Yixin Group Ltd

HKEX:2858

Earnings Call Analysis

Earnings Call Transcript 2023-Q2

[Operator]

Dear investors and analysts, good morning. Welcoming you to come to the 2023 Interim Results Conference of Yixin. Our conference will be conducted both online and with the telephone conference. So please allow me to introduce the representatives of the company's leadership that Mr. Zhang Xuan, Chairman and CEO; Mr. Gao Zhi, Co-President; Mr. Yang Xiaoguang, the CFO. For this meeting, we will first invite CEO and Chairman of the company, Mr. Zhang Xuan, to give the speech. Now let's welcome Mr. Zhang.

[Xuan Zhang, executive]

Distinguished leader and host. Hello, everybody. I am Zhang Xuan, I welcome you to participate in this 2023 interim results conference. First of all, I would like to thank you for your concern and support for Yixin development. Today's conference is mainly divided into the following parts.

First, I would like to introduce the general situation of the company and the development of the industry, then Mr. Gao Zhi, President will introduce the highlights of the business, and we will also have Yang Xiaoguang, CFO, introduce the company's financial performance.

Now I will first talk about the special development of Yixin and then QA session. So from 2014 until now, we can also see that Yixin has worked hard in the field of auto finance, with the accumulated also transaction volume, about RMB 2.5 million. And now we have already got this overall transaction scale over RMB 280 billion and it's the leading net auto finance company in China.

So on the asset side, we have over 36,000 partners, including different like OEMs, and for stores and auto dealers, et cetera. We have also covered the entire provinces of China. We have already completed with more than 100 financial institutions, including banks, trucks and other companies, et cetera. We also have constantly lowered the cost of the capital. We have, at Yixin, always provides customers with high quality financial services. At the same time, we also continue to couple with our strategic shareholders, Tencent and JD.com, data and research and development.

So first of all this new car and the secondhand car financial business, so Yixin is also actively expanding the 2 businesses of FinTech and other technologies of new energy vehicle, China's new energy, automotive industry is developing very fastly. We are also maintaining a very fast growth. And we also have tested in several financial technological developers and having covered a large bank OEMs, third-party technology companies, et cetera.

So our aftermarket services is also developing steadily, and the revenue is growing healthily through the continuous introduction of new products that we have provided the customers with good exclusives. We have first-class risk management and asset management capacity. So the leading auto finance trading platform, Yixin has established with the intelligence and the efficient risk control system for the whole process before mid and after its lending.

So it has already got a very strong mode for our company's business development. But on the industry perspective, I would like to share with you this new key vehicle developments.

