Ladies and gentlemen, welcome to the first half of 2019 earnings conference call. Shortly, you will be hearing from our presenters. The session will be followed by Q&A at the end, and we will try to answer as many questions as time permits. I would now like to hand you over to Ms. Helen Wu. Thank you. Please go ahead.
Thank you, operator. Good evening, and welcome to our first half 2019 earnings conference call. This is Helen Wu from Yixin IR team. Today with me are Mr. Andy Zhang, Chairman and CEO of Yixin Group, and Ms. Catherine Liu, our CFO. After their prepared remarks, Andy and Catherine will be available to answer the questions. Before we proceed, I would like to remind you that all our remarks today may include certain forward-looking statements. The number of risks and factors beyond our control may cause the actual results to differ materially from those contemplated by these forward-looking statements. During this call, we will present both IFRS and non-IFRS financials. We will also discuss general market conditions for our industry, and as such information may come from a variety of sources outside of Yixin Group.
For a detailed discussion of the risk factors we face and the non-IFRS measures, please refer to our public documentation on www.yixincars.com. As a reminder, this call is being recorded. In addition, a live website and replay of the conference call will be available on our website. With that, I will now pass the call to Mr. Andy Zhang, Chairman and CEO of Yixin.
Thank you everyone for joining our first half 2019 earnings conference call this evening. I'm pleased to present our first half results. As of June 30th, our accumulated total financed automobile transactions reached approximately 1.4 million, and our accumulated aggregate auto financing amount exceeded CNY 100 billion. As a leading player in the industry, we have enjoyed leadership advantages during our business development. Despite the sustained weakness in passenger vehicle sales in China during the first half of 2019, Yixin once again achieved significant growth, further strengthened our industry leadership, and enhanced our competitive advantages. For the first half, our total financed automobile transactions reached approximately 285,000, representing a 31% year-on-year increase, while China's total sales for new and used passenger vehicle decreased by 8% year-on-year, according to the data from CAAM and the CADA.
During these six months, our financed automobile transactions, both new and used, continued to achieve faster growth than in the industry. Our financed new automobile transactions increased 40% year-on-year and reached about 174,000, while China's new passenger vehicle sales decreased by 14% year-on-year, according to CAAM. Our financed used automobile transactions reached about 111,000, representing an 18% year-on-year increase, while China's used passenger vehicle sales increased only by 4% year-on-year, according to CADA. Our loan facilitation continued to grow fast and healthy. In the first half of 2019, we facilitated about 164,000 transactions through our loan facilitation services, representing a 486% year-on-year increase. Our transactions through loan facilitation services contribution, 58% of total financed automobile transactions increased from 13% for the same period last year.
Looking into the second half of 2019, we expect the growth momentum to continue from our loan facilitation services, which features strong scalability and attractive margin profile. We expect to further expand our loan facilitation partners network, increase our auto dealer coverage in low-tier cities, enrich our product offerings, and attract more financing customers. Our total revenues increased by 23% year-on-year to CNY 3,162 million, mainly due to the increase in our loan facilitation services. Our new core services revenues, which include revenues from loan facilitation transactions and the new self-operated financing lease transactions we facilitated during the period, increased 95% year-on-year to CNY 1,100 million. Coming into 2019, we began to see profitability improvement, benefiting from our strategy shift, as well as the business scalability and the improved operation efficiency.
For the first half 2019, our adjusted operating profit increased by 221% year-on-year to CNY 384 million, and our adjusted net profit increased by 178% year-on-year to CNY 343 million. Accordingly, our adjusted operating margin and our adjusted net margin increased to 12% and 11%, respectively, from 5% and 5%, respectively, for the same period last year. For our loan facilitation services, we currently work with 10 banks and financial institutions as our partners. In addition to our equity funding and the cash flow from operations, we also issued asset-backed securities and notes, as well as obtained loans and borrowings from over 20 banks and over 50 other financial institutions. At the end of June 2019, our total borrowings were CNY 27 billion, among which about 39% were from asset-backed securities and the notes. Yixin is a highly recognized issuer in China's asset-backed securities market.
