Participants

Shawn Zhang; Investor Relations; Jiayin Group Inc

Dinggui Yan; Chief Executive Officer, Founder, Director; Jiayin Group Inc

Chunlin Fan; Chief Financial Officer; Jiayin Group Inc

Yifang Xu; Chief Risk Officer, Director; Jiayin Group Inc

Presentation

Operator

Good day, ladies and gentlemen. Thank you for standing by and welcome to Jiayin Group fourth quarter 2024 earnings conference call. (Operator Instructions) 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 Jiaying Group. Please go ahead.

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 fourth quarter and full year of 2024. We released our earning results earlier today. The press release is available on the company's website as well as from newswire services. On the call with me today are Mr. Yan Dinggui, Chief Executive Officer; Mr. Fan Chunlin, Chief Financial Officer; and Ms. Xu Yifang, 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 US Private Security Litigation Reform Act of 1995. Forward-looking statements involve inherent risk and uncertainties. As such, the company's actual results may be materially different from the expectations expressed today. For the information regarding this and other risks and uncertainties, it 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 Renminbi.
With that, let me now turn the call over to our CEO, Mr. Yan Dingui. Mr. Yan will deliver his remarks in Chinese, and I will follow up with corresponding English translations. Please go ahead, Mr. Yan.

Dinggui Yan

(spoken in foreign language)

Shawn Zhang

In 2024, China's macroeconomic demonstrated steady growth with consumer credit demand rising steadily, supported by consumer stimulus policies. Overall, for the year, consumer credit grew by RMB1.24 trillion, reflecting a 6.2% year-over-year increase.
The year also marked a significant milestone for Jiayin as a strengthened its strategic positioning and achieved high-quality development. The company pursued a strategy of steady progress driven by technology expanding incrementally well, carefully managing risks. In Q4 2024, the company facilitated loan transactions totaling RMB27.7 billion, 37.8% year-over-year increase with low facilitation service revenue reaching RMB1.1 billion, up 46.3% year over year. The company's business goal grew steadily each quarter, consistently setting new records. The total loan facilitation volume for the year exceeded RMB100 billion, marking an important business milestone.

Dinggui Yan

(spoken in foreign language)

Shawn Zhang

Thanks to diverse borrower acquisition channels and flexible marketing strategies, the company has significantly improved its borrower acquisition efficiency. In 2024, the company added 2.774 million new borrowers, representing a year-over-year growth of 45.1%. Regarding borrower retention, we implemented a refined stratification mechanism, applying differentiated create growth strategies. The company's annual retention rate increased by approximately 7%. We pay particular attention to potential (technical difficulty) users and effectively improved their retention rate nearly 75%.
Additionally, we continue to expand a high-quality and sustainable network of institutional partnerships. During 2024, we maintained in-depth cooperative relationships with a total of 73 financial institutions. We also actively explored innovative and diverse business models in areas such as auto-backed loans and loans for small and micro businesses. We remain committed to achieving win-win collaborations. With financial institutions fostering the diversification of consumer credit products and scenarios.

Dinggui Yan

(spoken in foreign language)

Shawn Zhang

In response to the rapid growth of new borrower groups and strong credit demand, the company has consistently adhered to a prudent risk control strategy while adjusting credit limits as needed. We closely monitor changes in risk data and implement more flexible transaction strategies.
By integrating new external data sources and combining them with deep analysis of internal borrower behavior, we continuously iterate and enhance our risk control models. In Q4, delinquency rate for loans overdue for from 61 to 90 days dropped to 0.53%, representing a significant improvement compared with the same period a year earlier.
Furthermore, through our AI-powered self-developed risk control platform, we have established a comprehensive digital anti-fraud defense system. Throughout the year, we identified and intercepted more than 500 -- [540,000] high risk habitual fraud applications and blocked 468,000 malicious attacks from illicit activities. These results demonstrate that we are collectively building a full process digital and collaborative risk control network for giant technology.

