps, and the same amount of bps decreased by more than 120 bps. In addition, we also achieved a 17% improvement in the number of customers. At the same time, we also achieved a certain degree of improvement in G&A. Finally, we achieved a relatively reasonable income level. As I mentioned earlier, our take rate is currently around 3.0. Thirdly, we achieved a certain level of business document growth through reasonable customer investment and detailed operation on old customers. In the first quarter, our new customers' trading scale reached 15%. Our old customers, in the past. So, the flow rate of our old customers, the flow rate of old customers over three years or more, is more than 30%, and our supply rate is more than 80%. This also effectively relieves the pressure on the business caused by the decline in demand and the tightening of risks. Then, looking forward to 2024, we see that if we face some challenges from the perspective of the red line and the industry, Yes, but back to Xinyi, we also saw some opportunities through internal optimization and improvement. These opportunities also include that the risk is basically stable now, and there are some trends that are going well. In addition, our capital costs will continue to decline, and we still have room for continuous improvement in terms of technology driving our operating efficiency. In addition, it can also help us to achieve a certain degree of business growth. So, looking back at the past 24 years, although we faced these challenges and uncertainties, we also have confidence to deal with these impacts through our efforts. The entire company is prioritizing risks in China. Hello Alex, this is Jimmy.
Jimmy
Let me do the translation for Tim. Okay, first of all, let us recap the China macroeconomy and the microcredit industry that we are in. China economy presents a complex situation with GDP growth between 5.3% in the first quarter along with a rebound in export and improvement in manufacturing PMI. However, do note that there was also a rare contraction in social financing and M1 along with a decrease in social retail sales and with consumer confidence. This is a rather mixed signal. And for the industry which we operate, we have also observed changes from the demand and risk end. Overall, credit risk increased in the second half of 2023 and remained relatively stable in the first quarter. But the recovery is still slightly below our expectation. And demand was relatively stable in the first quarter due to seasonal factors such as Chinese stimulus fluctuates when entering the second quarter, validated by the mixed signals that we have seen earlier. And under this complex macro environment, Finvolution has implemented various strategies to counter this complex macro environment by enhancing our risk assessment model and patterning approval rates to ensure the overall stability of our risk metric. As Alexis has introduced earlier, our vintage delinquency has maintained stable at 2.5% with day one delinquency rates at 5.2% while loan collection recovery rate was at 86%. Leveraging our dual-rail effect of technology and operation efficiencies, we have seen a sequential decline of 50 bps in our funding costs and a year-over-year decline of 120 bps in our funding costs, while customer acquisition costs were optimized by 17% compared to the last quarter. And G&A expenses also decreased by 7% year-over-year. And all these measures enable us to achieve a stable take rate of 3%. Our consistent investment in customer acquisitions, with in-depth focus on repeat customers, has led to a stable business growth. For example, 30% of our borrowers have maintained on our platform for more than three years, and over 80% of the loans were facilitated for repeat borrowers, effectively elevating the fragile cost by fluctuating demand and tightening approval rates. And looking ahead in 2024, China economy has some challenges and also in our industry as well. But we have also seen some opportunities such as the stabilisation of risk, funding cost improvement and our enhancing on our efficiencies and focus on repeat borrowers. And with all these measures that we have implemented, we are still confident to maintain a healthy level of growth amidst challenging macro environment.
Operator
Thank you. Your next question comes from Hannah Han from Nomura. Please go ahead.
Hannah Han
Thank you, Mr. Guan. I have two questions. The first one is about the current shareholding recovery plan. Is it suitable to provide more progress and details? Is it suitable to have a new plan to further increase shareholding value? The second question is that I have observed an increase in cash in the first quarter. I would like to ask about the future of these cash-in plans. Let me translate my question. The first question regarding the share repurchase program, could you give us more details on the current process? Also, does the manager have a new plan for the increase in the shareholder value? For the second question, we observe an increase in cash in one cube. And could you provide more colors on the future use of this cash? And additionally, how does the company plan to improve its operating efficiency?
Jia Yuanxu
Thank you. 谢谢Hannah,我来回答一下这两个问题。 那第一个关于我们回购的情况,刚才我们其实也提到一季度我们整个是回购的金额是2700万美金啊, This figure is almost twice as high as it was last year. If you look at the total amount of rebates last year, it is about 28%. Our previous plan now has a balance of 93 million yuan. So from the balance, it is now relatively sufficient. In addition to the repurchase, in the first and second quarter of this year, we have also completed the work of payment of shares for the first two or three years. The entire fund amount is 6,200 million US dollars. So in the whole two or three years, from the repurchase plus the fund, our total amount is about 160 million US dollars. We will continue to give shareholders
Jimmy
Hello, Hannah. Let me do the translation. And for our share purchase in the first quarter, we have deployed 27.2 million, which increased by around one time compared to last year, and is 28%, and represent around 28%. And we still have 93 million for our buyback program in our quotas. We have also completed our share dividend distribution of $62 million and coupled with our share repurchase of around $100 million for the year of 2023, the total payout ratio was around 49% of net income. For share repurchase and dividend, we have been doing it consistently for the last six years and have returned around $630 million for our shareholders. And going forward, we will continue to create long-term value for our shareholders through high-quality growth and a leading capital return program through a combination of dividends and buyback.
Jia Yuanxu
Then Indonesia, after the whole pricing is adjusted, we still maintain a very healthy business model and a single profit situation. Then the Philippines, our growth rate is very fast now. So we should ensure the supply of cash in terms of growth. This will involve some investment from new customers, as well as some larger brand acquisition. We have already achieved some significant progress in terms of parking in Indonesia and the Philippines. However, there are still some procedures that need to be completed. After the entire process is completed, we will report to the market about the specific progress in terms of parking. Under this guarantee that we can grow healthily, we just mentioned that we will continue to create long-term value for shareholders. The main form is to close and repurchase. In the past six years, you can see from these numbers that we have been doing it, and the effort we have made is constantly being strengthened. Over the past six years, we have accumulated 6.3 billion US dollars from closing and repurchasing to the market. Let me do the translation for Alexis. Okay.
Jimmy
First of all, we need to ensure sufficient cash for the development of our business, especially our international business growth has been very rapid. Our Indonesian business, after the cap adjustment, has maintained healthy take rates, whereas Philippines is also growing at a very fast momentum. And in terms of local licenses, we have achieved significant progress in all our markets that we intend to have more local licenses, and we will share more when there is more concrete information is available. And coming back, over the last six years, right, we have cumulative return 630 million to our shareholders, which is around half of our current market cap. And we are confident to maintain a healthy return to our shareholders while delivering high quality growth in our business.
Jia Yuanxu
Okay, thank you, Hannah.
Operator
Thank you. There are no further questions at this time. I'd like to turn the call back over to management for closing remarks.
Jimmy
Thank you once again for joining us on our conference call. If you have any further questions, please feel free to contact Finvolution Group Investor Relations team. Thank you, everybody.
Operator
This does conclude our conference call for today. You may now disconnect your line. Thank you.
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