As of today, we have offered cumulatively 22 asset-backed securities and notes publicly with total issuance amount of CNY 31.3 billion on Shanghai Exchange, National Association of Financial Market Institutional Investors, and the Shanghai Insurance Exchange. In this first half of 2019, we also began to see improved cash flows and decreased debt ratios, which reflected better liquidity of our businesses. Our net cash inflow generated from operating activities was CNY 3.9 billion compared to a net cash outflow of CNY 4.9 billion for the same period in 2018. Our debt-to-equity ratio decreased to 1.77x at the end of June, compared to 2.03x as at December 31st, 2018. Going forward, we are dedicated to develop our cloud capabilities that feature standardization and artificial intelligence to better connect with and serve consumers, financial institutions, and auto dealers.
We will also focus on strengthening our big data capabilities to improve our risk control system for enhanced accuracy, security, and efficiency, and to enrich our product offerings and tap into our existing customers for increased monetization opportunities. With that, I will pass the call over to our CFO, Catherine Liu.
Thank you, Andy. We are pleased to deliver solid results for the first half of 2019. Our total revenues increased by 23% year-on-year to CNY 3,162 million, mainly due to the increase in our loan facilitation services. Our new core services revenues, which include revenues from loan facilitation transactions and new self-operated financing lease transactions we facilitated during the period, increased 95% year-on-year to CNY 1,100 million. Revenues from our loan facilitation services was CNY 839 million, representing a year-on-year increase of 655%. For the six months ended June 30th, 2019, we facilitated about 164,000 financed automobile transactions through loan facilitation services, representing 486% year-on-year increase in volume. Revenue contribution from our loan facilitation services increased to 27%, compared to 4% for the same period last year.
Revenues from our advertising and other services decreased by 72% year-on-year to CNY 42 million, mainly due to our strategy to de-emphasize advertising and other services. Benefiting from the growth of loan facilitation, our total revenues from transaction platform business increased by 237% year-on-year to CNY 881 million. Accordingly, our transaction platform business contributed 28% of our total revenue, increased from only 10% for the same period last year. Revenues from our self-operated financing business decreased by 1% year-on-year to CNY 2,280 million, mainly due to the decrease in revenue from our new financing lease transactions for the first half and partially offset by the revenue increase from our existing financing lease transactions in prior periods. During the first half, we facilitated about 121,000 financed automobile transactions through our self-operated financing lease business, representing 36% year-on-year decrease in volume, reflecting our strategy to focus on loan facilitation services.
Revenues from our financing lease services increased by 3% year-on-year to CNY 2,081 million. For the first half of 2019, we generated CNY 1,820 million revenues from existing financing lease transactions in prior periods, and CNY 261 million revenues from new financing lease transactions. Revenues from other self-operated services decreased by 30% year-on-year to CNY 200 million, primarily due to the decrease in revenue from operating lease services as a result of our strategy to de-emphasize operating lease services. Now moving to the cost of revenues and gross profit. Cost of revenues increased by 24% year-on-year to CNY 1,630 million, mainly due to the increase of commissions associated with our loan facilitation services, the increase of costs associated with automobile sales, the increase of funding costs associated with our self-operated financing business, and partially offset by the decrease of automobile depreciation associated with operating lease services.
Our total gross profit increased by 23% year-on-year to CNY 1,532 million, primarily due to total revenue growth. Our overall gross profit margin slightly decreased to 48% compared to 49% last year. Gross profit margin of our transaction platform businesses decreased to 61% compared to 77% last year, primarily due to the change of revenue under the increase of commissions associated with our loan facilitation services. Gross profit margin of our self-operated financing business decreased to 44% compared to 46% last year, primarily due to the increase of cost of automobile sold, and a slight decrease of gross profit margin of our self-operated financing lease services. Gross profit margin of self-operated financing lease slightly decreased to 51% from 52% for the same period last year.
The average yield of our net finance receivables was 11.7% compared to 12.1% for the same period last year, mainly due to the increase of finance in new auto transactions. As a percentage of total transactions, our finance in new and used auto transactions contributed 61% and 39% of our total financed auto transactions, compared to 57% and 43%, respectively, for the same period last year. The average funding cost of our net finance receivables was 5.7%, slightly decreased from 5.8% for the same period last year. The spread of our net finance receivables was 6.0%, compared to 6.3% for the same period last year, mainly because of the mix of our new and auto transactions. Moving to the operating expenses.
