Good day, ladies and gentlemen. Thank you for standing by and welcome to the Jiayin Group's first quarter of 2021 earnings conference call. Currently, all participants are in a listen-only mode. Later, we will conduct a question and answer session, and instructions will follow at that time. As a reminder, we are recording today's call. If you have any objections, you may disconnect at this time. I will now turn the call over to Ms. Julia Chan, Managing Director of the Blueshirt Group Asia. Ms. Chan, please proceed.
Hello, everyone. Thank you all for joining us on today's conference call to discuss Jiayin Group's financial results for the first quarter of 2021. We released the results early today. The press release is available on the company's website as well as on Newswire services. On the call with me today are Mr. Yan Dinggui, Chief Executive Officer, Ms. Shelley Bai, and Ms. Celia CHEN, Co-Chief Financial Officer, and Yifang Xu, Chief Risk Officer. Before we continue, please note that today's discussion will contain forward-looking statements made under the safe harbor provision of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties. As such, the company's actual results may be materially different from expectations expressed today. Further information regarding these and other risks and uncertainties is included in the company's public filings with the SEC.
The company does not assume any obligation to update any forward-looking statements except as required under applicable law. Please note that unless otherwise stated, all the figures mentioned during the conference call are in Chinese RMB. With that, let me now turn the call over to our Chief Executive Officer, Yan Dinggui. Mr. Yan will speak in Chinese and then our Chief Financial Officer, Shelley Bai, will translate his comments to English. Go ahead, Mr. Yan.
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Hello, everyone. Thank you for joining our first quarter of 2021 earnings conference call. We delivered solid business growth this quarter, leaving us on a great start to the year.
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Loan growth driven by our successful integration and rapidly growing demand from institutional partners, reached RMB 4.2 billion, up 44% in YoY growth. Notably, net income came in at RMB 93.7 million, a 137% YoY increase compared to RMB 39.5 million from the same period in 2020. These solid business and financial results are valid indicators of our strong business strategy and execution capabilities.
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Now allow me to share our key strategies for 2021. First, we will continue to drive organic growth in China, deepening partnerships with financial institutions by leveraging our sophisticated risk management system and providing individual customized solutions. Thanks to our early developments in process automation and seamless system integration, our funding partners increased to 28 in Q1. We are in discussion with another 46 institutions aiming to further broaden partnership.
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Our sophisticated credit assessment system produces behavioral-driven analytics that steer our customer acquisition and retention strategies, leading us to have the ability to select high-quality borrowers while maintaining current customers. This drives up a higher repeat borrowing rate of 74% in the first quarter of 2021 compared to the 70% in Q4 2020.
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We also published our delinquency rate in this quarter, which has shown a satisfactory improvement and maintained a good trend.
We will continue to invest in technology, improve efficiency, structure, as well as maintaining asset quality at a good level for the rest of 2021.
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Secondly, we are making prudent overseas expansion, analyzing and entering markets where our technology has a competitive edge and can make significant difference. For Southeast Asia, we see Indonesia as a key market with huge potential. Indonesia is the world's fourth most populous country and has demonstrated steady consumption growth and increased individual net worth. With a robust local stock market fueling incomes and tech innovation. Through established partnerships with local enterprises, customized risk management models and technology platforms, we are making great progress and are well positioned to lead accelerated growth once we receive the fintech online lending license, which we expect within the next one or two quarters.
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We are also entering the African markets, which present unique opportunities to easily build out our platform in a region continuously leapfrogging to the next generation of technology. We established our first African business in Nigeria after rigorous research and observing the successful operations of various early Chinese enterprises. Products and services will be rolled out with a conservative approach and gradually.
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In addition, the South American market is yet another important market and we are doing very well at maintaining our leadership position despite increased competition. We aim for quality growth and will continue optimizing strategic execution and operations.
