Yixin Group Limited (2858) Earnings Call Transcript & Summary

Dear investors and analysts, good evening. Welcome to the Yixin Group 2024 Interim Results Conference. Our conference is held in the form of online streaming plus teleconference. Please allow me to give the introduction of the management team of the group who present this interim result conference. They are Mr. Xuan Zhang, the Chairman and the CEO of the company; Mr. Gao Zhi, the Co-CEO of the Group; and Mr. Yang Xiaoguang, the CFO. And this conference, we'll first welcome Mr. Xuan Zhang, the CEO and Chairman of the group to give the remarks. Welcome.

Okay. Thank you, moderator, distinguished investors and as well as investor's friends. Good evening. I'm Xuan Zhang, the Chairman and the CEO of Yixin Group, and I'd like to welcome all of you to Yixin Group 2024 interim results conference. On behalf of the company, I would like to extend my heartfelt thanks to all of you who are concern and support. Today's session is divided into the following sections: First, I will give the introduction of the company's prospects and development of the industry; and then Mr. Gao Zhi, the President, will give the introduction the highlights of the business in the first half; and then we'll have Mr. Yang Xiaoguang, our CFO, to introduce the company's financial performance of the half year of 2024. Then I would like to introduce some of our plans and thoughts about the future development. Then finally, we will also leave some time for Q&A and further exchanges. So let's go to Slide 4. I'd like to give the introduction of our group. The company has been deeply cultivating the talented teams in the fields of auto field industry for 10 years, and it's -- we had already our 10th anniversary. And we are pioneer in China's auto financing ecosystem. The company's main business covers new cars, second-hand cars, new energy vehicles, finance and financial technology, FinTech, as the current key areas of development. And we have more than 36,000 partners across all provinces in Mainland China. And on the funding side, we've partnered with more than 100 financial institutions, including banks, trusts, financial leasing companies and so on. Tencent and JD are 2 of our major shareholders. The company continues to collaborate with them on data, technology and other aspects, with a comprehensive competitive advantage formed in various aspects that mold the company's development. Next, I'd like to talk about the major development history of the company, and it's mainly about our penetration in the auto industry. And it's worth mentioning that in November 2023, the cumulative auto finance and transaction volume exceeded RMB 300 billion and also finance transaction volume has exceeded 4 million units by May of 2024, which demonstrated our top strength in the industry. In terms of the industry, let's first look at the development of the new energy vehicles. Vehicle sales in the first half of 2024 maintained a high performance growth. According to China Passenger Car Association, in the first half of 2024, the sales of NEV is about 4.11 million units, increased by 33%. By June 2024, the new energy terminal retail penetration rate has been close to 50%. With increasing penetration, new energy vehicles have gradually taken over the leading role in China's automotive industry. So the industry has been boosted by a wide range of supportive policies and favorable policies, which continues to improve infrastructure. Internally, for the first half, new energy vehicle continues to get policy support, ensuring new energy vehicles' in rural areas, and other favorable policies stimulate further the rate of consumption potential. So new energy supporting infrastructure mainly consisting of charging piles and the battery swapping stations has been continuously growing. As of June 2024, the number of charging piles in China reached 10.24 million, the number of battery swapping stations reached 3,722 nationwide. And China has built the largest number and widest range of service and the most complete variety of the complementary energy infrastructure system. And as guided in the policy, the future automobile industry will accelerate the transformation of electrification. And next, let's talk about the new and used car market in general. According to the AAM (sic) [ CAAM ], sales of new passenger cars in the first half of 2024 is about 11.98 million units, increased by 6.3%, and the number of new passenger cars sold in the first half of 2024 increased by 6.3% year-on-year. And according to the Automobile Dealers Association, in 2024 first half, second-hand passenger vehicles transaction amounted to 7.53 million units, increased by 6.9%. And we can see the first half domestic demand growth is relatively slow. Auto industry as a whole is under pressure and the price war continues through this year. As a pillar industry of the national economy, the automobile industry get a lot of support from the central, local governments, and we made joint efforts in guiding the competition and encouraging the long-term consumption. At central level, the city council and various departments have taken serious consideration and various measures to introduce a series of policies to stimulate automobile consumption centered on treating -- focusing on the whole lifecycle of automobiles such as new cars, second-hand vehicles and aftermarkets. And local governments actively promotes implementation of various support policy, such as in the first half of 2024, the [ Nanjing ] Group and other places launched the treating activities as well as the other series of activities to promote development. With the first realization of the policy effect to further release the consumer potential, the second half of the industry pressure may be eased to a certain extent by the second half and automobiles sales will maintain moderate growth. Next, let's look at the auto finance, the FinTech market in general. First of all, the auto finance industry. China's auto finance industry is generally in a healthy stage of development. The government has continued to pay attention to the development of this sector. And in the first half -- the policies encourage financial institutions to provide more credit support for automobile industry and adopting policies such as adjusting the ratio of automobiles loans. And in terms of financial penetration in China's automobile market, there's still a big gap compared with the mature market. And with the gradual correction of both supply and demand, the penetration rate of automobile finance will return to its upward track, and there is still a broad space of the development in the future. And FinTech, as an important tool for the high quality development of the financial industry, FinTech can help promote the release of the consumer potential and empower the development of the new productivity. This area is also supported by policy. The People's Bank of China encouraged the integration of the digital elements into the entire process of finance service to realize the implementation of technology in the entire chains of financial services. According to the third-party data, the FinTech market size will reach about RMB 700 billion in 2024, close to RMB 900 billion next year. With the advancement of the digital transformation of financial institution, FinTech has been utilized in more scenarios. The actual business needs has driven the development of related technology products and in bringing communities to more financial institutions. Next, let's welcome Mr. Gao to introduce the company's business development in the first half of 2024. The floor is yours, Mr. Gao.