Selling and marketing expenses decreased by 3% year-on-year to CNY 579 million, primarily due to the decrease in marketing and advertising expenses, and partially offset by the increase of salary and employee benefit expenses and SBC expenses. Marketing and advertising expenses were CNY 54 million, compared to CNY 163 million last year. Our admin expenses decreased by 51% year-on-year to CNY 207 million, primarily due to the decrease of salary and employee benefit expenses and SBC expenses, as well as professional services expenses. Our research and development expenses decreased by 27% year-on-year to CNY 104 million, primarily due to the decrease in salary and employee benefit expenses, and partially offset by the increase in SBC expenses. Our net impairment loss on financial assets includes provision for expected credit losses of finance receivables, provision for impairment of trade receivables, and provision for impairment of other receivables.
Provision for expected credit loss of finance receivables was CNY 256 million compared to CNY 259 million for the same period last year. Provision for impairment of trade receivables was CNY 274 million, increased from CNY 22 million for the same period last year. The trade receivables were generated mainly from the services to auto dealers we no longer provide. In consideration of the general economic slowdown in recent periods, we made such provision for impairment of trade receivables from the services that we no longer provide. However, we expect the provision of trade receivables in the future to decrease significantly since we no longer provide these services. Coming into 2019, we began to see profitability improvements benefiting from our strategy shift, as well as our business scalability and improved operation efficiency.
Our adjusted operating profit increased by 221% year-on-year to CNY 384 million, and our adjusted operating profit margin increased to 12%, compared to 5% for the same period last year. Our adjusted net profit increased by 178% year-on-year to CNY 343 million, and our adjusted net profit margin increased to 11%, compared to 5% for the same period last year. The increases were mainly due to the increase of gross profit and revenues and the decrease of operating expenses. Our operating profit was CNY 164 million, compared to an operating loss of CNY 163 million for the same period last year. Our profit was CNY 123 million, compared to a loss of CNY 159 million for the same period last year. Now let's move to the balance sheet and asset quality.
Our carrying amount of finance receivables decreased to CNY 34.3 billion as at June 30th, 2019, compared to CNY 36.8 billion as at December 31st, 2018, primarily due to our strategy to focus on loan facilitation services. As at June 30th, 2019, our total borrowings were CNY 27.0 billion compared to CNY 30.2 billion as at December 31st, 2018. The decrease was mainly due to our strategy to focus on loan facilitation services. Total borrowings comprised of asset-backed securities and notes of CNY 10.4 billion, which contributed about 39% of our total borrowings. Bank loans and bonds from banks and other institutions of CNY 16.6 billion, which contributed about 61% of total borrowings.
As at June 30th, 2019, we had cash and cash equivalents of CNY 1,712 million, and our net cash inflow generated from operating activities was CNY 3.9 billion, compared to a net cash outflow of CNY 4.9 billion during the same period. Generally, we have a much more healthy debt ratio and cash flow. Since 2019, various local governments started to implement much stricter rules and guidance on delinquent consumer accounts payable, payment collection. In order to better comply with these new rules and guidance, we started to use litigations as our priority collection method. Although litigations usually take longer time for collection, and our delinquent ratios increased slightly accordingly in the near term. However, we believe in the longer term, it will help regulate the overall industry practice and further improve consumers' user experience.
In the first half of 2019, for all financing transactions for both our loan facilitation business and self-operated financing business, our 180 days past due ratio was 0.58% at June 30th, 2019, compared to 0.42% at December 31st, 2018. Our 90-day-plus, including 180-day-plus past due ratio, were 1.06%, compared to 0.92% at December 31st, 2018. This is our prepared remarks, and we will now open the call to Q&A. Operator, please go ahead.
Thank you. If you would like to ask a question, please do so by pressing star one to enter the question queue on your touch tone telephone. Should you wish to cancel your request, please press star one again. Once again, if you would like to ask a question, please do so by pressing star one to enter the question queue on your touch tone telephone. Should you wish to cancel your request, please press star one again. Your first question comes from the line of Alex Xi e of Credit Suisse. Thank you. Please go ahead.
