Yixin Group Limited (2858) Earnings Call Transcript & Summary

All the investors and analysts, good evening. Welcome to the Yixin Group 2024 Annual Results Conference and Annual Performance Conference, which will be conducted through live audio and teleconference. Please allow me to introduce the company's management team who attended this annual performance conference as follows: Mr. Zhang Xuan, Chairman and Chief Executive Officer; Mr. Gao Zhi, Co-President; Mr. Yang Xiaoguang, Chief Financial Officer, CFO; and Mr. Zhifeng Jia, Chief Technology Officer, CTO. This conference will be divided into 2 sessions. First, the company's management team will give you an introduction to the 2024 performance of the company. Now let's welcome the President and the Chair and the CEO of the company, Mr. Xuan Zhang to give the opening remarks.

Now let's welcome distinguished shareholders and also the investors, good morning to everyone. I'm the President and also CEO of the company of the Yixin Group. Welcome, everyone, to participate in the 2024, annual performance review and report of our company. Thank you so much for your good support of the company. In today's conference, we have the following session. First of all, let me introduce the overview of our company and the development of the industry. Afterward, Mr. Gao Zhi, the Co-President, will introduce the highlights of the Yixin business year 2024. Then the CTO, Mr. Zhifeng of the company will introduce the company's core competitive advantages and sustainable development measures, particularly in some of the AI-related fields. Then Mr. Yang Xiaoguang, the CFO of the company, will present the company's financial performance for the year 2024. Finally, I would like to leave some of the time for everyone to propose their questions. We can have a Q&A session later. And on Page 5, let's first come to see the basic situation of Yixin Group. As a professional automotive fintech platform in China, we established a business model driven by both new and used cars and have always taken technology-driven financial innovation as the main access and driving force for our strategic development. We already have more than 38,000 partners in the different provinces and cities of China. On the capital side, we have worked with more than 100 financial institutions, including banks, trusts, financial leasing companies, et cetera. We maintained in-depth cooperation with our major shareholder, Tencent, and carried out technological and technical collaboration, in cutting-edge fields such as big data, AI, and cloud computing. Our industry-leading risk management system ensures the safety of the assets and our management. The comprehensive competitive advantages have built a moat for the company's long-term development. Next slide. It is worth mentioning and noting that as the company has continuously deepened its presence in the automotive finance sector, by May 2024, the cumulative number of auto financing transactions has exceeded 4 million units. By December 2024, the cumulative transaction volume of auto financing has approached RMB 400 billion, which prominently demonstrates Yixin's leading strength in the industry. And in 2024, the overall trend of China's passenger vehicle market was stable with the progress. Despite the general pressure on the automotive industry in the first half of the year, the terminal market showed a significant recovery in the second half as policies continued to be strengthened in the third quarter. According to the data from the China Association of Automobile Manufacturers, the sales of new passenger vehicles reached 27.56 million units in 2024, a 5.8% year-on-year growth. According to the statistics from the China Automotive Dealers Association, the transaction volume of secondhand passenger vehicles reached 15.67 million units in 2024, representing a year-on-year growth of 6.1%. According to the data from the China Passenger Car Association, CPA, in 2024, the annual sales of new energy passenger vehicles exceeded 10 million units for the first time, with a year-on-year growth of 41%. In the field of intelligent driving with a deepening empowerment of the autonomous driving sector by cutting-edge technologies such as AI data 5G, coupled with the gradual improvement of the relevant regulations and cost optimization brought about by technological progress, autonomous driving mobility services are accelerating into the state of the industry expansion. Looking forward to 2025, with the intensification of the 2 new policies, the consumption potential is expected to be further unleashed and industry pressure is likely to be alleviated. At the same time, the popularization of intelligent driving and autonomous driving will also continue to drive the intelligent development of the industry. I would like to introduce the auto finance and fintech market. According to third-party data, the Chinese auto finance market is expected to reach a scale of RMB 3 trillion in 2024. In terms of policies, the government continues to pay close attention to the development of this sector and encourages financial institutions to provide more credit support for auto consumption through policies. However, compared with the developed markets, the financial penetration rate of the Chinese auto market is lagging behind, indicating a vast space for further development. According to the third-party forecast such as the motor intelligence, the financial penetration rate of the U.S., Germany, and finance in 2023 are approximately 89%, 77%, and 71%, respectively. In China, the financial penetration rate for new and used cars in 2023 is 56% and 38%, respectively. So compared with the developed countries in the auto industry powerful, we still have a long way to go and space for further improvement. As an important driver for the high-quality development of the finance industry, fintech can help unleash the consumption potential and empower the development of new productive forces. Yixin also enjoys the policy support that the Central Bank has issued a series of policies to promote digital finance, further supporting the deep integration of fintech and traditional finance, which lays a solid foundation for the sustained growth of the industry in the coming years. The third-party data showed that the market size of fintech will reach approximately CNY 800 billion by 2025. With the advancement of the digital transformation wave in financial institutions, fintech has also been applied in some more scenarios. And also that will bring convenience to more financial institutions. So I would like to invite Mr. Gao to introduce the company's business development situation for 2024.