Okay. Good evening, everyone. I'd like to give the introduction about our business situation in the first half. In the first half of 2024, in the face of the complex external environment, Yixin Group demonstrated the top-level performance as a top-level player in the industry. The company's business still maintains growth and the income of each segment continues to improve, profitability is significantly enhanced. The main highlights of the company's operations are as follows: firstly, our core business is developing steadily and we're seeing structural growth opportunities. In the first half of 2024, the amount of automobile financing reached RMB 31.5 billion and increased by 4% Y-o-Y. Financing amounts of the new energy vehicles grew rapidly compared with same period of last year. It increased by 63%. Moreover, our FinTech business realized explosive growth, with the financing scale facilitated in the first half of 2024 reaching RMB 9.7 billion. Second, value-added services revenue continued to rise, up 18% Y-o-Y to RMB 123 million. Thirdly, the asset quality continued to improve, with 90-plus days past due ratio down 3 bp to 1.86% compared with the end of 2023. Next, I'd like to give you a detailed introduction of some of the company's business development. First, the core business of the company, automobile financing service. The first half of the year, the company's total auto finance transaction volume of 329,000 units, up by 5% Y-o-Y. As for the new cars, the volume of transaction in first half 2024 totaled 175,000 units and the financing amount reached RMB 17.5 billion, and a slight decrease of 3% Y-o-Y. And it's mainly due to our tendency to focus -- to reshape our focus and focus more on the profitable financing business, and we will focus more on the business with a better profitability. And in the first half of the year, against the backdrop of more enhanced competition, [indiscernible] optimized our cooperation with OEMs by upgrading and transforming standardized business process and the interface to improve the efficiency and the flexibility of our service. For example, the intelligent interest rate function can automatically calculate the amount of the interest rates according to the manufacturer's policy, helping the front-end to source parts more efficiently. In terms of the second-hand vehicle, the transaction volume in the first half amounted 154,000 units, financing amount was RMB 13.9 billion, with a growth of 13%. The company will maintain a balanced asset structure. And in the long run, the used car business will always be a key business area of our company. Through our experience and the dedicated team and strict channel management, we'll adjust our strategy in time to capture market share while ensuring asset quality. Now I'd like to introduce the new energy vehicle segment. It's a very important driver of our growth. In the first half of 2024, the total volume of the new energy vehicle reached 70,000 units, up by 78% Y-o-Y. Financing amounted to RMB 7.1 billion, up by 63% Y-o-Y. The company's new energy business continues to grow at a high rate due to the following 2 factors: First, a wide range of brand partnership. We've been working with OEMs in the new energy sector in depth and including cooperation with more than 10 new energy sources to enhance the influence in the industry. And secondly, we emphasized on product innovation to adapt to the changing market. For example, we have introduced a 0% down payment in the long-term product to provide more options for new energy vehicle owners. And the share of the new energy vehicle business continues to climb, and with financing for new energy vehicle already accounting for 35% among new vehicles in the first half of 2024. The rapid growth of the NEV ownership has also brought opportunities to the second-hand new energy vehicles market. In terms for the first half, the proportion of used car transaction volume that includes the new energy business has already grown to 12.4%. And in the new energy automobile industry, with the relatively shallow degree of financial binding of the whole sector, third-party institutions like Yixin can better utilize their advantage and strength to provide customers with more comprehensive automobile financial services and also help improve the financial penetration rate in the industry. Next, I would like to talk about the FinTech business. Since we formally launched our FinTech business from 2022, the segment has been growing rapidly. There's 4 major highlights in the first half of the year. In terms of the cooperation and expansion, the number of FinTech finance institutions further increased to more than 50 and the number of the newly launched cooperation projects reached 7 projects, including the cooperation with Bank of Nanjing and the Shengjing