So in the first half of 2023, the new energy vehicle market continues to grow at a high speed. And the industrial structure accelerated and the automobile inventory also accelerated. So according to the data of this association, so the sales volume of new energy vehicle has already improved by 3.09 million and it's a Y-o-Y increase of 38% and the penetration of the rate is still like on the rise. So since the early days of this year, the national policy has continued to supportive that. First of all, the purchase tax reduction policy will further expand to 2027 to further promote the automotive industry consumption and further consolidated expand development advantages, certainly, we also accelerate the construction of new energy infrastructure until June of 2023. The number of charging piles have already reached 6.55 million, and we expect to have about 17.86 million by the end of 2025. Charging from the original distribution of the public new energy charging piles for construction of the new energy infrastructure in the Central and Western region. So we also improved significantly in recent years. According to the strategic plan of the Ministry of Industry and Information Technology, China will achieve the strategic goal. And then we also will promote with overall like new energy going through the remote areas is in line with the national policy. With the greater penetration of new energy vehicles into the third and fourth tier cities and the continuous improvement of the charge infrastructure. This will also bring a lot incremental markets under this opportunity. So further from this perspective, the whole year based on this increase of the Q2 market activity and the energy policy, we hope that sales could reach 8.5 million this year. So in the mid and long term, with the innovation and iteration of smart EV, we also hope that the penetration rate by 2025, we expect to reach about 46%, and the sales volume will exceed like 11 million. So now I like to see this overall development of the new and the secondhand vehicle in the first half of 2023. Well in the beginning of this year, as the economy and the society have gradually resumed its normal operation. So generally speaking, in Q1, we have already got some pressure based on all the different assets and down 7% Y-o-Y. Since April, we also have like this, a series of policy to simulate the consumption, including the subsidy of the purchase of the new cars implement, this one license for all the registration of the second hand cars. So compared with the same time of last year, so in H1, we have already got quite good increase cumulatively. So in the end, we have about 11.27 million, up by 8.9% Y-o-Y. And it also has included the results worldwide. So for the transaction volume of secondhand passenger car reached 7.04 million, up by 15.5% Y-o-Y. Looking forward to the second half of the year, the moderate recovery of the macro economy will also be gradually transmitted to this automotive market. And then, with the continuous emergence of a policy effects, we also can see the automobile market would also be further released and we also can see this in Nigeria, motivation of the domestic economy is also not very strong. And so the overall market is actually having quite slag and weak growth. So but the second time car will also show a higher Y-o-Y growth under this low utility in 2022. In the mid and the long term, China's automotive industry is a cost of currency in a period of transformation and change. And now with the policy and this compound innovation of the companies, we also expect to have with a better increase. But in 2025 the first volume of the new car is expected to reach 25 million. So at the same time, we also consider there's a continuous improvement of the car ownership. Consumer acceptance is also on the rise of the second hand car. And for example, we also have some new policy, for example, like the canceling of the subscription, et cetera, we expect to have this exclusive market of that. In 2025, we hope to exceed the 21 million of that. However, it doesn't include a spot. And then -- when it comes to auto finance industry, we can also see that the logo of that is actually be continuously think. So recently, with this account, the fleet improvement of China's credit information and the encouragement of the domestic cycle. So we have already got this overall good age of the development. Thanks to the increase of the demand, of replacement, the prosperity of the market segment and the increase of the penetration rate, we expect that market scale will reach RMB 3.8 trillion by 2026. In the past few years, the China's consumers acceptance of auto finance and service has also gradually increased and then it has already reached about 58%. And we also can see that compared with like America and the European automotive industry, we think the penetration of this auto finance reached 80%, there is still great potential for growth. And with the sanitization of the industry and the continuous innovation of products, China's auto finance market, we definitely have a good faith in that. Next, let's invite Mr. Gao to introduce the business in H1 this year.

[Zhi Gao, executive]

Hello, everybody. I'm Gao Zhi. So now I am talking about this overall business in H1 2023, Yixin has showed our strength as a market leader. The transaction volume continues to grow. The income of various factors increased as well, the profitability was also significantly held.

And we have several different highlights. First is the auto finance. Transaction volume has reached 21% Y-o-Y, reached RMB 30.4 billion. Second is the quantity and the quality of the assets continue to improve. Compared with the end of last year, our 90 plus overdue rates have dropped by 1 bp to 1.91%. So the market service, aftermarket service income also increased significantly, reaching RMB 104 million. Then the company's 2 main strategic businesses of new energy trading volume increased rapidly up 236% compared with the same time last year. So FinTech, since H1 of 2022 and then the H1 2023, the income increased rapidly to reach a very high level to RMB 86 million, a Y-o-Y increase of 101%. So I can say that the continuous improvement of our advantages of Yixin, continuous optimization of our main business.

