360 DIGITECH INVESTOR PRESENTATION - OCT 2021 - INVESTOR RELATIONS | 360 DIGITECH, INC.
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360 DigiTech
Investor Presentation
Oct 2021
1
Disclaimer
This presentation has been prepared by 360 DigiTech, Inc. (the the basis of or be relied upon in connection with any contract or the Company’s operations and other factors, many of which are
“Company”) solely for information purpose. By viewing or investment decision in relation to any securities or otherwise. beyond the Company’s control, and accordingly, actual results
accessing the information contained in this material, you hereby This presentation does not contain all relevant information may differ materially from these forward-looking statements.
acknowledge and agree that no representations, warranties or relating to the Company or its securities, particularly with The Company or any of its affiliates, advisers or representatives
undertakings, express or implied, are made by the Company or respect to the risks and special considerations involved with an has no obligation and does not undertake to revise forward-
any of its directors, shareholders, employees, agents, affiliates, investment in the securities of the Company. Nothing contained looking statements to reflect future events or circumstances.
advisors or representatives as to, and no reliance should be in this presentation shall be relied upon as a promise or
placed upon, the accuracy, fairness, completeness or representation as to the past or future performance of the
correctness of the information or opinions presented or Company. Past performance does not guarantee or predict
This presentation also contains non-GAAP financial measures,
contained in this presentation. None of the Company or any of future performance. You acknowledge that any assessment of
the presentation of which is not intended to be considered in
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and presented in accordance with accounting principles
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generally accepted in the United States of America (U.S.
arising from any information presented or contained in this Company and that you will conduct your own analysis and be
GAAP). In addition, the Company’s calculation of these non-
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GAAP financial measures may be different from the calculation
presentation. The information presented or contained in this future performance of the business of the Company.
used by other companies, and therefore comparability may be
presentation is subject to change without notice and its
limited. The reconciliation of those measures to the most
accuracy is not guaranteed.
comparable GAAP measures is contained within this document
Certain statements in this presentation, and other statements or available at the Company website https://ir.360shuke.com/.
that the Company may make, are forward-looking statements
This presentation does not constitute an offer to sell or issue or within the meaning of Section 27A of the Securities Act and
an invitation or recommendation to purchase or subscribe for Section 21E of the Securities Exchange Act of 1934, as
any securities of the Company for sale in the United States or amended. These statements reflect the Company’s intent,
anywhere else. No securities of the Company may be sold in beliefs or current expectations about the future. These
the United States without registration with the United States statements can be recognized by the use of words such as
Securities and Exchange Commission (the “SEC”) or an “expects,” “plans,” “will,” “estimates,” “projects,” “intends,”
exemption from such registration pursuant to the Securities Act “anticipates,” “believes,” “confident” or words of similar meaning.
of 1933, as amended (the “Securities Act”) and the rules and These forward-looking statements are not guarantees of future
regulations thereunder. No part of this presentation shall form performance and are based on a number of assumptions about
2
AGENDA
01 Corporate Overview
02 Leadership Position
03 Quarterly Update
3
01 Corporate Overview
4
Our Mission
To Become a Leading Global Fin-Tech
Platform through Continuous Innovations
in Business Models and Technologies,
and Comprehensive Insight
into Customers and Partners.
