YRD Yiren Digital

Ning Tang CEO
Mei Na CFO
Keyao He IR
Call transcript
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Good day and thank you for standing by. Welcome to the Yiren Digital Third Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions]. conference recorded. this advised be is being Please [Operator Instructions]. the would your to like hand now to conference first over I speaker today, Ms. He. Keyao ahead. go Please Thank you.

Keyao He

will you, Yiren Ms. and CRO; Fung everyone. join by Thank in Tang; Liu, and also our evening, our features Ms. Ning Wealth of Good presentation Na [ph], the SVP; CFO, a George Mei. CEO, Today's Mr. Raymond the Zhou presenters of CEO and session. CEO call Chairman who Mr. our of CreditEase Mei and the Founder, Q&A operator. Mr.

to would with to contained discussions Reform of differ statements. in any Litigation I made uncertainties can statements under that risks, any the contain forward-looking regarding results beginning, potential under like any is applicable this statements U.S. subject Securities Private as uncertainties Act We Before and to required factors to Further update not of the our remind Commission. that Securities information forward-looking actual such included materially provisions or U.S. Exchange cause during do factors law. those XXXX. risks, filings you obligation in from the Such Harbor Safe undertake are call statements and

information to referring isolation or non-GAAP as supplemental our non-GAAP operating and to considered in During financial in intended prepared be financial we presented U.S. will GAAP. performance. measures review a and the call, for be financial and These to accordance measures certain measures assess are with the not substitute

pass to for to earnings release. refer our about those press over GAAP or non-GAAP Ning now measures, will information financial please remarks. reconciliations For measures opening I to it

Ning Tang

you for Thank everyone. joining us today. Hello,

like business growth muted quarter a announce with beginning, a profitability increase I to At the amid macro a reiterate to synergies would our scale and saw models personal business visible delighted the interactions are quarter, in and in lines. environment. solid to We platform healthy as business we third a digital growing expand. continue our positioning and user-centric between management as financial integrate In strategic

insurance For number XX% Yiren of example, this total Wealth platform end of insurance the served of quarter. as compared grew long-term September borrowers quarter year, the second while by XX% XX of who this with compared our the products with quarter purchased last products on Hexiang number the cumulatively with investors increased

So services. to digital and by run our which comprehensive credit-tech in to financial protection long enhancement, value personal our we management financial meet their financial liquidity including management, mean corresponds serve needs, income to wealth management the generation, and and management, customers

update will through on business Now, wealth I management. our go

average well growth services both as investors the the new optimize a in targeting and exceeded prior XX, as of to XXXX, third a due quarter-over-quarter. Total on XX,XXX, increase representing client and client Wealth about In new reached the XX% number quarterly As assets our to XXX% and growth total last year. growth assets accelerated saw we platform, September XX% More investors active from grew quarter, Yiren XX% of strategy nearly the platform RMBXX.X from on about of XXX,XXX. number precise billion, investors acquisition products. specifically representing quarter

common consisting a going and investors asset with better in of and XXX% sport, investors Wealth precise leisure, our target assets client worth education life effective is balanced investors serve four spectrum. community years of times a clear more users Talking child capabilities insurance need different attract specific for penetrates representing better is asset finance and over have three the self growth. following quality enhanced growth into promising life non-financial that as accepted, Through our in our lifestyle the translating RMBXXX,XXX study continues Moreover, services investors. Wealth asset to LTV. higher results RMBXXX,XXX We who tailor to to year-over-year. of number common almost positive building these per investors better Excluding broader made up our of investor started the life are average our concept and client Yiren our Particularly, we into to acquisition investors Yiren life spirit, wealth, platform year, fourth self initiative improvement, the products, and serve mentioning. plus reflection existing products XXX% investor plus strategy, classes compared finance of number a the with a found to users’ a and offer of allocation of is increasingly the the enhance trend namely; health which strategy, parenting we’re scenarios, the two and comprehensive recently about and Yiren and come quarters. further common holding more Wealth pursuit These expect our high segment grew and at annual and needs. Through in becoming investor both reached targeting education we last grew least on selective proven for quarter, new to in services operations,