Dinggui Yan

(spoken in foreign language)

Shawn Zhang

With the internal development of technology and the effective progress of external large models, we continue to expand the application and empowerment of AI in business areas such as customer services, risk control, and marketing. For instance, our new (inaudible) agent assistance system provides real-time tech reminders and a script recommendations for customer services staff, achieving an accuracy rate of 90% and reducing the quality inspection error rate by more than 5% after empowering the system.
We have also integrated an AI-based image regulation system into the risk control process, quickly enhancing the efficiency and accuracy of document and credential regulation. In marketing, we have implemented a multimodal model based on speech and images to ensure an AI intelligent review of marketing graphics, text, and video content.
Additionally, we have completed the private deployment of the advanced large language model [Deep Seek R1]. In 2025, we expect to accelerate its application in core business areas, such as risk management, data science, and customer services, driving structural breakthroughs in enterprise efficiency.

Dinggui Yan

(spoken in foreign language)

Shawn Zhang

Overseas business expansion has always been a key strategic focus for us. In Q4 2024, our business partners in Indonesia saw a 74% year-over-year increase in low volume. At the same time, the number of registered users grew by 131% year over year. Maintaining strong growth momentum, we also established a partnership with a leading local financial institutions and are in discussions with five other potential partners.
In the Mexican market, we continue to work closely with local regulatory authorities. As a result, we have significantly optimized risk indicators and improved profitability. With ongoing improvements in operational capabilities and market penetration, we aim to strengthen our competitive position in the overseas market.

Dinggui Yan

(spoken in foreign language)

Shawn Zhang

In 2024, the company actively advanced industry academia research collaboration, working with institutions such as Shanghai Jiao Tong University, Xi'an Jiaotong University, and Jilin University to explore the application of cutting-edge AI technologies in the financial sector. In partnership with Shanghai Financial Information Industry Association, we also published the Shanghai Financial Information Industry Development Report highlighting industry development trends and pathways. Additionally, the company's youth mental health care initiative reached over 1,500 schools across eight provinces and municipal municipalities nationwide.
Providing psychological assessment and counseling to more than 50,000 teachers and students, this project was awarded as an annual public welfare innovation typical case by China National Radio Network. Looking ahead, we will continue to drive industry development through technological innovation and give back to society with concrete actions, reaffirming the trust placed in us.

Dinggui Yan

(spoken in foreign language)

Shawn Zhang

Regarding shareholder returns, the company distributed a total dividend of USD0.5 per ADS in 2024, totaling USD26.6 million. In appreciation of the strong support and trust from our investors, the company will further enhance shareholder returns.
Starting in 2025, we plan to declare and distribute a cash dividends once per fiscal year, with the total amount increasing from no less than 15% of the previous fiscal year's net profit after tax to approximately 30% of the previous fiscal year's net profit after tax. In this way, we intend to continue sharing the long-term benefits from the company's high quality development.

Dinggui Yan

(spoken in foreign language)

Shawn Zhang

Looking ahead to 2025, macroeconomic policies are expected to provide stronger support for consumer credit. Recently, the National Financial Regulatory Administration issued the notice on developing consumer finance to boost consumption, which includes several key areas such as increasing the supply of consumer credit, diversifying, consumer credit products, and optimizing loan repayment methods.
We believe these robust policy measures will instill confidence and drive momentum in the development of consumer credit industry. In line with the company's current growth trajectory, we remain optimistic about the company's business expansion and profitability in 2025 and have set the loan facilitation volume target range at RMB137 billion to RMB142 billion for the year. In the first quarter, our loan facilitation volume target is RMB35 billion, and the non-GAAP income from operation target is set at RMB0.57 to RMB0.63 billion.

Dinggui Yan

(spoken in foreign language)

Shawn Zhang

With that, I'll turn the call over to our CFO, Mr. Fan Chu Ying. Please go ahead.