Hi, management. Thank you for taking my questions. My first question is, why was the performance of Yixin's automobile financing transactions much better than the overall auto sales? What have we seen in the increasing penetration of auto finance in auto retail sales? What have we seen in the changes of our market shares in auto finance industry? My second question is, what are management's outlooks for the auto finance transaction volume in the second half, and also the mix between self-operated finance and the transaction facilitation model? Thanks.
Okay. I will be answering all the market-related questions. We have outgrown the market in the last few years since operation. First half of 2019 set another solid growth compared to the entire industry. I think the following reasons are, first of all, because of the market condition in general, where new cars and used cars are all facing a fairly tough retail market. I think the dealerships and OEMs are all seeking different alternatives to sell vehicles. Also the buyers of the entire mix of different vehicles, new and used, age-wise, has been getting younger and younger. Obviously, from a savings standpoint, from a volume pushing standpoint of the market drivers, all of them are looking for alternative methods, which in this case, auto financing and leasing comes into play. So we are definitely the beneficiary of this particular trend.
Just like any other mature markets, I believe this trend will continue until the auto financing and leasing penetration reaches approximately 70%-80% of the market. We have estimated for 2019, I think auto financing and leasing penetration should go up to above 55% to almost 60% at the end of 2019, which we still have almost 20 percentage points to catch up to the mature markets. So that also gives the market player confidence as to seeking growth from different areas. For us, because the entire market has been really slow on the auto sales, different consolidation has been really contemplating in the first half of 2019. We will see more of that happening in the second half of 2019. When there is consolidation, the half players always benefit from that.
Similarly, not only the car salespeople are consolidating, but also the financial services providers are also consolidating as well. The long tail end players has gradually phasing out of the market, and because we do have a strategy of continue to penetrate into lower tier cities, which we have been doing that successfully in the last 12 months, this is why we have been really outgrowing the market quite significantly. In terms of the second half of 2019 auto sales, I think yesterday the State Department or the General Office of the State Council of the People's Republic of China issued a statement where to encourage release or relief of the license plate restrictions in those cities in China, which has these in place currently.
Even though the wording within that statement has been quite direct, it also indicated that they advise gradual relief of those restrictions. I think that sort of gave a lot of auto industry players quite a bit confidence because this is the third time during the year one particular department came out to specify the importance of auto consumption in the general economy. This time it is actually the central government office that stepped out, make that suggestion and make that announcement. We take that as a very positive sign for the overall market, and especially when the message came out yesterday, which is the end of August. We are facing with four and a half months right before the Chinese New Year will be the sort of the high season during any particular year.
Hopefully, we will see different adoptions from those cities who currently have these restrictions in place gradually throughout the next few months to really necessarily complying with this particular statement. In terms of mix from our own volume, I believe our goal has been set very straightforward. Facilitation is our way, our route to success, our route to scalability, our route to efficiency. Therefore, you have seen the cash flow statement where indicated that we actually have a lot more operating cash inflow, much less outflow, in the first half of the year, which is also benefited from that strategy. Our facilitation percentage penetration has been much higher compared to the six months ago and the 12 months ago. I think this strategy will be continued to be in place, moving forward.
Hopefully in a reasonable timeframe where you will see majority of our transactions during the quarter or during the year will essentially be facilitation transactions. Thank you.
Thank you. Thank you.
Next question, please.
Thank you. Your next question comes from Hillman Chan, Citigroup. Thank you. Please ask your question.
Hi, Andy, Catherine, and Helen. Thank you for taking my question. Firstly, could management share more color on the competitive landscape for the industry? For example, with the players such as Uxin, Guazi, and others, even though they may not be entirely direct competitors to us, just want to see how we think about the intensity of the competition in the online auto space. My second question is more a housekeeping one. Could management share more color on how we should think about the cost of funding, going forward? Also, we note the paying due ratio has gone up a little bit. Could management share more about the reason behind, and how we should think about the payment due ratio in the near future? Thank you.
