Qifu Technology's Q3 2024 Earnings Call: Record Profitability and Strong Risk Performance
The recent conference call for Qifu Technology's Third Quarter 2024 earnings provided a glimpse into the company's remarkable performance, with significant improvements in risk metrics and record profitability. In his remarks, CEO Haisheng Wu highlighted the company's strategy of prudent operations, optimizing risk performance, and boosting operational efficiency.
Qifu Technology's loan volume stabilized and began to bottom out in Q3, while the company continued to iterate on its business model to build a more open ecosystem. Through a platform approach, the company is creating value for both users and financial institutions, broadening its business boundaries and strengthening its operational resilience.
By the end of Q3, Qifu Technology's platform had empowered a total of 162 financial institutions and served more than 55 million users with approved credit lines on a cumulative basis. Excluding the contribution from risk management SaaS services, total loan facilitation and origination volume on the company's platform increased by 13% sequentially.
The company's non-GAAP net income for the quarter reached an all-time high of RMB 1.83 billion, an increase of 29.1% sequentially and 54.5% year-over-year. This significant growth was driven further improvements in risk metrics and operational efficiency.
Qifu Technology's ongoing share buyback also contributed to improved non-GAAP net income per diluted ADS, which increased 34.8% sequentially and 71.5% year-over-year to RMB 12.4. Coupled with the ongoing optimization of capital allocation, the company's ROE in Q3 increased further to 32.2%, well ahead of most financial services and Internet companies in China.
Asset quality further improved in Q3 as Qifu Technology continued to execute its rigorous risk strategy. The company optimized its product and service offerings for differentiated user groups, tailoring credit limits and pricing to offer more attractive terms for low-risk users. This resulted in a notable improvement in the company's risk metrics, with D1 delinquency rate falling by 0.2 percentage points sequentially and 30-day collection rate increasing by 1.1 percentage points.
Despite macroeconomic headwinds, Qifu Technology has consistently improved upon its past results and outperformed its market commitments through ongoing involvement and enhancements to its business. The company's strong risk performance is expected to remain relatively stable in the coming quarters.
Liquidity in the financial system remained ample during Q3, allowing Qifu Technology to maintain its negotiating leverage on the funding side and reduce funding costs by 30 basis points sequentially. Additionally, the company issued RMB 3.5 billion in ABS in the quarter with issuance costs falling by more than 50 basis points sequentially.
