Executive Summary / Key Takeaways

• Jiayin Group (NASDAQ:JFIN) is strategically pivoting towards a technology-driven, asset-light loan facilitation model, significantly reducing its lower-margin guarantee services to enhance profitability and align with evolving Chinese fintech regulations.
• The company's robust investment in AI and big data, including proprietary platforms like Fuxi and MingYi, is a core differentiator, yielding quantifiable benefits in risk management, operational efficiency, and customer acquisition, such as blocking hundreds of thousands of fraudulent applications and reducing AI conversation costs by 80%.
• JFIN delivered strong financial performance in Q2 2025, with loan facilitation volume reaching a record RMB 37.1 billion (up 54.6% year-on-year) and net income surging 117.8% to RMB 519 million, driven by economies of scale and an optimized revenue mix.
• Management's outlook for Q3 2025 projects loan facilitation volume between RMB 32 billion and RMB 34 billion, and non-GAAP income from operations between RMB 0.49 billion and RMB 0.56 billion, reflecting a prudent yet optimistic stance amidst regulatory adjustments.
• While facing intense competition from larger ecosystem players like Ant Group and Tencent Financial Services, Jiayin Group leverages its specialized efficiency, transparent platform, and advanced risk control technology to carve out a strong position in targeted segments and expand its overseas footprint.

The Digital Backbone of China's Consumer Credit

Jiayin Group, established in 2011 and headquartered in Shanghai, operates as a pivotal fintech platform in China, adeptly connecting individual borrowers with a diverse network of licensed financial institutions. The company's core business model revolves around facilitating loan products and offering technology development services, a strategic focus that has intensified following a significant rebranding in late 2023 and early 2024. This shift underscored technology as its primary attribute, positioning Jiayin at the forefront of digital transformation within the consumer finance sector.

China's macroeconomic environment provides a fertile ground for Jiayin's operations. The first half of 2025 saw vigorous government initiatives to boost consumption, with total retail sales of consumer goods rising by 5% year-on-year. This supportive backdrop, coupled with guiding opinions from six government departments aimed at expanding financial supply in the consumption sector, creates a favorable market for loan facilitation services. The industry is also undergoing a period of regulatory refinement, with new guidelines on Internet loan facilitation issued in April 2025 by China's National Financial Supervision and Administration Commission. These regulations, which affirm the positive value of the loan facilitation model and set a clear framework, are viewed by Jiayin as a catalyst for healthier, more compliant, and sustainable industry development, particularly benefiting established players.

Jiayin's overarching strategy is centered on high-quality, technology-driven growth, marked by a deliberate pivot away from lower-margin financial guarantee services towards its core loan facilitation business. This strategic realignment is not merely a response to market dynamics but a proactive move to enhance profitability and solidify its competitive moat. The company's foundational strength lies in its differentiated technology, which underpins its operational efficiency, risk management capabilities, and ability to scale.

Technological Edge: Fueling Growth and Fortifying Defenses

At the heart of Jiayin Group's investment thesis is its profound commitment to technological differentiation and innovation. The company's core technology stack, built on AI, big data analytics, and sophisticated risk control models, is not just a support function but a primary driver of its business. Jiayin leverages these capabilities to connect end consumers with financial institutions through mobile internet, enabling refined operations and robust risk management.

The tangible benefits of this technological prowess are evident and quantifiable. In the first half of 2025, Jiayin's multimodal anti-fraud system, which extracts voice prints from millions of calls and employs multidimensional data cross-verification, successfully blocked approximately 320,000 malicious fraud applications and cumulatively identified and intercepted over 460,000 high-risk habitual fraud applications. This demonstrates a significant enhancement in fraud prevention. Furthermore, the company's investment in AI has led to substantial cost reductions; for instance, in agent assistance scenarios, the cost of AI-generated conversation summaries decreased by approximately 80% year-on-year.

Jiayin's R&D initiatives are strategically aligned to expand the breadth and depth of its business intelligence. In Q2 2025, the company launched a data intelligence assistant with three key agents, effectively reducing the threshold for business R&D and improving data R&D efficiency. Its models optimized through reinforcement learning ranked fifth on the internationally authoritative BIRD evaluation leaderboard, securing the top position among models with the same amount of parameters, with a generation accuracy rate reaching 71%. This achievement lays a solid foundation for future implementation in loan facilitation scenarios. The company has also built a one-stop self-service R&D platform, enabling business departments to deploy over 200 exclusive AI agents within just one month, strengthening internal empowerment and systematically advancing AI implementation across the business ecosystem.

