In the third quarter, the performance of the four top mutual fund companies showed some differentiation.
As of November 24th, multiple internet finance companies including Lujin Holdings (NYSE: LU; 06623. HK), Qifu Technology (formerly 360 Data Science, Nasdaq: QFIN; 03660. HK), Xinye Technology (NYSE: FINV), Lexin (Nasdaq: LX), and Jiayin Technology (formerly Jiayin Jinke, Nasdaq: JFIN) have all released unaudited financial performance reports for the third quarter of 2023.
According to the financial report, in the third quarter, Lujin Holdings achieved a revenue of 8.05 billion yuan, a year-on-year decrease of 39%; The net profit attributable to the shareholders of the group was RMB 94 million, a year-on-year decrease of 92.93% and a month on month decrease of 90.29%.
Qifu Technology achieved a net income of 4.281 billion yuan, a year-on-year increase of 3.3%; The net profit attributable to ordinary shareholders of the company was 1.142 billion yuan, a year-on-year increase of 15.03% and a month on month increase of 4.06%.
Xinye Technology achieved a revenue of 3.1975 billion yuan, a year-on-year increase of 7.6%; The net profit attributable to the common shareholders of the company was RMB 566 million, a year-on-year decrease of 5.52% and a month on month increase of 2.08%.
Lexin achieved a revenue of 3.51 billion yuan, a year-on-year increase of 30.4%; The net profit attributable to the ordinary shareholders of the company was 370 million yuan, a year-on-year increase of 34.55% and a month on month increase of 4.19%.
Among the four top mutual fund companies, Lujin Holdings' revenue decreased by nearly 40% year-on-year; The other three companies saw a year-on-year increase in revenue, with Lexin experiencing a significant growth rate.
In terms of net profit attributable to shareholders, the net profit of Lujin Holdings decreased by more than 90% year-on-year and month on month, with a significant decrease; The net profit of the other three companies increased year-on-year, with Lexin having the largest growth rate. On a month on month basis, the growth rates of the three companies, except for those controlled by Lujin, were around 2% to 4%, showing some recovery.
Lujinsuo Holdings saw a year-on-year decrease of nearly 60% in newly granted loans in the third quarter
Among the performance of the top four companies in the third quarter, the revenue and net profit of the "leader" Lujin Holdings have significantly declined.
According to the financial report, as of September 30th, the loan balance empowered by Lujin Holdings was 366.3 billion yuan, a year-on-year decrease of 42.5%; The newly granted loans in the third quarter amounted to 50.5 billion yuan, a decrease of 59.2% compared to 123.8 billion yuan in the same period of 2022. In the third quarter, the risk-taking ratio of new loans empowered by Lujin Holdings (excluding consumer finance subsidiaries) increased from 21.7% in the same period last year to 54.3%. As of September 30, the proportion of loan balances at risk borne by Lujin Holdings (excluding consumer finance subsidiaries) increased from 19.1% as of September 30, 2022 to 25.7%; The proportion of loan balances at risk borne by Lujin Holdings (including consumer finance subsidiaries) increased from 22.5% as of September 30, 2022 to 31.8%, while the proportion of loan balances at risk borne by credit enhancement partners was 65.7%, with Ping An Property&Casualty Insurance accounting for the majority.
  The company continues to uphold the concept of quality over quantity. Early indicators indicate that the quality of new loan assets facilitated in 2023 meets expectations, but has not yet returned to pre pandemic levels.
Ji Kui sheng, Co CEO of Lujin Holdings, mentioned that in the third quarter, due to ongoing uncertainty in the small and micro business owner (SBO) business and the possibility of needing more time to recover, the company plans to continue expanding its consumer finance business scale. In the third quarter, Lujin Holdings recorded steady growth in its consumer finance business, with new loan sales increasing by 15.3% month on month and 48.5% year-on-year.
At the same time, in order to diversify its business development, Lufax Holdings announced that the company plans to acquire 100% equity of Ping An One Account Bank, pending approval from the Hong Kong Monetary Authority and the shareholders of Financial One Account. Ping An One Account Bank is a fully licensed bank with a service scope similar to traditional banks.
