Vcredit Holdings Limited · HKEX:2003
Vcredit — FY2021 Earnings Presentation
27 slides from Vcredit's earnings presentation, March 2022
Slide 1: VCREDIT Holdings Limited Investor Presentation
VCREDIT Holdings Limited Investor Presentation March 2022
Slide 2: Table of contents
Table of contents 1 Corporate Vision 2 Market Overview 3 Company Strategy and Drivers of Profitability & Growth 4 2021 Annual Results Overview 5 Key Management 6 Strategic Initiatives 1
Slide 3: Corporate Vision
Stith Ui ) satel RQ Corporate Vision
Slide 4: We target credit-worthy consumers' and small business owners' mismatched credit demand
We target credit-worthy consumers’ and small business owners’ mismatched credit demand Differentiated value propositions to borrowers and partners Under-served consumers/small business owners Ecosystem Access to embedded consumer credit consumer credit assets Fulfilling commercialization needs Trans
Slide 5: Fully licensed & regulated funding structures
Fully licensed & regulated funding structures Trust lending Credit- and direct enhanced loan Pure loan lending facilitation facilitation Capital-light VCREDIT operations for Trust lending: ― Underwrite subordinated VCREDIT Licensed financing ― Select and recommend guarantee company tranche of origin
Slide 6: Business snapshot
Business snapshot Loan origination volume Funding structure Outstanding balance (RMB mn) (RMB mn) (RMB mn) 40,712 40,712 19,116 3% 0% 32.3% 32.3% 15,689 15,637 11.2% 15,637 0% 0% 30,773 30,773 6% 14,065 14,065 0% 1% 1% 54% 22,526 22,526 0% 65% 100% 17,460 18,186 18,186 17,460 0% 8% 100% 100% 64% 94%
Slide 7: Solid management execution with high operating efficiency
Solid management execution with high operating efficiency Income breakdown Adjusted OPEX breakdown(1) Adjusted net profit(2) (RMB mn) (RMB mn) %:as percentage of total loan origination volume (RMB mn) 4.0% 3.4% 3.1% 4.5% 3.6% 3.7% 1,213 3,458 1,513 16% 5% 805 2,573 18% 22% 44% 408 1,119 2% 247 28% 7
Slide 8: Return to profitability with lower leverage
Return to profitability with lower leverage EBIT(1) Adjusted EBIT(2) Leverage ratio(3) (RMB mn) (RMB mn) 1,514 1,548 1,009 1,036 7.6 505 511 287 323 6.2 6.2 6.2 4.6 4.6 (988) (1,063) (1,311) (1,350) 2020H1 2020H2 2021H1 2021H2 2020 2021 2020H1 2020H2 2021H1 2021H2 2020 2021 2020H1 2020H2 2021H1 2021
Slide 9: Our history and key milestones
Our history and key milestones Smart finance era Online only business platform 2021 Expansion stage • Registered users Gradually transferred to online business 2019 reached 113M • Obtained new • Issued 1st 2017 US dollar $300M NDRC Startup stage bonds of approval of foreign • Started to commercializ
Slide 10: Market Overview
ott Ui ) satel RQ Market Overview
Slide 11: Large and addressable consumer finance market
Large and addressable consumer finance market China’s consumer loan balance(1) China’s credit card owning situation(2) (RMB tn) 23 24 CAGR 10.8% 21 18 16 13 13 75% Population without credit cards 2019A 2020A 2021E 2022E 2023E 2024E 2025E Estimated origination volume(1) China’s online consumer credit
Slide 12: Market positioning and opportunities
Market positioning and opportunities Participants • Banks • Expected outstanding Sufficient Well volume of individual • Mega-sized digital cash served consumer loans will platforms grow to RMB10.9 Super-prime trillion in 2025(1) Participants • Rising consumption • Consumer expenditure and finance in
Slide 13: Company Strategy and Drivers of Profitability & Growth
Company Strategy and Drivers of Profitability & Growth
Slide 14: Migration towards higher quality customers
Migration towards higher quality customers Cumulative borrowers (1) Loan Volume of new customers breakdown by customer type (mn) 7.0 7.0 8% 6% 2% 10% 4% 13% 6.6 6.1 6.1 5.8 31% 38% 33% 47% 38% 41% 59% 63% 58% 51% 52% 46% 2020H1 2020H2 2021H1 2021H2 2020 2021 2020H1 2020H2 2021H1 2021H2 2020 2021 Pri