Earlier in Q1 2025, Jiayin promoted its "four plus two AI development strategy," focusing on business intelligence, data intelligence, agent intelligence, and workplace intelligence, while building intelligent agent and large model post-training platforms. The Fuxi model management platform, launched in May 2025, now covers 90% of its business lines, improving model deployment efficiency threefold and enhancing data preprocessing, stability, and execution speed. These technological advancements are critical to Jiayin's competitive moat, contributing to higher operational efficiency, lower costs, and better margins, thereby strengthening its market positioning and long-term growth strategy.

Financial Momentum and Strategic Realignment

Jiayin Group has demonstrated impressive financial momentum, particularly in its core loan facilitation services. In Q2 2025, the company achieved a record loan facilitation volume of RMB 37.1 billion, representing a substantial 54.6% year-on-year increase. This robust growth translated into a net revenue of RMB 1,886.2 million, up 27.8% from the same period in 2024. Non-GAAP income from operations surged by approximately 182% year-on-year to RMB 738 million, while net income increased by 117.8% to RMB 519 million. This strong profitability is a direct result of the significant increase in loan facilitation volume, which has generated economies of scale.

A key driver of Jiayin's improved profitability is the strategic optimization of its revenue mix. The company has deliberately reduced its reliance on lower-margin guarantee-related services. In Q2 2025, loan facilitation service revenue accounted for 85% of total revenue, a notable increase from 64% in Q2 2024, while guarantee-related service revenue decreased from approximately 29% to less than 7%. This shift has significantly enhanced the company's overall profit margins. For the full year 2024, facilitation revenue totaled RMB 4.01 billion, reflecting a 15% year-over-year increase, aligning with the company's strategic focus on high-quality growth.

Operational efficiency has also seen significant improvements, largely attributed to the company's strategic investments in AI technology and R&D. While sales and marketing expenses increased by 46% in Q2 2025 due to higher borrower acquisition efforts, and G&A and R&D expenses also rose, these are viewed as strategic investments designed to strengthen long-term growth momentum.

The 90-day plus delinquency ratio remained stable at 1.12% at the end of Q2 2025, showcasing the effectiveness of its data-driven risk control framework.

In terms of liquidity, Jiayin Group reported cash and cash equivalents of RMB 316.2 million at the end of Q2 2025, an increase from RMB 190.3 million at the end of the previous quarter. The company acknowledges that accounts receivable, which increased in Q3 2024 due to growing facilitation volume, represents over 50% of its total assets, and it remains committed to closely monitoring recovery and enhancing cash flow.

Competitive Landscape and Strategic Positioning

Jiayin Group operates within a highly dynamic and competitive online consumer finance market in China. Its primary direct competitors include major fintech players such as Ant Group, Tencent Financial Services , and Lufax Holding Ltd. . These rivals, particularly Ant Group and Tencent Financial Services , benefit from vast integrated ecosystems and extensive user bases, often leading to stronger customer loyalty and broader revenue streams. Ant Group, for instance, demonstrates robust revenue expansion and strong profitability margins, driven by its scale and advanced AI-driven credit scoring. Tencent Financial Services (TCEHY) leverages its massive social media user base for financial services, achieving strong revenue growth and solid profitability. Lufax (LU), while also focused on online consumer finance, offers a broader wealth management focus.

Jiayin Group distinguishes itself through its specialized efficiency and transparency in loan facilitation. Its platform-centric approach, underpinned by advanced AI and risk control technology, allows for notably faster processing in certain transactions and potentially lower operating costs compared to the broader, more diversified offerings of its larger competitors. While precise, directly comparable market share figures for all niche competitors are not publicly detailed, Jiayin's strong performance in loan facilitation suggests effective competition in targeted segments. The company's emphasis on secure, fast connections and specialized support services appeals to users prioritizing straightforward finance options.