5
The Challenges
Consumers’ and SMEs’ Unmet or Mismatched Credit Demand
Customers: Customers: Customers:
Customers:
difficult to access dynamic combination fast changing credit
small ticket size, short
credit b/c short credit of pricing, duration, profile and asset
duration, high-
history, age, job, etc. volume quality
frequency
Financial Institutions: Financial Institutions: Financial Institutions:
Financial Institutions:
credit systems are limited offerings lack of real-time AI-
high costs to reach
designed for mismatch diversified powered post-lending
long-tail demand
“traditional” borrowers demand management
6
The Solutions
Customer Acquisition Profiling Matching Collection
• AI Based Analysis on • Data-driven profiling • Cloud Bank System • AI robot collection:
users’ behavior and for customer connects consumers' ‒ Over 83% of
credit history behaviors including demand with institutions' collections are done
Innovations device behaviors and offerings through smart
• RTA-DMP Marketing by AI robots
and System efficient risk behaviors matching and achieves
98% approval rate. ‒ Rapid evolution of AI
Technologies customer acquisition • Real-time Anti-fraud
robot’s machine
• Embedded Finance Monitoring • Apollo Platform - learning capability
expanding into • Argus RM Model & Cosmic Cube System
optimizes product pricing ‒ AI powered
different consumption Algorithm
based on customers’ risk concurrent robot-call
scenarios • AI Technologies allow profile and rate technology with
99.5% of applications sensitivity. higher throughput
to be completed rates
automatically w/o and longer average
human intervention valid call duration.
7
Our Offerings
Capital Heavy Capital Light ICE (1) API (Embedded Finance) RM SaaS (2)
2016.07 2018 2019 2020 2020
More Tech-empowered Models
Customer acquisition Customer acquisition Customer acquisition Customer acquisition Customer acquisition
Preliminary risk evaluation Preliminary risk evaluation Preliminary risk evaluation Preliminary risk evaluation Preliminary risk evaluation
Matching & referral Matching & referral Matching & referral Matching & referral Matching & referral
Service
Provided(3)
Advanced risk evaluation Advanced risk evaluation
N/A Advanced risk evaluation Advanced risk evaluation
Taking principal risk Taking no principal risk
Post-lending management Post-lending management N/A Post-lending management N/A
Revenue • Loan facilitation service • Loan facilitation service • Referral fees • Loan facilitation service • Subscription fee of
Model fees (Customer fees (Customer fees sharing with API software
acquisition, Risk profiling, acquisition, Risk profiling, partners
Collection, etc.) Collection, etc.)
Note: (1) ICE refers to Intelligent Credit Engine; (2) RM SaaS refers to Risk Management SaaS; (3) Different color shades represent the intensity of each function we perform under each model.
Source: Company data. 8
Addressable Market – Consumer Finance
Our Leadership Position
Current Participants ❖ Indisputable leader among digital platforms
❖ Consumer finance companies ❖ Best in class risk management
❖ Micro-lending companies ❖ Further market share gain as industry consolidation continues
❖ Digital platforms such as : ❖ Cap-lite model gains momentum w/o principal risk exposure
RMB ❖ Cap-lite, ICE, and RM SaaS enable us to work with
~3.3 Trillion(1) different types of institutions and access enormous
transaction volume
Prime
IRR＞18%
A New Frontier for us
❖ Deep-rooted cooperation with KCB(2)
Current Participants ❖ QFIN’s strength in technology, innovation,
RMB risk management, speed to market, and
❖ Banks (large national in particular) customer interaction
❖ Mega-sized digital platforms such as: ~9.9 Trillion(1) ❖ KCB’s strength in low-cost funding, full
regulatory compliance
Super-prime
IRR < 18%
Note: (1) Estimated consumer financing loan origination for each tier as of 2020. (2) Our affiliate 360 Group became #1 shareholder of KCB with 30% stake in August 2020.
Source: industry consultant.