And then in H1 of this year, the total production volume is 312,000 units, up 17% Y-o-Y, and we reached a record high, reaching RMB 30.4 billion in the financing amount of our auto finance transaction. We also can see that in the past 3 years, the average financial amount of the cost has been increasing continuously and the quality of customers have also been continuously improved. In H1, total financing transactions, volume of new cars was 180,000 units of Y-o-Y, increase of 55% and we also can see the overall amounts of the financing has reached RMB 18.1 billion, a Y-o-Y increase of 66%. So the growth of our new car this year mainly comes to -- from TSX. And we directly use like price drop and discount instead of the previous discount loss, which makes us to stand out on the same standing point. So we also can see this has also made us leading with great benefit, leading as a third party leading enterprise. And second, we continuously expand and deepen our cooperation with a number of different customers, like OEMs and et cetera. And we also actively expand the scope of our risk preferences and serve more new car buyers. In H1 of this year, the transaction volume was 132,000 units and then the financial amount was RMB 12.3 billion drop of 13% down Y-o-Y in the past. In quarters, we have appropriately reduced the risk exposure of user cost, mainly consider the risk tolerance of secondhand cars is more susceptible to the relatively decreased and the depressed macroeconomic environment. Secondhand business is in the key business. We believe with our high quality of service and with the continuous expansion of the secondhand car market, we definitely will have this increasingly more important position in this industry. We also can see in H1 this year, our new energy vehicle finance business have also achieved remarkable growth with the total transaction volume reaching 39,000 units up by 236% Y-o-Y and the financing amount reached RMB 4.35 billion, up by 267% Y-o-Y. Sustainables of our new energy business is mainly driven by the following 3 factors. First of all, we also can see like for some overall exposure, et cetera, like Hechuang, Guangzhou, Changan and Toyota. We also have jointly corporate with them to take win-win corporation. The fourth if we have like a formulated exclusive financial plan for new energy vehicles, and they actually require better risk control and the product design of that. So consumers group also have special policies for that. And then for new energy vehicle financing, Yixin has also developed exclusive financial plans such as [indiscernible], new energy and [indiscernible], et cetera, so to have this great market opportunity to be seized by us for this new energy vehicle. So for the secondhand vehicles for new energy are also gradually emerging, and we are also starting to see several arrangements for that. But Yixin has adopted a new way of digital operations, different from the offline trading platforms. We also have with online and offline marketing, and we could also have this whole process touch point for our products to our consumers. We could also guarantee this, for example, application, registration to the approval are completely online, which have created very good information process and a close-to-loop online. So in recent years, we have already created a very good customer satisfaction. Until June 2023, we have already reached 29% of the penetration of our new energy vehicle financing. So this has also shown that the new energy business has also been recognized by the market. And now let's see FinTech. From H1 of 2022, we have already started to expand to there. We have already seen this steady development. We have like a different products like financing credit management, auto finance intelligence risk control, auto financing asset management, et cetera. We also have this financial technology becomes completed and to have a better modular, standardized and expandable SaaS services. In H1 2023, the financial technology business completed the financial scale of more than RMB 2 billion, achieving the overall income increase of RMB 86 million, a Y-o-Y increase of 101% during the period of report. The company continues to expand different business in the following aspects. First of all, we established the corporation relations with different partners, including that best cooperation with new energy brands, et cetera. So for H1 2023, we penetrated -- our penetration rate of new energy vehicle is about 36% in the new car transaction completed. So Saas -- secondly the SaaS mode is extended to the field of secondhand vehicles, which provide a unique business for our financial institution and partners indeed. So finally, we also provide local life comprehensive solution for regional banks, taking digital intelligence needed for small and medium-sized banks as our footprint and the company is because our industry experiences and efforts, technology to help them establish exclusive consumer acquisition channels as risk control, et cetera. So we also hope to use our effective expansion to help the industry to improve our digital level and greatly expand our financial market space. For risk management, Yixin has a comprehensive risk management system covering whole process of auto finance services. And in first half of 2023, we even have this credit increase of China was officially launched, which made our income formation, entry and risk control, offline and online. And therefore, this product is actually having this information collected online and online authorization and verification, et cetera, to have this background quick check, which could effectively screen high-quality consumers in a pre-profit. Now the overall pass rate has reached 62%. Yixin has self-developed a comprehensive credit evaluation system [indiscernible] is also constantly iterating as far as credit system, and we evaluated through monopoles credit dimensions, including more machine learning, algorithm for data analysis, make credit decisions in different scenarios and to jointly make this model with different partners, which makes the intelligence level of the model continuously to improve. At the same time, we also have independently developed an auto finance asset evaluation algorithm that can generate more than 1,000 different techs, which could also have accurate prediction of the default rate and in the number of the transactions on the car, the loss rates, et cetera, this could also offer a proprietary auction disposal platform, which provides us with efficient and transparent channel to verify the asset. Now let's look at this aftermarket business. Since 2020, we started to do the aftermarket business, and we hope to have like richer services and improved experiences for our customers. In H1 of 2023, our transaction of equity package was 151,000, up 24% Y-o-Y and the overall aftermarket service earned RMB 104 million, up by 17% Y-o-Y. In terms of our product, the team is also committed to design the diversified product series. And now we hope to be closer to the consumers right and demand. And then the next one is in terms of product, we are also like helping the company to check the value of their cars, and we also hope to have the seamless auto insurance services experiences for contract consumers and existing consumers. The institutional corporation, for example, we co-operated with like Pina, China Life insurance, et cetera, to provide consumers with more comprehensive insurance solutions and further strengthen our competitive edge. In the future, we will continue to innovate our products based on consumers needs in close to market services, actively expand cooperation with industrial ecological partners and tap the potential of customers. Let us welcome CFO, Yang Xiaoguang, Mr. Yang to explain the company's financial highlights.

