Lufax Holding Ltd · NYSE:LU
Lufax — Q3 2022 Earnings Presentation
15 slides from Lufax's earnings presentation, November 2022
Slide 1: Investor Presentation November 2022
Investor Presentation November 2022
Slide 2: Agenda for Today
Agenda for Today 1. Macro Challenges Weighed on Our Core SBO Customers 2. Performance Update 3. Business Reprioritizations for U-Shaped Bottom-line Recovery 4. Catalysts for Longer-term Growth Trajectory 5. Regulatory Update 6. Performance Guidance and Business Outlook
Slide 3: Macro Challenges Weighed on Our Core SBO Customers
1 Macro Challenges Weighed on Our Core SBO Customers SMBs / SBOs Represent a Critical and Confidence and Cash Flow Hit by Short-term Massive Market to Penetrate Macro Volatilities amid Covid Resurgence SMBs contribute largely to China’s economy but only receiving a small Covid resurgence and relevan
Slide 4: Negative Impact from Macro Challenges on Business Performance
2a Negative Impact from Macro Challenges on Business Performance Retail Credit Facilitation Wealth Management OUTSTANDING BALANCE OF LOANS FACILITATED CLIENT ASSETS RMB bn (1.3%) RMB bn 19.6% 33.2% (2.0%) 2019-2021 CAGR YoY 2019-2021 CAGR (1) YoY 661 645 636 545 19 462 103 407 433 425 417 244 2019 2
Slide 5: 9M2022 Bottom-line Mapping
2b 9M2022 Bottom-line Mapping Analysis of Key Factors and Levers RMB mm Increased CGI pricing Continue optimizing Increased % of risk affected take rate operational efficiency bearing and change in with technology credit quality of certain empowerment existing portfolio 1,576 (6,181) 19,061 (206) (8
Slide 6: Business Reprioritizations: Geographic Resilience and Borrower Quality (1/2)
3a Business Reprioritizations for U-Shaped Bottom-line Recovery Focus on Geographic Resilience and Borrower Quality That Bring Sustainable Return (1/2) Focus on More Resilient Geographies Focus on Well-rated Borrowers Shifting focus onto more resilient regions that demonstrated faster recovery to Bo
Slide 7: Business Reprioritizations: Geographic Resilience and Borrower Quality (2/2)
3a Business Reprioritizations for U-Shaped Bottom-line Recovery Focus on Geographic Resilience and Borrower Quality That Bring Sustainable Return (2/2) Illustration: Factors for U-shaped Bottom-line Recovery Business Reprioritization Economic Recovery Amid Macro Headwinds Driving Business Rebound Ev
Slide 8: Focus on the Enhancement of Direct Sales Channel
3b Business Reprioritizations for U-Shaped Bottom-line Recovery Focus on the Enhancement of Direct Sales Channel Focus on Enhancement of Direct Sales Channel Volume of New Loans Facilitated Productivity Analysis Monthly new loan sales per person MOB0 MOB1 MOB2 MOB3 MOB4 RMB648 bn (RMBk) 12.8% High-q
Slide 9: Continually Optimize Operation Efficiency
3c Business Reprioritizations for U-Shaped Bottom-line Recovery Continually Optimize Operation Efficiency Operating Expenses As a % of income 52.7% 55.0% 48.8% 47.6% 44.4% As % of average outstanding 6.0% 5.7% 5.0% 4.9% 4.2% balance1 Enhanced integration of middle- and RMB mm back-end office to furt
Slide 10: Cultivation of New Capabilities via New Initiatives
4a Catalysts for Longer-term Growth Trajectory Cultivation of New Capabilities via New Initiatives ✓ Engage potential ✓ New source of ✓ New cross-sell ✓ Deepen our SBO Ecosystem customers at an customer referrals opportunities interaction with earlier stage existing customers Functionalities Goals E
Slide 11: Enhanced Technology Empowerment
4b Catalysts for Longer-term Growth Trajectory Enhanced Technology Empowerment Cutting-edge Technologies to Empower End-to-end Business Process Direct Sales and 1 2 Credit Assessment 3 Post-loan Management Customer Onboarding Customer journey Customer Biometric Optical character Micro-facial Voice C
Slide 12: Improving Regulatory Environment
5a Improving Regulatory Environment Key Trends Observed Implications for Lufax Recent Policy and Regulation Updates Oct 2022, PBOC Report to the NPC Standing Committee • No substantial outstanding • Steadily push forward and conclude the rectification on platform companies’ financial business and it
Slide 13: Business and Risk Bearing Model Compliance
5b Business and Risk Bearing Model Compliance “Skin in the Game” Risk Bearing Outstanding Balance of Loans Facilitated1 (RMB bn) • Partnership with funding partners through financing % of risk guarantee recognized as distinct from the typical 8.7% 11.3% 14.8% 16.6% 19.4% 21.2% 22.5% bearing Distinct
Slide 14: Performance Guidance
6a Performance Guidance RMB bn 3Q 2022 YoY Change 9M 2022 YoY Change 2022E YoY Change New loan sales 123.8 (27.9%) 417.6 (15.9%) 490 – 495 (24%) ~ (23%) Client assets 416.8 (2.0%) 416.8 (2.0%) 390 – 430 (10%) ~ (1%) Total income 13.2 (17.2%) 45.3 (1.4%) 57 – 58 (8%) ~ (6%) Net profit 1.4 (67.1%) 9.6
Slide 15: Consistently Refining and Reinforcing Our Strengths
6b Consistently Refining and Reinforcing Our Strengths SBO-centric Product Design and Tailored Offerings Integrated Offline-online Channels Strong and Extensive Partnership with Financial Institution Partners Robust Data-driven Risk Management Capabilities Cutting-edge Proprietary Technologies 15