Bank. The financing transaction still continues to rise. Financial transaction facilitated by FinTech amounted to RMB 9.7 billion, up by 264% Y-o-Y. The revenues realized continue to see positive growth. The FinTech revenue reached RMB 835 million, up by 867% Y-o-Y. So firstly, capture industry trend through a new model. The penetration rate of the new energy in new vehicles and the model is about 46%. And the company's financial technology service has gradually developed 2 business models. One is to operate the pure technology products, and it's about to operate technology solutions with the partners such as the models to help to screen high-quality customers and reduce the risk of fraud. The other is operative technology plus the tracker service, that is the aggregation of transaction at the same time, but also to provide more technological empowerment. For example, in our cooperation with the [indiscernible] we're providing customers with auto finance needs for organization, and at the same time, it empowers them in terms of the product management, risk control management. And these kinds of financial technology service will apply cutting-edge technology and adopting more scenarios to provide technological empowerment for the automobile finance market and even more institutional partners in the financial field. The company expects that in 2024, the transaction scale facilitated by financial technology mode will exceed RMB 20 billion. Now let's look at our value-added service, and it's mainly about focusing the customers' demand, providing car-wide supplemental reinsurance product. In the first half of 2024, value-added service achieved revenue of RMB 123 million, up by 18% Y-o-Y. The first half of the year, the transactions were wide and interest package was 171,000, up by 13% Y-o-Y. Our battery GAP business launched in May 2023 received really good feedback in the market. In the first half, 22,000 units were completed, an increase of 228% compared with the second half of 2023. The company has expanded battery GAP product to the field of the new energy vehicle and has solved the concerns of battery depreciation and residual value for more new energy owners. In addition to the [indiscernible] equity platform, it also provided more convenient value-added services for [indiscernible] customers to the online equity mode. And the institutional cooperation is a strong guarantee for the long-term development of our value-added services. Yixin will continue to explore with its partners to deeply tap customers. And our core competitive advantage are contributing to 2 effects. The first relates to our scientific technological capabilities. The Titan cloud platform developed within the group applied AI to all business things through quality inspection robots, review robots, call robot, approval robots and assistant robots to help improve the operational efficiency. And actually, our Titan cloud platform already helped a lot of our partners in depth to bring values and extra value to them. Our quality inspection robot can automatically monitor the compliance of the agent's behavior. The risk review robot can help improve the accuracy of the review in contract review and other scenarios. Approve the application robots in controlled scenarios can help improve automatic pass rate of risk control, which will reach 54.3% in the first half of 2024. The assistant robot is used in the customer service system to help solve customers' doubts in the future, or apply digital AI capabilities to mostly reduce labor costs and improve management efficiency and lead the industry to a transformation into a data-driven development model. Another important core competitive advantage is our integrated risk management system. Yixin's risk management system covers a whole process of the business and it can effectively control the risks before, during and after the financing. And in all 4 segments, we applied AI technology in public campaign monitoring and car price assessment to reduce the risk of fraud due to inflated car prices. In the first half of 2024, the program [Audio Gap] reached hundreds of the many installers and won government awards. And in the credit assessment process, we leveraged our self-developed credit assessment system to conduct a multidimensional credit assessment based on our huge data assets and the precise algorithm model. In the post loan collection process, our asset center in Shanghai conducted full lifetime management of assets to review assets dynamically in a timely manner. Through the collection strategy, we proposed the solutions for assets at different stages in the different stages. In addition, we've set up an asset auction platform to optimize the value recovery of the assets. Next, we have Mr. Yang to talk about the financial performance.