9
Addressable Market – ‘
• Total cumulative
Key Milestones origination/facilitation
volume reached
RMB647 bn
• 105 financial institution
• Total cumulative partners
origination/facilitation • Total cumulative
volume reached registered users
• Total cumulative RMB504 bn reached 169 mm
origination/facilitation
volume reached RMB438 • 97 financial institution
bn partners Mar
• 91 financial institution • Total cumulative 2021
partners registered users Jun
reached 156 mm 2021
• Total cumulative registered
users reached 149 mm
• Among the first group to
Sep • Total cumulative
pass the filing with NIFA for 2020 origination/facilitation
• 1 group to join the
st
mobile finance app volume reached RMB735 bn
anti-fraud alert Dec • 108 financial institution
platform led by Jun 2020 partners
Ministry of Public
• Won the Security 2020 • Total cumulative registered
Achievement in • Approved by PBOC • Total cumulative users reached 176 mm
Credit Risk to access Credit origination/facilitation
Management Reference Center Nov Aug volume reached
Award by Asian 2019 2020 RMB573 bn
• Officially launched Banker Sep • 99 financial institution
partners
Cap-Lite model 2019 Dec • 360 Group got approval
Mar from CBIRC and • Total cumulative
May 2019 2019 became the largest registered users
shareholder of Kincheng reached 163 mm
2018 Oct
• Total cumulative Bank
2019 origination/facilitation
Jul • Strategically upgrade
Aug volume reached and propose name
2016 • Built AI RMB326 bn
2019 laboratory with changed to 360
Dec • 81 financial institution DigiTech
• Founded in Shanghai Jiao
2018 partners
July 2016 • Launched ICE Tong University
and launched • Total cumulative
• Listed on NASDAQ (QFIN) “future scientist” registered users
reached 135 mm
• Total cumulative program
origination/facilitation volume
reached RMB127 bn
• 24 financial institution partners
• Total cumulative registered
users reached 78.8 mm
11Experienced Management Team
Hongyi ZHOU Haisheng WU Alex XU Zhiqiang HE Yan ZHENG
Chairman CEO CFO SVP CRO
20+ years of managerial 15+ years of experience in 15+ years of experience in 10+ years of 10+ years of experience in
and operational experience Internet product capital market, corporate experience in consumer finance risk
in China’s Internet industry development and finance and business consulting and management and co-
operations management business management founder of a fintech
company
Source: Company data.
1202 Leadership Position
13Strong Growth Momentum (1)
Origination/facilitation Volume(1) Outstanding Balance(1)
(RMB billion) (RMB billion)
413.8 171.8
（3）
343.1 146.9
246.8 92.1
199.1 72.5
96.0 43.1
31.0 12.2
0.4 0.3
2016A 2017A 2018A 2019A 2020A 2021E 2022E 2016A 2017A 2018A 2019A 2020A 2021E 2022E
Cumulative Users with Approved Credit Line(2) Cumulative Borrowers
(million) (million)
22.3
34.7 19.7
30.9
24.7 15.9
12.5 8.3
3.3 2.3
0.1 0.1
2016A 2017A 2018A 2019A 2020A 2021Q2 2016A 2017A 2018A 2019A 2020A 2021Q2
Note: (1) Forward estimates are based on analysts' average. (2) Refers to the total number of users who had submitted their credit applications and were approved with a credit line at the end of each period. (3) The Company guided 2021 full year
loan origination/facilitation volume is RMB340-350 billion.
14Strong Growth Momentum (2)
Revenue (1) Non-GAAP Net Income (1)(2)
(RMB million) (RMB million)
18,280
16,194 6,635
15,480
13,564 5,447 5,600
9,220 3,797
2,752
4,447 1,801
788
2 165
2016A 2017A 2018A 2019A 2020A 2021E 2022E 2023E (21)
2016A 2017A 2018A 2019A 2020A 2021E 2022E 2023E
Note: (1) Forward estimates are from Bloomberg and Thomson consensus; (2) Excluding share-based compensation expenses.
Source: Company data, analyst reports.
15Increasing Contribution from Technology Solutions(1)
Facilitation Volume of Technology Solutions Outstanding Balance of Technology Solutions
(RMB billion) (RMB billion)
0.8% 7.9% 20.3% 22.6% 22.6% 26.9% 27.6% 34.1% 50.2% 56.1% 1.6% 5.7% 15.4% 19.9% 22.3% 25.9% 27.4% 31.9% 42.0% 49.5%
58.2
49.6
37.2 42.8
29.4
23.5
23.1
18.2 20.3
15.8 16.5
11.4 12.1 11.9 14.4
10.9
3.8 3.5
0.3 0.8
1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21
As % of total origination/facilitation volume / outstanding balance
Note: (1) Including Capital-Light, ICE and other technology solutions.