[Xiaoguang Yang, executive]

So now I'm going to report to you the main financial highlights achieved by Yixin in H1 this year. Generally speaking, we have several points. The first is the growth of asset management scale. And this is already reaching RMB 65.9 billion, an increase of 25% compared to same period last year. I can say that in this very challenging macroeconomic market condition with different pressure, we still can grow. I think this is definitely worth mentioning. And this has also further -- et cetera. And we also can say that we have about RMB 2.8 billion. So we also can see for fee and sales and R&D. This is about like a decline by 13%, and this has already shown that for our growth of market management. And at the same time, we are expanding our cost control and then to reduce our overall cost and fixed expense. So we have about 25% of our net profit, reaching RMB 410 million.

Now let's discuss some important financial indicators. And now we also can see that for first half of this year, they have about 15% of the Y-o-Y increase from the perspective of the income structure. Our platform income has taken about 75% which is quite stable. This is also like the main part of our income composition. In the first half of the year, revenue increased by 14% Y-o-Y. So we also can see that FinTech for our SaaS, this is worth mentioning, this has expanded by 101% Y-o-Y, accounting for 3% of the total of revenue. We expect for this business -- the future potential growth is still huge. And Yixin also like this market a lot, and we really like this market. And at the same time, -- so we use the FinTech -- so we also can see -- we also could see that for this overall growth, this is recognized by us and we also can say that for this major market, this is actually definitely like in line with that. And this has already reaching about 8% of this core business income is reaching RMB 1.82 billion. And now let's talk about this capital side. We continue to optimize the financing source and all the proportions of the working capital loans have further increased while maintaining the security of the stability of that. And we also could say that -- so we have already done for all different ones. So this is actually on the one hand, it has already got this new demand for that. This is also our own responsibility and is our own -- like efforts and it has already been recognized by that. This is actually quite good performance. And for further -- and we have already got this dropped by 4.8% of the issue of SVP, including 1 on 2022 Q4 the third in total. And that we definitely would like to explore more on that. So from gross margin perspective, for our overall growth, it has all been improved. And indeed, for growth rate, it has been lower but it's still above 50%. And I think this is in line with 2021. And the main of that is actually being influenced by that. So we also have set good performance compared with the China -- current like the packed environment and for this mortgage. So we also have like a deleveraging. This is also what we have already seen for our consumer. And the next thing is. So they also have a certain increase of that. And -- for all that, this is also with a certain decline. And for the overall platform, this is also in line with that. And the positive thing is as I have already said to them -- so you could also see that we have already got the further improvement of that. At the same time -- so this is also about like 50% of the overall base level. And now let's see our overall operation, we could also see that overall lowering of the cost and improvement of the revenue, we could also see has already seen very good effect. In the last few years, in the last 3 years, we have seen this continuous improvement. We have already got this per capita revenue reaching RMB 0.69 million is actually the record high and all the different expenses or the absolute level has also taken like a continuous optimization. So we also could say for the sales management is -- for 2022, we also have a certain improvement and -- so we also can say that this is also the overall performance. And now as the previous leaders have already said. So all the -- for example, like so this net profit is also on the rise. For first half of the year, this is also after the adjustment is RMB 410 million for our net profit is up by 25%, as we said before. And in 2022, is the year when we have this continuous improvement of our revenue and to reverse our loss situation, this also faced with very complicated environment. We have already got this great results. And now let's see the indicators of this asset quality, we have more than 90% of the overdue rate continue to incline -- to decline. So for the continuous 2.5 years, we improved that and controlled that. And now we have about 1.91% of this 90% overdue. So we also could see that -- this is also very good. And we also can say -- and we also -- so all that 2023, we have already got this 180%. And we also can say that -- this is also like quite cautious one. So we could also see about this liability and the ratio, the debt ratio, this has also improved better than before. And we also can see this is a healthier. And so this is also like -- this will influence our overall revenue. And now -- we have already got this better profitability. We think we still have like a further improvement opportunities. And at the end of last year, we still have like a better influence. And we also got a very good guarantee of that. And we also would like to invite Mr. Andy to talk about further improvement of consideration.