year Next, quarter, its we on in RMBXXX of are revenue. customized million, growth XX% premiums, it comprehensive beginning and had completed product quarter-over-quarter XX% and RMBXXX in better November, service insurance target innovation internal positioned to with in revenue expected In contributed and this a premium is our up already up XX% quarter. the this Hexiang Hexiang deliver full national commission total stands out our a year. provider both capability than prior last customization. million in strong up as from and and Hexiang compared pleased insurance to Hexiang brokerage business, reached

their of also quarter, than in immediate much Moreover, products By rate into long-term as customer working XX%, quarter. market endured In channel For XB RMBXXX standard million tailor with of this with both for XX%. end partners. of in services stood platforms the considerable a renewal and expansion. recognition. May third embedded an business insurance the Moreover, launched our of XB is a popularity This Hexiang common model product at unique third insurance high effective has made annuity has Hexiang higher these market solution the and Hexiang with scenarios. Hexiang standard innovative instance, industry XBXC channels premium win-win proven gained base,

we channel for Hexiang them operating currently have over partners expect offering we shelves the consumers growth effectively Hexiang, streams while For insurers is LTV. cost, brokers additional business more enhance help the minimal customers' XXX acquired products quarters further days, new revenue realize in at going and to a hit come. their nationwide, XXX the and products. With than in we coming to with

keep small five clear repeat activity loan as a XX% APP with X.X the reached and representing start on Xiang standard. continues our Xiang expected to stood to growth to you rate quarter-over-quarter. and a economics. September diversified quarter, Furthermore, strong rise growth volume continued traffic trajectory, progress start a digital for of borrowers compared on active year. business. volume and volume and convert was RMBX.X users facilitation Moreover, this Hua loans loans, as our in a we of our up representing enhanced scale low acquisition accounting Yi growth pool. consumption outline will I on our managed customer at in share from more jumping credit costs our SME Total almost to new into borrowing I billion and loan customer our which our increase times to of quarter. and monthly served million improved our revolving our increase into of billion, level, maintained at product witnessed translating year. third increasing servicing the base on total XX, as loan loan rapid have borrower Xiang XX% this XXX,XXX, some Further quarter-over-quarter of Now, is highlights XXX% traffic total base embed second to prior prior in to product On consumption want half of products, number close the increase Meanwhile, healthy platform reaching our due quarter, Hua scenarios we of Yi In own the XX% started focus to we year-over-year. Hua, quarter Yi operating XX% the with unit capabilities quarter, the for for loan In third an RMBX.X

profitability. concrete pleased of on business with in ensure us quarter-over-quarter, volume. small APR SME to its medium been and optimizing grow now to loan XX% this loans cap SME executing loan accomplish APR. the mentioning way compliance under swing robust effective the quarters, maintaining further the into volume over enterprise mix strategies by about requirements, talking and for compliance total while XXX% our accounting volume to SME in priced for the we to conditioning are transition. We increasing are three loan expect are And XX% growth that as It coming dive see is worth and And have to market, paving continues we we product full

above, are just we filling direction. I to respond SME First, like up and better economy regulatory support real to to mentioned loans

we proactively offering customers Second, quality. loans our to higher revolving price lower with been existing credit have

very customer through our to communication different compliance. progressive are we scoring, new improving be scenarios. credit the second diversified with adjustments mix credit new have acquiring to close better online for the customers and complete related Moreover, regulators been options our year. are guidelines Thirdly, to in our the three by to and next our we strategies, quarter been these confident combination able exploring efficient ensure we Through have performance consumption with of

signed as So the have the agency credit take we as testing agreement with flow licensed due which are well some cooperation and test already will time stage in far, surrounding capabilities. operational to of we an complexities models, the rating detailed

the the We finish will guided relevant expect manageable. period be the to costs and connection grace within

as improvement customer pay optimize refine industry We X.X% rate expect as as at to make delinquency standards days XX quality, guidance the enhance and in remained risk as to low mix. during close management needed. our our transition systems and least, our experience to remain well overall attention XX Last to to performance long run, to will and we timely but credit we stable we as our an regulatory continue the our and adjustments continue asset not

will ecosystem. more we drive stronger are bigger business forward, the with wealth as continue growing only our Meanwhile, driving but efforts also up within create profitability. size, ticket we our further Yiren investors with serve within to not up them management for whole will our products scale amounts, our diversified Going Digital synergies investable demand and showing higher our ecosystem,

overlap higher customer management segment, as will growing move credit-tech business our to long Additionally, the quality in be synergies continues the toward and wealth run. between and credit there businesses

on to Mei pass update. provide Now, quarter's who will will I financial it this

Mei Na

Thank and evening. you, good analysts investors, Ning. Dear

I financial key For financial focus will highlights on this update, quarter's only.