Okay. Hello, everyone. Good evening. Now it's my turn to give the introduction about the financial results and performance of the first half. Now first, I'd like to talk about the financial highlights of the company. The assets under management continued to grow, reaching RMB 99.6 billion at the end of the year, and also increased our operating income with rapid growth, reaching RMB 4.47 billion in the first half, up by 57%. The operating expense ratio continued to decline. The ratio of marketing management research expenses to revenue dropped to 22% from 28%. The net profit continued to increase, reaching RMB 410 million in first half 2024, up by 54% Y-o-Y. And then still we will present -- we can see adjusted net profit growth by over 20%. And in terms of the asset management amount and compared with the previous year, now by the end of June, the asset under management reached RMB 99.6 billion at the end of June 2024, up by 29%. It's worth mentioning because the vehicle business grew really quickly, so there is RMB 600 million of the asset under management. And these are about our well-controlled assets and the risk asset. So this is a really significant improvement of that. And next, I would like to talk about the performance in detail. So overall revenue, as I just mentioned, of RMB 4.47 billion indicates the revenue structure. We can see that the loans account for 42%. And when we look at the pie chart, we have a pretty diversified structure as the revenue and the loan facilitation accounts for a big part. And especially for the FinTech, the amount is about RMB 8.35 billion, really nearly 20%. So this is a fast growth compared with last year because last year the share is really limited. So you can see that in this part, the proportion will further increase in the future. For the self-supporting revenue and the self-operated leasing business also reached a revenue of RMB 900 million. And compared with last year, it also grew largely. And for the other platform revenue, about RMB [ 8.1200 ] million also accounted for nearly 20%. And our value-added services, that was [ profitable ] business, as was battery business, which also grew largely in the first half. You can see that our revenue structure is more diversified, which can better support our profit and P&L to make sure we deliver 50% over growth of our revenue. Now let's look at the gross profit growth of the company. Next slide. For the self-operated business service provided through finance leasing, interest income recognized per period, we can see the net interest of that of leased assets declined year-on-year. It's mainly due to, firstly, about the structural change. Also in the first half of the year, the second-hand vehicle grew substantially, but the self-operated business is mainly about the new car business. So that's the reason why the net interest spread declined a little bit. But actually, our revenue remained at a really stable situation. And at the same time, our capital cost for several years have been declined step by step, and later I will give you a detailed introduction about the primary reason. And for the facilitation loan business, we had a stable growth. While speaking for the gross profit, it dropped by 2% compared with the previous year, reached 48%, and as Mr. Gao mentioned, due to the market competition, which impacted also our profit. And for the auto finance asset, it's actually easy to be impacted by the national bank as well as the financial market impact. And the customer acquisition costs will also increase. That's the reason why we have a slight drop. But still in a really healthy level. And the gross profit is about RMB 22.13 billion with Y-o-Y growth of 13%. And about the operating expenses, our expenses have been reduced from 28% of last year to 22%. And this is really substantial optimization. It means that our operational efficiency as well as our scale economy has been well showed up. And in the future, this trend will continue in our business and continue to reflect the benefit to our business. And in the future -- for the long run, R&D direction will have more exploration, for example, [indiscernible] as well as AI technology. So I think that the efficiency in the future will be further increased. And with the foreseeable future, we can further improve our efficiency. And we can see that this is about the first time we exclude the credit loss of about 14.7%. And when we refer to the market upgrade, it's a really healthy status. At last for the net profit with a Y-o-Y growth of 56%. And the company's profitability continued to strengthen with rapid growth over the last year. In the first half, the net profit reached RMB 410 million with a net profit margin of 9.2%. And taking to the cost adjustments for non-cash items, non-profit and the non-IFRS profit reached RMB 507 million with adjusted net margin of 11.4%. And now let's talk about the assets and the liability. And the first half of the year in fund raising we've received really good results, and we'll further expand our partners to work with. And also at the same time, we further issued a lot of products, standardized products in the open market. For example, by end of June 2024, there were more than 100 financial institutions cooperating with us, more than 50,000 assets securitization investors, among which they are nearly 10 foreign institutional investors. And we also through the issuance of PPN as ultra short-term financing funds, SCP and other credit bonds and varieties continued to protect the diversified financing channels. And our SCP subscription [indiscernible] with a low interest rate of 3.25%. In the future in terms of financing, we'll further explore new channels and new modes and tools. And for the asset management, it's about RMB 99.6 billion compared with the last year due to huge growth, as I just mentioned. And for the [ Jinku ] business, under -- assets under management of the Yixin Group, but will not result in risk for us. So for this part of business, it comes for a higher percentage among our assets. And at the same time, let's look at nonperforming rate, and it's about 1.86%. Compared with last year, 1.91%, it's much lower. And the provision coverage ratio also reached a historical high, 186% at the end of the period, up from the same period last year. And this is a critical one, which incorporates various potential uncertainties in the future. And for the company's liquidity situation, the company's cash and cash equivalents are relatively abundant, about RMB 4.5 billion at the end of the period. Compared with the same period in 2023, it has increased largely. And also moderate cash reserves is a strong guarantee for the company to forge ahead. And that's basically about all for me for the financial performance. I'd like to give the floor back to Andy to give us an introduction about the strategic consideration of Yixin Group.

