X Financial, a leading fintech company, recently held its Q2 2024 earnings call, revealing a solid performance with a focus on sustainable growth and improved asset quality. The call, led by President Kan Li and CFO Fuya Zheng, highlighted key trends, financials, and future outlooks, providing valuable insights for investors and analysts.
Solid Financial Performance and Improving Asset Quality
X Financial reported a record-high net income of RMB 415 million, a significant 13% year-on-year and 14% sequential increase. This achievement was largely attributed to the company's proactive management of loan volumes and asset quality, as well as cost control measures. The total loan amount facilitated and originated decreased by 12% year-on-year but increased 6% sequentially to RMB 23 billion. Notably, delinquency rates for outstanding loans past due for 31-60 days and 91-180 days were 1.29% and 4.38%, respectively, compared to 1.61% and 4.37% a quarter ago and 0.96% and 2.5% a year ago, indicating a significant improvement in asset quality.
Future Outlook and Loan Volume Growth
Looking ahead, X Financial expects the total loan amount facilitated and originated to be between RMB 26 billion and RMB 27.5 billion for Q3 2024. This optimistic outlook is primarily driven by an improvement in the approval rate and a more lenient risk management system, which will allow for a significant increase in loan volumes. The company's strategic expansion into new channels is also expected to contribute to the growth in customer acquisition.
Customer Acquisition and Costs
Customer acquisition costs have remained consistent, with the rate keeping in line with the approval rate. As the approval rate increases, so does the overall spending on customer acquisition, translating into the higher loan volumes forecasted for Q3. The company's learning machine system is a key factor in improving customer quality, allowing for better risk management and a more effective separation of marginal customers from good ones.
Conclusion
X Financial's Q2 2024 earnings call presented a positive outlook for the company, with a focus on sustainable growth, improved asset quality, and strategic expansion. The company's proactive management of loan volumes and asset quality, as well as its commitment to cost control, have contributed to its solid financial performance. With a robust outlook for Q3 and a strategic approach to risk management, X Financial is well-positioned for continued success in the competitive fintech landscape.
As always, investors are encouraged to closely monitor X Financial's performance and future developments, as the company continues to navigate the evolving financial technology sector.