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Thirdly, we will continue to invest in financial technology development and actively participate in digital economy as a key player in the fintech evolution. Blockchains are built on principles for transparency, security and stability. The fintech evolution is at a crucial turning point, where blockchain technology and digital currencies are expected to profoundly impact society. As shared in our last earnings call, Bweenet is primarily focused on cryptocurrency related technology, from mining hardware design and distribution to mining management. There are limited downside risks as Bweenet itself does not mine cryptocurrencies. With integration of finance and operation functions steadily progressing, we expect completion within this month.
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Bweenet business development and operations will be under an independent separate team. With more institutional investment and more use cases in the financial sector, we believe growth potential is especially significant. Our strategy is to be flexible and participate in financial technology development with limited downside risks and no impact on our current business operations.
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In conclusion, 2021 will be a year of accelerated growth. We developed our top initiatives to execute the strategies I just outlined, and I am confident our team will be able to deliver outstanding results.
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With that, I will now turn the call over to our Co-Chief Financial Officer, Celia CHEN. Celia, please go ahead.
Thank you, Mr. Yan and Shelley. Thank you, everyone, for joining our call today. As Mr. Yan just mentioned, we kicked off 2021 on a strong note with impressive financial growth and meaningful business progress, placing us firmly on track to achieve our growth targets. Let me go through our financial highlights for the quarter. Before I go into details, please note that all numbers presented are in RMB and are for the first quarter of 2021, unless stated otherwise. All percentage changes are on a YoY basis, unless otherwise specified. In the interest of time, I will not walk through each item by line on this call. I will just highlight some of the key points here. Loan origination volume was RMB 4.2 billion, up 44.1% YoY and 35.1% sequentially. This was remarkable and was also the strongest growth since our IPO.
This demonstrated the success of our rapid business transformation, which laying the good foundation for us to continuously achieve robust growth in the coming future. Net revenue was RMB 343.1 million, up 9.4%. This increase was primarily due to the increase of revenue from loan facilitation services, which grew by 24.7% YoY to RMB 320.9 million. Other business grew by 8.3% to RMB 22.2 million. The increase was primarily due to the development of our overseas business. Moving on to costs. We continued to optimize our cost structure to further improve operating efficiency. In Q1, total operating expenses were RMB 229.3 million, down 12.6% from RMB 262.4 million last year.
Origination and servicing expenses were RMB 64.1 million, up 0.3%, primarily due to the increase in credit assessment expense resulting from higher loan origination volume, partially offset by reduced collection costs as the company no longer provided such services under its new business model. Balance for uncollectible receivables, contract assets, loan receivables, and others was RMB 8.0 million, down 73.7% from RMB 30.4 million in the same period of 2020. The decrease was primarily due to the relatively lower credit risk of the new business model. G&A expense was RMB 37.8 million, down 1.3%, primarily due to lower rental costs, partially offset by the increase in the other business-related expenses. R&D expenses were RMB 28.1 million, down 22.8%. This was mainly due to a more streamlined team in technology-related departments as we continue to improve our operating efficiency.
Sales and marketing expenses were down 2.4% to RMB 91.2 million, primarily due to a decrease in share-based compensation expense, partially offset by higher borrower acquisition expenses. We achieved attractive profitability through our loan volume growth and improved operating efficiency. We posted net income of RMB 93.7 million, up 137.2% YoY and 15.5% sequentially. We ended this quarter with RMB 123.3 million cash and cash equivalents, compared with RMB 117.3 million as of December 31st, 2020. Moving to our guidance. Given the recovery of Chinese economy and a fast-growing consumer finance market, we expect our loan origination volume in second quarter 2021 will be over 150% growth YoY and 35%-45% growth sequentially. With that, we can open the call for questions. Mr. Yan, Yifang Xu, our Chief Risk Officer, Mr Xu and I will answer questions. Operator, please go ahead.
Certainly. Ladies and gentlemen, we will now begin the question and answer session. If you wish to ask a question, please press star one on your telephone keypad, and please wait for your name to be announced. We have the first question. This is coming from the line of Andrew Scott from Roth Capital. Please go ahead.
