Jiayin Group Reports Strong Growth in Q1 Earnings Call

Jiayin Group ((JFIN)) has held its Q1 earnings call. Read on for the main highlights of the call.

Jiayin Group’s recent earnings call highlighted a robust performance marked by strong growth in loan facilitation and profitability, driven by strategic expansion and technological integration. Despite facing challenges such as increased marketing expenses and customer acquisition costs, the company showcased significant international growth and improved profitability, which outweighed the noted challenges.

Strong Loan Facilitation Volume Growth

The company reported a remarkable increase in loan facilitation volume, reaching RMB 35.6 billion, which represents a year-over-year growth of 58.2%. This significant rise underscores Jiayin Group’s effective strategies in expanding its loan offerings and capturing a larger market share.

Record Non-GAAP Operating Profit

Jiayin Group achieved a record non-GAAP operating profit of RMB 607 million, marking a substantial year-over-year increase of 91.6%. This impressive growth in operating profit highlights the company’s operational efficiency and successful cost management strategies.

Significant Net Profit Increase

The company’s net profit surged to RMB 540 million, reflecting a year-over-year rise of 97.5%. This substantial increase in net profit indicates the company’s strong financial health and its ability to generate significant returns for its stakeholders.

Expansion of New Borrowers

Jiayin Group expanded its borrower base by adding 1.056 million new borrowers, representing a year-over-year growth of 126.6%. This expansion demonstrates the company’s successful efforts in attracting new customers and expanding its market reach.

AI Integration and Technological Advancements

The launch of the Fuxi model management platform, which covers 90% of business lines and improves model deployment efficiency threefold, signifies Jiayin Group’s commitment to technological advancements and operational efficiency.

International Growth in Indonesia and Mexico

Jiayin Group’s international operations, particularly in Indonesia and Mexico, saw significant growth. Indonesian operations experienced a 196% surge in new registered users and a 190% increase in loan volume year over year, highlighting the company’s successful international expansion strategy.

Enhanced Dividend Policy

The company increased its dividend payout ratio to approximately 30% of the previous fiscal year’s net profit after tax, reflecting its commitment to providing returns to shareholders and enhancing shareholder value.

Increased Sales and Marketing Expenses

Sales and marketing expenses rose to RMB 674.5 million, an increase of 87.5% from the same period of the previous year. This rise in expenses is attributed to the company’s strategic efforts to expand its market presence and attract new customers.

Loss for Unsecured Assets

Jiayin Group reported a loss for unsecured assets, loans, and receivables amounting to RMB 17.5 million, up from RMB 2.6 million in the first quarter of 2024. This increase in losses highlights the challenges faced in managing unsecured assets.

Increase in Customer Acquisition Costs

The company observed a rising trend in customer acquisition costs due to competitive market dynamics and strategic expansion efforts. This increase reflects the challenges in acquiring new customers amidst a competitive landscape.

Decrease in Cash and Cash Equivalents

Jiayin Group’s cash and cash equivalents decreased to RMB 190.3 million from RMB 540.5 million at the end of the previous quarter. This decrease indicates the company’s increased investment in growth and expansion activities.

Forward-Looking Guidance

Looking ahead, Jiayin Group provided optimistic guidance for the second quarter, projecting loan facilitation volumes between RMB 37 billion and RMB 39 billion and non-GAAP operating profits ranging from RMB 660 million to RMB 730 million. The company plans to continue its focus on technological enhancements and AI integration to improve operational efficiency and risk management. Additionally, the extension of its share repurchase program to June 2026 reflects its commitment to shareholder returns.

In summary, Jiayin Group’s earnings call painted a positive picture of the company’s financial health and strategic direction. The strong growth in loan facilitation and profitability, coupled with international expansion and technological advancements, positions the company well for future success. Despite challenges such as increased marketing expenses and customer acquisition costs, Jiayin Group remains optimistic about its growth prospects and commitment to enhancing shareholder value.