VCREDIT 1H2023 Achieves Strong Growth

HONG KONG, Aug 25, 2023 – (ACN Newswire) – VCREDIT Holdings Limited (“VCREDIT” or the “Group”; stock code: 2003.HK), a leading independent online consumer finance provider in China, announced its unaudited interim results for the 6 months ended 30 June 2023 (the “Period”).

During the Period, the Group continued optimizing and innovating business strategies and models, enhancing technological capabilities, and maintaining a focus on higher quality borrowers. Total income was RMB1,917.6 million, with an adjusted net profit of RMB303.5 million. The Board has recommended the distribution of an interim dividend of HK15 cents per ordinary share of the Company.

During the Period, the Group delivered a robust operating performance and achieved strong growth which in line with expectation. Meanwhile, the Group continues to enhance the risk management framework to adapt to market dynamics and changes in user behavior, and sustain an ordered transition towards higher quality borrowers. The Group’s loan origination volume reached RMB36.2 billion for the Period, representing growth of 46.9% compared to the six months ended 30 June 2022 and an increase of 31.4% compared to the six months ended 31 December 2022. Outstanding loan balance exceeded RMB31.4 billion as of 30 June 2023, representing an increase of 25.1% compared to RMB25.1 billion as of 31 December 2022.

Continue to increase in research and development, empowering the business with technology
The rapid advancement of artificial intelligence is shaping and accelerating the digital transformation of consumer finance in the era of the digital economy. The Group is proactively embracing change by implementing revolutionary upgrades to its core business system. In the first half of 2023, the Group formally launched VCREDIT operating system (VOS), a new generation platform that streamlines its business modules, enhances the system architecture and significantly boosts research and development efficiency. Meanwhile, with the help of artificial intelligence big language model, the Group has launched an AI intelligent online customer service robot, which continuously improves the timeliness of user demand response and the convenience of process operation, further optimizing the user’s interactive experience.

Strategy of targeting and retaining better-quality customers and protecting their rights
The Group continues to expand high-quality customer acquisition channels. It has formed cooperative agreements with well-known content platforms, photo editing applications, internet-based logistics platforms and other premium channels. By improving user behavior analysis model and user profile segmentation, the Group achieves greater accuracy in push to high-quality customers. During the Period, the Group’s cumulative registered users increased by 7.1% as compared to the second half of 2022. For existing customers, the Group continued to improve its user experience by introducing an user willingness model to help raise brand recognition and improve user loyalty. In the first half of 2023, repeat loan customers accounted for 82.1% of the total loan volume.

The Group undertook a series of impactful model upgrades and complex testing. It has proactively adjusted its post-loan management risk strategy and implemented better customer services solutions as well the credit agency reform, namely “Duanzhilian”, in order to effectively protect user privacy and information security, achieving proactive compliance reform as well as equip to achieve a balance between short-term risk and long-term returns.

Significant collaborations to further expand asset-light approach and diversify the business
By the end of the Period, the Group had effective relationship with 96 external funding partners, including 21 national joint-stock commercial banks, consumer finance companies and trusts, which enabled the Group to create a wide-ranging and varied funding framework to support its goals. By leveraging the funding flexibility and capital protection provided by third party guarantors and asset management companies, the Group has focused more on our pure loan facilitation model and moved towards an asset-light approach.

In addition to maintaining growth in its existing consumer finance business, the Group has made significant steps in line with strategy to expand and diversify its business to different industries and regions to establish a diversified operating models. In the first half of 2023, the Group launched the new consumer finance brand “CreFIT” in Hong Kong, providing consumer finance products tailored for the local market. Furthermore, the Group has agreed to acquire Banco Portugues de Gestao, S.A, which is a credit institution registered with the Bank of Portugal. This acquisition will enable the Group expansion into Portugal and Europe.

Outlook
The macro environment is constantly changing and evolving, which requires the Group to respond in a prompt and effective way to remain competitive. In order to contribute to further growth in its consumer finance business and fulfill the financial needs of high-quality customers, the Group will strive to hone its business strategies and upscale its technology. In addition to growing the Group’s existing consumer finance operation in China, the Group will also look to expand and diversify its business strategies by investing or collaborating in or acquiring similar, related or complementary businesses and industries in other jurisdictions including Hong Kong, South-East Asia and Europe. The Group will continue to review potential investment opportunities and business prospects on a constant basis and make suitable investments and acquisitions as opportunities occur.

Looking forward, the Group intends to continue to execute these strategies to maintain its growth in the industry, including streamline and extend its credit solutions to better serve its customers to improve brand recognition and loyalty and creditworthiness of its customer base; enhance risk management capability through deployment of evolving technology and artificial intelligence; strengthen long-term collaborations with licensed financial institutional partners and other business partners; ensure its business is conducted within applicable regulatory parameters to achieve regulation-centric sustainability; review and assess potential business prospects and invest or collaborate in or acquire similar, related or complementary businesses and industries in China and other jurisdictions; cultivate a dynamic enterprise value and culture and grow its in-house talents.

About VCREDIT Holdings Limited (2003.HK)
VCREDIT Holdings Limited (stock code: 2003.hk) (“VCREDIT”) is a leading player in China’s consumer finance industry with over 10 years of track record. The Company caters to prime and near-prime borrowers underserved by traditional financial institutions by offering online consumption products. To match the funding needs for these products, the Company primarily engages institutional funding partners through three types of sustainable and scalable funding structures: trust lending, credit-enhanced loan facilitation and pure loan facilitation. Through such funding structures, VCREDIT provides institutional funding partners with solutions at varying levels of risk discretion and flexible profit-sharing arrangements. Website: https://en.vcredit.com/

For enquiries, please contact Hill+Knowlton Strategies Asia:
Diva Ding / Jennifer Wong
Tel: (852) 2894 6325 / (852) 2894 6255
Email: vcredit@hkstrategies.com

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