Thank you so much. All the investors and also the shareholders, I'd like to give an introduction about our business. In 2024, despite the complex external environment, the company's business scale maintained growth and the revenue of all the business segments continued to increase with a significant enhancement in profitability. The company's main highlights in the operation are as follows: First, the core business has developed steadily and seized the opportunities of structural growth. In 2024, the transaction volume of auto financing reached RMB 69.1 billion, representing a year-on-year increase of 5%. Among them, the financing amount for the new energy vehicles grew rapidly, up by 44% compared with the same period last year. Moreover, our fintech business witnessed explosive growth with the financing scale facilitated reaching RMB 21.1 billion in 2024. Second, revenue from the value-added services continued to rise, increasing by 11% year-on-year to RMB 249 million. Thirdly, asset quality remained stable with M3+ overdue rate dropping by 3 basis points to 1.86% compared to the end of 2023. Then I would like to specifically introduce the development of the business of the company. Firstly, it is about the core business of the company, which is about the auto financing services in 2024. The total transaction volume of the company's auto finance reached 726,000 units, representing a year-on-year growth of 7%. In terms of the new vehicles in 2024, the transaction volume was 376,000 units. Financing announced reached RMB 38.7 billion, a slight decrease of 4% year-on-year, mainly because we have a preference for focusing on more profitable finance and business. Additionally, by upgrading and standardizing business processes and interfaces, we have further optimized our cooperation with the alternators in the content efficiency and flexibility of the system, thus providing more precise and efficient services to the client. In terms of the second-hand cars, in 2024, the transaction volume was 350,000 units. Financing announced was 30.4 billion RMB, representing a year-on-year growth of 18%. This growth is mainly attributed to our appropriate expansion of the risk exposure while ensuring asset quality and our proactive expansion of the long-tail customer base and also the better use of AI technology to expand the customer volume. In 2024, we launched the Risk of Pricing product/TAS, which helps the front-end to enhance the customer risk assessment and enables us to capture a larger scale or share of the used car market. In terms of the new energy sources, our growth in the financial services for new energy vehicles has been particularly remarkable. The transaction volume and financing amounts of new energy vehicles have increased by 51% and 44%, respectively, reaching 175,000 units and RMB 17.1 billion. By 2024, financing amounts for new energy vehicles has accounted for 40% of the total financing amounts for new vehicles. Meanwhile, the rapid growth in the number of new energy vehicles in the U.S. has also driven the development of the new energy vehicle market. The proportion of the use of vehicle transactions includes new energy businesses rising to 13.5%. Then, let's come to see the certain fintech business of our company. Since the fintech business was officially launched in the market in 2022 in our company, the sector has witnessed rapid development. In terms of the scale of the financial transactions, the data of the RMB 21.1 billion in 2024 represents the year-on-year growth of 107%. Revenue achieved this sustained explosive growth, raising 1.8 billion in 2024 with a year-on-year increase of 490%. Technology empowerment drives the increase of the new energy vehicle's penetration rate. Under the Jinko business model, the penetration rate of the new energy vehicles in new cars is approximately $50 to the fund. Detailing the corporation to expand the business territory. For instance, in our cooperation with some city commercial banks, we usually start with the low-risk businesses on small-scale trials and then gradually expand into the more grassroots market to acquire the assets. It is worth mentioning that the group has successfully made it to the top 50 influential fintech enterprises in China lead, thanks to its outstanding performance and strong growth in the fintech sector, demonstrating it is the leading position in the whole industry. In the continuous development of our fintech business, we have always focused on high-quality clients and continuously depend on our cooperation, achieving remarkable results. Customer development and revenue growth. Our core customer base has steadily expanded, with the number of core customers increasing from 10 in 2023 to 17 in 2024. At the same time, the revenue contribution from the core customers has improved. The average revenue from the core customers in 2024 reached 104 million Yuan, accounting for 98% of the total revenue. This data not only respects the effectiveness of our in-depth customer operations but also concerns the sustainability of the long-term cooperation model. Then, it is about the dual business model. We already have the 2 main business models in the fintech business. The number one is the pure technology product output. For instance, the risk control model we provided for Porsche or the other luxury car brands not only trains high-quality customers but also effectively reduces broad risk. The second one is the technology plus traffic services. By facilitating transactions, we encourage the overall business value through technological empowerment. For instance, by collaborating with the poster-saving banks of China to screen out the customers with automotive finance needs for the institutions and provide the product and risk control management support, overall the fintech segment of each is gradually achieving a scale effect. In the future, it will continue to leverage cutting-back technology to expand into more application scenarios and provide long-term, strong technological support for institutional partners in the automotive finance sector and even broader financial fields. Next, let's talk about the value-added services, relying on our cooperation with the major domestic insurance institutions. The value-added services offer a diverse range of products such as vehicle usage rights and supplementary insurance based on customer needs. The aim is to enhance the user experience and increase customer loyalty, making it an important part of the company's business ecosystem. In 2024, the revenue from the value-added services reached RMB 249 million, representing a year-on-year growth of 11%, among which the transaction volume of the activity packages reached 373,000 borders, increasing by 12% around the year, which fully demonstrates the market's recognition of our products. This product is specifically designed to offer additional protection for the batteries of the new energy vehicles, addressing the widespread concerns in the market regarding battery health and residue value in 2024. The transaction volume of the battery DAP products reached 37,000 units and its penetration rate in the new energy vehicles has increased to 37.1%. Meanwhile, we also successfully expanded this product into the new energy vehicle market, further meeting the diverse needs of the market. In terms of the future outlook, we would like to continue to optimize our value-added service product system, deepen the cooperation with the insurance institutions to actively expand more high-potential value-added products, constantly enhance the user value, and drive business growth. Next, we would like to invite Mr. Jia, CTO, who will introduce the core competitive advantages of the group and also the measures of sustainable development.