Hello. Congrats on the strong results, thanks for taking my questions. The first question here that I have is the model is really showing the successful execution you guys are making with the transition to institutional partners, especially showing the strong gross margins you had in the quarter. Can you just maybe talk about the efficiencies you're realizing and you discussed on the call that are helping driving the strong results?
Yes. This is Celia, and I will take this question. Hi, Andrew. As you have mentioned, we have successfully exited the P2P business, to the loan facilitation model. In the first quarter, we have seen very strong increase in the loan facilitation volumes. Also we have seen some cost savings under different expense items. As we mentioned in the commentary, given the recovery of China's economy and fast-growing consumer financial market, we actually have a very good confidence to grow and expand the book as we did in the first quarter. We expect that our loan origination volume will grow continuously in the remaining quarters of this year, and we will continue to improve our operation efficiency and to maintain very good profitability. Yes.
Great. Thank you very much. Sorry, I didn't want to cut you off there. Second question for me, if I may. R&D expenses looked like they were down substantially in the quarter. Can you talk about your expectations there going forward?
Yes, the R&D expenses were down 22.7% YoY because we have successfully exited the P2P business. We actually made some efforts to streamline our technology department, and we optimized the personnel scheduling and related human resources. In that way, we have a more streamlined team in technologies. We see some savings in the related salaries and the compensations and also the share-based compensation. Going forward, we plan to improve our R&D investment to continuously improve our technological capabilities and efficiency to propel further growth for our company. If you look at the absolute number, I think it's a very good indicator for the remaining quarters of this year. I think we are going from this level, and we plan to improve the R&D investment level from here.
Yep. Thank you. That was very helpful. Next one, if I may. I was very excited to see the credit quality numbers disclosed in the release this morning, and it definitely reflects the shift in institutional funding. Can you just provide me some commentary on the numbers there and expectations going forward?
Sure. Thanks, Andrew, for your question. This is Yifang Xu taking all your questions on the credit result, the risk outcome. Yeah, as we are shifting our business towards institution funding portfolio, Andrew, we are facing a stronger desire from our partners to seek for better quality customers. I think that's been going on with our strategic intent starting from early last year, 2020, if you recall, that we're trying to position ourselves towards a higher quality customer base and anticipating a partnering with institution funding partners. As you can see, the risk numbers continue to improve over time. We are tackling from multiple fronts, one from our customer acquisition. We are trying to target in better customers just from the credit risk quantity. Also in addition, our existing portfolio customers that we are focusing on the better spectrums of our long-term customers.
As we learn more about our own customers, and we are able to really focusing on the customers who have a longer and a better credit outlook, risk outlook. To couple with that, also our loan collection capabilities also improved as well as our overall external risk environment. As we have seen from our peer companies have been improving over time. Our 30-day collection rate has pretty much reached an all-time high, and has been able to stay there for almost over two quarters now. That's something that we're happy to report. With all things that go in place, we're expecting our overall risk is going even better, especially with our existing customers, repeat customers book are continue to grow significantly at a significant pace. Expecting our portfolio risk is going to be even better. That'll be all.
Great. Thank you. That was extremely helpful. Appreciate the update on the Bweenet acquisition that you provided on the call. Can you just talk through some of the next steps you guys have moving forward to integrate the company and anything else that needs to be done over the next few quarters?
Yes, this is Celia. Currently we are in the middle of integrating the function of finance, operations, and other supporting functions. We expect to complete this consolidation within this month, by the end of June. In the next quarter or for the full year, we estimate that Bweenet would contribute additional 20% of net income if we can stick to the current business strategy. As we have been highlighting in the commentary earlier, Bweenet is primarily focused on cryptocurrency-related technology, mining hardware design and distributing to mining management. Actually Bweenet doesn't directly engage in cryptocurrency issuance mining or exchange, something like that. From that point of view, currently we are operating this business fully compliant with the regulatory requirements, and we will observe and watch very closely and make sure to adjust our business if necessary and keep our operations within a regulatory framework.