the strong site. management I in refer financial demand For the financial volume on deck can growth you Total and continue and you we very detailed further posted across strong to basis Web from to quarter to XX% am that details RMBX.X release our as profit been year-on-year achieved services. performance, with increased revenue financial solid in quarter third for revenue, earnings results another happy transaction year-over-year. on consumer our has with share a was billion, see our

accounting our This from wealth XX% quarter, revenue revenue, significant a revenue driver. service for total of close becoming to management

credit lender by year-over-year million, side, from below to XXX% up low XX% to this loan shorter consumer facilitation RMBXXX driven prior revenue RMBX.X XX% decreased XX% portfolio well and our accordingly. year year to adjust to acquisition the total operating On facilitated cuts quarter service to revenue as and a the decreased price decreased as expense to year-on-year APR efficiency. rate marketing product we million, expense million, RMBX.X take increased by loan by from sales year-on-year XX%. QX due from increased due as prior facilitation the Loan loan shift was

maintain mainly resume efforts million service input Its receivables mix. XX% XX% original pipeline to million, on in was times product transitional and income Our due to largely a to to operating of more upwards. volume and others XXXX collection we a efficiency. expense quarter. this change compared profitability driven have as efficiency. our RMBX.X income growth in growth profitability robust APR equivalent for year as decline to the of due being and in cost contract reflecting loan a billion, of X.X% asset X.X% last quality RMBXX.X to control confidence prior quarter, also increasing three our the net The grew to improved RMBXXX of Allowance was cost year-on-year Net from decreased loan mainly assets, and pricing, able to year and health, continued margin by

seek quarter, Turning leaving remarks. X% are our concludes any quarter we to questions. reserves new the prior open our in sheet, cash billion with now us for balance cash sufficient ended opportunity. RMBX.X to closing the with equivalent, from and Operator, we up This

Keyao He

Hello, operator.

session, Q&A a for you. open please. Thank are We


you. [Operator Certainly. Thank Instructions].

Boyd Equinox comes ahead. Capital line The [ph]. Heinz of the from go first question Please from

Unidentified Analyst

and you Thank average the very loan my taking number for in was the a was quarter. Hi. quarter and What a Good evening questions. nice loans tenure? for questions. the I what APR initiated of have

Mei Na

will Boyd, hello. your I answer This is Na. question.

average that, by about tenure of year this of the to our is quarter total account the sheltered this And but Our in with year XX% the for APR XX we to the XX this about by the line -- XX be the about in XX% to suppose, XX% end. the loan months -- quarter, close of and end. were tender about will months,

Unidentified Analyst

quarter? much see fourth can how so provide Okay. has guidance you did the in for progressing discuss business your you that not And that. been I far

is that did the economy You muted. say

So be discuss could would that Thanks. you if that great?

Mei Na


As is this is for our is year. all it SME you last there XX%, for for pricing loan. our accounts of after But for our SME XX%. we year, the significant. no increased notice actually that very loan below piece in not below only as for quarter, XX%. can our -- of the mentioned this In SME about loans, there has is cap, revaluation script, even And it X% [indiscernible] the year CEO mentioned, But the below that

we lower our think purpose that loan our -- reason APR increased, another to of think with policy. So is lower much the is and that line to pay and we is attention SME the portion the planned in than

much more price risk I think better, our will risk assessment. the that with that should to have clients. think more I collect to risk And our we lower collect activity

I year. we increase last pattern. as mentioned, potential is think So the we that our regular can guideline But APR XX%

by planning and So step we will improvement adjust on regulation step. strategy we'll the focus our

Unidentified Analyst

cap for So pressures? Can pre-tax what also for with that the given you is additionally. competition rate the -- those margins borrowers given and about is operating increasing, talk interest outlook quality higher can you in kicking or your

