Jiayin Group, Inc. Q1 FY2025 earnings call

• China's economy showed recovery momentum with total retail sales of consumer goods rising. Jiayin delivered strong start to 2025 with loan facilitation volume growth. - Added 1.056 million new borrowers, explored cross-industry channels, integrated AI for marketing. - Maintained partnerships with 59 financial institutions, 55 in discussion. - Accelerated digital transformation with AI strategy, launched Fuxi model management platform, upgraded R&D platform. - Overseas business in Indonesia and Mexico showed growth. - Released consumer rights protection white paper, advanced youth mental care project. - Updated dividend policy, extended share repurchase program validity.

Loan facilitation volume reached RMB 35.6 billion, up approximately 58.2% year over year. Non-GAAP operating profit hit RMB 607 million, marking a year-over-year increase of 91.6%, and net profit surged to RMB 540 million, reflecting a year-over-year rise of 97.5%. The company added 1.056 million new borrowers, representing a year-over-year growth of 126.6%, with new borrower contribution of total loan facilitation volume being 28.1%.

• For Q2 2025, loan facilitation volume guidance is RMB 37 billion to RMB 39 billion. - Non-GAAP operating profit guidance is RMB 660 million to RMB 730 million.

• Rising customer acquisition cost due to market dynamics, competition, and strategic investment. - Concerns about ADR delisting risk with ongoing US regulatory actions, but company is prepared with Hong Kong listing preparations. - New regulatory framework for loan facilitation business, requiring adjustments in product requirements and partner responses.

Q: There has been a noticeable trend of rising customer acquisition costs across the industry. How has the company's acquisition cost evolved recently? And in this context, what measures are you taking to mitigate the credit risk of new borrowers and ensure asset quality? My second question is how is the company's management planning to address the potential ADR listing risk? And what contingency measures are in place to mitigate the impact?

A: Xu Yifang answered on customer acquisition cost as strategic choice due to market, seasonality, and strategy, with plans to strengthen risk modeling. Fan Chunlin answered on ADR delisting risk, stating ongoing preparation for Hong Kong listing.

Q: I noticed the net profit increased by 97.5% in this quarter. What were the main drivers behind this significant improvement in profitability? And what is your outlook for profitability in the coming quarters? Recently, the financial regulators issued new guidelines on loan facilitation in China. How does the company view this policy development? And what impact do you expect it to have on your business operation?

A: Fan Chunlin said drivers include loan facilitation volume growth, revenue structure optimization, and AI investment. Outlook for Q2 includes loan facilitation volume and non-GAAP profit guidance. Xu Yifang said new regulation is recognized, company is adapting product requirements to partner institutions.