The Zhitong Finance App learned that Jiayin Technology (JFIN.US) recently released its 2023 financial report. Both revenue and profit reached new highs, achieving revenue of 5.47 billion yuan, up 67.1% year on year, net profit of 1,298 billion yuan, and net interest rate of 23.73%. During this period, the company contributed to a transaction amount of about 88.1 billion yuan, an increase of 58.7% year on year.

Jiayin Technology's performance was strong. It maintained steady growth for 12 consecutive quarters, actively paid dividends to shareholders, and announced two cash dividends. The total amount of cash distributed in the past two dividends was approximately US$42.7 million, accounting for 25% of net profit after tax in 2022. Furthermore, the company has boosted investor confidence through repurchases. Up to now, it has repurchased 10.6 million US dollars and raised the repurchase limit to 30 million US dollars.

The company's management is confident about the future and expects the loan target to increase to $93-98 billion for the full year of 2024, of which the target for the first quarter is $22 billion. Yan Dinggui, chairman of the company, said that in 2024, it is expected that when market conditions improve, it will continue to return greater value to shareholders by maintaining or increasing dividends.

High increase in performance and stable user stickiness

As a leading fintech service group in China, Jiayin Technology's performance has always had a leading edge in the industry. In 2020-2023, the revenue scale increased from 1.3 billion yuan to 5.47 billion yuan, and shareholders' net profit increased from 253 million yuan to 1,298 billion yuan, with compound growth rates of 61.44% and 72.47% respectively. In 2023, the company contributed to loan transactions amounting to $88.1 billion, maintaining double-digit compound growth.

The company actively explores multiple cooperation models with financial institutions, deepens all-round cooperation in the fields of operation, technology, risk management, and consumer rights protection, and explores more technical application scenarios other than loan promotion, such as empowering financial institutions to build digitally. The introduction of new quality productivity in 2024 is expected to accelerate the digital construction of the financial industry, which may bring huge business opportunities for cooperation to the company.

High-quality loan users are also an advantage of the company's multi-business cooperation with financial institutions. On the one hand, Jiayin Jinke continues to optimize the customer base structure. On the one hand, it accurately matches financial institutions through fintech and AI technology to increase the proportion of high-quality users and optimize the customer base; on the other hand, it increases the market development of different user groups for financial institutions, especially the micro, small and medium-sized enterprise market, and continuously increases the financing share of micro, small and medium-sized enterprises. In 2023, its user stickiness was further stabilized, with a repeat loan ratio of 72.9%, and an average loan amount of 9,944 yuan per item, all of which maintained an upward trend.

The company has built an efficient bridge between users and financial institutions, and formed a healthy closed loop. Under multiple feedbacks, institutions are willing to lend more capital to promote sustainable growth in the scale of loan aid. At the same time, the company drastically reduced customer acquisition costs through refined marketing strategies, elimination and adjustment of long-tail channels, and increased conversion rates. For example, marketing expenses in Q4 in 2023 fell 11.9% year-on-year, increasing profit levels.

It is worth mentioning that Jiayin Technology has adopted a global strategy to expand overseas market development and expand growth space. In the Nigerian market, achieving a breakthrough in business scale is quite challenging under the premise of local exchange rate fluctuations and market risk fluctuations. In promising pan-African markets such as Tanzania, the company is also actively seeking layout opportunities, particularly Indonesia. Local regulators have put forward new requirements to lower rates, which may be another key market for the company.

AI strengthens fintech and continuously optimizes quarterly expenses

Jiayin Technology has been recognized by financial institutions and users. The core is that fintech is in a leading position in the industry. It has accumulated nearly ten years of technology and has industry-leading fintech products such as Internet credit systems, risk control decision engines, and AI algorithm modeling. It is increasing investment in R&D every year, and the product results are remarkable. In 2023, the company's R&D expenses increased 36.4% year on year, and the R&D expenditure ratio was 5.41%.

In 2023, AI ushered in a wave of development, and the empowerment of AI technology in the industry mainly includes multiple dimensions such as anti-fraud monitoring, marketing customer acquisition models, and intelligent quality inspection of customer service. The company pioneered the layout, first changing the name of Jiayin Jinke to “Jiayin Technology”, in line with the development trend of cutting-edge technology represented by artificial intelligence in domestic and foreign markets, and then took the lead in launching competitive AI products in the industry to seize market opportunities.

For example, the company launched a self-developed “Women's Seat Support” smart seat support platform, which was in a leading position in related fields once it was launched. It uses technologies such as speech-to-text, natural language processing, large models, and vector knowledge bases to provide real-time risk reminders, product knowledge recommendations, and automatic conversation summarization to agents in different business fields to improve the work efficiency of the staff and the quality of enterprise operations.

AI has strengthened the level of fintech and consolidated the company's steady risk control capabilities. In 2023, the company's 61-90 day overdue rate was 0.68%, which remained low and superior to the industry average. In addition, the company applied self-developed technology to the anti-fraud process. In 2023, it identified and blocked about 415,900 high-risk inertial fraud applications, manually investigated and disposed of more than 52,000 potentially high-risk customer applications, and proactively blocked the fraud chain.

In fact, with its excellent fintech capabilities, Jiayin Technology has been recognized by the industry and empowered partners and business growth. While driving revenue growth, it is also comprehensively optimizing various expenses. On a quarterly basis, in Q4 2023, thanks to refined management, the company's core sales expenses ratio and administrative expenses ratio were 20.59% and 4.06%, respectively, down 14.9 and 1.54 percentage points from the previous year.

Adhere to sustainable development and value shareholder returns

Jiayin Jinke adheres to the path of sustainable development and continues to invest in ESG. For example, starting in 2021, it cooperated with the Shanghai Song Qingling Foundation to establish the Jiajing Charity Special Fund to help young people develop their mental health; in addition, it paid attention to groups with special difficulties and set up a special green channel to provide relief assistance to customers facing life difficulties due to special circumstances such as major illnesses, unemployment, and accidents. In 2023, the company helped 9,900 needy customers, including 592 customers in major natural disaster areas such as Beijing, Hebei, and Gansu.

Consumer insurance work is at the core of the fintech industry, and the company continued to protect consumer rights throughout 2023. According to the 2023 Consumer Insurance White Paper disclosed, in 2023, the “Qiming Star” system changed the risk warning level more than 110 times, warned external risks more than 47,000 times, manually controlled risks in a timely manner about 330 times, and the identification accuracy increased to more than 95%, providing strong support for the fight against financial fraud. The company has served a total of 43,80,137 customers throughout the year, with a satisfaction rate of 98.34%, and various consumer insurance campaigns covering 26 million people.

At the same time as sustainable development, Jiayin Technology is also actively improving shareholder returns, announcing a policy of paying dividends twice a year, and implementing it. The total share of the past two dividends reached 25%. It is important to know that the company's current valuation level is less than 2 times PE (TTM). Attractive dividends will greatly boost shareholder returns. However, the company's market capitalization premium return is very high, and the market value has increased 2.3 times since 2022.

Jiayin Technology's performance has increased rapidly, focusing on sustainable development. The results of ESG and consumer insurance work have been outstanding. Under the temptation of a twice-yearly dividend payment policy, increased repurchases, and undervaluation, the market value is expected to continue to break out of the trend.