Okay. I'd like to give you a brief sharing about our strategy in the future, some of our considerations, as well as our surveys in the industry. And in terms of the strategy, in this industry, we know that in recent years that China's automobile industry trend has a lot of activities that are going global and the vehicle exports showed a substantial growth. According to the Automobile Industry Association data, in the first half of 2024, China's cumulative exports of automobile reached 2.79 million, increased by 31% Y-o-Y. In addition, with the further improvement of China's automobile value chain overseas, the quality of Chinese automobile enterprise is also being continuously constructive. And both for the automobile industry and China going overseas, it has the following advantages. The first one is about the know-how of the industry. We had a very experienced team and abundant database. We have partnerships with over 100 auto brands. We worked with them for over 10 years. In terms of the technology, we have a high technical innovation capability and we can have some capability of self path, the localization. And over the past 1 year, we also accumulated a lot of AI-related technology. Another one is about the cooperation with GAP. We've been working with over 100 financial institutions for the long term, especially 10% to 20% of them are foreign banks and foreign investors. So these foreign institutions not only work with us in our domestic business, but they are also willing to support our overseas footprint, to conduct cooperation with us in overseas market. At present, we've been steadily developing in the overseas market, mainly in the Southeast Asia. We've made a lot of explorations. And in the future, we'll continue to make surveys and the modifications of other overseas markets and also to analyze the difference and the special unique features of each market, respectively, and to also leverage our advantage to further help with going global under this trend. And with different methods, we can adapt to the markets of different regions, and not only through the financial service and physical service, but also with the high-tech service as well as the fleet management or operational experience, as well as our business model to help us find more overseas opportunities. And the company will take into account differences and uniqueness of each country's market to have a flexible approach. And in the future, we see third and the second -- the third growth curve to further explore the overseas market. And next, we will open the floor for Q&A, and we welcome all the investors to exchange ideas with us.