That is basically the status of our M&A deal.
Thank you very much. Last one, if I may. The 30% - 40% sequential loan origination growth was great to hear. That's very exciting for 2Q. Can you please talk through your expectations for year-end and it looks like you acquired some new customers this quarter, so any commentary you could provide on adding people to the platform as well would be great.
This is Yifang. I'm going to take on this question. Can you repeat the second half of your question again?
Yeah. The repeat borrower percentage was down sequentially. It looks like you successfully added new customers to the platform. Any commentary you have there would be great.
Sure. We are expecting our next quarter's outlook, which is at a range of some 30+ range from QoQ growth, which is even better than what we have seen this quarter. We don't have a number for the overall yet, but I am definitely expecting a stronger growth for the second half of this year. We just want to take the numbers out a little bit and keep looking at it Q1 of our growth. The growth is primarily coming from two fronts. One is as we are transitioning very close to our 2Q peak as we know them for last year, we are seeing our institution partners have gained significant confidence and interest in our portfolio just because of our asset and our past performance and the risk metrics.
We are seeing more traction from our institution partners to come on board, and we are seeing a pretty good growth from a number of institutions that we are talking today and the healthy pipeline still in place. With a strong funding supply that we are seeing our loan originations are seeing the similar traction to them. In Q1, we are in the first phase in terms of our repeated customers portfolio. As you can see, our percentage of the loans from the repeated customers have grown compared to last quarter. Similarly, we are starting expanding our new acquisition portfolio in the middle of Q1. It's very likely that in Q2, we are going to see a higher percentage of the books coming from our new origination customers. That's just driven by the growth.
I'm going to talk about the risk in a little bit. We are slowly building the first phase to grow our new acquisitions as well. At the same time with our repeated customer base, we are still looking ways to grow that as well from several aspects, from the product diversification by offering a wide range of the base rates as well as the product terms. In our triple base on marketing capabilities, we are expanding to a full spectrum of the customer lifespan. Lastly, more importantly, is also the customer experience. We are getting into every detail of how we are interacting with the customers, trying to further improve our customers' engagement rates. On the new customer acquisition front
As I said earlier, that Q1, starting middle of Q1, that we have started getting more traction on getting new customers. That has been stepping Q2 and Q3 out. We are acquiring customers through full spectrum of marketing channels, including information-based marketing, our partnerships with other internet-based platforms, et cetera. We are focusing more on deeper customers throughout our spectrum. In the second half of this year, we're expecting that we're going to focus a little bit more on optimizing our acquisition costs throughout these marketing channel metrics. Even though we are focusing, like I said earlier, that we are going full speed on Q2 in terms of new customer acquisition, we're taking a pretty prudent view in terms of the portfolio risk management.
This has always been the core of our lending business, trying to take a very critical and I would say slightly conservative view. We are maintaining a very healthy buffer there in terms of our risk expectations and all the underlyings are trending. As such, more comprehensive portfolio and channel specific views, trying to make sure that we are gaining the growth, but not at a cost of deteriorating credit risk. That's our view of what we are expecting from a lending perspective in terms of the volume. Hopefully that will be fully supported by our continued growth with our institution partners, that in the second half of this year, we are definitely going to see a much stronger second half year compared to the first half of this year.
Great. Well, thanks very much, and once again, congratulations on the strong quarter.
Thank you.
Thank you. Once again, ladies and gentlemen, hit star followed by one if you wish to ask a question. Seeing no more questions, I will return the call to Ms. CHEN. Please go ahead.
Thank you, operator, and thank you all for participating on today's call, and thank you for your support. We appreciate your interest, and I look forward to reporting to you again next quarter on our progress.
Thank you. Thank you, ladies and gentlemen, that concludes our conference call for today. Thank you all for your participation. You may disconnect now.