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FinVolution is leaning heavily into its expansion outside of China to counter a cooling domestic market. While total loan volume for the full year fell about 3 percent, international transaction volume jumped nearly 39 percent. This shift is intentional, as the company aims to move away from the tighter lending rules and slower growth currently affecting its Chinese operations.
International revenue now makes up about a quarter of the company's total sales. This diversification is the core of the business plan, as the platform uses its risk-pricing technology to find new borrowers in markets like Indonesia and the Philippines. Even with the drop in total volume, annual revenue still rose about 4 percent to 13.6 billion RMB (roughly 1.9 billion dollars). The stock fell about 4 percent following the report. While the international growth is a bright spot, the 28 percent drop in China-based loan volume during the final quarter shows the pressure the company faces at home. For long-term owners, the main thing to watch is whether the international business can grow fast enough to become the primary driver of profit before the domestic slowdown weighs too heavily on the bottom line.
The company is expected to report revenue of about 470 million dollars. Beyond the top-line numbers, the focus remains on the growth of its international business in markets like Indonesia and the Philippines. This expansion is a key part of the company's effort to diversify its earnings away from the stricter regulatory environment in China.
Management has a record of setting conservative targets and clearing them by small margins. This suggests a predictable business where the leaders have a firm handle on their numbers.
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