Institutional and corporate investors are playing an increasingly important role in the business ecosystem of Xiaoying Technology.
Author: Liang Xi
Beijing time on August 19th, China’s financial technology company Xiaoying Technology (NYSE:XYF) announced the second quarter of 2019 financial report. According to the report, in the second quarter of 2019, the total revenue of Xiaoying Technology increased by 4.3% from the previous quarter to RMB 810 million. The net profit of GAAP-owned shareholders increased by 0.8% year-on-year to RMB304 million, up from 301 million yuan in the same period last year, and the growth rate of the previous quarter was 214 million, reaching 42%. Non-GAAP’s net profit attributable to shareholders was RMB 343 million, which was basically the same as the previous year’s 343 million yuan, an increase of 34% from the previous quarter of 256 million.
Overall, the business development and profitability of Xiaoying Technology Group remained basically stable.
Data Source: Xiao Win Technology (as of August 19, 2019)
The financial report shows that the increase in revenue and net profit was mainly due to the steady development of the company’s total loan facilitation amount. In the second quarter of 2019, the company’s total borrowing amounted to 10.17 billion yuan, an increase of 5.6% from the previous quarter’s 9.63 billion yuan, and the third consecutive quarter of sequential growth, indicating that overall, with The Internet finance industry is becoming more and more standardized, and the industry recovery will gradually improve the company’s operating environment.
Institutional investors accounted for an increase
However, loan size is not the only indicator of a company’s business performance. Beyond scale, user quality is also an important indicator of the company’s future growth potential and revenue stability.
Financial report data shows that in the second quarter of 2019, Xiaoying Technology combined the total amount of borrowing business,Human capital (mainly from financial institutions) accounted for 26.7%, a significant increase of 16.3 percentage points from 10.4% in the first quarter, which means that institutional and corporate investors are playing an increasingly important role in the business ecosystem of Xiaoying Technology. character of.
As of June 30, 2019, Xiaoying Technology has obtained formal credit of RMB 26.4 billion from financial institutions and other businesses. The proportion of non-personal treasury business has risen sharply, reflecting the significant increase in the ability of Xiaoying Technology Group and institutions to obtain funds for cooperation.
Compared with individual investors, financial institutions have higher stability in capital supply and greater demand for funds. By leveraging non-individual investors, Xiaoying Technology’s lending scale is expected to remain stable.
In addition, increasing the proportion of non-individual investors’ funding will help companies to resist the unknown risks caused by the uncertainty of the macroeconomic environment, which will help Xiaowin Technology maintain its revenue stability. .
Data Source: Xiao Win Technology (as of August 19, 2019)
The prospect of card loan business is wide
Since its inception in March 2014, Xiaoying Technology has continued to expand its product portfolio. So far, Xiaowin Technology has covered five brands including Xiaoying Net Gold, Xiaoying Card Loan, Xiaoyin Wealth Management, Xiaoying HP and Xiaoying Wallet. , a comprehensive product matrix has been established. Among them, the small win card loan has always been the main body of the company’s core earnings.
Small Win Card Loan is a lending service platform that helps the majority of borrowing users to maintain credit. Its high standard, low interest rate, flexible repayment period and other product features can effectively balance the repayment pressure and help borrowers solve borrowing difficulties. The problem has greater social benefits.
Data shows that in the second quarter of 2019, small win credit loans (mostly small wins card loans) contributed a total of 7.619 billion yuan in loans, compared with 9.925 billion yuan and 7.932 billion yuan in the same period last year and the first quarter of 2019. Yuan, accounting for 74.9% of the total amount of borrowing.
The small win card loan was officially launched in December 2016. It is an early credit card balance compensation product in China. Behind the continued high growth reflects the huge space in the credit card compensation market. The Bank of China Card Industry Development Blue Book (2019) issued by the China Banking Association’s Bank Card Professional Committee shows that from 2008 to 2018, China’s credit card issuance increased from 186 million to 9.7.Billion Zhang, the total transaction volume increased from 3.5 trillion yuan to 38.2 trillion yuan; in 2018, credit card issuance increased by 22.8% year-on-year, higher than the growth rate of domestic bank card issuance, credit card live card rate reached 73.2%, per capita card The volume is 0.7, and both indicators are at historical highs.