Thank you so much, Mr. Gao. Hello, everyone. I would like to give an introduction about the core competitiveness of our company. The core competitive advantages for EC are merely reflected in the 2 aspects. The first one is about technological capabilities. Over the past few years, we have always been driven by technology plus scenarios, transforming technological capabilities into actual prospective voices. Since 2018, we have independently developed the ATM decision flow engine. In 2019, we further activated the model platform, introduced the largest-scale deep learning technology, and launched ourselves to develop traditional model computing products. In 2020, we entered into the product position stage of the algorithm models, releasing robot platform 1.0 and intelligent core-centered products, achieving the first decentralized output of algorithm models. Through the initial robot configuration tool, we provided flexible and efficient intelligent solutions for multiple business scenarios. We further integrated voice interaction technology and launched an intelligent call center system significantly enhancing the automation level of the customer service and user experience. Starting from 2023, we have entered into the stage of exploring and implementing the multimodal large models. We released a series of large models supporting text in multiple sizes, covering the parameter scale required from the 70 to 72 and completed the filing of the first multimodal large model for the automotive vertical in 2024. In 2024, we entered into a robot Platform 3.0 and New Media Creation 1.0. The workflow plus agent architecture has been upgraded to fully empower all the business operations to detect multimodel large models. At the same time, in line with the global new medium trend, the efficient creation and marketing enhancement model has been launched to help the enterprise initiatives in a digital way. Our intelligent robot platform covers key things such as calling face-to-face inter-approval, customer services, et cetera, and achieving a deep integration of intelligence, automation, and efficiency. For instance, our quality inspection robot can automatically monitor the compliance of the agent's behavior. By 2024, this robot has completed over 330,000 hours of port inspection work. Our intelligent car robot has been applied in scenarios such as marketing corruption and customer services achieving big and has made over 82 million calls in total with a cumulative communication duration exceeding 120,000 hours. In February 2025, the company completed the local deployment and application of technology, becoming the first enterprise in the automotive industry and finance sector to comprehensively apply this technology to its actual business. Drawing on the training experience and reinforcement learning strategy for R1, we comprehensively transformed our own self-developed vertical large model through the technology, we achieved a 50% to 70% reduction in inference cost. The transformed model has achieved remarkable results in critical decision-making scenarios such as intelligent funding, et cetera, 100% customers can now be matched with the most suitable financial solutions with approval efficient accuracy, both increasing by over 50%, repair rate of the high aged orders also rising by more than 10%. In the future, we'll apply digitization and AI capabilities to more fields, reduce labor cost in management efficiency, and at the same time, strengthen decision-making support capability. An intelligent robust platform will play a greater role and become an important driving force for our digital transformation, helping the company maintain the competitive edge in the complex market environment. And the other significant core competitive advantage of our company lies in our integrated risk management system, which covers the entire business process and ensures effective risk management control at all stages. We also utilized AI technology to conduct public monitoring and vehicle price assessment, effectively reducing the fraud risk caused by inflated prices. In 2024, the amount saved by this project has reached CNY 1 billion level and the government award. Our self-developed credit assessment system has been updated to the version of the 6.0, relying on vast data assets and a precise algorithm. It placed greater emphasis on the in-depth analysis of customers' credit history and risk characteristics in a comprehensive assessment of the person's vehicle, thereby significantly enhancing the accuracy of assessment and risk identification capabilities and facilitating more precise matching of the financial product and optimization of the decision-making. We implement the full life cycle management of our assets in the asset center in Shanghai and formulate response plans for assets at different stages in the different states through the collection strategy engine. Meanwhile, we also established the asset auction platform to optimize the recovery of the asset value to the greatest extent. Through the comprehensive risk control management system, we not only ensure the safety of the assets but also lay a solid foundation for the sustained and healthy development of the company's business. Lastly, I would like to introduce the company's initiatives in sustainable development. Yixin established the ESG Committee at the Board level, continuously strengthening corporate governance promoting the healthy development of the auto finance industry, and fulfilling its social responsibilities by 2024, the inclusive financial division has served over 350,000 customers with a wide coverage. Among them, the proportion of ethnic minority customers exceeded 10%, fully demonstrating our inclusive philosophy and social responsibility. We actively participated in the industry exchange at the 2024 Auto Finance Industry Conference, Shanghai Station, we joined hands with the industry experts and enterprises to explore the future development direction and continuously lead the progress of the industry. Yixin Group has always led the industry development with a responsible attitude and is committed to creating greater value for society. In the future, we will continue to promote the industry upgrading and provide more support for society. Then let's welcome Mr. Yang to introduce the company's financial performance in 2024. All the shareholders and also investors, thank you so much for attending the conference. I'd like to be together with everyone to take a review about the financial performance of our company. And you can see that the operating revenue maintained rapid growth, reaching CNY 9.89 billion in 2024, representing a year-on-year increase of 48%. The operating expense ratio continued to decline while saving while increasing the revenue, which is around 20%, around an 8% decrease compared with the last year. So it also just showed what Michael, the PTO