However, Jiayin faces competitive disadvantages, primarily its smaller scale compared to industry giants, which can lead to higher customer acquisition costs. The market has become more dynamic since Q4 2024, with intensified competition for new users, contributing to a rising trend in customer acquisition costs for Jiayin. Despite this, the company views increased investment in borrower acquisition as a strategic choice, aiming for improved scale and quality of customers. Jiayin's strategic response involves strengthening front-end risk modeling capabilities, dynamically adjusting its channel mix, and further enhancing AI applications for credit risk identification to improve both customer acquisition and risk cost metrics for new borrowers.

In overseas markets, Jiayin is expanding its footprint, particularly in Indonesia and Mexico. In Q2 2025, Indonesian partners saw loan disbursements increase over 200% year-on-year and registered users grow by approximately 170%. Mexico also experienced nearly 40% quarter-on-quarter growth in loan disbursement and registered users. While the Indonesian market is intensely competitive, Jiayin believes strong overall market demand, especially among underserved populations, presents vast opportunities. The company strategically adjusted its Nigerian market operations in Q3 2024 to focus resources on core growth markets.

Outlook and Shareholder Returns

Jiayin Group's management maintains a cautiously optimistic outlook, balancing strong growth ambitions with a prudent approach to an evolving regulatory landscape. For Q3 2025, the company anticipates loan facilitation volume to be between RMB 32 billion and RMB 34 billion, with non-GAAP income from operations guided at RMB 0.49 billion to RMB 0.56 billion. The full-year 2025 loan facilitation volume guidance remains robust at RMB 137 billion to RMB 142 billion, reflecting an expected year-over-year growth of approximately 36% to 41%.

These projections are underpinned by several key assumptions. Management expects the new loan facilitation regulations to drive long-term healthy industry development and fair competition, which is seen as a positive for established players like Jiayin. The company is actively adapting its product offerings and cooperation models with institutional partners to align with these new rules, expecting to complete all necessary adjustments ahead of the scheduled deadline. Continued strategic investments in AI technology and R&D are also expected to drive sustained improvements in operational efficiency, borrower conversion, and retention rates, thereby enhancing overall profitability.

Jiayin Group is also committed to enhancing shareholder returns. In July 2025, the company distributed an annual cash dividend of USD 0.8 per ADS, totaling approximately USD 41.1 million, representing an increase of over 50% compared to the previous year. The Board of Directors approved an additional USD 50 million for the share repurchase plan in August 2025, extending its validity to June 12, 2026. This reflects a revised dividend policy, effective 2025, to distribute cash dividends once per fiscal year, totaling approximately 30% of the previous fiscal year's net profit after tax.

Risks and Challenges

Despite a compelling growth story, Jiayin Group faces several pertinent risks. The evolving regulatory environment in China's internet finance sector, while ultimately seen as beneficial, could introduce short-term adjustments in institutional strategies, pricing, and cooperation models. Licensed financial institutions are currently adopting a more cautious approach to funding supply, which could impact liquidity and asset quality, particularly for cyclical sensitive borrowers.

The competitive landscape remains intense, with larger players like Ant Group and Tencent possessing significant ecosystem advantages. Jiayin's increased borrower acquisition efforts, while strategic, have led to rising customer acquisition costs across the industry. The company is proactively managing this through refined risk modeling and channel mix adjustments, but it remains a key operational challenge. Furthermore, while the risk of ADR delisting for Chinese companies has been an ongoing concern, Jiayin believes its risk remains relatively low in the near term, having engaged in extensive communication with advisors and prepared for potential alternative scenarios like a Hong Kong listing.

Conclusion

Jiayin Group is carving out a distinctive and profitable niche in China's dynamic consumer finance market, driven by a clear strategic vision and a powerful technological foundation. Its pivot towards an asset-light, loan facilitation model, coupled with a relentless focus on AI and big data, has demonstrably improved financial performance, as evidenced by record loan facilitation volumes and surging net income in Q2 2025. The company's proprietary AI platforms are not merely buzzwords but deliver quantifiable benefits in risk management and operational efficiency, forming a robust competitive moat.

While navigating a competitive landscape dominated by larger players and adapting to evolving regulations, Jiayin's disciplined approach to growth, strategic investments in technology, and commitment to shareholder returns position it favorably. The management's prudent guidance for the coming quarters, alongside its long-term vision for high-quality, sustainable growth, underscores a confident trajectory. For discerning investors, Jiayin Group represents an opportunity to participate in the growth of China's digital consumer credit market, backed by technological leadership and a clear path to enhanced profitability.