Chunlin Fan

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 our percentage changes refer to year over year comparisons unless otherwise noted.
As Mr. Yan mentioned earlier, building on our strong momentum, we kept the year with a record-breaking long facilitation volume. Notably, loan facilitation volume in Q4 was RMB27.7 billion. Representing an increase of 37.8% from the same period of 2023. Our net revenue was RMB1,404.5 million, representing a decrease of 12.2% from the same period of 2023.
As we mentioned a few times during our earnings release call earlier, the company has been focusing on the loan facilitation services and deliberately downsized the financial guarantee service. If we dive deeper into the breakdown of the revenue, revenue from our loan facilitation services was RMB1,124 million, representing an increase of 46.3% from the same period of 2023. The decline of the total revenue was primarily due to the significant decrease in revenue from releasing of guarantee liabilities as a result of the company's strategic focus throughout the year 2024.
Moving on to costs. Facilitation and servicing expense was RMB339.3 million, representing a decrease of 59.5% from the same period of 2023. This was primarily due to decreased expenses related to financial guarantee services.
Allows for uncredible receivables, assets, loan receivable, and other was RMB1.2 million primarily due to the net impact of current period provisions and the reversal of allowance for receivables arising from a low expected credit loss rate.
Sales and marketing expense was RMB517.2 million, representing an increase of 57% from the same period of 2023, primarily due to an increase in borrower acquisition expenses. G&A expense was RMB53.7 million, representing a decrease of 17.6% from the same period of 2023, primarily driven by a decrease in employee costs. R&D expense was RMB10.4 million, representing an increase of 8.1% from the same period of 2023, primarily due to the increase in the number of our research and development personnel.
Non-GAAP income from operation was RMB402.4 million, representing an increase of 67.9% from RMB239.7 million in the same period of 2023. Consequently, our net income for the fourth quarter was RMB275.5 million, representing a decrease of 25.1%. This was primarily due to the higher base resulting from a one-off non-operational income in the same period of 2023.
Our basic and diluted net income per share was 1.3% compared with 1.72% in the fourth quarter of 2023. Basic and diluted net income for ADS was [5.2] compared with 6.88 in the fourth quarter of 2023. We ended this quarter with RMB540.5 million in cash and cash equivalent compared with RMB741.2 million at the end of the previous quarter.
With that, we can open the call for questions. Ms. Xu, our Chief Risk Officer, and I will answer your questions, operator, please.

Question and Answer Session

Operator

(Operator Instructions)
Rong Zhao, TF Securities.

(spoken in foreign language)
So I have noticed a significant slowdown in the company's revenue growth in 2024. Is this a short term adjustment or long term trend? Could the management share the business expansion plans and performance outlook for 2025?
Thank you.

Chunlin Fan

(spoken foreign language)

Shawn Zhang

This is Shawn Zhang, and I will do the translations for the management. So our current revenue structure primarily consists of two major components, which are loan facilitation revenue and guarantee service revenue.
The company's strategy for the year of 2024 focuses on the high-quality growth of facilitation service revenue, which represents our core competency and maintains a stable rate. Revenue related to guarantees services has lower profit margins, and we have been strategically reducing its proportion over the past few quarters. In terms of revenue contribution, the share of facilitation service revenue increased from 48% in Q4 2023 to 80% in Q4 2024.
Well, the share of the revenue related to guarantee business decreased from 4141.8% in Q4 2023 to 11% in Q4 2024. This shifts in revenue structure aligns with our strategic goal of high quality growth.

Chunlin Fan

(spoken foreign language)

Shawn Zhang

So based on this strategical focus, the overall revenue in the year of 2024 slows down, and the revenue for the fourth quarter even slightly declined year over year, mainly due to the decrease in revenue related to guarantee business.
However, if we focus on our core business, which is facilitation service revenue, it reached RMB1.124 billion in the fourth quarter, representing a year-over-year growth of 46.3%, which is even slightly higher than the growth rate of the facilitation volume. For the full year, facilitation revenue total RMB4.01 billion, reflecting a year over year increase of 15%, which also aligned with the annual growth rate of our facilitation volume.

Chunlin Fan

(spoken foreign language)

Shawn Zhang

If we compare with the performance in the past few years, the year of 2024 does have a year of relatively slow performance growth for our company. In particular, during the first half of 2024, we adopted a prudent operation strategy that began in Q4 2023 due to macroeconomic considerations.
However, starting from the second quarter of 2024, especially in the second half of the year with the gradual improvement in risk data and positive macroeconomic changes, we gradually resume a faster growth pace. Our operational data shows that facilitation volume continue to grow sly each quarter.
Notably, both the third quarter and fourth quarter achieved record high facilitation volumes for two consecutive quarters. We also implemented an aggressive strategy for acquiring new borrowers, laying a solid foundation for accelerated growth in the coming years.