introduced because of the certain application of AI in the different fields, we reduce the cost but increase the efficiency. And in the year of 2024, we get very good performance of that. At the same time, we achieved the scale of the asset management has continued to grow, reaching RMB 108.1 billion by the end of December 2024, an increase of 39% compared with the end of the previous year. But at the same time, we're in high-quality development. And most of the growth is from the science and technology empowerment. We also just had very rapid and rapid progress in terms of our technology business. And in terms of our revenue, I would like to give a further introduction. In terms of our debt, it is due to the main part of our main revenue, which is around 44%. At the same time, in 2024, we have around the RMB 1.8 billion increase, which is around fourfold of the year before last year. It is a very obvious increase. This is what continuously to transform itself into the fintech for the long time. And we are actually in a very big development in terms of the fintech. At the same time, it is the revenue from the other platforms that we got the big increase of our revenue, which heavily relies on certain trustees or the other related financial services we provide for the other customers, not the new business, but the certain old business we have, which also in a very rapid development with a year-on-year growth of more than 60%. At the same time, in our platform and also self-operated platforms, we can see that we're in the year-on-year growth for the 2 types of businesses, reaching RMB 77.8 billion and RMB 3.2 billion, respectively. And then let's take a look at the growth of the company's gross profit and the driving factors. For the self-operated business, the net interest margin of the leased assets remained stable year-on-year. And apart from the structural influence, we are in a very similar performance compared with that year of 2023. At the same time, we can obviously see the changes in the adjusted rate of the return. In 2024, we are in a certain 4.5% of that. It is still in the stock assets. If we see a certain marginal part, and that is more obvious for our growth. For the platform business, you can see the net service fee for the platform financing saw a recovery in FY 2024, which is around a 3.7% increase. Anyway, our growth rate is around the 2% decrease compared with that in 2022. But anyway, I think it is a healthy condition. And overall, the profit is around 43% year-on-year growth. And then let's come to see the certain expenses. I already mentioned about the financial net rate, which decreased from 35% in 2022 to 20% in 2024, which demonstrates the lean and refined management of the Yixin Group. When we expand the scale through the adjustment of the structure and the use of AI technologies and tools, we have rapid development. And in terms of the loss rate, it is very low. Our scale of assets actually increased, but it fully demonstrates that we also adjusted the product structure and also adjusted the certain risk of the risk rate. And later, I would like to specifically mention that later in my following slides. And you can see about the certain final profits and the company's profitability has continuously strengthened and reaching the very record new high in the past 3 years, which is around RMB 810 million. Considering adjustment for some noncash items, we also got a bigger development. Despite the complex external environment, the company has achieved satisfactory profit results. We hope that we can bring better returns of investment to all the shareholders and investors. And in terms of our financing structure, we just follow up on the diversified financing at EURO, which is an important strategy for us. Our financing in the different categories seems to be more diversified. At the same time, we already work with more than 100 different financial institutions, and also, we have more than 60 bond and asset securitization investors, including foreign investors. And in terms of our standardized products, they continue to be well received in the market with the cumulative financing scale exceeding RMB 58.5 billion. So far, for the high-quality automotive assets, they still remain relatively scarce in the market which is very popular in the market. In the past, we also just got a big record new high in a lot of the parameters. We also just created a very low cost. For example, like the ABM launching last year, the product rate has already been decreased to as low as 2.3%. At the same time, through the different financing tools and also the debt loans, we further expand our diversified channel of financing. Anyway, we would like to continue to explore new channels, new models, and new tools to maintain strong support from the liability side for our business. On the asset side, the company's asset management scale has grown very rapidly in recent years and also the rate and our structure become healthier and healthier. On the right side, you can see about the financing, the overdue rate has been decreased and also the assets just increased dramatically. The debt coverage loans have already been decreased. So it means that this is very important for us to respond to the diversified and also challenging external environment, which is a strong guarantee for us. And here, it showed us about the certain years for the debt and the loans, which is for the first time to be shown to everyone. And according to the new cards and the secondhand cards, if we see them separately, we can see certain data from 2023 to 2024. We can see the asset quality, which is at a very similar level of the previous years and it is even better, which means our risk models really effective. Here, it showed our higher confidence and also guarantees for the high quality of the assets within the market. Finally, I'd like to quickly go through the balance sheet. So you can see here in the year of 2024 in the end of it, we raised around RMB 4.2 billion of that balance sheet performance, which is also the highest in the previous years. It also fully demonstrated and reflected very good management of our assets of our liabilities and also our strong guarantee and support for the partners and cooperators, particularly for the liquidity situation. We have very good management for the liquidity of the assets, which laid a solid foundation for the business operation in the following stage. At the same time, just in the recent 2 years, we have shifted our focus to science and technology products. You can see the data here showed about our build transformation into it. And you can see for the liability, it is around 46%, which is also a very healthy condition. That's all about my introduction. And I'd like to hand over the microphone to the moderator. Thank you so much for everyone's sharing. So I like to come into the question and answers section.