[Operator Instructions] And I would like to welcome the first question, who is an investor joined by phone, [ Nicky ] from [ GU ] Capital.

I'm [ Nicky ] from [ GU ] Capital. I have a small question, it's about the FinTech. The SaaS of the company has developed really fast in the recent years. So this year how will you manage to reach your planned target?

I'm Gao Zhi. I'd like to answer this question. And from the data we shared, you can see already that in the FinTech it's about -- our target is about RMB 20 billion. In the first half, it will be reached half of that. And among this RMB 9.27 billion, you can see that our growth rate is faster and faster. So we actually are quite confident that by this year, we will manage to reach more than RMB 20 billion. And we have more and more partners with us. We have lots of big players who will join us to receive our FinTech service. So I believe there's no problem for us to reach the target. And what I'd like to add is about there are strong demand in the market. And when we look at our own situation, we are quite ready for the development of the business. And when we look at the current time and compare with 1.5 years ago, we just started to make survey in the market to understand the demand of the customer. And now we already had a really stable demand in the mature market situation. In the next step, we will work with more financial partners to run out the business. And we also delivered a round of service. We were more open minded to enter the next stage. And the company has a really clear strategy that FinTech will be the focus in the future. So I believe that we've already had the market, we already have some mature products and strong demand in the market. And I believe that in terms of the daily operation, we can accelerate to reach the target.

Okay. What I want to add is that for the [ Jinku ] business -- so the FinTech business is more like a [indiscernible] business. And in terms of the cycle from negotiation to the finish of the project, localization of the project normally takes 3 to 5 months. So we're looking at our commercial pipeline. In the current situation we are confident that by the first half we've already had a lot of accumulation orders. So we are confident that by the end of the year we can see our RMB 20 billion target we set for the year.

Next, I would like to welcome the second investor to ask questions. And the second question is from [ Jamie ] from [ Ten ] Capital.

I'm [ Jamie ] from [ Ten ] Capital. My question is about the impact of reduction of the interest rate to complete profit and revenue. And what's the company's strategy for that?

So what do you mean, it's the interest rate or the profit rate? Okay, okay, I've got it. For the interest rate, indeed, in China now, we're all speaking we have abundant capital in the market and that the drop of this interest rate and the really favorable environment have several impact on us versus -- it actually help with reducing the capital cost of us. And in this way, it can help us to further control the expenses, and it will actually help us and be more conducive to help us to expand our profit. In terms of surprise -- reversely, the impact will be more and more banks who like to work with us. They are more prone to the FinTech and automobile finance market and assets. And that they are more interested in our business. This would be -- well, some of the companies, some of the banks will also have their automobile finance business directly, or some of the banks will choose to partner with companies like us. So on one hand, we may have competition between the 2 firms in the matter for the pricing or the customer acquisition cost that will leave some impression on us. And secondly, it will also actually be conducive to us because we have really a good development of our FinTech business. So I think there are both opportunities and the risks for this, but we take a more positive attitude towards it. Okay. I don't know whether I addressed your question quite well.

