Qifu Technology (QFIN) Q1 2023 Earnings Call Transcript

For the period ending March 31, 2023

May 18, 2023 8:30 p.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

Ladies and gentlemen, thank you for standing by, and welcome to Qifu Technology's First Quarter 2023 Earnings Conference Call. [Operator Instructions].

At this time, I would like to turn the conference call over to , Senior Director of Capital Markets. Please go ahead, Karen.

Unidentified Company Representative

Thank you, operator. Hello, everyone, and welcome to Qifu Technologies' First Quarter 2023 Earnings Conference Call. Our earnings release was distributed. Joining me today is Mr. Wu Haisheng, our CEO; Mr. Alex Xu, our CFO; and Mr. Zheng Yan, our CRO.

Before we start, I would like to refer you to our safe harbor statements in the earnings press release, which applies to this call as we will make certain forward-looking statements. Also, this call includes discussions on certain non-GAAP financial measures. Please refer to our earnings release, which contains a reconciliation of the non-GAAP measures to GAAP measures. Also, please note that unless otherwise stated, all figures [Technical Difficulty] to our CEO, Mr. Wu Haisheng. Please go ahead.

Wu Haisheng

By the end of Q1, our platform cumulatively connected approximately 46 million users with approved credit lines and a total of 150 financial institutions. Total loan facilitation and origination volume on our platform reached RMB 109.5 billion, up by 10.7% year-over-year and 4.7% quarter-over-quarter. Cumulative users with approved credit lines increased 15.6% year-over-year. The growth was better than our initial expectation against the back [Technical Difficulty] of the rate recovery in China's macro economy. Since the beginning of this year, we have seen positive overall trends in our business, including credit demand from users, steadily increasing and a continuous improvement across multiple risk indicators.

Pricing remained stable during the quarter with our user base having been substantially optimized. At the same time, we continue to upgrade our risk management models, including the release of more than 1,000 version updates, an iteration of over 30,000 strategic rules to our credit assessment models over the past 12 months. We also further upgraded our PBOC credit data assessment models. Since Q3 last year, we have started to incorporate PBOC credit data into our ongoing post credit assessment process on a large scale.

With over 20,000 derived data dimensions, we are able to unlock the value of our existing users with enhanced credit assessment capabilities. Supported by our constantly improving ability to accurately identify risks, our day 1 delinquency rate in April 2023, decreased by 37 basis points from December 2022, while our M1 production rate increased by 189 basis points for the same period. With our risk performance having substantially reached our target, we are more confident in gradually ramping up investments in customer acquisition in the near term.