[Xuan Zhang, executive]

Thank you, Mr. Zhi Gao. I think in the past few years, our overall business, including our core business, we have already achieved quite good growth. And for that, this is -- and we also have several different reflections. The first is the new energy -- and for all this overall FinTech layout, we have already got this one-stop staff, and we have this overall FinTech platform -- so including like asset management, et cetera. And -- so we could also see that like our overall management and et cetera, we also have this whole life cycle management with this continuous innovation and polishing of that. And you had already cost the overall continuous of that -- so for this high end, the good quality consumers are mainly covered by banks, and we also have, for example, for all these ones could not be reached by that. So this is further improved in that -- and we could also see that for the mid range, we have this overall rise of debt and it has already reached RMB 1.5 billion. So this is definitely like the #1 in the industry. However, with this trivial level margins for our overall efficiency is still quite limited. And this is -- also, we hope to use this stat is a light asset model to like tap it to a bigger watt and then to open the ceiling of that. And now we also see that with technology, we have this more diversified one. And to improve this overall digitalization level of the FinTech industry and to have some other things, including from like asset management, and et cetera. And we also can say that for this overall management is for all those standardized products. And then, we could also see like AI tools developed by us from the harvesting of the consumer and with the credit evaluation and et cetera. So this is about the 2.0 version.

And now let's talk about this overall new energy assets. So we also can see the penetration rate is far exceeding our expectations. And this is over like 35% of that -- and for this 50% of the penetration rate until 2025, this is higher. And we think for the exclusive market for small and medium-sized markets to be penetrated. We think this proportion means the overall new energy would have more lower-tier cities. And then we also can see that in Tier 3, Tier 4 country-level market and for the infrastructure. As I said before, we will continuously optimize this overall infrastructure. This is also the national channel. So I think this is like a very good -- and this is also like with a lot of big market for all the Tier 3 and et cetera, So we have this very high accurate staff. So we also hope to do more layout of this lower-tier market. So we also can see that the overall trend is for all those different brands. They have already got this very healthy, very good market. So for next stage, we also can see that for the new vehicle ones, we think this like a very good strong potential for that, we believe. And then except for this ordinary FinTech for new energy vehicle effects, we are also thinking -- so we also can see that this is actually in the mid-run, it had something with the battery. And for all the inclination, et cetera, in 2022, we have already got this 480 GWV. So we also hope you could actually have this better expansion. So for all the different lines, it has something to do with the FinTech and et cetera. For example, like battery insurance, battery recycling, et cetera. And for this engine battery is actually taking a big amount of the cost of new energy vehicles. At the same time, with more volume existing in the market, we will also have this peak time of that. So for a very important aspect of the recycling of the battery is also being developed. And we expect that -- and for all those different new energy vehicles and the business and with all those rich experiences and for -- this overall supply chain, we could also have this corresponding matching business. And we also hope like we have this afterwards of the quality, we could have this cycle. And this is in the future, what we try to do.

