Vcredit Holdings Limited · HKEX:2003
Vcredit — H1 2023 Earnings Presentation
26 slides from Vcredit's earnings presentation, August 2023
Slide 1: VCREDIT Holdings Limited Investor Presentation
VCREDIT Holdings Limited Investor Presentation August 2023
Slide 2: Table of contents
Table of contents 1 Corporate Vision 2 Market Overview 3 Company Strategy and Drivers of Profitability & Growth 4 2023 Interim Results Overview 5 Key Management 6 Strategic Initiatives 1
Slide 3: Corporate Vision
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Slide 4: A leading credit platform for underserved consumers and SMEs
A leading credit platform for underserved consumers and SMEs Differentiated value propositions to borrowers and partners Under-served consumers/small business owners Fulfilling needs Transactions Traffic support Risk management Precision Post-loan marketing & monitoring Joint modeling Funding partne
Slide 5: Diversified Funding Structure
Diversified Funding Structure Trust lending Credit- and direct enhanced loan Pure loan lending facilitation facilitation VCREDIT Trust lending: ― Select and recommend ― Select and Capital-light Licensed financing ― Underwrite subordinated borrowers recommend borrowers operations guarantee company tr
Slide 6: Continuous growing with diversified funding sources
Continuous growing with diversified funding sources Loan origination volume Outstanding balance Funding structure (RMB mn) (RMB mn) (RMB mn) 36,198 36,198 31.4% 31.4% 25.2% 31,382 1% 14% 27,547 27,547 25,071 24,642 24,642 1% 17% 22,526 22,526 20,494 12% 19,116 1% 18,186 6% 18,186 15,637 71% 8% 99% 1
Slide 7: Remain profitable amid challenging environment
Remain profitable amid challenging environment Income breakdown Adjusted OPEX breakdown(1) Adjusted net profit(2) (RMB mn) (RMB mn) %:as percentage of total loan origination volume (RMB mn) 3.1% 4.5% 3.2% 3.3% 2.9% 805 1,918 1,880 1,053 11% 18% 6% 1,578 1,582 1,537 900 5% 16% 12% 5% 814 6% 779 2% 5%
Slide 8: Our History and Key Milestones
Our History and Key Milestones More is coming Oversea Markets Smart Finance Era Online only Business Platform Expansion Stage 2022 Gradually Transferred to • Registered users reached 127M Online Business • Issued HKD bonds of HK$200M 2019 • Invested in Opus Financial Group Startup Stage 2017 • Start
Slide 9: Market Overview
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Slide 10: Large and addressable consumer finance market
Large and addressable consumer finance market China’s consumer loan balance(1) Penetration rate of consumer credit (1)(2) (RMB tn) CAGR : 30.5% 29.8% 31.8% 8.6% 25.9% 27.1% 24.9 22.1% 21.9 23.4 20.5 17.9 13.4% 11.2% 12.2% 2022A 2023E 2024E 2025E 2026E 2014 2015 2016 2017 2018 2019 2020 2021 2022 By
Slide 11: Market positioning and opportunities
Market positioning and opportunities Participants • Banks • Expected China’s Sufficient Well online consumer • Mega-sized cash served digital credit will grow to platforms RMB9.2 trillion in Super-prime 2026(1) • Rising consumption Participants • Consumer expenditure and finance increasing company P
Slide 12: Company Strategy and Drivers of Profitability & Growth
Company Strategy and Drivers of Profitability & Growth
Slide 13: Acquiring customers with prudent risk strategy
Acquiring customers with prudent risk strategy Cumulative borrowers (1) Loan volume by customer type (mn) 10% 9.1 3% 2% 2% 3% 4% 8.3 20% 7.3 30% 35% 7.0 34% 40% 6.6 78% 67% 62% 63% 57% 2021H1 2021H2 2022H1 2022H2 2023H1 2021H1 2021H2 2022H1 2022H2 2023H1 Prime Near-prime Testing group Steady growth
Slide 14: Our data source and customer strategy
Our data source and customer strategy Our strategy Chinese internet eco-system ▪ Optimizing risk management framework with excellent risk splitting power E-commerce ▪ Utilizing artificial intelligence to enhance platform customer experience and drive Our data sustainable growth source Payment compan
Slide 15: 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’ technology rules engine Scorecard engine Machine- learning engine Decisioning engine 90+ data sources Anti-fraud engine 20
Slide 16: Asset quality
Asset quality First payment delinquency ratio(1) & M3+ ratio(2) Vintage based M3+ delinquency ratio(3)) 10% 8% 5.56% Volatility in the economic recovery Macroeconomic slowdown due to COVID regional 6% outbreaks The impact of the COVID outbreak in December 2.86% 2.39% 2.28% 2.49% 2.26% 4% 2.06% 1.81%
Slide 17: We aim to achieve higher customer life-time value
We aim to achieve higher customer life-time value Target premium Higher life-time customers value ⚫ Target higher profit on single ⚫ Connect to high-quality loan basis channels ⚫ Sustainable revenue with ⚫ Identify customers with low brand recognition and risk customer loyalty ⚫ Enhance customer exp
Slide 18: 2023 Interim Results Overview
2023 Interim Results Overview
Slide 19: 2023 Interim Results Overview
2023 Interim Results Overview ◼ Achieved a stable performance and sustainable business growth in 2023H1 with the record high loan originations against the challenging macro environment and the increasingly stringent regulatory policies on post-loan collection ◼ Drivers of business growth ✓ Better cu
Slide 20: Financial Review
Financial Review in RMB mn 2023H1 2022H1 Change 2022H2 Change Total income 1,918 1,582 21.2% 1,537 24.8% Net Interest type income 599 814 -26.5% 578 3.5% Loan facilitation service fees 1,105 692 59.6% 872 26.8% Other income 214 76 182.6% 87 147.6% Adjusted operating profit(1) 391 434 -9.9% 266 46.8%
Slide 21: Operating performance overview
Operating performance overview Key operating metrics No. of transaction of online consumption products (K) 2022H1 2022H2 2023H1 20.1% 3,325 2,768 Cumulative 118.1mn 126.8mn 135.8mn 2,128 registered users 1,721 1,682 Cumulative 87.3mn 95.1mn 102.2mn verified users Cumulative 7.3mn 8.3mn 9.1mn borrowe
Slide 22: Key Management
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Slide 23: Experienced and stable management team leading cohesive talent development
Experienced and stable management team leading cohesive talent development Lawrence Ma Stephen Liu Thomas Liu Founder, Chairman Founder, CEO COO Lan Xue Jiafang Jin Ethan Gong General Manager CSO CRO Ray Yu Hongzhe Shi Hong Bai CMO CTO CFO Credit-risk IT Technology- centric Post-loan service 16% dri
Slide 24: Dividend
Dividend Time Dividend per Share Regular HK 10 cents 2021 Interim Special HK 10 cents 2021 Final Regular HK 15 cents 2022 Interim Regular HK 10 cents 2022 Final Regular HK 10 cents 2023 Interim Regular HK 15 cents (Recommended by Board) 23
Slide 25: Strategic Initiatives
Strategic Initiatives
Slide 26: We are well positioned to keep growing core business
We are well positioned to keep growing core business Existing/potential funding Proprietary data demand partners will need our service in ⚫ Long history in retail lending business the foreseeable future ⚫ Sufficient customer attributes ⚫ Effective score card Chinese economy ⚫ Chinese economy is Comp