[Operator Instructions] The question is that I would like to ask you. Firstly, what is the purpose for the high volume of the loans? Will that generate a big pressure on the liquidity and cash flow in 2025? Secondly, what is the charging model and what are the future of the consumers? And the third one is the AI model. What is the contribution rate from the AI company revenue? Fourthly, will you continue to have the cooperation with the major shareholder company, Tencent in the future? Please answer the question.

Thank you so much for the questions. I think you asked so many questions. I'd like to try to answer the question of the first 2, and then I would like to invite the other leaders to answer the other questions. First question is about the loans. What will that generate whether that will generate the influence and pressure on the cash flow in 2025. Actually, 50% is for the basic loans and the other 50% is for the special interest rate loans. We did the basic interest distribution every year. And in the past, it's around 30% to 35% in the previous year. And in this year, we did increase that because we have the gap in the profit. And just now we talk about the debt of improvement of the cash flows in the past years because of the improvement of the technology services and products that developed so well and that is really friendly for the cash flow conditions. At the same time, in this year, the profit will be high. So we would like to use the dividend payout or the distributions of the dividends to bring more benefit returns to the investors. And also this year marks a very important history of our company that has been established for 10 years. We would like to appreciate the investors and the shareholders who have been together with us for the longer term and the company is a very good condition of the cash flow. So we would like to bring more dividends to the investors. Whether that will generate the pressure on the cash flow of the company, we don't worry about that because we already have a detailed calculation about that, so that will not generate any pressure on the cash flow of the company in 2025. The second question is about the certain business charging model. I would like to answer this question briefly. And then Mr. Gao probably may just add more information about the potential customers. In terms of the charging models, we have the 2 categories. One is that we follow up our SaaS system data collection to charge for the relevant fees. And secondly, within this system, apart from that, we also would like to follow up the traffic to all and to charge for the fees. So these are the 2 basic models. But now we mainly just focus on the second way, which contributed a large proportion of the revenue and the profit. But with the SaaS business, the scale further improved and expanded, probably the first part of our business also will just take up the larger proportion in the future. In terms of the future potential customers, now I would like to add more information about this question. For the SaaS business, no matter which model we follow up for the charging fees, we charge based on the final performance, and this is what we work together with the partners. In terms of the future potential customers, I can say that most of the customers are all our potential customers for the future. We are committed to making our business fresher and scientific and technological-driven business. So a lot of our customers gradually shift their focus to have more cooperation with us, including the risk management or their own SaaS business by themselves. But for those not cooperated the potential customers, I think with the auto finance market rapid development in the recent 2 years and also the great support of the banks and the loan and financing companies. I think anyone who are working within this auto finance industry are our potential customers. And in recent years, we've already just seen a very good returns and the benefits for the fact that we enter the industry in the early stage. Thank you so much. And you also asked the last question, whether we will have further interactions with the Tencent for Yixin. We've already been very important partner of the Tencent. We had a very good cooperation with each other as early as possible, including our cash side and also data side, traffic side as well as AI model. We have the cooperation in all of Ford mentioned fields. We already set up the cooperation in the aforementioned field and also continue that in the future. And the other question is about the contribution rate of the AI model to the company's revenue. So we would like to invite the management team member to introduce that.