Mei Na

Yes. Currently, is our X%. and cost gross our revenue is or about XX% acquisition X%

about first cost that decreased enhance other costs in cost we X%. will efficiency the is our be we Our X% to operating will the year. all And X% our X% And hope quarter. also or operating in next

for driver profitability. I think this our is another

Unidentified Analyst

could just have right dividend. below given about share used shares, that's a now very trading ADS start cash repurchase to very, shares. last here seem lot low and of question is to Just aggressively this that repurchasing to Thank possible the repurchase or book at Do is make valuations? you that offshore you. a would be sense It well value and

Mei Na

the mentioned, something for X.X -- can kept our if I Tang is there CEO, we have for And Yes, something. Yes, other suggest we can we as Ning. hand. on deposits plan, billion about

is value marketing our our However, much cash. than lower

in also. uncertainties there repurchase sense, purchased still considering quarter, think [indiscernible] share the is business. our as marketing. for future I have the Actually, second we should we in -- and we for our strategy, many -- our business after common So the But

keep we future back development. cash still So some we think -- our business on should hand enough for

development. you keep Of first any and we mentioned, our to I as for of or pick course, still pay of strategies performance discuss the to repurchase other internally as such our that that share dividend. the think But strategy all about

deposits. considering plans kept But Thank about the we think efficient have suggestions. I we So you. all your uncertainty, some think the we tax have

Unidentified Analyst

you good in coming and the Okay, very great. Thank luck year. much


you. [Operator Thank Instructions].

Please Young the from line question of Dragon Your [ph]. go ahead. comes Golden from Allan next

Unidentified Analyst

shift more for outlook funding. XX%, And we about by the elaborate on earlier. arrive second And a you of XX% what pricing? XXXX? rate, know to XXXX good shift results. loans Thanks the do shift pricing are I is pace is example, around discussed the rate in Can pricing year toward question XX take lower bit Yes. end. the the and such little take topic credit as we of the targeting how complete the at you Thanks. We've on congratulations the in

Mei Na

Yes. answer Thank I question. your will you. This is Na.

actually lower [ph] to I XX%. pricing, account of question, mentioned we're some the the as in previous the first pricing APR question, recreation the from the performing For pace

our We You in profitability. also have costs, savings. fund we And still XX%. about price confidence revenue lower asset gross mentioned for that lower capital, keep our the cost consider -- is quality, acquisition costs, operating currently, XX% our better on

also increase X%, For example, will the gross the rate acquisition respectively. revenue to cap cost compared to will rate X%. to to about revenue the But the XX% X% decrease cost funding gross currently, or risk, and XX% impact X%, X% and

the still net to we still confidence margin stable So keep have that compared revenue now. that the will

answer Okay. question? that your Did

Unidentified Analyst

so much. Thanks Yes.

Ning Tang

is I'd This our differentiated. to model that Ning. business add quite like is

business. We a have credit-type

insurance business and environment. of value. is uncertain part the business, We market very also about like a as more risky is is, growing it's think [ph] our kind And far of fast pillars, business revenue high My of thing model. stable. monoline business can significant with on. good you can in uncertainty and opportunity, as like a talked so as quality. represents and I is have much And view wealth my really But management sense is regulatory the a such big see, us line each which very very so the safer much three We

for do synergy credit insurance. doing think is between I of So the strategy. and the wealth more And sake these businesses, there really three things. differentiated that strong we and just because tax things the don't It's among management

probably speaking, the the presentation, the I the All highlighted So cost, customer this part of more synergy becoming and lowest makes obvious. highest. that more is relatively LTV first my in acquisition as our and

business. and how I you. Thank think look colleagues my at our I that's

Unidentified Analyst

question -- is those much, as what funding comprehensive Thanks Ning, funding more we our sources? funding shift about the APR, be one on side very to lower insights. strategy for that would And

Ning Tang

please. Na,

Mei Na

think companies Yes, the to funding is sorry. or our quality main XXXX, included about financial lease least In our is still better and XX%. we for our they at or I we think banking, decrease. with relationship the -- and we funding funding. Okay, We our we partner mentioned lower significant I more for microfinance client as for there space X% trust company that were suppose and partner get suppose X% funding our with think will

Unidentified Analyst

from all That's Thanks very side. Thanks. much. my


[Operator Thank Instructions]. you.

further no all today. our you participating. are this there Thank conference As for concludes questions this of point time, for at

disconnect You you all everybody may Thank now. joining.

Ning Tang

Thank you.

Mei Na

Thank you.