Recently, JFIN.US released its Q1 2024 financial report, achieving a revenue of 1.475 billion yuan, a year-on-year increase of 31.5%, and a net profit of 273 million yuan for shareholders, with a net profit margin of 18.51%. During the period, the company facilitated a loan amount of 22.5 billion yuan, a year-on-year increase of 13.6%, exceeding the previously set target. In addition, the company has also provided Q2 guidance, with a facilitation loan amount guidance set at 23 billion yuan.

In 2024, AI big model acceleration will penetrate into various industries. As a leading provider of domestic financial technology, the company continues to invest in research and development in the AI field and output results to drive performance growth. The chairman of the company, Yan Dinggui, said that in the more mature AI commercial service field, the company has fully integrated and unified the core capabilities of various business scenarios, as well as the scheme design and implementation delivery of AI technology application.

JFIN.US actively shares the company's development achievements and disclosed the first dividend plan for 2024, with a dividend amount of $0.50 per ADS.

Steady performance, promoting AI global expansion

It is learned from the Zhītōng Cáijīng app that JFIN.US is closely following the national policy trend and increasing its investment in financial technology and AI, and has initially formed a multi-dimensional AI product matrix to empower financial institutions to accelerate digital construction and improve operational efficiency. As of March 2024, the company has established cooperative relations with 70 financial institutions and is negotiating cooperation with another 32.

As an enabling platform, the company is a bridge connecting financial institutions and users, promoting the development of loan and other businesses of financial institutions and receiving a certain service fee. The platform's facilitated loan amount has been on the rise quarter-on-quarter, with 22.5 billion yuan in Q1 2024. The money realization rate has steadily increased by 0.9 percentage points year-on-year. In the past year, the facilitated loan amount was 90.8 billion yuan, with a realization rate of 6.41%, and the net income was 5.82 billion yuan, maintaining double-digit growth.

JFIN.US has established a good reputation in the industry, and the continuous increase in the number of cooperative institutions and facilitated loan amounts has demonstrated its recognition of the company. At the same time, the user structure of loan users has improved, focusing on the SME market, and the proportion of high-quality users has increased, which has high platform viscosity. In Q1 2024, the average loan amount per loan was 10,600 yuan, a year-on-year increase of 6.6%, and the repeat loan rate was 73%, a year-on-year increase of 2.2 percentage points. The platform's 61-90 day overdue rate remained at a low level of 0.68%.

In fact, the company has always been increasing its R&D efforts to better empower financial institutions and provide a better experience for high-quality users with funding needs. In Q1 2024, the company launched its self-developed 'Shilian' audio data mining algorithm and 'Mingjing' text data mining algorithm, the full-process intelligent information system 'Paoding', fully releasing the value of data, and recently launched its self-developed 'Baize' security system, achieving comprehensive host monitoring and efficient attack tracing. This marks another step forward in its research and development capabilities and big data strength.

Financial technology platforms are all laying out AI, and the company took the lead in launching its self-developed 'Nvwawa' intelligent seat-assistant platform, successfully applying AIGC (generated artificial intelligence) to the seat-service field of various scenarios, exploring AI technology to empower new business scenarios. Data shows that the first stage of the 'Nvwawa' intelligent seat-assistant has achieved 100% AI intelligent assistance for customer service operations, with real-time identification of customer intention labels exceeding 2,000 times per day and over 1.6 million customer service interactions. The big model generated conversation summary coverage rate is 100%, and the accuracy rate is 90%, which improves the service quality by more than 5%.

In addition, JFIN.US is also increasing its overseas layout, outputting research and development results to overseas markets, and has entered markets in Southeast Asia and the Americas. At the same time, it is actively seeking opportunities to expand to more overseas regions. Yan Dinggui, the chairman, said that overseas business will be one of the company's focus areas for future development and will further increase investment in overseas business.

In Q1 2024, the company negotiated with five locally licensed financial institutions in the Indonesian market to further expand the loan business volume in Indonesia, and the number of new registered users for local business increased by 37% month-on-month. In the Nigerian market, the overall business performance was steady and improving, with loan volume, loan scale, and new customer scale all steadily increasing. In the Mexican market, the invested local business entity also quickly increased its loan scale this quarter.

Expense improvement, insisting on long-termism

Jiayin group maintains a strong profitability, and all expenses are optimized to varying degrees in Q1 2024, with a sales expense ratio of 24.39%, a management expense ratio of 3.12%, and a year-on-year decrease of 9.57 and 0.98 percentage points, respectively. Sales expenses are the major expenses for the fintech platform. This year, the company has significantly increased its AI investment to improve operation efficiency and reduce customer acquisition costs, resulting in a decrease in commission expenses.

As mentioned earlier, the company has increased its research and development investment and developed many products such as "Shilan", "Mingjing", "Paoding", "Baize" and "Nvwa", which have brought it strong industry competitiveness. In Q1 2024, the company increased its R&D investment, expanded its R&D team, invested 83 million yuan, a year-on-year increase of 28.5%, and its R&D expense ratio was 5.63%, which basically remained the same as the same period last year.

The company has a very high return on assets, with an ROA of 5.3% in Q1 2024, an asset-liability ratio of 51.6%, a leverage ratio of 2.04 times, a shareholder return rate of 10.92%, and an annualized rate of up to 43.7%. As of March 2024, the company has 570 million yuan in cash on its account, with abundant cash flow. The company actively rewards shareholders and enhances shareholder value through dividends and buybacks. The total amount of cash distributed in the past two dividends is approximately $42.7 million, accounting for 25% of the after-tax net income in 2022. In addition, the board of directors approved raising the cap on the current share buyback plan to $30 million and extending the buyback plan expiration date to June 12, 2025, in the last quarter.

It is worth noting that Jiayin Group adheres to a long-term strategy, in addition to performance growth and shareholder returns, increases ESG construction and consumer protection work, and proves the company's long-term development strategy through practical actions.

The company has built a solid anti-fraud line. In Q1 2024, the platform has identified and blocked more than 650,000 fraudulent borrowers, including more than 65,000 cases of black production and malicious attacks, effectively avoiding various losses of 984 million yuan. At the same time, Jiayin Group's self-developed "Qiming Star" system also assists external operational platforms in accurately identifying more than 100 illegal financial black production complaints and conducts investigations and disposal of potential high-risk client applications in 12,400 cases.

Jiayin Group's strong performance and long-term strategy have been recognized by the capital market, with a market value increase of up to 228.3% since 2023, although the current PE (TTM) is only 2 times, which seriously undervalues its market value. The higher dividend yield will drive the valuation back, and under the impetus of performance, the market value may be in a long-term upward trend.