And for the next aspect, this is about -- we focus on this battery, et cetera. And for all those intelligent transportation, intelligent ones would also be more opportunities. So we expect this is more like 3.0 for the overall opportunities and listed what we will continuously look forward to that. And now I will recommend everybody to be open hearted and discuss with us. So we will just communicate with everybody, and we welcome you to do this Q&A session. To welcome all the investors to do the Q&A discussion.

[Operator]

[Operator Instructions] So the first one is -- we will just have the first from the online one. So Mr. Gao, Mr. Yang, and this is the question for me. I have 2 small questions. The first one is just now we have already mentioned that for this black consumption and for this degrading, depressing macro economy, how do we view about this lower half of the year about this debt and et cetera? And -- we also could say that whether we also have some other transaction of that is also being very stable. So can you share with me like for the current competition and environment, for example, for this used own car, do you have some special changes? For example, what is our latest idea about that?

[Xiaoguang Yang, executive]

Thank you, [ Vicky, ] for the question. I'll first answer the first question. And for the second question, I would invite Mr. Gao to answer that. So for the first question is what is the overall environment? Yes, for our H2 debt and for all those expectations, because we think -- so in this market, which is actually one of the major consumption market. And we could also see the data is we have some weak consumption, and we expect that -- the market is still with the cheapest scale. You can also see for each one. We still have the data growth and the used hand is also about RMB 10 million for Yixin. We expect -- we still have a further expansion of that.

So for H2, I expect the cost and the revenue, would you keep that. And this is also like keeping the same one, and we also have about like 25% of this overall growth. And we could also further improve and optimize that. This also comes from, I think that the phase comes in several points. The first one is we could see. We are not disclosing publicly. But here, I would like to say that for before M3 -- we have like for this time and everything it could also be like down to M3+. So we also can see structural wise, this is about 60%, and this is also [Audio Gap] so I would just like to say this is what's my answer.

I have something to say because -- for us, we could also say the first one, everything is actually supporting us to sell vehicles. And the second one is we can also see about like 1 million of the cars hoping to be sold with dozens of OEMs brands. Everybody wants to sell more cars. And except for like selling more cars, the battery is actually doing finance with leasing. So for financial dependency is even stronger than before. And I also would like to say it's about 20 million of the new cars and over 10 million of used cars related to us is about like 2% to 3% of the market. However, in the overall staff, and this is also like a very high profitability and OEM, for all the financial companies, we are very willing to cooperate with them. This is also another reason why in the past 2 years, we have this overall like presence in that. We have about over RMB 15 million -- over RMB 150 million to RMB 160 million, but what we have is actually limited. For this overall layout and for the size that could be penetrated is actually far feeding my leverage. So for FinTech, this could also help us to realize our top one. This is also gradually what we can see about the growth. And we also can see that for Yixin, we are still a positive although this market is under pressure and consumption is under pressure. We still say that our penetration rate is still not that big. This is our only value could be offered maybe for our overall market share would be bigger and bigger.

[Operator]

[Interpreted] So the next question is about the used car -- and then for the market and for Yixin's expected policy.

[Xiaoguang Yang, executive]

[Interpreted] We think that our idea is for used car and for FinTech for financial market for that, we think for this second hand transaction, you see on the rise according to the association. For each one this year, there are many reasons. Maybe we have like a decline demand or something. However, the overall volume, you see on the rise -- we could also see that this is actually easier. And we also can see that for finance, when we do this new car -- this is also exceeding my own expectation. And -- this is also not very good. And we could also say that this is not just about like a price or some other third parties. [Audio Gap] And we can also say that for 3 months, and this is also -- for that -- this is indeed like the competition is even worse than us. So from last year, we can also say that is from the previous data provided by me -- this is also like improving the overall staff and we could also see that -- first one is -- for their overall risk tolerance and they need to have that. So we could also say that -- and we are constantly on the rise, and we also like for the overall staff, et cetera, and -- this is still quite good. And we also have, for example, we could do more -- this is, you can also say that for the sales, it's like quite good. And how you see and we could also do like a more high end ones. And we could also do that, et cetera.

