LexinFintech (LX) Q3 2024 earnings summary

Executive summary

• Net profit reached RMB 310 million in Q3 2024, up 36.7% quarter-over-quarter, despite flat or declining loan originations and stable operating revenue.

• Loan originations totaled RMB 51 billion, with outstanding loan balance at RMB 111.2 billion, reflecting a 3.4% decline from the previous quarter due to tightened credit standards.

• User base grew to 223 million registered users, with cumulative active users at 31.5 million and users with credit lines at 44.1 million.

• Asset quality improved, with risk indicators such as FPD7 and day-one delinquency rates declining.

• Board approved an amended dividend policy, raising payout ratio to 25% of net profit starting 2025.

Financial highlights

• Operating revenue was RMB 3.7 billion, up 0.6% sequentially and 4.4% year-over-year.

• Net profit margin improved to 8.5%, up from 6.2% in the previous quarter.

• Take rate reached a record high of 3.25%, up from 2.91% in Q2 and 2.44% a year ago.

• Funding cost hit a historic low of 4.28%, down nearly 100 basis points from Q2.

• Gross profit decreased 11.0% year-over-year to RMB 1,207 million.

Outlook and guidance

• Management remains cautious on the short-term economic outlook but expects government stimulus to gradually support recovery.

• GMV of loan originations in Q4 projected to grow at flat to low single-digit rate quarter-over-quarter.

• Dividend payout ratio to increase from 20% to 25% of net profit starting in 2025.

• Confident in delivering stronger profitability next year, with more detailed guidance after Q4.

• Ongoing transformation initiatives and asset quality improvements are expected to drive further positive progress.