Lexin released its Q3 earnings report: revenue of 3.51 billion dollars increased 30.4% year-on-year, scale and profit increased steadily, showing unique ecological advantages

In the third quarter, Lexin's unique ecological advantages began to show: the mathematical business achieved rapid growth, and the cooperative transaction volume increased 59% over the previous month; the scenario e-commerce business continued to grow for several quarters, and GMV increased by 12.8% year-on-year. During the recent Double 11 promotion period, e-commerce order placement users increased 37% year over year, driving the turnover of high-quality active users in the consumer finance business to increase by about 12.4% over the same period last month.

In the third quarter, based on the challenges brought about by uncertainty in the macroeconomic environment, the company appropriately tightened risk strategies to balance growth and quality to ensure steady business growth. Financial data showed that the transaction volume in the third quarter reached 63.3 billion yuan, an increase of 13% over the previous year; the management loan balance increased to 120.7 billion yuan, an increase of 28% over the previous year; and the number of users increased 11.3% year on year.

Financial reports show that in the third quarter, with the deepening of refined operations, the company's profitability continued to improve, and total operating expenses fell 7% year-on-year; with the further expansion of high-quality financial institution partners, capital costs fell 21 bps from the second quarter, reaching another record low.

Xiao Wenjie, CEO of Lexin, said, “Facing the current industry and macroeconomic environment challenges, we continued to promote the implementation of a two-wheel drive strategy for risk and data in the third quarter, adopted a prudent and steady strategy, and continued to consolidate the underlying capabilities, and achieved good performance growth. Looking ahead to the fourth quarter, in the face of a complex and uncertain external environment, we will continue to uphold the principles of prudent management and priority risk management, continue to promote risk reduction and asset quality improvement, and focus on balancing growth and asset quality.”

Financial reports show that Lexin's unique ecological advantages made significant progress in the third quarter.

The mathematics business grew rapidly in the third quarter, with cooperative transactions increasing 59% month-on-month. Cooperation with many urban commercial banks and agricultural commercial banks was strengthened in depth, and commercialization capabilities were further improved. The mathematics business is currently accelerating its pace of expansion and further expanding its scale to help more urban commercial banks and agricultural commercial banks achieve digital transformation of retail credit. Close cooperation between mathematics and financial institutions has, on the one hand, promoted the rapid growth of the business itself, but also brought more room for imagination to the all-round cooperation between Lexin and banks, brought better collaboration to the consumer finance business, and promoted the deepening of financial cooperation between consumer finance and financial institutions.

Scenario e-commerce business continued to grow for many consecutive quarters. The GMV of Phased Le Mall reached 1,381 billion yuan in the third quarter, an increase of 12.8% over the previous year. The phased shopping mall focuses on serving high-quality and high-growth consumers such as the post-90s and post-95, giving full play to the characteristics of instalment. Focusing on the ultimate pursuit of cost performance by young people after the pandemic, it focuses on creating a trendy phased experience in terms of merchant introduction and category operation, and further explores the consumption potential of young consumers. During the quarter, Instalment Mall continued to consolidate the direct authorization of leading mobile phone brand manufacturers, maintain an advantage in scarce new products and the first batch of supplies to better drive the consumption potential of high-quality users; continued to expand and introduce categories loved by young people, such as luxury goods, sports, and pets. The number of new merchants covered 241 brands, an increase of 51% over the previous month, retaining more users to spend on the site and enhancing the stickiness of active users.

During the Double 11 period, the number of orders placed by the Installment Mall increased 32% year on year, and the number of users who placed orders increased 37% year on year; the stickiness of active users continued to increase; the number of active users traded increased 48% year on year, and the number of transactions increased 51% year on year. The dominant categories of 3C digital, home appliances, etc. welcomed explosive growth. Among them, sales of home appliances on the day of Double 11 increased 600% on a daily basis compared to the previous seven days. In addition to the dominant categories, on the day of Double Eleven, the food and department store category also showed impressive growth. The sales volume on that day was 30 times the average daily sales volume for the previous 7 days.