Chunlin Fan

(spoken foreign language)

Shawn Zhang

In the year of 2025, we will continue to pursue a high-quality growth strategy. And just as Mr. Yan said that we expected the facilitation volume guidance in the first quarter to be around RMB35 billion, representing a year over year increase of about 55%. And for the full year, we project a facilitation volume of RMB137 billion to 142 billion, reflecting a year-over-year growth of about 36% to 41%.

Chunlin Fan

(spoken foreign language)

Shawn Zhang

That will be my answer to your question, general.

Chunlin Fan

(spoken foreign language)

(spoken in foreign language)
so what plans and investments does company currently have in technology, and talent cultivation and, how does company ensure it maintains a leading position in technology? Thank you.

Yifang Xu

(spoken foreign language)

Shawn Zhang

Okay, I'm Xu Yihong, and, I will answer your question in Chinese, and Shawn will do the translation in English.

Yifang Xu

(spoken foreign language)

Shawn Zhang

Okay, so I will do the translation for this part first. So as a technology company, we have always been committed to leveraging technologies and data to connect and and consumers and licensed financial institutions through mobile internet, driving refined operations and risk measurements. And since the beginning of 2025, we have seen that Deepig is leading the AI revolution and accelerating the industry's AI transformation.

Yifang Xu

(spoken foreign language)

Shawn Zhang

Okay, so just as what I said before that we have increased investment and deployment in the AI transformation direction. So first part of the is we have increased the investment in big data and and artificial intelligence. So at the end of the last year, we completed a comprehensive upgrade of our corporate architecture and strategic positioning. We conducted a thorough review of both our front end and the middle-office operations and initiated the deployment of multi-node AI agents, advancing unified one stop intelligence solutions.

Yifang Xu

(spoken foreign language)

Shawn Zhang

So through our organizational support and increased investment, we are strengthening the automation capabilities across the entire data life cycle from the production and mining to application monitoring and iteration. We are empowering all data and technology personnel with AI driven tools.

Yifang Xu

(spoken foreign language)

Shawn Zhang

We are also exploring lightweight AI application in control process, and we are actively researching and deploying AI solutions in risk management, integrating artificial intelligence with accumulated professional expertise. This dual approach, reinforce our competitive advantage and builds a robust professional mode in the increasingly competitive consumer credit market. And that will conclude my answer for your question.

Chunlin Fan

(spoken foreign language)

(spoken foreign language)

Operator

[Huong]

(spoken foreign language)
Hello Man. This is [Huong from Jingyu USA] I have two questions. The first one is we have noticed a decline in the company's night income in 2024. What are the main reasons for this? Does the management believe there are Issue with cost control and are there any plans for improvement in the future? My next question is in 2025, how does the company plan to optimize borrower experience to increase their loyalty? Additionally, does the company have plans to attract new borrower groups? Thank you.

Chunlin Fan

(spoken foreign language)

Shawn Zhang

Okay. So I will answer your first question about our net income and cost. So in the year of 2024, the company's net income was RMB1.056 billion, with a net margin of about 18.2%. and it has a decrease of RMB $240 million compared with the RMB1.2, RMB1.297 billion in the 2023. And so I think there are -- so the year-over-year decline in our net income is mainly due to three reasons.
The first reason is our one-time non-operating income which happens in the fourth quarter of 2023. So in the fourth quarter of 2023, our company recorded approximately RMB280 million in the one-time non-operating income from a business disposal, which is the main reason for that, decrease CNY.

