Jiayin Group's Q4 2024 Earnings: A Mixed Bag of Growth and Challenges

Jiayin Group Inc. (NASDAQ: JFIN), a leading fintech platform in China, recently released its unaudited financial results for the fourth quarter and fiscal year ended December 31, 2024. The earnings call provided a mixed picture of growth and challenges, with significant increases in loan facilitation volume contrasting with declines in net revenue and net income. Let's dive into the key takeaways and what they mean for investors.

Loan Facilitation Volume Surges, But Revenue Lags

One of the standout figures from the earnings call was the 37.8% year-over-year increase in loan facilitation volume for Q4 2024, reaching RMB27.7 billion (US$3.8 billion). This surge in volume was driven by a strategic focus on high-quality growth and increased borrower acquisition efforts. However, this impressive growth in volume did not translate into a corresponding increase in net revenue, which actually decreased by 12.2% to RMB1,404.5 million (US$192.4 million).



The discrepancy between the increase in loan facilitation volume and the decrease in net revenue can be attributed to several factors. The average borrowing amount per borrowing decreased by 21.5% to RMB7,807 (US$1,070), and the repeat borrowing rate also declined from 72.9% to 69.9%. Additionally, revenue from releasing guarantee liabilities plummeted by 76.6% to RMB156.6 million (US$21.5 million), primarily due to a decrease in average outstanding loan balances for which the Company provided guarantee services.

Full-Year Performance: Growth Amid Challenges

For the full year 2024, Jiayin Group reported a 14.4% year-over-year increase in loan facilitation volume to RMB100.8 billion (US$13.8 billion). Net revenue grew by 6.1% to RMB5,801.0 million (US$794.7 million), but net income declined by 18.6% to RMB1,056.5 million (US$144.7 million). The company's strategic initiatives, including the extensive leveraging of artificial intelligence (AI) technology across various aspects of its business, played a crucial role in driving this growth.

Strategic Initiatives and AI Adoption

Jiayin Group's CEO, Yan Dinggui, highlighted several strategic initiatives that contributed to the company's growth. The adoption of AI technology has enabled the company to optimize services and customer segments, enhancing its ability to facilitate loans more efficiently. The company added 2.774 million new borrowers in 2024, a 45.1% year-over-year increase, and the annual retention rate increased by approximately 7%. These efforts were supported by diverse borrowing acquisition channels, refined retention strategies, and improved customer experience.

The company's risk control and technology innovation efforts have also been instrumental in driving growth. Jiayin improved its delinquency rate for loans overdue from 61 to 90 days to 0.53%, a significant improvement from the previous year. This was achieved through the integration of AI and machine learning into risk control and customer services, enhancing efficiency and accuracy.

Looking Ahead: Global Expansion and AI Integration

Looking ahead, Jiayin Group plans to accelerate global expansion, diversify funding, and advance AI adoption. The company aims to continue delivering long-term shareholder value through prudent operations and robust risk management strategies. The CEO's comments on the company's future outlook were optimistic, with a projection of 36-41% loan volume growth for 2025. However, given the current performance trends and the challenging Chinese financial sector environment, this ambitious outlook may face significant hurdles.

Conclusion

Jiayin Group's Q4 2024 earnings call presented a mixed financial picture with conflicting indicators. While loan facilitation volume showed strong growth, revenue dynamics reveal underlying challenges. The company's strategic initiatives and AI adoption efforts have driven growth, but the decline in net income and the strategic dividend increase raise questions about capital allocation and future profitability. Investors should closely monitor Jiayin Group's progress in executing its strategic priorities and risk management practices to assess its long-term prospects.