The loan assistance market has become a stock competition market
Some industry insiders told Pengpai News reporters that due to factors such as rising customer acquisition costs, cost reduction, and efficiency improvement, the loan assistance business market has become a competitive market for existing stocks, and the slowdown of business expansion is an inevitable trend.
In the third quarter, the number of active users of Lexin's loan products was 4.9 million, a year-on-year decrease of 13.6%; The proportion of duplicate borrowers reached 90.1%. According to the second quarter report disclosed by Lexin, the number of new active users using loan products in the second quarter was 400000, a year-on-year decrease of 49.3%.
In the domestic market, Xinye Technology facilitated a loan amount of 42.4 billion yuan for repeat borrowers in the third quarter, a year-on-year increase of 9.0%, and accounted for 86% of the company's total facilitated loan amount in the domestic market in the third quarter.
As of September 30th, Qifu Technology has successfully withdrawn funds from a total of 29.4 million borrowers (including repeat borrowers), a year-on-year increase of 11.9%.
In terms of the overall environment, in 2021, regulatory authorities in multiple regions provided window guidance to consumer finance companies within their jurisdiction, requiring them to lower their annual product interest rates to within 24%. Private banks, trust companies, mutual fund companies, and lending platforms are also affected by the 24% interest rate red line. Industry insiders who have been in the industry for many years have told reporters from The Paper that in the face of a drop in interest rates, companies need to adjust their customer base, and the cost of acquiring customers will continue to rise.
Another practitioner stated that the current overall trend in the mutual fund industry may focus more on refined operations, such as user segmentation, operation, and service, with more detailed granularity and deeper digital involvement.
Wu Haisheng, CEO and Director of Qifu Technology, mentioned in the third quarter financial report that due to the slowdown of macroeconomic recovery and the weakening of consumer credit demand, the company has timely adjusted its strategic approach, focusing on refined operations, and seeking breakthroughs in profitability improvement and quality growth.
Yan Dinggui, Chairman of Jiayin Technology, stated during the third quarter performance conference call that in the domestic financial sector, the company has observed significant risk fluctuations in the credit market at this stage, and asset condition and risk management have also become key issues in the industry in recent times. "We are well aware that in the current environment, sustained, prudent, and refined operations and management are crucial for our long-term stable and healthy development."
Lexin stated that in the third quarter, with the deepening of refined operations, the company's profitability continued to improve, and total operating expenses decreased by 7% year-on-year.
In the third quarter, Lexin's ecological businesses such as mathematics and e-commerce continued to grow. The transaction volume of mathematical business cooperation increased by 59% month on month; The scene e-commerce business has continued to grow for multiple quarters, with a total transaction volume of 1.381 billion yuan in the third quarter of the installment shopping mall, a year-on-year increase of 12.8%. The mall focuses on serving high-quality and high growth consumer groups such as those born in the 1990s and 1995.
Among them, many mutual fund companies have also shifted their focus to overseas business.
Xinye Technology officially began its internationalization process in 2018, with its first overseas destination being Southeast Asian countries.
In the international market, Xinye Technology facilitated a loan amount of 2.21 billion yuan in the third quarter, a year-on-year increase of 99.1%; As of the end of the third quarter, the balance of loans in the international market was 1.29 billion yuan, an increase of 101.6% compared to the same period in 2022. As of October, 80% of the employees in Xinye Technology's overseas business team are locals, and 70% of the transaction funds come from local financial institutions.
Yan Dinggui stated in a conference call that in the third quarter, Jiayin Technology's international business continued to show a thriving trend. The profitability of the Nigerian region has made significant progress, and for the first time this quarter, it has achieved an important strategic goal in this region - a positive net profit. Yan Dinggui mentioned that Nigeria's superior population size and structure, as well as its growing mobile penetration rate, provide enormous opportunities for the fintech sector, especially cash credit services.