And for secondhand ones, we could also see this is quite hard. And for the risk management, et cetera, and this is actually bigger than that. And we also expect that because -- in conclusion, for financial asset is actually you could just tolerance your risk in second half one -- and we also could have, for example, like we could have some like secondhand one, et cetera. And -- so we also have some different -- and we also have like a better quality, et cetera. And we also have about in the next 12 to 18 months -- so we got our own positioning. And maybe we also need to have our own change of our strategy. We also have like some different policies, and this is also like helping us to participate in that and for the secondhand car market, we expect for consumption, we will just recover to the normal level. We think for this pain or more like a financial institute could tolerate that.

[Operator]

Just now we got a question from [indiscernible] Asia, insurance is actually like a new market. H1 has already seen some fluctuation, but it's also picking up. So how do you expect about this market of H2? And what about exports? How do you think about it for new vehicles?

[Xiaoguang Yang, executive]

[Interpreted] So we also can see from the sales perspective, we expect, I have already judged that it's actually quite a small increase. And now for all the policies have basically got all of them. We have already seen that for all the OEMs -- so their war on price and I expect that this could keep like a similar size of last year and -- we could also see is about 20 million. It's definitely good. And it's definitely like up and down. We also can see for this export is quite good. And -- so we also have a lot of different ones. We also have co-operative with that. And we have done some increase of our corporation with that. So this is about this export of this new energy vehicle is definitely very good. And -- this is also like for China one and the Japanese wise, we will go global and then to do this overall penetration. This is also like a high probability.

And then for local markets, I think like the price was definitely on the rise. And so we also could say that we cannot see a very good one. And -- we still would do this very independent and very traditional like OEM and including our new staff, and we also have some other walls, some of them and maybe until the end of this year, maybe next year, we will still come back and including for some other JV -- so we could also see that from this overall like investment [indiscernible] and et cetera. So maybe for this overall cycle and for the price -- and for the options we still have more. And we also can see from our perspective for the overall competition except for price decline, finance is also like a very important, very important one. And -- we also can see for this overall new market and the new vehicle ones. So we also can see -- we could also like to give full play to our own staff.

[Operator]

Yes, Paul. Next question is -- we had this Chinese one from KBD Capital Limited at [indiscernible]. His question is, for this bad loan, the clearling time, do you have some increase compared to before?

[Xiaoguang Yang, executive]

And we also can see that we mean is actually for the better of work. And for my expectation is -- so we can also say that for the overall staff and -- for all that, so the first one is [Audio Gap] and we could also see like for all this top ends and arbitration, et cetera. And -- for that, this is about this management and improvement, et cetera, including like AI and the strategy from M0 to M3. And -- so all that is actually even higher. And -- this is actually higher at low rate compared with before -- that's all.

[Operator]

That's all for the question-and-answer because of the limited time, we will have the last question. It comes from [indiscernible] Security and for the state administration has already issued this management of car finance. It's about business range and openness to the outside will this influence the seems business. So how do you feel about that?

[Xiaoguang Yang, executive]

I think that, first of all, for this financial market is like -- because also like because from the management, this is for the company, is actually being more standardized and being all managed. So we could also help with the fiscal market and et cetera. We could also see that what we do is we can -- to this car finance business and our partners or some other ones. And we could also say -- that for all these because Yixin is like dealing with all the different health and the value for the industry is there. So from our own perspective, we think for the platform business and this on our previous experience. And now because for our like 30-plus -- like a financial system for our partners. We can also see like yesterday, we have -- we also have like the overall health and et cetera.

[Operator]

Thank you so much for all the questions. And we think that our interim results of the conference today is coming to an end. If you want to understand more about the company's, contact us for the investor relationship or the e-mail address in the [indiscernible]. Thank you so much for attending and looking forward to see you again next time. Thank you. Bye-bye. [Statements in English on this transcript were spoken by an interpreter present on the live call.]