X Financial ((XYF)) has held its Q4 earnings call. Read on for the main highlights of the call.
The recent earnings call for X Financial painted a positive picture of the company’s financial health and strategic direction. The call highlighted significant achievements in financial performance, asset quality improvements, and strategic investments in AI, all contributing to strong profitability and shareholder returns. Despite a minor issue with share count reporting, the overall outlook remains optimistic, with growth anticipated in 2025.
Record Loan Volumes
X Financial reported record loan volumes in the fourth quarter of 2024, reaching RMB32 billion, which marks a 24% increase year-over-year. For the entire year, the total loan volumes amounted to RMB104.9 billion, showcasing the company’s robust lending capabilities and market demand.
Strong Financial Performance
The company demonstrated strong financial performance with a more than doubling of net income year-over-year in Q4. This growth was driven by improved asset quality and lower funding costs. Total net revenue increased by 43% year-over-year to RMB1.7 billion, and net income grew by 104% to RMB386 million, reflecting the company’s efficient operations and strategic focus.
Improved Asset Quality
X Financial has made significant strides in improving asset quality, as evidenced by the decline in delinquency rates. The delinquency rate for loans overdue by 31 to 60 days improved to 1.17% from 1.57% a year ago, while the 91 to 108 days overdue delinquency rate declined to 2.48% from 3.12% last year.
AI Integration and Strategic Investments
The company has made substantial investments in AI technologies, such as DeepSeek, to enhance customer service, marketing, and risk management. These AI-driven tools have improved operational efficiency and customer engagement, positioning X Financial as a forward-thinking leader in the financial services sector.
Dividend and Share Repurchase
In 2024, X Financial returned approximately USD76 million to shareholders, including USD16.5 million in cash dividends and USD50.3 million in share repurchases. This demonstrates the company’s commitment to delivering value to its shareholders.
Accounting Discrepancy Clarification
During the earnings call, an issue was raised regarding the share count not reflecting the reduction due to repurchase by year-end. This was clarified as being due to a weighted average calculation, ensuring transparency and accuracy in financial reporting.
Forward-Looking Guidance
X Financial provided robust guidance for 2025, projecting a 30% increase in total loan volumes, driven by organic demand and a stable regulatory environment. The company aims to sustain profitability and growth through strategic AI investments, disciplined risk management, and capital allocation. Additionally, a semiannual dividend of USD0.25 per ADS was announced, along with a detailed share repurchase program.
In summary, X Financial’s earnings call conveyed a strong and positive sentiment, highlighting the company’s achievements and strategic initiatives. With record loan volumes, improved asset quality, and strategic investments in AI, the company is well-positioned for continued growth and profitability in 2025.