Okay. Thanks, Hillman. I will take the first question in terms of competition. I think, generally, we are still facing the same old type of competition. Online-wise, as you indicated, the Guazi and Uxin. Offline-wise, it is still consistently SAIC-GMAC, Ping An, and as well as Changan. These are the traditional competitors. I think in my last answer to the prior analyst that regarding the overall landscape, I think we are witnessing the process of the smaller players phasing out. We do see Yixin taking up a lot more market share, picking up what they left off. But still, again, these used to be concentrated in the lower tier cities, which historically none of our existing competitors has really been penetrating down into. It is also a new area for us.
So far, we have received better than expected results, because we do have quite a bit of a dominance in those markets, given that we have thousands of them currently who are working with us. In terms of the online competitor, I think auto financing in general, auto leasing in general, in the past history of the industry, no one has really been proving that it can be solely carried out from online. Again, I think that at the beginning of Yixin's history, we also take a crack at it. But we decided to move more offline, in 2016, and that is what has been giving us more success. Currently, I think our role is to stick with that for now. However, five years, three years later, we do have better technology. We have a lot more data that is being accumulated from existing customers.
We will definitely work a lot closer with our strategic shareholders, in the very near future in terms of having better risk factor models to build between us or among us. I think if it is their strategy as well, therefore I would not be surprised that we will be, again, taking another crack at the online side as well. But I think we need to wait until all the tools are ready. We need to wait until all the conditions are right before we are beginning to test that particular water after four or five years. That is my answer to your first question. I think Catherine is going to pick up the second and the third.
In terms of cost of funding, I think in the first half of this year, we see a stable and slightly decreased of the total cost of funding. Currently we are taking a conservative approach and we will wait and see how the cost of funding will trend. Our estimate is probably going to be relatively stable or slightly decreased. However, our cost of funding is still among the lowest among our competitors in the financing lease space because our leading position in the industry. For example, we have already issued 22 public ABS, ABN, which the information is listed, I think publicly.
If you take a look on our ABS and ABN, public listed, versus some of our competitors, public ABS and ABN, one is our number of public ABS, ABN is much, much higher than our competitors and our interest rate during the same period is also lower. As to your third question, our past due ratio slightly increased, mainly because, since 2019, various local governments started to implement much stricter rules and guidance on delinquent consumer accounts payment collections. In order to better comply with these new rules and guidance, especially started in the second quarter of 2019, we started to use litigations as our priority collections method. Litigations typically take longer time for collection, so our delinquent ratios increased accordingly in the near term. We believe this is the trend that affect everybody in the industry.
We believe in the long term, the government's activities will help regularize our industry practice and probably help the industry growth in the long run. In the short run, we probably will see our past due ratio slightly increase. We think in the long run, it is going to be stabilized. Okay. Next question.
Thank you. Our next questions come from Alex Ye of UBS. Thank you. Please ask your question.
Hi, management. Thanks for taking my question. I have three questions. The first one is on the strategy. We have seen the new car market has remained very weak over the past year. For Yixin, our new car loan facilitation volume seem to be growing at a faster pace than the used cars. I just wonder if you could share on some of your thoughts and strategy in terms of how we should look at the breakdown between your new car and used car volume going forward. Given the weakness the new car market has remained, would we consider taking a more aggressive stance in expanding into the used car market? My second question is on the operating efficiency.
It's good to see that we have turned into a profit for this half-year, and we have seen an improvement in our operating margin. I wonder, is there any room for our operating margin to further improve from the current 12% level, and how could we achieve that, particularly on the sales and marketing expense? Could we see any room to reduce that? My third question is on asset quality. You have mentioned that the increase in past due ratio is probably due to the more stringent rules on loan collections. I wonder, how important was the practice of collecting the cars back from those defaulted players has been to our bad debt collection in the past. Now that if we can't do that anymore, is there any way we could mitigate the negative impacts? Yeah, thanks.
Okay. I'll answer the first question, and Catherine will answer the second and third. First of all, I think strategy on new car and used car, obviously, as I've been answering the first two analyst questions relating to the new car market. Now we do have an opportunity in the new car market where we penetrate down to the lower tier cities, and also because the market slowed down in consolidation. A lot of the original small players have been squeezed out. We do have a good dominance in this area. Also, historically looking at the picture, I think new car buyers are, to us, a little bit healthier buyers, so to speak. We're not hesitating in terms of occupying these markets, especially first and second-tier cities. General view on auto sales.