The e-commerce double 11 period has led to an increase in transactions between high-quality active consumer finance users. The transaction amount increased by about 12.4% over the previous month. Active consumer spending users also further boosted e-commerce consumption, forming a business ecosystem with enhanced circulation.

The inclusive business strengthened a number of low-level capacity building in the third quarter, including organizational structure upgrades, sales management system improvements, and standardized talent training. The inclusive direct customer acquisition team covering 30 provinces, municipalities and autonomous regions and 336 cities will continue to promote the improvement of the company's risk identification capabilities and the reduction of customer acquisition costs in the era of accurate online+offline identification through the risk control model of accurate online+offline identification, and will further enhance Lexin's competitive advantage in the era of homogenized stock competition.

With its unique ecological advantages, Lexin has been selected on the “China Top 500 Service Enterprises” list four times, ranking 9 places higher than last year. It is the only company in the fintech industry that has been selected four times.

Financial reports show that Lexin continues to invest in technology to gain stable support for its two-wheel drive strategy and solidify its competitive advantage.

In the third quarter, Lexin invested 127 million yuan in R&D, continuing to lead the industry. Within the quarter, Lexin iterated and perfected the global model of the user life cycle, and implemented more AI model scenarios. Focusing on the essence of financial business, from data lineage sorting and model building to systematic tool construction, we strive to build a leading full-chain quantitative management system to improve operational efficiency and customer experience.

In the third quarter, Lexin continued to increase its investment in data mining and model building. Introducing more data sources, constructing an identification system centered on the People's Bank Credit Information System, and improving the model framework for the entire life cycle from customer acquisition, risk, and operation. The ranking and stability of the model have improved by 10%-20% compared to the previous one. Major upgrades have been made to the new customer model and strategy, and remarkable results have been achieved. The customer acquisition efficiency of information flow increased by 38.5% compared to the first quarter. The acceptance rate of new customers, the number of trading users, and the amount of loans promoted all increased by more than 20% compared to the control group; early admission indicators fell by nearly 20%.

Through pre-training of exclusive financial data and fine-tuning of business data, in the third quarter, Lexin accelerated the implementation and application of AI models in the company. In terms of business interaction, it has now been fully implemented in major business processes such as telemarketing, customer service, and collection; in terms of productivity improvement, it is widely used in scenarios such as R&D code assistance, design creativity generation, and data analysis to improve the company's overall operational efficiency.

At the same time as two-wheel drive high-quality development, Lexin actively fulfills its corporate social responsibilities. Small and micro enterprises are an important pillar of the national economy, and financial services are a booster for the development and growth of small and micro enterprises. The Lexin Inclusive “Small Store Fireworks Program” alleviates the financial “stuck neck” problem of small, small and micro enterprises through four special services: high quotas, fast review, good service, and low cost, to help develop the real economy. At present, Lexin Inclusive has provided high-quality financial services to more than 4 million small, micro, and individual businesses, with a transaction volume of more than 35 billion yuan.

In the third quarter, Lexin upgraded its consumer rights protection measures. On the basis of the “5S protection system”, Lexin built a comprehensive security firewall for consumers through four major measures to strengthen the data security management system, improve anti-fraud protection capabilities, increase intelligent customer service applications, and strengthen the crackdown on financial black production. In the first 8 months of this year, Lexin intercepted 160 million data security attacks, and the data protection and governance system maintained a record of zero data breaches since launch; the anti-fraud system avoided user losses totaling more than 470 million yuan; and customer service satisfaction increased to 99.6%. Recently, in order to help improve public financial literacy, Lexin joined hands with the Guangdong branch of the central bank to promote the implementation of the “Financial Education Project”. Currently, it has entered 30 primary and secondary schools and vocational and technical colleges in Guangzhou to promote anti-fraud knowledge. Previously, Lexin joined hands with the Beijing Anti-Fraud Center and the Anti-Fraud Alliance several times to launch “police and enterprise anti-fraud charity trips” to comprehensively establish a national anti-fraud defense line.