I would like to introduce the positioning and the value of the AI model in the company. We think that AI large model is a very important baseline or the driving force and also the core competitiveness of our company. So we use AI in all the processes and the different sections of the company, including customer acquisition. We use AI to find and identify the most suitable customer-targeted customers to get certain traffic online so that we can make it more efficient. In terms of the risk control session, we use AI to add certain risk control services to the customers, which is the top pioneer in the whole industry. We provide a very good financial solution to the customers. In terms of the asset management session, we use AI to convert the time-based M1 and M2 payment delays into certain individualized and customized solutions. So we use AI in all the different fields and the parts of our business and penetrated into the whole industrial chain. In terms of the technician, we use AI to improve the recovery rate of the M1 by half. At the same time, in the operation and management, we use the AI to reduce the cost and improve the efficiency, which dramatically improved our business to have the rapid development, but also to decrease the cost of the operation. So this is a very important view of us for the AI application globally. It actually supported the healthy development of our business for the future. At the same time, you actually asked the question about the direct revenue created by AI. We actually use the finance SaaS to have the cooperation and commercialization of the AI services. We already mentioned that we work together with the main automaker companies for the cooperation. We use our technology to achieve commercialization directly.

The second question is the Chinese investor from the Gold Brage. The question is that what is the guidance of the company for the 2025 business? And what about the growth rate of that in the year 2025?

Thank you so much for your question. For 2025, we would like to continue to be in a very optimistic and confident attitude for that. In terms of our external environment, we will still be trapped into the certain complicated external environment. However, for this year, in 2025, in Yixin Group, our revenue will be around 15% to 20% growth. It is estimated that we will reach around RMB 11.5 billion to RMB 12 billion. After the adjustment, net profit will be around the RMB 1.3 billion.

The third question is also from the online investor from the Rein Capital. The question is, in terms of the cost of the assets of the company, will that be further decreased? Do you have any specific measures for the cost control and improvement of the operational efficiency?

