Alex Yee

Alex Yee asked about the expected normalized take rate after asset quality stabilizes following current regulatory changes, and the company's share buyback plan, including the current unused quota and future pace/scale.

Answer

CFO Jiayuan Xu explained that the normalized take rate for the risk-bearing portfolio should track towards the normal period, considering risk fluctuations, funding costs, and operational efficiency, while acknowledging near-term P&L impact from risk. He also detailed the active share repurchase efforts, noting the accelerated pace in Q4 2025, and reiterated the commitment to shareholder returns through both dividends and buybacks, emphasizing the current stock valuation makes buybacks an effective value creation method.

Alex Yee asked about the expected normalized take rate for risk-bearing loans after asset quality stabilizes under the 24% cap, and for an update on the current unused share buyback quota, including specific guidance on the pace and scale of buybacks over the next 12 months given market uncertainties.

Answer

CFO Jiayuan Xu explained that the normalized take rate for risk-bearing portfolios should track normal periods, considering risk fluctuations, funding costs, and operational efficiency, while acknowledging potential P&L impact from near-term risk. Regarding shareholder returns, Mr. Xu stated that $78.4 million worth of shares had been repurchased as of November 14, with an accelerated pace in Q4, and reiterated the commitment to steady dividend per share growth, emphasizing buybacks as an effective value creation tool given the current stock valuation.

Alex Yee from UBS questioned Qifu Technology about its asset quality trends, specifically asking for monthly changes in October and November compared to Q3, and whether there was an accelerated deterioration. Yee also asked when management expects asset quality to stabilize and peak, assuming no further regulatory changes, and what upside or downside risks to be aware of.

Answer

Zheng Yan, CRO of Qfin Holdings, stated that high-cost funding tightened further in October, and industry risk levels rose in Q3, leading platforms to tighten risk policies and exacerbate liquidity issues. However, November showed positive signs with early risk indicators for new loans stabilizing and improving (FPD7 delinquency rate for new loans in September decreased by 8% vs July). Yan noted the 7-day delinquency rate in November was broadly flat compared to October. He explained efforts to optimize risk structure by increasing high-quality users and improving collection efficiency, but cautioned that full portfolio improvement takes 2-3 quarters, and the adjustment cycle might be longer than expected.

Alex Yee asked about the monthly asset quality trends for September, October, and November, specifically if there was accelerated deterioration versus Q3. He also asked when management expects asset quality to stabilize and peak, assuming no further regulatory changes, and what upside/downside factors to consider.

Answer

CRO Zheng Yan stated that high-cost funding tightened and industry risk levels rose in Q3, leading all platforms to tighten risk policies. However, positive signs emerged in November, with early risk indicators for new loans showing stabilization and slight improvement (FPD7 delinquency rate for new loans in September decreased by 8% vs. July). The seven-day delinquency rate in November remained broadly flat compared to October. He outlined Qfin's strategies to lower risk, including increasing high-quality users, optimizing operations for low-risk users, and improving collection efficiency with AI. He noted that while early signs are positive, it's too soon to confirm the trend, and it might take two-three quarters for improvements to show in the overall portfolio due to the nine-ten month loan tenor. He expressed confidence in managing through headwinds due to solid provisions and profit buffers.