The following is a summary of the LexinFintech Holdings Ltd. (LX) Q2 2024 Earnings Call Transcript:

Financial Performance:

• LexinFintech reported a revenue of RMB3.64 billion, reflecting a 12.3% growth quarter-over-quarter.

• The net profit increased to RMB230 million, marking a 12.4% quarter-over-quarter increase.

• The total General Merchandise Volume (GMV) of loan origination reached RMB51.1 billion.

• Managed loan balance stood robustly at RMB115.2 billion.

• Significant reduction in funding costs by 58 basis points to a new low of 5.26% quarter-over-quarter.

Business Progress:

• LexinFintech continued to enhance profitability and risk identification, implementing a full lifecycle risk management strategy.

• They are leveraging AI in telemarketing and loan collections, improving automation and operational efficiency.

• The company maintained strong overseas expansion, especially in Mexico, where loan origination volume and revenue grew impressively.

• Investment in R&D reached RMB143 million, focusing on AI large models to improve service efficiency.

• Implemented enhanced consumer rights protection measures, improving customer service handling and response capabilities.

Opportunities:

• The company is seeing rapid growth in the Mexican market, with loan origination volume up 61% and revenue growth by 113% quarter-over-quarter.

• LexinFintech plans to continue exploring more emerging market opportunities, aiming to scale up and potentially increase profitability in these new regions.

Risks:

• The main risk identified revolves around the gradual nature of growth expected from AI services as the company scales its offerings.

• There is also a focus on carefully balancing the scale of loan issuances and maintaining strict risk control measures to manage the associated risks effectively.

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