16Indisputable Market Leader (1)
Origination/facilitation Volume (1) Outstanding Balance (1)
(RMB billion) (RMB billion)
413.8
171.8
343.1
146.9
301.9
113.8
246.8 239.8
92.1 94.4
199.1
177.0 76.5
157.3 72.5
60.6 60.3
126.0 125.3
96.0 43.1 44.0
82.2 32.4
66.1 65.6 61.5 64.2 25.7 24.1 29.4 26.4
47.7 19.3
31.0 12.2
Note: (1) Forward estimates are based on analysts' average.
Source: Company data, analysts' reports.
17Indisputable Market Leader (2)
Revenue (1)(2) Non-GAAP Net Income (1)(3)
(RMB billion) (RMB billion)
18.3
16.2 6.6
15.5
14.7
13.6
12.6 5.4 5.6
12.3
11.0
10.3
9.2 9.6 9.4 3.8
7.6 3.3
6.8 2.9
6.0 2.8
2.5 2.6 2.8 2.5 2.4 2.4 2.4
4.4 5.0 4.5 2.1 2.0
3.9 1.8
3.0
1.1
0.8
0.8 0.3
0.2
(2)
Note: (1) Forward estimates are from Bloomberg and Thomson consensus, and analysts estimates; (2) Excluding revenue from online e-commerce channel; (3) Excluding share-based compensation expenses.
Source: Company data, analysts' reports.
18Best-in-class Risk Management (1)
M6+ Delinquency Rate by Vintage
5.50% 5.50%
5.00% 5.00%
4.50% 4.50%
4.00% 4.00%
3.50% 3.50%
3.00% 3.00%
2.50% 2.50%
2.00% 2.00%
1.50% 1.50%
1.00% 1.00%
0.50% 0.50%
0.00% 0.00%
7 8 9 10 11 12 13 14 15 16 17 18 7 8 9 10 11 12 13 14 15 16 17 18
2017Q1 2017Q2 2017Q3 2017Q4 2018Q1 2018Q2 2017Q1 2017Q2 2017Q3 2017Q4 2018Q1 2018Q2
2018Q3 2018Q4 2019Q1 2019Q2 2019Q3 2019Q4 2018Q3 2018Q4 2019Q1 2019Q2 2019Q3 2019Q4
2020Q1 2020Q2 2020Q3 2020Q4 2020Q1 2020Q2 2020Q3 2020Q4
Source: Company data.
19Best-in-class Risk Management (2)
M1+ Delinquency Rate by Vintage
9.00% 9.00%
8.00% 8.00%
7.00% 7.00%
6.00% 6.00%
5.00% 5.00%
4.00% 4.00%
3.00% 3.00%
2.00% 2.00%
1.00% 1.00%
0.00% 0.00%
2 3 4 5 6 7 8 9 10 11 12 2 3 4 5 6 7 8 9 10 11 12
2017Q3 2017Q4 2018Q1 2018Q2 2018Q3 2017Q3 2017Q4 2018Q1 2018Q2 2018Q3
2018Q4 2019Q1 2019Q2 2019Q3 2019Q4 2018Q4 2019Q1 2019Q2 2019Q3 2019Q4
2020Q1 2020Q2 2020Q3 2020Q4 2021Q1 2020Q1 2020Q2 2020Q3 2020Q4 2021Q1
Source: Company data.