Slide 15: Our data sources and customer strategy
Our data sources and customer strategy Our strategy Chinese internet eco-systems Improving customer differentiation and leveraging all legitimate data to keep iterating scorecard E-commerce platforms Improving customer experience of Our data our existing borrowers source Payment companies Prud
Slide 16: Robust credit risk management capability enhanced by cutting-edge technology
Robust credit risk management capability enhanced by cutting-edge technology Interception 24/7 Fully automated engine transaction process enabled by Policies and ‘Smart lending’ rules engine technology Scorecard engine Machine- learning engine Decisioning engine 90+ data sources Anti-fraud engine 20
Slide 17: Asset quality has improved significantly due to strong underwriting and risk control
Asset quality has improved significantly due to strong underwriting and risk control First payment delinquency ratio(1) & M3+ ratio(2) Vintage based M3+ delinquency ratio(3)) COVID-19 outbreak Regulator finalized ARP 10% 7.07% calculation Data industry 8% “earth quake” 5.56% Macroeconomic slowdown 4
Slide 18: We continue to drive customer life-time value higher
We continue to drive customer life-time value higher Target high- Higher life-time quality value customers Higher profit on single loan Work with high-quality basis channels Longer revenue generating Be more selective in period customer acquisition Test & Learn Model Develop multi-dimensio
Slide 19: 2021 Annual Results Overview
2021 Annual Results Overview
Slide 20: 2021 Annual results overview
2021 Annual results overview We delivered a solid management execution despite recurring COVID-19 outbreak and challenging macro environment Strong growth momentum with steady asset quality Successful migration to higher quality customers Improving margin of safety and increased liquidity posi
Slide 21: 2021 Annual results overview (cont'd)
2021 Annual results overview (cont’d) RMB mn 2021 2020 Change 2021H2 2020H2 Change Total income 3,458 2,573 34.4% 1,578 1,369 15.3% Net interest type income 1,380 1,301 6.0% 820 437 87.5% Loan facilitation service fees 1,540 713 115.9% 567 475 19.2% Other income 538 558 -3.6% 192 457 -58.0% Operatin
Slide 22: 2021 Annual results overview (cont'd)
2021 Annual results overview (cont’d) Key operating metrics No. of transaction of online consumption products (K) 2020 2021 3,403 35.1% Cumulative registered users(mn) 95.8 112.5 2,518 Cumulative verified users(mn) 68.7 80.8 1,721 1,682 Cumulative borrowers(k)(1) 6,103 6,971 1,329 1,190 Average tick
Slide 23: Key Management
ott Ui ) satel RQ Key Management
Slide 24: Experienced and stable management team leading cohesive talent development
Experienced and stable management team leading cohesive talent development Our management team Our talents 18% 5% Lawrence Ma Stephen Liu Founder, Chairman Founder, CEO Staff of IT 10% Total department is headcount 35% the largest proportion in 677 VCREDIT 13% 1% 18% Ethan Gong Hong Bai CRO CFO Seni
Slide 25: Dividend
Dividend Time Dividend per Share Regular HK 10 cents 2021 Interim Special HK 10 cents 2021 Final Regular HK 15 cents (Recommended by Board) Total HK 35 cents Subject to the company’s operational and financial situations, and also future development needs, etc., we intend to maintain a dividend payou
Slide 26: Strategic Initiatives
Stith Ui ) satel RQ Strategic Initiatives
Slide 27: We are well positioned to keep growing core business
We are well positioned to keep growing core business Existing/potential funding Chinese economy Chinese economy is Proprietary data demand partners will need our service in Long history in retail lending business the foreseeable future expected to maintain a stable growth rate Sufficient custo