FinVolution Group

Hello, ladies and gentlemen. Thank you for participating in the third quarter 2024 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 capital markets for the company. Jimmy, please go ahead.

Hello everyone and welcome to our third 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 company email alerts by visiting the IR section of our website at ir.finvigroup.com. Mr Teo Gen Lee, our Chief Executive Officer and Mr Jia Yuan Xu, 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 forwarding statements, except as required under applicable law. Finally, we post a slide presentation on our IRN website providing details of our results for the quarter. I will now turn the call over to our CEO, Mr. Tiajun Li. Please go ahead, sir.

Thanks, Jamie. Hello, everyone, and thank you for joining us. This is Tiajun Li, CEO of Evolution Group. We are happy to speak with you today. Revolution made great progress despite the purest challenges through strong execution of our local excellence, global outlook, our legal strategy. Although China's overall economic growth remained restrained in the third quarter, we anticipate more sustainable improvements in the fourth quarter, given the border than anticipated stimulus virus announced in late September. Also, we have made great progress towards the objective of achieving 50% of our revenue coming from the international market by 2030. By constantly leveraging our experience in China and ongoing technological improvements, we have propelled rapid growth in international transaction volume. This has translated into higher revenue and net income contribution, with international revenue contribution increasing significantly. from 3.7% in 2020 to 10.3% in 2022 and expected to be around 20% in 2024. Over the years, we have also consolidated our capabilities into individual models, which we can flexibly deploy while adapting to the evolving requirements of different countries. In line with our objective of increasing our international revenues, We recently strengthened our international team and invited Dr. Sun Xiaodong to join us as our Senior Vice President for International Business. Dr. Sun has held key positions at renowned firms such as Ant Financial International, MyBank, American Express, and Citibank. Both started by Mr. Sun's leadership and expertise. We are confident of accelerating our international business expansion and achieving new milestones. As of September 30, 2024, we have cumulatively served 32.6 million borrowers across China, Indonesia, and the Philippines. For our international markets, we are proud to share that the number of unique borrowers grew from 0.7 million in 2020. to 1.6 million in 2022, and to 2.1 million for the first nine months of 2024. Also, it's worthy to note the number of new borrowers were 0.63 million in 2020, 1.1 million in 2022, and 1.5 million in the first nine months of 2024. Validating the high percentage of new borrowers in our international business, The acquisition of high-quality borrowers across all our markets remains an important element of our strategy. As a result, the total number of new borrowers across our platform once again exceeded the 1 million mark. We are very pleased to share that as we enhanced our global operations during the third quarter, the number of new borrowers in international markets reached 671,000, up 60% year-over-year and 43% quarter-over-quarter. Notably, the number of new international borrowers increased by a quarter. Such strong growth underscores our execution excellence and our strategy's effectiveness in driving the rapid expansion of our international business. For the third quarter, Total transaction volume reached 52.2 billion RMB, while total outstanding loan balance reached 68.1 billion RMB of 1.8% and 3.3% respectively year-over-year. This continued growth across all the markets in which we operate validates our strategy's efficiency and sustainability. Given the low penetration rate for financial services in our international market, We continue to enhance our holistic approach to customer acquisition with innovative marketing campaigns that capitalize on our strategic partners' resources and our local teams' deep understanding of market trends. For instance, our comprehensive social media strategy continues to attract new site visitors and enhance our brand exposure, facilitating positive word-of-mouth publicity and projecting a trustworthy image that encouraged followers conversion. As of the end of the third quarter, our total followers on major social media platforms reached 2.5 million, up 21% year-over-year. As a tech pioneer, we are leveraging tech innovation to strengthen our operations and promote the fintech industry's integrity and security. During the third quarter, Finvolution presented its detection solutions for combating deep fake voice command scams during the 33rd International Joint Conference on Artificial Intelligence in South Korea. Advancement in voice synthesis technology are making it increasingly difficult to distinguish between genuine and cloned voices, posing significant risk in terms of data security and asset protection affecting different industries. We believe that our sophisticated larger laundry model-based solutions have the potential to effectively fight voice command fraud, safeguarding our users' interests and fostering a healthy industry ecosystem. We have also integrated larger laundry models into our loan collection recovery process, which has improved our loan collection recovery rate and saved us millions of dollars. The development of such innovative technologies is a result of our strong commitment to R&D and the annual Finvolution Technology Cup competition, which has incubated many cutting-edge solutions over its nine-year history. Looking ahead, we will continue to invest heavily in R&D to enhance service quality and operating efficiency empowered by leading technologies across our operations. Before I wrap up, a brief update on our ESG efforts. In line with our commitment to financial inclusion, we continue to support the backbone of the economy by facilitating loans for small business owners during the third quarter. As Agile, community-oriented providers of local employment opportunities, serving small business ultimately contribute to a more rapid economic recovery. During the quarter, we empowered 447,000 small business owners with totaling 15.4 billion RMB during the quarter of 25% year-over-year. In summary, we successfully navigated the third quarter's challenge by capitalizing on our strength in technology, customer acquisition, and retention. We also continue to attract quality talents across multiple countries, which has further strengthened our R&D capabilities and will eventually enable business process outsourcing from Indonesia and the Philippines. Facilitating our expansion as we enter into more new markets, firm execution of our local excellence, global outlook strategy, continuous technological innovation, and our enabling commitment to our vision of financial inclusion continue to drive our steady progress and long-term sustainable growth. Going forward, we are confident of becoming the leading fintech player across the Pan-Asian region. With that, I will now turn the call over to our CFO, Jiaoyuan Xu, who will discuss the operational and financial results.