20-F: Jiayin Group Inc. Reports Financial Results for Fiscal Year 2023, Announces Dividend Policy and Declares Cash Dividend

Jiayin Group Inc. announces strong financial performance for FY2023, highlighted by a significant increase in net revenue and the adoption of a new dividend policy.

Summary

• Jiayin Group Inc. reported a net revenue increase of 67.1% from RMB3,271.4 million in 2022 to RMB5,466.9 million (US$770.0 million) in 2023.
• Net income increased by 9.9% from RMB1,180.2 million in 2022 to RMB1,297.6 million (US$182.8 million) in 2023.
• The company's loan facilitation volume increased from RMB55.5 billion in 2022 to RMB88.1 billion (US$12.4 billion) in 2023.
• A new dividend policy was adopted, allowing for cash dividends to be declared twice each fiscal year, starting from 2023, at an aggregate amount of no less than 15% of the net income after tax of the Company in the previous fiscal year on a consolidated basis.
• A cash dividend of US$0.10 per ordinary share, or US$0.40 per ADS, was approved, with an aggregate distribution of approximately US$21.5 million in July 2023 and US$21.2 million in January 2024.

Sentiment

Score: 8

Explanation: The document presents a positive outlook with strong financial results and a new dividend policy, indicating a stable and growing company. However, risks related to regulatory environment and VIE structure temper the sentiment.

Positives

• Significant increase in net revenue and loan facilitation volume indicates strong business growth.
• Adoption of a dividend policy signals confidence in future profitability and commitment to shareholder returns.
• The company's transition to a full institutional funding partner model has been completed, reducing regulatory risks associated with individual investors.
• The company is exploring business opportunities in other developing countries with a significant size of lowto midincome population.

Negatives

• The company was a passive foreign investment company, or PFIC, for United States federal income tax purposes for its taxable year ended December 31, 2023, which could result in adverse United States federal income tax consequences to United States Holders of our ADSs or Class A ordinary shares.
• The company is subject to extensive and evolving legal development, non-compliance with which, or changes in which, may materially and adversely affect our and the consolidated VIEs business and prospects, and may result in a material change in our and the consolidated VIEs operations and/or the value of our ADSs or could significantly limit or completely hinder our and the consolidated VIEs ability to offer or continue to offer securities to investors and cause the value of our securities to significantly decline or be worthless.

Risks

• The online consumer finance market in China is subject to evolving regulations and potential government influence.
• The company relies on contractual arrangements with a VIE, which may not be as effective as direct ownership and are subject to regulatory scrutiny.
• The company's business is subject to credit cycles and the risk of deterioration of credit profiles of borrowers.
• The company faces competition from other online consumer finance platforms and traditional financial institutions.
• The company may be subject to intellectual property infringement claims.
• The company may be held liable for information or content displayed on, retrieved from or linked to our and the VIE Groups mobile applications, which may materially and adversely affect our and the VIE Groups business and operating results.
• The company may be subject to the Holding Foreign Companies Accountable Act or the Accelerating Holding Foreign Companies Accountable Act, if it is later determined that the PCAOB is unable to inspect or investigate completely our auditor, and as a result, U.S. national securities exchanges, such as Nasdaq, may determine to delist our securities.

Future Outlook

The company plans to further explore overseas markets, to expand its customer base and broaden its financing channels through partnerships with local banks and other financial institutions.

Industry Context

The announcement reflects the company's position within the evolving Chinese fintech landscape, where regulatory changes and market competition are key factors.

Comparison to Industry Standards

• The company's growth in revenue and loan facilitation volume is notable compared to other fintech platforms in China, such as Lufax and 360 DigiTech, which also operate in the consumer lending space.
• The company's M3+ Delinquency Rate by Vintage is a key metric to watch, as it reflects the credit quality of the loans facilitated through the platform, and is comparable to delinquency rates reported by other consumer lending platforms.
• The company's focus on institutional funding partners aligns with the broader industry trend of fintech platforms partnering with traditional financial institutions to access capital and manage risk.

Corporate Governance

Legal Proceedings

• A securities class action complaint was filed against the company and its officers and directors in 2020, but the case has been dismissed after a settlement.

Related Party Transactions

• The company has engaged in related party transactions with entities controlled by its founder, including referral service fees and loans.
• The company has engaged in related party transactions with Keen Best, an affiliate enterprise.

Stakeholder Impact

• Shareholders will benefit from the new dividend policy and potential for increased stock value.
• Employees may benefit from the company's continued growth and expansion.
• Customers will have access to a wider range of financial products and services.

Next Steps

• The company will continue to explore overseas markets and expand its customer base.
• The company will broaden its financing channels through partnerships with local banks and other financial institutions.

Key Dates

Keywords

financial results, loan facilitation, dividend policy, net revenue, net income, fintech, China, Jiayin Group