Thank you so much. I'd like to answer the question. In terms of the capital cost, so far, in China, generally speaking, we are in the shortage of the capital in the Chinese market. Yixin has its own protection, which has dramatically improved. We think we still have a certain potential for the decrease of the capital and asset cost. It refers to the direct financing of the company as well as the ABS launching, and it also includes the lowest cooperation with the banks. That is the invisible cost of the capital and asset that will be reflected in the certain interest. And we think that we still have a certain potential for the decrease of the cost. In terms of the specific measures for cost control and operational efficiency, this Michael and I all introduced that we talk about the AI application. In the next step, we will steadily and firmly use and deploy the AI application in the operations side. So far, for the transportation cars for our staff, they are all autonomous driving without drivers. So in terms of the corporate culture of our company as well as our internal, the different parts, we all use AI tools and penetrate the tools of AI into it. We also just launched the assistant into our internal applications. We would like to penetrate it into the different sessions of the management, and that will be further promoted. And in terms of the application of the AI in the other case, this is not a question asked, but Mike already mentioned that we've already just think that AI is not only a very important tool for the cost control and efficiency improvement, but also a very important part for us to use it in the acquisition of the customers, risk controls and also the asset management. And smart and intelligent asset using, we hope AI could play even a greater role in that. Thank you so much.

And then let's welcome the first question, which is also from the Chinese telephone question, [indiscernible] you can ask your question from the Shanghai Equity Fund.

I'd like to ask a question. In the year of 2024, the auto finance industry is fierce competition. A lot of the banks also engage in the market. Will that generate any influence to us? Also will the certain commissions continue to rise due to the impact of the industry in the future?

I think this is really very professional question. It seems that you have a very good understanding of the market. Yes, it is worth of mentioning like what we mentioned, it will generate a certain influence because more and more the capital flush into the market from the banks for the auto finance industry. Will that generate any influence for our company? I don't think that will generate a big influence because, firstly, we are not focusing on the target group of consumers. The bank focuses more on the IOC businesses for the customers, IOC, merger acquisition businesses. I think if you know more about this market, you might notice that in the past 2 years, you can see that the large companies, particularly the banks use a price war to the PC. The PC is not the main battlefield of the Yixin Group. So I don't think that is a big challenge for Yixin Group.

And will the commission be further influenced?

I think, firstly, like what we mentioned, the high interest rate and high returns in the past one year is a common phenomena within the industry. And our basic judgment is that we don't think it is a common condition and a phenomenon. We believe that no matter from the automakers factories or the supervision bodies, they really do not welcome that. I don't think that the high interest rate and the high returns will not be in a longer time that will be in a steady reduction with certain more the supervision of the supervising bodies that will decrease quickly. So I think it will not generate a big influence on us because we can get a certain higher price, but it didn't generate a big influence on us because we're not in the same market. So I think the influence to the different parties will be the same. We are not so special compared with the other players in the market. We only just have half of the business related to the new cars and the other half is about the secondhand market of the cars. So in terms of the interference of the financial companies or the banks, we've already seen that everybody tried a lot in the past 2 years, and they tried. So they're more willing to cooperate with us to get into this certain business, particularly the secondhand market. I think on the contrary, we can see that in the secondhand market or used car market, we can have the preferential policies work, and we can have the better opportunities in this.

[Operator Instructions] On the fifth question from the China telephone investor.

I would like to say that just now I already heard about the introduction presentation from the management team members. In the future, the fintech will be the main business of the company strategy. I have 2 questions. I have a question, we have 2 parts. Number one, within a short period of time, in terms of the fintech business of the company, what is the plan of the company for the fintech business in the short period of time? The second one is for the longer-term prospects. what is the main and core competitiveness of the company in the fintech business in the future longer term?

