LexinFintech Holdings Ltd. (NASDAQ:LX) Q4 2022 Earnings Call Transcript

Jamie Wang: As of right now, we have not yet received a further clear instructions. It’s worth mentioning that we are not one of the 14 platforms and the ramifications €“ for the 14 platforms are more on the decoupling, disconnecting from the banks. And also it’s worth noting that we are both simultaneously in discussion with as well as , especially with , we expect as of right now based on the progress to have the trial run by or before June 30. But right now, as far as we know with all the adjustment as well as other changes with the regulators, the ratification and the actual deadline is possible to be delayed. And also with the new structure, the regulator structure being adjusting the date, there is a possibility of postpone of a date, and the regulator foundations may need time to put themselves together in a more formal and regulated way to actually proceed.

James Zheng: Okay. Regarding your second question, I will take short at it. Basically, you’re asking about the capital-light model. Right now, the revenue share model with the financial partners basically account €“ in terms of revenue account roughly about 20% to 30%. I think this will continue to be our target for the remaining of the year. Obviously this is a balance between the profitability €“ the risk you are taking versus the profitability, right? So if we increase the risk taking on the business side, obviously this will increase the profitability, but if you want to be kind of more capitalized, obviously you are taking less risk than this is the balance we have to take. So I think directionally from the company perspective, we do want to gradually increase the capital-light model.

And what will help us in this regard is that we have the tech-empowerment business that we have with the medium, smaller-sized banks. And with increase of that business, obviously we will increase the rev share with the financial partners. Eventually, this will lead to a gradual increase of the capital-light model. Hope this answers your question.

Operator: Thank you very much. With that, I would like to hand the call back to the management for closing remarks. Thank you.

Jamie Wang: Thank you, again, everyone for joining us today. If you have further questions, please contact us via our contact information available on our IR website. Thank you.

James Zheng: Thanks. Bye-bye.

Operator: This concludes today’s conference call. Thank you for your participations. You may now disconnect.