I think we've enjoyed so many 30-some years of growth on auto sales, and since last July, I think it was the first downtrend ever in 2018. Also has been downtrending for the past 13, 14 months now. I think that's also why the General Office of the State Council came out yesterday and issuing the statement where to try to stimulate the auto consumption in general. I think not only we, as an industry player, are aware of that situation, but also I think the country and the state is also aware of the situation as well. For us, I think, the good part is that even though the sales volume has been dropping, but the penetration of financing/leasing has been increasing significantly year over year.
As I said before, I think for the entire market, where it gets to maturity, it's fair to expect 70%-80% of the financing and the leasing penetration in all of the vehicle sales during the year, regardless new or used. That's the opportunity that's for Yixin, and we want to grab that. We are always looking to find a good position in the market and continue to lead the market as well, no matter new or used. Strategy-wise, we're shifting from our own balance sheet to facilitation, and also our 3.0 strategy for Yixin is also going from facilitation into the pure cloud platform services. We are moving along that particular route as far as the company operation-wise is considered. I think Catherine is going to answer the second and third. Thank you.
In terms of margins, we believe that we still have rooms for improving efficiencies and improve the profitability, mainly due to several reasons. One is that we expect that our loan facilitation services as a percentage of total revenues will keep increasing. The loan facilitation services has better growth margins than our self-operated financing lease business. Along with the revenue mix change, we think that our growth margin will gradually increase. Second, we think our sales efficiency will also increase, i.e., each salesperson, they will have KPI increase every year. Also, in terms of our risk control and personal loan management, along with our economy of scale and more experience, we think there is also an operating efficiency improvement room. In terms of, I think, the back-end offices, such as technology, and finance and the legal back offices, there is also economy of scale.
Generally, we think there is room for improving operating efficiencies. As to your third question about changing asset quality. In the first half, our asset past due ratio slightly increased, mainly due to local government, much stricter rules and guidance. We think that even though previously we probably used car collection as one of the major methods, currently we are using litigation as our priority collection method. This is a matter mainly of timing, because litigation is going to take a longer time for collection. We think that in the near term, it will increase our past due ratio. But I think in the long term, it will be stabilizing.
Got it. Thanks.
Okay. Next question.
Our next question comes from the line of Susanna Chui from DBS. Thank you. Please ask your question.
Thanks management for taking my question. We actually saw the auto market start recovering and the decline is moderating for the last month figure. But we also see that you remain 2019 auto finance volume growth guidance at 20%, which means around 10% year-over-year growth in second half. I would like to ask, is it because you are tightening your credit control because of the rising cost ratio? I would like to ask how you balance the auto finance volume growth and the credit risk. Which one is in the first priority? Thanks.
I think, first of all, we are taking a conservative approach for our second half of the businesses. Currently, we still see very healthy growth in July and August. I think we also want to have a balance of the risk control and our growth. So we want to have a healthy growth with relatively stable asset quality.
I think for us, growth, honestly speaking, is not necessarily a challenge, especially in the tough market condition where all the resources are really being redirected to the top players. We have been witnessing that in the last, actually last, almost 12 months now. So within the team of YX, our primary concern, our primary focus is always bilateral. Bilateral meaning that we grow at a very stable and healthy condition. So again, we have to first ensure that before we actually eye in for more growth. But so far, I think, looking at what we are entering, we have more new car transactions versus other types. We are penetrating more into 4S, and we are also penetrating more into second tier. I think these are the areas where that can actually provide us with much higher quality assets as well. So, we are definitely balancing that.
Our primary concern is to sustain a healthy growth, not necessarily just to go for growth. That's always been our case.
Just to supplement, we believe that we will still see the industry growth by a significant pace. Okay. Next.
Our next question comes from the line of Miranda Zhuang of Bank of America. Thank you. Please ask your question.