2003 Quarterly Update
21Continued Growth Momentum
Origination/facilitation Volume(1) Outstanding Balance(1)
(RMB billion) (RMB billion)
88.5 117.6
74.1 101.9
66.0 69.0 84.2 92.1
56.0 58.9 70.6 72.5 74.1 78.5
48.4 53.5 52.8 61.3
2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21
Cumulative Users with Approved Credit Line(2) Cumulative Borrowers
(million) (million)
34.7 21.0 22.3
30.9 32.7 19.7
27.7 29.3 17.8 18.7
24.7 26.1 15.9 16.8
22.8 14.7
19.2 12.5
2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21
Note: (1) Including ICE since 19Q4. (2) Refers to the total number of users who had submitted their credit applications and were approved with a credit line at the end of each period.
22Solid Execution through Economic Cycle
Revenue Non-GAAP Net Income(1)
(RMB mm) (RMB mm)
Old Accounting New Accounting Old Accounting New Accounting
Standards Standards Standards Standards
1,615
4,002
3,704 1,407
3,599 1,312
1,288
3,340 3,337
3,183
2,583 942
2,401 2,345
2,227
756 764
692
515
255
2Q19 3Q19 4Q19 1Q20 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 2Q19 3Q19 4Q19 1Q20 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21
Note: (1) Excluding share-based compensation expenses.
Source: Company data.
23Operational Efficiency
S&M Expenses as % of Loan User Acquisition Costs(1) Funding Costs(2)
Origination/Facilitation (RMB)
S&M Expenses
(RMB mm)
269 500 385 500
7.2%
0.57% 0.57% 6.7% 6.9% 6.7%
250 250
0.52%
212
0.46%
167
2Q20 2Q21 1Q21 2Q21 2Q20 2Q21 1Q21 2Q21 2Q20 2Q21 1Q21 2Q21
Note: (1) User acquisition cost is calculated by (i) sales and marketing expenses (excluding share-based compensation related expenses), divided by (ii) the number of new users with credit lines for the period. (2) annualized weighted average
interest rate charged to customer by funding partners;
24Asset Quality Remains at Historical Best
D1 Delinquency & M1 Collection Rate
18.0% 100.0%
90.5% 90.5% 90.2% 91.2% 91.1% 91.1% 90.3%
89.4% 89.9% 89.6% 90.2% 90.1%
15.0% 87.7% 87.5% 87.7% 88.5% 90.0%
85.8% 86.2%
84.5%
81.8%
12.0% 80.0%
9.0% 70.0%
7.9% 7.6%
6.8% 6.9% 6.8%
6.4% 6.6%
6.2% 6.0% 5.9%
6.0% 5.5% 5.4% 5.2% 60.0%
5.0% 5.1% 5.0% 5.0% 5.0% 5.0%
4.8%
3.0% 50.0%
Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun
2019 2019 2020 2020 2020 2020 2020 2020 2020 2020 2020 2020 2020 2020 2021 2021 2021 2021 2021 2021
(1) (2)
D1 Delinquency Rate M1 Collection Rate
Note: (1) D1 delinquency rate is defined as (i) the total amount of principal that became overdue as of a specified date, divided by (ii) the total amount of principal that was due for repayment as of such date. (2) M1 collection rate is defined
as (i) the amount of principal that was repaid in one month among the total amount of principal that became overdue as of a specified date, divided by (ii) the total amount of principal that became overdue as of a specified date.
Source: Company data.
25Improving Margin of Safety – Leverage Ratio & Free Cash
Leverage Ratio(1) Free Cash(2)
(RMB mm)
Old Accounting Standards New Accounting Standards
9.8x 3,974
9.5x
8.9x
8.1x 8.3x 3,192
7.4x 2,821
7.2x
6.6x 2,418
6.3x
5.4x 1,823
1,617
4.8x
328 344
108
2Q19 3Q19 4Q19 1Q20 2Q20 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21
Note: (1) Leverage Ratio = (risk-bearing outstanding loan balance / net assets). (2) Free cash = (cash and cash equivalents – operation cash – cash reserve). For illustrative purpose only.
Source: Company data.
26THANK YOU 27
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