X Financial's Q4 2024: Key Contradictions in Capital Allocation, Loan Growth, and Regulatory Landscape

These are the key contradictions discussed in X Financial's latest 2024Q4 earnings call, specifically including: Share Repurchase Program and Capital Allocation Strategy, Loan Volume Growth Expectations, and Regulatory Environment:



Loan Volume Growth and Profitability:
- X Financial facilitated RMB32 billion in total loan volumes in Q4, a 24% year-over-year increase, and achieved full-year loan volumes of RMB104.9 billion.
- Growth in loan volumes was driven by disciplined underwriting, improved asset quality, macroeconomic tailwinds, and lower funding costs, leading to strong revenue and profitability growth, with Q4 net income more than doubling year-over-year.

AI Integration and Operational Efficiency:
- X Financial expanded its strategic investments in AI, leveraging models like DeepSeek and Alibaba's Tongyi Qianwen, enhancing operations with AI-powered customer service, marketing campaigns, and collection efforts.
- The integration of AI has significantly improved efficiency, customer engagement, and operational effectiveness, including a multi-model AI risk management system achieving over 95% accuracy.

Capital Returns and Shareholder Value:
- The company returned approximately USD76 million to shareholders in 2024 through cash dividends, share repurchases, and a tender offer.
- X Financial declared a semiannual dividend of USD0.25 per ADS, reinforcing its commitment to delivering shareholder value, and completed a total repurchase of 52.2 million shares in 2024.

2025 Outlook and Strategic Focus:
- X Financial expects total loan volumes to increase by approximately 30% for the full year of 2025, supported by organic demand and a stable regulatory environment.
- The company remains focused on leveraging technology to enhance financial services efficiency and maintaining disciplined risk management, supported by regulatory guidance aimed at expanding access to consumer credit and lowering borrowing costs.