Thank you for taking my questions, and congratulations on the solid results. I would like to understand more about the strategy to penetrate into lower tier cities. Can management give us an update of any color on the matrix of, for example, mix of the volumes for lower tier cities, or a mix of the dealer coverage in the lower tier cities by now? Is there any target for the penetration by end of this year or next year? Can management give us more color on how you will increase the penetration in lower tier cities? Lastly, can management give us any color on the unit economy of the auto finance transaction in lower tier cities versus that in the tier one and two cities?
It seems that the APR wise would be similar, but will we see any difference in the cost of the funding or any difference in terms of the rebate to the dealers or loan facilitation commission rates to the dealers? Thank you.
I think the second-tier penetration occupies about approximately 65% of our new car volume. We are dealing with about approximately over 7,000 second-tier dealers right now. The total market size will constitute about somewhere around 20,000 second-tier dealers in the entire market, sizable dealers, which is worthy of business. I think we are about 35%, 40% penetration right now. Hopefully by next year, this time, we will be doing upwards of 2/3 penetration by then. Again, this has been a very good part of a good contribution to us in terms of growth in the second tier.
In terms of APR differences, I think, it is relatively similar for our products to sell in first tier and second and other tier cities. I think our policy is still trying to penetrate into lower cities. I think the APR difference is not that significant.
Yeah, because all the OEMs are all penetrating all along. Again, I think, ultimately, you are still dealing with the same type of vehicles. It does not matter first or second. It is just that there may be a different mix or maybe because of the time of entering for us and for the OEM, we may have different mixes in different markets. That is pretty, in a way, fairly random. It really depends on our strategy of where to enter in, as well as what the OEM strategy is. I think, while both of us are coming in, going in, we really will see that if those who actually have high comparability, then we will cover more. Those with lower comparability, then we have less.
But that is a lot more of a detailed analysis, so maybe you can, in the future, work with our IR team to get some light on that. Thank you. Next question.
Thank you. Our last question comes from the line of Jason Chen of Blue Lotus Capital. Thank you. Please ask your question.
Hi, management. Thanks for taking my questions. I have two questions, actually. First one is on you were mentioning that Yixin is seeking more monetization opportunities leveraging all your big data. Can you please give us some detailed colors on this, or are we expecting those things will start contributing some of the revenue in near-term? Second one is a follow-up question on the past due ratios. Since you are expecting the past due ratios are going to be increased slightly in near terms, how should we look into your, basically, on the provision into second half of 2019 and the year after? Thank you.
With the big data, it is something that we are currently collaborating with our strategic shareholders, and because we have been accumulating over 1.4 million customers, and a lot of them are three years or longer. While we are capable of saying that we have a lot of those related data. But in terms of monetization, I think, again, as I said before, we are still looking through these data. We are looking through them different angles and how can we utilize these data along with our strategic partners and our strategic shareholders as to, firstly, implementing them into our risk management factor. Then in the future, potentially outsource that. But again, we are at the very, very early stage. We are looking at this as the overall Yixin 3.0 strategy.
Again, we're only at the 2.0 level right now in terms of business operations, we're having much higher percentage on facilitation, we'll be continuing to go higher. Before we actually get to the point of maybe 70%-80% of penetration on the facilitations, we will not start to too quickly monetize that on the big data. That doesn't mean we're not accumulating, that doesn't mean we're not working on this. Again, I was just shedding some light on as to what we're thinking, as to all of these things that eventually accumulated, we will put into use. That's just an indication of what our thinking will be.
To your second question, I think even though, due to the government policies, we think near term, our past due ratio will increase slightly. However, given that our loan facilitation is going to increase as a percentage of total transaction volume and revenues. Our ending balance of finance receivables for our self-operated financing business is, we believe, is going to decrease over the time. With this to offset the near-term past due ratio increase, we think that the provision for our impairment of finance receivables is going to be relatively stable compared with the first half of this year. This is a relatively conservative approach. Okay.
Okay. Operator, this is the end of the call.
All right. That is all the time we have left for questions. I would like to pass the call back to Ms. Catherine Liu, CFO of Yixin. Thank you, ma'am. Please go ahead.
Thank you all for joining us today. If you have any further questions, please contact our IR team at ir@yixincars.com.
That does conclude our call today. Thank you for your participation. You may now disconnect.