And next, we would like to welcome the third question. And the third question is from [ Vicky ] of Citibank.

Congratulations for your performance. And in Tier 3, Tier 4 cities, what are the buying behaviors of the consumers in the lower-tier cities? And what about their repayment situation? In such a macro environment, what's your policies and strategies in the future? And the second question I have is on your strong performance. So how were you thinking about the contribution impacted to the profit rate of our company?

I'd like to have Mr. Gao to answer the question firstly, and I will add a few things afterwards.

The first is about the Tier 3, Tier 4 cities and what are the buying behaviors for the users. Yes, I believe that with the favorable policies, there are strong demands in lower-tier cities in China. And in the automobile transaction, the favourable policies play a even more positive role. To give you an example, we had a policy to support to buy the vehicles in rural areas and the [ treating ] for car replacement, including the new energy vehicle. In the past, we thought that for NEV it mainly will be accepted by Tier 1, Tier 2 cities. But during the market survey, we found out lots of lower-tier cities, there are some small compact NEVs. Actually, they are more popular in the Tier 3 to Tier 5 cities because the using frequency is very high. And for Tier 3 to Tier 5 cities, these group of consumers they will be the mainstream of NEV consumption in the future. And for Tier 1 and Tier 2 cities, it's mainly about buying new cars and second-hand car and the replacement. Now for new purchasement, the mainstream is about Tier 3 to Tier 5 cities. And for us, we are more penetrated to lower tier cities. Because in the traditional OEM, when they build the channels of 4S Stores, if we join it, we're just a complementary. We will not be a mainstream in this -- mainstream link in this network. But in Tier 3 to Tier 5 cities, Yixin's power is really strong and became a mainstream network. So relatively speaking, it's really conducive and good news for Yixin Group. And for the repayment situation, whether it's the trend to have advanced repayment -- and for the prepayment in advance -- and now with the market situation and fierce competition, we can see that compared with the past more people prefer to have the repayment in advance. The ratio has further increased. And whether and how it will impact Yixin Group because in terms of the new cars, we mainly work on loan facilitation and we have seen that the new cars' percentage is lower. It's not because we can't do the new cars. It is because actually for the new vehicles many of the -- in terms of profit is really limited. So we intentionally shift our gear to more second-hand vehicles product. So for the prepayment in advance, which is actually more or less a problem for the new vehicles. So for us -- currently, it's not a big pressure for us because we don't have that part of business quite large. And so actually the pressure of the early prepayment is mainly on the banks, not on us. So I think that their banks as well as financial institutions may face a bigger risk, but not a FinTech company. So overall speaking, the [ term loan ] asset is quite limited because -- actually, the prepayment in advance for second-hand vehicle is quite limited, because actually there is not the interest subsidy for this part. So they will not have the strong demand to repay early, in advance.

I'd like to add a point. In this part, our idea is that we'll start business -- for Yixin Group, we explored the added business, the incremental business. So firstly, we don't think it will damage our profit rate. And certainly, from the company value, it will definitely increase the value of us, because, especially, under the current macro environment with a lot of uncertainties, I think that in the long run for Yixin Group it's more like a strength for us that will have a positive impact on us. And for the repayment in advance, we can see that we have higher and higher deposit of the people. Many people have the readiness to repay the loan in advance. That's also a reason why we have continuously a decline of the non-performing rate. So actually, it did have some impact on us. But overall speaking, it's not a bad thing for Yixin Group.

Okay. Thank you all the investors for your questions, and thank you management team for answering the questions. Here's the end of the interim results conference. And if you would like to know more of this information, please contact us through the IR column of our official website or by e-mail. Thank you again for participating in the Yixin Group 2024 Interim Results Conference. And we'll see you next time.

Thank you, everyone, and thank you all the investors. See you next time. [Statements in English on this transcript were spoken by an interpreter present on the live call.]