I would like to answer the question from the perspective of the numbers, and then Mr. Gao can introduce more from the business perspective. In terms of the data perspective, if you pay more attention to the previous financial report, you can see that in the past 2 to 3 years, this increased from the increase into the RMB 21.1 billion. That is a very quick increase. It is estimated that in the next 2 to 3 years, we can still just keep a very higher growth rate. in this year, our target is RMB 35 billion transaction revenue and volume that is around 70% increase compared with 2023 and 2024. We believe that we can keep relatively higher growth. I think we can keep nearly the annual growth rate of the 50% in the next 2 to 3 years that can be seen. We accelerate our transformation for the different considerations and reflections, including the considerations for the market. For Yixin Group, we think our business in this field needs to be of higher quality, including the profit, its risk control and also the revenue. They are just more competitive compared with the traditional financial businesses. At the same time, we will not use a large amount of the cash flow of the Yixin Group for this business and that is what we advocate for the high-quality development, which is important business of high-quality development. In terms of our business, the core competitiveness of our business, we have Jinko and the others. I think that all of them are the same. Firstly, as the auto finance, the main pioneer company in the industry, we provided the many services and also we have the different channels for the application of the scenarios. In terms of the core competitiveness, we heavily relies on our big data technologies which has been highlighted in terms of the AI applications and the different views. In our presentation just now, we also introduced the certain application of AI in the risk control, the product efficiency improvement, et cetera. We can better judge and identify the demand and needs of the customers and provide different financial solutions to the customers, which is really very unique within the industry. And in terms of the other views, in terms of the asset management, I also think that we have a lot of effective methods and tools to be used. For example, data shows that we have the bad external environment and a sluggish of economy, which is not stable. But even under this type of situation, we have very good momentum of the performance of our assets that heavily relies on certain model, modeling. And it is hard to tell you about the performance in a short period of time. But anyway, I'd like to add more information. I think that within this industry, we are the early practitioners to embrace the AI big data technologies into the finance. And for the longer time, finance and also the models are all the core driving force for us. In the past 10 years, we accumulated rich experience in the industry. We have high-quality data, no matter the positive data or the negative data. All of this data plays a very important role in the risk control and also customer acquisition. And you can see that for the financial industry, we are in a relatively natural matching of the data together with the applications. So many years ago, we already have a very small team for the AI, like Michael introduced; we have the dot-dot exploration of these applications of the AI tools and the models. And today, we're so lucky because in AI and the large models, we are already in open source. We just integrated all of our very precious data together and to put the data into large models. We discovered that this is really in a very good matching and provided us a very good support for the development of the strategies and policies before. So this is what we always talk about the core competitiveness of the AI, which is the algorithm and the computing forces. We've already been in the algorithm in the early stage. And in terms of the computing forces and computing power every year, we invest into it. And like those larger platforms, we targeted our own professional fields and industries to invest in the certain computing power and forces. And finally, it is about the quality and quantity of the data as well as the ability and capacity for the continuous updating of all the data. So I think in this field, I cannot see any other competitors that could be like us to continuously improve this. So I think this is also the core competitiveness of us to really get rid of the barriers. Thank you so much.

Due to the time limit, I would like to ask the last question from Anson Yeung for the Quam Securities Secura.

I'd like to ask the question. Just now I've already seen the AI deployment and the megadata advantages of the company. I'd like to see and ask the question when the company used the cutting-edge technology of the large data for the big data, what is your future applications and the strategies of the data? And what will the AI and big data technology support your overseas business?

I'd like to answer the question. In the past, we use the AI like what I mentioned in the presentation, we use AI in the whole process in the different sessions and parts of our business. In the future, we'd like to continue to follow this trend. Like Andy introduced, we're always the technology-driven and also the AI-driven company. Every year, we will continue to invest continuously to optimize our core competitiveness and also like to use the AI to expand more the cooperation with other channel partners and also cooperators, which is not only to expand our revenue and the profit, but also the important way to expand the data acquisition. We would like to use AI to improve our ability and capacity for data acquisition and also to build up such a database and also to promote the transformation from data to the models. I think that with the business promotion, we can have a better efficiency of that. On the other hand, we would like to continue to be around the AI to reshape our business procedure, which means that from the online, we would like to further shift our focus from the online business into the offline activities. We also use the AI, which is not only about the information system AI, but also the intelligent equipment or the devices applications offline, which not only support our online business, but also offline business by using the AI technology so that we can just expand the scale of the data together with the model so that we can have the better performance. And this is about the overall development strategy for the future. We would like to just use the cooperation and also further optimize the efficiency of the different processes and the penetration of the use of AI in the different fields. The second question is about the empowerment for the overseas business. Generally, we are in such a logic. Now our model, as well as the models around the AI have been updated and upgraded into the certain service processes and the product services. We are trying our best to do some trials overseas. You might already notice that we actually do some of the trials overseas. For example, in some of the countries overseas in the last year, we've already started our business of trying to do something, trying to do something new. And in terms of our considerations and also feedback of the products overseas, we got really positive feedback. We also, of course, hope that we can use such a very good tool into the more applications. We already just through some of the AI technologies, deeply changed the processes and also the structures of the products and the services. We hope that we can bring the advanced technologies and products into the overseas, the other countries. In this process, there might be a certain need for localization, of course. I think I'm so sure, we will not overlook the overseas market. We also may think about the opportunities overseas, not just the local market. Thank you so much.

Thank you so much all the questions from the investors, but also the answer from our management team. That's all about our today's annual performance review and conference. If you are interested in learning more about the company, you can contact us through the Investor Relations section of the official website or the e-mail address on the invitation letter. Thank you so much for attending Yixin Group 2024 Annual Performance Conference. Look forward to seeing you next time. Thank you so much. Thank you, everyone, for supporting us. Thank you to all the investors. Thank you.