Although the number and usage of credit card users are expanding, the credit card repayment ratio has not increased by the same amount. As of the end of 2018, the total amount of credit has reached 6.85 trillion yuan, a year-on-year increase of 23.2%; The annual 2.34 trillion yuan increased by 192.73%.
With the increase in the number of credit card issuances and the increase in usage rate, the small win card loan business still has a broad room for growth in the future.
Small win wallet business grows rapidly
It is worth noting that although the small win card loan business as a core business has a relatively broad growth space, Xiao Win Technology is still not comfortable with the status quo, but goes further.
The launch of the small win wallet in the second half of 2018 is a new credit payment product of Xiaoying Technology. It is also a mobile internet smart payment product that Xiaoying Technology strives to focus on daily consumption, which is relatively complicated with the bank card. Small win wallet can realize online application; quick approval; realize efficient use for instant use; support all payment scenarios such as WeChat payment, Alipay payment, UnionPay scan code payment, mobile phone flash payment; delay payment in the account period and installment according to demand Flexible repayment models such as models (supporting 3-11 issues) are more in line with the behavioral characteristics of young consumer groups.
Compared with traditional credit cards, Xiaoying Wallet has diversified usage scenarios, customized credit lines, and humanized repayment forms. It solves and satisfies users’ pain points and needs, and truly targets young users, helping them to alleviate short-term Financial services solutions tailored to consumer pressures. Facing most of the opportunities in the new financial sector, it is a supplement and improvement to traditional financial institutions. The small win wallet fills the original service gap and also solves the original market pain point.
According to the data provided by Xiaoying Technology, in the second quarter of 2019, the number of small win wallet transactions in Xiaoying Technology’s consumer finance products reached 2.9 million, an increase of 347% compared with the first quarter of 640,000. At the same time, as of the end of June, the number of accumulated users of Xiaoying Wallet (the number of users who passed the audit after registration) increased to 543,000. As of the end of March, the data was only 193,000. The number of active users increased from 82,000 at the end of March to 221,000, and the growth rate reached 170%.
At the same time, the financial report data shows that in the second quarter of 2019, the transaction volume of the small win wallet reached 970 million yuan, compared with 2.0 in the previous quarter. The value of outstanding loans increased from 180 million yuan in the previous quarter to 580 million yuan, a growth rate of 227%.
The management said: “Due to the changes in market demand and regulatory environment, the importance of Xiaoying Wallet is rising. It is expected that Xiaoying Wallet will maintain a strong growth momentum and gradually occupy its contribution to the overall business.”
Data Source: Xiao Win Technology (as of August 19, 2019)
Net profit and net interest rate both break new high
In addition to the broad prospects of business scale and the strong growth momentum of new business, the biggest bright spot in Xiaoying Technology’s earnings report is the increase in net profit and the sharp increase in net interest rate.
Financial report data shows that in the second quarter of 2019, Xiaoying Technology’s GAAP net profit increased by 0.8% year-on-year to RMB304 million, up from RMB301 million in the same period last year, and the net profit margin was 37.5%, Net profit and The net profit margin is the highest since the first quarter of 2017.
Non-GAAP The net profit attributable to shareholders was RMB 343 million, which was basically the same as the 343 million yuan in the same period last year.
Data Source: Xiao Win Technology (as of August 19, 2019)
The increase in operational efficiency is the number one reason why net profit can break new heights. According to financial report data, in the second quarter of 2019, the proportion of Xiaoying Technology’s administrative expenses to revenue decreased from 7.2% in the previous quarter to 6.9%; the proportion of market expenses decreased from 4.0% in the previous quarter to 3.3%.This shows that the operating efficiency of Xiaoying Technology is improving.
Technology + Public Welfare, Dual Drive Model
In addition to the hard power indicators in revenue and profit growth, soft power is also an important reference for measuring the development prospects of enterprises. In this respect, we have seen that Xiaoying Technology is helping the company to stand on a broader stage through the dual-drive model of “Technology + Public Welfare”.
Smart win + light win, technology helps steady development
For financial technology companies, security is a topic that cannot be avoided, and technology is the best solution to security problems.
