Release Date: November 20, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Yiren Digital Ltd (YRD, Financial) reported a 36% year-over-year increase in total loan volumes, reaching RMB13.4 billion.
- The company has seen a significant improvement in asset quality due to strong risk management and borrower optimization.
- Yiren Digital Ltd (YRD) has successfully integrated AI into daily operations, enhancing efficiency and customer experience.
- The company expanded its funding partnerships, adding nearly 20 new partners by the end of the third quarter.
- Yiren Digital Ltd (YRD) achieved a 27% quarter-over-quarter increase in total premiums for its insurance brokerage business.
Negative Points
- Revenue from the insurance segment decreased by 68% year-over-year due to regulatory changes and product adjustments.
- The consumption and lifestyle services segment experienced a 10% year-over-year decline in total GMV.
- Sales and marketing expenses increased by 71% year-over-year, driven by efforts to attract new and high-quality customers.
- Research and development expenses rose by 287% year-over-year due to ongoing investments in technology and AI talent.
- Net income decreased by 36% year-over-year, impacted by reduced profitability in the insurance business and increased expenses.
Q & A Highlights
Q: We noticed a slowdown in loan volume growth this quarter. Can you explain the reasons behind this and provide any updates on credit demand and new customer acquisition strategies for Q4?
A: Ning Tang, CEO: The demand for credit remains high, but market conditions are uncertain. We are focusing on a quality-over-quantity strategy, emphasizing risk management. We aim to bring in higher-quality customers at reasonable acquisition costs. Yuning Feng, CFO: We continue to collaborate with platforms like TikTok and WeChat to efficiently screen and qualify borrowers. We expect customer acquisition costs to remain high due to market competition, but we are committed to expanding our repeat borrowing pool.
Q: With increased investment in AI, what makes Yiren Digital competitive in the AI space, and can you elaborate on the AI systems being commercialized?
A: Ning Tang, CEO: We focus on AI applications rather than being an LLM company. Our competitive edge lies in credit and insurance-related models built on years of data. Our AI systems are integrated across various business functions, and we are working on monetizing these assets. Yuning Feng, CFO: We have developed six major AI systems, some of which are mature and ready for commercialization, particularly in financial institutions and peer businesses.
Q: How is the company managing risk while pursuing growth in the financial services segment?
A: Ning Tang, CEO: We maintain robust risk management practices while striving for growth. Our strategy focuses on acquiring high-quality customers and expanding our repeat borrowing pool, ensuring sustainable growth.
Q: Can you provide insights into the company's AI strategy and its impact on international markets?
A: Ning Tang, CEO: We are cautious in developing AI models, ensuring precision in finance-related interactions. Overseas markets, particularly in Southeast Asia and South America, present opportunities for AI deployment, allowing us to leapfrog technological phases experienced in China.
Q: What are the expectations for the company's financial performance in the upcoming quarter?
A: Yuning Feng, CFO: We anticipate Q4 revenue to be between RMB1.3 billion to RMB1.5 billion, with a healthy net profit margin. This outlook reflects our current assessment and may be subject to change due to market conditions.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
