Chiyao Huang

Chiyao Huang asked about the expected changes to Qfin's business model and loan population after the new loan facilitation rules in October, the outlook for take rates in 2026 and long-term loan economics, and the anticipated competitive landscape post-regulation.

Answer

CEO Wu Haisheng explained that the new rules would temporarily impact market size, risk, and profitability but lead to a healthier long-term environment. He detailed near-term impacts like reduced funding capacity for ICE/referral businesses, declining take rates (estimated 3-4% for Q4), and rising C-M2 delinquency. He also discussed strategies to optimize risk, improve collection efficiency, and reduce user acquisition costs. Regarding competition, he noted a shakeout in the high-pricing segment, reduced competition for traffic, and anticipated market consolidation benefiting Qfin by allowing acquisition of higher-value users at lower costs and improving user lifetime value.

Huang Chiyao from Morgan Stanley asked about Futu's mid-to-long-term strategy for its cryptocurrency business, focusing on licensing, product roadmap, and monetization, particularly the upside from a Hong Kong crypto exchange license. He also inquired about the company's learnings and competitive strategy in the Japanese market after two years of operation.

Answer

CFO Arthur Yu Chen outlined a four-part crypto strategy called 'RACE' (Real-world assets, Advanced technology, Conversions, Exchange), explaining that a Hong Kong license would lower costs, enable institutional services, and unlock new revenue from derivatives and staking. Head of IR Jingyu (Daniel) Yuan addressed the Japan market, noting its unique value proposition for self-directed US stock investors. He highlighted Q2 initiatives like launching US options trading and a successful branding event with Nasdaq, which helped drive trading volume up over 50% QoQ.

Chiyao Huang asked for a breakdown of the record client asset inflows by region, particularly from non-Greater China markets, and requested quantitative metrics on the adoption and engagement of Futu's new AI tools.

Answer

CFO Arthur Yu Chen confirmed that Q1 asset inflows were a record high, up over 50% QoQ, with Hong Kong and Singapore as the primary contributors. Daniel Yuan, Head of Strategy & IR, added that while it's early, AI tools have received positive feedback, are being integrated into membership tiers to drive engagement, and will be rolled out internationally.

Chiyao Huang of Morgan Stanley asked about the potential for integrating AI models like Deep Seek to gain efficiencies and strengthen product offerings. He also inquired about updates on the crypto business, including licensing, client penetration strategies, and competitive differentiation.

Answer

CEO Leaf Li stated that AI is already improving internal efficiency and client-facing features like news synthesis, but the company is proceeding cautiously with AI for investment decision-making to ensure accuracy. Senior Vice President Robin Xu added that crypto trading volume grew significantly in late 2024 and that the company plans to add more trading pairs, enhance capital efficiency, and launch crypto trading in the U.S. Futu has received conditional approval for its vAPP license in Hong Kong.

Chiyao Huang asked about the rationale for the special dividend, particularly in the context of overseas growth investments, and whether a more recurring shareholder return plan is forthcoming. He also requested a breakdown of sales and marketing expenses between fixed and variable components and the expected growth of the fixed budget in 2025.

Answer

CFO Arthur Chen explained the special dividend celebrates the company's 12th anniversary and 5th listing anniversary and will not impede growth. He stated that a recurring dividend policy will be revisited next year. Executive Daniel Yuan clarified that over 50% of S&M expenses are fixed (salary-related) and that headcount growth will be disciplined in the coming year as no new market entries are planned.

Chiyao Huang of Morgan Stanley inquired about Noah's ability to participate in the recent equity market excitement, the potential impact on revenue and profitability, and the firm's current asset allocation advice for clients.

Answer

Zander Yin, Co-Founder, Director, and CEO, explained that Q3 financials were not significantly impacted by the recent market rebound. While onshore client sentiment is improving, Noah's house view continues to advise clients to use RMB assets for global beta returns, emphasizing long-term allocation. Mr. Yin noted that while the core strategy is unchanged, Noah has enhanced its RMB product offerings to capture renewed client interest.

Chiyao Huang of Morgan Stanley asked for management's view on loan growth for the remainder of the year and requested more detail on how unit economics are expected to evolve under the 100% guarantee model.

Answer

Co-CEO Gregory Dean Gibb responded that demand from high-quality borrowers remains subdued, so the company will maintain its prudent approach. He reiterated the full-year guidance for new loan volume of CNY 190-220 billion. On unit economics, Gibb explained that the overall take rate has already increased to 9% from 7.3% and is approaching 14% for new business under the 100% guarantee model. He noted that while these new loans are expected to be lifetime profitable, they will likely incur an accounting loss in their first year due to up-front provisioning.

Chiyao Huang of Morgan Stanley asked for management's view on loan growth for the remainder of the year and for more detail on how unit economics are expected to evolve with the transition to the 100% guarantee model.

Answer

Co-CEO Gregory Dean Gibb responded that despite asset quality improvements, demand from high-quality borrowers remains subdued, so the company maintains its prudent full-year guidance for new loan volume of CNY 190-220 billion. On unit economics, he explained that the overall take rate has already risen to 9% from 7.3% and is expected to converge towards 14% as the book shifts to the 100% guarantee model. Mr. Gibb noted that while new loans under this model are lifetime profitable, they will incur an accounting loss in their first year due to upfront provisioning.