At the level of technology research and development, Xiaoying Technology has developed “WinSAFE Zhiying Risk Control System” and “WinAGILE Light Win Product Development System”.
“WinSAFE Zhiwin Risk Control System” analyzes the borrower’s repayment ability and repayment willingness through the big data risk control system composed of anti-fraud model, credit risk model and decision engine, and draws the final risk score and loan amount. Rely on data processing and modeling capabilities to ensure the safety of users’ funds.
The Zhisheng risk control system has a powerful data engine, and related data can be cross-validated with dozens of third-party data sources. And through automatic recognition, second-level face recognition and face analysis technologies, you can bring a more intelligent experience to users. At the same time, based on the big data ecosystem’s risk control system, we can continuously optimize our credit value model to achieve the highest standards in the industry of intelligence, agility, focus and precision.
“WinAGILE Light Win Product Development System” is designed to provide faster response, smoother experience and simpler through the six systems of account, payment, security, risk control, product and financial management. Operation and safer protection.
With the self-developed product release system, Xiaoying Technology can continue to iteratively, quickly test, and effectively release new financial products online, allowing users to enjoy the latest products of Xiaoying Technology.
It can be seen that through the dual technology system of “Chi-Win Wind Control + Light Win Product”, Xiaoying Technology can not only solve the user’s concerns about security in terms of security, but also enhance the user experience through continuous iterative products. Meet the needs of users more diverse.
Pu Hui + Public Welfare, the responsibility of Xiao Win Technology
In terms of social aspects, Xiaoying Technology’s efforts are mainly focused on the promotion of inclusive finance and social welfare activities.
As a booster for China’s digital inclusive finance, financial technology has become a key factor in improving financial services coverage.
In order to effectively alleviate the financing pressure of SMEs and solve the demand for the turnover of small and micro enterprises, Xiaohui Technology’s inclusive financial products, Xiaoying Card Loans, are currently working to serve consumer finance individuals and small and micro business owners with borrowing needs. Up to now, Xiaoying Card has provided financial services to more than 5 million users.
And Xiaoying Puhui completely broke the “standard financial product form”, which is a financial information service platform that can efficiently customize solutions based on user’s borrowing needs, credit data and usage scenarios through simple interaction based on the Internet.
In addition to Inclusive Finance, Xiaoying Technology has taken an active role in the social welfare field with its own strength. Since January this year, Xiaoying Technology has joined hands with the Mayun Foundation to promote the development of the rural boarding system.
The Xiaoying Charity Foundation, which was established on June 27, 2018, aims to “create a public welfare atmosphere, care for children, grow young people, advocate corporate social responsibility, and promote sustainable development of people and society, and nature”. Everyone’s sense of public welfare creates a better life.
Transporting public welfare and practicing corporate social responsibility is one of the corporate development goals that Xiaowin Technology has adhered to since its inception. Xiaojing Technology CHO Sun Jing said: “Xiaoying Technology is committed to establishing an inclusive financial system that serves individuals and small and medium-sized enterprises. At the same time, it places corporate development and social responsibility in the same important position and actively fulfills the economic and social responsibilities of corporate citizens. We hope that finance and public welfare can bring more happiness to everyone’s life.”
Growth potential is worth looking forward
Overall, the profit performance of Xiaoying Technology in the second quarter was outstanding, and both net profit and net profit margin reached the highest level since the first quarter of 2017.
In terms of business, the prospect of small wins and credits is broad, and the growth of small wins and wallets is strong, which adds more imagination to the future revenue growth potential.
In addition, compared with individual investors, institutional and corporate investors have higher stability and greater capital requirements. With the help of institutional and corporate investors, Xiaoying Technology’s lending scale is expected to stabilize. development of. On the other hand, the increase in the proportion of institutional investors also helps Xiaowin Technology resist the uncertainty from the macro economy.
In terms of soft power, the dual-drive model of technology + public welfare can make better use of the technology advantages accumulated by Xiaoying Technology in financial technology to better serve users and feedback society in an appropriate time to help companies achieve profitable value and society. The unity of value.
Either soft power or hard power, the development logic of the small win technology can see that its future growth potential is worth looking forward to.