Chunlin Fan

(spoken foreign language)

Shawn Zhang

So the second reason is about our increase borrow acquisition efforts in the year of 2024. Jiayin significantly increase our borrow acquisition activities in 2024, leading to a higher relative costs, including borrow acquisition and credit report expenses. Marketing expenses rose by RMB375 million compared to 2023.
As a result, a new borrower accounted for 33.2% of the total borrower base, with RMB2.774 million new borrowers added throughout the year, which is a year-over-year increase of over 45%. And the third reason I want to share is about the higher R&D expenses. So in the year of 2024, R&D expenses increased by more than RMB76 million which has a 25.7% rise year over year. And this increase was driven by the company's strategic focus on recruiting AI professionals and developing new systems and applications to improve operational efficiency and enhance our users experience.
So our strategic investments in the borrow acquisition and technology and also R&D sector are designed to strengthen our long term growth momentum. And so going forward with rapid growth in facilitation volume, effective control of the revenue share from guarantee services and for their implementation of AI applications, our company is that continues, improvements in borrower conversion and retention rates, which will significantly enhance our profitability.

Chunlin Fan

(spoken foreign language)

Shawn Zhang

You probably also noticed from what Mr. Yan just said before that starting in the year of 2025. So in addition to providing facilitation volume guidance, we will also offer a profit metric. During each earning release, we will provide a forecast for the next quarter's non-GAAP income from operations, which could reflect the our company's core business profitability most accurately.

Chunlin Fan

(spoken foreign language)

Shawn Zhang

So our company's fourth quarter performance has already provided a preliminary validation of this strategy. So in the fourth quarter, our non-gap income from operations reached RMB402 million, showing significant growth both year-over-year and quarter-over-quarter. We expect non-GAAP income from operations for the first quarter of 2025 to be in the range of RMB570 million to RMB630 million, representing a year-over-year increase of from 80% to 99%.

Chunlin Fan

(spoken foreign language)

Shawn Zhang

So our performance guidance sends two clear signals. First, in terms of our business goal, we are returning to a path of high quality and a rapid growth. And second, in terms of profitability, we are highly confident in achieving significant improvements in the year of 2025.

Chunlin Fan

(spoken foreign language)

Shawn Zhang

So I want to recall that we are increasing our -- so we are increasing our dividend policy from no less than 15% of the previous fiscal year net profit after tax to approximately 30% of the previous fiscal year's net profit after tax. So in this way we are -- we would like to continue to sharing the long-term profit benefits of the company's high-quality development.

Chunlin Fan

(spoken foreign language)

Shawn Zhang

Okay, so that will be my answer to your first question. I will give the second question to Mr. Xu -- to Miss Xu.

Yifang Xu

(spoken foreign language)

Shawn Zhang

Okay. So, thank you, Mr. Fan. So usually, people focus heavily on the financial attributes of the consumer credit, emphasizing the professionalism and capability of risk management, which is very important for our industry, but while, overlooking the consumer product aspect of consumer credit.
Ultimately, the borrower needs to be willing to pay and to recognize the value which strengthen our borrower retention. So in this regard, we focus on the entire industry chain and the products, process to enhance borrow stiffness for example.

Yifang Xu

(spoken foreign language)

Shawn Zhang

Okay. So I will give four examples under this case. First is that we are strengthening cooperation with some popular traffic platforms. We could provide borrowers who have experienced our products before with better offerings and experience.
Second is to improve the, so internally improve the simple connection. Between the marketing and risk control approval process. And third is, we would like to enhance the customer service, membership of benefits, and repayment reminders to improve the experience and privileges from our premium borrowers. And fourth, we would like to implement one stop credit services to allow our borrower to access multiple funding sources and even experiencing multi-platform credit solutions.

Yifang Xu

(spoken foreign language)

Shawn Zhang

Another very important point is that we would like to integrate the whole industry ecosystem through innovative business models focusing on our core borrowers and driving the borrower base towards better pricing structures.

Yifang Xu

(spoken foreign language)

Shawn Zhang

So lastly, about our new borrower groups, we continue to adhere to our existing market positioning, while constantly pursuing the acquisition and retention of our high quality borrowers. So this approach enabled us to achieve a diversified layout across products, borrowers and financial institutions.

Yifang Xu

(spoken foreign language)

Shawn Zhang

Okay. Thank you, Juan. That will conclude my answer to your question.

Operator

Thank you. Seeing no more questions, I will return the call to Shawn 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 progress.

Operator

Thank you all again. This concludes the call. You may now disconnect.